10-Q 1 d316142d10q.htm FORM 10-Q Form 10-Q
Table of Contents

 

 

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 March 31, 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   89109
Las Vegas, Nevada   (Zip Code)
(Address of principal executive offices)  

(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):

Large accelerated filer  x             Accelerated filer  ¨            Non-accelerated filer  ¨            Smaller reporting company  ¨

    (Do not check if a smaller reporting company)

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 April 30, 2012

Common Stock ($0.001 par value)   822,739,856 shares

 

 

 


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Table of Contents

PART I

FINANCIAL INFORMATION

 

Item 1.        Financial Statements (unaudited)   
   Condensed Consolidated Balance Sheets at March 31, 2012 and December 31, 2011      3   
   Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2011      4   
   Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2012 and 2011      5   
   Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2012 and 2011      6   
   Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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      31   

Item 3.

   Quantitative and Qualitative Disclosures about Market Risk      44   

Item 4.

   Controls and Procedures      45   

PART II

OTHER INFORMATION

 

Item 1.

   Legal Proceedings      45   

Item 1A.

   Risk Factors      45   

Item 6.

   Exhibits      46   

Signatures

     47   

 

2


Table of Contents

ITEM 1 — FINANCIAL STATEMENTS

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

     March 31,      December 31,  
     2012      2011  
     (In thousands, except share and  
     per share data)  
     (Unaudited)  
ASSETS   

Current assets:

     

Cash and cash equivalents

   $ 4,056,360      $ 3,902,718  

Restricted cash and cash equivalents

     4,874        4,828  

Accounts receivable, net

     1,530,340        1,336,817  

Inventories

     40,014        34,990  

Deferred income taxes, net

     15,066        72,192  

Prepaid expenses and other

     76,085        45,607  
  

 

 

    

 

 

 

Total current assets

     5,722,739        5,397,152  

Property and equipment, net

     15,329,602        15,030,979  

Deferred financing costs, net

     163,219        173,636  

Restricted cash and cash equivalents

     2,466        2,315  

Deferred income taxes, net

     18,889        153  

Leasehold interests in land, net

     1,414,349        1,390,468  

Intangible assets, net

     78,017        80,068  

Other assets, net

     141,751        169,352  
  

 

 

    

 

 

 

Total assets

   $ 22,871,032      $ 22,244,123  
  

 

 

    

 

 

 
LIABILITIES AND EQUITY   

Current liabilities:

     

Accounts payable

   $ 105,205      $ 104,113  

Construction payables

     311,568        359,909  

Accrued interest payable

     6,937        31,668  

Other accrued liabilities

     1,422,931        1,439,110  

Income taxes payable

     176,853        108,060  

Current maturities of long-term debt

     469,324        455,846  
  

 

 

    

 

 

 

Total current liabilities

     2,492,818        2,498,706  

Other long-term liabilities

     105,039        89,445  

Deferred income taxes

     159,427        205,438  

Deferred proceeds from sale of The Shoppes at The Palazzo

     267,228        266,992  

Deferred gain on sale of The Grand Canal Shoppes

     46,478        47,344  

Deferred rent from mall transactions

     119,545        119,915  

Long-term debt

     9,382,649        9,577,131  
  

 

 

    

 

 

 

Total liabilities

     12,573,184        12,804,971  
  

 

 

    

 

 

 

Commitments and contingencies (Note 9)

     

Equity:

     

Common stock, $0.001 par value, 1,000,000,000 shares authorized, 822,724,993 and 733,249,698 shares issued and outstanding

     823        733  

Capital in excess of par value

     6,174,773        5,610,160  

Accumulated other comprehensive income

     191,935        94,104  

Retained earnings

     2,438,945        2,145,692  
  

 

 

    

 

 

 

Total Las Vegas Sands Corp. stockholders’ equity

     8,806,476        7,850,689  

Noncontrolling interests

     1,491,372        1,588,463  
  

 

 

    

 

 

 

Total equity

     10,297,848        9,439,152  
  

 

 

    

 

 

 

Total liabilities and equity

   $ 22,871,032      $ 22,244,123  
  

 

 

    

 

 

 

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

 

3


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

 

     Three Months Ended  
     March 31,  
     2012     2011  
     (In thousands, except share and  
     per share data)  
     (Unaudited)  

Revenues:

    

Casino

   $ 2,266,493     $ 1,664,489  

Rooms

     267,727       231,974  

Food and beverage

     153,455       145,393  

Mall

     71,418       55,865  

Convention, retail and other

     129,717       108,790  
  

 

 

   

 

 

 
     2,888,810       2,206,511  

Less-promotional allowances

     (126,068     (94,592
  

 

 

   

 

 

 

Net revenues

     2,762,742       2,111,919  
  

 

 

   

 

 

 

Operating expenses:

    

Casino

     1,207,551       921,536  

Rooms

     52,786       48,453  

Food and beverage

     78,301       71,703  

Mall

     16,301       12,104  

Convention, retail and other

     79,524       75,141  

Provision for doubtful accounts

     52,218       35,058  

General and administrative

     218,717       210,485  

Corporate

     48,955       37,576  

Pre-opening

     51,459       9,471  

Development

     1,198       573  

Depreciation and amortization

     194,747       190,237  

Amortization of leasehold interests in land

     9,945       13,156  

Impairment loss

     42,893       —     

Loss on disposal of assets

     593       499  
  

 

 

   

 

 

 
     2,055,188       1,625,992  
  

 

 

   

 

 

 

Operating income

     707,554       485,927  

Other income (expense):

    

Interest income

     5,648       2,047  

Interest expense, net of amounts capitalized

     (64,672     (73,585

Other expense

     (3,419     (4,675

Loss on early retirement of debt

     (2,831     —     
  

 

 

   

 

 

 

Income before income taxes

     642,280       409,714  

Income tax expense

     (63,171     (45,211
  

 

 

   

 

 

 

Net income

     579,109       364,503  

Net income attributable to noncontrolling interests

     (80,167     (75,180
  

 

 

   

 

 

 

Net income attributable to Las Vegas Sands Corp.

     498,942       289,323  

Preferred stock dividends

     —          (19,598

Accretion to redemption value of preferred stock issued to Principal Stockholder’s family

     —          (23,136

Preferred stock inducement and repurchase premiums

     —          (18,433
  

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 498,942     $ 228,156  
  

 

 

   

 

 

 

Earnings per share:

    

Basic

   $ 0.66     $ 0.32  
  

 

 

   

 

 

 

Diluted

   $ 0.61     $ 0.28  
  

 

 

   

 

 

 

Weighted average shares outstanding:

    

Basic

     760,437,437       723,389,226  
  

 

 

   

 

 

 

Diluted

     818,797,155       811,239,242  
  

 

 

   

 

 

 

Dividends declared per common share

   $ 0.25     $ —     
  

 

 

   

 

 

 

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

 

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Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

     Three Months Ended  
     March 31,  
     2012     2011  
     (In thousands)  
     (Unaudited)  

Net income

   $ 579,109     $ 364,503  

Currency translation adjustment

     98,878       31,956  
  

 

 

   

 

 

 

Total comprehensive income

     677,987       396,459  

Comprehensive income attributable to noncontrolling interests

     (81,214     (72,643
  

 

 

   

 

 

 

Comprehensive income attributable to Las Vegas Sands Corp.

