When compiling capex data to analyze a company I’ve been researching (Las Vegas Sands), I am subtracting the Sum of 1Q, 2Q, and 3Q capex from the Full Year capex to get 4Q capex. However, the 4Q number is coming out very negative. I’ve checked all the numbers in the financial statements and they check out. There are no notes to indicate any kind of adjustments to the FY capex figures.
1Q capex = 56
2Q capex = 92
3Q capex = 137
FY capex = 196
calculated 4Q capex = -89 <<<< that’s a negative 89
No idea why these are calculating like this. Any thoughts very much welcome and appreciated.
**note that the quarterly and full year figures are the Marina Bay Sands (property specific) capex for 2017.
It sounds as though they sold capital equipment in the fourth quarter.
What do you see as the problem?
Appreciate the response. I listed the capex for Marina Bay Sands as one example, but the negative 4Q capex calculation is consistent across all their Macau properties as well. As a casino/hotel operator who, at the time, was growing business, I don’t see them selling that many millions of dollars of capital equipment. The notes to the statements don’t indicate that any of the capex figures are netting something else out.
I’m almost forced to think that some of the quarterly capex figures were adjusted down but just not sure why that would be the case.
Is there some reason that casinos might write down capital equipment in the fourth quarter? Taxes or something?
If not, then I have no idea. You seem to have a lot more experience in this arena than I.
Good thought. If they were writing down the assets I think it would appear as a different line item. That is, I don’t think it would be part of the capex number. My newest theory is that the full year figure doesn’t include depreciation, where the quarterly figures do. Depreciation has the potential to be large enough to cause the very negative 4Q numbers I’m getting. Need to investigate this further. If it ends up being true, just odd that the company would change their capex calculation methodology between 10-Q and 10-K reporting, especially without some kind of accompanying footnote. Will circle back if I land on anything concrete. Thanks again for the thoughts.