10q10k10q10k.net

What changed in STUDIO CITY INTERNATIONAL HOLDINGS Ltd's 20-F — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of STUDIO CITY INTERNATIONAL HOLDINGS Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+581 added−542 removedSource: 20-F (2024-03-22) vs 20-F (2023-03-31)

Top changes in STUDIO CITY INTERNATIONAL HOLDINGS Ltd's 2023 20-F

581 paragraphs added · 542 removed · 454 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

2 edited+0 added−0 removed0 unchanged
Biggest changeITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 9 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 9 ITEM 3. KEY INFORMATION 10 A. [RESERVED] 10 B. CAPITALIZATION AND INDEBTEDNESS 10 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 10 D. RISK FACTORS 11 ITEM 4. INFORMATION ON THE COMPANY 59 A.
Biggest changeITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 9 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 9 ITEM 3. KEY INFORMATION 10 A. [RESERVED] 12 B. CAPITALIZATION AND INDEBTEDNESS 12 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 12 D. RISK FACTORS 13 ITEM 4. INFORMATION ON THE COMPANY 63 A.
HISTORY AND DEVELOPMENT OF THE COMPANY 59 B. BUSINESS OVERVIEW 60 C. ORGANIZATIONAL STRUCTURE 87 D. PROPERTY, PLANT AND EQUIPMENT 88
HISTORY AND DEVELOPMENT OF THE COMPANY 63 B. BUSINESS OVERVIEW 64 C. ORGANIZATIONAL STRUCTURE 91 D. PROPERTY, PLANT AND EQUIPMENT 92

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

189 edited+87 added−33 removed454 unchanged
Biggest changeOur business, financial condition and results of operations can be affected materially and adversely by any of the following risk factors. 12 Table of Contents Risks Relating to Our Business • Risks relating to COVID-19 outbreaks and other epidemics and pandemics. • Risks relating to our reliance on the operation of the Studio City Casino under the Studio City Casino Agreement. • Risks relating to our short operating history. • Risks relating to our sole operation of Studio City. • Risks relating to our history of net losses. • Risks relating to finalizing the licensing procedures and opening up of our Phase 2 project for Studio City. • Risks relating to the inability to generate sufficient cash flow to meet our debt service obligations. • Risks relating to our compliance with credit facility and debt instruments. • Risks relating to our current and potential future indebtedness and our need for additional financing. • Risks relating to depending on the continued efforts or our senior management and retaining qualified personnel. • Risks relating to failure to comply with anti-corruption laws and anti-money laundering policies. • Risks relating to failure to protect the integrity and security of data, including customer information. • Risks relating to being based in or having all of our operations in Singapore, Hong Kong and Macau, uncertainties in the legal systems in the PRC, and policies, campaigns and measures adopted by the PRC and/or Macau governments from time to time. • Risks relating to inadequate insurance coverage.
Biggest changeRisks Relating to Our Business • Risks relating to recovery from the COVID-19 pandemic. • Risks relating to our reliance on the operation of the Studio City Casino under the Studio City Casino Agreement. • Risks relating to our short operating history. • Risks relating to our sole operation of Studio City. • Risks relating to our history of net losses. • Risks relating to the inability to generate sufficient cash flow to meet our debt service obligations. • Risks relating to our compliance with credit facility and debt instruments. • Risks relating to our current and potential future indebtedness and our need for additional financing. • Risks relating to depending on the continued efforts or our senior management and retaining qualified personnel. • Risks relating to failure to comply with anti-corruption laws and anti-money laundering policies. • Risks relating to cybersecurity and failure to protect the integrity and security of data, including customer information. • Risks relating to being based in or having all of our operations in Singapore, Hong Kong and Macau, uncertainties in the legal systems in the PRC, and policies, campaigns and measures adopted by the PRC and/or Macau governments from time to time. • Risks relating to inadequate insurance coverage. 15 Table of Contents Risks Relating to Operating in the Gaming Industry in Macau • Risks relating to the Gaming Operator’s Concession Contract. • Risks relating to facing intense competition. • Risks relating to the interpretation of the Macau gaming law amended in 2022 and related laws and their implementation by the Macau government. • Risks relating to adverse changes or developments in gaming laws or regulations in Macau.
The COVID-19 outbreak has also caused severe disruptions to the businesses of our tenants and other business partners, which has increased the risk of them defaulting on their contractual obligations with us, which may adversely affect our business, financial condition and results of operations, including causing increases in our bad debts.
The COVID-19 outbreak also caused severe disruptions to the businesses of our tenants and other business partners, which has increased the risk of them defaulting on their contractual obligations with us, which may adversely affect our business, financial condition and results of operations, including causing increases in our bad debts.
In January 2022, the Macau authorities also arrested an executive from another gaming promoter and certain related individuals and certain of these individuals were sentenced to jail terms in addition to the payment of monetary compensation to the Macau government in January 2023.
In January 2022, the Macau authorities also arrested an executive from another gaming promoter and certain related individuals and certain of these individuals were sentenced to jail terms in addition to the payment of monetary compensation to the Macau government in January 2023.
These regulatory agencies may impose fines and penalties on us, limit our operations, limit our ability to pay dividends outside of China, limit our ability to list on stock exchanges outside of China or offer our securities to foreign investors or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities.
These regulatory agencies may impose fines and penalties on us, limit our operations, limit our ability to pay dividends outside of China, limit our ability to list on stock exchanges outside of China or offer our securities to foreign investors or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities.
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. For example, in connection with COVID-19 outbreaks, securities markets across the globe have experienced significant volatility. These market fluctuations may also have a material adverse effect on the market price of our ADSs.
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. For example, in connection with COVID-19 outbreaks, securities markets across the globe experienced significant volatility. These market fluctuations may also have a material adverse effect on the market price of our ADSs.
Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
Our directors have discretion under our articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
In addition, the number of patrons visiting Studio City may be affected by the PRC government’s focus on deterring marketing of gaming to mainland Chinese citizens by casinos and its initiatives to tighten monetary transfer regulations, increase monitoring of various transactions, including bank or credit card transactions, reduce the amount that PRC-issued ATM cardholders can withdraw in each withdrawal and impose a limit on the annual aggregate amount that may be withdrawn.
In addition, the number of patrons visiting Studio City may be affected by the PRC government’s focus on deterring marketing of gaming to mainland Chinese citizens and its initiatives to tighten monetary transfer regulations, increase monitoring of various transactions, including bank or credit card transactions, reduce the amount that PRC-issued ATM cardholders can withdraw in each withdrawal and impose a limit on the annual aggregate amount that may be withdrawn.
A non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values) during such year is attributable to assets that produce or are held for the production of passive income.
A non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such taxable year is passive income or (ii) at least 50% of the value of its assets (generally based on an average of the quarterly values) during such year is attributable to assets that produce or are held for the production of passive income.
Failure to protect the integrity and security of company staff, supplier and customer information and comply with cybersecurity, data privacy, data protection or any other laws and regulations related to data may materially and adversely affect our business, financial condition and results of operations, and/or result in damage to reputation and/or subject us to fines, penalties, lawsuits, restrictions on our use or transfer of data and other risks.
Cybersecurity.” Failure to protect the integrity and security of company staff, supplier and customer information and comply with cybersecurity, data privacy, data protection or any other laws and regulations related to data may materially and adversely affect our business, financial condition and results of operations, and/or result in damage to reputation and/or subject us to fines, penalties, lawsuits, restrictions on our use or transfer of data and other risks.
Even though it recently eased its “zero Covid” policy, the PRC government may re-impose lockdown or travel restriction measures in response to COVID-19 outbreaks or the outbreak of another contagious disease. Such measures, if re-imposed, may significantly affect visitations to our property and have a material adverse effect on our results of operations.
Even though it eased its “zero Covid” policy, the PRC government may re-impose lockdown or travel restriction measures in response to COVID-19 outbreaks or the outbreak of another contagious disease. Such measures, if re-imposed, may significantly affect visitations to our property and have a material adverse effect on our results of operations.
Its oversight and discretion over our business could result in material adverse changes in our operations and the value of our ordinary shares and ADSs.” We also face risks associated with interpretations of or changes to gaming laws in Macau, including the interpretation of the recently amended gaming law in Macau, as well as the continued ability by the U.S.
Its oversight and discretion over our business could result in material adverse changes in our operations and the value of our ordinary shares and ADSs.” We also face risks associated with interpretations of or changes to gaming laws in Macau, including the interpretation of the amended gaming law in Macau, as well as the continued ability by the U.S.
Our operating results may be adversely affected by: • tightening of travel restrictions to Macau or from the PRC, including due to the outbreak of infectious diseases, such as COVID-19 outbreaks; • austerity measures which may be imposed by the PRC government; 43 Table of Contents • changes in government policies, laws and regulations, or in the interpretation or enforcement of these policies, laws and regulations; • changes in cross-border fund transfer and/or foreign exchange regulations or policies effected by the PRC and/or Macau governments; • measures taken by the PRC government to deter marketing of gaming activities to mainland Chinese residents by offshore casinos; • 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 by the Macau government.
Our operating results may be adversely affected by: • tightening of travel restrictions to Macau or from the PRC, including due to the outbreak of infectious diseases, such as COVID-19 outbreaks; • austerity measures which may be imposed by the PRC government; • changes in government policies, laws and regulations, or in the interpretation or enforcement of these policies, laws and regulations; • changes in cross-border fund transfer and/or foreign exchange regulations or policies effected by the PRC and/or Macau governments; • measures taken by the PRC government to deter marketing of gaming activities to mainland Chinese residents by offshore casinos; 46 Table of Contents • 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 by the Macau government.
Furthermore, the Gaming Operator has exclusive access to the customer database of the gaming operations at Studio City Casino and in the event of termination of the arrangement under the Studio City Casino Agreement, we may not be able to gain access to such database. 15 Table of Contents Any material dispute with the Gaming Operator or any failure by the Gaming Operator to comply with its obligations under its concession, or by the Gaming Operator or us to comply with its or our respective obligations under, or any termination of, the Studio City Casino Agreement may have a material adverse effect on the operation of Studio City Casino and in turn affect our financial condition and results of operations and may also result in a default under the terms of our existing and/or future indebtedness obligations and other agreements.
Furthermore, the Gaming Operator has exclusive access to the customer database of the gaming operations at Studio City Casino and in the event of termination of the arrangement under the Studio City Casino Agreement, we may not be able to gain access to such database. 17 Table of Contents Any material dispute with the Gaming Operator or any failure by the Gaming Operator to comply with its obligations under its concession, or by the Gaming Operator or us to comply with its or our respective obligations under, or any termination of, the Studio City Casino Agreement may have a material adverse effect on the operation of Studio City Casino and in turn affect our financial condition and results of operations and may also result in a default under the terms of our existing and/or future indebtedness obligations and other agreements.
As an example, COVID-19 outbreaks have resulted in many governments around the world, including in Macau, placing quarantines disallowing residents to travel into or outside of the quarantined area, enforcing business closures and other restrictions.
As an example, COVID-19 outbreaks resulted in many governments around the world, including in Macau, placing quarantines disallowing residents to travel into or outside of the quarantined area, enforcing business closures and other restrictions.
For example, the European Union (EU)’s General Data Protection Regulation, or the GDPR, which became effective in May 2018, requires companies to meet new and more stringent requirements regarding the handling of personal data.
For example, the European Union (EU)’s General Data Protection Regulation, or the GDPR, which became effective in May 2018, requires companies to meet new and more stringent requirements regarding the handling of personal information.
These risks include, but are not limited to: • changes in Macau governmental laws and regulations, including gaming laws and regulations, or interpretations thereof, as well as PRC travel and visa policies; • dependence on the gaming, tourism and leisure market in Macau; • limited diversification of our business and sources of revenue; • a decline in air, land or ferry passenger traffic to Macau from the PRC or other areas or countries due to higher ticket costs, fears concerning travel, travel restrictions or otherwise, including as a result of the outbreak of widespread health epidemics or pandemics, such as the outbreak of COVID-19, or any social unrest in Hong Kong; • a decline in economic and political conditions in Macau, the PRC or Asia, or an increase in competition within the gaming industry in Macau or generally in Asia; • inaccessibility to Macau due to inclement weather, road construction or closure of primary access routes; • austerity measures imposed now or in the future by the governments in the PRC or other countries in Asia; • tightened control of cross-border fund transfers, foreign exchange and/or anti-money laundering regulations or policies effected by the PRC or Macau governments; • any enforcement or legal measures taken by the PRC government to deter gaming activities and/or marketing thereof; • lower than expected rate of increase or decrease in the number of visitors to Macau; • natural and other disasters, including typhoons, outbreaks of infectious diseases, terrorism or violent criminal activities, affecting Macau; • relaxation of regulations on gaming laws in other regional economies that could compete with the Macau market; • government restrictions on growth of gaming markets, including policies on gaming table allocation and caps; and • a decrease in gaming activities and other spending at Studio City Casino.
These risks include, but are not limited to: • changes in Macau laws and regulations, including gaming laws and regulations, or interpretations thereof, as well as PRC travel and visa policies; • dependence on the gaming, tourism and leisure market in Macau; • limited diversification of our business and sources of revenue; • a decline in air, land or ferry passenger traffic to Macau from the PRC or other areas or countries due to higher ticket costs, fears concerning travel, travel restrictions or otherwise, including as a result of the outbreak of widespread health epidemics or pandemics, such as the outbreak of COVID-19; • a decline in economic and political conditions in Macau, the PRC or Asia; • an increase in competition within the gaming industry in Macau or generally in Asia; • inaccessibility to Macau due to inclement weather, road construction or closure of primary access routes; • austerity measures imposed now or in the future by the governments in the PRC or other countries in Asia; • tightened control of cross-border fund transfers, foreign exchange and/or anti-money laundering regulations or policies effected by the PRC or Macau governments; • any enforcement or legal measures taken by the PRC government to deter gaming activities and/or marketing thereof; • lower than expected rate of increase or decrease in the number of visitors to Macau; • natural and other disasters, including typhoons, outbreaks of infectious diseases, terrorism or violent criminal activities, affecting Macau; • relaxation of regulations on gaming laws in other regional economies that could compete with the Macau market; • government restrictions on growth of gaming markets, including policies on gaming table allocation and caps; and • a decrease in gaming activities and other spending at Studio City Casino.
Under the terms of such credit facility agreements, the occurrence of certain change of control events, including a decline below certain thresholds in the aggregate direct or indirect shareholdings in certain of Melco Resorts’ subsidiaries, including Studio City Holdings Five Limited, Studio City Finance and Studio City Investments, may result in an event of default and/or a cancellation of committed amounts as well as a requirement to prepay the credit facilities in relation to such indebtedness in full.
Under the terms of such credit facility agreements, the occurrence of certain change of control events, including a decline below certain thresholds in the aggregate direct or indirect shareholdings in certain of Melco Resorts’ subsidiaries, including Studio City Holdings Five Limited, Studio City Finance and Studio City Investments, may result in an event of default and/or a cancelation of committed amounts as well as a requirement to prepay the credit facilities in relation to such indebtedness in full.
An extended period of reduced discretionary spending and/or disruptions or declines in airline travel have had and could materially adversely affect our business, results of operations and financial condition.
An extended period of reduced discretionary spending and/or disruptions or declines in travel have had and could materially adversely affect our business, results of operations and financial condition.
If (i) we inadvertently conclude that certain regulatory permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change in a way that requires us to complete such filings or obtain such approvals in the future, and (iii) we are required to obtain such permissions or approvals in the future, but fail to receive or maintain such permissions or approvals, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies.
If (i) we incorrectly conclude that certain regulatory permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change in a way that requires us to complete such filings or obtain such approvals in the future, and (iii) we are required to obtain such permissions or approvals in the future, but fail to receive or maintain such permissions or approvals, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies.
If (i) we inadvertently conclude that certain regulatory permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change in a way that requires us to complete such filings or obtain such approvals in the future, and (iii) we are required to obtain such permissions or approvals in the future, but fail to receive or maintain such permissions or approvals, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies.
If (i) we incorrectly conclude that certain regulatory permissions and approvals are not required or (ii) applicable laws, regulations, or interpretations change in a way that requires us to complete such filings or obtain such approvals in the future, and (iii) we are required to obtain such permissions or approvals in the future, but fail to receive or maintain such permissions or approvals, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies.
Even if we are able to obtain alternative financing, it may not be on terms that are comparable or acceptable to us. 20 Table of Contents Certain covenants under our agreements governing our existing indebtedness restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions.
Even if we are able to obtain alternative financing, it may not be on terms that are comparable or acceptable to us. 22 Table of Contents Certain covenants under our agreements governing our existing indebtedness restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions.
However, such allocations may not be indicative of the actual expenses we would have incurred had we operated as an independent company. 17 Table of Contents We face concentration risk in relation to our sole operation of Studio City. We are dependent upon the operation of Studio City to generate our revenue and cash flows.
However, such allocations may not be indicative of the actual expenses we would have incurred had we operated as an independent company. 19 Table of Contents We face concentration risk in relation to our sole operation of Studio City. We are dependent upon the operation of Studio City to generate our revenue and cash flows.
We generated net income attributable to Studio City International Holdings Limited of US$33.6 million for the year ended December 31, 2019 while we had net losses attributable to Studio City International Holdings Limited of US$326.5 million, US$252.6 million, US$321.6 million, US$21.6 million, US$76.4 million and US$242.8 million for the years ended December 31, 2022, 2021, 2020, 2018, 2017 and 2016, respectively, primarily because of the impact of the COVID-19 outbreaks in the case of the years ended December 31, 2022, 2021 and 2020 and also due to Studio City having commenced operations only in October 2015 and was ramping up operations.
We generated net income attributable to Studio City International Holdings Limited of US$33.6 million for the years ended December 31, 2019, while we had net losses attributable to Studio City International Holdings Limited of US$133.5 million, US$326.5 million, US$252.6 million, US$321.6 million, US$21.6 million, US$76.4 million and US$242.8 million for the years ended December 31, 2023, 2022, 2021, 2020, 2018, 2017 and 2016, respectively, primarily because of the impact of COVID-19 outbreaks in the case of the years ended December 31, 2022, 2021 and 2020 and also due to Studio City having commenced operations only in October 2015 and was ramping up operations.
Despite our preventive efforts, we are subject to the risks of compromised security, including cyber and physical security breaches, system failures, computer viruses, technical malfunctions, inadequate system capacities, power outages, natural disasters and inadvertent, 24 Table of Contents negligent or intentional misuses, disclosure or dissemination of information or data by customers, company staff or employees of third-party vendors, ransomware attacks that encrypt, exfiltrate or otherwise render data unusable or unavailable or other forms of cybercrimes that include fraud or extortion.
Despite our preventive efforts, we are subject to the risks of compromised security, including cyber and physical security breaches, system failures, computer viruses, technical malfunctions, inadequate system capacities, power outages, natural disasters and inadvertent, negligent or intentional misuses, disclosure or dissemination of information or data by customers, company staff or employees of third-party vendors, ransomware attacks that encrypt, exfiltrate or otherwise render data unusable or unavailable or other forms of cybercrimes that include fraud or extortion.
These factors may adversely affect our ability to achieve profitability and service debt obligations and interest payments under any of our existing or future financing facilities. 19 Table of Contents We have a substantial amount of existing indebtedness and may incur additional indebtedness, which could have significant effects on our business and future operations.
These factors may adversely affect our ability to achieve profitability and service debt obligations and interest payments under any of our existing or future financing facilities. 21 Table of Contents We have a substantial amount of existing indebtedness and may incur additional indebtedness, which could have significant effects on our business and future operations.
In addition to the damages caused directly by a casualty loss (such as fire or natural disasters), infectious disease outbreaks or terrorist acts, we may suffer a disruption of our business as a result of these events or be subject to claims by third parties who may be injured or harmed.
In addition to the damages caused directly by a casualty loss (such as fire or natural disasters), infectious disease outbreaks, terrorist acts or cybersecurity attacks, we may suffer a disruption of our business as a result of these events or be subject to claims by third parties who may be injured or harmed.
A significant theft, loss or fraudulent use of customer or company data maintained by us or by a third-party service provider could have an adverse effect on our reputation, cause a material disruption to our operations and management team, and result in remediation expenses, regulatory penalties and litigation by customers and other parties whose information was subject to such attacks, all of which could have a material adverse effect on our business, prospects, results of operations and cash flows.
A significant theft, loss or fraudulent use of customer or company data maintained by us or by a third-party service provider could have an adverse effect on our reputation, cause a material disruption to our operations and management team, and result in remediation 26 Table of Contents expenses, regulatory penalties and litigation by customers and other parties whose information was subject to such attacks, all of which could have a material adverse effect on our business, prospects, results of operations and cash flows.
Studio City Entertainment has applied for the extension of the complementary tax exemption for 2022 and for the period from January 1, 2023 through December 31, 2027. However, we cannot assure you that the complementary tax exemption to Studio City Entertainment will be extended beyond its expiration date.
Studio City Entertainment has applied for the extension of the complementary tax exemption for 2022 and for the period from January 1, 2023 through December 31, 2027. However, we cannot assure you that the complementary tax exemption to Studio City Entertainment has been or will be extended beyond its expiration date.
In its policy address for 2017, the Macau government announced that it would continue to submit the applications for employment of non-resident workers to a rigorous exam and to stimulate the promotion of local workers to management positions in the gaming industry, signaling a tighter control on the employment of non-resident workers.
In its policy address for 2017, the Macau government announced that it would continue to submit the applications for employment of non-resident workers to a rigorous review and to stimulate the promotion of local workers to management positions in the gaming industry, signaling a tighter control on the employment of non-resident workers.
While these arrangements were entered into at pre-agreed rates that we believe are commercially reasonable, the determination of such commercial terms were subject to judgment and estimates and we may have obtained different terms for similar types of services had we entered into such arrangements with independent third parties or had we not been a subsidiary of Melco Resorts. • Our Board Members and Executive Officers May Have Conflicts of Interest .
While these arrangements were entered into at pre-agreed rates that we believe are commercially reasonable, the determination of such commercial terms were subject 42 Table of Contents to judgment and estimates and we may have obtained different terms for similar types of services had we entered into such arrangements with independent third parties or had we not been a subsidiary of Melco Resorts. • Our Board Members and Executive Officers May Have Conflicts of Interest .
Our results of operations will likely fluctuate due to these and other factors, some of which are beyond our control, including but not limited to: (i) fluctuations in overall consumer demand for 23 Table of Contents gaming and hospitality, leisure and resort during certain months and holidays; (ii) introduction of new policies or regulatory measures; and (iii) macro-economic conditions and their effect on discretionary consumer spending.
Our results of operations will likely fluctuate due to these and other factors, some of which are beyond our control, including but not limited to: (i) fluctuations in overall consumer demand for gaming and hospitality, leisure and resort during certain months and holidays; (ii) introduction of new policies or regulatory measures; and (iii) macro-economic conditions and their effect on discretionary consumer spending.
The Gaming Operator’s inability to collect gaming receivables from credit customers may in turn affect our financial performance. • Limited Availability of Credit to Gaming Patrons. The Gaming Operator conducts its table gaming activities at Studio City Casino partially on a credit basis.
The Gaming Operator’s inability to collect gaming receivables from credit customers may in turn affect our financial performance. 39 Table of Contents • Limited Availability of Credit to Gaming Patrons. The Gaming Operator conducts its table gaming activities at Studio City Casino partially on a credit basis.
These events could lead to the termination of the Gaming Operator’s concession without compensation and the Gaming Operator would be unable to operate gaming in Macau, which may have a 33 Table of Contents material adverse effect on our financial condition, results of operations and cash flows and could result in defaults under our indebtedness agreements and a partial or complete loss of our investments in Studio City.
These events could lead to the termination of the Gaming Operator’s concession without compensation and the Gaming Operator would be unable to operate gaming in Macau, which may have a material adverse effect on our financial condition, results of operations and cash flows and could result in defaults under our indebtedness agreements and a partial or complete loss of our investments in Studio City.
Terrorist and violent criminal activities in Europe, the United States, Southeast Asia and elsewhere, military conflicts between Russia and Ukraine, military conflicts in the Middle East, social events and natural disasters such as typhoons, tsunamis and earthquakes, and outbreaks of widespread health epidemics or pandemics, including COVID-19 outbreaks, among other things, have negatively affected travel and leisure expenditures.
Terrorist and violent criminal activities in Europe, the United States, Southeast Asia and elsewhere, the Israel-Hamas conflict, the military conflict between Russia and Ukraine and other conflicts in the Middle East, and/or social events and natural disasters such as typhoons, tsunamis and earthquakes, and outbreaks of widespread health epidemics or pandemics, including COVID-19 outbreaks, among other things, have negatively affected travel and leisure expenditures.
