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 September 30, 2012

¨	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 November 1, 2012
Common Stock ($0.001 par value)		823,449,212 shares

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Table of Contents


PART I FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011			3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011			4
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011			5
Condensed Consolidated Statements of Equity for the Nine Months Ended September 30, 2012 and 2011			6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011			7
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			39
Item 3. Quantitative and Qualitative Disclosures about Market Risk			63
Item 4. Controls and Procedures			64

PART II OTHER INFORMATION

Item 1. Legal Proceedings			64
Item 1A. Risk Factors			64
Item 6. Exhibits			65
Signatures			66

PART 1 FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,		December 31,
	2012		2011
	(In thousands, except share and
	per share data)
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,745,415	$	3,902,718
Restricted cash and cash equivalents		4,401		4,828
Accounts receivable, net		1,702,458		1,336,817
Inventories		42,511		34,990
Deferred income taxes, net		12,023		72,192
Prepaid expenses and other		92,269		45,607

Total current assets		5,599,077		5,397,152
Property and equipment, net		15,638,535		15,030,979
Deferred financing costs, net		228,098		173,636
Restricted cash and cash equivalents		3,466		2,315
Deferred income taxes, net		31,748		153
Leasehold interests in land, net		1,443,503		1,390,468
Intangible assets, net		73,165		80,068
Other assets, net		140,770		169,352

Total assets	$	23,158,362	$	22,244,123

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	150,192	$	104,113
Construction payables		372,320		359,909
Accrued interest payable		10,249		31,668
Other accrued liabilities		1,725,871		1,439,110
Income taxes payable		163,209		108,060
Current maturities of long-term debt		98,136		455,846

Total current liabilities		2,519,977		2,498,706
Other long-term liabilities		128,858		89,445
Deferred income taxes		156,346		205,438
Deferred proceeds from sale of The Shoppes at The Palazzo		267,710		266,992
Deferred gain on sale of The Grand Canal Shoppes		44,746		47,344
Deferred rent from mall transactions		118,805		119,915
Long-term debt		9,397,866		9,577,131

Total liabilities		12,634,308		12,804,971

Commitments and contingencies (Note 9)
Equity:
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 823,446,712 and 733,249,698 shares issued and outstanding		823		733
Capital in excess of par value		6,212,167		5,610,160
Accumulated other comprehensive income		256,222		94,104
Retained earnings		2,598,984		2,145,692

Total Las Vegas Sands Corp. stockholders’ equity		9,068,196		7,850,689
Noncontrolling interests		1,455,858		1,588,463

Total equity		10,524,054		9,439,152

Total liabilities and equity	$	23,158,362	$	22,244,123

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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In thousands, except share and per share data)
	(Unaudited)
Revenues:
Casino	$	2,201,030		$	1,903,142		$	6,534,947		$	5,429,903
Rooms		287,849			262,352			830,887			734,022
Food and beverage		142,685			147,223			455,884			438,632
Mall		103,232			89,212			268,390			218,956
Convention, retail and other		117,129			134,629			363,680			370,182

		2,851,925			2,536,558			8,453,788			7,191,695
Less-promotional allowances		(142,443	)		(127,183	)		(399,658	)		(325,305	)

Net revenues		2,709,482			2,409,375			8,054,130			6,866,390

Operating expenses:
Casino		1,278,162			993,378			3,673,171			2,889,327
Rooms		58,911			53,493			172,210			152,679
Food and beverage		77,748			71,781			238,022			216,619
Mall		16,666			15,534			50,765			43,756
Convention, retail and other		66,867			83,695			224,794			247,742
Provision for doubtful accounts		72,805			33,953			183,397			92,507
General and administrative		268,832			240,672			746,587			674,718
Corporate		54,617			54,031			162,164			133,983
Pre-opening		39,872			15,823			134,803			43,472
Development		4,201			3,308			12,196			6,301
Depreciation and amortization		226,538			200,071			641,725			596,469
Amortization of leasehold interests in land		10,014			10,143			30,016			33,333
Impairment loss		—			—			143,674			—
Loss on disposal of assets		154			937			1,229			8,879

		2,175,387			1,776,819			6,414,753			5,139,785

Operating income		534,095			632,556			1,639,377			1,726,605
Other income (expense):
Interest income		4,176			2,369			16,716			8,444
Interest expense, net of amounts capitalized		(62,292	)		(70,761	)		(191,497	)		(214,938	)
Other income (expense)		2,352			(6,617	)		715			(9,384	)
Loss on modification or early retirement of debt		—			—			(19,234	)		—

Income before income taxes		478,331			557,547			1,446,077			1,510,727
Income tax expense		(33,351	)		(52,375	)		(135,607	)		(151,960	)

Net income		444,980			505,172			1,310,470			1,358,767
Net income attributable to noncontrolling interests		(95,198	)		(80,293	)		(221,159	)		(233,928	)

Net income attributable to Las Vegas Sands Corp.		349,782			424,879			1,089,311			1,124,839
Preferred stock dividends		—			(19,140	)		—			(57,957	)
Accretion to redemption value of preferred stock issued to Principal Stockholder’s family		—			(23,136	)		—			(69,408	)
Preferred stock inducement and repurchase premiums		—			(28,972	)		—			(48,080	)

Net income attributable to common stockholders	$	349,782		$	353,631		$	1,089,311		$	949,394

Earnings per share:
Basic	$	0.43		$	0.48		$	1.36		$	1.31

Diluted	$	0.42		$	0.44		$	1.32		$	1.17

Weighted average shares outstanding:
Basic		821,482,154			729,773,246			801,084,165			727,309,255

Diluted		825,606,248			812,543,534			823,361,035			811,550,683

Dividends declared per common share	$	0.25		$	—		$	0.75		$	—

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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In thousands)
	(Unaudited)
Net income	$	444,980		$	505,172		$	1,310,470		$	1,358,767
Currency translation adjustment		94,294			(117,492	)		165,214			(28,644	)

Total comprehensive income		539,274			387,680			1,475,684			1,330,123
Comprehensive income attributable to noncontrolling interests		(95,799	)		(78,229	)		(224,255	)		(231,736	)

Comprehensive income attributable to Las Vegas Sands Corp.	$	443,475		$	309,451		$	1,251,429		$	1,098,387

