nanitem 14 principal accounting fees services following table sets forth fees paid payable independent registered public accounting firm 2004 2005 audit nonaudit services well percentage services approved audit committee category “audit fees” includes fees annual audit quarterly reviews well audit related accounting consultations work related initial public offering work related debt securities offerings category “auditrelated fees” includes nonaudit related accounting consultations services related pension benefit plans category “tax fees” includes tax consultation planning fees tax compliance services preapproval policies procedures audit committee charter contains policies related preapproval services provided independent registered public accounting firm audit committee one members authority delegated audit committee sole authority review advance grant appropriate preapprovals auditing services provided independent registered public accounting firm b nonaudit services provided independent registered public accounting firm permitted section 10a securities act 1933 connection therewith approve fees terms engagement audit committee adopted following guidelines regarding engagement company’s independent registered public accounting firm perform services company audit services including audits company’s employee benefit plan independent registered public accounting firm provide audit committee engagement letter year prior commencement audit services outlining scope audit services proposed performed fiscal year generally separate engagement letter also provided statutory audit foreign subsidiaries terms engagement letters agreed audit committee engagement letters formally accepted tax services independent registered public accounting firm provide audit committee separate scope tax services proposed performed fiscal year may also provide separate tax engagement letters special projects foreign subsidiaries terms tax engagement letters agreed audit committee tax engagement letters formally accepted nonaudit services require preapproval board directors casebycase basis preapproval authority delegated member preapproval must presented audit committee next scheduled meeting part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption fees paid independent registered public accounting firm part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption fees paid independent registered public accounting firm part iv item 15item 14 principal accounting fees services incorporate reference information responsive item appearing proxy statement part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption “fees paid independent registered public accounting firm” part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption fees paid independent registered public accounting firm part iv item 15item 14 principal accountant fees services incorporate reference information responsive item appearing proxy statement caption fees paid independent registered public accounting firm part iv item 15 item 7management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety consolidated financial statements notes thereto financial information included offering circular certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “disclosure regarding forwardlooking statements” general operate venetian casino resort sands expo convention center las vegas nevada sands macao casino macau china special administrative region people’s republic china also developing two additional casino resorts palazzo casino resort adjacent connected venetian casino resort macao venetian casino resort macau currently offer hotel gaming dining entertainment retail spa amenities venetian casino resort convention trade show space sands expo center las vegas gaming dining vip suites sands macao approximately 563 gross revenues 2004 derived gaming 248 gross revenues 2004 derived hotel rooms percentage gaming revenue venetian casino resort one lowest las vegas strip refers area las vegas major resort hotels located emphasis group convention trade show business resulting higher occupancy room rates midweek periods opening december 31 2004 956 sands macao’s gross revenue derived gaming activities remainder primarily derived food beverage las vegas continued experience upward trend total visitation convention trade show attendees well gaming win hotel occupancy hotel average daily room rates particular las vegas experienced increase visitors arriving air population southwest area united states including las vegas also grown population clark county doubled last thirteen years approximately 770280 1990 approximately 1715337 2004 venetian casino resortsands expo center complex benefited trends along low interest rates 2004 2003 macau gaming market continued benefit combination macroeconomic demographic drivers governmentsponsored infrastructure visitation programs china macau’s key feeder market chinese economy grown compounded annual growth rate 126 1993 2003 resulted significant growth wealth throughout country especially country’s expanding middle class addition domestic travel within china including special administrative regions continues grow substantially country continues liberalize travel laws example chinese visitation macau grown approximately 245300 visitors 1994 95 million visitors 2004 las vegas projects completed addition venetian casino resort second quarter 2003 refer phase ia addition phase ia addition opened business june 26 2003 phase ia addition included 1013room venezia hotel tower top venetian casino resort’s existing parking garage approximately 1000parking space expansion existing parking garage approximately 150000 square feet additional meeting conference space expansion congress center meeting conference facility total construction cost phase ia addition approximately 2750 million excluding 90 million expand venetian casino resort’s heating ventilation air conditioning facility “hvac plant” accommodate phase ia addition begun extensive design planning work completed demolition commenced excavation site palazzo casino resort fourth quarter 2004 paid 699 million development cost palazzo casino resort december 31 2004 paid approximately 1762 million design development construction costs palazzo casino resort phase ii mall palazzo casino resort expected open second quarter 2007 expected cost us approximately 16 billion exclusive land phase ii mall expected cost us approximately 2750 million exclusive certain incentive payments executives made july 2004 addition expect tenants make significant additional capital expenditures build stores restaurants palazzo casino resort august 20 2004 las vegas sands opco venetian casino resort llc entered 1010 billion senior secured credit facility among things finance palazzo casino resort construction costs september 30 2004 subsidiaries company entered 2500 million construction loan fund portion phase ii mall construction costs senior secured credit facility amended february 2005 order enhance company’s financial flexibilitysee “item 8 financial statements supplementary datanotes financial statementsnote 15subsequent events” intend fund development construction palazzo casino resort current budget 16 billion exclusive land certain incentives combination remaining 3083 million net proceeds sale grand canal shops operating cash flow proceeds amended senior secured credit facility proceeds phase ii mall construction loan debt financings necessary proceeds initial public offering macau projects operate sands macao casino las vegasstyle casino macau opened main portion sands macao may 18 2004 opened remainder sands macao including 42 additional table games four restaurants two spas entertainment venues 49 highend suites late august 2004 total cost developing constructing operating sands macao including design costs construction costs equipment costs working capital preopening expenses approximately 2650 million february 2005 opened pearl room transforming unfinished space adjacent sands macao casino floor approximately 17000 square feet additional casino space includes 40 additional tables 180 additional slot machines addition sands macao also plan build macao venetian casino resort allsuites hotel casino convention center complex venetianstyle theme similar las vegas property currently estimate cost macao venetian casino resort approximately 18 billion subconcession agreement obligated develop open macao venetian casino resort june 2006 convention center december 2006 invest cause invested least 44 billion patacas approximately 5346 million exchange rates effect december 31 2004 various development projects macau june 2009 expect cost sands macao construction macao venetian casino resort satisfy investment obligations need extension june 2006 construction deadline macao venetian casino resort currently expect open first quarter 2007 see “capital liquidity” item 1 ”risk factorswe required make substantial additional investments macau build open macao venetian casino resort june 2006 convention center december 2006 unless obtain extension lose right continue operate sands macao facilities developed subconcession” company currently plans seek extension deadline december 31 2004 paid capital expenditures 2530 million connection macao projects grand canal shops mall april 12 2004 entered agreement ggp sell grand canal shops mall lease certain restaurant retail assets venetian casino resort approximately 7660 million grand canal shops mall sale completed may 17 2004 las vegas sands opco realized net gain 4176 million connection sale used portion proceeds sale grand canal shops mall repay outstanding indebtedness 1200 million secured mall facility repurchase 64 million principal amount outstanding 11 mortgage notes pursuant asset sale offer make tax distribution 1000 million stockholders make incentive payments 632 million executive officers messrs adelson weidner stone goldstein company required defer portion gain sale grand canal shops mall first company deferred 1092 million gain transaction deemed prepaid operating lease payments deferral related 19 spaces currently occupied various tenants leased ggp annual rent one dollar per year 89year operating lease ggp assumed entitled rent payments tenant leases 19 spaces deferred amount amortized 89year lease term straightline basis second company deferred 772 million constitutes estimated net present value payments make ggp three lease back arrangements • leased c2k showroom space located within grand canal shops mall ggp period 25 years subject additional 50 years extension options initial annual fixed minimum rent 33 million per year • leased gondola retail store canal space located within grand canal shops mall ggp period 25 years subject additional 50 years extension options initial annual fixed minimum rent 35 million • leased certain office space ggp period 10 years subject additional 65 years extension options initial annual fixed minimum rent 860350 three lease payments described subject automatic increases 5 beginning sixth lease year subsequent fifth lease year thereafter net present value lease payments 772 million gaap portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases company party three tenant lease termination asset purchase agreements total remaining payment obligations arrangements 146 million december 31 2004 grand canal shops mall sale agreement continue obligated fulfill lease termination asset purchase agreements remaining obligations first agreement required us pay tenant 27 annual payments 400000 beginning 2004 remaining obligations second agreement required us pay 15 monthly payments totaling 100 million beginning january 1 2004 plus interest 6 per annum remaining obligations third agreement required us pay quarterly payments 62500 beginning 2004 ten years part grand canal shops mall sale company entered agreement ggp construct sell phase ii mall purchase price ggp agreed pay phase ii mall greater 2500 million ii phase ii mall’s net operating income months 19 30 operations assuming rent due tenants month 30 actually due months 19 30 divided capitalization rate capitalization rate 06 every dollar net operating income 380 million 08 every dollar net operating income 380 million date phase ii mall opens public ggp obligated make initial purchase price payment based projected net operating income first 12 months operations event less 2500 million every six months thereafter 24 month anniversary opening date required purchase price adjusted never less 2500 million based projected net operating income upcoming 12 months “final” purchase price adjustment subject audit thereafter made 30month anniversary phase ii mall’s opening date based formula described first two sentences paragraph purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting purposes calculating final purchase price adjustment applying base rent payable tenants last month applicable 12month period entire 12month period formed separate subsidiary develop phase ii mall refer phase ii mall subsidiary phase ii mall expected cost approximately 2750 million excluding incentive payments certain executives described addition expect tenants make significant additional expenditures build stores restaurants palazzo casino resort september 30 2004 subsidiaries company entered 2500 million construction loan finance construction phase ii mall expect finance phase ii mall construction costs proceeds loan approximately 250 million investment us july 2004 phase ii mall subsidiary paid onetime incentive payments certain executives aggregate amount 632 million incentive payments paid executives significant value created company connection securing financing phase ii mall arranging sale phase ii mall interface holding acquisition july 29 2004 company acquired capital stock interface holding principal stockholder exchange 220370 shares common stock 58625638 shares common stock initial public offering stock split time acquisition interface holding indirectly owned sands expo center directly held redeemable preferred interest venetian casino resort llc balance 2552 million july 29 2004 ceased accrual redeemable preferred return july 29 2004 retired redeemable preferred interest february 2005 following acquisition made equity contribution approximately 270 million interface groupnevada direct owner sands expo center july 30 2004 interface groupnevada entered 1000 million mortgage loan used proceeds loan portion equity contribution repay full amounts outstanding 1243 million prior mortgage loan pay related fees expenses historical financial statements restated due acquisition july 29 2004 common stock interface holding principal stockholder accounted acquisition reorganization entities common control manner similar poolingofinterests development projects entered agreements develop lease gaming entertainment facilities two prominent football clubs united kingdom discussions several others build entertainment gaming facilities major cities twelve months ended december 31 2004 incurred expensed 112 million relation subsidiary united kingdom predevelopment activities united kingdom initial public offering december 20 2004 issued 27380953 shares common stock initial public offering price 2900 per share initial public offering resulted net proceeds approximately 7392 million us deducting underwriting discounts commissions related offering expenses payable us debt refinancing february 2005 company refinanced significant portion indebtedness including issuing 2500 million 6375 senior notes due 2015 amending senior secured credit facility increase term loans 4000 million increasing size revolving loan facility 4500 million among changes company used 3273 million ipo proceeds 2448 million net proceeds senior notes offering portion increase senior secured bank credit facility retire 8436 million principal amount 11 mortgage notes transactions expected result pretax charge loss early retirement indebtedness approximately 1326 million first quarter 2005 see notes financial statements “note 15subsequent events” critical accounting policies estimates management identified following critical accounting policies affect significant judgments estimates used preparation consolidated financial statements preparation financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities going basis management evaluates estimates including related asset impairment accruals slot marketing points selfinsurance compensation related benefits revenue recognition allowance doubtful accounts contingencies litigation state accounting policies notes consolidated financial statements relevant sections discussion analysis estimates based information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe following critical accounting policies affect significant judgments estimates used preparation consolidated financial statements • maintain allowance reserve doubtful accounts operating casino resorts venetian sands macao provision doubtful accounts operating expense increases allowance doubtful accounts specific writeoffs decrease recoveries increase allowance doubtful accounts respectively regularly evaluate allowance doubtful accounts venetian credit marker play significant apply standard reserve percentages aged account balances specified dollar amount specifically analyze collectibility account balance specified dollar amount based upon age account customers financial condition collection history known information also monitor regional global economic conditions forecasts determine reserve levels adequate sands macao credit marker play significant apply standard reserve percentage aged account balances mix credit play percentage total casino play decreased significantly 2004 sands macao table games play primarily cash play venetian credit table games play represents approximately 55 total table games play estimate provision doubtful accounts 80 million 2004 compared 81 million 214 million years 2003 2002 respectively • maintain accruals health workers compensation selfinsurance slot club point redemption group sales commissions classified accrued liabilities consolidated balance sheets management determines adequacy accruals periodically evaluating historical experience projected trends related accruals information indicates accruals overstated understated business conditions indicate adjust assumptions utilized reduce provide additional accruals appropriate • subject various claims legal actions including lawsuits construction manager lehrer mcgovern bovis inc original construction venetian casino resort matters relate personal injuries customers damage customers’ personal assets management established accrual gain loss connection construction litigation gain loss reasonably possible determined probable measured reasonable certainty reasonably possible position could change near term arbitration proceedings concluded amount change could material management estimates guest claims expense accrues liabilities based upon historical experience accrued liability category consolidated balance sheet • december 31 2004 net property equipment 18 billion representing 488 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets assessing recoverability carrying value property equipment events circumstance warrant assessment must make assumptions regarding estimated future cash flows factors estimates related assumptions change may required record impairment loss assets impairment loss would recognized noncash component operating income recent accounting pronouncements december 2004 fasb issued sfas 123 revised 2004 “sharebased payment” “sfas 123r” supersedes fasb opinion 25 “accounting stock issued employees” statement requires compensation costs related share based payment transactions recognized financial statements provisions statement effective first interim annual reporting period begins june 15 2005 statement requires public entities measure cost employee services received exchange award equity instruments based grantdate fair value award limited exceptions cost recognized period employee required provide service exchange award statement also addresses accounting tax effects sharebased compensation awards statement apply us july 1 2005 currently expect adopt standard date using blackscholes model blackscholes model expect expense cost sharebased compensation awards issued july 1 2005 additionally expect recognize compensation cost portion awards outstanding july 1 2005 requisite service rendered requisite service rendered july 1 2005 currently evaluating provisions sfas 123r determine impact future financial statements summary financial results following table summarizes company’s results operations historical financial results twelve months ended december 31 2004 indicative future results among things following items anticipated occur magnitude near future sold grand canal shops mall may 17 2004 paid incentive payments 632 million related phase ii mall sale certain executives july 2004 incurred loss disposal assets 316 million incurred stockbased compensation charge 492 million related initial public offering key operating revenue measurements venetian casino resort’s operating revenue dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play sands macao almost wholly dependent casino customers visit casino daily basis hotel revenues expected material sands macao sands macao visitors arrive ferry automobile airplane helicopter hong kong cities china southeast asian cities close proximity macao following key measurements use evaluate operating revenue hotel revenue measurements include hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day revenue per available room represents summary hotel average daily room rates occupancy casino revenue measurements include table games drop slot handle volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coin placed slot machines aggregate period cited drop handle abbreviations table games drop slot handle based upon mix table games table games produce statistical average table win percentage measured percentage table game drop 200 210 slot machines produce statistical average slot machine win percentage measured percentage slot machine handle generally 60 70 actual win may vary statistical average generally slot machine play venetian casino resort conducted cash basis venetian casino resort’s table games revenue approximately 550 credit based guests wagering sands macao table game slot machine play conducted primarily cash basis year ended december 31 2004 compared year ended december 31 2003 operating revenues breakdown company’s net revenues follows consolidated net revenues 2004 1197 billion representing increase 5053 million 730 compared 6918 million consolidated net revenues 2003 increase net revenues primarily due • increase casino revenue 4358 million primarily due opening sands macao think magnitude increase trend related opening sands macao table games win percentage within statistically expected range twelve months ended december 31 2004 2003 compared average since opening venetian casino resort 1999 experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered • increase room revenue 606 million result adding additional 1013 new hotel rooms june 2003 part phase ia addition project increase average daily hotel room rates slight increase hotel room occupancy • increase food beverage revenue 414 million resulted increased banquet revenues venetian casino resort increases offset • decrease grand canal shops mall revenues 160 million 2004 compared 394 million 2003 due sale grand canal shops mall lease certain retail restaurant venues may 17 2004 • increase promotional allowances 449 million 2003 615 million 2004 result opening sands macao casino revenues 7086 million year ended december 31 2004 increase 4358 million 1597 2003 increase attributable several factors including • opening sands macao may 18 2004 table games drop volume sands macao period open 2004 2387 billion sands macau casino win period open 2004 3626 million • increase table games drop volume venetian casino resort 1023 billion twelve months ended december 31 2004 8290 million twelve months ended december 31 2003 primarily result increased casino marketing efforts future increases depend growth visitors las vegas marketing efforts aimed highend gaming customers • increase slot handle volume venetian casino resort twelve months ended december 31 2004 2085 billion 1902 billion period 2003 slot machine win percentage venetian casino resort percentage slot handle within statistically expected range 2004 2003 venetian casino resort maintained average daily room rate 220 2004 compared 204 2003 venetian casino resort generated revenue per available room 213 2004 compared 195 2003 room revenues 2004 3120 million representing increase 606 million 241 compared 2514 million 2003 increase room revenues result increase number hotel rooms opening venezia tower june 26 2003 increase average daily room rate slight increase room occupancy 960 970 2003 2004 respectively food beverage revenues 1216 million 2004 representing increase 414 million 516 compared 802 million 2003 increase attributable additional hotel rooms higher room occupancy increased banquet spaces retail revenues increased 29 million 73 428 million 2004 399 million 2003 increase primarily attributable new hotel rooms venetian casino resort operating expenses variations operating expenses generally based upon volume guests staying hotel utilizing venetian casino resort’s amenities including casino food beverage spa retail outlets operating expenses related operations venetian casino resort corporate preopening predevelopmental expenses based upon guests venetian casino resort strategic decisions related new opportunities company macau jurisdictions breakdown operating expenses follows increase operating expenses attributable higher operating revenues business volumes associated opening operations sands macao increased preopening developmental expense associated developmental activities united kingdom macau increased general administrative costs partially offset sale grand canal shops mall predevelopment expenses united kingdom primarily consisted legal consulting fees travel preliminary design costs related agreements develop lease gaming entertainment facilities two prominent football clubs united kingdom discussions several others build entertainment gaming facilities major cities casino department expenses increased 2121 million 1655 primarily result additional casino expenses related opening sands macao result increased slot machine volume increased table games marketing cost venetian casino resort 2121 million increase casino expenses 1571 million due 390 gross win tax casino win macau expect future casino expenses continue higher opening sands macao particularly higher gross win tax despite higher gross win tax casino operating margins sands macao similar venetian casino resort primarily lower labor marketing sales expenses macau room department expense increased 124 million 192 result slightly higher room occupancy costs food beverage expense increased 240 million 597 result increased food beverage sales venetian casino resort opening sands macao general administrative cost increased 470 million 372 primarily result opening sands macao increased utility costs legal expenses management bonus program property taxes venetian casino resort preopening developmental expense 339 million twelve months ended december 31 2004 representing increase 234 million 2223 compared 105 million twelve months ended december 31 2003 increase primarily result developmental activities macau united kingdom depreciation amortization expense increased 539 million 2003 694 million 2004 result placing service venezia tower venetian casino resort sands macao corporate expenses increased 1162 million primarily result payment incentive payments 632 million certain executives july 2004 paid phase ii mall subsidiary 492 million stockbased compensation expense resulting grant 3052460 stock options exercise price 564 per share july 2004 fair value common stock dates grant stock options originally estimated management based principally upon may 31 2004 valuation fair value common stock company unaffiliated valuation specialist deem necessary obtain additional third party valuation time option grants july already received independent valuation date may 31 close time option grant dates however retrospective review given proximity july 2004 grant dates initial public offering date believed time prepared third quarter financial statements fair value common stock 2177 per share based upon midpoint preliminary estimated range proposed valuation connection initial public offering best estimate fair value common stock underlying options date grant result intrinsic value 3052460 fully vested options granted year ended december 31 2004 492 million 1613 per share recorded corporate expense principal factors used determine midpoint preliminary estimated range shares sold initial public offering projections three operating properties venetian casino resort sands macao sands expo center two future projects macau venetian casino resort palazzo casino resort ii trading multiples gaming hospitality leisure industry companies iii discount rates appropriate comparable projects preliminary estimated midpoint range 2177 per share updated 2900 per share conformity final price per share initial public offering common stock update finial price impact compensation expense charge previously taken us fixed payment obligations rent expense primarily related hvac plant 2004 120 million including 99 million venetian casino resort 08 million sands expo center 05 million sands macao 08 million grand canal shops mall fixed payment obligations 101 million 2003 including 76 million venetian casino resort 25 million grand canal shops mall interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized 1381 million 2004 compared 1224 million 2003 net interest expense incurred 2004 1203 million related venetian casino resort excluding grand canal shops mall 27 million related grand canal shops mall 70 million sands expo center 81 million related sands macao increase interest expense attributable increased borrowings associated construction sands macao palazzo casino resort las vegas interest income 77 million 21 million years ended december 31 2004 2003 respectively increase due increase cash balances portion resulted completion initial public offering december 2004 year ended december 31 2003 compared year ended december 31 2002 operating revenues breakdown net revenues follows consolidated net revenues 2003 6918 million representing increase 684 million 110 compared 6233 million consolidated net revenues 2002 increase net revenues due • increase casino revenue 163 million primarily result increased table game slot machine revenue due addition 1013 new hotel rooms venetian casino resort june 2003 think increase trend related addition hotel room capacity opening palazzo casino resort future increases closely track visitor growth las vegas growth number convention trade show attendees venetian casino resort • increase room revenue 447 million result adding additional 1013 new hotel rooms june 2003 part phase ia addition project increase average daily hotel room rates slight increase hotel room occupancy • increase food beverage revenue 126 million additional rooms associated increased banquet revenues • increase revenues 1322 million 2003 compared 1267 million 2002 casino revenues 2728 million year ended december 31 2003 increase 163 million 64 2002 increase attributable several factors including slot handle volume venetian casino resort 2003 increased 1902 billion 1658 billion 2002 primarily result adding 1013 new hotel rooms slot machine win percentage slot handle within normal range 2003 2002 offset stringent table games marketing parameters 2003 resulted decreased table games volume use marketing parameters determine extend invitations discounts complimentaries participate table games extend invitations discounts complimentaries considering marketing parameters past history us collection history casinos research credit worthiness credit rating agencies bank accounts well length time customer expected play casino one visit type game played customer’s previous gaming history casino customer’s skill level 2003 made table games marketing parameters stringent reduce lower margin table game business table games drop volume decreased 8290 million 2003 8673 million 2002 table game win percentage table games drop within normal range 2003 2002 table games slot machine win percentage reasonably predictable time may vary considerably shorter periods venetian casino resort maintained average daily room rate 204 2003 compared 196 2002 venetian casino resort generated revenue per available room 195 2003 compared 187 2002 room revenues 2003 2514 million representing increase 447 million 216 compared 2067 million 2002 increase room revenues result increase number hotel rooms opening venezia tower june 26 2003 increase average daily room rate slight increase room occupancy 956 960 2002 2003 respectively food beverage revenues 802 million 2003 representing increase 126 million 186 compared 676 million 2002 increase attributable additional hotel rooms higher room occupancy sands expo center revenues 530 million 2003 compared 543 million 2002 grand canal shops mall revenues 394 million 2003 compared 365 million 2002 79 increase attributable higher foot traffic additional tenants increased proceeds rents calculated tenant gross revenues retail revenues increased 40 million 111 399 million 2003 359 million 2002 increase primarily attributable new hotel rooms operating expenses variations operating expenses generally based upon volume guests staying hotel utilizing venetian casino resort’s amenities including casino food beverage spa retail outlets operating expenses related operations venetian casino resort corporate preopening predevelopmental expenses based upon guests venetian casino resort strategic decisions new opportunities company macau breakdown operating expenses follows operating expenses including preopening developmental corporate expenses 5056 million 2003 representing increase 422 million 91 compared 4634 million 2002 increase operating expenses primarily attributable higher operating revenues business volumes departments venetian casino resort due completion phase ia addition increased preopening development expense associated construction sands macao increased general administrative costs partially offset decrease provision doubtful accounts casino department expenses increased 93 million 78 result increased slot machine volume increased table games marketing cost room department expense increased 114 million 213 result addition 1013 hotel rooms slightly higher room occupancy food beverage expense increased 50 million 143 result increased food beverage sales general administrative cost increased 132 million primarily result increased utility cost legal expense management bonus program property taxes provision doubtful accounts 81 million 2003 representing decrease 133 million compared 214 million increase 2002 decrease primarily result improved collections table games receivables 2003 due improvement world economy since terrorist attacks september 11 2001 improved collection efforts stringent credit parameters believe improved collections receivables represent trend believe collections receivables significantly affected changes united states world economy well factors accuracy risk assessment granting credit net casino receivables 286 million 2003 compared 378 million 2002 net hotel receivables 210 million 2003 compared 119 million 2002 91 million increase hotel receivables result increase number hotel rooms group convention banquet business hotel receivables generally secured credit cards cash deposits therefore rarely significant allowances associated outstanding balances preopening developmental expense 105 million compared 59 million 2002 increase 46 million 776 increase primarily result predevelopment activity associated development sands macao opening phase ia addition venetian casino resort fixed payment obligations rent expense primarily related hvac plant 2003 101 million including 75 million venetian casino resort 26 million grand canal shops mall fixed payment obligations 76 million 2002 including 52 million venetian casino resort 24 million grand canal shops mall interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized 1224 million 2003 compared 1245 million 2002 net interest expense incurred 2003 1073 million related venetian casino resort excluding grand canal shops mall 53 million related grand canal shops mall 23 million related sands macao 75 million related sands expo center increase interest expense attributable increased borrowings associated construction phase ia addition sands macao partially offset decreases interest rates variable rate debt higher capitalized interest 2003 interest income 21 million 30 million years ended december 31 2003 2002 respectively decrease due decline restricted cash balances phase ia addition sands macao construction declining interest rates investments liquidity capital resources cash flows summary cash flows consist following cash flowsoperating activities venetian casino resort’s slot machine retail hotel rooms businesses generally conducted cash basis table games group hotel businesses conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivables sands macao table games slot machine play currently conducted primarily cash basis december 31 2004 december 31 2003 held unrestricted cash equivalents 1295 billion 1528 million respectively net cash provided operating activities 2004 3734 million compared 1371 million 2003 factors contributing increase cash flow provided operating activities receipt prepaid rent ggp grand canal shops mall sale agreement positive operating results associated opening sands macao increase venetian casino resort’s room division operating profit 2004 compared 2003 certain positive changes working capital assets liabilities cash flows investing activities capital expenditures 2004 totaled 4657 million including 1184 million improvements maintenance capital expenditures venetian casino resort sands expo center las vegas 1978 million development construction sands macao development activities macau including venetian macao casino resort cotai strip 1495 million palazzo casino resort april 12 2004 entered agreement ggp sell grand canal shops mall lease certain restaurant retail assets venetian casino resort approximately 7660 million grand canal shops mall sale completed may 17 2004 las vegas sands opco realized net gain 4176 million connection sale used portion proceeds sale grand canal shops mall repay outstanding indebtedness 1200 million secured mall facility repurchase 64 million principal amount outstanding 11 mortgage notes pursuant asset sale offer make tax distribution 1000 million stockholders make incentive payments 632 million executive officers messrs adelson weidner stone goldstein gaap company deferred portion gain sale grand canal shops mall first deferred 1092 million gain transaction deemed prepaid operating lease payments deferral related 19 spaces currently occupied various tenants leased ggp annual rent one dollar per year 89year operating lease ggp assumed entitled rent payments tenant leases 19 spaces deferred amount amortized 89year lease term straightline basis second deferred 772 million constitutes estimated net present value payments make ggp three lease back arrangements restricted cash increased 2357 million primarily result borrowings senior secured credit facility use construction palazzo casino resort las vegas commenced design demolition construction work palazzo casino resort plan continue development work palazzo casino resort 2005 currently estimate construction completed second quarter 2007 cost develop construct palazzo casino resort approximately 16 billion exclusive land phase ii mall expected cost us approximately 2750 million exclusive certain incentive payments executives made july 2004 august 20 2004 entered 1010 billion senior secured credit facility september 30 2004 entered 2500 million construction loan among things finance construction costs palazzo casino resort phase ii mall december 31 2004 paid 1762 million design development construction costs palazzo casino resort expect development construction macao venetian casino resort require significant capital expenditures cash flows financing activities subsidiary las vegas sands opco paid 1250 million dividends 2004 including 1098 million representing tax distributions shareholders las vegas sands opco 152 million distributions interface holding prior acquisition july 2004 december 20 2004 issued 27380953 shares common stock initial public offering price 2900 per share initial public offering resulted net proceeds approximately 7392 million us deducting underwriting discounts commissions related offering expenses payable us shares common stock traded new york stock exchange symbol “lvs” aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2004 1 february 1 2005 las vegas sands opco venetian casino resort llc redeemed 2911 million aggregate principal amount 11 mortgage notes redemption price 111 principal amount notes plus accrued unpaid interest used portion proceeds initial public offering pay redemption price notes february 22 2005 repurchased additional 5423 million outstanding 11 mortgage notes tender offer march 24 2005 redeemed remaining 102 million used proceeds offering 2500 million aggregate principal amount senior notes borrowings senior secured credit facility pay repurchase redemption price 11 mortgage notes 2 senior secured credit facility consists 1150 million term loan delayed draw period february 20 2006 b 7700 million term loan b 1050 million delayed draw period february 20 2005 c 1250 million revolving credit facility december 31 2004 amounts borrowed facility 6650 million term loan b 2900 million used pay prior senior secured credit facility 10 million used pay accrued interest 195 million used pay transaction costs 3545 million deposited restricted cash account pay certain development construction costs palazzo casino resort term loan b mature june 15 2011 subject quarterly amortization payments commencing first quarter substantial completion palazzo casino resort addition 600 million letters credit outstanding december 31 2004 reduces amount available borrowing revolving facility amended senior secured credit facility february 2005 provide aggregate borrowings 1620 billion consisting 1170 billion term loan facility 4500 million revolving credit facility 3 150 million ffe credit facility mature july 1 2008 subject quarterly amortization payments 4 venetian macau senior secured notes tranche mature august 21 2008 subject mandatory annual redemption venetian macau senior secured notes tranche b mature august 21 2008 subject mandatory annual redemption 5 venetian intermediate credit facility mature march 27 2006 amortization 6 principal payments increase interface groupnevada achieve certain cash flow levels defined loan agreement interface mortgage loan mature february 10 2009 renewal options exercised monthly amortization payments 7 party services agreement third party hvac services venetian casino resort total remaining payment obligation arrangement 307 million december 31 2004 payable equal monthly installments july 1 2009 right terminate agreement based upon failure hvac provider agreement provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider 8 party tenant lease termination asset purchase agreements total remaining payment obligations arrangements 146 million december 31 2004 agreement grand canal shops mall sale company obligated fulfill lease termination asset purchase agreements 9 venetian macau party longterm land lease 25 years total remaining payment obligation lease 131 million december 31 2004 10 party certain leaseback agreements showroom gondola certain office space related grand canal shops mall sale total remaining payments due december 31 2004 1929 million 11 required pay annual fixed gaming tax 91 million per year government macau termination gaming concession addition terms subconcession agreement obligated make investments least 44 billion patacas approximately 5346 million exchange rates effect december 31 2004 various development projects macau june 2009 made investments approximately 218 billion patacas approximately 2650 million exchange rates effect december 31 2004 december 31 2004 satisfaction obligations pursuant recently entered contribution agreement bethworks llc bethlehem pennsylvania development company paid approximately 225 million bethworks partially reimburse bethworks propertyrelated expenses b required pay operating expenses property expected approximately 10 million per year c required make additional 20 million payment bethworks gaming license bethlehem property obtained see “businessother business opportunities” offbalance sheet arrangements 1997 entered offbalance sheet arrangements hvac provider terms energy service agreements purchase hvac energy services initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods fixed payments obligations due next twelve months 68 million energy services agreements hvac provider total remaining payment obligations arrangements 307 million december 31 2004 payable equal monthly installments july 1 2009 right terminate agreement based upon failure hvac provider provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider offbalance sheet arrangements capital liquidity expect fund operations capital expenditures sands macao construction palazzo casino resort macao venetian casino resort related cotai strip infrastructure development construction costs debt service requirements existing cash balances operating cash flow borrowings company’s revolving facility additional borrowings expected incurred macau subsidiaries 1250 million revolving facilities available working capital needs 650 million available december 31 2004 amended senior secured credit facility february 22 2005 among things increase revolving facility 4500 million december 20 2004 issued 27380953 shares common stock initial public offering price 2900 per share resulting proceeds approximately 7392 million us deducting underwriting discounts commissions related offering expenses payable us used portion net proceeds pay redemption price 2911 million aggregate principal amount 11 mortgage notes plus premiums accrued interested 362 million redeemed february 1 2005 intend use remaining net proceeds initial public offering working capital purposes general corporate purposes may include construction palazzo casino resort macau projects may 17 2004 company consummated sale grand canal shops mall pursuant received approximately 7660 million cash proceeds company used portion proceeds repay full 1200 million indebtedness prior secured mall facility make 1000 million tax distribution stockholders make 632 million one time incentive payment key executives repurchase 64 million aggregate principal amount 11 mortgage notes pursuant asset sale offer expect use remaining proceeds general corporate purposes including construction palazzo casino resort order finance construction palazzo casino resort phase ii mall subsidiaries company entered 1010 billion senior secured credit facility 2500 million construction loan facility drew 6650 million senior secured credit facility’s tranche b term loan august 20 2004 repay 2900 million indebtedness prior senior secured credit facility fund expenses related palazzo casino resort phase ii mall remaining 3545 million borrowings tranche b term loan placed escrow phase ii mall construction loan facility allows subsidiaries company borrow 2500 million senior secured delayed draw basis fund portion phase ii mall construction costs february 10 2005 company issued 2500 million private placement 6375 senior notes due 2015 february 22 2005 amended senior secured credit facility increase borrowings 4000 million additional term loans expand revolving credit facility 1250 million 4500 million lower interest costs revise covenants provide greater operational flexibility amended facility provides aggregate borrowings 1620 billion consisting 1170 billion term loan facility 4500 million revolving credit facility amended senior secured credit facility also terminated delayeddraw term loan facility february 1 2005 las vegas sands opco venetian casino resort llc redeemed 2911 million aggregate principal amount 11 mortgage notes redemption price 111 principal amount notes plus accrued unpaid interest used portion proceeds initial public offering pay redemption price notes february 22 2005 repurchased additional 5423 million outstanding 11 mortgage notes tender offer march 24 2005 redeemed remaining 102 million used 2448 million net proceeds 6375 senior notes offering 1066 million cash hand 3117 million term loan borrowings amended senior secured credit facility retire remaining outstanding 5525 million aggregate principal amount 11 mortgage notes pay fees expenses associated transactions december 31 2004 pro forma basis giving effect refinancing transactions described application net proceeds therefrom assuming term borrowings amended senior secured credit facility phase ii mall construction loan fully drawn would approximately 1949 billion indebtedness outstanding would also approximately 3900 million borrowing availability revolving facility see notes financial statements item 8 note 15”subsequent events” december 31 2004 1672 billion cash equivalents including 3775 million restricted cash palazzo casino resort sands expo center following closing senior secured credit facility august 2004 company deposited 3545 million proceeds term loans restricted account use funds funding loans amended secured credit facility phase ii mall construction loan subject significant conditions including • using remaining proceeds sale grand canal shops mall operating cash flow aggregate amount 5520 million construction costs borrowings amended senior secured credit facility used construction costs cash equity investment approximately 250 million borrowings phase ii mall construction loan used • sufficient funds available construction costs palazzo casino resort “in balance” purposes debt instruments • obtaining various consents agreements third parties including trade contractors ggp customary conditions currently estimate cost macao venetian casino resort approximately 18 billion need arrange additional debt financing finance costs litigation contingencies available resources las vegas sands opco party certain litigation matters claims related construction venetian casino resort subject 420 million net verdict along interest costs 385 million lehrer mcgovern bovis inc construction manager venetian casino resort subject adjustments based outcome remaining arbitration various appeals required pay construction manager’s verdict contested construction costs covered insurance policy may use cash following sources fund costs • borrowings revolving facility las vegas sands opco’s amended senior secured credit facility • cash hand • additional debt equity financing • operating cash flow see note 12 “commitments contingencies” consolidated financial statements dividends subsidiary las vegas sands opco declared accrued dividends 1442 million 2004 42 million 2003 dividends included 1290 million 42 million tax distributions shareholders 2004 2003 respectively tax distributions permitted existing debt instruments las vegas sands opco subchapter corporation result conversion taxable “c” corporation income tax purposes las vegas sands opco longer makes tax distributions dividends also included distribution immediately prior july 29 2004 acquisition interface holding company approximately 152 million principal shareholder also principal shareholder interface holding time distribution comprised 129 million cash 19 million receivables due shareholder 04 million certain fixed assets restrictions distributions parent company limited business operations main asset stock subsidiaries debt instruments las vegas sands opco contain significant restrictions payment dividends distributions us las vegas sands opco particular amended senior secured credit facility prohibits las vegas sands opco paying dividends making distributions us investing us limited exceptions las vegas sands opco may distribute us 250 million 500 million dividend payments twelvemonth period substantial completion palazzo casino resort depending whether certain financial tests met addition debt instruments macau subsidiaries phase ii mall subsidiary also restrict payment dividends distributions us debt instruments subject limited exceptions venetian macau may pay dividends make distributions us make investments us except amount generally limited 50 net income venetian macau meets certain leverage tests addition phase ii mall construction loan prohibits phase ii mall subsidiary paying dividends making distributions us making investments us tax distributions limited basket amount debt instruments subsidiaries also contain certain restrictions among things limit ability company andor certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders financial covenants included amended senior secured credit facility include minimum interest coverage ratio maximum leverage ratio minimum net worth covenant maximum capital expenditure limitations see “note 7longterm debt” consolidated financial statements inflation believe inflation changing prices material impact net sales revenues income continuing operations past year special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements involve number risks uncertainties factors beyond company’s control may cause material differences actual results performance expectations factors include limited general economic conditions competition new ventures government regulation legalization gaming interest rates future terrorist acts insurance factors detailed report readers cautioned place undue reliance forwardlooking statements speak date thereof las vegas sands corp assumes obligation update information item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” general operate venetian sands expo center las vegas nevada sands macao china also developing two casino resorts palazzo adjacent connected venetian macao china well additional projects cotai strip macao currently offer hotel gaming dining entertainment retail spa amenities venetian convention trade show space sands expo center gaming dining vip suites sands macao approximately 437 gross revenue venetian 2005 derived gaming 379 derived hotel rooms percentage gaming revenue venetian reflects resort’s emphasis group convention trade show business resulting higher occupancy room rates midweek periods approximately 957 sands macao’s gross revenue 2005 derived gaming activities remainder primarily derived food beverage services las vegas projects palazzo currently construction expected open summer 2007 cost palazzo could reach high 18 billion exclusive land phase ii mall expected cost approximately 2800 million exclusive certain incentive payments executives made july 2004 addition expect tenants make significant additional capital expenditures build stores restaurants palazzo august 20 2004 entered 10 billion senior secured credit facility “prior senior secured credit facility” among things finance palazzo’s construction costs february 22 2005 entered senior secured credit facility amended restated prior senior secured credit facility increased size facility 16 billion addition september 30 2004 entered 2500 million phase ii mall construction loan fund portion phase ii mall construction costs see “ aggregate indebtedness contractual obligations” intend use 3618 million plus interest earnings proceeds 9700 million term b facility 2000 million term b delayed draw facility senior secured credit facility 2215 million proceeds phase ii mall construction loan cash hand borrowings revolving facility senior secured credit facility operating cash flow fund development construction costs palazzo including phase ii mall pay related fees expenses macao projects building venetian macao 3000 allsuites hotel casino convention center complex venetianstyle theme similar las vegas property gaming subconcession macao obligated develop open venetian macao convention center december 2007 also obligated invest least 44 billion patacas approximately 5274 million exchange rates effect december 31 2005 various development projects macao june 2009 december 31 2005 spent required minimum amount currently expect open venetian macao mid2007 fail meet december 2007 deadline could lose right continue operate sands macao facilities development macao gaming subconcession investment date venetian macao could lost addition constructing venetian macao land yet granted concession obtain land concession could forfeit part investment site construction venetian macao would able open operate facility planned addition broke ground october 2005 expansion sands macao enhance size scope property increase gaming capacity 650 construction venetian macao expansion sands macao progressing according plan connection development venetian macao sponsoring master plan development multiple properties cotai strip submitted development plans macao government six casinoresort developments addition venetian macao area approximately 200 acres cotai strip developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas worldclass restaurants entertainment facilities attractions well common public areas plan operate casinos developments macao gaming subconcession intend develop cotai strip developments follows • one intended four seasons hotel casino adjacent venetian macao expected boutique hotel 400 luxury hotel rooms 600 four seasonsserviced vacation suites distinctive dining experiences full service spas amenities 25000 square foot casino 190000 square foot mall upscale retail offerings hotel vacation suites entered exclusive nonbinding letter intent currently negotiating definitive agreements four seasons hotels inc manage hotel vacation suites completion venetian macao four seasons dependent upon macao government’s overall approval cotai strip master development plan • one intended include two hotel complex 1500 luxury midsized hotel rooms luxury vacation suites casino entire development entered management agreement shangrila hotels resorts manage hotels vacation suites shangrila traders brands • one intended include twohotel complex luxury midsized hotel rooms luxury vacation suites casino entire development negotiating starwood hotel resorts manage hotels vacation suites brands • expect develop two cotai strip developments intended include twohotel complex luxury midsized hotel rooms luxury vacation suites casino entire development discussions experienced wellknown hotel management companies manage hotel portions resorts us brands • signed nonbinding memorandum agreement independent developer another cotai strip development currently negotiating definitive agreements pursuant plan partner developer build multihotel complex several hotel brands yet macao government approvals need order develop cotai strip developments expect make land premium payments relating venetian macao properties development amounts determined currently estimate cost venetian macao approximately 23 billion exclusive land cost sands macao expansion approximately 990 million vml finalizing commitments 25 billion senior secured credit facility partially fund sands macao expansion design development construction preopening costs venetian macao four seasons hotel development projects cotai strip pay related fees expenses yet finalized estimate cost cotai strip developments however need arrange additional debt financing finance costs well grand canal shops april 12 2004 sold grand canal shops mall leased certain restaurant retail assets venetian approximately 7660 million required generally accepted accounting principles deferred portion gain sale grand canal shops mall first deferred 1092 million gain transaction deemed prepaid operating lease payments related 19 spaces currently occupied various tenants leased ggp purchaser grand canal shops mall annual rent one dollar per year 89year operating lease ggp assumed entitled rent payments tenant leases 19 spaces deferred amount amortized 89year lease term straightline basis second deferred 772 million constitutes estimated net present value payments make ggp three lease back arrangements deferred gain amortized reduce lease expense straightline basis life leases party two tenant lease termination asset purchase agreements december 31 2005 total remaining payment obligations arrangements 119 million connection sale grand canal shops mall entered agreement ggp construct sell phase ii mall purchase price ggp agreed pay phase ii mall greater 2500 million ii phase ii mall’s net operating income months 19 30 operations divided capitalization rate capitalization rate 60 380 million net operating income 80 380 million interface holding acquisition july 29 2004 acquired capital stock interface holding principal stockholder exchange 220370 shares common stock 58625638 shares common stock parent company merger defined “ certain relationships related transactions” time acquisition interface holding indirectly owned sands expo center directly held redeemable preferred interest venetian casino resort llc balance 2552 million july 29 2004 ceased accrual redeemable preferred return july 29 2004 cancelled redeemable preferred interest february 2005 following acquisition 2004 made equity contribution approximately 270 million interface groupnevada direct owner sands expo center july 30 2004 interface groupnevada entered 1000 million mortgage loan used proceeds loan portion equity contribution repay full amounts outstanding 1243 million prior mortgage loan pay related fees expenses development projects following singapore government’s adoption gaming legislation 2005 submitted proposal singapore government license develop large integrated resort including casino singapore currently three competing proposals resortcasino license singapore government expected award license mid2006 entered nonbinding agreement zhuhai municipal people’s government people’s republic china work create master plan develop leisure convention destination resort hengqin island located approximately one mile cotai strip actively preparing preliminary design concepts presentation government development subject number conditions including receiving governmental approvals december 3 2004 following enactment legislation legalizing slot machine gaming pennsylvania entered contribution agreement bethworks llc owner approximately 124 acre site located bethlehem pennsylvania submitted proposal obtain one two “at large” gaming licenses available pennsylvania several competing proposals licenses slot machine license new legislation granted site intend jointly develop property use casino complex including hotel meeting rooms retail restaurant movie theater office commercial spaces bethlehem development subject number conditions including obtaining gaming license also entered agreements develop lease gaming entertainment facilities two prominent football clubs united kingdom discussions several others build entertainment gaming facilities major cities united kingdom several competing proposals single “regional” casino license currently authorized statute agreements develop lease gaming entertainment facilities subject number conditions including obtaining gaming license currently exploring possibility operating casino resorts additional asian jurisdictions united states europe critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities ongoing basis management evaluates estimates including related allowance doubtful accounts discounts accruals slot marketing points selfinsurance litigation asset impairment income taxes state accounting policies notes consolidated financial statements relevant sections discussion analysis estimates based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful accounts discounts maintain allowance reserve doubtful accounts discounts operating casino resorts venetian sands macao provision doubtful accounts operating expense increases allowance doubtful accounts discounts specific writeoffs decrease allowance doubtful accounts discounts regularly evaluate allowance doubtful accounts discounts venetian credit marker play significant apply standard reserve percentages aged account balances specified dollar amount specifically analyze collectibility account balance specified dollar amount based upon age account customer’s financial condition collection history known information also monitor regional global economic conditions forecasts determine reserve levels adequate sands macao credit marker play significant apply standard reserve percentage aged account balances mix credit play percentage total casino play decreased significantly 2005 sands macao table games play primarily cash play venetian credit table games play represents approximately 609 total table games play allowance doubtful accounts discounts 490 million 345 million 302 million 366 379 357 gross accounts receivable years ended december 31 2005 2004 2003 selfinsurance slot club point accruals maintain accruals health workers compensation selfinsurance slot club point redemption classified accrued liabilities consolidated balance sheets determine adequacy accruals periodically evaluating historical experience projected trends related accruals consultation outside actuarial experts selfinsurance accruals information indicates accruals overstated understated business conditions indicate adjust assumptions utilized reduce provide additional accruals appropriate litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance sfas 5 “accounting contingencies” include accruals accrued liability category consolidated balance sheets property equipment december 31 2005 net property equipment 260 billion representing 670 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets assessing recoverability carrying value property equipment events circumstance warrant assessment must make assumptions regarding estimated future cash flows factors estimates related assumptions change may required record impairment loss assets impairment loss would recognized noncash component operating income taxes subject income taxes united states several states foreign jurisdictions operate account income taxes accordance sfas 109 “accounting income taxes” sfas 109 deferred tax assets liabilities recognized based differences financial statement tax basis assets liabilities using enacted tax rates sfas 109 requires recognition deferred tax assets net applicable valuation allowances related net operating loss carryforwards tax credits temporary differences standard requires recognition future tax benefit extent realization benefit likely otherwise valuation allowance applied income tax returns subject examination internal revenue service “irs” tax authorities positions taken tax returns sometimes subject uncertainty tax laws take positions unless “substantial authority” internal revenue code applicable regulations may take positions tax returns based substantial authority ultimately