Any negative press or publicity could also lead to government or other regulatory investigations, including causing regulators to take action against us or the Gaming Operator, including actions that could affect the ability or terms upon which the Gaming Operator holds 27 Table of Contents its concession, its or our suitability to continue as a shareholder of certain subsidiaries and/or the suitability of key personnel to remain with the Gaming Operator.
Any negative press or publicity could also lead to government or other regulatory investigations, including causing regulators to take action against us or the Gaming Operator, including actions that could affect the ability or terms upon which the Gaming Operator holds its concession, its or our suitability to continue as a shareholder of certain subsidiaries and/or the suitability of key personnel to remain with the Gaming Operator.
Moreover, many of our attractions which draw in large numbers of visitors, such as the Golden 21 Table of Contents Reel may become obsolete in terms of technology or otherwise fail to continue to attract sufficient number of visitors.
Moreover, many of our attractions which draw in large numbers of visitors, such as the Golden 23 Table of Contents Reel, may become obsolete in terms of technology or otherwise fail to continue to attract sufficient number of visitors.
In addition, the Participation Agreement, pursuant to which MSC Cotai granted the Participation Interest to New Cotai, provides that all disputes arising out of the Participation Agreement must be resolved through arbitration proceedings subject to certain limited exceptions and such provision will affect the manner by which New Cotai or any other parties to the Participation Agreement may pursue any claim or action arising out of the Participation Agreement.
In addition, the Participation Agreement, pursuant to which MSC Cotai granted the Participation Interest to New Cotai, provides that all disputes arising out of the Participation Agreement must be resolved through arbitration proceedings subject to certain limited exceptions and such provision will affect the manner by which New Cotai or any other parties to the Participation Agreement may pursue any claim or action arising out 55 Table of Contents of the Participation Agreement.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: • limited public float of our ADSs; • developments in the Macau market or other Asian gaming markets, including disruptions caused by widespread health epidemics or pandemics, such as COVID-19 outbreaks; • uncertainties or delays relating to the opening of our Phase 2 project for Studio City; • international political tensions, including between China and the U.S., and policies and/or legislation which may be proposed and/or enacted in relation to such tensions; • general economic, political or other factors that may affect Macau, where Studio City is located and/or the macroeconomic environment, including COVID-19 outbreaks or any other global pandemic or crisis; • changes in the economic performance or market valuations of the gaming and leisure industry companies; • changes in the Gaming Operator’s market share of the Macau gaming market; • regulatory developments affecting us or our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • announcements of new investments, acquisitions, strategic partnerships, joint ventures or divestments by us or our competitors; • changes in financial estimates by securities analysts; • detrimental adverse publicity about us, Studio City or our industries; • additions or departures of key personnel; • fluctuations in the exchange rates between the U.S. dollar, H.K. dollar, Pataca and Renminbi; • release or expiration of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; • sales or perceived sales of additional shares or ADSs or securities convertible or exchangeable or exercisable for shares or ADSs; • potential litigation or regulatory investigations; and • rumors related to any of the above, irrespective of their veracity.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: • limited public float of our ADSs; • international political tensions, including between China and the U.S., and policies and/or legislation which may be proposed and/or enacted in relation to such tensions; • developments in the Macau market or other Asian gaming markets, including disruptions caused by widespread health epidemics or pandemics, such as COVID-19 outbreaks; • general economic, political or other factors that may affect Macau, where Studio City is located and/or the macroeconomic environment, including COVID-19 outbreaks or any other global pandemic or crisis; • changes in the economic performance or market valuations of the gaming and leisure industry companies; • changes in the Gaming Operator’s market share of the Macau gaming market; • regulatory developments affecting us or our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • announcements of new investments, acquisitions, strategic partnerships, joint ventures or divestments by us or our competitors; • changes in financial estimates by securities analysts; • detrimental adverse publicity about us, Studio City or our industries; 53 Table of Contents • additions or departures of key personnel; • fluctuations in the exchange rates between the U.S. dollar, H.K. dollar, Pataca and Renminbi; • release or expiration of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; • sales or perceived sales of additional shares or ADSs or securities convertible or exchangeable or exercisable for shares or ADSs; • potential litigation or regulatory investigations; and • rumors related to any of the above, irrespective of their veracity.
The Gaming Operator deducts gaming taxes and the costs incurred in connection with its on-going operations from Studio City Casino’s gross gaming revenues and we receive the residual amount and recognize such residual amount as revenue from the Studio City Casino Agreement.
The Gaming Operator deducts gaming taxes and the costs incurred in connection with its operations from Studio City Casino’s gross gaming revenues and we receive the residual amount and recognize such residual amount as revenue from the Studio City Casino Agreement.
Under the terms of the indentures governing our existing indebtedness, we will be permitted to incur additional indebtedness if certain conditions are met, some of which may be senior secured indebtedness. If we incur additional indebtedness, certain risks described above will be exacerbated.
Under the terms of the agreements governing our existing indebtedness, we will be permitted to incur additional indebtedness if certain conditions are met, some of which may be senior secured indebtedness. If we incur additional indebtedness, certain risks described above will be exacerbated.
In addition, if any of our suppliers, service providers, technology partners or other business partners that have collaborative relationships with us or our affiliates were to become subject to sanctions or other restrictions, this might restrict or negatively impact our ongoing relationships or collaborations with them, which could materially and adversely affect our competitiveness and business operations.
In addition, if any of our suppliers, service providers, technology partners or other business partners that have collaborative 34 Table of Contents relationships with us or our affiliates were to become subject to sanctions or other restrictions, this might restrict or negatively impact our ongoing relationships or collaborations with them, which could materially and adversely affect our competitiveness and business operations.
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we deem or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.
The depositary may refuse to deliver, transfer or register transfers of our ADSs 58 Table of Contents generally when our share register or the books of the depositary are closed, or at any time if we deem or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.
Failure to meet the GDPR requirements, for example, may result in penalties of up to four percent of worldwide revenue. Negative press or publicity about us or our directors, officers or affiliates may lead to government investigations, result in harm to our business, brand or reputation and have a material and adverse effect on our business.
Failure to meet the GDPR requirements, for example, may result in penalties of up to four percent of worldwide revenue. 29 Table of Contents Negative press or publicity about us or our directors, officers or affiliates may lead to government investigations, result in harm to our business, brand or reputation and have a material and adverse effect on our business.
Tax laws and regulations may also be subject to amendments or different interpretations and implementation, thereby adversely affecting our profitability after tax. For example, the newly amended Macau gaming law requires the payment of a special premium if gross gaming revenue falls below the gross gaming revenue threshold set by the Macau government.
Tax laws and regulations may also be subject to amendments or different interpretations and implementation, thereby adversely affecting our profitability after tax. For example, the Macau gaming law amended in 2022 requires the payment of a special premium if gross gaming revenue falls below the gross gaming revenue threshold set by the Macau government.
Based on the value of our assets and the composition of our income and assets, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended December 31, 2022.
Based on the value of our assets and the composition of our income and assets, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended December 31, 2023.
If any of these events were to occur, it may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. 16 Table of Contents We rely on services provided by subsidiaries of Melco Resorts, including hiring and training of personnel for Studio City.
If any of these events were to occur, it may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. We rely on services provided by subsidiaries of Melco Resorts, including hiring and training of personnel for Studio City.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. It is not clear what effect such negative publicity could have on us.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. 54 Table of Contents It is not clear what effect such negative publicity could have on us.
If a digital currency is adopted by the Macau government for gaming operations in Macau, there could be a material and adverse impact on Studio City Casino’s VIP rolling chip operations if limitations on transactions per player are also introduced in conjunction with the adoption of the digital currency.
If a digital currency is adopted by the 47 Table of Contents Macau government for gaming operations in Macau, there could be a material and adverse impact on Studio City Casino’s VIP rolling chip operations if limitations on transactions per player are also introduced in conjunction with the adoption of the digital currency.
In addition, the Chief Executive of Macau has the right to require an increase of the Gaming Operator’s share capital or that the Gaming Operator provides certain deposits or other guarantees of performance with respect to its obligations in any amount determined by the Macau government to be necessary.
In addition, the Chief Executive of 36 Table of Contents Macau has the right to require an increase of the Gaming Operator’s share capital or that the Gaming Operator provides certain deposits or other guarantees of performance with respect to its obligations in any amount determined by the Macau government to be necessary.
These decisions may be different from the decisions that we would have made on our own. Melco Resorts’ decisions with respect to us or our business may be resolved in ways that favor Melco Resorts and therefore Melco Resorts’ own shareholders, which may not 40 Table of Contents coincide with the interests of our other shareholders.
These decisions may be different from the decisions that we would have made on our own. Melco Resorts’ decisions with respect to us or our business may be resolved in ways that favor Melco Resorts and therefore Melco Resorts’ own shareholders, which may not coincide with the interests of our other shareholders.
Furthermore, in November 2021, the Court of Final Appeal in Macau issued a final unappealable decision that a gaming operator is jointly liable with a gaming 44 Table of Contents promoter for the refund of funds deposited with such gaming promoter and the Macau authorities arrested executives from a gaming promoter for alleged illegal overseas gaming related activities.
Furthermore, in November 2021, the Court of Final Appeal in Macau issued a final unappealable decision that a gaming operator is jointly liable with a gaming promoter for the refund of funds deposited with such gaming promoter and the Macau authorities arrested executives from a gaming promoter for alleged illegal overseas gaming related activities.
We cannot assure you that we can or will continually adhere to all of the continued listing requirements of the New York Stock Exchange, including those required to maintain our listing on the New York Stock Exchange, or that the New York Stock Exchange will not take any other action in the course of monitoring our compliance with the continued listing requirements of the New York Stock Exchange.
We cannot assure you that we can or will continually adhere to all of the continued listing requirements of the New York Stock Exchange, including those required to maintain our listing on the New York Stock 52 Table of Contents Exchange, or that the New York Stock Exchange will not take any other action in the course of monitoring our compliance with the continued listing requirements of the New York Stock Exchange.
Various factors have recently negatively impacted economic growth in the PRC, including the government’s efforts to cool the PRC’s housing market and disruptions caused by COVID-19, leading to reduced consumer discretionary budget and ultimately affecting their spending on travel and leisure.
Various factors have negatively impacted economic growth in the PRC in recent years, including the government’s efforts to cool the PRC’s housing market and disruptions caused by COVID-19, leading to reduced consumer discretionary budget and ultimately affecting their spending on travel and leisure.
Any flooding, unscheduled cessation of operations, interruption in the technology or transportation services or interruption in the supply of public utilities is likely to result in an immediate, and possibly substantial, loss of revenues due to a shutdown of Studio City, including 47 Table of Contents operations at Studio City Casino.
Any flooding, unscheduled cessation of operations, interruption in the technology or transportation services or interruption in the supply of public utilities is likely to result in an immediate, and possibly substantial, loss of revenues due to a shutdown of Studio City, including operations at Studio City Casino.
Our businesses collect, use and transmit large volumes of data, including credit card numbers and personal data in various information systems relating to our customers, suppliers and staff, and such personal 25 Table of Contents data may be collected and/or used in, and transmitted to or from, multiple jurisdictions.
Our businesses collect, use and transmit large volumes of data, including credit card numbers and personal information in various information systems relating to our customers, suppliers and staff, and such personal information may be collected and/or used in, and transmitted to or from, multiple jurisdictions.
It also requires data processors processing important data or listed outside China to carry out a data security assessment annually by itself or through a third party data security service provider and submit an assessment report to the local agency of the CAC.
It also requires data processors processing important data or listed outside China to carry out a data security assessment 28 Table of Contents annually by itself or through a third party data security service provider and submit an assessment report to the local agency of the CAC.
These arrangements include the Studio City Casino Agreement, the Management and Shared Services Arrangements and any commercial agreements between Melco Resorts and us, or the affiliates of Melco Resorts and us. Potential conflicts of interest may also arise out of any commercial arrangements that Melco Resorts and us may enter into in the future.
These arrangements include the Studio City Casino Agreement, the Management and Shared Services Arrangements 43 Table of Contents and any commercial agreements between Melco Resorts and us, or the affiliates of Melco Resorts and us. Potential conflicts of interest may also arise out of any commercial arrangements that Melco Resorts and us may enter into in the future.
Other factors affecting discretionary consumer spending, including amounts of disposable consumer income, fears of recession, lack of consumer confidence in the economy, change in consumer preferences, high energy, fuel and other commodity 42 Table of Contents costs and increased cost of travel may negatively impact our business.
Other factors affecting discretionary consumer spending, including amounts of disposable consumer income, fears of recession, lack of consumer confidence in the economy, change in consumer preferences, high energy, fuel and other commodity costs and increased cost of travel may negatively impact our business.
There are currently restrictions on the export of the Renminbi outside of the PRC, including to Macau. For example, a PRC citizen traveling abroad is only allowed to take a total of RMB20,000 (US$2,889) plus the equivalent of up to US$5,000 out of the PRC.
There are currently restrictions on the export of the Renminbi outside of the PRC, including to Macau. For example, a PRC citizen traveling abroad is only allowed to take a total of RMB20,000 (equivalent to approximately US$2,809) plus the equivalent of up to US$5,000 out of the PRC.
Such regulations and guidance are potentially subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.
Such regulations and guidance are potentially subject to different 61 Table of Contents interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.
Furthermore, if litigation were to result from such claims, our business could be interrupted. We may not have sufficient insurance coverage. We currently have various insurance policies providing certain coverage typically required by gaming and hospitality operations in Macau. These insurance policies provide coverage that is subject to policy terms, conditions and limits.
Furthermore, if litigation were to result from such claims, our business could be interrupted. We may not have sufficient insurance coverage. We currently have various insurance policies providing certain coverage typically required by gaming and hospitality operations in Macau. These insurance policies provide coverage that is subject to policy terms, 31 Table of Contents conditions and limits.
However, a separate legal action for enforcement of the foreign judgment must be 55 Table of Contents commenced in Macau in order to recover a debt from the judgment debtor, in case the debtor does not make voluntary payment of its debt upon recognition of the foreign judgment by the Courts in Macau.
However, a separate legal action for enforcement of the foreign judgment must be commenced in Macau in order to recover a debt from the judgment debtor, in case the debtor does not make voluntary payment of its debt upon recognition of the foreign judgment by the Courts in Macau.
We may be involved in disputes with various parties involved in the construction and operation of Studio City, including contractual disputes with contractors, consultants, suppliers, retailers, food and beverage operators and construction workers. See “Item 8. Financial Information — A.
We may be involved in disputes with various parties involved in the operation of Studio City, including contractual disputes with contractors, consultants, suppliers, retailers, food and beverage operators and 32 Table of Contents construction workers. See “Item 8. Financial Information — A.
Such collection, use and/or transmission of personal data are governed by privacy laws and regulations and such laws and regulations change often, vary significantly by jurisdiction and often are newly enacted.
Such collection, use and/or transmission of personal information are governed by privacy laws and regulations and such laws and regulations change often, vary significantly by jurisdiction and often are newly enacted.
For a discussion of significant 57 Table of Contents differences between the provisions of the Companies Act (as amended) of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information — B.
For a discussion of significant differences between the provisions of the Companies Act (as amended) of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information — B.
In addition, since we have only been a public company since October 2018, our management team will need to develop the expertise necessary to comply with the numerous regulatory and other requirements applicable to public companies, including requirements relating to corporate governance, listing standards and securities and investor relations issues.
In addition, since we have only been a public company since October 2018, our management team will need to develop the expertise necessary to comply with the numerous regulatory and other requirements 41 Table of Contents applicable to public companies, including requirements relating to corporate governance, listing standards and securities and investor relations issues.
While the Gaming Operator does not currently have gaming promoters arrangements at the Studio City Casino following their cessation in December 2021, if the Gaming Operator decides to enter into new 35 Table of Contents arrangements with gaming promoters in the future, such arrangements and related activities will be subject to the requirements under the applicable laws and regulations.
While the Gaming Operator does not currently have gaming promoters arrangements at the Studio City Casino following their cessation in December 2021, if the Gaming Operator decides to enter into new arrangements with gaming promoters in the future, such arrangements and related activities will be subject to the requirements under the applicable laws and regulations.
Under the Participation Agreement, New Cotai and its permitted transferees will be 53 Table of Contents entitled to exchange its Participation Interest for Class A ordinary shares. We have granted registration rights with respect to the Class A ordinary shares delivered in exchange for Participation Interests. See “Item 7. Major Shareholders and Related Party Transactions — B.
Under the Participation Agreement, New Cotai and its permitted transferees will be entitled to exchange its Participation Interest for Class A ordinary shares. We have granted registration rights with respect to the Class A ordinary shares delivered in exchange for Participation Interests. See “Item 7. Major Shareholders and Related Party Transactions — B.
Even prior to these events, the global economy was facing the end of quantitative easing by the U.S. Federal Reserve, the continuation of international trade conflicts, including the trade disputes between the United States and China and the potential further escalation of trade tariffs and related retaliatory measures between these two countries and globally.
Even prior to the global COVID-19 outbreak, the global economy was facing the end of quantitative easing by the U.S. Federal Reserve, the continuation of international trade conflicts, including the trade disputes between the United States and China and the potential further escalation of trade tariffs and related retaliatory measures between these two countries and globally.
Additionally, given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Additionally, the Chinese government has in the past made statements indicating an intent to exert more oversight and control over offerings by China-based issuers that are conducted overseas and/or foreign investment in China-based issuers and any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Press releases relating to financial results and material events will be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
Press releases relating to financial results and 59 Table of Contents material events will be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
As a result, we may experience difficulty in converting Patacas into U.S. dollars, which could hinder our ability to service a portion of our 31 Table of Contents indebtedness and certain expenses denominated in U.S. dollars.
As a result, we may experience difficulty in converting Patacas into U.S. dollars, which could hinder our ability to service a portion of our indebtedness and certain expenses denominated in U.S. dollars.
With the easing of COVID-19 travel restrictions in Macau and the increase in business volumes, Studio City will need more personnel to operate at full capacity as well as the opening of the Phase 2 project, with a significant portion of these vacancies expected to be filled by non-resident workers for which Macau government-issued quotas are required.
With the lifting of COVID-19 travel restrictions in Macau and the increase in business volumes and opening of Phase 2, Studio City will need more personnel to operate at full capacity, with a significant portion of these vacancies expected to be filled by non-resident workers for which Macau government-issued quotas are required.
These laws and regulations apply not only to third-party transactions, but also to transfers of information within our organization. These laws and regulations may restrict our business activities and increase our compliance costs and efforts.
These laws and regulations apply not only to 27 Table of Contents third-party transactions, but also to transfers of information within our organization. These laws and regulations may restrict our business activities and increase our compliance costs and efforts.
For example, in December 2021, there was a fatality at the construction site at the Phase 2 project and certain façade related works were suspended for approximately two weeks.
For example, in December 2021, there was a fatality at the Studio City Phase 2 construction site and certain façade related works were suspended for approximately two weeks.
The depositary and its agents will not be responsible for any failure to 51 Table of Contents carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote.
The depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote.
We have a substantial amount of existing indebtedness. As of December 31, 2022, we had total principal amount of outstanding indebtedness of US$2.45 billion, representing the outstanding principal balances of our existing notes and credit facility. See “Item 5. Operating and Financial Review and Prospects — B.
We have a substantial amount of existing indebtedness. As of December 31, 2023, we had total principal amount of outstanding indebtedness of US$2.35 billion, representing the outstanding principal balances of our existing notes and credit facility. See “Item 5. Operating and Financial Review and Prospects — B.
In addition, Sociedade de Jogos de Macau, S.A., or SJM, opened Grand Lisboa Palace in July 2021 and is expected to open two additional hotels in 2023, while Sands Cotai Central in Cotai has been rebranded and redeveloped into The Londoner Macau, which opened in February 2021.
In addition, Sociedade de Jogos de Macau, S.A., or SJM, opened Grand Lisboa Palace in July 2021 and opened two additional hotels in 2023, while Sands Cotai Central in Cotai has been rebranded and redeveloped into The Londoner Macau, which opened in February 2021.
In addition to the ongoing outbreak of COVID-19, there can be no assurance that an outbreak of swine flu, avian influenza, SARS, MERS, Zika, Ebola or other contagious disease or any measures taken by the governments of affected countries against such potential outbreaks will not seriously interrupt our gaming operations.
There can be no assurance that any further outbreak of COVID-19 or an outbreak of swine flu, avian influenza, SARS, MERS, Zika, Ebola or other contagious disease or any measures taken by the governments of affected countries against such potential outbreaks will not seriously interrupt our gaming operations.

… 229 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

106 edited+17 added−25 removed178 unchanged
Biggest changeIt received one-Michelin-starred establishment rank for the sixth consecutive year in the Michelin Guide Hong Kong Macau 2022, and • Studio City Phase 2 received the “Regional Award, Asia” at the 2021 BREEAM Awards which acknowledges the sustainability-related measures implemented during the project, as well as its contribution to the goals of carbon neutrality and zero waste.
Biggest changeIt was honored with the “Best Chinese Cuisine in Asia – Excellence Award” by 2022 Haute Grandeur Global Restaurant Awards, • Studio City Water Park was listed among China’s Top 100 Novel Attractions in the 2023 Global Travel Play Book released by the China Tourism Academy and Mafengwo, and also received the “World Waterpark Association (“WWA”) Leading Edge Award” for its indoor water park in 2023 and the “WWA Leading Edge Award” for its outdoor water park in 2021, and • Studio City Phase 2 received the “Regional Award, Asia” at the 2021 BREEAM Awards which acknowledges the sustainability-related measures implemented during the project, as well as its contribution to the goals of carbon neutrality and zero waste.
These measures include providing players with information about responsible gaming behaviors, as well as about gaming dependency and addiction issues, including the information on responsible gaming; adequate measures to ensure the prohibition of entry into casinos of those to whom access is prohibited; information on the dissemination of the measure of interdiction of entry in casino upon request, as well as the means of submitting such request; creation of a specialized gaming group to provide adequate assistance and counseling services to those in need; and training and recycling actions on responsible gaming aimed at employees, as well as counselling services.
These measures include providing players with information about responsible gaming behaviors, as well as about gaming dependency and addiction issues, including the information on responsible gaming; adequate measures to ensure the prohibition of entry into casinos of those to whom access is prohibited; information on the dissemination of the measure of interdiction of entry in casino upon request, as well as the means of submitting such request; creation of a specialized gaming group to provide adequate assistance and counseling services to those in need; and training and recycling actions on responsible gaming aimed at employees, as well as counseling services.
Restrictions on Distribution of Profits Regulations All of our subsidiaries incorporated in Macau are required to set aside a minimum of 25% of the entity’s profit after tax to the legal reserve until the balance of the legal reserve reaches a level equivalent to 50% of the entity’s share capital in accordance with the provisions of the Macau Commercial Code.
Restrictions on Distribution of Profits Regulations Our subsidiaries incorporated in Macau are required to set aside a minimum of 25% of the entity’s profit after tax to the legal reserve until the balance of the legal reserve reaches a level equivalent to 50% of the entity’s share capital in accordance with the provisions of the Macau Commercial Code.
The Macau government may be able to unilaterally rescind the Concession Contract upon the following termination events: • the operation of gaming without permission or operation of business which does not fall within the business scope of the concession; • abandonment of approved business or suspension of operations of our gaming business in Macau without reasonable grounds; • transfer of all or part of the Gaming Operator’s operation in Macau in violation of the relevant laws and administrative regulations governing the operation of games of chance in casino 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; 83 Table of Contents • 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 the Gaming Operator; • failure to provide or supplement the guarantee deposit or the guarantees specified in the concession within the prescribed period; • bankruptcy or insolvency of the Gaming Operator; • fraudulent activity harming public interest; • serious and repeated violation of the applicable rules for carrying out games of chance in casino or damage to the fairness of games of chance in casino; • systematic non-compliance with the Macau Gaming Operations Law’s or Concession Contract’s obligations; or • non-compliance with the investment amount and the respective criteria provided for in the Concession Contract, within the deadline set out by the Secretary for Economy and Finance.
The Macau government may be able to unilaterally rescind the Concession Contract upon the following termination events: • the operation of gaming without permission or operation of business which does not fall within the business scope of the concession; • abandonment of approved business or suspension of operations of our gaming business in Macau without reasonable grounds; • transfer of all or part of the Gaming Operator’s operation in Macau in violation of the relevant laws and administrative regulations governing the operation of games of chance in casino 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 the Gaming Operator; • failure to provide or supplement the guarantee deposit or the guarantees specified in the concession within the prescribed period; • bankruptcy or insolvency of the Gaming Operator; • fraudulent activity harming public interest; • serious and repeated violation of the applicable rules for carrying out games of chance in casino or damage to the fairness of games of chance in casino; • systematic non-compliance with the Macau Gaming Operations Law’s or Concession Contract’s obligations; or • non-compliance with the investment amount and the respective criteria provided for in the Concession Contract, within the deadline set out by the Secretary for Economy and Finance.