   $ 596,773     $ 323,816  
  

 

 

   

 

 

 

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

 

5


Table of Contents

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

     —          —           —          —           289,323       75,180       364,503  

Currency translation adjustment

     —          —           —          34,493        —          (2,537     31,956  

Exercise of stock options

     —          1        8,419       —           —          91       8,511  

Tax shortfall from stock-based compensation

     —          —           (11     —           —          —          (11

Stock-based compensation

     —          —           20,084       —           —          755       20,839  

Exercise of warrants

     (65,225     20        70,965        —           —          —          5,760  

Repurchase of preferred stock

     (2,312     —           —          —           (2,232     —          (4,544

Dividends declared, net of amounts previously accrued

     —          —           —          —           (12,744     —          (12,744

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

     —          —           —          —           (23,136     —          (23,136

Preferred stock inducement premium

     —          —           —          —           (16,201     —          (16,201
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance at March 31, 2011

   $ 139,819     $ 729      $ 5,544,162     $ 164,012      $ 1,108,859     $ 1,341,686     $ 8,299,267  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance at January 1, 2012

   $ —        $ 733      $ 5,610,160     $ 94,104      $ 2,145,692     $ 1,588,463     $ 9,439,152  

Net income

     —          —           —          —           498,942       80,167       579,109  

Currency translation adjustment

     —          —           —          97,831        —          1,047       98,878  

Exercise of stock options

     —          1        20,151       —           —          1,107       21,259  

Stock-based compensation

     —          —           18,383       —           —          1,001       19,384  

Issuance of restricted stock

     —          1        (1     —           —          —          —     

Exercise of warrants

     —          88        526,080       —           —          —          526,168  

Dividends declared

     —          —           —          —           (205,689     (178,218     (383,907

Distributions to noncontrolling interests

     —          —           —          —           —          (2,195     (2,195
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance at March 31, 2012

   $ —        $ 823      $ 6,174,773     $ 191,935      $ 2,438,945     $ 1,491,372     $ 10,297,848  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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

 

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Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

 

     Three Months Ended  
     March 31,  
     2012     2011  
     (In thousands)  
     (Unaudited)  

Cash flow from operating activities:

    

Net income

   $ 579,109     $ 364,503  

Adjustments to reconcile net income to net cash generated from operating activities:

    

Depreciation and amortization

     194,747       190,237  

Amortization of leasehold interests in land

     9,945       13,156  

Amortization of deferred financing costs and original issue discount

     11,596       11,871  

Amortization of deferred gain and rent

     (1,236     (1,290

Non-cash change in deferred proceeds from sale of The Shoppes at The Palazzo

     428       —     

Loss on early retirement of debt

     815       —     

Impairment and loss on disposal of assets

     43,486       499  

Stock-based compensation expense

     19,166       20,239  

Provision for doubtful accounts

     52,218       35,058  

Foreign exchange losses

     724       2,462  

Deferred income taxes

     (4,083     35,372  

Changes in operating assets and liabilities:

    

Accounts receivable

     (223,358     (119,311

Inventories

     (4,742     (1,239

Prepaid expenses and other

     (27,785     (3,135

Accounts payable

     356       (26,026

Accrued interest payable

     (24,903     (19,148

Income taxes payable

     63,134       8,631  

Other accrued liabilities

     (22,166     (93,501
  

 

 

   

 

 

 

Net cash generated from operating activities

     667,451       418,378  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Change in restricted cash and cash equivalents

     (195     149,962  

Capital expenditures

     (398,260     (332,508

Proceeds from disposal of property and equipment

     761       3,097  

Acquisition of intangible assets

     —          (329
  

 

 

   

 

 

 

Net cash used in investing activities

     (397,694     (179,778
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from exercise of stock options

     21,259       8,511  

Proceeds from exercise of warrants

     526,168       5,760  

Dividends paid

     (383,463     (19,598

Distributions to noncontrolling interests

     (2,195     —     

Repayments on long-term debt (Note 3)

     (306,231     (121,721

Repurchase of preferred stock

     —          (4,544

Payments of preferred stock inducement premium

     —          (16,201

Payments of deferred financing costs

     (114     —     
  

 

 

   

 

 

 

Net cash used in financing activities

     (144,576     (147,793
  

 

 

   

 

 

 

Effect of exchange rate on cash

     28,461       6,053  
  

 

 

   

 

 

 

Increase in cash and cash equivalents

     153,642       96,860  

Cash and cash equivalents at beginning of period

     3,902,718       3,037,081  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 4,056,360     $ 3,133,941  
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash payments for interest, net of amounts capitalized

   $ 77,786     $ 80,881  
  

 

 

   

 

 

 

Cash payments for taxes, net of refunds

   $ 1,955     $ (5,726
  

 

 

   

 

 

 

Changes in construction payables

   $ (48,341   $ (38,992
  

 

 

   

 

 

 

Non-cash investing and financing activities:

    

Capitalized stock-based compensation costs

   $ 218     $ 600  
  

 

 

   

 

 

 

Changes in dividends payable on unvested restricted stock and stock units included in other accrued liabilities

   $ 444     $ —     
  

 

 

   

 

 

 

Property and equipment acquired under capital lease

   $ 340     $ —     
  

 

 

   

 

 

 

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

   $ —        $ 23,136  
  

 

 

   

 

 

 

Warrants exercised and settled through tendering of preferred stock

   $ —        $ 65,225  
  

 

 

   

 

 

 

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

 

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Table of Contents

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 200 acres in Macao (consisting of parcels referred to as 1, 2, 3, 5 and 6 and 7 and 8). 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.

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 2012, the Company opened phase I of its Sands Cotai Central integrated resort, which is located on parcels 5 and 6 and 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, which is currently scheduled to open in the third quarter of 2012, includes the opening of the first hotel tower on parcel 6, which will feature nearly 2,000 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 2,000 rooms and suites under the Sheraton Towers brand. Upon completion of phases I and II of the project, the integrated resort will feature approximately 5,800 hotel rooms, approximately 300,000 square feet of gaming space, approximately 1.2 million square feet of retail, entertainment, dining and

 

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(UNAUDITED)

 

exhibition and conference facilities, and a multipurpose theater. The total cost to complete phases I and II is expected to be approximately $1.2 billion. 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 March 31, 2012, the Company has capitalized costs of $3.32 billion for the entire project, including the land premium (net of amortization) and $213.6 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.

