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FORM
6-K
 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a–16 OR 15d–16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of
 November 2023
Commission File Number:
001-
38699
 
 
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
 
 

71 Robinson Road
#04-03
Singapore 068895
and
38
th
Floor, The Centrium
60 Wyndham Street
Central
Hong Kong
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20–F or Form 40–F.
Form 20-F  ☒            Form
40-F  ☐
 
 
 
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
Form 6–K
TABLE OF CONTENTS
 
  
3
  
  
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
By:
 
/s/ Geoffrey Davis
Name:
 
Geoffrey Davis, CFA
Title:
 
Chief Financial Officer
Date: November 30, 2023
 
3
EXHIBIT INDEX
 
Exhibit No.
  
Description
Exhibit 99.1
  
Unaudited Condensed Consolidated Financial Statements of Studio City International Holdings Limited for the Nine Months Ended September 30, 2023 and 2022
Exhibit 99.2
  
Management’s discussion and analysis and financial data for prior periods
101.INS
  
Inline XBRL Instance Document-this instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH
  
Inline XBRL Taxonomy Extension Schema Document
101.CAL
  
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
  
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
  
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
  
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Table of Contents
http://fasb.org/us-gaap/2023#RelatedPartyMemberhttp://fasb.org/us-gaap/2023#RelatedPartyMemberhttp://www.studiocityinternationalholdingsltd.com/20230930#AccruedExpensesAndOtherCurrentLiabilitieshttp://www.studiocityinternationalholdingsltd.com/20230930#AccruedExpensesAndOtherCurrentLiabilities
Exhibit 99.1
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
 
    
Page
  
     2  
     3  
     5  
     6  
     7  
     8  
 
- 1 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
     September 30,
2023		     December 31,
2022		  
     (Unaudited)        
ASSETS
     
Current assets:
     
Cash and cash equivalents
    $ 292,951     $ 509,523  
Accounts receivable, net of allowances for credit losses $6 and nil
      1,100       263  
Receivables from affiliated companies
      40,479       221  
Inventories
      5,735       5,121  
Prepaid expenses and other current assets
      39,780       38,721  
  
 
 
    
 
 
  
Total current assets
      380,045       553,849  
  
 
 
    
 
 
  
Property and equipment, net
      2,802,281       2,868,064  
Intangible assets, net
      346       1,373  
Long-term prepayments, deposits and other assets
      22,214       48,325  
Restricted cash
      129       130  
Operating lease
right-of-use
assets
      11,601       13,136  
Land use right, net
      105,875       108,645  
  
 
 
    
 
 
  
Total assets
    $ 3,322,491     $ 3,593,522  
  
 
 
    
 
 
  
LIABILITIES, SHAREHOLDERS’ EQUITY AND PARTICIPATION INTEREST
     
Current liabilities:
     
Accounts payable
    $ 1,992     $ 501  
Accrued expenses and other current liabilities
      107,227       165,688  
Income tax payable
      4       22  
Payables to affiliated companies
      22,712       81,178  
  
 
 
    
 
 
  
Total current liabilities
      131,935       247,389  
  
 
 
    
 
 
  
Long-term debt, net
      2,434,981       2,434,476  
Other long-term liabilities
      3,024       21,631  
Deferred tax liabilities, net
      318       382  
Operating lease liabilities,
non-current
      11,985       13,499  
  
 
 
    
 
 
  
Total liabilities
    $ 2,582,243     $ 2,717,377  
  
 
 
    
 
 
  
Commitments and contingencies (Note 14)
     
Shareholders’ equity and participation interest:
     
Class A ordinary shares, par value $0.0001; 1,927,488,240 shares authorized; 770,352,700 shares issued and outstanding
    $ 77     $ 77  
Class B ordinary shares, par value $0.0001; 72,511,760 shares authorized; 72,511,760 shares issued and outstanding
      7       7  
Additional
paid-in
capital
      2,477,359       2,477,359  
Accumulated other comprehensive losses
      (20,985 )      (11,671 ) 
Accumulated losses
      (1,780,059 )      (1,665,166 ) 
  
 
 
    
 
 
  
Total shareholders’ equity
      676,399       800,606  
  
 
 
    
 
 
  
Participation interest
      63,849       75,539  
  
 
 
    
 
 
  
Total shareholders’ equity and participation interest
      740,248       876,145  
  
 
 
    
 
 
  
Total liabilities, shareholders’ equity and participation interest
    $ 3,322,491     $ 3,593,522  
  
 
 
    
 
 
  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
- 2 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
 
2022
 
Operating revenues:
  
 
Revenue from casino contract with a related party
  
$
 
98,546
 
 
$
 
(44,171
) 
Rooms (including revenues from related parties of $
48,339
and $
10,183
for the nine months ended
September 30, 2023 and 2022, respectively)
  
 
72,091
 
 
 
13,566
 
Food and beverage (including revenues from related parties of $
26,879
and $
9,196
for the nine months
ended September 30, 2023 and 2022, respectively)
  
 
42,611
 
 
 
12,855
 
Entertainment (including revenues from related parties of $
39,492
and $
473
for the nine months ended
September 30, 2023 and 2022, respectively)
  
 
58,785
 
 
 
1,175
 
Services fee from related parties
  
 
22,569
 
 
 
16,215
 
Mall
  
 
7,583
 
 
 
5,800
 
Retail and other
  
 
2,102
 
 
 
1,871
 
    
 
 
    
 
 
  
Total operating revenues
  
 
304,287
 
 
 
7,311
 
    
 
 
    
 
 
  
Operating costs and expenses:
  
      
 
      
Costs related to casino contract (including costs to related parties of $
19,973
and $
21,090
for the nine
months ended September 30, 2023 and 2022, respectively)
  
 
(21,265
) 
 
 
(21,864
) 
Rooms (including costs to related parties of $
10,977
and $
5,455
for the nine months ended
 
September 30,

2023 and 2022, respectively)
  
 
(17,920
) 
 
 
(8,476
) 
Food and beverage (including costs to related parties of $
17,525
and $
11,575
for the nine months ended
September 30, 2023 and 2022, respectively)
  
 
(37,089
) 
 
 
(18,241
) 
Entertainment (including costs to related parties of $
9,685
and $
1,492
for the nine months ended
September 30, 2023 and 2022, respectively)
  
 
(49,352
) 
 
 
(1,704
) 
Mall (including costs to related parties of $
1,343
and $
1,188
for the nine months ended September 30,
2023 and 2022, respectively)
  
 
(2,770
) 
 
 
(3,041
) 
Retail and other (including costs to related parties of $
1,203
and $
777
for the nine months ended
September 30, 2023 and 2022, respectively)
  
 
(1,543
) 
 
 
(904
) 
General and administrative (including expenses to related parties of $
38,480
and $
34,019
for the nine
months ended September 30, 2023 and 2022, respectively)
  
 
(79,904
) 
 
 
(59,457
) 
Pre-opening
costs (including expenses to related parties of $
7,426
and $
1,147
for the nine months ended September 30, 2023 and 2022, respectively)
  
 
(17,620
) 
 
 
(1,731
) 
Amortization of land use right
  
 
(2,474
) 
 
 
(2,474
) 
Depreciation and amortization
  
 
(116,189
) 
 
 
(92,854
) 
Property charges and other (including expenses to related parties of $
623
and $
3,853
for the nine months
ended September 30, 2023 and 2022, respectively)
  
 
(540
) 
 
 
(3,790
) 
    
 
 
    
 
 
  
Total operating costs and expenses
  
 
(346,666
) 
 
 
(214,536
) 
    
 
 
    
 
 
  
Operating loss
  
 
(42,379
) 
 
 
(207,225
) 
    
 
 
    
 
 
  
Non-operating
income (expenses):
  
      
 
      
Interest income
  
 
8,173
 
 
 
4,187
 
Interest expenses, net of amounts capitalized
  
 
(93,806
) 
 
 
(70,430
) 
Other financing costs
  
 
(311
) 
 
 
(311
) 
Foreign exchange gains, net
  
 
2,521
 
 
 
6,402
 
Other expenses, net
  
 
(61
) 
 
 
—
  
 
Gain on extinguishment of debt
  
 
80
 
 
 
—
  
 
    
 
 
    
 
 
  
Total
non-operating
expenses, net
  
 
(83,404
) 
 
 
(60,152
) 
    
 
 
    
 
 
  
Loss before income tax
  
 
(125,783
) 
 
 
(267,377
) 
Income tax benefit (expense)
  
 
77
 
 
 
(485
) 
    
 
 
    
 
 
  
Net loss
  
 
(125,706
) 
 
 
(267,862
) 
Net loss attributable to participation interest
  
 
10,813
 
 
 
26,817
 
    
 
 
    
 
 
  
Net loss attributable to Studio City International Holdings Limited
  
$
 
(114,893
) 
 
$
 
(241,045
) 
    
 
 
    
 
 
  
 
- 3 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
 
  
Nine Months Ended
September 30,
 
 
  
2023
 
 
2022
 
Net loss attributable to Studio City International Holdings Limited per Class A ordinary share:
  
 
Basic
  
$
(0.149
) 
 
$
(0.349
) 
    
 
 
    
 
 
  
Diluted
  
$
(0.149
) 
 
$
(0.351
) 
    
 
 
    
 
 
  
Weighted average Class A ordinary shares outstanding used in net loss attributable to Studio City International Holdings Limited per Class A ordinary share calculation:
  
 
 
 
 
 
 
 
Basic
  
 
770,352,700
 
 
 
690,440,759
 
    
 
 
    
 
 
  
Diluted
  
 
770,352,700
 
 
 
762,952,519
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
- 4 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(In thousands)


 
  
Nine Months Ended
September 30,
 
 
  
        2023        
 
 
        2022        
 
Net loss
    $ (125,706 )    $ (267,862 ) 
Other comprehensive loss:
                 
Foreign currency translation adjustments
      (10,191 )      (25,062 ) 
    
 
 
    
 
 
  
Other comprehensive loss
      (10,191 )      (25,062 ) 
    
 
 
    
 
 
  
Total comprehensive loss
      (135,897 )      (292,924 ) 
Comprehensive loss attributable to participation interest
   
 
 
 
 
 
 
 
 
 11,690    
 
 
 
 
 
 
 
 
 28,821  
    
 
 
    
 
 
  
Comprehensive loss attributable to Studio City International Holdings Limited
    $ (124,207 )    $ (264,103 ) 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
- 5 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
(In thousands, except share and per share data)
 
    Studio City International Holdings Limited Shareholders’ Equity              
                                  Accumulated                    
    Class A     Class B     Additional     Other                    
    Ordinary Shares     Ordinary Shares    
Paid-in
     Comprehensive     Accumulated     Participation     Total  
    Shares     Amount     Shares     Amount     Capital     Losses     Losses     Interest     Equity  
Balance at January 1, 2022
     370,352,700     $ 37       72,511,760     $ 7     $ 2,134,227     $ (6,136 )    $ (1,338,715 )    $ 154,763     $ 944,183  
Net loss
     —         —         —         —         —         —         (241,045 )      (26,817 )      (267,862 ) 
Foreign currency translation adjustments
     —         —         —         —         —         (23,058 )      —         (2,004 )      (25,062 ) 
Shares issued, net of offering expenses
     400,000,000       40       —         —         299,119       —         —         —         299,159  
Change in Participation Interest resulting from 2022 Private Placements (as described in
Note 11)
     —         —         —         —         44,013       —         —         (44,013 )      —    
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at September 30, 2022
     770,352,700     $ 77       72,511,760     $ 7     $ 2,477,359     $ (29,194 )    $ (1,579,760 )    $ 81,929     $ 950,418  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at January 1, 2023
     770,352,700     $ 77       72,511,760     $ 7     $ 2,477,359     $ (11,671 )    $ (1,665,166 )    $ 75,539     $ 876,145  
Net loss
     —         —         —         —         —         —         (114,893 )      (10,813 )      (125,706 ) 
Foreign currency translation adjustments
     —         —         —         —         —         (9,314 )      —         (877 )      (10,191 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at September 30, 2023
     770,352,700     $ 77       72,511,760     $ 7     $ 2,477,359     $ (20,985 )    $ (1,780,059 )    $ 63,849     $ 740,248  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
- 6 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)


 
  
Nine Months Ended
September 30,
 
 
  
        2023        
 
 
        2022        
 
Cash flows from operat
ing activities:
                 
Net cash used in operating activities
    $ (84,452 )    $ (158,659 ) 
    
 
 
    
 
 
  
Cash flows from investing activities:
                 
Acquisition of property and equipment
      (127,683 )      (359,036 ) 
Funds to an affiliated company
      (1,838 )      (948 ) 
Proceeds from sale of property and equipment
      693       9  
    
 
 
    
 
 
  
Net cash used in investing activities
      (128,828 )      (359,975 ) 
    
 
 
    
 
 
  
Cash flows from financing activities:
                 
Repayments of long-term debt
      (1,912 )      —    
Payments of deferred financing costs
      —         (6,050 ) 
Net proceeds from issuance of shares
      —         299,228  
Proceeds from long-term debt
      —         350,000  
    
 
 
    
 
 
  
Net cash (used in) provided by financing activities
      (1,912 )      643,178  
    
 
 
    
 
 
  
Effect of exchange rate on cash, cash equivalents and restricted cash
      (1,381 )      (3,276 ) 
    
 
 
    
 
 
  
(Decrease) increase in cash, cash equivalents and restricted cash
      (216,573 )      121,268  
Cash, cash equivalents and restricted cash at beginning of period
   
 
 
 
 
 
 
 
 
 
 
 509,653    
 
 
 
 
 
 
 
 
 
 499,419  
    
 
 
    
 
 
  
Cash, cash equivalents and restricted cash at end of period
    $ 293,080     $ 620,687  
    
 
 
    
 
 
  
Supplemental cash flow disclosures:
                 
Cash paid for interest, net of amounts capitalized
    $ (113,416 )    $ (87,890 ) 
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from
operating leases
    $ (673 )    $ (726 ) 
Change in operating lease
right-of-use
assets and lease liabilities arising from lease modification
    $ (1,456 )    $ (1,343 ) 
Change in accrued expenses and other current liabilities and other long-term liabilities related to
acquisition of property and equipment
    $ 9,504     $ 125,378  
Change in receivables from/payables to affiliated companies related to acquisition of property and
equipment and other long-term assets
    $ 1,990     $ 1,918  
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
- 7 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
 
1.
ORGANIZATION AND BUSINESS
 
  (a)
Company Information
Studio City International Holdings Limited (“Studio City International”) is an exempted company with limited liability registered by way of continuation in the Cayman Islands, with its American depositary shares (“ADSs”) listed on the New York Stock Exchange under the symbol “MSC” in the United States of America (the “U.S.”).
Studio City International together with its subsidiaries (collectively referred to as the “Company”) currently operates
the non-gaming
operations of Studio City, a cinematically-themed integrated resort in Cotai, the Macau Special Administrative Region of the People’s Republic of China (“Macau”), and provides services pursuant to a casino contract to Melco Resorts (Macau) Limited (“Melco Resorts Macau”), a subsidiary of Melco Resorts & Entertainment Limited (“Melco”), which holds the gaming concession in Macau, for the operations of the gaming area at Studio City (“Studio City Casino”). Melco’s ADSs are listed on the Nasdaq Global Select Market in the U.S.
Studio City International authorized two classes of ordinary shares, the Class A ordinary shares and the Class B ordinary shares, in each case with a par value of $0.0001 each. The Class A ordinary share and Class B ordinary share have the same rights, except that holders of the Class B ordinary shares do not have any right to receive dividends or distributions upon the liquidation or winding up of Studio City International or to otherwise share in profits and surplus assets. MCO Cotai Investments Limited, a subsidiary of Melco, through its ownership of the Class A ordinary shares, is the controlling shareholder of Studio City International. New Cotai, LLC (“New Cotai”), a private company organized in the U.S., is the holder of all outstanding Class B ordinary shares which have only voting and no economic rights. New Cotai has a
non-voting,
non-shareholding
economic participation interest (“Participation Interest”) in MSC Cotai Limited (“MSC Cotai”), a subsidiary of Studio City International, which entitles New Cotai to receive from MSC Cotai an amount equal to a certain percentage of the amount of any distribution, dividend or other consideration paid by MSC Cotai to Studio City International, subject to adjustments, exceptions and conditions as set out in the participation agreement (the “Participation Agreement”) entered into by MSC Cotai, New Cotai and Studio City International in 2018 (the “MSC Cotai’s Distribution”). The Participation Agreement also 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 and a proportionate number of Class B ordinary shares will be deemed surrendered and automatically cancelled for no consideration as set out in the Participation Agreement when New Cotai exchanges all or a portion of the Participation Interest for Class A ordinary shares. As of September 30, 2023 and December 31, 2022, the Participation Interest entitled New Cotai to receive from MSC Cotai an amount equal to approximately 9.4% of the MSC Cotai’s
Distribution in each of those periods.
As of September 30, 2023 and December 31, 2022, Melco International Development Limited (“Melco International”), a company listed in the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), is the single largest shareholder of Melco.
 
