Edgar Filing: LAS VEGAS SANDS CORP

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

FORM 10-Q

UNITED STATES

SECURITIES & EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32373

LAS VEGAS SANDS CORP.

(Exact name of registration as specified in its charter)

Nevada

27-0099920

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


3355 Las Vegas Boulevard South
Las Vegas, Nevada		89109
(Address of principal executive offices)		(Zip Code)

(702) 414-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.


Class		Outstanding at July 31, 2013
Common Stock ($0.001 par value)		824,061,778 shares

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Table of Contents


PART I FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)			3
Condensed Consolidated Balance Sheets at June 30, 2013 and December 31, 2012			3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012			4
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2013 and 2012			5
Condensed Consolidated Statements of Equity for the Six Months Ended June 30, 2013 and 2012			6
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012			7
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			36
Item 3. Quantitative and Qualitative Disclosures about Market Risk			58
Item 4. Controls and Procedures			59

PART II OTHER INFORMATION

Item 1. Legal Proceedings			59
Item 1A. Risk Factors			59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			59
Item 5. Other Information			60
Item 6. Exhibits			61
Signatures			62

PART 1 FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2013			2012
	(In thousands, except share and per share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,514,141		$	2,512,766
Restricted cash and cash equivalents		5,782			4,521
Accounts receivable, net		1,803,357			1,819,260
Inventories		41,229			43,875
Deferred income taxes, net		1,643			2,299
Prepaid expenses and other		99,207			94,793

Total current assets		4,465,359			4,477,514
Property and equipment, net		15,437,067			15,766,748
Deferred financing costs, net		183,039			214,465
Restricted cash and cash equivalents		1,205			1,938
Deferred income taxes, net		40,435			43,280
Leasehold interests in land, net		1,428,710			1,458,741
Intangible assets, net		109,678			70,618
Other assets, net		118,331			130,348

Total assets	$	21,783,824		$	22,163,652

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	121,035		$	106,498
Construction payables		285,661			343,372
Accrued interest payable		11,635			15,542
Other accrued liabilities		2,005,915			1,895,483
Income taxes payable		171,013			164,126
Current maturities of long-term debt		980,168			97,802

Total current liabilities		3,575,427			2,622,823
Other long-term liabilities		141,126			133,936
Deferred income taxes		170,906			185,945
Deferred proceeds from sale of The Shoppes at The Palazzo		268,244			267,956
Deferred gain on sale of The Grand Canal Shoppes		42,148			43,880
Deferred rent from mall transactions		117,695			118,435
Long-term debt		8,511,231			10,132,265

Total liabilities		12,826,777			13,505,240

Commitments and contingencies (Note 9)
Equity:
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 825,289,759 and 824,297,756 shares issued, 824,406,713 and 824,297,756 shares outstanding		825			824
Capital in excess of par value		6,286,224			6,237,488
Treasury stock, at cost, 883,046 and zero shares		(46,562	)		—
Accumulated other comprehensive income		175,107			263,078
Retained earnings		1,084,511			560,452

Total Las Vegas Sands Corp. stockholders’ equity		7,500,105			7,061,842
Noncontrolling interests		1,456,942			1,596,570

Total equity		8,957,047			8,658,412

Total liabilities and equity	$	21,783,824		$	22,163,652

The accompanying notes are an integral part of these condensed consolidated financial statements.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(In thousands, except share and per share data) (Unaudited)
Revenues:
Casino	$	2,674,129		$	2,067,424		$	5,410,183		$	4,333,917
Rooms		324,629			275,311			649,645			543,038
Food and beverage		174,772			159,744			360,101			313,199
Mall		107,993			93,740			193,454			165,158
Convention, retail and other		123,050			116,834			249,111			246,551

		3,404,573			2,713,053			6,862,494			5,601,863
Less — promotional allowances		(161,632	)		(131,147	)		(316,834	)		(257,215	)

Net revenues		3,242,941			2,581,906			6,545,660			5,344,648

Operating expenses:
Casino		1,519,721			1,187,458			3,046,000			2,395,009
Rooms		65,685			60,513			134,375			113,299
Food and beverage		89,294			81,973			186,025			160,274
Mall		18,147			17,798			35,405			34,099
Convention, retail and other		80,094			78,403			158,943			157,927
Provision for doubtful accounts		62,058			58,374			126,737			110,592
General and administrative		307,869			259,038			598,283			477,755
Corporate		46,481			58,592			102,753			107,547
Pre-opening		1,031			43,472			7,868			94,931
Development		6,002			6,797			11,353			7,995
Depreciation and amortization		251,048			220,440			503,605			415,187
Amortization of leasehold interests in land		10,108			10,057			20,275			20,002
Impairment loss		—			100,781			—			143,674
Loss on disposal of assets		4,762			482			6,694			1,075

		2,462,300			2,184,178			4,938,316			4,239,366

Operating income		780,641			397,728			1,607,344			1,105,282
Other income (expense):
Interest income		3,236			6,892			7,029			12,540
Interest expense, net of amounts capitalized		(68,376	)		(64,533	)		(137,208	)		(129,205	)
Other income (expense)		3,893			1,782			1,785			(1,637	)
Loss on modification or early retirement of debt		—			(16,403	)		—			(19,234	)

Income before income taxes		719,394			325,466			1,478,950			967,746
Income tax expense		(47,721	)		(39,085	)		(103,303	)		(102,256	)

Net income		671,673			286,381			1,375,647			865,490
Net income attributable to noncontrolling interests		(141,920	)		(45,794	)		(273,933	)		(125,961	)

Net income attributable to Las Vegas Sands Corp.	$	529,753		$	240,587		$	1,101,714		$	739,529

Earnings per share:
Basic	$	0.64		$	0.29		$	1.34		$	0.94

Diluted	$	0.64		$	0.29		$	1.33		$	0.90

Weighted average shares outstanding:
Basic		823,974,421			821,110,555			823,671,664			790,773,996

Diluted		827,901,261			826,102,326			827,701,270			822,458,833

Dividends declared per common share	$	0.35		$	0.25		$	0.70		$	0.50

The accompanying notes are an integral part of these condensed consolidated financial statements.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
	(In thousands) (Unaudited)
Net income	$	671,673		$	286,381		$	1,375,647		$	865,490
Currency translation adjustment		(41,081	)		(27,958	)		(89,537	)		70,920

Total comprehensive income		630,592			258,423			1,286,110			936,410
Comprehensive income attributable to noncontrolling interests		(143,034	)		(47,242	)		(272,367	)		(128,456	)

Comprehensive income attributable to Las Vegas Sands Corp.	$	487,558		$	211,181		$	1,013,743		$	807,954

The accompanying notes are an integral part of these condensed consolidated financial statements.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY


	Las Vegas Sands Corp. Stockholders’ Equity
	Common Stock		Capital in Excess of Par Value			Treasury Stock			Accumulated Other Comprehensive Income			Retained Earnings			Noncontrolling Interests			Total
	(In thousands)
	(Unaudited)
Balance at January 1, 2012	$	733	$	5,610,160		$	—		$	94,104		$	2,145,692		$	1,588,463		$	9,439,152
Net income		—		—			—			—			739,529			125,961			865,490
Currency translation adjustment		—		—			—			68,425			—			2,495			70,920
Exercise of stock options		1		23,706			—			—			—			1,849			25,556
Stock-based compensation		—		31,497			—			—			—			1,665			33,162
Issuance of restricted stock		1		(1	)		—			—			—			—			—
Exercise of warrants		88		526,310			—			—			—			—			526,398
Dividends declared		—		—			—			—			(411,497	)		(357,056	)		(768,553	)
Distributions to noncontrolling interests		—		—			—			—			—			(5,095	)		(5,095	)

Balance at June 30, 2012	$	823	$	6,191,672		$	—		$	162,529		$	2,473,724		$	1,358,282		$	10,187,030

Balance at January 1, 2013	$	824	$	6,237,488		$	—		$	263,078		$	560,452		$	1,596,570		$	8,658,412
Net income		—		—			—			—			1,101,714			273,933			1,375,647
Currency translation adjustment		—		—			—			(87,971	)		—			(1,566	)		(89,537	)
Exercise of stock options		1		20,453			—			—			—			2,381			22,835
Tax benefit fromstock-based compensation		—		3,107			—			—			—			—			3,107
Stock-based compensation		—		25,176			—			—			—			1,696			26,872
Repurchase of common stock		—		—			(46,562	)		—			—			—			(46,562	)
Dividends declared		—		—			—			—			(577,655	)		(411,359	)		(989,014	)
Distributions to noncontrolling interests		—		—			—			—			—			(4,713	)		(4,713	)

Balance at June 30, 2013	$	825	$	6,286,224		$	(46,562	)	$	175,107		$	1,084,511		$	1,456,942		$	8,957,047

The accompanying notes are an integral part of these condensed consolidated financial statements.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended
	June 30,
	2013			2012
	(In thousands) (Unaudited)
Cash flows from operating activities:
Net income	$	1,375,647		$	865,490
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation and amortization		503,605			415,187
Amortization of leasehold interests in land		20,275			20,002
Amortization of deferred financing costs and original issue discount		28,241			22,590
Amortization of deferred gain and rent		(2,472	)		(2,472	)
Non-cash change in deferred proceeds from sale of The Shoppes at The Palazzo		684			860
Loss on modification or early retirement of debt		—			16,313
Impairment and loss on disposal of assets		6,694			144,749
Stock-based compensation expense		26,508			32,867
Provision for doubtful accounts		126,737			110,592
Foreign exchange (gain) loss		(9,966	)		2,449
Excess tax benefits from stock-based compensation		(3,107	)		—
Deferred income taxes		(5,307	)		(16,489	)
Changes in operating assets and liabilities:
Accounts receivable		(139,154	)		(319,650	)
Inventories		2,375			(5,330	)
Prepaid expenses and other		4,955			(21,213	)
Leasehold interests in land		(25,387	)		(24,232	)
Accounts payable		15,611			29,811
Accrued interest payable		(3,623	)		(24,478	)
Income taxes payable		15,903			51,295
Other accrued liabilities		85,988			119,978