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
									Accumulated
						Capital in			Other
	Preferred			Common		Excess of			Comprehensive			Retained			Noncontrolling
	Stock			Stock		Par Value			Income			Earnings			Interests			Total
	(In thousands)
	(Unaudited)
Balance at January 1, 2011	$	207,356		$	708	$	5,444,705		$	129,519		$	880,703		$	1,268,197		$	7,931,188
Net income		—			—		—			—			1,124,839			233,928			1,358,767
Currency translation adjustment		—			—		—			(26,452	)		—			(2,192	)		(28,644	)
Exercise of stock options		—			2		21,270			—			—			1,140			22,412
Tax shortfall from stock-based compensation		—			—		(83	)		—			—			—			(83	)
Stock-based compensation		—			—		45,735			—			—			2,199			47,934
Issuance of restricted stock		—			1		(1	)		—			—			—			—
Exercise of warrants		(66,625	)		21		76,266			—			—			—			9,662
Repurchase of preferred stock		(33,363	)		—		—			—			(31,586	)		—			(64,949	)
Disposition of interest in majority owned subsidiary		—			—		—			—			—			829			829
Distributions to noncontrolling interests		—			—		—			—			—			(7,806	)		(7,806	)
Dividends declared, net of amounts previously accrued		—			—		—			—			(51,103	)		—			(51,103	)
Accumulated but undeclared dividend requirement on preferred stock issued to Principal Stockholder’s family		—			—		—			—			(6,854	)		—			(6,854	)
Accretion to redemption value of preferred stock issued to Principal Stockholder’s family		—			—		—			—			(69,408	)		—			(69,408	)
Preferred stock inducement premium		—			—		—			—			(16,494	)		—			(16,494	)

Balance at September 30, 2011	$	107,368		$	732	$	5,587,892		$	103,067		$	1,830,097		$	1,496,295		$	9,125,451

Balance at January 1, 2012	$	—		$	733	$	5,610,160		$	94,104		$	2,145,692		$	1,588,463		$	9,439,152
Net income		—			—		—			—			1,089,311			221,159			1,310,470
Currency translation adjustment		—			—		—			162,118			—			3,096			165,214
Exercise of stock options		—			1		27,253			—			—			3,116			30,370
Stock-based compensation		—			—		48,258			—			—			2,381			50,639
Issuance of restricted stock		—			1		(1	)		—			—			—			—
Exercise of warrants		—			88		528,820			—			—			—			528,908
Acquisition of remaining shares of noncontrolling interest		—			—		(2,323	)		—			—			2,323			—
Deemed distribution to Principal Stockholder		—			—		—			—			(18,576	)		—			(18,576	)
Dividends declared		—			—		—			—			(617,443	)		(357,056	)		(974,499	)
Distributions to noncontrolling interests		—			—		—			—			—			(7,624	)		(7,624	)

Balance at September 30, 2012	$	—		$	823	$	6,212,167		$	256,222		$	2,598,984		$	1,455,858		$	10,524,054

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


	Nine Months Ended
	September 30,
	2012			2011
	(In thousands)
	(Unaudited)
Cash flow from operating activities:
Net income	$	1,310,470		$	1,358,767
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation and amortization		641,725			596,469
Amortization of leasehold interests in land		30,016			33,333
Amortization of deferred financing costs and original issue discount		36,401			35,059
Amortization of deferred gain and rent		(3,708	)		(7,182	)
Non-cash change in deferred proceeds from sale of The Shoppes at The Palazzo		1,295			754
Loss on modification or early retirement of debt		16,313			—
Impairment and loss on disposal of assets		144,903			8,879
Stock-based compensation expense		50,268			47,242
Provision for doubtful accounts		183,397			92,507
Foreign exchange loss		3,081			3,013
Deferred income taxes		(20,671	)		69,219
Changes in operating assets and liabilities:
Accounts receivable		(509,089	)		(502,848	)
Inventories		(7,026	)		(1,287	)
Prepaid expenses and other		(41,303	)		1,628
Leasehold interests in land		(24,163	)		(22,980	)
Accounts payable		44,560			(10,217	)
Accrued interest payable		(21,969	)		(23,319	)
Income taxes payable		46,328			80,497
Other accrued liabilities		292,005			169,639

Net cash generated from operating activities		2,172,833			1,929,173

Cash flows from investing activities:
Change in restricted cash and cash equivalents		(717	)		590,096
Capital expenditures		(1,062,778	)		(1,087,605	)
Proceeds from disposal of property and equipment		2,266			5,487
Acquisition of intangible assets		—			(100	)

Net cash used in investing activities		(1,061,229	)		(492,122	)

Cash flows from financing activities:
Proceeds from exercise of stock options		30,370			22,412
Proceeds from exercise of warrants		528,908			9,662
Dividends paid		(973,108	)		(57,957	)
Distributions to noncontrolling interests		(7,624	)		(7,806	)
Deemed distribution to Principal Stockholder		(18,576	)		—
Proceeds from long-term debt (Note 3)		3,625,516			—
Repayments on long-term debt (Note 3)		(4,391,311	)		(399,403	)
Repurchase of preferred stock		—			(64,949	)
Payments of preferred stock inducement premium		—			(16,494	)
Payments of deferred financing costs		(100,190	)		(6,076	)

Net cash used in financing activities		(1,306,015	)		(520,611	)

Effect of exchange rate on cash		37,108			(1,946	)

Increase (decrease) in cash and cash equivalents		(157,303	)		914,494
Cash and cash equivalents at beginning of period		3,902,718			3,037,081

Cash and cash equivalents at end of period	$	3,745,415		$	3,951,575

Supplemental disclosure of cash flow information:
Cash payments for interest, net of amounts capitalized	$	165,178		$	203,183

Cash payments for taxes, net of refunds	$	100,397		$	(5,582	)

Change in construction payables	$	12,411		$	(161,295	)

Non-cash investing and financing activities:
Capitalized stock-based compensation costs	$	371		$	692

Change in dividends payable on unvested restricted stock and stock units included in other accrued liabilities	$	1,391		$	—

Property and equipment acquired under capital lease	$	10,097		$	—

Acquisition of remaining shares of noncontrolling interest	$	2,323		$	—

Disposition of interest in majority owned subsidiary	$	—		$	829

Accumulated but undeclared dividend requirement on preferred stock issued to Principal Stockholder’s family	$	—		$	6,854

Accretion to redemption value of preferred stock issued to Principal Stockholder’s family	$	—		$	69,408

Warrants exercised and settled through tendering of preferred stock	$	—		$	66,625

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, 2011. 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 (“GAAP”). 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.”

In November 2009, 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), completed an initial public offering by listing its ordinary shares (the “SCL Offering”) on The Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”). Immediately following the SCL Offering and several transactions consummated in connection with such offering, the Company owned 70.3% of the issued and outstanding ordinary shares of SCL. The shares of SCL were 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 70.3% of SCL, which includes the operations of The Venetian Macao, Four Seasons Macao, Sands Macao, Sands Cotai Central 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 534,000 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.

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 91,000 square feet of gaming space; 19 Paiza mansions; retail space of approximately 211,000 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 expects to monetize units within the Four Seasons Apartments after the necessary government approvals are obtained and future demand warrants it.

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 197,000 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.

In April and September 2012, the Company opened phases I and IIA, 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. Phase I also includes completion of the structural work of an adjacent hotel tower, located on parcel 6, to be managed by Sheraton International Inc. and Sheraton Overseas Management Co. (collectively “Starwood”) under the Sheraton Towers brand; a variety of retail offerings; more than 300,000 square feet of meeting space; several food and beverage establishments; along with the 106,000-square-foot casino and VIP gaming areas. Phase IIA, includes the first hotel tower on parcel 6, which features approximately 1,800 additional Sheraton-branded rooms, along with the second casino and the remaining retail, entertainment, dining and meeting facilities. Phase IIB, which is projected to open in the first quarter of 2013, consists of the second hotel tower on parcel 6 and will feature an additional 2,100 rooms and suites under the Sheraton Towers brand. Upon completion of phases I and II of the project, the integrated resort will feature approximately 300,000 square feet of gaming space, approximately 1.2 million square feet of retail, entertainment, dining and exhibition and conference facilities, and a multipurpose theater. The total cost to complete phase IIB is expected to be approximately $700 million. 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 September 30, 2012, the Company has capitalized costs of $3.81 billion for the entire project, including the land premium (net of amortization) and $229.6 million in outstanding construction payables.