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 currently 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; and is the broadcast home of the local PBS affiliate. The Company has recommenced construction on the remaining component of the integrated resort, a 50,000-square-foot multipurpose event center (expected to open in the second quarter of 2012). 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 its other Cotai Strip developments, which represent two integrated resort developments (referred to as parcels 3 and 7 and 8). Subject to the approval from the Macao government, as discussed further below, the developments are expected to include hotels, exhibition and conference facilities, gaming areas, showrooms, spas, dining, retail and entertainment facilities, and other amenities. The Company had commenced pre-construction activities on these developments and plans to operate the related gaming areas under the Company’s Macao gaming subconcession. In addition, the Company is completing the development of some public areas surrounding its Cotai Strip properties on behalf of the Macao government. The Company currently intends to develop its other Cotai Strip properties as follows:

 

   

Parcel 3 — Once completed, the integrated resort on parcel 3 will be connected to The Venetian Macao and Four Seasons Macao. The multi-hotel complex is intended to include a gaming area, a shopping mall and serviced luxury apart-hotel units. The Company had commenced pre-construction activities and has capitalized costs of $96.7 million, including the land premium (net of amortization), as of March 31, 2012. The Company intends to commence construction after Sands Cotai Central is complete and necessary government approvals are obtained.

 

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Parcels 7 and 8 — Consistent with its original plans, the Company had commenced pre-construction activities and has capitalized construction costs of $101.1 million as of March 31, 2012. The Company intends to commence construction after Sands Cotai Central and the integrated resort on parcel 3 are completed, necessary government approvals obtained (including the land concession, see below), future demand warrants it and additional financing is obtained. If the Company is successful in winning its judicial appeal and obtaining the land concession for parcels 7 and 8 (as discussed below), and is able to proceed with this portion of the development as planned, the related integrated resort is expected to be similar in size and scope to Sands Cotai Central.

The impact of the delayed construction on the Company’s previously estimated cost to complete its Cotai Strip developments on parcels 3 and 7 and 8 is currently not determinable with certainty. As of March 31, 2012, the Company has capitalized an aggregate of $7.78 billion in construction costs and land premiums (net of amortization) for its Cotai Strip developments, including The Venetian Macao, Four Seasons Macao and Sands Cotai Central, as well as the Company’s investments in transportation infrastructure, including its passenger ferry service operations. In addition to funding phases I and II of Sands Cotai Central with borrowings under the Company’s new $3.7 billion Macao credit facility completed in November 2011 (the “2011 VML Credit Facility”), the Company will need to arrange additional financing to fund the balance of its Cotai Strip developments and there is no assurance that the Company will be able to obtain the additional financing required or on terms suitable to the Company.

Land concessions in Macao generally have an initial term of 25 years with automatic extensions of 10 years thereafter in accordance with Macao law. The Company has received land concessions from the Macao government to build on parcels 1, 2, 3 and 5 and 6, including the sites on which The Venetian Macao, the Four Seasons Macao and Sands Cotai Central are located. The Company does not own these land sites in Macao; however, the land concessions grant the Company exclusive use of the land. As specified in the land concessions, the Company is required to pay premiums for each parcel, which are either payable in a single lump sum upon acceptance of the land concessions by the Macao government or in seven semi-annual installments, as well as annual rent for the term of the land concessions. In 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, which has yet to issue a decision. Should the Company win its judicial appeal, it is still possible for the Chief Executive of Macao to again deny the land concession based upon public policy considerations. If the Company does not obtain the land concession or does not receive full reimbursement of its capitalized investment in this project, the Company would record a charge for all or some portion of the $101.1 million in capitalized construction costs, as of March 31, 2012, related to its development on parcels 7 and 8.

Under the Company’s land concession for parcel 3, the Company was initially required to complete the corresponding development by August 2011. The Macao government has granted the Company a two-year extension to complete the development of parcel 3, which now must be completed by April 2013. The land concession for Sands Cotai Central contains a similar requirement that the corresponding development be completed by May 2014. The Company intends to apply for an extension from the Macao government to complete its parcel 3 development as it will be unable to meet the April 2013 deadline. Should the Company determine that it is unable to complete Sands Cotai Central by May 2014, the Company also intends to apply for an extension from the Macao government. No assurances can be given that additional extensions will be granted. If the Company is unable to meet the applicable deadline for Sands Cotai Central and the deadlines for either development are not extended, it could lose its land concessions for parcel 3 or Sands Cotai Central, 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 $96.7 million and $3.32 billion in capitalized construction costs and land premiums (net of amortization), as of March 31, 2012, related to its development on parcel 3 or Sands Cotai Central, respectively.

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 March 31, 2012, the Company has capitalized construction costs of $178.3 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.

 

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Development Financing Strategy

Through March 31, 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 5.5x for the quarterly periods ended March 31 and June 30, 2012, and then decreases to 5.0x for all quarterly periods thereafter 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 Singapore credit facility requires operations of Marina Bay Sands to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 5.25x for the quarterly period ended March 31, 2012, and then decreases by 0.25x every other quarter until September 30, 2014, when it decreases to, and remains at, 3.75x for all quarterly periods thereafter through maturity. The Company’s 2011 VML Credit Facility, entered into in September 2011, 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 ended March 31, 2012 through June 30, 2013, decreases to 4.0x for the quarterly periods ended September 30, 2013 through December 31, 2014, decreases to 3.5x for the quarterly periods ended March 31 through December 31, 2015, 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. Certain defaults under the 2011 VML Credit Facility would trigger a cross-default under the Company’s ferry financing. 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 and restricted cash and cash equivalents of approximately $4.06 billion and $7.3 million, respectively, as of March 31, 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 VML and VOL credit facilities, as well as to continue to fund the development, construction and completion of certain components of Sands Cotai Central.

In March 2012, the Company’s wholly owned subsidiary, Marina Bay Sands Pte. Ltd. (“MBS”), secured a commitment for a new 5.1 billion Singapore dollar (“SGD,” approximately $4.06 billion at exchange rates in effect on March 31, 2012) credit facility, which is expected to consist of a SGD 4.6 billion (approximately $3.66 billion at exchange rates in effect on March 31, 2012) term loan and a SGD 500.0 million (approximately $398.1 million at exchange rates in effect on March 31, 2012) revolving facility, which will include a SGD 100.0 million (approximately $79.6 million at exchange rates in effect on March 31, 2012) swingline facility. The proceeds from the new facility will be used to refinance the existing Singapore credit facility, to pay related fees and expenses, and for general corporate purposes. MBS has commenced marketing of the new facility.

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 is 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 is 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.

