When companies file reports with the Securities and Exchange Commission, they have a tendency to be lazy. From quarter to quarter and year to year, management teams like to leave their 10-Qs and 10-Ks alone as much as possible and make changes only where necessary.
Not that this is a bad thing. Having been on the other side of the equation as an investment banker, I know how picky the SEC can be about what you say and how you say it, so once a company gets something approved, there's very good reason to leave it as is as long as possible.
For investors, though, this means that reading quarterly and annual reports involves wading through material they've read countless times in an effort to find anything new. SEC Watch has come up with a solution for this -- in its "pro account" offering, it allows users to create "difference reports" that highlight just the differences between two filings.
I've gotten my hands on one of these difference reports for Las Vegas Sands
Sellers all around
The report actually begins with insider trading activity. In this case, it shows that insiders sold $11.4 million in Las Vegas Sands stock between the two quarterly filings and didn't buy any new shares.
Some folks like to use insider buying as a bullish or a bearish signal on the stock. I tend to agree, to an extent. There are many reasons for an insider to sell -- a kid heading to college, general diversification, a new sports car, gambling debts, etc. -- but generally only one reason to buy: They think they'll make money. So the fact that there has been insider selling at Las Vegas Sands is neutral for me, while the lack of insider buying is maybe a slight negative.
In prior reports, the company had primarily blamed the capital markets and the economy for the suspension of its projects:
"Given the challenging conditions in the capital markets and the global economy and their impact on the Company's ongoing operations, the Company revised its development plan to suspend portions of its development projects and to focus its development efforts on those projects with the highest expected rates of return on invested capital." (Italics mine.)
Nobody should be surprised because MGM Mirage
However, Las Vegas Sands eliminated the section that I italicized above, and as the text now reads, it sounds as if the company wants to leave itself some outs if it decides to simply end the projects based on unattractive expected returns. If management does decide to pull the plug on these projects, it would be jarring for investors because there would be impairment charges and possible termination fees, but over the long term, abandoning sub-par projects would be in investors' best interest.
Bye-bye, St. Regis Las Vegas
Related to the note above, Las Vegas Sands has changed all the verbiage in its filing referring to the condo tower it had planned to build in Las Vegas. The company had referred to it as the St. Regis Residences, but now refers to it as the Las Vegas Condo Tower.
Why the change? Because the company's agreement with Starwood Hotels
Thanks to its blazing growth, Las Vegas Sands has racked up a lot of debt. As of Sept. 30, the company had $10 billion in debt, compared with Wynn Resorts'
But Las Vegas Sands has also done a good job of managing its debt and working with its lenders to make sure that it has ample breathing room. Another major change in the company's third-quarter 10-Q was the details of its amended credit agreement. The company paid down $1 billion in debt and accepted a higher interest rate under the new agreement, under which the company's leverage ratio (net debt over trailing 12-months EBITDA) was given the flexibility to increase from 6 to 6.5 through the second quarter of 2011.
Sweet gig, dude
And finally, just for fun, I noticed at the very bottom of the filing that Las Vegas Sands disclosed an agreement with Wing Chao. A former bigwig at Disney, Chao joined the board of directors at the end of July, but didn't last long -- he announced his resignation in October. But the resignation was done so that Chao could become a consultant to the company for its development projects. As the 10-Q notes, Chao will spend four or more days per month working for the company and will be paid $6,000 per day. Not bad!
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