Net cash generated from operating activities		2,024,207			1,418,319

Cash flows from investing activities:
Change in restricted cash and cash equivalents		(532	)		(454	)
Capital expenditures		(394,015	)		(735,512	)
Proceeds from disposal of property and equipment		1,716			1,478
Acquisition of intangible assets		(45,857	)		—

Net cash used in investing activities		(438,688	)		(734,488	)

Cash flows from financing activities:
Proceeds from exercise of stock options		22,835			25,556
Proceeds from exercise of warrants		—			526,398
Excess tax benefits from stock-based compensation		3,107			—
Dividends paid		(988,898	)		(767,642	)
Distributions to noncontrolling interests		(4,713	)		(5,095	)
Proceeds from long-term debt (Note 3)		80,496			3,625,516
Repayments on long-term debt (Note 3)		(688,431	)		(4,382,790	)
Payments of deferred financing costs		—			(100,142	)

Net cash used in financing activities		(1,575,604	)		(1,078,199	)

Effect of exchange rate on cash		(8,540	)		13,650

Increase (decrease) in cash and cash equivalents		1,375			(380,718	)
Cash and cash equivalents at beginning of period		2,512,766			3,902,718

Cash and cash equivalents at end of period	$	2,514,141		$	3,522,000

Supplemental disclosure of cash flow information:
Cash payments for interest, net of amounts capitalized	$	105,294		$	123,312

Cash payments for taxes, net of refunds	$	96,257		$	56,154

Change in construction payables	$	(57,711	)	$	(63,554	)

Non-cash investing and financing activities:
Capitalized stock-based compensation costs	$	364		$	295

Change in dividends payable on unvested restricted stock and stock units included in other accrued liabilities	$	116		$	911

Property and equipment acquired under capital lease	$	2,668		$	7,930

Repurchase of common stock included in other accrued liabilities	$	46,562		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 — ORGANIZATION AND BUSINESS OF COMPANY

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Las Vegas Sands Corp. (“LVSC”), a Nevada corporation, and its subsidiaries (collectively the “Company”) for the year ended December 31, 2012. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments and normal recurring accruals considered necessary for a fair statement of the results for the interim period have been included. The interim results reflected in the unaudited condensed consolidated financial statements are not necessarily indicative of expected results for the full year. The Company’s common stock is traded on the New York Stock Exchange under the symbol “LVS.”

The shares of the Company’s subsidiary, Sands China Ltd. (“SCL,” the indirect owner and operator of the majority of the Company’s operations in the Macao Special Administrative Region (“Macao”) of the People’s Republic of China) are listed on The Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”) and are not, and will not, be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent a registration under the Securities Act of 1933, as amended, or an applicable exception from such registration requirements.

Operations

Macao

The Company currently owns 70.2% of SCL, which includes the operations of The Venetian Macao, Sands Cotai Central, Four Seasons Macao, Sands Macao and other ancillary operations that support these properties, as further discussed below. The Company operates the gaming areas within these properties pursuant to a 20-year gaming subconcession.

The Company owns and operates The Venetian Macao Resort Hotel (“The Venetian Macao”), which anchors the Cotai Strip, the Company’s master-planned development of integrated resort properties on an area of approximately 140 acres in Macao (consisting of parcels referred to as 1, 2, 3 and 5 and 6). The Venetian Macao (located on parcel 1) includes a 39-floor luxury hotel with over 2,900 suites; approximately 374,000 square feet of gaming space; a 15,000-seat arena; an 1,800-seat theater; retail and dining space of approximately 1.0 million square feet; and a convention center and meeting room complex of approximately 1.2 million square feet.

In April and September 2012 and January 2013, the Company opened phases I, IIA and IIB, respectively, of its Sands Cotai Central integrated resort (located on parcels 5 and 6), which is situated across the street from The Venetian Macao and Four Seasons Macao. Phase I consists of a hotel tower on parcel 5, which includes approximately 600 five-star rooms and suites under the Conrad brand and approximately 1,200 four-star rooms and suites under the Holiday Inn brand; more than 350,000 square feet of meeting space; several food and beverage establishments; along with the 230,000-square-foot casino and VIP gaming areas. Phase IIA, includes the first hotel tower on parcel 6, which features approximately 1,800 rooms and suites managed by Starwood Asia Pacific Hotels and Resorts Pte Ltd. and Sheraton Overseas Management Co. (collectively “Starwood”) under the Sheraton brand, along with the second casino and additional retail, entertainment, dining and meeting facilities. Phase IIB consists of the second hotel tower on parcel 6 and features approximately 2,100 rooms and suites managed by Starwood under the Sheraton brand. With the completion of phases I and II of the project, the integrated resort features approximately 300,000 square feet of gaming space, approximately 800,000 square feet of retail, dining and entertainment space, over 550,000 square feet of meeting facilities and a multipurpose theater (to open in 2014). Phase III of the project is expected to include a fourth hotel and mixed-use tower, located on parcel 5, to be managed by Starwood under the St. Regis brand and the total cost to complete is expected to be approximately $450 million. The Company intends to commence construction of phase III of the project as demand and market conditions warrant it. As of June 30, 2013, the Company has capitalized costs of $4.07 billion for the entire project, including the land premium (net of amortization) and $159.6 million in outstanding construction payables.

The Company owns the Four Seasons Hotel Macao, Cotai Strip (the “Four Seasons Hotel Macao”), which features 360 rooms and suites managed and operated by Four Seasons Hotels Inc. and is located adjacent and connected to The Venetian Macao. Connected to the Four Seasons Hotel Macao, the Company owns and operates the Plaza Casino (together with the Four Seasons Hotel Macao and located on parcel 2, the “Four Seasons Macao”), which features approximately 108,000 square feet of gaming space; 19 Paiza mansions; retail space of approximately 260,000 square feet, which is connected to the mall at The Venetian Macao; several food and beverage offerings; and conference, banquet and other facilities. This integrated resort will also feature the Four Seasons Apartment Hotel Macao, Cotai Strip (the “Four Seasons Apartments”), an apart-hotel tower that consists of approximately 1.0 million square feet of Four Seasons-serviced and -branded luxury apart-hotel units and common areas. The Company has completed the structural work of the tower and is advancing its plans to monetize units within the Four Seasons Apartments.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The Company owns and operates the Sands Macao, the first Las Vegas-style casino in Macao. The Sands Macao offers approximately 249,000 square feet of gaming space and a 289-suite hotel tower, as well as several restaurants, VIP facilities, a theater and other high-end services and amenities.

Singapore

The Company owns and operates the Marina Bay Sands in Singapore, which features three 55-story hotel towers (totaling approximately 2,600 rooms and suites), the Sands SkyPark (which sits atop the hotel towers and features an infinity swimming pool and several dining options), approximately 160,000 square feet of gaming space, an enclosed retail, dining and entertainment complex of approximately 800,000 net leasable square feet, a convention center and meeting room complex of approximately 1.2 million square feet, theaters and a landmark iconic structure at the bay-front promenade that contains an art/science museum. In April 2013, the Company paid 57.0 million Singapore dollars (“SGD,” approximately $45.1 million at exchange rates in effect on June 30, 2013) to the Casino Regulatory Authority in Singapore as part of the process to renew its gaming license, which now expires in April 2016.

United States

Las Vegas

The Company owns and operates The Venetian Resort Hotel Casino (“The Venetian Las Vegas”), a Renaissance Venice-themed resort; The Palazzo Resort Hotel Casino (“The Palazzo”), a resort featuring modern European ambience and design; and an expo and convention center of approximately 1.2 million square feet (the “Sands Expo Center”). These Las Vegas properties, situated on or near the Las Vegas Strip, form an integrated resort with approximately 7,100 suites; approximately 225,000 square feet of gaming space; a meeting and conference facility of approximately 1.1 million square feet; and enclosed retail, dining and entertainment complexes located within The Venetian Las Vegas (“The Grand Canal Shoppes”) and The Palazzo (“The Shoppes at The Palazzo”), both of which were sold to GGP Limited Partnership (“GGP,” see “— Note 2 — Property and Equipment, Net” regarding the sale of The Shoppes at The Palazzo).

Pennsylvania

The Company owns and operates the Sands Casino Resort Bethlehem (the “Sands Bethlehem”), a gaming, hotel, retail and dining complex located on the site of the historic Bethlehem Steel Works in Bethlehem, Pennsylvania. Sands Bethlehem features approximately 145,000 square feet of gaming space; a 300-room hotel tower; a 150,000-square-foot retail facility; an arts and cultural center; and a 50,000-square-foot multipurpose event center, which opened in May 2012. The Company owns 86% of the economic interest in the gaming, hotel and entertainment portion of the property through its ownership interest in Sands Bethworks Gaming LLC and more than 35% of the economic interest in the retail portion of the property through its ownership interest in Sands Bethworks Retail LLC.

Development Projects

Macao

The Company submitted plans to the Macao government for The Parisian Macao (located on parcel 3), an integrated resort that will be connected to The Venetian Macao and Four Seasons Macao. The Parisian Macao, which is currently expected to open in late 2015, is intended to include a gaming area (to be operated under the Company’s gaming subconcession), hotel and shopping mall. The Company expects the cost to design, develop and construct The Parisian Macao will be approximately $2.7 billion, inclusive of payments made for the land premium. The Company has commenced construction activities and has capitalized costs of $195.4 million, including the land premium (net of amortization), as of June 30, 2013. In addition, the Company will be completing the development of some public areas surrounding its Cotai Strip properties on behalf of the Macao government.