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.

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; entertainment facilities; 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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 152,000 square feet of gaming space; a 300-room hotel tower, which opened in May 2011; a 150,000-square-foot retail facility, with a progressive opening that began in November 2011; an arts and cultural center; a 50,000-square-foot multipurpose event center, which opened in May 2012; and is the broadcast home of the local PBS affiliate. Sands Bethlehem is also expected to be home to the National Museum of Industrial History. 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

The Company has suspended portions of its development projects and should general economic conditions fail to improve, if the Company is unable to obtain sufficient funding or applicable government approvals such that completion of its suspended projects is not probable, or should management decide to abandon certain projects, all or a portion of the Company’s investment to date on its suspended projects could be lost and would result in an impairment charge.

Macao

The Company submitted plans to the Macao government for The Parisian Macao (formerly referred to as parcel 3), an integrated resort that will be connected to The Venetian Macao and Four Seasons Macao. Subject to government approval, The Parisian Macao is intended to include a gaming area (to be operated under the Company’s Macao 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 had commenced pre-construction activities and has capitalized costs of $106.8 million, including the land premium (net of amortization), as of September 30, 2012. The Company intends to commence construction after the necessary government approvals are obtained. In addition, the Company is 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 was required to complete the development by May 2014. The land concession for The Parisian Macao contains a similar requirement that the development initially be completed by August 2011, but the Company subsequently was granted an extension from the Macao government, which extended the deadline until April 2013. In July 2012, the Macao government granted the Company an additional extension, which now requires the development to be completed by April 2016. Should the Company determine that it is unable to complete the developments by their respective deadlines, the Company intends to apply for extensions from the Macao government; however, no assurances can be given that extensions will be granted. If the Company is unable to meet these deadlines and the deadlines are not extended, it 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 $3.81 billion or $106.8 million in capitalized construction costs and land premiums (net of amortization), as of September 30, 2012, 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 September 30, 2012, the Company has capitalized construction costs of $178.9 million for this project. The impact of the suspension on the estimated overall cost of the project is currently not determinable with certainty.

Other

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

Development Financing Strategy

Through September 30, 2012, the Company has funded its development projects primarily through borrowings under its U.S., Macao and Singapore credit facilities, operating cash flows, proceeds from its equity offerings and proceeds from the disposition of non-core assets.

The U.S. credit facility, as amended in August 2010, 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 “EBITDA true-up”). The Macao credit facility (the “2011 VML Credit Facility”) also requires the Company’s Macao operations to comply with similar financial covenants, which commenced with the quarterly period ended March 31, 2012, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.5x for the quarterly periods ending September 30, 2012 through 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 Singapore credit facility (the “2012 Singapore Credit Facility”), entered into in June 2012, requires operations of Marina Bay Sands to comply with similar financial covenants, which commenced with the quarter ended September 30, 2012, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.0x for the quarterly periods ending September 30, 2012 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 approximately $3.75 billion and restricted cash and cash equivalents of approximately $7.9 million as of September 30, 2012. The Company believes that the cash on hand, cash flow generated from operations and available borrowings under its credit facilities will be sufficient to fund its development projects currently under construction and maintain compliance with the financial covenants of its U.S., Macao and Singapore credit facilities. In the normal course of its activities, the Company will continue to evaluate its capital structure and opportunities for enhancements thereof. In November 2011, the Company completed its $3.7 billion 2011 VML Credit Facility, which was used to repay the outstanding indebtedness under the prior Macao credit facilities, as well as to continue to fund the development, construction and completion of certain components of Sands Cotai Central. In June 2012, the Company entered into its 5.1 billion Singapore dollar (“SGD,” approximately $4.16 billion at exchange rates in effect on September 30, 2012) 2012 Singapore Credit Facility, which was used to repay the outstanding indebtedness under the prior Singapore credit facility (see “— Note 3 — Long-term Debt — 2012 Singapore Credit Facility”).

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that is intended to align the principles for fair value measurements and the related disclosure requirements under GAAP and international financial reporting standards. The guidance was effective for interim and annual reporting periods beginning on or after December 15, 2011. The adoption of this guidance did not have a material effect on the Company’s financial condition, results of operations or cash flows.

In June 2011, the FASB issued authoritative guidance that amends the presentation of comprehensive income in the financial statements by requiring an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance also eliminates the option to present the components of other comprehensive income as part of the statement of equity. The guidance was effective for interim and annual reporting periods beginning on or after December 15, 2011, with early adoption permitted. See the condensed consolidated statements of comprehensive income for the required presentation.

In July 2012, the FASB issued authoritative guidance that is intended to simplify testing indefinite-lived intangible assets other than goodwill for impairment. The revised standard allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is “more-likely-than-not” that the asset is impaired. The guidance is effective for interim and annual impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance will not have a material effect on the Company’s financial condition, results of operations or cash flows.

NOTE 2 — PROPERTY AND EQUIPMENT, NET

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


	September 30, 2012			December 31, 2011
Land and improvements	$	559,333		$	436,768
Building and improvements		14,254,350			11,456,407
Furniture, fixtures, equipment and leasehold improvements		2,394,403			2,147,326
Transportation		411,645			405,156
Construction in progress		1,740,749			3,677,479

		19,360,480			18,123,136
Less — accumulated depreciation and amortization		(3,721,945	)		(3,092,157	)

	$	15,638,535		$	15,030,979

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



	September 30, 2012		December 31, 2011
Sands Cotai Central	$	911,359	$	2,902,743
Four Seasons Macao (principally the Four Seasons Apartments)		414,272		404,650
Other		415,118		370,086

	$	1,740,749	$	3,677,479

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

The $415.1 million in other construction in progress consists primarily of construction of the Las Vegas Condo Tower and The Parisian 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 $254.1 million (net of $57.3 million of accumulated depreciation) as of September 30, 2012, 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 nine months ended September 30, 2012 and the three and nine months ended September 30, 2011, the Company capitalized interest expense of $9.9 million, $44.3 million, $34.9 million and $97.3 million, respectively. During the three and nine months ended September 30, 2012 and the three and nine months ended September 30, 2011, the Company capitalized approximately $4.8 million, $13.2 million, $3.9 million and $17.8 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property.

The Company had commenced pre-construction activities on its Cotai Strip development referred to as parcels 7 and 8. During December 2010, the Company received notice from the Macao government that its application for a land concession for parcels 7 and 8 was not approved and the Company applied to the Chief Executive of Macao for an executive review of the decision. In January 2011, the Company filed a judicial appeal with the Court of Second Instance in Macao. In May 2012, the Company withdrew its appeal and recorded an impairment loss of $100.7 million during the nine months ended September 30, 2012, related to the capitalized construction costs of its development on parcels 7 and 8.