accepted irs currently examining federal income tax returns years ended december 31 1998 1999 2000 assess potential unfavorable outcomes based criteria sfas 5 establish tax reserve unfavorable outcome probable amount unfavorable outcome reasonably estimated assess potential outcomes tax uncertainties quarterly basis determining whether probable criterion sfas 5 met presume taxing authority focus exposure assess probable outcome particular issue based upon relevant legal technical merits also apply judgment regarding potential actions tax authorities resolution settlement process maintain required tax reserves time underlying issue resolved actual results differ reserve estimates adjust income tax provision tax reserves period resolved tax years examined taxing authorities adjust tax reserves year tax examinations settled tax years examined taxing authorities adjust tax reserves year statute limitations expires estimate potential outcome uncertain tax issue highly judgmental believe adequately provided reasonable foreseeable outcomes related uncertain tax matters recent accounting pronouncements december 2004 fasb issued sfas 123r “sharebased payment” supersedes apb 25 “accounting stock issued employees” amends sfas 95 “statement cash flows” statement requires compensation costs related sharebased payment transactions recognized financial statements statement also requires benefits tax deductions excess recognized compensation cost reported financing cash flow rather operating cash flow provisions statement effective first annual reporting period begins june 15 2005 statement requires public entities measure cost employee services received exchange award equity instruments based grantdate fair value award limited exceptions cost recognized period employee required provide service exchange award statement also addresses accounting tax effects sharebased compensation awards adopted standard january 1 2006 using modified prospective application method modified prospective application method expense cost sharebased compensation awards issued january 1 2006 additionally recognize compensation cost portion awards outstanding january 1 2006 requisite service rendered requisite service rendered january 1 2006 based stock options outstanding december 31 2005 estimate options record approximately 50 million 46 million 42 million 12 million stock option expense years ending december 31 2006 2007 2008 2009 respectively provide assurances actual amount stock option expense recorded future years approximate current estimates may 2005 fasb issued sfas 154 “accounting changes error corrections replacement apb opinion 20 fasb statement 3” changes requirements accounting reporting change accounting principle sfas 154 applies voluntary changes accounting principle well changes required accounting pronouncement include specific transition provisions statement requires retrospective application prior periods’ financial statements changes accounting principle sfas 154 effective accounting changes corrections errors made fiscal years beginning december 15 2005 expect adoption sfas 154 material effect consolidated financial position results operations cash flows summary financial results following table summarizes results operations historical financial results years ended december 31 2005 2004 indicative future results among things following items anticipated occur magnitude near future sold grand canal shops mall may 17 2004 recognized gain 4176 million paid incentive payments 632 million related phase ii mall sale certain executives july 2004 incurred loss disposal assets 316 million 2004 related primarily demolition space accommodate construction showroom incurred stockbased compensation charge 492 million related initial public offering 2004 incurred loss retirement debt 1370 million 2005 related redemption 11 mortgage notes vml’s senior secured notes key operating revenue measurements venetian’s operating revenue dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play sands macao almost wholly dependent casino customers visit casino daily basis hotel revenues expected material sands macao visitors sands macao arrive ferry automobile airplane helicopter hong kong cities china southeast asian cities close proximity macao following key measurements use evaluate operating revenue hotel revenue measurements include hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates higher revenue per available room casino revenue measurements las vegas table games drop slot handle volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coin placed slot machines aggregate period cited drop handle abbreviations table games drop slot handle based upon mix table games table games produce statistical average table win percentage calculated discounts measured percentage table game drops 200 210 slot machines produce statistical average slot machine win percentage calculated slot club cash incentives measured percentage slot machine handle generally 60 70 casino revenue measurements macao view macao table games segregated two groups consistent macao market’s convention rolling chip play vip play nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered volume measurement nonrolling chip table games drop described rolling chip volume nonrolling chip volume equivalent since rolling chip volume measure amounts wagered versus dropped rolling chip volume substantially higher drop slot handle sands macao gross amount wagered coins placed slot machines aggregate period cited view rolling chip table games win percentage rolling chip volume view nonrolling chip table games win percentage drop win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games macao rolling chip table games win percentage calculated discounts commissions measured percentage rolling chip volume expected 25 28 nonrolling chip play table games expected produce statistical average table win percentage measured percentage table game drop discounts commissions 165 175 like las vegas macao slot machines produce statistical average slot machine win percentage measured percentage slot machine handle generally 60 70 actual win may vary statistical average generally slot machine play venetian sands macao conducted cash basis venetian’s table games revenue approximately 609 credit based guests wagering sands macao’s table game play conducted primarily cash basis year ended december 31 2005 compared year ended december 31 2004 operating revenues net revenues consisted following 1 grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 consolidated net revenues 174 billion year ended december 31 2005 increase 5439 million compared 120 billion year ended december 31 2004 increase net revenues due primarily increase casino revenue 5415 million increase attributable operation sands macao full year 2005 compared seven months 2004 increase net revenues partially offset decrease retail revenue 134 million primarily result sale grand canal shops mall lease certain retail restaurant venues may 17 2004 casino revenues 125 billion year ended december 31 2005 increase 5415 million compared 7086 million year ended december 31 2004 increase 4946 million attributable operation sands macao full year 2005 compared seven months 2004 increased volumes associated junket operations addition 469 million increase venetian due increase table game drop 1616 million increase 27 percentage points win percentage experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2005 3236 million increase 116 million compared 3120 million year ended december 31 2004 increase attributable increase average daily room rate 220 2004 225 2005 well slight increase occupancy rate 970 2004 973 2005 venetian generated revenue per available room 218 year ended december 31 2005 compared 213 year ended december 31 2004 food beverage revenues 1475 million year ended december 31 2005 increase 259 million compared 1216 million year ended december 31 2004 increase 152 million attributable increased business volumes sands macao well full year operations versus seven months prior year food beverage revenues venetian increased 107 million due increased hotel occupancy general group business property retail revenues 1031 million year ended december 31 2005 decrease 134 million compared 1164 million year ended december 31 2004 retail revenues 2004 include revenue 159 million related operations grand canal shops mall lease retail outlets venetian grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 operating expenses breakdown operating expenses follows 1 grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 operating expenses 125 billion year ended december 31 2005 compared 5786 million year ended december 31 2004 excluding gain sale grand canal shops mall total operating expenses year ended december 31 2004 9962 million increase operating expenses primarily attributable higher operating revenues business volumes associated opening operations sands macao increase partially offset decrease corporate expense 881 million related 632 million incentive payments paid certain executives july 2004 phase ii mall sale 492 million stockbased compensation expense resulting stock options granted july 2004 casino department expenses 6566 million year ended december 31 2005 increase 3163 million compared 3402 million year ended december 31 2004 increase primarily attributable additional casino expenses related opening sands macao may 2004 full year expenses property 2005 period increased slot machine table games volume venetian 3163 million increase casino expenses 2296 million due 390 gross win tax casino revenues macao despite higher gross win tax casino operating margins sands macao similar venetian primarily lower labor marketing sales expenses macao food beverage expense increased 126 million primarily related increased food beverage revenue noted provision doubtful accounts 94 million year ended december 31 2005 compared 80 million year ended december 31 2004 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative costs increased 197 million primarily result full year operations sands macao 2005 compared seven months 2004 corporate expense year ended december 31 2005 383 million decrease 881 million compared 1264 million year ended december 31 2004 decrease primarily result 1124 million expenses related incentive payments paid certain executives july 2004 phase ii mall sale stockbased compensation expense resulting stock options granted july 2004 partially offset 50 million charitable contribution first quarter 2005 addition corporate staff 2005 period including reassignment employees venetian casino resort llc las vegas sands corp build corporate infrastructure new public company preopening development expenses 37 million 222 million respectively year ended december 31 2005 compared 190 million 149 million respectively year ended december 31 2004 preopening expense year ended december 31 2004 included 180 million related sands macao opened may 2004 preopening expense year ended december 31 2005 primarily related venetian macao palazzo projects expect preopening expense increase projects get closer 2007 opening dates increase development expenses primarily related activities macao united kingdom singapore pennsylvania see “ general development projects” depreciation amortization expense year ended december 31 2005 953 million increase 259 million compared 694 million year ended december 31 2004 increase primarily result placing service assets sands macao second quarter 2004 full year depreciation expense property 2005 due various expansion projects placed service venetian including new luxury suites entertainment theater meeting rooms addition 70 million cumulative depreciation expense related amounts capitalized connection litigation settlements related original construction venetian recorded 2005 see “item 3 legal proceedingsconstruction litigation” loss disposal assets year ended december 31 2005 14 million compared 316 million year ended december 31 2004 loss disposal assets 316 million 2004 resulted primarily demolition space accommodate construction showroom venetian interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized 963 million year ended december 31 2005 decrease 418 million compared 1381 million year ended december 31 2004 net interest expense incurred year ended december 31 2005 708 million related venetian 47 million related sands macao 127 million related litigation settlements 81 million related sands expo center decrease primarily attributable replacement higher fixed rate debt instrument lower variable rate bank debt first quarter 2005 retired las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes addition first quarter 2005 increased borrowings senior secured credit facility issued 2500 million aggregate principal amount 6375 senior notes decrease also due capitalization 227 million interest year ended december 31 2005 compared 46 million capitalized interest year ended december 31 2004 capitalized interest costs associated construction projects principally venetian macao palazzo expect capitalized interest continue increase projects approach planned openings 2007 factors affecting earnings interest income year ended december 31 2005 331 million increase 254 million compared 77 million year ended december 31 2004 increase due increase invested cash equivalent balances primarily december 2004 initial public offering 2005 borrowings las vegas sands llc’s senior secured credit facility loss early retirement debt 1370 million year ended december 31 2005 result redemption las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes effective income tax rate year ended december 31 2005 15 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result income tax holiday macao expire end 2008 prior december 2004 las vegas sands inc elected taxed corporation wholly owned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes year ended december 31 2004 compared year ended december 31 2003 operating revenues net revenues consisted following 1 grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 consolidated net revenues 120 billion year ended december 31 2004 increase 5052 million compared 6918 million year ended december 31 2003 increase net revenues due increase casino revenue 4358 million primarily due opening sands macao increase room revenue 606 million result addition 1013 hotel rooms opening venezia tower june 26 2003 increase food beverage revenue 414 million resulted increased banquet revenues venetian increase net revenues partially offset decrease retail revenues 158 million primarily result sale grand canal shops mall lease certain retail restaurant venues may 17 2004 casino revenues 7086 million year ended december 31 2004 increase 4358 million compared 2728 million year ended december 31 2003 increase primarily attributable opening sands macao may 18 2004 contributed revenue 3876 million 2004 experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2004 3120 million increase 606 million compared 2514 million year ended december 31 2003 increase result addition 1013 hotel rooms opening venezia tower june 26 2003 increase average daily room rate 204 2003 220 2004 slight increase room occupancy 960 2003 970 2004 venetian generated revenue per available room 213 year ended december 31 2004 compared 195 year ended december 31 2003 food beverage revenues 1216 million year ended december 31 2004 increase 414 million compared 802 million year ended december 31 2003 increase attributable additional hotel rooms higher room occupancy increased banquet spaces retail revenues 1164 million year ended december 31 2004 decrease 158 million compared 1322 million year ended december 31 2003 decrease primarily due sale grand canal shops mall lease retail outlets venetian operating expenses breakdown operating expenses follows operating expenses 5786 million year ended december 31 2004 compared 5056 million year ended december 31 2003 excluding gain sale grand canal shops mall total operating expenses year ended december 31 2004 9962 million increase operating expenses attributable higher operating revenues business volumes associated opening operations sands macao increase corporate expenses related incentive payments paid certain executives july 2004 phase ii mall sale stockbased compensation expense resulting stock options granted july 2004 casino department expenses 3402 million year ended december 31 2004 increase 2121 million compared 1282 million year ended december 31 2003 increase primarily attributable additional casino expenses related opening sands macao may 2004 increased slot machine table games volume venetian 2121 million increase casino expenses 1571 million due 390 gross win tax casino revenues macao expect future casino expenses continue higher opening sands macao particularly higher gross win tax despite higher gross win tax casino operating margins sands macao similar venetian primarily lower labor marketing sales expenses macao room expense increased 124 million 648 million 2003 772 million 2004 result increase number hotel rooms opening venezia tower june 26 2003 slight increase room occupancy food beverage expense increased 240 million result increased food beverage sales venetian opening sands macao provision doubtful accounts 80 million year ended december 31 2004 compared 81 million year ended december 31 2003 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative costs increased 470 million primarily result opening sands macao increased utility costs legal expenses management bonus program property taxes venetian corporate expense year ended december 31 2004 1264 million increase 1162 million compared 102 million year ended december 31 2003 increase primarily result payment incentive payments 632 million certain executives july 2004 paid phase ii mall sale 492 million stockbased compensation expense resulting grant 3052460 stock options exercise price 564 per share july 2004 fair value common stock dates grant stock options originally estimated management based principally upon may 31 2004 valuation fair value common stock las vegas sands inc subsidiaries unaffiliated valuation specialist deem necessary obtain additional third party valuation time option grants july already received independent valuation date may 31 close time option grant dates however retrospective review given proximity july 2004 grant dates initial public offering date believed time prepared third quarter financial statements fair value common stock 2177 per share based upon midpoint preliminary estimated range proposed valuation connection initial public offering best estimate fair value common stock underlying options date grant result intrinsic value 3052460 fully vested options granted year ended december 31 2004 492 million 1613 per share recorded corporate expense principal factors used determine midpoint preliminary estimated range shares sold initial public offering projections three operating properties venetian sands macao sands expo center two future projects venetian macao palazzo ii trading multiples gaming hospitality leisure industry companies iii discount rates appropriate comparable projects preliminary estimated midpoint range 2177 per share updated 2900 per share conformity final price per share initial public offering common stock update final price impact compensation expense charge previously taken us preopening development expenses 190 million 149 million respectively year ended december 31 2004 compared 105 million zero respectively year ended december 31 2003 increase preopening primarily result increased preopening expenses macao first two quarters 2004 increase development expenses related development activities macao united kingdom depreciation amortization expense year ended december 31 2004 694 million increase 155 million compared 539 million year ended december 31 2003 increase result placing service venezia tower venetian sands macao 2004 loss disposal assets year ended december 31 2004 316 million primarily result demolition space accommodate construction showroom venetian interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized 1381 million year ended december 31 2004 increase 157 million compared 1224 million year ended december 31 2003 net interest expense incurred year ended december 31 2004 1203 million related venetian excluding grand canal shops mall 27 million related grand canal shops mall 70 million related sands expo center 81 million related sands macao increase interest expense attributable increased borrowings associated construction sands macao palazzo factors affecting earnings interest income year ended december 31 2004 77 million increase 56 million compared 21 million year ended december 31 2003 increase due increase cash balances portion resulted completion initial public offering december 2004 effective tax rate 2004 lower federal statutory rate due primarily zero effective tax rate macao net income result income tax holiday macao expire end 2008 addition prior december 2004 las vegas sands inc elected taxed corporation wholly owned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities venetian’s slot machine retail hotel rooms businesses generally conducted cash basis table games group hotel businesses conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivables sands macao table games slot machine play currently conducted primarily cash basis december 31 2005 december 31 2004 held unrestricted cash equivalents 4568 million 129 billion respectively net cash provided operating activities 2005 5899 million increase 2165 million compared 3734 million 2004 factors contributing increase cash flow provided operating activities primarily increase operating results sands macao increase overall operations venetian certain positive changes working capital assets liabilities cash flows investing activities capital expenditures 2005 totaled 8606 million including 1386 million expansions improvements maintenance capital expenditures venetian sands expo center las vegas 3882 million construction development activities macao including sands macao venetian macao cotai strip 3338 million palazzo restricted cash increased 2654 million primarily result drawing 2000 million senior secured credit facility future use construction palazzo capital liquidity expect fund operations capital expenditures sands macao expansion construction palazzo phase ii mall venetian macao cotai strip developments related cotai strip infrastructure development construction costs debt service requirements existing cash balances operating cash flow borrowings revolving credit facility 4500 million revolving credit facility working capital needs 3690 million available december 31 2005 december 20 2004 company issued 27380953 shares common stock initial public offering price 2900 per share resulting net proceeds approximately 7387 million company deducting underwriting discounts commissions related offering expenses payable company used portion net proceeds described pay redemption purchase price 11 mortgage notes issued las vegas sands inc venetian casino resort llc redeemed february 1 2005 700 million redeem vml’s senior secured notes may 23 2005 intend use remaining net proceeds initial public offering working capital purposes general corporate purposes may include construction palazzo macao projects february 10 2005 company issued 2500 million 6375 senior notes due 2015 private placement february 22 2005 entered senior secured credit facility senior secured credit facility amended restated prior senior secured credit facility increase borrowings 4000 million additional term loans expand revolving credit facility 1250 million 4500 million lower interest costs revise covenants provide greater operational flexibility senior secured credit facility provides aggregate borrowings 162 billion consisting 117 billion term loan facility 4500 million revolving credit facility february 1 2005 las vegas sands inc venetian casino resort llc redeemed 2911 million aggregate principal amount 11 mortgage notes redemption price 111 principal amount notes plus accrued unpaid interest used portion proceeds initial public offering pay redemption price notes february 22 2005 repurchased additional 5423 million outstanding 11 mortgage notes tender offer march 24 2005 redeemed remaining 102 million used 2448 million net proceeds 6375 senior notes offering 1066 million cash hand 3117 million term loan borrowings senior secured credit facility retire outstanding 5525 million aggregate principal amount 11 mortgage notes pay fees expenses associated transactions commenced construction palazzo plan continue work palazzo 2006 currently estimate construction completed summer 2007 cost develop construct palazzo could reach high approximately 18 billion exclusive land phase ii mall expected cost approximately 2800 million exclusive certain incentive payments executives made july 2004 addition expect tenants make significant additional capital expenditures build stores restaurants palazzo december 31 2005 paid 5064 million design development construction costs palazzo intend use 3618 million plus interest earnings proceeds 9700 million term b facility 2000 million term b delayed draw facility senior secured credit facility 2215 million proceeds phase ii mall construction loan cash hand borrowings revolving facility senior secured credit facility operating cash flow fund development construction costs palazzo including phase ii mall pay related fees expenses currently estimate cost venetian macao approximately 23 billion exclusive land need arrange additional debt financing finance costs yet finalized estimate cost cotai strip developments process obtaining new 250 billion senior secured credit facility partial funding sands macao expansion construction venetian macao cotai strip developments documentation new facility still negotiated potential lenders yet legally committed lend funds credit facility expected close march 2006 addition portion sands macao’s cash flows expected used finance construction venetian macao therefore may need incur additional debt finance venetian macao sands macao’s cash flows sufficient also expect cotai strip developments financed large part additional debt aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2005 1 senior secured credit facility consists 9700 million single draw term b loan facility 2000 million term b delayed draw facility fully drawn august 19 2005 4500 million revolving credit facility december 31 2005 amounts borrowed 117 billion term b facilities including delayed draw 310 million revolving credit facility term b facility delayed draw facility mature june 15 2011 subject quarterly amortization payments commencing first quarter substantial completion palazzo revolving credit facility matures february 22 2010 interim amortization addition 500 million letters credit outstanding december 31 2005 reduces amount available borrowing revolving credit facility 3690 million 2 ffe credit facility mature july 1 2008 subject quarterly amortization payments 3 phase ii mall construction loan commitment 2500 million due march 30 2008 4 venetian intermediate credit facility mature march 27 2006 amortization intend refinance facility due utilizing availability revolving credit facility accordingly classified 500 million due february 22 2010 maturity date revolving credit facility 5 principal payments increase interface groupnevada achieve certain cash flow levels defined loan agreement interface mortgage loan mature february 10 2009 renewal options exercised monthly amortization payments 6 6375 senior notes due february 15 2015 7 based december 31 2005 libor rates 453 plus applicable interest rate spread accordance respective debt agreements 8 party services agreement third party hvac services venetian total remaining payment obligation arrangement 239 million december 31 2005 payable equal monthly installments july 1 2009 right terminate agreement based upon failure hvac provider agreement provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider 9 party tenant lease termination asset purchase agreements total remaining payment obligation arrangements 119 million december 31 2005 agreement grand canal shops mall sale obligated fulfill lease termination asset purchase agreements 10 party employment agreements six senior executives terms three five years 11 vml party longterm land lease 25 years total remaining payment obligation lease 117 million december 31 2005 12 party certain leaseback agreements blue man group theater gondola certain office space related grand canal shops mall sale total remaining payments due december 31 2005 1846 million 13 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual fixed gaming tax approximately 90 million per year government macao termination gaming subconcession addition terms subconcession agreement obligated make investments least 44 billion patacas approximately 5274 million exchange rates effect december 31 2005 various development projects macao june 2006 spent required minimum amount expect make land premium payments relating venetian macao properties development amounts determined pursuant contribution agreement bethworks llc “bethworks” bethlehem pennsylvania development expended approximately 66 million portion paid bethworks reimburse bethworks propertyrelated expenses b required fund operating expenses property expected approximately 10 million per year c required make additional 20 million payment bethworks gaming license bethlehem property obtained see “ business overview development projects” offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions straightforward interest rate caps 1997 entered offbalance sheet arrangements hvac provider terms energy service agreements purchase hvac energy services initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods fixed payment obligations due next twelve months 68 million energy services agreements hvac provider total remaining payment obligations arrangements 239 million december 31 2005 payable equal monthly installments july 1 2009 right terminate agreement based upon failure hvac provider provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider offbalance sheet arrangements dividends subsidiary las vegas sands inc declared accrued dividends 211 million 2004 paid january 2005 dividends represented tax distributions shareholders 2004 tax distributions permitted existing debt instruments las vegas sands inc subchapter corporation result conversion taxable “c” corporation income tax purposes las vegas sands inc longer makes tax distributions restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments las vegas sands llc contain significant restrictions payment dividends distributions us las vegas sands llc particular senior secured credit facility prohibits las vegas sands llc paying dividends making distributions us investing us limited exceptions las vegas sands llc may distribute us 250 million 500 million dividend payments twelvemonth period substantial completion palazzo depending whether certain financial tests met addition debt instrument phase ii mall subsidiary also restricts payment dividends distributions us subject limited exceptions phase ii mall construction loan prohibits phase ii mall subsidiary paying dividends making distributions us making investments us tax distributions limited basket amount debt instruments subsidiaries also contain proposed new credit facility construction venetian macao expected contain certain restrictions among things limit ability company andor certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders financial covenants included senior secured credit facility include minimum interest coverage ratio maximum leverage ratio minimum net worth covenant maximum capital expenditure limitations see “note 7 longterm debt” consolidated financial statements inflation believe inflation changing prices material impact net sales revenues income continuing operations past year special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions may impact levels disposable income consumer spending pricing hotel rooms • uncertainty tourist behavior related spending vacationing casino resorts las vegas macao • disruptions reductions travel due conflicts iraq future terrorist incidents • outbreaks infectious diseases severe acute respiratory syndrome avian flu market areas • dependence upon three properties two markets cash flow • new developments construction ventures including palazzo venetian macao cotai strip developments • passage new legislation receipt governmental approvals proposed developments macao singapore united kingdom jurisdictions planning operate • substantial leverage debt service including sensitivity fluctuations interest rates capital markets trends • insurance coverage including risk obtained sufficient coverage acts terrorism able obtain additional coverage significantly increased rates • government regulation casino industry including gaming license regulation legalization gaming certain domestic jurisdictions including native american reservations regulation gaming internet • increased competition additional construction las vegas including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas • popularity las vegas convention trade show destination • new taxes changes existing tax rates • ability meet certain development deadlines macao • ability maintain gaming subconcession macao • completion infrastructure projects macao • increased competition planned construction projects macao • future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations operate integrated resorts las vegas macao current ongoing development projects macao cotai strip singapore pennsylvania palazzo partially opened december 2007 inconsequential impact las vegas operations approximately 619 gross revenue venetian sands expo center congress center year ended december 31 2007 derived hotel rooms food beverage nongaming sources 381 derived gaming percentage nongaming revenue venetian reflects integrated resort’s emphasis group convention trade show business resulting higher occupancy room rates midweek periods macao operations consist sands macao venetian macao opened august 2007 ancillary operations support properties support ongoing development projects cotai strip well approximately 948 sands macao’s gross revenue year ended december 31 2007 derived gaming activities remainder primarily derived food beverage services approximately 814 venetian macao’s gross revenue period ended december 31 2007 derived gaming activities remainder derived room revenues food beverage services nongaming sources united states development projects las vegas condominiums early stages constructing highrise residential condominium tower approximately 10 million saleable square feet situated palazzo venetian condominium tower currently expected open late 2009 built estimated cost approximately 6000 million sands bethworks process developing gaming hotel shopping dining complex called sands bethworks located site historic bethlehem steel works bethlehem pennsylvania 70 miles midtown manhattan new york sands bethworks currently expected open summer 2009 built estimated cost approximately 6000 million macao development projects submitted development plans macao government six integrated resort developments addition venetian macao area approximately 200 acres located cotai strip developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas restaurants entertainment facilities attractions amenities well public common areas upon completion developments cotai strip including venetian macao currently planned feature approximately 19750 suitesrooms 16 million square feet gaming space capacity approximately 3300 table games 16470 slot machines singapore development project august 2006 mbs entered development agreement stb build operate integrated resort called marina bay sands singapore although construction started marina bay sands continuing work singapore government finalize various aspects integrated resort process revising cost estimates project expect cost develop construct marina bay sands excess 40 billion inclusive payment made 2006 land premium taxes fees marina bay sands expected open late 2009 development projects currently exploring possibility developing operating integrated resorts additional asian us jurisdictions europe summary financial results following table summarizes results operations growth company significant development pipeline historical financial results indicative future results continue open new properties including remaining cotai strip developments marina bay sands key operating revenue measurements operating revenues las vegas properties venetian macao dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play hotel revenues material sands macao revenues principally driven casino customers visit casino daily basis visitors macao properties arrive ferry automobile bus airplane helicopter hong kong cities china southeast asian cities close proximity macao elsewhere following key measurements use evaluate operating revenue casino revenue measurements las vegas table games drop slot handle volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coin placed slot machines aggregate period cited drop handle abbreviations table games drop slot handle based upon mix table games table games produce statistical average win percentage calculated discounts measured percentage table game drop 200 220 slot machines produce statistical average win percentage calculated slot club cash incentives measured percentage slot machine handle generally 60 70 casino revenue measurements macao table games segregated two groups consistent macao market’s convention rolling chip play vip play nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered volume measurement nonrolling chip play table games drop described rolling chip volume nonrolling chip volume equivalent rolling chip volume measure amounts wagered versus dropped rolling chip volume substantially higher table games drop slot handle gross amount wagered coins placed slot machines aggregate period cited view rolling chip table games win percentage rolling chip volume nonrolling chip table games win percentage drop win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games macao rolling chip table games win percentage calculated discounts commissions measured percentage rolling chip volume expected 30 nonrolling chip table games expected produce statistical average win percentage measured percentage table game drop 180 200 similar las vegas macao slot machines produce statistical average win percentage measured percentage slot machine handle generally 60 70 actual win may vary statistical average generally slot machine play conducted cash basis creditbased wagering las vegas properties approximately 626 table games revenues year ended december 31 2007 table games play macao properties conducted primarily cash basis 194 creditbased wagering year ended december 31 2007 hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate year ended december 31 2007 compared year ended december 31 2006 operating revenues net revenues consisted following consolidated net revenues 295 billion year ended december 31 2007 increase 7137 million compared 224 billion year ended december 31 2006 increase net revenues due primarily opening venetian macao august 2007 casino revenues year ended december 31 2007 increased 5744 million compared year ended december 31 2006 increase 5493 million attributable opening venetian macao august 2007 326 million attributable growth casino operations sands macao offset slight decrease venetian 68 million attributable decrease win percentage compared year ended december 31 2006 following table summarizes results casino revenue activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered table excludes palazzo 2007 two days operations material indicative future results room revenues year ended december 31 2007 increased 868 million compared year ended december 31 2006 increase primarily attributable 634 million venetian macao well increase average daily room rate venetian palazzo suites open public january 2008 suites sands macao primarily provided casino patrons complimentary basis therefore included following table summarizes results room revenue activity food beverage revenues year ended december 31 2007 increased 504 million compared year ended december 31 2006 increase primarily attributable 212 million venetian macao increases 114 million sands macao due increased number visitors 80 million venetian two joint venture restaurants opened summer 2007 convention retail revenues year ended december 31 2007 increased 527 million compared year ended december 31 2006 increase primarily attributable 413 million revenues venetian macao consisting principally rental revenues mall approximately 96 million revenue related large group room cancellations venetian operating expenses breakdown operating expenses follows operating expenses 262 billion year ended december 31 2007 increase 9578 million compared 166 billion year ended december 31 2006 increase operating expenses primarily attributable higher operating revenues growth operating businesses macao lesser extent las vegas preopening activities fully described casino expenses year ended december 31 2007 increased 5106 million compared year ended december 31 2006 5106 million increase 3221 million due 390 gross win tax higher casino revenues properties macao additional 1096 million casinorelated expenses exclusive aforementioned 390 gross win tax attributable venetian macao remaining increase primarily attributable additional payrollrelated expenses rolling chip program sands macao rooms expense increased 86 million food beverage expense increased 292 million convention retail expense increased 334 million increases primarily due associated increase respective revenue categories noted provision doubtful accounts 264 million year ended december 31 2007 compared 181 million year ended december 31 2006 due primarily 106 million provision one customer beginning 2007 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses year ended december 31 2007 increased 890 million compared year ended december 31 2006 increase attributable growth operating businesses las vegas macao 695 million increase incurred venetian macao 69 million incurred las vegas sands macao related stockbased compensation expense corporate expense year ended december 31 2007 increased 349 million compared year ended december 31 2006 increase attributable increases 162 million legal professional fees 52 million payrollrelated expenses 45 million travelrelated expenses 90 million corporate general administrative costs continue build corporate infrastructure support current planned growth rental expense year ended december 31 2007 increased 183 million compared year ended december 31 2006 increase primarily attributable full year amortization singapore’s leasehold interest land entered august 2006 amortization leasehold interest land parcels 1 2 3 cotai strip entered february 2007 preopening development expenses 1893 million 97 million respectively year ended december 31 2007 compared 377 million 261 million respectively year ended december 31 2006 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2007 primarily related opening venetian macao palazzo activities cotai strip marina bay sands bethworks projects development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2007 primarily related activities hengqin island asia europe us expect preopening development expenses decrease due opening venetian macao palazzo 2007 depreciation amortization expense year ended december 31 2007 increased 918 million compared year ended december 31 2006 increase primarily result venetian macao totaling 600 million full year depreciation expense related sands macao podium expansion increase 70 million placed service august 2006 additionally 75 million accelerated deprecation expense year ended december 31 2007 related replacement assets venetian connection room renovation project interest expense following table summarizes information related interest expense longterm debt interest cost increased 2376 million compared year ended december 31 2006 resulting substantial increase average longterm debt balances proceeds primarily used fund various development projects see “ liquidity capital resources” detail financing activities increase interest cost offset capitalization 2232 million interest year ended december 31 2007 compared 946 million capitalized interest year ended december 31 2006 expect interest cost continue increase longterm debt balances increase leasehold interest land payments made macao singapore considered qualifying assets included base amount used determine capitalized interest factors affecting earnings interest income year ended december 31 2007 725 million increase 63 million compared 662 million year ended december 31 2006 increase attributable additional invested cash balances primarily borrowings us senior secured credit facilities macao credit facility yet spent expense year ended december 31 2007 87 million compared 02 million year ended december 31 2006 87 million expense amount primarily attributable foreign exchange translation losses associated us denominated debt held macao loss early retirement debt 107 million year ended december 31 2007 due refinancing us senior secured credit facility early retirement construction loan related shoppes palazzo effective income tax rate year ended december 31 2007 156 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result income tax exemption macao gaming operations set expire end 2008 based macanese law treatment gaming operators believe income tax exemption extended additional fiveyear term effective tax rate 123 year ended december 31 2006 primarily due application aforementioned macao income tax exemption effective income tax rate 2007 higher 2006 period due tax benefit recorded certain losses foreign jurisdictions geographic income mix year ended december 31 2006 compared year ended december 31 2005 operating revenues net revenues consisted following consolidated net revenues 224 billion year ended december 31 2006 increase 4959 million compared 174 billion year ended december 31 2005 increase net revenues due primarily increase casino revenues 4260 million primarily attributable growth operations sands macao casino revenues year ended december 31 2006 increased 4260 million compared year ended december 31 2005 increase 3821 million attributable growth casino operations sands macao due primarily formal introduction rolling chip program march 2005 casino expansion august 2006 following table summarizes results casino revenue activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2006 increased 270 million compared year ended december 31 2005 increase attributable increase average daily room rate well slight increase occupancy rate following table summarizes results room revenue activity food beverage revenues 1878 million year ended december 31 2006 increase 403 million compared 1475 million year ended december 31 2005 increase primarily attributable food beverage revenues venetian increased 322 million due increased group business resulting primarily approximately 450000 square feet additional meeting space property convention retail revenues year ended december 31 2006 increased 226 million compared year ended december 31 2005 increase primarily attributable 76 million additional convention revenues sands expo center 104 million revenues associated blue man group phantom opera gordie brown performances began october 2005 june 2006 october 2006 respectively operating expenses breakdown operating expenses follows operating expenses 166 billion year ended december 31 2006 increase 4113 million compared 125 billion year ended december 31 2005 increase operating expenses primarily attributable higher operating revenues growth operating businesses macao lesser extent las vegas fully described casino expenses year ended december 31 2006 increased 2684 million compared year ended december 31 2005 increase casino expenses 1761 million due 390 gross win tax casino revenues macao despite higher gross win tax casino operating margins sands macao similar venetian primarily lower labor marketing sales expenses macao rolling chip volume increases percentage total gaming operations casino margins decrease due commissions paid rolling chip program remaining increase primarily attributable additional payroll related expenses related continued growth operations sands macao casino expansion august 2006 food beverage expense increased 124 million convention retail expense increased 62 million increases primarily due associated increase respective revenue categories noted provision doubtful accounts 181 million year ended december 31 2006 compared 94 million year ended december 31 2005 due primarily increase casino hotel receivables year amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses year ended december 31 2006 increased 375 million compared year ended december 31 2005 increase attributable growth operating businesses las vegas macao well 71 million related stockbased compensation expense recorded connection adoption statement financial accounting standards “sfas” 123r corporate expense year ended december 31 2006 increased 213 million compared year ended december 31 2005 increase corporate expense 195 million related payroll operating expenses increase headcount corporate area support continued expansion activities 54 million related stockbased compensation recorded connection adoption sfas 123r partially offset 50 million charitable contribution made 2005 recur 2006 preopening development expenses 377 million 261 million respectively year ended december 31 2006 compared 37 million 222 million respectively year ended december 31 2005 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2006 primarily related venetian macao project expansion sands macao development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2006 primarily related activities singapore pennsylvania europe expect preopening development expenses continue increase progress venetian macao cotai strip projects macao palazzo las vegas marina bay sands singapore hengqin island pennsylvania well continued pursuit development opportunities elsewhere depreciation amortization expense year ended december 31 2006 increased 155 million compared year ended december 31 2005 increase primarily due additional depreciation expense result capital improvements venetian sands macao interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized year ended december 31 2006 increased 396 million compared year ended december 31 2005 increase primarily attributable increase average longterm debt balances resulting primarily completion 25 billion macao credit facility may 2006 support development activities macao 153 billion singapore bridge facility august 2006 support development marina bay sands expect interest expense continue increase longterm debt balances interest rates increase offset capitalization 946 million interest year ended december 31 2006 compared 227 million capitalized interest year ended december 31 2005 expect capitalized interest continue increase venetian macao palazzo projects approach anticipated 2007 opening dates increase construction activities cotai strip marina bay sands bethworks factors affecting earnings interest income year ended december 31 2006 662 million increase 331 million compared 331 million year ended december 31 2005 increase attributable additional invested cash balances primarily borrowings us senior secured credit facility macao credit facility loss early retirement debt 1370 million year ended december 31 2005 result redemption las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes effective income tax rate year ended december 31 2006 123 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result income tax exemption macao gaming operations set expire end 2008 effective tax rate 15 year ended december 31 2005 primarily due tax benefit associated loss early retirement debt 2005 period well application aforementioned macao income tax exemption liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play las vegas properties conducted cash credit basis table games play macao properties conducted primarily cash basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash provided operating activities year ended december 31 2007 3655 million increase 5622 million compared cash used operating activities 1967 million year ended december 31 2006 main factor contributing increase payments leasehold interests land 2006 paid 7867 million singapore leasehold interest land 2007 made payments totaling 2352 million macao leasehold interests land related parcels 1 2 3 sands macao hotel tower expansion increase offset decrease operating income previously described year ended december 31 2007 compared year ended december 31 2006 cash flows investing activities capital expenditures year ended december 31 2007 totaled 379 billion including 196 billion construction development activities macao including sands macao venetian macao developments cotai strip 118 billion construction development activities palazzo shoppes palazzo 3646 million construction development activities singapore 1522 million expansions improvements maintenance capital expenditures venetian sands expo center las vegas 1299 million corporate activities primarily purchase aircraft construction sands bethworks restricted cash decreased 5563 million due primarily decreases restricted cash balances venetian palazzo sands expo center totaled 4137 million due primarily construction payments related palazzo lesser extent refinancing new 50 billion senior secured credit facility removed restrictions certain cash balances also 4062 million decrease restricted cash balances macao due use proceeds loan draws fund additional construction costs venetian macao 500 million decrease related payment pennsylvania gaming license offset increase 3185 million restricted cash balances held singapore constructionrelated payments cash flows financing activities year ended december 31 2007 net cash flows provided financing activities 332 billion net increase primarily attributable net borrowings 299 billion new us senior secured credit facility 155 billion macao credit facility 3398 million singapore bridge facility 895 million airplane financings offset net repayment existing us borrowings 143 billion prior senior secured credit facility 1145 million shoppes palazzo construction loan 909 million sands expo center mortgage loan capital liquidity previously described number significant development projects underway united states macao singapore expect construction continue 2011 united states estimated costs build las vegas condominium tower sands bethworks project approximately 6000 million capitalized approximately 821 million 669 million respectively macao estimated cost build developments cotai strip including venetian macao approximately 120 billion capitalized approximately 291 billion singapore although construction started marina bay sands continuing work singapore government finalize various design aspects integrated resort process finalizing cost estimates project expect cost design develop construct marina bay sands excess 40 billion inclusive payments made 2006 land premium taxes fees incurred approximately 139 billion principally funded global development projects borrowings bank credit facilities operating subsidiaries operating cash flows proceeds disposition noncore assets 2007 began execute financing strategy secure additional borrowing capacity fund existing future development projects operations asia including macao singapore united states april 2007 increased size macao credit facility fund macao development projects 25 billion 33 billion exercising right access additional 8000 million incremental facilities accordion feature provided macao credit facility incremental 8000 million consisted additional 6000 million term loans increase 2000 million revolving credit facility 7000 million connection increase macao credit facility lenders also approved reduction interest rate margin classes loans 50 basis points thereby reducing overall interest expense macao credit facility december 31 2007 approximately 4490 million available borrowing revolving credit facility portion macao credit facility currently preliminary stages exploring options respect refinancing macao credit facility proceeds would used refinance amount currently outstanding macao credit facility well provide incremental borrowings continue fund development projects cotai strip macao may 2007 initiated us refinancing efforts entering 50 billion senior secured credit facility portion proceeds facility used refinance indebtedness collateralized las vegas integrated resort including venetian palazzo shoppes palazzo sands expo center fund design development construction costs incurred connection completion palazzo partially opened december 30 2007 shoppes palazzo las vegas condominiums completed us refinancing efforts entering 1670 million amended restated ffe credit facility august 2007 proceeds used finance refinance acquisition furniture fixtures equipment located venetian palazzo december 31 2007 approximately 197 billion 1050 million available borrowing capacity senior secured credit facility amended restated ffe credit facility respectively senior secured credit facility permits us make investments foreign subsidiaries development projects outside las vegas amount exceed 21 billion permits us invest sands bethworks project long 30 investment form equity december 31 2007 used approximately 7058 million permitted 21 billion fund portion required equity contribution marina bay sands project investments respect asian development projects including macao december 2007 entered sgd 544 billion credit facility approximately 376 billion exchange rates effect december 31 2007 fund construction costs expenses marina bay sands closed funded january 2008 portion proceeds facility together portion initial sgd 8000 million approximately 5534 million exchange rates effect december 31 2007 equity contribution used repay outstanding borrowings approximately sgd 192 billion approximately 133 billion exchange rates effect december 31 2007 existing singapore bridge facility remaining funds available borrowing singapore credit facility used fund significant portion design development construction costs marina bay sands project terms singapore credit facility obligated fund least 20 total costs expenses incurred connection design development construction marina bay sands project equity contributions subordinated intercompany loans remaining 80 funded debt including debt singapore credit facility funded current equity contribution requirement borrowings us senior secured credit facility due substantial development activities included current liabilities construction payables approximately 7175 million december 31 2007 portion current liabilities funded longterm borrowing capacity working capital deficit approximately 1142 million december 31 2007 subsequent yearend borrowed approximately 4500 million credit facilities approximately 2250 million used pay construction payables outstanding december 31 2007 held unrestricted restricted cash equivalents approximately 8572 million 4118 million respectively december 31 2007 believe existing cash balances operating cash flows venetian palazzo proceeds anticipated sale shoppes palazzo ggp las vegas condominium units together available borrowing capacity us senior secured credit facility ffe credit facility sufficient fund estimated development construction costs las vegas condominiums sands bethworks projects 2008 addition believe funds also enable us fund equity contribution requirement marina bay sands project provide additional capital macao subsidiaries fund portion development projects cotai strip macao time period existing restricted unrestricted cash balances macao subsidiaries operating cash flows sands macao venetian macao available borrowing capacity macao credit facility together funds made available us senior secured credit facility used fund current development construction costs cotai strip development activities short term however need arrange additional debt andor equity financing near term continue fund design development construction activities remaining cotai strip development projects expect complete refinancing 2008 near term continue borrow significant amounts existing future bank credit facilities fund global construction development projects connection borrowing needs regularly evaluate conditions global credit markets however may able obtain additional borrowings necessary credit terms favorable existing credit facilities able obtain requisite financing terms favorable anticipate may required slow suspend global development activities including cotai strip development financing sources funds become available aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2007 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 based december 31 2007 libor rate 47 hibor rate 35 singapore swap offer rate 25 plus applicable interest rate spread accordance respective debt agreements 3 party services agreement third party heating ventilation air conditioning “hvac” energyrelated services las vegas integrated resort right terminate agreement based upon failure hvac provider agreement provide hvac services upon sale grand canal shops may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider 4 party tenant lease termination asset purchase agreements agreement grand canal shops sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements five senior executives remaining terms two years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter 7 party certain leaseback agreements blue man group theater gondola certain office space related grand canal shops sale 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual fixed gaming tax approximately 352 million per year government macao termination gaming subconcession june 2022 9 entered agreements purchase ten ferries aggregate cost approximately 1554 million built macao operations subsequent yearend agreed purchase additional four ferries aggregate cost approximately 720 million 10 party longterm lease agreement 99 years parking structure located adjacent venetian 11 party certain operating leases real estate various equipment service arrangements 12 adopted provisions financial accounting standards board interpretation “fin” 48 “accounting uncertainty income taxes interpretation fasb statement 109” january 1 2007 december 31 2007 155 million liability related unrecognized tax benefits related interest expense unable reasonably estimate timing fin 48 liability interest payments individual years beyond 12 months due uncertainties timing effective settlement tax positions offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions may impact levels disposable income consumer spending pricing hotel rooms • uncertainty tourist behavior related spending vacationing casinoresorts las vegas macao singapore • disruptions reductions travel due conflicts iraq future terrorist incidents • outbreaks infectious diseases severe acute respiratory syndrome avian flu market areas • dependence upon properties las vegas macao cash flow • new developments construction ventures including venetian macao cotai strip developments marina bay sands singapore sands bethworks las vegas condominiums • ability obtain sufficient funding developments including developments cotai strip • passage new legislation receipt governmental approvals proposed developments macao singapore jurisdictions planning operate • substantial leverage debt service including sensitivity fluctuations interest rates capital markets trends • insurance coverage including risk obtained sufficient coverage acts terrorism able obtain additional coverage significantly increased rates • government regulation casino industry including gaming license regulation legalization gaming certain domestic jurisdictions including native american reservations regulation gaming internet • increased competition additional construction las vegas including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas • popularity las vegas convention trade show destination • new taxes changes existing tax rates • ability meet certain development deadlines macao singapore • ability maintain gaming subconcession macao • completion infrastructure projects macao • increased competition planned construction projects macao • future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts las vegas macao regularly evaluate allowance doubtful casino accounts specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play significant las vegas properties credit table games play represented approximately 626 total table games play macao table games play primarily cash play credit table games play represented approximately 194 total table games play macao resorts allowance doubtful casino accounts 265 258 gross casino receivables years ended december 31 2007 2006 respectively allowance doubtful accounts hotel receivables material selfinsurance accruals maintain accruals health workers compensation selfinsurance classified accrued liabilities consolidated balance sheets determine adequacy accruals periodically evaluating historical experience projected trends related accruals consultation outside actuarial experts information indicates accruals overstated understated business conditions indicate adjust assumptions utilized reduce provide additional accruals appropriate litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance sfas 5 “accounting contingencies” include accruals accrued liabilities consolidated balance sheets property equipment december 31 2007 net property equipment 857 billion representing 748 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weightedaverage cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interest land leasehold interest land represents payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest stockbased compensation sfas 123r “sharebased payment” requires recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatilities selection companies peer group due lack historical information used simplified method estimating expected option life options qualify “plainvanilla” options continue use simplified method beyond december 31 2007 due lack historical information allowed staff accounting bulletin 110 “sharebased payment” believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s 2004 equity award plan adopted sfas 123r effective january 1 2006 years ended december 31 2007 2006 recorded stockbased compensation expense 332 million 147 million respectively expense recorded 2005 december 31 2007 1137 million unrecognized compensation cost net estimated forfeitures 80 related nonvested stock options 41 million unrecognized compensation cost related nonvested restricted stock option restricted stock costs expected recognized weighted average period 33 years 17 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate deferred income tax balances reflect effects temporary differences carrying amounts assets liabilities tax bases stated enacted tax rates expected effect taxes actually paid