The legal framework and the instructions issued by DICJ require that certain procedures must be adopted before collecting, processing and/or transferring personal data, including obtaining consent from the data subject and/or notifying or requesting authorization from the GPDP and/or DICJ, as applicable, prior to processing personal data.
The legal framework and the instructions issued by DICJ require that certain procedures must be adopted before collecting, processing and/or transferring personal information, including obtaining consent from the data subject and/or notifying or requesting authorization from the GPDP and/or DICJ, as applicable, prior to processing personal information.
Venetian Macau Limited is a subsidiary of Las Vegas Sands Corporation and Sands China Limited, which are listed on the New York Stock Exchange and the Hong Kong Stock Exchange, respectively. Las Vegas Sands Corporation is the developer of Sands Macao, The Venetian Macau, Sands Cotai Central and Parisian Macao.
Venetian Macau, S.A. is a subsidiary of Las Vegas Sands Corporation and Sands China Limited, which are listed on the New York Stock Exchange and the Hong Kong Stock Exchange, respectively. Las Vegas Sands Corporation is the developer of Sands Macao, The Venetian Macau, Sands Cotai Central and Parisian Macao.
Members of the corporate bodies of a management company may not be members of a corporate body of a concessionaire or gaming promoter. 72 Table of Contents • The concessionaires must have a managing-director who is a Macau permanent resident and holds at least 15% of the registered share capital of the concessionaire. • The concessionaires are subject to the payment of an annual premium established in the concession contracts, which varies depending on the number of casinos that each concessionaire is authorized to operate, the number of authorized gaming tables and gaming machines, the type of games of chance operated, the location of the casinos, and other relevant criteria set by the Macau government. • If the average gross gaming revenue of the gaming tables or gaming machines does not reach a set minimum limit, the concessionaire must pay a special premium, in an amount equal to the difference between the amount of the special tax on gaming, calculated according to the average gross gaming revenue, and such minimum limit.
Members of the corporate bodies of a management company may not be members of a corporate body of a concessionaire or gaming promoter. • The concessionaires must have a managing-director who is a Macau permanent resident and holds at least 15% of the registered share capital of the concessionaire. • The concessionaires are subject to the payment of an annual premium established in the concession contracts, which varies depending on the number of casinos that each concessionaire is authorized to operate, the number of authorized gaming tables and gaming machines, the type of games of chance operated, the location of the casinos, and other relevant criteria set by the Macau government. • If the average gross gaming revenue of the gaming tables or gaming machines does not reach a set minimum limit, the concessionaire must pay a special premium, in an amount equal to the difference between the amount of the special tax on gaming, calculated according to the average gross gaming revenue, and such minimum limit.
The Gaming Operator may be subject to administrative sanctions if, after it receives notice that a person is unsuitable to be a shareholder or to have any other relationship with it, the Gaming Operator: • pays that person any dividend or interest upon its shares; • allows that person to exercise, directly or indirectly, any voting right conferred through shares held by that person; • pays remuneration in any form to that person for services rendered or otherwise; or • fails to pursue all lawful efforts to require that unsuitable person to relinquish his or her shares. • The Macau government also requires prior approval for the creation of a lien over shares or gaming equipment and utensils of a concession holder. • The Macau government must give its prior approval to changes in control through a merger, consolidation, shares acquisition, or any act or conduct by any person whereby such person obtains control.
The Gaming Operator may be subject to administrative sanctions if, after it receives notice that a person is unsuitable to be a shareholder or to have any other relationship with it, the Gaming Operator: • pays that person any dividend or interest upon its shares; • allows that person to exercise, directly or indirectly, any voting right conferred through shares held by that person; 74 Table of Contents • pays remuneration in any form to that person for services rendered or otherwise; or • fails to pursue all lawful efforts to require that unsuitable person to relinquish his or her shares. • The Macau government also requires prior approval for the creation of a lien over shares or gaming equipment and utensils of a concession holder. • The Macau government must give its prior approval to changes in control through a merger, consolidation, shares acquisition, or any act or conduct by any person whereby such person obtains control.
Principal changes under the recently amended law include, among others, the following: • the number of gaming concessions that may be awarded by the Macau government is up to six; • the term of the concessions may be up to ten years, subject to extension(s) of up to three years in total; • the registered share capital of each concessionaire shall be at least MOP5 billion (US$621.6 million); • the managing director of each concessionaire must be a Macau permanent resident and hold at least 15% of the concessionaire’s registered share capital; • significant transactions should be notified by concessionaires to the Macau government in advance; • an administrative sanctions regime is to be established; • national security is one of the main objectives of the Macau gaming legal framework and a concession may be terminated without compensation in case it is considered a threat to national security; • a per gaming table and per gaming machine special premium is due should gross gaming revenue fall below the gross gaming revenue threshold set by the Macau government; • the Macau government sets the maximum number of gaming tables and gaming machines allocated to each concessionaire and the allocation of such gaming tables and gaming machines to a specific casino is subject to the approval of the Macau government; • the Macau government may reduce the number of gaming tables or gaming machines in certain circumstances; • the amount of gaming chips of each concessionaire in circulation is subject to Macau government approval; and • the concessionaires are jointly and severally liable for administrative fines and civil liability arising from the exercise in their casinos of the authorized gaming promotion activity by gaming promoters, their directors and key employees, as well as their collaborators.
Principal changes under the amended law include, among others, the following: • the number of gaming concessions that may be awarded by the Macau government is up to six; 70 Table of Contents • the term of the concessions may be up to ten years, subject to extension(s) of up to three years in total; • the registered share capital of each concessionaire shall be at least MOP5 billion (US$621.4 million); • the managing director of each concessionaire must be a Macau permanent resident and hold at least 15% of the concessionaire’s registered share capital; • significant transactions should be notified by concessionaires to the Macau government in advance; • an administrative sanctions regime is to be established; • national security is one of the main objectives of the Macau gaming legal framework and a concession may be terminated without compensation in case it is considered a threat to national security; • a per gaming table and per gaming machine special premium is due should gross gaming revenue fall below the gross gaming revenue threshold set by the Macau government; • the Macau government sets the maximum number of gaming tables and gaming machines allocated to each concessionaire and the allocation of such gaming tables and gaming machines to a specific casino is subject to the approval of the Macau government; • the Macau government may reduce the number of gaming tables or gaming machines in certain circumstances; • the amount of gaming chips of each concessionaire in circulation is subject to Macau government approval; and • the concessionaires are jointly and severally liable for administrative fines and civil liability arising from the exercise in their casinos of the authorized gaming promotion activity by gaming promoters, their directors and key employees, as well as their collaborators.
In the event that the results of the review reveal non-compliance or lack of proactiveness in complying with the concession contracts, concessionaires should improve compliance within the deadline determined by the Secretary for Economy and Finance. • The concessionaires registered share capital shall not be less than MOP5 billion (equivalent to approximately US$621.6 million) and during the term of the concession their net assets shall not be less than such amount.
In the event that the results of the review reveal non-compliance or lack of proactiveness in complying with the concession contracts, concessionaires should improve compliance within the deadline determined by the Secretary for Economy and Finance. • The concessionaires registered share capital shall not be less than MOP5 billion (equivalent to approximately US$621.4 million) and during the term of the concession their net assets shall not be less than such amount.
Since its opening, events held at Studio City included live concerts from headline acts such as Madonna, four time Grammy Awards nominee FLO RIDA, Aaron Kwok ( 郭富城 ), Han Hong ( 韓紅 ), Kenny G, A-mei ( 張惠妹 ) and Jam Hsiao ( 蕭敬騰 ) as well as themed events such as a three-day Wedding Showcase (featuring dream wedding venue set-ups, tableware demonstrations, wedding gown catwalk shows and instrumental performances), a Chinese New Year’s Promo, Shakemas Campaign for Christmas, Michelin Guide Street Food Festival and The Super 8 basketball tournament. 63 Table of Contents Customers We seek to cater to a broad range of customers with a focus on mass market players through the diverse gaming and non-gaming facilities and amenities at Studio City.
Since its opening, events held at Studio City included live concerts from headline acts such as Madonna, four time Grammy Awards nominee FLO RIDA, Han Hong ( 韓紅 ), Kenny G, A-mei ( 張惠妹 ) and Jam Hsiao ( 蕭敬騰 ) as well as themed events such as a three-day Wedding Showcase (featuring dream wedding venue set-ups, tableware demonstrations, wedding gown catwalk shows and instrumental performances), a Chinese New Year’s Promo, Shakemas Campaign for Christmas, MICHELIN Guide Street Food Festival and The Super 8 basketball tournament. 67 Table of Contents Customers We seek to cater to a broad range of customers with a focus on mass market players through the diverse gaming and non-gaming facilities and amenities at Studio City.
Our cinematically-themed integrated resort is designed to attract a wide range of customers by providing highly differentiated non-gaming attractions, including the world’s first figure-8 Ferris wheel, a deluxe night club and karaoke, a 5,000-seat live performance arena and an outdoor water park.
Our cinematically-themed integrated resort is designed to attract a wide range of customers by providing highly differentiated non-gaming attractions, including the world’s first figure-8 Ferris wheel, a deluxe night club and karaoke venue, a 5,000-seat live performance arena, an outdoor and an indoor water park.
Individuals that fail to duly complete the required declaration may be subject to a fine (ranging from 1% to 5% of the amount that exceeds the amount determined by the order of the Chief Executive of Macau for declaration purposes, such fine being at least MOP1,000 (equivalent to approximately US$124) and not exceeding MOP500,000 (equivalent to approximately US$62,159)).
Individuals that fail to duly complete the required declaration may be subject to a fine (ranging from 1% to 5% of the amount that exceeds the amount determined by the order of the Chief Executive of Macau for declaration purposes, such fine being at least MOP1,000 (equivalent to approximately US$124) and not exceeding MOP500,000 (equivalent to approximately US$62,142)).
Eight individual salons, together with the Grand Ballroom, provide a banquet seating capacity of up to 1,300 seats or meeting and break-out spaces with extensive pre-function areas for up to 1,800 people. Many of the salons offer views of the pool deck and have private outdoor terraces for coffee and lunch breaks.
Eight individual salons, together with the Grand Ballroom, provide a banquet seating capacity of up to 1,200 seats or meeting and break-out spaces with extensive pre-function areas for up to 1,800 people. Many of the salons offer views of the pool deck and have private outdoor terraces for coffee and lunch breaks.
In accordance with such law, all individuals entering Macau with an amount in cash or negotiable instrument to the bearer equal to or higher than the amount determined by the order of the Chief Executive of Macau at MOP120,000 (equivalent to approximately US$14,918) will be required to declare such amount to the customs authorities.
In accordance with such law, all individuals entering Macau with an amount in cash or negotiable instrument to the bearer equal to or higher than the amount determined by the order of the Chief Executive of Macau at MOP120,000 (equivalent to approximately US$14,914) will be required to declare such amount to the customs authorities.
The gaming promoters are compensated 64 Table of Contents through commission arrangements that are calculated on a monthly or a per trip basis. Commission is calculated by reference to monthly rolling chip volume. The gaming promoters may also receive complimentary allowances for food and beverage, hotel accommodation and transportation.
The gaming promoters are compensated 68 Table of Contents through commission arrangements that are calculated on a monthly or a per trip basis. Commission is calculated by reference to monthly rolling chip volume. The gaming promoters may also receive complimentary allowances for food and beverage, hotel accommodation and transportation.
These include Travellers International Hotel Group, Inc., Bloomberry Resorts Corporation, Tiger Resorts Leisure and Entertainment Inc., Melco Resorts Leisure (PHP) Corporation as well as Philippine Amusement and Gaming Corporation. 67 Table of Contents Seasonality Macau, which is our principal market of operation, experiences many peaks and seasonal effects.
These include Travellers International Hotel Group, Inc., Bloomberry Resorts Corporation, Tiger Resorts Leisure and Entertainment Inc., Melco Resorts Leisure (PHP) Corporation as well as Philippine Amusement and Gaming Corporation. 71 Table of Contents Seasonality Macau, which is our principal market of operation, experiences many peaks and seasonal effects.
Risk Factors — Risks Relating to Our Business — The possible infringement of key intellectual property used in our business, the dissemination of proprietary information used in our business or the infringement or alleged infringement of intellectual property rights belonging to third parties could adversely affect our business.” 79 Table of Contents Personal Data Regulations Processing of personal data by our subsidiaries in Macau is subject to compliance with the Personal Data Protection Act (Law no. 8/2005), in the case of Melco Resorts Macau, any instructions issued by DICJ from time to time.
Risk Factors — Risks Relating to Our Business — The possible infringement of key intellectual property used in our business, the dissemination of proprietary information used in our business or the infringement or alleged infringement of intellectual property rights belonging to third parties could adversely affect our business.” Personal Information Regulations Processing of personal information by our subsidiaries in Macau is subject to compliance with the Personal Data Protection Act (Law no. 8/2005), in the case of Melco Resorts Macau, any instructions issued by DICJ from time to time.
Currently the maximum number of gaming tables that may be operated in Macau is 6,000 and the maximum number of gaming machines is 12,000 and the Gaming Operator has been authorized to operate 750 gaming tables and 2,100 gaming machines. 73 Table of Contents • The circulation of chips is subject to authorization from the Secretary for Economy and Finance, which may establish the maximum limit of the total amount of chips in circulation. • The concessionaires can only disseminate information or activities related to gaming in the zones for games of changes of the casinos, under the applicable laws and regulations. • The concessionaires and the companies of which they are dominant shareholders cannot be admitted to listing on stock exchanges. • An administrative sanctions regime is established with fines ranging from MOP100,000 (equivalent to approximately US$12,432) and MOP5,000,000 (equivalent to approximately US$621,595) and, depending on the seriousness of the offense, damages, fault, benefits obtained, economic situation and previous conduct, a supplemental penalty of total or partial closure of gaming areas for periods ranging from one month to one year. • In the event of dissolution of a current concessionaire for failing to obtain a new concession in the next tender, the shareholders of the concessionaire holding 5% or more of the concessionaire’s share capital as of the date of termination of the concession contract or the date of termination of the concession are jointly and severally liable for the concessionaire’s outstanding chips.
Currently the maximum number of gaming tables that may be operated in Macau is 6,000 and the maximum number of gaming machines is 12,000 and the Gaming Operator has been authorized to operate 750 gaming tables and 2,100 gaming machines. • The circulation of chips is subject to authorization from the Secretary for Economy and Finance, which may establish the maximum limit of the total amount of chips in circulation. • The concessionaires can only disseminate information or activities related to gaming in the zones for games of changes of the casinos, under the applicable laws and regulations. • The concessionaires and the companies of which they are dominant shareholders cannot be admitted to listing on stock exchanges. • An administrative sanctions regime is established with fines ranging from MOP100,000 (equivalent to approximately US$12,428) and MOP5,000,000 (equivalent to approximately US$621,420) and, depending on the seriousness of the offense, damages, fault, benefits obtained, economic situation and previous conduct, a supplemental penalty of total or partial closure of gaming areas for periods ranging from one month to one year. • In the event of dissolution of a current concessionaire for failing to obtain a new concession in the next tender, the shareholders of the concessionaire holding 5% or more of the concessionaire’s share capital as of the date of termination of the concession contract or the date of termination of the concession are jointly and severally liable for the concessionaire’s outstanding chips.
Below are the main features of the Macau Gaming Operations Law, including amended provisions, as supplemented by Administrative Regulation no. 26/2001 (as amended in July 2022 pursuant to Administrative Regulation no. 28/2022), that are currently applicable to our business. • If the Gaming Operator breaches the Macau Gaming Operations Law, its Concession Contract could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory 70 Table of Contents procedures.
Below are the main features of the Macau Gaming Operations Law, including amended provisions, as supplemented by Administrative Regulation no. 26/2001 (as amended in July 2022 pursuant to Administrative Regulation no. 28/2022), that are currently applicable to our business. • If the Gaming Operator breaches the Macau Gaming Operations Law, its Concession Contract could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures.
Under these laws and regulations, the Gaming Operator is required to: • implement internal procedures and rules governing the prevention of anti-money laundering and terrorism financing crimes which are subject to prior approval from DICJ; • identify and evaluate the money laundering and terrorism financing risk inherent to gaming activities; • identify any customer who is in a stable business relationship with the Gaming Operator, who is a politically exposed person or 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 customers who fail to provide any information requested by the Gaming Operator; • keep records on the identification of a customer for a period of five years; • establish a regime for electronic transfers; • keep individual records of all transactions related to gaming which involve credit securities; • keep records of all electronic transactions for amounts equal to or exceeding MOP8,000 (equivalent to approximately US$995) in cases of occasional transactions and MOP120,000 (equivalent to approximately US$14,918) in cases of transactions that arose in the context of a continuous business relationship; • notify the Macau Finance Information Bureau if there is any sign of money laundering or financing of terrorism; • adopt as compliance function and appoint compliance officers; and • cooperate with the Macau government by providing all required information and documentation requested in relation to anti-money laundering activities.
Under these laws and regulations, the Gaming Operator is required to: • implement internal procedures and rules governing the prevention of anti-money laundering and terrorism financing crimes which are subject to prior approval from DICJ; • identify and evaluate the money laundering and terrorism financing risk inherent to gaming activities; • identify any customer who is in a stable business relationship with the Gaming Operator, who is a politically exposed person or 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 customers who fail to provide any information requested by the Gaming Operator; • keep records on the identification of a customer for a period of five years; • establish a regime for electronic transfers; • keep individual records of all transactions related to gaming which involve credit securities; • keep records of all electronic transactions for amounts equal to or exceeding MOP8,000 (equivalent to approximately US$994) in cases of occasional transactions and MOP120,000 (equivalent to approximately US$14,914) in cases of transactions that arose in the context of a continuous business relationship; • notify the Macau Finance Information Bureau if there is any sign of money laundering or financing of terrorism; 81 Table of Contents • adopt as compliance function and appoint compliance officers; and • cooperate with the Macau government by providing all required information and documentation requested in relation to anti-money laundering activities.
The granting or renewal of a gaming promoter license may be requested by a commercial company that fulfills certain cumulative requirements, such as having its registered office in Macau, being a limited liability company by shares with the activity of gaming promotion as its exclusive business purpose, having a registered capital of not less than MOP10 million (equivalent to approximately US$1.2 million) fully paid up in cash, and net assets of not less than such amount during the license period, having as shareholders individuals only, having 50% or more of its registered capital being held by permanent residents of Macau who have completed 21 years of age, having agreed with one concessionaire the provision of gaming promotion services to the same, having provided a security deposit, not having any debts or fines imposed for breach of legal provisions relating to gaming under tax enforcement proceedings, having adequate financial capacity, not having the company and its shareholders, directors and key employees been declared insolvent or bankrupt, nor being responsible for debts arising from the insolvency or bankruptcy of third parties, and the company and its shareholders, directors and key employees being deemed suitable. 74 Table of Contents Each gaming promoter can only conduct the gaming promotion activity with one concessionaire, and only for a commission.
The granting or renewal of a gaming promoter license may be requested by a commercial company that fulfills certain cumulative requirements, such as having its registered office in Macau, being a limited liability company by shares with the activity of gaming promotion as its exclusive business purpose, having a registered capital of not less than MOP10 million (equivalent to approximately US$1.2 million) fully paid up in cash, and net assets of not less than such amount during the license period, having as shareholders individuals only, having 50% or more of its registered capital being held by permanent residents of Macau who have completed 21 years of age, having agreed with one concessionaire the provision of gaming promotion services to the same, having provided a security deposit, not having any debts or fines imposed for breach of legal provisions relating to gaming under tax enforcement proceedings, having adequate financial capacity, not having the company and its shareholders, directors and key employees been declared insolvent or bankrupt, nor being responsible for debts arising from the insolvency or bankruptcy of third parties, and the company and its shareholders, directors and key employees being deemed suitable.
If breached by the concessionaire, the legislation on commission caps has a sanction enabling the relevant government authority to determine the closure, in whole or in part, of the areas for games of chance, for a period of one month to one year, and/or to make public a government decision imposing a fine on a concessionaire, by publishing such decision on the DICJ website and in two Macau newspapers (in Chinese and 75 Table of Contents Portuguese respectively).
If breached by the concessionaire, the legislation on commission caps has a sanction enabling the relevant government authority to determine the closure, in whole or in part, of the areas for games of chance, for a period of one month to one year, and/or to make public a government decision imposing a fine on a concessionaire, by publishing such decision on the DICJ website and in two Macau newspapers (in Chinese and Portuguese respectively).
The annual minimum limit of the gross gaming revenue must be set out in view of the past gross gaming revenue of Macau and the current situation of the economic development of Macau, and may be adjusted exceptionally in case of extraordinary, unpredictable or force majeure incidents, and is currently in the amount of MOP7 million (equivalent to approximately US$870,233) annual gross gaming revenue for gaming tables and MOP300,000 (equivalent to approximately US$37,296) annual gross gaming revenue for gaming machines. • With respect to the gaming promotion activities, the concessionaires must inform the DICJ of any facts that may affect the solvency of gaming promoters, including the fact that they have been named as defendants in civil proceedings or have entered into loan or financing agreements that exceed their solvency, within a period of five days counted from the date of occurrence of the respective facts or the concessionaires’ knowledge thereof; inform the DICJ of facts that indicate the practice, by gaming promoters, of crimes and administrative offenses provided for in the law, within five days from the date of the concessionaires’ knowledge thereof, without prejudice to duties provided in other laws; supervise the activity of the gaming promoters, including their fulfillment of the duties provided in gaming laws and regulations; and adopt appropriate measures to prevent gaming promoters from conducting illegal activities in the casinos of the concessionaires. • Each gaming promoter can only conduct gaming promotion activities with one concessionaire and may only receive a commission, not being a gaming promoter permitted to share with the concessionaires, in any form whatsoever, the casino revenue. • The concessionaires are jointly and severally liable for administrative fines and civil liability arising from the exercise in their casinos of the authorized gaming promotion activity by gaming promoters, their directors and key employees, as well as their collaborators.
The annual minimum limit of the gross gaming revenue must be set out in view of the past gross gaming revenue of Macau and the current situation of the economic development of Macau, and may be adjusted exceptionally in case of extraordinary, unpredictable or force majeure incidents, and is currently in the amount of MOP7 million (equivalent to approximately US$869,988) annual gross gaming revenue for gaming tables and MOP300,000 (equivalent to approximately US$37,285) annual gross gaming revenue for gaming machines. • With respect to the gaming promotion activities, the concessionaires must inform the DICJ of any facts that may affect the solvency of gaming promoters, including the fact that they have been named as defendants in civil proceedings or have entered into loan or financing agreements that exceed their 76 Table of Contents solvency, within a period of five days counted from the date of occurrence of the respective facts or the concessionaires’ knowledge thereof; inform the DICJ of facts that indicate the practice, by gaming promoters, of crimes and administrative offenses provided for in the law, within five days from the date of the concessionaires’ knowledge thereof, without prejudice to duties provided in other laws; supervise the activity of the gaming promoters, including their fulfillment of the duties provided in gaming laws and regulations; and adopt appropriate measures to prevent gaming promoters from conducting illegal activities in the casinos of the concessionaires. • Each gaming promoter can only conduct gaming promotion activities with one concessionaire and may only receive a commission, not being a gaming promoter permitted to share with the concessionaires, in any form whatsoever, the casino revenue. • The concessionaires are jointly and severally liable for administrative fines and civil liability arising from the exercise in their casinos of the authorized gaming promotion activity by gaming promoters, their directors and key employees, as well as their collaborators.
