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Cayman Islands (State or Other Jurisdiction of Incorporation or Organization) | 7011 (Primary Standard Industrial Classification Code Number) | Not Applicable (I.R.S. Employer Identification No.) |
87 Mary Street
George Town
Grand Cayman KY1-9005
Cayman Islands
(345) 945 3727
111 Eight Avenue, 13th Floor
New York, NY 10011
(212) 894-8940
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Debevoise & Plimpton LLP
13th Floor, Entertainment Building
30 Queen’s Road Central
Hong Kong SAR
China
(852) 2160-9800
Proposed Maximum | Proposed Maximum | |||||||||||
Title of Each Class of | Amount to be | Offering | Aggregate Offering | Amount of | ||||||||
Securities to be Registered | Registered | Price per Unit(1) | Price | Registration Fee | ||||||||
10.25% Senior Notes due 2018 | US$600,000,000 | 98.671% | US$600,000,000 | US$42,780(2) | ||||||||
Guarantees of 10.25% Senior Notes due 2018(3) | N/A(4) | (4) | (4) | (4) | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). | |
(2) | The registration fee has been calculated under Rule 457(f)(2) of the Securities Act. | |
(3) | The following co-registrants are each guarantors of the 10.25% Senior Notes due 2018 and will be guarantors of the Exchange Notes that are being registered under this registration statement: Melco Crown Entertainment Limited, MPEL International Limited, Melco Crown Gaming (Macau) Limited, MPEL Nominee One Limited, MPEL Investments Limited, Altira Hotel Limited, Altira Developments Limited, Melco Crown (COD) Hotels Limited, Melco Crown (COD) Developments Limited, Melco Crown (Cafe) Limited, Golden Future (Management Services) Limited, MPEL (Delaware) LLC, Melco Crown Hospitality and Services Limited, Melco Crown (COD) Retail Services Limited, Melco Crown (COD) Ventures Limited, COD Theatre Limited, Melco Crown COD (HR) Hotel Limited, Melco Crown COD (CT) Hotel Limited and Melco Crown COD (GH) Hotel Limited. | |
(4) | Pursuant to Rule 457(n), no separate filing fee is required with respect to the guarantees. |
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State or Other | ||||||
Jurisdiction of | ||||||
Exact Name of Co-Registrant | Incorporation or | I.R.S. Employer | Address and Telephone Number | |||
as Specified in its Charter | Organization | Identification No. | of Principal Executive Offices | |||
Melco Crown Entertainment Limited | Cayman Islands | Not Applicable | 36th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong (852) 2598 3600 | |||
MPEL International Limited | Cayman Islands | Not Applicable | Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands (345) 945 3727 | |||
Melco Crown Gaming (Macau) Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Dr. Mário Soares, no. 25, Edificio Montepio, 1.o andar, comp. 13, Macau (853) 2859 1592 | |||
MPEL Nominee One Limited | Cayman Islands | Not Applicable | Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands (345) 945 3727 | |||
MPEL Investments Limited | Cayman Islands | Not Applicable | Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands (345) 945 3727 | |||
Altira Hotel Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Altira Developments Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown (COD) Hotels Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown (COD) Developments Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown (Cafe) Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 |
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State or Other | ||||||
Jurisdiction of | ||||||
Exact Name of Co-Registrant | Incorporation or | I.R.S. Employer | Address and Telephone Number | |||
as Specified in its Charter | Organization | Identification No. | of Principal Executive Offices | |||
Golden Future (Management Services) Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
MPEL (Delaware) LLC | Delaware | Not Applicable | 32 West Loockerman Square, Suite 210, Dover, Delaware 19904 (302) 674 8670 | |||
Melco Crown Hospitality and Services Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown (COD) Retail Services Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown (COD) Ventures Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
COD Theatre Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown COD (HR) Hotel Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown COD (CT) Hotel Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 | |||
Melco Crown COD (GH) Hotel Limited | Macau Special Administrative Region of the People’s Republic of China | Not Applicable | Avenida Xian Xing Hai, Edifico Zhu Kuan, 22o andar, Macau (853) 8868 8880 |
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• | MCE Finance Limited, or MCE Finance, will exchange all outstanding Initial Notes that are validly tendered and not validly withdrawn for an equal principal amount of Exchange Notes that are freely tradable. | |
• | You may withdraw tenders of Initial Notes at any time prior to the expiration date of the exchange offer. | |
• | The offer to exchange Initial Notes for Exchange Notes will be open until 5:00 p.m., New York City time, on , 2010, unless extended. | |
• | MCE Finance will not receive any proceeds from the issuance of Exchange Notes in the exchange offer. |
• | The terms of the Exchange Notes to be issued in the exchange offer are substantially identical to the terms of the Initial Notes, except that the Exchange Notes will be registered under the Securities Act and therefore will not be subject to restrictions on transfer and will not entitle their holders to registration rights. The Exchange Notes will also be fully and unconditionally guaranteed by the parent company of MCE Finance, Melco Crown Entertainment Limited (the “Parent”), and certain of the Parent’s subsidiaries, MPEL International Limited, Melco Crown Gaming (Macau) Limited, MPEL Nominee One Limited, MPEL Investments Limited, Altira Hotel Limited, Altira Developments Limited, Melco Crown (COD) Hotels Limited, Melco Crown (COD) Developments Limited, Melco Crown (Cafe) Limited, Golden Future (Management Services) Limited, MPEL (Delaware) LLC, Melco Crown Hospitality and Services Limited, Melco Crown (COD) Retail Services Limited, Melco Crown (COD) Ventures Limited, COD Theatre Limited, Melco Crown COD (HR) Hotel Limited, Melco Crown COD (CT) Hotel Limited and Melco Crown COD (GH) Hotel Limited (together with the Parent, the “Guarantors.”) |
• | There is currently no public market for the Exchange Notes. Approval in-principle has been received for the listing and quotation of the Exchange Notes on the Official List of the Singapore Exchange Securities Trading Limited (the“SGX-ST”). The SGX-ST assumes no responsibility for the correctness of any statements made, reports contained or opinions expressed in this prospectus. Approval in-principle for the listing and quotation of the Exchange Notes on the Official List of the SGX-ST is not to be taken as an indication of the merits of the Exchange Notes, the Guarantees, MCE Finance, the Guarantors or their respective subsidiaries or associated companies, if any. |
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EX-5.2 | ||||||||
EX-5.3 | ||||||||
EX-23.1 |
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c/o Melco Crown Entertainment Limited
36th Floor, The Centrium
60 Wyndham Street
Central
Hong Kong
Attn: Company Secretary
(852) 2598 3600
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• | “we,” “us,” “our company,” “our” and the “Company” refer to the Parent and its predecessor entities and its consolidated subsidiaries, including, but not limited to, MCE Finance (except where the context otherwise requires); | |
• | “Parent” refers to Melco Crown Entertainment Limited, a Cayman Islands exempted company with limited liability; | |
• | “MCE Finance” refers to MCE Finance Limited, a Cayman Islands exempted company with limited liability, a wholly-owned subsidiary of the Parent and the issuer of the Initial Notes and the Exchange Notes described in this prospectus; | |
• | “Guarantees” refers to the guarantees provided by the Parent, MPEL International and the Subsidiary Group Guarantors. | |
• | “Guarantors” refers to the Parent, MPEL International and the Subsidiary Group Guarantors. | |
• | “Subsidiary Group Guarantors” refers to Melco Crown Gaming (Macau) Limited, MPEL Nominee One Limited, MPEL Investments Limited, Altira Hotel Limited, Altira Developments Limited, Melco Crown (COD) Hotels Limited, Melco Crown (COD) Developments Limited, Melco Crown (Cafe) Limited, Golden Future (Management Services) Limited, MPEL (Delaware) LLC, Melco Crown Hospitality and Services Limited, Melco Crown (COD) Retail Services Limited, Melco Crown (COD) Ventures Limited, COD Theatre Limited, Melco Crown COD (HR) Hotel Limited, Melco Crown COD (CT) Hotel Limited and Melco Crown COD (GH) Hotel Limited. | |
• | “Melco” refers to Melco International Development Limited, a Hong Kong listed company; | |
• | “Melco Crown Gaming” refers to our wholly-owned subsidiary, Melco Crown Gaming (Macau) Limited, a Macau company; | |
• | “MPEL International” refers to MPEL International Limited, a Cayman Islands company with limited liability, and a direct, wholly-owned subsidiary of MCE Finance; | |
• | “Crown” refers to Crown Limited, an Australian listed corporation which completed its acquisition of the gaming businesses and investments of PBL, now known as Consolidated Media Holdings Limited, on December 12, 2007 and which is now our shareholder. As the context may require, “Crown” shall include its predecessor, PBL; | |
• | “PBL” refers to Publishing and Broadcasting Limited, an Australian listed corporation which is now known as Consolidated Media Holdings Limited; | |
• | “SPV” refers to Melco Crown SPV Limited, formerly Melco PBL SPV Limited, a Cayman Islands exempted company which is 50/50 owned by Melco Leisure and Entertainment Group Limited and Crown Asia Investments Pty. Ltd.; | |
• | “Altira Developments Limited” refers to the Macau company through which we hold the land and buildings for Altira Macau; | |
• | “Altira Hotel Limited” refers to the Macau company through which we currently operate the hotel and other non-gaming businesses at Altira Macau; | |
• | “Melco Crown (COD) Developments Limited” refers to the Macau company through which we hold the land and buildings for City of Dreams; | |
• | “Melco Crown (COD) Hotels Limited” refers to the Macau company through which we currently operate the hotels and other non-gaming businesses at City of Dreams; | |
• | “SBGF Agreement” refers to the subconcession bank guarantee request letter, dated 1 September 2006, issued by Melco Crown Gaming and the bank guarantee number 269/2006, dated 6 September 2006, |
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extended by Banco Nacional Ultramarino, S.A. in favor of the government of the Macau SAR at the request of Melco Crown Gaming, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection thereunder; |
• | “our subconcession” refers to the Macau gaming subconcession held by Melco Crown Gaming; | |
• | “China,” “mainland China” and “PRC” refer to the People’s Republic of China, excluding Hong Kong, Macau and Taiwan; | |
• | “Greater China” refers to mainland China, Hong Kong, Macau and Taiwan, collectively; | |
• | “HK$” and “H.K. dollars” refer to the legal currency of Hong Kong; | |
• | “Hong Kong” refers to the Hong Kong Special Administration Region of the People’s Republic of China; | |
• | “Macau” and the “Macau SAR” refer to the Macau Special Administrative Region of the People’s Republic of China; | |
• | “Patacas” and “MOP” refer to the legal currency of Macau; | |
• | “Renminbi” and “RMB” refer to the legal currency of China; | |
• | “US$” and “U.S. dollars” refer to the legal currency of the United States; and | |
• | “U.S. GAAP” refers to the accounting principles generally accepted in the United States. |
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• | political and economic stability; | |
• | an effective judicial system; | |
• | a favorable tax system; | |
• | the absence of exchange control or currency restrictions; and | |
• | the availability of professional and support services. |
• | the Cayman Islands has a less developed body of securities laws as compared to the United States and provides significantly less protection to investors; and | |
• | Cayman Islands companies do not have standing to sue before the federal courts of the United States. |
• | recognize or enforce judgments of United States courts obtained against us, MCE Finance or any of the Guarantors incorporated in the Cayman Islands or our or their directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or | |
• | entertain original actions brought in each respective jurisdiction against us, MCE Finance or any of the Guarantors incorporated in the Cayman Islands or our or their directors or officers predicated upon the securities laws of the United States or any state in the United States. |
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• | satisfaction of and compliance with conditions and covenants under the US$1.75 billion City of Dreams Project Facility, or City of Dreams Project Facility, to maintain the facility; | |
• | our ability to raise additional financing; | |
• | our future business development, results of operations and financial condition; | |
• | growth of the gaming market and visitation in Macau; | |
• | our anticipated growth strategies; | |
• | the liberalization of travel restrictions on PRC citizens and convertibility of the Renminbi; | |
• | the uncertainty of tourist behavior related to spending and vacationing at casino resorts in Macau; | |
• | fluctuations in occupancy rates and average daily room rates in Macau; | |
• | increased competition and other planned casino hotel and resort projects in Macau and elsewhere in Asia, including in Macau from Sociedade de Jogos de Macau, S.A, or SJM, Sands China, Wynn Resorts (Macau) S.A, or Wynn Macau, Galaxy Casino, S.A., or Galaxy, and MGM Grand Paradise; | |
• | the formal grant of an occupancy permit for certain areas of City of Dreams that remain under construction or development; |
• | the development of Macau Studio City; |
• | our entering into new development and construction and new ventures; | |
• | construction cost estimates for our development projects, including projected variances from budgeted costs; | |
• | government regulation of the casino industry, including gaming license approvals and the legalization of gaming in other jurisdictions; |
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• | the completion of infrastructure projects in Macau; and | |
• | other factors described under “Risk Factors.” |
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Average Daily Rate or ADR | calculated by dividing total room revenue (less service charges, if any) by total rooms occupied, i.e., average price of occupied rooms per day. | |
Cage | a secure room within a casino with a facility that allows patrons to exchange cash for chips required to participate in gaming activities, or to exchange chips for cash. | |
Chip | round token that is used on casino gaming tables in lieu of cash. | |
Concession | a government grant for the operation of games of fortune and chance in casinos in the Macau SAR under an administrative contract pursuant to which the entity holding the concession, or the concessionaire, is authorized to operate games of fortune and chance in casinos in the Macau SAR. | |
Dealer | a casino employee who takes and pays out wagers or otherwise oversees a gaming table. | |
Drop | the amount of cash and net markers issued that are deposited in a gaming table’s drop box to purchase gaming chips plus gaming chips purchased at the casino cage. | |
Drop box | a box or container that serves as a repository for cash, chips, chip purchase vouchers, credit markers and forms used to record movements in the chip inventory on each table game. | |
Expected hold percentage | casino win based upon our mix of games as a percentage of drop assuming theoretical house advantage is achieved. | |
Gaming machine handle (volume) | the total amount wagered in gaming machines in aggregate for the period cited. | |
Gaming promoter or junket representative | an individual or corporate entity who, for the purpose of promoting rolling chip gaming activity, arranges customer transportation and accommodation, provides credit in its sole discretion, and arranges food and beverage services and entertainment in exchange for commissions or other compensation from a gaming operator. | |
Gaming promoter aggregator model | under this model, the casino owner typically pays an additional level of remuneration above usual market commission rate to the gaming promoter which in return provides additional services by managing and providing credit to its collaborators. | |
Hold percentage | the amount of win (calculated before discounts and commissions) as a percentage of drop or roll. | |
Hotel occupancy rate | the average percentage of available hotel rooms occupied during a period. |
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Integrated resort | a resort which provides customers with a combination of hotel accommodations, casinos or gaming areas, retail and dining facilities, MICE space, entertainment venues and spas. | |
Junket player | a player sourced by gaming promoters to play in the VIP gaming rooms or areas. | |
Marker | evidence of indebtedness by a player to the casino or gaming operator. | |
Mass market patron | a non-rolling chip player who uses non-rolling chips to make wagers. | |
Mass market segment | consists of both table games and slot machines played on public mass gaming floors by mass market patrons for cash stakes that are typically lower than those in the rolling chip segment. | |
MICE | Meetings, Incentives, Conventions and Exhibitions, an acronym commonly used to refer to tourism involving large groups brought together for an event or specific purpose. | |
Non-negotiable chip | promotional casino chip that cannot be exchanged for cash. | |
Non-rolling chip or traditional cash chip | chip used by mass market patrons to make wagers and can be exchanged for cash. | |
Non-rolling chip hold percentage | mass market table games win as a percentage of non-rolling chip volume. | |
Non-rolling chip volume | the amount of table games drop in the mass market segment, therefore tracking the initial purchase of chips. | |
Premium player | a player who is a direct customer of the casino and is attracted to the casino through direct marketing efforts and relationships with the gaming operator. | |
Progressive jackpot | a jackpot for a slot machine or table game where the value of the jackpot increases as wagers are made. Multiple slot machines or table games may be linked together to establish one progressive jackpot. | |
Revenue per Available Room or REVPAR | calculated by dividing total room revenue (less service charges, if any) by total rooms available, thereby representing a summary of hotel average daily room rates and occupancy. | |
Rolling chip | non-negotiable chip primarily used by rolling chip patrons to make wagers. | |
Rolling chip hold percentage | rolling chip table games win as a percentage of rolling chip volume. | |
Rolling chip patron | a player who is primarily a VIP player and typically receives various forms of complimentary services from the gaming promoters or casinos. |
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Rolling chip segment | consists of table games played in private VIP gaming rooms or areas by rolling chip patrons who are either premium players or junket players. | |
Rolling chip volume | the amount of non-negotiable chips wagered and lost by the rolling chip market segment, therefore tracking the sum of all losing wagers. | |
Slot machine | traditional gaming machine operated by a single player and electronic multiple-player gaming machines. | |
Subconcession | an agreement for the operation of games of fortune and chance in casinos between the entity holding the concession, or the concessionaire, a subconcessionaire and the Macau SAR, pursuant to which the subconcessionaire is authorized to operate games of fortune and chance in casinos in the Macau SAR. | |
Table games win | the amount of wagers won net of wagers lost that is retained and recorded as casino revenue. | |
VIP gaming room or VIP gaming area | gaming rooms or areas that have restricted access to rolling chip patrons and typically offer more personalized service than the general mass market gaming areas. | |
Wet stage performance theater | the approximately 2,000-seat theater specifically designed to stage “The House of Dancing Water” show. | |
Win percentage-gaming machines | actual win expressed as a percentage of gaming machine handle. |
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• | create a cross-platform sales and marketing department to promote all of our brands to potential customers throughout Asia in accordance with applicable laws; |
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• | utilize special product offers, special events, tournaments and promotions to build and maintain relationships with our guests, in order to increase repeat visits and help fill capacity during lower-demand periods; |
• | refine our own customer loyalty programs to further build a database of repeat customers, which we closely modeled on Crown’s “Crown Club” program; and |
• | implement complimentary incentive programs and commission based programs with selected promoters to attract high-end customers. |
• | the early stage of operations of our business and properties; |
• | our dependence upon a limited number of properties for a substantial portion of our cash flow; |
• | our subsidiaries need a significant amount of cash to service their debt, and they may not generate sufficient cash flow to make scheduled debt payments; |
• | all of our operations are in Macau, which has certain political and economic risks that may lead to significant volatility and have a material adverse effect on our results of operations; |
• | the gaming industry in Macau is highly regulated; |
• | intense competition in Macau and elsewhere in Asia may cause us to lose, or to be unable to gain, market share and impact our ability to attract or retain suitably qualified management and personnel; |
• | our current indebtedness (which amounts to US$1.95 billion as of September 30, 2010) and any future indebtedness could impair our financial condition and further exacerbate the risks associated with our significant leverage; |
• | we are subject to and required to comply with many financing conditions and covenants, and a breach of certain conditions or covenants may result in our inability to rollover our loans or may result in our default under the terms and conditions of our financing and an acceleration of the repayment of such indebtedness, which would have a material adverse effect on the availability of our working capital; |
• | we extend credit, often unsecured, to some of our customers and we may not be able to collect such credit; |
• | gaming revenue is inherently subject to volatility as a result of win rate fluctuations; our focus on the rolling chip segment of the gaming market exposes us to a higher level of volatility and the winnings of our patrons could exceed our casino winnings; |
• | any outbreak of contagious disease in Macauand/or any of our properties may adversely affect visitation to Macauand/or our properties and may result in a material reduction of our revenue; |
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• | restrictions on or conditions to travel in Macau could adversely impact the number of visitors from mainland China to our properties in Macau; |
• | MCE Finance is a holding company that will depend on payments under the Intercompany Note to provide it with funds to meet its obligations under the Notes; and |
• | there is no established trading market for the Exchange Notes and holders of Exchange Notes may not be able to sell the Exchange Notes at the price they paid or at all. |
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(1) | On May 17, 2010, MCE Finance on-lent to MPEL Investments under an intercompany note (the “Intercompany Note”) an aggregate amount necessary to reduce our indebtedness under the City of Dreams Project Facility. The Initial Notes and Guarantees were and the Exchange Notes and Guarantees will be secured by a first priority pledge of the Intercompany Note. |
(2) | MPEL Nominee Three Limited and MPEL Nominee Two Limited are guarantors under the City of Dreams Project Facility, but as of the date of the indenture, are not guarantors of the Initial Notes or the Exchange Notes. |
(3) | The shares are owned 96% by Melco Crown Gaming (Macau) Limited and 4% by MPEL Nominee Two Limited. Melco Crown (Cafe) Limited operates our non-gaming Mocha Club business. |
(4) | Melco Crown (COD) Hotels Limited and Melco Crown (COD) Developments Limited operate our non-gaming City of Dreams business. |
(5) | The shares of this company are owned 96% by Melco Crown Gaming (Macau) Limited and 4% by MPEL Nominee Two Limited. |
(6) | The shares of this company are owned as to 99.98% by Melco Crown Gaming (Macau) Limited, 0.01% by MPEL Nominee Three Limited and 0.01% by MPEL Nominee Two Limited. |
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Background | On May 17, 2010, MCE Finance completed a private placement of the Initial Notes. In connection with that private placement, MCE Finance and the Guarantors entered into a registration rights agreement with Deutsche Bank Securities Inc., Merrill Lynch International, The Royal Bank of Scotland plc, ANZ Securities, Inc., Citigroup Global Markets Inc., Commerz Markets LLC, Credit Agricole Corporate and Investment Bank, nabSecurities, LLC and UBS AG (collectively, the “initial purchasers”), in which MCE Finance and the Guarantors agreed, among other things, to conduct this exchange offer. | |
The Exchange Offer | MCE Finance is offering to exchange up to US$600,000,000 aggregate principal amount of Initial Notes for up to US$600,000,000 aggregate principal amount of Exchange Notes which have been registered under the Securities Act. Initial Notes may be tendered only in minimum denominations of US$2,000 of principal amount and integral multiples of US$1,000 in excess thereof. | |
Resale of the Exchange Notes | MCE Finance and the Guarantors have undertaken the exchange offer pursuant to the terms of the registration rights agreement entered into with the initial purchasers of the Initial Notes. See “The Exchange Offer” for further information regarding the exchange offer and resale of the Exchange Notes. | |
Consequences of Failure to Exchange the Initial Notes | You will continue to hold Initial Notes that remain subject to their existing transfer restrictions if: | |
• you do not tender your Initial Notes; or | ||
• you tender your Initial Notes and they are not accepted for exchange. | ||
With some limited exceptions, we will have no obligation to register the Initial Notes after we consummate the exchange offer. See “The Exchange Offer — Terms of the Exchange Offer” and “The Exchange Offer — Consequence of Failure to Exchange.” | ||
Expiration Date | The exchange offer will expire at 5:00 p.m., New York City time, on , 2010 (the “expiration date”), unless we extend it, in which case expiration date will mean the latest date and time on which the exchange offer is extended. | |
Interest on the Exchange Notes | The Exchange Notes will accrue interest from the most recent date to which interest has been paid or provided for on the Initial Notes or, if no interest has been paid on the Initial Notes, from the date of original issue of the Initial Notes. | |
Conditions to the Exchange Offer | The exchange offer is subject to several customary conditions, some of which we may waive. See “The Exchange Offer — Conditions.” |
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Procedures for Tendering Initial Notes | If you wish to accept the exchange offer, you must submit required documentation and effect a tender of Initial Notes pursuant to the procedures for book-entry transfer (or other applicable procedures), all in accordance with the instructions described in this prospectus and in the relevant letter of transmittal. See “The Exchange Offer — Procedures for Tendering,” “The Exchange Offer — Book-Entry Transfer” and “The Exchange Offer — Guaranteed Delivery Procedures.” | |
Guaranteed Delivery Procedures | If you wish to tender your Initial Notes, but cannot properly do so prior to the applicable expiration date, you may tender your Initial Notes according to the guaranteed delivery procedures set forth in “The Exchange Offer — Guaranteed Delivery Procedures.” | |
Withdrawal Rights | Tenders of Initial Notes may be withdrawn at any time prior to 5:00 p.m. New York City time on the expiration date. To withdraw a tender of Initial Notes, a written or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in “The Exchange Offer — Exchange Agent” prior to 5:00 p.m. on the expiration date. | |
Acceptance of Initial Notes and Delivery of Exchange Notes | Except in some circumstances, any and all Initial Notes that are validly tendered in an exchange offer prior to 5:00 p.m., New York City time, on the expiration date will be accepted for exchange. The Exchange Notes issued pursuant to the exchange offer will be delivered promptly following the expiration date. We may reject any and all Initial Notes that we determine have not been properly tendered or any Initial Notes the acceptance of which would, in the opinion of our counsel, be unlawful. With some limited exceptions, we will have no obligation to register the Initial Notes after we consummate the applicable exchange offer. See “The Exchange Offer — Terms of the Exchange Offer.” | |
Certain U.S. Federal Income Tax Consequences | The exchange of an Initial Note for an Exchange Note pursuant to the exchange offer will not result in a taxable exchange to a beneficial owner of such Initial Note for U.S. federal income tax purposes. See “Taxation — Certain U.S. Federal Income Tax Consequences.” | |
Exchange Agent | The Bank of New York Mellon in Hong Kong is serving as the exchange agent in connection with the exchange offer. | |
Information Agent and Solicitation Agent | BNY Mellon Shareowner Services is serving as the information agent and the solicitation agent in connection with the exchange offer. |
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• | will be registered under the Securities Act and therefore will not be subject to restrictions on transfer; | |
• | will not entitle their holders to registration rights; | |
• | will bear a different CUSIP or ISIN number; and | |
• | will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the Initial Notes. |
Issuer | MCE Finance Limited, currently a wholly-owned subsidiary of Melco Crown Entertainment Limited. | |
Notes Offered | US$600,000,000 aggregate principal amount of 10.25% Senior Notes due 2018. | |
Maturity | May 15, 2018. | |
Interest | 10.25% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, with the first payment on November 15, 2010. | |
Ranking of Notes | The Initial Notes are and the Exchange Notes will be (1) general obligations of MCE Finance, (2)pari passuin right of payment to all existing and future senior indebtedness of MCE Finance, (3) senior in right of payment to any existing and future subordinated Indebtedness of MCE Finance, (4) effectively subordinated to all of MCE Finance’s existing and future secured indebtedness to the extent of the value of the assets securing such debt, and (5) unconditionally guaranteed by the Guarantors. | |
Guarantees | The Initial Notes are and the Exchange Notes will be guaranteed, jointly and severally, on a senior basis by the Parent and MPEL International with respect to the due and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under the Notes and the indenture. | |
The Initial Notes are and the Exchange Notes will be guaranteed on a senior subordinated basis by the Subsidiary Group Guarantors. | ||
The Initial Notes are and the Exchange Notes will be guaranteed, jointly and severally, on a senior subordinated basis by each of the Subsidiary Group Guarantors with respect to the due and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under the Notes. A guarantee by a Subsidiary Group Guarantor may be released or replaced in certain circumstances. See “Risk Factors — Risks Relating to Our Indebtedness, the Notes and the Guarantees” and “Description of Exchange Notes — Note Guarantees.” We refer to the guarantees provided by the Parent, MPEL International and the Subsidiary Group Guarantors as the “Guarantees.” | ||
Ranking of Guarantees | The guarantees provided by the Parent and MPEL International are and will be (1) general obligations of the Parent and MPEL International, (2) pari passuin right of payment with all existing and future senior indebtedness of the Parent and MPEL International, and |
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(3) senior in right of payment to any existing and future subordinated indebtedness of the Parent and MPEL International. | ||
The guarantees provided by the Subsidiary Group Guarantors are and will be (1) a general obligation of each such Subsidiary Group Guarantor, (2) subordinated in right of payment to indebtedness of such Subsidiary Group Guarantors under the City of Dreams Project Facility and under the SBGF Agreement, and (3) senior in right of payment to any existing and future subordinated indebtedness of such Subsidiary Group Guarantors. |
Security | The Initial Notes and the related Guarantees are and the Exchange Notes and the related Guarantees will be secured by a first priority pledge of the Intercompany Note. (On May 17, 2010, MCE Finance on-lent to MPEL Investments under the Intercompany Note an aggregate amount necessary to reduce our indebtedness under the City of Dreams Project Facility. The face value of the Intercompany Note is US$600 million. Interest accrues on the Intercompany Note at a rate at least equal to the interest rate payable on the Notes, subject to certain adjustments. The Intercompany Note is repayable at the same time as the repayment in full or in part of amounts due under the Notes. See “Description of Exchange Notes — The Intercompany Note.”) |
Optional Redemption | Prior to May 15, 2014, MCE Finance at its option may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes plus the applicable “make-whole” premium described in this prospectus plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the redemption date. See “Description of Exchange Notes — Optional Redemption.” | |
At any time after May 15, 2014, MCE Finance at its option may redeem the Notes, in whole or in part, at the redemption prices set forth in “Description of Exchange Notes — Optional Redemption” plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the redemption date. | ||
At any time prior to May 15, 2013, MCE Finance may redeem up to 35% of the principal amount of the Notes, with the net cash proceeds of one or more Equity Offerings at a redemption price of 110.25% of the principal amount of the Notes, plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the redemption date. See “Description of Exchange Notes — Optional Redemption.” | ||
Repurchase of Notes upon a Change of Control | Upon the occurrence of a Change in Control, MCE Finance will make an offer to repurchase all outstanding Notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the repurchase date. See “Description of Exchange Notes — Repurchase at the Option of Holders — Change of Control.” | |
Redemption for Taxation Reasons | Subject to certain exceptions and as more fully described herein, MCE Finance may redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, together with |
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accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the date fixed by MCE Finance for redemption, if MCE Finance or a Guarantor would become obliged to pay certain additional amounts as a result of certain changes in specified tax laws or certain other circumstances. See “Description of Exchange Notes — Redemption for Taxation Reasons.” | ||
Gaming Redemption | The indenture grants MCE Finance the power to redeem the Notes if the gaming authority of any jurisdiction in which the Parent, MCE Finance or any of their respective subsidiaries conducts or proposes to conduct gaming requires that a person who is a holder or the beneficial owner of Notes be licensed, qualified or found suitable under applicable gaming laws and such holder or beneficial owner, as the case may be, fails to apply or become licensed or qualified within the required time period or is found unsuitable. See “Description of Exchange Notes — Gaming Redemption.” | |
Certain Covenants | The Notes, the indenture governing the Notes, and the Guarantees include certain limitations on MCE Finance and its restricted subsidiaries’ ability to, among other things: | |
• incur or guarantee additional indebtedness; | ||
• make specified restricted payments; | ||
• issue or sell capital stock; | ||
• sell assets; | ||
• create liens; | ||
• enter into agreements that restrict the restricted subsidiaries’ ability to pay dividends, transfer assets or make intercompany loans; | ||
• enter into transactions with shareholders or affiliates; and | ||
• effect a consolidation or merger. | ||
These covenants are subject to a number of important qualifications and exceptions described in “Descriptions of Notes — Certain Covenants.” | ||
Exchange Offer; Registration Rights | Under a registration rights agreement executed as part of the offering of the Initial Notes, MCE Finance and the Parent have agreed to: | |
• file this registration statement with the SEC within 90 days after the issue date of the Initial Notes; | ||
• use commercially reasonable efforts to cause the registration statement relating to the Notes to be declared effective no later than 180 days after the registration statement is filed; and | ||
• consummate the offer to exchange the Initial Notes within 30 business days after the effective date of the registration statement. | ||
Under certain circumstances, MCE Finance and the Guarantors will use all commercially reasonable efforts to file and to cause the SEC to declare effective a shelf registration statement with respect to the resale of the Initial Notes and MCE Finance and the Guarantors will use all commercially reasonable efforts to keep the shelf registration statement effective for up to one year after the date of the original issue |
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of the Initial Notes. See “Description of Exchange Notes — Registration Rights; Liquidated Damages.” |
Listing and Trading | The Initial Notes are listed and quoted on the SGX-ST. Approvalin-principle has been received for the listing and quotation of the Exchange Notes on the Official List of the SGX-ST. The Exchange Notes will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in foreign currencies) for so long as the Exchange Notes are listed on the SGX-ST and the rules of the SGX-ST so require. |
Paying Agent | For so long as the Exchange Notes are listed on the SGX-ST and the rules of the SGX-ST so require, we will appoint and maintain a paying agent in Singapore, where the Exchange Notes may be presented or surrendered for payment or redemption, in the event that the Global Notes are exchanged for definitive Exchange Notes. In addition, in the event that the Global Notes are exchanged for definitive Exchange Notes, an announcement of such exchange shall be made by or on behalf of us through the SGX-ST and such announcement will include all material information with respect to the delivery of the definitive Exchange Notes, including details of the paying agent in Singapore, as long as the Exchange Notes are listed on the SGX-ST and the rules of the SGX-ST so require. |