recovered sfas 109 “accounting income taxes” requires deferred tax assets evaluated future realization reduced valuation allowance extent believe portion realized consider many factors assessing likelihood future realization deferred tax assets including recent cumulative earnings experience expectations future taxable income taxing jurisdiction carryforward periods available us tax reporting purposes relevant factors significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain effective january 1 2007 adopted provisions fin 48 contains twostep approach recognizing measuring uncertain tax positions accounted accordance sfas 109 first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely realized upon ultimate settlement consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes subject income tax examination tax authorities years 2003 currently income tax returns examined internal revenue service major tax authorities recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types service products regulatory business environment operations within segment company’s organizational management reporting structure approximately 649 619 gross revenue las vegas operating properties years ended december 31 2008 2007 respectively derived room revenues food beverage services nongaming sources 351 381 respectively derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods macao operating segments consist sands macao venetian macao four seasons macao ancillary operations support properties support remaining cotai strip development projects approximately 925 948 gross revenue sands macao years ended december 31 2008 2007 respectively derived gaming activities remainder primarily derived room revenues food beverage services approximately 788 814 gross revenue venetian macao year ended december 31 2008 period ended december 31 2007 respectively derived gaming activities remainder derived room revenues food beverage services nongaming sources approximately 684 gross revenue four seasons macao period ended december 31 2008 derived gaming activities remainder primarily derived retail nongaming sources development projects mentioned given current conditions capital markets global economy impact ongoing operations chosen suspend portions development projects focus development efforts projects highest rates expected return invested capital general economic conditions improve unable obtain sufficient funding completion suspended projects probable management decide abandon certain projects portion investment date suspended projects could lost would result impairment charge addition may subject penalties termination clauses construction contracts united states development projects process constructing sands bethlehem gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania approximately 70 miles midtown manhattan new york continue construction casino component 124acre development open 3000 slot machines ability increase 5000 slot machines six months opening date include variety dining options well parking garage surface parking construction activities remaining components include 300room hotel approximate 200000squarefoot retail facility 50000squarefoot multipurpose event center variety additional dining options temporarily suspended intended recommence capital markets general economic conditions improve expect complete construction casino parking components prepare additional components delay second quarter 2009 constructing st regis residences situated palazzo venetian las vegas las vegas strip expected feature approximately 400 luxury residences suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction conditions improve expect take approximately 18 months construction recommences complete project macao development projects submitted plans macao government cotai strip developments represent five integrated resort developments addition venetian macao four seasons macao area approximately 200 acres refer parcels 3 5 6 7 8 developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas restaurants entertainment facilities amenities commenced construction preconstruction five parcels planned operate casinos developments macao gaming subconcession suspended construction phase parcels 5 6 includes shangrila traders tower first sheraton tower along podium encompasses casino associated public areas portions shopping mall approximately 100000 square feet meeting space company pursues projectlevel financing obtained expect take approximately twelve months complete construction phase construction phase ii project includes second sheraton tower st regis hotel serviced luxury apartment hotel suspended conditions capital markets general economic conditions improve commenced preconstruction parcels 7 8 3 intend commence construction necessary government approvals obtained regional global economic conditions improve future demand warrants additional financing obtained singapore development project august 2006 mbs entered development agreement stb build operate integrated resort called marina bay sands singapore based current development plan intend continue construction existing timeline majority project targeted open late 2009 early 2010 development projects current economic environment access capital improve may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe july 2008 withdrew previously submitted application develop casino resort kansas city kansas metropolitan area management developments october 29 2008 certain members management team including sheldon g adelson chairman board chief executive officer william p weidner president chief operating officer bradley h stone executive vice president robert g goldstein senior vice president “senior management members” recommended board directors institute additional corporate policies procedures upon recommendation board directors formed committee “advisory committee” comprised irwin chafetz michael leven irwin siegel mr leven chairman advisory committee role advisory committee resolve disagreements among management also board directors gave mr stone additional responsibilities president global operations construction board directors adopted measures address governance concerns raised senior management members address number outstanding differences chief executive officer senior management members response loss confidence certain senior management members management company governance process summary financial results following table summarizes results operations historical financial results indicative future results continue open new properties including sands bethlehem second quarter 2009 marina bay sands late 2009 early 2010 key operating revenue measurements operating revenues las vegas operating properties venetian macao four seasons macao dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play hotel revenues material sands macao revenues principally driven casino customers visit casino daily basis following key measurements use evaluate operating revenues casino revenue measurements las vegas table games drop “drop” slot handle “handle” volume measurements win hold percentage represents percentage drop handle respectively casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coin placed slot machines aggregate period cited based upon mix table games table games produce statistical average win percentage calculated discounts measured percentage drop 200 220 slot machines produce statistical average hold percentage calculated slot club cash incentives measured percentage handle generally 60 70 casino revenue measurements macao table games segregated two groups consistent macao market’s convention rolling chip play vip play nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered volume measurement nonrolling chip play table games drop previously described rolling chip volume nonrolling chip volume equivalent rolling chip volume measure amounts wagered versus dropped rolling chip volume substantially higher table games drop slot handle gross amount wagered coins placed slot machines aggregate period cited view rolling chip table games win percentage rolling chip volume nonrolling chip table games win percentage nonrolling chip drop win hold percentage represents percentage rolling chip volume nonrolling chip drop handle respectively casino recorded casino revenue based upon mix table games macao rolling chip table games win percentage calculated discounts commissions measured percentage rolling chip volume expected 30 nonrolling chip table games expected produce statistical average win percentage measured percentage nonrolling chip drop 180 200 similar las vegas macao slot machines produce statistical average hold percentage measured percentage handle generally 60 70 actual win may vary statistical average generally slot machine play conducted cash basis creditbased wagering las vegas properties approximately 576 table games revenues year ended december 31 2008 table games play macao properties conducted primarily cash basis 237 creditbased wagering year ended december 31 2008 hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate year ended december 31 2008 compared year ended december 31 2007 operating revenues net revenues consisted following consolidated net revenues 439 billion year ended december 31 2008 increase 144 billion compared 295 billion year ended december 31 2007 increase net revenues due primarily full year operations venetian macao opened august 2007 palazzo opened december 2007 opening four seasons macao august 2008 casino revenues year ended december 31 2008 increased 9417 million compared year ended december 31 2007 increase 106 billion attributable full year operation venetian macao 461 million attributable opening four seasons macao offset 2838 million decrease sands macao due primarily increased competition compared year ended december 31 2007 casino revenues las vegas operating properties increased 1182 million driven opening palazzo offset lower expected table games volume win percentage compared year ended december 31 2007 following table summarizes results casino revenue activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2008 increased 3298 million compared year ended december 31 2007 due primarily full year operations venetian macao palazzo increase las vegas operating properties offset reduced adr occupancy rates negatively impacted reduction room rates order increase visitation palazzo excess suite inventory new resort ramps operations respectively overall decline general economic conditions room revenues four seasons macao negatively impacted low occupancy rate due slow ramp property offset adr 344 period ended december 31 2008 suites sands macao primarily provided casino patrons complimentary basis therefore revenues 271 million 116 million years ended december 31 2008 2007 respectively related statistics included following table summarizes results room revenue activity food beverage revenues year ended december 31 2008 increased 1308 million compared year ended december 31 2007 increase primarily attributable full year operations venetian macao increased 440 million palazzo primary driver 850 million increase las vegas operating properties well several joint venture restaurants opened 2008 convention retail revenues year ended december 31 2008 increased 2284 million compared year ended december 31 2007 increase primarily attributable increase 1251 million venetian macao consisted primarily full year rental revenues mall 521 million las vegas operating properties driven primarily full year operations palazzo 399 million asia consisted primarily passenger ferry service operations operating expenses breakdown operating expenses follows operating expenses 423 billion year ended december 31 2008 increase 161 billion compared 262 billion year ended december 31 2007 increase operating expenses primarily attributable full year operations venetian macao palazzo opening four seasons macao growth operating businesses macao las vegas depreciation amortization costs fully described casino expenses year ended december 31 2008 increased 7786 million compared year ended december 31 2007 increase 5072 million due 390 gross win tax casino revenues venetian macao offset 1125 million decrease gross win tax sands macao due decrease casino revenues noted additional 2385 million increase casinorelated expenses exclusive aforementioned 390 gross win tax attributable venetian macao primarily related payrollrelated expenses commissions paid rolling chip program casino expenses las vegas operating properties increased 1199 million primarily due palazzo consisting principally payrollrelated expenses gamingrelated taxes increase costs providing promotional allowances rooms expense increased 604 million food beverage expense increased 683 million compared year ended december 31 2007 increases primarily due venetian macao palazzo four seasons macao convention retail expense increased 1157 million compared year ended december 31 2007 378 million attributable venetian macao 295 million attributable las vegas operating properties remaining increase primarily attributable passenger ferry service operations macao provision doubtful accounts 419 million year ended december 31 2008 compared 264 million year ended december 31 2007 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses year ended december 31 2008 increased 2312 million compared year ended december 31 2007 increase primarily attributable growth operating businesses las vegas macao asia segment 927 million increase incurred las vegas operating properties 1120 million incurred venetian macao 151 million incurred asia preopening development expenses 1623 million 128 million respectively year ended december 31 2008 compared 1893 million 97 million respectively year ended december 31 2007 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2008 primarily related activities four seasons macao cotai strip developments marina bay sands bethlehem st regis residences development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2008 primarily related activities hengqin island asia europe us depreciation amortization expense year ended december 31 2008 increased 3044 million compared year ended december 31 2007 increase primarily attributable venetian macao totaling 1305 million palazzo totaling 1313 million four seasons macao totaling 164 million impairment loss 376 million year ended december 31 2008 primarily related certain real estate transportation assets previously utilized connection marketing activities asia adjusted ebitdar adjusted ebitdar used management primary measure operating performance segments adjusted ebitdar net income loss interest income taxes depreciation amortization preopening expense development expense income expense loss early retirement debt loss disposal assets impairment loss rental expense corporate expense stockbased compensation expense included general administrative expense noncontrolling interest following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted ebitdar net income loss opening palazzo adjusted ebitdar las vegas operating properties increased 311 million compared year ended december 31 2007 increase primarily attributable increase 3509 million net revenue offset increase 1658 million payrollrelated expenses increases operating expenses associated increase related revenue categories increase general administrative expenses support growth las vegas operating properties adjusted ebitdar sands macao decreased 1589 million compared year ended december 31 2007 previously described decrease primarily attributable decrease casino revenues 2838 million offset 1125 million decrease gross win tax reduced casino revenues result increased competition expect 2008 results sands macao representative future results prior periods adjusted ebitdar venetian macao four seasons macao asia segments comparable prioryear periods results operations segments previously described asia segment composed primarily passenger ferry service macao hong kong initiated evening sailings increased frequency sailings peak hours june 2008 interest expense following table summarizes information related interest expense longterm debt interest cost increased 850 million compared year ended december 31 2007 resulting substantial increase average longterm debt balances partially offset decrease interest rates proceeds primarily used fund various development projects see “ liquidity capital resources” detail financing activities increase interest cost offset capitalization 1312 million interest year ended december 31 2008 compared 2232 million capitalized interest year ended december 31 2007 decrease capitalized interest due primarily openings venetian macao palazzo 2007 four seasons macao august 2008 capitalized interest expected decrease 2009 discontinued capitalizing interest recently suspended projects leasehold interest land payments made macao singapore considered qualifying assets included base amount used determine capitalized interest factors effecting earnings interest income year ended december 31 2008 198 million decrease 527 million compared 725 million year ended december 31 2007 decrease attributable reduction invested cash balances year primarily borrowings us senior secured credit facility macao credit facility spent constructionrelated activities well decrease interest rates income year ended december 31 2008 195 million compared expense 87 million year ended december 31 2007 income expense amounts primarily attributable foreign exchange gains losses associated us denominated debt held macao change fair value singapore interest rate caps entered 2008 loss early retirement debt 91 million year ended december 31 2008 due conversion 4750 million convertible senior notes shares common stock refinancing singapore bridge facility effective tax rate year ended december 31 2008 beneficial rate 262 effective tax rate benefit year reflects pretax book loss us statutory rate 35 zero tax rate income tax exemption macao gaming operations set expire 2013 nondeductible preopening expenses foreign subsidiaries nonrealizable net operating losses foreign jurisdictions unfavorably impacted rate effective tax rate year ended december 31 2007 156 primarily attributable aforementioned macao income tax exemption effective tax rate changed primarily due pretax domestic loss year ended december 31 2008 pretax foreign income year ended december 31 2007 year ended december 31 2007 compared year ended december 31 2006 operating revenues net revenues consisted following consolidated net revenues 295 billion year ended december 31 2007 increase 7137 million compared 224 billion year ended december 31 2006 increase net revenues due primarily opening venetian macao august 2007 casino revenues year ended december 31 2007 increased 5744 million compared year ended december 31 2006 increase 5493 million attributable opening venetian macao august 2007 326 million attributable growth casino operations sands macao offset slight decrease venetian las vegas 68 million attributable decrease win percentage compared year ended december 31 2006 following table summarizes results casino revenue activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered table excludes palazzo 2007 two days operations material indicative future results room revenues year ended december 31 2007 increased 868 million compared year ended december 31 2006 increase primarily attributable 634 million venetian macao well increase average daily room rate venetian las vegas palazzo suites open public january 2008 suites sands macao primarily provided casino patrons complimentary basis therefore included following table summarizes results room revenue activity food beverage revenues year ended december 31 2007 increased 504 million compared year ended december 31 2006 increase primarily attributable 212 million venetian macao increases 114 million sands macao due increased number visitors 80 million venetian las vegas two joint venture restaurants opened summer 2007 convention retail revenues year ended december 31 2007 increased 527 million compared year ended december 31 2006 increase primarily attributable 413 million revenues venetian macao consisting principally rental revenues mall approximately 96 million revenue related large group room cancellations venetian las vegas operating expenses breakdown operating expenses follows operating expenses 262 billion year ended december 31 2007 increase 9578 million compared 166 billion year ended december 31 2006 increase operating expenses primarily attributable higher operating revenues growth operating businesses macao lesser extent las vegas preopening activities fully described casino expenses year ended december 31 2007 increased 5106 million compared year ended december 31 2006 5106 million increase 3221 million due 390 gross win tax higher casino revenues properties macao additional 1096 million casinorelated expenses exclusive aforementioned 390 gross win tax attributable venetian macao remaining increase primarily attributable additional payrollrelated expenses rolling chip program sands macao rooms expense increased 86 million food beverage expense increased 292 million convention retail expense increased 334 million increases primarily due associated increase respective revenue categories noted provision doubtful accounts 264 million year ended december 31 2007 compared 181 million year ended december 31 2006 due primarily 106 million provision one customer beginning 2007 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses year ended december 31 2007 increased 890 million compared year ended december 31 2006 increase attributable growth operating businesses las vegas macao 695 million increase incurred venetian macao 69 million incurred las vegas sands macao related stockbased compensation expense corporate expense year ended december 31 2007 increased 349 million compared year ended december 31 2006 increase attributable increases 162 million legal professional fees 52 million payrollrelated expenses 45 million travelrelated expenses 90 million corporate general administrative costs continue build corporate infrastructure support current planned growth rental expense year ended december 31 2007 increased 183 million compared year ended december 31 2006 increase primarily attributable full year amortization singapore’s leasehold interest land entered august 2006 amortization leasehold interest land parcels 1 2 3 cotai strip entered february 2007 preopening development expenses 1893 million 97 million respectively year ended december 31 2007 compared 377 million 261 million respectively year ended december 31 2006 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2007 primarily related opening venetian macao palazzo activities cotai strip developments marina bay sands bethlehem development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2007 primarily related activities hengqin island asia europe us expect preopening development expenses decrease due opening venetian macao palazzo 2007 depreciation amortization expense year ended december 31 2007 increased 918 million compared year ended december 31 2006 increase primarily result venetian macao totaling 600 million full year depreciation expense related sands macao podium expansion increase 70 million placed service august 2006 additionally 75 million accelerated deprecation expense year ended december 31 2007 related replacement assets venetian las vegas connection room renovation project adjusted ebitdar adjusted ebitdar used management primary measure operating performance segments adjusted ebitdar net income interest income taxes depreciation amortization preopening expense development expense loss early retirement debt loss disposal assets rental expense corporate expense stockbased compensation expense included general administrative expense following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted ebitdar net income adjusted ebitdar las vegas operating properties decreased 124 million compared year ended december 31 2006 decrease primarily attributable increase 584 million payrollrelated expenses support growth operating businesses offset increase 244 million net revenue adjusted ebitdar sands macao decreased 845 million compared year ended december 31 2006 previously described decrease primarily attributable 1166 million increase casino expenses primarily related gross tax casino revenues payrollrelated expenses rolling chip program offset increase net revenues 376 million adjusted ebitdar venetian macao asia segments comparable prioryear periods results operations venetian macao previously described asia segment composed primarily passenger ferry service macao hong kong interest expense following table summarizes information related interest expense longterm debt interest cost increased 2376 million compared year ended december 31 2006 resulting substantial increase average longterm debt balances proceeds primarily used fund various development projects see “ liquidity capital resources” detail financing activities increase interest cost offset capitalization 2232 million interest year ended december 31 2007 compared 946 million capitalized interest year ended december 31 2006 expect interest cost continue increase longterm debt balances increase leasehold interest land payments made macao singapore considered qualifying assets included base amount used determine capitalized interest factors effecting earnings interest income year ended december 31 2007 725 million increase 63 million compared 662 million year ended december 31 2006 increase attributable additional invested cash balances primarily borrowings us senior secured credit facilities macao credit facility yet spent expense year ended december 31 2007 87 million compared 02 million year ended december 31 2006 87 million expense amount primarily attributable foreign exchange losses associated us denominated debt held macao loss early retirement debt 107 million year ended december 31 2007 due refinancing prior us senior secured credit facility early retirement construction loan related shoppes palazzo effective income tax rate year ended december 31 2007 156 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result income tax exemption macao gaming operations continue benefit tax exemption end 2013 effective tax rate 123 year ended december 31 2006 primarily due application aforementioned macao income tax exemption effective income tax rate 2007 higher 2006 period due tax benefit recorded certain losses foreign jurisdictions geographic income mix liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play las vegas properties conducted cash credit basis table games play macao properties conducted primarily cash basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash provided operating activities year ended december 31 2008 1278 million decrease 2377 million compared 3655 million year ended december 31 2007 main factors contributing decrease operating cash flow decrease operating income year ended december 31 2008 significant increase accounts receivable due gaming activity las vegas operations increase granting casino credit macao properties offset decrease leasehold interests land payments year ended december 31 2008 cash flows investing activities capital expenditures year ended december 31 2008 totaled 379 billion including 20 billion construction development activities macao primarily related four seasons macao cotai strip developments 4479 million construction development activities palazzo shoppes palazzo 7636 million construction development activities singapore 1300 million improvements maintenance capital expenditures venetian las vegas sands expo center las vegas 3075 million construction sands bethlehem 1396 million corporate activities primarily construction st regis residences restricted cash decreased 2180 million due primarily 2762 million decrease restricted cash balances singapore made construction payments related marina bay sands offset 649 million macao related proceeds loan draws fund construction costs related primarily four seasons macao cotai strip developments cash flows financing activities year ended december 31 2008 net cash flows provided financing activities 561 billion net increase primarily attributable 256 billion net proceeds issuance common preferred stock warrants convertible senior notes net borrowings 174 billion us senior secured credit facility 4443 million macao credit facility 4040 million singapore credit facilities 2186 million ferry financing credit facility 2439 million proceeds received sale shoppes palazzo development financing strategy december 31 2008 principally funded development projects borrowings us macao singapore bank credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds disposition noncore assets held unrestricted restricted cash equivalents approximately 304 billion 1948 million respectively december 31 2008 commencing september 30 2008 us senior secured credit facility ffe financings require las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio decreases 75x december 31 2008 70x quarterly periods ending march 31 june 30 2009 65x quarterly periods ending september 30 december 31 2009 macao credit facility also requires us comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio decreases 45x december 31 2008 40x quarterly periods ending march 31 june 30 2009 35x quarterly periods ending september 30 december 31 2009 unable maintain compliance financial covenants credit facilities would default respective credit facilities default domestic credit facilities would trigger crossdefault airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default senior notes default macao credit facilities would trigger crossdefault ferry financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able pay refinance amounts may become accelerated agreements could force us restructure alter operations debt obligations las vegas properties achieve levels adjusted ebitda necessary maintain compliance maximum leverage ratio quarterly periods ended september 30 december 31 2008 completed private placement 4750 million convertible senior notes september 2008 21 billion common preferred stock warrants offering november 2008 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” “item 8 financial statements supplementary data notes consolidated financial statements note 9 stockholders’ equity” respectively portion proceeds convertible senior notes used exercise ebitda trueup provision defined quarterly period ended september 30 2008 would sufficient maintain compliance maximum leverage ratio applied quarterly periods ended september 30 december 31 2008 accordingly additional proceeds offerings contributed lvsllc reduce net debt parties domestic credit facilities order maintain compliance maximum leverage ratio quarterly periods ended september 30 december 31 2008 december 31 2008 domestic leverage ratio 62x compared maximum leverage ratio 75x adjusted ebitda generated macao operations sufficient maintain compliance respective maximum leverage ratio quarterly periods ended 2008 december 31 2008 macao leverage ratio 40x compared maximum leverage ratio 45x order fund revised development plan described “ note 1 organization business company development projects” comply maximum leverage ratio covenants us macao credit facilities quarterly periods 2009 beyond utilize cash hand cash flow operations available borrowings credit facilities also need execute combination following measures achieve increased levels adjusted ebitda las vegas macao properties primarily aggressive costcutting measures ii successfully complete sale certain noncore assets eg four seasons apartments malls venetian macao four seasons macao portion proceeds would used repay debt iii elect contribute 50 million 20 million cash hand las vegas macao operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating maximum leverage ratio “ebitda trueup” iv execute debt reduction plan aforementioned measures sufficient fund revised development plan maintain compliance financial covenants may also need execute combination following measures decrease rate spending global development projects ii obtain additional financing parent company level proceeds could used reduce repay debt las vegas andor macao iii consider asset sales iv elect delay payment dividends preferred stock v seek waivers amendments las vegas macao credit facilities however assurance able obtain waivers amendments management believes successful execution combination measures sufficient us fund commitments maintain compliance financial covenants throughout 2009 aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2008 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 based december 31 2008 london interbank offer rate “libor” rate 14 hong kong interbank offer rate “hibor” rate 03 singapore swap offer rate 15 plus applicable interest rate spread accordance respective debt agreements 3 party services agreement third party heating ventilation air conditioning “hvac” energyrelated services las vegas integrated resort right terminate agreement based upon failure hvac provider agreement provide hvac services upon sales grand canal shoppes palazzo ggp assumed responsibility 16 million 12 million respectively annual payments hvac provider subsequent yearend agreed principal hvac provider extension hvac agreement additional tenyear term 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements seven corporate senior executives remaining terms one four years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 7 party certain leaseback agreements blue man group theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2008 annual premium approximately 331 million payable macao government termination gaming subconcession june 2022 9 january 2008 entered agreements purchase four ferries addition ten previously purchased aggregate cost approximately 720 million built macao operations 10 party longterm lease agreement 99 years parking structure located adjacent venetian las vegas 11 party certain operating leases real estate various equipment service arrangements 12 adopted provisions financial accounting standards board interpretation “fin” 48 “accounting uncertainty income taxes interpretation fasb statement 109” january 1 2007 december 31 2008 330 million liability related unrecognized tax benefits related interest expense unable reasonably estimate timing fin 48 liability interest payments individual years beyond 12 months due uncertainties timing effective settlement tax positions offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • substantial leverage debt service debt covenant compliance including sensitivity fluctuations interest rates capital markets trends • recent disruptions global financing markets ability obtain sufficient funding current future developments including cotai strip pennsylvania singapore las vegas developments • general economic business conditions may impact levels disposable income consumer spending pricing hotel rooms retail mall sales • impact suspensions certain development projects ability meet certain development deadlines including macao singapore • uncertainty tourist behavior related spending vacationing casinoresorts las vegas macao singapore • visa restrictions limiting number visits length stay visitors mainland china macao properties • dependence upon properties las vegas macao cash flow • relationship ggp successor owner shoppes palazzo grand canal shoppes ability ggp perform phase ii mall purchase sale agreement amended • new developments construction ventures including cotai strip developments marina bay sands bethlehem st regis residences • passage new legislation receipt governmental approvals proposed developments macao singapore jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage acts terrorism able obtain additional coverage significantly increased rates • disruptions reductions travel due conflicts iraq future terrorist incidents • outbreaks infectious diseases severe acute respiratory syndrome avian flu market areas • government regulation casino industry including gaming license regulation legalization gaming certain domestic jurisdictions including native american reservations regulation gaming internet • increased competition additional construction las vegas including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas • popularity las vegas macao convention trade show destinations • new taxes changes existing tax rates • ability maintain macao gaming subconcession singapore gaming concession • completion infrastructure projects macao singapore • increased competition planned construction projects macao singapore • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts las vegas macao regularly evaluate allowance doubtful casino accounts specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play significant las vegas properties credit table games play represented approximately 576 total table games play macao table games play primarily cash play credit table games play represented approximately 237 total macao table games play however percentage expected increase credit extended junkets allowance doubtful casino accounts 246 265 gross casino receivables customers years ended december 31 2008 2007 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material selfinsurance accruals maintain accruals health workers compensation selfinsurance classified accrued liabilities consolidated balance sheets determine adequacy accruals periodically evaluating historical experience projected trends related accruals consultation outside actuarial experts information indicates accruals overstated understated business conditions indicate adjust assumptions utilized reduce provide additional accruals appropriate litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance statement financial accounting standards “sfas” 5 “accounting contingencies” include accruals accrued liabilities consolidated balance sheets property equipment december 31 2008 net property equipment 1187 billion representing 692 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weightedaverage cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest indefinite useful life assets december 31 2008 500 million asset related sands bethlehem gaming license determined indefinite useful life assets indefinite useful lives subject amortization tested impairment annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized stockbased compensation sfas 123r “sharebased payment” requires recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based combination historical volatility historical volatilities selection companies peer group due lack historical information used simplified method estimating expected option life options qualify “plainvanilla” options continue use simplified method beyond december 31 2008 due lack historical information allowed staff accounting bulletin 110 “sharebased payment” believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s 2004 equity award plan years ended december 31 2008 2007 recorded stockbased compensation expense 539 million 332 million respectively december 31 2008 1543 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 27 million unrecognized compensation cost related nonvested restricted stock option restricted stock costs expected recognized weighted average period 33 years 15 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards sfas 109 “accounting income taxes” requires reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed periodically based sfas 109 morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring unused tax planning alternatives december 31 2008 2007 net deferred tax asset 672 million 309 million respectively appears likely net deferred tax asset realized future taxable earnings operating results less currently projected objectively verifiable evidence support realization deferred tax asset valuation allowance may required reduce deferred tax asset reduction deferred tax asset could increase income tax expense adverse effect results operations tangible net worth period allowance recorded december 31 2008 valuation allowance established us deferred tax asset however continue assess need allowance future periods significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain effective january 1 2007 adopted provisions fin 48 provides twostep approach recognizing measuring uncertain tax positions accounted accordance sfas 109 first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes company’s major tax jurisdictions us macao singapore us company examination years 2004 macao singapore company subject examination years 2003 recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types service products regulatory business environment operations within segment company’s organizational management reporting structure approximately 627 649 gross revenue las vegas operating properties years ended december 31 2009 2008 respectively derived room revenues food beverage services nongaming sources 373 351 respectively derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods approximately 899 gross revenue sands bethlehem period ended december 31 2009 derived gaming activities remainder derived food beverage services nongaming sources macau operating segments consist sands macao venetian macao four seasons macao ancillary operations support properties support remaining cotai strip development projects approximately 936 925 gross revenue sands macao years ended december 31 2009 2008 respectively derived gaming activities remainder primarily derived room revenues food beverage services approximately 814 788 gross revenue venetian macao years ended december 31 2009 2008 respectively derived gaming activities remainder derived room revenues food beverage services nongaming sources approximately 738 684 gross revenue four seasons macao year ended december 31 2009 period ended december 31 2008 derived gaming activities remainder derived retail nongaming sources development projects given challenging conditions capital markets global economy impact ongoing operations revised development plan suspend portions development projects focus development efforts projects highest expected rates return invested capital general economic conditions fail improve unable obtain sufficient funding completion suspended projects probable management decide abandon certain projects portion investment date suspended projects could lost would result impairment charge addition may subject penalties termination clauses construction contracts termination rights management contracts certain hotel management companies united states development project constructing st regis residences located las vegas strip palazzo venetian part revised development plan suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve expect take approximately 18 months thereafter complete construction project macau development projects submitted plans macau government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres refer parcels 3 5 6 7 8 subject approval macau government developments expected include hotels exhibition conference facilities gaming areas showrooms spas dining retail entertainment facilities amenities commenced construction preconstruction developments plan operate related gaming areas macau gaming subconcession sequenced construction integrated resort development parcels 5 6 due difficulties capital markets overall decline general economic conditions phases ii integrated resort expected feature approximately 6000 shangrila traders sheratonbranded hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining facilities exhibition conference facilities multipurpose theater phase iii project expected include fourth st regisbranded hotel mixeduse tower connection receiving commitments 175 billion project financing november 2009 expect close march 2010 used together portion proceeds scl offering recommencing construction phases ii expect take approximately 16 months complete phase additional six months thereafter complete adjacent sheraton tower phase ii additional 24 months thereafter complete remaining retail facilities phase ii intend complete phase iii project demand market conditions warrant commenced preconstruction parcels 7 8 3 intend commence construction integrated resort parcels 5 6 complete necessary government approvals obtained regional global economic conditions improve future demand warrants additional financing obtained singapore development project august 2006 mbs entered development agreement stb build operate integrated resort called marina bay sands singapore marina bay sands expected include three 55story hotel towers totaling approximately 2600 rooms suites casino enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 13 million square feet theaters landmark iconic structure bayfront promenade contain artscience museum based current development plan expect open marina bay sands april 27 2010 development projects current economic environment access capital improve may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe summary financial results following table summarizes results operations historical financial results indicative future results continue open new properties including marina bay sands april 27 2010 key operating revenue measurements operating revenues las vegas operating properties venetian macao four seasons macao dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play hotel revenues material sands macao sands bethlehem revenues principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenue casino revenue measurements us table games drop “drop” slot handle “handle” volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coins placed slot machines aggregate period cited view table games win percentage drop slot hold percentage slot handle based upon mix table games table games produce statistical average win percentage calculated discounts measured percentage drop 200 220 slot machines produce statistical average hold percentage calculated slot club cash incentives measured percentage handle generally 60 70 actual win may vary statistical average generally slot machine play conducted cash basis approximately 575 table games play year ended december 31 2009 conducted credit basis casino revenue measurements macau table games segregated two groups consistent macau market’s convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop previously described rolling chip nonrolling chip volume measurements comparable amounts wagered substantially higher amounts dropped slot handle gross amount wagered coins placed slot machines aggregate period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip table games win percentage calculated discounts commissions expected 30 nonrolling chip table games expected produce statistical average win percentage measured percentage drop 180 200 similar las vegas macau slot machines produce statistical average win percentage measured percentage handle generally 60 70 actual win may vary statistical average generally gaming conducted cash basis 314 table games play year ended december 31 2009 conducted credit basis percentage expected increase credit extended premium players gaming promoters table games play hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate year ended december 31 2009 compared year ended december 31 2008 operating revenues net revenues consisted following consolidated net revenues 456 billion year ended december 31 2009 increase 1732 million compared 439 billion year ended december 31 2008 increase net revenues due primarily full year operations four seasons macao opened august 2008 opening sands bethlehem may 2009 casino revenues increased 3327 million compared year ended december 31 2008 increase 1611 million attributable full year operations four seasons macao 1418 million attributable opening sands bethlehem 891 million venetian macao primarily due increase nonrolling chip win percentage increases partially offset decreases las vegas operating properties sands macao following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues decreased 1093 million compared year ended december 31 2008 room revenues decreased room rates reduced maintain occupancy las vegas operating properties venetian macao decrease partially offset 166 million increase revenues attributable full year operations four seasons macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues decreased 414 million compared year ended december 31 2008 decrease due 662 million decrease across operating properties driven decrease banquet insuite dining operations resulting lower occupancy properties noted lower proportion group corporate businesses decrease offset 133 million attributable sands bethlehem increase 115 million attributable full year operations four seasons macao convention retail revenues increased 123 million compared year ended december 31 2008 increase primarily due increase 242 million attributable mall four seasons macao due full year operations 211 million asia segment driven passenger ferry service operations macau increased frequency sailings commenced night sailings summer 2008 increases partially offset decrease 270 million las vegas operating properties 79 million venetian macao primarily driven decrease convention operations resulting decline global economic conditions operating expenses breakdown operating expenses follows operating expenses 459 billion year ended december 31 2009 increase 3656 million compared 423 billion year ended december 31 2008 increase operating expenses primarily attributable full year operations four seasons macao opening sands bethlehem recognizing impairment losses legal settlement included corporate expense increases provision doubtful accounts depreciation amortization partially offset decrease operating expenses driven decreased revenues well costcutting measures casino expenses increased 1352 million compared year ended december 31 2008 increase 1032 million attributable sands bethlehem 951 million due 390 gross win tax casino revenues macau properties driven primarily increases four seasons macao venetian macao previously described well 365 million exclusive 390 gross win tax casino revenues attributable full year operations four seasons macao increases partially offset combined decrease 996 million operating properties driven costcutting measures rooms expense decreased 335 million food beverage expense decreased 206 million compared year ended december 31 2008 decreases driven associated decreases related revenues described well costcutting measures convention retail expense increased 270 million compared year ended december 31 2008 increase primarily attributable 434 million increase passenger ferry service operations macau partially offset 153 million decrease las vegas operating properties driven associated decrease related revenues well costcutting measures provision doubtful accounts 1038 million year ended december 31 2009 compared 419 million year ended december 31 2008 increase 390 million related casino operations granted credit premium players macau response opening new properties 166 million related mall operations tenants experienced difficulties driven reduced visitation consumer spending result economic downturn amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses decreased 243 million compared year ended december 31 2008 decrease primarily attributable 558 million decrease across operating properties driven costcutting measures 256 million 193 million 109 million las vegas operating properties venetian macao sands macao respectively well 177 million decrease asia decrease partially offset expenses 250 million 242 million attributable sands bethlehem four season macao respectively corporate expense increased 277 million compared year ended december 31 2008 increase attributable 425 million legal settlement see “item 3 legal proceedings” partially offset decrease 148 million corporate costs driven costcutting measures preopening expenses 1577 million year ended december 31 2009 compared 1623 million year ended december 31 2008 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2009 primarily related activities marina bay sands bethlehem well costs associated suspension activities cotai strip developments development expenses material years ended december 31 2009 2008 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 791 million compared year ended december 31 2008 increase primarily attributable full year depreciation expense related four seasons macao opening sands bethlehem contributed 376 million 175 million respectively additionally increases 118 million 79 million attributable venetian macao palazzo respectively properties unopened areas entire year ended december 31 2008 impairment loss 1695 million year ended december 31 2009 consisting primarily 940 million related reduction expected proceeds received sale shoppes palazzo 572 million related indefinite suspension plans expand sands expo center 150 million related certain real estate previously utilized connection marketing activities asia adjusted property ebitdar adjusted property ebitdar used management primary measure operating performance segments adjusted property ebitdar net loss attributable las vegas sands corp interest income taxes depreciation amortization preopening expense development expense income expense loss modification early retirement debt impairment loss disposal assets rental expense corporate expense stockbased compensation expense net loss attributable noncontrolling interests following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitdar net loss attributable las vegas sands corp adjusted property ebitdar across operating properties includes savings benefits costcutting measures management expects generate approximately 500 million total annualized savings across operations driven primarily decreases payrollrelated expenses costcutting measures fully implemented end 2009 expected generate annualized savings approximately 200 million las vegas approximately 300 million macau management believes cost savings provide enhanced operating leverage global economy improves adjusted property ebitdar venetian macao increased 575 million compared year ended december 31 2008 increase primarily due increase net revenues 474 million well reduced expenses driven costcutting measures previously described adjusted property ebitdar sands macao increased 304 million compared year ended december 31 2008 increase primarily due decrease operating expenses driven costcutting measures 317 million decrease casino expenses exclusive 39 gross win tax casino revenues 109 million decrease general administrative expenses decreases expenses partially offset increase 177 million provision doubtful accounts adjusted property ebitdar asia segment increased 169 million compared year ended december 31 2008 previously described passenger ferry service operations increased due increased number sailings adjusted property ebitdar las vegas operating properties decreased 1329 million compared year ended december 31 2008 decrease primarily due decrease net revenues 2347 million partially offset decreases associated operating expenses decrease 256 million general administrative expenses driven costcutting measures 108 million payrollrelated expenses adjusted property ebitdar four seasons macao sands bethlehem comparable prioryear period results operations four seasons macao sands bethlehem previously described interest expense following table summarizes information related interest expense longterm debt interest cost decreased 1657 million compared year ended december 31 2008 resulting decrease weighted average interest rate partially offset increase weighted average longterm debt balances capitalized interest decreased 658 million compared year ended december 31 2008 primarily due suspension cotai strip developments completion four seasons macao sands bethlehem decrease weighted average interest rate leasehold interest land payments made macau singapore considered qualifying assets included base amount used determine capitalized interest factors effecting earnings expense 99 million year ended december 31 2009 compared income 195 million year ended december 31 2008 expense year ended december 31 2009 primarily attributable decrease fair value interest rate cap agreements held singapore loss modification early retirement debt 232 million year ended december 31 2009 compared 91 million year ended december 31 2008 year ended december 31 2009 171 million loss resulted early retirement 6000 million exchangeable bonds see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt macau related debt exchangeable bonds” 60 million loss resulted writeoff deferred financing costs related 5000 million required pay macau credit facility connection scl offering see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt macau related debt macau credit facility” effective income tax rate beneficial rate 10 year ended december 31 2009 compared beneficial rate 262 year ended december 31 2008 effective income tax rate year ended december 31 2009 includes recording valuation allowance net deferred tax assets us operations zero percent tax rate macau gaming operations due income tax exemption macau set expire 2013 nondeductible preopening expenses foreign subsidiaries nonrealizable net operating losses us foreign jurisdictions unfavorably impacted effective income tax rate management anticipate recording income tax benefit related deferred tax assets generated us operations however extent financial results us operations improve becomes likely deferred tax assets realizable able reduce valuation allowance earnings year ended december 31 2008 compared year ended december 31 2007 operating revenues net revenues consisted following consolidated net revenues 439 billion year ended december 31 2008 increase 144 billion compared 295 billion year ended december 31 2007 increase net revenues due primarily full year operations venetian macao opened august 2007 palazzo opened december 2007 opening four seasons macao august 2008 casino revenues increased 9417 million compared year ended december 31 2007 increase 106 billion attributable full year operations venetian macao 461 million attributable opening four seasons macao offset 2838 million decrease sands macao due primarily increased competition compared year ended december 31 2007 casino revenues las vegas operating properties increased 1182 million driven opening palazzo offset lower expected table games volume win percentage compared year ended december 31 2007 following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 3298 million compared year ended december 31 2007 due primarily full year operations venetian macao palazzo increase las vegas operating properties offset reduced adr occupancy rates negatively impacted reduction room rates order increase visitation palazzo excess suite inventory new resort ramps operations respectively overall decline general economic conditions room revenues four seasons macao negatively impacted low occupancy rate due slow ramp property offset adr 344 period ended december 31 2008 suites sands macao primarily provided casino patrons complimentary basis therefore revenues 271 million 116 million years ended december 31 2008 2007 respectively related statistics included following table summarizes results room activity food beverage revenues increased 1308 million compared year ended december 31 2007 increase primarily attributable full year operations venetian macao increased 440 million palazzo primary driver 850 million increase las vegas operating properties well several joint venture restaurants opened 2008 convention retail revenues increased 2284 million compared year ended december 31 2007 increase primarily attributable increase 1251 million venetian macao consisted primarily full year rental revenues mall 521 million las vegas operating properties driven primarily full year operations palazzo 399 million asia consisted primarily passenger ferry service operations operating expenses breakdown operating expenses follows operating expenses 423 billion year ended december 31 2008 increase 161 billion compared 262 billion year ended december 31 2007 increase operating expenses primarily attributable full year operations venetian macao palazzo opening four seasons macao growth operating businesses macau las vegas depreciation amortization costs fully described casino expenses increased 7786 million compared year ended december 31 2007 increase 5072 million due 390 gross win tax casino revenues venetian macao offset 1125 million decrease gross win tax sands macao due decrease casino revenues noted additional 2385 million increase casinorelated expenses exclusive aforementioned 390 gross win tax attributable venetian macao primarily related payrollrelated expenses commissions paid rolling chip program casino expenses las vegas operating properties increased 1199 million primarily due palazzo consisting principally payrollrelated expenses gamingrelated taxes increase costs providing promotional allowances rooms expense increased 604 million food beverage expense increased 683 million compared year ended december 31 2007 increases primarily due venetian macao palazzo four seasons macao convention retail expense increased 1157 million compared year ended december 31 2007 378 million attributable venetian macao 295 million attributable las vegas operating properties remaining increase primarily attributable passenger ferry service operations macau provision doubtful accounts 419 million year ended december 31 2008 compared 264 million year ended december 31 2007 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 2312 million compared year ended december 31 2007 increase primarily attributable growth operating businesses las vegas macau asia segment 927 million increase incurred las vegas operating properties 1120 million incurred venetian macao 151 million incurred asia preopening development expenses 1623 million 128 million respectively year ended december 31 2008 compared 1893 million 97 million respectively year ended december 31 2007 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2008 primarily related activities four seasons macao cotai strip developments marina bay sands bethlehem st regis residences development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2008 primarily related activities hengqin island asia europe us depreciation amortization expense increased 3044 million compared year ended december 31 2007 increase primarily attributable venetian macao totaling 1305 million palazzo totaling 1313 million four seasons macao totaling 164 million impairment loss 376 million year ended december 31 2008 primarily related certain real estate transportation assets previously utilized connection marketing activities asia adjusted property ebitdar adjusted property ebitdar used management primary measure operating performance segments adjusted property ebitdar net income loss attributable las vegas sands corp interest income taxes depreciation amortization preopening expense development expense income expense loss modification early retirement debt impairment loss disposal assets rental expense corporate expense stockbased compensation expense net loss attributable noncontrolling interests following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitdar net income loss attributable las vegas sands corp adjusted property ebitdar sands macao decreased 1589 million compared year ended december 31 2007 previously described decrease primarily attributable decrease casino revenues 2838 million offset 1125 million decrease gross win tax reduced casino revenues result increased competition expect 2008 results sands macao representative future results prior periods opening palazzo adjusted property ebitdar las vegas operating properties increased 311 million compared year ended december 31 2007 increase primarily attributable increase 3509 million net revenue offset increase 1658 million payrollrelated expenses increases operating expenses associated increase related revenue categories increase general administrative expenses support growth las vegas operating properties adjusted property ebitdar venetian macao four seasons macao asia segments comparable prioryear periods results operations segments previously described asia segment composed primarily passenger ferry service macau hong kong initiated evening sailings increased frequency sailings peak hours june 2008 interest expense following table summarizes information related interest expense longterm debt interest cost increased 850 million compared year ended december 31 2007 resulting substantial increase weighted average longterm debt balances proceeds primarily used fund various development projects partially offset decrease interest rates see “ liquidity capital resources” detail financing activities capitalized interest decreased 920 million compared year ended december 31 2007 due primarily openings venetian macao palazzo 2007 four seasons macao august 2008 capitalized interest expected decrease 2009 discontinued capitalizing interest recently suspended projects leasehold interest land payments made macau singapore considered qualifying assets included base amount used determine capitalized interest factors effecting earnings interest income year ended december 31 2008 198 million decrease 527 million compared 725 million year ended december 31 2007 decrease attributable reduction invested cash balances year primarily borrowings us senior secured credit facility macau credit facility spent constructionrelated activities well decrease interest rates income year ended december 31 2008 195 million compared expense 87 million year ended december 31 2007 income expense amounts primarily attributable foreign exchange gains losses associated us denominated debt held macau change fair value singapore interest rate caps entered 2008 loss early retirement debt 91 million year ended december 31 2008 due conversion 4750 million convertible senior notes shares common stock refinancing singapore bridge facility effective tax rate year ended december 31 2008 beneficial rate 262 effective tax rate benefit year reflects pretax book loss us statutory rate 35 zero tax rate income tax exemption macau gaming operations set expire 2013 nondeductible preopening expenses foreign subsidiaries nonrealizable net operating losses foreign jurisdictions unfavorably impacted rate effective tax rate year ended december 31 2007 156 primarily attributable aforementioned macau income tax exemption effective tax rate changed primarily due pretax domestic loss year ended december 31 2008 pretax foreign income year ended december 31 2007 liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play las vegas properties conducted cash credit basis table games play macau properties conducted primarily cash basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash provided operating activities increased 5137 million compared year ended december 31 2008 increase attributable reduction cash paid interest 981 million increase 535 million income tax refunds received favorable changes working capital driven accounts receivable accrued liabilities year ended december 31 2009 cash flows investing activities capital expenditures year ended december 