Set out below are the key terms in relation to ownership and capitalization under the Concession Contract: • the registered share capital and net asset value of the Gaming Operator cannot be less than MOP5,000,000,000 (equivalent to approximately US$621,595,000) and, to guarantee its performance of certain of its legal and contractual obligations, including labor obligations, the Gaming Operator must maintain a guarantee issued by a Macau SAR bank in favor of the Macau SAR in the amount of MOP1,000,000,000 (equivalent to approximately US$124,319,000) until 180 days after the earlier of the expiration or termination of the Concession; • the managing director of the Gaming Operator must be a permanent resident of the Macau SAR and must hold at least 15% of the registered share capital of the Gaming Operator; • any person who directly acquires voting rights in the Gaming Operator will be subject to authorization from the Macau government; • the Gaming Operator will be required to take the necessary measures to ensure that any person who directly or indirectly acquires more than 5% of the shares in the Gaming Operator would be subject to authorization from the Macau government, except when such acquisition is wholly made through the shares of publicly-listed companies tradable at a stock exchange; • any person who directly or indirectly acquires more than 5% of the shares in the Gaming Operator will be required to report the acquisition to the Macau government (except when such acquisition is wholly made through shares tradable on a stock exchange as a publicly-listed company); • the Macau government’s prior approval would be required for any recapitalization plan of the Gaming Operator; and • the Chief Executive of Macau could require the increase of the Gaming Operator’s share capital, if deemed necessary.
Set out below are the key terms in relation to ownership and capitalization under the Concession Contract: • the registered share capital and net asset value of the Gaming Operator cannot be less than MOP5,000,000,000 (equivalent to approximately US$621,419,999) and, to guarantee its performance of certain of its legal and contractual obligations, including labor obligations, the Gaming Operator must maintain a guarantee issued by a Macau SAR bank in favor of the Macau SAR in the amount of MOP1,000,000,000 (equivalent to approximately US$124,284,000) until 180 days after the earlier of the expiration or termination of the Concession; • the managing director of the Gaming Operator must be a permanent resident of the Macau SAR and must hold at least 15% of the registered share capital of the Gaming Operator; • any person who directly acquires voting rights in the Gaming Operator will be subject to authorization from the Macau government; 88 Table of Contents • the Gaming Operator will be required to take the necessary measures to ensure that any person who directly or indirectly acquires more than 5% of the shares in the Gaming Operator would be subject to authorization from the Macau government, except when such acquisition is wholly made through the shares of publicly-listed companies tradable at a stock exchange; • any person who directly or indirectly acquires more than 5% of the shares in the Gaming Operator will be required to report the acquisition to the Macau government (except when such acquisition is wholly made through shares tradable on a stock exchange as a publicly-listed company); • the Macau government’s prior approval would be required for any recapitalization plan of the Gaming Operator; and • the Chief Executive of Macau could require the increase of the Gaming Operator’s share capital, if deemed necessary.
The issuance, renewal and cancellation of gaming promoter licenses are the responsibility of the Secretary for Economy and Finance, who also determines the maximum annual number of gaming promoters which each concessionaire may engage as published on the DICJ’s website.
The issuance, renewal and cancelation of gaming promoter licenses are the responsibility of the Secretary for Economy and Finance, who also determines the maximum annual number of gaming promoters which each concessionaire may engage as published on the DICJ’s website.
The Macau government owns the Studio City Casino gaming and gaming support areas, and the Macau government has transferred these areas to the Gaming Operator for usage in its operations during the duration of the concession for a fee of MOP750.00 (equivalent to approximately US$93) per square meter for years 1 to 3 of the Concession Contract, subject to consumer price index increase in years 2 and 3 of the concession.
The Macau government owns the Studio City Casino gaming and gaming support areas, and the Macau government has transferred these areas to the Gaming Operator for usage in its operations during the duration of the concession for a fee of MOP750.00 (equivalent to approximately US$93) per 75 Table of Contents square meter for years 1 to 3 of the Concession Contract, subject to consumer price index increase in years 2 and 3 of the concession.
Further, it imposed policies, regulations and restrictions that affect the minimum age required for entrance into casinos in Macau, location requirements for sites with gaming machine lounges, supply and requirements of gaming machines, equipment and systems, instructions on promoting responsible gaming, restrictions on the reallocation of gaming tables between properties and other matters.
Further, it imposed policies, regulations and restrictions that affect the minimum age required for entrance into casinos in Macau, location requirements for sites with gaming machine lounges, supply and requirements of gaming 77 Table of Contents machines, equipment and systems, instructions on promoting responsible gaming, restrictions on the reallocation of gaming tables between properties and other matters.
In many of these instances, the Concession Contract does not provide a specific cure period within which any such events may be cured and, instead, the Gaming Operator may be dependent on consultations and negotiations with the Macau government to give it an opportunity to remedy any such default.
In many of these instances, the Concession Contract does not provide a specific cure period within which any such events may be cured and, instead, the Gaming Operator may be dependent on consultations and negotiations with the Macau 87 Table of Contents government to give it an opportunity to remedy any such default.
We generated all of our revenues for each of the years ended December 31, 2022, 2021 and 2020 from our operations in Macau, the sole market in which we compete to operate.
We generated all of our revenues for each of the years ended December 31, 2023, 2022 and 2021 from our operations in Macau, the sole market in which we compete to operate.
However, our current and any future trademarks are subject to expiration and we cannot guarantee that we will be able to renew all of them upon expiration. Our trademarks and other intellectual property rights distinguish our services and products from those of our competitors and contribute to our ability to compete in our target markets.
However, our current and any future trademarks are subject to expiration and we cannot guarantee that we will be able to renew all of them upon expiration. 72 Table of Contents Our trademarks and other intellectual property rights distinguish our services and products from those of our competitors and contribute to our ability to compete in our target markets.
Of the total investment amount referred to above, MOP10,008,000,000 (equivalent to approximately US$1.2 billion) will be applied to non-gaming related projects, with the balance applied to gaming related projects.
Of the total investment amount referred to above, MOP10,008,000,000 (equivalent to approximately US$1.24 billion) will be applied to non-gaming related projects, with the balance applied to gaming related projects.
The concessionaires must mandatorily notify the Chief Executive of Macau prior to executing large financial initiatives, which are defined as those with a value greater than 71 Table of Contents MOP2.5 billion (equivalent to approximately US$310.8 million) regarding the internal movement of funds and MOP500 million (equivalent to approximately US$62.2 million) regarding salaries, remunerations, benefits of employees, and any other financial decisions. • The main objectives of the gaming law are, amongst others, safeguarding of national and Macau security, adequate diversification and sustainable development of the Macau economy, assurance that the development and operation of games of chance in casinos are in line with Macau’s policies and mechanisms in respect of combating the illegal flow of cross-border capital and preventing money laundering, and the scale, operation and practice of games of chance in casinos are subject to legal restrictions.
The concessionaires must mandatorily notify the Chief Executive of Macau prior to executing large financial initiatives, which are defined as those with a value greater than MOP2.5 billion (equivalent to approximately US$310.7 million) regarding the internal movement of funds and MOP500 million (equivalent to approximately US$62.1 million) regarding salaries, remunerations, benefits of employees, and any other financial decisions. • The main objectives of the gaming law are, amongst others, safeguarding of national and Macau security, adequate diversification and sustainable development of the Macau economy, assurance that the development and operation of games of chance in casinos are in line with Macau’s policies and mechanisms in respect of combating the illegal flow of cross-border capital and preventing money laundering, and the scale, operation and practice of games of chance in casinos are subject to legal restrictions.
The Industrial Property Code (Decree-Law no. 97/99/M, as amended pursuant to Law no. 11/2001), covers (i) inventions meeting the patentability requirements; (ii) semiconductor topography products; (iii) trademarks; (iv) designations of origin and geographical indications; and (v) awards.
The Industrial Property Code (Decree-Law no. 97/99/M, as amended pursuant to Law no. 11/2001), covers 83 Table of Contents (i) inventions meeting the patentability requirements; (ii) semiconductor topography products; (iii) trademarks; (iv) designations of origin and geographical indications; and (v) awards.
Under such tax holiday, Studio City Hotels is allowed to double the maximum rates applicable to 85 Table of Contents depreciation and reintegration for the purposes of assessment of the Macau complementary tax. In August 2021, the hotel license of Studio City Hotel was transferred from Studio City Hotels to Studio City Developments, the owner of the Studio City property.
Under such tax holiday, Studio City Hotels is allowed to double the maximum rates applicable to depreciation and reintegration for the purposes of assessment of the Macau complementary tax. In August 2021, the hotel license of Studio City Hotel was transferred from Studio City Hotels to Studio City Developments, the owner of the Studio City property.
Venetian Macau Limited operates Sands Macao on the Macau peninsula, together with The Venetian Macau and the Plaza Casino at The Four Seasons Hotel Macao, which are located in Cotai. Venetian Macau Limited also operated Sands Cotai Central in Cotai, which has been rebranded and redeveloped into The Londoner Macau, which opened in February 2021.
Venetian Macau, S.A. operates Sands Macao on the Macau peninsula, together with The Venetian Macau and the Plaza Casino at The Four Seasons Hotel Macao, which are located in Cotai. Venetian Macau, S.A. also operated Sands Cotai Central in Cotai, which has been rebranded and redeveloped into The Londoner Macau, which opened in February 2021.
Studio City Casino gaming customers currently include mass market and VIP rolling chip players. Studio City Casino catered exclusively to mass market players until it launched its VIP rolling chip operations in November 2016. For the years ended December 31, 2022, 2021 and 2020, Studio City Casino’s gross gaming revenues was US$171.2 million, US$380.8 million and US$264.4 million, respectively.
Studio City Casino gaming customers currently include mass market and VIP rolling chip players. Studio City Casino catered exclusively to mass market players until it launched its VIP rolling chip operations in November 2016. For the years ended December 31, 2023, 2022 and 2021, Studio City Casino’s gross gaming revenues was US$912.4 million, US$171.2 million and US$380.8 million, respectively.
Market and Competition Macau Gaming Market Gaming in Macau is administered through concessions awarded by the Macau government to six different concessionaires: SJM, MGM Grand, Galaxy, Venetian Macau Limited, Wynn Resorts Macau and Melco Resorts Macau. 65 Table of Contents SJM is a subsidiary of SJM Holdings Ltd., a company listed on the Hong Kong Stock Exchange in which family members of Mr.
Market and Competition Macau Gaming Market Gaming in Macau is administered through concessions awarded by the Macau government to six different concessionaires: SJM, MGM Grand, Galaxy, Venetian Macau, S.A., Wynn Resorts Macau and Melco Resorts Macau. 69 Table of Contents SJM is a subsidiary of SJM Holdings Ltd., a company listed on the Hong Kong Stock Exchange in which family members of Mr.
The complex has a first-class premium seating level offering 16 private VIP suites, in addition to approximately 242 luxury club seats and a deluxe club lounge. Each VIP suite is spacious and elegantly designed, coming fully equipped with stylish furnishings and a flat-screen TV.
The complex has a first-class premium seating level offering 16 private VIP suites, in addition to approximately 242 luxury club 66 Table of Contents seats and a deluxe club lounge. Each VIP suite is spacious and elegantly designed, coming fully equipped with stylish furnishings and a flat-screen TV.
See “— Our Internal Control Policies.” The Gaming Operator’s Concession The Concession Regime The Macau government conducted an international tender process for gaming concessions in Macau in 2022, and granted six gaming concessions to SJM, MGM Grand, Galaxy, Venetian Macau Limited (“VML”), Wynn Macau and Melco Resorts Macau, respectively. Subconcessions are prohibited.
See “— Our Internal Control Policies.” The Gaming Operator’s Concession The Concession Regime The Macau government conducted an international tender process for gaming concessions in Macau in 2022, and granted six gaming concessions to SJM, MGM Grand, Galaxy, Venetian Macau Limited (“VML”), 85 Table of Contents Wynn Macau and Melco Resorts Macau, respectively. Subconcessions are prohibited.
The Concession Contract requires the Gaming Operator to make a minimum investment in Macau of MOP11,823,700,000 (equivalent to approximately US$1.5 billion) The investment plan includes gaming and non-gaming related projects in the expansion of foreign market patrons, conventions and exhibitions, entertainment shows, sports events, art and culture, health and well-being, thematic entertainment, gastronomy, community and maritime tourism and others.
The Concession Contract requires the Gaming Operator to make a minimum investment in Macau of MOP11,823,700,000 (equivalent to approximately US$1.47 billion) The investment plan includes gaming and non-gaming related projects in the expansion of foreign market patrons, conventions and exhibitions, entertainment shows, sports events, art and culture, health 86 Table of Contents and well-being, thematic entertainment, gastronomy, community and maritime tourism and others.
Retail Studio City has approximately 34,400 square meters of themed and innovative retail space at the lower levels of the property. The retail mall showcases a variety of shops and food and beverage offerings including a small portion of our self-operated retail outlets. The Boulevard at Studio City provides a unique retail experience to visitors.
Retail Studio City has approximately 38,500 square meters of themed and innovative retail space at the lower levels of the property. The retail mall showcases a variety of shops and food and beverage offerings including a small portion of our self-operated retail outlets. The Boulevard at Studio City provides a unique retail experience to visitors.
Playing host to concerts, theatrical shows, sporting events, family shows, award ceremonies and more, the Studio City Event Center is the next generation in versatile, innovative, premier and live entertainment venues. • Studio City Water Park — a water park featuring several high-thrill and family-focused attractions, including the High Point Twister, a 20-meter tall slide tower with waterslides for individuals and small families alike, and the Golden Bucket, a massive water play structure with a classic tipping bucket, four slides and over 60 water features.
Playing host to concerts, theatrical shows, sporting events, family shows, award ceremonies and more, the Studio City Event Center is the next generation in versatile, innovative, premier and live entertainment venues. • Studio City Water Park — an all-weather water park complex and Macau’s largest water park: • Outdoor Water Park — a water park featuring several high-thrill and family-focused attractions, including the High Point Twister, a 20-meter tall slide tower with waterslides for individuals and small families alike, and the Golden Bucket, a massive water play structure with a classic tipping bucket, four slides and over 60 water features.
A managing company can only enter into a managing agreement with one concessionaire, and can only receive management fees from the concessionaire, with casino revenue sharing or payment of commissions not being permitted.
A managing company can only enter into a managing agreement with one concessionaire, and can only receive management fees from the concessionaire, with casino revenue sharing or payment of commissions not 79 Table of Contents being permitted.
The Celebrity Tower with approximately 1,000 rooms brings a deluxe hotel experience to a board range of travelers, which includes access to all of the entertainment facilities offered by Studio City. It offers eleven different room packages ranging from the Celebrity King at 42 square meters to the Celebrity Deluxe Suite at 95 square meters.
The Celebrity Tower with approximately 1,000 rooms 65 Table of Contents brings a deluxe hotel experience to a board range of travelers, which includes access to all of the entertainment facilities offered by Studio City. It offers eleven different room types ranging from the Celebrity King at 42 square meters to the Celebrity Deluxe Suite at 95 square meters.
Under Article 2 of Administrative Regulation no. 7/2006 (as amended pursuant to Administrative Regulation no. 17/2017) and the DICJ Instruction no. 1/2016 (as amended pursuant to DICJ Instruction 77 Table of Contents no.1/2019), the Gaming Operator is required to track and report transactions and granting of credit that are of MOP500,000 (equivalent to approximately US$62,159) or above.
Under Article 2 of Administrative Regulation no. 7/2006 (as amended pursuant to Administrative Regulation no. 17/2017) and the DICJ Instruction no. 1/2016 (as amended pursuant to DICJ Instruction no.1/2019), the Gaming Operator is required to track and report transactions and granting of credit that are of MOP500,000 (equivalent to approximately US$62,142) or above.
In 2022, total operating revenues decreased to US$11.5 million and we generated net loss attributable to Studio City International Holdings Limited of US$326.5 million due to the temporary casino closure and quarantine and social distancing measures to contain the COVID-19 outbreak in 2022.
While total operating revenues increased in 2021 from 2020, total operating revenues decreased to US$11.5 million in 2022 and we generated net loss attributable to Studio City International Holdings Limited of US$326.5 million due to the temporary casino closure and quarantine and social distancing measures to contain the COVID-19 outbreak in 2022.
The following diagram illustrates our organizational structure, including the place of formation, ownership interest and affiliation of our significant subsidiaries, as of March 24, 2023: 87 Table of Contents Notes: 1. Includes 747,288 Class A ordinary shares held by Melco International. See “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.” 2.
The following diagram illustrates our organizational structure, including the place of formation, ownership interest and affiliation of our significant subsidiaries, as of March 15, 2024: 91 Table of Contents Notes: 1. Includes 747,288 Class A ordinary shares held by Melco International. See “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.” 2.
Reflects 114,020,172 Class A ordinary shares of SCI represented by ADSs. Information regarding beneficial ownership is reported as of December 31, 2022 and is based on the information contained in the Schedule 13G/A filed by Silver Point Capital L.P. with the SEC on February 14, 2023. 5.
Reflects 114,569,116 Class A ordinary shares of SCI represented by ADSs. Information regarding beneficial ownership is reported as of December 31, 2023 and is based on the information contained in the Schedule 13G/A filed by Silver Point Capital L.P. with the SEC on February 14, 2024. 5.
The customs authorities may also request an individual exiting Macau to declare if such individual is 78 Table of Contents carrying an amount in cash or negotiable instruments to the bearer equal to or higher to such amount.
The customs authorities may also request an individual exiting Macau to declare if such individual is carrying an amount in cash or negotiable instruments to the bearer equal to or higher to such amount.
Studio City Entertainment has applied for an extension of the complementary tax exemption for 2022 and for the period from January 1, 2023 through December 31, 2027 and such applications are currently pending approval by the Macau government. Dividend distributions by Studio City Entertainment continue to be subject to Macau complementary tax.
Studio City Entertainment applied for an extension of the Macau complementary tax exemption for 2022 and for the period from January 1, 2023 through December 31, 2027. These applications are subject to the discretionary approval of the Macau government. Dividend distributions by Studio City Entertainment continue to be subject to Macau complementary tax.
A special premium may be due by the Gaming Operator in the event the average gross gaming revenue of the Gaming Operator’s gaming tables does not reach the annual minimum of MOP7,000,000 (equivalent to approximately US$870,233) and the average gross gaming revenue of the gaming machines does not reach the annual minimum of MOP300,000 (equivalent to approximately US$37,296).
A special premium may be due by the Gaming Operator in the event the average gross gaming revenue of the Gaming Operator’s gaming tables does not reach the annual minimum of MOP7,000,000 (equivalent to approximately US$869,988) and the average gross gaming revenue of the gaming machines does not reach the annual minimum of MOP300,000 (equivalent to approximately US$37,285).
As a result, Studio City Casino had gross gaming revenue from mass market table games of US$131.3 million, US$313.6 million and US$193.8 million in 2022, 2021 and 2020, respectively.
As a result, Studio City Casino had gross gaming revenue from mass market table games of US$783.6 million, US$131.3 million and US$313.6 million in 2023, 2022 and 2021, respectively.
Studio City features approximately 1,600 luxury hotel rooms, diverse food and beverage establishments and approximately 34,400 square meters of complementary retail space. Studio City is strategically located in Cotai, as one of the few dedicated Cotai hotel-casino resort stops on the Macau Light Rapid Transit Line, with an access bridge leading to Studio City.
Studio City features approximately 2,493 luxury hotel rooms, diverse food and beverage establishments and approximately 38,500 square meters of complementary retail space. Studio City is strategically located in Cotai, as one of the few dedicated Cotai hotel-casino resort stops on the Macau Light Rapid Transit Line, with an access bridge leading to Studio City.
For further information on the Macau gaming market, see “— Market and Competition — Macau Gaming Market.” Gaming Studio City Casino currently consists of mass market table gaming, gaming machine and VIP gaming areas, with a total operating gross floor area of 22,048 square meters, located on the ground and first floors of 60 Table of Contents Studio City.
For further information on the Macau gaming market, see “— Market and Competition — Macau Gaming Market.” Gaming Studio City Casino currently consists of mass market table gaming, gaming machine and VIP gaming areas, with a total operating gross floor area of 28,784.3 square meters, located on the ground and first floors of Studio City.
The following table sets forth certain data with respect to our hotel for the years indicated: For the Year Ended December 31, 2022 2021 2020 Average daily rate (US$) 111 123 128 REVPAR (US$) 31 62 36 Occupancy rate 28 % 51 % 28 % Studio City’s Star Tower garnered the Forbes Travel Guide Five-Star recognition for the sixth consecutive year in 2023.
The following table sets forth certain data with respect to our hotel for the years indicated: For the Year Ended December 31, 2023 2022 2021 Average daily rate (US$) 153 111 123 REVPAR (US$) 137 31 62 Occupancy rate 90 % 28 % 51 % Studio City’s Star Tower garnered the Forbes Travel Guide Five-Star recognition for the seventh consecutive year in 2024.
A summary of the key terms of the Concession Contract is as follows. 81 Table of Contents All concessionaires must pay a special gaming tax of 35% of gross gaming revenues, defined as all gaming revenues derived from casino or gaming areas, plus an annual gaming premium of: • MOP30 million (equivalent to approximately US$3.7 million) per annum fixed premium; • MOP300,000 (equivalent to approximately US$37,296) per annum per VIP gaming table; • MOP150,000 (equivalent to approximately US$18,648) per annum per mass market gaming table; and • MOP1,000 (equivalent to approximately US$124) per annum per electric or mechanical gaming subject to a minimum annual payment of an amount required for the operation of 500 gaming tables and 1,000 electronic gaming machines.
All concessionaires must pay a special gaming tax of 35% of gross gaming revenues, defined as all gaming revenues derived from casino or gaming areas, plus an annual gaming premium of: • MOP30 million (equivalent to approximately US$3.7 million) per annum fixed premium; • MOP300,000 (equivalent to approximately US$37,285) per annum per VIP gaming table; • MOP150,000 (equivalent to approximately US$18,643) per annum per mass market gaming table; and • MOP1,000 (equivalent to approximately US$124) per annum per electric or mechanical gaming subject to a minimum annual payment of an amount required for the operation of 500 gaming tables and 1,000 electronic gaming machines.
The commission cap regulations impose fines, ranging from MOP2,000,000 (equivalent to approximately US$248,638) up to MOP5,000,000 (equivalent to approximately US$621,595) on concessionaires that do not comply with the cap and other fines, ranging from MOP600,000 (equivalent to approximately US$74,591) up to MOP1,500,000 (equivalent to approximately US$186,478) on concessionaires that do not comply with their reporting obligations regarding commission payments.
The commission cap regulations impose fines, ranging from MOP2,000,000 (equivalent to approximately US$248,568) up to MOP5,000,000 (equivalent to approximately US$621,420) on concessionaires that do not comply with the cap and other fines, ranging from MOP600,000 (equivalent to approximately US$74,570) up to MOP1,500,000 (equivalent to approximately US$186,426) on concessionaires that do not comply with their reporting obligations regarding commission payments.
Studio City Casino’s gaming machine handle and gaming machine win rate were US$0.66 billion and 2.8% in 2022, respectively, US$1.11 billion and 2.7% in 2021, respectively, and US$0.74 billion and 2.8% in 2020, respectively.
Studio City Casino’s gaming machine handle and gaming machine win rate were US$2.48 billion and 3.3% in 2023, respectively, US$0.66 billion and 2.8% in 2022, respectively, and US$1.11 billion and 2.7% in 2021, respectively.
The premium mass market gaming area has decorations and features distinctive from the mainstream mass market gaming area. Studio City Casino’s mass market table games drop and hold percentage were US$0.46 billion and 28.5% in 2022, respectively, US$1.13 billion and 27.7% in 2021, respectively, and US$0.73 billion and 26.6% in 2020, respectively.
The premium mass market gaming area has decorations and features distinctive from the mainstream mass market gaming area. Studio City Casino’s mass market table games drop and hold percentage were US$2.87 billion and 27.3% in 2023, respectively, US$0.46 billion and 28.5% in 2022, respectively, and US$1.13 billion and 27.7% in 2021, respectively.
Studio City Casino’s VIP rolling chip volume, VIP rolling chip win rate and VIP rolling chip gross gaming revenue were US$0.84 billion, 2.56% and US$21.4 million, respectively, in 2022, US$1.84 billion, 2.00% and US$36.8 million, respectively, in 2021 and US$2.21 billion, 2.28% and US$50.4 million, respectively, in 2020.
Studio City Casino’s VIP rolling chip volume, VIP rolling chip win rate and VIP rolling chip gross gaming revenue were US$2.79 billion, 1.65% and US$46.0 million, respectively, in 2023, US$0.84 billion, 2.56% and US$21.4 million, respectively, in 2022 and US$1.84 billion, 2.00% and US$36.8 million, respectively, in 2021.
As a result, until such time as the PCAOB issues any new determination, we do not believe we are at risk of being a Commission-Identified Issuer for a second consecutive year and are no longer at risk of having our securities subject to a trading prohibition under the HFCAA.
As a result, until such time as the PCAOB issues any new determination, we do not believe we are at risk of being a Commission-Identified Issuer nor at risk of having our securities subject to a trading prohibition under the HFCAA.