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Year Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$, except share and per share data and operating data) | ||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||
Net revenues | $ | 1,332,873 | $ | 1,416,134 | $ | 358,496 | $ | 1,141,245 | $ | 432,328 | ||||||||||
Total operating costs and expenses | $ | (1,604,920 | ) | $ | (1,414,960 | ) | $ | (554,313 | ) | $ | (1,142,479 | ) | $ | (606,303 | ) | |||||
Operating (loss) income | $ | (272,047 | ) | $ | 1,174 | $ | (195,817 | ) | $ | (1,234 | ) | $ | (173,975 | ) | ||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | $ | (42,575 | ) | $ | (179,284 | ) | |||||
Loss per share | ||||||||||||||||||||
— Basic and diluted | $ | (0.210 | ) | $ | (0.002 | ) | $ | (0.145 | ) | $ | (0.027 | ) | $ | (0.131 | ) | |||||
— ADS(1) | $ | (0.631 | ) | $ | (0.006 | ) | $ | (0.436 | ) | $ | (0.080 | ) | $ | (0.392 | ) | |||||
Shares used in calculating loss per share | ||||||||||||||||||||
— Basic and diluted | 1,465,974,019 | 1,320,946,942 | 1,224,880,031 | 1,595,281,416 | 1,370,943,132 |
As of December 31, | As of June 30, | |||||||||||||||
2009 | 2008 | 2007 | 2010 | |||||||||||||
(In thousands of US$) | ||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||
Cash and cash equivalents | $ | 212,598 | $ | 815,144 | $ | 835,419 | $ | 295,232 | ||||||||
Restricted cash | $ | 236,119 | $ | 67,977 | $ | 298,983 | $ | 194,274 | ||||||||
Total assets | $ | 4,900,369 | $ | 4,498,289 | $ | 3,620,268 | $ | 4,909,773 | ||||||||
Total current liabilities | $ | 559,167 | $ | 450,136 | $ | 483,685 | $ | 547,150 | ||||||||
Total debts (include other long-term liabilities)(2) | $ | 1,819,473 | $ | 1,566,467 | $ | 625,899 | $ | 1,965,611 | ||||||||
Total liabilities | $ | 2,391,325 | $ | 2,089,685 | $ | 1,191,727 | $ | 2,431,248 | ||||||||
Total equity | $ | 2,509,044 | $ | 2,408,604 | $ | 2,428,541 | $ | 2,478,525 |
(1) | Each ADS represents three ordinary shares. | |
(2) | Total debts include loans from shareholders, long-term debt and other long-term liabilities. |
• | On May 12, 2007, Altira Macau opened and became fully operational on July 14, 2007. |
• | On June 1, 2009, City of Dreams opened and progressively added to its operations with the opening of Grand Hyatt Macau in the fourth quarter of 2009. |
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Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
Adjusted property EBITDA(1)(3) (in thousands of US$) | $ | 95,784 | $ | 188,269 | $ | (702 | ) | $ | 185,924 | $ | 14,510 | |||||||||
Adjusted EBITDA(2)(3) (in thousands of US$) | $ | 55,756 | $ | 157,025 | $ | (24,251 | ) | $ | 160,329 | $ | (2,537 | ) |
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Adjusted property EBITDA(1)(3) | ||||||||||||||||||||
Mocha Clubs | $ | 25,416 | $ | 25,805 | $ | 22,056 | $ | 13,616 | $ | 12,893 | ||||||||||
Altira Macau | 13,702 | 162,487 | (22,444 | ) | 58,501 | 13,796 | ||||||||||||||
City of Dreams | 56,666 | (23 | ) | (314 | ) | 113,807 | (12,179 | ) | ||||||||||||
Total Adjusted property EBITDA | $ | 95,784 | $ | 188,269 | $ | (702 | ) | $ | 185,924 | $ | 14,510 | |||||||||
(1) | “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, other expenses (including pre-opening costs, share-based compensation, marketing expense relating to Altira Macau opening in May 2007, property charges and others, corporate and other expenses and non-operating income (expenses)). | |
(2) | “Adjusted EBITDA” is earnings before interest, taxes, depreciation, amortization, other expenses (including pre-opening costs, share-based compensation, marketing expense relating to Altira Macau opening in May 2007, property charges and others, and non-operating income (expenses)). |
(3) | The Company changed the name of its segment operating measure from Adjusted EBITDA to Adjusted property EBITDA effective for annual and interim periods commencing January 1, 2010. Additionally, the Company introduced a new performance measure, Adjusted EBITDA, which represents the Company’s total Adjusted property EBITDA less corporate and other expenses. Disclosures for previous periods are also presented on this basis for comparative purposes. Management uses Adjusted property EBITDA as its measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. Adjusted EBITDA and Adjusted property EBITDA are also presented as supplemental disclosures because management believes they are widely used to measure performance and as a basis for valuation of gaming companies. The Company also presents Adjusted property EBITDA and Adjusted EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures, and meet working capital requirements. Gaming companies have historically reported Adjusted property EBITDA and Adjusted EBITDA as a supplement to financial measures in accordance with U.S. GAAP. |
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Adjusted property EBITDA | $ | 95,784 | $ | 188,269 | $ | (702 | ) | $ | 185,924 | $ | 14,510 | |||||||||
Corporate and other expenses | (40,028 | ) | (31,244 | ) | (23,549 | ) | (25,595 | ) | (17,047 | ) | ||||||||||
Adjusted EBITDA | 55,756 | 157,025 | (24,251 | ) | 160,329 | (2,537 | ) | |||||||||||||
Pre-opening costs | (91,882 | ) | (21,821 | ) | (40,032 | ) | (6,982 | ) | (79,563 | ) | ||||||||||
Depreciation and amortization | (217,496 | ) | (126,885 | ) | (113,932 | ) | (152,112 | ) | (81,541 | ) | ||||||||||
Share-based compensation | (11,385 | ) | (6,855 | ) | (5,256 | ) | (2,503 | ) | (6,200 | ) | ||||||||||
Marketing expense relating to Altira Macau opening | — | — | (11,959 | ) | — | — | ||||||||||||||
Property charges and others | (7,040 | ) | (290 | ) | (387 | ) | 34 | (4,134 | ) | |||||||||||
Interest and other non-operating expenses, net | (36,546 | ) | (5,107 | ) | 16,212 | (41,484 | ) | (5,175 | ) | |||||||||||
Income tax credit (expense) | 132 | 1,470 | 1,454 | 143 | (134 | ) | ||||||||||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | $ | (42,575 | ) | $ | (179,284 | ) | |||||
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Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (112,257 | ) | $ | (11,158 | ) | $ | 147,372 | $ | 73,339 | $ | (49,559 | ) | |||||||
Net cash used in investing activities | $ | (1,143,639 | ) | $ | (913,602 | ) | $ | (972,620 | ) | $ | (117,471 | ) | $ | (554,260 | ) | |||||
Net cash provided by financing activities | $ | 653,350 | $ | 904,485 | $ | 1,076,671 | $ | 126,766 | $ | 444,307 |
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In billions of US$) | ||||||||||||||||||||
Altira Macau | $ | 37.5 | $ | 62.3 | $ | 14.4 | $ | 19.4 | $ | 18.8 | ||||||||||
City of Dreams | 20.3 | — | — | 22.0 | 1.9 | |||||||||||||||
Total rolling chip volume | $ | 57.8 | $ | 62.3 | $ | 14.4 | $ | 41.4 | $ | 20.7 | ||||||||||
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In millions of US$) | ||||||||||||||||||||
Altira Macau | $ | 273.0 | $ | 353.2 | $ | 240.6 | $ | 147.6 | $ | 149.5 | ||||||||||
City of Dreams | 912.6 | — | — | 963.1 | 99.8 | |||||||||||||||
Total non-rolling chip volume | $ | 1,185.6 | $ | 353.2 | $ | 240.6 | $ | 1,110.7 | $ | 249.3 | ||||||||||
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(%) | ||||||||||||||||||||
Altira Macau | ||||||||||||||||||||
Rolling chip table games | 2.55 | 2.85 | 2.37 | 3.01 | 2.62 | |||||||||||||||
Non-rolling chip table games | 16.0 | 14.6 | 16.5 | 16.6 | 13.8 | |||||||||||||||
City of Dreams | ||||||||||||||||||||
Rolling chip table games | 2.65 | — | — | 2.60 | 0.79 | |||||||||||||||
Non-rolling chip table games | 16.3 | — | — | 21.2 | 16.4 |
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Six Months Ended | ||||||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2010 | |||||||||||||||||||
Ratio of earnings to fixed charges | — | 0.08 | — | — | — | 0.07 | ||||||||||||||||||
Deficiency (In thousands of US$) | 357,162 | 53,417 | 193,232 | 82,665 | 4,499 | 48,917 |
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• | fulfill conditions precedent to draw down or roll over funds from current and future credit facilities; | |
• | raise additional capital, as required; | |
• | respond to changing financing requirements; | |
• | operate, support, expand and develop our operations and our facilities; | |
• | attract and retain customers and qualified employees; | |
• | maintain effective control of our operating costs and expenses; | |
• | develop and maintain internal personnel, systems, controls and procedures to assure compliance with the extensive regulatory requirements applicable to the gaming business as well as regulatory compliance as a public company; | |
• | respond to competitive market conditions; | |
• | respond to changes in our regulatory environment; | |
• | identify suitable locations and enter into new leases or right to use agreements (which are similar to license agreements) for new Mocha Clubs; and | |
• | renew or extend lease agreements for existing Mocha Clubs. |
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• | changes in Macau’s and China’s political, economic and social conditions; | |
• | tightening of travel restrictions to Macau which may be imposed by China; | |
• | changes in policies of the government or changes in laws and regulations, or in the interpretation or enforcement of these laws and regulations; | |
• | changes in foreign exchange regulations; | |
• | measures that may be introduced to control inflation, such as interest rate increases or bank account withdrawal controls; and | |
• | changes in the rate or method of taxation. |
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• | dependence on the gaming and leisure market in Macau and limited diversification of our businesses and sources of revenue; | |
• | a decline in economic, competitive and political conditions in Macau or generally in Asia; | |
• | inaccessibility to Macau due to inclement weather, road construction or closure of primary access routes; | |
• | a decline in air or ferry passenger traffic to Macau due to higher ticket costs, fears concerning travel or otherwise; | |
• | travel restrictions to Macau imposed now or in the future by China; | |
• | changes in Macau governmental laws and regulations, or interpretations thereof, including gaming laws and regulations; | |
• | natural and other disasters, including typhoons, outbreaks of infectious diseases or terrorism, affecting Macau; | |
• | that the number of visitors to Macau does not increase at the rate that we have expected; and | |
• | a decrease in gaming activities at our properties. |
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• | lack of sufficient or delays in availability of financing; | |
• | changes to plans and specifications; | |
• | engineering problems, including defective plans and specifications; | |
• | shortages of, and price increases in, energy, materials and skilled and unskilled labor, and inflation in key supply markets; | |
• | delays in obtaining or inability to obtain necessary permits, licenses and approvals; | |
• | changes in laws and regulations, or in the interpretation and enforcement of laws and regulations, applicable to gaming, leisure, residential, real estate development or construction projects; | |
• | labor disputes or work stoppages; | |
• | disputes with and defaults by contractors and subcontractors; | |
• | environmental, health and safety issues, including site accidents and the spread of viruses such as H1N1 or H5N1; | |
• | weather interferences or delays; | |
• | fires, typhoons and other natural disasters; | |
• | geological, construction, excavation, regulatory and equipment problems; and | |
• | other unanticipated circumstances or cost increases. |
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• | approximately US$1.75 billion under the City of Dreams Project Facility primarily for the development and construction of City of Dreams, of which we have drawn down, as of the date of this prospectus, an amount equivalent to approximately US$1.68 billion, of which US$444.1 million has been repaid out of the net proceeds from the sale of the Initial Notes and US$1.24 billion remains outstanding; and | |
• | financing for a significant portion of the costs of developing Phase II at the City of Dreams site, in an amount which is as yet undetermined. |
• | make it difficult for us to satisfy our obligations with respect to the Notes; | |
• | increase our vulnerability to general adverse economic and industry conditions; |
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• | impair our ability to obtain additional financing in the future for working capital needs, capital expenditure, acquisitions or general corporate purposes; | |
• | require us to dedicate a significant portion of our cash flow from operations to the payment of principal and interest on our debt, which would reduce the funds available to us for our operations; | |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | |
• | place us at a competitive disadvantage as compared to our competitors, to the extent that they are not as leveraged; | |
• | subject us to higher interest expense in the event of increases in interest rates to the extent a portion of our debt bears interest at variable rates; | |
• | cause us to incur additional expenses by hedging interest rate exposures of our debt and exposure to hedging counterparties’ failure to pay under such hedging arrangements, which would reduce the funds available for us for our operations; and | |
• | in the event we or one of our subsidiaries were to default, result in the loss of all or a substantial portion of our and our subsidiaries’ assets, over which our lenders have taken or will take security. |
• | incur additional debt, including guarantees; | |
• | create security or liens; | |
• | dispose of assets; |
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• | make certain acquisitions and investments; | |
• | make loans, payments on certain indebtedness, distributions and other restricted payments or apply revenues earned in one part of our operations to fund development costs or cover operating losses in another part of our operations; | |
• | enter into sale and leaseback transactions; | |
• | engage in new businesses; | |
• | enter into or vary contracts; | |
• | issue preferred shares; and | |
• | enter into transactions with shareholders and affiliates. |
• | Consolidated Leverage Ratio, as defined in the City of Dreams Project Facility; | |
• | Consolidated Interest Cover Ratio, as defined in the City of Dreams Project Facility; and | |
• | Consolidated Cash Cover Ratio, as defined in the City of Dreams Project Facility. |
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• | incur or guarantee additional indebtedness; | |
• | make specified restricted payments; | |
• | issue or sell capital stock of our restricted subsidiaries; | |
• | sell assets; | |
• | create liens; | |
• | enter into agreements that restrict the ability of us and our restricted subsidiaries to pay dividends, transfer assets or make intercompany loans; | |
• | enter into transactions with shareholders or affiliates; and | |
• | effect a consolidation or merger. |
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• | prevailing interest rates and the markets for similar securities; | |
• | our results of operations, financial condition, historical financial performance and future prospects; | |
• | political and economic developments in and affecting Macau and other countries in which we conduct business now or in the future; | |
• | general economic conditions locally, regionally and globally; | |
• | changes in the credit ratings of the Notes or us; and | |
• | the financial condition and stability of the Asian or global financial sector. |
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• | incurred the debt with the intent to hinder, delay or defraud creditors or was influenced by a desire to put the beneficiary of the guarantee in a position which, in the event of the guarantor’s insolvency, would be better than the position the beneficiary would have been in had the guarantee not been given; | |
• | received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; | |
• | was insolvent or rendered insolvent by reason of such incurrence; | |
• | was engaged in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital; or | |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature. |
• | the Guarantor delivered its Guarantee at a time when it had debt outstanding or with the intent to defraud its future creditors; | |
• | delivery of the Guarantee rendered it impossible for the Guarantor’s creditors to obtain full repayment (regardless of whether independent events had already made full repayment impossible); and | |
• | the grant of the Guarantee was a gratuitous act for which no consideration was received by the beneficiary or, if consideration was received, the beneficiary was aware that the grant of the Guarantee would result in the Guarantor defrauding existing or future creditors. |
• | the Guarantee was a gratuitous act for which no consideration was received by the beneficiary and was granted within two years of the date of the judgment of bankruptcy or insolvency; | |
• | in the case of an intercompany Guarantee that was delivered within six months of the date of judgment of bankruptcy or insolvency; or | |
• | in the case of a Guarantee delivered within specified time periods of the date of bankruptcy or insolvency, the beneficiary was aware that the grant of the Guarantee would result in the Guarantor defrauding existing or future creditors. |
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• | rank pari passu in right of payment with all existing and future senior subordinated indebtedness of such Subsidiary Group Guarantor; | |
• | be subordinated in right of payment to each such Subsidiary Group Guarantor’s obligations under, or guarantee of obligations under, the City of Dreams Project Facility and the SBGF Agreement (“Designated Senior Indebtedness”); | |
• | be senior in right of payment to all existing and future obligations of such Subsidiary Group Guarantors expressly subordinated to the relevant Guarantee; and | |
• | be effectively subordinated to any secured indebtedness and other secured obligations of each such Subsidiary Group Guarantor to the extent of the value of the assets securing such indebtedness or other obligations (other than to the extent such assets also secure such Subsidiary Guarantees on an equal and ratable or priority basis). |
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• | required to file the exchange offer registration statement; or | |
• | permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy or action; or |
• | is prohibited by law or SEC policy or action from participating in the exchange offer; | |
• | may not resell the Exchange Notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales by such holder; or | |
• | is a broker-dealer and holds Initial Notes acquired directly from MCE Finance or any of its affiliates. |
• | you are not an “affiliate,” as defined in Rule 144 of the Securities Act, of MCE Finance or any of the Guarantors; | |
• | you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the exchange offer; and | |
• | you are acquiring the Exchange Notes in the ordinary course of business. |
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• | such holder is not an “affiliate,” as defined in Rule 144 of the Securities Act, of MCE Finance or any of the Guarantors; | |
• | such holder is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the exchange offer; and | |
• | such Exchange Notes are acquired in the ordinary course of the holder’s business. |
• | cannot rely on the position of the SEC enunciated inMorgan Stanley and Co., Inc. (available June 5, 1991) andExxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter toShearman & Sterling dated July 2, 1993, and similar no-action letters; and | |
• | must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. |
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• | the exchange offer registration statement of which this prospectus forms a part is not filed with the SEC on or prior to 90 days after the closing date of the offering of Initial Notes; | |
• | the exchange offer registration statement of which this prospectus forms a part is not declared effective by the SEC within 180 days after the closing date of the offering of Initial Notes; | |
• | the exchange offer is not consummated on or prior to the 30th business day, or longer if required by federal securities laws, after such exchange offer registration statement has been declared effective; | |
• | the shelf registration statement is not filed with the SEC on or prior to 30 days after such filing obligation arises; | |
• | the shelf registration statement is not declared effective by the SEC on or prior to 90 days after such obligation arises; or | |
• | the shelf registration statement or the exchange offer registration statement of which this prospectus forms a part is filed and declared effective but thereafter ceases to be effective or usable for its intended purpose without being succeeded within three days by a post-effective amendment to such shelf registration statement or exchange offer registration statement, as the case may be, that cures such failure and that is itself declared effective within five days of filing such post-effective amendment to such shelf registration statement or exchange offer registration statement, as the case may be. |
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• | delay acceptance of any Initial Notes due to an extension of the exchange offer, to extend the exchange offer or to terminate the exchange offer and not permit acceptance of Initial Notes not previously accepted if any of the conditions set forth under “— Conditions” have not occurred and have not been waived by us prior to 5:00 p.m., New York City time, on the expiration date, by giving oral or written notice of such delay, extension or termination to the exchange agent; or | |
• | amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the Initial Notes. |
• | certificates of Initial Notes must be received by the exchange agent along with the applicable letter of transmittal; or | |
• | a timely confirmation of a book-entry transfer of Initial Notes, if such procedures are available, into the exchange agent’s account at the book-entry transfer facility, DTC, pursuant to the procedure for book-entry transfer described below, must be received by the exchange agent prior to the expiration date with the letter of transmittal; or | |
• | you must comply with the guaranteed delivery procedures described below. |
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• | by a registered holder of Initial Notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or | |
• | for the account of an Eligible Institution. |
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• | certificates for such Initial Notes or a timely book-entry confirmation of such Initial Notes into the exchange agent’s account at the book-entry transfer facility; | |
• | a properly completed and duly executed letter of transmittal; and | |
• | all other required documents. |
• | the tender is made through an Eligible Institution; | |
• | prior to the expiration date, the exchange agent receives by facsimile transmission, mail or hand delivery from such Eligible Institution a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, which |
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• | sets forth the name and address of the holder of the Initial Notes and the principal amount of Initial Notes tendered; | |
• | states the tender is being made thereby; | |
• | guarantees that within three New York Stock Exchange (“NYSE”) trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered Initial Notes, in proper form for transfer, or book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the Eligible Institution with the exchange agent; and |
• | the certificates for all physically tendered Initial Notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. |
• | specify the name of the person having tendered the Initial Notes to be withdrawn; | |
• | identify the Initial Notes to be withdrawn, including the principal amount of such Initial Notes; | |
• | in the case of Initial Notes tendered by book-entry transfer, specify the number of the account at the book-entry transfer facility from which the Initial Notes were tendered and specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Initial Notes and otherwise comply with the procedures of such facility; | |
• | contain a statement that such holder is withdrawing its election to have such Initial Notes exchanged; | |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which such Initial Notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the Initial Notes register the transfer of such Initial Notes in the name of the person withdrawing the tender; and | |
• | specify the name in which such Initial Notes are registered, if different from the person who tendered such Initial Notes. |
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By Registered/Certified Mail: The Bank of New York Mellon Corporate Trust Operations Reorganization Unit 101 Barclay Street - 7 East New York, N.Y. 10286 United States of America | By Facsimile (for Eligible Institutions only): (212)-298-1915 | |
Regular Mail or Overnight Courier: The Bank of New York Mellon Corporate Trust Operations Reorganization Unit 101 Barclay Street - 7 East New York, N.Y. 10286 United States of America | For Information or Confirmation by Telephone: Attn:Mrs. Carolle Montreuil (212) 815-5920 carolle.montreuil@bnymellon.com | |
Hand Delivery: The Bank of New York Mellon Corporate Trust Operations Reorganization Unit 101 Barclay Street - 7 East New York, N.Y. 10286 United States of America |
BNY Mellon Shareowner Services 480 Washington Boulevard AIM # 074-2950 Attn: Information Agent, 29th Floor Jersey City, NJ 07310 United States of America | Toll-free telephone number: 1-800-777-3674 Telephone number of Bryan Shea: (201) 680-5285 Telephone number of Margot Travers: (201) 680-5235 |
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• | fees and expenses of the trustee and exchange agent and their counsel; | |
• | registration and filing fees and expenses; | |
• | fees and expenses of compliance with federal and state securities laws; | |
• | printing, messenger and delivery services and telephone expenses; | |
• | fees and disbursements of counsel for MCE Finance and the Guarantors; | |
• | application and filing fees in connection with listing and quotation of the Exchange Notes on the SGX-ST; and | |
• | fees and disbursements of accountants of the Parent. |
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As of June 30, 2010 | ||||
(In thousands of US$, | ||||
except for share data) | ||||
Cash and cash equivalents(1)(2) | $ | 295,232 | ||
Indebtedness: | ||||
City of Dreams Project Facility | $ | 1,239,141 | ||
Other long-term liabilities | 18,715 | |||
Loans from shareholders | 115,647 | |||
10.25% senior notes, due 2018, net | 592,108 | |||
Total indebtedness | 1,965,611 | |||
Shareholders’ Equity: | ||||
Ordinary shares at US$0.01 par value per share (2,500,000,000 shares authorized; 1,596,748,456 shares issued) | $ | 15,968 | ||
Treasury shares, at US$0.01 par value per share (1,359,576 shares) | (14 | ) | ||
Additional paid-in capital | 3,091,268 | |||
Accumulated other comprehensive losses | (19,481 | ) | ||
Accumulated losses | (609,216 | ) | ||
Total shareholders’ equity(1) | 2,478,525 | |||
Total capitalization | $ | 4,444,136 | ||
(1) | A part of each of these line items is attributable to the Parent and certain other subsidiaries of the Parent that are not subsidiaries of MCE Finance or are Unrestricted Subsidiaries. The Parent is a Guarantor but will not be subject to the covenants set forth in the indenture. Subsidiaries of the Parent who are not subsidiaries of MCE Finance will not be Guarantors and will not be subject to the covenants set forth in the indenture. See “Risk Factors — The financial statements contained in this prospectus are for the Parent and its consolidated subsidiaries, and no Guarantor has any obligation to provide its financial statements to holders of the Notes.” |
(2) | Excludes US$194.3 million of restricted cash held as required by the City of Dreams Project Facility. |
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Noon Buying Rate | ||||||||||||||||
Period | Period End | Average(1) | High | Low | ||||||||||||
(Hong Kong dollar per US$1.00) | ||||||||||||||||
October 2010 | 7.7513 | 7.7580 | 7.7642 | 7.7513 | ||||||||||||
September 2010 | 7.7599 | 7.7643 | 7.7738 | 7.7561 | ||||||||||||
August 2010 | 7.7781 | 7.7702 | 7.7788 | 7.7605 | ||||||||||||
July 2010 | 7.7672 | 7.7753 | 7.7962 | 7.7651 | ||||||||||||
June 2010 | 7.7865 | 7.7880 | 7.8040 | 7.7690 | ||||||||||||
May 2010 | 7.7850 | 7.7856 | 7.8030 | 7.7626 | ||||||||||||
2009 | 7.7536 | 7.7513 | 7.7618 | 7.7495 | ||||||||||||
2008 | 7.7499 | 7.7814 | 7.8159 | 7.7497 | ||||||||||||
2007 | 7.7984 | 7.8008 | 7.8289 | 7.7497 | ||||||||||||
2006 | 7.7771 | 7.7685 | 7.7928 | 7.7506 | ||||||||||||
2005 | 7.7533 | 7.7755 | 7.7999 | 7.7514 |
(1) | Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period. |
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Six Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2010 | 2009 | ||||||||||||||||||||||
(In thousands of US$, except share and per share data and operating data) | ||||||||||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||||||||||
Net revenues | $ | 1,332,873 | $ | 1,416,134 | $ | 358,496 | $ | 36,101 | $ | 17,328 | $ | 1,141,245 | $ | 432,328 | ||||||||||||||
Total operating costs and expenses | $ | (1,604,920 | ) | $ | (1,414,960 | ) | $ | (554,313 | ) | $ | (93,754 | ) | $ | (21,050 | ) | $ | (1,142,479 | ) | $ | (606,303 | ) | |||||||
Operating (loss) income | $ | (272,047 | ) | $ | 1,174 | $ | (195,817 | ) | $ | (57,653 | ) | $ | (3,722 | ) | $ | (1,234 | ) | $ | (173,975 | ) | ||||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | $ | (73,479 | ) | $ | (3,259 | ) | $ | (42,575 | ) | $ | (179,284 | ) | |||||||
Loss per share | ||||||||||||||||||||||||||||
— Basic and diluted | $ | (0.210 | ) | $ | (0.002 | ) | $ | (0.145 | ) | $ | (0.116 | ) | $ | (0.006 | ) | $ | (0.027 | ) | $ | (0.131 | ) | |||||||
— ADS(1) | $ | (0.631 | ) | $ | (0.006 | ) | $ | (0.436 | ) | $ | (0.348 | ) | $ | (0.019 | ) | $ | (0.080 | ) | $ | (0.392 | ) | |||||||
Shares used in calculating loss per share | ||||||||||||||||||||||||||||
— Basic and diluted | 1,465,974,019 | 1,320,946,942 | 1,224,880,031 | 633,228,439 | 522,945,205 | 1,595,281,416 | 1,370,943,132 |
As of December 31, | As of June 30, | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2010 | |||||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 212,598 | $ | 815,144 | $ | 835,419 | $ | 583,996 | $ | 19,769 | $ | 295,232 | ||||||||||||
Restricted cash | $ | 236,119 | $ | 67,977 | $ | 298,983 | $ | — | $ | — | $ | 194,274 | ||||||||||||
Total assets | $ | 4,900,369 | $ | 4,498,289 | $ | 3,620,268 | $ | 2,279,920 | $ | 421,208 | $ | 4,909,773 | ||||||||||||
Total current liabilities | $ | 559,167 | $ | 450,136 | $ | 483,685 | $ | 207,613 | $ | 138,741 | $ | 547,150 | ||||||||||||
Total debts (include other long-term liabilities)(2) | $ | 1,819,473 | $ | 1,566,467 | $ | 625,899 | $ | 115,647 | $ | — | $ | 1,965,611 | ||||||||||||
Total liabilities | $ | 2,391,325 | $ | 2,089,685 | $ | 1,191,727 | $ | 389,554 | $ | 163,024 | $ | 2,431,248 | ||||||||||||
Noncontrolling interests(3) | $ | — | $ | — | $ | — | $ | — | $ | 19,492 | $ | — | ||||||||||||
Total equity | $ | 2,509,044 | $ | 2,408,604 | $ | 2,428,541 | $ | 1,890,366 | $ | 258,184 | $ | 2,478,525 |
(1) | Each ADS represents three ordinary shares. | |
(2) | Total debts include loans from shareholders, long-term debt and other long-term liabilities. | |
(3) | The noncontrolling interests represent the 20% interest in Mocha Slot Group Limited and its subsidiaries before the interest was purchased by us on May 9, 2006. |
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• | From January 1, 2005 to March 7, 2005, the financial statements reflect the consolidated financial statements of Mocha Slot Group Limited, or Mocha, Melco Crown (COD) Developments Limited and Altira Developments Limited because they were under common control for this period. The contributions by Melco of its 80% interest in Mocha, 70% interest in Altira Developments Limited and 50.8% interest in the City of Dreams project to MPEL (Greater China) Limited, formerly Melco PBL Entertainment (Greater China) Limited, a company previously 80% indirectly owned by us and 20% owned by Melco, and cash contributions by Crown of US$163 million, which were completed on March 8, 2005, were accounted for as the formation of a joint venture for which a carryover basis of accounting has been adopted. | |
• | In September 2006, we acquired a Macau subconcession. Prior to this date we did not hold a concession or subconcession to operate gaming activities in Macau and we operated under a services agreement with SJM. | |
• | In April 2006, we commenced construction of City of Dreams. | |
• | On May 12, 2007, Altira Macau opened and became fully operational on July 14, 2007. |
• | On June 1, 2009, City of Dreams opened and progressively added to its operations with the opening of Grand Hyatt Macau in the fourth quarter of 2009. |
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RESULTS OF OPERATIONS
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Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Net revenues | $ | 1,332,873 | $ | 1,416,134 | $ | 358,496 | $ | 1,141,245 | $ | 432,328 | ||||||||||
Total operating costs and expenses | $ | (1,604,920 | ) | $ | (1,414,960 | ) | $ | (554,313 | ) | $ | (1,142,479 | ) | $ | (606,303 | ) | |||||
Operating (loss) income | $ | (272,047 | ) | $ | 1,174 | $ | (195,817 | ) | $ | (1,234 | ) | $ | (173,975 | ) | ||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | $ | (42,575 | ) | $ | (179,284 | ) |
• | On May 12, 2007, Altira Macau opened and was fully operational by July 14, 2007. |
• | On June 1, 2009, City of Dreams opened and progressively added to its operations following the completion of construction of Grand Hyatt Macau in December 2009. |
• | Table games win: the amount of wagers won net of wagers lost that is retained and recorded as casino revenue. | |
• | Drop: the amount of cash and net markers issued that are deposited in a gaming table’s drop box to purchase gaming chips plus gaming chips purchased at the casino cage. | |
• | Gaming machine handle (volume): the total amount wagered in gaming machines in aggregate for the period cited. | |
• | Win percentage-gaming machines: actual win expressed as a percentage of gaming machine handle. | |
• | Hold percentage: the amount of win (calculated before discounts and commissions) as a percentage of drop. | |
• | Expected hold percentage: casino win based upon our mix of games as a percentage of drop assuming theoretical house advantage is achieved. |
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• | Rolling chip volume: the amount of non-negotiable chips wagered and lost by the rolling chip market segment, therefore tracking the sum of all losing wagers. |
• | Rolling chip hold percentage: rolling chip table games win as a percentage of rolling chip volume. | |
• | Non-rolling chip volume: the amount of table games drop in the mass market segment, therefore tracking the initial purchase of chips. | |
• | Non-rolling chip hold percentage: Mass market table games win as a percentage of non-rolling chip volume. |
• | Average Daily Rate, or ADR: calculated by dividing total room revenue (less service charges, if any) by total rooms occupied, i.e., average price of occupied rooms per day. | |
• | Hotel occupancy rate: the average percentage of available hotel rooms occupied during a period. | |
• | Revenue per Available Room, or REVPAR: calculated by dividing total room revenue (less service charges, if any) by total rooms available, thereby representing a summary of hotel average daily room rates and occupancy. |
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Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2009 | 2008 | 2007 | 2010 | 2009 | ||||||||||||||||
(In thousands of US$) | ||||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (112,257 | ) | $ | (11,158 | ) | $ | 147,372 | $ | 73,339 | $ | (49,559 | ) | |||||||
Net cash used in investing activities | (1,143,639 | ) | (913,602 | ) | (972,620 | ) | (117,471 | ) | (554,260 | ) | ||||||||||
Net cash provided by financing activities | 653,350 | 904,485 | 1,076,671 | 126,766 | 444,307 | |||||||||||||||
Net (decrease) increase in cash and cash equivalents | (602,546 | ) | (20,275 | ) | 251,423 | 82,634 | (159,512 | ) | ||||||||||||
Cash and cash equivalents at beginning of year/period | 815,144 | 835,419 | 583,996 | 212,598 | 815,144 | |||||||||||||||
Cash and cash equivalents at end of year/period | $ | 212,598 | $ | 815,144 | $ | 835,419 | $ | 295,232 | $ | 655,632 | ||||||||||
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Payments Due by Period | ||||||||||||||||||||
Less than | 1-3 | 3-5 | More than | |||||||||||||||||
1 Year | Years | Years | 5 Years | Total | ||||||||||||||||
(In millions of US$) | ||||||||||||||||||||
Contractual obligations | ||||||||||||||||||||
Long-term debt obligations: | ||||||||||||||||||||
Loans from shareholders(1) | $ | — | $ | 115.6 | $ | — | $ | — | $ | 115.6 | ||||||||||
Other long-term debt(2) | 44.5 | 793.1 | 845.6 | — | 1,683.2 | |||||||||||||||
Operating lease obligations: | ||||||||||||||||||||
Leases for office space, VIP lounge, recruitment and training center, staff quarter and Mocha Clubs locations | 10.0 | 11.6 | 9.0 | 9.7 | 40.3 | |||||||||||||||
Other contractual commitments: | ||||||||||||||||||||
Government land use fees payable for Altira Macau land(3) | 0.2 | 0.3 | 0.3 | 2.8 | 3.6 | |||||||||||||||
Government land use fees payable for City of Dreams land(4) | 1.2 | 2.4 | 2.4 | 22.0 | 28.0 | |||||||||||||||
Interest on land premium for City of Dreams land(4) | 1.1 | 2.8 | 0.2 | — | 4.1 | |||||||||||||||
Construction, plant and equipment acquisition commitments(5) | 32.6 | — | — | — | 32.6 | |||||||||||||||
Buses and limousines services commitments | 2.6 | — | — | — | 2.6 | |||||||||||||||
Fixed premium on gaming subconcession | 3.7 | 7.5 | 7.5 | 28.0 | 46.7 | |||||||||||||||
Trademark and memorabilia license fee commitments | 0.9 | 1.8 | 1.8 | 4.0 | 8.5 | |||||||||||||||
Consultancy and other services commitments | 2.7 | 1.3 | 0.8 | — | 4.8 | |||||||||||||||
Total contractual obligations | $ | 99.5 | $ | 936.4 | $ | 867.6 | $ | 66.5 | $ | 1,970.0 | ||||||||||
(1) | Excludes the working capital loans provided by Melco and Crown, which had an outstanding balance of US$25,000 as of December 31, 2009. As of December 31, 2009, the balance of the outstanding term loans from Melco and Crown, amounting to approximately US$115.6 million was repayable in May 2011. The term loan from Melco as of December 31, 2009 is bearing interest at3-months HIBOR per annum and at three months HIBOR plus 1.5% per annum only during the period from May 16, 2008 to May 15, 2009. The term loan from Crown as of December 31, 2009 is bearing interest at3-months HIBOR. | |
(2) | Other long-term debt represents US$1.75 billion under the City of Dreams Project Facility. The City of Dreams Project Facility consists of a US$1.5 billion term loan facility and a US$250 million revolving credit facility. The term loan facility matures in September 2014 and is subject to quarterly amortization payments commencing in December 2010. The revolving credit facility matures in September 2012 or, if |