Under the Company’s land concession for Sands Cotai Central, the Company is required to complete the development by May 2014. The Company will be applying for an extension from the Macao government to complete Sands Cotai Central, as the Company will be unable to meet the May 2014 deadline. The land concession for The Parisian Macao contains a similar requirement, which was extended by the Macao government in July 2012, that the development be completed by April 2016. Should the Company determine that it is unable to complete The Parisian Macao by April 2016, the Company would then also expect to apply for another extension from the Macao government. If the Company is unable to meet The Parisian Macao deadline and the deadlines for either development are not extended, the Company could lose its land concessions for Sands Cotai Central or The Parisian Macao, which would prohibit the Company from operating any facilities developed under the respective land concessions. As a result, the Company could record a charge for all or some portion of its $4.07 billion or $195.4 million in capitalized construction costs and land premiums (net of amortization), as of June 30, 2013, related to Sands Cotai Central and The Parisian Macao, respectively.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

United States

The Company was constructing a high-rise residential condominium tower (the “Las Vegas Condo Tower”), located on the Las Vegas Strip between The Palazzo and The Venetian Las Vegas. The Company suspended construction activities for the project due to reduced demand for Las Vegas Strip condominiums and the overall decline in general economic conditions. The Company intends to recommence construction when demand and conditions improve. As of June 30, 2013, the Company has capitalized construction costs of $178.8 million for this project. The impact of the suspension on the estimated overall cost of the project is currently not determinable with certainty. Should demand and conditions fail to improve or management decide to abandon the project, the Company could record a charge for all or some portion of the $178.8 million in capitalized construction costs as of June 30, 2013.

Other

The Company continues to aggressively pursue a variety of new development opportunities around the world.

Development Financing Strategy

Through June 30, 2013, the Company has funded its development projects primarily through borrowings under its credit facilities, operating cash flows, proceeds from its equity offerings and proceeds from the disposition of non-core assets.

The U.S. credit facility requires the Company’s Las Vegas operations to comply with certain financial covenants at the end of each quarter, including maintaining a maximum leverage ratio of net debt, as defined, to trailing twelve-month adjusted earnings before interest, income taxes, depreciation and amortization, as defined (“Adjusted EBITDA”). The maximum leverage ratio is 5.0x for all quarterly periods through maturity. The Company can elect to contribute up to $50 million of cash on hand to its Las Vegas operations on a bi-quarterly basis; such contributions having the effect of increasing Adjusted EBITDA during the applicable quarter for purposes of calculating compliance with the maximum leverage ratio. The Company’s Macao facility also requires the Company’s Macao operations to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.5x for the quarterly period ended June 30, 2013, decreases to 4.0x for the quarterly periods ending September 30, 2013 through December 31, 2014, decreases to 3.5x for the quarterly periods ending March 31 through December 31, 2015, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. The Company’s Singapore credit facility (the “2012 Singapore Credit Facility”) requires operations of Marina Bay Sands to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.0x for the quarterly periods ending June 30 through September 30, 2013, decreases to 3.5x for the quarterly periods ending December 31, 2013 through December 31, 2014, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. If the Company is unable to maintain compliance with the financial covenants under these credit facilities, it would be in default under the respective credit facilities. A default under the U.S. credit facility would trigger a cross-default under the Company’s airplane financings. Any defaults or cross-defaults under these agreements would allow the lenders, in each case, to exercise their rights and remedies as defined under their respective agreements. If the lenders were to exercise their rights to accelerate the due dates of the indebtedness outstanding, there can be no assurance that the Company would be able to repay or refinance any amounts that may become due and payable under such agreements, which could force the Company to restructure or alter its operations or debt obligations.

The Company held unrestricted cash and cash equivalents of $2.51 billion and restricted cash and cash equivalents of $7.0 million as of June 30, 2013. The Company believes the cash on hand and cash flow generated from operations will be sufficient to maintain compliance with the financial covenants of its credit facilities. The Company may need to arrange additional financing to fund the balance of its Cotai Strip developments. In the normal course of its activities, the Company will continue to evaluate its capital structure and opportunities for enhancements thereof, including evaluating strategic alternatives related to the Company’s Pennsylvania operations.

Recent Accounting Pronouncements

In February 2013, the FASB issued authoritative guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company’s financial condition, results of operations or cash flows.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 2 — PROPERTY AND EQUIPMENT, NET

Property and equipment consists of the following (in thousands):


	June 30,			December 31,
	2013			2012
Land and improvements	$	555,495		$	515,538
Building and improvements		15,161,374			14,414,026
Furniture, fixtures, equipment and leasehold improvements		2,650,013			2,557,071
Transportation		442,104			411,671
Construction in progress		1,044,737			1,824,531

		19,853,723			19,722,837
Less — accumulated depreciation and amortization		(4,416,656	)		(3,956,089	)

	$	15,437,067		$	15,766,748

Construction in progress consists of the following (in thousands):


	June 30,		December 31,
	2013		2012
Four Seasons Macao (principally the Four Seasons Apartments)	$	408,765	$	415,367
The Parisian Macao		137,117		59,510
Sands Cotai Central		88,433		913,432
Other		410,422		436,222

	$	1,044,737	$	1,824,531

The $410.4 million in other construction in progress as of June 30, 2013, consists primarily of construction of the Las Vegas Condo Tower and various projects at The Venetian Macao.

Under generally accepted accounting principles, the sale of The Shoppes at The Palazzo has not been accounted for as a sale because the Company’s participation in certain future revenues constitutes continuing involvement in The Shoppes at The Palazzo. Therefore, $266.2 million of the proceeds allocated to the mall sale transaction has been recorded as deferred proceeds (a long-term financing obligation), which will accrue interest at an imputed rate and will be offset by (i) imputed rental income and (ii) rent payments made to GGP related to spaces leased back from GGP by the Company. The property and equipment legally sold to GGP totaling $245.0 million (net of $66.3 million of accumulated depreciation) as of June 30, 2013, will continue to be recorded on the Company’s condensed consolidated balance sheet and will continue to be depreciated in the Company’s condensed consolidated income statement.

During the three and six months ended June 30, 2013 and the three and six months ended June 30, 2012, the Company capitalized interest expense of $0.6 million, $2.4 million, $12.3 million and $34.4 million, respectively. During the three and six months ended June 30, 2013 and the three and six months ended June 30, 2012, the Company capitalized approximately $5.3 million, $11.0 million, $3.7 million and $8.0 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property.

The Company suspended portions of its development projects. As described in “— Note 1 — Organization and Business of Company,” the Company may be required to record an impairment charge related to these developments in the future.

NOTE 3 — LONG-TERM DEBT

Long-term debt consists of the following (in thousands):


	June 30,			December 31,
Corporate and U.S. Related:	2013			2012
Senior Secured Credit Facility — Term B	$	1,807,320		$	1,816,477
Senior Secured Credit Facility — Delayed Draws I and II		539,239			606,561
Senior Secured Credit Facility — Revolving		200,000			400,000
Airplane Financings		69,203			71,047
HVAC Equipment Lease		18,900			19,714
Other		3,193			3,689
Macao Related:
2011 VML Credit Facility		3,208,154			3,209,839
Other		8,755			7,313
Singapore Related:
2012 Singapore Credit Facility — Term		3,636,628			3,767,141
2012 Singapore Credit Facility — Revolving		—			327,578
Other		7			708

		9,491,399			10,230,067
Less — current maturities		(980,168	)		(97,802	)

Total long-term debt	$	8,511,231		$	10,132,265

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Senior Secured Credit Facility

As of June 30, 2013, the Company had $295.5 million of available borrowing capacity under the Senior Secured Credit Facility, net of outstanding letters of credit.

2011 VML Credit Facility

As of June 30, 2013, the Company had $500.0 million of available borrowing capacity under the 2011 VML Credit Facility.

2012 Singapore Credit Facility

As of June 30, 2013, the Company had SGD 492.7 million (approximately $389.5 million at exchange rates in effect on June 30, 2013) of available borrowing capacity under the 2012 Singapore Credit Facility, net of outstanding banker’s guarantees.

Cash Flows from Financing Activities

Cash flows from financing activities related to long-term debt and capital lease obligations are as follows (in thousands):


	Six Months Ended
	June 30,
	2013			2012
Proceeds from 2012 Singapore Revolving Facility	$	80,496		$	3,625,516

Repayments on 2012 Singapore Revolving Facility	$	(406,870	)	$	—
Repayments on Singapore Credit Facility		—			(3,635,676	)
Repayments on Senior Secured Credit Facility		(276,479	)		(413,341	)
Redemption of Senior Notes		—			(189,712	)
Repayments on Airplane Financings		(1,844	)		(1,844	)
Repayments on Ferry Financing		—			(140,337	)
Repayments on HVAC Equipment Lease and Other Long-Term Debt		(3,238	)		(1,880	)

	$	(688,431	)	$	(4,382,790	)

Fair Value of Long-Term Debt

The estimated fair value of the Company’s long-term debt as of June 30, 2013 and December 31, 2012, was approximately $9.40 billion and $10.12 billion, respectively, compared to its carrying value of $9.46 billion and $10.20 billion, respectively. The estimated fair value of the Company’s long-term debt is based on level 2 inputs (quoted prices in markets that are not active).

NOTE 4 — EQUITY AND EARNINGS PER SHARE

Common Stock

Dividends

On March 29 and June 28, 2013, the Company paid a dividend of $0.35 per common share as part of a regular cash dividend program. During the six months ended June 30, 2013, the Company recorded $577.7 million as a distribution against retained earnings (of which $302.1 million related to the Principal Stockholder’s family).

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

On March 30 and June 29, 2012, the Company paid a dividend of $0.25 per common share as part of a regular cash dividend program. During the six months ended June 30, 2012, the Company recorded $411.5 million as a distribution against retained earnings (of which $215.7 million related to the Principal Stockholder’s family).

In July 2013, the Company’s Board of Directors declared a quarterly dividend of $0.35 per common share (a total estimated to be approximately $289 million) to be paid on September 30, 2013, to shareholders of record on September 20, 2013.

Repurchase Program

In June 2013, the Company’s Board of Directors approved a share repurchase program, which expires in June 2015, with an initial authorization of $2.0 billion. Repurchases of the Company’s common stock are made at the Company’s discretion in accordance with applicable federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, legal requirements, other investment opportunities and market conditions. During June 2013, the Company repurchased 883,046 shares of its common stock for $46.6 million (including commissions) under this program. All share repurchases of the Company’s common stock have been recorded as treasury shares.