The Gaming Operator has undertaken to carry out incremental additional non-gaming investment in the amount of approximately 20% of its initial non-gaming investment, or MOP2,003,000,000 (equivalent to approximately US$249.0 million), in the event Macau’s annual gross gaming revenue reaches MOP180,000,000,000 (equivalent to approximately US$22.4 billion) (“Incremental Investment Trigger”).
The Gaming Operator has undertaken to carry out incremental additional non-gaming investment in the amount of approximately 20% of its initial non-gaming investment, or MOP2,003,000,000 (equivalent to approximately US$248.9 million), in the event Macau’s annual gross gaming revenue reaches MOP180,000,000,000 (equivalent to approximately US$22.37 billion) (“Incremental Investment Trigger”), which occurred in 2023.
As a result, Studio City Casino had gross gaming revenue from gaming machine of US$18.6 million, US$30.4 million and US$20.2 million in 2022, 2021 and 2020, respectively. Average net win per gaming machine per day in 2022, 2021 and 2020 was US$75, US$129 and US$98, respectively.
As a result, Studio City Casino had gross gaming revenue from gaming machine of US$82.8 million, US$18.6 million and US$30.4 million in 2023, 2022 and 2021, respectively. Average net win per gaming machine per day in 2023, 2022 and 2021 was US$343, US$75 and US$129, respectively.
Hotel Studio City includes self-managed luxury hotel facilities with approximately 1,600 hotel rooms, all elegantly furnished and complete with services and amenities to match. The hotel facilities include indoor and 61 Table of Contents outdoor swimming pools, beauty salon, spa, fitness centers and other amenities.
Hotel Studio City includes self-managed luxury hotel facilities with approximately 2,493 hotel rooms, all elegantly furnished and complete with services and amenities to match. The hotel facilities include indoor and outdoor swimming pools, beauty salon, spa, fitness centers and other amenities.
As of December 31, 2022, the balance of the reserve amounted to US$6,000. FCPA The FCPA prohibits us and our staff and agents from offering or giving money or any other item of value to win or retain business or to influence any act or decision of any foreign official. The Code includes specific FCPA-related provisions.
FCPA The FCPA prohibits us and our staff and agents from offering or giving money or any other item of value to win or retain business or to influence any act or decision of any foreign official. The Code includes specific FCPA-related provisions.
Risk Factors — Risks Relating to Our Business — We may not have sufficient insurance coverage.” Environmental Matters We are committed to environmental awareness and have developed built-in innovative and energy saving green technologies for operations at Studio City.
Risk Factors — Risks Relating to Our Business — We may not have sufficient insurance coverage.” Environmental Matters We are committed to environmental awareness and have developed built-in innovative and energy saving green technologies for operations at Studio City. Currently, we are not aware of any material environmental complaints having been made against us.
Furthermore, gaming promoters, including their shareholders, directors, and key employees, are subject to verification of suitability based on criteria such as reputation, tendency to take on excessive risks in view of how they usually conduct business or the nature of their professional activities, their economic and financial situation, existence of well-founded suspicions on the legality of the origin of the funds to be used in the gaming promotion activity or regarding the true identity of the holder of such funds, existence of improper transactions with criminal groups, and indictment or conviction for crime punishable by imprisonment of three years or more.
When assessing whether the funds or chips deposited were used in games of chance in casino or were earned in these games, the law provides that it shall be taken into account, in particular, the concessionaire’s records. 78 Table of Contents Furthermore, gaming promoters, including their shareholders, directors, and key employees, are subject to verification of suitability based on criteria such as reputation, tendency to take on excessive risks in view of how they usually conduct business or the nature of their professional activities, their economic and financial situation, existence of well-founded suspicions on the legality of the origin of the funds to be used in the gaming promotion activity or regarding the true identity of the holder of such funds, existence of improper transactions with criminal groups, and indictment or conviction for crime punishable by imprisonment of three years or more.
As a major tourist 62 Table of Contents attraction in Macau, Studio City’s premier entertainment offerings help to drive visitation to our property. Studio City’s entertainment offerings include: • Golden Reel — an iconic landmark of Macau, it is the world’s first figure-8 and Asia’s highest Ferris wheel.
As a major tourist attraction in Macau, Studio City’s premier entertainment offerings help to drive visitation to our property. Studio City’s entertainment offerings include: • Golden Reel — an iconic landmark of Macau, it is the world’s first figure-8 and Asia’s highest Ferris wheel. The Golden Reel rises approximately 130 meters high between Studio City’s Art Deco-inspired twin hotel towers.
New Cotai also has a Participation Interest in MSC Cotai which represents its economic right to receive an amount equal to approximately 9.4% of the dividends, distributions or other consideration paid to the Company by MSC Cotai, if any, from time to time.
Reflects 124,596,560 Class A ordinary shares of SCI represented by ADSs as of January 30, 2024. 3. New Cotai also has a Participation Interest in MSC Cotai which represents its economic right to receive an amount equal to approximately 9.4% of the dividends, distributions or other consideration paid to the Company by MSC Cotai, if any, from time to time.
If, after the completion of the execution of the investment plan under the Concession Contract, the total amount of expenses made by the concessionaire, directly or, with approval from the Macau government, indirectly, is lower than the global amount and the amount committed at the time of activation of the Incremental Investment Trigger, the concessionaire undertakes to use the remaining amount on projects correlated to its activity to be designated by the concessionaire and accepted by the Macau government and/or on projects that are designated by the Macau government with significant public benefit to Macau. 82 Table of Contents During the implementation of the investment plan under the Concession Contract, the Macau government may request the concessionaire to provide any document or to amend the implementation of projects contained in the investment plans to ensure compliance with current technical norms or rules and the required quality standard.
If, after the completion of the execution of the investment plan under the Concession Contract, the total amount of expenses made by the concessionaire, directly or, with approval from the Macau government, indirectly, is lower than the global amount and the amount committed at the time of activation of the Incremental Investment Trigger, the concessionaire undertakes to use the remaining amount on projects correlated to its activity to be designated by the concessionaire and accepted by the Macau government and/or on projects that are designated by the Macau government with significant public benefit to Macau.
Finally, the Studio City Water Park also includes Studio City’s Riverscape, a jungle-themed action river that is over 450 meters long which offers three routes of differing lengths, three white-sand beaches and 16 water features throughout the guest’s journey. • Legend Heroes PVRK — a technology-based entertainment park which combines virtual technology with the physical world to deliver an immersive user experience.
Finally, the Studio City Water Park also includes Studio City’s Riverscape, a jungle-themed action river that is over 450 meters long which offers three routes of differing lengths, three white-sand beaches and 16 water features throughout the guest’s journey. • Indoor Water Park — a climate-controlled, space-themed indoor water park with 16 attractions, including seven exhilarating water slides, two wave pools, including a unique Oblivion Pool that extends both indoors and outdoors, and the only indoor surfing simulator in Macau. • Legend Heroes PVRK — a technology-based entertainment park which combines virtual technology with the physical world to deliver an immersive user experience.
We have applied for the declaration of touristic utility purpose pursuant to which Studio City Developments would be entitled to the property tax holiday and be allowed to double the maximum rates applicable to depreciation and reintegration for the purposes of assessment of the Macau complementary tax to be granted to Studio City Developments.
In July 2023, the Macau government granted the declaration of touristic utility purpose to Studio City Developments pursuant to which Studio City Developments is entitled to the property tax holiday and is allowed to double the maximum rates applicable to depreciation and reintegration for the purposes of assessment of the Macau complementary tax. 90 Table of Contents C.
Melco Resorts has, through its subsidiaries, two main groups of labor quotas in Macau, one to import non-skilled workers from the PRC and the other to import non-skilled workers from all other countries. The Gaming Operator is not currently allowed to hire non-Macau resident dealers and supervisors under the Macau government’s policy.
Melco Resorts has, through its subsidiaries, two main groups of labor quotas in Macau, one to import non-skilled workers from the PRC and the other to import non-skilled workers from all other countries.
MGM Grand opened MGM Macau on the Macau Peninsula in December 2007 and MGM Cotai in February 2018. Galaxy currently operates multiple casinos in Macau, including StarWorld, a hotel and casino resort in Macau’s central business and tourism district.
MGM Grand was originally formed as a joint venture by MGM-Mirage and Ms. Pansy Ho, sister of Mr. Lawrence Ho. MGM Grand opened MGM Macau on the Macau Peninsula in December 2007 and MGM Cotai in February 2018. Galaxy currently operates multiple casinos in Macau, including StarWorld, a hotel and casino resort in Macau’s central business and tourism district.
In addition, gaming tables and gaming machines previously allocated to a concessionaire may also be revoked if the minimum average annual gross gaming revenue of MOP7 million (equivalent to approximately US$870,233) for gaming tables and MOP300,000 (equivalent to approximately US$37,296) for gaming machines are not met for two consecutive years or the tables or gaming machines are not fully utilized without reason within a certain period. 66 Table of Contents Law no. 7/2022 which amends the Macau Gaming Operations Law (Law no. 16/2001) came into force in June 2022.
In addition, gaming tables and gaming machines previously allocated to a concessionaire may also be revoked if the minimum average annual gross gaming revenue of MOP7 million (equivalent to approximately US$869,988) for gaming tables and MOP300,000 (equivalent to approximately US$37,285) for gaming machines are not met for two consecutive years or the tables or gaming machines are not fully utilized without reason within a certain period.
The Gaming Operator applied for and was granted the benefit of a corporate tax holiday on Macau complementary tax (but not gaming tax) from 2017 through 2021 on profits generated from gaming operations.
The Gaming Operator applied for and was granted the benefit of a corporate tax holiday on Macau complementary tax (but not gaming tax) from 2017 89 Table of Contents through 2021 on profits generated from gaming operations, which was extended until December 31, 2022 by dispatch of the Chief Executive.
The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 59 Table of Contents B.
The information contained on our website is not part of this annual report on Form 20-F. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 63 Table of Contents B.
In addition, the Concession Contract contains various general covenants and obligations and other provisions, including special duties of cooperation, special duties of information, and execution of the Gaming Operator’s investment obligations. 84 Table of Contents Transfers of property and credit rights of the Gaming Operator exceeding MOP100,000,000 (equivalent to approximately US$12,432,000) and loan agreements or similar arrangements executed by the Gaming Operator as borrower or creditor equal to or exceeding that amount are each subject to approval by the Macau SAR government, except for those loan agreements related to credit granted for gaming purposes.
Transfers of property and credit rights of the Gaming Operator exceeding MOP100,000,000 (equivalent to approximately US$12,428,400) and loan agreements or similar arrangements executed by the Gaming Operator as borrower or creditor equal to or exceeding that amount are each subject to approval by the Macau SAR government, except for those loan agreements related to credit granted for gaming purposes.
Currently, we are not aware of any material environmental complaints having been made against us. 69 Table of Contents Our Internal Control Policies We have adopted our own governance policies and internal control measures in order to achieve operations in a professional manner in compliance with its, and Melco Resorts’, internal control requirements and applicable laws.
Our Internal Control Policies We have adopted our own governance policies and internal control measures in order to achieve operations in a professional manner in compliance with its, and Melco Resorts’, internal control requirements and applicable laws.

… 68 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

103 edited+22 added−26 removed44 unchanged
Biggest changeInvestors are encouraged to review the reconciliation of the historical non-GAAP financial measure to its most directly comparable GAAP financial measure. 94 Table of Contents Reconciliation of Net Loss Attributable to Studio City International Holdings Limited to Adjusted EBITDA Year Ended December 31, 2022 2021 2020 (2) (in thousands of US$) Net loss attributable to Studio City International Holdings Limited $ (326,451 ) $ (252,555 ) $ (321,626 ) Net loss attributable to participation interest (34,856 ) (49,447 ) (83,466 ) Net loss (361,307 ) (302,002 ) (405,092 ) Income tax expense (credit) 382 (457 ) (1,011 ) Interest and other non-operating expenses, net 83,709 110,886 126,175 Property charges and other 5,799 6,031 4,798 Depreciation and amortization 126,956 127,634 160,334 Share-based compensation 361 438 791 Pre-opening costs 3,263 984 201 Adjusted EBITDA $ (140,837 ) $ (56,486 ) $ (113,804 ) Adjusted EBITDA margin (1) (1,219.6 )% (52.9 )% (231.3 )% (1) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total operating revenues.
Biggest changeReconciliation of Net Loss Attributable to Studio City International Holdings Limited to Adjusted EBITDA Year Ended December 31, 2023 2022 2021 (in thousands of US$) Net loss attributable to Studio City International Holdings Limited $ (133,517 ) $ (326,451 ) $ (252,555 ) Net loss attributable to participation interest (12,567 ) (34,856 ) (49,447 ) Net loss (146,084 ) (361,307 ) (302,002 ) Income tax (benefit) expense (81 ) 382 (457 ) Interest and other non-operating expenses, net 117,123 83,709 110,886 Depreciation and amortization 169,397 126,956 127,634 Property charges and other 1,407 5,799 6,031 Share-based compensation — 361 438 Pre-opening costs 17,451 3,263 984 Adjusted EBITDA $ 159,213 $ (140,837 ) $ (56,486 ) Adjusted EBITDA margin (1) 35.7 % (1,219.6 )% (52.9 )% (1) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total operating revenues.
The COVID-19 outbreak has also caused severe disruptions to the businesses of our tenants and other business partners, which may increase the risk of them defaulting on their contractual obligations with us, which may adversely affect our business, financial condition and results of operations, including causing increases in our bad debts.
The COVID-19 outbreak also caused severe disruptions to the businesses of our tenants and other business partners, which may increase the risk of them defaulting on their contractual obligations with us, which may adversely affect our business, financial condition and results of operations, including causing increases in our bad debts.
Net cash used in investing activities of US$407.2 million in 2021 was primarily attributable to payments for acquisition of property and equipment of US$400.4 million, funds to an affiliated company of US$4.4 million and payments for acquisition of intangible assets of US$4.1 million, partially offset by proceeds from sale of property and equipment and other long-term assets of US$1.7 million.
Net cash used in investing activities of US$407.2 million in 2021 was primarily attributable to payments for acquisition of property and equipment of US$400.4 million, funds to an affiliated company of US$4.4 million and payments for acquisition of intangible assets of US$4.1 million, partially offset by proceeds from the sale of property and equipment and other long-term assets of US$1.7 million.
In addition, any non-compliance with such laws may result in damage or reputation and/or subject us to lawsuits, fines and other penalties as well as restrictions on our use or transfer of data; • Increases in cybersecurity and ransomware attacks around the world and the need to continually evaluate, enhance and improve our internal process, systems and technology infrastructure to comply with the increasing cybersecurity, data privacy and data protection laws, regulations and requirements; and • Gaming promoters in Macau have experienced significantly increased regulatory scrutiny that has resulted in the cessation of business of many gaming promoters.
In addition, any non-compliance with such laws may result in damage or reputation and/or subject us to lawsuits, fines and other penalties as well as restrictions on our use or transfer of data; • Increases in cybersecurity and ransomware attacks around the world, including in the gaming and hospitality industries and the need to continually evaluate, enhance and improve our internal process, systems and technology infrastructure to comply with the increasing cybersecurity, data privacy and data protection laws, regulations and requirements; and • Gaming promoters in Macau have experienced significantly increased regulatory scrutiny that has resulted in the cessation of business of many gaming promoters.
Our future operating results are subject to significant business, economic, regulatory and competitive uncertainties and risks, many of which are beyond our control. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business.” For detailed information regarding our operations and development projects, see “Item 4. Information on the Company — B. Business Overview.” A.
Our future operating results are subject to significant business, economic, regulatory and competitive uncertainties and risks, many of which are beyond our control. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business.” For detailed information regarding our operations, see “Item 4. Information on the Company — B. Business Overview.” A.
However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in the consolidated financial statements, the resulting changes could have a material adverse effect on the consolidated financial statements. See note 2 to the consolidated financial statements for further information on significant accounting policies. 105 Table of Contents
However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in the consolidated financial statements, the resulting changes could have a material adverse effect on the consolidated financial statements. See note 2 to the consolidated financial statements for further information on significant accounting policies. 108 Table of Contents
Business Overview — Market and Competition,” and other information elsewhere in this annual report for recent trends affecting our revenues and costs since the previous financial year and a discussion of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause the reported financial information not necessarily to be indicative of future operating results or financial condition.
Business Overview — Market and Competition” and other information elsewhere in this annual report for recent trends affecting our revenues and costs since the previous financial year and a discussion of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause the reported financial information not necessarily to be indicative of future operating results or financial condition.
See “Special Note Regarding Forward-Looking Statements” regarding these statements. Overview We are a holding company and, through our subsidiaries, operate the non-gaming businesses of Studio City. Studio City Casino is operated by the Gaming Operator, one of the subsidiaries of Melco Resorts and a 88 Table of Contents holder of a gaming concession.
See “Special Note Regarding Forward-Looking Statements” regarding these statements. Overview We are a holding company and, through our subsidiaries, operate the non-gaming businesses of Studio City. Studio City Casino is operated by the Gaming Operator, one of the subsidiaries of Melco Resorts and a 92 Table of Contents holder of a gaming concession.
OPERATING RESULTS Operations Our principal operating activities are the provision of services pursuant to a casino contract and the hospitality business in Macau. The Company monitors the operations and evaluate earnings by reviewing the assets and operations of Studio City as one operating segment. Accordingly, we do not present separate segment information.
OPERATING RESULTS Operations Our principal operating activities are the provision of services pursuant to a casino contract and the hospitality business in Macau. The Company monitors the operations and evaluates earnings by reviewing the assets and operations of Studio City as one operating segment. Accordingly, we do not present separate segment information.
In addition, our subsidiaries incorporated in Macau are required to set aside a minimum of 25% of the entity’s profit after taxation to the legal reserve until the balance of the legal reserve reaches a level equivalent to 50% of the entity’s share capital in accordance with the provisions of the Macau Commercial Code.
In addition, our subsidiaries incorporated in Macau are required to set aside a minimum of 25% of the entity’s profit after tax to the legal reserve until the balance of the legal reserve reaches a level equivalent to 50% of the entity’s share capital in accordance with the provisions of the Macau Commercial Code.
Anti-money laundering, anti-bribery and 101 Table of Contents corruption and sanctions and counter-terrorism financing laws and regulations have become increasingly complex and subject to greater regulatory scrutiny and supervision by regulators globally and may increase our compliance costs and any potential non-compliances of such laws and regulations could have an adverse effect on our reputation, financial condition, results of operations or cash flows; • Enactment of new laws, or amendments to existing laws with more stringent requirements, in relation to personal data, including, among others, collection, use and/or transmission of personal data, and as to which there may be limited precedence on their interpretation and application, may increase operating costs and/or adversely impact our ability to market to our customers and guests.
Anti-money laundering, anti-bribery and corruption and sanctions and counter-terrorism financing laws and regulations have become increasingly complex and subject to greater regulatory scrutiny and supervision by regulators globally and may increase our compliance costs and any potential non-compliances of such laws and regulations could have an adverse effect on our reputation, financial condition, results of operations or cash flows; • Enactment of new laws, or amendments to existing laws with more stringent requirements, in relation to personal information, including, among others, collection, use and/or transmission of personal information, and as to which there may be limited precedence on their interpretation and application, may increase operating costs and/or adversely impact our ability to market to our customers and guests.
Refer to note 2(i) to the consolidated financial statements included elsewhere in this annual report for further details of estimated useful lives of the property and equipment. Our land use right in Macau under the land concession contract for Studio City is being amortized over the estimated term of the land use right on a straight-line basis.
Refer to note 2(i) to the consolidated financial statements included elsewhere in this annual report for further details of estimated useful lives of the property and equipment. 106 Table of Contents Our land use right in Macau under the land concession contract for Studio City is being amortized over the estimated term of the land use right on a straight-line basis.
Costs related to casino contract, which mainly represent (1) services fees for shared corporate services provided by the Master Service Providers pursuant to the Management and Shared Services Arrangements and (2) management payroll expenses, are relatively fixed in nature and amounted to US$29.9 million and US$28.1 million in 2022 and 2021, respectively. • Rooms.
Costs related to casino contract, which mainly represent (1) services fees for shared corporate services provided by the Master Service Providers pursuant to the Management and Shared Services Arrangements and (2) management payroll expenses, are relatively fixed in nature and amounted to US$28.8 million and US$29.9 million in 2023 and 2022, respectively. • Rooms.
We have significant indebtedness and will continue to evaluate our capital structure and opportunities to enhance it in the normal course of our activities. We may from time to time seek to retire or purchase our outstanding debt through cash purchases, in open market purchases, privately-negotiated transactions or otherwise.
We have significant indebtedness and will continue to evaluate our capital structure and opportunities to enhance it in the normal course of our activities. We may from time to time seek to retire or purchase our outstanding debt through open market purchases, tender offers, privately-negotiated transactions or otherwise.
For a discussion of our results of operations for the year ended December 31, 2021 compared with the year ended December 31, 2020, see “Item 5. Operating and Financial Review and Prospects — A.
For a discussion of our results of operations for the year ended December 31, 2022 compared with the year ended December 31, 2021, see “Item 5. Operating and Financial Review and Prospects — A.
The undiscounted cash flows of such assets are measured by first grouping our long-lived assets into asset groups and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected to 103 Table of Contents arise from the use of and eventual disposition of such asset group.
The undiscounted cash flows of such assets are measured by first grouping our long-lived assets into asset groups and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected to arise from the use of and eventual disposition of such asset group.
For discussion on the ability of our subsidiaries to transfer funds to our Company in the form of 100 Table of Contents cash dividends, loans or advances and the impact such restrictions have on our ability to meet our cash obligations, see “Item 3. Key Information — D.
For discussion on the ability of our subsidiaries to transfer funds to our Company in the form of cash dividends, loans or advances and the impact such restrictions have on our ability to meet our cash obligations, see “Item 3. Key Information — D.
Risk Factors — Risks Relating to Our Business — Certain covenants under our agreements governing our existing indebtedness restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions” and “Item 8. Financial Information — A.
Risk Factors — Risks Relating to Our Business — Certain covenants under our agreements governing our existing indebtedness restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions,” “Item 8. Financial Information — A.
The following table sets forth our gross indebtedness as of December 31, 2022: Issuer As of December 31, 2022 (in thousands of US$) 2028 Studio City Senior Secured Credit Facility Studio City Company $ 128 2025 Notes Studio City Finance 500,000 2027 Notes Studio City Company 350,000 2028 Notes Studio City Finance 500,000 2029 Notes Studio City Finance 1,100,000 Total $ 2,450,128 Major changes in our indebtedness during the year ended and subsequent to December 31, 2022 are summarized below.
The following table sets forth our gross indebtedness as of December 31, 2023: Issuer As of December 31, 2023 (in thousands of US$) 2028 Studio City Senior Secured Credit Facility Studio City Company $ 128 2025 Notes Studio City Finance 397,000 2027 Notes Studio City Company 350,000 2028 Notes Studio City Finance 500,000 2029 Notes Studio City Finance 1,100,000 Total $ 2,347,128 Major changes in our indebtedness during the year ended and subsequent to December 31, 2023 are summarized below.
Additionally, Adjusted EBITDA of Studio City included in such Melco Resorts’ annual report does not reflect certain intercompany costs related to the table games operations at Studio City Casino. B.
Additionally, Adjusted EBITDA of Studio City included in such Melco Resorts’ annual report does not reflect certain gaming concession related costs and certain intercompany costs related to the table games operations at Studio City Casino. B.
We expect to incur capital expenditures in the future as we continue to expand our existing operations and open our Phase 2 project. We have relied, and intend in the future to rely, on our operating cash flow and different forms of financing to meet our funding needs and repay our indebtedness, as the case may be.
We expect to incur capital expenditures in the future as we continue to expand our existing operations. We have relied, and intend in the future to rely, on our operating cash flow and different forms of financing to meet our funding needs and repay our indebtedness, as the case may be.
Adjusted EBITDA Our net income/loss before interest, taxes, depreciation, amortization, pre-opening costs, share-based compensation, property charges and other, other non-operating income and expenses, or Adjusted EBITDA, was negative US$140.8 million, negative US$56.5 million and negative US$113.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Adjusted EBITDA Our net income/loss before interest, taxes, depreciation, amortization, pre-opening costs, share-based compensation, property charges and other, other non-operating income and expenses, or Adjusted EBITDA, was US$159.2 million, negative US$140.8 million and negative US$56.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
If an indicator of impairment exists, we then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. Estimating future cash flows of the assets involves significant assumptions, including future revenue growth rates and gross margins.
If an indicator of impairment exists, we then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. Estimating future cash flows of the assets involves significant assumptions, including future revenue growth rates, future market conditions and gross margin.