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earlier, the date of repayment, prepayment or cancellation in full of the term loan facility and has no interim amortization payment. On May 17, 2010, MCE Finance issued the Initial Notes with an interest rate of 10.25% per annum and a maturity of May 15, 2018, which are listed on the Official List of the SGX-ST. Additionally, in May 2010, we entered into a fourth amendment agreement to the City of Dreams Project Facility (the “Amendment Agreement”). The Amendment Agreement, among other things, (i) amends the date of the first covenant test date to December 31, 2010; (ii) provides additional flexibility to the financial covenants; (iii) removes the obligation but retains the right to enter into any new interest rate or foreign currency swaps or other hedging arrangements; and (iv) restricts the use of the net proceeds received from the Initial Notes to repayment of certain amounts outstanding under the City of Dreams Project Facility, including prepaying the term loan facility in an amount of US$293.7 million and the revolving credit facility in an amount of US$150.4 million, as well as providing for a permanent reduction of the revolving credit facility of US$100 million. |
(3) | Annual government land use fees payable is approximately MOP 1.4 million (US$171,000) and is adjusted every five years as agreed between the Macau government and Altira Developments Limited in accordance with the applicable market rates from time to time. | |
(4) | In April 2005, the Macau government offered to grant a medium-term lease of 25 years for City of Dreams to Melco Crown (COD) Developments Limited, and Melco Crown (COD) Developments Limited preliminarily accepted the offer on May 10, 2005. In February 2008, Melco Crown (COD) Developments Limited and Melco Crown Gaming accepted the final terms of the land lease agreement, which required us to pay a land premium of approximately MOP 842.1 million (US$105.1 million). We paid MOP 300.0 million (US$37.4 million) of the land premium upon our acceptance of the final terms on February 11, 2008. On August 13, 2008 the Macau government formally granted the land concession to Melco Crown (COD) Developments Limited of which approximately MOP 467.5 million (US$58.3 million) has been paid as of December 31, 2009 and the remaining amount of approximately MOP 374.6 million (US$46.8 million), accrued with 5% interest per annum, will be paid in six biannual installments. In November 2009, Melco Crown (COD) Developments Limited and Melco Crown Gaming accepted in principle the initial terms for the revision of the land lease agreement from the Macau government for the increased developable gross floor area for City of Dreams and recognized additional land premium of approximately MOP 257.4 million (US$32.1 million) payable to the Macau government. In March 2010, Melco Crown (COD) Developments Limited and Melco Crown Gaming accepted the final terms for the revision of the land lease agreement and fully paid the additional land premium to the Macau government. The total outstanding balances of the land use right have been included in accrued expenses and other current liabilities and land use right payable as of December 31, 2009. We have also provided a guarantee deposit of approximately MOP 3.4 million (US$424,000), upon signing of the government lease in February 2008. According to the terms of the revised offer from the Macau government, payment in the form of government land use fees in an aggregate amount of approximately MOP 9.5 million (US$1.2 million) per annum is payable to the Macau government and such amount may be adjusted every five years as agreed between the Macau government and Melco Crown (COD) Developments Limited in accordance with the market rates from time to time. | |
(5) | The amount as of December 31, 2009 mainly represents construction contracts for the design and construction, plant and equipment acquisitions of City of Dreams of approximately US$31.4 million. The balance includes the remaining payment obligations for Altira Macau and Mocha Clubs. |
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• | create a cross-platform sales and marketing department to promote all of our brands to potential customers throughout Asia in accordance with applicable laws; | |
• | utilize special product offers, special events, tournaments and promotions to build and maintain relationships with our guests, in order to increase repeat visits and help fill capacity during lower-demand periods; |
• | refine our own customer loyalty programs to further build a database of repeat customers, which we closely modeled on Crown’s “Crown Club” program; and |
• | implement complimentary incentive programs and commission based programs with selected promoters to attract high-end customers. |
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Gaming | ||||||||
Mocha Club | Opening Date | Location | Area | |||||
(In sq. ft.) | ||||||||
Mocha Altira | December 2008 | Level 1 of Altira Macau | 2,950 | |||||
Mocha Square | October 2007 | 1/F, 2/F and 3/F of Mocha Square | 3,400 | |||||
Marina Plaza | December 2006 | 1/F and 2/F of Marina Plaza | 10,800 | |||||
Hotel Taipa | January 2006 | G/F of Hotel Taipa | 6,000 | |||||
Sintra | November 2005 | G/F and 1/F of Hotel Sintra | 5,000 | |||||
Taipa Square | March 2005 | G/F, 1/F and 2/F of Hotel Taipa Square | 9,200 | |||||
Kingsway | April 2004 | G/F of Kingsway Commercial Centre | 6,700 | |||||
Royal | September 2003 | Lobby and 1/F of Hotel Royal | 8,450 | |||||
Total | 52,500 | |||||||
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December 31, | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Number of | Percentage of | Number of | Percentage of | Number of | Percentage of | |||||||||||||||||||
Employees | Total | Employees | Total | Employees | Total | |||||||||||||||||||
Mocha | 757 | 7.8 | % | 615 | 12.8 | % | 545 | 11.1 | % | |||||||||||||||
Altira Macau | 2,753 | 28.6 | 3,540 | 73.7 | 4,201 | 85.2 | ||||||||||||||||||
City of Dreams | 5,718 | 59.4 | 317 | 6.6 | 83 | 1.7 | ||||||||||||||||||
Corporate and centralized services | 403 | 4.2 | 331 | 6.9 | 99 | 2.0 | ||||||||||||||||||
Total | 9,631 | 100 | % | 4,803 | 100 | % | 4,928 | 100 | % | |||||||||||||||
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• | the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; | |
• | the adequate operation and exploitation of games of fortune and chance; | |
• | the fair and honest operation and exploitation of games of fortune and chance free of criminal influence; | |
• | the protection of Macau’s interest in receiving the taxes resulting from the gaming operation; and | |
• | the development of the tourism industry, social stability and economic development of Macau. |
• | pay that person any dividend or interest upon our shares; | |
• | allow that person to exercise, directly or indirectly, any voting right conferred through shares held by that person; | |
• | pay remuneration in any form to that person for services rendered or otherwise; or | |
• | fail to pursue all lawful efforts to require that unsuitable person to relinquish his or her shares. |
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• | a percentage of the gross revenues received; or | |
• | the number and type of gaming devices operated. |
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• | identify any customer or transaction where there is a sign of money laundering or financing of terrorism or which involves significant sums of money in the context of the transaction, even if any sign of money laundering is absent; | |
• | refuse to deal with any of our customers who fail to provide any information requested by us; | |
• | keep records on the identification of a customer for a period of five years; | |
• | notify the Finance Information Bureau if there is any sign of money laundering or financing of terrorism; and | |
• | cooperate with the Macau government by providing all required information and documentation requested in relation to anti-money laundering activities. |
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• | the operation of gaming without permission or operation of business which does not fall within the business scope of the subconcession; | |
• | abandonment of approved business or suspension of operations of our gaming business in Macau without reasonable grounds for more than seven consecutive days or more than 14 non-consecutive days within one calendar year; | |
• | transfer of all or part of Melco Crown Gaming’s operation in Macau in violation of the relevant laws and administrative regulations governing the operation of games of fortune or chance and other casino games in Macau and without Macau government approval; | |
• | failure to pay taxes, premiums, levies or other amounts payable to the Macau government; | |
• | refusal or failure to resume operations following the temporary assumption of operations by the Macau government; | |
• | repeated opposition to the supervision and inspection by the Macau government and failure to comply with decisions and recommendations of the Macau government, especially those of the DICJ, applicable to us; | |
• | failure to provide or supplement the guarantee deposit or the guarantees specified in the subconcession within the prescribed period; | |
• | bankruptcy or insolvency of Melco Crown Gaming; | |
• | fraudulent activity harming the public interest; | |
• | serious and repeated violation of the applicable rules for carrying out casino games of chance or games of other forms or damage to the fairness of casino games of chance or games of other forms; | |
• | systematic non-compliance with the Macau Gaming Law’s basic obligations; | |
• | the grant to any other person of any managing power over the gaming business of Melco Crown Gaming or the grant of a subconcession or entering into any agreement to the same effect; or | |
• | failure by a controlling shareholder in Melco Crown Gaming to dispose of its interest in Melco Crown Gaming, within 90 days, following notice from the gaming authorities of another jurisdiction in which such controlling shareholder is licensed to operate casino games of chance to the effect that such controlling shareholder no longer wishes to own shares in Melco Crown Gaming. |
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Name | Age | Position/Title | ||||
Lawrence (Yau Lung) Ho | 33 | Co-Chairman and Chief Executive Officer | ||||
James D. Packer | 43 | Co-Chairman | ||||
John Wang | 50 | Director | ||||
Clarence Chung | 47 | Director | ||||
Todd Nisbet | 43 | Director | ||||
Rowen B. Craigie | 55 | Director | ||||
James A. C. MacKenzie | 57 | Independent Director | ||||
Thomas Jefferson Wu | 38 | Independent Director | ||||
Alec Tsui | 61 | Independent Director | ||||
Robert Mactier | 46 | Independent Director | ||||
Leanne Palmer | 36 | Acting Chief Financial Officer | ||||
Geoffrey Davis | 42 | Deputy Chief Financial Officer and Treasurer | ||||
Stephanie Cheung | 48 | Executive Vice President and Chief Legal Officer | ||||
Nigel Dean | 57 | Executive Vice President and Chief Internal Audit Officer | ||||
Akiko Takahashi | 57 | Executive Vice President and Chief Human Resources/Corporate Social Responsibility Officer | ||||
Ted (Ying Tat) Chan | 38 | Co-Chief Operating Officer, Gaming | ||||
Nicholas Naples | 52 | Co-Chief Operating Officer, Operations | ||||
Constance (Ching Hui) Hsu | 37 | President of Mocha Clubs |
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• | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; | |
• | declaring dividends and distributions; | |
• | appointing officers and determining the term of office of officers; | |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and | |
• | approving the transfer of shares of our company, including the registering of such shares in our share register. |
• | the integrity of the financial statements of our company; |
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• | the qualifications and independence of our independent auditors; | |
• | the performance of our independent auditors; | |
• | the integrity of our systems of internal accounting and financial controls; | |
• | legal and regulatory issues relating to the financial statements of our company, including the oversight of the independent auditor, the review of the financial statements and related material, the internal audit process and the procedure for receiving complaints regarding accounting, internal accounting controls, auditing or other related matters; | |
• | the disclosure, in accordance with our relevant policies, of any material information regarding the quality or integrity of our financial statements, which is brought to its attention by our disclosure committee, which we expect to set up and will comprise certain members of our senior management; and | |
• | the integrity and effectiveness of our internal audit function and risk management policies, procedures and practices. |
• | considering a tendering process for the appointment of the independent auditor every five years, selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors; | |
• | at least annually, obtaining a written report from our independent auditor describing matters relating to its independence, undertaking a performance evaluation of the independent auditor on an annual basis and reporting the results of such evaluation to the Chief Executive Officer; | |
• | discussing with our independent auditor, among other things, issues regarding accounting and auditing principles and practices and the management’s internal control report; | |
• | approving related-party transactions, amounting to more than US$256,000 per transaction or series of transactions, or of an unusual or non standard nature which are brought to its attention; | |
• | Establishing and overseeing procedures for the handling of complaints and whistle blowing; | |
• | deciding whether any material information regarding the quality or integrity of the Company’s financial statements, which is brought to its attention by our disclosure committee, should be disclosed; | |
• | approving the internal audit charter and annual audit plans; | |
• | assessing and approving any policies and procedures to identify, accept, mitigate, allocate or otherwise manage various types of risks presented by management, and making recommendations with respect to our risk management process; | |
• | together with our board, evaluating the performance of the audit committee; | |
• | assessing the adequacy of its charter; and | |
• | cooperating with the other board committees in any areas of overlapping responsibilities. |
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• | in consultation with senior management, making recommendations on our general compensation philosophy and overseeing the development and implementation of our compensation programs; | |
• | making recommendation to the board with respect to the compensation packages of our directors and approving the compensation package of our senior executive officers, including the chief executive officer; | |
• | overseeing our regulatory compliance with respect to compensation matters; | |
• | together with the board, evaluating the performance of the compensation committee; | |
• | assessing the adequacy of its charter; and | |
• | cooperating with the other board committees in any areas of overlapping responsibilities. |
• | the identification of qualified candidates to become members and chairs of the board committees and to fill any such vacancies; | |
• | oversight of our compliance with legal and regulatory requirements, in particular the legal and regulatory requirements of the Macau SAR (including the relevant laws related to the gaming industry), of the Cayman Islands, of the SEC and of the Nasdaq; | |
• | the development and recommendation to our board of a set of corporate governance principles applicable to our company; and | |
• | the disclosure, in accordance with our relevant policies, of any material information (other than that regarding the quality or integrity of our financial statements), which is brought to its attention by the disclosure committee. |
• | identifying and recommending to the board nominees for election or re-election to the board committees, or for appointment to fill any such vacancy; | |
• | developing a set of corporate governance principles and reviewing such principles at least annually; | |
• | deciding whether any material information (other than that regarding the quality or integrity of our financial statements), which is brought to its attention by the disclosure committee, should be disclosed; | |
• | together with the board, evaluating the performance of the committee; |
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• | assessing the adequacy of its charter; and | |
• | cooperating with the other board committees in any areas of overlapping responsibilities. |
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• | options to purchase our ordinary shares; and | |
• | restricted shares. |
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Number of | ||||||||
Exercise | Unvested | |||||||
Price/Grant Date | Share Options/ | |||||||
Fair Value per | Restricted | Vesting | ||||||
ADS | Shares | Period | ||||||
Share Options | ||||||||
2007 Long Term Incentive Plan | $14.15 - $15.19 | 335,181 | 4 to 5 years | |||||
2008 Long Term Incentive Plan | $12.04 - $14.08 | 373,101 | 4 years | |||||
2008 Retention Program | $3.04 | 13,002,339 | 3 years | |||||
2009 Cancel and Re-issue Program | $4.28 | 3,612,327 | 4 years | |||||
2009 Long Term Incentive Plan | $3.04 - $3.26 | 4,654,500 | 4 years | |||||
21,977,448 | ||||||||
Restricted Shares | ||||||||
2008 Long Term Incentive Plan | $3.99 - $12.04 | 434,794 | 3 to 4 years | |||||
2008 Retention Program | $3.04 | 2,167,059 | 3 years | |||||
2009 Long Term Incentive Plan | $3.26 | 644,178 | 4 years | |||||
3,246,031 | ||||||||
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Ordinary Shares | ||||||||
and Ordinary Shares | ||||||||
Represented by ADSs | ||||||||
Beneficially Owned(1) | ||||||||
Name | Number | % | ||||||
Melco Leisure and Entertainment Group Limited(2)(3)(4) | 534,538,846 | 33.53 | ||||||
Crown Asia Investments Pty. Ltd.(5) | 534,538,846 | 33.53 |
(1) | Beneficial ownership is determined in accordance withRule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and includes voting or investment power with respect to the securities. Melco and Crown continue to have a shareholders’ agreement relating to certain aspects of the voting and disposition of our ordinary shares held by them, and may accordingly constitute a “group” within the meaning ofRule 13d-3. However, Melco and Crown each disclaim beneficial ownership of the shares of our company owned by the other. | |
(2) | Melco Leisure and Entertainment Group Limited is incorporated in the British Virgin Islands and is a wholly owned subsidiary of Melco. The address of Melco and Melco Leisure and Entertainment Group Limited isc/o The Penthouse, 38th Floor, The Centrium, 60 Wyndham Street, Central, Hong Kong. Melco is listed on the Main Board of the Hong Kong Stock Exchange. |
(3) | Mr. Lawrence Ho, our Co-Chairman and Chief Executive Officer and the Chairman, Chief Executive Officer and Executive Director of Melco, personally holds 8,087,112 ordinary shares of Melco, representing approximately 0.66% of Melco’s ordinary shares outstanding as of November 4, 2010. In addition, 115,509,024 shares are held by Lasting Legend Ltd., 288,532,606 shares are held by Better Joy Overseas Ltd. and 7,294,000 shares are held by The L3G Capital Trust, all of which companies are owned by persons and or trusts affiliated with Mr. Lawrence Ho. Therefore, we believe that for purposes ofRule 13d-3, Mr. Ho beneficially owns 419,422,742 ordinary shares of Melco, representing approximately 34.08% of Melco’s ordinary shares outstanding as of November 4, 2010. This does not include 298,982,188 shares which may be issued by Melco to Great Respect Limited as a result of any future conversion of conversion rights in full by Great Respect Limited under the amended convertible loan notes held by Great Respect Limited, a company controlled by a discretionary trust formed for the benefit of members of the Ho family (including Mr. Ho and Dr. Ho), upon the issuance of the land certificate for the City of Dreams site. |
(4) | As of November 4, 2010, Dr. Stanley Ho personally held 18,587,789 ordinary shares of Melco. In addition, 3,127,107 shares of Melco are held by Lanceford Company Limited, a company 100% owned by Dr. Stanley Ho. Therefore, for purposes ofRule 13d-3, Dr. Ho may be deemed to beneficially own 21,714,896 ordinary shares representing approximately 1.76% of Melco’s outstanding shares. Dr. Ho’s beneficial ownership does not include 298,982,188 shares which may be issued by Melco to Great Respect Limited as a result of any future conversion of conversion rights in full by Great Respect Limited under the amended convertible loan notes held by Great Respect Limited upon the issuance of the land certificate for the City of Dreams site. |
(5) | Crown Asia Investments Pty. Ltd., formerly PBL Asia Investments Limited, was incorporated in the Cayman Islands but is now a registered Australian company and is 100% indirectly owned by Crown. The address of Crown and Crown Asia Investments Pty. Ltd. is Level 3, Crown Towers, 8 Whiteman Street, Southbank, Victoria 3006, Australia. Crown is listed on the Australian Stock Exchange. As of November 5, 2010, Crown was approximately 43.0% owned by Consolidated Press Holdings Group, which is a group of companies owned by the Packer family. |
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Six Months | ||||||||||||||||
Ended | ||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||
2009 | 2008 | 2007 | 2010 | |||||||||||||
(In thousands of US$) | ||||||||||||||||
Amounts paid/payable to affiliated companies | ||||||||||||||||
Advertising and promotional expenses | $ | 211 | $ | 597 | $ | 65 | $ | 39 | ||||||||
Consultancy fee capitalized in construction in progress | 1,312 | 246 | 2,294 | — | ||||||||||||
Consultancy fee recognized as expense | 1,301 | 1,168 | 4,150 | 265 | ||||||||||||
Management fees | 45 | 1,698 | — | 9 | ||||||||||||
Network support fee | 28 | 52 | 238 | — | ||||||||||||
Office rental | 2,354 | 1,466 | 1,114 | 1,127 | ||||||||||||
Operating and office supplies | 257 | 255 | 707 | 114 | ||||||||||||
Project management fees capitalized in construction in progress | — | — | 1,442 | — | ||||||||||||
Property and equipment | 59,482 | 16,327 | 12,141 | 1,206 | ||||||||||||
Repairs and maintenance | 87 | 655 | 41 | 237 | ||||||||||||
Service fee expense | 748 | 781 | — | 248 | ||||||||||||
Traveling expense capitalized in construction in progress | 65 | 66 | — | 3 | ||||||||||||
Traveling expense recognized as expense | 2,809 | 1,387 | 746 | 1,887 | ||||||||||||
Amounts received/receivable from affiliated companies | ||||||||||||||||
Other service fee income | 896 | 276 | — | 97 | ||||||||||||
Rooms and food and beverage income | 23 | 100 | 41 | 15 | ||||||||||||
Sales proceeds for disposal of property and equipment | — | 2,788 | — | — | ||||||||||||
Amounts paid/payable to shareholders | ||||||||||||||||
Interest charges capitalized in construction in progress | 963 | 3,367 | 4,167 | — | ||||||||||||
Interest charges recognized as expense | 215 | — | 758 | 88 | ||||||||||||
Amounts received/receivable from a shareholder | ||||||||||||||||
Other service fee income | — | — | — | 25 | ||||||||||||
Rooms and food and beverage income | — | — | — | 26 |
(a) | Amounts Due From Affiliated Companies |
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(b) | Amounts Due To Affiliated Companies |
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(c) | Amounts Due From (To) Shareholders/Loans From Shareholders |
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• | cashflow generated from the operations of our existing businesses; | |
• | borrowings under the US$1.75 billion City of Dreams Project Facility; and | |
• | a portion of the net proceeds from our initial offering and our follow-on offering in December 2006 and November 2007, respectively. |
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• | a first priority mortgage over all land and all present and future buildings on and fixtures to such land, and an assignment of land use rights under land concession agreements or equivalent held by the relevant entities in the Borrowing Group; | |
• | the letters of credit described above in “— Description of Other Material Indebtedness — City of Dreams Project Facility — Melco and Crown Support”; | |
• | charges over the bank accounts in respect of the Borrowing Group; | |
• | assignment of the Borrowing Group’s rights under certain insurance policies and other contracts; | |
• | first priority security over the Borrowing Group’s chattels, receivables and other assets which are not subject to any security under any other security documentation; | |
• | subordination and assignment of shareholder and other intra-group loans; | |
• | pledges over certain intellectual property used by the group and pledge over equipment and tools used in the gaming business by Melco Crown Gaming; and | |
• | first priority charges over the issued share capital of the Borrowing Group. |
• | create or permit to subsist further charge or any form of encumbrance over its assets, property or revenues except as permitted under the City of Dreams Project Facility; | |
• | sell, transfer or dispose of any of its assets unless (subject to certain exceptions) such sale is conducted on an arm’s length basis at a fair market value permitted in accordance with the terms of the City of Dreams Project Facility and the proceeds from the sale shall be credited to the relevant accounts over which the lenders have a first priority charge on; | |
• | make any payment of fees under any agreement with Melco or Crown (or their affiliates) other than fees approved by the Majority Lenders or, after a certain date, in accordance with the waterfall, or enter into agreements with Melco or Crown (or their affiliates) except in certain limited circumstances; | |
• | make any loan or incur or guarantee indebtedness except for certain identified indebtedness and guarantees permitted (which include the Guarantees provided by the Subsidiary Group Guarantors); | |
• | subject to certain exceptions, enter into or vary contracts (excluding the Intercompany Note or the Guarantees); | |
• | create any subsidiaries except as permitted under the City of Dreams Project Facility, such as those necessary for completion and operation of City of Dreams; or | |
• | make investments other than within agreed upon limitations. |
• | Consolidated Leverage Ratio, as defined in the City of Dreams Project Facility, which cannot exceed 4.50 to 1 for the reporting periods ending December 31, 2010, March 31, 2011 and June 30, 2011, cannot exceed 4.00 to 1 for the reporting periods ending September 30, 2011, December 31, 2011 and March 31, 2012, and cannot exceed 3.75 to 1 for the reporting periods ending June 30, 2012 onwards; |
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• | Consolidated Interest Cover Ratio, as defined in the City of Dreams Project Facility, which must be greater than or equal to 2.50 to 1 for the reporting periods ending December 31, 2010 and March 31, 2011, and must be greater than or equal to 3.00 to 1 for the reporting periods ending June 30, 2011 onwards; and | |
• | Consolidated Cash Cover Ratio, as defined in the City of Dreams Project Facility, which must be greater than or equal to 1.05 to 1 for the reporting periods ending December 31, 2010 onwards. |
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• | will be general obligations of MCE Finance; | |
• | will be secured by a first priority pledge of the Intercompany Note; | |
• | will bepari passuin right of payment to all existing and future senior Indebtedness of MCE Finance; | |
• | will be senior in right of payment to any existing and future subordinated Indebtedness of MCE Finance; and | |
• | will be unconditionally guaranteed by the Guarantors. |
• | will be a general obligation of Parent; | |
• | will bepari passuin right of payment with all existing and future senior Indebtedness of Parent; and | |
• | will be senior in right of payment to any existing and future subordinated Indebtedness of Parent. |
• | will be a general obligation of such Subsidiary Guarantor; | |
• | will bepari passuin right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor; and |
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• | will be senior in right of payment to any existing and future subordinated Indebtedness of such Subsidiary Guarantor. |
• | will be a general obligation of such Subsidiary Guarantor; | |
• | will be subordinated in right of payment to such Subsidiary Guarantor’s obligations under the Designated Senior Indebtedness Documents as described below; | |
• | will bepari passuin right of payment with all other existing and future senior Indebtedness of such Subsidiary Guarantor; and | |
• | will be senior in right of payment to any existing and future subordinated Indebtedness of such Subsidiary Guarantor. |
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(1) | for or on account of: |
(a) | any Taxes that would not have been imposed but for: |
(i) | the existence of any present or former connection between the holder or beneficial owner of such Note or Note Guarantee, as the case may be, and the Relevant Jurisdiction, including without limitation, such holder or beneficial owner being or having been a citizen or resident of such Relevant Jurisdiction, being or having been treated as a resident of such Relevant Jurisdiction, being or having been present or engaged in a trade or business in such Relevant Jurisdiction or having or having had a permanent establishment in such Relevant Jurisdiction, other than merely holding such Note or the receipt of payments thereunder or under the Note Guarantee; | |
(ii) | the presentation of such Note (where presentation is required) more than 30 days after the later of the date on which the payment of the principal of, premium (if any) or interest on, such Note became due and payable pursuant to the terms thereof or was made or duly provided for, except to the extent that the holder thereof would have been entitled to such Additional Amounts if it had presented such Note for payment on any date within such30-day period; | |
(iii) | the failure of the holder or beneficial owner of such Note or Note Guarantee to comply with a timely request of MCE Finance or any Guarantor addressed to such holder or beneficial owner to provide information concerning such holder’s or beneficial owner’s nationality, residence, identity or connection with the Relevant Jurisdiction; or | |
(iv) | the presentation of such Note (where presentation is required) for payment in the Relevant Jurisdiction, unless such Note could not have been presented for payment elsewhere; |
(b) | any estate, inheritance, gift, sale, transfer, excise, personal property, net income or similar Tax; | |
(c) | any withholding or deduction where such withholding or deduction is imposed or levied on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC (or any amendment thereof) or any other Directive (or any amendment thereof) implementing the conclusions of the ECOFIN Council meeting of November26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directives or amendments; | |
(d) | any Taxes that are payable other than by withholding or deduction from payments of principal of, or premium (if any) or interest on the Note or payments under the Note Guarantees; or | |
(e) | any combination of Taxes referred to in the preceding clauses (a), (b), (c) and (d); or |
(2) | with respect to any payment of the principal of, or premium (if any) or interest on, such Note or any payment under such Note Guarantee to or for the account of a fiduciary, partnership or other fiscally transparent entity or any other person (other than the sole beneficial owner of such payment) to the extent that a beneficiary or settlor with respect to that fiduciary, or a partner or member of that partnership or fiscally transparent entity or a beneficial owner with respect to such other person, as the case may be, who would not have been entitled to such Additional Amounts had such beneficiary, settlor, partner, member or beneficial owner held directly the Note with respect to which such payment was made. |
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(1) | in a liquidation or dissolution of such Subsidiary Group Guarantor; |
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(2) | in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to such Subsidiary Group Guarantor or its property; | |
(3) | in an assignment for the benefit of creditors of such Subsidiary Group Guarantor; or | |
(4) | in any marshaling of such Subsidiary Group Guarantor’s assets and liabilities (or an equivalent action under the applicable governing law). |
(1) | the payment is prohibited by these subordination provisions; and | |
(2) | the Trustee or the holder receives written notice that the payment is prohibited, |
(1) | in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) MCE Finance or a Restricted Subsidiary of MCE Finance, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture; | |
(2) | in connection with any sale or other disposition of all of the Capital Stock of that Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) MCE Finance or a Restricted Subsidiary of MCE Finance, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture; | |
(3) | if MCE Finance designates any Restricted Subsidiary that is a Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture; or | |
(4) | upon legal defeasance or satisfaction and discharge of the Indenture as provided below under the captions “— Legal Defeasance and Covenant Defeasance” and “— Satisfaction and Discharge.” |
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(1) | all rights of MCE Finance to exercise such rights will cease, and all such rights will become vested in the collateral agent, which, to the extent permitted by law, will have the sole right to exercise such rights; and | |
(2) | all rights of MCE Finance to receive payments made upon or with respect to the Intercompany Note will cease and such payments will be paid to the collateral agent. |
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(1) | upon the full and final payment and performance of all Obligations of MCE Finance under the Indenture and the Notes; and | |
(2) | upon legal defeasance or satisfaction and discharge of the Notes as provided below under the captions “— Legal Defeasance and Covenant Defeasance” and “— Satisfaction and Discharge.” |
(1) | at least 65% of the aggregate principal amount of Notes originally issued under the Indenture (excluding Notes held by MCE Finance and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and | |
(2) | the redemption occurs within 45 days of the date of the closing of such Equity Offering. |
Year | Percentage | |||
2014 | 105.125 | % | ||
2015 | 102.563 | % | ||
2016 and thereafter | 100.000 | % |
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(1) | to require such Person to dispose of its Notes or beneficial interest therein within 30 days of receipt of notice of MCE Finance’s election or such earlier date as may be requested or prescribed by such gaming authority; or | |
(2) | to redeem such Notes, which redemption may be less than 30 days following the notice of redemption if so requested or prescribed by the applicable gaming authority, at a redemption price equal to: |
(a) | the lesser of: |
(1) | the person’s cost, plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the earlier of the redemption date or the date of the finding of unsuitability or failure to comply; and | |
(2) | 100% of the principal amount thereof, plus accrued and unpaid interest, Additional Amounts and Liquidated Damages, if any, to the earlier of the redemption date or the date of the finding of unsuitability or failure to comply; or |
(b) | such other amount as may be required by applicable law or order of the applicable gaming authority. |
(1) | any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of a Relevant Jurisdiction affecting taxation; or | |
(2) | any change in, or amendment to, an official position regarding the application or interpretation of such laws, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction), |
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(1) | an Officers’ Certificate stating that such change or amendment referred to in the prior paragraph has occurred, and describing the facts related thereto and stating that such requirement cannot be avoided by MCE Finance or a Guarantor, as the case may be, taking reasonable measures available to it; and | |
(2) | an Opinion of Counsel or an opinion of a tax consultant of recognized international standing stating that the requirement to pay such Additional Amounts results from such change or amendment referred to in the prior paragraph. |
(1) | accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; | |
(2) | deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and | |
(3) | deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by MCE Finance. |
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(1) | MCE Finance (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and | |
(2) | at least 75% of the consideration received in the Asset Sale by MCE Finance or such Restricted Subsidiary is in the form of cash. For purposes of this provision, each of the following will be deemed to be cash: |
(a) | any liabilities, as shown on MCE Finance’s most recent consolidated balance sheet, of MCE Finance or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases MCE Finance or such Restricted Subsidiary from further liability; | |
(b) | any securities, notes or other obligations received by MCE Finance or any such Restricted Subsidiary from such transferee that are contemporaneously, subject to ordinary settlement periods, converted by MCE Finance or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion; and | |
(c) | any stock or assets of the kind referred to in clauses (2) or (4) of the next paragraph of this covenant. |
(1) | to repay (a) Indebtedness incurred under clause (1) of the second paragraph of the covenant set forth under the heading “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” (b) other Indebtedness of MCE Finance or a Subsidiary Guarantor secured by the asset that is the subject of such Asset Sale or (c) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, and in each case if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; | |
(2) | to acquire all or substantially all of the assets of, or any Capital Stock of, a Person undertaking another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of MCE Finance (providedthat (a) such acquisition funded with any |
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proceeds from an Event of Loss occurs within the date that is 545 days after receipt of the Net Proceeds from the relevant Event of Loss to the extent that a binding agreement to acquire such assets or Capital Stock is entered into on or prior to the date that is 360 days after receipt of the Net Proceeds from the relevant Event of Loss, and (b) if such acquisition is not consummated within the period set forth in clause (a), the Net Proceeds not so applied will be deemed to be Excess Proceeds); |
(3) | to make a capital expenditure (providedthat (a) such capital expenditure funded with any proceeds from an Event of Loss occurs within the date that is 545 days after receipt of the Net Proceeds from the relevant Event of Loss to the extent that filings with the relevant Macau authorities have been made within 360 days of such Event of Loss, and (b) if such capital expenditure is not commenced in the time period set forth in clause (a), the Net Proceeds not so applied will be deemed to be Excess Proceeds); or | |