Warrants

On March 2, 2012, the Principal Stockholder’s family exercised all of their outstanding warrants to purchase 87,500,175 shares of the Company’s common stock for $6.00 per share and paid $525.0 million in cash as settlement of the warrant exercise price. Additionally, during the six months ended June 30, 2012, 13,970 warrants were exercised to purchase an aggregate of 232,999 shares of the Company’s common stock at $6.00 per share and $1.4 million in cash was received as settlement of the warrant exercise price. No warrants were exercised during the six months ended June 30, 2013.

Noncontrolling Interests

On February 28 and June 21, 2013, SCL paid a dividend of 0.67 Hong Kong dollars (“HKD”) and HKD 0.66 per share, respectively (a total of $1.38 billion), to SCL shareholders (of which we retained $970.2 million). On February 28 and June 22, 2012, SCL paid a dividend of HKD 0.58 per share (a total of $1.2 billion) to SCL shareholders (of which the Company retained $844.4 million).

During the six months ended June 30, 2013 and 2012, the Company distributed $4.7 million and $5.1 million to certain of its noncontrolling interests.

Earnings Per Share

The weighted average number of common and common equivalent shares used in the calculation of basic and diluted earnings per share consisted of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Weighted-average common shares outstanding (used in the calculation of basic earnings per share)		823,974,421		821,110,555		823,671,664		790,773,996
Potential dilution from stock options, warrants and restricted stock and stock units		3,926,840		4,991,771		4,029,606		31,684,837

Weighted-average common and common equivalent shares (used in the calculation of diluted earnings per share)		827,901,261		826,102,326		827,701,270		822,458,833

Antidilutive stock options excluded from the calculation of diluted earnings per share		4,554,859		4,681,204		4,544,859		4,681,204

Accumulated Other Comprehensive Income

As of June 30, 2013 and December 31, 2012, accumulated other comprehensive income consisted solely of foreign currency translation adjustments.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 5 — VARIABLE INTEREST ENTITIES

The Company consolidates any variable interest entities (“VIEs”) in which it is the primary beneficiary and discloses significant variable interests in VIEs of which it is not the primary beneficiary, if any, which management determines such designation based on accounting standards for VIEs.

The Company has entered into various joint venture agreements with independent third parties. The operations of these joint ventures have been consolidated by the Company due to the Company’s significant investment in these joint ventures, its power to direct the activities of the joint ventures that would significantly impact their economic performance and the obligation to absorb potentially significant losses or the rights to receive potentially significant benefits from these joint ventures. The Company evaluates its primary beneficiary designation on an ongoing basis and will assess the appropriateness of the VIE’s status when events have occurred that would trigger such an analysis.

As of June 30, 2013 and December 31, 2012, the Company’s joint ventures had total assets of $105.0 million and $94.5 million, respectively, and total liabilities of $116.3 million and $95.8 million, respectively.

NOTE 6 — INCOME TAXES

The Company’s major tax jurisdictions are the U.S., Macao and Singapore. In January 2013, the Internal Revenue Service (“IRS”) completed its examination of tax years 2005 through 2009. The Company decreased its unrecognized tax benefits by $9.3 million due to the conclusion of the IRS audit. The Inland Revenue Authority of Singapore is performing a compliance review of the Marina Bay Sands tax return for tax years 2010 and 2011. The Company is subject to examination for tax years after 2007 in Macao and Singapore and for tax years after 2009 in the U.S. The Company believes it has adequately reserved for its uncertain tax positions; however, there is no assurance that the taxing authorities will not propose adjustments that are different from the Company’s expected outcome, which would impact the provision for income taxes.

Since January 1, 2012, the Company no longer considers the current portion of the tax earnings and profits of certain of its foreign subsidiaries to be permanently reinvested. The Company has not provided a deferred tax provision for these foreign earnings as the Company expects there will be sufficient U.S. foreign tax credits to offset the U.S. income tax that would result from the repatriation of foreign earnings. The Company recorded valuation allowances on the net deferred tax assets of its U.S. operations and certain foreign jurisdictions. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent it becomes “more-likely-than-not” that the deferred tax assets are realizable, the Company will reduce the valuation allowance as appropriate.

The Company received a 5-year income tax exemption in Macao that exempts the Company from paying corporate income tax on profits generated by gaming operations. The Company will continue to benefit from this tax exemption through the end of 2013. During July 2012, Venetian Macau Limited (“VML”) requested an additional 5-year income tax exemption; however, there is no assurance that the Company will receive the extension. In February 2011, the Company entered into an agreement with the Macao government, effective through the end of 2013 that provides for an annual payment of 14.4 million patacas (approximately $1.8 million at exchange rates in effect on June 30, 2013) that is a substitution for a 12% tax otherwise due from VML shareholders on dividend distributions paid from VML gaming profits.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 7 — STOCK-BASED EMPLOYEE COMPENSATION

Stock-based compensation activity under the LVSC 2004 and SCL Equity Plans is as follows (in thousands, except weighted average grant date fair values):


	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Compensation expense:
Stock options	$	7,057	$	7,179	$	16,090	$	18,045
Restricted stock and stock units		4,834		6,522		10,418		14,822

	$	11,891	$	13,701	$	26,508	$	32,867

Compensation cost capitalized as part of property and equipment	$	92	$	77	$	364	$	295

LVSC 2004 Plan:
Stock options granted		160		416		218		467

Weighted average grant date fair value	$	36.19	$	37.85	$	35.01	$	37.59

Restricted stock granted		25		16		43		513

Weighted average grant date fair value	$	56.98	$	46.27	$	54.55	$	53.08

Restricted stock units granted		26		300		34		313

Weighted average grant date fair value	$	57.28	$	44.98	$	56.14	$	45.22

SCL Equity Plan:
Stock options granted		1,242		2,047		2,729		4,482

Weighted average grant date fair value	$	2.41	$	1.57	$	2.29	$	1.63

Restricted stock units granted		1,000		—		1,000		—

Weighted average grant date fair value	$	5.26	$	—	$	5.26	$	—

The fair value of each option grant was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
LVSC 2004 Plan:
Weighted average volatility		94.8	%		95.2	%		94.8	%		95.2	%
Expected term (in years)		5.5			5.3			5.5			5.4
Risk-free rate		1.3	%		1.1	%		1.2	%		1.1	%
Expected dividends		2.5	%		1.8	%		2.5	%		1.8	%
SCL Equity Plan:
Weighted average volatility		68.1	%		70.2	%		68.2	%		70.3	%
Expected term (in years)		6.3			6.3			6.3			6.2
Risk-free rate		0.4	%		0.5	%		0.4	%		0.6	%
Expected dividends		3.3	%		4.2	%		3.4	%		4.1	%

NOTE 8 — FAIR VALUE MEASUREMENTS

Under applicable accounting guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance also establishes a valuation hierarchy for inputs in measuring fair value that maximizes the use of observable inputs (inputs market participants would use based on market data obtained from sources independent of the Company) and minimizes the use of unobservable inputs (inputs that reflect the Company’s assumptions based upon the best information available in the circumstances) by requiring that the most observable inputs be used when available. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the assets or liabilities, either directly or indirectly. Level 3 inputs are unobservable inputs for the assets or liabilities. Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table provides the assets carried at fair value (in thousands):


			Fair Value Measurements Using:
	Total Carrying Value		Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2013
Cash equivalents⁽¹⁾	$	1,589,352	$	1,589,352	$	—	$	—
Interest rate caps⁽²⁾	$	340	$	—	$	340	$	—
As of December 31, 2012
Cash equivalents⁽¹⁾	$	1,377,330	$	1,377,330	$	—	$	—
Interest rate caps⁽²⁾	$	218	$	—	$	218	$	—

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(1)	The Company has short-term investments classified as cash equivalents as the original maturities are less than 90 days.

(2)	As of June 30, 2013 and December 31, 2012, the Company had 24 and 30 interest rate cap agreements, respectively, with an aggregate fair value of approximately $0.3 million and $0.2 million, respectively, based on quoted market values from the institutions holding the agreements.

NOTE 9 — COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved in other litigation in addition to those noted below, arising in the normal course of business. Management has made certain estimates for potential litigation costs based upon consultation with legal counsel. Actual results could differ from these estimates; however, in the opinion of management, such litigation and claims will not have a material effect on the Company’s financial condition, results of operations or cash flows.

On October 15, 2004, Richard Suen and Round Square Company Limited (“RSC”) filed an action against LVSC, Las Vegas Sands, Inc. (“LVSI”), Sheldon G. Adelson and William P. Weidner in the District Court of Clark County, Nevada (the “District Court of Clark County”), asserting a breach of an alleged agreement to pay a success fee of $5.0 million and 2.0% of the net profit from the Company’s Macao resort operations to the plaintiffs as well as other related claims. In March 2005, LVSC was dismissed as a party without prejudice based on a stipulation to do so between the parties. Pursuant to an order filed March 16, 2006, plaintiffs’ fraud claims set forth in the first amended complaint were dismissed with prejudice against all defendants. The order also dismissed with prejudice the first amended complaint against defendants Sheldon G. Adelson and William P. Weidner. On May 24, 2008, the jury returned a verdict for the plaintiffs in the amount of $43.8 million. On June 30, 2008, a judgment was entered in this matter in the amount of $58.6 million (including pre-judgment interest). The Company appealed the verdict to the Nevada Supreme Court. On November 17, 2010, the Nevada Supreme Court reversed the judgment and remanded the case to the District Court of Clark County for a new trial. In its decision reversing the monetary judgment against the Company, the Nevada Supreme Court also made several other rulings which may affect the outcome of the new trial, including overturning the pre-trial dismissal of the plaintiffs’ breach of contract claim and deciding several evidentiary matters, some of which confirmed and some of which overturned rulings made by the District Court of Clark County. On February 27, 2012, the District Court of Clark County set a date of March 25, 2013, for the new trial. On June 22, 2012, the defendants filed a request to add experts and plaintiffs filed a motion seeking additional financial data as part of their discovery. The District Court of Clark County granted both requests. The retrial began on March 27 and on May 14, 2013, the jury returned a verdict in favor of RSC in the amount of $70.0 million. On May 28, 2013, a judgment was entered in the matter in the amount of $101.6 million (including pre-judgment interest). On June 7, 2013, the Company filed a motion with the District Court of Clark County requesting that the judgment be set aside as a matter of law or in the alternative that a new trial be granted. On July 30, 2013, the District Court of Clark County denied the Company’s motion. The Company intends to appeal the jury verdict. The Company believes that it has valid bases in law and fact to appeal the verdict. As a result, the Company believes that the likelihood that the amount of the judgment will be affirmed is not probable, and, accordingly, that the amount of any loss cannot be reasonably estimated at this time. Because the Company believes that this potential loss is not probable or estimable, it has not recorded any reserves or contingencies related to this legal matter. In the event that the Company’s assumptions used to evaluate this matter as neither probable nor estimable change in future periods, it may be required to record a liability for an adverse outcome.