  (b)
Recent Developments Related to Business Operations and
COVID-19
The construction of Studio City Phase 2 was completed before the extended deadline of June 30, 2023 for the development period under the Studio City land concession. The Studio City Phase 2 first stage was opened in April 2023 with the opening of the Epic Tower and the indoor waterpark, while the second stage was opened in September 2023 with the opening of the W Macau Hotel.
While the disruptions to the Company’s business caused by the
COVID-19
outbreak were eased significantly following the relaxation of
COVID-19
related restrictions and quarantine-free travel in Macau, the People’s Republic of China and Hong Kong since January 2023, the pace of recovery after
COVID-19
related disruptions remains highly uncertain. The Company is currently unable to reasonably estimate the financial impact to its future results of operations, cash flows and financial condition from these disruptions.
 
-
8
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
1.
ORGANIZATION AND BUSINESS
- continued
 
  (b)
Recent Developments Related to Business Operations and
COVID-19
- continued
 
As of September 30, 2023, the Company has sufficient liquidity including cash and cash equivalents of $292,951 and available unused borrowing capacity under the 2016 SC Revolving Credit Facility of HK$233,000 (equivalent to $29,755), subject to the satisfaction of certain conditions precedent.
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a)
Basis of Presentation and Principles of Consolidation
On December 16, 2022, the Macau government awarded a ten-year concession to operate games of fortune and chance in casinos in Macau (the “Concession”) to Melco Resorts Macau. The term of the Concession commenced on January 1, 2023 and ends on December 31, 2032. Under the Concession, Melco Resorts Macau is authorized to operate the Studio City Casino.
Under the Studio City Casino Agreement as amended on June 23, 2022, Melco Resorts Macau agreed to operate the Studio City Casino since the Company does not hold a gaming concession in Macau, Melco Resorts Macau deducts gaming taxes and the costs incurred in connection with its operations from Studio City Casino’s gross gaming revenues. The residual gross gaming revenues which the Company receives as revenue is captioned as revenue from casino contract.
In December 2015, Studio City International and certain of its subsidiaries entered into a master services agreement; and certain of its subsidiaries entered into the related work agreements (collectively, the “Management and Shared Services Arrangements”) with certain of Melco’s subsidiaries with respect to services provided to and from Studio City, which expired in June 2022 and were extended to December 31, 2032 in March 2023.
Under the Management and Shared Services Arrangements, certain of the corporate and administrative functions as well as operational activities of the Company are administered by staff employed by certain Melco’s subsidiaries, including senior management services, centralized corporate functions and operational and venue support services. Payment arrangements for the services are provided for in the individual work agreements and may vary depending on the services provided. 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 the Company based on percentages of efforts on the services provided to the Company. Other costs in relation to shared office equipment are allocated based on a percentage of usage.
The Company believes the costs incurred under the Studio City Casino Agreement, captioned as costs related to casino contract, and the allocation methods under the Management and Shared Services Arrangements are reasonable and the accompanying condensed consolidated financial statements reflect the Company’s cost of doing business. However, such allocations may not be indicative of the actual expenses the Company would have incurred had it operated as an independent company for the periods presented. Details of the services and related charges are disclosed in Note 15.
The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles for interim financial reporting. The results of operations for the nine months ended September 30, 2023 and 2022 are not necessarily indicative of expected results for the full year. The financial information as of December 31, 2022 presented in these condensed consolidated financial statements is derived from the Company’s consolidated financial statements as of December 31, 2022.
The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial results of such periods.
 
-
9
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTTING POLICIES
- continued
 
  (a)
Basis of Presentation and Principles of Consolidation
- continued
 
The accompanying condensed consolidated financial statements include the accounts of Studio City International and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2022.
 
  (b)
Accounts Receivable and Credit Risk
Accounts receivable, including hotel and other receivables, are typically
non-interest
bearing and are recorded at amortized cost. Accounts are written off when management deems it is probable the receivables are uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for credit losses is maintained to reduce the Company’s receivables to their carrying amounts, which reflects the net amount the Company expects to collect. The allowance is estimated based on specific reviews of the age of the balances owed, the customers’ financial condition, management’s experience with the collection trends of the customers and management’s expectations of current and future economic conditions.
Management believes that as of September 30, 2023 and December 31, 2022, no significant concentrations of credit risk existed for which an allowance had not already been recorded.
 
  (c)
Impairment of Long-lived Assets
The Company evaluates the long-lived assets with finite lives to be held and used for impairment whenever indicators of impairment exist. The Company then compares the estimated future cash flows of the assets, on an undiscounted basis, to the carrying values of the assets. Estimating future cash flows of the assets involves significant assumptions, including future revenue growth rates and gross margins. If the undiscounted cash flows exceed the carrying values, no impairments are indicated. If the undiscounted cash flows do not exceed the carrying values, then an impairment charge is recorded based on the fair values of the assets, typically measured using a discounted cash flow model involving significant assumptions, such as discount rates. If an asset is still under development, future cash flows include remaining construction costs.
No impairment losses were recognized during the nine months ended September 30, 2023 and 2022.
 
-
10
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- continued
 
  (d)
Revenue Recognition
The Company follows the accounting standards for reporting revenue gross as a principal versus net as an agent, when accounting for operations of one of its hotels and concluded that it is the controlling entity and is the principal to this arrangement. For the operations of one of its hotels, the Company is the owner of the hotel property, and the hotel manager operates the hotel under a management agreement providing management services to the Company, and the Company receives all rewards and takes substantial risks associated with the hotel’s business, it is principal and the transactions are, therefore, recognized on a gross basis.
Contract and Contract-Related Liabilities
In providing goods and services to customers, there may be a timing difference between cash receipts from customers and recognition of revenues, resulting in a contract or contract-related liability. The Company’s primary types of liabilities related to contracts with customers are advance deposits on rooms and advance ticket sales which represent cash received in advance for goods or services yet to be provided. These amounts are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets and will be recognized as revenues when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenues and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenues within one year. Advance customer deposits and ticket sales of $4,521 as of September 30, 2023 increased by $2,728 from the balance of $1,793 as of December 31, 2022. Advance customer deposits and ticket sales of $2,162 as of September 30, 2022 decreased by $97 from the balance of $2,259 as of December 31, 2021.
 
  (e)
Comprehensive Loss and Accumulated Other Comprehensive Losses
Comprehensive loss includes net loss and other
non-shareholder
changes in equity, or other comprehensive loss and is reported in the accompanying condensed consolidated statements of comprehensive loss.
As of September 30, 2023 and December 31, 2022, the Company’s accumulated other comprehensive losses consisted solely of foreign currency translation adjustments, net of tax and participation interest.
 
- 1
1
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- continued
 
  (f)
Net Loss Attributable to Studio City International Holdings Limited Per Class
 A Ordinary Share
Basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited by the weighted average number of Class A ordinary shares outstanding during the period.
Diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited adjusted for participation interest by the weighted average number of Class A ordinary shares outstanding during the period adjusted to include the number of additional Class A ordinary shares that would have been outstanding if potential dilutive securities had been issued and the
if-converted
method is applied for the potential dilutive effect of the exchange of Class B ordinary shares for the proportionate number of Class A ordinary shares. During the nine months ended September 30, 2023, there were no potentially dilutive securities issued or outstanding.
Basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share does not include Class B ordinary shares as such shares do not participate in the loss of Studio City International. As a result, Class B ordinary shares are not considered participating securities and are not included in the weighted average number of shares outstanding for purposes of computing net loss attributable to Studio City International Holdings Limited per share.
The weighted average number of Class A ordinary shares used in the calculation of basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share consisted of the following:
 
     Nine Months Ended
September 30,		  
     2023      2022  
Weighted average number of Class A ordinary shares outstanding used in the calculation of basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        690,440,759  
Incremental weighted average number of Class A ordinary shares from assumed exchange of Class B ordinary shares to Class A ordinary shares under the
if-converted
method
      —          72,511,760  
    
 
 
     
 
 
  
Weighted average number of Class A ordinary shares outstanding used in the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        762,952,519  
    
 
 
     
 
 
  
Anti-dilutive Class A ordinary shares under the
if-converted
method excluded from the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      72,511,760        —    
    
 
 
     
 
 
  
 
- 1
2
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- continued
 
  (g)
Recent Changes in Accounting Standards
Recent Accounting Pronouncement Not Yet Adopted
The Company has evaluated the recently issued, but not yet effective, accounting pronouncements that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these financial statements, and anticipated the future adoption of these pronouncements will not have a material effect on the Company’s financial position, results of operations and cash flows.
 
3.
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows consisted of the following:
 
     September 30,
2023		      December 31,
2022		  
Cash
    $ 43,056      $ 54,340  
Cash equivalents
      249,895        455,183  
    
 
 
     
 
 
  
Total cash and cash equivalents
      292,951        509,523  
Non-current
portion of restricted cash
      129        130  
    
 
 
     
 
 
  
Total cash, cash equivalents and restricted cash
    $ 293,080      $ 509,653  
    
 
 
     
 
 
  
 
4.
ACCOUNTS RECEIVABLE, NET
Components of accounts receivable, net are as follows:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Hotel
    $ 885      $ 250  
Other
      221        13  
    
 
 
     
 
 
  
Sub-total
      1,106        263  
Less: allowances for credit losses
      (6 )       —    
    
 
 
     
 
 
  
     $ 1,100      $ 263  
    
 
 
     
 
 
  
The Company’s allowances for credit losses as of September 30, 2023 were from its hotel receivables.
Movement in the allowances for credit losses are as follows:
 

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Balance at beginning of year
    $ —      $ —  
Provision for credit losses
      6        —  
    
 
 
     
 
 
  
Balance at end of period
    $
 
 
 
 
 
 
 
 
 
 
 
 6      $
 
 
 
 
 
 
 
 
 —  
    
 
 
     
 
 
  
 
- 1
3
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
5.
PROPERTY AND EQUIPMENT, NET
 
     September 30,
2023		      December 31,
2022		  
Cost
    $ 3,807,797      $ 3,780,769  
Less: accumulated depreciation and amortization
      (1,005,516 )       (912,705 ) 
    
 
 
     
 
 
  
Property and equipment, net
    $ 2,802,281      $ 2,868,064  
    
 
 
     
 
 
  
As of September 30, 2023 and December 31, 2022, the amount of property and equipment, net included balances of construction in progress, included interest capitalized in accordance with applicable accounting standards and other direct incidental costs capitalized mainly for the Studio City Phase 2 project of $4,966 and $1,079,112, respectively. Upon the opening of Studio City Phase 2 first stage in April 2023 and second stage in September 2023, its associated construction in progress balances were placed into service in the respective period.
The depreciation and amortization expenses of property and equipment recognized for the nine months ended September 30, 2023 and 2022 were $
110,728
and $
84,520
,
respectively
.

Under the terms of the Macau gaming law and the Concession, the gaming and gaming support areas comprising the Studio City Casino with an area of 28,784.3 square meters with its land lease right held by Studio City Developments, and related gaming equipment and utensils (collectively as referred to the “Reversion Assets”), which were reverted to the Macau government without compensation and free and clear from any charges or encumbrances on December 31, 2022 at the expiration of the previous subconcession, effective as of January 1, 2023, have been transferred by the Macau government to Melco Resorts Macau for the duration of the Concession, in return for annual payments for the right to use and operate the Reversion Assets. The Reversion Assets are owned by the Macau government and Melco Resorts Macau pays an annual fee of MOP0.75 per square meter of the casino for years 1 to 3 of the Concession, subject to a consumer price index increase in years 2 and 3 of the Concession. The fee will increase to MOP2.5 per square meter of the casino for years 4 to 10 of the Concession, subject to a consumer price index increase in years 5 to 10 of the Concession.
As Studio City Casino continues to be operated at and with the Reversion Assets in the same manner as under the previous subconcession, obtains substantially all of the economic benefits and bears all of the risks arising from the operation of these assets, as well as assuming Melco Resorts Macau will be successful in the awarding of a new concession upon expiry of the Concession, Melco Resorts Macau and Studio City Developments continues to recognize these Reversion Assets as property and equipment over their remaining estimated useful lives.
 
6.
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS
Long-term prepayments, deposits and other assets consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Other long-term assets
    $ 18,399      $ 16,824  
Less: accumulated amortization
      (8,728 )       (4,309 ) 
    
 
 
     
 
 
  
Other long-term assets, net
      9,671        12,515  
Long-term prepayments
      6,332        29,250  
Advance payments and deposits for acquisition of property and equipment
      1,002        1,645  
Other deposits and other
      4,917        4,582  
Deferred financing costs, net
      292        333  
    
 
 
     
 
 
  
Long-term prepayments, deposits and other assets
    $ 22,214      $ 48,325  
    
 
 
     
 
 
  
The amortization expenses of other long-term assets recognized for the
nine
months ended September 30, 2023 and 2022 were $4,439 and $7,288, respectively.
 
- 14 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)

7.
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 
     September 30,
2023		      December 31,
2022		  
Property and equipment payables
    $ 52,459      $ 87,701  
Interest expenses payable
      27,832        63,371  
Operating expense and other accruals and liabilities
      21,348        11,728  
Advance customer deposits and ticket sales
      4,521        1,793  
Operating lease liabilities
      1,067        1,095  
    
 
 
     
 
 
  
     $ 107,227      $ 165,688  
    
 
 
     
 
 
  
 
8.
LONG-TERM DEBT, NET
Long-term debt, net consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Senior Notes
                  
2022 7.000% Studio City Secured Notes, due 2027 (net of unamortized deferred financing costs of $4,321 and $5,134, respectively)
    $ 345,679      $ 344,866  
2021 5.000% Studio City Notes, due 2029 (net of unamortized deferred financing costs and original issue premiums of $3,779 and $4,228, respectively)
      1,096,221        1,095,772  
2020 6.000% SC Notes, due 2025 (net of unamortized deferred financing costs of $1,937 and $2,692, respectively)
      496,063        497,308  
2020 6.500% SC Notes, due 2028 (net of unamortized deferred financing costs of $3,110 and $3,598, respectively)
      496,890        496,402  
Credit Facilities
                  
2016 Studio City Credit Facilities
(1)
      128        128  
    
 
 
     
 
 
  
     $ 2,434,981      $ 2,434,476  
    
 
 
     
 
 
  
Note
 
 
(1)
As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs related to the 2016 SC Revolving Credit Facility of the 2016 Studio City Credit Facilities of $
292
and $
333
are included in long-term prepayments, deposits and other assets in the accompanying condensed consolidated balance sheets, respectively.
During the nine months ended September 30, 2023, there was no significant change to the long-term debt as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
 
9.
LEASES
Lessor Arrangements
During the nine months ended September 30, 2023 and 2022, the Company earned minimum operating lease income of $2,962 and $3,303, respectively, and contingent operating lease income of $2,296 and $260, respectively.
 
- 1
5
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
10.
FAIR VALUE MEASUREMENTS
The carrying values of cash equivalents, long-term deposits and other long-term liabilities approximated fair value and were classified as level 2 in the fair value hierarchy.
The estimated fair values of long-term debt as of September 30, 2023 and December 31, 2022, were approximately $2,047,603 and $1,959,195, respectively, as compared to their carrying values, excluding unamortized deferred financing costs and original issue premiums, of $2,448,128 and $2,450,128, respectively. Fair values were estimated using quoted market prices and were classified as level 1 in the fair value hierarchy for the 2022 7.000% Studio City Secured Notes, 2021 5.000% Studio City Notes and the 2020 Studio City Notes. Fair value for the 2016 Studio City Credit Facilities approximated its carrying value as the instrument carried variable interest rates that approximated the market rates and was classified as level 2 in the fair value hierarchy.
As of September 30, 2023 and December 31, 2022, the Company did not have any
non-financial
assets or liabilities that were recognized or disclosed at fair value in the accompanying condensed consolidated financial statements.
 