The Company also recorded a one-time impairment loss of $42.9 million related to the termination of the ZAiA show at The Venetian Macao during the nine months ended September 30, 2012.

The Company suspended portions of its development projects. As described in “— Note 1 — Organization and Business of Company — Development Projects,” 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):


	September 30, 2012			December 31, 2011
Corporate and U.S. Related:
Senior Secured Credit Facility — Term B	$	1,821,056		$	2,135,504
Senior Secured Credit Facility — Delayed Draws I and II		608,090			713,089
6.375% Senior Notes (net of original issue discount of $547)		—			189,165
Airplane Financings		71,969			74,734
HVAC Equipment Lease		20,110			21,337
Other		4,070			2,958
Macao Related:
2011 VML Credit Facility		3,209,090			3,206,010
Ferry Financing		—			140,268
Other		7,720			306
Singapore Related:
2012 Singapore Credit Facility		3,753,028			—
Singapore Credit Facility		—			3,548,162
Other		869			1,444

		9,496,002			10,032,977
Less — current maturities		(98,136	)		(455,846	)

Total long-term debt	$	9,397,866		$	9,577,131

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Senior Secured Credit Facility

In June 2012, the Company paid down $400.0 million under the Senior Secured Credit Facility and recorded a $1.6 million loss on early retirement of debt during the nine months ended September 30, 2012. As of September 30, 2012, the Company had $528.1 million of available borrowing capacity under the Senior Secured Credit Facility, net of outstanding letters of credit.

Senior Notes

In March 2012, the Company redeemed the Senior Notes for $191.7 million and recorded a $2.8 million loss on early retirement of debt during the nine months ended September 30, 2012.

2011 VML Credit Facility

As of September 30, 2012, the Company had $500.0 million of available borrowing capacity under the 2011 VML Credit Facility.

Ferry Financing

In May 2012, the Company repaid the $131.6 million outstanding balance under the Ferry Financing and recorded a $1.7 million loss on early retirement of debt during the nine months ended September 30, 2012.

Singapore Credit Facility

In June 2012, borrowings under the new 2012 Singapore Credit Facility (as further described below) were used to repay the outstanding balance under the Singapore Credit Facility. The Company recorded a $13.1 million loss on modification and early retirement of debt during the nine months ended September 30, 2012, as part of the refinancing of the facility.

2012 Singapore Credit Facility

In June 2012, the Company’s wholly owned subsidiary, Marina Bay Sands Pte. Ltd. (“MBS”), entered into a SGD 5.1 billion (approximately $4.16 billion at exchange rates in effect on September 30, 2012) credit agreement, providing for a fully funded SGD 4.6 billion (approximately $3.75 billion at exchange rates in effect on September 30, 2012) term loan (the “2012 Singapore Term Facility”) and a SGD 500.0 million (approximately $407.9 million at exchange rates in effect on September 30, 2012) revolving facility (the “2012 Singapore Revolving Facility”) that is available until November 25, 2017, which includes a SGD 100.0 million (approximately $81.6 million at exchange rates in effect on September 30, 2012) ancillary facility (the “2012 Singapore Ancillary Facility”). As of September 30, 2012, the Company had SGD 493.3 million (approximately $402.5 million at exchange rates in effect on September 30, 2012) available for borrowing, net of outstanding letters of credit.

The indebtedness under the 2012 Singapore Credit Facility is collateralized by a first-priority security interest in substantially all of MBS’s assets, other than capital stock and similar ownership interests, certain furniture, fixtures, fittings and equipment and certain other excluded assets.

The 2012 Singapore Term Facility matures on June 25, 2018, with MBS required to repay or prepay the 2012 Singapore Credit Facility under certain circumstances. Commencing September 30, 2014, and at the end of each quarter thereafter, MBS is required to repay the outstanding 2012 Singapore Term Facility in an amount increasing from 2.0% (September 30, 2014) to 8.0% (March 31, 2017 to March 31, 2018) of the aggregate principal amount outstanding of SGD 4.6 billion (approximately $3.75 billion at exchange rates in effect on September 30, 2012). The remaining balance on the 2012 Singapore Term Facility is due on the maturity date. The 2012 Singapore Revolving Facility matures on December 25, 2017, and has no interim amortization payments.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

Borrowings under the 2012 Singapore Credit Facility bear interest at the Singapore Swap Offered Rate (“SOR”) plus a spread of 1.85% (set at approximately 2.2% as of September 30, 2012) until December 22, 2012 (the first 180 days after the closing date). Beginning December 23, 2012, the spread for all outstanding loans is subject to reduction based on a ratio of debt to Adjusted EBITDA. MBS pays a standby commitment fee of 35% to 40% of the spread per annum on all undrawn amounts under the 2012 Singapore Revolving Facility.

The 2012 Singapore Credit Facility contains affirmative and negative covenants customary for such financings, including, but not limited to, limitations on liens, indebtedness, loans and guarantees, investments, acquisitions and asset sales, restricted payments, affiliate transactions and use of proceeds from the facilities. The 2012 Singapore Credit Facility also requires MBS to comply with financial covenants, including maximum ratios of total indebtedness to Adjusted EBITDA, minimum ratios of Adjusted EBITDA to interest expense and a positive net worth requirement. The 2012 Singapore Credit Facility also contains events of default customary for such financings.

Cash Flows from Financing Activities

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


	Nine Months Ended September 30,
	2012			2011
Proceeds from 2012 Singapore Credit Facility	$	3,625,516		$	—

Repayments on Singapore Credit Facility	$	(3,635,676	)	$	(302,210	)
Repayments on Senior Secured Credit Facility		(419,448	)		(21,703	)
Redemption of Senior Notes		(189,712	)		—
Repayments on Ferry Financing		(140,337	)		(26,243	)
Repayments on VML Credit Facility		—			(43,750	)
Repayments on Airplane Financings		(2,766	)		(2,766	)
Repayments on HVAC Equipment Lease		(1,227	)		(1,261	)
Repayments on Other Long-Term Debt		(2,145	)		(1,470	)

	$	(4,391,311	)	$	(399,403	)

Fair Value of Long-Term Debt

The estimated fair value of the Company’s long-term debt as of September 30, 2012 and December 31, 2011, was approximately $9.26 billion and $9.48 billion, respectively, compared to its carrying value of $9.47 billion and $10.01 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

Preferred Stock and Warrants

On February 15, 2011, the Company paid a dividend of $2.50 per preferred share, totaling $19.6 million (of which $13.1 million was paid to the Principal Stockholder’s family). On May 16, 2011, the Company paid a dividend of $2.50 per preferred share, totaling $19.2 million (of which $13.1 million was paid to the Principal Stockholder’s family). On August 15, 2011, the Company paid a dividend of $2.50 per preferred share, totaling $19.1 million (of which $13.1 million was paid to the Principal Stockholder’s family).