On October 20, 2010, Steven C. Jacobs, the former Chief Executive Officer of SCL, filed an action against LVSC and SCL in the District Court of Clark County alleging breach of contract against LVSC and SCL and breach of the implied covenant of good faith and fair dealing and tortious discharge in violation of public policy against LVSC. On March 16, 2011, an amended complaint was filed, which added Sheldon G. Adelson as a defendant and alleged a claim of defamation per se against him, LVSC and SCL. On June 9, 2011, the District Court of Clark County dismissed the defamation claim and certified the decision as to Sheldon G. Adelson as a final judgment. On July 1, 2011, the plaintiff filed a notice of appeal regarding the final judgment as to Sheldon G. Adelson. On August 26, 2011, the Nevada Supreme Court issued a writ of mandamus instructing the District Court of Clark County to hold an evidentiary hearing on whether personal jurisdiction exists over SCL and stayed the case until after the district court’s decision. On January 17, 2012, Mr. Jacobs filed his opening brief with the Nevada Supreme Court regarding his appeal of the defamation claim against Mr. Adelson. On January 30, 2012, Mr. Adelson filed his reply to Mr. Jacobs’ opening brief. On March 8, 2012, the District Court of Clark County set a hearing date for the week of June 25-29, 2012, for the evidentiary hearing on personal jurisdiction over SCL. On May 24, 2012, the District Court of Clark County vacated the hearing date previously set for June 25-29 and set a status conference for June 28, 2012. At the June 28 status hearing, the District Court of Clark County set out a hearing schedule to resolve a discovery dispute and did not reset a date for the jurisdictional hearing. From September 10 to September 12, 2012, the District Court of Clark County held a hearing to determine the outcome of certain discovery disputes and issued an Order on September 14, 2012. In its Order, the District Court of Clark County fined LVSC $25,000 and, for the purposes of the jurisdictional discovery and evidentiary hearing, precluded the

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Defendants from relying on the Macao Data Privacy Act as an objection or defense under its discovery obligations. On December 21, 2012, the District Court of Clark County ordered the defendants to produce documents from a former counsel to LVSC containing attorney client privileged information. On January 23, 2013, the defendants filed a writ with the Nevada Supreme Court challenging this order (the “January Writ”). On January 29, 2013, the District Court of Clark County granted defendants motion for a stay of the order. On February 15, 2013, the Nevada Supreme Court ordered the plaintiff to answer the January Writ. On February 28, 2013, the District Court of Clark County ordered a hearing on plaintiffs request for sanctions and additional discovery (the “February 28^th Order”). On April 8, 2013, the defendants filed a writ with the Nevada Supreme Court challenging the February 28^th Order (the “April Writ”); and the Nevada Supreme Court ordered the plaintiff to answer the April Writ by May 20, 2013. The defendants also filed and were granted a stay of the February 28^th Order by the District Court of Clark County until such time as the Nevada Supreme Court decides the April Writ. On June 18, 2013, the District Court of Clark County scheduled the jurisdictional hearing for July 16-22, 2013 and issued an order allowing the plaintiff access to privileged communications of counsel to the Company (the “June 18^th Order”). On June 21, 2013, the Company filed another writ with the Nevada Supreme Court challenging the June 18^th Order (the “June Writ”). The Nevada Supreme Court accepted the June Writ on June 28, 2013, and issued a stay of the June 18^th Order. On June 28, 2013, the District Court of Clark County vacated the jurisdictional hearing. On July 3, 2013, the Company filed a motion with the Nevada Supreme Court to consolidate the pending writs (each of which have now been fully briefed to the Nevada Supreme Court). Mr. Jacobs is seeking unspecified damages in this matter. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

On February 9, 2011, LVSC received a subpoena from the Securities and Exchange Commission (the “SEC”) requesting that the Company produce documents relating to its compliance with the Foreign Corrupt Practices Act (the “FCPA”). The Company has also been advised by the Department of Justice (the “DOJ”) that it is conducting a similar investigation. It is the Company’s belief that the subpoena may have emanated from the lawsuit filed by Steven C. Jacobs described above.

After the Company’s receipt of the subpoena from the SEC on February 9, 2011, the Board of Directors delegated to the Audit Committee, comprised of three independent members of the Board of Directors, the authority to investigate the matters raised in the SEC subpoena and related inquiry of the DOJ.

As part of the annual audit of the Company’s financial statements, the Audit Committee advised the Company and its independent accountants that it had reached certain preliminary findings, including that there were likely violations of the books and records and internal controls provisions of the FCPA and that in recent years, the Company has improved its practices with respect to books and records and internal controls.

Based on the information provided to management by the Audit Committee and its counsel, the Company believes, and the Audit Committee concurs, that the preliminary findings:

•

do not have a material impact on the financial statements of the Company;

•

do not warrant any restatement of the Company’s past financial statements; and

•

do not represent a material weakness in the Company’s internal controls over financial reporting as of June 30, 2013.

The investigation by the Audit Committee, though largely completed, remains ongoing. The Company is cooperating with all investigations. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter, the extent of materiality, or the range of reasonably possible loss, if any.

On May 24, 2010, Frank J. Fosbre, Jr. filed a purported class action complaint in the United States District Court for the District of Nevada (the “U.S. District Court”), against LVSC, Sheldon G. Adelson, and William P. Weidner. The complaint alleged that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 1, 2007 through November 6, 2008. The complaint sought, among other relief, class certification, compensatory damages and attorneys’ fees and costs. On July 21, 2010, Wendell and Shirley Combs filed a purported class action complaint in the U.S. District Court, against LVSC, Sheldon G. Adelson, and William P. Weidner. The complaint alleged that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from June 13, 2007 through November 11, 2008. The complaint, which was substantially similar to the Fosbre complaint, discussed above, sought, among other relief, class certification, compensatory damages and attorneys’ fees and costs. On August 31, 2010, the U.S. District Court entered an order consolidating the Fosbre and Combs cases, and appointed lead plaintiffs and lead counsel. As such, the Fosbre and Combs cases are reported as one consolidated matter. On November 1, 2010, a purported class action amended complaint was filed in the consolidated action against LVSC, Sheldon G. Adelson and William P. Weidner. The amended complaint alleges that LVSC, through the individual defendants, disseminated or approved materially false and misleading information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 2, 2007

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

through November 6, 2008. The amended complaint seeks, among other relief, class certification, compensatory damages and attorneys’ fees and costs. On January 10, 2011, the defendants filed a motion to dismiss the amended complaint, which, on August 24, 2011, was granted in part, and denied in part, with the dismissal of certain allegations. On November 7, 2011, the defendants filed their answer to the allegations remaining in the amended complaint. On July 11, 2012, the U.S. District Court issued an order allowing Defendants’ Motion for Partial Reconsideration of the Court’s Order dated August 24, 2011, striking additional portions of the plaintiff’s complaint and reducing the class period to a period of February 4 to November 6, 2008. On August 7, 2012, the plaintiff filed a purported class action second amended complaint (the “Second Amended Complaint”) seeking to expand their allegations back to a time period of 2007 (having previously been cut back to 2008 by the U.S. District Court) essentially alleging very similar matters that had been previously stricken by the U.S. District Court. On October 16, 2012, the defendants filed a new motion to dismiss the Second Amended Complaint. The plaintiffs responded to the motion to dismiss on November 1, 2012, and defendants filed their reply on November 12, 2012. On November 20, 2012, the U.S. District Court granted a stay of discovery under the Private Securities Litigation Reform Act pending a decision on the new motion to dismiss and therefore, the discovery process has been suspended. On April 16, 2013, the case was reassigned to a new judge. On July 30, 2013, the U.S. District Court heard the motion to dismiss and took the matter under advisement. This consolidated action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

On March 9, 2011, Benyamin Kohanim filed a shareholder derivative action (the “Kohanim action”) on behalf of the Company in the District Court of Clark County against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time. The complaint alleges, among other things, breach of fiduciary duties in failing to properly implement, oversee and maintain internal controls to ensure compliance with the FCPA. The complaint seeks to recover for the Company unspecified damages, including restitution and disgorgement of profits, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. On April 18, 2011, Ira J. Gaines, Sunshine Wire and Cable Defined Benefit Pension Plan Trust dated 1/1/92 and Peachtree Mortgage Ltd. filed a shareholder derivative action (the “Gaines action”) on behalf of the Company in the District Court of Clark County against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time. The complaint raises substantially similar claims as alleged in the Kohanim action. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiffs. The Kohanim and Gaines actions have been consolidated and are reported as one consolidated matter. On July 25, 2011, the plaintiffs filed a first verified amended consolidated complaint. The plaintiffs have twice agreed to stay the proceedings. A 120-day stay was entered by the Court in October 2011. It was extended for another 90 days in February 2012 and expired in May 2012. The parties agreed to an extension of the May 2012 deadline that expired on October 30, 2012. The defendants filed a motion to dismiss on November 1, 2012, based on the fact that the plaintiffs have suffered no damages. On January 23, 2013, the Court denied the motion to dismiss in part, deferred the remainder of the motion to dismiss and stayed the proceedings until a July 22, 2013 status hearing. On July 22, 2013, the Court extended the stay until December 2, 2013. This consolidated action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