31 2009 totaled 209 billion including 134 billion construction development activities singapore 2477 million construction development activities pennsylvania 4043 million construction development activities macau primarily unopened areas four seasons macao cotai strip developments 659 million las vegas operating properties primarily shoppes palazzo 368 million corporate activities cash flows financing activities net cash flows provided financing activities 331 billion year ended december 31 2009 primarily included proceeds 239 billion scl offering related transactions see “item 8 financial statements supplementary data notes consolidated financial statements note 9 equity noncontrolling interests” 6000 million exchangeable bond offering net borrowings 120 billion singapore credit facility repayments 6626 million macau credit facility 400 million us credit facility payments 947 million preferred stock dividends 404 million deferred financing costs development financing strategy december 31 2009 funded development projects primarily borrowings us macau singapore credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds recent equity offerings proceeds disposition noncore assets us credit facility ffe facility require las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 65x quarterly period ended december 31 2009 decreases 05x every quarter decreases remains 50x quarterly periods thereafter maturity commencing quarterly period ending march 31 2011 macau credit facility amended august 2009 requires macau operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly period ended december 31 2009 decreases 05x every quarter decreases remains 30x quarterly periods thereafter maturity commencing quarterly period ending march 31 2011 elect contribute 50 million 20 million cash hand las vegas macau operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facilities would trigger crossdefault airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default senior notes default macau credit facility would trigger crossdefault ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations 2008 completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering 2009 completed 6000 million exchangeable bond offering 25 billion scl offering see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt macau related debt exchangeable bonds” “item 8 financial statements supplementary data notes consolidated financial statements note 9 equity noncontrolling interests” portion proceeds offerings used us exercise ebitda trueup provision quarterly periods ended march 31 september 30 2009 additional proceeds contributed las vegas sands llc reduce net debt order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2009 december 31 2009 us leverage ratio 53x compared maximum leverage ratio allowed 65x proceeds also used macau exercise ebitda trueup provision quarterly period ended june 30 2009 cash hand used pay 1250 million indebtedness macau credit facility march 2009 order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2009 november 2009 connection scl offering required repay permanently reduce 5000 million borrowings macau credit facility december 31 2009 macau leverage ratio 28x compared maximum leverage ratio allowed 45x held unrestricted restricted cash equivalents approximately 496 billion 1186 million respectively december 31 2009 management believes cash hand cash flow operations available borrowings credit facilities sufficient fund revised development plan described “item 1 business development projects” maintain compliance financial covenants us macau credit facilities normal course activities continue evaluate capital structure opportunities enhancements thereof additionally connection receiving proceeds proposed 175 billion project financing credit facility expect close march 2010 used together 5000 million proceeds scl offering recommencing construction phases ii cotai strip development parcel 5 6 aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2009 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 based december 31 2009 london interbank offered rate “libor” 03 hong kong interbank offered rate “hibor” 01 singapore swap offer rate “sor” 06 plus applicable interest rate spread accordance respective debt agreements 3 july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements eight executive officers remaining terms one three years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macau law land lease cotai strip parcels 5 6 effective published macau’s official gazette management expects occur first quarter 2010 included related premium rent payments accordingly 7 party certain leaseback agreements blue man group theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macau included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2009 annual premium approximately 324 million payable macau government termination gaming subconcession june 2022 9 party longterm lease agreement 99 years parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 adopted accounting standards uncertainty income tax january 1 2007 december 31 2009 661 million liability related unrecognized tax benefits related interest expense unable reasonably estimate timing liability interest payments related adoption accounting standards individual years beyond 12 months due uncertainties timing effective settlement tax positions offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macau singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forward looking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • substantial leverage debt service debt covenant compliance including sensitivity fluctuations interest rates capital markets trends • disruptions global financing markets ability obtain sufficient funding current future developments including cotai strip singapore pennsylvania las vegas developments • general economic business conditions may impact levels disposable income consumer spending pricing hotel rooms retail mall sales • impact suspensions certain development projects ability meet certain development deadlines including macau singapore • uncertainty tourist behavior related spending vacationing casinoresorts las vegas macau singapore • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macau restrictions foreign currency exchange importation currency • dependence upon properties primarily las vegas macau following opening marina bay sands singapore cash flow • expected annualized savings enhanced operating leverage generated costcutting measures may fully realized • relationship ggp successor owner shoppes palazzo grand canal shoppes ability ggp perform purchase sale agreement shoppes palazzo amended • new developments construction ventures including cotai strip developments marina bay sands bethlehem st regis residences • passage new legislation receipt governmental approvals proposed developments macau singapore jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel due acts terrorism • disruptions reductions travel well disruptions operations due outbreaks infectious diseases severe acute respiratory syndrome avian flu swine flu • government regulation casino industry including gaming license regulation legalization gaming jurisdictions regulation gaming internet • increased competition additional construction las vegas including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas macau • popularity las vegas macau following opening marina bay sands singapore convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain macau gaming subconcession pennsylvania gaming licence obtain singapore gaming license • completion infrastructure projects macau singapore • increased competition planned construction projects macau singapore • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts las vegas macau regularly evaluate allowance doubtful casino accounts specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 575 314 table games play las vegas properties macau properties respectively year ended december 31 2009 allowance doubtful casino accounts 299 246 gross casino receivables customers years ended december 31 2009 2008 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance accounting standards regarding contingencies include accruals accrued liabilities consolidated balance sheets property equipment december 31 2009 net property equipment 1335 billion representing 649 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weightedaverage cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest indefinite useful life assets december 31 2009 500 million asset related sands bethlehem gaming license determined indefinite useful life assets indefinite useful lives subject amortization tested impairment annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized fair value sands bethlehem gaming license estimated using expected adjusted property ebitdar combined estimated future taxaffected cash flows terminal value using gordon growth methodology discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitdar discounted cash flows common measures used value cashincentive businesses casinos determining fair value gaming license judgmental nature requires use significant estimates assumptions including adjusted property ebitdar growth rates discount rates future market conditions among others future changes estimates assumptions based upon unanticipated changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based combination historical volatility historical volatilities selection companies peer group due lack historical information used simplified method estimating expected option life options qualify “plainvanilla” options continue use simplified method beyond december 31 2009 due lack historical information allowed related accounting standards believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s 2004 equity award plan years ended december 31 2009 2008 recorded stockbased compensation expense 455 million 539 million respectively december 31 2009 873 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 03 million unrecognized compensation cost related unvested restricted stock option restricted stock costs expected recognized weighted average period 25 years 08 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes requires reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed periodically based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring unused tax planning alternatives us operations cumulative loss position threeyear period ended december 31 2009 purposes assessing realization us deferred tax assets considered scheduled reversal deferred tax liabilities sources taxable income tax planning strategies based related accounting standards cumulative loss position caused management conclude likely us deferred tax assets fully realized recorded valuation allowance net deferred tax assets us operations valuation allowance 969 million december 31 2009 management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results us operations improve becomes likely deferred tax assets realizable able reduce valuation allowance earnings significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes major tax jurisdictions us macau singapore examination years 2004 us subject examination years 2004 macau singapore recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment macao operating segments consist venetian macao sands macao four seasons macao sands cotai central opened ancillary operations support properties approximately 830 827 gross revenue venetian macao years ended december 31 2011 2010 respectively derived gaming activities remainder derived room mall food beverage nongaming sources approximately 944 942 gross revenue sands macao years ended december 31 2011 2010 respectively derived gaming activities remainder primarily derived food beverage approximately 826 820 gross revenue four seasons macao years ended december 31 2011 2010 respectively derived gaming activities remainder derived mall nongaming sources singapore operating segment consists marina bay sands partially opened april 27 2010 additional portions opened progressively throughout 2010 approximately 765 798 gross revenue marina bay sands year ended december 31 2011 period ended december 31 2010 respectively derived gaming activities remainder derived room food beverage mall nongaming sources operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure approximately 693 638 gross revenue las vegas operating properties years ended december 31 2011 2010 respectively derived room food beverage nongaming sources 307 362 respectively derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods approximately 898 921 gross revenue sands bethlehem years ended december 31 2011 2010 respectively derived gaming activities remainder derived food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including sands cotai central integrated resort expected open april 2012 key operating revenue measurements operating revenues venetian macao four seasons macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms volume play table games slot machines including similar electronic gaming devices operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” sum markers issued credit instruments less markers paid table plus cash deposited table drop box rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 275 345 respectively table games play conducted credit basis year ended december 31 2011 casino revenue measurements us volume measurements us table games drop slot handle previously described view table games win percentage drop slot hold percentage handle macao singapore slot machine play generally conducted cash basis approximately 717 table games play las vegas year ended december 31 2011 conducted credit basis table games play pennsylvania commenced july 2010 primarily conducted cash basis hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2011 compared year ended december 31 2010 operating revenues net revenues consisted following consolidated net revenues 941 billion year ended december 31 2011 increase 256 billion compared 685 billion year ended december 31 2010 increase net revenues primarily driven 166 billion increase progressive opening marina bay sands well 7192 million increase across macao operations 1115 million increase las vegas operating properties casino revenues increased 190 billion compared year ended december 31 2010 increase primarily due 130 billion increase marina bay sands 5765 million increase macao operations primarily driven increase rolling chip volume following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 2025 million compared year ended december 31 2010 increase room revenues primarily due 1699 million increase marina bay sands well increases venetian macao four seasons macao las vegas operating properties driven increase average daily room rates hotel tower sands bethlehem opened may 2011 suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1523 million compared year ended december 31 2010 increase primarily due 1083 million increase marina bay sands 291 million increase las vegas operating properties driven increased banquet activities mall revenues increased 1385 million compared year ended december 31 2010 increase primarily attributable 909 million increase marina bay sands well increases 243 million 231 million four seasons macao venetian macao respectively primarily due higher overage rent following table summarizes results mall activity convention retail revenues increased 1472 million compared year ended december 31 2010 increase primarily due 868 million increase marina bay sands 375 million increase asia driven ferry operations operating expenses breakdown operating expenses follows operating expenses 702 billion year ended december 31 2011 increase 135 billion compared 567 billion year ended december 31 2010 increase operating expenses primarily attributable progressive opening marina bay sands well increased casino activity macao operations increase corporate expense general administrative expenses partially offset decrease preopening expenses casino expenses increased 7587 million compared year ended december 31 2010 increase 4259 million attributable marina bay sands 2663 million due 390 gross win tax increased casino revenues across macao operations mall expenses increased 154 million compared year ended december 31 2010 increase primarily due 151 million increase marina bay sands rooms food beverage convention retail expenses increased 667 million 995 million 1072 million respectively compared year ended december 31 2010 increases driven associated increases related revenues described provision doubtful accounts 1505 million year ended december 31 2011 compared 978 million year ended december 31 2010 increase primarily due 656 million increase provisions marina bay sands amount provision vary short periods time factors specific customers owe us money given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 1536 million compared year ended december 31 2010 increase primarily due 1284 million increase marina bay sands corporate expense increased 768 million compared year ended december 31 2010 increase primarily due increased legal expenses higher incentive compensation expenses preopening expenses 658 million year ended december 31 2011 compared 1148 million year ended december 31 2010 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2011 primarily related activities sands cotai central preopening expenses year ended december 31 2010 primarily related activities marina bay sands costs associated recommencing work sands cotai central development expenses material years ended december 31 2011 2010 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 994 million compared year ended december 31 2010 increase primarily result opening marina bay sands contributed 1284 million increase partially offset decreases macao operations due certain assets fully depreciated loss disposal assets 102 million year ended december 31 2011 compared 386 million year ended december 31 2010 loss year ended december 31 2011 related disposition one majority owned subsidiaries well disposition construction materials equipment macao losses incurred year ended december 31 2010 principally related disposition construction materials macao las vegas adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net income royalty fees stockbased compensation expense corporate expense rental expense preopening expense development expense depreciation amortization impairment loss disposal assets interest expense loss modification early retirement debt income taxes following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 18 segment information” discussion operating segments reconciliation adjusted property ebitda net income adjusted property ebitda macao operations increased 3599 million compared year ended december 31 2010 led increase 2130 million venetian macao previously described increase across properties primarily attributable combined increase net revenues 7192 million partially offset increase 2663 million gross win tax increased casino revenues well increases associated operating expenses adjusted property ebitda marina bay sands comparable prioryear period property opened april 2010 adjusted property ebitda las vegas operating properties increased 232 million compared year ended december 31 2010 increase primarily attributable increase net revenues 593 million excluding intersegment royalty revenue partially offset increases associated operating expenses adjusted property ebitda sands bethlehem increased 318 million compared year ended december 31 2010 increase primarily driven commencement table games operations july 2010 interest expense following table summarizes information related interest expense longterm debt interest cost decreased 73 million compared year ended december 31 2010 resulting decrease weighted average debt balance partially offset slight increase weighted average interest rate capitalized interest increased 211 million compared year ended december 31 2010 primarily due increased construction activities sands cotai central macao factors effecting earnings expense 40 million year ended december 31 2011 compared 83 million year ended december 31 2010 expense year ended december 31 2011 primarily due decreases fair value interest rate cap agreements macao singapore foreign exchange losses loss modification early retirement debt 226 million year ended december 31 2011 primarily due refinancing vml vol credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt macao related debt” effective income tax rate 101 year ended december 31 2011 compared 87 year ended december 31 2010 effective income tax rate years ended december 31 2011 2010 reflects 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao extended expire 2013 recorded valuation allowance related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 3230 million year ended december 31 2011 compared 1822 million year ended december 31 2010 amounts primarily related noncontrolling interest scl year ended december 31 2010 compared year ended december 31 2009 operating revenues net revenues consisted following consolidated net revenues 685 billion year ended december 31 2010 increase 229 billion compared 456 billion year ended december 31 2009 increase net revenues driven 126 billion net revenues marina bay sands opened april 2010 well increase 8495 million across macao operations 1068 million las vegas operating properties casino revenues increased 201 billion compared year ended december 31 2009 increase 106 billion attributable marina bay sands 7784 million due macao operations primarily driven increase rolling chip activity following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1397 million compared year ended december 31 2009 increase room revenues attributable 986 million marina bay sands well increases venetian macao four seasons macao las vegas operating properties driven increased visitation well increase average daily room rates venetian macao four seasons macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1188 million compared year ended december 31 2009 increase primarily attributable 836 million revenues marina bay sands 196 million macao operations mall revenues increased 493 million compared year ended december 31 2009 increase primarily attributable 468 million mall revenues marina bay sands following table summarizes results mall activity convention retail revenues increased 723 million compared year ended december 31 2009 increase primarily attributable 407 million revenues marina bay sands operating expenses breakdown operating expenses follows operating expenses 567 billion year ended december 31 2010 increase 108 billion compared 459 billion year ended december 31 2009 increase operating expenses primarily attributable opening marina bay sands increased casino activity across properties increase general administrative expenses depreciation amortization expense partially offset decreases due 1695 million impairment charge 425 million legal settlement included corporate expense recorded year ended december 31 2009 casino expenses increased 8998 million compared year ended december 31 2009 increase 4082 million due 390 gross win tax increased casino revenues across macao operations 3590 million attributable marina bay sands opened april 27 2010 well increase 935 million sands bethlehem open part 2009 rooms expense increased 222 million food beverage expense increased 420 million compared year ended december 31 2009 increases driven associated increases related revenues described mall expense increased 111 million compared year ended december 31 2009 increase attributable 119 million expenses marina bay sands convention retail expense increased 232 million compared year ended december 31 2009 increase primarily attributable 149 million expenses marina bay sands provision doubtful accounts 978 million year ended december 31 2010 compared 1038 million year ended december 31 2009 decrease attributable overall decrease provision receivables across properties result higher provision year ended december 31 2009 due economic conditions 2009 partially offset 275 million provision casino receivables marina bay sands amount provision vary short periods time factors specific customers owe us money given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 1571 million compared year ended december 31 2009 increase primarily attributable 1579 million expenses marina bay sands corporate expense decreased 233 million compared year ended december 31 2009 decrease attributable 425 million legal settlement recorded year ended december 31 2009 partially offset increase 224 million corporate payrollrelated expenses preopening expenses 1148 million year ended december 31 2010 compared 1577 million year ended december 31 2009 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2010 primarily related activities marina bay sands cotai central development expenses material years ended december 31 2010 2009 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 1089 million compared year ended december 31 2009 increase primarily result opening marina bay sands full year depreciation expense sands bethlehem contributed 1191 million 106 million respectively impairment loss 161 million year ended december 31 2010 compared 1695 million year ended december 31 2009 impairment loss year ended december 31 2010 related equipment macao expected disposed impairment loss year ended december 31 2009 consisted primarily 940 million related reduction expected proceeds received sale shoppes palazzo 572 million related indefinite suspension plans expand sands expo center 150 million related certain real estate previously utilized connection marketing activities asia loss disposal assets 386 million year ended december 31 2010 compared 92 million year ended december 31 2009 loss year ended december 31 2010 related disposition construction materials macao las vegas adjusted property ebitda following table summarizes information related segments adjusted property ebitda macao operations increased 4082 million compared year ended december 31 2009 led increase 2533 million venetian macao previously described increase across properties primarily attributable combined increase net revenues 8495 million partially offset increase 4082 million gross win tax increased casino revenues well increases associated operating expenses adjusted property ebitda las vegas operating properties increased 510 million compared year ended december 31 2009 increase primarily attributable increase net revenues 1068 million partially offset increases associated operating expenses adjusted property ebitda marina bay sands opened april 2010 sands bethlehem opened may 2009 comparable prioryear period results operations previously described interest expense following table summarizes information related interest expense longterm debt interest cost increased 273 million compared year ended december 31 2009 increase primarily attributable increase weighted average interest rate driven vol credit facility amendment us credit facility partially offset decrease weighted average debt balance result repayments us vml credit facilities increase capitalized interest driven recommencement activities sands cotai central macao 2010 factors effecting earnings expense 83 million year ended december 31 2010 compared 99 million year ended december 31 2009 expense year ended december 31 2010 primarily attributable foreign exchange losses decreases fair value interest rate cap agreements macao singapore loss modification early retirement debt 186 million year ended december 31 2010 primarily related 211 million loss related amendment us credit facility august 2010 partially offset gain early retirement debt 34 million related repurchase 603 million outstanding principal senior notes see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” effective income tax rate 87 year ended december 31 2010 compared beneficial rate 10 year ended december 31 2009 effective income tax rate year ended december 31 2010 reflects 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao extended expire 2013 effective income tax rate year ended december 31 2009 includes recording valuation allowance net deferred tax assets us operations recorded income tax benefit related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 1822 million year ended december 31 2010 compared net loss 143 million year ended december 31 2009 amounts primarily related noncontrolling interest scl development projects suspended portions development projects general economic conditions fail improve unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion investment date suspended projects could lost would result impairment charge macao submitted plans macao government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres refer sands cotai central parcels 3 7 8 subject approval macao government discussed developments expected include hotels exhibition conference facilities gaming areas showrooms spas dining retail entertainment facilities amenities commenced construction preconstruction activities developments plan operate related gaming areas macao gaming subconcession addition completing development public areas surrounding cotai strip properties behalf macao government currently intend develop cotai strip properties follows • sands cotai central staging construction sands cotai central integrated resort upon completion phases ii project integrated resort feature approximately 5800 hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining exhibition conference facilities multipurpose theater phase currently expected open april 2012 consists hotel tower parcel 5 managed hilton worldwide include 600 fivestar rooms suites conrad brand intercontinental hotels group include 1200 fourstar rooms suites holiday inn brand phase also includes completion structural work adjacent hotel tower located parcel 6 managed sheraton international inc sheraton overseas management co collectively “starwood” sheraton towers brand variety retail offerings 300000 square feet meeting space several food beverage establishments along 106000squarefoot casino vip gaming areas phase iia currently scheduled open third quarter 2012 includes opening first hotel tower parcel 6 feature nearly 2000 sheratonbranded rooms along second casino remaining retail entertainment dining meeting facilities phase iib projected open first quarter 2013 consists second hotel tower parcel 6 feature additional 2000 rooms suites sheraton towers brand total cost complete phases ii expected approximately 16 billion phase iii project expected include fourth hotel mixeduse tower located parcel 5 managed starwood st regis brand total cost complete expected approximately 450 million intend commence construction phase iii project demand market conditions warrant december 31 2011 capitalized costs 306 billion entire project including land premium net amortization 2137 million outstanding construction payables management agreement starwood imposed certain construction deadlines opening obligations us certain past andor anticipated delays described would allowed starwood terminate agreement november 2011 amended management agreement starwood among things provide new construction opening obligations deadlines • parcel 3 completed integrated resort parcel 3 connected venetian macao four seasons macao multihotel complex intended include gaming area shopping mall serviced luxury aparthotel units commenced preconstruction activities capitalized costs 960 million including land premium net amortization december 31 2011 intend commence construction sands cotai central complete necessary government approvals obtained • parcels 7 8 consistent original plans commenced preconstruction activities capitalized construction costs 1011 million december 31 2011 intended commence construction sands cotai central integrated resort parcel 3 completed necessary government approvals obtained including land concession assuming future demand warrants additional financing obtained successful winning judicial appeal obtaining land concession parcels 7 8 discussed able proceed portion development planned related integrated resort expected similar size scope sands cotai central impact delayed construction previously estimated cost complete cotai strip developments parcels 3 7 8 currently determinable certainty december 31 2011 capitalized aggregate 749 billion construction costs land premiums net amortization cotai strip developments including venetian macao four seasons macao sands cotai central well investments transportation infrastructure including passenger ferry service operations addition funding phases ii sands cotai central borrowings new 37 billion macao credit facility entered september 2011 “2011 vml credit facility” see “ liquidity capital resources development financing strategy” disclosure need arrange additional financing fund balance cotai strip developments assurance able obtain additional financing required terms suitable company land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law received land concessions macao government build parcels 1 2 3 5 6 including sites venetian macao parcel 1 four seasons macao parcel 2 sands cotai central parcels 5 6 located land sites macao however land concessions grant us exclusive use land specified land concessions required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions december 2010 received notice macao government application land concession parcels 7 8 approved applied chief executive macao executive review decision january 2011 filed judicial appeal court second instance macao yet issue decision win judicial appeal still possible chief executive macao deny land concession based upon public policy considerations obtain land concession receive full reimbursement capitalized investment project would record charge portion 1011 million capitalized construction costs december 31 2011 related development parcels 7 8 land concession parcel 3 initially required complete corresponding development august 2011 macao government granted us twoyear extension complete development parcel 3 must completed april 2013 land concession sands cotai central contains similar requirement corresponding development completed may 2014 48 months date land concession became effective intend apply extension macao government complete parcel 3 development unable meet april 2013 deadline determine unable complete sands cotai central may 2014 also intend apply extension government assurances given additional extensions granted unable meet applicable deadline sands cotai central deadlines either development extended could lose land concessions parcel 3 sands cotai central would prohibit us operating facilities developed respective land concessions result could record charge portion 960 million 306 billion capitalized construction costs december 31 2011 related development parcels 3 sands cotai central respectively united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve december 31 2011 capitalized construction costs 1783 million project impact suspension estimated overall cost project currently determinable certainty continue aggressively pursue variety new development opportunities around world liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash provided operating activities increased 7923 million compared year ended december 31 2010 increase attributable primarily increase operating income year ended december 31 2011 previously described cash flows investing activities capital expenditures year ended december 31 2011 totaled 151 billion including 9154 million construction development activities macao primarily sands cotai central development 4661 million construction activities singapore 563 million construction activities sands bethlehem 707 million las vegas operating properties corporate activities cash flows financing activities net cash flows used financing activities 109 billion year ended december 31 2011 primarily attributable repayments 206 billion vml credit facility 7497 million vol credit facility 4186 million singapore credit facility payments 8453 million repurchases redemption preferred stock 753 million preferred stock dividends 169 million induce exercise warrants settlement tendering preferred stock uses partially offset proceeds 320 billion 2011 vml credit facility december 31 2011 110 billion available borrowing revolving portions us macao singapore credit facilities net letters credit outstanding banker’s guarantees undrawn amounts committed funded lehman brothersrelated subsidiaries development financing strategy december 31 2011 funded development projects primarily borrowings us macao singapore credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” operating cash flows proceeds equity offerings proceeds disposition noncore assets us credit facility amended august 2010 requires las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 60x quarterly period ended december 31 2011 decreases 55x quarterly periods ended march 31 june 30 2012 decreases 50x quarterly periods thereafter maturity elect contribute 50 million cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” singapore credit facility requires operations marina bay sands comply similar financial covenants commenced quarterly period ended september 30 2011 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 55x quarterly period ended december 31 2011 decreases 525x quarterly period ended march 31 2012 decreases 025x every quarter september 30 2014 decreases remains 375x quarterly periods thereafter maturity macao 2011 vml credit facility entered september 2011 also require macao operations comply similar financial covenants commencing quarterly period ended march 31 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly periods ended march 31 2012 june 30 2013 decreases 40x quarterly periods ended september 30 2013 december 31 2014 decreases 35x quarterly periods ended march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default senior notes certain defaults 2011 vml credit facility would trigger crossdefault ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations 2008 completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering preferred stock became redeemable option november 2011 2009 completed 6000 million exchangeable bond offering 25 billion scl offering see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt macao related debt exchangeable bonds” “item 8 financial statements supplementary data notes consolidated financial statements note 10 equity noncontrolling interests” portion proceeds offerings used us pay 7759 million revolving portion us credit facility march 2010 10 billion term loan portions us credit facility august 2010 exercise ebitda trueup provision quarterly period ended march 31 2011 december 31 2011 us singapore macao leverage ratios 39x 24x 20x respectively compared maximum leverage ratios allowed 60x 55x 45x effective quarterly period ending march 31 2012 respectively held unrestricted restricted cash equivalents approximately 390 billion 71 million respectively december 31 2011 approximately 315 billion unrestricted amount held nonus subsidiaries 315 billion approximately 237 billion available repatriated us minimal taxes owed amounts due company’s significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations available borrowings credit facilities sufficient fund developments currently construction maintain compliance financial covenants us macao singapore credit facilities normal course activities continue evaluate capital structure opportunities enhancements thereof november 2011 completed 37 billion 2011 vml credit facility used repay outstanding indebtedness vml vol credit facilities well continue fund development construction completion certain components sands cotai central part regular cash dividend program january 31 2012 board directors declared quarterly cash dividend 025 per common share total approximately 206 million includes principal stockholder’s family exercise warrants discussed paid march 30 2012 shareholders record march 20 2012 also january 31 2012 board directors scl declared dividend 058 hong kong dollars per share total approximately 6010 million exchange rates effect december 31 2011 retain 703 amount scl shareholders record february 20 2012 paid february 28 2012 february 2012 submitted redemption notice senior notes order redeem 1897 million outstanding balance expect settle march 2012 record 29 million loss extinguishment debt principal stockholder’s family indicated intent pay 5250 million exercise outstanding warrants purchase 87500175 shares common stock march 2012 aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2011 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” details financing transactions 2 subsequent december 31 2011 submitted redemption notice senior notes order redeem 1897 million outstanding balance march 2012 result outstanding balance reclassified “less 1 year” 3 based december 31 2011 london interbank offered rate “libor” hong kong interbank offered rate “hibor” 06 singapore swap offer rate “sor” 04 plus applicable interest rate spread accordance respective debt agreements 4 july 2009 entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 5 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 6 party employment agreements eight executive officers remaining terms one four years 7 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 8 party certain leaseback agreements blue man group theater gondola certain office retail space related sales grand canal shoppes palazzo 9 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2011 annual premium approximately 335 million payable macao government termination gaming subconcession june 2022 10 party 99year lease agreement 92 years remaining parking structure located adjacent venetian las vegas 11 party certain operating leases real estate various equipment service arrangements 12 december 31 2011 434 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forward looking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • substantial leverage debt service debt covenant compliance including pledge assets security indebtedness • disruptions global financing markets ability obtain sufficient funding current future developments • extensive regulations subject costs compliance regulations • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • impact suspensions certain development projects ability meet certain development deadlines • uncertainty tourist behavior related discretionary spending vacationing casinoresorts macao singapore las vegas pennsylvania • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • relationship ggp successor owner shoppes palazzo grand canal shoppes • new developments construction ventures including cotai strip developments • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel due acts terrorism • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases avian flu sars h1n1 flu terrorist activity war • government regulation casino industry including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses • fluctuations demand allsuites rooms occupancy rates average daily room rates macao singapore las vegas • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • failure maintain integrity internal customer data • completion infrastructure projects macao singapore • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 275 345 717 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2011 allowance doubtful casino accounts 222 242 gross casino receivables customers december 31 2011 2010 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2011 net property equipment 1503 billion representing 676 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weighted average cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2011 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized fair value sands bethlehem gaming license table games certificate estimated using expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility combined historical volatilities selection companies peer group lack historical information case scl equity plan used simplified method estimating expected option life options qualify “plainvanilla” options continue use simplified method beyond december 31 2011 due lack historical information allowed related accounting standards believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2011 2010 recorded stockbased compensation expense 627 million 580 million respectively december 31 2011 2004 plan 409 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 321 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested restricted stock units stock option restricted stock units costs expected recognized weighted average period 20 years 30 years respectively december 31 2011 scl equity plan 183 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 31 years income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes requires reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 1795 million 2163 million december 31 2011 2010 respectively valuation allowance net deferred tax assets us operations 1457 million 1149 million december 31 2011 2010 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes major tax jurisdictions us macao singapore us pursuing resolution appeals process certain adjustments proposed internal revenue service irs years 2005 2009 subject examination years 2006 macao singapore tax years 2009 us recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment macao operating segments consist venetian macao sands macao four seasons macao sands cotai central ancillary operations support properties approximately 832 830 gross revenue venetian macao years ended december 31 2012 2011 respectively derived gaming activities remainder derived room mall food beverage nongaming sources approximately 945 944 gross revenue sands macao years ended december 31 2012 2011 respectively derived gaming activities remainder derived primarily food beverage operations approximately 865 826 gross revenue four seasons macao years ended december 31 2012 2011 respectively derived gaming activities remainder derived primarily mall room operations approximately 866 gross revenue sands cotai central period ended december 31 2012 derived gaming activities remainder derived primarily room food beverage operations singapore operating segment consists marina bay sands opened progressively throughout 2010 approximately 744 765 gross revenue marina bay sands years ended december 31 2012 2011 respectively derived gaming activities remainder derived room food beverage mall nongaming sources operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure approximately 652 693 gross revenue las vegas operating properties years ended december 31 2012 2011 respectively derived room food beverage nongaming sources remainder derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods approximately 885 898 gross revenue sands bethlehem years ended december 31 2012 2011 respectively derived gaming activities remainder derived primarily food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including remaining phase sands cotai central parisian macao key operating revenue measurements operating revenues venetian macao four seasons macao sands cotai central marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” sum markers issued credit instruments less markers paid table plus cash deposited table drop box rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 315 332 respectively table games play conducted credit basis year ended december 31 2012 casino revenue measurements us volume measurements us table games drop slot handle previously described view table games win percentage drop slot hold percentage handle macao singapore slot machine play generally conducted cash basis approximately 724 table games play las vegas year ended december 31 2012 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day calculations hotel occupancy average daily room rates include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates customer segment type room product ensure complimentary room rates consistent retail rates revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2012 compared year ended december 31 2011 operating revenues net revenues consisted following consolidated net revenues 1113 billion year ended december 31 2012 increase 172 billion compared 941 billion year ended december 31 2011 increase driven 105 billion net revenues sands cotai central increases 4082 million 2108 million four seasons macao venetian macao respectively casino revenues increased 157 billion compared year ended december 31 2011 increase primarily attributable 9603 million revenues sands cotai central 3941 million increase four seasons macao driven increase rolling chip volume due expanded vip gaming area 1987 million increase venetian macao driven increases nonrolling chip drop win percentage following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1540 million compared year ended december 31 2011 increase attributable 838 million revenues sands cotai central 570 million increase marina bay sands driven increases occupancy average daily room rates hotel tower sands bethlehem opened may 2011 suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 297 million compared year ended december 31 2011 increase primarily attributable 398 million revenues sands cotai central 105 million increase venetian macao partially offset 214 million decrease las vegas operating properties driven decrease banquet operations mall revenues increased 718 million compared year ended december 31 2011 increase primarily attributable increases 186 million marina bay sands driven increase mall occupancy overage rents 183 million venetian macao driven higher base rents due renewed contracts well increase overage rents 175 million four seasons macao driven increase overage rents expansion mall november 2012 following table summarizes results mall activity 1 mall expenses consist common area maintenance management fees direct operating expenses exclude depreciation amortization certain general administrative costs including property taxes provision doubtful accounts presented separately consolidated statements operations mall operating companies may use different methodologies deriving mall expenses accordingly mall expenses may comparable mall operating companies 2 november 2012 shoppes four seasons expanded dutyfree luxury shops resulting additional 51000 square feet gross leasable space 3 phases ii shoppes sands cotai central opened april september 2012 respectively 4 base rent per square foot tenant sales per square foot excluded table progressive opening outlets sands bethlehem began november 2011 convention retail revenues decreased 43 million compared year ended december 31 2011 decrease primarily due 154 million decrease marina bay sands driven decrease entertainment revenue primarily due closing show property partially offset 87 million revenues sands cotai central operating expenses breakdown operating expenses follows operating expenses 882 billion year ended december 31 2012 increase 180 billion compared 702 billion year ended december 31 2011 increase operating expenses primarily attributable opening sands cotai central increase casino activity macao operating properties 1437 million impairment charges casino expenses increased 112 billion compared year ended december 31 2011 increase 7889 million due 39 gross win tax increased casino revenue across macao properties well 1855 million additional casino expenses attributable sands cotai central rooms food beverage expenses increased 273 million 238 million respectively compared year ended december 31 2011 increases primarily attributable opening sands cotai central convention retail expenses decreased 338 million compared year ended december 31 2011 decrease primarily due decreases 257 million 143 million marina bay sands venetian macao respectively driven decrease entertainment expense due closure certain shows partially offset 71 million expenses sands cotai central provision doubtful accounts 2393 million year ended december 31 2012 compared 1505 million year ended december 31 2011 increase primarily due increases 573 million 181 million marina bay sands macao operating properties respectively driven increases casino accounts receivable related credit extended well increases provisions specific customers amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 2250 million compared year ended december 31 2011 increase primarily attributable 1039 million expenses sands cotai central increases 616 million marina bay sands primarily driven increase property taxes 297 million venetian macao corporate expense increased 213 million compared year ended december 31 2011 primarily driven increase legal fees preopening expenses 1438 million year ended december 31 2012 compared 658 million year ended december 31 2011 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2012 2011 primarily related activities sands cotai central development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 976 million compared year ended december 31 2011 increase primarily attributable 1078 million expenses sands cotai central partially offset decreases macao operating properties due certain assets fully depreciated impairment loss 1437 million year ended december 31 2012 consisting primarily 1007 million writeoff capitalized construction costs related cotai strip parcels 7 8 macao 429 million impairment due termination zaia show venetian macao see “item 8 financial statements supplementary data notes consolidated financial statements note 4 property equipment net” adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net income royalty fees stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income expense loss modification early retirement debt income taxes following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitda net income adjusted property ebitda macao operations increased 4021 million compared year ended december 31 2011 increase primarily attributable 2135 million adjusted property ebitda generated sands cotai central increases 1205 million 702 million venetian macao four seasons macao respectively driven increase casino activity adjusted property ebitda marina bay sands decreased 1644 million compared year ended december 31 2011 decrease primarily attributable 357 million decrease net revenues increases 616 million 573 million general administrative expenses provision doubtful accounts respectively adjusted property ebitda las vegas operating properties remained relatively unchanged compared year ended december 31 2011 net revenues increased 404 million excluding intersegment royalty revenue offset increases 228 million 145 million 145 million casino expenses general administrative expenses provision doubtful accounts respectively adjusted property ebitda sands bethlehem increased 233 million compared year ended december 31 2011 increase primarily attributable 706 million increase net revenues driven increase casino activity partially offset increases associated operating expenses interest expense following table summarizes information related interest expense longterm debt interest cost decreased 1093 million compared year ended december 31 2011 resulting primarily decrease weighted average interest rate capitalized interest decreased 778 million compared year ended december 31 2011 primarily due completion phases iia sands cotai central april september 2012 respectively factors effecting earnings income 57 million year ended december 31 2012 compared expense 40 million year ended december 31 2011 income year ended december 31 2012 primarily due 66 million foreign exchange gain related dissolution one wholly owned foreign subsidiaries partially offset decreases fair value interest rate cap agreements macao singapore loss modification early retirement debt 192 million year ended december 31 2012 primarily due 131 million loss related refinancing singapore credit facility june 2012 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt singapore credit facility” effective income tax rate 88 year ended december 31 2012 compared 101 year ended december 31 2011 effective income tax rate years ended december 31 2012 2011 reflects 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao extended expire 2013 july 2012 requested additional 5year income tax exemption recorded valuation allowance related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 3577 million year ended december 31 2012 compared 3230 million year ended december 31 2011 amounts primarily related noncontrolling interest scl year ended december 31 2011 compared year ended december 31 2010 operating revenues net revenues consisted following consolidated net revenues 941 billion year ended december 31 2011 increase 256 billion compared 685 billion year ended december 31 2010 increase net revenues primarily driven 166 billion increase progressive opening marina bay sands well 7192 million increase across macao operations 1115 million increase las vegas operating properties casino revenues increased 190 billion compared year ended december 31 2010 increase primarily due 130 billion increase marina bay sands 5765 million increase macao operations primarily driven increase rolling chip volume following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 2025 million compared year ended december 31 2010 increase room revenues primarily due 1699 million increase marina bay sands well increases venetian macao four seasons macao las vegas operating properties driven increase average daily room rates hotel tower sands bethlehem opened may 2011 suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1523 million compared year ended december 31 2010 increase primarily due 1083 million increase marina bay sands 291 million increase las vegas operating properties driven increased banquet activities mall revenues increased 1385 million compared year ended december 31 2010 increase primarily attributable 909 million increase marina bay sands well increases 243 million 231 million four seasons macao venetian macao respectively primarily due higher overage rent following table summarizes results mall activity 1 mall expenses consist common area maintenance management fees direct operating expenses exclude depreciation amortization certain general administrative costs including property taxes provision doubtful accounts presented separately consolidated statements operations mall operating companies may use different methodologies deriving mall expenses accordingly mall expenses may comparable mall operating companies 2 shoppes marina bay sands opened april 2010 3 occupancy base rent per square foot tenant sales per square foot excluded table outlets sands bethlehem partially open december 31 2011 due progressive opening beginning november 2011 convention retail revenues increased 1472 million compared year ended december 31 2010 increase primarily due 868 million increase marina bay sands 375 million increase asia driven ferry operations operating expenses breakdown operating expenses follows operating expenses 702 billion year ended december 31 2011 increase 135 billion compared 567 billion year ended december 31 2010 increase operating expenses primarily attributable progressive opening marina bay sands well increased casino activity macao operations increase corporate expense general administrative expenses partially offset decrease preopening expenses casino expenses increased 7587 million compared year ended december 31 2010 increase 4259 million attributable marina bay sands 2663 million due 390 gross win tax increased casino revenues across macao operations mall expenses increased 154 million compared year ended december 31 2010 increase primarily due 151 million increase marina bay sands rooms food beverage convention retail expenses increased 667 million 995 million 1072 million respectively compared year ended december 31 2010 increases driven associated increases related revenues described provision doubtful accounts 1505 million year ended december 31 2011 compared 978 million year ended december 31 2010 increase primarily due 656 million increase provisions marina bay sands amount provision vary short periods time factors specific customers owe us money given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 1536 million compared year ended december 31 2010 increase primarily due 1284 million increase marina bay sands corporate expense increased 768 million compared year ended december 31 2010 increase primarily due increased legal expenses higher incentive compensation expenses preopening expenses 658 million year ended december 31 2011 compared 1148 million year ended december 31 2010 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2011 primarily related activities sands cotai central preopening expenses year ended december 31 2010 primarily related activities marina bay sands costs associated recommencing work sands cotai central development expenses material years ended december 31 2011 2010 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 994 million compared year ended december 31 2010 increase primarily result opening marina bay sands contributed 1284 million increase partially offset decreases macao operations due certain assets fully depreciated loss disposal assets 102 million year ended december 31 2011 compared 386 million year ended december 31 2010 loss year ended december 31 2011 related disposition one majority owned subsidiaries well disposition construction materials equipment macao losses incurred year ended december 31 2010 principally related disposition construction materials macao las vegas adjusted property ebitda following table summarizes information related segments adjusted property ebitda macao operations increased 3599 million compared year ended december 31 2010 led increase 2130 million venetian macao previously described increase across properties primarily attributable combined increase net revenues 7192 million partially offset increase 2663 million gross win tax increased casino revenues well increases associated operating expenses adjusted property ebitda marina bay sands comparable prioryear period property opened april 2010 adjusted property ebitda las vegas operating properties increased 232 million compared year ended december 31 2010 increase primarily attributable increase net revenues 593 million excluding intersegment royalty revenue partially offset increases associated operating expenses adjusted property ebitda sands bethlehem increased 318 million compared year ended december 31 2010 increase primarily driven commencement table games operations july 2010 interest expense following table summarizes information related interest expense longterm debt interest cost decreased 73 million compared year ended december 31 2010 resulting decrease weighted average debt balance partially offset slight increase weighted average interest rate capitalized interest increased 211 million compared year ended december 31 2010 primarily due increased construction activities sands cotai central macao factors effecting earnings expense 40 million year ended december 31 2011 compared 83 million year ended december 31 2010 expense year ended december 31 2011 primarily due decreases fair value interest rate cap agreements macao singapore foreign exchange losses loss modification early retirement debt 226 million year ended december 31 2011 primarily due refinancing vml vol credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt macao related debt” effective income tax rate 101 year ended december 31 2011 compared 87 year ended december 31 2010 effective income tax rate years ended december 31 2011 2010 reflects 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao extended expire 2013 july 2012 requested additional 5year income tax exemption recorded valuation allowance related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 3230 million year ended december 31 2011 compared 1822 million year ended december 31 2010 amounts primarily related noncontrolling interest scl development projects suspended portions development projects general economic conditions fail improve unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion investment date suspended projects could lost would result impairment charge macao submitted plans macao government parisian macao integrated resort connected venetian macao four seasons macao parisian macao currently expected open late 2015 intended include gaming area operated gaming subconcession hotel shopping mall expect cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium commenced construction activities capitalized costs 1189 million including land premium net amortization december 31 2012 addition completing development public areas surrounding cotai strip properties behalf macao government december 31 2012 capitalized aggregate 843 billion construction costs land premiums net amortization cotai strip developments include venetian macao four seasons macao sands cotai central parisian macao well investments transportation infrastructure including passenger ferry service operations addition funding phases ii sands cotai central borrowings 37 billion macao credit facility completed november 2011 “2011 vml credit facility” see “ liquidity capital resources development financing strategy” disclosure need arrange additional financing fund balance cotai strip developments terms suitable us land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law received land concessions macao government build parcels 1 2 3 5 6 including sites venetian macao four seasons macao sands cotai central parisian macao located land sites macao however land concessions grant us exclusive use land specified land concessions required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions land concession sands cotai central required complete development may 2014 land concession parisian macao contains similar requirement extended macao government july 2012 development completed april 2016 expect apply extension macao government complete sands cotai central unable meet may 2014 deadline determine unable complete parisian macao april 2016 would also expect apply extension macao government unable meet parisian macao deadline deadlines either development extended could lose land concessions sands cotai central parisian macao would prohibit us operating facilities developed respective land concessions result could record charge portion 396 billion 1189 million capitalized construction costs land premiums net amortization december 31 2012 related sands cotai central parisian macao respectively united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve december 31 2012 capitalized construction costs 1789 million project impact suspension estimated overall cost project currently determinable certainty continue aggressively pursue variety new development opportunities around world liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash generated operating activities increased 3953 million compared year ended december 31 2011 increase primarily attributable increase operating cash flows generated macao operations cash flows investing activities capital expenditures year ended