Melco Resorts Macau deducts gaming taxes and the costs incurred in connection with the operations of Studio City Casino pursuant to the Studio City Casino Agreement, including the standalone selling prices of complimentary services within Studio City provided to the Studio City gaming patrons, from the Studio City Casino gross gaming revenues.
Under the Studio City Casino Agreement, Melco Resorts Macau deducts gaming taxes and the costs incurred in connection with its operations from Studio City Casino’s gross gaming revenues, including the standalone selling prices of complimentary services within Studio City provided to the Studio City gaming patrons of Studio City Casino.
The higher pre-opening costs in 2022 were mainly related to Phase 2 of Studio City. • Amortization of land use right. Amortization expenses for the land use right continued to be recognized on a straight-line basis at an annual rate of US$3.3 million in both 2022 and 2021. • Depreciation and amortization.
The higher pre-opening costs in 2023 were mainly related to the opening of the Phase 2 project. • Amortization of land use right. Amortization expenses for the land use right continued to be recognized on a straight-line basis at an annual rate of US$3.3 million in both 2023 and 2022. • Depreciation and amortization .
GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, contingent assets and liabilities and revenues and expenses. Certain of our accounting policies require that management apply significant judgment in defining the appropriate assumptions integral to financial estimates.
GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, contingent assets and liabilities and revenues and expenses. Certain of 105 Table of Contents our accounting policies require that management applies significant judgment in defining the appropriate assumptions integral to financial estimates.
(2) See note 11 to the consolidated financial statements included elsewhere in this annual report for further details on these lease liabilities. For further details for our commitments and contingencies, see note 18 to the consolidated financial statements included elsewhere in this annual report.
(2) See note 11 to the consolidated financial statements included elsewhere in this annual report for further details on these lease liabilities. 103 Table of Contents For further details for our commitments and contingencies, see note 18 to the consolidated financial statements included elsewhere in this annual report.
We have been able to meet our working capital needs, and we believe that our current available cash and cash equivalents, bank deposits, funds available for drawdown under the 2028 Studio City Senior Secured 95 Table of Contents Credit Facility and any additional equity or debt financings will be adequate to satisfy our current and anticipated operating, debt and capital commitments, including our development project plans, as described in “— Other Financing and Liquidity Matters” below.
We have been able to meet our working capital needs, and we believe that our current available cash and cash equivalents, bank deposits, funds available for drawdown under the 2028 Studio City Senior Secured Credit Facility and any additional equity or debt financings will be adequate to satisfy our current and anticipated operating, debt and capital commitments, as described in “— Other Financing and Liquidity Matters” below.
Operating Results — Year Ended December 31, 2021 Compared to Year Ended December 31, 2020” of our annual report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 31, 2022.
Operating Results — Year Ended December 31, 2022 Compared to Year Ended December 31, 2021” of our annual report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023.
Year Ended December 31, 2022 2021 2020 (in thousands of US$) Total operating revenues $ 11,548 $ 106,868 $ 49,208 Total operating costs and expenses (288,764 ) (298,441 ) (329,136 ) Operating loss (277,216 ) (191,573 ) (279,928 ) Net loss attributable to Studio City International Holdings Limited $ (326,451 ) $ (252,555 ) $ (321,626 ) Key Performance Indicators (KPIs) We use the following KPIs to evaluate the operations of Studio City Casino, including table games and gaming machines: • Rolling chip volume: the amount of non-negotiable chips wagered and lost by the rolling chip market segment. • Rolling chip win rate: rolling chip table games win (calculated before discounts, commissions, non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis) as a percentage of rolling chip volume. • Mass market table games drop: the amount of table games drop in the mass market table games segment. • Mass market table games hold percentage: mass market table games win (calculated before discounts, commissions, non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis) as a percentage of mass market table games drop. • Table games win: the amount of wagers won net of wagers lost on gaming tables that is retained and recorded as casino revenues.
Year Ended December 31, 2023 2022 2021 (in thousands of US$) Total operating revenues $ 445,538 $ 11,548 $ 106,868 Total operating costs and expenses (474,580 ) (288,764 ) (298,441 ) Operating loss (29,042 ) (277,216 ) (191,573 ) Net loss attributable to Studio City International Holdings Limited $ (133,517 ) $ (326,451 ) $ (252,555 ) Key Performance Indicators (KPIs) We use the following KPIs to evaluate the operations of Studio City Casino, including table games and gaming machines: • Rolling chip volume: the amount of non-negotiable chips wagered and lost by the rolling chip market segment. • Rolling chip win rate: rolling chip table games win (calculated before discounts, commissions, non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis) as a percentage of rolling chip volume. • Mass market table games drop: the amount of table games drop in the mass market table games segment. • Mass market table games hold percentage: mass market table games win (calculated before discounts, commissions, non-discretionary incentives (including the point-loyalty programs) as administered by the Gaming Operator and allocating casino revenues related to goods and services provided to gaming patrons on a complimentary basis) as a percentage of mass market table games drop. • Table games win: the amount of wagers won net of wagers lost on gaming tables that is retained and recorded as casino revenues.
Revenue from casino contract is derived from the provision of facilities for the operations of Studio City Casino by the Gaming Operator and services related thereto pursuant to the Studio City Casino Agreement. Revenue from casino contract were negative US$56.7 million in 2022, compared with revenue from casino contract of negative US$1.5 million in 2021.
Revenue from casino contract is derived from the provision of facilities for the operations of Studio City Casino by the Gaming Operator and services related thereto pursuant to the Studio City Casino Agreement. Revenue from casino contract was US$155.5 million in 2023, compared with revenue from casino contract of negative US$56.7 million in 2022.
LIQUIDITY AND CAPITAL RESOURCES We have relied on, and intend to continue to rely on, our cash generated from our operations and our debt and equity financings to meet our financing or refinancing needs. As of December 31, 2022, we recorded US$509.5 million in cash and cash equivalents.
LIQUIDITY AND CAPITAL RESOURCES We have relied on, and intend to continue to rely on, our cash generated from our operations and our debt and equity financings to meet our financing or refinancing needs. As of December 31, 2023, we recorded US$228.0 million in cash and cash equivalents.
Studio City Casino generated gross gaming revenues of US$171.2 million and US$380.8 million in 2022 and 2021, respectively, before the deduction by the Gaming Operator of gaming taxes and the costs incurred in connection with its on-going operation of Studio City Casino pursuant to the Studio City Casino Agreement.
Studio City Casino generated gross gaming revenues of US$912.4 million and US$171.2 million in 2023 and 2022, respectively, before the deduction by the Gaming Operator of gaming taxes and the costs incurred in connection with its on-going operation of Studio City Casino pursuant to the Studio City Casino Agreement.
The negative Adjusted EBITDA for Studio City in 2022, 2021 and 2020 referred to in Melco Resorts’ 2022 annual report on Form 20-F were US$35.7 million, US$36.0 million and US$34.8 million less, respectively, than the negative Adjusted EBITDA of Studio City contained in this report.
The negative Adjusted EBITDA for Studio City in 2022 and 2021 referred to in Melco Resorts’ 2023 annual report on Form 20-F was US$35.7 million and US$36.0 million, respectively, less than the negative Adjusted EBITDA of Studio City contained in this report.
In addition, we have contingent liabilities arising in the ordinary course of business. 99 Table of Contents Our total long-term indebtedness and other contractual obligations as of December 31, 2022 are summarized below.
In addition, we have contingent liabilities arising in the ordinary course of business. Our total long-term indebtedness and other contractual obligations as of December 31, 2023 are summarized below.
Our capital expenditures on an accrual basis amounted to US$427.7 million, US$503.7 million and US$214.0 million for the years ended December 31, 2022, 2021 and 2020, respectively, primarily for the construction, development and enhancement of Studio City.
Our capital expenditures on an accrual basis amounted to US$68.9 million, US$427.7 million and US$503.7 million for the years ended December 31, 2023, 2022 and 2021, respectively, primarily for the construction, development and enhancement of Studio City.
As of December 31, 2022 and 2021, we recorded valuation allowances of US$91.1 million and US$74.4 million, respectively, as management believes that it is more likely than not that these deferred tax assets will not be realized.
As of December 31, 2023 and 2022, we recorded valuation allowances of US$80.7 million and US$91.1 million, respectively, as management believes that it is more likely than not that these deferred tax assets will not be realized.
Net Loss Attributable to Studio City International Holdings Limited As a result of the foregoing, we had a net loss attributable to Studio City International Holdings Limited of US$326.5 million in 2022, compared to a net loss attributable to Studio City International Holdings Limited of US$252.6 million in 2021.
Net Loss Attributable to Studio City International Holdings Limited As a result of the foregoing, we had a net loss attributable to Studio City International Holdings Limited of US$133.5 million in 2023, compared to a net loss attributable to Studio City International Holdings Limited of US$326.5 million in 2022.
The disruptions to our business caused by COVID-19 outbreaks have had an adverse effect on our operations and any recovery from such disruptions is highly uncertain; • The implementation of the amended Macau Gaming Operations Law, as well as any other policies and legislation implemented by the Macau government, including interpretations thereof, such as those relating to travel and visa policies; • Policies and campaigns implemented by the PRC government, including restrictions on travel, anti-corruption campaigns, heightened monitoring of cross-border currency movement and adoption of new measures to eliminate perceived channels of illicit cross-border currency movements, restrictions on currency withdrawal, increased scrutiny of marketing activities in the PRC or new measures taken by the PRC government, including criminalizing certain conduct, to deter marketing of gaming activities to mainland Chinese residents by foreign casinos, as well as any slowdown of economic growth in the PRC, may lead to a decline and limit the recovery and growth in the number of patrons visiting our property and the spending amount of such patrons; • The gaming and leisure market in Macau is developing and the competitive landscape is expected to evolve as more gaming and non-gaming facilities are developed in Macau.
The pace of recovery of our business from COVID-19 could vary materially from our current expectations and could materially affect our business, prospects, financial condition and results of operations; 104 Table of Contents • The implementation of the amended Macau Gaming Operations Law, as well as any other policies and legislation implemented by the Macau government, including interpretations thereof, such as those relating to travel and visa policies; • Policies and campaigns implemented by the PRC government, including restrictions on travel, anti-corruption campaigns, heightened monitoring of cross-border currency movement and adoption of new measures to eliminate perceived channels of illicit cross-border currency movements, restrictions on currency withdrawal, increased scrutiny of marketing activities in the PRC or new measures taken by the PRC government, including criminalizing certain conduct, to deter marketing of gaming activities to mainland Chinese residents by foreign casinos, as well as any slowdown of economic growth in the PRC, may lead to a decline and limit the recovery and growth in the number of patrons visiting our property and the spending amount of such patrons; • The gaming and leisure market in Macau is developing and the competitive landscape is expected to evolve as more gaming and non-gaming facilities are developed in Macau.
We recorded net cash used in operating activities of US$178.8 million in 2022, as compared to net cash used in operating activities of US$136.8 million in 2021. The change was primarily attributable to softer performance of Studio City’s operations as described in the foregoing sections, partially offset by the decreased working capital needed for operations.
We recorded net cash used in operating activities of US$18.9 million in 2023, as compared to net cash used in operating activities of US$178.8 million in 2022. The change was primarily attributable to improved performance of Studio City’s operations as described in the foregoing sections, partially offset by the increased working capital needed for operations.
Our subsidiaries have incurred debt on their own behalf and any of our newly formed subsidiaries may incur debt on their own behalf in the future and the instruments governing their debt have and may restrict their ability to pay dividends to us.
As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries. Our subsidiaries have incurred debt on their own behalf and any of our newly formed subsidiaries may incur debt on their own behalf in the future and the instruments governing their debt have and may restrict their ability to pay dividends to us.
Net cash provided by financing activities of US$471.5 million in 2021 was primarily attributable to the proceeds from the issuance of the First 2029 Notes in aggregate principal amount of US$750.0 million and the issuance of the Additional 2029 Notes of US$355.3 million, partially offset by the payment of the 2024 Notes Tender Offer of US$347.1 million in aggregate principal amount and the redemption of the remaining 2024 Notes of US$252.9 million in aggregate principal amount outstanding, as well as payments of deferred financing costs of US$33.3 million.
Net cash provided by financing activities of US$471.5 million in 2021 was primarily attributable to the proceeds from the issuance of the First 2029 Notes in an aggregate principal amount of US$750.0 million and the issuance of the Additional 2029 Notes of US$355.3 million, partially offset by the payment of the 2024 Notes Tender Offer of US$347.1 million in aggregate principal amount and the redemption of the remaining 2024 Notes of US$252.9 million in aggregate principal amount outstanding, as well as payments of deferred financing costs of US$33.3 million. 101 Table of Contents Indebtedness We enter into loan facilities and issue notes through our subsidiaries.
Year Ended December 31, 2022 2021 2020 (in thousands of US$) Net cash used in operating activities $ (178,775 ) $ (136,841 ) $ (167,425 ) Net cash used in investing activities (453,395 ) (407,235 ) (209,789 ) Net cash provided by financing activities 643,109 471,508 623,811 Effect of exchange rate on cash, cash equivalents and restricted cash (705 ) (3,372 ) 1,530 Increase (decrease) in cash, cash equivalents and restricted cash 10,234 (75,940 ) 248,127 Cash, cash equivalents and restricted cash at beginning of year 499,419 575,359 327,232 Cash, cash equivalents and restricted cash at end of year $ 509,653 $ 499,419 $ 575,359 Operating Activities Operating cash flows are generally affected by changes in operating income and certain operating assets and liabilities, including the receivables related to the revenue from casino contract and hotel operations, as well as the non-gaming business, including food and beverage, entertainment, mall, retail and other, which are conducted primarily on a cash basis.
Year Ended December 31, 2023 2022 2021 (in thousands of US$) Net cash used in operating activities $ (18,894 ) $ (178,775 ) $ (136,841 ) Net cash used in investing activities (161,540 ) (453,395 ) (407,235 ) Net cash (used in) provided by financing activities (100,902 ) 643,109 471,508 Effect of exchange rate on cash, cash equivalents and restricted cash (147 ) (705 ) (3,372 ) (Decrease) increase in cash, cash equivalents and restricted cash (281,483 ) 10,234 (75,940 ) Cash, cash equivalents and restricted cash at beginning of year 509,653 499,419 575,359 Cash, cash equivalents and restricted cash at end of year $ 228,170 $ 509,653 $ 499,419 Operating Activities Operating cash flows are generally affected by changes in operating income and certain operating assets and liabilities, including the receivables related to the revenue from casino contract and hotel operations, as well as the non-gaming business, including food and beverage, entertainment, mall, retail and other, which are conducted primarily on a cash basis.
In 2022 and 2021, total gaming taxes and costs incurred in connection with the on-going operation of Studio City Casino deducted from gross gaming revenues were US$227.9 million and US$382.3 million, respectively, which included (i) gaming taxes imposed on the gross gaming revenue of US$66.8 million and US$148.5 million, respectively; (ii) the complimentary services provided by us to Studio City Casino’s gaming patrons of US$22.9 million and US$44.1 million, respectively; (iii) shared administrative services and shuttle bus transportation services provided by us to Studio City Casino of US$17.9 million and US$20.9 million, respectively and (iv) remaining costs of US$120.3 million and US$168.8 million, respectively, primarily representing gaming-related staff costs and other gaming-related costs, including costs related to table games operations at Studio City Casino. • Rooms.
In 2023 and 2022, total gaming taxes and costs incurred in connection with the on-going operation of Studio City Casino deducted from gross gaming revenues were US$756.9 million and US$227.9 million, respectively, which included (i) gaming taxes imposed on the gross gaming revenue of US$364.9 million and US$66.8 million, respectively; (ii) the complimentary services provided by us to Studio City Casino’s gaming patrons of US$113.9 million and US$22.9 million, respectively; (iii) shared administrative services and shuttle bus transportation services provided by us to Studio City Casino of US$36.4 million and US$17.9 million, respectively and (iv) remaining costs of US$241.7 million and US$120.3 million, respectively, primarily representing gaming-related staff costs and other gaming-related costs, including certain gaming concession related costs and costs related to table games operations at Studio City Casino. • Rooms.
The effective tax rates in 2022 and 2021 were (0.1%) and 0.2%, respectively.
The effective tax rates in 2023 and 2022 were 0.1% and (0.1)%, respectively.
Loss before Income Tax As a result of the foregoing, we had a loss before income tax of US$360.9 million in 2022, compared to a loss before income tax of US$302.5 million in 2021. 93 Table of Contents Income Tax Expense/Benefit Income tax expense was US$0.4 million in 2022 and was primarily attributable to deferred income tax expense as compared to income tax benefit of US$0.5 million in 2021 which was primarily attributable to deferred income tax benefit.
Loss before Income Tax As a result of the foregoing, we had a loss before income tax of US$146.2 million in 2023, compared to a loss before income tax of US$360.9 million in 2022. 97 Table of Contents Income Tax Benefit/Expense Income tax benefit was US$0.1 million in 2023 and was primarily attributable to a deferred income tax benefit as compared to income tax expense of US$0.4 million in 2022 which was primarily attributable to a deferred income tax expense.
Non-operating Expenses, Net Net non-operating expenses consisted of interest income, interest expenses, net of amounts capitalized, other financing costs, net foreign exchange gains, loss on extinguishment of debt and other non-operating income, net. We incurred total net non-operating expenses of US$83.7 million in 2022, compared to US$110.9 million in 2021. • Interest expenses, net of amounts capitalized.
Non-operating Expenses, Net Net non-operating expenses consisted of interest income, interest expense, net of amounts capitalized, other financing costs, net foreign exchange gains, gain on extinguishment of debt and other non-operating (expenses) income, net. We incurred total net non-operating expenses of US$117.1 million in 2023, compared to US$83.7 million in 2022. • Interest expense, net of amounts capitalized.
Mass market table games revenue increased to US$131.3 million in 2022 from US$313.6 million in 2021, attributable to a decrease in mass market table games drop, partially offset by an increase in mass market table games hold percentage. Mass market table games drop decreased to US$0.46 billion in 2022 from US$1.13 billion in 2021.
Mass market table games revenue increased to US$783.6 million in 2023 from US$131.3 million in 2022, attributable to an increase in mass market table games drop, partially offset by a decrease in mass market table games hold percentage. Mass market table games drop increased to US$2.87 billion in 2023 from US$0.46 billion in 2022.
Studio City Casino’s expected rolling chip win rate is 2.85% to 3.15%. 90 Table of Contents We use the following KPIs to evaluate our hotel operations: • Average daily rate: calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms occupied, including complimentary rooms, i.e., average price of occupied rooms per day. • Occupancy rate: the average percentage of available hotel rooms occupied, including complimentary rooms, during a period. • Revenue per available room, or REVPAR: calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms available, thereby representing a combination of hotel average daily room rates and occupancy.
We use the following KPIs to evaluate our hotel operations: • Average daily rate: calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms occupied, including complimentary rooms, i.e., average price of occupied rooms per day. • Occupancy rate: the average percentage of available hotel rooms occupied, including complimentary rooms, during a period. • Revenue per available room, or REVPAR: calculated by dividing total room revenues including complimentary rooms (less service charges, if any) by total rooms available, thereby representing a combination of hotel average daily room rates and occupancy.
Operating Loss As a result of the foregoing, we had an operating loss of US$277.2 million in 2022, compared to an operating loss of US$191.6 million in 2021.
Operating Loss As a result of the foregoing, we had an operating loss of US$29.0 million in 2023, compared to an operating loss of US$277.2 million in 2022.
Net loss attributable to Studio City International Holdings Limited for the year ended December 31, 2022 was US$326.5 million, as compared to a net loss attributable to Studio City International Holdings Limited of US$252.6 million for the year ended December 31, 2021.
Net loss attributable to Studio City International Holdings Limited for the year ended December 31, 2023 was US$133.5 million, as compared to a net loss attributable to Studio City International Holdings Limited of 93 Table of Contents US$326.5 million for the year ended December 31, 2022.
Studio City’s average daily rate, occupancy rate and REVPAR were US$111, 28% and US$31, respectively, in 2022, as compared to US$123, 51% and US$62, respectively, in 2021. • Food and beverage, entertainment, mall and retail and other.
Studio City’s average daily rate, occupancy rate and REVPAR were US$153, 90% and US$137, respectively, in 2023, as compared to US$111, 28% and US$31, respectively, in 2022. • Food and beverage, entertainment, mall and retail and other.
We recognize depreciation and amortization expense related to capitalized construction costs and other property and equipment from the time each asset is placed in service. This may occur at different stages as Studio City’s facilities are completed and opened. Property and equipment are depreciated and amortized on a straight-line basis over the asset’s estimated useful life.
We recognize depreciation and amortization expense related to capitalized construction costs and other property and equipment from the time each asset is placed in service. Property and equipment are depreciated and amortized on a straight-line basis over the asset’s estimated useful life.
Our effective tax rates in 2022 and 2021 differed from the statutory Macau complementary tax rate of 12%, where the Company’s majority operations are located, primarily due to the effects of expenses for which no income tax benefit is receivable, expired tax losses, changes in valuation allowances, different tax rates of subsidiaries operating in other jurisdictions and income for which no income tax expense is payable for the relevant years together with the effect of tax losses that cannot be carried forward for the year ended December 31, 2021.
Our effective tax rates in 2023 and 2022 differ from the statutory Macau Complementary Tax rate of 12%, where the Company’s majority operations are located, primarily due to effects of expired tax losses, expenses for which no income tax benefit is receivable, different tax rates of subsidiaries operating in other jurisdictions, income for which no income tax expense is payable and changes in valuation allowances for the relevant years.
Studio City Company has a corporate rating of “B+” by Standard & Poor’s and Studio City Finance has a corporate rating of “B1” by Moody’s Investors Service, respectively. For future borrowings, any decrease in our corporate rating could result in an increase in borrowing costs. Restrictions on Distributions The Company is a holding company with no operations of its own.
Studio City Finance currently has a corporate rating of “B1” by Moody’s Investors Service with a stable outlook. For future borrowings, any decrease in our corporate rating could result in an increase in borrowing costs. Restrictions on Distributions The Company is a holding company with no operations of its own. We conduct our operations through our subsidiaries.
Net Loss Attributable to Participation Interest Our net loss attributable to participation interest was US$34.9 million in 2022, compared to a net loss attributable to participation interest of US$49.4 million in 2021.
Net Loss Attributable to Participation Interest Our net loss attributable to participation interest was US$12.6 million in 2023, compared to a net loss attributable to participation interest of US$34.9 million in 2022.
As these volumes are the denominator used in calculating win rate or hold percentage, with the same use of gaming win as the numerator, the win rate is generally lower in the rolling chip market segment than the hold percentage in the mass market table games segment.
As these volumes are the denominator used in calculating win rate or hold percentage, with the same use of gaming win as the numerator, the win rate is generally lower in the rolling chip market segment than the hold percentage in the mass market table games segment. 94 Table of Contents Studio City Casino’s expected rolling chip win rate is 2.85% to 3.15%.
Mass market table games hold percentage increased to 28.5% in 2022 from 27.7% in 2021. Gaming machine revenue decreased to US$18.6 million in 2022 from US$30.4 million in 2021.
Mass market table games hold percentage decreased to 27.3% in 2023 from 28.5% in 2022. Gaming machine revenue increased to US$82.8 million in 2023 from US$18.6 million in 2022.
The legal reserve sets aside an amount from the subsidiaries’ statements of operations and is not available for distribution to the shareholders of the subsidiaries. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
The legal reserve is not available for distribution to the shareholders of the subsidiaries. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Further, the HK$233.0 million (equivalent to approximately US$29.8 million) revolving credit facility under the 2028 Studio City Senior Secured Credit Facility is available for future drawdown as of December 31, 2022, subject to certain conditions precedent.
Further, the HK$233.0 million (equivalent to US$29.8 million) revolving credit facility under the 2028 Studio City Senior Secured Credit Facility is available for future drawdown as of December 31, 2023, subject to certain conditions precedent. 99 Table of Contents As of December 31, 2023, restricted cash of US$0.1 million primarily represented the cash collateral in relation to the 2028 Studio City Senior Secured Credit Facility.
Payments Due by Period Less than 1 year 1-3 years 3-5 years More than 5 years Total (in millions of US$) Long-term debt obligations (1) : 2028 Studio City Senior Secured Credit Facility $ — $ — $ — $ 0.1 $ 0.1 2025 Notes — 500.0 — — 500.0 2027 Notes — — 350.0 — 350.0 2028 Notes — — — 500.0 500.0 2029 Notes — — — 1,100.0 1,100.0 Fixed interest payments 142.0 270.1 202.6 58.3 673.0 Operating leases (2) 1.1 2.3 2.3 31.3 37.0 Construction costs and property and equipment retention payables 20.4 19.4 — — 39.8 Other contractual commitments: Construction costs and property and equipment acquisition commitments 22.9 0.5 — — 23.4 Total contractual obligations $ 186.4 $ 792.3 $ 554.9 $ 1,689.7 $ 3,223.3 (1) See note 10 to the consolidated financial statements included elsewhere in this annual report for further details on these debt facilities.