On April 1, 2011, Nasser Moradi, Richard Buckman, Douglas Tomlinson and Matt Abbeduto filed a shareholder derivative action (the “Moradi action”), as amended on April 15, 2011, on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time. The complaint raises substantially similar claims as alleged in the Kohanim and Gaines actions. The complaint seeks to recover for the Company unspecified damages, including exemplary damages and restitution, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiffs. On April 18, 2011, the Louisiana Municipal Police Employees Retirement System filed a shareholder derivative action (the “LAMPERS action”) on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi and Gaines actions. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. On April 22, 2011, John Zaremba filed a shareholder derivative action (the “Zaremba action”) on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi, Gaines and LAMPERS actions. The complaint seeks to recover for the Company unspecified damages, including restitution, disgorgement of profits and injunctive relief, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. On August 25, 2011, the U.S. District Court consolidated the Moradi, LAMPERS and Zaremba actions and such actions are reported as one consolidated matter. On November 17, 2011, the defendants filed a motion to dismiss or alternatively to stay the federal action due to the parallel state court action described above. On May 25, 2012, the case was transferred to a new judge. On August 27, 2012, the U.S. District Court granted the motion to stay pending a further update of the Special Litigation Committee due on October 30, 2012. On October 30, 2012, the defendants filed the update asking the judge to determine whether to continue the stay until January 31, 2013, or to address motions to dismiss. On November 7, 2012, the U.S. District Court denied defendants request for an extension of the stay but asked the parties to brief the motion to dismiss. On November 21, 2012, defendants filed their motion to dismiss. On December 21, 2012, plaintiffs filed their opposition and on January 18, 2013, defendants filed their reply. This consolidated action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

On March 23, 2012, Ernest Kleinschmidt filed a shareholder derivative action (the “Kleinschmidt action”) on behalf of the Company in the District Court of Clark County against Sheldon G. Adelson, Michael A. Leven, Irwin A. Siegel, Jeffrey H. Schwartz, Jason N. Ader, Charles D. Forman, Irwin Chafetz and George P. Koo, who are currently members of the Board of Directors, and Wing T. Chao, Andrew R. Heyer, James Purcell, Bradley H. Stone and William P. Weidner, who are former members of the Board of Directors and/or executives of the Company. The complaint alleges, among other things, breach of fiduciary duties for disseminating false and misleading information, failure to maintain internal controls and failing to properly oversee and manage the Company, and unjust enrichment. The complaint seeks, among other relief, unspecified damages, direction to LVSC to take unspecified actions to improve its corporate governance and internal procedures, restitution and disgorgement of profits, and attorneys’ fees, costs and related expenses for the plaintiff. On June 29, 2012, the defendants who had been served at that time including nominal defendant LVSC and defendants Michael A. Leven, Irwin A. Siegel, Jason N. Ader, Charles D. Forman, Irwin Chafetz, George P. Koo, James Purcell, Bradley H. Stone and William P. Weidner filed a motion to dismiss. On July 20 and July 25, 2012, defendants Jeffery H. Schwartz and Wing T. Chao, respectively, each filed a substantially similar motion to dismiss. On October 10, 2012, the case was transferred to business court within the District Court of Clark County. On October 12, 2012, the case was reassigned to a new judge. On January 14, 2013, the District Court of Clark County filed its order dismissing the entire case for failure to make a demand on the Board of Directors of LVSC with 5 of 6 claims dismissed with prejudice as being time barred under applicable statutes of limitations. The sixth claim for unjust enrichment was allowed to be re-filed, but only after demand on the Board of Directors of LVSC is made. The Company received a letter from the plaintiffs lawyers dated February 9, 2013, making their demand on the Board of Directors of LVSC for the unjust enrichment claim that the District Court of Clark County previously dismissed without prejudice. In addition, on February 19, 2013, the plaintiffs filed a notice of appeal with the Nevada Supreme Court appealing the dismissal of the case. Plaintiff’s opening brief in the Nevada Supreme Court is due on August 12, 2013, and the response briefs will be due per the court’s calendar. Based on proceedings to date, management is unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

On January 19, 2012, Asian American Entertainment Corporation, Limited (“AAEC”) filed a claim (the “Macao action”) with the Macao Judicial Court (Tribunal Judicial de Base) against VML, LVS (Nevada) International Holdings, Inc. (“LVS (Nevada)”), Las Vegas Sands, LLC (“LVSLLC”) and Venetian Casino Resort, LLC (“VCR” and collectively, the “Defendants”). The claim is for 3.0 billion patacas (approximately $375.4 million at exchange rates in effect on June 30, 2013) as compensation for damages resulting from the alleged breach of agreements entered into between AAEC and the Defendants for their joint presentation of a bid in response to the public tender held by the Macao government for the award of gaming concessions at the end of 2001. On July 4, 2012, the Defendants filed their defense to the Macao action with the Macao Judicial Court. AAEC then filed a reply that included several amendments to the original claim, although the amount of the claim was not amended. On January 4, 2013, the Defendants filed an amended defense to the amended claim with the Macao Judicial Court. The Macao action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

As previously disclosed by the Company, on February 5, 2007, AAEC brought a similar claim (the “Prior Action”) in the U.S. District Court, against LVSI (now known as LVSLLC), VCR and Venetian Venture Development, LLC, which are subsidiaries of the Company, and William P. Weidner and David Friedman, who are former executives of the Company. The U.S. District Court entered an order on April 16, 2010, dismissing the Prior Action. On April 20, 2012, LVSLLC, VCR and LVS (Nevada) filed an injunctive action (the “Nevada Action”) against AAEC in the U.S. District Court seeking to enjoin AAEC from proceeding with the Macao Action based on AAEC’s filing, and the U.S. District Court’s dismissal, of the Prior Action. On June 14, 2012, the U.S. District Court issued an order that denied the motions requesting the Nevada Action, thereby effectively dismissing the Nevada Action.

On August 1, 2012, SCL filed an announcement with the SEHK stating that SCL’s subsidiary, VML, has received a notification from the Office for Personal Data Protection of the Macao government (the “OPDP”) indicating that the OPDP has launched an official investigation procedure in relation to the alleged transfer from Macao by VML to the United States of certain data contrary to the Personal Data Protection Act (Macau). On April 13, 2013, the OPDP presented its findings and VML received a cumulative fine of 40,000 patacas (approximately $5,006 at exchange rates in effect on June 30, 2013). VML paid the fine as levied by the OPDP.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The Company has received subpoenas from the U.S. Attorney’s Office requesting the production of documents relating to two prior customers of the Company’s properties. The Company is cooperating with the U.S. Attorney’s Office on these matters. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.

NOTE 10 — SEGMENT INFORMATION

The Company’s principal operating and developmental activities occur in three geographic areas: Macao, Singapore and the United States. The Company reviews the results of operations for each of its operating segments: The Venetian Macao; Sands Cotai Central; Four Seasons Macao; Sands Macao; Other Asia (comprised primarily of the Company’s ferry operations and various other operations that are ancillary to the Company’s properties in Macao); Marina Bay Sands; The Venetian Las Vegas, which includes the Sands Expo Center; The Palazzo; and Sands Bethlehem. The Venetian Las Vegas and The Palazzo operating segments are managed as a single integrated resort and have been aggregated as one reportable segment (the “Las Vegas Operating Properties”), considering their similar economic characteristics, types of customers, types of services and products, the regulatory business environment of the operations within each segment and the Company’s organizational and management reporting structure. The Company also reviews construction and development activities for each of its primary projects under development, some of which have been suspended, in addition to its reportable segments noted above. The Company’s primary projects under development are The Parisian Macao and phase III of Sands Cotai Central in Macao, and the Las Vegas Condo Tower (included in Corporate and Other) in the U.S. The corporate activities of the Company are also included in Corporate and Other. The information for the six months ended June 30, 2012, has been reclassified to conform to the current presentation. The Company’s segment information as of June 30, 2013 and December 31, 2012, and for the three and six months ended June 30, 2013 and 2012, is as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net Revenues:
Macao:
The Venetian Macao	$	894,706		$	649,446		$	1,766,918		$	1,422,206
Sands Cotai Central		584,002			265,601			1,171,181			265,601
Four Seasons Macao		274,089			266,137			497,309			565,741
Sands Macao		294,667			271,603			604,940			620,686
Other Asia		36,408			37,935			70,281			73,503

		2,083,872			1,490,722			4,110,629			2,947,737
Marina Bay Sands		739,490			694,762			1,534,354			1,543,431
United States:
Las Vegas Operating Properties		345,730			327,313			757,271			711,916
Sands Bethlehem		126,759			115,096			249,675			230,658

		472,489			442,409			1,006,946			942,574
Intersegment eliminations		(52,910	)		(45,987	)		(106,269	)		(89,094	)

Total net revenues	$	3,242,941		$	2,581,906		$	6,545,660		$	5,344,648

Adjusted Property EBITDA(1)
Macao:
The Venetian Macao	$	360,864		$	229,241		$	709,346		$	511,174
Sands Cotai Central		146,147			51,838			277,668			51,838
Four Seasons Macao		61,809			76,587			115,361			144,106
Sands Macao		88,338			71,304			184,940			178,260
Other Asia		(2,135	)		(5,955	)		(5,724	)		(11,677	)

		655,023			423,015			1,281,591			873,701
Marina Bay Sands		355,349			330,405			752,130			802,924
United States:
Las Vegas Operating Properties		62,969			64,350			176,397			180,156
Sands Bethlehem		33,579			26,917			63,435			54,419

		96,548			91,267			239,832			234,575

Total adjusted property EBITDA		1,106,920			844,687			2,273,553			1,911,200
Other Operating Costs and Expenses
Stock-based compensation		(6,847	)		(6,338	)		(13,661	)		(15,507	)
Corporate		(46,481	)		(58,592	)		(102,753	)		(107,547	)
Pre-opening		(1,031	)		(43,472	)		(7,868	)		(94,931	)
Development		(6,002	)		(6,797	)		(11,353	)		(7,995	)
Depreciation and amortization		(251,048	)		(220,440	)		(503,605	)		(415,187	)
Amortization of leasehold interests in land		(10,108	)		(10,057	)		(20,275	)		(20,002	)
Impairment loss		—			(100,781	)		—			(143,674	)
Loss on disposal of assets		(4,762	)		(482	)		(6,694	)		(1,075	)

Operating income		780,641			397,728			1,607,344			1,105,282
Other Non-Operating Costs and Expenses
Interest income		3,236			6,892			7,029			12,540
Interest expense, net of amounts capitalized		(68,376	)		(64,533	)		(137,208	)		(129,205	)
Other income (expense)		3,893			1,782			1,785			(1,637	)
Loss on modification or early retirement of debt		—			(16,403	)		—			(19,234	)
Income tax expense		(47,721	)		(39,085	)		(103,303	)		(102,256	)

Net income	$	671,673		$	286,381		$	1,375,647		$	865,490

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

(1)

Adjusted property EBITDA is net income before royalty fees, stock-based compensation expense, corporate expense, pre-opening expense, development expense, depreciation and amortization, amortization of leasehold interests in land, impairment loss, loss on disposal of assets, interest, other income (expense), loss on modification or early retirement of debt and income taxes. Adjusted property EBITDA is used by management as the primary measure of operating performance of the Company’s properties and to compare the operating performance of the Company’s properties with that of its competitors.