december 31 2012 totaled 145 billion including 105 billion macao primarily sands cotai central 1562 million las vegas operating properties 1196 million singapore 224 million sands bethlehem 1009 million corporate activities cash flows financing activities net cash flows used financing activities 305 billion year ended december 31 2012 primarily attributable 344 billion dividend payments 1897 million redemption senior notes repayments 1403 million ferry financing facility partially offset 5250 million proceeds exercise warrants principal stockholder’s family proceeds 3260 million 2012 singapore revolving facility december 31 2012 6771 million available borrowing us macao singapore credit facilities net letters credit development financing strategy december 31 2012 funded development projects primarily borrowings credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds equity offerings proceeds disposition noncore assets us credit facility requires las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 50x quarterly periods maturity elect contribute 50 million cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” macao credit facility also requires macao operations comply similar financial covenants commenced quarterly period ended march 31 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly periods ending december 31 2012 june 30 2013 decreases 40x quarterly periods ending september 30 2013 december 31 2014 decreases 35x quarterly periods ending march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity singapore credit facility requires operations marina bay sands comply similar financial covenants commenced quarterly period ended september 30 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 40x quarterly period ending december 31 2012 september 30 2013 decreases 35x quarterly periods ending december 31 2013 december 31 2014 decreases remains 30x quarterly periods thereafter maturity december 31 2012 us macao singapore leverage ratios 12x 16x 30x respectively compared maximum leverage ratios allowed 50x 45x 40x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 251 billion restricted cash equivalents approximately 65 million december 31 2012 approximately 225 billion unrestricted amount held nonus subsidiaries 225 billion approximately 165 billion available repatriated us minimal taxes owed amounts due company’s significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities need arrange additional financing fund balance cotai strip developments terms suitable us including pursuing approximately 20 billion financing parisian macao normal course activities continue evaluate capital structure opportunities enhancements thereof including evaluating strategic alternatives related pennsylvania operations november 2011 completed 37 billion 2011 vml credit facility used repay outstanding indebtedness vml vol credit facilities well continue fund development construction completion certain components sands cotai central march 2012 redeemed outstanding balance senior notes 1917 million recorded 28 million loss early retirement debt year ended december 31 2012 may 2012 repaid 1316 million outstanding balance ferry financing recorded 17 million loss early retirement debt year ended december 31 2012 june 2012 entered sgd 51 billion approximately 418 billion exchange rates effect december 31 2012 singapore credit facility primarily used repay outstanding indebtedness prior singapore credit facility result recorded 131 million loss modification early retirement debt year ended december 31 2012 june 2012 repaid 4000 million indebtedness term loans us credit facility recorded 16 million loss early retirement debt year ended december 31 2012 december 2012 borrowed 4000 million 3276 million revolvers us singapore credit facilities respectively february 28 june 22 2012 scl paid dividend 058 hong kong dollars per share total 120 billion scl shareholders retained 8444 million january 25 2013 board directors scl declared dividend hkd 067 per share total approximately 6964 million exchange rates effect december 31 2012 retain 4891 million scl shareholders record february 19 2013 paid february 28 2013 march 30 june 29 september 28 december 28 2012 paid dividend 025 per common share part regular cash dividend program december 18 2012 paid special cash dividend 275 per common share year ended december 31 2012 recorded 309 billion distribution retained earnings 162 billion related principal stockholder’s family january 29 2013 company’s board directors declared quarterly dividend 035 per common share total estimated approximately 289 million paid march 29 2013 shareholders record march 21 2013 expect level dividend continue quarterly remainder 2013 march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares common stock paid 5250 million cash settlement exercise price aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2012 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 july 2009 entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 3 based december 31 2012 london interbank offered rate “libor” 03 hong kong interbank offered rate “hibor” 04 singapore swap offer rate “sor” 03 plus applicable interest rate spread accordance respective debt agreements 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements nine executive officers remaining terms one five years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 7 party certain leaseback agreements theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2012 annual premium approximately 388 million payable macao government termination gaming subconcession june 2022 9 party 99year lease agreement 91 years remaining parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 december 31 2012 593 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forward looking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • substantial leverage debt service debt covenant compliance including pledge assets security indebtedness • disruptions global financing markets ability obtain sufficient funding current future developments • extensive regulations subject costs compliance regulations • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • impact suspensions certain development projects ability meet certain development deadlines • uncertainty tourist behavior related discretionary spending vacationing casinoresorts macao singapore las vegas pennsylvania • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • relationship ggp successor owner shoppes palazzo grand canal shoppes • new developments construction ventures including cotai strip developments • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel due acts terrorism • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases avian flu sars h1n1 flu terrorist activity war • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses • fluctuations demand allsuites rooms occupancy rates average daily room rates macao singapore las vegas • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • failure maintain integrity internal customer data • completion infrastructure projects macao singapore • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 315 332 724 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2012 allowance doubtful casino accounts 277 222 gross casino receivables customers december 31 2012 2011 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2012 net property equipment 1577 billion representing 711 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weighted average cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2012 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis first conduct qualitative assessment determine whether believe “morelikelythannot” asset impaired assessing qualitative factors determine “morelikelythannot” asset impaired perform impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized annual indefinite lived intangible asset impairment analysis sands bethlehem gaming license table games certificate included assessment certain qualitative factors including limited results prior year fair value calculation operating results projected operating results macroeconomic industry conditions considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired although believe qualitative factors considered impairment reasonable significant changes one assumptions could produce different result future changes estimates assumptions based upon changes operating results macroeconomic factors management’s intentions may result future changes fair value gaming license table games certificate determine quantitative impairment test performed estimate fair value sands bethlehem gaming license table games certificate fair value analysis would based expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility combined historical volatilities selection companies peer group lack historical information case scl equity plan expected option life based contractual term option well historical exercise forfeiture behavior lack historical information case scl equity plan use simplified method estimating expected option life options qualify “plainvanilla” options expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2012 2011 recorded stockbased compensation expense 654 million 627 million respectively december 31 2012 2004 plan 315 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 385 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock units costs expected recognized weighted average period 21 years 28 years respectively december 31 2012 scl equity plan 187 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 24 years income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes requires reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 2094 million 1795 million december 31 2012 2011 respectively valuation allowance net deferred tax assets us operations 118 billion 1457 million december 31 2012 2011 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes major tax jurisdictions us macao singapore january 2013 internal revenue service completed appeals process examination company’s us tax returns years 2005 2009 subject examination years 2007 macao singapore tax years 2009 us recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment macao operating segments consist venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties approximately 853 832 gross revenue venetian macao years ended december 31 2013 2012 respectively derived gaming activities remainder derived room mall food beverage nongaming sources approximately 857 866 gross revenue sands cotai central period ended december 31 2013 2012 respectively derived gaming activities remainder derived primarily room food beverage operations approximately 828 865 gross revenue four seasons macao years ended december 31 2013 2012 respectively derived gaming activities remainder derived primarily mall room operations approximately 942 945 gross revenue sands macao years ended december 31 2013 2012 respectively derived gaming activities remainder derived primarily food beverage operations singapore operating segment consists marina bay sands approximately 746 744 gross revenue marina bay sands years ended december 31 2013 2012 respectively derived gaming activities remainder derived room food beverage mall nongaming sources operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure approximately 638 652 gross revenue las vegas operating properties years ended december 31 2013 2012 respectively derived room food beverage nongaming sources remainder derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods approximately 885 gross revenue sands bethlehem years ended december 31 2013 2012 derived gaming activities remainder derived primarily food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including parisian macao remaining phase sands cotai central key operating revenue measurements operating revenues venetian macao sands cotai central four seasons macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” sum markers issued credit instruments less markers paid table plus cash deposited table drop box rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 279 293 respectively table games play conducted credit basis year ended december 31 2013 casino revenue measurements us volume measurements us table games drop slot handle previously described view table games win percentage drop slot hold percentage handle based upon mix table games table games expected produce win percentage calculated discounts 20 22 las vegas operating properties 14 16 sands bethlehem macao singapore slot machine play generally conducted cash basis approximately 742 table games play las vegas operating properties year ended december 31 2013 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day calculations hotel occupancy average daily room rates include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates customer segment type room product ensure complimentary room rates consistent retail rates revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2013 compared year ended december 31 2012 operating revenues net revenues consisted following consolidated net revenues 1377 billion year ended december 31 2013 increase 264 billion compared 1113 billion year ended december 31 2012 increase net revenues driven increase 165 billion sands cotai central due progressive opening commenced april 2012 increase 8133 million venetian macao primarily due increased casino revenues casino revenues increased 238 billion compared year ended december 31 2012 increase primarily attributable increase 147 billion sands cotai central due progressive opening 7865 million increase venetian macao driven increase nonrolling chip drop following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 2267 million compared year ended december 31 2012 increase attributable increase 1530 million sands cotai central due progressive opening increase 348 million marina bay sands driven increase average daily room rates increase 263 million las vegas operating properties driven increase occupancy suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1017 million compared year ended december 31 2012 increase primarily attributable 623 million increase sands cotai central due progressive opening well 263 million increase las vegas operating properties driven increase banquet operations mall revenues increased 845 million compared year ended december 31 2012 increase primarily due 853 million increase macao operating properties driven increase base rents well progressive opening sands cotai central information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 first second phases shoppes cotai central opened april september 2012 respectively 2 beginning august 2013 significant portion rent paid dutyfree luxury shops converted overage rent base rent accordance respective lease agreements resulting increase base rent per square foot 3 decrease occupancy shoppes marina bay sands due ongoing repositioning mall bring several new expand many key luxury tenants approximately 37000 square feet gross leasable area currently undergoing new fitout development considered occupied december 31 2013 4 progressive opening outlets sands bethlehem began november 2011 base rent per square foot tenant sales per square foot year ended december 31 2012 excluded table certain cotenancy requirements met 2012 mall partially occupied operating expenses breakdown operating expenses follows operating expenses 1036 billion year ended december 31 2013 increase 154 billion compared 882 billion year ended december 31 2012 increase operating expenses primarily attributable progressive opening sands cotai central commenced april 2012 casino expenses increased 136 billion compared year ended december 31 2012 increase 9868 million attributable 39 gross win tax increased casino revenue across macao properties well 2115 million additional casino expenses attributable sands cotai central rooms food beverage expenses increased 346 million 384 million respectively compared year ended december 31 2012 increases driven associated increases related revenues described provision doubtful accounts 2378 million year ended december 31 2013 compared 2393 million year ended december 31 2012 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 2678 million compared year ended december 31 2012 increase primarily attributable 1222 million increase sands cotai central 727 million increase las vegas operating properties driven 474 million legal settlement expense see “item 8 financial statements supplementary data notes consolidated financial statements note 13 commitments contingencies litigation” well 639 million increase venetian macao driven increase advertising expense corporate expense decreased 175 million compared year ended december 31 2012 driven decrease legal fees preopening expenses 133 million year ended december 31 2013 compared 1438 million year ended december 31 2012 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2013 2012 primarily related activities sands cotai central development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 1154 million compared year ended december 31 2012 increase primarily attributable 1466 million increase sands cotai central partially offset decreases las vegas operating properties macao operating properties due certain assets fully depreciated impairment loss 1437 million year ended december 31 2012 consisted primarily 1007 million writeoff capitalized construction costs related former cotai strip development referred parcels 7 8 macao 429 million impairment due termination zaia show venetian macao adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net income royalty fees stockbased compensation expense legal settlement expense corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income expense loss modification early retirement debt income taxes following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitda net income adjusted property ebitda macao operations increased 9241 million compared year ended december 31 2012 increase primarily attributable increase 5262 million sands cotai central due progressive opening commenced april 2012 well increase 3567 million venetian macao driven increase casino activity adjusted property ebitda marina bay sands increased 183 million compared year ended december 31 2012 increase primarily attributable 822 million increase net revenues driven increase casino revenues partially offset increases associated operating expenses adjusted property ebitda las vegas operating properties increased 206 million compared year ended december 31 2012 net revenues increased 1232 million excluding intersegment royalty revenue offset increases associated operating expenses adjusted property ebitda sands bethlehem increased 93 million compared year ended december 31 2012 increase primarily attributable 263 million increase net revenues driven increase casino activity partially offset increases associated operating expenses interest expense following table summarizes information related interest expense longterm debt interest cost decreased 321 million compared year ended december 31 2012 resulting primarily decrease weighted average interest rate capitalized interest decreased 447 million compared year ended december 31 2012 primarily due completion conrad holiday inn tower first second sheraton towers sands cotai central april september 2012 january 2013 respectively factors effecting earnings income 43 million year ended december 31 2013 compared 57 million year ended december 31 2012 income year ended december 31 2013 primarily attributable foreign exchange gains loss modification early retirement debt 142 million year ended december 31 2013 related refinancing us credit facility december 2013 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt senior secured credit facility” effective income tax rate 60 year ended december 31 2013 compared 88 year ended december 31 2012 effective income tax rate years ended december 31 2013 2012 reflects 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao extended october 2013 end 2018 recorded valuation allowance related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 6487 million year ended december 31 2013 compared 3577 million year ended december 31 2012 amounts primarily related noncontrolling interest scl year ended december 31 2012 compared year ended december 31 2011 operating revenues net revenues consisted following consolidated net revenues 1113 billion year ended december 31 2012 increase 172 billion compared 941 billion year ended december 31 2011 increase driven 105 billion net revenues sands cotai central increases 4082 million 2108 million four seasons macao venetian macao respectively casino revenues increased 157 billion compared year ended december 31 2011 increase primarily attributable 9603 million revenues sands cotai central 3941 million increase four seasons macao driven increase rolling chip volume due expanded vip gaming area 1987 million increase venetian macao driven increases nonrolling chip drop win percentage following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1540 million compared year ended december 31 2011 increase attributable 838 million revenues sands cotai central 570 million increase marina bay sands driven increases occupancy average daily room rates hotel tower sands bethlehem opened may 2011 suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 297 million compared year ended december 31 2011 increase primarily attributable 398 million revenues sands cotai central 105 million increase venetian macao partially offset 214 million decrease las vegas operating properties driven decrease banquet operations mall revenues increased 718 million compared year ended december 31 2011 increase primarily attributable increases 186 million marina bay sands driven increase mall occupancy overage rents 183 million venetian macao driven higher base rents due renewed contracts well increase overage rents 175 million four seasons macao driven increase overage rents expansion mall november 2012 following table summarizes results mall activity 1 first second phases shoppes cotai central opened april september 2012 respectively 2 november 2012 shoppes four seasons expanded dutyfree luxury shops resulting additional 51000 square feet gross leasable space 3 base rent per square foot tenant sales per square foot excluded table progressive opening outlets sands bethlehem began november 2011 convention retail revenues decreased 43 million compared year ended december 31 2011 decrease primarily due 154 million decrease marina bay sands driven decrease entertainment revenue primarily due closing show property partially offset 87 million revenues sands cotai central operating expenses breakdown operating expenses follows operating expenses 882 billion year ended december 31 2012 increase 180 billion compared 702 billion year ended december 31 2011 increase operating expenses primarily attributable opening sands cotai central increase casino activity macao operating properties 1437 million impairment charges casino expenses increased 112 billion compared year ended december 31 2011 increase 7889 million due 39 gross win tax increased casino revenue across macao properties well 1855 million additional casino expenses attributable sands cotai central rooms food beverage expenses increased 273 million 238 million respectively compared year ended december 31 2011 increases primarily attributable opening sands cotai central convention retail expenses decreased 338 million compared year ended december 31 2011 decrease primarily due decreases 257 million 143 million marina bay sands venetian macao respectively driven decrease entertainment expense due closure certain shows partially offset 71 million expenses sands cotai central provision doubtful accounts 2393 million year ended december 31 2012 compared 1505 million year ended december 31 2011 increase primarily due increases 573 million 181 million marina bay sands macao operating properties respectively driven increases casino accounts receivable related credit extended well increases provisions specific customers amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 2250 million compared year ended december 31 2011 increase primarily attributable 1039 million expenses sands cotai central increases 616 million marina bay sands primarily driven increase property taxes 297 million venetian macao corporate expense increased 213 million compared year ended december 31 2011 driven increase legal fees preopening expenses 1438 million year ended december 31 2012 compared 658 million year ended december 31 2011 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2012 2011 primarily related activities sands cotai central development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 976 million compared year ended december 31 2011 increase primarily attributable 1078 million expenses sands cotai central partially offset decreases macao operating properties due certain assets fully depreciated impairment loss 1437 million year ended december 31 2012 consisted primarily 1007 million writeoff capitalized construction costs related former cotai strip development referred parcels 7 8 macao 429 million impairment due termination zaia show venetian macao adjusted property ebitda following table summarizes information related segments adjusted property ebitda macao operations increased 4021 million compared year ended december 31 2011 increase primarily attributable 2135 million adjusted property ebitda generated sands cotai central increases 1205 million 702 million venetian macao four seasons macao respectively driven increase casino activity adjusted property ebitda marina bay sands decreased 1644 million compared year ended december 31 2011 decrease primarily attributable 357 million decrease net revenues increases 616 million 573 million general administrative expenses provision doubtful accounts respectively adjusted property ebitda las vegas operating properties remained relatively unchanged compared year ended december 31 2011 net revenues increased 404 million excluding intersegment royalty revenue offset increases 228 million 145 million 145 million casino expenses general administrative expenses provision doubtful accounts respectively adjusted property ebitda sands bethlehem increased 233 million compared year ended december 31 2011 increase primarily attributable 706 million increase net revenues driven increase casino activity partially offset increases associated operating expenses interest expense following table summarizes information related interest expense longterm debt interest cost decreased 1093 million compared year ended december 31 2011 resulting primarily decrease weighted average interest rate capitalized interest decreased 778 million compared year ended december 31 2011 primarily due completion conrad holiday inn tower first sheraton tower sands cotai central april september 2012 respectively factors effecting earnings income 57 million year ended december 31 2012 compared expense 40 million year ended december 31 2011 income year ended december 31 2012 primarily due 66 million foreign exchange gain related dissolution one wholly owned foreign subsidiaries partially offset decreases fair value interest rate cap agreements macao singapore loss modification early retirement debt 192 million year ended december 31 2012 primarily due 131 million loss related refinancing singapore credit facility june 2012 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt singapore credit facility” effective income tax rate 88 year ended december 31 2012 compared 101 year ended december 31 2011 effective income tax rate years ended december 31 2012 2011 reflects 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao extended october 2013 end 2018 recorded valuation allowance related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 3577 million year ended december 31 2012 compared 3230 million year ended december 31 2011 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations years ended december 31 2013 2012 2011 thousands 1 first second phases shoppes cotai central opened april september 2012 respectively 2 revenues cam levies management fees included minimum rents outlets sands bethlehem 3 minimum rents include base rents straightline adjustments base rents 4 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property tax exemption expired august 2013 venetian macao currently process requesting extension macao government 5 mallrelated expenses consist cam management fees direct operating expenses property taxes provision recovery doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income “noi” useful supplemental measure mall’s operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects macao submitted plans macao government parisian macao integrated resort connected venetian macao four seasons macao parisian macao currently expected open late 2015 intended include gaming area operated gaming subconcession hotel shopping mall expect cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium commenced construction activities capitalized costs 3760 million including land premium net amortization december 31 2013 addition completing development public areas surrounding cotai strip properties behalf macao government december 31 2013 capitalized aggregate 897 billion construction costs land premiums net amortization cotai strip developments include venetian macao sands cotai central four seasons macao parisian macao well investments transportation infrastructure including passenger ferry service operations land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law received land concessions macao government build parcels 1 2 3 5 6 including sites venetian macao sands cotai central four seasons macao parisian macao located land sites macao however land concessions grant us exclusive use land specified land concessions required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions land concession sands cotai central required complete development may 2014 applied extension macao government complete sands cotai central unable meet may 2014 deadline land concession parisian macao contains similar requirement extended macao government july 2012 development completed april 2016 determine unable complete parisian macao april 2016 would also expect apply extension macao government unable meet parisian macao deadline deadlines either development extended could lose land concessions sands cotai central parisian macao would prohibit us operating facilities developed respective land concessions result could record charge portion 415 billion 3760 million capitalized construction costs land premiums net amortization december 31 2013 related sands cotai central parisian macao respectively united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve december 31 2013 capitalized construction costs 1786 million project impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decide abandon project could record charge portion 1786 million capitalized construction costs december 31 2013 continue aggressively pursue variety new development opportunities around world liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash generated operating activities increased 138 billion compared year ended december 31 2012 increase primarily attributable increase operating cash flows generated macao operations cash flows investing activities capital expenditures year ended december 31 2013 totaled 8981 million including 6144 million construction development activities macao consisted primarily 2625 million sands cotai central 2128 million parisian macao 1427 million singapore 932 million las vegas operating properties 478 million corporate activities additionally year ended december 31 2013 paid sgd 570 million approximately 449 million exchange rates effect december 31 2013 renew singapore gaming license continuously evaluating portfolio assets including evaluating strategic alternatives related pennsylvania operations cash flows financing activities net cash flows used financing activities 243 billion year ended december 31 2013 primarily attributable 156 billion dividend payments 5612 million common stock repurchases repayments 4305 million 2012 singapore credit facility december 31 2013 154 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview december 31 2013 funded development projects primarily borrowings credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds equity offerings proceeds disposition noncore assets us macao singapore credit facilities contain various financial covenants us credit facility amended december 2013 requires las vegas operations comply financial covenant end quarter extent revolving loans certain letters credit outstanding financial covenant requires las vegas operations maintain maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” macao credit facility also requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 40x quarterly periods ending december 31 2013 december 31 2014 decreases 35x quarterly periods ending march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity singapore credit facility requires operations marina bay sands comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods ending december 31 2013 december 31 2014 decreases remains 30x quarterly periods thereafter maturity december 31 2013 us macao singapore leverage ratios 12x 11x 29x respectively compared maximum leverage ratios allowed 55x 40x 35x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 360 billion restricted cash equivalents approximately 68 million december 31 2013 approximately 318 billion unrestricted amount held nonus subsidiaries 318 billion approximately 229 billion available repatriated us minimal taxes owed amounts due company’s significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities may elect arrange additional financing fund balance cotai strip developments normal course activities continue evaluate capital structure opportunities enhancements thereof november 2011 completed 37 billion 2011 vml credit facility used repay outstanding indebtedness vml vol credit facilities well continue fund development construction completion certain components sands cotai central march 2012 redeemed outstanding balance senior notes 1917 million may 2012 repaid 1316 million outstanding balance ferry financing june 2012 entered sgd 51 billion approximately 402 billion exchange rates effect december 31 2013 2012 singapore credit facility primarily used repay outstanding indebtedness prior singapore credit facility december 2013 completed 35 billion 2013 us credit facility primarily used repay outstanding indebtedness prior senior secured credit facility see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility” currently process amending restating 2011 vml credit facility allow lender holding term loans 2011 vml credit facility extend maturity term loans 2020 provide new revolving loan commitments 20 billion also option raise incremental senior secured unsecured debt existing baskets within amended credit facility amendment subject approval lenders certain macao government approvals anticipated close first quarter 2014 february 28 june 22 2012 scl paid dividend 058 hong kong dollars “hkd” per share total 120 billion scl shareholders retained 8444 million february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively total 138 billion scl shareholders retained 9702 million january 24 2014 board directors scl declared dividend hkd 087 per share special dividend hkd 077 per share total 171 billion retained 120 billion scl shareholders record february 14 2014 paid february 26 2014 march 30 june 29 september 28 december 28 2012 paid dividend 025 per common share part regular cash dividend program december 18 2012 paid special cash dividend 275 per common share year ended december 31 2012 recorded 309 billion distribution retained earnings 162 billion related principal stockholder’s family remaining 147 billion related shareholders march 29 june 28 september 27 december 31 2013 paid dividend 035 per common share recorded 115 billion distribution retained earnings 6042 million related principal stockholder’s family remaining 5489 million related shareholders year ended december 31 2013 january 28 2014 board directors declared quarterly dividend 050 per common share total estimated approximately 406 million paid march 31 2014 shareholders record march 21 2014 expect level dividend continue quarterly remainder 2014 board directors continually assess level appropriateness cash dividends june 2013 board directors approved share repurchase program expires june 2015 initial authorization 20 billion repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions year ended december 31 2013 repurchased 8570281 shares common stock 5705 million including commissions program subsequent year end february 28 2014 repurchased 8224255 shares common stock 6638 million including commissions program share repurchases common stock recorded treasury shares march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares common stock paid 5250 million cash settlement exercise price aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2013 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 july 2009 entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 3 based december 31 2013 london interbank offered rate “libor” 02 hong kong interbank offered rate “hibor” 04 singapore swap offer rate “sor” 02 plus applicable interest rate spread accordance respective debt agreements 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements eight executive officers remaining terms one four years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 7 party certain leaseback agreements theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2013 annual premium approximately 438 million payable macao government termination gaming subconcession june 2022 9 party 99year lease agreement 90 years remaining parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 december 31 2013 133 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forward looking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness • disruptions global financing markets ability obtain sufficient funding current future developments • extensive regulations subject costs compliance regulations • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability meet certain development deadlines • uncertainty tourist behavior related discretionary spending vacationing casinoresorts macao singapore las vegas pennsylvania • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • relationship ggp successor owner grand canal shoppes • new developments construction ventures including cotai strip developments • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • failure maintain integrity customer company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 279 293 742 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2013 allowance doubtful casino accounts 362 277 gross casino receivables customers december 31 2013 2012 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2013 net property equipment 1536 billion representing 676 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weighted average cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2013 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis first conduct qualitative assessment determine whether believe “morelikelythannot” asset impaired assessing qualitative factors determine “morelikelythannot” asset impaired perform impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized annual indefinite lived intangible asset impairment analysis sands bethlehem gaming license table games certificate included assessment certain qualitative factors including limited results recent fair value calculation operating results projected operating results macroeconomic industry conditions considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired although believe qualitative factors considered impairment reasonable significant changes one assumptions could produce different result future changes estimates assumptions based upon changes operating results macroeconomic factors management’s intentions may result future changes fair value gaming license table games certificate determine quantitative impairment test performed estimate fair value sands bethlehem gaming license table games certificate fair value analysis would based expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility combined historical volatilities selection companies peer group lack historical information case scl equity plan expected option life based contractual term option well historical exercise forfeiture behavior lack historical information case scl equity plan use simplified method estimating expected option life options qualify “plainvanilla” options expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2013 2012 recorded stockbased compensation expense 534 million 654 million respectively december 31 2013 2004 plan 190 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 298 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 23 years 22 years respectively december 31 2013 scl equity plan 162 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options 160 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 22 years 35 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 2178 million 2094 million december 31 2013 2012 respectively valuation allowance net deferred tax assets us operations 130 billion 118 billion december 31 2013 2012 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore january 2013 internal revenue service completed appeals process examination company’s us tax returns years 2005 2009 inland revenue agency singapore currently performing compliance review marina bay sands tax return tax years 2010 2011 subject examination years 2008 macao singapore tax years 2009 us recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment macao operating segments consist venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties singapore operating segment consists marina bay sands operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure years ended december 31 2014 2013 gross revenue reportable segments derived follows • venetian macao approximately 842 853 respectively gaming activities remainder room mall food beverage nongaming sources • sands cotai central approximately 839 857 respectively gaming activities remainder primarily room food beverage operations • four seasons macao approximately 815 828 respectively gaming activities remainder primarily mall room operations • sands macao approximately 940 942 respectively gaming activities remainder primarily food beverage operations • marina bay sands approximately 752 746 respectively gaming activities remainder room food beverage mall nongaming sources • las vegas operating properties approximately 676 638 respectively room food beverage nongaming sources remainder gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods • sands bethlehem approximately 882 885 respectively gaming activities remainder primarily food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including parisian macao remaining phase sands cotai central key operating revenue measurements operating revenues venetian macao sands cotai central four seasons macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” sum markers issued credit instruments less markers paid table plus cash deposited table drop box rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 230 310 respectively table games play conducted credit basis year ended december 31 2014 casino revenue measurements us volume measurements us table games drop slot handle previously described view table games win percentage drop slot hold percentage handle based upon mix table games table games expected produce win percentage calculated discounts 22 30 baccarat 14 18 nonbaccarat macao singapore slot machine play generally conducted cash basis approximately 723 table games play las vegas operating properties year ended december 31 2014 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day calculations hotel occupancy average daily room rates include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates customer segment type room product ensure complimentary room rates consistent retail rates revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2014 compared year ended december 31 2013 operating revenues net revenues consisted following consolidated net revenues 1458 billion year ended december 31 2014 increase 8140 million compared 1377 billion year ended december 31 2013 increase net revenues driven increases 6050 million macao operating properties 2458 million marina bay sands primarily due increased casino revenues casino revenues increased 6174 million compared year ended december 31 2013 despite challenges vip market increase primarily due increase 4749 million macao operating properties driven increases nonrolling chip drop partially offset decreases rolling chip volume due decreased demand vip market following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1597 million compared year ended december 31 2013 increase primarily due 841 million increase sands cotai central driven increases occupancy average daily room rates also increases 280 million 237 million 190 million venetian macao marina bay sands las vegas operating properties respectively driven increase average daily room rates suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 485 million compared year ended december 31 2013 increase primarily due 414 million increase macao operating properties driven increase property visitation mall revenues increased 721 million compared year ended december 31 2013 increase primarily due 560 million increase macao operating properties driven increase base rents information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 first second third phases shoppes cotai central opened april september 2012 june 2014 respectively completion shoppes cotai central feature 600000 square feet gross leasable area operating expenses breakdown operating expenses follows operating expenses 1048 billion year ended december 31 2014 increase 1230 million compared 1036 billion year ended december 31 2013 increase operating expenses primarily attributable increase casino expenses macao operating properties casino expenses increased 2218 million compared year ended december 31 2013 increase primarily due 2296 million increase macao operating properties 1043 million due 39 gross win tax increased casino revenues remaining 1253 million driven increase payrollrelated expenses provision doubtful accounts 1867 million year ended december 31 2014 compared 2378 million year ended december 31 2013 decrease driven overall decrease casino receivables macao operating properties due decrease vip play amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses decreased 716 million compared year ended december 31 2013 decrease primarily attributable 785 million decrease marina bay sands driven 901 million property tax refund received december 2014 related settlement taxes assessed paid years 2010 2014 also 365 million decrease las vegas operating properties driven 474 million legal settlement charge incurred august 2013 see “item 8 financial statements supplementary data notes consolidated financial statements note 13 commitments contingencies litigation” decreases partially offset 370 million increase macao operating properties corporate expenses decreased 148 million compared year ended december 31 2013 driven decrease legal fees preopening expenses 262 million year ended december 31 2014 compared 133 million year ended december 31 2013 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2014 2013 primarily related activities parisian macao sands cotai central respectively development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net income intersegment royalty fees stockbased compensation expense legal settlement expense corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income expense loss modification early retirement debt income taxes following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitda net income nm meaningful adjusted property ebitda macao operations increased 3611 million compared year ended december 31 2013 previously described increase primarily due 6050 million increase net revenues macao operating properties partially offset 2296 million increase casino expenses additionally 550 million increase expenses due new bonus program nonmanagement employees macao initiated year ended december 31 2014 adjusted property ebitda marina bay sands increased 3386 million compared year ended december 31 2013 increase primarily due 2458 million increase net revenues driven increase casino revenues previously described 901 million property tax refund received december 2014 adjusted property ebitda las vegas operating properties decreased 378 million compared year ended december 31 2013 decrease primarily due 448 million decrease net revenues excluding intersegment royalty revenue driven decrease casino revenues adjusted property ebitda sands bethlehem decreased 28 million compared year ended december 31 2013 net revenues increased 75 million offset increases 62 million 58 million general administrative expenses casino expenses respectively interest expense following table summarizes information related interest expense interest cost increased 76 million compared year ended december 31 2013 due increase weighted average debt balance capitalized interest increased 46 million compared year ended december 31 2013 primarily due construction parisian macao factors effecting earnings income 20 million year ended december 31 2014 compared 43 million year ended december 31 2013 amounts periods primarily due foreign exchange gains loss modification early retirement debt 199 million year ended december 31 2014 primarily due 180 million loss related amendment 2011 vml credit facility march 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” effective income tax rate 64 year ended december 31 2014 compared 60 year ended december 31 2013 effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao extended october 2013 end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 7474 million year ended december 31 2014 compared 6487 million year ended december 31 2013 amounts primarily related noncontrolling interest scl year ended december 31 2013 compared year ended december 31 2012 operating revenues net revenues consisted following consolidated net revenues 1377 billion year ended december 31 2013 increase 264 billion compared 1113 billion year ended december 31 2012 increase net revenues driven increase 165 billion sands cotai central due progressive opening commenced april 2012 increase 8133 million venetian macao primarily due increased casino revenues casino revenues increased 238 billion compared year ended december 31 2012 increase primarily attributable increase 147 billion sands cotai central due progressive opening 7865 million increase venetian macao driven increase nonrolling chip drop following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 2267 million compared year ended december 31 2012 increase attributable increase 1530 million sands cotai central due progressive opening increase 348 million marina bay sands driven increase average daily room rates increase 263 million las vegas operating properties driven increase occupancy suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1017 million compared year ended december 31 2012 increase primarily attributable 623 million increase sands cotai central due progressive opening well 263 million increase las vegas operating properties driven increase banquet operations mall revenues increased 845 million compared year ended december 31 2012 increase primarily due 853 million increase macao operating properties driven increase base rents well progressive opening sands cotai central information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 first second third phases shoppes cotai central opened april september 2012 june 2014 respectively completion shoppes cotai central feature 600000 square feet gross leasable area 2 beginning august 2013 significant portion rent paid dutyfree luxury shops converted overage rent base rent accordance respective lease agreements resulting increase base rent per square foot 3 decrease occupancy shoppes marina bay sands due ongoing repositioning mall brought new tenants expanded key luxury tenants approximately 37000 square feet gross leasable area undergoing new fitout development considered occupied december 31 2013 4 progressive opening outlets sands bethlehem began november 2011 base rent per square foot tenant sales per square foot year ended december 31 2012 excluded table certain cotenancy requirements met 2012 mall partially occupied operating expenses breakdown operating expenses follows operating expenses 1036 billion year ended december 31 2013 increase 154 billion compared 882 billion year ended december 31 2012 increase operating expenses primarily attributable progressive opening sands cotai central commenced april 2012 casino expenses increased 136 billion compared year ended december 31 2012 increase 9868 million attributable 39 gross win tax increased casino revenue across macao properties well 2115 million additional casino expenses attributable sands cotai central rooms food beverage expenses increased 346 million 384 million respectively compared year ended december 31 2012 increases driven associated increases related revenues described provision doubtful accounts 2378 million year ended december 31 2013 compared 2393 million year ended december 31 2012 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 2678 million compared year ended december 31 2012 increase primarily attributable 1222 million increase sands cotai central 727 million increase las vegas operating properties driven 474 million legal settlement expense see “item 8 financial statements supplementary data notes consolidated financial statements note 13 commitments contingencies litigation” well 639 million increase venetian macao driven increase advertising expense corporate expenses decreased 175 million compared year ended december 31 2012 driven decrease legal fees preopening expenses 133 million year ended december 31 2013 compared 1438 million year ended december 31 2012 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2013 2012 primarily related activities sands cotai central development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 1154 million compared year ended december 31 2012 increase primarily attributable 1466 million increase sands cotai central partially offset decreases las vegas operating properties macao operating properties due certain assets fully depreciated impairment loss 1437 million year ended december 31 2012 consisted primarily 1007 million writeoff capitalized construction costs related former cotai strip development referred parcels 7 8 macao 429 million impairment due termination zaia show venetian macao adjusted property ebitda following table summarizes information related segments adjusted property ebitda macao operations increased 9241 million compared year ended december 31 2012 increase primarily attributable increase 5262 million sands cotai central due progressive opening commenced april 2012 well increase 3567 million venetian macao driven increase casino activity adjusted property ebitda marina bay sands increased 183 million compared year ended december 31 2012 increase primarily attributable 822 million increase net revenues driven increase casino revenues partially offset increases associated operating expenses adjusted property ebitda las vegas operating properties increased 206 million compared year ended december 31 2012 net revenues increased 1232 million excluding intersegment royalty revenue offset increases associated operating expenses adjusted property ebitda sands bethlehem increased 93 million compared year ended december 31 2012 increase primarily attributable 263 million increase net revenues driven increase casino activity partially offset increases associated operating expenses interest expense following table summarizes information related interest expense interest cost decreased 321 million compared year ended december 31 2012 resulting primarily decrease weighted average interest rate capitalized interest decreased 447 million compared year ended december 31 2012 primarily due completion conrad holiday inn tower first second sheraton towers sands cotai central april september 2012 january 2013 respectively factors effecting earnings income 43 million year ended december 31 2013 compared 57 million year ended december 31 2012 income year ended december 31 2013 primarily attributable foreign exchange gains loss modification early retirement debt 142 million year ended december 31 2013 related refinancing us credit facility december 2013 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt senior secured credit facility” effective income tax rate 60 year ended december 31 2013 compared 88 year ended december 31 2012 effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao extended october 2013 end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 6487 million year ended december 31 2013 compared 3577 million year ended december 31 2012 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations years ended december 31 2014 2013 2012 thousands 1 first second third phases shoppes cotai central opened april september 2012 june 2014 respectively completion shoppes cotai central feature 600000 square feet gross leasable area 2 revenues cam levies management fees included minimum rents outlets sands bethlehem 3 minimum rents include base rents straightline adjustments base rents 4 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property tax exemption expired august 2013 venetian macao may 2014 company received additional sixyear property tax exemption venetian macao result year ended december 31 2014 company reversed 15 million previously recognized property taxes venetian macao additionally previously described marina bay sands received 901 million property tax refund december 2014 90 million related mall 5 mallrelated expenses consist cam management fees direct operating expenses property taxes provision recovery doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income “noi” useful supplemental measure mall’s operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects macao submitted plans macao government parisian macao integrated resort connected venetian macao four seasons macao parisian macao intended include gaming area operated gaming subconcession hotel 3000 rooms suites retail entertainment dining meeting facilities expect cost design develop construct parisian macao approximately27 billion inclusive payments made land premium recommenced construction upon receiving certain government approvals temporary stoppage june august 2014 projects nature continue analyze options full phased opening facility anticipated open 2016 subject macao government approval capitalized costs 8043 million including land premium net amortization december 31 2014 addition completing development public areas surrounding cotai strip properties behalf macao government december 31 2014 capitalized aggregate 984 billion construction costs land premiums net amortization cotai strip developments include venetian macao sands cotai central four seasons macao parisian macao well investments transportation infrastructure including passenger ferry service operations land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law received land concessions macao government build sites venetian macao sands cotai central four seasons macao parisian macao located land sites macao however land concessions grant us exclusive use land specified land concessions required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions land concession parisian macao required complete development april 2016 land concession sands cotai central contains similar requirement development completed december 2016 determine unable complete parisian macao sands cotai central respective deadlines would expect apply another extension macao government unable meet current deadlines either development extended could lose land concessions parisian macao sands cotai central would prohibit us operating facilities developed respective land concessions result could record charge portion 8043 million 447 billion capitalized construction costs land premiums net amortization december 31 2014 related parisian macao sands cotai central respectively united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decide abandon project could record charge portion 1786 million capitalized construction costs december 31 2014 continue aggressively pursue new development opportunities globally liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash generated operating activities increased 3934 million compared year ended december 31 2013 increase primarily attributable increase operating cash flows generated macao operating properties marina bay sands cash flows investing activities capital expenditures year ended december 31 2014 totaled 118 billion including 9461 million construction development activities macao consisted primarily 3906 million parisian macao 3457 million sands cotai central 1087 million las vegas operating properties 796 million singapore 443 million corporate activities cash flows financing activities net cash flows used financing activities 372 billion year ended december 31 2014 primarily attributable 239 billion dividend payments 168 billion common stock repurchases partially offset net proceeds 4300 million 2013 us revolving facility december 31 2014 178 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview december 31 2014 funded development projects primarily borrowings credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds equity offerings proceeds disposition noncore assets us macao singapore credit facilities contain various financial covenants us credit facility amended december 2013 requires las vegas operations comply financial covenant end quarter extent revolving loans certain letters credit outstanding financial covenant requires las vegas operations maintain maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio macao credit facility amended march 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” also requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly periods ending december 31 2014 september 30 2015 decreases 40x quarterly periods ending december 31 2015 march 31 2017 decreases remains 35x quarterly periods thereafter maturity singapore credit facility amended august 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2012 singapore credit facility” requires operations marina bay sands comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods ending december 31 2014 september 30 2019 decreases remains 30x quarterly periods thereafter maturity december 31 2014 us macao singapore leverage ratios 10x 22x respectively compared maximum leverage ratios allowed 55x 45x 35x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger cross default airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 351 billion restricted cash equivalents approximately 66 million december 31 2014 approximately 298 billion unrestricted amount held nonus subsidiaries 298 billion approximately 221 billion available repatriated us minimal taxes owed amounts due significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities may elect arrange additional financing fund balance cotai strip developments normal course activities continue evaluate capital structure opportunities enhancements thereof march 2014 amended 2011 vml credit facility extended maturity march 31 2020 provided revolving loan commitments 20 billion used fund development construction completion sands cotai central parisian macao working capital requirements general corporate purposes august 2014 amended sgd 51 billion approximately 386 billion exchange rates effect december 31 2014 2012 singapore credit facility extended maturity 2012 singapore revolving facility 2012 singapore term facility february 28 august 28 2020 respectively proceeds 2012 singapore credit facility used repay outstanding indebtedness prior singapore credit facility year ended december 31 2014 net borrowings 4300 million revolving portion 35 billion 2013 us credit facility completed december 2013 proceeds primarily used repay outstanding indebtedness prior senior secured credit facility march 2012 redeemed outstanding balance senior notes 1917 million may 2012 repaid 1316 million outstanding balance ferry financing february 26 2014 scl paid dividend 087 hong kong dollars hkd per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share scl shareholders total 260 billion retained 182 billion february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively scl shareholders total 138 billion retained 9702 million february 28 june 22 2012 scl paid dividend hkd 058 per share scl shareholders total 120 billion retained 8444 million january 23 2015 board directors scl declared dividend hkd 099 per share total 103 billion retained 722 million scl shareholders record february 13 2015 paid february 27 2014 year ended december 31 2014 paid quarterly dividend 050 per common share recorded 161 billion distribution retained earnings year ended december 31 2013 paid quarterly dividend 035 per common share recorded 115 billion distribution retained earnings year ended december 31 2012 paid quarterly dividend 025 per common share part regular cash dividend program december 18 2012 paid special cash dividend 275 per common share year ended december 31 2012 recorded 309 billion distribution retained earnings january 28 2015 board directors declared quarterly dividend 065 per common share total estimated approximately 519 million paid march 31 2015 shareholders record march 23 2015 expect level dividend continue quarterly remainder 2015 board directors continually assess level appropriateness cash dividends june 2013 board directors approved stock repurchase program initial authorization 20 billion expires june 2015 completed year ended december 31 2014 october 2014 board directors authorized repurchase additional 20 billion outstanding common stock expires october 2016 repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions year ended december 31 2014 2013 repurchased 22406655 8570281 shares respectively common stock 166 billion 5705 million respectively including commissions program share repurchases common stock recorded treasury stock march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares common stock paid 5250 million cash settlement exercise price aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2014 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 july 2009 entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 3 based december 31 2014 london interbank offered rate “libor” 03 hong kong interbank offered rate “hibor” 04 singapore swap offer rate “sor” 07 plus applicable interest rate spread accordance respective debt agreements 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements three executive officers remaining terms