Payments Due by Period Less than 1 year 1-3 years 3-5 years More than 5 years Total (in millions of US$) Long-term debt obligations (1) : 2028 Studio City Senior Secured Credit Facility $ — $ — $ 0.1 $ — $ 0.1 2025 Notes — 397.0 — — 397.0 2027 Notes — — 350.0 — 350.0 2028 Notes — — 500.0 — 500.0 2029 Notes — — — 1,100.0 1,100.0 Fixed interest payments 135.8 236.8 146.8 2.1 521.5 Operating leases (2) 1.1 2.3 2.3 30.2 35.9 Construction costs and property and equipment retention payables 21.7 — — — 21.7 Other contractual commitments: Construction costs and property and equipment acquisition commitments 14.3 0.4 — — 14.7 Total contractual obligations $ 172.9 $ 636.5 $ 999.2 $ 1,132.3 $ 2,940.9 (1) See note 10 to the consolidated financial statements included elsewhere in this annual report for further details on these debt facilities.
We recognize the residual amount as revenue from casino contract and was previously captioned as revenues from provision of gaming related services. We have concluded that we are not the controlling entity to the arrangements and recognizes the revenue from casino contract on a net basis.
The residual amount which we receive as revenue is captioned as revenue from casino contract. We have concluded that we are not the controlling entity to the arrangements and recognize the revenue from casino contract on a net basis.
General and administrative expenses were US$79.8 million and US$87.6 million in 2022 and 2021, respectively. Such expenses primarily consist of payroll expenses, utilities, marketing and advertising costs, repairs and maintenance, legal and professional fees, and fees paid to the Master Service Providers for shared corporate services provided to non-gaming departments.
Such expenses primarily consist of payroll expenses, utilities, marketing and advertising costs, repairs and maintenance, legal and professional fees, and fees paid to the Master Service Providers for shared corporate services provided to non-gaming departments. Expenses relating to services fee revenues are also included in the general and administrative expenses.
Our services fee revenues, which primarily consist of certain shared administrative services and shuttle bus transportation services to Studio City Casino, decreased by US$3.0 million, or 12.1%, to US$21.9 million in 2022 from US$24.9 million in 2021.
Our services fee revenues, which primarily consist of certain shared administrative services and shuttle bus transportation services to Studio City Casino, increased by US$18.6 million, or 84.9%, to US$40.5 million in 2023 from US$21.9 million in 2022.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. Studio City Company has a corporate rating of “B+” with a positive outlook by Standard & Poor’s.
Other financing costs, which were associated with the 2021/2028 Studio City Senior Secured Credit Facility, were US$0.4 million in both 2022 and 2021. • Loss on extinguishment of debt.
Other financing costs, which were associated with the 2028 Studio City Senior Secured Credit Facility, were US$0.4 million in both 2023 and 2022. • Gain on extinguishment of debt. Gain on extinguishment of debt was US$1.6 million in 2023 and was primarily associated with the 2025 Notes Tender Offer. No gain on extinguishment of debt was incurred in 2022.
Net cash used in investing activities was US$209.8 million in 2020. 96 Table of Contents Net cash used in investing activities of US$453.4 million in 2022 was primarily attributable to payments for acquisition of property and equipment of US$452.1 million.
Net cash used in investing activities was US$407.2 million in 2021. Net cash used in investing activities of US$161.5 million and US$453.4 million in 2023 and 2022, respectively, was primarily attributable to payments for acquisition of property and equipment of US$156.8 million and US$452.1 million, respectively.
Under the Management and Shared Services Arrangements, certain of our corporate and administrative functions as well as operational activities are administered by staff employed by certain subsidiaries of Melco 102 Table of Contents Resorts, including senior management services, centralized corporate functions and operational and venue support services.
We receive the residual gross gaming revenues and recognize these amounts as our revenue from casino contract. Under the Management and Shared Services Arrangements, certain of our corporate and administrative functions as well as operational activities are administered by staff employed by certain subsidiaries of Melco Resorts, including senior management services, centralized corporate functions and operational and venue support services.
According to the DSEC, visitor arrivals to Macau decreased by 26.0% on a year-over-year basis in 2022 as compared to 2021 while, according to the DICJ, gross gaming revenues in Macau declined by 51.4% on a year- over-year basis in 2022.
According to the DSEC, visitor arrivals to Macau increased by 395% on a year-over-year basis in 2023 as compared to 2022 while, according to the DICJ, gross gaming revenues in Macau rose by 334% on a year-over-year basis in 2023.
Expenses related to food and beverage, entertainment, mall and retail and other, which primarily represent the costs of operating the respective non-gaming services at Studio City and respective payroll expenses, decreased by US$4.0 million, or 11.1% to US$32.0 million in 2022 and US$36.0 million in 2021. 92 Table of Contents • General and administrative.
Expenses related to food and beverage, entertainment, mall and retail and other, which primarily represent the costs of operating the respective non-gaming services at Studio City and respective payroll expenses, increased by US$82.0 million, or 256.6% to US$114.0 million in 2023 from US$32.0 million in 2022.
As we derive all of our revenues from our business and operations in Macau, our business has been materially and adversely affected by the COVID-19 pandemic.
However, visitor arrivals in 2023 were still 28% lower than in 2019, and gross gaming revenues in 2023 were still 37% lower than in 2019. As we derive all of our revenues from our business and operations in Macau, our business has been materially and is still adversely affected by the COVID-19 pandemic.
As of December 31, 2022, 2021 and 2020, we operated in one geographical area, Macau, where we generated our revenue and where our long-lived assets were located. Our operations in 2022 continued to be significantly impacted by travel restrictions and quarantine requirements as well as casino closures.
As of December 31, 2023, 2022 and 2021, we operated in one geographical area, Macau, where we generated our revenue and where our long-lived assets were located. Our operations in 2023 benefited from the relaxation of travel restrictions and quarantine requirements as well as opening of our Phase 2 project.
Financing raised by Studio City International Holdings Limited has been transferred to our financing and operating subsidiaries through the use of equity capital contributions or intercompany loan arrangements. In 2022, excluding cash transferred for the purpose of the settlement of intragroup charges, no cash has been transferred to our holding company, Studio City International Holdings Limited, from its subsidiaries.
Cash within our group is primarily transferred between our subsidiaries through intercompany loan arrangements. Financing raised by Studio City International Holdings Limited has been transferred to our financing and operating subsidiaries through the use of equity capital contributions or intercompany loan arrangements.
Minimum operating and right to use fees, representing lease revenues, adjusted for contractual base fees and operating fees escalations, are included in mall revenues and are recognized over the terms of the related agreements on a straight-line basis. 104 Table of Contents Income Tax Deferred income taxes are recognized for all significant temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements.
Minimum operating and right to use fees representing lease revenues, adjusted for contractual base fees and operating fees escalations, are included in mall revenues and are recognized over the terms of the related agreements on a straight-line basis.
Operating Costs and Expenses Our total operating costs and expenses decreased by US$9.7 million, or 3.2%, to US$288.8 million in 2022 from US$298.4 million in 2021. • Costs related to casino contract.
Operating Costs and Expenses Our total operating costs and expenses increased by US$185.8 million, or 64.3%, to US$474.6 million in 2023 from US$288.8 million in 2022. • Costs related to casino contract.
The use of Adjusted EBITDA has material limitations as an analytical tool, as Adjusted EBITDA does not include all items that impact our net income/loss.
The use of Adjusted EBITDA has material limitations as an analytical tool, as Adjusted EBITDA does not include all items that impact our net income/loss. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measure to its most directly comparable GAAP financial measure.
We will continue to make capital expenditures to grow our business and expect that cash generated from our operating and financing activities will meet our capital expenditure needs in the foreseeable future. We expect to incur capital expenditures as we continue to expand our existing operations and open our Phase 2 project.
We will continue to make capital expenditures to grow our business and expect that cash generated from our operating and financing activities will meet our capital expenditure needs in the foreseeable future. See “— Other Financing and Liquidity Matters” below for more information.
Room expenses, which represent the costs of operating the hotel facilities and respective payroll expenses, decreased by US$1.1 million, or 8.7%, to US$11.1 million in 2022 from US$12.2 million in 2021. • Food and beverage, entertainment, mall and retail and other.
Room expenses, which represent the costs of operating the hotel facilities and respective payroll expenses, increased by US$17.2 million, or 154.3%, to US$28.3 million in 2023 from US$11.1 million in 2022.
TREND INFORMATION The following trends and uncertainties may affect our operations and financial conditions: • The recovery from the disruptions caused by COVID-19 outbreaks, including any re-imposition of travel and visa restrictions and quarantine requirements due to any future COVID-19 outbreaks, the efficacy of COVID-19 vaccines, including against any new strains of the coronavirus that causes COVID-19, the impact of potentially higher unemployment rates, declines in income levels, and loss of personal wealth resulting from COVID-19 outbreaks affecting discretionary spending and travel, all of which remain highly uncertain.
Business Overview — Intellectual Property.” D. TREND INFORMATION The following trends and uncertainties may affect our operations and financial conditions: • The recovery from the disruptions caused by COVID-19 outbreaks, including the impact of potentially higher unemployment rates, declines in income levels, and loss of personal wealth resulting from COVID-19 outbreaks affecting discretionary spending and travel.
We recorded net cash used in operating activities of US$136.8 million in 2021, as compared to net cash used in operating activities of US$167.4 million in 2020. The change was primarily attributable to the improved performance of Studio City’s operations, partially offset by the increased working capital needed for operations.
The change was primarily attributable to softer performance of Studio City’s operations, partially offset by the decreased working capital needed for operations. 100 Table of Contents Investing Activities Net cash used in investing activities was US$161.5 million in 2023, as compared to net cash used in investing activities of US$453.4 million in 2022.

… 71 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

32 edited+0 added−2 removed78 unchanged
Biggest changeThe other duties of the audit and risk committee include: • reviewing and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor; • approving the remuneration and terms of engagement of the independent auditor 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 and quality control procedures; • discussing with our independent auditor and our management, among other things, the audits of the financial statements, including whether any material information brought to their attention should be disclosed, issues regarding accounting and auditing principles and practices and the management’s internal control report; • reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our board for inclusion in our annual reports; • approving all material related party transactions brought to its attention, without further approval of our board; • establishing and overseeing procedures for the handling of complaints and whistleblowing; • approving the internal audit charter and annual audit plans, and undertaking an annual performance evaluation of the internal audit function; • assessing senior management’s 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 for the board’s approval; • reviewing our financial controls, internal control and risk management systems, and discussing with our management the system of internal control and ensuring that our management has discharged its duty to have an effective internal control system including the adequacy of resources, the qualifications and experience of our accounting and financial staff, and their training programs and budget; • together with our board, evaluating the performance of the audit and risk committee on an annual basis; • assessing the adequacy of the charter of the audit and risk committee; and • co-operating with the other board committees in any areas of overlapping responsibilities.
Biggest changeThe audit and risk committee is responsible for assisting our board in overseeing and monitoring: • the audits of the financial statements of our Company; • the qualifications and independence of our independent auditors; • the performance of our independent auditors; • the accounting and financial reporting processes of our Company and the integrity of our systems of internal accounting and financial controls; 114 Table of Contents • legal and regulatory issues relating to the financial statements of our Company, including oversight of the independent auditors, review of the financial statements and related material, 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; • the integrity and effectiveness of our internal audit function; and • the Company’s risk management policies, procedures and practices. • The other duties of the audit and risk committee include: • reviewing and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor; • approving the remuneration and terms of engagement of the independent auditor 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 and quality control procedures; • discussing with our independent auditor and our management, among other things, the audits of the financial statements, including whether any material information brought to their attention should be disclosed, issues regarding accounting and auditing principles and practices and the management’s internal control report; • reviewing and recommending the financial statements for inclusion within our quarterly earnings releases and to our board for inclusion in our annual reports; • approving all material related party transactions brought to its attention, without further approval of our board; • establishing and overseeing procedures for the handling of complaints and whistleblowing; • approving the internal audit charter and annual audit plans, and undertaking an annual performance evaluation of the internal audit function; • assessing senior management’s policies and procedures to identify, accept, mitigate, allocate or otherwise manage various types of risks that may materially impact the Company’s business, strategy, operation, financials and reputation, including without limitation, legal, compliance and operational risks and other evolving risks such as cybersecurity threats, and making recommendations with respect to our risk management process for the board’s approval; • reviewing our financial controls, internal control and risk management systems, and discussing with our management the system of internal control and ensuring that our management has discharged its duty to have an effective internal control system including the adequacy of resources, the qualifications and experience of our accounting and financial staff, and their training programs and budget; • together with our board, evaluating the performance of the audit and risk committee on an annual basis; • assessing the adequacy of the charter of the audit and risk committee; and • co-operating with the other board committees in any areas of overlapping responsibilities.
Mielle worked at Libra Investments, Inc. as an associate in the corporate finance department covering middle market companies. Prior to that, she worked at Lehman Brothers as an analyst in the Financial Institutions group, focusing on mergers and acquisitions. Ms. Mielle also serves on the board of directors of Ready Capital Corporation, Tiptree Inc., Digicel Group and Osiris Acquisition Corp.
Mielle worked at Libra Investments, Inc. as an associate in the corporate finance department covering middle market companies. Prior to that, she worked at Lehman Brothers as an analyst in the Financial Institutions group, focusing on mergers and acquisitions. Ms. Mielle also serves on the board of directors of Ready Capital Corporation, Tiptree Inc. and Osiris Acquisition Corp. Ms.
In 2017, Mr. Ho was awarded the Medal of Merit-Tourism by the Macau SAR government for his significant contributions to tourism in the territory. In recognition of Mr. Ho’s directorship and entrepreneurial spirit, he was granted the Business Awards of Macau’s “Leadership Gold Award” in 2015 and honored with the “Outstanding Individual Award” at the Industry Community Awards in 2020.
In 2017, Mr. Ho was awarded the Medal of Merit—Tourism by the Macau SAR government for his significant contributions to tourism in the territory. In recognition of Mr. Ho’s excellent directorship and entrepreneurial spirit, he was granted the Business Awards of Macau’s “Leadership Gold Award” in 2015 and honored with “Outstanding Individual Award” at the Industry Community Awards in 2020.
In addition, our property general manager has agreed not to, for a certain period following termination of his employment: (i) be engaged, concerned or interested in any capacity (other than as a passive investor of not more than 5% of the issued ordinary shares of any company listed on a recognized investment exchange) with any business carried on within, among others, Hong Kong, Macau and the Philippines similar to or in competition with any restricted business, (ii) solicit or seek or endeavor to entice away any business orders of customers or (iii) induce, solicit or entice or endeavor to induce, solicit or entice away, or offer employment or engagement to, certain employees. 114 Table of Contents Our chief financial officer provides services to us pursuant to the Management and Shared Services Arrangements.
In addition, our property general manager has agreed not to, for a certain period following termination of his employment: (i) be engaged, concerned or interested in any capacity (other than as a passive investor of not more than 5% of the issued ordinary shares of any company listed on a recognized investment exchange) with any business carried on within, among others, Hong Kong, Macau and the Philippines similar to or in competition with any restricted business, (ii) solicit or seek or endeavor to entice away any business orders of customers or (iii) induce, solicit or entice or endeavor to induce, solicit or entice away, or offer employment or engagement to, certain employees. 117 Table of Contents Our chief financial officer provides services to us pursuant to the Management and Shared Services Arrangements.
Ms. Mielle graduated with an M.B.A. (Finance) from Stanford University and a Master in Management degree from Ecole des Hautes Etudes Commerciales in France (HEC Paris). Mr. Kevin F. Sullivan has been a member of our board of directors since October 2018. From 2013 to 2021, Mr.
Mielle graduated with an M.B.A. (Finance) from Stanford University and a Master in Management degree from Ecole des Hautes Etudes Commerciales in France (HEC Paris). Mr. Kevin F. Sullivan has been a member of our board of directors since October 2018. From 2013 to 2021, Mr.
Our directors also owe to our Company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of 110 Table of Contents his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.
Our directors also owe to our Company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and 113 Table of Contents experience.
See “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.” None of our directors or executive officers who are shareholders have different voting rights from other shareholders of our Company. F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION Not applicable. 116 Table of Contents
See “Item 7. Major Shareholders and Related Party Transactions — A. Major Shareholders.” None of our directors or executive officers who are shareholders have different voting rights from other shareholders of our Company. F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION Not applicable. 119 Table of Contents
Sullivan held positions of increasing responsibility over his 32 years at Deutsche Bank and Bankers Trust, 108 Table of Contents including Group Head of the loan sales, trading and capital markets division, Asia Head of the leveraged finance division, Group Head of the Asset Based Lending division, Member of the Capital Commitments Committee and Member of the Equity Investment Committee.
Sullivan held positions of increasing responsibility over his 32 years at Deutsche Bank and Bankers Trust, 111 Table of Contents including Group Head of the loan sales, trading and capital markets division, Asia Head of the leveraged finance division, Group Head of the Asset Based Lending division, Member of the Capital Commitments Committee and Member of the Equity Investment Committee.
Ho has also been appointed as the chairman and director of Maple Peak Investment Inc., a company listed on the TSX Venture Exchange in Canada, since July 2016, and also serves on numerous boards and committees of privately-held companies in Hong Kong, Macau and mainland China.
Ho has also been appointed as the chairman and director of Maple Peak Investments Inc., a company listed on the TSX Venture Exchange in Canada, since July 2016, and also serves on numerous boards and committees of privately-held companies in Hong Kong, Macau and mainland China.
Compensation Committee Our compensation committee consists of Dominique Mielle, Kevin F. Sullivan, David Anthony Reganato and Nigel Alan Dean, and is chaired by Mr. Dean. Each of Dominique Mielle, Kevin F. Sullivan and 112 Table of Contents Nigel Alan Dean satisfies the “independence” requirements of Section 303A of the New York Stock Exchange Listed Company Manual.
Compensation Committee Our compensation committee consists of Dominique Mielle, Kevin F. Sullivan, David Anthony Reganato and Nigel Alan Dean, and is chaired by Mr. Dean. Each of Dominique Mielle, Kevin F. Sullivan and 115 Table of Contents Nigel Alan Dean satisfies the “independence” requirements of Section 303A of the New York Stock Exchange Listed Company Manual.
None of the dedicated staff members performing services solely at Studio City are members of any labor union and neither we nor any of the Master Service Providers are a party to any collective bargaining or similar agreement with such staff. 115 Table of Contents E.
None of the dedicated staff members performing services solely at Studio City are members of any labor union and neither we nor any of the Master Service Providers are a party to any collective bargaining or similar agreement with such staff. 118 Table of Contents E.
Akiko Takahashi has been a member of our board of directors since October 2018. Ms. Takahashi is executive vice president and chief of staff to Chairman and CEO of Melco Resorts, and was appointed to this 107 Table of Contents role in June 2019.
Akiko Takahashi has been a member of our board of directors since October 2018. Ms. Takahashi is executive vice president and chief of staff to Chairman and CEO of Melco Resorts, and was appointed to this 110 Table of Contents role in June 2019.
The types of awards that may be granted under the share incentive plan of Melco Resorts include options, incentive share options, restricted shares, share appreciation rights, dividend equivalents, share 109 Table of Contents payments, deferred shares and restricted share units.
The types of awards that may be granted under the share incentive plan of Melco Resorts include options, incentive share options, restricted shares, share appreciation rights, dividend equivalents, share 112 Table of Contents payments, deferred shares and restricted share units.
Sullivan * — * Nigel Alan Dean — — — Kevin Richard Benning — — — Directors and executive officers as a group 463,150,896 — 54.94 % * Represents less than 1% of our total outstanding shares.
Sullivan * — * Nigel Alan Dean — — — Kevin Richard Benning — — — Directors and executive officers as a group 463,150,896 — 54.95 % * Represents less than 1% of our total outstanding shares.
Percentage of voting power of each director and executive officer is calculated by dividing the number of Class A ordinary shares and Class B ordinary shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 24, 2023, by the sum of (i) 842,864,460 which is the total number of Class A ordinary shares and Class B ordinary shares outstanding as of March 24, 2023, and (ii) the number of Class A ordinary shares and Class B ordinary shares that such person or group has the right to acquire beneficial ownership within 60 days of March 24, 2023.
Percentage of voting power of each director and executive officer is calculated by dividing the number of Class A ordinary shares and Class B ordinary shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60 days after March 15, 2024, by the sum of (i) 842,864,460 which is the total number of Class A ordinary shares and Class B ordinary shares outstanding as of March 15, 2024, and (ii) the number of Class A ordinary shares and Class B ordinary shares that such person or group has the right to acquire beneficial ownership within 60 days of March 15, 2024.
Prior to that, he worked at Price Waterhouse & Co. as part of its New York senior audit staff from 1975 to 1979. Mr. Sullivan has also been the lead independent director of Griffon Corporation and has served on its board, audit and head of finance committees since January 2013. Mr. Sullivan graduated with an M.B.A. in Finance from St.
Prior to that, he worked at Price Waterhouse & Co. as part of its New York senior audit staff from 1975 to 1979. Mr. Sullivan is also an independent director of Griffon Corporation and has served on its board, audit and head of finance committees since January 2013. Mr. Sullivan graduated with an M.B.A. in Finance from St.
Cheung graduated with a bachelor of laws degree from Osgoode Hall Law School and a master’s degree in business administration from York University. Ms. Cheung is admitted as a solicitor in Ontario, Canada, England and Wales and Hong Kong and is a member of the Hong Kong Institute of Directors and a fellow of Salzburg Global. Ms.
Cheung graduated with a bachelor of laws degree from Osgoode Hall Law School and a master’s degree in business administration from York University. Ms. Cheung is admitted as a solicitor in Ontario, Canada, England and Wales and Hong Kong and is a member of the Hong Kong Institute of Directors. Ms.
Ho was also appointed as the executive director of Melco Resorts on December 20, 2004 and served as its co-chairman and chief executive officer between December 2004 and April 2016 before being re-designated as chairman and chief executive officer in May 2016. Since November 2001, Mr.
Ho was also appointed as the executive director of Melco Resorts on December 20, 2004 and served as its co-chairman and chief executive officer between December 2004 and April 2016 before being re-designated as chairman and chief executive officer in May 2016. Mr.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS In 2022, we paid an aggregate of US$0.9 million in cash and benefits to our directors and executive officers. We have not set aside or accrued any material amount to provide pension, retirement or other similar benefits to our directors and executive officers.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS In 2023, we paid an aggregate of US$1.0 million in cash and benefits to our directors and executive officers. We have not set aside or accrued any material amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Sullivan 70 Independent Director Nigel Alan Dean 69 Independent Director Kevin Richard Benning 40 Property General Manager Directors Mr. Lawrence Yau Lung Ho has been a member of our board of directors since July 2011. Mr.
Sullivan 71 Independent Director Nigel Alan Dean 70 Independent Director Kevin Richard Benning 41 Property General Manager Directors Mr. Lawrence Yau Lung Ho has been a member of our board of directors since July 2011. Mr.
Stephanie Cheung has been a member of our board of directors since October 2018. Ms. Cheung is the executive vice president and chief legal officer of Melco Resorts and she was appointed to this role in December 2008. Prior to that, she held the title of general counsel of Melco Resorts from November 2006, when she joined Melco Resorts.
Stephanie Cheung has been a member of our board of directors since October 2018. Ms. Cheung was the executive vice president and chief legal officer of Melco Resorts from December 2008 to December 2023. Prior to that, she held the title of general counsel of Melco Resorts from November 2006, when she joined Melco Resorts.
Mr. Ho has been honored as one of the recipients of the “Asian Corporate Director Recognition Awards” by Corporate Governance Asia magazine for nine years since 2012 and was awarded “Asia’s Best CEO” at the Asian Excellence Awards for the 11 th year in 2022. 106 Table of Contents Mr.
Mr. Ho has been honored as one of the recipients of the “Asian Corporate Director Recognition Awards” by Corporate Governance Asia magazine for nine years since 2012, and was awarded “Asia’s Best CEO” at the Asian Excellence Awards for the 12 th year in 2023. 109 Table of Contents Mr.
SHARE OWNERSHIP Share Ownership of Directors and Members of Senior Management The following table sets forth the beneficial interest of each director and executive officer in our ordinary shares as of March 24, 2023.