	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Intersegment Revenues
Macao:
The Venetian Macao	$	1,414	$	1,159	$	2,488	$	2,072
Sands Cotai Central		89		76		178		76
Other Asia		9,607		7,796		18,861		14,212

		11,110		9,031		21,527		16,360
Marina Bay Sands		2,344		611		4,752		1,099
Las Vegas Operating Properties		39,456		36,345		79,990		71,635

Total intersegment revenues	$	52,910	$	45,987	$	106,269	$	89,094


	Six Months Ended June 30,
	2013		2012
Capital Expenditures
Corporate and Other	$	21,646	$	12,958
Macao:
The Venetian Macao		44,091		35,513
Sands Cotai Central		124,841		506,096
Four Seasons Macao		5,668		19,345
Sands Macao		9,740		12,875
Other Asia		217		435
The Parisian Macao		59,342		354

		243,899		574,618
Marina Bay Sands		96,974		87,450
United States:
Las Vegas Operating Properties		27,339		46,905
Sands Bethlehem		4,157		13,581

		31,496		60,486

Total capital expenditures	$	394,015	$	735,512

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	June 30,		December 31,
	2013		2012
Total Assets
Corporate and Other	$	864,258	$	586,788
Macao:
The Venetian Macao		2,989,848		3,254,193
Sands Cotai Central		4,761,747		4,791,560
Four Seasons Macao		1,288,725		1,338,714
Sands Macao		411,689		414,531
Other Asia		329,143		345,522
The Parisian Macao		195,445		118,975
Other Development Projects		217		123

		9,976,814		10,263,618
Marina Bay Sands		6,519,903		6,941,510
United States:
Las Vegas Operating Properties		3,700,457		3,605,513
Sands Bethlehem		722,392		766,223

		4,422,849		4,371,736

Total assets	$	21,783,824	$	22,163,652


	June 30,		December 31,
	2013		2012
Total Long-Lived Assets
Corporate and Other	$	404,359	$	398,100
Macao:
The Venetian Macao		1,934,698		1,968,415
Sands Cotai Central		3,818,917		3,836,471
Four Seasons Macao		950,846		971,732
Sands Macao		281,259		285,344
Other Asia		195,193		202,392
The Parisian Macao		195,445		118,912

		7,376,358		7,383,266
Marina Bay Sands		5,385,730		5,657,351
United States:
Las Vegas Operating Properties		3,104,747		3,179,426
Sands Bethlehem		594,583		607,346

		3,699,330		3,786,772

Total long-lived assets	$	16,865,777	$	17,225,489

NOTE 11 — CONDENSED CONSOLIDATING FINANCIAL INFORMATION

LVSLLC, VCR, Mall Intermediate Holding Company, LLC, Venetian Transport, LLC, Venetian Marketing, Inc., Lido Intermediate Holding Company, LLC, Lido Casino Resort Holding Company, LLC, Sands Expo & Convention Center, Inc. (formerly Interface Group-Nevada, Inc.), Palazzo Condo Tower, LLC, Sands Pennsylvania, Inc., Phase II Mall Holding, LLC, LVS (Nevada) International Holdings, Inc. and LVS Management Services, LLC (collectively, the “Restricted Subsidiaries”), are all guarantors under the Senior Secured Credit Facility. In March 2013, Phase II Mall Holding, LLC was merged into Lido Casino Resort Holding Company, LLC, which was then merged into Lido Intermediate Holding Company, LLC, which was then merged into VCR. Mall Intermediate Holding Company, LLC was also merged into VCR in March 2013 and Venetian Transport, LLC was merged into LVSLLC in May 2013. The noncontrolling interest amount included in the Restricted Subsidiaries’ condensed consolidating balance sheets is related to non-voting preferred stock of one of the subsidiaries held by third parties.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

In February 2008, all of the capital stock of Phase II Mall Subsidiary, LLC was sold to GGP; however, the sale is not complete from an accounting perspective due to the Company’s continuing involvement in the transaction related to the participation in certain future revenues earned by GGP. Certain of the assets, liabilities and operating results related to the ownership and operation of the mall by Phase II Mall Subsidiary, LLC subsequent to the sale will continue to be accounted for by the Restricted Subsidiaries, and therefore are included in the “Restricted Subsidiaries” columns in the following condensed consolidating financial information. As a result, net liabilities of $23.4 million (consisting of $245.0 million of property and equipment, offset by $268.4 million of liabilities consisting primarily of deferred proceeds from the sale) and $17.3 million (consisting of $250.8 million of property and equipment, offset by $268.1 million of liabilities consisting primarily of deferred proceeds from the sale) as of June 30, 2013 and December 31, 2012, respectively, and a net loss (consisting primarily of depreciation expense) of $3.2 million and $6.4 million for the three and six months ended June 30, 2013, respectively, and $3.8 million and $7.5 million for the three and six months ended June 30, 2012, respectively, related to the mall and are being accounted for by the Restricted Subsidiaries. These balances and amounts are not collateral for the Senior Secured Credit Facility.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The condensed consolidating financial information of LVSC, the Restricted Subsidiaries and the non-restricted subsidiaries on a combined basis as of June 30, 2013 and December 31, 2012, and for the three and six months ended June 30, 2013 and 2012, is as follows (in thousands):

CONDENSED CONSOLIDATING BALANCE SHEETS

June 30, 2013


							Consolidating/
	Las Vegas		Restricted		Non-Restricted		Eliminating
	Sands Corp.		Subsidiaries		Subsidiaries		Entries			Total
Cash and cash equivalents	$	34,592	$	332,564	$	2,146,985	$	—		$	2,514,141
Restricted cash and cash equivalents		—		—		5,782		—			5,782
Intercompany receivables		218,008		58,325		—		(276,333	)		—
Intercompany notes receivable		—		296,012		237,161		(533,173	)		—
Accounts receivable, net		3,674		280,501		1,519,182		—			1,803,357
Inventories		4,389		11,492		25,348		—			41,229
Deferred income taxes, net		5,976		—		—		(4,333	)		1,643
Prepaid expenses and other		18,091		9,877		71,243		(4	)		99,207

Total current assets		284,730		988,771		4,005,701		(813,843	)		4,465,359
Property and equipment, net		174,880		3,259,245		12,002,942		—			15,437,067
Investments in subsidiaries		7,474,193		5,455,526		—		(12,929,719	)		—
Deferred financing costs, net		209		9,712		173,118		—			183,039
Restricted cash and cash equivalents		—		1,102		103		—			1,205
Intercompany receivables		5,633		43,078		—		(48,711	)		—
Intercompany notes receivable		—		1,005,813		—		(1,005,813	)		—
Deferred income taxes, net		1,774		39,156		—		(495	)		40,435
Leasehold interests in land, net		—		—		1,428,710		—			1,428,710
Intangible assets, net		690		—		108,988		—			109,678
Other assets, net		264		23,103		94,964		—			118,331

Total assets	$	7,942,373	$	10,825,506	$	17,814,526	$	(14,798,581	)	$	21,783,824

Accounts payable	$	15,180	$	30,054	$	75,801	$	—		$	121,035
Construction payables		3,760		2,379		279,522		—			285,661
Intercompany payables		—		213,420		62,913		(276,333	)		—
Intercompany notes payable		237,161		—		296,012		(533,173	)		—
Accrued interest payable		78		594		10,963		—			11,635
Other accrued liabilities		72,393		228,624		1,704,898		—			2,005,915
Income taxes payable		1,753		—		169,264		(4	)		171,013
Deferred income taxes		—		4,323		10		(4,333	)		—
Current maturities of long-term debt		3,688		973,290		3,190		—			980,168

Total current liabilities		334,013		1,452,684		2,602,573		(813,843	)		3,575,427
Other long-term liabilities		42,739		10,242		88,145		—			141,126
Intercompany payables		—		—		48,711		(48,711	)		—
Intercompany notes payable		—		—		1,005,813		(1,005,813	)		—
Deferred income taxes		—		—		171,401		(495	)		170,906
Deferred amounts related to mall transactions		—		428,087		—		—			428,087
Long-term debt		65,516		1,593,844		6,851,871		—			8,511,231

Total liabilities		442,268		3,484,857		10,768,514		(1,868,862	)		12,826,777

Total Las Vegas Sands Corp. stockholders’ equity		7,500,105		7,340,244		5,589,475		(12,929,719	)		7,500,105
Noncontrolling interests		—		405		1,456,537		—			1,456,942

Total equity		7,500,105		7,340,649		7,046,012		(12,929,719	)		8,957,047

Total liabilities and equity	$	7,942,373	$	10,825,506	$	17,814,526	$	(14,798,581	)	$	21,783,824