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 nine months ended September 30, 2012, 39,070 warrants were exercised to purchase an aggregate of 655,496 shares of the Company’s common stock at $6.00 per share and $3.9 million in cash was received as settlement of the warrant exercise price.

During the nine months ended September 30, 2011, holders of preferred stock exercised 1,258,120 warrants to purchase an aggregate of 20,968,703 shares of the Company’s common stock at $6.00 per share and tendered 1,161,500 shares of preferred stock and $9.7 million in cash as settlement of the warrant exercise price. In conjunction with certain of these transactions, the Company paid $16.5 million in premiums to induce the exercise of warrants with settlement through tendering preferred stock. During the nine months ended September 30, 2011, the Company also repurchased and retired 581,629 shares of preferred stock for $64.9 million and recorded a $31.6 million repurchase premium as part of the transaction.

Common Stock Dividends

On March 30, June 29 and September 28, 2012, the Company paid a dividend of $0.25 per common share as part of a regular cash dividend program. During the nine months ended September 30, 2012, the Company recorded $617.4 million as a distribution against retained earnings (of which $323.5 million related to the Principal Stockholder’s family). Of this amount, approximately $1.4 million has been recorded as a liability as of September 30, 2012, which will be paid to holders of unvested restricted stock and stock units upon vesting.

In October 2012, the Company’s Board of Directors declared a quarterly dividend of $0.25 per common share (a total estimated to be approximately $206 million) to be paid on December 28, 2012, to shareholders of record on December 20, 2012.

Other Equity Transactions

In July 2012, the Company purchased a Boeing 747 airplane from an entity controlled by the Principal Stockholder for $34.0 million, based on independent third party appraisals. In accordance with accounting standards regarding transactions between entities under common control, the Company recorded the cost of the airplane at the Principal Stockholder’s book value at the date of the transaction, which was $15.4 million. The $18.6 million difference between the amount paid and the book value of the airplane (a gain to the Principal Stockholder) was recorded as a deemed distribution to the Principal Stockholder.

The Company believes that the purchase of the airplane allows it to meet the increased demand for high-end premium direct customer travel driven from the Company’s expanding global gaming operations and is an important component in creating the ultimate trans-Pacific transportation experience for its customers. The Company believes it would have been more costly to acquire the airplane in the open market due to the limited supply of similar aircraft with luxury features.

Noncontrolling Interests

On February 28 and June 22, 2012, SCL paid a dividend of 0.58 Hong Kong dollars per share (a total of $1.20 billion) to SCL shareholders (of which the Company retained $844.4 million). In addition, during the nine months ended September 30, 2012, the Company distributed $7.6 million to certain of its noncontrolling interests.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted-average common shares outstanding (used in the calculation of basic earnings per share)		821,482,154		729,773,246		801,084,165		727,309,255
Potential dilution from stock options, warrants and restricted stock and stock units		4,124,094		82,770,288		22,276,870		84,241,428

Weighted-average common and common equivalent shares (used in the calculation of diluted earnings per share)		825,606,248		812,543,534		823,361,035		811,550,683

Antidilutive stock options, warrants and restricted stock and stock units excluded from the calculation of diluted earnings per share		5,549,521		5,496,367		5,395,158		5,512,267

Accumulated Other Comprehensive Income

As of September 30, 2012 and December 31, 2011, accumulated other comprehensive income consisted solely of foreign currency translation adjustments.

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 September 30, 2012 and December 31, 2011, the Company’s joint ventures had total assets of $101.2 million and $108.4 million, respectively, and total liabilities of $105.7 million and $104.3 million, respectively.

NOTE 6 — INCOME TAXES

The Company’s major tax jurisdictions are the U.S., Macao and Singapore. In 2010 and 2011, the Internal Revenue Service (“IRS”) issued Revenue Agent’s Reports for tax years 2005 through 2008 and 2009, respectively, of which the Company is appealing certain adjustments proposed by the IRS. The Inland Revenue Authority of Singapore is performing a compliance review of the Marina Bay Sands tax return for tax year 2010. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits as of September 30, 2012, may decrease by a range of $0 to $17 million within the next twelve months primarily due to the possible settlement of matters presently under consideration at appeals in connection with the IRS audit of the Company’s 2005 through 2009 consolidated federal income tax returns. The Company is subject to examination for tax years after 2006 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 and impact the provision for income taxes.

During the nine months ended September 30, 2012, certain wholly owned foreign subsidiaries paid dividends resulting in incremental U.S. taxable income. The receipt of the dividends did not result in a cash tax liability for the Company as the incremental U.S. taxable income was fully offset by the utilization of the U.S. federal net operating loss and the U.S. foreign tax credits generated as a result of the dividends. In addition, the dividends generated excess U.S. foreign tax credits that will be available to be carried forward to tax years beyond 2012. 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 be able to reduce the valuation allowance.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 September 30, 2012) that is a substitution for a 12% tax otherwise due from VML shareholders on dividend distributions paid from VML gaming profits.

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 September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
Compensation expense:
Stock options	$	9,137	$	10,339		$	27,182	$	35,308
Restricted stock and stock units		8,264		3,614			23,086		11,934

	$	17,401	$	13,953		$	50,268	$	47,242

Compensation cost capitalized as part of property and equipment	$	76	$	(324	)	$	371	$	692

LVSC 2004 Plan:
Stock options granted		45		—			512		260

Weighted average grant date fair value	$	25.97	$	—		$	36.57	$	36.33

Restricted stock granted		4		506			517		1,197

Weighted average grant date fair value	$	38.39	$	42.67		$	52.97	$	45.52

Restricted stock units granted		20		—			333		—

Weighted average grant date fair value	$	41.59	$	—		$	25.98	$	—

SCL Equity Plan:
Stock options granted		2,383		2,039			6,865		7,316

Weighted average grant date fair value	$	1.58	$	1.84		$	1.61	$	1.71

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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
LVSC 2004 Plan:
Weighted average volatility		95.1	%		—	%		95.2	%		94.4	%
Expected term (in years)		5.5			—			5.5			6.3
Risk-free rate		0.9	%		—	%		1.1	%		2.7	%
Expected dividends		2.4	%		—	%		1.8	%		—	%
SCL Equity Plan:
Weighted average volatility		69.7	%		67.7	%		70.1	%		68.4	%
Expected term (in years)		6.3			6.3			6.2			6.3
Risk-free rate		0.3	%		0.8	%		0.5	%		1.4	%
Expected dividends		4.1	%		—	%		4.1	%		—	%

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 September 30, 2012
Cash equivalents⁽¹⁾	$	2,167,575	$	2,167,575	$	—	$	—
Interest rate caps⁽²⁾	$	437	$	—	$	437	$	—
As of December 31, 2011
Cash equivalents⁽¹⁾	$	2,766,796	$	2,766,796	$	—	$	—
Interest rate caps⁽²⁾	$	1,195	$	—	$	1,195	$	—

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

(2)	As of September 30, 2012 and December 31, 2011, the Company has 32 and 38 interest rate cap agreements, respectively, with an aggregate fair value of approximately $0.4 million and $1.2 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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