11.
CAPITAL STRUCTURE
During February and March 2022, Studio City International, respectively, announced and completed a series of private offers (the “2022 Private Placements”) of 400,000,000 Class A ordinary shares to certain existing shareholders and holders of its ADSs, including Melco, with gross proceeds amounting to $300,000 and offering expenses of $841. The 2022 Private Placements resulted in an adjustment to the carrying amount of the Participation Interest with a corresponding increase in the Company’s additional
paid-in
capital.
As of September 30, 2023 and December 31, 2022, Studio City International’s authorized share capital was 1,927,488,240 Class A ordinary shares and 72,511,760 Class B ordinary shares of a par value of $0.0001 each. As of September 30, 2023 and December 31, 2022, 770,352,700 Class A ordinary shares and 72,511,760 Class B ordinary shares were issued and outstanding
 in each of those periods
.
 
12.
INCOME TAXES
The income tax (benefit) expense consisted of:

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Over provision of income taxes in prior years:
                  
Hong Kong Profits Tax
    $ (14 )     $
 
 
 
 
 
 
 
 
 
 
 —    
    
 
 
     
 
 
  
Income tax (benefit) expense - deferred:
                  
Macau Complementary Tax
      (63 )       485  
    
 
 
     
 
 
  
Total income tax (benefit) expense
    $
 
 
 
 
 
 
 
 
 
 
 
 (77 )     $
 
 
 485  
    
 
 
     
 
 
  
 
- 1
6
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
12.
INCOME TAXES
- continued
 
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. The
non-gaming
profits and dividend distributions of Studio City Entertainment to its shareholders continue to be subject to Macau Complementary Tax.
The effective tax rates for the nine months ended September 30, 2023 and 2022 were 0.1% and (0.2)%, respectively. Such rates differ from the statutory Macau Complementary Tax rate of 12%, where the majority of the Company’s operations are located, primarily due to the effects of expenses for which no income tax benefit is receivable, 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 periods together with the effect of profits expected to be exempted from Macau Complementary Tax for the nine months ended September 30, 2023.
As of September 30, 2023 and December 31, 2022, valuation allowances of $90,813 and $91,092 were provided, respectively, as management believes it is more likely than not that these deferred tax assets will not be realized.
As of September 30, 2023, other than the above, there was no significant change to the tax exposures as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
 
13.
DISTRIBUTION OF PROFITS
During the nine months ended September 30, 2023 and 2022, Studio City International did not declare or pay any cash dividends on the ordinary shares. No dividends have been proposed since the end of the reporting period.
 
14.
COMMITMENTS AND CONTINGENCIES
 
  (a)
Capital Commitments
As of September 30, 2023, the Company had capital commitments contracted for but not incurred for the construction and acquisition of property and equipment for Studio City totaling $14,673.
 
  (b)
Guarantee
As of September 30, 2023, except the maturity date of the Trade Credit Facility which was further extended from August 31, 2023 to August 31, 2025, there was no significant change to the guarantee as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
 
  (c)
Litigation
As of September 30, 2023, the Company was a party to certain legal proceedings which relate to matters arising out of the ordinary course of its business. Management believes that the outcomes of such proceedings have been adequately provided for or have no material impacts on the Company’s condensed consolidated financial statements as a whole.
 
- 1
7
-
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
15.
RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 2023 and 2022, the Company entered into the following significant related party transactions:
 
          Nine Months Ended
September 30,		  
Related companies
   
Nature of transactions
    2023      2022  
       
Transactions with affiliated companies
                       
Melco and its subsidiaries
   
Revenues (services provided by the Company):
                  
    
Revenue from casino contract
    $ 98,546      $ (44,171 ) 
    
Rooms and food and beverage
(1)
      75,218        19,379  
    
Services fee
(2)
      22,569        16,215  
    
Entertainment
(1)
      39,492        473  
    
Costs and expenses (services provided to the Company):
                  
    
Staff costs recharges
(3)
      64,661        42,928  
    
Corporate services
(4)
      25,701        24,583  
    
Other services
      16,415        12,977  
    
Staff costs for construction and renovation work capitalized
      3,585        8,993  
    
Purchase of goods and services
      458        108  
    
Sale and purchase of assets:
                  
    
Sale of property and equipment and other long-term assets
      756        6  
    
Purchase of property and equipment
      8        184  
    
Transfer-in
of other long-term assets
      1,636        749  
Notes
 
 
(1)
These revenues primarily represented the standalone selling prices of the complimentary services (including rooms, food and beverage and entertainment services) provided to Studio City Casino’s gaming patrons and charged to Melco Resorts Macau. For the nine months ended September 30, 2023 and 2022, the related party rooms and food and beverage revenues and entertainment revenues aggregated to $
114,710
and $
19,852
, respectively, of which $
80,473
and $
17,708
related to Studio City Casino’s gaming patrons and $
34,237
and $
2,144
related to
non-Studio
City Casino’s gaming patrons, respectively.
 
(2)
Services provided by the Company to Melco and its subsidiaries mainly include, but are not limited to, certain shared administrative services and shuttle bus transportation services provided to Studio City Casino.
 
(3)
Staff costs are recharged by Melco and its subsidiaries for staff who are solely dedicated to Studio City to carry out activities, including food and beverage management, retail management, hotel management, entertainment projects, mall development and sales and marketing activities and staff costs for certain shared administrative services.
 
(4)
Corporate services are provided to the Company by Melco and its subsidiaries. These services include, but are not limited to, general corporate services and senior executive management services for operational purposes.
 
- 1
8
 -
STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- continued
(In thousands, except share and per share data)
 
15.
RELATED PARTY TRANSACTIONS
- continued
 
Other Related Party Transactions
As of September 30, 2023 and December 31, 2022, Mr. Lawrence Yau Lung Ho, Studio City International’s director, and his controlled entity held an aggregate principal amount of $60,000
of senior notes issued by Studio City Finance in each of those periods. As of September 30, 2023 and December 31, 2022, an independent director of Studio City International held an aggregate principal amount of $
400 of senior notes issued by Studio
City Company in each of those periods
.
During the nine months ended September 30, 2023 and 2022, total interest expenses of $2,475 and $2,475 in relation to the senior notes issued by Studio City Finance, were paid or payable to Mr. Lawrence Yau Lung Ho and his controlled entity, respectively. During the nine months ended September 30, 2023 and 2022, total interest expenses of $21 and $7 in relation to the senior notes issued by Studio City Company, were paid or payable to the independent director of Studio City International, respectively.
 
  (a)
Receivables from Affiliated Companies
The outstanding balances as of September 30, 2023 and December 31, 2022 are receivables from Melco’s subsidiaries mainly arising from operating income or prepayment of operating expenses, and are unsecured,
non-interest
bearing and repayable on demand.
 
  (b)
Payables to Affiliated Companies
The outstanding balances as of September 30, 2023 and December 31, 2022 are payables to Melco International’s subsidiaries mainly arising from operating expenses, and are unsecured,
non-interest
bearing and repayable on demand.
 
16.
SEGMENT INFORMATION
The Company’s principal operating activities are engaged in the hospitality business and provision of services pursuant to a casino contract in Macau. The Company monitors its operations and evaluates its earnings by reviewing the assets and operations of Studio City as one operating segment. Accordingly, the Company does not present separate segment information. As of September 30, 2023 and December 31, 2022, the Company operated in one geographical area, Macau, where it derives its revenues and its long-lived assets are located.
 
17.
SUBSEQUENT EVENTS
On November 9, 2023, Studio City Finance announced a cash tender offer (the “Tender Offer”) for up to an aggregate principal amount of $75,000 of the 2020 6.000% SC Notes. The Tender Offer will expire on December 8, 2023, unless extended or terminated by Studio City Finance. As of November 22, 2023, the early tender date, an aggregate principal
amount of $317,461 of the 2020 6.000% SC Notes was tendered. On November 24, 2023, Studio City Finance announced that it would amend the Tender Offer to increase the aggregate principal amount of the 2020 6.000% SC Notes to $100,000. Studio City Finance accepted for purchase the 2020 6.000% SC Notes that were validly tendered (and not validly withdrawn) pursuant to the Tender Offer for a combined aggregate principal amount equal to $100,000. Settlement of such purchase took place on November 28, 2023. 
 
- 1
9
 -

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included as Exhibit 99.1 to this report on Form 6-K. Capitalized terms used but not otherwise defined in this Exhibit 99.2 have the same meaning as in the annual report on Form 20-F filed on March 31, 2023.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

The following table sets forth a summary of our consolidated results of operations for the nine months ended September 30, 2023 and 2022. This information should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included as Exhibit 99.1 to this report on Form 6-K.

 

     Nine Months Ended
September 30,		  
     2023      2022  
  

 

 

     

 

 

  
     (In thousands of US$)  

Total operating revenues

    $ 304,287      $ 7,311  

Total operating costs and expenses

    $ (346,666 )     $ (214,536 ) 

Operating loss

    $ (42,379 )     $ (207,225 ) 

Net loss attributable to Studio City International Holdings Limited

    $ (114,893 )     $ (241,045 ) 

Revenues

For the nine months ended September 30, 2023, our total operating revenues were US$304.3 million, an increase of US$297.0 million from US$7.3 million of total operating revenues for the nine months ended September 30, 2022. The increase in total operating revenues was primarily attributable to the relaxation of COVID-19 related restrictions in Macau in January 2023 and the openings of Studio City Phase 2, as well as the launch of residency concerts in April 2023, which led to an increase in revenue from casino contract and higher non-gaming revenues.

 

  •  

Revenue from casino contract. 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$98.5 million for the nine months ended September 30, 2023, compared with revenue from casino contract of negative US$44.2 million for the nine months ended September 30, 2022. The change was primarily attributable to the relaxation of COVID-19 related restrictions in Macau in January 2023 which led to a year-over-year increase in inbound tourism during the nine months of 2023.

Studio City Casino generated gross gaming revenues of US$617.5 million and US$130.3 million for the nine months ended September 30, 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.

Mass market table games revenue increased to US$524.0 million for the nine months ended September 30, 2023 from US$100.5 million for the nine months ended September 30, 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$2.01 billion for the nine months ended September 30, 2023 from US$346.9 million for the nine months ended September 30, 2022. Mass market table games hold percentage decreased to 26.1% for the nine months ended September 30, 2023 from 29.0% for the nine months ended September 30, 2022.

Gaming machine revenue increased to US$58.1 million for the nine months ended September 30, 2023 from US$15.2 million for the nine months ended September 30, 2022. This increase is attributable to an increase in both gaming machine handle and gaming machine win rate. Gaming machine handle increased to US$1.70 billion for the nine months ended September 30, 2023 from US$532.9 million for the nine months ended September 30, 2022. Gaming machine win rate increased to 3.4% for the nine months ended September 30, 2023 from 2.9% for the nine months ended September 30, 2022. Average net win per gaming machine per day was US$319 and US$82 for the nine months ended September 30, 2023 and 2022, respectively.

 

1

VIP rolling chip revenue increased to US$35.4 million for the nine months ended September 30, 2023 from US$14.6 million for the nine months ended September 30, 2022, attributable to an increase in VIP rolling chip volume, partially offset by a decrease in VIP rolling chip win rate. Studio City’s VIP rolling chip volume increased to US$2.22 billion for the nine months ended September 30, 2023 from US$585.5 million for the nine months ended September 30, 2022. VIP rolling chip win rate decreased to 1.59% for the nine months ended September 30, 2023 from 2.50% for the nine months ended September 30, 2022.

Revenue from casino contract were US$98.5 million and negative US$44.2 million for the nine months ended September 30, 2023 and 2022, respectively. Revenue from casino contract is net of gaming taxes and the costs incurred in connection with the on-going operation of Studio City Casino deducted by the Gaming Operator.

For the nine months ended September 30, 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$519.0 million and US$174.5 million, respectively, which included (i) gaming taxes imposed on the gross gaming revenue of US$247.0 million and US$50.8 million, respectively; (ii) the complimentary services provided by us to Studio City Casino’s gaming patrons of US$80.5 million and US$17.7 million, respectively; (iii) shared administrative services and shuttle bus transportation services provided by us to Studio City Casino of US$19.5 million and US$13.2 million, respectively and (iv) remaining costs of US$172.0 million and US$92.8 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. We generate room revenues from Studio City hotel consisting of Celebrity Tower, all-suite Star Tower, Epic Tower and W Macau. Our room revenues increased by US$58.5 million, or 431.4%, to US$72.1 million for the nine months ended September 30, 2023 from US$13.6 million for the nine months ended September 30, 2022. The increase was primarily attributable to an increased occupancy rate as a result of a year-over-year increase in inbound tourism as well as the openings of Epic Tower and W Macau during the nine months of 2023. Studio City’s average daily rate, occupancy rate and REVPAR were US$148, 88% and US$129, respectively, for the nine months ended September 30, 2023, as compared to US$114, 27% and US$31, respectively, for the nine months ended September 30, 2022.

 

  •  

Food and beverage, entertainment, mall and retail and other. Our revenues generated from food and beverage, entertainment, mall and retail and other increased by US$89.4 million, or 411.9%, to US$111.1 million for the nine months ended September 30, 2023 from US$21.7 million for the nine months ended September 30, 2022, primarily attributable to an increase in business activities as a result of a year-over-year increase in inbound tourism during the nine months of 2023 as well as the openings of indoor waterpark in April 2023 and the launch of residency concerts in the same month.

 

  •  

Services fee. Our services fee revenues, which primarily consist of certain shared administrative services and shuttle bus transportation services to Studio City Casino were US$22.6 million and US$16.2 million for the nine months ended September 30, 2023 and 2022, respectively.

Operating Costs and Expenses

Our total operating costs and expenses increased by US$132.1 million, or 61.6%, to US$346.7 million for the nine months ended September 30, 2023 from US$214.5 million for the nine months ended September 30, 2022.

 

  •  

Costs related to casino contract. 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$21.3 million and US$21.9 million for the nine months ended September 30, 2023 and 2022, respectively.

 

  •  

Rooms. Room expenses, which represent the costs of operating the hotel facilities and respective payroll expenses, increased by US$9.4 million, or 111.4%, to US$17.9 million for the nine months ended September 30, 2023 from US$8.5 million for the nine months ended September 30, 2022, which was in-line with the increase in revenues.

 

  •  

Food and beverage, entertainment, mall and retail and other. 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, were US$90.8 million and US$23.9 million for the nine months ended September 30, 2023 and 2022, respectively, which was in-line with the increase in revenues.

 

  •  

General and administrative. General and administrative expenses were US$79.9 million and US$59.5 million for the nine months ended September 30, 2023 and 2022, 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. Expenses relating to services fee revenues are also included in the general and administrative expenses.

 

2

  •  

Pre-opening costs. Pre-opening costs were US$17.6 million for the nine months ended September 30, 2023 as compared to US$1.7 million for the nine months ended September 30, 2022. Such costs primarily represent personnel, marketing and other costs incurred prior to the opening of new or start-up operations. The higher pre-opening costs for the nine months ended September 30, 2023 were mainly related to the marketing of the Studio City Phase 2, which opened in stages during the nine months of 2023.

 

  •  

Amortization of land use right. Amortization expenses for the land use right continued to be recognized on a straight-line basis at the rate of US$2.5 million for both the nine months ended September 30, 2023 and 2022.

 

  •  

Depreciation and amortization. Depreciation and amortization expenses increased by US$23.3 million, or 25.1%, to US$116.2 million for the nine months ended September 30, 2023 from US$92.9 million for the nine months ended September 30, 2022. The higher depreciation and amortization for the nine months ended September 30, 2023 were mainly related to the Studio City Phase 2, which opened in stages during the nine months of 2023.

 

  •  

Property charges and other. Property charges and other expenses of US$0.5 million and US$3.8 million for the nine months ended September 30, 2023 and 2022, respectively, were primarily attributable to payroll costs as a result of departmental restructuring.