 

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(UNAUDITED)

 

NOTE 2 — PROPERTY AND EQUIPMENT, NET

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

 

$15,329,602 $15,329,602
     March 31,     December 31,  
     2012     2011  

Land and improvements

   $ 439,023     $ 436,768  

Building and improvements

     11,633,890       11,456,407  

Furniture, fixtures, equipment and leasehold improvements

     2,224,125       2,147,326  

Transportation

     411,626       405,156  

Construction in progress

     3,928,031       3,677,479  
  

 

 

   

 

 

 
     18,636,695       18,123,136  

Less — accumulated depreciation and amortization

     (3,307,093     (3,092,157
  

 

 

   

 

 

 
   $ 15,329,602     $ 15,030,979  
  

 

 

   

 

 

 

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

 

 

$15,329,602 $15,329,602
     March 31,     December 31,  
     2012     2011  

Sands Cotai Central

   $ 3,119,034     $ 2,902,743  

Four Seasons Macao (principally the Four Seasons Apartments)

     407,946       404,650  

Other

     401,051       370,086   
  

 

 

   

 

 

 
   $ 3,928,031     $ 3,677,479  
  

 

 

   

 

 

 

The $401.1 million in other construction in progress consists primarily of construction of the Las Vegas Condo Tower and Cotai Strip parcels 3 and 7 and 8.

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 $260.8 million (net of $50.6 million of accumulated depreciation) as of March 31, 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 months ended March 31, 2012 and 2011, the Company capitalized interest expense of $22.1 million and $30.6 million, respectively. During the three months ended March 31, 2012 and 2011, the Company capitalized approximately $2.8 million and $8.9 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property.

During the three months ended March 31, 2012, the Company terminated its ZAiA show at The Venetian Macao and recorded a one-time impairment loss of $42.9 million.

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.

The Company had commenced pre-construction activities on parcels 7 and 8, and has capitalized construction costs of $101.1 million as of March 31, 2012. 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, which has yet to issue a decision. Should the Company win its judicial appeal, it is still possible for the Chief Executive of Macao to again deny the land concession based upon public policy considerations. In order to obtain the land concession and construct the resort, the Company would need to win its appeal and avoid any future denial of the land concession based upon public policy considerations. If the Company does not obtain the land concession or does not receive full reimbursement of its capitalized investment in this project, the Company would record a charge for all or some portion of the $101.1 million in capitalized construction costs, as of March 31, 2012, related to its development on parcels 7 and 8.

 

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NOTE 3 — LONG-TERM DEBT

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

 

 

     March 31,     December 31,  
     2012     2011  

Corporate and U.S. Related:

    

Senior Secured Credit Facility — Term B

   $ 2,130,081     $ 2,135,504  

Senior Secured Credit Facility — Delayed Draws I and II

     711,279       713,089  

6.375% Senior Notes (net of original issue discount of $547)

     —          189,165  

Airplane Financings

     73,813       74,734  

HVAC Equipment Lease

     20,922       21,337  

Other

     2,730       2,958  

Macao Related:

    

2011 VML Credit Facility

     3,206,733       3,206,010  

Ferry Financing

     131,557       140,268  

Other

     562       306  

Singapore Related:

    

Singapore Credit Facility

     3,573,132       3,548,162  

Other

     1,164       1,444  
  

 

 

   

 

 

 
     9,851,973       10,032,977  

Less — current maturities

     (469,324     (455,846
  

 

 

   

 

 

 

Total long-term debt

   $ 9,382,649     $ 9,577,131  
  

 

 

   

 

 

 

Senior Secured Credit Facility

As of March 31, 2012, the Company had $520.6 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.

2011 VML Credit Facility

As of March 31, 2012, the Company had $500.0 million of available borrowing capacity under the 2011 VML Credit Facility.

Singapore Credit Facility

As of March 31, 2012, the Company had SGD 105.6 million (approximately $84.1 million at exchange rates in effect on March 31, 2012) of available borrowing capacity under the Singapore Credit Facility. In January 2012, the banker’s guarantee was released by the STB and the Singapore Credit Facility C was immediately terminated.

Cash Flows from Financing Activities

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

 

 

     Three Months Ended  
     March 31,  
     2012     2011  

Repayments on Singapore Credit Facility

   $ (98,577   $ (97,691

Repayments on Senior Secured Credit Facility

     (7,234     (7,234

Repayments on VML Credit Facility

     —          (6,250

Redemption of Senior Notes

     (189,712     —     

Repayments on Ferry Financing

     (8,779     (8,745

Repayments on Airplane Financings

     (922     (922

Repayments on HVAC Equipment Lease

     (415     (426

Repayments on Other Long-Term Debt

     (592     (453
  

 

 

   

 

 

 
   $ (306,231   $ (121,721
  

 

 

   

 

 

 

 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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Fair Value of Long-Term Debt

The estimated fair value of the Company’s long-term debt as of March 31, 2012 and December 31, 2011, was approximately $9.48 billion, compared to its carrying value of $9.83 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 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 three months ended March 31, 2012, 11,670 warrants were exercised to purchase an aggregate of 194,499 shares of the Company’s common stock at $6.00 per share and $1.2 million in cash was received as settlement of the warrant exercise price.

During the three months ended March 31, 2011, holders of preferred stock exercised 1,194,700 warrants to purchase an aggregate of 19,911,702 shares of the Company’s common stock at $6.00 per share and tendered 1,137,100 shares of preferred stock and $5.8 million in cash as settlement of the warrant exercise price. In conjunction with certain of these transactions, the Company paid $16.2 million in premiums to induce the exercise of warrants with settlement through tendering preferred stock. During the three months ended March 31, 2011, the Company also repurchased and retired 40,300 shares of preferred stock for $4.5 million and recorded a $2.2 million repurchase premium as part of the transaction.

Common Stock Dividends

On March 30, 2012, the Company paid a dividend of $0.25 per common share as part of a regular cash dividend program. During the three months ended March 31, 2012, the Company recorded $205.7 million as a distribution against retained earnings (of which $107.8 million related to the Principal Stockholder’s family). Of this amount, approximately $0.4 million has been recorded as a liability, which will be paid to holders of unvested restricted stock and stock units upon vesting.

In April 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 June 29, 2012, to shareholders of record on June 20, 2012.

Noncontrolling Interests

On February 28, 2012, SCL paid a dividend of 0.58 Hong Kong dollars per share (a total of $599.8 million) to SCL shareholders of record on February 20, 2012 (of which the Company retained $421.6 million). In addition, during the three months ended March 31, 2012, the Company distributed $2.2 million to certain of its noncontrolling interests.