On October 15, 2004, Richard Suen and Round Square Company Limited 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, 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. As such, the Company is unable at this time to determine the probability of the outcome or range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

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, Nevada, 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 Supreme Court of Nevada 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 Court held a hearing to determine the outcome of certain discovery disputes and issued an Order on September 14, 2012. In its Order, the Court fined LVSC $25,000 and, for the purposes of the jurisdictional discovery and evidentiary hearing, precluded the Defendants from relying on the Macao Data Privacy Act as an objection or defense under its discovery obligations. Mr. Jacobs is seeking unspecified damages. 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 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 that it is conducting a similar investigation. It is the Company’s belief that the subpoena may have emanated from allegations contained in the lawsuit filed by Steven C. Jacobs described above. The Company is cooperating with the investigations. 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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 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 discovery process is ongoing. 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, Nevada, 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, Nevada, 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. 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 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. 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 23, 2012, Ernest Kleinschmidt filed a shareholder derivative action (the “Kleinschmidt action”) on behalf of the Company in the District Court of Clark County, Nevada, 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. This action is in a preliminary stage and management had determined that based on proceedings to date, it 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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

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 $375.6 million at exchange rates in effect on September 30, 2012) 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. 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 Las Vegas Sands Inc. (now known as Las Vegas Sands, LLC), 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. The Company intends to cooperate with the investigation. 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.

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.

Other Agreements

The Company’s agreement with Starwood related to the Las Vegas Condo Tower has been terminated in connection with the suspension of the project and management is currently evaluating alternatives for branding the project. If the Company is unsuccessful in rebranding its Las Vegas Condo Tower, such measures could have a material adverse effect on the Company’s financial condition, results of operations and cash flows.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 10 — SEGMENT INFORMATION

The Company’s principal operating and developmental activities occur in three geographic areas: Macao, Singapore and the U.S. The Company reviews the results of operations for each of its operating segments: The Venetian Macao; Sands Macao; Four Seasons Macao; Sands Cotai Central; 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 Sands Cotai Central (phases IIB and III) and The Parisian Macao (included in Other Development Projects) in Macao and the Las Vegas Condo Tower (included in Corporate and Other) in the U.S. Corporate and Other also includes the corporate activities of the Company. The information for the nine months ended September 30, 2011, has been reclassified to conform to the current presentation. The Company’s segment information as of September 30, 2012 and December 31, 2011, and for the three and nine months ended September 30, 2012 and 2011, is as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net Revenues:
Macao:
The Venetian Macao	$	772,769		$	689,243		$	2,194,975		$	2,062,917
Sands Macao		315,280			307,420			935,966			961,173
Four Seasons Macao		224,478			169,050			790,219			461,914
Sands Cotai Central		295,855			—			561,456			—
Other Asia		37,289			43,190			110,792			109,413

		1,645,671			1,208,903			4,593,408			3,595,417
Marina Bay Sands		625,548			792,427			2,168,979			2,114,921
United States:
Las Vegas Operating Properties		364,426			347,446			1,076,342			985,043
Sands Bethlehem		121,966			106,720			352,624			294,870

		486,392			454,166			1,428,966			1,279,913
Intersegment eliminations		(48,129	)		(46,121	)		(137,223	)		(123,861	)

Total net revenues	$	2,709,482		$	2,409,375		$	8,054,130		$	6,866,390

Adjusted Property EBITDA(1)
Macao:
The Venetian Macao	$	299,001		$	252,720		$	810,175		$	739,486
Sands Macao		80,869			75,821			259,129			264,042
Four Seasons Macao		54,386			59,719			198,492			154,886
Sands Cotai Central		53,654			—			105,492			—
Other Asia		(2,124	)		2,515			(13,801	)		(11,321	)

		485,786			390,775			1,359,487			1,147,093
Marina Bay Sands		260,788			413,893			1,063,712			1,103,723
United States:
Las Vegas Operating Properties		98,206			94,311			278,362			252,385
Sands Bethlehem		32,118			25,170			86,537			68,318

		130,324			119,481			364,899			320,703

Total adjusted property EBITDA		876,898			924,149			2,788,098			2,571,519
Other Operating Costs and Expenses
Stock-based compensation		(7,407	)		(7,280	)		(22,914	)		(22,477	)
Corporate		(54,617	)		(54,031	)		(162,164	)		(133,983	)
Pre-opening		(39,872	)		(15,823	)		(134,803	)		(43,472	)
Development		(4,201	)		(3,308	)		(12,196	)		(6,301	)
Depreciation and amortization		(226,538	)		(200,071	)		(641,725	)		(596,469	)
Amortization of leasehold interests in land		(10,014	)		(10,143	)		(30,016	)		(33,333	)
Impairment loss		—			—			(143,674	)		—
Loss on disposal of assets		(154	)		(937	)		(1,229	)		(8,879	)

Operating income		534,095			632,556			1,639,377			1,726,605
Other Non-Operating Costs and Expenses
Interest income		4,176			2,369			16,716			8,444
Interest expense, net of amounts capitalized		(62,292	)		(70,761	)		(191,497	)		(214,938	)
Other income (expense)		2,352			(6,617	)		715			(9,384	)
Loss on modification or early retirement of debt		—			—			(19,234	)		—
Income tax expense		(33,351	)		(52,375	)		(135,607	)		(151,960	)

Net income	$	444,980		$	505,172		$	1,310,470		$	1,358,767

(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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Intersegment Revenues
Macao:
The Venetian Macao	$	1,177	$	801	$	3,249	$	2,624
Sands Cotai Central		88		—		164		—
Other Asia		8,954		9,857		23,166		27,340

		10,219		10,658		26,579		29,964
Marina Bay Sands		958		261		2,057		710
Las Vegas Operating Properties		36,952		35,202		108,587		93,187

Total intersegment revenues	$	48,129	$	46,121	$	137,223	$	123,861


	Nine Months Ended September 30,
	2012		2011
Capital Expenditures
Corporate and Other	$	49,321	$	12,728
Macao:
The Venetian Macao		55,118		9,770
Sands Macao		16,844		4,130
Four Seasons Macao		22,145		16,525
Sands Cotai Central		700,442		571,730
Other Asia		953		5,220
Other Development Projects		10,922		—

		806,424		607,375
Marina Bay Sands		98,382		393,068
United States:
Las Vegas Operating Properties		90,340		27,872
Sands Bethlehem		18,311		46,562

		108,651		74,434

Total capital expenditures	$	1,062,778	$	1,087,605


	September 30, 2012		December 31, 2011
Total Assets
Corporate and Other	$	1,012,232	$	644,645
Macao:
The Venetian Macao		3,195,011		3,199,194
Sands Macao		472,587		485,231
Four Seasons Macao		1,356,217		1,267,977
Sands Cotai Central		4,284,400		4,333,406
Other Asia		352,386		328,415
Other Development Projects		106,996		206,150

		9,767,597		9,820,373
Marina Bay Sands		7,267,792		6,794,258
United States:
Las Vegas Operating Properties		4,166,171		4,105,618
Sands Bethlehem		944,570		879,229

		5,110,741		4,984,847

Total assets	$	23,158,362	$	22,244,123

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)


	September 30, 2012		December 31, 2011
Total Long-Lived Assets
Corporate and Other	$	349,796	$	312,860
Macao:
The Venetian Macao		1,941,701		2,002,751
Sands Macao		286,387		291,620
Four Seasons Macao		980,281		1,006,441
Sands Cotai Central		3,740,669		3,053,551
Other Asia		205,849		216,030
Other Development Projects		106,821		197,079

		7,261,708		6,767,472
Marina Bay Sands		5,689,463		5,471,376
United States:
Las Vegas Operating Properties		3,169,038		3,244,090
Sands Bethlehem		612,033		625,649

		3,781,071		3,869,739

Total long-lived assets	$	17,082,038	$	16,421,447

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 part of the Senior Secured Credit Facility. The noncontrolling interest amounts included in the Restricted Subsidiaries’ condensed consolidating financial information are related to non-voting preferred stock of one of the subsidiaries held by third parties.