(4) | to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business (providedthat (a) such acquisition funded from an Event of Loss occurs within the date that is 545 days after receipt of the Net Proceeds from the relevant Event of Loss to the extent that a binding agreement to acquire such assets is entered into on or prior to the date that is 360 days after receipt of the Net Proceeds from the relevant Event of Loss, and (b) if such acquisition is not consummated within the period set forth in clause (a), the Net Proceeds not so applied will be deemed to be Excess Proceeds). |
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(1) | declare or pay any dividend or make any other payment or distribution on account of MCE Finance’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving MCE Finance or any of its Restricted Subsidiaries) or to the direct or indirect holders of MCE Finance’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of MCE Finance and other than dividends or distributions payable to MCE Finance or a Restricted Subsidiary of MCE Finance); | |
(2) | purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving MCE Finance) any Equity Interests of MCE Finance or any direct or indirect parent of MCE Finance; | |
(3) | make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of MCE Finance or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among MCE Financeand/or any of its Restricted Subsidiaries), except a payment of interest or principal at the Stated Maturity thereof; or | |
(4) | make any Restricted Investment |
(1) | no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; | |
(2) | MCE Finance would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” and |
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(3) | such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by MCE Finance and its Restricted Subsidiaries since the date of the Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of: |
(a) | 75% of the Consolidated Cash Flow of MCE Financeless2.25 times Fixed Charges for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the Indenture to the end of MCE Finance’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Cash Flow for such period is a deficit, less 100% of such deficit);plus | |
(b) | 100% of the aggregate net cash proceeds received by MCE Finance since the date of the Indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of MCE Finance (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of MCE Finance that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of MCE Finance);plus | |
(c) | to the extent that any Restricted Investment that was made after the date of the Indenture is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment;plus | |
(d) | to the extent that any Unrestricted Subsidiary of MCE Finance designated as such after the date of the Indenture is redesignated as a Restricted Subsidiary after the date of the Indenture, the lesser of (i) the Fair Market Value of MCE Finance’s Investment in such Subsidiary as of the date of such redesignation or (ii) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of the Indenture;plus | |
(e) | 50% of any dividends received by MCE Finance or a wholly-owned Restricted Subsidiary of MCE Finance that is a Guarantor after the date of the Indenture from an Unrestricted Subsidiary of MCE Finance, to the extent that such dividends were not otherwise included in the Consolidated Cash Flow of MCE Finance for such period. |
(1) | the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of the Indenture; | |
(2) | the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of MCE Finance) of, Equity Interests of MCE Finance (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to MCE Finance;providedthat the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from clause (3)(b) of the preceding paragraph; | |
(3) | the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of MCE Finance or any Guarantor that is contractually subordinated to the Notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness; | |
(4) | the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of MCE Finance to the holders of its Equity Interests on apro ratabasis; |
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(5) | the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of MCE Finance or any Restricted Subsidiary of MCE Finance held by any current or former officer, director or employee of MCE Finance or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed US$1.0 million in any twelve-month period; | |
(6) | the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; | |
(7) | the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of MCE Finance or any Restricted Subsidiary of MCE Finance issued on or after the date of the Indenture in accordance with the Fixed Charge Coverage Ratio test described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” | |
(8) | any Restricted Payment made from net revenues or receipts derived from Excluded Projects; and | |
(9) | any other Restricted Payments in an aggregate amount, when taken together with all other Restricted Payments made pursuant to this clause (9), not to exceed US$15.0 million. |
(1) | the incurrence by MCE Finance and any Subsidiary Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of MCE Finance and its Restricted Subsidiaries thereunder) not to exceed US$1,400.0 millionlessthe aggregate amount of all Net Proceeds of Asset Sales applied by MCE Finance or any of its Restricted Subsidiaries since the date of the Indenture to repay any term Indebtedness incurred pursuant to this clause (1) or to repay any revolving credit indebtedness incurred under this clause (1) and effect a corresponding commitment reduction thereunder pursuant to the covenant described above under the caption “— Repurchase at the Options of Holders — Asset Sales;”notwithstanding the foregoing, for the period from the date of the Indenture to the date that is six Hong Kong business days after the date of the |
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Indenture, the aggregate principal amount outstanding under Credit Facilities under this clause (1) did not exceed US$1,700.0 million; |
(2) | the incurrence by MCE Finance and its Restricted Subsidiaries of Existing Indebtedness; | |
(3) | the incurrence by MCE Finance and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees issued on the date of the Indenture and the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement; | |
(4) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of MCE Finance or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed US$25.0 million at any time outstanding; | |
(5) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (12) of this paragraph; | |
(6) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of intercompany Indebtedness between or among MCE Financeand/or any of its Restricted Subsidiaries;provided, however, that: |
(a) | if MCE Finance or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not MCE Finance or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of MCE Finance, or the Note Guarantee, in the case of a Subsidiary Guarantor; and | |
(b) | (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than MCE Finance or a Restricted Subsidiary of MCE Finance and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either MCE Finance or a Restricted Subsidiary of MCE Finance, will be deemed, in each case, to constitute an incurrence of such Indebtedness by MCE Finance or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); |
(7) | the issuance by any of MCE Finance’s Restricted Subsidiaries to MCE Finance or to any of its Restricted Subsidiaries of shares of preferred stock;provided,however, that: |
(a) | any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than MCE Finance or a Restricted Subsidiary of MCE Finance; and | |
(b) | any sale or other transfer of any such preferred stock to a Person that is not either MCE Finance or a Restricted Subsidiary of MCE Finance, |
(8) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes; | |
(9) | the guarantee by MCE Finance or any of the Subsidiary Guarantors of Indebtedness of MCE Finance or a Restricted Subsidiary of MCE Finance that was permitted to be incurred by another provision of this covenant;providedthat if the Indebtedness being guaranteed is subordinated to orpari passuwith the Notes, then the guarantee shall be subordinated orpari passu, as applicable, to the same extent as the Indebtedness guaranteed; |
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(10) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business; | |
(11) | the incurrence by MCE Finance or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days; and | |
(12) | the incurrence by MCE Finance or the Subsidiary Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), not to exceed US$50.0 million. |
(1) | the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; | |
(2) | the principal amount of the Indebtedness, in the case of any other Indebtedness; and | |
(3) | in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: |
(a) | the Fair Market Value of such assets at the date of determination; and | |
(b) | the amount of the Indebtedness of the other Person. |
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(1) | pay dividends or make any other distributions on its Capital Stock to MCE Finance or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to MCE Finance or any of its Restricted Subsidiaries; | |
(2) | make loans or advances to MCE Finance or any of its Restricted Subsidiaries; or | |
(3) | sell, lease or transfer any of its properties or assets to MCE Finance or any of its Restricted Subsidiaries. |
(1) | agreements governing Existing Indebtedness and Credit Facilities as in effect on the date of the Indenture and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements;providedthat the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of the Indenture; | |
(2) | the Indenture, the Initial Notes, the Exchange Notes, the Note Guarantees, the Subordination Agreement and the Pledge of Intercompany Note; | |
(3) | applicable law, rule, regulation or order; | |
(4) | any instrument governing Indebtedness or Capital Stock of a Person acquired by MCE Finance or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;providedthat, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred; | |
(5) | customary non-assignment provisions in contracts and licenses entered into in the ordinary course of business; | |
(6) | purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of the preceding paragraph; | |
(7) | any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition; | |
(8) | Permitted Refinancing Indebtedness;providedthat the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; |
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(9) | Liens permitted to be incurred under the provisions of the covenant described above under the caption “— Liens” that limit the right of the debtor to dispose of the assets subject to such Liens; | |
(10) | provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into with the approval of MCE Finance’s Board of Directors, which limitation is applicable only to the assets that are the subject of such agreements; and | |
(11) | restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. |
(1) | either: (a) MCE Finance is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than MCE Finance) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the Cayman Islands, the European Union, Singapore, the United States, any state of the United States or the District of Columbia; | |
(2) | the Person formed by or surviving any such consolidation or merger (if other than MCE Finance) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of MCE Finance under the Notes, the Indenture, the Registration Rights Agreement, the Subordination Agreement, and the Pledge of Intercompany Note pursuant to agreements reasonably satisfactory to the Trustee; | |
(3) | immediately after such transaction, no Default or Event of Default exists; and | |
(4) | MCE Finance or the Person formed by or surviving any such consolidation or merger (if other than MCE Finance), or to which such sale, assignment, transfer, conveyance or other disposition has been made, would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock.” |
(1) | either: (a) Parent is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than Parent) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the Cayman Islands, the European Union, Singapore, the United States, any state of the United States or the District of Columbia; | |
(2) | the Person formed by or surviving any such consolidation or merger (if other than Parent) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of Parent under the Notes, the Indenture, Note Guarantees, the Registration Rights Agreement and the Subordination Agreement pursuant to agreements reasonably satisfactory to the Trustee; and | |
(3) | immediately after such transaction, no Default or Event of Default exists. |
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(1) | either: (a) such Subsidiary Guarantor is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the Cayman Islands, Hong Kong, Macau, Singapore, the United States, any state of the United States or the District of Columbia; | |
(2) | the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of such Subsidiary Guarantor under the Notes, the Indenture, the Note Guarantees, the Registration Rights Agreement, the Subordination Agreement and the Pledge of Intercompany Note pursuant to agreements reasonably satisfactory to the Trustee; | |
(3) | immediately after such transaction, no Default or Event of Default exists; and | |
(4) | with respect to the consolidation, or merger of, or the sale, assignment, transfer, conveyance or other disposition of all or substantially all of the properties or assets of a Subsidiary Guarantor that is a Significant Subsidiary, MCE Finance would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” |
(1) | a merger of MCE Finance or a Guarantor, as the case may be, with an Affiliate solely for the purpose of reincorporating or reorganizing MCE Finance or a Guarantor, as the case may be, in another jurisdiction,providedsuch jurisdiction is a jurisdiction listed in clause (1) of the preceding paragraph; or | |
(2) | any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among MCE Finance and the Guarantors or between or among Guarantors. |
(1) | the Affiliate Transaction is on terms that are no less favorable to MCE Finance or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by MCE Finance or such Restricted Subsidiary with an unrelated Person; and | |
(2) | MCE Finance delivers to the Trustee: |
(a) | with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$30.0 million, a resolution of the Board of Directors of MCE Finance set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of MCE Finance; and |
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(b) | with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$45.0 million, an opinion as to the fairness to MCE Finance or such Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. |
(1) | any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by MCE Finance or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto; | |
(2) | transactions between or among MCE Financeand/or its Restricted Subsidiaries; | |
(3) | transactions with a Person (other than an Unrestricted Subsidiary of MCE Finance) that is an Affiliate of MCE Finance solely because MCE Finance owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person; | |
(4) | payment of reasonable directors’ fees to Persons who are not otherwise Affiliates of MCE Finance; | |
(5) | any issuance of Equity Interests (other than Disqualified Stock) of MCE Finance to Affiliates of MCE Finance; | |
(6) | Restricted Payments that do not violate the provisions of the Indenture described above under the caption “— Restricted Payments;” | |
(7) | the grant of a lease of, the right to use or equivalent interest under Macau law of that portion of real property granted to Melco Crown (COD) Developments Limited pursuant to the applicable land concession granted by the government of the Macau SAR in connection with the development of an apart-hotel on such real property in accordance with such applicable land concession to an Affiliate; | |
(8) | transactions or arrangements pursuant to any services agreements in effect as of the date of the Indenture as disclosed in the prospectus; and | |
(9) | loans or advances to employees in the ordinary course of business not to exceed US$1.0 million in the aggregate at any one time outstanding. |
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(1) | add any additional creditors (other than a Sponsor, the Parent, MCE Finance, any Guarantors or any Finance Party (as defined in the Senior Credit Agreement)); or | |
(2) | amend the subordination provisions of any Shareholders Subordinated Loan or the 2007 Subordination Deed or any equivalent article of any future subordination deed governing any Credit Agreement Subordinated Indebtedness in a manner that adversely affects the ranking of Notes or the Note Guarantees. |
(1) | within 120 days after the end of each fiscal year, copies of its financial statements (on a consolidated basis) in respect of such financial year (including a statement of income, balance sheet and cash flow |
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statement) audited by a member firm of an internationally-recognized firm of independent accountants; and |
(2) | within 60 days after the end of each of the first three fiscal quarters of each fiscal year, copies of its unaudited financial statements (on a consolidated basis) in respect of such quarterly period (including a statement of income, balance sheet and cash flow statement). |
(1) | default for 30 days in the payment when due of interest on, Additional Amounts or Liquidated Damages, if any, with respect to, the Notes, whether or not prohibited by the subordination provisions of the Indenture; | |
(2) | default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes, whether or not prohibited by the subordination provisions of the Indenture; | |
(3) | failure by MCE Finance or any of its Restricted Subsidiaries to comply with its obligations under the provisions described under the captions “— Repurchase at the Option of Holders — Change of Control,” “— Repurchase at the Option of Holders — Asset Sales,” “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock” or “— Certain Covenants — Merger, Consolidation or Sale of Assets;” | |
(4) | failure by MCE Finance or any of its Restricted Subsidiaries for 60 days after notice to MCE Finance by the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class to comply with any of the other agreements in the Indenture, the Note Guarantees, the Intercompany Note, the Pledge of Intercompany Note or the Subordination Agreement; | |
(5) | default under any mortgage, indenture or instrument (other than the Designated Senior Indebtedness Documents) under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by MCE Finance or any of its Restricted Subsidiaries (or the payment of which is guaranteed by MCE Finance or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of the Indenture, if that default: |
(a) | is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or | |
(b) | results in the acceleration of such Indebtedness prior to its express maturity, |
(6) | default under the Designated Senior Indebtedness Documents that results in the acceleration thereof prior to the final maturity thereof; |
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(7) | any direct or indirect parent of Melco Crown Gaming becomes an obligor under any Designated Senior Indebtedness (other than any such parent that was an obligor under any Designated Senior Indebtedness on the date of the Indenture or that was required to become an obligor under the Designated Senior Indebtedness, as such Indebtedness was in effect on the date of the Indenture); | |
(8) | failure by MCE Finance or any of its Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of US$10.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; | |
(9) | breach by MCE Finance of any representation or warranty or agreement in the Pledge of Intercompany Note, the repudiation by MCE Finance of any of its obligations under the Pledge of Intercompany Note or the unenforceability of the Pledge of Intercompany Note against MCE Finance for any reason; | |
(10) | except as permitted by the Indenture or the Note Guarantee, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee; | |
(11) | certain events of bankruptcy or insolvency described in the Indenture with respect to MCE Finance or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; and | |
(12) | revocation, termination, temporary administrative intervention or other cessation of effectiveness of any Gaming License. |
(1) | such holder has previously given the Trustee notice that an Event of Default is continuing; | |
(2) | holders of at least 25% in aggregate principal amount of the then outstanding Notes have requested the Trustee to pursue the remedy; | |
(3) | such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense; | |
(4) | the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and |
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(5) | holders of a majority in aggregate principal amount of the then outstanding Notes have not given the Trustee a direction inconsistent with such request within such60-day period. |
(1) | the rights of holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, Additional Amounts and Liquidated Damages, if any, on, such Notes when such payments are due from the trust referred to below; | |
(2) | MCE Finance’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | |
(3) | the rights, powers, trusts, duties and immunities of the Trustee, and MCE Finance’s and the Guarantors’ obligations in connection therewith; and | |
(4) | the Legal Defeasance and Covenant Defeasance provisions of the Indenture. |
(1) | MCE Finance must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars, non-callable U.S. Government securities, or a combination of cash in U.S. dollars and non-callable U.S. Government securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to |
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pay the principal of, or interest and premium, Additional Amounts and Liquidated Damages, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and MCE Finance must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date; |
(2) | in the case of Legal Defeasance, MCE Finance must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (a) MCE Finance has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; | |
(3) | in the case of Covenant Defeasance, MCE Finance must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; | |
(4) | no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which MCE Finance or any Guarantor is a party or by which MCE Finance or any Guarantor is bound; | |
(5) | such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which MCE Finance or any of its Subsidiaries is a party or by which MCE Finance or any of its Subsidiaries is bound; | |
(6) | MCE Finance must deliver to the Trustee an officers’ certificate stating that the deposit was not made by MCE Finance with the intent of preferring the holders of Notes over the other creditors of MCE Finance with the intent of defeating, hindering, delaying or defrauding any creditors of MCE Finance or others; and | |
(7) | MCE Finance must deliver to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. |
(1) | reduce the principal amount of Notes whose holders must consent to an amendment, supplement or waiver; |
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(2) | reduce the principal of or change the fixed maturity of any Note or alter or waive any provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described above under the caption “— Repurchase at the Option of Holders”); | |
(3) | reduce the rate of or change the time for payment of interest, including default interest, on any Note; | |
(4) | waive a Default or Event of Default in the payment of principal of, or interest or premium, Additional Amounts or Liquidated Damages, if any, on, the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); | |
(5) | make any Note payable in money other than that stated in the Notes; | |
(6) | make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, or interest or premium, Additional Amounts or Liquidated Damages, if any, on, the Notes; | |
(7) | waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”); | |
(8) | make any change in the subordination provisions of the Note Guarantee in a manner adverse to the holders of Notes or to the Subordination Agreement in a manner that adversely affects the ranking of the Notes or the Note Guarantees; | |
(9) | release any Guarantor from any of its obligations under its Note Guarantee or the Indenture, or release MCE Finance or any relevant Guarantor from its obligations under the Pledge of Intercompany Note or the Subordination Agreement, except in accordance with the terms of the Indenture and the Note Guarantee; or | |
(10) | make any change in the preceding amendment and waiver provisions. |
(1) | to cure any ambiguity, defect or inconsistency; | |
(2) | to provide for uncertificated Notes in addition to or in place of certificated Notes; | |
(3) | to provide for the assumption of MCE Finance’s or a Guarantor’s obligations to holders of Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of MCE Finance’s or such Guarantor’s assets, as applicable; | |
(4) | to make any change that would provide any additional rights or benefits to the holders of Notes or that does not adversely affect the legal rights under the Indenture of any such holder; | |
(5) | to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; | |
(6) | to conform the text of the Indenture, the Note Guarantees, the Subordination Agreement, the Intercompany Note, the Pledge of Intercompany Note or the Notes to any provision of this Description of Exchange Notes to the extent that such provision in this Description of Exchange Notes was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees, the Subordination Agreement, the Intercompany Note, the Pledge of Intercompany Note or the Notes; | |
(7) | to provide for the issuance of additional Notes in accordance with the limitations set forth in the Indenture as of the date of the Indenture; or | |
(8) | to allow any Guarantor to execute a supplemental Indentureand/or a Note Guarantee with respect to the Notes. |
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(1) | either: |
(a) | all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to MCE Finance, have been delivered to the Trustee for cancellation; or | |
(b) | all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and MCE Finance or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable U.S. Government securities, or a combination of cash in U.S. dollars and non-callable U.S. Government securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; |
(2) | no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which MCE Finance or any Guarantor is a party or by which MCE Finance or any Guarantor is bound; | |
(3) | MCE Finance or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and | |
(4) | MCE Finance has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be. |
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(1) | upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the initial purchasers with portions of the principal amount of the Global Notes; and | |
(2) | ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes). |
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(1) | any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or | |
(2) | any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. |
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(1) | DTC (a) notifies MCE Finance that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, MCE Finance fails to appoint a successor depositary; | |
(2) | MCE Finance, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or | |
(3) | there has occurred and is continuing a Default or Event of Default with respect to the Notes. |
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(1) | MCE Finance and the Guarantors are not: |
(a) | required to file the Exchange Offer Registration Statement; or | |
(b) | permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or SEC policy; or |
(2) | any holder of Transfer Restricted Securities notifies MCE Finance prior to the 20th business day following consummation of the Exchange Offer that: |
(a) | it is prohibited by law or SEC policy from participating in the Exchange Offer; | |
(b) | it may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or | |
(c) | it is a broker-dealer and owns Notes acquired directly from MCE Finance or an affiliate of MCE Finance, |
(1) | the date on which such Note has been exchanged by a Person other than a broker-dealer for an exchange note in the Exchange Offer; | |
(2) | following the exchange by a broker-dealer in the Exchange Offer of a Note for an exchange note, the date on which such exchange note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement; | |
(3) | the date on which such Note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or | |
(4) | the date on which such Note is resold to the public pursuant to Rule 144 under the Securities Act. |
(1) | MCE Finance and the Guarantors will file an Exchange Offer Registration Statement with the SEC on or prior to 90 days after the closing of the offering of the Initial Notes; | |
(2) | MCE Finance and the Guarantors will use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the SEC on or prior to 180 days after the closing of the offering of the Initial Notes; | |
(3) | unless the Exchange Offer would not be permitted by applicable law or SEC policy or action, MCE Finance and the Guarantors will: |
(a) | commence the Exchange Offer; and |
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(b) | use all commercially reasonable efforts to issue on or prior to 30 business days, or longer, if required by the federal securities laws, after the date on which the Exchange Offer Registration Statement was declared effective by the SEC, Exchange Notes in exchange for all Notes tendered prior thereto in the Exchange Offer; and |
(4) | if obligated to file the Shelf Registration Statement, MCE Finance and the Guarantors will use all commercially reasonable efforts to file the Shelf Registration Statement with the SEC on or prior to 30 days after such filing obligation arises and to cause the Shelf Registration to be declared effective by the SEC on or prior to 90 days after such obligation arises. |
(1) | MCE Finance and the Guarantors fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing; | |
(2) | any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness (the“Effectiveness Target Date”); | |
(3) | MCE Finance and the Guarantors fail to consummate the Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement; or | |
(4) | the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (1) through (4) above, a“Registration Default”), |
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(1) | Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and | |
(2) | Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. |
(1) | 1.0% of the principal amount of the Note; or | |
(2) | the excess of: |
(a) | the present value at such redemption date of (i) the redemption price of the Note at May 15, 2014, (such redemption price being set forth in the table appearing above under the caption “— Optional Redemption”) plus (ii) all required interest payments due on the Note through May 15, 2014, (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over | |
(b) | the principal amount of the Note, if greater. |
(1) | the sale, lease, conveyance or other disposition of any assets or rights;provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of MCE Finance and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption “— Repurchase at the Option of Holders — Change of Control”and/or the provisions described above under the caption “— Certain Covenants — Merger, Consolidation or Sale of Assets” and not by the provisions of the Asset Sale covenant; | |
(2) | the issuance of Equity Interests in any of MCE Finance’s Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries; and | |
(3) | any Event of Loss. |
(1) | any single transaction or series of related transactions that involves assets having a Fair Market Value of less than US$5.0 million; | |
(2) | a transfer of assets between or among MCE Financeand/or its Restricted Subsidiaries; | |
(3) | an issuance of Equity Interests by a Restricted Subsidiary of MCE Finance to MCE Finance or to a Restricted Subsidiary of MCE Finance; |
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(4) | the sale, license, transfer, lease or other disposal of products, services or accounts receivable in the ordinary course of business, and any sale or other disposition of damaged, worn-out or obsolete assets in the ordinary course of business; | |
(5) | operating leases, licenses, right to use or equivalent interest under Macau law entered into in the ordinary course of business in connection with the operation of a Permitted Business; | |
(6) | the lease of, right to use or equivalent interest under Macau law of that portion of real property granted to Melco Crown (COD) Developments Limited pursuant to the applicable land concession granted by the government of the Macau SAR in connection with the development of an apart-hotel on such real property in accordance with such applicable land concession; | |
(7) | the sale or other disposition of cash or Cash Equivalents; and | |
(8) | a Restricted Payment that does not violate the covenant described above under the caption “— Certain Covenants — Restricted Payments” or a Permitted Investment. |
(1) | with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; | |
(2) | with respect to a partnership, the Board of Directors of the general partner of the partnership; | |
(3) | with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and | |
(4) | with respect to any other Person, the board or committee of such Person serving a similar function. |
(1) | in the case of a corporation, corporate stock; | |
(2) | in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; | |
(3) | in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and | |
(4) | any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt |
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securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock. |
(1) | U.S. dollars, Hong Kong dollars, Patacas, Australian dollars and Taiwan dollars; | |
(2) | securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (providedthat the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than six months from the date of acquisition; | |
(3) | certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any commercial bank organized under the laws of Macau, Hong Kong, a member state of the European Union or of the United States of America or any state thereof having capital and surplus in excess of US$500.0 million (or the foreign currency equivalent thereof as of the date of such investment) and whose long-term debt is rated“A-3” or higher by Moody’s or “A−” or higher by S&P or the equivalent rating category or another internationally recognized rating agency; | |
(4) | repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; | |
(5) | commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within six months after the date of acquisition; and | |
(6) | money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. |
(1) | the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of MCE Finance and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act) (other than a Sponsor or a Related Party of a Sponsor); | |
(2) | the adoption of a plan relating to the liquidation or dissolution of MCE Finance; | |
(3) | subject to the proviso below, the Sponsors cease collectively to beneficially own, directly or indirectly, at least 51% of the outstanding Capital Stock of Melco Crown Gaming (including any and all agreements, warrants, rights or options to acquire any Capital Stock) (measured in each case, by both voting power and size of equity interests); or | |
(4) | the first day on which Parent ceases to own, directly or indirectly, 100% of the outstanding Equity Interests of MCE Finance, |
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(1) | an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income;plus | |
(2) | provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;plus | |
(3) | the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income;plus | |
(4) | depreciation, amortization (including amortization of intangibles but excluding amortization of period cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income;minus | |
(5) | non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, |
(1) | the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person; | |
(2) | the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; | |
(3) | the cumulative effect of a change in accounting principles will be excluded; | |
(4) | notwithstanding clause (1) above, the Net Income of any Unrestricted Subsidiary will be excluded, whether or not distributed to the specified Person or one of its Subsidiaries; and | |
(5) | the Net Income attributable to any Excluded Projects will be excluded, whether or not distributed to the specified Person or one of its Subsidiaries. |
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(1) | acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance withRegulation S-X under the Securities Act) as if they had occurred on the first day of the four-quarter reference period; | |
(2) | the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded; | |
(3) | the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date; | |
(4) | any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period; | |
(5) | any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and | |
(6) | if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months). |
(1) | the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates;plus | |
(2) | the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;plus | |
(3) | any interest on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon;plus | |
(4) | the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of MCE Finance (other than Disqualified Stock) or to MCE Finance or a Restricted Subsidiary of MCE Finance,times(b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax |
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rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP. |
(1) | Parent, MPEL International, Melco Crown Gaming, MPEL Nominee One Limited, MPEL Investments Limited, Altira Hotel Limited, Altira Developments Limited, Melco Crown (COD) Hotels Limited, Melco Crown (COD) Developments Limited, Melco Crown (Cafe) Limited, Golden Future (Management Services) Limited,MPEL (Delaware) LLC, Melco Crown Hospitality and Services Limited, Melco Crown (COD) Retail Services Limited, Melco Crown (COD) Ventures Limited, COD Theatre Limited, Melco Crown COD (HR) Hotel Limited, Melco Crown COD (CT) Hotel Limited and Melco Crown COD (GH) Hotel Limited; and | |
(2) | any other Subsidiary of MCE Finance that executes a Note Guarantee in accordance with the provisions of the Note Guarantee, |
(1) | interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; | |