one five years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 7 party certain leaseback agreements theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2014 annual premium approximately 427 million payable macao government termination gaming subconcession june 2022 9 party 99year lease agreement 89 years remaining parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 december 31 2014 122 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forward looking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness • disruptions global financing markets ability obtain sufficient funding current future developments • extensive regulations subject costs compliance regulations • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability meet certain development deadlines • uncertainty tourist behavior related discretionary spending vacationing casinoresorts macao singapore las vegas pennsylvania • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • relationship ggp successor owner grand canal shoppes • new developments construction ventures including cotai strip developments • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • failure maintain integrity customer company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 230 310 723 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2014 allowance doubtful casino accounts 338 293 gross casino receivables december 31 2014 2013 respectively credit extended junkets offset commissions payable said junkets considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2014 net property equipment 1537 billion representing 687 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weighted average cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2014 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis may first conduct qualitative assessment determine whether believe “morelikelythannot” asset impaired elect perform qualitative assessment determine “morelikelythannot” asset impaired assessing qualitative factors perform impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized quantitative impairment test performed estimate fair value intangible assets fair value analysis would based expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others determine qualitative assessment performed assess certain qualitative factors including limited results recent fair value calculation operating results projected operating results macroeconomic industry conditions future changes estimates assumptions based upon changes operating results macroeconomic factors management’s intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility combined historical volatilities selection companies peer group lack historical information case scl equity plan expected option life based contractual term option well historical exercise forfeiture behavior lack historical information case scl equity plan use simplified method estimating expected option life options qualify “plainvanilla” options expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2014 2013 recorded stockbased compensation expense 481 million 534 million respectively december 31 2014 2004 plan 415 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 158 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 46 years 16 years respectively december 31 2014 scl equity plan 326 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options 135 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 27 years 25 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 2152 million 2178 million december 31 2014 2013 respectively valuation allowance certain net deferred tax assets us operations 227 billion 130 billion december 31 2014 2013 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance period determination made significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore subject examination years beginning 2010 us macao singapore inland revenue authority singapore currently performing compliance review marina bay sands tax return tax years 2010 2012 recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view integrated resort properties operating segment macao operating segments consist venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties singapore operating segment consists marina bay sands operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure years ended december 31 2015 2014 gross revenue reportable segments derived follows • venetian macao approximately 808 842 respectively gaming activities remainder room mall food beverage nongaming sources • sands cotai central approximately 803 839 respectively gaming activities remainder primarily room food beverage operations • four seasons macao approximately 726 815 respectively gaming activities remainder primarily mall room operations • sands macao approximately 928 940 respectively gaming activities remainder primarily food beverage operations • marina bay sands approximately 739 752 respectively gaming activities remainder room food beverage mall nongaming sources • las vegas operating properties approximately 716 676 respectively room food beverage nongaming sources remainder gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods • sands bethlehem approximately 883 882 respectively gaming activities remainder primarily food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including parisian macao remainder sands cotai central key operating revenue measurements operating revenues venetian macao sands cotai central four seasons macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” sum markers issued credit instruments cash deposited table drop box gaming chips purchased cage rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 231 331 respectively table games play conducted credit basis year ended december 31 2015 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop box view table games win percentage drop slot hold percentage handle based upon mix table games table games expected produce win percentage calculated discounts 21 29 baccarat 16 20 nonbaccarat macao singapore slot machine play generally conducted cash basis approximately 674 table games play las vegas operating properties year ended december 31 2015 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day calculations hotel occupancy average daily room rates include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates customer segment type room product ensure complimentary room rates consistent retail rates revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2015 compared year ended december 31 2014 operating revenues net revenues consisted following consolidated net revenues 1169 billion year ended december 31 2015 decrease 290 billion compared 1458 billion year ended december 31 2014 decrease net revenues driven decreases 272 billion macao operating properties 2618 million marina bay sands primarily due decreased casino revenues casino revenues decreased 292 billion compared year ended december 31 2014 decrease primarily attributable decrease 265 billion macao operating properties driven decrease rolling chip volume demand decreased vip market 2594 million decrease marina bay sands driven decrease rolling chip win percentage following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues decreased 705 million compared year ended december 31 2014 decrease primarily due decreases 1002 million macao operating properties 246 million marina bay sands driven decreased occupancy average daily room rates partially offset 525 million increase las vegas operating properties driven increased occupancy average daily room rates suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues decreased 213 million compared year ended december 31 2014 decrease primarily due 535 million decrease macao operating properties driven decrease property visitation partially offset 296 million increase las vegas operating properties driven increase banquet operations mall revenues increased 108 million compared year ended december 31 2014 increase primarily due 164 million increase macao operating properties driven increase base rents information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 third phase shoppes cotai central opened june 2014 completion shoppes cotai central feature 600000 square feet gross leasable area operating expenses breakdown operating expenses follows operating expenses 885 billion year ended december 31 2015 decrease 164 billion compared 1048 billion year ended december 31 2014 decrease operating expenses primarily due decrease casino expenses macao operating properties casino expenses decreased 159 billion compared year ended december 31 2014 decrease 131 billion due 39 gross win tax decreased casino revenues macao operating properties remaining decrease primarily attributable decreases junket commissions well implementation certain cost control measures macao operating properties convention retail expenses decreased 439 million compared year ended december 31 2014 decrease primarily due decreases 225 million 132 million macao operating properties las vegas operating properties respectively driven decrease entertainment expenses 85 million decrease passenger ferry service operations macao provision doubtful accounts 1556 million year ended december 31 2015 compared 1867 million year ended december 31 2014 decrease driven overall decrease casino receivables macao operating properties due decreases vip play junket activity amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit preopening expenses 475 million year ended december 31 2015 compared 262 million year ended december 31 2014 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2015 2014 primarily related activities parisian macao sands cotai central respectively development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred loss disposal assets 352 million year ended december 31 2015 compared 69 million year ended december 31 2014 loss year ended december 31 2015 primarily related dispositions macao operating properties adjusted property ebitda adjusted property ebitda nongaap financial measure used management primary measure operating performance segments adjusted property ebitda net income intersegment royalty fees stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land loss disposal assets interest income loss modification early retirement debt income taxes following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation adjusted property ebitda net income adjusted property ebitda macao operations decreased 104 billion compared year ended december 31 2014 previously described decrease primarily due decrease casino operations driven decreased demand vip market adjusted property ebitda marina bay sands decreased 2167 million compared year ended december 31 2014 previously described decrease primarily due decrease casino operations well 901 million tax refund received december 2014 related settlement taxes assessed paid years 2010 2014 adjusted property ebitda las vegas operating properties decreased 84 million compared year ended december 31 2014 decrease primarily due decrease casino operations partially offset increases nongaming operations primarily rooms food beverage adjusted property ebitda sands bethlehem increased 154 million compared year ended december 31 2014 increase primarily due 449 million increase net revenues driven increase casino revenues partially offset increase associated operating expenses interest expense following table summarizes information related interest expense interest cost increased 92 million compared year ended december 31 2014 resulting slight increase weighted average interest rate partially offset decrease weighted average debt balance capitalized interest increased 182 million compared year ended december 31 2014 primarily related construction parisian macao factors effecting earnings income 305 million year ended december 31 2015 compared 20 million year ended december 31 2014 amounts periods primarily due foreign exchange gains loss modification early retirement debt 199 million year ended december 31 2014 primarily due 180 million loss related amendment 2011 vml credit facility march 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” effective income tax rate 90 year ended december 31 2015 compared 64 year ended december 31 2014 effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao expires end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 4195 million year ended december 31 2015 compared 7474 million year ended december 31 2014 amounts primarily related noncontrolling interest scl year ended december 31 2014 compared year ended december 31 2013 operating revenues net revenues consisted following consolidated net revenues 1458 billion year ended december 31 2014 increase 8140 million compared 1377 billion year ended december 31 2013 increase net revenues driven increases 6050 million macao operating properties 2458 million marina bay sands primarily due increased casino revenues casino revenues increased 6174 million compared year ended december 31 2013 despite challenges vip market increase primarily due increase 4749 million macao operating properties driven increases nonrolling chip drop partially offset decreases rolling chip volume due decreased demand vip market following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1597 million compared year ended december 31 2013 increase primarily due 841 million increase sands cotai central driven increases occupancy average daily room rates also increases 280 million 237 million 190 million venetian macao marina bay sands las vegas operating properties respectively driven increase average daily room rates suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 485 million compared year ended december 31 2013 increase primarily due 414 million increase macao operating properties driven increase property visitation mall revenues increased 721 million compared year ended december 31 2013 increase primarily due 560 million increase macao operating properties driven increase base rents information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 first second third phases shoppes cotai central opened april september 2012 june 2014 respectively completion shoppes cotai central feature 600000 square feet gross leasable area operating expenses breakdown operating expenses follows operating expenses 1048 billion year ended december 31 2014 increase 1230 million compared 1036 billion year ended december 31 2013 increase operating expenses primarily attributable increase casino expenses macao operating properties casino expenses increased 2218 million compared year ended december 31 2013 increase primarily due 2296 million increase macao operating properties 1043 million due 39 gross win tax increased casino revenues remaining 1253 million driven increase payrollrelated expenses provision doubtful accounts 1867 million year ended december 31 2014 compared 2378 million year ended december 31 2013 decrease driven overall decrease casino receivables macao operating properties due decrease vip play amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses decreased 716 million compared year ended december 31 2013 decrease primarily attributable 785 million decrease marina bay sands driven 901 million property tax refund received december 2014 related settlement taxes assessed paid years 2010 2014 also 365 million decrease las vegas operating properties driven 474 million legal settlement charge incurred august 2013 see “item 8 financial statements supplementary data notes consolidated financial statements note 13 commitments contingencies litigation” decreases partially offset 370 million increase macao operating properties corporate expenses decreased 148 million compared year ended december 31 2013 driven decrease legal fees preopening expenses 262 million year ended december 31 2014 compared 133 million year ended december 31 2013 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2014 2013 primarily related activities parisian macao sands cotai central respectively development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred adjusted property ebitda following table summarizes information related segments nm meaningful adjusted property ebitda macao operations increased 3611 million compared year ended december 31 2013 previously described increase primarily due 6050 million increase net revenues macao operating properties partially offset 2296 million increase casino expenses additionally 550 million increase expenses due new bonus program nonmanagement employees macao initiated year ended december 31 2014 adjusted property ebitda marina bay sands increased 3386 million compared year ended december 31 2013 increase primarily due 2458 million increase net revenues driven increase casino revenues previously described 901 million property tax refund received december 2014 adjusted property ebitda las vegas operating properties decreased 378 million compared year ended december 31 2013 decrease primarily due 448 million decrease net revenues excluding intersegment royalty revenue driven decrease casino revenues adjusted property ebitda sands bethlehem decreased 28 million compared year ended december 31 2013 net revenues increased 75 million offset increases 62 million 58 million general administrative expenses casino expenses respectively interest expense following table summarizes information related interest expense interest cost increased 76 million compared year ended december 31 2013 due increase weighted average debt balance capitalized interest increased 46 million compared year ended december 31 2013 primarily due construction parisian macao factors effecting earnings income 20 million year ended december 31 2014 compared 43 million year ended december 31 2013 amounts periods primarily due foreign exchange gains loss modification early retirement debt 199 million year ended december 31 2014 primarily due 180 million loss related amendment 2011 vml credit facility march 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” effective income tax rate 64 year ended december 31 2014 compared 60 year ended december 31 2013 effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao extended october 2013 end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 7474 million year ended december 31 2014 compared 6487 million year ended december 31 2013 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations years ended december 31 2015 2014 2013 thousands 1 revenues cam levies direct recoveries included minimum rents outlets sands bethlehem 2 minimum rents include base rents straightline adjustments base rents 3 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision recovery doubtful accounts excludes depreciation amortization general administrative costs 4 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property tax exemption expired august 2013 venetian macao may 2014 company received additional sixyear property tax exemption venetian macao result year ended december 31 2014 company reversed 26 million previously recognized property taxes venetian macao additionally previously described marina bay sands received 901 million property tax refund december 2014 90 million related mall common mall operating industry companies disclose mall net operating income “noi” useful supplemental measure mall’s operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects macao constructing parisian macao integrated resort connected venetian macao four seasons macao parisian macao intended include gaming area operated gaming subconcession hotel approximately 3000 rooms suites retail entertainment dining meeting facilities expect cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium projects nature continue analyze options full phased opening facility anticipated open second half 2016 subject macao government approval capitalized costs 165 billion including land premium net amortization december 31 2015 addition completing development open areas surrounding cotai strip properties december 31 2015 capitalized aggregate 1114 billion construction costs land premiums net amortization cotai strip developments include venetian macao sands cotai central four seasons macao parisian macao well investments transportation infrastructure including passenger ferry service operations land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law received land concessions macao government build sites venetian macao sands cotai central four seasons macao parisian macao located land sites macao however land concessions grant us exclusive use land specified land concessions required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions land concession parisian macao required complete development november 2016 land concession sands cotai central contains similar requirement development completed december 2016 determine unable complete parisian macao sands cotai central respective deadlines would expect apply another extension macao government unable meet current deadlines either development extended could lose land concessions parisian macao sands cotai central would prohibit us operating facilities developed respective land concessions result could record charge portion 165 billion 487 billion capitalized construction costs land premiums net amortization december 31 2015 related parisian macao sands cotai central respectively united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions evaluating highest return opportunity project intend recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project could record charge portion 1786 million capitalized construction costs december 31 2015 continue aggressively pursue new development opportunities globally liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2015 net cash generated operating activities decreased 138 billion compared year ended december 31 2014 decrease primarily attributable decrease operating cash flows generated macao operating properties year ended december 31 2014 net cash generated operating activities increased 3934 million compared year ended december 31 2013 increase primarily attributable increase operating cash flows generated macao operating properties marina bay sands cash flows investing activities capital expenditures year ended december 31 2015 totaled 153 billion including 129 billion construction development activities macao consisted primarily 7667 million parisian macao 4031 million sands cotai central 1297 million singapore 776 million las vegas operating properties 286 million corporate activities capital expenditures year ended december 31 2014 totaled 118 billion including 9461 million construction development activities macao consisted primarily 3906 million parisian macao 3457 million sands cotai central 1087 million las vegas operating properties 796 million singapore 443 million corporate activities capital expenditures year ended december 31 2013 totaled 8981 million including 6144 million construction development activities macao consisted primarily 2625 million sands cotai central 2128 million parisian macao 1427 million singapore 932 million las vegas operating properties 478 million corporate activities additionally year ended december 31 2013 paid sgd 570 million approximately 403 million exchange rates effect december 31 2015 renew singapore gaming license cash flows financing activities net cash flows used financing activities 321 billion year ended december 31 2015 primarily attributable 269 billion dividend payments net repayment 4125 million 2013 us credit facility 2051 million common stock repurchases partially offset net proceeds 1791 million 2011 vml credit facility net cash flows used financing activities 372 billion year ended december 31 2014 primarily attributable 239 billion dividend payments 168 billion common stock repurchases partially offset net proceeds 4300 million 2013 us revolving facility net cash flows used financing activities 243 billion year ended december 31 2013 primarily attributable 156 billion dividend payments 5612 million common stock repurchases repayments 4305 million 2012 singapore credit facility december 31 2015 297 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview december 31 2015 funded development projects primarily borrowings credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows proceeds equity offerings proceeds disposition noncore assets us macao singapore credit facilities contain various financial covenants us credit facility requires las vegas operations comply financial covenant end quarter extent revolving loans certain letters credit outstanding financial covenant requires las vegas operations maintain maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio macao credit facility amended also requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 40x quarterly periods ending december 31 2015 march 31 2017 decreases remains 35x quarterly periods thereafter maturity singapore credit facility amended requires marina bay sands operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods ending december 31 2015 september 30 2019 decreases remains 30x quarterly periods thereafter maturity december 31 2015 us macao singapore leverage ratios 09x 15x 23x respectively compared maximum leverage ratios allowed 55x 40x 35x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 218 billion restricted cash equivalents approximately 79 million december 31 2015 approximately 170 billion unrestricted amount held nonus subsidiaries 170 billion approximately 132 billion available repatriated us minimal taxes owed amounts due significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities may elect arrange additional financing fund balance cotai strip developments normal course activities continue evaluate capital structure opportunities enhancements thereof april 2015 entered joinder agreement joinder agreement 2011 vml credit facility joinder agreement certain lenders agreed provide term loan commitments 10 billion 2011 vml accordion term funded april 30 2015 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” year ended december 31 2015 made repayments 8202 million 2011 vml revolving facility net repayments 3900 million 2013 us revolving facility february 27 july 15 2015 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion february 26 2014 scl paid dividend hkd 087 per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share scl shareholders total 260 billion retained 182 billion february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively scl shareholders total 138 billion retained 9702 million january 2016 board directors scl declared dividend hkd 099 per share total 103 billion retained 723 million scl shareholders record february 9 2016 paid february 26 2016 year ended december 31 2015 paid quarterly dividend 065 per common share recorded 207 billion distribution retained earnings year ended december 31 2014 paid quarterly dividend 050 per common share recorded 161 billion distribution retained earnings year ended december 31 2013 paid quarterly dividend 035 per common share recorded 115 billion distribution retained earnings january 2016 board directors declared quarterly dividend 072 per common share total estimated approximately 572 million paid march 31 2016 shareholders record march 22 2016 expect level dividend continue quarterly remainder 2016 board directors continually assess level appropriateness cash dividends june 2013 board directors approved stock repurchase program initial authorization 20 billion expired june 2015 substantially completed year ended december 31 2014 october 2014 board directors authorized repurchase additional 20 billion outstanding common stock expires october 2016 repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions years ended december 31 2015 2014 2013 repurchased 4383793 22406655 8570281 shares respectively common stock 2051 million 166 billion 5705 million respectively including commissions program share repurchases common stock recorded treasury stock aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2015 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 july 2009 entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 3 based december 31 2015 london interbank offered rate “libor” 06 hong kong interbank offered rate “hibor” 04 singapore swap offer rate “sor” 17 plus applicable interest rate spread accordance respective debt agreements 4 party tenant lease termination asset purchase agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreement 5 party employment agreements six executive officers remaining terms approximately one five years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 7 party certain leaseback agreements theater gondola retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2015 annual premium payable macao government approximately 396 million termination gaming subconcession june 2022 9 party 99year lease agreement 88 years remaining parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 december 31 2015 30 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps foreign currency contracts restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • uncertainty consumer behavior related discretionary spending vacationing casinoresorts macao singapore las vegas bethlehem pennsylvania • disruptions global financing markets ability obtain sufficient funding current future developments • extensive regulations subject costs compliance failure comply regulations • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability obtain required visas work permits management employees outside countries work macao ability compete managers employees skills required perform services offer properties • new developments construction projects ventures including cotai strip developments • ability meet certain development deadlines • regulatory policies mainland china countries customers reside operations including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage may able obtain sufficient coverage future able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • relationship gaming promoters macao • currency exchange rates • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession macao singapore las vegas bethlehem pennsylvania • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • labor actions labor problems • failure maintain integrity customer company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • relationship ggp successor owner grand canal shoppes • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 231 331 674 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2015 allowance doubtful casino accounts 364 338 gross casino receivables december 31 2015 2014 respectively credit extended junkets offset commissions payable said junkets considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2015 net property equipment 1573 billion representing 750 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weighted average cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2015 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis may first conduct qualitative assessment determine whether believe “morelikelythannot” asset impaired elect perform qualitative assessment determine “morelikelythannot” asset impaired assessing qualitative factors perform impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference quantitative impairment test performed estimate fair value intangible assets fair value analysis would based expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others determine qualitative assessment performed assess certain qualitative factors including limited results recent fair value calculation operating results projected operating results macroeconomic industry conditions future changes estimates assumptions based upon changes operating results macroeconomic factors management’s intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility expected option life based contractual term option well historical exercise forfeiture behavior expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2015 2014 recorded stockbased compensation expense 458 million 481 million respectively december 31 2015 lvsc 2004 plan 334 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 47 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 38 years 11 years respectively december 31 2015 scl equity plan 193 million unrecognized compensation cost net estimated forfeitures 95 per year related unvested stock options 61 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 29 years 18 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 1958 million 2152 million december 31 2015 2014 respectively valuation allowance certain net deferred tax assets us operations 311 billion 227 billion december 31 2015 2014 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance period determination made significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore subject examination years beginning 2010 us singapore years beginning 2011 macao inland revenue authority singapore currently performing compliance review marina bay sands tax return tax years 2010 2012 recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations generally view integrated resort properties operating segment macao operating segments consist venetian macao sands cotai central parisian macao opened september 2016 four seasons macao sands macao singapore operating segment consists marina bay sands operating segments us consist las vegas operating properties sands bethlehem years ended december 31 2016 2015 gross revenue reportable segments derived follows • venetian macao approximately 819 808 respectively gaming activities remainder room mall food beverage nongaming sources • sands cotai central approximately 784 803 respectively gaming activities remainder primarily room food beverage operations • parisian macao approximately 806 gross revenues 110day period ended december 31 2016 derived gaming activities remainder primarily room food beverage operations • four seasons macao approximately 698 726 respectively gaming activities remainder primarily mall room operations • sands macao approximately 924 928 respectively gaming activities remainder primarily food beverage operations • marina bay sands approximately 72 739 respectively gaming activities remainder room food beverage mall nongaming sources • las vegas operating properties approximately 733 716 respectively room food beverage nongaming sources remainder gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods • sands bethlehem approximately 884 883 respectively gaming activities remainder primarily food beverage nongaming sources summary financial results following table summarizes results operations historical financial results indicative future results parisian macao opened september 2016 ramps operations complete remaining development projects including remainder sands cotai central key operating revenue measurements operating revenues venetian macao sands cotai central parisian macao four seasons macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups consistent macao singapore markets’ convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop “drop” net markers issued credit instruments cash deposited table drop boxes gaming chips purchased cage rolling chip nonrolling chip volume measurements comparable amounts wagered lost rolling chip play substantially higher amounts dropped nonrolling chip play slot handle “handle” also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold amount casino percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 generally slot machine play conducted cash basis macao singapore 164 286 respectively table games play conducted credit basis year ended december 31 2016 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop boxes view table games win percentage drop slot hold percentage handle based upon mix table games table games expected produce win percentage calculated discounts 21 29 baccarat 16 20 nonbaccarat macao singapore slot machine play generally conducted cash basis approximately 596 table games play las vegas operating properties year ended december 31 2016 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day calculations occupancy average daily room rates include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates type customer room product ensure complimentary room rates consistent retail rates revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit guests check early may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area “gloa” divided gross leasable area “gla” end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2016 compared year ended december 31 2015 operating revenues net revenues consisted following consolidated net revenues 1141 billion year ended december 31 2016 decrease 278 million compared 1169 billion year ended december 31 2015 decrease net revenues driven decreases 168 million macao operations 153 million marina bay sands primarily due decreased casino revenues partially offset 29 million increase las vegas operating properties driven increased room revenues casino revenues decreased 312 million compared year ended december 31 2015 decrease primarily due decreases 522 million macao properties excluding parisian macao driven decrease rolling chip volume demand decreased vip market 152 million marina bay sands driven decrease rolling chip volume win percentage well decrease nonrolling chip drop decreases partially offset 359 million revenues attributable parisian macao following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 57 million compared year ended december 31 2015 increase primarily due increases 43 million las vegas operating properties 17 million marina bay sands driven increased occupancy average daily room rates macao properties decreased 3 million due 39 million decrease properties excluding parisian macao driven slowdown overall macao gaming industry partially offset 36 million revenues attributable parisian macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 17 million compared year ended december 31 2015 increase primarily attributable 20 million revenues parisian macao opened september 2016 mall revenues increased 27 million compared year ended december 31 2015 increase primarily attributable 23 million revenues shoppes parisian information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 completion shoppes cotai central feature 600000 square feet gross leasable area 2 shoppes parisian opened september 2016 operating expenses breakdown operating expenses follows operating expenses 892 billion year ended december 31 2016 increase 70 million compared 885 billion year ended december 31 2015 increase primarily attributable operating expenses 299 million parisian macao opened september 2016 112 million increase depreciation amortization 82 million increase preopening expenses related opening parisian macao increases partially offset 419 million decrease casino expenses macao operations excluding parisian macao casino expenses decreased 276 million compared year ended december 31 2015 decrease 114 million due 39 gross win tax decreased casino revenues macao properties remaining decrease primarily due decreases junket commissions cost control cost avoidance initiatives macao properties excluding parisian macao including transition personnel preopening advance connection opening parisian macao decreases casino expenses las vegas operating properties marina bay sands decreases partially offset casino expenses attributable parisian macao provision doubtful accounts 173 million year ended december 31 2016 compared 156 million year ended december 31 2015 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit corporate expenses increased 80 million compared year ended december 31 2015 increase primarily due nonrecurring legal costs preopening expenses 130 million year ended december 31 2016 compared 48 million year ended december 31 2015 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2016 primarily related activities parisian macao development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 112 million compared year ended december 31 2015 increase primarily attributable 57 million expenses parisian macao 38 million increase marina bay sands driven acceleration depreciation certain assets due room renovations loss disposal impairment assets 79 million year ended december 31 2016 compared 35 million year ended december 31 2015 loss year ended december 31 2016 consisted primarily 49 million writeoff assets related las vegas condo tower well asset dispositions macao properties consolidated adjusted property ebitda consolidated adjusted property ebitda nongaap financial measure used management primary measure operating performance segments consolidated adjusted property ebitda net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation gaming companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations casinos standalone basis gaming companies including las vegas sands corp historically excluded certain expenses relate management specific casino properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result presentation consolidated adjusted property ebitda may directly comparable similarly titled measures presented companies following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information” discussion operating segments reconciliation consolidated adjusted property ebitda net income adjusted property ebitda macao operations increased 22 million compared year ended december 31 2015 increase primarily attributable 114 million adjusted property ebitda generated parisian macao cost control cost avoidance initiatives macao properties increase partially offset decreases sands macao sands cotai central four seasons macao driven decreased casino revenues due lower demand vip market adjusted property ebitda marina bay sands decreased 118 million compared year ended december 31 2015 previously described decrease primarily due decrease casino operations driven decreases rolling chip volume win percentage well decrease nonrolling chip drop adjusted property ebitda las vegas operating properties increased 51 million compared year ended december 31 2015 increase primarily due increased room revenues partially offset decrease casino operations adjusted property ebitda sands bethlehem increased 5 million compared year ended december 31 2015 increase primarily due 22 million increase net revenues driven increase casino revenues partially offset increase associated expenses interest expense following table summarizes information related interest expense interest cost increased 15 million compared year ended december 31 2015 resulting primarily increase weighted average total debt balance capitalized interest increased 6 million compared year ended december 31 2015 primarily due construction parisian macao factors effecting earnings income 31 million years ended december 31 2016 2015 income year ended december 31 2016 primarily attributable 20 million foreign currency transaction gains driven singapore dollar denominated intercompany debt held us 10 million fair value adjustment singapore forward contracts gains resulted appreciation us dollar versus singapore dollar loss modification early retirement debt 5 million year ended december 31 2016 primarily related amendments 2013 us credit facility see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility” effective income tax rate 106 year ended december 31 2016 compared 90 year ended december 31 2015 increase effective income tax rate relates primarily valuation allowances recorded year ended december 31 2016 determined certain deferred tax assets longer “morelikelythannot” realizable effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao expires end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate net income attributable noncontrolling interests 346 million year ended december 31 2016 compared 420 million year ended december 31 2015 amounts primarily related noncontrolling interest scl year ended december 31 2015 compared year ended december 31 2014 operating revenues net revenues consisted following consolidated net revenues 1169 billion year ended december 31 2015 decrease 290 billion compared 1458 billion year ended december 31 2014 decrease net revenues driven decreases 271 billion macao operations 262 million marina bay sands primarily due decreased casino revenues casino revenues decreased 292 billion compared year ended december 31 2014 decrease primarily attributable decrease 265 billion macao properties driven decrease rolling chip volume demand decreased vip market 260 million decrease marina bay sands driven decrease rolling chip win percentage following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues decreased 70 million compared year ended december 31 2014 decrease primarily due decreases 100 million macao properties 25 million marina bay sands driven decreased occupancy average daily room rates partially offset 53 million increase las vegas operating properties driven increased occupancy average daily room rates suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues decreased 22 million compared year ended december 31 2014 decrease primarily due 54 million decrease macao properties driven decrease property visitation partially offset 30 million increase las vegas operating properties driven increase banquet operations mall revenues increased 10 million compared year ended december 31 2014 increase primarily due 16 million increase macao properties driven increase base rents information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 third phase shoppes cotai central opened june 2014 completion shoppes cotai central feature 600000 square feet gross leasable area operating expenses breakdown operating expenses follows operating expenses 885 billion year ended december 31 2015 decrease 164 billion compared 1048 billion year ended december 31 2014 decrease operating expenses primarily due decrease casino expenses macao properties casino expenses decreased 159 billion compared year ended december 31 2014 decrease 131 billion due 39 gross win tax decreased casino revenues macao properties remaining decrease primarily attributable decreases junket commissions well implementation certain cost control measures macao properties convention retail expenses decreased 44 million compared year ended december 31 2014 decrease primarily due decreases 23 million 13 million macao properties las vegas operating properties respectively driven decrease entertainment expenses 9 million decrease passenger ferry service operations macao provision doubtful accounts 156 million year ended december 31 2015 compared 187 million year ended december 31 2014 decrease driven overall decrease casino receivables macao properties due decreases vip play junket activity amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit preopening expenses 48 million year ended december 31 2015 compared 26 million year ended december 31 2014 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses years ended december 31 2015 2014 primarily related activities parisian macao sands cotai central respectively development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred loss disposal assets 35 million year ended december 31 2015 compared 7 million year ended december 31 2014 loss year ended december 31 2015 primarily related dispositions macao properties consolidated adjusted property ebitda following table summarizes information related segments adjusted property ebitda macao operations decreased 104 billion compared year ended december 31 2014 previously described decrease primarily due decrease casino operations driven decreased demand vip market adjusted property ebitda marina bay sands decreased 217 million compared year ended december 31 2014 previously described decrease primarily due decrease casino operations well 90 million tax refund received december 2014 related settlement taxes assessed paid years 2010 2014 adjusted property ebitda las vegas operating properties decreased 9 million compared year ended december 31 2014 decrease primarily due decrease casino operations partially offset increases nongaming operations primarily rooms food beverage adjusted property ebitda sands bethlehem increased 16 million compared year ended december 31 2014 increase primarily due 45 million increase net revenues driven increase casino revenues partially offset increase associated operating expenses interest expense following table summarizes information related interest expense interest cost increased 10 million compared year ended december 31 2014 resulting slight increase weighted average interest rate partially offset decrease weighted average debt balance capitalized interest increased 19 million compared year ended december 31 2014 primarily related construction parisian macao factors effecting earnings income 31 million year ended december 31 2015 compared 2 million year ended december 31 2014 amounts periods primarily due foreign exchange gains loss modification early retirement debt 20 million year ended december 31 2014 primarily due 18 million loss related amendment 2011 vml credit facility march 2014 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2011 vml credit facility” effective income tax rate 90 year ended december 31 2015 compared 64 year ended december 31 2014 effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate profits generated macao gaming operations due income tax exemption macao expires end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes “morelikelythannot” deferred tax assets portion thereof realizable reduce valuation allowances period determination made net income attributable noncontrolling interests 420 million year ended december 31 2015 compared 747 million year ended december 31 2014 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations years ended december 31 2016 2015 2014 millions 1 shoppes parisian opened september 2016 2 revenues cam levies direct recoveries included minimum rents outlets sands bethlehem 3 minimum rents include base rents straightline adjustments base rents 4 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property also eligible obtain additional sixyear exemption provided certain qualifications met date venetian macao four seasons macao obtained second exemption extending property tax exemption august 2019 august 2020 respectively year ended december 31 2014 company reversed 3 million previously recognized property taxes venetian macao additionally previously described marina bay sands received 90 million property tax refund december 2014 9 million related mall 5 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income “noi” useful supplemental measure mall’s operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects integrated resorts mature continue reinvest portfolio properties maintain high quality products remain competitive markets operate constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well revenue generating additions integrated resorts macao december 31 2016 capitalized aggregate 1244 billion construction costs land premiums cotai strip developments include venetian macao sands cotai central parisian macao four seasons macao well investments transportation infrastructure including passenger ferry service operations four seasons macao four seasons macao also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas completed structural work four season apartments advancing plans intention monetize units within four season apartments subject macao government approval sands cotai central completed structural work remainder fourth tower sands cotai central aparthotel wing consists approximately 10 million square feet st regisserviced branded luxury aparthotel units common areas intention monetization units within st regis tower subject macao government approval upon completion integrated resort sands cotai central consist 137 millionsquarefoot 6400room complex featuring rooms suites aparthotel units approximately 800000 square feet retail entertainment dining space 550000 square feet meeting facilities multipurpose theater united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas 2008 suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions continue evaluate highest return opportunity project intend recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project could record charge portion 123 million capitalized construction costs december 31 2016 continue pursue new development opportunities globally liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2016 net cash generated operating activities increased 593 million compared year ended december 31 2015 increase primarily attributable changes working capital accounts consisting primarily changes accounts receivable accrued liabilities partially offset decrease net income year ended december 31 2015 net cash generated operating activities decreased 138 billion compared year ended december 31 2014 decrease primarily attributable decrease operating cash flows generated macao operations cash flows investing activities capital expenditures year ended december 31 2016 totaled 140 billion including 119 billion construction development activities macao consisted primarily 925 million parisian macao 128 million sands cotai central 92 million las vegas operating properties 83 million singapore 38 million corporate activities additionally year ended december 31 2016 paid sgd 66 million approximately 47 million exchange rates effect time transaction renew singapore gaming license threeyear term capital expenditures year ended december 31 2015 totaled 153 billion including 129 billion construction development activities macao consisted primarily 767 million parisian macao 403 million sands cotai central 130 million singapore 78 million las vegas operating properties 29 million corporate activities capital expenditures year ended december 31 2014 totaled 118 billion including 946 million construction development activities macao consisted primarily 391 million parisian macao 346 million sands cotai central 109 million las vegas operating properties 80 million singapore 44 million corporate activities cash flows financing activities net cash flows used financing activities 263 billion year ended december 31 2016 primarily attributable 291 billion dividend payments partially offset net proceeds 309 million various credit facilities net cash flows used financing activities 321 billion year ended december 31 2015 primarily attributable 269 billion dividend payments net repayment 413 million 2013 us credit facility 205 million common stock repurchases partially offset net proceeds 179 million 2011 vml credit facility net cash flows used financing activities 372 billion year ended december 31 2014 primarily attributable 239 billion dividend payments 168 billion common stock repurchases partially offset net proceeds 430 million 2013 us revolving facility december 31 2016 346 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview fund development projects primarily borrowings credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” operating cash flows us macao singapore credit facilities amended contain various financial covenants us credit facility requires las vegas operations comply financial covenant end quarter extent revolving loans certain letters credit outstanding financial covenant requires las vegas operations maintain maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio macao credit facility requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 40x quarterly periods ending december 31 2016 june 30 2017 decreases remains 35x quarterly periods thereafter maturity singapore credit facility requires marina bay sands operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods ending december 31 2016 september 30 2019 decreases remains 30x quarterly periods thereafter maturity december 31 2016 us macao singapore leverage ratios defined per respective credit facility agreements 08x 20x 24x respectively compared maximum leverage ratios allowed 55x 40x 35x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 213 billion restricted cash equivalents approximately 10 million december 31 2016 approximately 173 billion unrestricted amount held nonus subsidiaries 173 billion approximately 134 billion available repatriated us minimal taxes owed amounts due significant foreign taxes paid would ultimately generate us foreign tax credits cash repatriated remaining unrestricted amounts available repatriation primarily due dividend requirements third party public shareholders case funds repatriated scl believe cash hand cash flow generated operations well 346 billion available borrowing us macao singapore credit facilities net outstanding letters credit december 31 2016 sufficient maintain compliance financial covenants credit facilities fund working capital needs committed planned capital expenditures development opportunities debt obligations dividend commitments normal course activities continue evaluate capital structure opportunities enhancements thereof june 2016 entered agreement amend 2011 vml credit facility became effective august 2016 agreement extended maturity portion term loans facility may 2022 provided additional term loan commitments 10 billion see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2016 vml credit facility” august december 2016 entered agreements amend 2013 us credit facility extended maturity portion revolving credit commitments facility september 2020 lower applicable margin credit spread borrowings term loans see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility” year ended december 31 2016 net borrowings 999 million macao credit facilities made net repayments 594 million 2013 extended us revolving facility year ended december 31 2016 paid quarterly dividend 072 per common share recorded 229 billion distribution retained earnings year ended december 31 2015 paid quarterly dividend 065 per common share recorded 207 billion distribution retained earnings year ended december 31 2014 paid quarterly dividend 050 per common share recorded 161 billion distribution retained earnings january 2017 board directors declared quarterly dividend 073 per common share total estimated approximately 580 million paid march 31 2017 shareholders record march 23 2017 expect level dividend continue quarterly remainder 2017 board directors continually assess level appropriateness cash dividends february 26 june 24 2016 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 207 billion retained 145 billion february 27 july 15 2015 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion retained 145 billion february 26 2014 scl paid dividend hkd 087 per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share scl shareholders total 260 billion retained 182 billion january 2017 board directors scl declared dividend hkd 099 per share total 103 billion retained 722 million scl shareholders record february 8 2017 paid february 24 2017 june 2013 board directors approved stock repurchase program initial authorization 20 billion expired june 2015 substantially completed year ended december 31 2014 october 2014 board directors authorized repurchase additional 20 billion outstanding common stock expired october 2016 november 2016 board directors authorized repurchase 156 billion outstanding common stock expires november 2018 repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions year ended december 31 2016 repurchased shares years ended december 31 2015 2014 repurchased 4383793 22406655 shares respectively common stock 205 million 166 billion respectively including commissions previous programs share repurchases common stock recorded treasury stock aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2016 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” details financing transactions 2 based 1month rates december 31 2016 london interbank offered rate “libor” 08 hong kong interbank offered rate “hibor” 07 singapore swap offer rate “sor” 09 plus applicable interest rate spread accordance respective debt agreements 3 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2016 annual premium payable macao government approximately 41 million termination gaming subconcession june 2022 4 mall deposits consist refundable security deposits received mall tenants 5 party certain operating leases real estate various equipment service arrangements primarily include 133 million related 99year lease agreement 87 years remaining parking structure located adjacent venetian las vegas 104 million related certain leaseback agreements related sales grand canal shoppes palazzo 86 million related longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law 6 december 31 2016 16 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps foreign currency forward contracts restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • uncertainty consumer behavior related discretionary spending vacationing casinoresorts macao singapore las vegas bethlehem pennsylvania • extensive regulations subject costs compliance failure comply regulations • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due obtain sufficient funding remainder planned future development projects • fluctuations currency exchange rates • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability obtain required visas work permits management employees outside countries work macao ability compete managers employees skills required perform services offer properties • new developments construction projects ventures including completion cotai strip developments • regulatory policies mainland china countries customers reside operations including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • passage new legislation receipt governmental approvals proposed developments macao jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage may able obtain sufficient coverage future able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • relationship gaming promoters macao • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificate subconcession macao singapore las vegas bethlehem pennsylvania • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • labor actions labor problems • failure maintain integrity customer company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • relationship ggp successor owner grand canal shoppes • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 164 286 596 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2016 table games play pennsylvania primarily conducted cash basis allowance doubtful casino accounts 477 364 gross casino receivables december 31 2016 2015 respectively credit extended junkets offset commissions payable said junkets considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2016 net property equipment 1590 billion representing 777 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale indefinite useful life assets december 31 2016 50 million asset related sands bethlehem gaming license 17 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis may first conduct qualitative assessment determine whether believe “morelikelythannot” asset impaired elect perform qualitative assessment determine “morelikelythannot” asset impaired assessing qualitative factors perform impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference determine qualitative assessment performed assess certain qualitative factors including limited results recent fair value calculation operating results projected operating results macroeconomic industry conditions future changes estimates assumptions based upon changes operating results macroeconomic factors management’s intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility expected option life based contractual term option well historical exercise forfeiture behavior expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s equity award plans years ended december 31 2016 2015 recorded stockbased compensation expense 35 million 46 million respectively december 31 2016 lvsc 2004 plan 33 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 1 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 31 years 08 years respectively december 31 2016 scl equity plan 15 million unrecognized compensation cost net estimated forfeitures 113 per year related unvested stock options 2 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 29 years 10 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 234 million 196 million december 31 2016 2015 respectively valuation allowance certain net deferred tax assets us operations 396 billion 311 billion december 31 2016 2015 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable able reduce valuation allowance period determination made appropriate significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations recorded unrecognized tax benefits 74 million 65 million december 31 2016 2015 respectively consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore subject examination years beginning 2010 us years beginning 2012 macao singapore november 2016 inland revenue authority singapore completed compliance review marina bay sands tax returns tax years 2010 2012 recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 managements discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements managements discussion analysis financial condition results operations forwardlooking statements see special note regarding forwardlooking statements operations view integrated resorts operating segment operating segments macao consist venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao sands macao operating segment singapore marina bay sands operating segments us consist las vegas operating properties includes venetian resort las vegas sands expo center sands bethlehem march 8 2018 entered purchase sale agreement pci gaming authority unincorporated chartered instrumentality poarch band creek indians acquire sands bethlehem total enterprise value 130 billion closing transaction subject regulatory review closing conditions revenue recognition adopted new revenue recognition standard january 1 2018 full retrospective basis revenue contracts customers primarily consists casino wagers room sales food beverage transactions rental income mall tenants convention sales entertainment ferry ticket sales contracts written oral implied customary business practices gross casino revenue aggregate gaming wins losses commissions rebated gaming promoters premium players rolling play cash discounts cash incentives patrons related gaming play recorded reduction gross casino revenue gaming contracts include performance obligation honor patron’s wager typically include performance obligation provide product service patron complimentary basis incentivize gaming exchange points earned loyalty programs patron earns points loyalty programs estimated fair value points earned deferred redemption redeemed revenue recognized respective revenue type similarly revenue also allocated respective revenue type complimentaries provided managements discretion aforementioned allocations residual amount recorded casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service convention revenues recognized related service rendered event held deposits future hotel occupancy convention space food beverage services contracts recorded deferred revenue recognition criteria met cancellation fees hotel convention space food