Earnings Per Share

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

 

     Three Months Ended  
     March 31,  
     2012      2011  

Weighted-average common shares outstanding (used in the calculation of basic earnings per share)

     760,437,437        723,389,226  

Potential dilution from stock options, warrants and restricted stock and stock units

     58,359,718        87,850,016  
  

 

 

    

 

 

 

Weighted-average common and common equivalent shares (used in the calculation of diluted earnings per share)

     818,797,155        811,239,242  
  

 

 

    

 

 

 

Antidilutive stock options, warrants and restricted stock and stock units excluded from the calculation of diluted earnings per share

     4,269,417        5,334,276  
  

 

 

    

 

 

 

Accumulated Other Comprehensive Income

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

 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

NOTE 5 — VARIABLE INTEREST ENTITIES

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

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

As of March 31, 2012 and December 31, 2011, the Company’s joint ventures had total assets of $108.1 million and $108.4 million, respectively, and total liabilities of $107.8 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 Company disagrees with several of the proposed adjustments and submitted a protest and a request for an appeals conference to the IRS. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits at March 31, 2012, may decrease by a range of $0 to $24 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 2008 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 than the Company’s expected outcome and impact the provision for income taxes.

During the three months ended March 31, 2012, a wholly owned foreign subsidiary paid a dividend resulting in incremental U.S. taxable income. The receipt of the dividend 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 dividend. In addition, the dividend 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.

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. 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 March 31, 2012) that is a substitution for a 12% tax otherwise due from Venetian Macau Limited (“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
March 31,
 
     2012      2011  

Compensation expense:

     

Stock options

   $ 10,866      $ 15,301  

Restricted stock and stock units

     8,300        4,938  
  

 

 

    

 

 

 
   $ 19,166      $ 20,239  
  

 

 

    

 

 

 

Compensation cost capitalized as part of property and equipment

   $ 218      $ 600  
  

 

 

    

 

 

 

LVSC 2004 Plan:

     

Stock options granted

     51        230  
  

 

 

    

 

 

 

Weighted average grant date fair value

   $ 35.49      $ 36.22  
  

 

 

    

 

 

 

Restricted stock granted

     497        620  
  

 

 

    

 

 

 

Weighted average grant date fair value

   $ 53.30      $ 48.01  
  

 

 

    

 

 

 

Restricted stock units granted

     13        —     
  

 

 

    

 

 

 

Weighted average grant date fair value

   $ 51.07      $ —     
  

 

 

    

 

 

 

SCL Equity Plan:

     

Stock options granted

     2,435        2,746  
  

 

 

    

 

 

 

Weighted average grant date fair value

   $ 1.68      $ 1.52  
  

 

 

    

 

 

 

 

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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
March 31,
 
     2012     2011  

LVSC 2004 Plan:

    

Weighted average volatility

     95.3     94.3

Expected term (in years)

     6.3       6.3  

Risk-free rate

     1.1     2.8

Expected dividends

     1.9     —     

SCL Equity Plan:

    

Weighted average volatility

     70.4     68.9

Expected term (in years)

     6.2       6.3  

Risk-free rate

     0.6     1.7

Expected dividends

     4.0     —     

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 March 31, 2012

           

Cash equivalents(1)

   $ 2,796,052      $ 2,796,052      $ —         $ —     

Interest rate caps(2)

   $ 201      $ —         $ 201      $ —     

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 March 31, 2012 and December 31, 2011, the Company had 37 and 38 interest rate cap agreements, respectively, with an aggregate fair value of approximately $0.2 million and $1.2 million, respectively, based on quoted market values from the institutions holding the agreements.

 

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NOTE 9 — COMMITMENTS AND CONTINGENCIES

Litigation

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

On October 15, 2004, Richard Suen and Round Square Company Limited 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. 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. 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.

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,

 

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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. The discovery process has also begun. 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 is set to expire in May 2012. This consolidated action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

On April 1, 2011, Nasser Moradi, Richard Buckman, Douglas Tomlinson and Matt Abbeduto filed a shareholder derivative action (the “Moradi action”), as amended on April 15, 2011, on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time. The complaint raises substantially similar claims as alleged in the Kohanim and Gaines actions. The complaint seeks to recover for the Company unspecified damages, including exemplary damages and restitution, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiffs. On April 18, 2011, the Louisiana Municipal Police Employees Retirement System filed a shareholder derivative action (the “LAMPERS action”) on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi and Gaines actions. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. On April 22, 2011, John Zaremba filed a shareholder derivative action (the “Zaremba action”) on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi, Gaines and LAMPERS actions. The complaint seeks to recover for the Company unspecified damages, including restitution, disgorgement of profits and injunctive relief, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. On August 25, 2011, the U.S. District Court consolidated the Moradi, LAMPERS and Zaremba actions and such actions are reported as one consolidated matter. On November 17, 2011, the defendants filed a motion to dismiss or alternatively to stay the federal action due to the parallel state court action described above. 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, failing 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. The Company has not been served with the complaint in the Kleinschmidt action and, therefore, 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 intends to defend this matter vigorously.

On January 19, 2012, Asian American Entertainment Corporation, Limited (“AAEC”) filed a claim (the “Macao action”) with the Macao Judicial Court (Tribunal Judicial de Base) against VML, LVS (Nevada) International Holdings, Inc. (“LVS (Nevada)”), Las Vegas Sands, LLC (“LVSLLC”) and

 

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Venetian Casino Resort, LLC (“VCR,” and collectively, the “Defendants”). The claim is for 3.0 billion patacas (approximately $375.1 million at exchange rates in effect on March 31, 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. 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. The U.S. District Court has not ruled on the Nevada Action.

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.

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; 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 (which opened phase I in April 2012) and Cotai Strip parcels 3 and 7 and 8 (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 three months ended March 31, 2011, has been reclassified to conform to the current presentation. The Company’s segment information as of March 31, 2012 and December 31, 2011, and for the three months ended March 31, 2012 and 2011, is as follows (in thousands):

 

 

     Three Months Ended  
     March 31,  
     2012     2011  

Net Revenues:

    

Macao:

    

The Venetian Macao

   $ 772,760     $ 638,269  

Sands Macao

     349,083       322,793  

Four Seasons Macao

     299,604       172,107  

Other Asia

     35,568       33,773  
  

 

 

   

 

 

 
     1,457,015       1,166,942  

Marina Bay Sands

     848,669       584,925  

United States:

    

Las Vegas Operating Properties

     384,603       305,075  

Sands Bethlehem

     115,562       91,030  
  

 

 

   

 

 

 
     500,165       396,105  

Intersegment eliminations

     (43,107     (36,053
  

 

 

   

 

 

 

Total net revenues

   $ 2,762,742     $ 2,111,919  
  

 

 

   

 

 

 

Adjusted Property EBITDA(1)

    

Macao:

    