(2) | other agreements or arrangements designed to manage interest rates or interest rate risk; and | |
(3) | other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices. |
(1) | in respect of borrowed money; | |
(2) | evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); | |
(3) | in respect of banker’s acceptances; | |
(4) | representing Capital Lease Obligations; |
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(5) | representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or | |
(6) | representing any Hedging Obligations, |
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(1) | any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and | |
(2) | any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). |
(1) | as to which neither MCE Finance nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; | |
(2) | no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of MCE Finance or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and | |
(3) | as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of MCE Finance or any of its Restricted Subsidiaries. |
(1) | ownership, operation and management of casinos and gaming areas in accordance with the Subconcession; | |
(2) | the City of Dreams Business, the Altira Macau Business and the Mocha Club Business; | |
(3) | the Excluded Projects; | |
(4) | provision of credit to gaming patrons, food and beverage, spa, entertainment, entertainment production, convention, advertising, marketing, retail, foreign exchange, transportation, travel and outsourcing of in-house facilities and other businesses and activities which are necessary for, incidental to, arising out of, supportive of or connected to any Permitted Business; and | |
(5) | without limiting the foregoing, (a) owning the shares of any of MCE Finance’s Restricted Subsidiaries, (b) the making of any investments permitted by clause (1) of the definition of “Permitted Investments,” or |
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(c) the provision of administrative services to MCE Finance or any of its Restricted Subsidiaries, so long as such actions are otherwise permitted by the terms of the Indenture. |
(1) | any Investment in MCE Finance or in a Restricted Subsidiary of MCE Finance that is a Subsidiary Guarantor; | |
(2) | any Investment in Cash Equivalents; | |
(3) | any Investment by MCE Finance or any Restricted Subsidiary of MCE Finance in a Person, if as a result of such Investment: |
(a) | such Person becomes a Restricted Subsidiary of MCE Finance and a Guarantor; or | |
(b) | such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, MCE Finance or a Restricted Subsidiary of MCE Finance that is a Guarantor; |
(4) | any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales;” | |
(5) | any acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of MCE Finance; | |
(6) | any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of MCE Finance or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates; | |
(7) | Investments represented by Hedging Obligations; | |
(8) | loans or advances to employees made in the ordinary course of business of MCE Finance or any Restricted Subsidiary of MCE Finance in an aggregate principal amount not to exceed US$1.0 million at any one time outstanding; | |
(9) | repurchases of the Notes; | |
(10) | any Investments consisting of gaming credit extended to customers in the ordinary course of business and consistent with applicable law; and | |
(11) | other Investments in any Person other than an Affiliate of MCE Finance having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (11) that are at the time outstanding, not to exceed US$5.0 million. |
(1) | Liens on assets of MCE Finance or any of its Restricted Subsidiaries securing Indebtedness incurred pursuant to clause (1) of the second paragraph of the covenant set forth under the heading “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock;” | |
(2) | Liens created by the Indenture and the Pledge of Intercompany Note with respect to the Notes and Note Guarantees issued on the date of the Indenture and the exchange notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement; | |
(3) | Liens in favor of MCE Finance or the Subsidiary Guarantors; | |
(4) | Liens on property of a Person existing at the time such Person is merged with or into or consolidated with MCE Finance or any Subsidiary of MCE Finance;providedthat such Liens were in existence prior to the |
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contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with MCE Finance or the Subsidiary; |
(5) | Liens on property (including Capital Stock) existing at the time of acquisition of the property by MCE Finance or any Subsidiary of MCE Finance;providedthat such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition; | |
(6) | Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business, any netting or set-off arrangement entered into by MCE Finance or any Restricted Subsidiary with Citibank, N.A., Banco Nacional Ultramarino, S.A. or Bank of China, Macau Branch in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of MCE Finance or any Restricted Subsidiary but only so long as: (i) such arrangement does not permit credit balances of MCE Finance or the Restricted Subsidiaries to be netted or set off against debit balances of persons which are other Persons; and (ii) such arrangement does not give rise to other Liens over the assets of MCE Finance or any Restricted Subsidiary in support of liabilities of persons other than MCE Finance or its Restricted Subsidiaries; | |
(7) | Liens created in favor of a plaintiff or defendant in any proceedings as security for costs or expenses; | |
(8) | Liens arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to MCE Finance or its Restricted Subsidiaries in the ordinary course of trading and on the supplier’s standard or usual terms and not arising as a result of any default or omission by MCE Finance or its Restricted Subsidiaries,provided thatthe aggregate value of all assets subject to any such Liens shall not exceed US$5.0 million; | |
(9) | Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock” covering only the assets acquired with or financed by such Indebtedness; | |
(10) | Liens existing on the date of the Indenture (other than Liens securing the Senior Credit Agreement); | |
(11) | Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded;providedthat any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor; | |
(12) | Liens over goods, documents of title to goods and related documents and insurances and their proceeds to secure liabilities of MCE Finance or any of its Restricted Subsidiaries in respect of letters of credit, trust receipts, import loans or shipping guarantees issued or granted for all or part of the purchase price and costs of shipment, insurance and storage of goods acquired by MCE Finance or any of its Restricted Subsidiaries in the ordinary course of business; | |
(13) | Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods in the ordinary course of business; | |
(14) | Liens or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation of all applicable laws provided that such Liens are contested in good faith by appropriate measures and sufficient reserves in cash or other liquid assets are available to discharge such Liens; | |
(15) | Liens on assets deemed to arise in connection with and solely as a result of the execution, delivery or performance of contracts to sell such assets if such sale is otherwise permitted under the Indenture; | |
(16) | Liens arising, subsisting or imposed by law, including but not limited to carrier’s, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business; | |
(17) | survey exceptions, easements or reservations of, or rights of others for, licenses,rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as |
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to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair their use in the operation of the business of such Person; |
(18) | Liens created for the benefit of (or to secure) the Notes or the Note Guarantees; | |
(19) | Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the Indenture;provided,however,that: |
(a) | the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and | |
(b) | the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge; and |
(20) | Liens incurred in the ordinary course of business of MCE Finance or any Subsidiary of MCE Finance with respect to obligations that do not exceed US$10.0 million at any one time outstanding. |
(1) | the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith); | |
(2) | such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; | |
(3) | if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes with subordination terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and | |
(4) | such Indebtedness is incurred either by MCE Finance or by the Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged. |
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(1) | in the event either of the Notes or Parent is rated by two Rating Agencies on the Rating Date as Investment Grade, such rating of the Notes or Parent by either such Rating Agency shall be below Investment Grade; | |
(2) | in the event either of the Notes or Parent is rated by one, and only one, of the Rating Agencies on the Rating Date as Investment Grade, such rating of the Notes or Parent by such Rating Agency shall be below Investment Grade; or | |
(3) | in the event either of the Notes or Parent is rated below Investment Grade by any two Rating Agencies on the Rating Date, such rating of the Notes or Parent by either Rating Agency shall be decreased by one or more gradations (including gradations within Rating Categories as well as between Rating Categories). |
(1) | any controlling stockholder, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Sponsor; or | |
(2) | any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Sponsorsand/or such other Persons referred to in the immediately preceding clause (1). |
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(1) | any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and | |
(2) | any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). |
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(1) | any liability for federal, state, local or other taxes owed or owing by such Subsidiary Group Guarantor; | |
(2) | any intercompany Indebtedness of Subsidiary Group Guarantor to MCE Finance or any other Subsidiary Guarantor; or | |
(3) | any trade payables. |
(1) | has no Indebtedness other than Non-Recourse Debt; | |
(2) | except as permitted by the covenant described above under the caption “— Certain Covenants — Transactions with Affiliates,” is not party to any agreement, contract, arrangement or understanding with MCE Finance or any Restricted Subsidiary of MCE Finance unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to MCE Finance or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of MCE Finance; | |
(3) | is a Person with respect to which neither MCE Finance nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and | |
(4) | has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of MCE Finance or any of its Restricted Subsidiaries, |
(1) | the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by | |
(2) | the then outstanding principal amount of such Indebtedness. |
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(a) | an institutional investor (as defined in Section 4A of the SFA); | |
(b) | a relevant person (as defined in Section 275 (2) of the SFA); or | |
(c) | any person pursuant to an offer referred to in Section 275 (1A) of the SFA, |
(a) | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
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(b) | a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, |
(1) | to an institutional investor (under Section 274 of the SFA), or to a relevant person (as defined in Section 275(2) of the SFA) and in accordance with the conditions specified in Section 275 of the SFA; | |
(2) | (in the case of a corporation) where the transfer arises from an offer referred to in Section 276(3)(i)(B) of the SFA or (in the case of a trust) where the transfer arises from an offer referred to in Section 276(4)(i)(B) of the SFA; | |
(3) | where no consideration is or will be given for the transfer; | |
(4) | where the transfer is by operation of law; or | |
(5) | as specified in Section 276(7) of the SFA. |
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(1) | Our annual report onForm 20-F for the year ended December 31, 2009 (File No.001-33178) which we filed with the SEC on March 31, 2010 excluding F-pages which are included herein; and |
(2) | Our reports onForm 6-K furnished to the SEC since March 31, 2010, including the reports onForm 6-K furnished to the SEC on April 21, April 28, April 30, May 5, May 7, May 12 , May 18, July 23, July 28, August 13, October 26, and November 2, 2010. |
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December 31, | ||||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 212,598 | $ | 815,144 | ||||
Restricted cash | 236,119 | 67,977 | ||||||
Accounts receivable, net (Note 3) | 299,700 | 72,755 | ||||||
Amounts due from affiliated companies (Note 19(a)) | 1 | 650 | ||||||
Inventories | 6,534 | 2,170 | ||||||
Prepaid expenses and other current assets | 19,768 | 17,556 | ||||||
Total current assets | 774,720 | 976,252 | ||||||
PROPERTY AND EQUIPMENT, NET (Note 4) | 2,786,646 | 2,107,722 | ||||||
GAMING SUBCONCESSION, NET (Note 5) | 713,979 | 771,216 | ||||||
INTANGIBLE ASSETS, NET (Note 6) | 4,220 | 4,220 | ||||||
GOODWILL (Note 6) | 81,915 | 81,915 | ||||||
LONG-TERM PREPAYMENT AND DEPOSITS | 52,365 | 60,894 | ||||||
DEFERRED TAX ASSETS (Note 14) | — | 28 | ||||||
DEFERRED FINANCING COST | 38,948 | 49,336 | ||||||
DEPOSIT FOR ACQUISITION OF LAND INTEREST (Note 7) | — | 12,853 | ||||||
LAND USE RIGHTS, NET (Note 8) | 447,576 | 433,853 | ||||||
TOTAL | $ | 4,900,369 | $ | 4,498,289 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 8,719 | $ | 2,494 | ||||
Accrued expenses and other current liabilities (Note 9) | 497,767 | 442,671 | ||||||
Income tax payable | 768 | 1,954 | ||||||
Current portion of long-term debt (Note 10) | 44,504 | — | ||||||
Amounts due to affiliated companies (Note 19(b)) | 7,384 | 1,985 | ||||||
Amounts due to shareholders (Note 19(c)) | 25 | 1,032 | ||||||
Total current liabilities | 559,167 | 450,136 | ||||||
LONG-TERM DEBT (Note 10) | 1,638,703 | 1,412,516 | ||||||
OTHER LONG-TERM LIABILITIES (Note 11) | 20,619 | 38,304 | ||||||
DEFERRED TAX LIABILITIES (Note 14) | 17,757 | 19,191 | ||||||
LOANS FROM SHAREHOLDERS (Note 19(c)) | 115,647 | 115,647 | ||||||
LAND USE RIGHT PAYABLE (Note 18(a)) | 39,432 | 53,891 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 18) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Ordinary shares at US$0.01 par value per share | ||||||||
(Authorized — 2,500,000,000 and 1,500,000,000 shares and issued — 1,595,617,550 and 1,321,550,399 shares as of December 31, 2009 and 2008 (Note 13)) | 15,956 | 13,216 | ||||||
Treasury shares, at US$0.01 par value per share | ||||||||
(471,567 and 385,180 shares as of December 31, 2009 and 2008 (Note 13)) | (5 | ) | (4 | ) | ||||
Additional paid-in capital | 3,088,768 | 2,689,257 | ||||||
Accumulated other comprehensive losses | (29,034 | ) | (35,685 | ) | ||||
Accumulated losses | (566,641 | ) | (258,180 | ) | ||||
Total shareholders’ equity | 2,509,044 | 2,408,604 | ||||||
TOTAL | $ | 4,900,369 | $ | 4,498,289 | ||||
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
OPERATING REVENUES | ||||||||||||
Casino | $ | 1,304,634 | $ | 1,405,932 | $ | 348,725 | ||||||
Rooms | 41,215 | 17,084 | 5,670 | |||||||||
Food and beverage | 28,180 | 16,107 | 11,121 | |||||||||
Entertainment, retail and others | 11,877 | 5,396 | 1,964 | |||||||||
Gross revenues | 1,385,906 | 1,444,519 | 367,480 | |||||||||
Less: promotional allowances | (53,033 | ) | (28,385 | ) | (8,984 | ) | ||||||
Net revenues | 1,332,873 | 1,416,134 | 358,496 | |||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||
Casino | (1,130,302 | ) | (1,159,930 | ) | (303,922 | ) | ||||||
Rooms | (6,357 | ) | (1,342 | ) | (2,222 | ) | ||||||
Food and beverage | (16,853 | ) | (12,745 | ) | (10,541 | ) | ||||||
Entertainment, retail and others | (4,004 | ) | (1,240 | ) | (504 | ) | ||||||
General and administrative | (130,986 | ) | (90,707 | ) | (82,773 | ) | ||||||
Pre-opening costs | (91,882 | ) | (21,821 | ) | (40,032 | ) | ||||||
Amortization of gaming subconcession | (57,237 | ) | (57,237 | ) | (57,190 | ) | ||||||
Amortization of land use rights | (18,395 | ) | (18,269 | ) | (17,276 | ) | ||||||
Depreciation and amortization | (141,864 | ) | (51,379 | ) | (39,466 | ) | ||||||
Property charges and others | (7,040 | ) | (290 | ) | (387 | ) | ||||||
Total operating costs and expenses | (1,604,920 | ) | (1,414,960 | ) | (554,313 | ) | ||||||
OPERATING (LOSS) INCOME | (272,047 | ) | 1,174 | (195,817 | ) | |||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||
Interest income | 498 | 8,215 | 18,640 | |||||||||
Interest expenses, net of capitalized interest | (31,824 | ) | — | (770 | ) | |||||||
Amortization of deferred financing costs | (5,974 | ) | (765 | ) | (1,005 | ) | ||||||
Loan commitment fees | (2,253 | ) | (14,965 | ) | (4,760 | ) | ||||||
Foreign exchange gain, net | 491 | 1,436 | 3,832 | |||||||||
Other income, net | 2,516 | 972 | 275 | |||||||||
Total non-operating (expenses) income | (36,546 | ) | (5,107 | ) | 16,212 | |||||||
LOSS BEFORE INCOME TAX | (308,593 | ) | (3,933 | ) | (179,605 | ) | ||||||
INCOME TAX CREDIT (Note 14) | 132 | 1,470 | 1,454 | |||||||||
NET LOSS | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | |||
LOSS PER SHARE: | ||||||||||||
Basic and diluted | $ | (0.210 | ) | $ | (0.002 | ) | $ | (0.145 | ) | |||
SHARES USED IN LOSS PER SHARE CALCULATION: | ||||||||||||
Basic and diluted | 1,465,974,019 | 1,320,946,942 | 1,224,880,031 | |||||||||
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Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Paid-in | Comprehensive | Accumulated | Shareholders’ | Comprehensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Losses | Equity | Loss | ||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2007 | 1,180,931,146 | $ | 11,809 | — | $ | — | $ | 1,955,383 | $ | 740 | $ | (77,566 | ) | $ | 1,890,366 | |||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (178,151 | ) | (178,151 | ) | $ | (178,151 | ) | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (1,685 | ) | — | (1,685 | ) | (1,685 | ) | ||||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | (10,131 | ) | — | (10,131 | ) | (10,131 | ) | ||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 5,346 | — | — | 5,346 | ||||||||||||||||||||||||||||
Shares issued, net of offering expenses (Note 13) | 139,612,500 | 1,396 | — | — | 721,400 | — | — | 722,796 | ||||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 395,256 | 4 | — | — | (4 | ) | — | — | — | |||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2007 | 1,320,938,902 | 13,209 | — | — | 2,682,125 | (11,076 | ) | (255,717 | ) | 2,428,541 | $ | (189,967 | ) | |||||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (2,463 | ) | (2,463 | ) | $ | (2,463 | ) | |||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | (24,609 | ) | — | (24,609 | ) | (24,609 | ) | ||||||||||||||||||||||||
Reversal of over-accrued offering expenses | — | — | — | — | 117 | — | — | 117 | ||||||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 7,018 | — | — | 7,018 | ||||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 226,317 | 3 | — | — | (3 | ) | — | — | — | |||||||||||||||||||||||||||
Shares issued for future exercises of share options (Note 13) | 385,180 | 4 | (385,180 | ) | (4 | ) | — | — | — | |||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2008 | 1,321,550,399 | 13,216 | (385,180 | ) | (4 | ) | 2,689,257 | (35,685 | ) | (258,180 | ) | 2,408,604 | $ | (27,072 | ) | |||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (308,461 | ) | (308,461 | ) | $ | (308,461 | ) | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (11 | ) | — | (11 | ) | (11 | ) | ||||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | 6,662 | — | 6,662 | 6,662 | |||||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 11,807 | — | — | 11,807 | ||||||||||||||||||||||||||||
Shares issued, net of offering expenses (Note 13) | 263,155,335 | 2,631 | — | — | 380,898 | — | — | 383,529 | ||||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 8,297,110 | 83 | — | — | 6,831 | — | — | 6,914 | ||||||||||||||||||||||||||||
Shares issued for future vesting of restricted shares (Note 13) | 2,614,706 | 26 | (2,614,706 | ) | (26 | ) | — | — | — | — | ||||||||||||||||||||||||||
Issuance of shares for restricted shares vested (Note 13) | — | — | 2,528,319 | 25 | (25 | ) | — | — | — | |||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2009 | 1,595,617,550 | $ | 15,956 | (471,567 | ) | $ | (5 | ) | $ | 3,088,768 | $ | (29,034 | ) | $ | (566,641 | ) | $ | 2,509,044 | $ | (301,810 | ) | |||||||||||||||
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | |||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||
Depreciation and amortization | 217,496 | 126,885 | 113,932 | |||||||||
Amortization of deferred financing costs | 5,974 | 765 | 1,005 | |||||||||
Impairment loss recognized on property and equipment | 3,137 | 17 | 421 | |||||||||
Loss (gain) on disposal of property and equipment | 640 | (328 | ) | 585 | ||||||||
Allowance for doubtful debts | 16,757 | 5,378 | 2,733 | |||||||||
Share-based compensation | 11,385 | 6,855 | 5,256 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (243,702 | ) | (28,743 | ) | (51,711 | ) | ||||||
Amounts due from affiliated companies | 649 | 89 | 151 | |||||||||
Inventories | (4,364 | ) | (686 | ) | (1,288 | ) | ||||||
Prepaid expenses and other current assets | (5,824 | ) | (1,503 | ) | (13,924 | ) | ||||||
Long-term prepayment and deposits | (1,712 | ) | 1,219 | (7,899 | ) | |||||||
Deferred tax assets | 28 | (28 | ) | — | ||||||||
Accounts payable | 6,225 | (3,670 | ) | 3,172 | ||||||||
Accrued expenses and other current liabilities | 193,009 | (110,567 | ) | 273,166 | ||||||||
Income tax payable | (1,186 | ) | 394 | 1,301 | ||||||||
Amounts due to affiliated companies | (1,220 | ) | (3,461 | ) | 428 | |||||||
Amounts due to shareholders | 25 | — | — | |||||||||
Other long-term liabilities | 321 | 784 | 950 | |||||||||
Deferred tax liabilities | (1,434 | ) | (2,095 | ) | (2,755 | ) | ||||||
Net cash (used in) provided by operating activities | (112,257 | ) | (11,158 | ) | 147,372 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of property and equipment | (937,074 | ) | (1,053,992 | ) | (668,281 | ) | ||||||
Deposits for acquisition of property and equipment | (2,712 | ) | (34,699 | ) | (5,356 | ) | ||||||
Prepayment of show production cost | (21,735 | ) | (16,127 | ) | — | |||||||
Changes in restricted cash | (168,142 | ) | 231,006 | (298,983 | ) | |||||||
Payment for land use rights | (30,559 | ) | (42,090 | ) | — | |||||||
Proceeds from sale of property and equipment | 3,730 | 2,300 | — | |||||||||
Refund of deposit for acquisition of land interest | 12,853 | — | — | |||||||||
Net cash used in investing activities | (1,143,639 | ) | (913,602 | ) | (972,620 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Payment of deferred financing costs | (870 | ) | (7,641 | ) | (49,735 | ) | ||||||
Loans from shareholders | — | (181 | ) | (96,583 | ) | |||||||
Payment of principal of capital leases | — | — | (16 | ) | ||||||||
Proceeds from issue of share capital | 383,529 | — | 722,796 | |||||||||
Proceeds from long-term debt | 270,691 | 912,307 | 500,209 | |||||||||
Net cash provided by financing activities | 653,350 | 904,485 | 1,076,671 | |||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (602,546 | ) | (20,275 | ) | 251,423 | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 815,144 | 835,419 | 583,996 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 212,598 | $ | 815,144 | $ | 835,419 | ||||||
F-7
Table of Contents
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS | ||||||||||||
Cash paid for interest (net of capitalized interest) | $ | (27,978 | ) | $ | (181 | ) | $ | (596 | ) | |||
Cash paid for tax | $ | (2,457 | ) | $ | — | $ | — | |||||
NON-CASH INVESTING ACTIVITIES | ||||||||||||
Construction costs and property and equipment funded through accrued expenses and other current liabilities | $ | 91,648 | $ | 246,998 | $ | 132,356 | ||||||
Land use right cost funded through land use right payable, accrued expenses and other current liabilities and loans from shareholders | $ | 22,462 | $ | — | $ | 41,680 | ||||||
Costs of property and equipment funded through amounts due from (to) affiliated companies | $ | 4,427 | $ | 1,562 | $ | 1,598 | ||||||
Disposal of property and equipment through amount due from an affiliated company | $ | — | $ | (2,788 | ) | $ | — | |||||
Deferred financing costs funded through accounts payable and accrued expenses and other current liabilities | $ | — | $ | 1,427 | $ | 575 | ||||||
Provision of bonus funded through restricted shares issued and vested | $ | 6,914 | $ | — | $ | — | ||||||
F-8
Table of Contents
1. | COMPANY INFORMATION |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) | Basis of Presentation and Principles of Consolidation |
(b) | Use of Estimates |
(c) | Fair Value Measurements |
F-9
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(c) | Fair Value Measurements — (Continued) |
(d) | Cash and Cash Equivalents |
(e) | Restricted Cash |
(f) | Accounts Receivable and Credit Risk |
(g) | Inventories |
(h) | Property and Equipment |
F-10
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(h) | Property and Equipment — (Continued) |
Classification | Estimated Useful Life | |
Buildings | 7 to 25 years or over the term of the land use right agreement, whichever is shorter | |
Furniture, fixtures and equipment | 2 to 7 years | |
Plant and gaming machinery | 3 to 5 years | |
Leasehold improvements | 10 years or over the lease term, whichever is shorter | |
Motor vehicles | 5 years |
(i) | Capitalization of Interest and Amortization of Deferred Financing Costs |
(j) | Gaming Subconcession, Net |
(k) | Goodwill and Intangible Assets, Net |
F-11
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(l) | Impairment of Long-Lived Assets (Other Than Goodwill) |
(m) | Deferred Financing Costs |
(n) | Land Use Rights, Net |
(o) | Revenue Recognition and Promotional Allowances |
F-12
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(o) | Revenue Recognition and Promotional Allowances — (Continued) |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Rooms | $ | 6,778 | $ | 4,240 | $ | 903 | ||||||
Food and beverage | 17,296 | 9,955 | 7,029 | |||||||||
Entertainment, retail and others | 3,448 | — | — | |||||||||
$ | 27,522 | $ | 14,195 | $ | 7,932 | |||||||
(p) | Point-Loyalty Programs |
(q) | Gaming Tax |
(r) | Pre-Opening Costs |
(s) | Advertising Expenses |
F-13
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(s) | Advertising Expenses — (Continued) |
(t) | Foreign Currency Transactions and Translations |
(u) | Share-Based Compensation Expenses |
(v) | Income Tax |
F-14
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(v) | Income Tax — (Continued) |
(w) | Loss Per Share |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Weighted-average number of ordinary shares outstanding used in the calculation of basic loss per share | 1,465,974,019 | 1,320,946,942 | 1,224,880,031 | |||||||||
Incremental weighted-average number of ordinary shares from assumed exercised of restricted shares and share options using the treasury stock method | — | — | — | |||||||||
Weighted-average number of ordinary shares outstanding used in the calculation of diluted loss per share | 1,465,974,019 | 1,320,946,942 | 1,224,880,031 | |||||||||
(x) | Accounting for Derivative Instruments and Hedging Activities |
F-15
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(x) | Accounting for Derivative Instruments and Hedging Activities — (Continued) |
(y) | Accumulated Other Comprehensive Income (Loss) |
December 31, | ||||||||
2009 | 2008 | |||||||
Foreign currency translation adjustment | $ | (956 | ) | $ | (945 | ) | ||
Changes in the fair value of interest rate swap agreements | (28,078 | ) | (34,740 | ) | ||||
$ | (29,034 | ) | $ | (35,685 | ) | |||
(z) | Reclassifications |
(aa) | Recent Changes in Accounting Standards |
F-16
Table of Contents
3. | ACCOUNTS RECEIVABLE, NET |
December 31, | ||||||||
2009 | 2008 | |||||||
Casino | $ | 320,789 | $ | 78,649 | ||||
Hotel | 2,457 | 1,647 | ||||||
Other | 681 | 572 | ||||||
Sub-total | $ | 323,927 | $ | 80,868 | ||||
Less: allowance for doubtful debts | (24,227 | ) | (8,113 | ) | ||||
$ | 299,700 | $ | 72,755 | |||||
4. | PROPERTY AND EQUIPMENT, NET |
December 31, | ||||||||
2009 | 2008 | |||||||
Cost | ||||||||
Buildings | $ | 2,219,127 | $ | 312,007 | ||||
Furniture, fixtures and equipment | 307,305 | 77,289 | ||||||
Plant and gaming machinery | 114,983 | 69,104 | ||||||
Leasehold improvements | 97,188 | 36,770 | ||||||
Motor vehicles | 3,375 | 1,502 | ||||||
Sub-total | $ | 2,741,978 | $ | 496,672 | ||||
Less: accumulated depreciation | (249,780 | ) | (107,847 | ) | ||||
Sub-total | $ | 2,492,198 | $ | 388,825 | ||||
Construction in progress | 294,448 | 1,718,897 | ||||||
Property and equipment, net | $ | 2,786,646 | $ | 2,107,722 | ||||
5. | GAMING SUBCONCESSION, NET |
December 31, | ||||||||
2009 | 2008 | |||||||
Deemed cost | $ | 900,000 | $ | 900,000 | ||||
Less: accumulated amortization | (186,021 | ) | (128,784 | ) | ||||
Gaming subconcession, net | $ | 713,979 | $ | 771,216 | ||||
F-17
Table of Contents
5. | GAMING SUBCONCESSION, NET — (Continued) |
6. | GOODWILL AND INTANGIBLE ASSETS, NET |
7. | DEPOSIT FOR ACQUISITION OF LAND INTEREST |
F-18
Table of Contents
8. | LAND USE RIGHTS, NET |
December 31, | ||||||||
2009 | 2008 | |||||||
Altira Macau | $ | 141,543 | $ | 141,543 | ||||
City of Dreams | 376,021 | 343,903 | ||||||
517,564 | 485,446 | |||||||
Less: accumulated amortization | (69,988 | ) | (51,593 | ) | ||||
Land use rights, net | $ | 447,576 | $ | 433,853 | ||||
9. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
December 31, | ||||||||
2009 | 2008 | |||||||
Construction costs payable | $ | 80,668 | $ | 246,998 | ||||
Customer deposits | 50,829 | 9,808 | ||||||
Outstanding gaming chips and tokens | 136,774 | 54,758 | ||||||
Other gaming related accruals | 53,294 | 32,699 | ||||||
Gaming tax accruals | 67,376 | 42,038 | ||||||
Land use right payable | 29,781 | 13,763 | ||||||
Operating expense accruals | 67,701 | 42,607 | ||||||
Interest rate swap liabilities | 11,344 | — | ||||||
$ | 497,767 | $ | 442,671 | |||||
10. | LONG-TERM DEBT |
F-19
Table of Contents
10. | LONG-TERM DEBT — (Continued) |
F-20
Table of Contents
10. | LONG-TERM DEBT — (Continued) |
Year Ending December 31, | ||||
2010 | $ | 44,504 | ||
2011 | 267,024 | |||
2012 | 526,102 | |||
2013 | 385,702 | |||
2014 | 459,875 | |||
1,683,207 | ||||
Current portion of long-term debt | (44,504 | ) | ||
$ | 1,638,703 | |||
11. | OTHER LONG-TERM LIABILITIES |
December 31, | ||||||||
2009 | 2008 | |||||||
Interest rate swap liabilities | $ | 16,727 | $ | 34,733 | ||||
Deferred rent liabilities | 3,613 | 3,371 | ||||||
Other deposits received | 279 | 200 | ||||||
$ | 20,619 | $ | 38,304 | |||||
F-21
Table of Contents
11. | OTHER LONG-TERM LIABILITIES — (Continued) |
12. | FAIR VALUE MEASUREMENTS |
Quoted Prices | ||||||||||||||||
in Active | Significant | |||||||||||||||
Market for | Other | Significant | ||||||||||||||
Identical | Observable | Unobservable | Balance as of | |||||||||||||
Assets | Inputs | Inputs | December 31, | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2009 | |||||||||||||
Interest rate swap liabilities | $ | — | $ | 28,071 | $ | — | $ | 28,071 | ||||||||
F-22
Table of Contents
13. | CAPITAL STRUCTURE |
14. | INCOME TAX CREDIT |
F-23
Table of Contents
14. | INCOME TAX CREDIT — (Continued) |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Income tax provision for current year: | ||||||||||||
Macau Complementary Tax | $ | 190 | $ | — | $ | — | ||||||
Hong Kong Profits Tax | 731 | 892 | 1,301 | |||||||||
Sub-total | 921 | 892 | 1,301 | |||||||||
Under (over) provision of income tax in prior years: | ||||||||||||
Macau Complementary Tax | $ | 2 | $ | — | $ | — | ||||||
Hong Kong Profits Tax | 351 | (239 | ) | — | ||||||||
Sub-total | 353 | (239 | ) | — | ||||||||
Deferred tax (credit) charge: | ||||||||||||
Macau Complementary Tax | $ | (1,537 | ) | $ | (2,038 | ) | $ | (2,812 | ) | |||
Hong Kong Profits Tax | 131 | (85 | ) | 57 | ||||||||
Sub-total | (1,406 | ) | (2,123 | ) | (2,755 | ) | ||||||
Total income tax credit | $ | (132 | ) | $ | (1,470 | ) | $ | (1,454 | ) | |||
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Loss before income tax | $ | (308,593 | ) | $ | (3,933 | ) | $ | (179,605 | ) | |||
Macau Complementary Tax rate | 12 | % | 12 | % | 12 | % | ||||||
Income tax credit at Macau Complementary Tax rate | (37,031 | ) | (472 | ) | (21,553 | ) | ||||||
Effect of different tax rates of subsidiaries operating in other jurisdiction | 235 | 126 | 641 | |||||||||
Under (over) provision in prior year | 353 | (239 | ) | — | ||||||||
Effect of income for which no income tax expense is payable | (633 | ) | (1,102 | ) | (2,671 | ) | ||||||
Effect of expense for which no income tax benefit is receivable | 2,978 | 779 | 1,048 | |||||||||
Effect of tax holiday granted by Macau government | — | (8,855 | ) | — | ||||||||
Losses that cannot be carried forward | 15,639 | — | 20,045 | |||||||||
Change in valuation allowance | 18,327 | 8,293 | 1,036 | |||||||||
$ | (132 | ) | $ | (1,470 | ) | $ | (1,454 | ) | ||||
F-24
Table of Contents
14. | INCOME TAX CREDIT — (Continued) |
December 31, | ||||||||
2009 | 2008 | |||||||
Deferred income tax assets | ||||||||
Net operating loss carryforwards | $ | 33,085 | $ | 16,088 | ||||
Depreciation and amortization | — | 28 | ||||||
Sub-total | 33,085 | 16,116 | ||||||
Valuation allowance | ||||||||
Current | (7,311 | ) | (1,330 | ) | ||||
Long-term | (25,774 | ) | (14,758 | ) | ||||
Sub-total | (33,085 | ) | (16,088 | ) | ||||
Total net deferred income tax assets | $ | — | $ | 28 | ||||
Deferred income tax liabilities | ||||||||
Land use rights | $ | (17,149 | ) | $ | (18,686 | ) | ||
Intangible assets | (505 | ) | (505 | ) | ||||
Unrealized capital allowance | (103 | ) | — | |||||
Net deferred income tax liabilities | $ | (17,757 | ) | $ | (19,191 | ) | ||
F-25
Table of Contents
14. | INCOME TAX CREDIT — (Continued) |
15. | SHARE-BASED COMPENSATION |
F-26
Table of Contents
15. | SHARE-BASED COMPENSATION — (Continued) |
December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Expected dividend yield | — | — | — | |||||||||
Expected stock price volatility | 74.60 | % | 57.65 | % | 38.26 | % | ||||||
Risk-free interest rate | 1.45 | % | 1.67 | % | 3.96 | % | ||||||
Forfeiture rate | — | — | — | |||||||||
Expected average life of options (years) | 5.5 | 4.7 | 5.2 |
F-27
Table of Contents
15. | SHARE-BASED COMPENSATION — (Continued) |
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Number of | Average | Remaining | Aggregate | |||||||||||||
Share | Exercise Price | Contractual | Intrinsic | |||||||||||||
Options | per Share | Term | Value | |||||||||||||
Outstanding at January 1, 2007 | — | — | ||||||||||||||
Granted | 3,908,390 | $ | 5.02 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | (191,514 | ) | $ | 5.06 | ||||||||||||
Expired | — | — | ||||||||||||||
Outstanding at December 31, 2007 | 3,716,876 | $ | 5.02 | |||||||||||||
Granted | 20,558,343 | $ | 1.83 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | (2,003,178 | ) | $ | 4.34 | ||||||||||||
Expired | (1,795 | ) | $ | 5.06 | ||||||||||||
Outstanding at December 31, 2008 | 22,270,246 | $ | 2.14 | |||||||||||||
Granted | 4,792,536 | $ | 1.07 | |||||||||||||
Granted under option exchange program | 3,612,327 | $ | 1.43 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | (2,809,419 | ) | $ | 1.93 | ||||||||||||
Expired | (104,738 | ) | $ | 4.58 | ||||||||||||
Cancelled under option exchange program | (5,418,554 | ) | $ | 4.39 | ||||||||||||
Outstanding at December 31, 2009 | 22,342,398 | $ | 1.26 | 8.8 | $ | 1,600 | ||||||||||
Exercisable at December 31, 2009 | 364,950 | $ | 4.62 | 7.9 | — | |||||||||||
Vested | ||||||||||||||||
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Number of | Average | Remaining | Aggregate | |||||||||||||
Share | Exercise Price | Contractual | Intrinsic | |||||||||||||
Options | per Share | Term | Value | |||||||||||||
Range of exercise prices per share($4.01-$5.06) (Note) | 364,950 | $ | 4.62 | 7.9 | — | |||||||||||
F-28
Table of Contents
15. | SHARE-BASED COMPENSATION — (Continued) |
Expected to Vest | ||||||||||||||||
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Number of | Average | Remaining | Aggregate | |||||||||||||
Share | Exercise Price | Contractual | Intrinsic | |||||||||||||
Options | per Share | Term | Value | |||||||||||||
Range of exercise prices per share($1.01-$5.06) | 21,977,448 | $ | 1.21 | 8.8 | $ | 1,600 | ||||||||||
Weighted- | ||||||||
Number of | Average | |||||||
Restricted | Grant Date | |||||||
Shares | Fair Value | |||||||
Unvested at January 1, 2007 | 2,532,010 | $ | 6.33 | |||||
Granted | — | — | ||||||
Vested | (395,256 | ) | 6.33 | |||||
Forfeited | (130,310 | ) | 6.33 | |||||
Unvested at December 31, 2007 and January 1, 2008 | 2,006,444 | $ | 6.33 | |||||
Granted | 6,529,844 | 1.30 | ||||||
Vested | (226,317 | ) | 6.33 | |||||
Forfeited | (771,895 | ) | 5.88 | |||||
Unvested at December 31, 2008 and January 1, 2009 | 7,538,076 | $ | 2.02 | |||||
Granted | 7,071,741 | 1.09 | ||||||
Vested | (10,825,445 | ) | 1.61 | |||||
Forfeited | (538,341 | ) | 1.61 | |||||
Unvested at December 31, 2009 | 3,246,031 | $ | 1.41 | |||||
F-29
Table of Contents
15. | SHARE-BASED COMPENSATION — (Continued) |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Share options | $ | 5,169 | $ | 2,598 | $ | 518 | ||||||
Restricted shares | 6,638 | 4,420 | 4,828 | |||||||||
Total share-based compensation expenses | 11,807 | 7,018 | 5,346 | |||||||||
Less: share-based compensation expenses capitalized | (422 | ) | (163 | ) | (90 | ) | ||||||
Share-based compensation recognized in general and administrative expenses | $ | 11,385 | $ | 6,855 | $ | 5,256 | ||||||
16. | EMPLOYEE BENEFIT PLANS |
17. | DISTRIBUTION OF PROFITS |
18. | COMMITMENTS AND CONTINGENCIES |
(a) | Capital Commitments |
F-30
Table of Contents
18. | COMMITMENTS AND CONTINGENCIES — (Continued) |
(a) | Capital Commitments — (Continued) |
(b) | Lease Commitments and Other Arrangements |
Year Ending December 31, | ||||
2010 | $ | 10,013 | ||
2011 | 6,306 | |||
2012 | 5,318 | |||
2013 | 5,182 | |||
2014 | 3,853 | |||
Over 2014 | 9,667 | |||
Total minimum lease payments | $ | 40,339 | ||
F-31
Table of Contents
18. | COMMITMENTS AND CONTINGENCIES — (Continued) |
(b) | Lease Commitments and Other Arrangements — (Continued) |
Year Ending December 31, | ||||
2010 | $ | 8,293 | ||
2011 | 8,287 | |||
2012 | 7,793 | |||
2013 | 7,185 | |||
2014 | 7,182 | |||
Over 2014 | 4,590 | |||
Total minimum future fees to be received | $ | 43,330 | ||
(c) | Other Commitments |
• | $37 (MOP300,000) per year for each gaming table (subject to a minimum of 100 tables) reserved exclusively for certain kind of games or to certain players; | |
• | $19 (MOP150,000) per year for each gaming table (subject to a minimum of 100 tables) not reserved exclusively for certain kind of games or to certain players; and | |
• | $0.1 (MOP1,000) per year for each electrical or mechanical gaming machine, including the slot machine. |
F-32
Table of Contents
18. | COMMITMENTS AND CONTINGENCIES — (Continued) |
(c) | Other Commitments — (Continued) |
(d) | Contingencies |
18(c)(vii) to the consolidated financial statements.