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 $13.8 million (consisting of $254.1 million of property and equipment, offset by $267.9 million of liabilities consisting primarily of deferred proceeds from the sale) and $3.0 million (consisting of $264.1 million of property and equipment, offset by $267.1 million of liabilities consisting primarily of deferred proceeds from the sale) as of September 30, 2012 and December 31, 2011, respectively, and a net loss (consisting primarily of depreciation expense) of $3.8 million and $11.3 million for the three and nine months ended September 30, 2012, respectively, and $4.2 million and $15.4 million for the three and nine months ended September 30, 2011, 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.

The Company revised its condensed consolidating statements of cash flows for nine months ended September 30, 2011, to correct the classification of dividends received by Las Vegas Sands Corp. from the Restricted Subsidiaries and the Restricted Subsidiaries from the non-restricted subsidiaries. The revisions were made to appropriately classify dividends received that represent a return on investment as an operating activity. The revisions resulted in increases of $85.3 million and $60.0 million to the “net cash generated from operating activities” of Las Vegas Sands Corp. and the Restricted Subsidiaries, respectively, for the nine months ended September 30, 2011, with corresponding decreases to “net cash generated from investing activities.” These revisions, which the Company determined are not material, had no impact on any financial statements or footnotes, except for the Las Vegas Sands Corp. and Restricted Subsidiaries columns of the condensed consolidating statements of cash flows.

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 September 30, 2012 and December 31, 2011, and for the three and nine months ended September 30, 2012 and 2011, is as follows (in thousands):

CONDENSED CONSOLIDATING BALANCE SHEETS

September 30, 2012


							Consolidating/
	Las Vegas		Restricted		Non-Restricted		Eliminating
	Sands Corp.		Subsidiaries		Subsidiaries		Entries			Total
Cash and cash equivalents	$	46,987	$	937,493	$	2,760,935	$	—		$	3,745,415
Restricted cash and cash equivalents		—		49		4,352		—			4,401
Intercompany receivables		219,048		43,358		—		(262,406	)		—
Accounts receivable, net		192		245,599		1,456,667		—			1,702,458
Inventories		4,795		10,835		26,881		—			42,511
Deferred income taxes, net		—		35,314		430		(23,721	)		12,023
Prepaid expenses and other		20,091		12,568		67,678		(8,068	)		92,269

Total current assets		291,113		1,285,216		4,316,943		(294,195	)		5,599,077
Property and equipment, net		158,337		3,319,008		12,161,190		—			15,638,535
Investments in subsidiaries		8,715,980		6,398,443		—		(15,114,423	)		—
Deferred financing costs, net		252		14,100		213,746		—			228,098
Restricted cash and cash equivalents		—		2,451		1,015		—			3,466
Intercompany receivables		31,278		89,565		—		(120,843	)		—
Intercompany notes receivable		—		895,433		—		(895,433	)		—
Deferred income taxes, net		72,149		—		—		(40,401	)		31,748
Leasehold interests in land, net		—		—		1,443,503		—			1,443,503
Intangible assets, net		690		—		72,475		—			73,165
Other assets, net		243		26,160		114,367		—			140,770

Total assets	$	9,270,042	$	12,030,376	$	18,323,239	$	(16,465,295	)	$	23,158,362

Accounts payable	$	31,594	$	27,957	$	90,641	$	—		$	150,192
Construction payables		3,182		5,143		363,995		—			372,320
Intercompany payables		—		215,079		47,327		(262,406	)		—
Accrued interest payable		84		825		9,340		—			10,249
Other accrued liabilities		25,368		223,206		1,477,297		—			1,725,871
Income taxes payable		—		—		171,277		(8,068	)		163,209
Deferred income taxes		23,721		—		—		(23,721	)		—
Current maturities of long-term debt		3,688		90,798		3,650		—			98,136

Total current liabilities		87,637		563,008		2,163,527		(294,195	)		2,519,977
Other long-term liabilities		45,928		10,491		72,439		—			128,858
Intercompany payables		—		—		120,843		(120,843	)		—
Intercompany notes payable		—		—		895,433		(895,433	)		—
Deferred income taxes		—		40,593		156,154		(40,401	)		156,346
Deferred amounts related to mall transactions		—		431,261		—		—			431,261
Long-term debt		68,281		2,360,253		6,969,332		—			9,397,866

Total liabilities		201,846		3,405,606		10,377,728		(1,350,872	)		12,634,308

Total Las Vegas Sands Corp. stockholders’ equity		9,068,196		8,624,365		6,490,058		(15,114,423	)		9,068,196
Noncontrolling interests		—		405		1,455,453		—			1,455,858

Total equity		9,068,196		8,624,770		7,945,511		(15,114,423	)		10,524,054

Total liabilities and equity	$	9,270,042	$	12,030,376	$	18,323,239	$	(16,465,295	)	$	23,158,362

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2011


							Consolidating/
	Las Vegas		Restricted		Non-Restricted		Eliminating
	Sands Corp.		Subsidiaries		Subsidiaries		Entries			Total
Cash and cash equivalents	$	12,849	$	689,642	$	3,200,227	$	—		$	3,902,718
Restricted cash and cash equivalents		—		185		4,643		—			4,828
Intercompany receivables		127,302		43,793		—		(171,095	)		—
Accounts receivable, net		1,047		226,869		1,108,901		—			1,336,817
Inventories		2,434		9,633		22,923		—			34,990
Deferred income taxes, net		38,806		32,867		519		—			72,192
Prepaid expenses and other		10,263		4,259		31,085		—			45,607

Total current assets		192,701		1,007,248		4,368,298		(171,095	)		5,397,152
Property and equipment, net		137,044		3,391,316		11,502,619		—			15,030,979
Investments in subsidiaries		7,891,281		6,263,974		—		(14,155,255	)		—
Deferred financing costs, net		608		20,677		152,351		—			173,636
Restricted cash and cash equivalents		—		2,315		—		—			2,315
Intercompany receivables		31,162		128,270		—		(159,432	)		—
Intercompany notes receivable		—		794,286		—		(794,286	)		—
Deferred income taxes, net		544		—		—		(391	)		153
Leasehold interests in land, net		—		—		1,390,468		—			1,390,468
Intangible assets, net		690		—		79,378		—			80,068
Other assets, net		112		18,778		150,462		—			169,352