SHARE OWNERSHIP Share Ownership of Directors and Members of Senior Management The following table sets forth the beneficial interest of each director and executive officer in our ordinary shares as of March 15, 2024.
Lawrence Ho holds approximately 58.48% of the total issued shares of Melco International, including interests of the companies which are owned or controlled by persons and/or trusts associated with him, interest of his spouse and interest of a trust in which he is one of the beneficiaries and is taken to have interest under the Securities and Futures Ordinance (Chapter 571, the Laws of Hong Kong).
Lawrence Ho is taken to have interest in these shares as a result of his interest in approximately 59.01% of the total issued shares of Melco International, including his personal interest, interests of the companies which are owned or controlled by persons and/or trusts associated with him, interest of his spouse and interest of a trust in which he is one of the beneficiaries and is taken to have interest under the Securities and Futures Ordinance (Chapter 571, the Laws of Hong Kong).
D. EMPLOYEES Staff There were 3,571, 3,794 and 3,924 dedicated staff members as of December 31, 2022, 2021 and 2020, respectively, performing services solely at Studio City.
D. EMPLOYEES Staff There were 5,286, 3,571 and 3,794 dedicated staff members as of December 31, 2023, 2022 and 2021, respectively, performing services solely at Studio City.
Winkler has served as the managing director and the president of Melco International since August 2016 and May 2018, respectively, and a director of various subsidiaries of Melco International. Before joining Melco International, Mr. Winkler served as a managing director at Moelis & Company, a global investment bank.
Winkler joined Melco International as the managing director in August 2016 and assumed the role of president and managing director of Melco International since May 2018, and a director of various subsidiaries of Melco International. Before joining Melco International, Mr. Winkler served as a managing director at Moelis & Company, a global investment bank.
He is a vice chairman of All-China Federation of Industry and Commerce; a member of the All-China Youth Federation; a member of the Macau Basic Law Promotion Association; chairman of the Macau International Volunteers Association; a member of the Board of Governors of The Canadian Chamber of Commerce in Hong Kong; a member of the Asia International Leadership Council; permanent honorary committee member of The Chinese General Chamber of Commerce of Hong Kong; honorary patron of The Canadian Chamber of Commerce in Macao; honorary president of the Association of Property Agents and Real Estate Developers of Macau and a director executive of the Macao Chamber of Commerce.
He is a vice chairman of the All-China Federation of Industry and Commerce; a member of the Macau Basic Law Promotion Association; a member of the Board of Governors of The Canadian Chamber of Commerce in Hong Kong; a member of the Asia International Leadership Council; honorary advisor of Global Tourism Economy Research Centre; permanent honorary committee member of The Chinese General Chamber of Commerce of Hong Kong; honorary patron of The Canadian Chamber of Commerce in Macao; honorary president of the Macau Research Association for Macau Gaming Law; honorary president of the Association of Property Agents and Real Estate Developers of Macau and a director executive of the Macao Chinese General Chamber of Commerce.
Directors and Executive Officers Age Position/Title Lawrence Yau Lung Ho 46 Director Evan Andrew Winkler 48 Director Clarence Yuk Man Chung 60 Director Geoffrey Stuart Davis 54 Director and Chief Financial Officer Stephanie Cheung 60 Director Akiko Takahashi 69 Director David Anthony Reganato 43 Director Dale Robert Black 59 Director Dominique Mielle 54 Independent Director Kevin F.
Directors and Executive Officers Age Position/Title Lawrence Yau Lung Ho 47 Director Evan Andrew Winkler 49 Director Clarence Yuk Man Chung 61 Director Geoffrey Stuart Davis 55 Director and Chief Financial Officer Stephanie Cheung 61 Director Akiko Takahashi 70 Director David Anthony Reganato 44 Director Dale Robert Black 60 Director Dominique Mielle 55 Independent Director Kevin F.
Ho has served as the managing director of Melco International and its chairman and chief executive officer since March 2006. Mr.
Ho became the managing director of Melco International in 2011 and has been its chairman and chief executive officer since March 2006. Mr.
The other duties of the nominating and corporate governance committee include: • making recommendations to our board for its approval, the appointment or re-appointment of any members of our board and the chairs and members of its committees, including evaluating any succession planning; • reviewing on an annual basis the appropriate skills, knowledge and characteristics required of board members and of the committees of our board and making any recommendations to improve the performance of our board and its committees; • developing and recommending to our board such policies and procedures with respect to nomination or appointment of members of our board and chairs and members of its committees or other corporate governance matters as may be required pursuant to any SEC or New York Stock Exchange rules, or otherwise considered desirable and appropriate; • developing a set of corporate governance principles and reviewing such principles at least annually; • deciding whether any material information which is brought to its attention (other than that regarding the quality or integrity of our financial statements) should be disclosed; • reviewing and monitoring the training and continuous professional development of our directors and senior management; • developing, reviewing and monitoring the code of conduct and compliance manual applicable to staff and directors; • together with the board, evaluating the performance of the committee on an annual basis; • assessing the adequacy of the charter of the nominating and corporate governance committee; and • co-operating with the other board committees in any areas of overlapping responsibilities.
The nominating and corporate governance committee will be responsible for, among other things, assisting our board in discharging its responsibilities regarding: • the identification of qualified candidates to become members and chairs of the board committees and to fill any such vacancies, and reviewing the appropriateness of the continued service of directors; • ensuring that our board meets the criteria for independence under the New York Stock Exchange corporate governance rules and nominating directors who meet such independence criteria; • oversight of our compliance with legal and regulatory requirements, in particular the legal and regulatory requirements of Macau, the Cayman Islands, the SEC and the New York Stock Exchange; • the development and recommendation to our board of a set of corporate governance principles applicable to our Company; and 116 Table of Contents • the disclosure, in accordance with our relevant policies, of any material information (other than that regarding the quality or integrity of our financial statements). • The other duties of the nominating and corporate governance committee include: • making recommendations to our board for its approval, the appointment or re-appointment of any members of our board and the chairs and members of its committees, including evaluating any succession planning; • reviewing on an annual basis the appropriate skills, knowledge and characteristics required of board members and of the committees of our board and making any recommendations to improve the performance of our board and its committees; • developing and recommending to our board such policies and procedures with respect to nomination or appointment of members of our board and chairs and members of its committees or other corporate governance matters as may be required pursuant to any SEC or New York Stock Exchange rules, or otherwise considered desirable and appropriate; • developing a set of corporate governance principles and reviewing such principles at least annually; • deciding whether any material information which is brought to its attention (other than that regarding the quality or integrity of our financial statements) should be disclosed; • reviewing and monitoring the training and continuous professional development of our directors and senior management; • developing, reviewing and monitoring the code of conduct and compliance manual applicable to staff and directors; • together with the board, evaluating the performance of the committee on an annual basis; • assessing the adequacy of the charter of the nominating and corporate governance committee; and • co-operating with the other board committees in any areas of overlapping responsibilities.
She has acted as the secretary to the board of Melco Resorts since she joined Melco Resorts. Prior to joining Melco Resorts, Ms. Cheung practiced law with various international law firms in Hong Kong, Singapore and Toronto. Ms.
She also acted as the secretary to the board of Melco Resorts from November 2006 to December 2023. Prior to joining Melco Resorts, Ms. Cheung practiced law with various international law firms in Hong Kong, Singapore and Toronto. Ms.
The following table indicates the distribution of these staff by function pursuant to the Management and Shared Services Arrangements as of December 31, 2022: Function Number of Staff Management, Administrative and Finance 13 Gaming 1,690 Hotel 565 Food and Beverage 554 Property Operations 198 Entertainment 86 Marketing 176 Others 289 Total 3,571 Through the Management and Shared Services Arrangements, we are able to leverage the resources and platform of the Master Service Providers to have qualified staff dedicated to working on our property.
The following table indicates the distribution of these staff by function pursuant to the Management and Shared Services Arrangements as of December 31, 2023: Function Number of Staff Management, Administrative and Finance 20 Gaming 1,634 Hotel 1,061 Food and Beverage 949 Property Operations 247 Entertainment 304 Marketing 201 W Macau 560 Others 310 Total 5,286 Through the Management and Shared Services Arrangements, we are able to leverage the resources and platform of the Master Service Providers to have qualified staff dedicated to working on our property.
Removed
The audit and risk committee is responsible for assisting our board in overseeing and monitoring: • the audits of the financial statements of our Company; • the qualifications and independence of our independent auditors; • the performance of our independent auditors; 111 Table of Contents • the accounting and financial reporting processes of our Company and 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 auditors, 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; • the integrity and effectiveness of our internal audit function; and • the risk management policies, procedures and practices.
Removed
The nominating and corporate governance committee will be responsible for, among other things, assisting our board in discharging its responsibilities regarding: • the identification of qualified candidates to become members and chairs of the board committees and to fill any such vacancies, and reviewing the appropriateness of the continued service of directors; • ensuring that our board meets the criteria for independence under the New York Stock Exchange corporate governance rules and nominating directors who meet such independence criteria; • oversight of our compliance with legal and regulatory requirements, in particular the legal and regulatory requirements of Macau, the Cayman Islands, the SEC and the New York Stock Exchange; • the development and recommendation to our board of a set of corporate governance principles applicable to our Company; and 113 Table of Contents • the disclosure, in accordance with our relevant policies, of any material information (other than that regarding the quality or integrity of our financial statements).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

22 edited+1 added−2 removed64 unchanged
Biggest changeServices and Right to Use Direct Agreement On November 26, 2013, Studio City Company, the Gaming Operator, Studio City Holdings Five Limited and the security agent under the 2018 Project Facility, among others, entered into the Services and Right to Use Direct Agreement, which sets forth, among other things, certain restrictions on the rights of the Gaming Operator to (subject to the necessary regulatory approvals being obtained) suspend the continued operation of Studio City Casino and/or terminate the Studio City Casino Agreement. 2022 Private Placements In relation to the 2022 Private Placements, the Company entered into subscription agreements with certain existing institutional shareholders and holders of its ADSs, including MCO Cotai, New Cotai and Silver Point Capital, L.P. at a price of US$0.75 per Class A ordinary share or US$3.00 per ADS.
Biggest changeServices and Right to Use Direct Agreement On November 26, 2013, Studio City Company, the Gaming Operator, Studio City Holdings Five Limited and the security agent under the 2018 Project Facility, among others, entered into the Services and Right to Use Direct Agreement, which sets forth, among other things, certain restrictions on the rights of the Gaming Operator to (subject to the necessary regulatory approvals being obtained) suspend the continued operation of Studio City Casino and/or terminate the Studio City Casino Agreement.
The Master Services Agreement may be terminated (a) by mutual agreement in writing, (b) automatically if the Services and Right to Use Agreement is terminated, (c) by any party upon a 30-day prior written notice if all Work Agreements have been terminated and are no longer in effect, (d) by the Master Service Providers (i) when there is a material breach by a Studio City Entity which remains uncured after 30 days of written notice provided by the Master Service Providers of such breach, or (ii) upon a specified change of control event whereby Melco Resorts does not directly or indirectly control the Company or any other entity that controls Studio City and the gaming areas in particular, or where relevant actions taken by any lenders lead to the foregoing results, and (e) by the Studio City Entities upon any material 122 Table of Contents breach by a Master Service Provider which remains uncured after 30 days of written notice of such breach.
The Master Services Agreement may be terminated (a) by mutual agreement in writing, (b) automatically if the Services and Right to Use Agreement is terminated, (c) by any party upon a 30-day prior written notice if all Work Agreements have been terminated and are no longer in effect, (d) by the Master Service Providers (i) when there is a material breach by a Studio City Entity which remains uncured after 30 days of written notice provided by the Master Service Providers of such breach, or (ii) upon a specified change of control event whereby Melco Resorts does not directly or indirectly control the Company or any other entity that controls Studio City and the gaming areas in particular, or where relevant actions taken by any lenders lead to the foregoing results, and (e) by the Studio City Entities upon any material breach by a Master Service Provider which remains uncured after 30 days of written notice of such breach.
We believe arbitration provisions in commercial agreements are generally respected by federal courts and state courts of New York. 120 Table of Contents Shareholders’ Agreement In connection with our initial public offering and the Organizational Transactions, we entered into an amended shareholders agreement with Melco Resorts, MCO Cotai and New Cotai which took effect immediately after the completion of our initial public offering (as amended, the “Shareholders’ Agreement”).
We believe arbitration provisions in commercial agreements are generally respected by federal courts and state courts of New York. 123 Table of Contents Shareholders’ Agreement In connection with our initial public offering and the Organizational Transactions, we entered into an amended shareholders agreement with Melco Resorts, MCO Cotai and New Cotai which took effect immediately after the completion of our initial public offering (as amended, the “Shareholders’ Agreement”).
When electing to exchange, a Participant must deliver an exchange notice to MSC Cotai, which notice must be delivered at least five business days prior to 119 Table of Contents the proposed exchange date; provided, that settlement may not occur later than 90 days from the notice date.
When electing to exchange, a Participant 122 Table of Contents must deliver an exchange notice to MSC Cotai, which notice must be delivered at least five business days prior to the proposed exchange date; provided, that settlement may not occur later than 90 days from the notice date.
The Studio City Casino Agreement set forth the terms and conditions for the operation of Studio City Casino by the Gaming Operator and the obligations of Studio City Entertainment in respect thereof. 121 Table of Contents Under the Studio City Casino Agreement, the Gaming Operator manages the day-to-day operations of the Studio City Casino, provides the necessary security and develops and implements all systems and controls necessary for Studio City Casino.
The Studio City Casino Agreement set forth the terms and conditions for the operation of Studio City Casino by the Gaming Operator and the obligations of Studio City Entertainment in respect thereof. 124 Table of Contents Under the Studio City Casino Agreement, the Gaming Operator manages the day-to-day operations of the Studio City Casino, provides the necessary security and develops and implements all systems and controls necessary for Studio City Casino.
As of December 31, 2022, a total of 842,864,460 Class A ordinary shares and Class B ordinary shares were outstanding, of which 368,577,580 Class A ordinary shares were registered in the name of a nominee of Deutsche Bank Trust Company Americas, the depositary under the deposit agreement.
As of December 31, 2023, a total of 842,864,460 Class A ordinary shares and Class B ordinary shares were outstanding, of which 368,577,580 Class A ordinary shares were registered in the name of a nominee of Deutsche Bank Trust Company Americas, the depositary under the deposit agreement.
RELATED PARTY TRANSACTIONS For a discussion of significant related party transactions we entered into during the years ended December 31, 2022, 2021 and 2020, see note 19 to the consolidated financial statements included elsewhere in this annual report.
RELATED PARTY TRANSACTIONS For a discussion of significant related party transactions we entered into during the years ended December 31, 2023, 2022 and 2021, see note 19 to the consolidated financial statements included elsewhere in this annual report.
Board Practices — Employment Agreements.” Transaction with the Gaming Operator under Studio City Casino Agreement Under the Studio City Casino Agreement, the Gaming Operator is responsible for the operation of Studio City Casino and deducts gaming taxes and the costs incurred in connection with its on-going operation of Studio City Casino from the gross gaming revenues.
Board Practices — Employment Agreements.” Transaction with the Gaming Operator under Studio City Casino Agreement Under the Studio City Casino Agreement, the Gaming Operator is responsible for the operation of Studio City Casino and deducts gaming taxes and the costs incurred in connection with its operation of Studio City Casino from the gross gaming revenues.
The Gaming Operator also recruits all casino staff, including dealers, cashiers, security and surveillance personnel and managers. The Gaming Operator will deduct gaming taxes and costs incurred in connection with its on-going operation of Studio City Casino.
The Gaming Operator also recruits all casino staff, including dealers, cashiers, security and surveillance personnel and managers. The Gaming Operator will deduct gaming taxes and costs incurred in connection with its operation of Studio City Casino.
See “— Participation Agreement.” When New Cotai exchanges all or a portion of the Participation Interest for Class A ordinary shares 118 Table of Contents pursuant to the terms of exchange set forth in the Participation Agreement and described herein, a proportionate number of Class B ordinary shares will be deemed surrendered and automatically canceled for no consideration as set out in the Participation Agreement.
See “— Participation Agreement.” When New Cotai exchanges all or a portion of the Participation Interest for Class A ordinary shares pursuant to the terms of exchange set forth in the Participation Agreement and described herein, a proportionate number of Class B ordinary shares will be deemed surrendered and automatically canceled for no consideration as set out in the Participation Agreement.
Corporate services are charged at pre-negotiated rates, subject to a base fee and cap. Senior management service fees and staff costs on operational services are allocated to us based on a percentage of efforts on the services provided to us. Other costs in relation to shared office equipment are allocated based on percentages of usage.
Corporate services are charged at pre-negotiated rates, subject to a base fee and cap. Senior management service fees and staff costs on 126 Table of Contents operational services are allocated to us based on a percentage of efforts on the services provided to us. Other costs in relation to shared office equipment are allocated based on percentages of usage.
Information regarding beneficial ownership is based on the information contained in the Schedule 13G/A filed by Silver Point Capital L.P. with the SEC on February 14, 2023.
Information regarding beneficial ownership is based on the information contained in the Schedule 13G/A filed by Silver Point Capital L.P. with the SEC on February 14, 2024.
These include intra-party sales of inventory and supplies, computer software and hardware services, limousine services and sales services in relation to attraction tickets. 123 Table of Contents Payment arrangements between the service provider and service recipient are provided for in the individual Work Agreement and may vary depending on the services provided.
These include intra-party sales of inventory and supplies, computer software and hardware services, limousine services and sales services in relation to attraction tickets. Payment arrangements between the service provider and service recipient are provided for in the individual Work Agreement and may vary depending on the services provided.
See “— Participation Agreement.” • The Participation Agreement provides that New Cotai is entitled to exchange all or a portion of its Participation Interest for a number of Class A ordinary shares subject to adjustments, exceptions and conditions as set out in the Participation Agreement.
See “— Participation Agreement.” • The Participation Agreement provides that New Cotai is entitled to exchange all or a portion of its Participation Interest for a number of Class A ordinary shares subject to adjustments, exceptions 121 Table of Contents and conditions as set out in the Participation Agreement.
Silver Point Capital, L.P. or its wholly owned subsidiaries are the investment manager of the Silver Point Funds and Silver Point Capital Management, LLC is the general partner of Silver Point Capital Fund, L.P. The address of the principal business office of Silver Point Capital, L.P. is Two Greenwich Plaza, Greenwich, Connecticut 06830.
Silver Point Capital, L.P. or its wholly owned subsidiaries are the 120 Table of Contents investment manager of the Silver Point Funds and Silver Point Capital Management, LLC is the general partner of Silver Point Capital Fund, L.P. The address of the principal business office of Silver Point Capital, L.P. is Two Greenwich Plaza, Greenwich, Connecticut 06830.
Name Number of Class A ordinary shares beneficially owned Number of Class B ordinary shares beneficially owned Percentage Voting Power (1) Melco International (2) 463,095,592 — 54.94 % New Cotai, LLC (3) 124,596,560 72,511,760 23.39 % The Silver Point Funds (4) 114,020,172 — 13.53 % (1) Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, and includes voting or investment power with respect to the securities.
Name Number of Class A ordinary shares beneficially owned Number of Class B ordinary shares beneficially owned Percentage Voting Power (1) Melco International (2) 463,095,592 — 54.94 % New Cotai, LLC (3) 124,596,560 72,511,760 23.39 % The Silver Point Funds (4) 114,569,116 — 13.59 % (1) Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, and includes voting or investment power with respect to the securities.
We receive the residual gross gaming revenues and recognize these amounts as revenue from casino contract. See “— Studio City Casino Agreement” for details of the terms of the Studio City Casino Agreement. In 2022, 2021 and 2020, revenue from casino contract were negative US$56.7 million, negative US$1.5 million and negative US$42.7 million, respectively.
We receive the residual gross gaming revenues and recognize these amounts as revenue from casino contract. See “— Studio City Casino Agreement” for details of the terms of the Studio City Casino Agreement. In 2023, 2022 and 2021, revenue from casino contract were US$155.5 million, negative US$56.7 million and negative US$1.5 million, respectively.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS The following table sets forth the beneficial ownership of our ordinary shares as of March 24, 2023 by all persons who are known to us to be the beneficial owners of 5% or more of our share capital.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS The following table sets forth the beneficial ownership of our ordinary shares as of March 15, 2024 by all persons who are known to us to be the beneficial owners of 5% or more of our share capital.
(3) Represents 72,511,760 Class B ordinary shares, constituting 100.0% of the outstanding Class B ordinary shares and, as of December 31, 2022, 31,149,140 ADS (representing 124,596,560 Class A ordinary shares), constituting 16.2% of the outstanding Class A ordinary shares, directly held by New Cotai, LLC. Subject to the terms of the exchange arrangements described in “Item 7.
(3) Represents 72,511,760 Class B ordinary shares, constituting 100.0% of the outstanding Class B ordinary shares and, as of January 30, 2024, 31,149,140 ADS (representing 124,596,560 Class A ordinary shares), constituting 16.2% of the outstanding Class A ordinary shares, directly held by New Cotai, LLC. Subject to the terms of the exchange arrangements described in “Item 7.
In case of any breach by either party under the “provision of services” and “standard of care; quality” clauses under the Master Services Agreement, the exclusive remedy of the non-breaching party, subject to indemnification for third-party claims and certain limitations on liabilities regarding consequential and other damages as well as caps on a party’s liability equal to the fees paid or charged under the relevant Work Agreement, is for the breaching party to (a) perform or re-perform the relevant services if reasonably determined by the non-breaching party that the performance of the relevant services is commercially practicable and/or (b) refund any fees paid if reasonably determined by the non-breaching parties that performance or re-performance is not commercially practicable or would not be sufficient compensation for the breach.
If the Master Services Agreement is terminated, all Work Agreements shall automatically terminate. 125 Table of Contents In case of any breach by either party under the “provision of services” and “standard of care; quality” clauses under the Master Services Agreement, the exclusive remedy of the non-breaching party, subject to indemnification for third-party claims and certain limitations on liabilities regarding consequential and other damages as well as caps on a party’s liability equal to the fees paid or charged under the relevant Work Agreement, is for the breaching party to (a) perform or re-perform the relevant services if reasonably determined by the non-breaching party that the performance of the relevant services is commercially practicable and/or (b) refund any fees paid if reasonably determined by the non-breaching parties that performance or re-performance is not commercially practicable or would not be sufficient compensation for the breach.
Total gaming taxes and the costs incurred in connection with the on-going operation of Studio City Casino deducted from gross gaming revenues were US$227.9 million, US$382.3 million and US$307.1 million in 2022, 2021 and 2020, respectively.
Total gaming taxes and the costs incurred in connection with the on-going operation of Studio City Casino deducted from gross gaming revenues were US$756.9 million, US$227.9 million and US$382.3 million in 2023, 2022 and 2021, respectively.
(4) Represents 28,505,043 ADSs (representing 114,020,172 Class A ordinary shares), constituting 14.8% of the outstanding Class A ordinary shares, held by Silver Point Capital Fund, L.P., Silver Point Capital Offshore Master Fund, L.P., Silver Point Distressed Opportunities Fund, L.P., Silver Point Distressed Opportunities Offshore Master Fund, L.P., Silver Point Distressed Opportunity Institutional Partners Master Fund 117 Table of Contents (Offshore), L.P. and Silver Point Distressed Opportunity Institutional Partners, L.P., or the Silver Point Funds, as of December 31, 2022.
(4) Represents 28,642,279 ADSs (representing 114,569,116 Class A ordinary shares), constituting 14.9% of the outstanding Class A ordinary shares, held by Silver Point Capital Fund, L.P., Silver Point Capital Offshore Master Fund, L.P., Silver Point Distressed Opportunities Fund, L.P., Silver Point Distressed Opportunities Offshore Master Fund, L.P., Silver Point Distressed Opportunity Institutional Partners Master Fund (Offshore), L.P. and Silver Point Distressed Opportunity Institutional Partners, L.P., or the Silver Point Funds, as of December 31, 2023.
Removed
Information regarding beneficial ownership of the Class A ordinary shares is reported as of December 31, 2022 and is based on the information contained in the Schedule 13G/A filed by New Cotai, LLC with the SEC on February 9, 2023.
Added
Other than as provided in the table above, reports filed with or furnished to the SEC, public disclosure, including without limitation Schedule 13 filings, and this annual report, we are not aware of any significant change in the percentage ownership held by any major shareholder since January 1, 2021.
Removed
If the Master Services Agreement is terminated, all Work Agreements shall automatically terminate.

Other MSC 10-K year-over-year comparisons