Analysis of Debt
Total Debt (Carrying Amount)
Las Vegas Sands Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The total carrying amount of long-term debt exhibited a consistent upward trajectory from 2018 through 2022, rising from US$ 11,985 million to US$ 15,978 million. This represents an overall increase in leverage of approximately 33.3% over the five-year period.
- Total Debt Trajectory
- Aggregate debt obligations increased every year without exception. The most notable period of growth occurred between 2019 and 2021, during which total debt rose from US$ 12,492 million to US$ 14,795 million.
- Long-term Debt Composition
- Debt excluding current maturities grew steadily from US$ 11,874 million in 2018 to a peak of US$ 14,721 million in 2021. In 2022, a slight contraction was observed in this specific category, with the balance decreasing to US$ 13,947 million.
- Shift in Current Maturities
- A significant structural change in the debt profile occurred in 2022. From 2018 to 2021, current maturities remained minimal and stable, fluctuating between US$ 70 million and US$ 111 million. However, by December 31, 2022, current maturities spiked to US$ 2,031 million. This substantial increase indicates that a large volume of long-term debt has reached its maturity date, shifting the obligation from a long-term to a short-term liability.
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Total Debt (Fair Value)
| Dec 31, 2022 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total long-term debt, including current maturities (fair value) | 15,140) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.95 |
Based on: 10-K (reporting date: 2022-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on Senior Notes and finance lease liabilities: 3.99%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 3.20% | 1,745) | 56) | |
| 2.90% | 498) | 14) | |
| 3.50% | 993) | 35) | |
| 3.90% | 744) | 29) | |
| 5.13% | 1,793) | 92) | |
| 3.80% | 795) | 30) | |
| 2.30% | 694) | 16) | |
| 5.40% | 1,887) | 102) | |
| 2.85% | 644) | 18) | |
| 4.38% | 692) | 30) | |
| 3.25% | 595) | 19) | |
| 4.90% | 21) | 1) | |
| Total | 11,101) | 443) | |
| 3.99% | |||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 443 ÷ 11,101 = 3.99%
Interest Costs Incurred
Las Vegas Sands Corp., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total interest costs incurred exhibited a sustained upward trajectory over the five-year period from 2018 to 2022, increasing from 449 million US dollars to 706 million US dollars. This overall growth represents a significant rise in the cost of debt servicing, characterized by a steady incline punctuated by a marginal contraction in 2020.
- Total Interest Costs Incurred
- The total cost of interest rose by approximately 57% between 2018 and 2022. A consistent increase is observed from 2018 through 2019, followed by a slight decrease in 2020, and a subsequent acceleration in costs through 2021 and 2022.
- Interest Expense, Net of Amounts Capitalized
- Interest expense served as the primary driver of the total cost increase. This figure climbed from 446 million US dollars in 2018 to 702 million US dollars in 2022. The growth pattern closely mirrors the total interest costs, indicating that the vast majority of interest incurred was recognized directly as an expense rather than being capitalized.
- Capitalized Interest
- Capitalized interest remained a negligible component of the total interest burden. Although a peak was observed in 2020 at 21 million US dollars, these costs declined sharply thereafter, returning to 4 million US dollars by 2022. The volatility in capitalized interest suggests fluctuations in the scale or timing of qualifying asset construction during this period.
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Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of amounts capitalized
= -685 ÷ 702 = -0.98
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= -685 ÷ 706 = -0.97
The interest coverage ratios exhibit a severe decline starting in 2020, transitioning from a position of strong solvency to a sustained period of negative coverage. This shift indicates that earnings became insufficient to cover interest obligations beginning in the 2020 fiscal year, followed by a gradual but incomplete recovery through 2022.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- A significant contraction is observed between 2018 and 2020, where the ratio fell from 8.40 to -2.95. While the ratio improved in 2021 (-1.34) and 2022 (-0.97), it remained negative throughout this three-year period, signaling that operating income was unable to meet interest expenses.
- Interest Coverage Ratio (without capitalized interest)
- The trend for the non-adjusted ratio mirrors the adjusted metric, moving from a high of 8.46 in 2018 to a low of -3.07 in 2020. Subsequent years showed a narrowing of the deficit, reaching -0.98 by the end of 2022, yet failing to return to positive territory.
- Comparative Variance
- There is a negligible variance between the interest coverage ratio and the adjusted interest coverage ratio across all reported years. This suggests that the capitalization of interest has had a minimal impact on the overall debt service capacity and the resulting solvency metrics during the analyzed timeframe.
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