beverage services recognized upon cancellation customer included revenues ferry entertainment revenue recognition criteria met completion ferry trip event respectively revenue contracts combination services allocated pro rata based service’s standalone selling price revenue leases primarily recorded mall revenue generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightline basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized threshold met key operating revenue measurements operating revenues venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups rolling chip play composed vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop net markers issued credit instruments cash deposited table drop boxes gaming chips purchased exchanged cage rolling chip nonrolling chip volume measurements comparable two distinct measures volume amounts wagered lost rolling chip play substantially higher amounts dropped nonrolling chip play slot handle also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold amount casino percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis rolling chip win percentage expected 30 33 macao 27 30 singapore january 1 2018 nonrolling chip drop marina bay sands includes chips purchased exchanged cage consistent macao properties prior period amounts updated conform current presentation actual win percentage may vary expected win percentage historical win hold percentages generally slot machine play conducted cash basis macao singapore 153 160 respectively table games play conducted credit basis year ended december 31 2018 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop box view table games win percentage drop slot hold percentage handle win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis based upon mix table games table games expected produce win percentage 18 26 baccarat 16 24 nonbaccarat actual win percentage may vary expected win percentage historical win hold percentages similar macao singapore slot machine play generally conducted cash basis approximately 658 table games play las vegas operating properties year ended december 31 2018 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate volume indicator average percentage available hotel rooms occupied period average daily room rate adr price indicator average price occupied rooms per day available rooms exclude rooms unavailable occupancy period due renovation development requirements calculations occupancy rate adr include impact rooms provided complimentary basis revenue per available room revpar represents summary hotel adr occupancy available rooms occupied adr normally higher revpar reserved rooms guests show stay lose deposit guests check early may resold walkin guests mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area gloa divided gross leasable area gla end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2018 compared year ended december 31 2017 summary financial results net revenues operating income year ended december 31 2018 increased 79 1373 billion 83 375 billion compared 1273 billion 346 billion respectively year ended december 31 2017 increases primarily driven stronger operating performance macao due 14 increase revenues net income decreased 96 295 billion year ended december 31 2018 compared 326 billion year ended december 31 2017 decrease primarily driven increase tax expense due nonrecurring noncash income tax benefit 526 million related us tax reform discussed partially offset increase operating income adjusted property ebitda year ended december 31 2018 increased 77 528 billion compared 490 billion year ended december 31 2017 operating revenues net revenues consisted following consolidated net revenues 1373 billion year ended december 31 2018 increase 10 billion compared 1273 billion year ended december 31 2017 increase primarily driven 108 billion increase macao operations primarily due increased casino revenues increase partially offset 65 million decrease marina bay sands primarily due decreased casino revenues casino revenues increased 733 million compared year ended december 31 2017 increase primarily attributable 936 million increase macao operating properties driven increases nonrolling chip drop rolling chip volume increase partially offset 155 million decrease marina bay sands driven decrease rolling chip volume following table summarizes results casino activity 1 january 1 2018 nonrolling chip drop includes chips purchased exchanged cage prior period amounts updated conform current period presentation experience average win percentages remain fairly consistent measured extended periods time significant volume wagers vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 147 million compared year ended december 31 2017 increase primarily due increases 83 million 35 million 29 million macao operating properties marina bay sands las vegas operating properties respectively driven increased occupancy average daily room rates year ended december 31 2018 approximately 18 fewer average rooms available parisian macao compared year ended december 31 2017 due room renovations following table summarizes results room activity food beverage revenues increased 37 million compared year ended december 31 2017 increase primarily due increases 28 million marina bay sands driven opening new restaurants 7 million venetian macao driven increase banquet operations mall revenues increased 39 million compared year ended december 31 2017 increase primarily due increases 14 million 13 million 12 million shoppes four seasons shoppes venetian shoppes marina bay sands respectively driven overage rents well additional retail space available sands cotai central information related financial performance malls see additional information regarding retail mall operations following table summarizes results malls cotai strip macao singapore note table excludes results mall operations sands macao sands bethlehem 1 shoppes cotai central feature approximately 600000 square feet gross leasable area upon completion phases sands cotai centrals renovation rebranding expansion londoner macao convention retail revenues increased 45 million compared year ended december 31 2017 increase primarily due increases 20 million 15 million las vegas operating properties marina bay sands respectively driven increase convention business increase also attributable recovery business interruption insurance proceeds macao related typhoon hato typhoon mangkhut operating expenses operating expenses consisted following operating expenses 998 billion year ended december 31 2018 increase 714 million compared 926 billion year ended december 31 2017 increase operating expenses driven increase casino expense macao operating properties due increased casino revenues visitation casino expenses increased 572 million compared year ended december 31 2017 increase primarily attributable 566 million increase macao operating properties driven increase gaming taxes due increased casino revenues provision doubtful accounts 5 million year ended december 31 2018 compared 96 million year ended december 31 2017 decrease resulted increased collections previously reserved customer balances year ended december 31 2018 compared prior year period continued improvement quality casino credit currently extended amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 66 million compared year ended december 31 2017 increase primarily due 35 million increase team member costs across properties 22 million increase marina bay sands driven increase property taxes 15 million increase las vegas operating properties due increased marketing advertising efforts property operations costs corporate expenses increased 29 million compared year ended december 31 2017 increase primarily due political contributions made year ended december 31 2018 depreciation amortization decreased 60 million compared year ended december 31 2017 decrease primarily attributable 127 million decrease resulting change estimated useful lives certain property equipment partially offset 73 million increase due acceleration depreciation certain assets disposed conjunction londoner macao project loss disposal impairment assets 150 million year ended december 31 2018 compared 20 million year ended december 31 2017 loss year ended december 31 2018 consisted primarily 128 million writeoff costs related four seasons tower suites macao project segment adjusted property ebitda following table summarizes information related segments see item 8 financial statements supplementary data notes consolidated financial statements note 19 segment information discussion operating segments reconciliation consolidated adjusted property ebitda net income 1 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result presentation consolidated adjusted property ebitda may directly comparable similarly titled measures presented companies adjusted property ebitda integrated resorts primarily driven casino room mall operations previously discussed adjusted property ebitda macao operations increased 472 million compared year ended december 31 2017 previously described increase primarily due increased casino revenues driven increases nonrolling chip drop rolling chip volume increased room revenues driven increases occupancy adr well increased mall revenues driven overage rents adjusted property ebitda marina bay sands decreased 65 million compared year ended december 31 2017 previously described decrease primarily due decreased casino revenues driven decrease rolling chip volume partially offset increase nongaming operations decrease provision doubtful accounts driven collections previously reserved customer balances adjusted property ebitda sands bethlehem decreased 31 million compared year ended december 31 2017 decrease primarily due decreased casino revenues driven decrease table games win percentage interest expense following table summarizes information related interest expense interest cost increased 120 million compared year ended december 31 2017 resulting primarily increases weighted average interest rate weighted average total debt balance increase weighted average interest rate due issuance scl senior notes increases interest rates globally weighted average total debt balance increased connection issuance scl senior notes additional borrowings us credit facility see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt factors affecting earnings income 26 million year ended december 31 2018 compared expense 94 million year ended december 31 2017 income year ended december 31 2018 primarily attributable 25 million foreign currency transaction gains driven singapore dollar denominated intercompany debt reported us dollars resulting appreciation us dollar versus singapore dollar period us dollar denominated debt held scl loss modification early retirement debt 64 million year ended december 31 2018 primarily due writeoff unamortized deferred financing fees resulting early retirement 2016 vml credit facility connection issuance scl senior notes see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt 2016 vml credit facility effective income tax rate 113 year ended december 31 2018 compared 68 year ended december 31 2017 us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries effective tax rate 2018 included onetime discrete expense 57 million resulting recently issued guidance internal revenue service related certain international provisions act effective tax rate 2018 would 96 without onetime discrete expense discrete tax expense recorded 2018 relates increase valuation allowance recorded certain us foreign tax credit assets determined assets longer morelikelythannot realizable due concluding foreign tax credits allowed us tax liability would utilized effective tax rate 2017 included onetime discrete benefit 526 million recorded result us tax reform effective tax rate 2017 would 104 without onetime discrete benefit effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao august 2018 income tax exemption macao extended june 26 2022 date subconcession agreement expires recorded valuation allowance related certain deferred tax assets previously generated operations us certain foreign jurisdictions however extent financial results operations improve determine related administrative guidance notices implementation regulations potential legislative amendments interpretations act require changes positions taken becomes morelikelythannot deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate net income attributable noncontrolling interests 538 million year ended december 31 2018 compared 455 million year ended december 31 2017 amounts primarily related noncontrolling interest scl reflect increased net income generated scl 2018 year ended december 31 2017 compared year ended december 31 2016 operating revenues net revenues consisted following consolidated net revenues 1273 billion year ended december 31 2017 increase 146 billion compared 1127 billion year ended december 31 2016 increase primarily due increases 994 million parisian macao opened september 2016 343 million marina bay sands primarily due increased casino revenues casino revenues increased 120 billion compared year ended december 31 2016 increase due increases 805 million parisian macao opened september 2016 368 million marina bay sands driven increases rolling chip win percentage volume following table summarizes results casino activity 1 january 1 2018 nonrolling chip drop includes chips purchased exchanged cage prior period amounts updated conform current period presentation room revenues increased 87 million compared year ended december 31 2016 increase primarily due increases 92 million parisian macao opened september 2016 24 million sands cotai central driven increased occupancy average daily room rates partially offset 18 million decrease marina bay sands driven decreased occupancy fewer rooms available due renovations year ended december 31 2017 approximately 9 8 4 fewer rooms available plaza macao four seasons hotel macao venetian macao marina bay sands respectively compared year ended december 31 2016 following table summarizes results room activity food beverage revenues increased 81 million compared year ended december 31 2016 increase primarily due increases 43 million las vegas operating properties driven increase banquet operations associated convention customers 41 million parisian macao opened september 2016 mall revenues increased 60 million compared year ended december 31 2016 increase primarily due 43 million increase revenues shoppes parisian information related financial performance malls see additional information regarding retail mall operations following table summarizes results malls cotai strip macao singapore note table excludes results mall operations sands macao sands bethlehem 1 shoppes cotai central feature approximately 600000 square feet gross leasable area upon completion phases sands cotai centrals renovation rebranding expansion londoner macao 2 shoppes parisian opened september 2016 tenant sales per square foot reflect sales tenants tenant open period 12 months operating expenses operating expenses consisted following operating expenses 926 billion year ended december 31 2017 increase 495 million compared 877 billion year ended december 31 2016 increase operating expenses driven opening parisian macao september 2016 casino expenses increased 511 million compared year ended december 31 2016 increase primarily attributable increases 524 million parisian macao 36 million marina bay sands driven increase gaming tax partially offset 39 million decrease macao operations excluding parisian macao driven 22 million decrease gaming taxes due decreased casino revenues provision doubtful accounts 96 million year ended december 31 2017 compared 173 million year ended december 31 2016 decrease resulted increased collections previously reserved customer balances year ended december 31 2017 compared prior year period continued improvement quality casino credit currently extended amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 130 million compared year ended december 31 2016 increase primarily due 89 million increase parisian macao increases 18 million las vegas operating properties driven increase marketing advertising efforts 12 million venetian macao driven increase team member related expenses corporate expenses decreased 83 million compared year ended december 31 2016 decrease primarily due nonrecurring legal costs incurred year ended december 31 2016 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses decreased 122 million compared year ended december 31 2016 primarily due parisian macao development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 60 million compared year ended december 31 2016 increase primarily attributable 144 million increase parisian macao partially offset 112 million decrease resulting change estimated useful lives certain property equipment see item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies property equipment loss disposal impairment assets 20 million year ended december 31 2017 compared 79 million year ended december 31 2016 loss year ended december 31 2017 primarily related dispositions macao us operations adjusted property ebitda following table summarizes information related segments adjusted property ebitda integrated resorts primarily driven casino room mall operations previously discussed adjusted property ebitda macao operations increased 362 million compared year ended december 31 2016 increase primarily due 298 million increase parisian macao opened september 2016 44 million venetian macao mainly due increased casino operations driven increase nonrolling chip drop adjusted property ebitda marina bay sands increased 360 million compared year ended december 31 2016 increase primarily due increased casino revenues driven increases rolling chip win percentage volume increase partially offset decrease room revenues driven fewer rooms available due renovations adjusted property ebitda las vegas operating properties increased 35 million compared year ended december 31 2016 increase primarily due 54 million increase net revenues excluding intersegment royalty revenue driven increased convention group meeting events benefiting food beverage results higher win percentage driving casino revenues partially offset increase marketing advertising costs interest expense following table summarizes information related interest expense interest cost increased 21 million compared year ended december 31 2016 resulting primarily increase weighted average total debt balance slight increase weighted average interest rate capitalized interest decreased 32 million compared year ended december 31 2016 primarily due opening parisian macao september 2016 factors affecting earnings expense 94 million year ended december 31 2017 compared income 31 million year ended december 31 2016 expense year ended december 31 2017 primarily attributable depreciation us dollar versus singapore dollar period resulted 83 million foreign currency transaction losses driven singapore dollar denominated intercompany debt reported us dollars 12 million fair value adjustment singapore forward contracts loss modification early retirement debt 5 million year ended december 31 2017 primarily related amendment 2013 us credit facility see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt 2013 us credit facility effective income tax rate 68 year ended december 31 2017 compared 106 year ended december 31 2016 decrease effective income tax rate relates primarily release certain valuation allowances result us tax reform act made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes morelikelythannot deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate effective tax rate 2017 would 104 without onetime discrete benefit 526 million recorded result impact us tax reform net income attributable noncontrolling interests 455 million year ended december 31 2017 compared 346 million year ended december 31 2016 amounts primarily related noncontrolling interest scl reflect increased net income generated scl 2017 additional information regarding retail mall operations following tables summarize results mall operations cotai strip marina bay sands years ended december 31 2018 2017 2016 note table excludes results mall operations sands macao sands bethlehem 1 minimum rents include base rents straightline adjustments base rents 2 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property also eligible obtain additional sixyear exemption provided certain qualifications met date venetian macao plaza macao four seasons hotel macao parisian macao obtained second exemption extending property tax exemption july 2019 july 2020 august 2028 respectively initial exemption sands cotai central distinct exemption hotel tower expiration dates range march 2018 november 2021 company currently working obtaining second exemption sands cotai central 3 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income noi useful supplemental measure malls operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well revenue generating additions integrated resorts macao december 31 2018 capitalized aggregate 1293 billion construction costs land premiums cotai strip developments include venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao well investments transportation infrastructure including passenger ferry service operations previously announced renovation expansion rebranding sands cotai central new destination integrated resort londoner macao adding extensive thematic elements externally internally londoner macao feature new attractions features london including london’s recognizable landmarks expanded retail food beverage venues add approximately 370 luxury suites st regis tower suites macao design work nearing completion construction initiated phased minimize disruption property’s peak periods expect additional st regis tower suites macao completed 2020 londoner macao project completed phases throughout 2020 2021 also previously announced four seasons tower suites macao feature approximately 290 additional premium quality suites completed structural work tower commenced preliminary build suites expect project completed first quarter 2020 anticipate total costs associated development projects approximately 22 billion ultimate costs completion dates projects subject change finalize planning design work complete projects see item 1a risk factors risks related business significant risks associated construction projects could material adverse effect financial condition results operations cash flows united states constructing las vegas condo tower located las vegas strip within venetian resort las vegas 2008 suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions continue evaluate highest return opportunity project impact suspension estimated overall cost project currently determinable certainty management decide abandon project could record charge portion 129 million capitalized construction costs december 31 2018 continue evaluate additional development projects markets pursue new development opportunities globally liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis rooms food beverage nongaming revenues conducted primarily cash basis trade receivable resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2018 net cash generated operating activities increased 158 million compared year ended december 31 2017 increase primarily attributable increase operating income driven macao operations year ended december 31 2017 net cash generated operating activities increased 499 million compared year ended december 31 2016 increase primarily attributable increase operating cash flows generated macao singapore operations cash flows investing activities capital expenditures year ended december 31 2018 totaled 949 million including 535 million macao consisted primarily 180 million venetian macao 131 million sands cotai central parisian macao 182 million singapore 127 million las vegas operating properties 105 million corporate activities capital expenditures year ended december 31 2017 totaled 837 million including 479 million macao consisted primarily 204 million parisian macao 153 million venetian macao 86 million sands cotai central 196 million singapore 123 million las vegas operating properties 39 million corporate activities capital expenditures year ended december 31 2016 totaled 140 billion including 119 billion macao consisted primarily 925 million parisian macao 128 million sands cotai central 92 million las vegas operating properties 83 million singapore 38 million corporate activities additionally year ended december 31 2016 paid sgd 66 million approximately 47 million exchange rates effect time transaction renew singapore gaming license threeyear term cash flows financing activities net cash flows used financing activities 152 billion year ended december 31 2018 primarily attributable 298 billion dividend payments 905 million common stock repurchases partially offset net proceeds 242 billion issuance scl senior notes borrowings 2013 us credit facility net cash flows used financing activities 349 billion year ended december 31 2017 primarily attributable 294 billion dividend payments 375 million common stock repurchases net repayments 204 million various credit facilities partially offset proceeds 40 million exercise stock options net cash flows used financing activities 263 billion year ended december 31 2016 primarily attributable 292 billion dividend payments partially offset 309 million net proceeds various credit facilities december 31 2018 351 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview fund development projects primarily borrowings debt instruments see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt operating cash flows march 2018 amended sgd 480 billion approximately 351 billion exchange rates effect december 31 2018 singapore credit facility extended maturities term loans revolving loans march 29 2024 september 29 2023 respectively amended amortization schedule leverage covenant provide leverage ratio exceed 40x quarterly periods maturity see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt 2012 singapore credit facility march 2018 amended us credit facility refinanced term loans aggregate amount 216 billion extended maturity term loans march 27 2025 reduced applicable margin credit spread borrowings term loans june 2018 amended us credit facility among things increase amount term loans 135 billion aggregate amount 351 billion see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt 2013 us credit facility august 2018 scl issued private offering three series unsecured notes aggregate principal amount 550 billion see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt scl senior notes portion net proceeds offering used repay full outstanding borrowings prior macao credit facility use remaining net proceeds offering scl senior notes general corporate purposes including capital expenditures connection scl senior notes entered interest rate swap agreements august 2018 designated fair value hedges see item 8 financial statements supplementary data notes consolidated financial statements note 10 derivative instruments entered 20 billion revolving credit facility available pursuant facility agreement dated november 20 2018 scl credit facility november 20 2018 effective november 21 2018 canceled remaining commitments prior macao credit facility december 31 2018 amounts drawn scl credit facility us macao singapore credit facilities amended contain various financial covenants include maintaining maximum leverage ratio debt net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined adjusted ebitda us credit facility requires las vegas operations maintain maximum leverage ratio net debt adjusted ebitda end quarter extent revolving loans certain letters credit outstanding maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio scl credit facility requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda 40x quarterly periods maturity singapore credit facility requires marina bay sands operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda 40x quarterly periods maturity december 31 2018 us macao singapore leverage ratios defined per respective credit facility agreements 06x 19x respectively compared maximum leverage ratios allowed 55x 40x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities defaults debt agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 465 billion restricted cash equivalents approximately 13 million december 31 2018 approximately 30 billion unrestricted amount held nonus subsidiaries 30 billion approximately 220 billion available repatriated us expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise us tax reform created onetime mandatory tax previously unremitted earnings foreign subsidiaries upon transitioning worldwide tax system territorial tax system foreign taxes paid earnings created us foreign tax credit offsets onetime tax foreign earnings repatriated us future exempt us income tax expect significant withholding foreign taxes apply repatriation earnings remaining unrestricted amounts held nonus subsidiaries available repatriation primarily due dividend requirements thirdparty public shareholders case funds repatriated scl believe cash hand cash flow generated operations well 351 billion available borrowing us macao singapore credit facilities net outstanding letters credit december 31 2018 sufficient maintain compliance financial covenants credit facilities fund working capital needs committed planned capital expenditures development opportunities debt obligations dividend commitments normal course activities continue evaluate global capital markets consider future opportunities enhancements capital structure year ended december 31 2018 paid quarterly dividend 075 per common share part regular cash dividend program recorded 235 billion distribution retained earnings january 2019 board directors declared quarterly dividend 077 per common share total estimated approximately 597 million paid march 28 2019 shareholders record march 20 2019 expect level dividend continue quarterly remainder 2019 board directors continually assess level appropriateness cash dividends february 23 june 22 2018 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 205 billion company retained 144 billion year ended december 31 2018 january 2019 board directors scl declared dividend hkd 099 per share total 102 billion retain approximately 715 million scl shareholders record february 4 2019 paid february 22 2019 november 2016 board directors authorized repurchase 156 billion outstanding common stock expire november 2018 june 2018 board directors authorized increasing remaining repurchase amount 111 billion 250 billion extending expiration date november 2020 year ended december 31 2018 repurchased 14998127 shares common stock 905 million including commissions program share repurchases common stock recorded treasury stock repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2018 1 december 31 2018 51 million liability related uncertain tax positions expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table 2 see item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt details financing transactions 3 based 1month rates december 31 2018 london interbank offered rate libor 250 singapore swap offer rate sor 175 plus applicable interest rate spread accordance respective debt agreements 4 party certain operating leases real estate various equipment primarily include 135 million related 99year lease agreement 85 years remaining parking structure located adjacent venetian resort las vegas 90 million related certain leaseback agreements related sale grand canal shoppes 77 million related longterm land leases initial term 25 years 5 mall deposits consist refundable security deposits received mall tenants 6 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2018 annual premium payable macao government approximately 42 million termination gaming subconcession june 2022 7 consists noncancellable contractual obligations primarily relates certain hotel restaurant management service agreements amounts exclude open purchase orders suppliers yet received agreements generally allow us option cancel reschedule adjust terms based business needs prior delivery goods performance services offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate swaps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words anticipates believes estimates seeks expects plans intends similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • uncertainty consumer behavior related discretionary spending vacationing integrated resorts macao singapore las vegas bethlehem pennsylvania • extensive regulations subject costs compliance failure comply regulations • ability maintain gaming licenses certificate subconcession macao singapore las vegas bethlehem pennsylvania • new developments construction projects ventures including cotai strip developments • fluctuations currency exchange rates interest rates • regulatory policies mainland china countries customers reside operations including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due obtain sufficient funding planned future development projects • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability obtain required visas work permits management employees outside countries work macao ability compete managers employees skills required perform services offer properties • dependence upon properties primarily macao singapore las vegas cash flow • passage new legislation receipt governmental approvals operations macao singapore jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage may able obtain sufficient coverage future able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • relationship gaming promoters macao • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation impact us tax reform • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • labor actions labor problems • failure maintain integrity information systems contain legally protected information people company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • relationship ggp successor owner grand canal shoppes • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customers financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 153 160 658 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2018 table games play pennsylvania primarily conducted cash basis allowance doubtful casino accounts 411 515 gross casino receivables december 31 2018 2017 respectively credit extended gaming promoters offset commissions payable said gaming promoters considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2018 net property equipment 1515 billion representing 672 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets estimated useful lives assets periodically reviewed adjusted necessary prospective basis year ended december 31 2017 completed evaluation estimated useful lives property equipment see item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies property equipment assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based managements estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards foreign us tax rate differential reflects fact income earned singapore macao taxed local rates lower us tax rates august 2018 received additional exemption macaos corporate income tax profits generated operation casino games chance period january 1 2019 june 26 2022 date subconcession agreement expires entered agreement macao government effective end 2018 provided annual payment 42 million patacas approximately 5 million exchange rates effect december 31 2018 substitution 12 tax otherwise due vml shareholders dividend distributions september 2018 requested additional agreement macao government june 26 2022 correspond expiration income tax exemption gaming operations however assurance receive additional agreement accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 268 million 261 million december 31 2018 2017 respectively valuation allowance certain net deferred tax assets us operations 450 billion 443 billion december 31 2018 2017 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable able reduce valuation allowance period determination made appropriate significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations recorded unrecognized tax benefits 118 million 92 million december 31 2018 2017 respectively consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore could subject examination years beginning 2010 us years beginning 2014 macao singapore us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries result year ended december 31 2017 recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 recent accounting pronouncements see related disclosure item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies item 7aitem 7 managements discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements managements discussion analysis financial condition results operations forwardlooking statements see special note regarding forwardlooking statements overview continue benefit strong operating performances across properties described detail 2019 accomplishments furthering several strategic objectives continued progress key development projects macao conversion sands cotai central londoner macao opened gaming spaces grand suites four seasons along certain luxury suites available simulation purposes singapore initiated development activities secured financing fund construction costs associated mbs expansion project finally continued strengthen balance sheet sale sands bethlehem issuance lvsc senior notes july refinance us credit facility november provide funds general corporate purposes share repurchases may 31 2019 closed sale sands bethlehem pennsylvania closing received 116 billion net cash proceeds recorded gain sale 556 million early january 2020 outbreak respiratory illness caused novel coronavirus identified wuhan hubei province china “2019 novel coronavirus” certain cities china currently quarantine citizens across china advised avoid nonessential travel steps also taken various countries around world including operate restrict inbound travel mainland china contain spread virus china individual visit scheme macao china ivs suspended february 4 2020 hong kong sar government temporarily closed hong kong macao ferry terminal hong kong scl therefore suspended cotai water jet ferry operations macao hong kong notice macao government tourism office disclosed total visitation mainland china macao declined 83 first seven days chinese new year january 2020 compared period chinese new year 2019 february 4 2020 macao government announced suspension casino operations february 5 2020 casinos macao permitted resume normal operations travel restrictions related china ivs global restrictions inbound travel mainland china lifted global response contain spread 2019 novel coronavirus escalates unsuccessful operations macao materially impacted operations singapore las vegas could adversely impacted given dynamic nature circumstances related impact results operations cash flows financial condition cannot reasonably estimated time view integrated resorts operating segment operating segments macao consist venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao sands macao operating segment singapore marina bay sands operating segments us consist las vegas operating properties includes venetian resort las vegas sands expo center may 30 2019 sands bethlehem key operating revenue measurements operating revenues venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao principally driven casino customers visit property daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups rolling chip play composed vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop net markers issued credit instruments cash deposited table drop boxes gaming chips purchased exchanged cage rolling chip nonrolling chip volume measurements comparable two distinct measures volume amounts wagered lost rolling chip play substantially higher amounts dropped nonrolling chip play slot handle also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold amount casino percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis rolling chip win percentage expected 30 33 macao singapore actual win percentage may vary expected win percentage historical win hold percentages generally slot machine play conducted cash basis macao singapore 147 239 respectively table games play conducted credit basis year ended december 31 2019 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop box view table games win percentage drop slot hold percentage slot handle win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis based upon mix table games table games expected produce win percentage 18 26 baccarat 16 24 nonbaccarat actual win percentage may vary expected win percentage historical win hold percentages similar macao singapore slot machine play generally conducted cash basis approximately 668 table games play las vegas operating properties year ended december 31 2019 conducted credit basis hotel revenue measurements performance indicators used occupancy rate volume indicator average percentage available hotel rooms occupied period average daily room rate adr price indicator average price occupied rooms per day available rooms exclude rooms unavailable occupancy period due renovation development requirements calculations occupancy rate adr include impact rooms provided complimentary basis revenue per available room revpar represents summary hotel adr occupancy available rooms occupied adr normally higher revpar reserved rooms guests show stay lose deposit guests check early may resold walkin guests mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area gloa divided gross leasable area gla end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2019 compared year ended december 31 2018 summary financial results net revenues 1374 billion compared 1373 billion year ended december 31 2018 operating income decreased 14 370 billion year ended december 31 2019 compared 375 billion year ended december 31 2018 decrease operating income primarily due nonrecurring legal settlement partially offset decreased casino expenses driven sale sands bethlehem may 31 2019 net income increased 120 330 billion year ended december 31 2019 compared 295 billion year ended december 31 2018 increase primarily driven gain sale sands bethlehem 556 million partially offset 109 million increase interest expense net amounts capitalized 93 million increase tax expense decrease operating income adjusted property ebitda year ended december 31 2019 increased 21 539 billion compared 528 billion year ended december 31 2018 operating revenues net revenues consisted following consolidated net revenues 1374 billion year ended december 31 2019 increase 10 million compared 1373 billion year ended december 31 2018 increase primarily driven increases 188 million 136 million macao properties las vegas operating properties respectively primarily due increased casino revenues increase partially offset 309 million decrease due sale sands bethlehem may 31 2019 net casino revenues increased 9 million compared year ended december 31 2018 increase primarily attributable 202 million increase macao operating properties driven increases nonrolling chip win percentage drop 87 million increase las vegas operating properties driven increases table games win percentage slot handle increase partially offset 269 million decrease due sale sands bethlehem may 31 2019 following table summarizes results casino activity 1 completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 experience average win percentages remain fairly consistent measured extended periods time significant volume wagers vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 19 million compared year ended december 31 2018 increase primarily due increases 20 million 11 million las vegas operating properties marina bay sands respectively driven increases occupancy adr increase partially offset 9 million decrease due sale sands bethlehem may 31 2019 11 million decrease sands cotai central due conversion londoner macao approximately 8 fewer rooms available sands cotai central 2019 compared 2018 following table summarizes results room activity 1 completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 food beverage revenues increased 32 million compared year ended december 31 2018 increase primarily due 30 million increase marina bay sands driven opening new restaurants night club additionally las vegas operating properties increased 23 million due increases banquet operations insuite dining volume opening new restaurants partially offset 15 million decrease due sale sands bethlehem mall revenues increased 26 million compared year ended december 31 2018 increase primarily due increases 20 million 6 million shoppes venetian shoppes marina bay sands respectively driven increases base rents result store renewals new tenants increases overage rents increase 6 million shoppes four seasons driven increase overage rent partially offset decrease 4 million shoppes parisian due decrease base rents information related financial performance malls see additional information regarding retail mall operations following table summarizes results malls cotai strip macao singapore note table excludes results mall operations sands macao sands bethlehem 1 shoppes cotai central feature approximately 600000 square feet gross leasable area upon completion phases sands cotai centrals renovation rebranding expansion londoner macao convention retail revenues decreased 76 million compared year ended december 31 2018 decrease primarily driven 38 million decrease ferry operations due opening hong kong zhuhaimacao bridge october 2018 ongoing situation hong kong since june 2019 13 million decrease due sale sands bethlehem may 31 2019 receipt insurance proceeds macao year ended december 31 2018 related typhoon hato typhoon mangkhut operating expenses operating expenses consisted following operating expenses 1004 billion year ended december 31 2019 increase 63 million compared 998 billion year ended december 31 2018 increase operating expenses driven nonrecurring legal settlement partially offset decrease casino expenses primarily due sale sands bethlehem casino expenses decreased 144 million compared year ended december 31 2018 decrease primarily attributable 179 million decrease due sale sands bethlehem decrease partially offset increases 12 million 11 million las vegas operating properties macao properties respectively driven increased casino revenues provision doubtful accounts 30 million year ended december 31 2019 compared 5 million year ended december 31 2018 increase resulted collections previously reserved customer balances year ended december 31 2018 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit corporate expenses increased 111 million compared year ended december 31 2018 increase primarily due nonrecurring legal settlement preopening expenses represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses increased 28 million compared year ended december 31 2018 primarily due opening new venues marina bay sands ongoing development projects macao development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 54 million compared year ended december 31 2018 increase primarily due 46 million increase macao operating properties primarily driven 20 million increase due acceleration deprecation due londoner macao project capital projects placed service operating properties amortization leasehold interest land increased 14 million driven increase leasehold interest land connection mbs expansion project loss disposal impairment assets 90 million year ended december 31 2019 compared 150 million year ended december 31 2018 loss year ended december 31 2019 consisted primarily 65 million impairment ferries macao loss year ended december 31 2018 consisted primarily 128 million writeoff costs related preparing site grand suites four seasons project segment adjusted property ebitda following table summarizes information related segments see item 8 financial statements supplementary data notes consolidated financial statements note 18 segment information discussion operating segments reconciliation consolidated adjusted property ebitda net income 1 completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 2 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain sale sands bethlehem gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result presentation consolidated adjusted property ebitda may directly comparable similarly titled measures presented companies adjusted property ebitda macao operations increased 110 million compared year ended december 31 2018 increase primarily due increased casino revenues driven increases nonrolling chip win percentage drop increased mall revenues driven increases overage rents base rents due store renewals new tenants increase partially offset impact construction associated londoner macao project decrease ferry operations connection opening hong kongzhuhaimacao bridge october 2018 ongoing situation hong kong since june 2019 receipt insurance proceeds received year ended december 31 2018 related typhoon hato typhoon mangkhut adjusted property ebitda marina bay sands decreased 29 million compared year ended december 31 2018 decrease primarily due 25 million increase general administrative expenses driven increased payroll related costs property taxes repair maintenance costs adjusted property ebitda las vegas operating properties increased 93 million compared year ended december 31 2018 increase primarily due increased casino revenues driven increases table games win percentage slot handle increased room revenues resulting increases occupancy adr adjusted property ebitda sands bethlehem decreased 64 million compared year ended december 31 2018 resulting sale property closing may 31 2019 interest expense following table summarizes information related interest expense interest cost increased 115 million compared year ended december 31 2018 resulting primarily increases weighted average interest rate weighted average total debt balance due issuance scl senior notes august 2018 carried higher fixed interest rate compared variable rate 2016 vml credit facility issuance 2025 lvsc senior notes november 2019 see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt factors affecting earnings income 23 million year ended december 31 2019 compared 26 million year ended december 31 2018 income year ended december 31 2019 primarily attributable 24 million foreign currency transaction gains driven us dollar denominated debt held scl gain partially offset foreign currency transaction losses related singapore dollar denominated intercompany debt reported us dollars resulting depreciation us dollar versus singapore dollar period loss modification early retirement debt 24 million year ended december 31 2019 primarily due writeoff unamortized deferred financing costs resulting early retirement 2013 us credit facility connection issuance lvsc senior notes see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility effective income tax rate 124 year ended december 31 2019 compared 113 year ended december 31 2018 effective income tax rate 2019 includes impact gain sale sands bethlehem may 31 2019 effective income tax rate year ended december 31 2019 would 95 without discrete income tax expense 161 million resulting sale sands bethlehem us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries effective tax rate 2018 included onetime discrete expense 57 million resulting recently issued guidance internal revenue service related certain international provisions act effective tax rate 2018 would 96 without onetime discrete expense discrete tax expense recorded 2018 relates increase valuation allowance recorded certain us foreign tax credit assets determined assets longer morelikelythannot realizable due concluding foreign tax credits allowed us tax liability would utilized effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao recorded valuation allowance related certain deferred tax assets previously generated operations us certain foreign jurisdictions however extent financial results operations improve determine related administrative guidance notices implementation regulations potential legislative amendments interpretations act require changes positions taken becomes morelikelythannot deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate net income attributable noncontrolling interests 606 million year ended december 31 2019 compared 538 million year ended december 31 2018 amounts primarily related noncontrolling interest scl reflect increase net income generated scl 2019 additional information regarding retail mall operations following tables summarize results mall operations cotai strip marina bay sands years ended december 31 2019 2018 note table excludes results mall operations sands macao sands bethlehem 1 minimum rents include base rents straightline adjustments base rents 2 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property also eligible obtain additional sixyear exemption provided certain qualifications met date venetian macao plaza macao four seasons hotel macao parisian macao obtained second exemption second exemption venetian macao expired july 2019 exemption plaza macao four seasons hotel macao parisian macao expiring august 2020 september 2028 respectively initial exemption sands cotai central distinct exemption hotel tower expiration dates range may 2018 april 2024 company currently working obtaining second exemption sands cotai central 3 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income noi useful supplemental measure malls operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs table believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies year ended december 31 2018 compared year ended december 31 2017 discussion changes results operations 2018 2017 omitted form 10k found item 7 managements discussion analysis financial condition results operations year ended december 31 2018 compared year ended december 31 2017 companys annual report form 10k fiscal year ended december 31 2018 liquidity capital resources cash flows summary cash flows consisted following discussion changes cash flows 2018 2017 omitted form 10k found item 7 managements discussion analysis financial condition results operations liquidity capital resources companys annual report form 10k fiscal year ended december 31 2018 cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis rooms food beverage nongaming revenues conducted primarily cash basis trade receivable resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2019 net cash generated operating activities decreased 166 billion compared year ended december 31 2018 decrease primarily attributable 963 million land lease payment made singapore connection mbs expansion project increase interest cost described nonrecurring legal settlement additionally working capital decreased versus prior year due lower levels deposits gaming customers outstanding chips cash flows investing activities capital expenditures year ended december 31 2019 totaled 122 billion including 762 million macao consisted 298 million plaza macao four seasons hotel macao primarily grand suites four seasons 282 million sands cotai central primarily londoner macao 131 million venetian macao 198 million las vegas operating properties 195 million singapore 61 million corporate activities capital expenditures year ended december 31 2018 totaled 949 million including 535 million macao consisted primarily 180 million venetian macao 131 million sands cotai central parisian macao 182 million singapore 127 million las vegas operating properties 105 million corporate activities cash flows financing activities net cash flows used financing activities 337 billion year ended december 31 2019 primarily attributable 30 billion dividend payments 754 million common stock repurchases 132 million payments financing costs partially offset proceeds 495 million issuance 2025 lvsc senior note net cash flows used financing activities 152 billion year ended december 31 2018 primarily attributable 298 billion dividend payments 905 million common stock repurchases partially offset net proceeds 242 billion issuance scl senior notes borrowings 2013 us credit facility december 31 2019 395 billion available borrowing us macao singapore revolving facilities net letters credit additionally 278 billion available borrowing 2012 singapore delayed draw term facility finance construction costs incurred connection mbs expansion project capital financing overview fund development projects primarily borrowings debt instruments see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt operating cash flows july 2019 lvsc issued public offering three series senior unsecured notes aggregate principal amount 350 billion portion net proceeds offering used repay full outstanding borrowings 2013 us credit facility november 2019 lvsc issued public offering additional series senior unsecured notes aggregate principal amount 500 million portion net proceeds offering used general corporate purposes including repurchases shares common stock see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt corporate us related debt lvsc senior notes us macao singapore credit facilities amended contain various financial covenants include maintaining maximum leverage ratio debt net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined adjusted ebitda december 31 2019 us macao singapore leverage ratios defined per respective credit facility agreements 12x 18x 20x respectively compared maximum leverage ratios allowed 40x 45x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities defaults debt agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 423 billion restricted cash equivalents approximately 16 million december 31 2019 approximately 289 billion unrestricted amount held nonus subsidiaries 289 billion approximately 215 billion available repatriated us expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise remaining unrestricted amounts held nonus subsidiaries available repatriation primarily due dividend requirements thirdparty public stockholders case funds repatriated scl believe cash hand cash flow generated operations well 395 billion available borrowing us macao singapore credit facilities net outstanding letters credit 278 billion available borrowing 2012 singapore delayed draw term facility december 31 2019 sufficient fund working capital needs committed planned capital expenditures development opportunities debt obligations dividend commitments normal course activities continue evaluate global capital markets consider future opportunities enhancements capital structure year ended december 31 2019 paid quarterly dividend 077 per common share part regular cash dividend program recorded 237 billion distribution retained earnings january 2020 board directors declared quarterly dividend 079 per common share total estimated approximately 603 million paid march 26 2020 shareholders record march 18 2020 expect level dividend continue quarterly remainder 2020 board directors continually assess level appropriateness cash dividends february 22 june 21 2019 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 205 billion retained 144 billion year ended december 31 2019 january 2020 board directors scl declared dividend hkd 099 per share total 103 billion retain approximately 720 million scl shareholders record february 5 2020 paid february 21 2020 november 2016 board directors authorized repurchase 156 billion outstanding common stock expire november 2018 june 2018 board directors authorized increasing remaining repurchase amount 111 billion 250 billion extending expiration date november 2020 year ended december 31 2019 repurchased 12556635 shares common stock 754 million including commissions program share repurchases common stock recorded treasury stock repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings cash flows legal requirements investment opportunities market conditions aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2019 1 december 31 2019 81 million liability related uncertain tax positions expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table 2 see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt details financing transactions item 8 financial statements supplementary data notes consolidated financial statements note 14 leases details finance leases 3 based 1month rate december 31 2019 singapore swap offer rate sor 149 plus applicable interest rate spread accordance respective debt agreements 4 party certain operating leases real estate various equipment primarily include 336 million related longterm land leases macao anticipated lease term 50years 134 million related 99year lease agreement 84 years remaining parking structure located adjacent venetian resort las vegas 78 million related certain leaseback agreements related sale grand canal shoppes see item 8 financial statements supplementary data notes consolidated financial statements note 14 leases details operating leases 5 mall deposits consist refundable security deposits received mall tenants 6 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2019 annual premium payable macao government approximately 42 million termination gaming subconcession june 2022 7 primarily consists noncancellable contractual obligations primarily relates certain hotel restaurant management service agreements amounts exclude open purchase orders suppliers yet received agreements generally allow us option cancel reschedule adjust terms based business needs prior delivery goods performance services offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate swaps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries certain debt instruments contain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell certain assets company without prior approval lenders noteholders special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words anticipates believes estimates seeks expects plans intends similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • disruptions reductions travel well disruptions operations due natural manmade disasters pandemics epidemics outbreaks infectious contagious diseases recent 2019 novel coronavirus situation political instability civil unrest terrorist activity war • uncertainty consumer behavior related discretionary spending vacationing integrated resorts macao singapore las vegas • new developments construction projects ventures including cotai strip developments mbs expansion project • extensive regulations subject costs compliance failure comply regulations • ability maintain gaming licenses subconcession macao singapore las vegas • fluctuations currency exchange rates interest rates • regulatory policies mainland china countries customers reside operations including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • leverage debt service debt covenant compliance including pledge certain assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due obtain sufficient funding planned future development projects • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability obtain required visas work permits management employees outside countries work macao ability compete managers employees skills required perform services offer properties • dependence upon properties primarily macao singapore las vegas cash flow • passage new legislation receipt governmental approvals operations macao singapore jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage may able obtain sufficient coverage future able obtain additional coverage significantly increased rates • ability collect gaming receivables credit players • relationship gaming promoters macao • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • labor actions labor problems • failure maintain integrity information systems contain legally protected information people company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • relationship ggp successor owner grand canal shoppes • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customers financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 147 239 668 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2019 allowance doubtful casino accounts 323 411 gross casino receivables december 31 2019 2018 respectively credit extended gaming promoters offset commissions payable said gaming promoters considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2019 net property equipment 1484 billion representing 640 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets estimated useful lives assets periodically reviewed adjusted necessary prospective basis assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based managements estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards foreign us tax rate differential reflects fact us tax rates higher statutory tax rates singapore macao 17 12 respectively august 2018 received additional exemption macaos corporate income tax profits generated operation casino games chance period january 1 2019 june 26 2022 date subconcession agreement expires additionally entered agreement macao government april 2019 effective june 26 2022 providing annual payment 38 million patacas approximately 5 million exchange rates effect december 31 2019 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits intend request extensions tax arrangements however assurance receive additional agreement accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 279 million 268 million december 31 2019 2018 respectively valuation allowance certain net deferred tax assets us operations 451 billion 450 billion december 31 2019 2018 respectively management reassess realization deferred tax assets reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable able reduce valuation allowance period determination made appropriate significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations recorded unrecognized tax benefits 134 million 118 million december 31 2019 2018 respectively consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore could subject examination tax years beginning 2010 us tax years beginning 2015 macao singapore us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax therefore longer generating us foreign tax credits result year ended december 31 2017 recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 year ended december 31 2018 recorded tax expense 57 million resulting guidance issued internal revenue service related certain international provisions us tax reform recent accounting pronouncements see related disclosure item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies recent accounting pronouncements item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations operate venetian renaissance venicethemed resort situated las vegas strip “strip” venetian includes first allsuites hotel strip 4027 suites gaming facility approximately 120000 gross square feet enclosed retail dining entertainment complex approximately 440000 net leasable square feet “the grand canal shops” “mall” sold third party 2004 meeting conference facility approximately 11 million square feet sands expo center approximately 12 million square feet approximately 429 