The Venetian Macao

   $ 281,933     $ 228,400  

Sands Macao

     106,956       92,648  

Four Seasons Macao

     67,519       57,547  

Other Asia

     (5,722     (4,606
  

 

 

   

 

 

 
     450,686       373,989  

Marina Bay Sands

     472,519       284,471  

United States:

    

Las Vegas Operating Properties

     115,806       65,165  

Sands Bethlehem

     27,502       22,109  
  

 

 

   

 

 

 
     143,308       87,274  
  

 

 

   

 

 

 

Total adjusted property EBITDA

     1,066,513       745,734  

Other Operating Costs and Expenses

    

Stock-based compensation

     (9,169     (8,295

Corporate

     (48,955     (37,576

Pre-opening

     (51,459     (9,471

Development

     (1,198     (573

Depreciation and amortization

     (194,747     (190,237

Amortization of leasehold interests in land

     (9,945     (13,156

Impairment loss

     (42,893     —     

Loss on disposal of assets

     (593     (499
  

 

 

   

 

 

 

Operating income

     707,554       485,927  

Other Non-Operating Costs and Expenses

    

Interest income

     5,648       2,047  

Interest expense, net of amounts capitalized

     (64,672     (73,585

Other expense

     (3,419     (4,675

Loss on early retirement of debt

     (2,831     —     

Income tax expense

     (63,171     (45,211
  

 

 

   

 

 

 

Net income

   $ 579,109     $ 364,503  
  

 

 

   

 

 

 

 

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(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 expense, loss on early retirement of debt and income taxes. Adjusted property EBITDA is used by management as the primary measure of operating performance of the Company’s properties and to compare the operating performance of the Company’s properties with that of its competitors.

 

     Three Months Ended  
     March 31,  
     2012      2011  

Intersegment Revenues

     

Macao:

     

The Venetian Macao

   $ 913      $ 895  

Other Asia

     6,416        7,901  
  

 

 

    

 

 

 
     7,329        8,796  

Marina Bay Sands

     488        197  

Las Vegas Operating Properties

     35,290        27,060  
  

 

 

    

 

 

 

Total intersegment revenues

   $   43,107      $    36,053  
  

 

 

    

 

 

 

 

     Three Months Ended  
     March 31,  
     2012      2011  

Capital Expenditures

     

Corporate and Other

   $ 5,024      $ 2,845  

Macao:

     

The Venetian Macao

     20,606        —     

Sands Macao

     4,729        —     

Four Seasons Macao

     16,705        1,293  

Sands Cotai Central

     262,986        140,993  

Other Asia

     232        2,819  

Other Development Projects

     44        —     
  

 

 

    

 

 

 
     305,302        145,105  

Marina Bay Sands

     62,391        157,984  

United States:

     

Las Vegas Operating Properties

     16,509        8,402  

Sands Bethlehem

     9,034        18,172  
  

 

 

    

 

 

 
     25,543        26,574  
  

 

 

    

 

 

 

Total capital expenditures

   $ 398,260      $ 332,508  
  

 

 

    

 

 

 

 

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     March 31,      December 31,  
     2012      2011  

Total Assets

     

Corporate and Other

   $ 1,622,256      $ 644,645  

Macao:

     

The Venetian Macao

     2,865,502        3,199,194  

Sands Macao

     506,535        485,231  

Four Seasons Macao

     1,329,780        1,267,977  

Sands Cotai Central

     3,690,709        4,333,406  

Other Asia

     356,681        328,415  

Other Development Projects

     206,885        206,150  
  

 

 

    

 

 

 
     8,956,092        9,820,373  

Marina Bay Sands

     7,194,070        6,794,258  

United States:

     

Las Vegas Operating Properties

     4,208,296        4,105,618  

Sands Bethlehem

     890,318        879,229  
  

 

 

    

 

 

 
     5,098,614        4,984,847  
  

 

 

    

 

 

 

Total assets

   $ 22,871,032      $ 22,244,123  
  

 

 

    

 

 

 
     March 31,      December 31,  
     2012      2011  

Total Long-Lived Assets

     

Corporate and Other

   $ 315,433      $ 312,860  

Macao:

     

The Venetian Macao

     1,967,123        2,002,751  

Sands Macao

     289,176        291,620  

Four Seasons Macao

     998,287        1,006,441  

Sands Cotai Central

     3,315,125        3,053,551  

Other Asia

     212,936        216,030  

Other Development Projects

     197,819        197,079  
  

 

 

    

 

 

 
     6,980,466        6,767,472  

Marina Bay Sands

     5,619,695        5,471,376  

United States:

     

Las Vegas Operating Properties

     3,204,503        3,244,090  

Sands Bethlehem

     623,854        625,649  
  

 

 

    

 

 

 
     3,828,357        3,869,739  
  

 

 

    

 

 

 

Total long-lived assets

   $ 16,743,951      $ 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, 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 amount included in the Restricted Subsidiaries’ condensed consolidating balance sheets is related to non-voting preferred stock of one of the subsidiaries held by third parties.

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 $6.6 million (consisting of $260.8 million of property and equipment, offset by $267.4 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 March 31, 2012 and December 31, 2011, respectively, and a net loss (consisting primarily of depreciation expense) of $3.8 million for the three months ended March 31, 2012, 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.

 

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LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

The Company revised its condensed consolidating statements of cash flows for three months ended March 31, 2011, to correct the classification of dividends received by Las Vegas Sands Corp. from the Restricted Subsidiaries. The revision was made to appropriately classify dividends received that represent a return on investment as an operating activity. The revision resulted in an increase of $28.6 million to the Las Vegas Sands Corp.’s “net cash generated from operating activities” for the three months ended March 31, 2011, with a corresponding decrease to “net cash generated from investing activities.” The Company will revise the Las Vegas Sands Corp. column in the condensed consolidating statements of cash flows to increase “net cash generated from operating activities” by $49.1 million and $85.3 million, for the six months ended June 30, 2011, and the nine months ended September 30, 2011, respectively, with a corresponding decrease to “net cash generated from investing activities” the next time they are filed. The Company will also revise the Restricted Subsidiaries column in the condensed consolidating statements of cash flows to increase “net cash generated from operating activities” by $60.0 million for the nine months ended September 30, 2011, with a corresponding decrease to “net cash generated from investing activities” the next time they are filed. The revision will be made to appropriately classify dividends received by the Restricted Subsidiaries from the non-restricted subsidiaries that represent a return on investment. 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.