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2012


	Las Vegas		Restricted		Non-Restricted		Consolidating/ Eliminating
	Sands Corp.		Subsidiaries		Subsidiaries		Entries			Total
Cash and cash equivalents	$	7,962	$	182,402	$	2,322,402	$	—		$	2,512,766
Restricted cash and cash equivalents		—		34		4,487		—			4,521
Intercompany receivables		209,961		62,968		—		(272,929	)		—
Intercompany notes receivable		—		1,100,000		237,161		(1,337,161	)		—
Accounts receivable, net		6,646		259,691		1,552,923		—			1,819,260
Inventories		3,501		13,081		27,293		—			43,875
Deferred income taxes, net		5,687		—		87		(3,475	)		2,299
Prepaid expenses and other		13,257		12,223		69,313		—			94,793

Total current assets		247,014		1,630,399		4,213,666		(1,613,565	)		4,477,514
Property and equipment, net		173,065		3,329,824		12,263,859		—			15,766,748
Investments in subsidiaries		7,045,198		4,657,313		—		(11,702,511	)		—
Deferred financing costs, net		238		12,528		201,699		—			214,465
Restricted cash and cash equivalents		—		1,068		870		—			1,938
Intercompany receivables		6,109		54,982		—		(61,091	)		—
Intercompany notes receivable		—		928,728		—		(928,728	)		—
Deferred income taxes, net		3,665		39,429		—		186			43,280
Leasehold interests in land, net		—		—		1,458,741		—			1,458,741
Intangible assets, net		690		—		69,928		—			70,618
Other assets, net		243		18,994		111,111		—			130,348

Total assets	$	7,476,222	$	10,673,265	$	18,319,874	$	(14,305,709	)	$	22,163,652

Accounts payable	$	9,948	$	25,007	$	71,543	$	—		$	106,498
Construction payables		5,318		7,680		330,374		—			343,372
Intercompany payables		—		173,698		99,231		(272,929	)		—
Intercompany notes payable		237,161		—		1,100,000		(1,337,161	)		—
Accrued interest payable		82		1,050		14,410		—			15,542
Other accrued liabilities		42,318		235,882		1,617,283		—			1,895,483
Income taxes payable		—		4		164,122		—			164,126
Deferred income taxes		—		3,475		—		(3,475	)		—
Current maturities of long-term debt		3,688		90,649		3,465		—			97,802

Total current liabilities		298,515		537,445		3,400,428		(1,613,565	)		2,622,823
Other long-term liabilities		48,506		9,776		75,654		—			133,936
Intercompany payables		—		—		61,091		(61,091	)		—
Intercompany notes payable		—		—		928,728		(928,728	)		—
Deferred income taxes		—		—		185,759		186			185,945
Deferred amounts related to mall transactions		—		430,271		—		—			430,271
Long-term debt		67,359		2,753,745		7,311,161		—			10,132,265

Total liabilities		414,380		3,731,237		11,962,821		(2,603,198	)		13,505,240

Total Las Vegas Sands Corp. stockholders’ equity		7,061,842		6,941,623		4,760,888		(11,702,511	)		7,061,842
Noncontrolling interests		—		405		1,596,165		—			1,596,570

Total equity		7,061,842		6,942,028		6,357,053		(11,702,511	)		8,658,412

Total liabilities and equity	$	7,476,222	$	10,673,265	$	18,319,874	$	(14,305,709	)	$	22,163,652

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended June 30, 2013


	Las Vegas Sands Corp.			Restricted Subsidiaries			Non-Restricted Subsidiaries			Consolidating/ Eliminating Entries			Total
Revenues:
Casino	$	—		$	105,067		$	2,569,062		$	—		$	2,674,129
Rooms		—			120,567			204,062			—			324,629
Food and beverage		—			51,523			123,249			—			174,772
Mall		—			—			107,993			—			107,993
Convention, retail and other		—			76,829			89,651			(43,430	)		123,050

		—			353,986			3,094,017			(43,430	)		3,404,573
Less — promotional allowances		(342	)		(20,510	)		(140,409	)		(371	)		(161,632	)

Net revenues		(342	)		333,476			2,953,608			(43,801	)		3,242,941

Operating expenses:
Casino		—			71,464			1,448,853			(596	)		1,519,721
Rooms		—			38,880			26,805			—			65,685
Food and beverage		—			23,883			66,484			(1,073	)		89,294
Mall		—			—			18,147			—			18,147
Convention, retail and other		—			23,777			62,380			(6,063	)		80,094
Provision for doubtful accounts		—			9,748			52,310			—			62,058
General and administrative		—			70,351			237,694			(176	)		307,869
Corporate		41,184			134			41,053			(35,890	)		46,481
Pre-opening		—			—			1,030			1			1,031
Development		5,997			9			—			(4	)		6,002
Depreciation and amortization		6,323			45,622			199,103			—			251,048
Amortization of leasehold interests in land		—			—			10,108			—			10,108
Loss on disposal of assets		—			551			4,211			—			4,762

		53,504			284,419			2,168,178			(43,801	)		2,462,300

Operating income (loss)		(53,846	)		49,057			785,430			—			780,641
Other income (expense):
Interest income		32			44,792			4,386			(45,974	)		3,236
Interest expense, net of amounts capitalized		(1,492	)		(21,806	)		(91,052	)		45,974			(68,376	)
Other income (expense)		32			(481	)		4,342			—			3,893
Income from equity investments in subsidiaries		571,639			487,974			—			(1,059,613	)		—

Income before income taxes		516,365			559,536			703,106			(1,059,613	)		719,394
Income tax benefit (expense)		13,388			(19,104	)		(42,005	)		—			(47,721	)

Net income		529,753			540,432			661,101			(1,059,613	)		671,673
Net income attributable to noncontrolling interests		—			(606	)		(141,314	)		—			(141,920	)

Net income attributable to Las Vegas Sands Corp.	$	529,753		$	539,826		$	519,787		$	(1,059,613	)	$	529,753

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended June 30, 2012


	Las Vegas Sands Corp.			Restricted Subsidiaries			Non-Restricted Subsidiaries			Consolidating/ Eliminating Entries			Total
Revenues:
Casino	$	—		$	94,598		$	1,972,826		$	—		$	2,067,424
Rooms		—			112,787			162,524			—			275,311
Food and beverage		—			54,045			105,699			—			159,744
Mall		—			—			93,740			—			93,740
Convention, retail and other		—			73,427			82,806			(39,399	)		116,834

		—			334,857			2,417,595			(39,399	)		2,713,053
Less — promotional allowances		(280	)		(18,874	)		(111,667	)		(326	)		(131,147	)

Net revenues		(280	)		315,983			2,305,928			(39,725	)		2,581,906

Operating expenses:
Casino		—			63,872			1,124,136			(550	)		1,187,458
Rooms		—			36,955			23,560			(2	)		60,513
Food and beverage		—			23,710			59,296			(1,033	)		81,973
Mall		—			—			17,798			—			17,798
Convention, retail and other		—			22,638			61,239			(5,474	)		78,403
Provision for doubtful accounts		—			7,475			50,899			—			58,374
General and administrative		—			68,285			190,941			(188	)		259,038
Corporate		53,475			106			37,485			(32,474	)		58,592
Pre-opening		—			—			43,473			(1	)		43,472
Development		6,800			—			—			(3	)		6,797
Depreciation and amortization		3,672			55,307			161,461			—			220,440
Amortization of leasehold interests in land		—			—			10,057			—			10,057
Impairment loss		—			—			100,781			—			100,781
(Gain) loss on disposal of assets		(1	)		165			318			—			482

		63,946			278,513			1,881,444			(39,725	)		2,184,178

Operating income (loss)		(64,226	)		37,470			424,484			—			397,728
Other income (expense):
Interest income		95			33,081			6,375			(32,659	)		6,892
Interest expense, net of amounts capitalized		(376	)		(23,893	)		(72,923	)		32,659			(64,533	)
Other income (expense)		—			(663	)		2,445			—			1,782
Loss on modification or early retirement of debt		—			(1,599	)		(14,804	)		—			(16,403	)
Income from equity investments in subsidiaries		282,436			229,547			—			(511,983	)		—

Income before income taxes		217,929			273,943			345,577			(511,983	)		325,466
Income tax benefit (expense)		22,658			(13,843	)		(47,900	)		—			(39,085	)

Net income		240,587			260,100			297,677			(511,983	)		286,381
Net income attributable to noncontrolling interests		—			(736	)		(45,058	)		—			(45,794	)

Net income attributable to Las Vegas Sands Corp.	$	240,587		$	259,364		$	252,619		$	(511,983	)	$	240,587

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2013


	Las Vegas Sands Corp.			Restricted Subsidiaries			Non-Restricted Subsidiaries			Consolidating/ Eliminating Entries			Total
Revenues:
Casino	$	—		$	264,964		$	5,145,219		$	—		$	5,410,183
Rooms		—			241,681			407,964			—			649,645
Food and beverage		—			106,344			253,757			—			360,101
Mall		—			—			193,454			—			193,454
Convention, retail and other		—			163,265			173,693			(87,847	)		249,111

		—			776,254			6,174,087			(87,847	)		6,862,494
Less — promotional allowances		(614	)		(42,740	)		(272,613	)		(867	)		(316,834	)

Net revenues		(614	)		733,514			5,901,474			(88,714	)		6,545,660

Operating expenses:
Casino		—			151,047			2,896,379			(1,426	)		3,046,000
Rooms		—			78,031			56,344			—			134,375
Food and beverage		—			47,914			140,250			(2,139	)		186,025
Mall		—			—			35,405			—			35,405
Convention, retail and other		—			55,067			115,647			(11,771	)		158,943
Provision for doubtful accounts		—			19,326			107,411			—			126,737
General and administrative		—			139,160			459,516			(393	)		598,283
Corporate		87,924			265			87,539			(72,975	)		102,753
Pre-opening		—			115			7,753			—			7,868
Development		10,968			395			—			(10	)		11,353
Depreciation and amortization		12,477			90,595			400,533			—			503,605
Amortization of leasehold interests in land		—			—			20,275