Operating Loss

As a result of the foregoing, we had an operating loss of US$42.4 million for the nine months ended September 30, 2023, compared to an operating loss of US$207.2 million for the nine months ended September 30, 2022.

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, gain on extinguishment of debt and other non-operating expenses, net. We incurred total net non-operating expenses of US$83.4 million for the nine months ended September 30, 2023, compared to US$60.2 million for the nine months ended September 30, 2022.

 

  •  

Interest Income. Interest income were US$8.2 million and US$4.2 million for the nine months ended September 30, 2023 and 2022, respectively. The increase was primarily attributable to a higher average interest rate.

 

  •  

Interest expenses, net of amounts capitalized. Interest expenses were US$93.8 million (net of amounts capitalized of US$15.2 million) for the nine months ended September 30, 2023, compared to US$70.4 million (net of amounts capitalized of US$35.2 million) for the nine months ended September 30, 2022. The increase was primarily attributable to the cessation of capitalization since April 2023.

 

  •  

Other financing costs. Other financing costs, which were associated with the 2028 Studio City Senior Secured Credit Facility, were US$0.3 million for both the nine months ended September 30, 2023 and 2022.

Loss before Income Tax

As a result of the foregoing, we had a loss before income tax of US$125.8 million for the nine months ended September 30, 2023, compared to a loss before income tax of US$267.4 million for the nine months ended September 30, 2022.

Income Tax Benefit (Expense)

Income tax benefit was US$77 thousand for the nine months ended September 30, 2023 and was primarily attributable to deferred income tax benefit, as compared to income tax expense of US$0.5 million for the nine months ended September 30, 2022 which was attributable to deferred income tax expense. The effective tax rates for the nine months ended September 30, 2023 and 2022 were 0.1% and (0.2)%, respectively. Our effective tax rates for the nine months ended September 30, 2023 and 2022 differed from the statutory Macau complementary tax rate of 12%, where the majority of the Company’s operations are located, primarily due to the effects of expenses for which no income tax benefit is receivable, 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 periods together with the effect of profits expected to be exempted from Macau complementary tax for the nine months ended September 30, 2023. Our management currently does not expect to realize significant income tax benefits associated with net operating loss carry-forwards and other deferred tax assets generated by our Macau operations. However, to the extent that the financial results of our Macau operations improve and it becomes more likely than not that the deferred tax assets are realizable, we will reduce the valuation allowance related to the net operating losses and other deferred tax assets.

 

3

Net Loss Attributable to Participation Interest

Our net loss attributable to participation interest was US$10.8 million for the nine months ended September 30, 2023, compared to a net loss attributable to participation interest of US$26.8 million for the nine months ended September 30, 2022.

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$114.9 million for the nine months ended September 30, 2023, compared to a net loss attributable to Studio City International Holdings Limited of US$241.0 million for the nine months ended September 30, 2022.

Adjusted EBITDA

Our net income/loss before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, other non-operating income and expenses, or Adjusted EBITDA, were US$94.4 million and negative US$106.4 million for the nine months ended September 30, 2023 and 2022, respectively.

We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. This non-GAAP financial measure eliminates the impact of items that we do not consider indicative of the performance of our business. While we believe that this non-GAAP financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared in accordance with U.S. GAAP. It should not be considered in isolation or construed as an alternative to net income/loss, cash flow or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. This non-GAAP financial measure, which may differ from similarly titled measures used by other companies should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

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.

 

4

Reconciliation of Net Loss Attributable to Studio City International Holdings Limited to Adjusted EBITDA

 

     Nine Months Ended
September 30,		  
     2023     2022  
  

 

 

    

 

 

  
     (In thousands of US$)  

Net loss attributable to Studio City International Holdings Limited

    $ (114,893 )    $ (241,045 ) 

Net loss attributable to participation interest

      (10,813 )      (26,817 ) 
  

 

 

    

 

 

  

Net loss

      (125,706 )      (267,862 ) 

Income tax (benefit) expense

      (77 )      485  

Interest and other non-operating expenses, net

      83,404       60,152  

Depreciation and amortization

      118,663       95,328  

Property changes and other

      540       3,790  

Pre-opening costs

      17,620       1,731  
  

 

 

    

 

 

  

Adjusted EBITDA

    $ 94,444     $ (106,376 ) 
  

 

 

    

 

 

  

Adjusted EBITDA margin (1)

     31.0 %      (1,455.0 )% 

 

(1)

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total operating revenues.

The Adjusted EBITDA for Studio City for the nine months ended September 30, 2023 referred to in Melco Resorts’ earnings release dated November 7, 2023 (“Melco Resorts’ earnings release”) was US$35.0 million more than the Adjusted EBITDA of Studio City contained in this report, while the negative Adjusted EBITDA for Studio City for the nine months ended September 30, 2022 referred to in Melco Resorts’ earnings release was US$26.5 million less than the negative Adjusted EBITDA of Studio City contained in this report. The Adjusted EBITDA of Studio City contained in this report includes certain intercompany charges that are not included in the Adjusted EBITDA for Studio City contained in Melco Resorts’ earnings release. Such intercompany charges include, among other items, fees and shared service charges billed between the Company and its subsidiaries and certain subsidiaries of Melco Resorts. Additionally, Adjusted EBITDA of Studio City included in Melco Resorts’ earnings release does not reflect certain gaming concession related costs and certain intercompany costs related to the table games operations at Studio City Casino.

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 September 30, 2023, we recorded US$293.0 million in cash and cash equivalents. 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 September 30, 2023, subject to certain conditions precedent.

As of September 30, 2023, restricted cash of US$0.1 million represented the cash collateral in relation to the 2028 Studio City Senior Secured Credit Facility.

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, including our development project plans, as described in “— Other Financing and Liquidity Matters” below. For any additional financing requirements, we cannot provide assurance that future borrowings will be available.

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. Such purchase, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

 

5

Cash Flows

The following table sets forth a summary of our cash flows for the periods presented.

 

     Nine Months Ended
September 30,		  
     2023      2022  
  

 

 

     

 

 

  
     (In thousands of US$)  

Net cash used in operating activities

    $ (84,452 )     $ (158,659 ) 

Net cash used in investing activities

      (128,828 )       (359,975 ) 

Net cash (used in) provided by financing activities

      (1,912 )       643,178  

Effect of exchange rate on cash, cash equivalents and restricted cash

      (1,381 )       (3,276 ) 
  

 

 

     

 

 

  

(Decrease) increase in cash, cash equivalents and restricted cash

      (216,573 )       121,268  

Cash, cash equivalents and restricted cash at beginning of period

      509,653        499,419  
  

 

 

     

 

 

  

Cash, cash equivalents and restricted cash at end of period

    $ 293,080      $ 620,687  
  

 

 

     

 

 

  

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.

We recorded net cash used in operating activities of US$84.5 million for the nine months ended September 30, 2023, as compared to net cash used in operating activities of US$158.7 million for the nine months ended September 30, 2022. The change was primarily attributable to the improved performance of Studio City’s operations as described in “—Results of Operations” above.

Investing Activities

Net cash used in investing activities was US$128.8 million for the nine months ended September 30, 2023, as compared to US$360.0 million for the nine months ended September 30, 2022.

Net cash used in investing activities amounted to US$128.8 million for the nine months ended September 30, 2023, attributable to payments for acquisition of property and equipment of US$127.7 million and funds to an affiliated company of US$1.8 million, partially offset by proceeds from the sale of property and equipment of US$0.7 million.

Net cash used in investing activities amounted to US$360.0 million for the nine months ended September 30, 2022, primarily attributable to payments for acquisition of property and equipment of US$359.0 million and funds to an affiliated company of US$0.9 million.

Our capital expenditures on an accrual basis amounted to US$53.6 million for the nine months ended September 30, 2023, primarily for the construction, development and enhancement of Studio City. 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. See “— Other Financing and Liquidity Matters” below for more information.

Financing Activities

Net cash used in financing activities was US$1.9 million for the nine months ended September 30, 2023, as compared to net cash provided by financing activities of US$643.2 million for the nine months ended September 30, 2022.

Net cash used in financing activities was US$1.9 million for the nine months ended September 30, 2023, which represented the repayments on long-term debt.

Net cash provided by financing activities amounted to US$643.2 million for the nine months ended September 30, 2022, which represented proceeds from the issuance of the 2027 Notes in the aggregate principal amount of US$350.0 million and net proceeds from issuance of shares of US$299.2 million, partially offset by payments of deferred financing costs of US$6.1 million.

 

6

Indebtedness

We enter into loan facilities and issue notes through our subsidiaries. The following table sets forth our gross indebtedness as of September 30, 2023:

 

     Issuer      As of September 30,
2023		  
            (in thousands of US$)  

2028 Studio City Senior Secured Credit Facility

      Studio City Company      $ 128  

2025 Notes

      Studio City Finance        498,000  

2027 Notes

      Studio City Company        350,000  

2028 Notes

      Studio City Finance        500,000  

2029 Notes

      Studio City Finance        1,100,000  
     

 

 

  

Total

       $ 2,448,128  
     

 

 

  

There was no significant change in our gross indebtedness as of September 30, 2023 compared to December 31, 2022.

On November 9, 2023, Studio City Finance announced a cash tender offer (the “Tender Offer”) for up to an aggregate principal amount of US$75.0 million of the 2025 Notes. The Tender Offer will expire on December 8, 2023, unless extended or terminated by Studio City Finance. As of November 22, 2023, the early tender date, an aggregate principal amount of US$317.5 million of the 2025 Notes was tendered. On November 24, 2023, Studio City Finance announced that it would amend the Tender Offer to increase the aggregate principal amount of the 2025 Notes to US$100.0 million. Studio City Finance accepted for purchase the 2025 Notes that were validly tendered (and not validly withdrawn) pursuant to the Tender Offer for a combined aggregate principal amount equal to US$100.0 million. Settlement of such purchase took place on November 28, 2023.

For further details of the above indebtedness, see note 8 to the condensed consolidated financial statements included elsewhere in this report and note 10 to the consolidated financial statements for the year ended December 31, 2022 included in the annual report on Form 20-F filed on March 31, 2023, which includes information regarding the type of debt facilities used, the maturity profile of debt, the currency and interest rate structure, the charge on our assets and the nature and extent of any restrictions on our ability, and the ability of our subsidiaries, to transfer funds as cash dividends, loans or advances.

Other Financing and Liquidity Matters

We may obtain financing in the form of, among other things, equity or debt, including additional bank loans or high yield, mezzanine or other debt, or rely on our operating cash flow to fund the development of our projects. We are a growing company with significant financial needs. 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.

The timing of any future debt and equity financing activities will be dependent on our funding needs, our construction schedule, the availability of funds on terms acceptable to us and prevailing market conditions. We may carry out activities from time to time to strengthen our financial position and ability to better fund our business expansion plans. Such activities may include refinancing existing debt, monetizing assets, sale-and-leaseback transactions or other similar activities.

Any other future developments may be subject to further financing and a number of other factors, many of which are beyond our control.

Our material cash requirements arise from the payment of interest expenses and repayment of principal relating to our indebtedness.

Cash from financings and operations is primarily retained by our operating subsidiaries for the purposes of funding our operating activities and capital expenditures. 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. For the nine months ended September 30, 2023, 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. There are no regulatory or foreign exchange restrictions or limitations on our ability to transfer cash within our corporate group or to declare dividends to holders of our ADSs, except that our subsidiaries incorporated in Macau are required to set aside a specified amount of the entity’s profit after tax as a legal reserve which is not distributable to the shareholders of such subsidiaries.

 

7

As of September 30, 2023, we had capital commitments contracted for but not incurred for the construction and acquisition of property and equipment for Studio City totaling US$14.7 million. In addition, we have contingent liabilities arising in the ordinary course of business. For further details for our commitments and contingencies, see note 14 to the condensed consolidated financial statements included elsewhere in this report.

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. In November 2023, Standard & Poor’s and Moody’s Investors Service revised the outlook of Studio City to “Positive” and “Stable” respectively. For future borrowings, any decrease in our corporate rating could result in an increase in borrowing costs.

 