 

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

CONDENSED CONSOLIDATING BALANCE SHEETS

March 31, 2012

 

                          Consolidating/        
     Las Vegas      Restricted      Non-Restricted      Eliminating        
     Sands Corp.      Subsidiaries      Subsidiaries      Entries     Total  

Cash and cash equivalents

   $ 179,599      $ 850,810      $ 3,025,951      $ —        $ 4,056,360  

Restricted cash and cash equivalents

     —           34        4,840        —          4,874  

Intercompany receivables

     179,686        47,999        —           (227,685     —     

Accounts receivable, net

     1,565        263,950        1,264,825        —          1,530,340  

Inventories

     2,459        11,975        25,580        —          40,014  

Deferred income taxes, net

     —           33,837        610        (19,381     15,066  

Prepaid expenses and other

     11,968        9,814        54,654        (351     76,085  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total current assets

     375,277        1,218,419        4,376,460        (247,417     5,722,739  

Property and equipment, net

     139,704        3,352,544        11,837,354        —          15,329,602  

Investment in subsidiaries

     8,426,648        6,545,431        —           (14,972,079     —     

Deferred financing costs, net

     281        18,673        144,265        —          163,219  

Restricted cash and cash equivalents

     —           2,466        —           —          2,466  

Intercompany receivables

     31,423        145,581        —           (177,004     —     

Intercompany notes receivable

     —           829,788        —           (829,788     —     

Deferred income taxes, net

     65,879        —           —           (46,990     18,889  

Leasehold interests in land, net

     —           —           1,414,349        —          1,414,349  

Intangible assets, net

     690        —           77,327        —          78,017  

Other assets, net

     113        24,392        117,246        —          141,751  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 9,040,015      $ 12,137,294      $ 17,967,001      $ (16,273,278   $ 22,871,032  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Accounts payable

   $ 19,708      $ 23,129      $ 62,368      $ —        $ 105,205  

Construction payables

     1,722        5,324        304,522        —          311,568  

Intercompany payables

     —           174,271        53,414        (227,685     —     

Accrued interest payable

     101        1,039        5,797        —          6,937  

Other accrued liabilities

     10,248        196,662        1,216,021        —          1,422,931  

Income taxes payable

     —           7        177,197        (351     176,853  

Deferred income taxes

     19,381        —           —           (19,381     —     

Current maturities of long-term debt

     3,688        30,549        435,087        —          469,324  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total current liabilities

     54,848        430,981        2,254,406        (247,417     2,492,818  

Other long-term liabilities

     35,326        10,729        58,984        —          105,039  

Intercompany payables

     73,240        —           103,764        (177,004     —     

Intercompany notes payable

     —           —           829,788        (829,788     —     

Deferred income taxes

     —           47,156        159,261        (46,990     159,427  

Deferred amounts related to mall transactions

     —           433,251        —           —          433,251  

Long-term debt

     70,125        2,831,733        6,480,791        —          9,382,649  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     233,539        3,753,850        9,886,994        (1,301,199     12,573,184  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Las Vegas Sands Corp. stockholders’ equity

     8,806,476        8,383,039        6,589,040        (14,972,079     8,806,476  

Noncontrolling interests

     —           405        1,490,967        —          1,491,372  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total equity

     8,806,476        8,383,444        8,080,007        (14,972,079     10,297,848  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities and equity

   $ 9,040,015      $ 12,137,294      $ 17,967,001      $ (16,273,278   $ 22,871,032  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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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  

Investment 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  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

24


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2012

 

     Las Vegas
Sands  Corp.
    Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  
          
          

Revenues:

          

Casino

   $ —        $ 158,694     $ 2,107,799     $ —        $ 2,266,493  

Rooms

     —          113,449       154,278       —          267,727  

Food and beverage

     —          47,854       105,601       —          153,455  

Mall

     —          —          71,418       —          71,418  

Convention, retail and other

     —          75,840       91,278       (37,401     129,717  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —          395,837       2,530,374       (37,401     2,888,810  

Less — promotional allowances

     (233     (22,385     (102,997     (453     (126,068
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     (233     373,452       2,427,377       (37,854     2,762,742  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Casino

     —          78,164       1,130,005       (618     1,207,551  

Rooms

     —          33,126       19,661       (1     52,786  

Food and beverage

     —          22,796       56,600       (1,095     78,301  

Mall

     —          —          16,301       —          16,301  

Convention, retail and other

     —          20,712       62,117       (3,305     79,524  

Provision for doubtful accounts

     —          6,548       45,670       —          52,218  

General and administrative

     —          68,489       150,444       (216     218,717  

Corporate

     46,195       91       35,281       (32,612     48,955  

Pre-opening

     —          —          51,460       (1     51,459  

Development

     1,204       —          —          (6     1,198  

Depreciation and amortization

     3,587       55,899       135,261       —          194,747  

Amortization of leasehold interests in land

     —          —          9,945       —          9,945  

Impairment loss

     —          —          42,893       —          42,893  

Loss on disposal of assets

     —          402       191       —          593  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     50,986       286,227       1,755,829       (37,854     2,055,188  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (51,219     87,225       671,548       —          707,554  

Other income (expense):

          

Interest income

     98       31,476       5,292       (31,218     5,648  

Interest expense, net of amounts capitalized

     (3,358     (25,368     (67,164     31,218       (64,672

Other income (expense)

     (47     339       (3,711     —          (3,419

Loss on early retirement of debt

     (2,831     —          —          —          (2,831

Income from equity investments in subsidiaries

     528,287       420,352       —          (948,639     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     470,930       514,024       605,965       (948,639     642,280  

Income tax benefit (expense)

     28,012       (27,375     (63,808     —          (63,171
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     498,942       486,649       542,157       (948,639     579,109  

Net income attributable to noncontrolling interests

     —          (525     (79,642     —          (80,167
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Las Vegas Sands Corp.

   $ 498,942     $ 486,124     $ 462,515     $ (948,639   $ 498,942  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2011

 

     Las Vegas
Sands Corp.
    Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  
          
          

Revenues:

          

Casino

   $ —        $ 83,123     $ 1,581,366     $ —        $ 1,664,489  

Rooms

     —          112,874       119,100       —          231,974  

Food and beverage

     —          50,307       95,086       —          145,393  

Mall

     —          —          55,865       —          55,865  

Convention, retail and other

     —          64,543       74,194       (29,947     108,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —          310,847       1,925,611       (29,947     2,206,511  

Less — promotional allowances

     (163     (17,626     (76,396     (407     (94,592
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     (163     293,221       1,849,215       (30,354     2,111,919  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Casino

     —          64,368       857,745       (577     921,536  

Rooms

     —          32,248       16,205       —          48,453  

Food and beverage

     —          23,596       49,563       (1,456     71,703  

Mall

     —          —          12,104       —          12,104  

Convention, retail and other

     —          21,153       58,478       (4,490     75,141  

Provision for doubtful accounts

     —          6,096       28,962       —          35,058  

General and administrative

     —          60,732       149,973       (220     210,485  

Corporate

     32,980       55       28,152       (23,611     37,576  

Pre-opening

     —          —          9,471       —          9,471  

Development

     573       —          —          —          573  

Depreciation and amortization

     4,183       52,813       133,241       —          190,237  

Amortization of leasehold interests in land

     —          —          13,156       —          13,156  

(Gain) loss on disposal of assets

     —          (55     554       —          499  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     37,736       261,006       1,357,604       (30,354     1,625,992  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (37,899     32,215       491,611       —          485,927  

Other income (expense):

          

Interest income

     557       25,275       1,292       (25,077     2,047  

Interest expense, net of amounts capitalized

     (3,450     (23,072     (72,140     25,077       (73,585

Other expense

     —          (717     (3,958     —          (4,675

Income from equity investments in subsidiaries

     328,939       277,722       —          (606,661     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     288,147       311,423       416,805       (606,661     409,714  

Income tax benefit (expense)

     1,176       (9,052     (37,335     —          (45,211
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     289,323       302,371       379,470       (606,661     364,503  

Net income attributable to noncontrolling interests

     —          —          (75,180     —          (75,180
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Las Vegas Sands Corp.