Total assets	$	8,254,142	$	11,626,864	$	17,643,576	$	(15,280,459	)	$	22,244,123

Accounts payable	$	15,084	$	23,397	$	65,632	$	—		$	104,113
Construction payables		280		4,477		355,152		—			359,909
Intercompany payables		—		119,203		51,892		(171,095	)		—
Accrued interest payable		4,674		1,087		25,907		—			31,668
Other accrued liabilities		28,100		212,279		1,198,731		—			1,439,110
Income taxes payable		—		4		108,056		—			108,060
Current maturities of long-term debt		3,688		30,561		421,597		—			455,846

Total current liabilities		51,826		391,008		2,226,967		(171,095	)		2,498,706
Other long-term liabilities		26,215		10,723		52,507		—			89,445
Intercompany payables		65,201		—		94,231		(159,432	)		—
Intercompany notes payable		—		—		794,286		(794,286	)		—
Deferred income taxes		—		48,471		157,358		(391	)		205,438
Deferred amounts related to mall transactions		—		434,251		—		—			434,251
Long-term debt		260,211		2,839,369		6,477,551		—			9,577,131

Total liabilities		403,453		3,723,822		9,802,900		(1,125,204	)		12,804,971

Total Las Vegas Sands Corp. stockholders’ equity		7,850,689		7,902,637		6,252,618		(14,155,255	)		7,850,689
Noncontrolling interests		—		405		1,588,058		—			1,588,463

Total equity		7,850,689		7,903,042		7,840,676		(14,155,255	)		9,439,152

Total liabilities and equity	$	8,254,142	$	11,626,864	$	17,643,576	$	(15,280,459	)	$	22,244,123

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended September 30, 2012


										Consolidating/
	Las Vegas			Restricted			Non-Restricted			Eliminating
	Sands Corp.			Subsidiaries			Subsidiaries			Entries			Total
Revenues:
Casino	$	—		$	171,472		$	2,029,558		$	—		$	2,201,030
Rooms		—			105,695			182,154			—			287,849
Food and beverage		—			31,157			111,528			—			142,685
Mall		—			—			103,232			—			103,232
Convention, retail and other		—			69,094			88,212			(40,177	)		117,129

		—			377,418			2,514,684			(40,177	)		2,851,925
Less — promotional allowances		(270	)		(22,337	)		(119,428	)		(408	)		(142,443	)

Net revenues		(270	)		355,081			2,395,256			(40,585	)		2,709,482

Operating expenses:
Casino		—			78,953			1,199,871			(662	)		1,278,162
Rooms		—			32,893			26,019			(1	)		58,911
Food and beverage		—			17,848			60,916			(1,016	)		77,748
Mall		—			—			16,666			—			16,666
Convention, retail and other		—			17,963			54,346			(5,442	)		66,867
Provision for doubtful accounts		—			9,047			63,758			—			72,805
General and administrative		—			69,861			199,172			(201	)		268,832
Corporate		50,017			119			37,742			(33,261	)		54,617
Pre-opening		—			—			39,872			—			39,872
Development		4,203			—			—			(2	)		4,201
Depreciation and amortization		7,432			54,137			164,969			—			226,538
Amortization of leasehold interests in land		—			—			10,014			—			10,014
(Gain) loss on disposal of assets		—			(64	)		218			—			154

		61,652			280,757			1,873,563			(40,585	)		2,175,387

Operating income (loss)		(61,922	)		74,324			521,693			—			534,095
Other income (expense):
Interest income		44			34,804			3,557			(34,229	)		4,176
Interest expense, net of amounts capitalized		(373	)		(21,425	)		(74,723	)		34,229			(62,292	)
Other income		—			804			1,548			—			2,352
Income from equity investments in subsidiaries		331,727			309,588			—			(641,315	)		—

Income before income taxes		269,476			398,095			452,075			(641,315	)		478,331
Income tax benefit (expense)		80,306			(81,569	)		(32,088	)		—			(33,351	)

Net income		349,782			316,526			419,987			(641,315	)		444,980
Net income attributable to noncontrolling interests		—			(685	)		(94,513	)		—			(95,198	)

Net income attributable to Las Vegas Sands Corp.	$	349,782		$	315,841		$	325,474		$	(641,315	)	$	349,782

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended September 30, 2011


										Consolidating/
	Las Vegas			Restricted			Non-Restricted			Eliminating
	Sands Corp.			Subsidiaries			Subsidiaries			Entries			Total
Revenues:
Casino	$	—		$	124,258		$	1,778,884		$	—		$	1,903,142
Rooms		—			114,046			148,306			—			262,352
Food and beverage		—			43,675			103,548			—			147,223
Mall		—			—			89,212			—			89,212
Convention, retail and other		—			74,333			99,038			(38,742	)		134,629

		—			356,312			2,218,988			(38,742	)		2,536,558
Less — promotional allowances		(167	)		(20,007	)		(106,606	)		(403	)		(127,183	)

Net revenues		(167	)		336,305			2,112,382			(39,145	)		2,409,375

Operating expenses:
Casino		—			71,088			922,953			(663	)		993,378
Rooms		—			35,589			17,904			—			53,493
Food and beverage		—			22,711			50,569			(1,499	)		71,781
Mall		—			—			15,534			—			15,534
Convention, retail and other		—			20,069			70,232			(6,606	)		83,695
Provision for doubtful accounts		—			260			33,693			—			33,953
General and administrative		—			65,396			175,480			(204	)		240,672
Corporate		48,539			58			35,607			(30,173	)		54,031
Pre-opening		—			—			15,823			—			15,823
Development		3,308			—			—			—			3,308
Depreciation and amortization		4,654			55,669			139,748			—			200,071
Amortization of leasehold interests in land		—			—			10,143			—			10,143
Loss on disposal of assets		—			—			937			—			937

		56,501			270,840			1,488,623			(39,145	)		1,776,819

Operating income (loss)		(56,668	)		65,465			623,759			—			632,556
Other income (expense):
Interest income		416			29,268			1,769			(29,084	)		2,369
Interest expense, net of amounts capitalized		(3,453	)		(24,704	)		(71,688	)		29,084			(70,761	)
Other expense		—			(2,145	)		(4,472	)		—			(6,617	)
Income from equity investments in subsidiaries		461,957			393,673			—			(855,630	)		—

Income before income taxes		402,252			461,557			549,368			(855,630	)		557,547
Income tax benefit (expense)		22,627			(16,715	)		(58,287	)		—			(52,375	)

Net income		424,879			444,842			491,081			(855,630	)		505,172
Net income attributable to noncontrolling interests		—			(487	)		(79,806	)		—			(80,293	)

Net income attributable to Las Vegas Sands Corp.	$	424,879		$	444,355		$	411,275		$	(855,630	)	$	424,879

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Nine Months Ended September 30, 2012

Consolidating/

Las Vegas

Restricted

Non-Restricted

Eliminating