8

v3.23.3
Cover Page
 9 Months Ended
Sep. 30, 2023
Document Information [Line Items]  
Document Type 6-K
Amendment Flag false
Document Period End Date Sep. 30, 2023
Entity Registrant Name STUDIO CITY INTERNATIONAL HOLDINGS LIMITED
Entity Central Index Key 0001713334
Current Fiscal Year End Date --12-31
v3.23.3
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 292,951 $ 509,523
Accounts receivable, net of allowances for credit losses $6 and nil 1,100 263
Inventories 5,735 5,121
Prepaid expenses and other current assets 39,780 38,721
Total current assets 380,045 553,849
Property and equipment, net 2,802,281 2,868,064
Intangible assets, net 346 1,373
Long-term prepayments, deposits and other assets 22,214 48,325
Restricted cash 129 130
Operating lease right-of-use assets 11,601 13,136
Land use right, net 105,875 108,645
Total assets 3,322,491 3,593,522
Current liabilities:    
Accounts payable 1,992 501
Accrued expenses and other current liabilities 107,227 165,688
Income tax payable $ 4 $ 22
Other Liability, Current, Related Party, Type [Extensible Enumeration] Related Party [Member] Related Party [Member]
Payables to affiliated companies $ 22,712 $ 81,178
Total current liabilities 131,935 247,389
Long-term debt, net 2,434,981 2,434,476
Other long-term liabilities 3,024 21,631
Deferred tax liabilities, net 318 382
Operating lease liabilities, non-current 11,985 13,499
Total liabilities 2,582,243 2,717,377
Commitments and contingencies (Note 14)
Shareholders' equity and participation interest:    
Additional paid-in capital 2,477,359 2,477,359
Accumulated other comprehensive losses (20,985) (11,671)
Accumulated losses (1,780,059) (1,665,166)
Total shareholders' equity 676,399 800,606
Participation interest 63,849 75,539
Total shareholders' equity and participation interest 740,248 876,145
Total liabilities, shareholders' equity and participation interest 3,322,491 3,593,522
Related Party [Member]    
Current assets:    
Receivables from affiliated companies 40,479 221
Class A Ordinary Shares [Member]    
Shareholders' equity and participation interest:    
Ordinary shares, value 77 77
Class B Ordinary Shares [Member]    
Shareholders' equity and participation interest:    
Ordinary shares, value $ 7 $ 7
v3.23.3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Accounts receivable, net of allowances for credit losses $ 6 $ 0 $ 0 $ 0
Class A Ordinary Shares [Member]        
Ordinary shares, par value $ 0.0001 $ 0.0001    
Ordinary shares, authorized 1,927,488,240 1,927,488,240    
Ordinary shares, issued 770,352,700 770,352,700    
Ordinary shares, outstanding 770,352,700 770,352,700    
Class B Ordinary Shares [Member]        
Ordinary shares, par value $ 0.0001 $ 0.0001    
Ordinary shares, authorized 72,511,760 72,511,760    
Ordinary shares, issued 72,511,760 72,511,760    
Ordinary shares, outstanding 72,511,760 72,511,760    
v3.23.3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Operating revenues:    
Operating revenues $ 304,287 $ 7,311
Operating costs and expenses:    
General and administrative (79,904) (59,457)
Pre-opening costs (17,620) (1,731)
Amortization of land use right (2,474) (2,474)
Depreciation and amortization (116,189) (92,854)
Property charges and other (540) (3,790)
Total operating costs and expenses (346,666) (214,536)
Operating loss (42,379) (207,225)
Non-operating income (expenses):    
Interest income 8,173 4,187
Interest expenses, net of amounts capitalized (93,806) (70,430)
Other financing costs (311) (311)
Foreign exchange gains, net 2,521 6,402
Other expenses, net (61) 0
Gain on extinguishment of debt 80 0
Total non-operating expenses, net (83,404) (60,152)
Loss before income tax (125,783) (267,377)
Income tax benefit (expense) 77 (485)
Net loss (125,706) (267,862)
Net loss attributable to participation interest 10,813 26,817
Net loss attributable to Studio City International Holdings Limited (114,893) (241,045)
Casino Contract [Member]    
Operating revenues:    
Operating revenues 98,546 (44,171)
Operating costs and expenses:    
Cost of revenue (21,265) (21,864)
Rooms [Member]    
Operating revenues:    
Operating revenues 72,091 13,566
Operating costs and expenses:    
Cost of revenue (17,920) (8,476)
Food and Beverage [Member]    
Operating revenues:    
Operating revenues 42,611 12,855
Operating costs and expenses:    
Cost of revenue (37,089) (18,241)
Entertainment [Member]    
Operating revenues:    
Operating revenues 58,785 1,175
Operating costs and expenses:    
Cost of revenue (49,352) (1,704)
Services Fee [Member]    
Operating revenues:    
Operating revenues 22,569 16,215
Mall [Member]    
Operating revenues:    
Operating revenues 7,583 5,800
Operating costs and expenses:    
Cost of revenue (2,770) (3,041)
Retail and Other [Member]    
Operating revenues:    
Operating revenues 2,102 1,871
Operating costs and expenses:    
Cost of revenue $ (1,543) $ (904)
Class A Ordinary Shares [Member]    
Net loss attributable to Studio City International Holdings Limited per Class A ordinary share:    
Basic $ (0.149) $ (0.349)
Diluted $ (0.149) $ (0.351)
Weighted average Class A ordinary shares outstanding used in net loss attributable to Studio City International Holdings Limited per Class A ordinary share calculation:    
Basic 770,352,700 690,440,759
Diluted 770,352,700 762,952,519
v3.23.3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Operating revenues $ 304,287 $ 7,311
General and administrative 79,904 59,457
Pre-opening costs 17,620 1,731
Related Party [Member]    
General and administrative 38,480 34,019
Property charges and other 623 3,853
Pre-opening costs 7,426 1,147
Casino Contract [Member]    
Operating revenues 98,546 (44,171)
Cost of revenue 21,265 21,864
Casino Contract [Member] | Related Party [Member]    
Cost of revenue 19,973 21,090
Rooms [Member]    
Operating revenues 72,091 13,566
Cost of revenue 17,920 8,476
Rooms [Member] | Related Party [Member]    
Operating revenues 48,339 10,183
Cost of revenue 10,977 5,455
Food and Beverage [Member]    
Operating revenues 42,611 12,855
Cost of revenue 37,089 18,241
Food and Beverage [Member] | Related Party [Member]    
Operating revenues 26,879 9,196
Cost of revenue 17,525 11,575
Entertainment [Member]    
Operating revenues 58,785 1,175
Cost of revenue 49,352 1,704
Entertainment [Member] | Related Party [Member]    
Operating revenues 39,492 473
Cost of revenue 9,685 1,492
Mall [Member]    
Operating revenues 7,583 5,800
Cost of revenue 2,770 3,041
Mall [Member] | Related Party [Member]    
Cost of revenue 1,343 1,188
Retail and Other [Member]    
Operating revenues 2,102 1,871
Cost of revenue 1,543 904
Retail and Other [Member] | Related Party [Member]    
Cost of revenue $ 1,203 $ 777
v3.23.3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]    
Net loss $ (125,706) $ (267,862)
Other comprehensive loss:    
Foreign currency translation adjustments (10,191) (25,062)
Other comprehensive loss (10,191) (25,062)
Total comprehensive loss (135,897) (292,924)
Comprehensive loss attributable to participation interest 11,690 28,821
Comprehensive loss attributable to Studio City International Holdings Limited $ (124,207) $ (264,103)
v3.23.3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Thousands
Total
Common Stock [Member]
Class A Ordinary Shares [Member]
Common Stock [Member]
Class B Ordinary Shares [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Losses [Member]
Accumulated Losses [Member]
Participation Interest [Member]
BEGINNING BALANCE at Dec. 31, 2021 $ 944,183 $ 37 $ 7 $ 2,134,227 $ (6,136) $ (1,338,715) $ 154,763
BEGINNING BALANCE (in shares) at Dec. 31, 2021   370,352,700 72,511,760        
Net loss (267,862) $ 0 $ 0 0 0 (241,045) (26,817)
Foreign currency translation adjustments (25,062) 0 0 0 (23,058) 0 (2,004)
Shares issued, net of offering expenses 299,159 $ 40 $ 0 299,119 0 0 0
Shares issued, net of offering expenses, shares   400,000,000 0        
Change in Participation Interest resulting from 2022 Private Placements (as described in Note 11) 0 $ 0 $ 0 44,013 0 0 (44,013)
ENDING BALANCE at Sep. 30, 2022 950,418 $ 77 $ 7 2,477,359 (29,194) (1,579,760) 81,929
ENDING BALANCE (in shares) at Sep. 30, 2022   770,352,700 72,511,760        
BEGINNING BALANCE at Dec. 31, 2022 876,145 $ 77 $ 7 2,477,359 (11,671) (1,665,166) 75,539
BEGINNING BALANCE (in shares) at Dec. 31, 2022   770,352,700 72,511,760        
Net loss (125,706) $ 0 $ 0 0 0 (114,893) (10,813)
Foreign currency translation adjustments (10,191) 0 0 0 (9,314) 0 (877)
ENDING BALANCE at Sep. 30, 2023 $ 740,248 $ 77 $ 7 $ 2,477,359 $ (20,985) $ (1,780,059) $ 63,849
ENDING BALANCE (in shares) at Sep. 30, 2023   770,352,700 72,511,760        
v3.23.3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities:    
Net cash used in operating activities $ (84,452) $ (158,659)
Cash flows from investing activities:    
Acquisition of property and equipment (127,683) (359,036)
Funds to an affiliated company (1,838) (948)
Proceeds from sale of property and equipment 693 9
Net cash used in investing activities (128,828) (359,975)
Cash flows from financing activities:    
Repayments of long-term debt (1,912) 0
Payments of deferred financing costs 0 (6,050)
Net proceeds from issuance of shares 0 299,228
Proceeds from long-term debt 0 350,000
Net cash (used in) provided by financing activities (1,912) 643,178
Effect of exchange rate on cash, cash equivalents and restricted cash (1,381) (3,276)
(Decrease) increase in cash, cash equivalents and restricted cash (216,573) 121,268
Cash, cash equivalents and restricted cash at beginning of period 509,653 499,419
Cash, cash equivalents and restricted cash at end of period 293,080 620,687
Supplemental cash flow disclosures:    
Cash paid for interest, net of amounts capitalized (113,416) (87,890)
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from operating leases (673) (726)
Change in operating lease right-of-use assets and lease liabilities arising from lease modification (1,456) (1,343)
Change in accrued expenses and other current liabilities and other long-term liabilities related to acquisition of property and equipment 9,504 125,378
Change in receivables from/payables to affiliated companies related to acquisition of property and equipment and other long-term assets $ 1,990 $ 1,918
v3.23.3
ORGANIZATION AND BUSINESS
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BUSINESS
1.
ORGANIZATION AND BUSINESS
 
  (a)
Company Information
Studio City International Holdings Limited (“Studio City International”) is an exempted company with limited liability registered by way of continuation in the Cayman Islands, with its American depositary shares (“ADSs”) listed on the New York Stock Exchange under the symbol “MSC” in the United States of America (the “U.S.”).
Studio City International together with its subsidiaries (collectively referred to as the “Company”) currently operates
the non-gaming
operations of Studio City, a cinematically-themed integrated resort in Cotai, the Macau Special Administrative Region of the People’s Republic of China (“Macau”), and provides services pursuant to a casino contract to Melco Resorts (Macau) Limited (“Melco Resorts Macau”), a subsidiary of Melco Resorts & Entertainment Limited (“Melco”), which holds the gaming concession in Macau, for the operations of the gaming area at Studio City (“Studio City Casino”). Melco’s ADSs are listed on the Nasdaq Global Select Market in the U.S.
Studio City International authorized two classes of ordinary shares, the Class A ordinary shares and the Class B ordinary shares, in each case with a par value of $0.0001 each. The Class A ordinary share and Class B ordinary share have the same rights, except that holders of the Class B ordinary shares do not have any right to receive dividends or distributions upon the liquidation or winding up of Studio City International or to otherwise share in profits and surplus assets. MCO Cotai Investments Limited, a subsidiary of Melco, through its ownership of the Class A ordinary shares, is the controlling shareholder of Studio City International. New Cotai, LLC (“New Cotai”), a private company organized in the U.S., is the holder of all outstanding Class B ordinary shares which have only voting and no economic rights. New Cotai has a
non-voting,
non-shareholding
economic participation interest (“Participation Interest”) in MSC Cotai Limited (“MSC Cotai”), a subsidiary of Studio City International, which entitles New Cotai to receive from MSC Cotai an amount equal to a certain percentage of the amount of any distribution, dividend or other consideration paid by MSC Cotai to Studio City International, subject to adjustments, exceptions and conditions as set out in the participation agreement (the “Participation Agreement”) entered into by MSC Cotai, New Cotai and Studio City International in 2018 (the “MSC Cotai’s Distribution”). The Participation Agreement also 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 and a proportionate number of Class B ordinary shares will be deemed surrendered and automatically cancelled for no consideration as set out in the Participation Agreement when New Cotai exchanges all or a portion of the Participation Interest for Class A ordinary shares. As of September 30, 2023 and December 31, 2022, the Participation Interest entitled New Cotai to receive from MSC Cotai an amount equal to approximately 9.4% of the MSC Cotai’s
Distribution in each of those periods.
As of September 30, 2023 and December 31, 2022, Melco International Development Limited (“Melco International”), a company listed in the Hong Kong Special Administrative Region of the People’s Republic of China (“Hong Kong”), is the single largest shareholder of Melco.
 
  (b)
Recent Developments Related to Business Operations and
COVID-19
The construction of Studio City Phase 2 was completed before the extended deadline of June 30, 2023 for the development period under the Studio City land concession. The Studio City Phase 2 first stage was opened in April 2023 with the opening of the Epic Tower and the indoor waterpark, while the second stage was opened in September 2023 with the opening of the W Macau Hotel.
While the disruptions to the Company’s business caused by the
COVID-19
outbreak were eased significantly following the relaxation of
COVID-19
related restrictions and quarantine-free travel in Macau, the People’s Republic of China and Hong Kong since January 2023, the pace of recovery after
COVID-19
related disruptions remains highly uncertain. The Company is currently unable to reasonably estimate the financial impact to its future results of operations, cash flows and financial condition from these disruptions.
 
As of September 30, 2023, the Company has sufficient liquidity including cash and cash equivalents of $292,951 and available unused borrowing capacity under the 2016 SC Revolving Credit Facility of HK$233,000 (equivalent to $29,755), subject to the satisfaction of certain conditions precedent.
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Sep. 30, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  (a)
Basis of Presentation and Principles of Consolidation
On December 16, 2022, the Macau government awarded a ten-year concession to operate games of fortune and chance in casinos in Macau (the “Concession”) to Melco Resorts Macau. The term of the Concession commenced on January 1, 2023 and ends on December 31, 2032. Under the Concession, Melco Resorts Macau is authorized to operate the Studio City Casino.
Under the Studio City Casino Agreement as amended on June 23, 2022, Melco Resorts Macau agreed to operate the Studio City Casino since the Company does not hold a gaming concession in Macau, Melco Resorts Macau deducts gaming taxes and the costs incurred in connection with its operations from Studio City Casino’s gross gaming revenues. The residual gross gaming revenues which the Company receives as revenue is captioned as revenue from casino contract.
In December 2015, Studio City International and certain of its subsidiaries entered into a master services agreement; and certain of its subsidiaries entered into the related work agreements (collectively, the “Management and Shared Services Arrangements”) with certain of Melco’s subsidiaries with respect to services provided to and from Studio City, which expired in June 2022 and were extended to December 31, 2032 in March 2023.
Under the Management and Shared Services Arrangements, certain of the corporate and administrative functions as well as operational activities of the Company are administered by staff employed by certain Melco’s subsidiaries, including senior management services, centralized corporate functions and operational and venue support services. Payment arrangements for the services are provided for in the individual work agreements and may vary depending on the services provided. 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 the Company based on percentages of efforts on the services provided to the Company. Other costs in relation to shared office equipment are allocated based on a percentage of usage.
The Company believes the costs incurred under the Studio City Casino Agreement, captioned as costs related to casino contract, and the allocation methods under the Management and Shared Services Arrangements are reasonable and the accompanying condensed consolidated financial statements reflect the Company’s cost of doing business. However, such allocations may not be indicative of the actual expenses the Company would have incurred had it operated as an independent company for the periods presented. Details of the services and related charges are disclosed in Note 15.
The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles for interim financial reporting. The results of operations for the nine months ended September 30, 2023 and 2022 are not necessarily indicative of expected results for the full year. The financial information as of December 31, 2022 presented in these condensed consolidated financial statements is derived from the Company’s consolidated financial statements as of December 31, 2022.
The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial results of such periods.
 
The accompanying condensed consolidated financial statements include the accounts of Studio City International and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2022.
 
  (b)
Accounts Receivable and Credit Risk
Accounts receivable, including hotel and other receivables, are typically
non-interest
bearing and are recorded at amortized cost. Accounts are written off when management deems it is probable the receivables are uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for credit losses is maintained to reduce the Company’s receivables to their carrying amounts, which reflects the net amount the Company expects to collect. The allowance is estimated based on specific reviews of the age of the balances owed, the customers’ financial condition, management’s experience with the collection trends of the customers and management’s expectations of current and future economic conditions.
Management believes that as of September 30, 2023 and December 31, 2022, no significant concentrations of credit risk existed for which an allowance had not already been recorded.
 
  (c)
Impairment of Long-lived Assets
The Company evaluates the long-lived assets with finite lives to be held and used for impairment whenever indicators of impairment exist. The Company then compares the estimated future cash flows of the assets, on an undiscounted basis, to the carrying values of the assets. Estimating future cash flows of the assets involves significant assumptions, including future revenue growth rates and gross margins. If the undiscounted cash flows exceed the carrying values, no impairments are indicated. If the undiscounted cash flows do not exceed the carrying values, then an impairment charge is recorded based on the fair values of the assets, typically measured using a discounted cash flow model involving significant assumptions, such as discount rates. If an asset is still under development, future cash flows include remaining construction costs.
No impairment losses were recognized during the nine months ended September 30, 2023 and 2022.
 
  (d)
Revenue Recognition
The Company follows the accounting standards for reporting revenue gross as a principal versus net as an agent, when accounting for operations of one of its hotels and concluded that it is the controlling entity and is the principal to this arrangement. For the operations of one of its hotels, the Company is the owner of the hotel property, and the hotel manager operates the hotel under a management agreement providing management services to the Company, and the Company receives all rewards and takes substantial risks associated with the hotel’s business, it is principal and the transactions are, therefore, recognized on a gross basis.
Contract and Contract-Related Liabilities
In providing goods and services to customers, there may be a timing difference between cash receipts from customers and recognition of revenues, resulting in a contract or contract-related liability. The Company’s primary types of liabilities related to contracts with customers are advance deposits on rooms and advance ticket sales which represent cash received in advance for goods or services yet to be provided. These amounts are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets and will be recognized as revenues when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenues and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenues within one year. Advance customer deposits and ticket sales of $4,521 as of September 30, 2023 increased by $2,728 from the balance of $1,793 as of December 31, 2022. Advance customer deposits and ticket sales of $2,162 as of September 30, 2022 decreased by $97 from the balance of $2,259 as of December 31, 2021.
 
  (e)
Comprehensive Loss and Accumulated Other Comprehensive Losses
Comprehensive loss includes net loss and other
non-shareholder
changes in equity, or other comprehensive loss and is reported in the accompanying condensed consolidated statements of comprehensive loss.
As of September 30, 2023 and December 31, 2022, the Company’s accumulated other comprehensive losses consisted solely of foreign currency translation adjustments, net of tax and participation interest.
 