(e) | Litigation |
F-33
Table of Contents
19. | RELATED PARTY TRANSACTIONS |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Amounts paid/payable to affiliated companies | ||||||||||||
Advertising and promotional expenses | $ | 211 | $ | 597 | $ | 65 | ||||||
Consultancy fee capitalized in construction in progress | 1,312 | 246 | 2,294 | |||||||||
Consultancy fee recognized as expense | 1,301 | 1,168 | 4,150 | |||||||||
Management fees | 45 | 1,698 | — | |||||||||
Network support fee | 28 | 52 | 238 | |||||||||
Office rental | 2,354 | 1,466 | 1,114 | |||||||||
Operating and office supplies | 257 | 255 | 707 | |||||||||
Project management fees capitalized in construction in progress | — | — | 1,442 | |||||||||
Property and equipment | 59,482 | 16,327 | 12,141 | |||||||||
Repairs and maintenance | 87 | 655 | 41 | |||||||||
Service fee expense | 748 | 781 | — | |||||||||
Traveling expense capitalized in construction in progress | 65 | 66 | — | |||||||||
Traveling expense recognized as expense | 2,809 | 1,387 | 746 | |||||||||
Amounts received/receivable from affiliated companies | ||||||||||||
Other service fee income | 896 | 276 | — | |||||||||
Rooms and food and beverage income | 23 | 100 | 41 | |||||||||
Sales proceeds for disposal of property and equipment | — | 2,788 | — | |||||||||
Amounts paid/payable to shareholders | ||||||||||||
Interest charges capitalized in construction in progress | 963 | 3,367 | 4,167 | |||||||||
Interest charges recognized as expense | 215 | — | 758 | |||||||||
(a) | Amounts Due From Affiliated Companies |
(b) | Amounts Due To Affiliated Companies |
F-34
Table of Contents
19. | RELATED PARTY TRANSACTIONS — (Continued) |
(b) | Amounts Due To Affiliated Companies — (Continued) |
F-35
Table of Contents
19. | RELATED PARTY TRANSACTIONS — (Continued) |
(b) | Amounts Due To Affiliated Companies — (Continued) |
(c) | Amounts Due To/Loans From Shareholders |
F-36
Table of Contents
19. | RELATED PARTY TRANSACTIONS — (Continued) |
(c) | Amounts Due To/Loans From Shareholders — (Continued) |
20. | SEGMENT INFORMATION |
December 31, | ||||||||
2009 | 2008 | |||||||
Mocha Clubs | $ | 144,455 | $ | 166,241 | ||||
Altira Macau | 594,743 | 617,383 | ||||||
City of Dreams | 3,093,310 | 2,117,951 | ||||||
Corporate and Others | 1,067,861 | 1,596,714 | ||||||
Total consolidated assets | $ | 4,900,369 | $ | 4,498,289 | ||||
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Mocha Clubs | $ | 11,448 | $ | 15,491 | $ | 13,297 | ||||||
Altira Macau | 6,712 | 6,275 | 203,845 | |||||||||
City of Dreams | 808,424 | 1,148,098 | 519,522 | |||||||||
Corporate and Others | 2,152 | 21,334 | 4,219 | |||||||||
Total capital expenditures | $ | 828,736 | $ | 1,191,198 | $ | 740,883 | ||||||
F-37
Table of Contents
20. | SEGMENT INFORMATION — (Continued) |
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
NET REVENUES | ||||||||||||
Mocha Clubs | $ | 97,984 | $ | 91,967 | $ | 81,343 | ||||||
Altira Macau | 658,043 | 1,313,047 | 277,153 | |||||||||
City of Dreams | 552,141 | — | — | |||||||||
Corporate and Others | 24,705 | 11,120 | — | |||||||||
Total net revenues | 1,332,873 | 1,416,134 | 358,496 | |||||||||
ADJUSTED PROPERTY EBITDA(1) | ||||||||||||
Mocha Clubs | 25,416 | 25,805 | 22,056 | |||||||||
Altira Macau | 13,702 | 162,487 | (22,444 | ) | ||||||||
City of Dreams | 56,666 | (23 | ) | (314 | ) | |||||||
Total adjusted property EBITDA | 95,784 | 188,269 | (702 | ) | ||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||
Pre-opening costs | (91,882 | ) | (21,821 | ) | (40,032 | ) | ||||||
Amortization of gaming subconcession | (57,237 | ) | (57,237 | ) | (57,190 | ) | ||||||
Amortization of land use rights | (18,395 | ) | (18,269 | ) | (17,276 | ) | ||||||
Depreciation and amortization | (141,864 | ) | (51,379 | ) | (39,466 | ) | ||||||
Share-based compensation | (11,385 | ) | (6,855 | ) | (5,256 | ) | ||||||
Marketing expense relating to Altira Macau opening | — | — | (11,959 | ) | ||||||||
Property charges and others | (7,040 | ) | (290 | ) | (387 | ) | ||||||
Corporate and others expenses | (40,028 | ) | (31,244 | ) | (23,549 | ) | ||||||
Total operating costs and expenses | (367,831 | ) | (187,095 | ) | (195,115 | ) | ||||||
OPERATING (LOSS) INCOME | (272,047 | ) | 1,174 | (195,817 | ) | |||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||
Interest income | 498 | 8,215 | 18,640 | |||||||||
Interest expenses, net of capitalized interest | (31,824 | ) | — | (770 | ) | |||||||
Amortization of deferred financing costs | (5,974 | ) | (765 | ) | (1,005 | ) | ||||||
Loan commitment fees | (2,253 | ) | (14,965 | ) | (4,760 | ) | ||||||
Foreign exchange gain, net | 491 | 1,436 | 3,832 | |||||||||
Other income, net | 2,516 | 972 | 275 | |||||||||
Total non-operating (expenses) income | (36,546 | ) | (5,107 | ) | 16,212 | |||||||
LOSS BEFORE INCOME TAX | (308,593 | ) | (3,933 | ) | (179,605 | ) | ||||||
INCOME TAX CREDIT | 132 | 1,470 | 1,454 | |||||||||
NET LOSS | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | |||
(1) | “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, other expenses (including pre-opening costs, share-based compensation, marketing expense relating to Altira Macau opening in May 2007, property charges and others, corporate and other expenses and non-operating income (expenses)). The chief operating decision maker used Adjusted property EBITDA to measure the operating performance of Mocha Clubs, Altira Macau and City of Dreams. |
F-38
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
F-39
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
December 31, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 34,358 | $ | — | $ | 177,057 | $ | 1,183 | $ | — | $ | 212,598 | ||||||||||||
Restricted cash | — | — | 233,085 | 3,034 | — | 236,119 | ||||||||||||||||||
Accounts receivables, net | — | — | 299,700 | — | — | 299,700 | ||||||||||||||||||
Amounts due from affiliated companies | — | — | 14 | 31 | (44 | ) | 1 | |||||||||||||||||
Intercompany receivables | 64,676 | — | 10,069 | 176,169 | (250,914 | ) | — | |||||||||||||||||
Inventories | — | — | 6,534 | — | — | 6,534 | ||||||||||||||||||
Prepaid expenses and other current assets | 12,605 | — | 15,101 | 1,718 | (9,656 | ) | 19,768 | |||||||||||||||||
Total current assets | 111,639 | — | 741,560 | 182,135 | (260,614 | ) | 774,720 | |||||||||||||||||
PROPERTY AND EQUIPMENT, NET | — | — | 2,773,321 | 13,325 | — | 2,786,646 | ||||||||||||||||||
GAMING SUBCONCESSION, NET | — | — | 713,979 | — | — | 713,979 | ||||||||||||||||||
INTANGIBLE ASSETS, NET | — | — | 4,220 | — | — | 4,220 | ||||||||||||||||||
GOODWILL | — | — | 81,915 | — | — | 81,915 | ||||||||||||||||||
INVESTMENTS IN SUBSIDIARIES | 2,697,541 | 1,665,989 | 4,058,121 | 6,301 | (8,427,952 | ) | — | |||||||||||||||||
LONG-TERM PREPAYMENT AND DEPOSITS | 1,178 | — | 50,685 | 502 | — | 52,365 | ||||||||||||||||||
DEFERRED FINANCING COST | — | — | 38,948 | — | — | 38,948 | ||||||||||||||||||
LAND USE RIGHTS, NET | — | — | 447,576 | — | — | 447,576 | ||||||||||||||||||
TOTAL | $ | 2,810,358 | $ | 1,665,989 | $ | 8,910,325 | $ | 202,263 | $ | (8,688,566 | ) | $ | 4,900,369 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 8,719 | $ | — | $ | — | $ | 8,719 | ||||||||||||
Accrued expenses and other current liabilities | 3,302 | — | 500,273 | 3,848 | (9,656 | ) | 497,767 | |||||||||||||||||
Income tax payable | 387 | — | — | 381 | — | 768 | ||||||||||||||||||
Current portion of long-term debt | — | — | 44,504 | — | — | 44,504 | ||||||||||||||||||
Intercompany payables | 180,336 | 1 | 64,185 | 6,392 | (250,914 | ) | — | |||||||||||||||||
Amounts due to affiliated companies | 1,620 | — | 5,655 | 153 | (44 | ) | 7,384 | |||||||||||||||||
Amounts due to shareholders | 22 | — | — | 3 | — | 25 | ||||||||||||||||||
Total current liabilities | 185,667 | 1 | 623,336 | 10,777 | (260,614 | ) | 559,167 | |||||||||||||||||
LONG-TERM DEBT | — | — | 1,638,703 | — | — | 1,638,703 | ||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | 20,606 | 13 | — | 20,619 | ||||||||||||||||||
DEFERRED TAX LIABILITIES | — | — | 17,654 | 103 | — | 17,757 | ||||||||||||||||||
ADVANCE FROM ULTIMATE HOLDING COMPANY | — | — | 1,021,869 | 11,254 | (1,033,123 | ) | — | |||||||||||||||||
LOANS FROM SHAREHOLDERS | 115,647 | — | — | — | — | 115,647 | ||||||||||||||||||
LAND USE RIGHT PAYABLE | — | — | 39,432 | — | — | 39,432 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Total shareholders’ equity | 2,509,044 | 1,665,988 | 5,548,725 | 180,116 | (7,394,829 | ) | 2,509,044 | |||||||||||||||||
TOTAL | $ | 2,810,358 | $ | 1,665,989 | $ | 8,910,325 | $ | 202,263 | $ | (8,688,566 | ) | $ | 4,900,369 | |||||||||||
F-40
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
December 31, 2008
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 163,014 | $ | — | $ | 645,839 | $ | 6,291 | $ | — | $ | 815,144 | ||||||||||||
Restricted cash | — | — | 67,977 | — | — | 67,977 | ||||||||||||||||||
Accounts receivables, net | — | — | 72,755 | — | — | 72,755 | ||||||||||||||||||
Amounts due from affiliated companies | — | — | 650 | 46 | (46 | ) | 650 | |||||||||||||||||
Intercompany receivables | 580,423 | — | 6,066 | 149,663 | (736,152 | ) | — | |||||||||||||||||
Inventories | — | — | 2,170 | — | — | 2,170 | ||||||||||||||||||
Prepaid expenses and other current assets | 720 | — | 16,736 | 100 | — | 17,556 | ||||||||||||||||||
Total current assets | 744,157 | — | 812,193 | 156,100 | (736,198 | ) | 976,252 | |||||||||||||||||
PROPERTY AND EQUIPMENT, NET | — | — | 2,091,618 | 16,104 | — | 2,107,722 | ||||||||||||||||||
GAMING SUBCONCESSION, NET | — | — | 771,216 | — | — | 771,216 | ||||||||||||||||||
INTANGIBLE ASSETS, NET | — | — | 4,220 | — | — | 4,220 | ||||||||||||||||||
GOODWILL | — | — | 81,915 | — | — | 81,915 | ||||||||||||||||||
INVESTMENTS IN SUBSIDIARIES | 1,967,503 | 1,955,392 | 4,058,337 | 6,176 | (7,987,408 | ) | — | |||||||||||||||||
LONG-TERM PREPAYMENT AND DEPOSITS | 1,715 | — | 58,803 | 376 | — | 60,894 | ||||||||||||||||||
DEFERRED TAX ASSETS | — | — | — | 28 | — | 28 | ||||||||||||||||||
DEFERRED FINANCING COST | — | — | 49,336 | — | — | 49,336 | ||||||||||||||||||
DEPOSIT FOR ACQUISITION OF LAND INTEREST | — | — | — | 12,853 | — | 12,853 | ||||||||||||||||||
LAND USE RIGHTS, NET | — | — | 433,853 | — | — | 433,853 | ||||||||||||||||||
TOTAL | $ | 2,713,375 | $ | 1,955,392 | $ | 8,361,491 | $ | 191,637 | $ | (8,723,606 | ) | $ | 4,498,289 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 2,494 | $ | — | $ | — | $ | 2,494 | ||||||||||||
Accrued expenses and other current liabilities | 4,907 | — | 435,907 | 1,863 | (6 | ) | 442,671 | |||||||||||||||||
Income tax payable | 1,296 | — | — | 658 | — | 1,954 | ||||||||||||||||||
Intercompany payables | 180,336 | 1 | 552,053 | 3,762 | (736,152 | ) | — | |||||||||||||||||
Amounts due to affiliated companies | 1,553 | — | 313 | 159 | (40 | ) | 1,985 | |||||||||||||||||
Amounts due to shareholders | 1,032 | — | — | — | — | 1,032 | ||||||||||||||||||
Total current liabilities | 189,124 | 1 | 990,767 | 6,442 | (736,198 | ) | 450,136 | |||||||||||||||||
LONG-TERM DEBT | — | — | 1,412,516 | — | — | 1,412,516 | ||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | 38,268 | 36 | — | 38,304 | ||||||||||||||||||
DEFERRED TAX LIABILITIES | — | — | 19,191 | — | — | 19,191 | ||||||||||||||||||
ADVANCE FROM ULTIMATE HOLDING COMPANY | — | — | 8,368 | — | (8,368 | ) | — | |||||||||||||||||
LOANS FROM SHAREHOLDERS | 115,647 | — | — | — | — | 115,647 | ||||||||||||||||||
LAND USE RIGHT PAYABLE | — | — | 53,891 | — | — | 53,891 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Total shareholders’ equity | 2,408,604 | 1,955,391 | 5,838,490 | 185,159 | (7,979,040 | ) | 2,408,604 | |||||||||||||||||
TOTAL | $ | 2,713,375 | $ | 1,955,392 | $ | 8,361,491 | $ | 191,637 | $ | (8,723,606 | ) | $ | 4,498,289 | |||||||||||
F-41
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Casino | $ | — | $ | — | $ | 1,304,634 | $ | — | $ | — | $ | 1,304,634 | ||||||||||||
Rooms | — | — | 42,598 | — | (1,383 | ) | 41,215 | |||||||||||||||||
Food and beverage | — | — | 29,450 | — | (1,270 | ) | 28,180 | |||||||||||||||||
Entertainment, retail and others | — | — | 10,103 | 1 | 1,773 | 11,877 | ||||||||||||||||||
Gross revenues | — | — | 1,386,785 | 1 | (880 | ) | 1,385,906 | |||||||||||||||||
Less: promotional allowances | — | — | (53,033 | ) | — | — | (53,033 | ) | ||||||||||||||||
Net revenues | — | — | 1,333,752 | 1 | (880 | ) | 1,332,873 | |||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||
Casino | — | — | (1,130,887 | ) | — | 585 | (1,130,302 | ) | ||||||||||||||||
Rooms | — | — | (6,402 | ) | — | 45 | (6,357 | ) | ||||||||||||||||
Food and beverage | — | — | (16,936 | ) | — | 83 | (16,853 | ) | ||||||||||||||||
Entertainment, retail and others | — | — | (4,283 | ) | — | 279 | (4,004 | ) | ||||||||||||||||
General and administrative | (21,089 | ) | — | (122,884 | ) | (22,584 | ) | 35,571 | (130,986 | ) | ||||||||||||||
Pre-opening costs | — | — | (91,994 | ) | (530 | ) | 642 | (91,882 | ) | |||||||||||||||
Amortization of gaming subconcession | — | — | (57,237 | ) | — | — | (57,237 | ) | ||||||||||||||||
Amortization of land use rights | — | — | (18,395 | ) | — | — | (18,395 | ) | ||||||||||||||||
Depreciation and amortization | — | — | (139,875 | ) | (1,989 | ) | — | (141,864 | ) | |||||||||||||||
Property charges and others | — | — | (4,185 | ) | (2,855 | ) | — | (7,040 | ) | |||||||||||||||
Total operating costs and expenses | (21,089 | ) | — | (1,593,078 | ) | (27,958 | ) | 37,205 | (1,604,920 | ) | ||||||||||||||
OPERATING LOSS | (21,089 | ) | — | (259,326 | ) | (27,957 | ) | 36,325 | (272,047 | ) | ||||||||||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||||||||||||||
Interest (expenses) income, net | (119 | ) | — | (31,208 | ) | 1 | — | (31,326 | ) | |||||||||||||||
Other finance costs | — | — | (8,227 | ) | — | — | (8,227 | ) | ||||||||||||||||
Foreign exchange (loss) gain, net | (115 | ) | — | 711 | (98 | ) | (7 | ) | 491 | |||||||||||||||
Other income, net | 15,127 | — | 303 | 23,404 | (36,318 | ) | 2,516 | |||||||||||||||||
Share of results of subsidiaries | (301,368 | ) | (296,065 | ) | (216 | ) | — | 597,649 | — | |||||||||||||||
Total non-operating (expenses) income | (286,475 | ) | (296,065 | ) | (38,637 | ) | 23,307 | 561,324 | (36,546 | ) | ||||||||||||||
LOSS BEFORE INCOME TAX | (307,564 | ) | (296,065 | ) | (297,963 | ) | (4,650 | ) | 597,649 | (308,593 | ) | |||||||||||||
INCOME TAX (EXPENSES) CREDIT | (897 | ) | — | 1,536 | (507 | ) | — | 132 | ||||||||||||||||
NET LOSS | $ | (308,461 | ) | $ | (296,065 | ) | $ | (296,427 | ) | $ | (5,157 | ) | $ | 597,649 | $ | (308,461 | ) | |||||||
F-42
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2008
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Casino | $ | — | $ | — | $ | 1,405,932 | $ | — | $ | — | $ | 1,405,932 | ||||||||||||
Rooms | — | — | 17,575 | — | (491 | ) | 17,084 | |||||||||||||||||
Food and beverage | — | — | 16,480 | — | (373 | ) | 16,107 | |||||||||||||||||
Entertainment, retail and others | — | — | 5,396 | — | — | 5,396 | ||||||||||||||||||
Gross revenues | — | — | 1,445,383 | — | (864 | ) | 1,444,519 | |||||||||||||||||
Less: promotional allowances | — | — | (28,385 | ) | — | — | (28,385 | ) | ||||||||||||||||
Net revenues | — | — | 1,416,998 | — | (864 | ) | 1,416,134 | |||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||
Casino | — | — | (1,159,974 | ) | — | 44 | (1,159,930 | ) | ||||||||||||||||
Rooms | — | — | (1,359 | ) | — | 17 | (1,342 | ) | ||||||||||||||||
Food and beverage | — | — | (12,748 | ) | — | 3 | (12,745 | ) | ||||||||||||||||
Entertainment, retail and others | — | — | (1,240 | ) | — | — | (1,240 | ) | ||||||||||||||||
General and administrative | (22,115 | ) | — | (90,990 | ) | (12,997 | ) | 35,395 | (90,707 | ) | ||||||||||||||
Pre-opening costs | — | — | (21,901 | ) | (3 | ) | 83 | (21,821 | ) | |||||||||||||||
Amortization of gaming subconcession | — | — | (57,237 | ) | — | — | (57,237 | ) | ||||||||||||||||
Amortization of land use rights | — | — | (18,269 | ) | — | — | (18,269 | ) | ||||||||||||||||
Depreciation and amortization | — | — | (50,485 | ) | (894 | ) | — | (51,379 | ) | |||||||||||||||
Property charges and others | — | — | (290 | ) | — | — | (290 | ) | ||||||||||||||||
Total operating costs and expenses | (22,115 | ) | — | (1,414,493 | ) | (13,894 | ) | 35,542 | (1,414,960 | ) | ||||||||||||||
OPERATING (LOSS) INCOME | (22,115 | ) | — | 2,505 | (13,894 | ) | 34,678 | 1,174 | ||||||||||||||||
NON-OPERATING INCOME (EXPENSES) | ||||||||||||||||||||||||
Interest income, net | 5,755 | — | 2,438 | 22 | — | 8,215 | ||||||||||||||||||
Other finance costs | — | — | (15,730 | ) | — | — | (15,730 | ) | ||||||||||||||||
Foreign exchange (loss) gain, net | (409 | ) | — | 1,865 | (20 | ) | — | 1,436 | ||||||||||||||||
Other income, net | 18,291 | — | 6 | 17,353 | (34,678 | ) | 972 | |||||||||||||||||
Share of results of subsidiaries | (3,866 | ) | (6,862 | ) | (46 | ) | — | 10,774 | — | |||||||||||||||
Total non-operating income (expenses) | 19,771 | (6,862 | ) | (11,467 | ) | 17,355 | (23,904 | ) | (5,107 | ) | ||||||||||||||
(LOSS) INCOME BEFORE INCOME TAX | (2,344 | ) | (6,862 | ) | (8,962 | ) | 3,461 | 10,774 | (3,933 | ) | ||||||||||||||
INCOME TAX (EXPENSES) CREDIT | (119 | ) | — | 2,038 | (449 | ) | — | 1,470 | ||||||||||||||||
NET (LOSS) INCOME | $ | (2,463 | ) | $ | (6,862 | ) | $ | (6,924 | ) | $ | 3,012 | $ | 10,774 | $ | (2,463 | ) | ||||||||
F-43
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2007
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Casino | $ | — | $ | — | $ | 348,725 | $ | — | $ | — | $ | 348,725 | ||||||||||||
Rooms | — | — | 5,924 | — | (254 | ) | 5,670 | |||||||||||||||||
Food and beverage | — | — | 11,344 | — | (223 | ) | 11,121 | |||||||||||||||||
Entertainment, retail and others | — | — | 1,964 | — | — | 1,964 | ||||||||||||||||||
Gross revenues | — | — | 367,957 | — | (477 | ) | 367,480 | |||||||||||||||||
Less: promotional allowances | — | — | (8,984 | ) | — | — | (8,984 | ) | ||||||||||||||||
Net revenues | — | — | 358,973 | — | (477 | ) | 358,496 | |||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||
Casino | — | — | (303,957 | ) | — | 35 | (303,922 | ) | ||||||||||||||||
Rooms | — | — | (2,222 | ) | — | — | (2,222 | ) | ||||||||||||||||
Food and beverage | — | — | (10,541 | ) | — | — | (10,541 | ) | ||||||||||||||||
Entertainment, retail and others | — | — | (504 | ) | — | — | (504 | ) | ||||||||||||||||
General and administrative | (16,323 | ) | (1 | ) | (84,846 | ) | (40,948 | ) | 59,345 | (82,773 | ) | |||||||||||||
Pre-opening costs | — | — | (40,470 | ) | — | 438 | (40,032 | ) | ||||||||||||||||
Amortization of gaming subconcession | — | — | (57,190 | ) | — | — | (57,190 | ) | ||||||||||||||||
Amortization of land use rights | — | — | (17,276 | ) | — | — | (17,276 | ) | ||||||||||||||||
Depreciation and amortization | — | — | (38,955 | ) | (511 | ) | — | (39,466 | ) | |||||||||||||||
Property charges and others | — | — | (387 | ) | — | — | (387 | ) | ||||||||||||||||
Total operating costs and expenses | (16,323 | ) | (1 | ) | (556,348 | ) | (41,459 | ) | 59,818 | (554,313 | ) | |||||||||||||
OPERATING LOSS | (16,323 | ) | (1 | ) | (197,375 | ) | (41,459 | ) | 59,341 | (195,817 | ) | |||||||||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||||||||||||||
Interest income, net | 10,401 | — | 7,378 | 91 | — | 17,870 | ||||||||||||||||||
Other finance costs | — | — | (5,765 | ) | — | — | (5,765 | ) | ||||||||||||||||
Foreign exchange gain (loss), net | 5,138 | — | (1,291 | ) | (15 | ) | — | 3,832 | ||||||||||||||||
Other income, net | 16,106 | — | 1,180 | 42,330 | (59,341 | ) | 275 | |||||||||||||||||
Share of results of subsidiaries | (192,296 | ) | (193,293 | ) | 37 | — | 385,552 | — | ||||||||||||||||
Total non-operating (expenses) income | (160,651 | ) | (193,293 | ) | 1,539 | 42,406 | 326,211 | 16,212 | ||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAX | (176,974 | ) | (193,294 | ) | (195,836 | ) | 947 | 385,552 | (179,605 | ) | ||||||||||||||
INCOME TAX (EXPENSES) CREDIT | (1,177 | ) | — | 2,812 | (181 | ) | — | 1,454 | ||||||||||||||||
NET (LOSS) INCOME | $ | (178,151 | ) | $ | (193,294 | ) | $ | (193,024 | ) | $ | 766 | $ | 385,552 | $ | (178,151 | ) | ||||||||
F-44
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net cash used in operating activities | $ | (11,476 | ) | $ | — | $ | (100,062 | ) | $ | (719 | ) | $ | — | $ | (112,257 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||||||
Advances to subsidiaries | (1,023,370 | ) | — | — | — | 1,023,370 | — | |||||||||||||||||
Amounts due from subsidiaries | 522,661 | — | — | — | (522,661 | ) | — | |||||||||||||||||
Acquisition of property and equipment | — | — | (934,961 | ) | (2,113 | ) | — | (937,074 | ) | |||||||||||||||
Deposits for acquisition of property and equipment | — | — | (2,712 | ) | — | — | (2,712 | ) | ||||||||||||||||
Prepayment of show production cost | — | — | (21,735 | ) | — | — | (21,735 | ) | ||||||||||||||||
Changes in restricted cash | — | — | (165,108 | ) | (3,034 | ) | — | (168,142 | ) | |||||||||||||||
Payment for land use rights | — | — | (30,559 | ) | — | — | (30,559 | ) | ||||||||||||||||
Refund of deposit for acquisition of land interest | — | — | — | 12,853 | — | 12,853 | ||||||||||||||||||
Proceeds from sale of property and equipment | — | — | 3,729 | 1 | — | 3,730 | ||||||||||||||||||
Net cash (used in) provided by investing activities | (500,709 | ) | — | (1,151,346 | ) | 7,707 | 500,709 | (1,143,639 | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||||||
Payment of deferred financing costs | — | — | (870 | ) | — | — | (870 | ) | ||||||||||||||||
Advance from ultimate holding company | — | — | 1,012,114 | 11,256 | (1,023,370 | ) | — | |||||||||||||||||
Amount due to ultimate holding company | — | — | (499,309 | ) | (23,352 | ) | 522,661 | — | ||||||||||||||||
Proceeds from issue of share capital | 383,529 | — | — | �� | — | — | 383,529 | |||||||||||||||||
Proceeds from long-term debt | — | — | 270,691 | — | — | 270,691 | ||||||||||||||||||
Net cash provided by (used in) financing activities | 383,529 | — | 782,626 | (12,096 | ) | (500,709 | ) | 653,350 | ||||||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (128,656 | ) | — | (468,782 | ) | (5,108 | ) | — | (602,546 | ) | ||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 163,014 | — | 645,839 | 6,291 | — | 815,144 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 34,358 | $ | — | $ | 177,057 | $ | 1,183 | $ | — | $ | 212,598 | ||||||||||||
F-45
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2008
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 9,419 | $ | (1 | ) | $ | (23,030 | ) | $ | 2,454 | $ | — | $ | (11,158 | ) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||||||
Amounts due from subsidiaries | (420,055 | ) | — | — | — | 420,055 | — | |||||||||||||||||
Acquisition of property and equipment | — | — | (1,041,552 | ) | (12,440 | ) | — | (1,053,992 | ) | |||||||||||||||
Deposits for acquisition of property and equipment | — | — | (34,699 | ) | — | — | (34,699 | ) | ||||||||||||||||
Prepayment of show production cost | — | — | (16,127 | ) | — | — | (16,127 | ) | ||||||||||||||||
Changes in restricted cash | — | — | 231,006 | — | — | 231,006 | ||||||||||||||||||
Payment for land use rights | — | — | (42,090 | ) | — | — | (42,090 | ) | ||||||||||||||||
Proceeds from sale of property and equipment | — | — | 2,300 | — | — | 2,300 | ||||||||||||||||||
Net cash used in investing activities | (420,055 | ) | — | (901,162 | ) | (12,440 | ) | 420,055 | (913,602 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | �� | |||||||||||||||||||||||
Payment of deferred financing costs | — | — | (7,641 | ) | — | — | (7,641 | ) | ||||||||||||||||
Loans from shareholders | — | — | (181 | ) | — | — | (181 | ) | ||||||||||||||||
Amount due to ultimate holding company | — | 1 | 404,617 | 15,437 | (420,055 | ) | — | |||||||||||||||||
Proceeds from long-term debt | — | — | 912,307 | — | — | 912,307 | ||||||||||||||||||
Net cash provided by financing activities | — | 1 | 1,309,102 | 15,437 | (420,055 | ) | 904,485 | |||||||||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (410,636 | ) | — | 384,910 | 5,451 | — | (20,275 | ) | ||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 573,650 | — | 260,929 | 840 | — | 835,419 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 163,014 | $ | — | $ | 645,839 | $ | 6,291 | $ | — | $ | 815,144 | ||||||||||||
F-46
Table of Contents
21. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the year ended December 31, 2007
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 17,885 | $ | — | $ | (415,114 | ) | $ | 544,601 | $ | — | $ | 147,372 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||||||
Amounts due from subsidiaries | (399,878 | ) | — | — | — | 399,878 | — | |||||||||||||||||
Acquisition of property and equipment | — | — | (664,063 | ) | (4,218 | ) | — | (668,281 | ) | |||||||||||||||
Deposits for acquisition of property and equipment | — | — | (5,356 | ) | — | — | (5,356 | ) | ||||||||||||||||
Changes in restricted cash | — | — | (298,983 | ) | — | — | (298,983 | ) | ||||||||||||||||
Net cash used in investing activities | (399,878 | ) | — | (968,402 | ) | (4,218 | ) | 399,878 | (972,620 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||||||
Payment of deferred financing costs | — | — | (49,735 | ) | — | — | (49,735 | ) | ||||||||||||||||
Loans from shareholders | (96,583 | ) | — | — | — | — | (96,583 | ) | ||||||||||||||||
Amount due to ultimate holding company | — | — | 942,661 | (542,783 | ) | (399,878 | ) | — | ||||||||||||||||
Payment of principal of capital leases | — | — | (16 | ) | — | — | (16 | ) | ||||||||||||||||
Proceeds from issue of share capital | 722,796 | — | — | — | — | 722,796 | ||||||||||||||||||
Proceeds from long-term debt | — | — | 500,209 | — | — | 500,209 | ||||||||||||||||||
Net cash provided by (used in) financing activities | 626,213 | — | 1,393,119 | (542,783 | ) | (399,878 | ) | 1,076,671 | ||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 244,220 | — | 9,603 | (2,400 | ) | — | 251,423 | |||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 329,430 | — | 251,326 | 3,240 | — | 583,996 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 573,650 | $ | — | $ | 260,929 | $ | 840 | $ | — | $ | 835,419 | ||||||||||||
(1) | The Guarantor subsidiaries column includes financial information of Melco Crown Gaming which is not 100% owned by the Parent. |
F-47
Table of Contents
ADDITIONAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE 1
FINANCIAL INFORMATION OF PARENT COMPANY
BALANCE SHEETS
(In thousands of U.S. dollars, except share and per share data)
December 31, | ||||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 34,358 | $ | 163,014 | ||||
Amounts due from subsidiaries | 64,676 | 580,423 | ||||||
Prepaid expenses and other current assets | 12,605 | 720 | ||||||
Total current assets | 111,639 | 744,157 | ||||||
INVESTMENTS IN SUBSIDIARIES | 2,697,541 | 1,967,503 | ||||||
LONG-TERM PREPAYMENT AND DEPOSITS | 1,178 | 1,715 | ||||||
TOTAL | $ | 2,810,358 | $ | 2,713,375 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accrued expenses and other current liabilities | $ | 3,302 | $ | 4,907 | ||||
Income tax payable | 387 | 1,296 | ||||||
Amounts due to affiliated companies | 1,620 | 1,553 | ||||||
Amounts due to subsidiaries | 180,336 | 180,336 | ||||||
Amounts due to shareholders | 22 | 1,032 | ||||||
Total current liabilities | 185,667 | 189,124 | ||||||
LOANS FROM SHAREHOLDERS | 115,647 | 115,647 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Ordinary shares at US$0.01 par value per share | ||||||||
(Authorized — 2,500,000,000 and 1,500,000,000 shares and issued — 1,595,617,550 and 1,321,550,399 shares as of December 31, 2009 and 2008 (Note 13)) | 15,956 | 13,216 | ||||||
Treasury shares, at US$0.01 par value per share | ||||||||
(471,567 and 385,180 shares as of December 31, 2009 and 2008 (Note 13)) | (5 | ) | (4 | ) | ||||
Additional paid-in capital | 3,088,768 | 2,689,257 | ||||||
Accumulated other comprehensive losses | (29,034 | ) | (35,685 | ) | ||||
Accumulated losses | (566,641 | ) | (258,180 | ) | ||||
Total shareholders’ equity | 2,509,044 | 2,408,604 | ||||||
