Accounts Receivable, Net

3 Months Ended

Mar. 31, 2020

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Accounts Receivable and Provision for Credit Losses

Accounts receivable are comprised of casino, hotel, mall and other receivables, which do not bear interest and are recorded at amortized cost. The Company extends credit to approved casino customers following background checks and investigations of creditworthiness. The Company also extends credit to gaming promoters in Macao. These receivables can be offset against commissions payable to the respective gaming promoters. Business or economic conditions, the legal enforceability of gaming debts, foreign currency control measures or other significant events in foreign countries could affect the collectability of receivables from customers and gaming promoters residing in these countries.

Accounts receivable primarily consist of casino receivables. Other than casino receivables, there is no other concentration of credit risk with respect to accounts receivable as the Company has a large number of customers. The Company believes the concentration of its credit risk in casino receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures, and also believes there are no concentrations of credit risk for which a provision has not been established. Although management believes the provision is adequate, it is possible the estimated amount of cash collections with respect to accounts receivable could change.

The Company maintains a provision for expected credit losses on casino, hotel and mall receivables and regularly evaluates the balances. The Company applies standard reserve percentages, to aged account balances, which are grouped based on shared credit risk characteristics and days past due. The reserve percentages are based on estimated loss rates supported by historical observed default rates over the expected life of the receivable and are adjusted for forward-looking information. The Company also specifically analyzes the collectability of each account with a balance over a specified dollar amount, based upon the age of the account, the customer's financial condition, collection history and any other known information and adjusts the aforementioned reserve with the results from the individual reserve analysis. The Company also monitors regional and global economic conditions and forecasts in its evaluation of the

adequacy of the recorded reserves. Account balances are written off against the provision when the Company believes it is probable the receivable will not be recovered.

Credit or marker play was 22.1%, 14.9% and 70.0% of table games play at the Company’s Macao properties, Marina Bay Sands and Las Vegas Operating Properties, respectively, during the period ended March 31, 2020. The Company’s provision for casino credit losses was 34.7% and 32.3% of gross casino receivables as of March 31, 2020 and December 31, 2019, respectively. The Company’s provision for credit losses from its hotel and other receivables is not material.

Accounts receivable, net consists of the following:



	March 31, 2020			December 31, 2019
	(In millions)
Casino	$	752		$	858
Rooms	48			88
Mall	78			93
Other	46			87
	924			1,126
Less - provision for credit losses	(271		)	(282		)
	$	653		$	844

The following table shows the movement in the provision for credit losses recognized for accounts receivable that occurred during the period:



	March 31, 2020			March 31, 2019
	(In millions)
Balance at beginning of year	$	282		$	324
Current period provision for credit losses	18			4
Write-offs	(23		)	(17		)
Recoveries of receivables previously written-off	—			1
Exchange rate impact	(6		)	1
Balance at end of period	$	271		$	313

Impacts of Adoption

On January 1, 2020, the Company adopted the guidance under the accounting standard update (“ASU”) issued in June 2016 by the Financial Accounting Standards Board (“FASB”). The ASU revised the methodology for measuring credit losses on financial losses on financial instruments and the timing of when such losses are recorded. The adoption, which was applied on a modified retrospective basis, did not have a material impact on the Company's financial condition and results of operations and therefore did not result in an adjustment to retained earnings as of January 1, 2020.