  (f)
Net Loss Attributable to Studio City International Holdings Limited Per Class
 A Ordinary Share
Basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited by the weighted average number of Class A ordinary shares outstanding during the period.
Diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited adjusted for participation interest by the weighted average number of Class A ordinary shares outstanding during the period adjusted to include the number of additional Class A ordinary shares that would have been outstanding if potential dilutive securities had been issued and the
if-converted
method is applied for the potential dilutive effect of the exchange of Class B ordinary shares for the proportionate number of Class A ordinary shares. During the nine months ended September 30, 2023, there were no potentially dilutive securities issued or outstanding.
Basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share does not include Class B ordinary shares as such shares do not participate in the loss of Studio City International. As a result, Class B ordinary shares are not considered participating securities and are not included in the weighted average number of shares outstanding for purposes of computing net loss attributable to Studio City International Holdings Limited per share.
The weighted average number of Class A ordinary shares used in the calculation of basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share consisted of the following:
 
     Nine Months Ended
September 30,		  
     2023      2022  
Weighted average number of Class A ordinary shares outstanding used in the calculation of basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        690,440,759  
Incremental weighted average number of Class A ordinary shares from assumed exchange of Class B ordinary shares to Class A ordinary shares under the
if-converted
method
      —          72,511,760  
    
 
 
     
 
 
  
Weighted average number of Class A ordinary shares outstanding used in the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        762,952,519  
    
 
 
     
 
 
  
Anti-dilutive Class A ordinary shares under the
if-converted
method excluded from the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      72,511,760        —    
    
 
 
     
 
 
  
 
  (g)
Recent Changes in Accounting Standards
Recent Accounting Pronouncement Not Yet Adopted
The Company has evaluated the recently issued, but not yet effective, accounting pronouncements that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these financial statements, and anticipated the future adoption of these pronouncements will not have a material effect on the Company’s financial position, results of operations and cash flows.
v3.23.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
 9 Months Ended
Sep. 30, 2023
Cash and Cash Equivalents [Abstract]  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
3.
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows consisted of the following:
 
     September 30,
2023		      December 31,
2022		  
Cash
    $ 43,056      $ 54,340  
Cash equivalents
      249,895        455,183  
    
 
 
     
 
 
  
Total cash and cash equivalents
      292,951        509,523  
Non-current
portion of restricted cash
      129        130  
    
 
 
     
 
 
  
Total cash, cash equivalents and restricted cash
    $ 293,080      $ 509,653  
    
 
 
     
 
 
  
v3.23.3
ACCOUNTS RECEIVABLE, NET
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
ACCOUNTS RECEIVABLE, NET
4.
ACCOUNTS RECEIVABLE, NET
Components of accounts receivable, net are as follows:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Hotel
    $ 885      $ 250  
Other
      221        13  
    
 
 
     
 
 
  
Sub-total
      1,106        263  
Less: allowances for credit losses
      (6 )       —    
    
 
 
     
 
 
  
     $ 1,100      $ 263  
    
 
 
     
 
 
  
The Company’s allowances for credit losses as of September 30, 2023 were from its hotel receivables.
Movement in the allowances for credit losses are as follows:
 

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Balance at beginning of year
    $ —      $ —  
Provision for credit losses
      6        —  
    
 
 
     
 
 
  
Balance at end of period
    $
 
 
 
 
 
 
 
 
 
 
 
 6      $
 
 
 
 
 
 
 
 
 —  
    
 
 
     
 
 
  
v3.23.3
PROPERTY AND EQUIPMENT, NET
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET
5.
PROPERTY AND EQUIPMENT, NET
 
     September 30,
2023		      December 31,
2022		  
Cost
    $ 3,807,797      $ 3,780,769  
Less: accumulated depreciation and amortization
      (1,005,516 )       (912,705 ) 
    
 
 
     
 
 
  
Property and equipment, net
    $ 2,802,281      $ 2,868,064  
    
 
 
     
 
 
  
As of September 30, 2023 and December 31, 2022, the amount of property and equipment, net included balances of construction in progress, included interest capitalized in accordance with applicable accounting standards and other direct incidental costs capitalized mainly for the Studio City Phase 2 project of $4,966 and $1,079,112, respectively. Upon the opening of Studio City Phase 2 first stage in April 2023 and second stage in September 2023, its associated construction in progress balances were placed into service in the respective period.
The depreciation and amortization expenses of property and equipment recognized for the nine months ended September 30, 2023 and 2022 were $
110,728
and $
84,520
,
respectively
.

Under the terms of the Macau gaming law and the Concession, the gaming and gaming support areas comprising the Studio City Casino with an area of 28,784.3 square meters with its land lease right held by Studio City Developments, and related gaming equipment and utensils (collectively as referred to the “Reversion Assets”), which were reverted to the Macau government without compensation and free and clear from any charges or encumbrances on December 31, 2022 at the expiration of the previous subconcession, effective as of January 1, 2023, have been transferred by the Macau government to Melco Resorts Macau for the duration of the Concession, in return for annual payments for the right to use and operate the Reversion Assets. The Reversion Assets are owned by the Macau government and Melco Resorts Macau pays an annual fee of MOP0.75 per square meter of the casino for years 1 to 3 of the Concession, subject to a consumer price index increase in years 2 and 3 of the Concession. The fee will increase to MOP2.5 per square meter of the casino for years 4 to 10 of the Concession, subject to a consumer price index increase in years 5 to 10 of the Concession.
As Studio City Casino continues to be operated at and with the Reversion Assets in the same manner as under the previous subconcession, obtains substantially all of the economic benefits and bears all of the risks arising from the operation of these assets, as well as assuming Melco Resorts Macau will be successful in the awarding of a new concession upon expiry of the Concession, Melco Resorts Macau and Studio City Developments continues to recognize these Reversion Assets as property and equipment over their remaining estimated useful lives.
v3.23.3
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS
 9 Months Ended
Sep. 30, 2023
Long Term Prepayments Deposits And Other Assets [Abstract]  
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS
6.
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS
Long-term prepayments, deposits and other assets consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Other long-term assets
    $ 18,399      $ 16,824  
Less: accumulated amortization
      (8,728 )       (4,309 ) 
    
 
 
     
 
 
  
Other long-term assets, net
      9,671        12,515  
Long-term prepayments
      6,332        29,250  
Advance payments and deposits for acquisition of property and equipment
      1,002        1,645  
Other deposits and other
      4,917        4,582  
Deferred financing costs, net
      292        333  
    
 
 
     
 
 
  
Long-term prepayments, deposits and other assets
    $ 22,214      $ 48,325  
    
 
 
     
 
 
  
The amortization expenses of other long-term assets recognized for the
nine
months ended September 30, 2023 and 2022 were $4,439 and $7,288, respectively.
v3.23.3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 9 Months Ended
Sep. 30, 2023
Payables and Accruals [Abstract]  
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
7.
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 
     September 30,
2023		      December 31,
2022		  
Property and equipment payables
    $ 52,459      $ 87,701  
Interest expenses payable
      27,832        63,371  
Operating expense and other accruals and liabilities
      21,348        11,728  
Advance customer deposits and ticket sales
      4,521        1,793  
Operating lease liabilities
      1,067        1,095  
    
 
 
     
 
 
  
     $ 107,227      $ 165,688  
    
 
 
     
 
 
  
v3.23.3
LONG-TERM DEBT, NET
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
LONG-TERM DEBT, NET
8.
LONG-TERM DEBT, NET
Long-term debt, net consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Senior Notes
                  
2022 7.000% Studio City Secured Notes, due 2027 (net of unamortized deferred financing costs of $4,321 and $5,134, respectively)
    $ 345,679      $ 344,866  
2021 5.000% Studio City Notes, due 2029 (net of unamortized deferred financing costs and original issue premiums of $3,779 and $4,228, respectively)
      1,096,221        1,095,772  
2020 6.000% SC Notes, due 2025 (net of unamortized deferred financing costs of $1,937 and $2,692, respectively)
      496,063        497,308  
2020 6.500% SC Notes, due 2028 (net of unamortized deferred financing costs of $3,110 and $3,598, respectively)
      496,890        496,402  
Credit Facilities
                  
2016 Studio City Credit Facilities
(1)
      128        128  
    
 
 
     
 
 
  
     $ 2,434,981      $ 2,434,476  
    
 
 
     
 
 
  
Note
 
 
(1)
As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs related to the 2016 SC Revolving Credit Facility of the 2016 Studio City Credit Facilities of $
292
and $
333
are included in long-term prepayments, deposits and other assets in the accompanying condensed consolidated balance sheets, respectively.
During the nine months ended September 30, 2023, there was no significant change to the long-term debt as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
v3.23.3
LEASES
 9 Months Ended
Sep. 30, 2023
Leases [Abstract]  
LEASES
9.
LEASES
Lessor Arrangements
During the nine months ended September 30, 2023 and 2022, the Company earned minimum operating lease income of $2,962 and $3,303, respectively, and contingent operating lease income of $2,296 and $260, respectively.
v3.23.3
FAIR VALUE MEASUREMENTS
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
10.
FAIR VALUE MEASUREMENTS
The carrying values of cash equivalents, long-term deposits and other long-term liabilities approximated fair value and were classified as level 2 in the fair value hierarchy.
The estimated fair values of long-term debt as of September 30, 2023 and December 31, 2022, were approximately $2,047,603 and $1,959,195, respectively, as compared to their carrying values, excluding unamortized deferred financing costs and original issue premiums, of $2,448,128 and $2,450,128, respectively. Fair values were estimated using quoted market prices and were classified as level 1 in the fair value hierarchy for the 2022 7.000% Studio City Secured Notes, 2021 5.000% Studio City Notes and the 2020 Studio City Notes. Fair value for the 2016 Studio City Credit Facilities approximated its carrying value as the instrument carried variable interest rates that approximated the market rates and was classified as level 2 in the fair value hierarchy.
As of September 30, 2023 and December 31, 2022, the Company did not have any
non-financial
assets or liabilities that were recognized or disclosed at fair value in the accompanying condensed consolidated financial statements.
v3.23.3
CAPITAL STRUCTURE
 9 Months Ended
Sep. 30, 2023
Text Block [Abstract]  
CAPITAL STRUCTURE
11.
CAPITAL STRUCTURE
During February and March 2022, Studio City International, respectively, announced and completed a series of private offers (the “2022 Private Placements”) of 400,000,000 Class A ordinary shares to certain existing shareholders and holders of its ADSs, including Melco, with gross proceeds amounting to $300,000 and offering expenses of $841. The 2022 Private Placements resulted in an adjustment to the carrying amount of the Participation Interest with a corresponding increase in the Company’s additional
paid-in
capital.
As of September 30, 2023 and December 31, 2022, Studio City International’s authorized share capital was 1,927,488,240 Class A ordinary shares and 72,511,760 Class B ordinary shares of a par value of $0.0001 each. As of September 30, 2023 and December 31, 2022, 770,352,700 Class A ordinary shares and 72,511,760 Class B ordinary shares were issued and outstanding
 in each of those periods
.
v3.23.3
INCOME TAXES
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
12.
INCOME TAXES
The income tax (benefit) expense consisted of:

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Over provision of income taxes in prior years:
                  
Hong Kong Profits Tax
    $ (14 )     $
 
 
 
 
 
 
 
 
 
 
 —    
    
 
 
     
 
 
  
Income tax (benefit) expense - deferred:
                  
Macau Complementary Tax
      (63 )       485  
    
 
 
     
 
 
  
Total income tax (benefit) expense
    $
 
 
 
 
 
 
 
 
 
 
 
 (77 )     $
 
 
 485  
    
 
 
     
 
 
  
 
 
 
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. The
non-gaming
profits and dividend distributions of Studio City Entertainment to its shareholders continue to be subject to Macau Complementary Tax.
The effective tax rates for the nine months ended September 30, 2023 and 2022 were 0.1% and (0.2)%, respectively. Such rates differ from the statutory Macau Complementary Tax rate of 12%, where the majority of the Company’s operations are located, primarily due to the effects of expenses for which no income tax benefit is receivable, 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 periods together with the effect of profits expected to be exempted from Macau Complementary Tax for the nine months ended September 30, 2023.
As of September 30, 2023 and December 31, 2022, valuation allowances of $90,813 and $91,092 were provided, respectively, as management believes it is more likely than not that these deferred tax assets will not be realized.
As of September 30, 2023, other than the above, there was no significant change to the tax exposures as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
v3.23.3
DISTRIBUTION OF PROFITS
 9 Months Ended
Sep. 30, 2023
Text Block [Abstract]  
DISTRIBUTION OF PROFITS
13.
DISTRIBUTION OF PROFITS
During the nine months ended September 30, 2023 and 2022, Studio City International did not declare or pay any cash dividends on the ordinary shares. No dividends have been proposed since the end of the reporting period.
v3.23.3
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES
14.
COMMITMENTS AND CONTINGENCIES
 
  (a)
Capital Commitments
As of September 30, 2023, the Company had capital commitments contracted for but not incurred for the construction and acquisition of property and equipment for Studio City totaling $14,673.
 
  (b)
Guarantee
As of September 30, 2023, except the maturity date of the Trade Credit Facility which was further extended from August 31, 2023 to August 31, 2025, there was no significant change to the guarantee as disclosed in the Company’s consolidated financial statements as of December 31, 2022.
 
  (c)
Litigation
As of September 30, 2023, the Company was a party to certain legal proceedings which relate to matters arising out of the ordinary course of its business. Management believes that the outcomes of such proceedings have been adequately provided for or have no material impacts on the Company’s condensed consolidated financial statements as a whole.
v3.23.3
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
15.
RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 2023 and 2022, the Company entered into the following significant related party transactions:
 
          Nine Months Ended
September 30,		  
Related companies
   
Nature of transactions
    2023      2022  
       
Transactions with affiliated companies
                       
Melco and its subsidiaries
   
Revenues (services provided by the Company):
                  
    
Revenue from casino contract
    $ 98,546      $ (44,171 ) 
    
Rooms and food and beverage
(1)
      75,218        19,379  
    
Services fee
(2)
      22,569        16,215  
    
Entertainment
(1)
      39,492        473  
    
Costs and expenses (services provided to the Company):
                  
    
Staff costs recharges
(3)
      64,661        42,928  
    
Corporate services
(4)
      25,701        24,583  
    
Other services
      16,415        12,977  
    
Staff costs for construction and renovation work capitalized
      3,585        8,993  
    
Purchase of goods and services
      458        108  
    
Sale and purchase of assets:
                  
    
Sale of property and equipment and other long-term assets
      756        6  
    
Purchase of property and equipment
      8        184  
    
Transfer-in
of other long-term assets
      1,636        749  
Notes
 
 
(1)
These revenues primarily represented the standalone selling prices of the complimentary services (including rooms, food and beverage and entertainment services) provided to Studio City Casino’s gaming patrons and charged to Melco Resorts Macau. For the nine months ended September 30, 2023 and 2022, the related party rooms and food and beverage revenues and entertainment revenues aggregated to $
114,710
and $
19,852
, respectively, of which $
80,473
and $
17,708
related to Studio City Casino’s gaming patrons and $
34,237
and $
2,144
related to
non-Studio
City Casino’s gaming patrons, respectively.
 
(2)
Services provided by the Company to Melco and its subsidiaries mainly include, but are not limited to, certain shared administrative services and shuttle bus transportation services provided to Studio City Casino.
 
(3)
Staff costs are recharged by Melco and its subsidiaries for staff who are solely dedicated to Studio City to carry out activities, including food and beverage management, retail management, hotel management, entertainment projects, mall development and sales and marketing activities and staff costs for certain shared administrative services.
 
(4)
Corporate services are provided to the Company by Melco and its subsidiaries. These services include, but are not limited to, general corporate services and senior executive management services for operational purposes.
 
 
Other Related Party Transactions
As of September 30, 2023 and December 31, 2022, Mr. Lawrence Yau Lung Ho, Studio City International’s director, and his controlled entity held an aggregate principal amount of $60,000
of senior notes issued by Studio City Finance in each of those periods. As of September 30, 2023 and December 31, 2022, an independent director of Studio City International held an aggregate principal amount of $
400 of senior notes issued by Studio
City Company in each of those periods
.
During the nine months ended September 30, 2023 and 2022, total interest expenses of $2,475 and $2,475 in relation to the senior notes issued by Studio City Finance, were paid or payable to Mr. Lawrence Yau Lung Ho and his controlled entity, respectively. During the nine months ended September 30, 2023 and 2022, total interest expenses of $21 and $7 in relation to the senior notes issued by Studio City Company, were paid or payable to the independent director of Studio City International, respectively.
 
  (a)
Receivables from Affiliated Companies
The outstanding balances as of September 30, 2023 and December 31, 2022 are receivables from Melco’s subsidiaries mainly arising from operating income or prepayment of operating expenses, and are unsecured,
non-interest
bearing and repayable on demand.
 