TOTAL | $ | 2,810,358 | $ | 2,713,375 | ||||
F-48
Table of Contents
ADDITIONAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE 1
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share data)
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
REVENUE | $ | — | $ | — | $ | — | ||||||
OPERATING EXPENSES | ||||||||||||
General and administrative | (21,089 | ) | (22,115 | ) | (16,323 | ) | ||||||
Total operating expenses | (21,089 | ) | (22,115 | ) | (16,323 | ) | ||||||
OPERATING LOSS | (21,089 | ) | (22,115 | ) | (16,323 | ) | ||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||
Interest income | 96 | 5,755 | 11,159 | |||||||||
Interest expenses | (215 | ) | — | (758 | ) | |||||||
Foreign exchange (loss) gain, net | (115 | ) | (409 | ) | 5,138 | |||||||
Other income, net | 15,127 | 18,291 | 16,106 | |||||||||
Share of results of subsidiaries | (301,368 | ) | (3,866 | ) | (192,296 | ) | ||||||
Total non-operating (expenses) income | (286,475 | ) | 19,771 | (160,651 | ) | |||||||
LOSS BEFORE INCOME TAX | (307,564 | ) | (2,344 | ) | (176,974 | ) | ||||||
INCOME TAX EXPENSE | (897 | ) | (119 | ) | (1,177 | ) | ||||||
NET LOSS | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | |||
F-49
Table of Contents
ADDITIONAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE 1
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands of U.S. dollars, except share and per share data)
Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Paid-in | Comprehensive | Accumulated | Shareholders’ | Comprehensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Losses | Equity | Loss | ||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2007 | 1,180,931,146 | $ | 11,809 | — | $ | — | $ | 1,955,383 | $ | 740 | $ | (77,566 | ) | $ | 1,890,366 | |||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (178,151 | ) | (178,151 | ) | $ | (178,151 | ) | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (1,685 | ) | — | (1,685 | ) | (1,685 | ) | ||||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | (10,131 | ) | — | (10,131 | ) | (10,131 | ) | ||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 5,346 | — | — | 5,346 | — | |||||||||||||||||||||||||||
Shares issued, net of offering expenses (Note 13) | 139,612,500 | 1,396 | — | — | 721,400 | — | — | 722,796 | — | |||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 395,256 | 4 | — | — | (4 | ) | — | — | — | — | ||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2007 | 1,320,938,902 | 13,209 | — | — | 2,682,125 | (11,076 | ) | (255,717 | ) | 2,428,541 | $ | (189,967 | ) | |||||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (2,463 | ) | (2,463 | ) | $ | (2,463 | ) | |||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | (24,609 | ) | — | (24,609 | ) | (24,609 | ) | ||||||||||||||||||||||||
Reversal of over-accrued offering expenses | — | — | — | — | 117 | — | — | 117 | — | |||||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 7,018 | — | — | 7,018 | — | |||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 226,317 | 3 | — | — | (3 | ) | — | — | — | — | ||||||||||||||||||||||||||
Shares issued for future exercises of share options (Note 13) | 385,180 | 4 | (385,180 | ) | (4 | ) | — | — | — | — | — | |||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2008 | 1,321,550,399 | 13,216 | (385,180 | ) | (4 | ) | 2,689,257 | (35,685 | ) | (258,180 | ) | 2,408,604 | $ | (27,072 | ) | |||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (308,461 | ) | (308,461 | ) | $ | (308,461 | ) | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (11 | ) | — | (11 | ) | (11 | ) | ||||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | 6,662 | — | 6,662 | 6,662 | |||||||||||||||||||||||||||
Share-based compensation (Note 15) | — | — | — | — | 11,807 | — | — | 11,807 | — | |||||||||||||||||||||||||||
Shares issued, net of offering expenses (Note 13) | 263,155,335 | 2,631 | — | — | 380,898 | — | — | 383,529 | — | |||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 13) | 8,297,110 | 83 | — | — | 6,831 | — | — | 6,914 | — | |||||||||||||||||||||||||||
Shares issued for future vesting of restricted shares (Note 13) | 2,614,706 | 26 | (2,614,706 | ) | (26 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of shares for restricted shares vested (Note 13) | — | — | 2,528,319 | 25 | (25 | ) | — | — | — | — | ||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2009 | 1,595,617,550 | $ | 15,956 | (471,567 | ) | $ | (5 | ) | $ | 3,088,768 | $ | (29,034 | ) | $ | (566,641 | ) | $ | 2,509,044 | $ | (301,810 | ) | |||||||||||||||
F-50
Table of Contents
ADDITIONAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE 1
FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (308,461 | ) | $ | (2,463 | ) | $ | (178,151 | ) | |||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||
Share-based compensation | 11,385 | 6,855 | 5,256 | |||||||||
Share of results of subsidiaries | 301,368 | 3,866 | 192,296 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Amounts due from affiliated companies | — | 2 | 28 | |||||||||
Prepaid expenses and other current assets | (11,885 | ) | 2,753 | (3,052 | ) | |||||||
Long-term prepayment and deposits | 537 | (1,715 | ) | 126 | ||||||||
Accrued expenses and other current liabilities | (1,605 | ) | 2,119 | (1,216 | ) | |||||||
Income tax payable | (909 | ) | 119 | 1,177 | ||||||||
Amounts due to shareholders | (1,973 | ) | — | — | ||||||||
Amounts due to affiliated companies | 67 | (2,108 | ) | 1,361 | ||||||||
Amounts due to subsidiaries | — | (9 | ) | 60 | ||||||||
Net cash (used in) provided by operating activities | (11,476 | ) | 9,419 | 17,885 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Advances to subsidiaries | (1,023,370 | ) | — | — | ||||||||
Amounts due from subsidiaries | 522,661 | (420,055 | ) | (399,878 | ) | |||||||
Net cash used in investing activities | (500,709 | ) | (420,055 | ) | (399,878 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Loans from shareholders | — | — | (96,583 | ) | ||||||||
Proceeds from issue of share capital | 383,529 | — | 722,796 | |||||||||
Cash provided by financing activities | 383,529 | — | 626,213 | |||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (128,656 | ) | (410,636 | ) | 244,220 | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 163,014 | 573,650 | 329,430 | |||||||||
�� | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 34,358 | $ | 163,014 | $ | 573,650 | ||||||
F-51
Table of Contents
ADDITIONAL INFORMATION — FINANCIAL STATEMENTS SCHEDULE 1
FINANCIAL INFORMATION OF PARENT COMPANY
NOTES TO FINANCIAL STATEMENTS SCHEDULE 1
(In thousands of U.S. dollars, except share and per share data)
F-52
Table of Contents
Table of Contents
Page(s) | ||||
H-2 | ||||
H-3 | ||||
H-4 | ||||
H-5 | ||||
H-7 |
H-1
Table of Contents
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 295,232 | $ | 212,598 | ||||
Restricted cash | 194,274 | 236,119 | ||||||
Accounts receivable, net (Note 3) | 312,131 | 299,700 | ||||||
Amount due from an affiliated company (Note 12(a)) | — | 1 | ||||||
Amount due from a shareholder (Note 12(c)) | 8 | — | ||||||
Inventories | 7,881 | 6,534 | ||||||
Prepaid expenses and other current assets | 17,547 | 19,768 | ||||||
Total current assets | 827,073 | 774,720 | ||||||
PROPERTY AND EQUIPMENT, NET (Note 4) | 2,736,580 | 2,786,646 | ||||||
GAMING SUBCONCESSION, NET | 685,360 | 713,979 | ||||||
INTANGIBLE ASSETS, NET | 4,220 | 4,220 | ||||||
GOODWILL | 81,915 | 81,915 | ||||||
LONG-TERM PREPAYMENT, DEPOSITS AND OTHER ASSETS | 84,249 | 52,365 | ||||||
DEFERRED TAX ASSETS | 171 | — | ||||||
DEFERRED FINANCING COSTS | 52,389 | 38,948 | ||||||
LAND USE RIGHTS, NET | 437,816 | 447,576 | ||||||
TOTAL | $ | 4,909,773 | $ | 4,900,369 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 9,273 | $ | 8,719 | ||||
Accrued expenses and other current liabilities (Note 5) | 402,995 | 497,767 | ||||||
Income tax payable | 989 | 768 | ||||||
Current portion of long-term debt (Note 6) | 130,873 | 44,504 | ||||||
Amounts due to affiliated companies (Note 12(b)) | 3,009 | 7,384 | ||||||
Amounts due to shareholders (Note 12(c)) | 11 | 25 | ||||||
Total current liabilities | 547,150 | 559,167 | ||||||
LONG-TERM DEBT (Note 6) | 1,700,376 | 1,638,703 | ||||||
OTHER LONG-TERM LIABILITIES | 18,715 | 20,619 | ||||||
DEFERRED TAX LIABILITIES | 17,430 | 17,757 | ||||||
LOANS FROM SHAREHOLDERS (Note 12(c)) | 115,647 | 115,647 | ||||||
LAND USE RIGHT PAYABLE | 31,930 | 39,432 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 11) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Ordinary shares at US$0.01 par value per share | ||||||||
(Authorized — 2,500,000,000 shares and issued — 1,596,748,456 and 1,595,617,550 shares as of June 30, 2010 and December 31, 2009 (Note 8)) | 15,968 | 15,956 | ||||||
Treasury shares, at US$0.01 par value per share (1,359,576 and 471,567 shares as of June 30, 2010 and December 31, 2009 (Note 8)) | (14 | ) | (5 | ) | ||||
Additional paid-in capital | 3,091,268 | 3,088,768 | ||||||
Accumulated other comprehensive losses | (19,481 | ) | (29,034 | ) | ||||
Accumulated losses | (609,216 | ) | (566,641 | ) | ||||
Total shareholders’ equity | 2,478,525 | 2,509,044 | ||||||
TOTAL | $ | 4,909,773 | $ | 4,900,369 | ||||
H-2
Table of Contents
Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
OPERATING REVENUES | ||||||||
Casino | $ | 1,104,839 | $ | 424,409 | ||||
Rooms | 39,335 | 11,448 | ||||||
Food and beverage | 27,406 | 8,391 | ||||||
Entertainment, retail and others | 10,761 | 3,831 | ||||||
Gross revenues | 1,182,341 | 448,079 | ||||||
Less: promotional allowances | (41,096 | ) | (15,751 | ) | ||||
Net revenues | 1,141,245 | 432,328 | ||||||
OPERATING COSTS AND EXPENSES | ||||||||
Casino | (865,830 | ) | (383,127 | ) | ||||
Rooms | (6,767 | ) | (2,060 | ) | ||||
Food and beverage | (15,330 | ) | (6,512 | ) | ||||
Entertainment, retail and others | (4,143 | ) | (1,014 | ) | ||||
General and administrative | (91,349 | ) | (48,352 | ) | ||||
Pre-opening costs | (6,982 | ) | (79,563 | ) | ||||
Amortization of gaming subconcession | (28,619 | ) | (28,619 | ) | ||||
Amortization of land use rights | (9,760 | ) | (9,085 | ) | ||||
Depreciation and amortization | (113,733 | ) | (43,837 | ) | ||||
Property charges and others | 34 | (4,134 | ) | |||||
Total operating costs and expenses | (1,142,479 | ) | (606,303 | ) | ||||
OPERATING LOSS | (1,234 | ) | (173,975 | ) | ||||
NON-OPERATING EXPENSES | ||||||||
Interest expenses, net | (36,766 | ) | (3,730 | ) | ||||
Other finance costs | (2,620 | ) | (2,620 | ) | ||||
Foreign exchange gain, net | 17 | 175 | ||||||
Other income, net | 1,041 | 1,000 | ||||||
Costs associated with debt modification | (3,156 | ) | — | |||||
Total non-operating expenses | (41,484 | ) | (5,175 | ) | ||||
LOSS BEFORE INCOME TAX | (42,718 | ) | (179,150 | ) | ||||
INCOME TAX CREDIT (EXPENSE) (Note 9) | 143 | (134 | ) | |||||
NET LOSS | $ | (42,575 | ) | $ | (179,284 | ) | ||
LOSS PER SHARE: | ||||||||
Basic and diluted | $ | (0.027 | ) | $ | (0.131 | ) | ||
SHARES USED IN LOSS PER SHARE CALCULATION: | ||||||||
Basic and diluted | 1,595,281,416 | 1,370,943,132 | ||||||
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Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||||||
Common Shares | Treasury Shares | Paid-in | Comprehensive | Accumulated | Shareholders’ | Comprehensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Losses | Losses | Equity | Loss | ||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2009 | 1,321,550,399 | $ | 13,216 | (385,180 | ) | $ | (4 | ) | $ | 2,689,257 | $ | (35,685 | ) | $ | (258,180 | ) | $ | 2,408,604 | ||||||||||||||||||
Net loss for the period | — | — | — | — | — | — | (179,284 | ) | (179,284 | ) | $ | (179,284 | ) | |||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | 2,943 | — | 2,943 | 2,943 | |||||||||||||||||||||||||||
Share-based compensation (Note 10) | — | — | — | — | 6,518 | — | — | 6,518 | ||||||||||||||||||||||||||||
Shares issued, net of offering expenses (Note 8) | 135,000,000 | 1,350 | — | — | 173,136 | — | — | 174,486 | ||||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 8) | 7,168,818 | 72 | — | — | 6,842 | — | — | 6,914 | ||||||||||||||||||||||||||||
Shares issued for future vesting of restricted shares (Note 8) | 2,598,321 | 26 | (2,598,321 | ) | (26 | ) | — | — | — | — | ||||||||||||||||||||||||||
Issuance of shares for restricted shares vested (Note 8) | — | — | 916,659 | 9 | (9 | ) | — | — | — | |||||||||||||||||||||||||||
BALANCE AT JUNE 30, 2009 | 1,466,317,538 | $ | 14,664 | (2,066,842 | ) | $ | (21 | ) | $ | 2,875,744 | $ | (32,742 | ) | $ | (437,464 | ) | $ | 2,420,181 | $ | (176,341 | ) | |||||||||||||||
BALANCE AT JANUARY 1, 2010 | 1,595,617,550 | $ | 15,956 | (471,567 | ) | $ | (5 | ) | $ | 3,088,768 | $ | (29,034 | ) | $ | (566,641 | ) | $ | 2,509,044 | ||||||||||||||||||
Net loss for the period | — | — | — | — | — | — | (42,575 | ) | (42,575 | ) | $ | (42,575 | ) | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (8 | ) | — | (8 | ) | (8 | ) | ||||||||||||||||||||||||
Change in fair value of interest rate swap agreements | — | — | — | — | — | 9,561 | — | 9,561 | 9,561 | |||||||||||||||||||||||||||
Share-based compensation (Note 10) | — | — | — | — | 2,503 | — | — | 2,503 | ||||||||||||||||||||||||||||
Shares issued upon restricted shares vested (Note 8) | 199,160 | 2 | — | — | (2 | ) | — | — | — | |||||||||||||||||||||||||||
Shares issued for future exercises of share options (Note 8) | 931,746 | 10 | (931,746 | ) | (10 | ) | — | — | — | — | ||||||||||||||||||||||||||
Issuance of shares for restricted shares vested (Note 8) | — | — | 43,737 | 1 | (1 | ) | — | — | — | |||||||||||||||||||||||||||
BALANCE AT JUNE 30, 2010 | 1,596,748,456 | $ | 15,968 | (1,359,576 | ) | $ | (14 | ) | $ | 3,091,268 | $ | (19,481 | ) | $ | (609,216 | ) | $ | 2,478,525 | $ | (33,022 | ) | |||||||||||||||
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Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (42,575 | ) | $ | (179,284 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 152,112 | 81,541 | ||||||
Amortization of deferred financing costs | 6,944 | 1,075 | ||||||
Amortization of discount on senior notes payable | 82 | — | ||||||
Impairment loss recognized on property and equipment | — | 3,137 | ||||||
Loss on disposal of property and equipment | 102 | 274 | ||||||
Allowance for doubtful debts | 17,911 | 5,730 | ||||||
Written off deferred financing cost on modification of debt | 1,992 | — | ||||||
Share-based compensation | 2,503 | 6,200 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (45,320 | ) | (100,356 | ) | ||||
Amounts due from affiliated companies | 1 | 26 | ||||||
Amount due from a shareholder | (8 | ) | — | |||||
Inventories | (1,347 | ) | (2,209 | ) | ||||
Prepaid expenses and other current assets | 156 | (13,662 | ) | |||||
Long-term prepayment, deposits and other assets | 499 | (1,057 | ) | |||||
Deferred tax assets | (171 | ) | 28 | |||||
Accounts payable | 554 | 4,066 | ||||||
Accrued expenses and other current liabilities | (19,442 | ) | 147,498 | |||||
Income tax payable | 221 | (1,374 | ) | |||||
Amounts due to affiliated companies | (499 | ) | (818 | ) | ||||
Amounts due to shareholders | (14 | ) | 46 | |||||
Other long-term liabilities | (35 | ) | 141 | |||||
Deferred tax liabilities | (327 | ) | (561 | ) | ||||
Net cash provided by (used in) operating activities | 73,339 | (49,559 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Acquisition of property and equipment | (118,853 | ) | (607,335 | ) | ||||
Deposits for acquisition of property and equipment | (835 | ) | (3,541 | ) | ||||
Prepayment of show production cost | (17,157 | ) | (5,364 | ) | ||||
Changes in restricted cash | 41,835 | 67,977 | ||||||
Payment for land use right | (22,462 | ) | (6,796 | ) | ||||
Proceeds from sale of property and equipment | 1 | 799 | ||||||
Net cash used in investing activities | (117,471 | ) | (554,260 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Payment of deferred financing costs | (21,194 | ) | (870 | ) | ||||
Proceeds from issue of share capital | — | 174,486 | ||||||
Proceeds from long-term debt | — | 270,691 | ||||||
Principal payments on long-term debt | (444,066 | ) | — | |||||
Proceeds from senior notes issuance | 592,026 | — | ||||||
Net cash provided by financing activities | 126,766 | 444,307 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 82,634 | (159,512 | ) | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 212,598 | 815,144 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 295,232 | $ | 655,632 | ||||
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Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS | ||||||||
Cash paid for interest (net of capitalized interest) | $ | (29,932 | ) | $ | (1,121 | ) | ||
Cash paid for tax | $ | (134 | ) | $ | (2,041 | ) | ||
NON-CASH INVESTING ACTIVITIES | ||||||||
Construction costs and property and equipment funded through accrued expenses and other current liabilities | $ | 37,789 | $ | 257,060 | ||||
Costs of property and equipment funded through amounts due to affiliated companies | $ | 1,130 | $ | 11,573 | ||||
Deferred financing costs funded through accrued expenses and other current liabilities | $ | 1,634 | $ | — | ||||
Provision of bonus funded through restricted shares issued and vested | $ | — | $ | 6,914 | ||||
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1. | COMPANY INFORMATION |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) | Gaming Tax |
(b) | Loss Per Share |
H-7
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — (Continued) |
(b) | Loss Per Share — (Continued) |
Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
Weighted-average number of ordinary shares outstanding used in the calculation of basic loss per share | 1,595,281,416 | 1,370,943,132 | ||||||
Incremental weighted-average number of ordinary shares from assumed exercised of restricted shares and share options using the treasury stock method | — | — | ||||||
Weighted-average number of ordinary shares outstanding used in the calculation of diluted loss per share | 1,595,281,416 | 1,370,943,132 | ||||||
(c) | Accounting for Derivative Instruments and Hedging Activities |
(d) | Reclassifications |
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3. | ACCOUNTS RECEIVABLE, NET |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Components of accounts receivable, net are as follows: | ||||||||
Casino | $ | 335,859 | $ | 320,789 | ||||
Hotel | 2,447 | 2,457 | ||||||
Other | 982 | 681 | ||||||
Sub-total | $ | 339,288 | $ | 323,927 | ||||
Less: allowance for doubtful debts | (27,157 | ) | (24,227 | ) | ||||
$ | 312,131 | $ | 299,700 | |||||
4. | PROPERTY AND EQUIPMENT, NET |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Cost | ||||||||
Buildings | $ | 2,220,834 | $ | 2,219,127 | ||||
Furniture, fixtures and equipment | 318,525 | 307,305 | ||||||
Plant and gaming machinery | 120,217 | 114,983 | ||||||
Leasehold improvements | 113,603 | 97,188 | ||||||
Motor vehicles | 4,214 | 3,375 | ||||||
Sub-total | $ | 2,777,393 | $ | 2,741,978 | ||||
Less: accumulated depreciation | (362,830 | ) | (249,780 | ) | ||||
Sub-total | $ | 2,414,563 | $ | 2,492,198 | ||||
Construction in progress | 322,017 | 294,448 | ||||||
Property and equipment, net | $ | 2,736,580 | $ | 2,786,646 | ||||
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5. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Construction costs payable | $ | 34,538 | $ | 80,668 | ||||
Customer deposits | 46,276 | 50,829 | ||||||
Outstanding gaming chips and tokens | 120,436 | 136,774 | ||||||
Other gaming related accruals | 21,566 | 53,294 | ||||||
Gaming tax accruals | 94,319 | 67,376 | ||||||
Land use right payable | 14,821 | 29,781 | ||||||
Operating expense accruals | 67,380 | 67,701 | ||||||
Interest rate swap liabilities | 3,659 | 11,344 | ||||||
$ | 402,995 | $ | 497,767 | |||||
6. | LONG-TERM DEBT |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
City of Dreams Project Facility | $ | 1,239,141 | �� | $ | 1,683,207 | |||
$600,000 10.25% senior notes, due 2018, net | 592,108 | — | ||||||
$ | 1,831,249 | $ | 1,683,207 | |||||
Current portion of long-term debt | (130,873 | ) | (44,504 | ) | ||||
$ | 1,700,376 | $ | 1,638,703 | |||||
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6. | LONG-TERM DEBT — (Continued) |
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6. | LONG-TERM DEBT — (Continued) |
Six months ending December 31, 2010 | $ | 35,693 | ||
Year ending December 31, 2011 | 214,155 | |||
Year ending December 31, 2012 | 311,133 | |||
Year ending December 31, 2013 | 309,336 | |||
Year ending December 31, 2014 | 368,823 | |||
Thereafter | 600,000 | |||
$ | 1,839,140 | |||
7. | FAIR VALUE MEASUREMENTS |
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7. | FAIR VALUE MEASUREMENTS — (Continued) |
Quoted Prices | ||||||||||||||||
In Active | Significant | |||||||||||||||
Market for | Other | Significant | Balance | |||||||||||||
Identical | Observable | Unobservable | as of | |||||||||||||
Assets | Inputs | Inputs | June 30, | |||||||||||||
(Level 1) | (Level 2) | (level 3) | 2010 | |||||||||||||
Interest rate swap liabilities | $ | — | $ | 18,517 | $ | — | $ | 18,517 | ||||||||
8. | CAPITAL STRUCTURE |
9. | INCOME TAX CREDIT (EXPENSE) |
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9. | INCOME TAX CREDIT (EXPENSE) — (Continued) |
10. | SHARE-BASED COMPENSATION |
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10. | SHARE-BASED COMPENSATION — (Continued) |
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Number | Average | Remaining | Aggregate | |||||||||||||
of Share | Exercise | Contractual | Intrinsic | |||||||||||||
Options | Price per Share | Term | Value | |||||||||||||
Outstanding at January 1, 2010 | 22,342,398 | $ | 1.26 | |||||||||||||
Granted | 587,046 | $ | 1.25 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | (1,078,092 | ) | $ | 1.73 | ||||||||||||
Expired | (148,362 | ) | $ | 4.45 | ||||||||||||
Outstanding at June 30, 2010 | 21,702,990 | $ | 1.22 | 8.33 | $ | 3,502 | ||||||||||
Exercisable at June 30, 2010 | 1,439,921 | $ | 1.82 | 8.43 | $ | 199 | ||||||||||
Number of | Weighted- | |||||||
Restricted | Average Grant | |||||||
Shares | Date Fair Value | |||||||
Unvested at January 1, 2010 | 3,246,031 | $ | 1.41 | |||||
Granted | 390,090 | 1.33 | ||||||
Vested | (242,897 | ) | 3.62 | |||||
Forfeited | (160,407 | ) | 1.27 | |||||
Unvested at June 30, 2010 | 3,232,817 | $ | 1.24 | |||||
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10. | SHARE-BASED COMPENSATION — (Continued) |
Six Months | ||||||||
Ended June 30, | ||||||||
2010 | 2009 | |||||||
Share options | $ | 1,914 | $ | 2,828 | ||||
Restricted shares | 589 | 3,690 | ||||||
Total share-based compensation expenses | 2,503 | 6,518 | ||||||
Less: share-based compensation expenses capitalized | — | (318 | ) | |||||
Share-based compensation recognized in general and administrative expenses | $ | 2,503 | $ | 6,200 | ||||
11. | COMMITMENTS AND CONTINGENCIES |
(a) | Capital Commitments |
(b) | Lease Commitments and Other Arrangements |
Six months ending December 31, 2010 | $ | 5,614 | ||
Year ending December 31, 2011 | 6,739 | |||
Year ending December 31, 2012 | 5,400 | |||
Year ending December 31, 2013 | 5,211 | |||
Year ending December 31, 2014 | 3,853 | |||
Over 2014 | 9,667 | |||
Total minimum lease payments | $ | 36,484 | ||
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11. | COMMITMENTS AND CONTINGENCIES — (Continued) |
(b) | Lease Commitments and Other Arrangements — (Continued) |
Six months ending December 31, 2010 | $ | 4,821 | ||
Year ending December 31, 2011 | 9,652 | |||
Year ending December 31, 2012 | 9,200 | |||
Year ending December 31, 2013 | 8,696 | |||
Year ending December 31, 2014 | 8,677 | |||
Over 2014 | 5,592 | |||
Total minimum future fees to be received | $ | 46,638 | ||
(c) | Other Commitments |
(d) | Contingencies |
H-17
Table of Contents
11. | COMMITMENTS AND CONTINGENCIES — (Continued) |
(d) | Contingencies — (Continued) |
(e) | Litigation |
12. | RELATED PARTY TRANSACTIONS |
Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
Amounts paid/payable to affiliated companies | ||||||||
Advertising and promotional expenses | $ | 39 | $ | 195 | ||||
Consultancy fee capitalized in construction in progress | — | 1,312 | ||||||
Consultancy fee recognized as expense | 265 | 367 | ||||||
Management fees | 9 | 41 | ||||||
Network support fee | — | 13 | ||||||
Office rental | 1,127 | 1,107 | ||||||
Operating and office supplies | 114 | 70 | ||||||
Property and equipment | 1,206 | 49,812 | ||||||
Repairs and maintenance | 237 | 39 | ||||||
Service fee expense | 248 | 301 | ||||||
Traveling expense capitalized in construction in progress | 3 | 47 | ||||||
Traveling expense recognized as expense | 1,887 | 599 | ||||||
Amounts received/receivable from affiliated companies | ||||||||
Other service fee income | 97 | 167 | ||||||
Rooms and food and beverage income | 15 | 12 | ||||||
Amounts paid/payable to shareholders | ||||||||
Interest charges capitalized in construction in progress | — | 963 | ||||||
Interest charges recognized as expense | 88 | 51 | ||||||
Amounts received/receivable from a shareholder | ||||||||
Other service fee income | 25 | — | ||||||
Rooms and food and beverage income | 26 | — | ||||||
H-18
Table of Contents
12. | RELATED PARTY TRANSACTIONS — (Continued) |
(a) | Amount Due From An Affiliated Company |
(b) | Amounts Due To Affiliated Companies |
H-19
Table of Contents
12. | RELATED PARTY TRANSACTIONS — (Continued) |
(b) | Amounts Due To Affiliated Companies — (Continued) |
(c) | Amounts Due From (To) Shareholders/Loans From Shareholders |
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Table of Contents
12. | RELATED PARTY TRANSACTIONS — (Continued) |
(c) | Amounts Due From (To) Shareholders/Loans From Shareholders — (Continued) |
13. | SEGMENT INFORMATION |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Mocha Clubs | $ | 139,892 | $ | 144,455 | ||||
Altira Macau | 562,159 | 594,743 | ||||||
City of Dreams | 3,160,528 | 3,093,310 | ||||||
Corporate and Others | 1,047,194 | 1,067,861 | ||||||
Total consolidated assets | $ | 4,909,773 | $ | 4,900,369 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Mocha Clubs | $ | 1,645 | $ | 3,258 | ||||
Altira Macau | 480 | 1,468 | ||||||
City of Dreams | 61,528 | 662,486 | ||||||
Corporate and Others | 741 | 1,538 | ||||||
Total capital expenditures | $ | 64,394 | $ | 668,750 | ||||
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Table of Contents
13. | SEGMENT INFORMATION — (Continued) |
Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
NET REVENUES | ||||||||
Mocha Clubs | $ | 53,638 | $ | 48,551 | ||||
Altira Macau | 427,846 | 342,791 | ||||||
City of Dreams | 645,644 | 26,808 | ||||||
Corporate and Others | 14,117 | 14,178 | ||||||
Total net revenues | 1,141,245 | 432,328 | ||||||
ADJUSTED PROPERTY EBITDA(1) | ||||||||
Mocha Clubs | 13,616 | 12,893 | ||||||
Altira Macau | 58,501 | 13,796 | ||||||
City of Dreams | 113,807 | (12,179 | ) | |||||
Total adjusted property EBITDA | 185,924 | 14,510 | ||||||
OPERATING COSTS AND EXPENSES | ||||||||
Pre-opening costs | (6,982 | ) | (79,563 | ) | ||||
Amortization of gaming subconcession | (28,619 | ) | (28,619 | ) | ||||
Amortization of land use rights | (9,760 | ) | (9,085 | ) | ||||
Depreciation and amortization | (113,733 | ) | (43,837 | ) | ||||
Share-based compensation | (2,503 | ) | (6,200 | ) | ||||
Property charges and others | 34 | (4,134 | ) | |||||
Corporate and other expenses | (25,595 | ) | (17,047 | ) | ||||
Total operating costs and expenses | (187,158 | ) | (188,485 | ) | ||||
OPERATING LOSS | (1,234 | ) | (173,975 | ) | ||||
NON-OPERATING EXPENSES | ||||||||
Interest expenses, net | (36,766 | ) | (3,730 | ) | ||||
Other finance costs | (2,620 | ) | (2,620 | ) | ||||
Foreign exchange gain, net | 17 | 175 | ||||||
Other income, net | 1,041 | 1,000 | ||||||
Costs associated with debt modification | (3,156 | ) | — | |||||
Total non-operating expenses | (41,484 | ) | (5,175 | ) | ||||
LOSS BEFORE INCOME TAX | (42,718 | ) | (179,150 | ) | ||||
INCOME TAX CREDIT (EXPENSE) | 143 | (134 | ) | |||||
NET LOSS | $ | (42,575 | ) | $ | (179,284 | ) | ||