   $ 289,323     $ 302,371     $ 304,290     $ (606,661   $ 289,323  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

26


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2012

 

     Las Vegas
Sands Corp.
     Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  
           
           

Net income

   $ 498,942      $ 486,649     $ 542,157     $ (948,639   $ 579,109  

Currency translation adjustment

     97,831        83,269       98,878       (181,100     98,878  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

     596,773        569,918       641,035       (1,129,739     677,987  

Comprehensive income attributable to noncontrolling interests

     —           (525     (80,689     —          (81,214
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Las Vegas Sands Corp.

   $ 596,773      $ 569,393     $ 560,346     $ (1,129,739   $ 596,773  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

27


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2011

 

    Las Vegas
Sands Corp.
    Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  

Net income

  $ 289,323     $ 302,371     $ 379,470     $ (606,661   $ 364,503  

Currency translation adjustment

    34,493       28,252       31,956       (62,745     31,956  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

    323,816       330,623       411,426       (669,406     396,459  

Comprehensive income attributable to noncontrolling interests

    —          —          (72,643     —          (72,643
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Las Vegas Sands Corp.

  $ 323,816     $ 330,623     $ 338,783     $ (669,406   $ 323,816  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

28


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2012

 

     Las Vegas
Sands Corp.
    Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  

Net cash generated from operating activities

   $ 22,116     $ 273,221     $ 472,362     $ (100,248   $ 667,451  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

          

Change in restricted cash and cash equivalents

     —          —          (195     —          (195

Capital expenditures

     (4,805     (16,694     (376,761     —          (398,260

Proceeds from disposal of property and equipment

     —          11       750       —          761  

Notes receivable to non-restricted subsidiaries

     —          (5,198     —          5,198       —     

Dividends received from non-restricted subsidiaries

     —          268,000       —          (268,000     —     

Repayment of receivable from non-restricted subsidiaries

     —          250       —          (250     —     

Capital contributions to subsidiaries

     (33     (250,000     —          250,033       —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (4,838     (3,631     (376,206     (13,019     (397,694
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

          

Proceeds from exercise of stock options

     19,183       —          2,076       —          21,259  

Proceeds from the exercise of warrants

     526,168       —          —          —          526,168  

Dividends paid

     (205,245     —          (178,218     —          (383,463

Distributions to noncontrolling interests

     —          (525     (1,670     —          (2,195

Dividends paid to Las Vegas Sands Corp.

     —          (100,248     —          100,248       —     

Dividends paid to Restricted Subsidiaries

     —          —          (268,000     268,000       —     

Capital contributions received

     —          —          250,033       (250,033     —     

Borrowings from Restricted Subsidiaries

     —          —          5,198       (5,198     —     

Repayments on borrowings from Restricted Subsidiaries

     —          —          (250     250       —     

Repayments on Singapore credit facility

     —          —          (98,577     —          (98,577

Repayments on senior secured credit facility

     —          (7,234     —          —          (7,234

Redemption of senior notes

     (189,712     —          —          —          (189,712

Repayments on ferry financing

     —          —          (8,779     —          (8,779

Repayments on airplane financings

     (922     —          —          —          (922

Repayments on HVAC

     —          (415     —          —          (415

Repayments on other long-term debt

     —          —          (592     —          (592

Payments of deferred financing costs

     —          —          (114     —          (114
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) financing activities

     149,472       (108,422     (298,893     113,267       (144,576
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate on cash

     —          —          28,461       —          28,461  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     166,750       161,168       (174,276     —          153,642  

Cash and cash equivalents at beginning of period

     12,849       689,642       3,200,227       —          3,902,718  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 179,599     $ 850,810     $ 3,025,951     $ —        $ 4,056,360  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

29


Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2011

 

     Las Vegas
Sands Corp.
    Restricted
Subsidiaries
    Non-Restricted
Subsidiaries
    Consolidating/
Eliminating
Entries
    Total  

Net cash generated from (used in) operating activities

   $ (21,295   $ 46,192     $ 422,045     $ (28,564   $ 418,378  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

          

Change in restricted cash and cash equivalents

     —          —          149,962       —          149,962  

Capital expenditures

     (2,429     (8,760     (321,319     —          (332,508

Proceeds from disposal of property and equipment

     —          —          3,097       —          3,097  

Acquisition of intangible assets

     (100     —          (229     —          (329

Notes receivable to non-restricted subsidiaries

     —          (18,110     —          18,110       —     

Dividends received from non-restricted subsidiaries

     —          23,400       —          (23,400     —     

Capital contributions to subsidiaries

     (50,000     —          —          50,000       —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (52,529     (3,470     (168,489     44,710       (179,778
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

          

Proceeds from exercise of stock options

     8,420       —          91       —          8,511  

Proceeds from the exercise of warrants

     5,760       —          —          —          5,760  

Dividends paid

     (19,598     —          —          —          (19,598

Dividends paid to Las Vegas Sands Corp.

     —          (28,564     —          28,564       —     

Dividends paid to Restricted Subsidiaries

     —          —          (23,400     23,400       —     

Capital contributions received

     —          50,000       —          (50,000     —     

Borrowings from Restricted Subsidiaries

     —          —          18,110       (18,110     —     

Repayments on Singapore credit facility

     —          —          (97,691     —          (97,691

Repayments on senior secured credit facility

     —          (7,234     —          —          (7,234

Repayments on VML credit facility

     —          —          (6,250     —          (6,250

Repayments on ferry financing

     —          —          (8,745     —          (8,745

Repayments on airplane financings

     (922     —          —          —          (922

Repayments on HVAC

     —          (426     —          —          (426

Repayments on other long-term debt

     —          —          (453     —          (453

Repurchase of preferred stock

     (4,544     —          —          —          (4,544

Payments of preferred stock inducement premium

     (16,201     —          —