  (b)
Payables to Affiliated Companies
The outstanding balances as of September 30, 2023 and December 31, 2022 are payables to Melco International’s subsidiaries mainly arising from operating expenses, and are unsecured,
non-interest
bearing and repayable on demand.
v3.23.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION
16.
SEGMENT INFORMATION
The Company’s principal operating activities are engaged in the hospitality business and provision of services pursuant to a casino contract in Macau. The Company monitors its operations and evaluates its earnings by reviewing the assets and operations of Studio City as one operating segment. Accordingly, the Company does not present separate segment information. As of September 30, 2023 and December 31, 2022, the Company operated in one geographical area, Macau, where it derives its revenues and its long-lived assets are located.
v3.23.3
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
17.
SUBSEQUENT EVENTS
On November 9, 2023, Studio City Finance announced a cash tender offer (the “Tender Offer”) for up to an aggregate principal amount of $75,000 of the 2020 6.000% SC Notes. The Tender Offer will expire on December 8, 2023, unless extended or terminated by Studio City Finance. As of November 22, 2023, the early tender date, an aggregate principal
amount of $317,461 of the 2020 6.000% SC Notes was tendered. On November 24, 2023, Studio City Finance announced that it would amend the Tender Offer to increase the aggregate principal amount of the 2020 6.000% SC Notes to $100,000. Studio City Finance accepted for purchase the 2020 6.000% SC Notes that were validly tendered (and not validly withdrawn) pursuant to the Tender Offer for a combined aggregate principal amount equal to $100,000. Settlement of such purchase took place on November 28, 2023. 
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2023
Basis of Presentation
  (a)
Basis of Presentation and Principles of Consolidation
On December 16, 2022, the Macau government awarded a ten-year concession to operate games of fortune and chance in casinos in Macau (the “Concession”) to Melco Resorts Macau. The term of the Concession commenced on January 1, 2023 and ends on December 31, 2032. Under the Concession, Melco Resorts Macau is authorized to operate the Studio City Casino.
Under the Studio City Casino Agreement as amended on June 23, 2022, Melco Resorts Macau agreed to operate the Studio City Casino since the Company does not hold a gaming concession in Macau, Melco Resorts Macau deducts gaming taxes and the costs incurred in connection with its operations from Studio City Casino’s gross gaming revenues. The residual gross gaming revenues which the Company receives as revenue is captioned as revenue from casino contract.
In December 2015, Studio City International and certain of its subsidiaries entered into a master services agreement; and certain of its subsidiaries entered into the related work agreements (collectively, the “Management and Shared Services Arrangements”) with certain of Melco’s subsidiaries with respect to services provided to and from Studio City, which expired in June 2022 and were extended to December 31, 2032 in March 2023.
Under the Management and Shared Services Arrangements, certain of the corporate and administrative functions as well as operational activities of the Company are administered by staff employed by certain Melco’s subsidiaries, including senior management services, centralized corporate functions and operational and venue support services. Payment arrangements for the services are provided for in the individual work agreements and may vary depending on the services provided. 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 the Company based on percentages of efforts on the services provided to the Company. Other costs in relation to shared office equipment are allocated based on a percentage of usage.
The Company believes the costs incurred under the Studio City Casino Agreement, captioned as costs related to casino contract, and the allocation methods under the Management and Shared Services Arrangements are reasonable and the accompanying condensed consolidated financial statements reflect the Company’s cost of doing business. However, such allocations may not be indicative of the actual expenses the Company would have incurred had it operated as an independent company for the periods presented. Details of the services and related charges are disclosed in Note 15.
The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles for interim financial reporting. The results of operations for the nine months ended September 30, 2023 and 2022 are not necessarily indicative of expected results for the full year. The financial information as of December 31, 2022 presented in these condensed consolidated financial statements is derived from the Company’s consolidated financial statements as of December 31, 2022.
The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial results of such periods.
 
The accompanying condensed consolidated financial statements include the accounts of Studio City International and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2022.
Principles of Consolidation
The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2022.
Accounts Receivable and Credit Risk
  (b)
Accounts Receivable and Credit Risk
Accounts receivable, including hotel and other receivables, are typically
non-interest
bearing and are recorded at amortized cost. Accounts are written off when management deems it is probable the receivables are uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for credit losses is maintained to reduce the Company’s receivables to their carrying amounts, which reflects the net amount the Company expects to collect. The allowance is estimated based on specific reviews of the age of the balances owed, the customers’ financial condition, management’s experience with the collection trends of the customers and management’s expectations of current and future economic conditions.
Management believes that as of September 30, 2023 and December 31, 2022, no significant concentrations of credit risk existed for which an allowance had not already been recorded.
Impairment of Long-lived Assets
  (c)
Impairment of Long-lived Assets
The Company evaluates the long-lived assets with finite lives to be held and used for impairment whenever indicators of impairment exist. The Company then compares the estimated future cash flows of the assets, on an undiscounted basis, to the carrying values of the assets. Estimating future cash flows of the assets involves significant assumptions, including future revenue growth rates and gross margins. If the undiscounted cash flows exceed the carrying values, no impairments are indicated. If the undiscounted cash flows do not exceed the carrying values, then an impairment charge is recorded based on the fair values of the assets, typically measured using a discounted cash flow model involving significant assumptions, such as discount rates. If an asset is still under development, future cash flows include remaining construction costs.
No impairment losses were recognized during the nine months ended September 30, 2023 and 2022.
Revenue Recognition
  (d)
Revenue Recognition
The Company follows the accounting standards for reporting revenue gross as a principal versus net as an agent, when accounting for operations of one of its hotels and concluded that it is the controlling entity and is the principal to this arrangement. For the operations of one of its hotels, the Company is the owner of the hotel property, and the hotel manager operates the hotel under a management agreement providing management services to the Company, and the Company receives all rewards and takes substantial risks associated with the hotel’s business, it is principal and the transactions are, therefore, recognized on a gross basis.
Contract and Contract-Related Liabilities
In providing goods and services to customers, there may be a timing difference between cash receipts from customers and recognition of revenues, resulting in a contract or contract-related liability. The Company’s primary types of liabilities related to contracts with customers are advance deposits on rooms and advance ticket sales which represent cash received in advance for goods or services yet to be provided. These amounts are included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets and will be recognized as revenues when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenues and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenues within one year. Advance customer deposits and ticket sales of $4,521 as of September 30, 2023 increased by $2,728 from the balance of $1,793 as of December 31, 2022. Advance customer deposits and ticket sales of $2,162 as of September 30, 2022 decreased by $97 from the balance of $2,259 as of December 31, 2021.
Comprehensive Loss and Accumulated Other Comprehensive Losses
  (e)
Comprehensive Loss and Accumulated Other Comprehensive Losses
Comprehensive loss includes net loss and other
non-shareholder
changes in equity, or other comprehensive loss and is reported in the accompanying condensed consolidated statements of comprehensive loss.
As of September 30, 2023 and December 31, 2022, the Company’s accumulated other comprehensive losses consisted solely of foreign currency translation adjustments, net of tax and participation interest.
Net Loss Attributable to Studio City International Holdings Limited Per Class A Ordinary Share
  (f)
Net Loss Attributable to Studio City International Holdings Limited Per Class
 A Ordinary Share
Basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited by the weighted average number of Class A ordinary shares outstanding during the period.
Diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share is calculated by dividing the net loss attributable to Studio City International Holdings Limited adjusted for participation interest by the weighted average number of Class A ordinary shares outstanding during the period adjusted to include the number of additional Class A ordinary shares that would have been outstanding if potential dilutive securities had been issued and the
if-converted
method is applied for the potential dilutive effect of the exchange of Class B ordinary shares for the proportionate number of Class A ordinary shares. During the nine months ended September 30, 2023, there were no potentially dilutive securities issued or outstanding.
Basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share does not include Class B ordinary shares as such shares do not participate in the loss of Studio City International. As a result, Class B ordinary shares are not considered participating securities and are not included in the weighted average number of shares outstanding for purposes of computing net loss attributable to Studio City International Holdings Limited per share.
The weighted average number of Class A ordinary shares used in the calculation of basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share consisted of the following:
 
     Nine Months Ended
September 30,		  
     2023      2022  
Weighted average number of Class A ordinary shares outstanding used in the calculation of basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        690,440,759  
Incremental weighted average number of Class A ordinary shares from assumed exchange of Class B ordinary shares to Class A ordinary shares under the
if-converted
method
      —          72,511,760  
    
 
 
     
 
 
  
Weighted average number of Class A ordinary shares outstanding used in the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        762,952,519  
    
 
 
     
 
 
  
Anti-dilutive Class A ordinary shares under the
if-converted
method excluded from the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      72,511,760        —    
    
 
 
     
 
 
  
Recent Changes in Accounting Standards
  (g)
Recent Changes in Accounting Standards
Recent Accounting Pronouncement Not Yet Adopted
The Company has evaluated the recently issued, but not yet effective, accounting pronouncements that have been issued or proposed by the Financial Accounting Standards Board or other standards-setting bodies through the filing date of these financial statements, and anticipated the future adoption of these pronouncements will not have a material effect on the Company’s financial position, results of operations and cash flows.
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Summary of Weighted Average Number of Class A Ordinary Shares Used in the Calculation of Basic and Diluted Net Loss
The weighted average number of Class A ordinary shares used in the calculation of basic and diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share consisted of the following:
 
     Nine Months Ended
September 30,		  
     2023      2022  
Weighted average number of Class A ordinary shares outstanding used in the calculation of basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        690,440,759  
Incremental weighted average number of Class A ordinary shares from assumed exchange of Class B ordinary shares to Class A ordinary shares under the
if-converted
method
      —          72,511,760  
    
 
 
     
 
 
  
Weighted average number of Class A ordinary shares outstanding used in the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      770,352,700        762,952,519  
    
 
 
     
 
 
  
Anti-dilutive Class A ordinary shares under the
if-converted
method excluded from the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share
      72,511,760        —    
    
 
 
     
 
 
  
v3.23.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables)
 9 Months Ended
Sep. 30, 2023
Cash and Cash Equivalents [Abstract]  
Schedule of Cash Cash Equivalents And Restricted Cash
Cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated statements of cash flows consisted of the following:
 
     September 30,
2023		      December 31,
2022		  
Cash
    $ 43,056      $ 54,340  
Cash equivalents
      249,895        455,183  
    
 
 
     
 
 
  
Total cash and cash equivalents
      292,951        509,523  
Non-current
portion of restricted cash
      129        130  
    
 
 
     
 
 
  
Total cash, cash equivalents and restricted cash
    $ 293,080      $ 509,653  
    
 
 
     
 
 
  
v3.23.3
ACCOUNTS RECEIVABLE, NET (Tables)
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Components of Accounts Receivable, Net
Components of accounts receivable, net are as follows:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Hotel
    $ 885      $ 250  
Other
      221        13  
    
 
 
     
 
 
  
Sub-total
      1,106        263  
Less: allowances for credit losses
      (6 )       —    
    
 
 
     
 
 
  
     $ 1,100      $ 263  
    
 
 
     
 
 
  
Movement in Allowances for Credit Losses
Movement in the allowances for credit losses are as follows:
 

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Balance at beginning of year
    $ —      $ —  
Provision for credit losses
      6        —  
    
 
 
     
 
 
  
Balance at end of period
    $
 
 
 
 
 
 
 
 
 
 
 
 6      $
 
 
 
 
 
 
 
 
 —  
    
 
 
     
 
 
  
v3.23.3
PROPERTY AND EQUIPMENT, NET (Tables)
 9 Months Ended
Sep. 30, 2023
Property, Plant and Equipment [Abstract]  
Components of Property and Equipment, Net
     September 30,
2023		      December 31,
2022		  
Cost
    $ 3,807,797      $ 3,780,769  
Less: accumulated depreciation and amortization
      (1,005,516 )       (912,705 ) 
    
 
 
     
 
 
  
Property and equipment, net
    $ 2,802,281      $ 2,868,064  
    
 
 
     
 
 
  
v3.23.3
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS (Tables)
 9 Months Ended
Sep. 30, 2023
Long Term Prepayments Deposits And Other Assets [Abstract]  
Summary Of Long-term prepayments, deposits and other assets
Long-term prepayments, deposits and other assets consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Other long-term assets
    $ 18,399      $ 16,824  
Less: accumulated amortization
      (8,728 )       (4,309 ) 
    
 
 
     
 
 
  
Other long-term assets, net
      9,671        12,515  
Long-term prepayments
      6,332        29,250  
Advance payments and deposits for acquisition of property and equipment
      1,002        1,645  
Other deposits and other
      4,917        4,582  
Deferred financing costs, net
      292        333  
    
 
 
     
 
 
  
Long-term prepayments, deposits and other assets
    $ 22,214      $ 48,325  
    
 
 
     
 
 
  
v3.23.3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)
 9 Months Ended
Sep. 30, 2023
Payables and Accruals [Abstract]  
Schedule of Accrued Expenses and Other Current Liabilities
     September 30,
2023		      December 31,
2022		  
Property and equipment payables
    $ 52,459      $ 87,701  
Interest expenses payable
      27,832        63,371  
Operating expense and other accruals and liabilities
      21,348        11,728  
Advance customer deposits and ticket sales
      4,521        1,793  
Operating lease liabilities
      1,067        1,095  
    
 
 
     
 
 
  
     $ 107,227      $ 165,688  
    
 
 
     
 
 
  
v3.23.3
LONG-TERM DEBT, NET (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Summary of Long-term Debt, Net
Long-term debt, net consisted of the following:
 
 
  
September 30,
2023
 
  
December 31,
2022
 
Senior Notes
                  
2022 7.000% Studio City Secured Notes, due 2027 (net of unamortized deferred financing costs of $4,321 and $5,134, respectively)
    $ 345,679      $ 344,866  
2021 5.000% Studio City Notes, due 2029 (net of unamortized deferred financing costs and original issue premiums of $3,779 and $4,228, respectively)
      1,096,221        1,095,772  
2020 6.000% SC Notes, due 2025 (net of unamortized deferred financing costs of $1,937 and $2,692, respectively)
      496,063        497,308  
2020 6.500% SC Notes, due 2028 (net of unamortized deferred financing costs of $3,110 and $3,598, respectively)
      496,890        496,402  
Credit Facilities
                  
2016 Studio City Credit Facilities
(1)
      128        128  
    
 
 
     
 
 
  
     $ 2,434,981      $ 2,434,476  
    
 
 
     
 
 
  
Note
 
 
(1)
As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs related to the 2016 SC Revolving Credit Facility of the 2016 Studio City Credit Facilities of $
292
and $
333
are included in long-term prepayments, deposits and other assets in the accompanying condensed consolidated balance sheets, respectively.
v3.23.3
INCOME TAXES (Tables)
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Summary of Income Tax Expense (Benefit)
The income tax (benefit) expense consisted of:

 
  
Nine Months Ended
September 30,
 
 
  
2023
 
  
2022
 
Over provision of income taxes in prior years:
                  
Hong Kong Profits Tax
    $ (14 )     $
 
 
 
 
 
 
 
 
 
 
 —    
    
 
 
     
 
 
  
Income tax (benefit) expense - deferred:
                  
Macau Complementary Tax
      (63 )       485  
    
 
 
     
 
 
  
Total income tax (benefit) expense
    $
 
 
 
 
 
 
 
 
 
 
 
 (77 )     $
 
 
 485  
    
 
 
     
 
 
  
v3.23.3
RELATED PARTY TRANSACTIONS (Tables)
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
Schedule of Significant Related Party Transactions
During the nine months ended September 30, 2023 and 2022, the Company entered into the following significant related party transactions:
 
          Nine Months Ended
September 30,		  
Related companies
   
Nature of transactions
    2023      2022  
       
Transactions with affiliated companies
                       
Melco and its subsidiaries
   
Revenues (services provided by the Company):
                  
    
Revenue from casino contract
    $ 98,546      $ (44,171 ) 
    
Rooms and food and beverage
(1)
      75,218        19,379  
    
Services fee
(2)
      22,569        16,215  
    
Entertainment
(1)
      39,492        473  
    
Costs and expenses (services provided to the Company):
                  
    
Staff costs recharges
(3)
      64,661        42,928  
    
Corporate services
(4)
      25,701        24,583  
    
Other services
      16,415        12,977  
    
Staff costs for construction and renovation work capitalized
      3,585        8,993  
    
Purchase of goods and services
      458        108  
    
Sale and purchase of assets:
                  
    
Sale of property and equipment and other long-term assets
      756        6  
    
Purchase of property and equipment
      8        184  
    
Transfer-in
of other long-term assets
      1,636        749  
Notes
 
 
(1)
These revenues primarily represented the standalone selling prices of the complimentary services (including rooms, food and beverage and entertainment services) provided to Studio City Casino’s gaming patrons and charged to Melco Resorts Macau. For the nine months ended September 30, 2023 and 2022, the related party rooms and food and beverage revenues and entertainment revenues aggregated to $
114,710
and $
19,852
, respectively, of which $
80,473
and $
17,708
related to Studio City Casino’s gaming patrons and $
34,237
and $
2,144
related to
non-Studio
City Casino’s gaming patrons, respectively.
 