(1) | “Adjusted property EBITDA” is earnings before interest, taxes, depreciation, amortization, other expenses (including pre-opening costs, share-based compensation, property charges and others, corporate and other expenses and non-operating expenses). The chief operating decision maker used Adjusted property EBITDA to measure the operating performance of Mocha Clubs, Altira Macau and City of Dreams and to compare the operating performance of its properties with those of its competitors. |
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Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
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Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
June 30, 2010
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 13,183 | $ | — | $ | 259,958 | $ | 22,091 | $ | — | $ | 295,232 | ||||||||||||
Restricted cash | — | — | 194,274 | — | — | 194,274 | ||||||||||||||||||
Accounts receivable, net | — | — | 312,131 | — | — | 312,131 | ||||||||||||||||||
Amounts due from affiliated companies | — | — | 237 | 45 | (282 | ) | — | |||||||||||||||||
Intercompany receivables | 74,906 | 9,064 | 28,603 | 164,012 | (276,585 | ) | — | |||||||||||||||||
Amount due from a shareholder | — | — | 2 | 25 | (19 | ) | 8 | |||||||||||||||||
Inventories | — | — | 7,881 | — | — | 7,881 | ||||||||||||||||||
Prepaid expenses and other current assets | 2,502 | 22 | 12,213 | 2,810 | — | 17,547 | ||||||||||||||||||
Total current assets | 90,591 | 9,086 | 815,299 | 188,983 | (276,886 | ) | 827,073 | |||||||||||||||||
PROPERTY AND EQUIPMENT, NET | — | — | 2,723,925 | 12,655 | — | 2,736,580 | ||||||||||||||||||
GAMING SUBCONCESSION, NET | — | — | 685,360 | — | — | 685,360 | ||||||||||||||||||
INTANGIBLE ASSETS, NET | — | — | 4,220 | — | — | 4,220 | ||||||||||||||||||
GOODWILL | — | — | 81,915 | — | — | 81,915 | ||||||||||||||||||
INVESTMENTS IN SUBSIDIARIES | 2,688,706 | 2,212,739 | 4,058,121 | 6,305 | (8,965,871 | ) | — | |||||||||||||||||
LONG-TERM PREPAYMENT, DEPOSITS AND OTHER ASSETS | 910 | — | 82,817 | 522 | — | 84,249 | ||||||||||||||||||
DEFERRED TAX ASSETS | — | — | — | 171 | — | 171 | ||||||||||||||||||
DEFERRED FINANCING COSTS | — | 14,009 | 38,380 | — | — | 52,389 | ||||||||||||||||||
LAND USE RIGHTS, NET | — | — | 437,816 | — | — | 437,816 | ||||||||||||||||||
TOTAL | $ | 2,780,207 | $ | 2,235,834 | $ | 8,927,853 | $ | 208,636 | $ | (9,242,757 | ) | $ | 4,909,773 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 9,273 | $ | — | $ | — | $ | 9,273 | ||||||||||||
Accrued expenses and other current liabilities | 1,432 | 9,241 | 387,318 | 5,004 | — | 402,995 | ||||||||||||||||||
Income tax payable | 470 | — | — | 519 | — | 989 | ||||||||||||||||||
Current portion of long-term debt | — | — | 130,873 | — | — | 130,873 | ||||||||||||||||||
Intercompany payables | 183,428 | 82,101 | 11,056 | (276,585 | ) | — | ||||||||||||||||||
Amounts due to affiliated companies | 675 | — | 2,444 | 172 | (282 | ) | 3,009 | |||||||||||||||||
Amounts due to shareholders | 30 | — | — | — | (19 | ) | 11 | |||||||||||||||||
Total current liabilities | 186,035 | 9,241 | 612,009 | 16,751 | (276,886 | ) | 547,150 | |||||||||||||||||
LONG-TERM DEBT | — | 592,108 | 1,108,268 | — | — | 1,700,376 | ||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | 18,690 | 25 | — | 18,715 | ||||||||||||||||||
DEFERRED TAX LIABILITIES | — | — | 17,142 | 288 | — | 17,430 | ||||||||||||||||||
ADVANCE FROM ULTIMATE HOLDING COMPANY | — | — | 1,044,608 | 11,254 | (1,055,862 | ) | — | |||||||||||||||||
LOAN FROM INTERMEDIATE HOLDING COMPANY | — | — | 578,021 | — | (578,021 | ) | — | |||||||||||||||||
LOANS FROM SHAREHOLDERS | 115,647 | — | — | — | — | 115,647 | ||||||||||||||||||
LAND USE RIGHT PAYABLE | — | — | 31,930 | — | — | 31,930 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Total shareholders’ equity | 2,478,525 | 1,634,485 | 5,517,185 | 180,318 | (7,331,988 | ) | 2,478,525 | |||||||||||||||||
TOTAL | $ | 2,780,207 | $ | 2,235,834 | $ | 8,927,853 | $ | 208,636 | $ | (9,242,757 | ) | $ | 4,909,773 | |||||||||||
H-24
Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
December 31, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 34,358 | $ | — | $ | 177,057 | $ | 1,183 | $ | — | $ | 212,598 | ||||||||||||
Restricted cash | — | — | 233,085 | 3,034 | — | 236,119 | ||||||||||||||||||
Accounts receivables, net | — | — | 299,700 | — | — | 299,700 | ||||||||||||||||||
Amounts due from affiliated companies | — | — | 14 | 31 | (44 | ) | 1 | |||||||||||||||||
Intercompany receivables | 64,676 | — | 10,069 | 176,169 | (250,914 | ) | — | |||||||||||||||||
Inventories | — | — | 6,534 | — | — | 6,534 | ||||||||||||||||||
Prepaid expenses and other current assets | 12,605 | — | 15,101 | 1,718 | (9,656 | ) | 19,768 | |||||||||||||||||
Total current assets | 111,639 | — | 741,560 | 182,135 | (260,614 | ) | 774,720 | |||||||||||||||||
PROPERTY AND EQUIPMENT, NET | — | — | 2,773,321 | 13,325 | — | 2,786,646 | ||||||||||||||||||
GAMING SUBCONCESSION, NET | — | — | 713,979 | — | — | 713,979 | ||||||||||||||||||
INTANGIBLE ASSETS, NET | — | — | 4,220 | — | — | 4,220 | ||||||||||||||||||
GOODWILL | — | — | 81,915 | — | — | 81,915 | ||||||||||||||||||
INVESTMENTS IN SUBSIDIARIES | 2,697,541 | 1,665,989 | 4,058,121 | 6,301 | (8,427,952 | ) | — | |||||||||||||||||
LONG-TERM PREPAYMENT, DEPOSITS AND OTHER ASSETS | 1,178 | — | 50,685 | 502 | — | 52,365 | ||||||||||||||||||
DEFERRED FINANCING COST | — | — | 38,948 | — | — | 38,948 | ||||||||||||||||||
LAND USE RIGHTS, NET | — | — | 447,576 | — | — | 447,576 | ||||||||||||||||||
TOTAL | $ | 2,810,358 | $ | 1,665,989 | $ | 8,910,325 | $ | 202,263 | $ | (8,688,566 | ) | $ | 4,900,369 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 8,719 | $ | — | $ | — | $ | 8,719 | ||||||||||||
Accrued expenses and other current liabilities | 3,302 | — | 500,273 | 3,848 | (9,656 | ) | 497,767 | |||||||||||||||||
Income tax payable | 387 | — | — | 381 | — | 768 | ||||||||||||||||||
Current portion of long-term debt | — | — | 44,504 | — | — | 44,504 | ||||||||||||||||||
Intercompany payables | 180,336 | 1 | 64,185 | 6,392 | (250,914 | ) | — | |||||||||||||||||
Amounts due to affiliated companies | 1,620 | — | 5,655 | 153 | (44 | ) | 7,384 | |||||||||||||||||
Amounts due to shareholders | 22 | — | — | 3 | — | 25 | ||||||||||||||||||
Total current liabilities | 185,667 | 1 | 623,336 | 10,777 | (260,614 | ) | 559,167 | |||||||||||||||||
LONG-TERM DEBT | — | — | 1,638,703 | — | — | 1,638,703 | ||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | 20,606 | 13 | — | 20,619 | ||||||||||||||||||
DEFERRED TAX LIABILITIES | — | — | 17,654 | 103 | — | 17,757 | ||||||||||||||||||
ADVANCE FROM ULTIMATE HOLDING COMPANY | — | — | 1,021,869 | 11,254 | (1,033,123 | ) | — | |||||||||||||||||
LOANS FROM SHAREHOLDERS | 115,647 | — | — | — | — | 115,647 | ||||||||||||||||||
LAND USE RIGHT PAYABLE | — | — | 39,432 | — | — | 39,432 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Total shareholders’ equity | 2,509,044 | 1,665,988 | 5,548,725 | 180,116 | (7,394,829 | ) | 2,509,044 | |||||||||||||||||
TOTAL | $ | 2,810,358 | $ | 1,665,989 | $ | 8,910,325 | $ | 202,263 | $ | (8,688,566 | ) | $ | 4,900,369 | |||||||||||
H-25
Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the six months ended June 30, 2010
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Casino | $ | — | $ | — | $ | 1,104,839 | $ | — | $ | — | $ | 1,104,839 | ||||||||||||
Rooms | — | — | 40,425 | — | (1,090 | ) | 39,335 | |||||||||||||||||
Food and beverage | — | — | 28,628 | — | (1,222 | ) | 27,406 | |||||||||||||||||
Entertainment, retail and others | — | — | 10,589 | 173 | (1 | ) | 10,761 | |||||||||||||||||
Gross revenues | — | — | 1,184,481 | 173 | (2,313 | ) | 1,182,341 | |||||||||||||||||
Less: promotional allowances | — | — | (41,096 | ) | — | — | (41,096 | ) | ||||||||||||||||
Net revenues | — | — | 1,143,385 | 173 | (2,313 | ) | 1,141,245 | |||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||
Casino | — | — | (865,841 | ) | — | 11 | (865,830 | ) | ||||||||||||||||
Rooms | — | — | (6,986 | ) | — | 219 | (6,767 | ) | ||||||||||||||||
Food and beverage | — | — | (15,472 | ) | — | 142 | (15,330 | ) | ||||||||||||||||
Entertainment, retail and others | — | — | (4,145 | ) | — | 2 | (4,143 | ) | ||||||||||||||||
General and administrative | (6,402 | ) | (3 | ) | (93,065 | ) | (21,077 | ) | 29,198 | (91,349 | ) | |||||||||||||
Pre-opening costs | — | — | (6,987 | ) | — | 5 | (6,982 | ) | ||||||||||||||||
Amortization of gaming subconcession | — | — | (28,619 | ) | — | — | (28,619 | ) | ||||||||||||||||
Amortization of land use rights | — | — | (9,760 | ) | — | — | (9,760 | ) | ||||||||||||||||
Depreciation and amortization | — | — | (112,779 | ) | (954 | ) | — | (113,733 | ) | |||||||||||||||
Property charges and others | — | — | 34 | — | — | 34 | ||||||||||||||||||
Total operating costs and expenses | (6,402 | ) | (3 | ) | (1,143,620 | ) | (22,031 | ) | 29,577 | (1,142,479 | ) | |||||||||||||
OPERATING LOSS | (6,402 | ) | (3 | ) | (235 | ) | (21,858 | ) | 27,264 | (1,234 | ) | |||||||||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||||||||||||||
Interest (expenses) income, net | (83 | ) | 143 | (36,833 | ) | 7 | — | (36,766 | ) | |||||||||||||||
Other finance costs | — | (221 | ) | (2,399 | ) | — | — | (2,620 | ) | |||||||||||||||
Foreign exchange gain (loss), net | 5 | (176 | ) | 383 | (195 | ) | — | 17 | ||||||||||||||||
Other income, net | 5,232 | 25 | 635 | 22,413 | (27,264 | ) | 1,041 | |||||||||||||||||
Costs associated with debt modification | — | — | (3,156 | ) | — | — | (3,156 | ) | ||||||||||||||||
Share of results of subsidiaries | (41,122 | ) | (40,825 | ) | — | — | 81,947 | — | ||||||||||||||||
Total non-operating (expenses) income | (35,968 | ) | (41,054 | ) | (41,370 | ) | 22,225 | 54,683 | (41,484 | ) | ||||||||||||||
(LOSS) INCOME BEFORE INCOME TAX | (42,370 | ) | (41,057 | ) | (41,605 | ) | 367 | 81,947 | (42,718 | ) | ||||||||||||||
INCOME TAX (EXPENSES) CREDIT | (205 | ) | — | 511 | (163 | ) | — | 143 | ||||||||||||||||
NET (LOSS) INCOME | $ | (42,575 | ) | $ | (41,057 | ) | $ | (41,094 | ) | $ | 204 | $ | 81,947 | $ | (42,575 | ) | ||||||||
H-26
Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the six months ended June 30, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||||||
Casino | $ | — | $ | — | $ | 424,409 | $ | — | $ | — | $ | 424,409 | ||||||||||||
Rooms | — | — | 11,847 | — | (399 | ) | 11,448 | |||||||||||||||||
Food and beverage | — | — | 8,737 | — | (346 | ) | 8,391 | |||||||||||||||||
Entertainment, retail and others | — | — | 2,057 | 1 | 1,773 | 3,831 | ||||||||||||||||||
Gross revenues | — | — | 447,050 | 1 | 1,028 | 448,079 | ||||||||||||||||||
Less: promotional allowances | — | — | (15,751 | ) | — | — | (15,751 | ) | ||||||||||||||||
Net revenues | — | — | 431,299 | 1 | 1,028 | 432,328 | ||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||
Casino | — | — | (383,196 | ) | — | 69 | (383,127 | ) | ||||||||||||||||
Rooms | — | — | (2,062 | ) | — | 2 | (2,060 | ) | ||||||||||||||||
Food and beverage | — | — | (6,532 | ) | — | 20 | (6,512 | ) | ||||||||||||||||
Entertainment, retail and others | — | — | (1,014 | ) | — | — | (1,014 | ) | ||||||||||||||||
General and administrative | (10,674 | ) | — | (44,240 | ) | (9,023 | ) | 15,585 | (48,352 | ) | ||||||||||||||
Pre-opening costs | — | — | (79,955 | ) | (464 | ) | 856 | (79,563 | ) | |||||||||||||||
Amortization of gaming subconcession | — | — | (28,619 | ) | — | — | (28,619 | ) | ||||||||||||||||
Amortization of land use rights | — | — | (9,085 | ) | — | — | (9,085 | ) | ||||||||||||||||
Depreciation and amortization | — | — | (42,994 | ) | (843 | ) | — | (43,837 | ) | |||||||||||||||
Property charges and others | — | — | (1,279 | ) | (2,855 | ) | — | (4,134 | ) | |||||||||||||||
Total operating costs and expenses | (10,674 | ) | — | (598,976 | ) | (13,185 | ) | 16,532 | (606,303 | ) | ||||||||||||||
OPERATING LOSS | (10,674 | ) | — | (167,677 | ) | (13,184 | ) | 17,560 | (173,975 | ) | ||||||||||||||
NON-OPERATING (EXPENSES) INCOME | ||||||||||||||||||||||||
Interest (expenses) income, net | (6 | ) | — | (3,725 | ) | 1 | — | (3,730 | ) | |||||||||||||||
Other finance costs | — | — | (2,620 | ) | — | — | (2,620 | ) | ||||||||||||||||
Foreign exchange (loss) gain, net | (53 | ) | — | 219 | 9 | — | 175 | |||||||||||||||||
Other income, net | 8,848 | — | — | 9,712 | (17,560 | ) | 1,000 | |||||||||||||||||
Share of results of subsidiaries | (176,944 | ) | (172,609 | ) | (8 | ) | — | 349,561 | — | |||||||||||||||
Total non-operating (expenses) income | (168,155 | ) | (172,609 | ) | (6,134 | ) | 9,722 | 332,001 | (5,175 | ) | ||||||||||||||
LOSS BEFORE INCOME TAX | (178,829 | ) | (172,609 | ) | (173,811 | ) | (3,462 | ) | 349,561 | (179,150 | ) | |||||||||||||
INCOME TAX (EXPENSES) CREDIT | (455 | ) | — | 968 | (647 | ) | — | (134 | ) | |||||||||||||||
NET LOSS | $ | (179,284 | ) | $ | (172,609 | ) | $ | (172,843 | ) | $ | (4,109 | ) | $ | 349,561 | $ | (179,284 | ) | |||||||
H-27
Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the six months ended June 30, 2010
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 11,789 | $ | (1,553 | ) | $ | 54,737 | $ | 8,366 | $ | — | $ | 73,339 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||||||
Advances to subsidiaries | (22,734 | ) | (577,796 | ) | — | — | 600,530 | — | ||||||||||||||||
Amounts due from subsidiaries | (10,230 | ) | — | — | — | 10,230 | — | |||||||||||||||||
Acquisition of property and equipment | — | — | (118,261 | ) | (592 | ) | — | (118,853 | ) | |||||||||||||||
Deposits for acquisition of property and equipment | — | — | (835 | ) | — | — | (835 | ) | ||||||||||||||||
Prepayment of show production cost | — | — | (17,157 | ) | — | — | (17,157 | ) | ||||||||||||||||
Changes in restricted cash | — | — | 38,811 | 3,024 | — | 41,835 | ||||||||||||||||||
Payment for land use right | — | — | (22,462 | ) | — | — | (22,462 | ) | ||||||||||||||||
Proceeds from sale of property and equipment | — | — | 1 | — | — | 1 | ||||||||||||||||||
Net cash (used in) provided by investing activities | (32,964 | ) | (577,796 | ) | (119,903 | ) | 2,432 | 610,760 | (117,471 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||||||
Payment of deferred financing costs | — | (12,676 | ) | (8,518 | ) | — | — | (21,194 | ) | |||||||||||||||
Advance from ultimate holding company | — | — | 22,734 | — | (22,734 | ) | — | |||||||||||||||||
Amount due to ultimate holding company | — | (1 | ) | 121 | 10,110 | (10,230 | ) | — | ||||||||||||||||
Loan from intermediate holding company | — | — | 577,796 | — | (577,796 | ) | — | |||||||||||||||||
Principal payments on long-term debt | — | — | (444,066 | ) | — | — | (444,066 | ) | ||||||||||||||||
Proceeds from senior notes issuance | — | 592,026 | — | — | — | 592,026 | ||||||||||||||||||
Net cash provided by financing activities | — | 579,349 | 148,067 | 10,110 | (610,760 | ) | 126,766 | |||||||||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (21,175 | ) | — | 82,901 | 20,908 | — | 82,634 | |||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 34,358 | — | 177,057 | 1,183 | — | 212,598 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 13,183 | $ | — | $ | 259,958 | $ | 22,091 | $ | — | $ | 295,232 | ||||||||||||
H-28
Table of Contents
14. | CONDENSED CONSOLIDATING FINANCIAL INFORMATION — (Continued) |
For the six months ended June 30, 2009
Guarantor | Non-Guarantor | |||||||||||||||||||||||
Parent | Issuer | Subsidiaries(1) | Subsidiaries | Elimination | Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||
Net cash used in operating activities | $ | (3,914 | ) | $ | — | $ | (43,286 | ) | $ | (2,359 | ) | $ | — | $ | (49,559 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||||||
Advances to subsidiaries | (685,795 | ) | — | — | — | 685,795 | — | |||||||||||||||||
Amounts due from subsidiaries | 510,307 | — | — | — | (510,307 | ) | — | |||||||||||||||||
Acquisition of property and equipment | — | — | (606,112 | ) | (1,223 | ) | — | (607,335 | ) | |||||||||||||||
Deposits for acquisition of property and equipment | — | — | (3,541 | ) | — | — | (3,541 | ) | ||||||||||||||||
Prepayment of show production cost | — | — | (5,364 | ) | — | — | (5,364 | ) | ||||||||||||||||
Changes in restricted cash | — | — | 67,977 | — | — | 67,977 | ||||||||||||||||||
Payment for land use right | — | — | (6,796 | ) | — | — | (6,796 | ) | ||||||||||||||||
Proceeds from sale of property and equipment | — | — | 799 | — | — | 799 | ||||||||||||||||||
Net cash used in investing activities | (175,488 | ) | — | (553,037 | ) | (1,223 | ) | 175,488 | (554,260 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||||||
Payment of deferred financing cost | — | — | (870 | ) | — | — | (870 | ) | ||||||||||||||||
Advance from ultimate holding company | — | — | 674,541 | 11,254 | (685,795 | ) | — | |||||||||||||||||
Amount due to ultimate holding company | — | — | (500,402 | ) | (9,905 | ) | 510,307 | — | ||||||||||||||||
Proceeds from issue of share capital | 174,486 | — | — | — | — | 174,486 | ||||||||||||||||||
Proceeds from long-term debt | — | — | 270,691 | — | — | 270,691 | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Net cash provided by financing activities | 174,486 | — | 443,960 | 1,349 | (175,488 | ) | 444,307 | |||||||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (4,916 | ) | — | (152,363 | ) | (2,233 | ) | — | (159,512 | ) | ||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 163,014 | — | 645,839 | 6,291 | — | 815,144 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 158,098 | $ | — | $ | 493,476 | $ | 4,058 | $ | — | $ | 655,632 | ||||||||||||
(1) | The Guarantor subsidiaries column includes financial information of Melco Crown Gaming which is not 100% owned by the Parent. |
H-29
Table of Contents
Table of Contents
Item 20. | Indemnification of Directors and Officers. |
Item 21. | Exhibits and Financial Statement Schedules. |
Exhibit | ||||
Number | Description of Exhibit | |||
3 | .1 | Amended and Restated Memorandum and Articles of Association (incorporated by reference to exhibit 1.1 toForm 20-F (FileNo. 001-33178) filed by Melco Crown Entertainment Limited on March 31, 2010). | ||
4 | .1 | Indenture, dated May 17, 2010, between MCE Finance Limited and The Bank of New York Mellon as trustee (previously filed). | ||
4 | .2 | Registration Rights Agreement, dated May 17, 2010, among MCE Finance Limited, Melco Crown Entertainment Limited, MPEL International Limited, the Senior Subordinated Guarantors as specified therein, Deutsche Bank Securities Inc., Merrill Lynch International, The Royal Bank of Scotland plc, ANZ Securities, Inc., Citigroup Global Markets Inc., Commerz Markets LLC, Credit Agricole Corporate and Investment Bank, nabSecurities, LLC and UBS AG (previously filed). | ||
4 | .3 | Intercompany Promissory Note, dated May 17, 2010, issued by MPEL Investments Limited (previously filed). | ||
4 | .4 | Pledge Agreement, dated as of May 17, 2010, between MCE Finance Limited and The Bank of New York Mellon as collateral agent (previously filed). | ||
4 | .5 | Note Guarantee, dated as of May 17, 2010, among MCE Finance Limited, Melco Crown Entertainment Limited, MPEL International Limited, Melco Crown Gaming (Macau) Limited, MPEL Nominee One Limited, MPEL Investments Limited, Altira Hotel Limited, Altira Developments Limited, Melco Crown (COD) Hotels Limited, Melco Crown (COD) Developments and The Bank of New York as trustee (previously filed). | ||
4 | .6 | Subordination Agreement, dated as of May 17, 2010, among MCE Finance Limited, Melco Crown Entertainment Limited, MPEL International Limited and The Bank of New York Mellon as trustee and as subordination agent (previously filed). | ||
4 | .7 | Senior Facilities Agreement dated September 5, 2007 for Melco PBL Gaming (Macau) Limited as the Original Borrower arranged by Australia and New Zealand Banking Group Limited, Bank of America Securities Asia Limited, Barclays Capital, Deutsche Bank AG, Hong Kong Branch and UBS AG Hong Branch as Coordinating Lead Arrangers with Deutsche Bank AG, Hong Kong Branch acting as Agent and DB Trustees (Hong Kong) Limited acting as Security Agent (incorporated by reference to exhibit 10.32 toForm F-1 (FileNo. 333-146780) filed by Melco PBL Gaming (Macau) Limited on October 18, 2007). |
II-1
Table of Contents
Exhibit | ||||
Number | Description of Exhibit | |||
4 | .8 | Amendment Agreement in Respect of Senior Facilities Agreement dated December 7, 2007 for Melco PBL Gaming (Macau) Limited as Company and Deutsche Bank AG, Hong Kong Branch, as Agent (incorporated by reference to exhibit 4.6 toForm 20-F (FileNo. 001-33178) filed by Melco Crown Entertainment Limited on March 31, 2009). | ||
4 | .9 | Second Amendment Agreement in Respect of Senior Facilities Agreement dated September 1, 2008 for Melco Crown Gaming (Macau) Limited as Company and Deutsche Bank AG, Hong Kong Branch, as Agent (incorporated by reference to exhibit 4.7 toForm 20-F (FileNo. 001-33178) filed by Melco Crown Entertainment Limited on March 31, 2009). | ||
4 | .10 | Third Amendment Agreement in Respect of Senior Facilities Agreement dated December 1, 2008 for Melco Crown Gaming (Macau) Limited as Company and Deutsche Bank AG, Hong Kong Branch, as Agent (incorporated by reference to exhibit 4.8 toForm 20-F (FileNo. 001-33178) filed by Melco Crown Entertainment Limited on March 31, 2009). | ||
4 | .11 | Fourth Amendment Agreement in Respect of Senior Facilities Agreement dated December 1, 2008 for Melco Crown Gaming (Macau) Limited as Company and Deutsche Bank AG, Hong Kong Branch, as Agent (previously filed). | ||
5 | .1 | Opinion of Debevoise & Plimpton LLP (previously filed). | ||
5 | .2* | Opinion of Walkers. | ||
5 | .3* | Opinion of Manuela António Law Office. | ||
12 | .1 | Statement regarding Computation of Ratio of Earnings to Fixed Charges (previously filed). | ||
21 | .1 | Subsidiaries of the Registrant (incorporated by reference toForm 6-K (FileNo. 001-33178) furnished by Melco Crown Entertainment Limited on May 7, 2010). | ||
23 | .1* | Consent of Deloitte Touche Tohmatsu. | ||
23 | .2 | Consent of Debevoise & Plimpton LLP (included in Exhibit 5.1) (previously filed). | ||
23 | .3* | Consent of Walkers (included in Exhibit 5.2). | ||
23 | .4* | Consent of Manuela António Law Office (included in Exhibit 5.3). | ||
24 | .1 | Powers of Attorney (previously filed). | ||
25 | .1 | Statement of Eligibility of the Trustee onForm T-1 (previously filed). | ||
99 | .1 | Form of Letter of Transmittal (previously filed). | ||
99 | .2 | Form of Notice of Guaranteed Delivery (previously filed). | ||
99 | .3 | Form of Instructions to Registered Holder and/or Book-Entry Transfer Participant from Beneficial Owner (previously filed). | ||
99 | .4 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (previously filed). | ||
99 | .5 | Form of Letter to Clients (previously filed). | ||
99 | .6 | Form of Guidelines for Certification of Taxpayer Identification Number on SubstituteForm W-9 (included in Exhibit 99.1) (previously filed). |
* | Filed herewith. |
Item 22. | Undertakings. |
(1) | to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. |
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Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation for Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof. | |
(3) | to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |
(4) | to file a post effective amendment to the registration statement to include any financial statements required by Item 8.A. ofForm 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished,provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act orRule 3-19 ofRegulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. | |
(5) | that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the Registrants are subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. | |
(6) | that, for the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
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(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(7) | that, for purposes of determining any liability under the Securities Act of 1933, each filing of the annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 of a third party that is incorporated by reference in the registration statement in accordance with Item 1100(c)(1) of Regulation AB shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initialbona fideoffering thereof. |
(8) | insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(9) (i) | to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and |
(ii) | to arrange or provide for a facility in the U.S. for the purpose of responding to such requests. |
(10) | to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
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By: | * |
Title: | Chief Executive Officer |
Signature | Title(s) | Date | ||||
* Name: Lawrence (Yau Lung) Ho | Chief Executive Officer (principal executive officer) | November 5, 2010 | ||||
/s/ Leanne Palmer Name: Leanne Palmer | Acting Chief Financial Officer (principal financial and accounting officer) | November 5, 2010 | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Co-Chairman and Chief Executive Officer |
Signature | Title(s) | Date | ||||
* Name: Lawrence (Yau Lung) Ho | Co-Chairman and Chief Executive Officer (principal executive officer) | November 5, 2010 | ||||
* Name: James D. Packer | Co-Chairman | November 5, 2010 | ||||
/s/ Leanne Palmer Name: Leanne Palmer | Acting Chief Financial Officer (principal financial and accounting officer) | November 5, 2010 | ||||
* Name: John Wang | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: William Todd Nisbet | Director | November 5, 2010 | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: James A. C. MacKenzie | Director | November 5, 2010 | ||||
* Name: Thomas Jefferson Wu | Director | November 5, 2010 | ||||
* Name: Alec Tsui | Director | November 5, 2010 |
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Signature | Title(s) | Date | ||||
* Name: Robert Mactier | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Director |
Signature | Title(s) | Date | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Managing Director |
Signature | Title(s) | Date | ||||
* Name: Lawrence (Yau Lung) Ho | Managing Director | November 5, 2010 | ||||
* Name: James D. Packer | Director | November 5, 2010 | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Chan Ying Tat | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Director |
Signature | Title(s) | Date | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Chan Ying Tat | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Director |
Signature | Title(s) | Date | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Nicholas C Naples | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Director |
Signature | Title(s) | Date | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Hsu Ching Hui | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | * |
Title: | Director |
Signature | Title(s) | Date | ||||
* Name: Rowen B. Craigie | Director | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director | November 5, 2010 | ||||
* Name: Nicholas C Naples | Director | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
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By: | /s/ Leanne Palmer |
Title: | President |
Signature | Title(s) | Date | ||||
/s/ Leanne Palmer Name: Leanne Palmer | President (principal executive officer) | November 5, 2010 | ||||
* Name: Lawrence (Yau Lung) Ho | Director of Sole Member†† | November 5, 2010 | ||||
* Name: James D. Packer | Director of Sole Member†† | November 5, 2010 | ||||
* Name: Rowen B. Craigie | Director of Sole Member†† | November 5, 2010 | ||||
* Name: Clarence (Yuk Man) Chung | Director of Sole Member†† | November 5, 2010 | ||||
* Name: Chan Ying Tat | Director of Sole Member†† | November 5, 2010 | ||||
* Name: Donald Puglisi | Authorized U.S. Representative | November 5, 2010 | ||||
*By: /s/ Leanne Palmer Name: Leanne Palmer Title: Attorney-in-Fact | November 5, 2010 |
† | MPEL (Delaware) LLC does not have any principal financial officer or controller/principal accounting officer. | |
†† | The Sole Member is Melco Crown Gaming (Macau) Limited. |
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