(2)
Services provided by the Company to Melco and its subsidiaries mainly include, but are not limited to, certain shared administrative services and shuttle bus transportation services provided to Studio City Casino.
 
(3)
Staff costs are recharged by Melco and its subsidiaries for staff who are solely dedicated to Studio City to carry out activities, including food and beverage management, retail management, hotel management, entertainment projects, mall development and sales and marketing activities and staff costs for certain shared administrative services.
 
(4)
Corporate services are provided to the Company by Melco and its subsidiaries. These services include, but are not limited to, general corporate services and senior executive management services for operational purposes.
v3.23.3
ORGANIZATION AND BUSINESS - Additional Information (Detail)
$ / shares in Units, $ in Thousands, $ in Thousands
Sep. 30, 2023
USD ($)
$ / shares
Sep. 30, 2023
HKD ($)
Dec. 31, 2022
USD ($)
$ / shares
Organization and Business [Line Items]      
Cash and cash equivalents | $ $ 292,951   $ 509,523
2016 Studio City Credit Facilities [Member] | Revolving Credit Facility [Member]      
Organization and Business [Line Items]      
Remaining Borrowing Capacity $ 29,755 $ 233,000  
New Cotai, LLC [Member]      
Organization and Business [Line Items]      
Common stock dividend percentage 9.40% 9.40% 9.40%
Class A Ordinary Shares [Member]      
Organization and Business [Line Items]      
Ordinary shares, par value $ 0.0001   $ 0.0001
Class B Ordinary Shares [Member]      
Organization and Business [Line Items]      
Ordinary shares, par value $ 0.0001   $ 0.0001
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Weighted Average Number of Class A Ordinary Shares Used in the Calculation of Basic and Diluted Net Loss (Detail) - Common Class A [Member] - shares
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Schedule Of Significant Accounting Policies [Line Items]    
Weighted average number of Class A ordinary shares outstanding used in the calculation of basic net loss attributable to Studio City International Holdings Limited per Class A ordinary share 770,352,700 690,440,759
Incremental weighted average number of Class A ordinary shares from assumed exchange of Class B ordinary shares to Class A ordinary shares under the if-converted method 0 72,511,760
Weighted average number of Class A ordinary shares outstanding used in the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share 770,352,700 762,952,519
Anti-dilutive Class A ordinary shares under the if-converted method excluded from the calculation of diluted net loss attributable to Studio City International Holdings Limited per Class A ordinary share 72,511,760 0
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Dec. 31, 2021
Schedule Of Significant Accounting Policies [Line Items]        
Impairment losses recognized on property and equipment $ 0 $ 0    
Maximum deposits recognizing period 1 year      
Advance Customer Deposits and Ticket Sales [Member]        
Schedule Of Significant Accounting Policies [Line Items]        
Advance customer deposits and ticket sales $ 4,521 2,162 $ 1,793 $ 2,259
Increase (decrease) in advance customer deposits and ticket sales $ 2,728 $ (97)    
v3.23.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Schedule of Cash Cash Equivalents And Restricted Cash (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Cash and Cash Equivalents [Abstract]        
Cash $ 43,056 $ 54,340    
Cash equivalents 249,895 455,183    
Total cash and cash equivalents 292,951 509,523    
Non-current portion of restricted cash 129 130    
Total cash, cash equivalents and restricted cash $ 293,080 $ 509,653 $ 620,687 $ 499,419
v3.23.3
ACCOUNTS RECEIVABLE, NET - Components of Accounts Receivable, Net (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Accounts Receivable [Line Items]        
Accounts receivable, gross $ 1,106 $ 263    
Less: allowances for credit losses (6) 0 $ 0 $ 0
Accounts receivable, net 1,100 263    
Hotel [Member]        
Accounts Receivable [Line Items]        
Accounts receivable, gross 885 250    
Other [Member]        
Accounts Receivable [Line Items]        
Accounts receivable, gross $ 221 $ 13    
v3.23.3
ACCOUNTS RECEIVABLE, NET - Movement in Allowances for Credit Losses (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Receivables [Abstract]    
Balance at beginning of year $ 0 $ 0
Provision for credit losses 6 0
Balance at end of period $ 6 $ 0
v3.23.3
PROPERTY AND EQUIPMENT, NET - Components of Property and Equipment, Net (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Property and Equipment, Net    
Cost $ 3,807,797 $ 3,780,769
Less: accumulated depreciation and amortization (1,005,516) (912,705)
Property and equipment, net $ 2,802,281 $ 2,868,064
v3.23.3
PROPERTY AND EQUIPMENT, NET - Additional Information (Detail)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
m²
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Property, Plant and Equipment [Line Items]      
Description of annual fee paid by macau government from one to three years MOP0.75 per square meter    
Description of annual fee paid by macau government from one to three years MOP2.5 per square meter    
Area of Land | m² 28,784.3    
Depreciation and amortization expenses of property and equipment $ 110,728 $ 84,520  
Studio City Phase 2 project [Member]      
Property, Plant and Equipment [Line Items]      
Construction in progress, gross $ 4,966   $ 1,079,112
v3.23.3
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Long Term Prepayments Deposits And Other Assets [Abstract]    
Amortization expenses of other long-term assets $ 4,439 $ 7,288
v3.23.3
LONG-TERM PREPAYMENTS, DEPOSITS AND OTHER ASSETS - Summary Of Long-term prepayments, deposits and other assets (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Long Term Prepayments Deposits And Other Assets [Abstract]    
Other long-term assets $ 18,399 $ 16,824
Less: accumulated amortization (8,728) (4,309)
Other long-term assets, net 9,671 12,515
Long-term prepayments 6,332 29,250
Advance payments and deposits for acquisition of property and equipment 1,002 1,645
Other deposits and other 4,917 4,582
Deferred financing costs, net 292 333
Long-term prepayments, deposits and other assets $ 22,214 $ 48,325
v3.23.3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of Accrued Expenses and Other Current Liabilities (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Property and equipment payables $ 52,459 $ 87,701
Interest expenses payable 27,832 63,371
Operating expense and other accruals and liabilities 21,348 11,728
Operating lease liabilities 1,067 1,095
Total Accrued Expenses and Other Current Liabilities $ 107,227 $ 165,688
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Total Accrued Expenses and Other Current Liabilities Total Accrued Expenses and Other Current Liabilities
Advance Customer Deposits And Ticket Sales [Member]    
Advance customer deposits and ticket sales $ 4,521 $ 1,793
v3.23.3
LONG-TERM DEBT, NET - Summary of Long-term Debt, Net (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Long-term Debt [Line Items]    
Long-term debt, net $ 2,434,981 $ 2,434,476
2022 7.000% Studio City Secured Notes, due 2027 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Long-term debt, net 345,679 344,866
2021 5.000% Studio City Notes, due 2029 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Long-term debt, net 1,096,221 1,095,772
2020 6.000% SC Notes, due 2025 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Long-term debt, net 496,063 497,308
2020 6.500% SC Notes, due 2028 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Long-term debt, net 496,890 496,402
2016 Studio City Credit Facilities [Member] | Total Credit Facility [Member]    
Long-term Debt [Line Items]    
Long-term debt, net [1] $ 128 $ 128
[1] As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs related to the 2016 SC Revolving Credit Facility of the 2016 Studio City Credit Facilities of $292 and $333 are included in long-term prepayments, deposits and other assets in the accompanying condensed consolidated balance sheets, respectively.
v3.23.3
LONG-TERM DEBT, NET - Summary of Long-term Debt, Net (Parenthetical) (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
2022 7.000% Studio City Secured Notes, due 2027 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Unamortized deferred financing costs $ 4,321 $ 5,134
2021 5.000% Studio City Notes, due 2029 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Unamortized deferred financing costs and original issue premiums 3,779 4,228
2020 6.000% SC Notes, due 2025 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Unamortized deferred financing costs 1,937 2,692
2020 6.500% SC Notes, due 2028 [Member] | Senior Notes [Member]    
Long-term Debt [Line Items]    
Unamortized deferred financing costs 3,110 3,598
Revolving Credit Facility [Member] | 2016 Studio City Credit Facilities [Member] | Long term Prepayments, Deposits and Other Assets [Member]    
Long-term Debt [Line Items]    
Unamortized deferred financing costs $ 292 $ 333
v3.23.3
LEASES - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Lessee, Lease, Description [Line Items]    
Minimum operating lease income $ 2,962 $ 3,303
Contingent operating lease income $ 2,296 $ 260
v3.23.3
FAIR VALUE MEASUREMENTS - Additional Information (Detail) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Fair Value Disclosures [Abstract]    
The estimated fair values of long-term debt $ 2,047,603 $ 1,959,195
The carrying value of long-term debt, excluding unamortized deferred financing costs and original issue premiums $ 2,448,128 $ 2,450,128
v3.23.3
CAPITAL STRUCTURE - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
Mar. 31, 2022
Sep. 30, 2023
Dec. 31, 2022
Two Thousand And Twenty Two Private Placements [Member]      
Capital Structure [Line Items]      
Gross proceeds from shares $ 300,000    
Offering expenses $ 841    
Class A Ordinary Shares [Member]      
Capital Structure [Line Items]      
Ordinary shares, authorized   1,927,488,240 1,927,488,240
Ordinary shares, par value   $ 0.0001 $ 0.0001
Ordinary shares, issued   770,352,700 770,352,700
Ordinary shares, outstanding   770,352,700 770,352,700
Class A Ordinary Shares [Member] | Two Thousand And Twenty Two Private Placements [Member]      
Capital Structure [Line Items]      
Issuance of ordinary shares 400,000,000    
Class B Ordinary Shares [Member]      
Capital Structure [Line Items]      
Ordinary shares, authorized   72,511,760 72,511,760
Ordinary shares, par value   $ 0.0001 $ 0.0001
Ordinary shares, issued   72,511,760 72,511,760
Ordinary shares, outstanding   72,511,760 72,511,760
v3.23.3
INCOME TAXES - Summary of Income Tax Expense (Benefit) (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Income tax (benefit) expense - deferred:    
Total income tax (benefit) expense $ (77) $ 485
Macau Complementary Tax [Member]    
Income tax (benefit) expense - deferred:    
Income tax (benefit) expense - deferred (63) 485
Hong Kong Profits Tax [Member]    
Over provision of income taxes in prior years:    
Over provision of income taxes in prior years $ (14) $ 0
v3.23.3
INCOME TAXES - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Schedule Of Income Taxes [Line Items]      
Percentage of tax on estimated taxable income 12.00% 12.00%  
Effective tax rate 0.10% 0.20%  
Valuation allowances $ 90,813   $ 91,092
Macau Complementary Tax [Member]      
Schedule Of Income Taxes [Line Items]      
Period For Which Complementary Tax exemption Applied January 1, 2023 through December 31, 2027    
v3.23.3
DISTRIBUTION OF PROFITS - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Distribution Of Profits [Abstract]    
Dividends declared $ 0 $ 0
Dividends paid 0 $ 0
Dividends proposed $ 0  
v3.23.3
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
Commitments and Contingencies [Line Items]  
Capital commitments $ 14,673
Trade Credit Facility [Member]  
Commitments and Contingencies [Line Items]  
Credit facility, maturity date Aug. 31, 2023
Trade Credit Facility [Member] | Extended Maturity [Member]  
Commitments and Contingencies [Line Items]  
Credit facility, maturity date Aug. 31, 2025
v3.23.3
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Revenues (services provided by the Group):    
Revenues $ 304,287 $ 7,311
Casino Contract [Member]    
Revenues (services provided by the Group):    
Revenues 98,546 (44,171)
Costs and expenses (services provided to the Group):    
Costs and expenses 21,265 21,864
Services Fee [Member]    
Revenues (services provided by the Group):    
Revenues 22,569 16,215
Entertainment [Member]    
Revenues (services provided by the Group):    
Revenues 58,785 1,175
Costs and expenses (services provided to the Group):    
Costs and expenses 49,352 1,704
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member]    
Sale and purchase of assets:    
Sale of property and equipment and other long-term assets 756 6
Purchase of property and equipment 8 184
Transfer-in of other long-term assets 1,636 749
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Casino Contract [Member]    
Revenues (services provided by the Group):    
Revenues 98,546 (44,171)
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Rooms Food and Beverage [Member]    
Revenues (services provided by the Group):    
Revenues 75,218 19,379
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Services Fee [Member]    
Revenues (services provided by the Group):    
Revenues 22,569 16,215
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Entertainment [Member]    
Revenues (services provided by the Group):    
Revenues 39,492 473
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Staff Costs Recharges [Member]    
Costs and expenses (services provided to the Group):    
Costs and expenses 64,661 42,928
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Corporate Services [Member]    
Costs and expenses (services provided to the Group):    
Costs and expenses 25,701 24,583
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Other Services [Member]    
Costs and expenses (services provided to the Group):    
Costs and expenses 16,415 12,977
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Staff costs for construction and renovation work capitalized [Member]    
Costs and expenses (services provided to the Group):    
Costs and expenses 3,585 8,993
Melco and its Subsidiaries [Member] | Transactions with affiliated companies [Member] | Purchase of Goods and Services [Member]    
Costs and expenses (services provided to the Group):    
Costs and expenses $ 458 $ 108
v3.23.3
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Parenthetical) (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Related Party Transaction [Line Items]    
Aggregated revenue $ 304,287 $ 7,311
Melco and its Subsidiaries [Member] | Rooms Food and Beverage and Entertainment Revenues [Member]    
Related Party Transaction [Line Items]    
Aggregated revenue 114,710 19,852
Melco and its Subsidiaries [Member] | Rooms Food and Beverage and Entertainment Revenues [Member] | Studio City Casinos Gaming Patrons [Member]    
Related Party Transaction [Line Items]    
Aggregated revenue 80,473 17,708
Melco and its Subsidiaries [Member] | Rooms Food and Beverage and Entertainment Revenues [Member] | Non Studio City Casinos Gaming Patrons [Member]    
Related Party Transaction [Line Items]    
Aggregated revenue $ 34,237 $ 2,144
v3.23.3
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Related Party Transaction [Line Items]      
Aggregate principal amount $ 2,448,128   $ 2,450,128
Total interest expenses 93,806 $ 70,430  
Lawrence Yau Lung Ho and his controlled entity [Member]      
Related Party Transaction [Line Items]      
Total interest expenses 2,475 2,475  
Lawrence Yau Lung Ho and his controlled entity [Member] | Senior Notes [Member]      
Related Party Transaction [Line Items]      
Aggregate principal amount 60,000   60,000
Independent Director [Member]      
Related Party Transaction [Line Items]      
Total interest expenses 21 $ 7  
Independent Director [Member] | Senior Notes [Member]      
Related Party Transaction [Line Items]      
Aggregate principal amount $ 400   $ 400
v3.23.3
SUBSEQUENT EVENTS - Additional Information (Detail) - Subsequent Event [Member] - 2020 6.000% SC Notes [Member] - USD ($)
$ in Thousands
Nov. 24, 2023
Nov. 22, 2023
Nov. 09, 2023
Tender Offer      
Subsequent Events [Line Items]      
Tender offer amount, maximum     $ 75,000
Senior Notes [Member]      
Subsequent Events [Line Items]      
Interest rate per annum   6.00%  
Debt instrument tendered offered amount $ 100,000 $ 317,461  
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