gross revenue venetian year ended december 31 2006 derived gaming 571 derived hotel rooms food beverage sources percentage nongaming revenue venetian reflects resort’s emphasis group convention trade show business resulting higher occupancy room rates midweek periods also operate sands macao las vegasstyle casino macao china opened may 18 2004 sands macao offers 229000 square feet gaming facilities expansion completed august 2006 well several restaurants vip facilities theatre highend amenities addition continue progress according plan expansion hotel tower expect complete summer 2007 cost approximately 1001 million approximately 962 sands macao’s gross revenue year ended december 31 2006 derived gaming activities remainder primarily derived food beverage services united states development projects palazzo currently constructing palazzo second resort similar size venetian situated 14acre site next venetian sands expo center palazzo expected consist allsuites 50floor luxury hotel tower approximately 3025 suites gaming facility approximately 105000 square feet enclosed shopping dining entertainment complex approximately 450000 square feet contracted sell third party palazzo expected open fall 2007 cost estimated approximately 185 billion exclusive land furniture fixtures equipment phase ii mall expected cost approximately 2800 million exclusive certain incentive payments executives made july 2004 addition expect additional capital expenditures required build stores restaurants located phase ii mall connection sale grand canal shops mall entered agreement ggp purchaser grand canal shops mall sell ggp phase ii mall upon completion construction purchase price ggp agreed pay phase ii mall greater 2500 million ii phase ii mall’s net operating income months 19 30 operations divided capitalization rate capitalization rate 60 first 380 million net operating income 80 net operating income 380 million early stages constructing high rise residential condominium tower consist approximately 270 luxury condominiums situated palazzo venetian condominium tower currently expected open late fall 2008 estimated cost ranging 6000 million 7000 million sands bethworks december 20 2006 pennsylvania gaming control board announced subsidiary sands bethworks gaming awarded pennsylvania gaming license award license subject appeals actual license awarded appeal period ends intend develop gaming hotel shopping dining complex located site historic bethlehem steel works bethlehem pennsylvania 70 miles midtown manhattan new york first phase 124acre development expected feature 300room hotel 200000 square feet retail space 3000 slot machines variety dining options additional 2000 slot machines added subsequent phase currently expect cost develop construct sands bethworks approximately 6000 million expect complex open 2008 macao development projects cotai strip building venetian macao china approximately 3000 allsuites hotel casino convention center complex venetianstyle theme similar venetian las vegas gaming subconcession macao obligated develop open venetian macao convention center december 2007 currently expect open venetian macao summer 2007 fail meet december 2007 deadline extended could lose right continue operate sands macao facilities developed macao gaming subconcession investment date venetian macao could lost addition development venetian macao developing multiple properties cotai strip submitted development plans macao government six casinoresort developments addition venetian macao area approximately 200 acres located cotai strip parcels 1 2 3 5 6 7 8 developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas worldclass restaurants entertainment facilities attractions amenities well common public areas commenced construction preconstruction seven parcels cotai strip plan operate casinos developments macao gaming subconcession specifically intend develop cotai strip properties follows • parcel 2 intended four seasons hotel casino adjacent venetian macao expected boutique hotel approximately 400 luxury hotel rooms approximately 800000 square feet four seasonsserviced luxury apartments distinctive dining experiences full service spa amenities approximately 45000 square foot casino approximately 210000 square feet upscale retail offerings entire development entered exclusive nonbinding letter intent currently negotiating definitive agreements four seasons hotels inc manage hotel serviced luxury apartments four seasons brand • parcel 5 intended include threehotel complex approximately 2450 luxury midscale hotel rooms serviced luxury apartments casino retail shopping mall entire development entered management agreement shangrila hotels resorts manage two hotels shangrila traders brands addition negotiating starwood hotels resorts worldwide manage hotel serviced luxury apartments st regis brand • parcel 6 intended include twohotel complex approximately 4000 luxury midscale hotel rooms casino retail shopping mall physically connected mall shangrilatraders hotel podium entire development negotiating starwood hotels resorts worldwide manage hotels sheraton brand • parcels 7 8 intended include twohotel complex approximately 3000 luxury midscale hotel rooms parcel serviced luxury vacation suites casino retail shopping malls physically connected entire development entered nonbinding agreements hilton hotels manage hilton conrad brand hotels serviced luxury vacation suites parcel 7 fairmont raffles holdings manage fairmont raffles brand hotel complexes serviced luxury vacation suites parcel 8 currently negotiating definitive agreements hilton hotels fairmont raffles holdings • parcel 3 signed nonbinding memorandum agreement independent developer currently negotiating definitive agreement pursuant partner developer build multihotel complex may include cosmopolitan hotel addition signed nonbinding letter intent intercontinental hotels group manage hotels intercontinental holiday inn international brands serviced luxury vacation suites intercontinental brand site currently negotiating definitive agreements intercontinental hotels group total multihotel complex intended include approximately 3600 hotel rooms serviced luxury vacation suites casino retail shopping mall casino venetian macao currently planned approximately 850 table games 4100 slot machines opens summer 2007 designed final capacity approximately 1150 table games 7000 slot machines four seasons resort currently planned feature approximately 130 table games 400 slot machines casinos sites 3 5 6 7 8 currently planned include approximately 325 table games 1750 slot machines upon completion developments cotai strip currently planned feature total gaming capacity approximately 2900 table games 16000 slot machines february 2007 received final draft land concession agreement macao government pursuant awarded concession lease parcels 1 2 3 cotai strip including sites building venetian macao four seasons hotel accepted conditions draft land concession made initial premium payment 1065 million towards aggregate land premium 3237 million additionally 241 million paid form cost reclamation work works done land installation costs electrical substation remaining amount payable time land concession become effective date published macao’s official gazette land concession effective required make additional land premium annual rent payments relating parcels 1 2 3 amounts times specified land concession also commenced construction cotai strip properties land yet granted land concessions obtain land concessions could lose substantial part investment cotai strip properties currently estimate cost developing building venetian macao approximately 24 billion exclusive aggregate land concession payment 3237 million parcels 1 2 3 may 2006 vml obtained 25 billion credit facility fund sands macao expansion partially fund design development construction preopening costs venetian macao four seasons hotel development projects cotai strip pay related fees expenses currently expect total cost development cotai strip range 90 billion 110 billion need arrange additional debt financing finance costs well yet necessary macao government approvals need order develop cotai strip developments commenced construction cotai strip properties land yet granted land concessions obtain land concessions could lose substantial part investment cotai strip properties december 31 2006 invested approximately 1000 million cotai strip properties hengqin island development project entered nonbinding letter intent zhuhai municipal people’s government people’s republic china work create master plan develop leisure convention destination resort hengqin island located approximately one mile cotai strip within mainland china actively preparing preliminary design concepts presentation government january 10 2007 zhuhai government established project coordination committee act government liaison empowered work directly company advance development project interfaced committee actively working committee continue advance plans project remains subject number conditions including governmental approvals singapore development project august 2006 whollyowned subsidiary mbs entered development agreement stb build operate integrated resort called marina bay sands singapore marina bay sands large integrated resort includes three 54story hotel towers totaling approximately 2600 suites linked roofs skypark pools cafes recreation facilities casino enclosed retail dining entertainment complex approximately 750000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains approximately 150000 square foot artscience museum development agreement paid 12 billion singapore dollars “sgd” approximately us7825 million exchange rates effect december 31 2006 premium payments lease land resort built plus additional sgd1056 million approximately us689 million exchange rates effect december 31 2006 various taxes fees combined amount 8060 million capitalized balance sheet leasehold interest land 48 million amortized december 31 2006 amortize asset 60 years length lease agreement remaining 454 million 397 million recorded receivable collected january 2007 57 million capitalized balance sheet construction progress addition fees provided deposit sgd1926 million approximately us1256 million exchange rates effect december 31 2006 security deposit construction integrated resort currently satisfied bank guarantees also august 2006 mbs entered twoyear sgd221 billion approximately us144 billion exchange rates effect december 31 2006 bridge facility finance payments provide nearterm development expenditures expect cost develop construct marina bay sands integrated resort approximately 36 billion inclusive land premium taxes fees discussed marina bay sands expected open 2009 united kingdom development projects december 2006 announced one affiliates cantor gaming affiliate global financial services company cantor fitzgerald agreed launch online casino poker site initially aimed serving united kingdom market cantor gaming provide online casino poker destination featuring las vegas sands brands site offer casino games including blackjack roulette baccarat video poker slots online poker offering part full endtoend gaming service including customer age location verification online payment processing customer services site expected launched second quarter 2007 site hosted operator licensed compliance laws alderney british channel islands accept us customers united kingdom government recently announced country’s first regional super casino would built manchester tender process operator facility undertaken intend participate tender process addition existing agreements develop lease gaming entertainment facilities sheffield united glasgow rangers football clubs united kingdom ability eventually develop lease gaming entertainment facilities agreements subject number conditions including passage legislation expand number authorized regional casinos ability obtain gaming license development projects currently exploring possibility operating integrated resorts additional asian jurisdictions united states europe critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful accounts maintain allowance reserve doubtful accounts operating casino resorts venetian sands macao regularly evaluate allowance doubtful accounts venetian credit marker play significant apply standard reserve percentages aged account balances specified dollar amount specifically analyze collectibility account balance specified dollar amount based upon age account customer’s financial condition collection history known information also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves sands macao credit marker play significant apply standard reserve percentage aged account balances mix credit play percentage total casino play decreased significantly since 2005 due continued growth sands macao table games play primarily cash play venetian credit table games play represents approximately 626 total table games play allowance doubtful accounts 228 269 gross casino hotel accounts receivable years ended december 31 2006 2005 respectively selfinsurance accruals maintain accruals health workers compensation selfinsurance classified accrued liabilities consolidated balance sheets determine adequacy accruals periodically evaluating historical experience projected trends related accruals consultation outside actuarial experts information indicates accruals overstated understated business conditions indicate adjust assumptions utilized reduce provide additional accruals appropriate litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance sfas 5 “accounting contingencies” include accruals accrued liabilities consolidated balance sheets property equipment december 31 2006 net property equipment 458 billion representing 643 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs stockbased compensation sfas 123r “sharebased payment” requires recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatilities selection companies peer group due lack historical information used simplified method estimating expected option life options qualify “plainvanilla” options believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted prior adopting sfas 123r applied apb opinion 25 “accounting stock issued employees” related interpretations accounting stockbased compensation plans employee stock options granted exercise price equal fair market value defined company’s 2004 equity award plan company adopted sfas 123r effective january 1 2006 year ended december 31 2006 recorded stockbased compensation expense 147 million expense recorded 2005 2004 december 31 2006 558 million unrecognized compensation cost net estimated forfeitures 80 related nonvested stock options 21 million unrecognized compensation cost related nonvested restricted stock option restricted stock costs expected recognized weighted average period 32 years 19 years respectively income taxes subject income taxes united states several states foreign jurisdictions operate account income taxes accordance sfas 109 “accounting income taxes” sfas 109 deferred tax assets liabilities recognized based differences financial statement tax basis assets liabilities using enacted tax rates sfas 109 requires recognition deferred tax assets net applicable valuation allowances related net operating loss carryforwards tax credits temporary differences standard requires recognition future tax benefit extent realization benefit likely otherwise valuation allowance applied income tax returns subject examination internal revenue service “irs” tax authorities positions taken tax returns sometimes subject uncertainty tax laws take positions unless “substantial authority” internal revenue code applicable regulations may take positions tax returns based substantial authority ultimately accepted irs assess potential unfavorable outcomes based criteria sfas 5 establish tax reserve unfavorable outcome probable amount unfavorable outcome reasonably estimated assess potential outcomes tax uncertainties quarterly basis determining whether probable criterion sfas 5 met presume taxing authority focus exposure assess probable outcome particular issue based upon relevant legal technical merits also apply judgment regarding potential actions tax authorities resolution settlement process maintain required tax reserves time underlying issue resolved actual results differ reserve estimates adjust income tax provision tax reserves period resolved tax years examined taxing authorities adjust tax reserves year tax examinations settled tax years examined taxing authorities adjust tax reserves year statute limitations expires estimate potential outcome uncertain tax issue highly judgmental believe adequately provided reasonable foreseeable outcomes related uncertain tax matters recent accounting pronouncements june 2006 fasb ratified consensus reached emerging issues task force “eitf” issue 0603 “how sales collected customers remitted governmental authorities presented income statement gross versus net presentation” eitf reached consensus presentation taxes either gross net basis accounting policy decision requires disclosure eitf issue 0603 effective first interim annual reporting period beginning december 15 2006 taxes collected customers recorded net basis intention modifying accounting policy adoption eitf issue 0603 effect results operations financial position july 2006 fasb issued interpretation “fin” 48 “accounting uncertainty income taxes” provides guidance accounting uncertainty income taxes recognized financial statements accordance sfas 109 fin 48 provides guidance financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance derecognition classification interest penalties accounting interim periods disclosures transition fin 48 require entities assess likelihood uncertain tax positions accepted applicable taxing authority measure amount benefit recognized purposes considered greater 50 likely sustained fin 48 effective fiscal years beginning december 15 2006 adopt fin 48 january 1 2007 required currently evaluating impact adopting standard believe reduction opening retained earnings amount exceed 120 million september 2006 fasb issued sfas 157 “fair value measurements” defines fair value establishes framework measuring fair value expands disclosures fair value measurements sfas 157 applies accounting pronouncements require permit fair value measurement sfas 157 require new fair value measurements expect application standard change current practices provisions sfas 157 effective financial statements issued fiscal years beginning november 15 2007 interim periods within fiscal years summary financial results following table summarizes results operations historical financial results years ended december 31 2005 2004 indicative future results among things following items anticipated occur magnitude near future sold grand canal shops mall may 17 2004 recognized gain 4176 million paid incentive payments 632 million related phase ii mall sale certain executives july 2004 incurred loss disposal assets 316 million 2004 related primarily demolition space accommodate construction showroom incurred stockbased compensation charge 492 million related initial public offering 2004 incurred loss retirement debt 1370 million 2005 related redemption 11 mortgage notes vml’s senior secured notes key operating revenue measurements venetian’s operating revenue dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play sands macao almost wholly dependent casino customers visit casino daily basis hotel revenues material sands macao visitors sands macao arrive ferry automobile bus airplane helicopter hong kong cities china southeast asian cities close proximity macao following key measurements use evaluate operating revenue casino revenue measurements las vegas table games drop slot handle volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered coin placed slot machines aggregate period cited drop handle abbreviations table games drop slot handle based upon mix table games table games produce statistical average table win percentage calculated discounts measured percentage table game drops 200 220 slot machines produce statistical average slot machine win percentage calculated slot club cash incentives measured percentage slot machine handle generally 60 70 casino revenue measurements macao view macao table games segregated two groups consistent macao market’s convention rolling chip play vip play nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered volume measurement nonrolling chip table games drop described rolling chip volume nonrolling chip volume equivalent since rolling chip volume measure amounts wagered versus dropped rolling chip volume substantially higher drop slot handle sands macao gross amount wagered coins placed slot machines aggregate period cited view rolling chip table games win percentage rolling chip volume view nonrolling chip table games win percentage drop win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games macao rolling chip table games win percentage calculated discounts commissions measured percentage rolling chip volume expected 27 30 nonrolling chip table games expected produce statistical average table win percentage measured percentage table game drop discounts commissions 180 200 similar las vegas macao slot machines produce statistical average slot machine win percentage measured percentage slot machine handle generally 60 70 actual win may vary statistical average generally slot machine play venetian sands macao conducted cash basis venetian’s table games revenue approximately 626 credit based guests wagering year ended december 31 2006 sands macao’s table game play conducted primarily cash basis hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates higher revenue per available room year ended december 31 2006 compared year ended december 31 2005 operating revenues net revenues consisted following consolidated net revenues 224 billion year ended december 31 2006 increase 4959 million compared 174 billion year ended december 31 2005 increase net revenues due primarily increase casino revenue 4260 million increase primarily attributable growth operations sands macao due primarily formal introduction rolling chip program march 2005 casino expansion august 2006 casino revenues year ended december 31 2006 increased 4260 million compared year ended december 31 2005 increase 3821 million attributable growth casino operations sands macao due primarily formal introduction rolling chip program march 2005 casino expansion august 2006 following table summarizes results casino revenue activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2006 increased 270 million compared year ended december 31 2005 increase attributable increase average daily room rate well slight increase occupancy rate following table summarizes results room revenue activity food beverage revenues 1878 million year ended december 31 2006 increase 403 million compared 1475 million year ended december 31 2005 increase primarily attributable food beverage revenues venetian increased 322 million due increased group business resulting primarily approximately 450000 square feet additional meeting space property convention retail revenues year ended december 31 2006 increased 226 million compared year ended december 31 2005 increase primarily attributable 76 million additional convention revenues sands expo center 104 million revenues associated blue man group phantom opera gordie brown performances began october 2005 june 2006 october 2006 respectively operating expenses breakdown operating expenses follows operating expenses 166 billion year ended december 31 2006 increase 4113 million compared 125 billion year ended december 31 2005 increase operating expenses primarily attributable higher operating revenues growth operating businesses macao lesser extent las vegas fully described casino department expenses year ended december 31 2006 increased 2684 million compared year ended december 31 2005 increase casino expenses 1761 million due 390 gross win tax casino revenues macao despite higher gross win tax casino operating margins sands macao similar venetian primarily lower labor marketing sales expenses macao rolling chip volume increases percentage total gaming operations casino margins decrease due commissions paid rolling chip program remaining increase primarily attributable additional payroll related expenses related continued growth operations sands macao casino expansion august 2006 food beverage expense increased 124 million convention retail expense increased 62 million increases primarily due associated increase respective revenue categories noted provision doubtful accounts 181 million year ended december 31 2006 compared 94 million year ended december 31 2005 due primarily increase casino hotel receivables year amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses year ended december 31 2006 increased 376 million compared year ended december 31 2005 increase attributable growth operating businesses las vegas macao well 71 million related stockbased compensation expense recorded connection adoption sfas 123r corporate expense year ended december 31 2006 increased 213 million compared year ended december 31 2005 increase corporate expense 195 million related payroll operating expenses increase headcount corporate area support continued expansion activities 54 million related stockbased compensation recorded connection adoption sfas 123r partially offset 50 million charitable contribution made 2005 recur 2006 preopening development expenses 377 million 261 million respectively year ended december 31 2006 compared 37 million 222 million respectively year ended december 31 2005 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2006 primarily related venetian macao project expansion sands macao development expense includes costs associated company’s evaluation pursuit new business opportunities also expensed incurred development expenses year ended december 31 2006 primarily related activities singapore pennsylvania europe expect preopening development expenses continue increase progress venetian macao cotai strip projects macao palazzo las vegas marina bay sands singapore hengqin island pennsylvania well continued pursuit development opportunities elsewhere depreciation amortization expense year ended december 31 2006 increased 155 million compared year ended december 31 2005 increase primarily due additional depreciation expense result capital improvements venetian sands macao interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized year ended december 31 2006 increased 396 million compared year ended december 31 2005 increase primarily attributable increase average longterm debt balances resulting primarily completion 25 billion macao credit facility may 2006 support development activities macao 144 billion singapore bridge facility august 2006 support development marina bay sands expect interest expense continue increase longterm debt balances interest rates increase offset capitalization 946 million interest year ended december 31 2006 compared 227 million capitalized interest year ended december 31 2005 expect capitalized interest continue increase venetian macao palazzo projects approach anticipated 2007 opening dates increase construction activities cotai strip marina bay sands bethworks factors affecting earnings interest income year ended december 31 2006 662 million increase 331 million compared 331 million year ended december 31 2005 increase attributable additional invested cash balances primarily borrowings senior secured credit facility macao credit facility loss early retirement debt 1370 million year ended december 31 2005 result redemption las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes effective income tax rate year ended december 31 2006 123 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result temporary income tax exemption macao gaming operations set expire end 2008 effective tax rate 15 year ended december 31 2005 primarily due tax benefit associated loss early retirement debt 2005 period well application aforementioned macao temporary income tax exemption year ended december 31 2005 compared year ended december 31 2004 operating revenues net revenues consisted following 1 grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 consolidated net revenues 174 billion year ended december 31 2005 increase 5439 million compared 12 billion year ended december 31 2004 increase net revenues due primarily increase casino revenue 5415 million increase attributable operation sands macao full year 2005 compared seven months 2004 increase net revenues partially offset decrease convention retail revenue 134 million primarily result sale grand canal shops mall lease certain retail restaurant venues may 17 2004 casino revenues year ended december 31 2005 increased 5415 million compared year ended december 31 2004 increase 4946 million attributable operation sands macao full year 2005 compared seven months 2004 increased volumes associated introduction rolling chip program march 2005 addition 469 million increase venetian due increase table game drop 1616 million increase 27 percentage points win percentage experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues year ended december 31 2005 increased 116 million compared year ended december 31 2004 increase attributable increase average daily room rate 220 2004 225 2005 well slight increase occupancy rate 970 2004 973 2005 venetian generated revenue per available room 218 year ended december 31 2005 compared 213 year ended december 31 2004 food beverage revenues year ended december 31 2005 increased 259 million compared year ended december 31 2004 increase 152 million attributable increased business volumes sands macao well full year operations versus seven months prior year food beverage revenues venetian increased 107 million due increased hotel occupancy general group business property convention retail revenues year ended december 31 2005 decreased 134 million compared year ended december 31 2004 convention retail revenues 2004 include revenue 159 million related operations grand canal shops mall lease retail outlets venetian grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 operating expenses breakdown operating expenses follows 1 grand canal shops mall sold certain retail restaurant venues leased ggp may 17 2004 operating expenses 125 billion year ended december 31 2005 compared 5786 million year ended december 31 2004 excluding gain sale grand canal shops mall total operating expenses year ended december 31 2004 9962 million increase operating expenses primarily attributable higher operating revenues business volumes associated opening operations sands macao increase partially offset decrease corporate expense 881 million related 632 million incentive payments paid certain executives july 2004 phase ii mall sale 492 million stockbased compensation expense resulting stock options granted july 2004 casino department expenses year ended december 31 2005 increased 3163 million compared year ended december 31 2004 increase primarily attributable additional casino expenses related opening sands macao may 2004 full year expenses property 2005 period increased slot machine table games volume venetian 3163 million increase casino expenses 2296 million due 390 gross win tax casino revenues macao despite higher gross win tax casino operating margins sands macao similar venetian primarily lower labor marketing sales expenses macao food beverage expense increased 126 million primarily related increased food beverage revenue noted provision doubtful accounts 94 million year ended december 31 2005 compared 80 million year ended december 31 2004 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative costs increased 197 million primarily result full year operations sands macao 2005 compared seven months 2004 corporate expense year ended december 31 2005 decreased 881 million compared year ended december 31 2004 decrease primarily result 1124 million expenses related incentive payments paid certain executives july 2004 phase ii mall sale stockbased compensation expense resulting stock options granted july 2004 partially offset 50 million charitable contribution first quarter 2005 addition corporate staff 2005 period including reassignment employees venetian casino resort llc las vegas sands corp built corporate infrastructure new public company preopening development expenses 37 million 222 million respectively year ended december 31 2005 compared 190 million 149 million respectively year ended december 31 2004 preopening expense year ended december 31 2004 included 180 million related sands macao opened may 2004 preopening expense year ended december 31 2005 primarily related venetian macao palazzo projects expect preopening expense increase projects get closer 2007 opening dates increase development expenses primarily related activities macao united kingdom singapore pennsylvania depreciation amortization expense year ended december 31 2005 increased 259 million compared year ended december 31 2004 increase primarily result placing service assets sands macao second quarter 2004 full year depreciation expense property 2005 due various expansion projects placed service venetian including new luxury suites entertainment theater meeting rooms addition 70 million cumulative depreciation expense related amounts capitalized connection litigation settlements related original construction venetian recorded 2005 loss disposal assets year ended december 31 2005 14 million compared 316 million year ended december 31 2004 loss disposal assets 316 million 2004 resulted primarily demolition space accommodate construction showroom venetian interest expense following table summarizes information related interest expense longterm debt interest expense net amounts capitalized year ended december 31 2005 decreased 418 million compared year ended december 31 2004 net interest expense incurred year ended december 31 2005 708 million related venetian 47 million related sands macao 127 million related litigation settlements 81 million related sands expo center decrease primarily attributable replacement higher fixed rate debt instrument lower variable rate bank debt first quarter 2005 retired las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes addition first quarter 2005 increased borrowings senior secured credit facility issued 2500 million aggregate principal amount 6375 senior notes decrease also due capitalization 227 million interest year ended december 31 2005 compared 46 million capitalized interest year ended december 31 2004 capitalized interest costs associated construction projects principally venetian macao palazzo expect capitalized interest continue increase projects approach planned openings 2007 factors affecting earnings interest income year ended december 31 2005 331 million increase 254 million compared 77 million year ended december 31 2004 increase due increase invested cash equivalent balances primarily december 2004 initial public offering 2005 borrowings las vegas sands llc’s senior secured credit facility loss early retirement debt 1370 million year ended december 31 2005 result redemption las vegas sands inc’s 8436 million aggregate principal amount 11 mortgage notes vml’s 1200 million aggregate principal amount senior secured notes effective income tax rate year ended december 31 2005 15 effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result temporary income tax exemption macao expire end 2008 prior december 2004 las vegas sands inc elected taxed corporation whollyowned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities venetian’s slot machine retail hotel rooms businesses generally conducted cash basis table games group hotel businesses conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivables sands macao table games slot machine play currently conducted primarily cash basis net cash used operating activities year ended december 31 2006 1967 million decrease 7866 million compared net cash provided operating activities 5899 million year ended december 31 2005 primary factor contributing net cash used operating activities onetime 7867 million land concession payments made singapore government marina bay sands project conjunction signing development agreement august 2006 cash flows investing activities capital expenditures year ended december 31 2006 totaled 193 billion includes 985 million construction development activities sands macao 102 billion construction development activities venetian macao 1007 million construction development activities macao development projects 5305 million construction development activities palazzo 1091 million expansions improvements maintenance capital expenditures venetian sands expo center las vegas 495 million corporate activities 131 million construction development activities singapore restricted cash increased 3106 million year ended december 31 2006 primarily result adding 4654 million net restricted cash macao credit facility used macao related construction offset decrease 1748 million net restricted cash used palazzo related construction cash flows financing activities year ended december 31 2006 net cash flows provided financing activities 244 billion primarily attributable net borrowings 13 billion macao credit facility 8921 million singapore credit facility 2291 million senior secured revolving facility 860 million phase ii mall construction loan 348 million ffe credit facilities offset repayment 500 million credit facility venetian venture development intermediate limited capital liquidity december 31 2006 held unrestricted cash equivalents 4681 million expect fund operations capital expenditures venetian sands expo center sands macao sands macao expansion construction debt service requirements existing cash balances operating cash flow borrowings las vegas macao revolving credit facilities 4500 million senior secured revolving credit facility las vegas 1899 million available december 31 2006 5000 million senior secured revolving credit facility macao working capital needs however macao credit facility required secure land concession order fully draw facility asked lenders amend macao credit facility remove requirement among others constructing palazzo currently estimate construction completed fall 2007 cost develop construct palazzo could reach high approximately 185 billion exclusive land furniture fixtures equipment phase ii mall expected cost approximately 2800 million exclusive certain incentive payments executives made july 2004 addition expect additional capital expenditures required build stores restaurants located palazzo december 31 2006 paid approximately 104 billion design development construction costs palazzo intend use 3748 million plus interest earnings proceeds 9700 million term b facility 2000 million term b delayed draw facility senior secured credit facility 1355 million proceeds phase ii mall construction loan cash hand borrowings revolving facility senior secured credit facility operating cash flow fund remaining development construction costs palazzo including phase ii mall pay related fees expenses december 2006 company group lenders general electric capital corporation administrative agent lenders entered 1429 million credit facility included refinancing previous ffe facility 79 million “ffe term funded credit facility” additional 1350 million “ffe term delayed draw credit facility” proceeds ffe term delayed draw credit facility used finance certain equipment fixtures furniture goods “specified ffe” palazzo venetian facility secured specified ffe guaranteed certain domestic subsidiaries company ffe term delayed draw credit facility provides 54month delayed draw loan interest term loan either threemonth libor plus 20 base rate plus 10 payable quarterly ffe term delayed draw credit facility subject ten quarterly principal payments beginning april 1 2008 amount equal 50 aggregate principal amount april 1 2008 remaining amount due four equal installments october 1 2010 january 1 2011 april 1 2011 june 15 2011 december 31 2006 376 million drawn ffe term delayed draw credit facility early stages constructing high rise residential condominium tower consist approximately 270 luxury condominiums situated palazzo venetian condominium tower currently expected open late fall 2008 estimated cost ranging 6000 million 7000 million intend obtain longterm financing amount necessary fund construction condominium tower may 25 2006 two subsidiaries vml us finance llc “borrower” venetian macau limited guarantor entered credit agreement “macao credit facility” funding sands macao expansion partial funding construction venetian macao cotai strip developments macao credit facility consists 12 billion funded term b loan “macao term b facility” 7000 million delayed draw term b loan “macao term b delayed draw facility” 1000 million funded local currency term loan “macao local term facility” 5000 million revolving credit facility “macao revolving facility” december 31 2006 13 billion drawn macao term b facility macao local term facility december 31 2006 amounts outstanding macao revolving facility amounts drawn macao term b delayed draw facility addition majority sands macao’s cash flows expected used finance portion construction venetian macao certain macao developments february 2007 received final draft land concession agreement macao government pursuant awarded concession lease parcels 1 2 3 cotai strip including sites building venetian macao four seasons hotel accepted conditions draft land concession made initial premium payment 1065 million towards aggregate land premium 3237 million additionally 241 million paid form cost reclamation work works done land installation costs electrical substation remaining amount payable time land concession become effective date published macao’s official gazette land concession effective required make additional land premium annual rent payments relating parcels 1 2 3 amounts times specified land concession currently estimate cost developing building venetian macao approximately 24 billion exclusive aggregate land concession payment 3237 million parcels 1 2 3 unable obtain amendment macao credit facility described able draw funds macao credit facility order fund construction activities seek additional financing purpose although yet finalized estimate costs cotai strip developments expect total cost development cotai strip range 90 billion 110 billion incur additional debt finance completion cotai strip developments august 18 2006 mbs entered agreements together “singapore credit facility” providing sgd11 billion approximately us7173 million exchange rates effect december 31 2006 floating rate notes facility “singapore floating rate notes” sgd11 billion approximately us7173 million exchange rates effect december 31 2006 term loan facility “singapore term loan” singapore floating rate notes consist funded sgd7886 million approximately us5142 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility singapore term loan consists funded sgd5960 million approximately us3887 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility sgd1926 million approximately us1256 million exchange rates effect december 31 2006 facility provide bank guarantees security deposit required delivered stb development agreement december 31 2006 sgd7982 million approximately us5205 million exchange rates effect december 31 2006 drawn singapore floating rate notes sgd6035 million approximately us3935 million exchange rates effect december 31 2006 drawn singapore term loan sgd1926 million approximately us1256 million exchange rates effect december 31 2006 singapore term loan committed provide guarantee security deposit required delivered stb development agreement singapore credit facility matures august 2008 currently expect cost develop construct marina bay sands approximately 36 billion inclusive land premium taxes fees previously paid entered singapore credit facility satisfy nearterm development costs obligations development agreement intend obtain longterm financing amount necessary fund construction marina bay sands december 20 2006 pennsylvania gaming control board announced sands bethworks gaming awarded pennsylvania gaming license develop gaming hotel shopping dining complex located site historic bethlehem steel works bethlehem pennsylvania currently expect cost develop construct complex approximately 6000 million intend obtain longterm financing amount necessary fund construction sands bethworks announced agreed purchase ten ferries cost approximately 1538 million bring customers cotai strip including venetian macao cotai strip developments first ferries scheduled delivered late 2007 intend obtain longterm financing amount sufficient fund purchase ferries aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2006 1 senior secured credit facility consists 9700 million single draw term b loan facility 2000 million term b delayed draw facility fully drawn august 19 2005 4500 million revolving credit facility december 31 2006 amounts borrowed 117 billion term b facilities including delayed draw 2601 million revolving credit facility term b facility delayed draw facility mature june 15 2011 subject quarterly amortization payments commencing first quarter substantial completion palazzo revolving credit facility matures february 22 2010 interim amortization december 31 2006 amount available borrowing revolving credit facility 1899 million 2 ffe credit facility consists 79 million single draw term facility 1350 million delayed draw term facility december 31 2006 amounts borrowed 450 million facilities single draw term facility mature july 1 2008 subject quarterly amortization payments one final payment 37 million october 1 2008 delayed draw term facility subject ten quarterly principal payments beginning april 1 2008 amount equal 50 aggregate principal amount april 1 2008 remaining amount due four equal installments october 1 2010 january 1 2011 april 1 2011 june 15 2011 3 phase ii mall construction loan commitment 2500 million due march 30 2008 4 amount represents borrowings macao credit facility consists 12 billion funded term b loan “macao term b facility” 7000 million delayed draw term b loan “macao term b delayed draw facility” 1000 million funded local currency term loan “macao local term facility” 5000 million revolving credit facility “macao revolving facility” december 31 2006 amounts outstanding macao revolving facility amounts drawn macao term b delayed draw facility macao revolving facility macao local term facility five year maturity macao term b delayed draw facility macao term b facility mature six seven years respectively macao term b delayed draw facility macao term b facility subject nominal amortization first five six years respectively first quarter following substantial completion venetian macao remainder loans payable four equal installments last year immediately preceding respective maturity dates following substantial completion venetian macao local term facility subject quarterly amortization amount approximately 63 million per quarter remainder loan payable four equal installments last year immediately preceding maturity date 5 amount represents borrowings singapore credit facility consists sgd11 billion approximately us7173 million exchange rates effect december 31 2006 floating rate notes facility “singapore floating rate notes” sgd11 billion approximately us7173 million exchange rates effect december 31 2006 term loan facility “singapore term loan” singapore floating rate notes consist funded sgd7886 million approximately us5142 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility singapore term loan consists funded sgd5960 million approximately us3887 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility sgd1926 million approximately us1256 million exchange rates effect december 31 2006 facility provide bank guarantees relation security deposit required delivered stb development agreement singapore credit facility matures full august 22 2008 6 principal payments increase interface groupnevada achieve certain cash flow levels defined loan agreement sands expo center mortgage loan mature february 10 2009 renewal options exercised monthly amortization payments 7 6375 senior notes due february 15 2015 8 based december 31 2006 libor rates 54 plus applicable interest rate spread accordance respective debt agreements 9 party services agreement third party hvac services venetian total remaining payment obligation arrangement 171 million december 31 2006 payable equal monthly installments july 1 2009 right terminate agreement based upon failure hvac provider agreement provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider 10 party tenant lease termination asset purchase agreements total remaining payment obligation arrangements 113 million december 31 2006 agreement grand canal shops mall sale obligated fulfill lease termination asset purchase agreements 11 party employment agreements seven senior executives remaining terms one three years 12 vml party longterm land lease 25 years total remaining payment obligation lease 92 million december 31 2006 13 party certain leaseback agreements blue man group theater gondola certain office space related grand canal shops mall sale total remaining payments due december 31 2006 1769 million 14 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual fixed gaming tax approximately 94 million per year government macao termination gaming subconcession 15 2006 entered commitments purchase ten ferries built next two years macao operations total remaining payment obligation december 31 2006 1353 million 16 party longterm lease agreement 99 years parking structure located adjacent venetian december 31 2006 total remaining payments due 1164 million 17 party certain operating leases real estate various equipment service arrangements total remaining payments due december 31 2006 413 million offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions simple interest rate caps 1997 entered operating lease arrangements hvac provider terms operating lease agreements purchase hvac energy services initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods fixed payment obligations due next twelve months 68 million operating lease agreements hvac provider total remaining payment obligations arrangements 171 million december 31 2006 payable equal monthly installments july 1 2009 right terminate agreements based upon failure hvac provider provide hvac services upon sale grand canal shops mall may 17 2004 ggp assumed responsibility 16 million annual payments hvac provider offbalance sheet arrangements dividends 2004 las vegas sands inc declared paid 1079 million dividends tax distributions stockholders time including principal stockholder 2004 las vegas sands inc also declared 211 million dividend stockholders paid january 2005 tax distributions made order provide stockholders funds pay taxes attributable taxable income las vegas sands inc including taxable income las vegas sands inc associated sale grand canal shops mall flowed virtue las vegas sands inc’s status subchapter corporation income tax purposes result conversion taxable “c” corporation income tax purposes las vegas sands inc known las vegas sands llc longer making tax distributions immediately prior july 29 2004 acquisition interface group holding company inc “interface holding” las vegas sands inc interface holding distributed approximately 152 million sole stockholder distribution comprised 129 million cash 19 million receivables due principal stockholder interface holding 04 million certain fixed assets restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments principal operating subsidiary las vegas sands llc contain significant restrictions payment dividends distributions us las vegas sands llc particular senior secured credit facility prohibits las vegas sands llc paying dividends making distributions us investing us limited exceptions las vegas sands llc may make certain distributions us cover taxes certain reasonable customary operating costs addition las vegas sands llc may make distributions us order enable us pay dividends common stock long construction palazzo substantially complete certain financial leverage tests satisfied distributions may exceed 250 million 500 million twelvemonth period depending financial leverage ratio time distributions addition debt instrument subsidiary phase ii mall subsidiary llc “phase ii mall subsidiary” restricts payment dividends distributions us subject limited exceptions phase ii mall construction loan prohibits phase ii mall subsidiary paying dividends making distributions us making investments us tax distributions limited basket amount debt instruments subsidiaries including macao credit facility construction venetian macao singapore credit facility construction marina bay sands contain certain restrictions among things limit ability company andor certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets applicable company without prior approval lenders noteholders financial covenants included senior secured credit facility macao credit facility include minimum interest coverage ratio maximum leverage ratio minimum net worth covenant maximum capital expenditure limitations see “item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt” inflation believe inflation changing prices material impact net sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions may impact levels disposable income consumer spending pricing hotel rooms • uncertainty tourist behavior related spending vacationing casino resorts las vegas macao • disruptions reductions travel due conflicts iraq future terrorist incidents • outbreaks infectious diseases severe acute respiratory syndrome avian flu market areas • dependence upon three properties two markets cash flow • new developments construction ventures including palazzo venetian macao cotai strip developments marina bay sands singapore sands bethworks • ability obtain sufficient funding developments including developments cotai strip singapore • passage new legislation receipt governmental approvals proposed developments macao singapore jurisdictions planning operate • substantial leverage debt service including sensitivity fluctuations interest rates capital markets trends • insurance coverage including risk obtained sufficient coverage acts terrorism able obtain additional coverage significantly increased rates • government regulation casino industry including gaming license regulation legalization gaming certain domestic jurisdictions including native american reservations regulation gaming internet • increased competition additional construction las vegas including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas • popularity las vegas convention trade show destination • new taxes changes existing tax rates • ability meet certain development deadlines macao singapore • ability maintain gaming subconcession macao • completion infrastructure projects macao • increased competition planned construction projects macao • future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws item 7aitem 7 management’s discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements “management’s discussion analysis financial condition results operations” forwardlooking statements see “ special note regarding forwardlooking statements” operations view casino properties operating segment operating segments us consist venetian las vegas palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated las vegas operating properties considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure approximately 638 629 gross revenue las vegas operating properties years ended december 31 2010 2009 respectively derived room revenues food beverage services nongaming sources 362 371 respectively derived gaming activities percentage nongaming revenue reflects integrated resort’s emphasis group convention trade show business resulting high occupancy room rates throughout week including midweek periods approximately 921 899 gross revenue sands bethlehem year ended december 31 2010 period ended december 31 2009 respectively derived gaming activities remainder derived food beverage services nongaming sources macau operating segments consist sands macao venetian macao four seasons macao ancillary operations support properties support remaining cotai strip development projects approximately 942 936 gross revenue sands macao years ended december 31 2010 2009 respectively derived gaming activities remainder primarily derived room revenues food beverage services approximately 827 813 gross revenue venetian macao years ended december 31 2010 2009 respectively derived gaming activities remainder derived room revenues food beverage services nongaming sources approximately 820 738 gross revenue four seasons macao years ended december 31 2010 2009 respectively derived gaming activities remainder derived retail nongaming sources singapore operating segment consists marina bay sands partially opened april 27 2010 additional portions opened progressively throughout 2010 approximately 798 gross revenue marina bay sands period ended december 31 2010 derived gaming activities remainder derived room revenues food beverage services nongaming sources development projects suspended portions development projects focus efforts projects highest expected rates return invested capital general economic conditions fail improve unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion investment date suspended projects could lost would result impairment charge addition may subject penalties termination clauses construction contracts termination rights management contracts certain hotel management companies united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions intend recommence construction demand conditions improve expect take approximately 18 months thereafter complete construction project december 31 2010 capitalized construction costs 1764 million project macau submitted plans macau government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres refer parcels 3 5 6 7 8 subject approval macau government discussed developments expected include hotels exhibition conference facilities gaming areas showrooms spas dining retail entertainment facilities amenities commenced construction preconstruction activities developments plan operate related gaming areas macau gaming subconcession staging construction integrated resort parcels 5 6 phases ii integrated resort expected feature approximately 6000 shangrila traders sheratonbranded hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining facilities exhibition conference facilities multipurpose theater phase iii project expected include fourth st regisbranded hotel mixeduse tower connection entering 175 billion vol credit facility used together 5000 million proceeds scl offering recommenced construction activities currently working macau government obtain sufficient construction labor project adequate labor quotas received timing completion phases ii currently determinable however progressing alternative scenarios completion selected portions phases ii construction labor currently onsite intend commence construction phase iii project demand market conditions warrant december 31 2010 capitalized construction costs 201 billion entire project including 1351 million outstanding construction payables commenced preconstruction activities parcels 7 8 3 intend commence construction integrated resort parcels 5 6 complete necessary government approvals obtained including land concession parcels 7 8 regional global economic conditions improve future demand warrants additional financing obtained december 31 2010 capitalized construction costs 1021 million 343 million parcels 7 8 3 respectively december 2010 received notice macau government application land concession parcels 7 8 approved applied chief executive macau review decision subsequent december 31 2010 filed appeal court second instance macau yet issue decision win appeal still possible chief executive macau deny land concession based upon public policy considerations obtain land concession receive full reimbursement capitalized investment project would record charge portion 1021 million capitalized construction costs december 31 2010 related development parcels 7 8 current economic environment access capital improve may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe summary financial results following table summarizes results operations historical financial results indicative future results continue develop open new properties including cotai strip integrated resort parcels 5 6 key operating revenue measurements operating revenues las vegas operating properties venetian macao four seasons macao marina bay sands dependent upon volume customers stay hotel affects price charged hotel rooms volume table games slot machine play operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements us table games drop “drop” slot handle “handle” volume measurements win hold percentage represents percentage drop handle casino recorded casino revenue table games drop represents sum markers issued credit instruments less markers paid table plus cash deposited table drop box slot handle gross amount wagered period cited view table games win percentage drop slot hold percentage slot handle based upon mix table games table games las vegas produced trailing 12month win percentage calculated discounts 181 slot machines las vegas pennsylvania produced trailing 12month win percentage calculated slot club cash incentives 78 68 respectively actual win may vary trailing 12month win percentage generally slot machine play conducted cash basis las vegas approximately 642 table games play year ended december 31 2010 conducted credit basis pennsylvania table games play commenced july 2010 primarily conducted cash basis expect increase credit extended players operations ramp sands bethlehem casino revenue measurements macau singapore macau singapore table games segregated two groups consistent macau singapore market’s convention rolling chip play vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop previously described rolling chip nonrolling chip volume measurements comparable amounts wagered lost substantially higher amounts dropped slot handle gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue based upon mix table games rolling chip win percentage calculated discounts commissions expected 27 30 nonrolling chip table games produced trailing 12month win percentage 253 205 265 venetian macao sands macao four seasons macao respectively macau slot machines produced trailing 12month win percentage 70 59 57 venetian macao sands macao four seasons macao respectively macau 369 table games play conducted credit basis year ended december 31 2010 percentage expected increase continue extend credit premium players junket operators table games play singapore 352 table games play conducted credit basis period ended december 31 2010 percentage expected increase credit extended premium players operations ramp marina bay sands hotel revenue measurements hotel occupancy rate average percentage available hotel rooms occupied period average daily room rate average price occupied rooms per day used performance indicators revenue per available room represents summary hotel average daily room rates occupancy available rooms occupied average daily room rates normally higher revenue per available room reserved rooms guests show stay lose deposit may resold walkin guests rooms considered occupied twice statistical purposes due obtaining original deposit walkin guest revenue cases significant number rooms resold occupancy rates may excess 100 revenue per available room may higher average daily room rate year ended december 31 2010 compared year ended december 31 2009 operating revenues net revenues consisted following consolidated net revenues 685 billion year ended december 31 2010 increase 229 billion compared 456 billion year ended december 31 2009 increase net revenues driven 126 billion net revenues marina bay sands opened april 2010 well increase 8495 million across macau properties 1068 million las vegas operating properties casino revenues increased 201 billion compared year ended december 31 2009 increase 106 billion attributable marina bay sands 7784 million due macau properties primarily driven increase rolling chip activity following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 1397 million compared year ended december 31 2009 increase room revenues attributable 986 million marina bay sands well increases venetian macao four seasons macao las vegas operating properties driven increased visitation well increase average daily room rates venetian macao four seasons macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 1188 million compared year ended december 31 2009 increase primarily attributable 836 million revenues marina bay sands 196 million macau properties convention retail revenues increased 1216 million compared year ended december 31 2009 increase primarily attributable 875 million revenues marina bay sands operating expenses breakdown operating expenses follows operating expenses 567 billion year ended december 31 2010 increase 108 billion compared 459 billion year ended december 31 2009 increase operating expenses primarily attributable opening marina bay sands increased casino activity across properties increase general administrative expenses depreciation amortization expense partially offset decreases due 1695 million impairment charge 425 million legal settlement included corporate expense recorded year ended december 31 2009 casino expenses increased 8998 million compared year ended december 31 2009 increase 4082 million due 390 gross win tax increased casino revenues across macau properties 3590 million attributable marina bay sands opened april 27 2010 well increase 935 million sands bethlehem open part 2009 rooms expense increased 222 million food beverage expense increased 420 million compared year ended december 31 2009 increases driven associated increases related revenues described convention retail expense increased 343 million compared year ended december 31 2009 increase primarily attributable 268 million expenses marina bay sands provision doubtful accounts 978 million year ended december 31 2010 compared 1038 million year ended december 31 2009 decrease attributable overall decrease provision receivables across properties result higher provision year ended december 31 2009 due economic conditions 2009 partially offset 275 million provision casino receivables marina bay sands amount provision vary short periods time factors specific customers owe us money given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 1571 million compared year ended december 31 2009 increase primarily attributable 1579 million expenses marina bay sands corporate expense decreased 233 million compared year ended december 31 2009 decrease attributable 425 million legal settlement recorded year ended december 31 2009 partially offset increase 224 million corporate payrollrelated expenses preopening expenses 1148 million year ended december 31 2010 compared 1577 million year ended december 31 2009 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2010 primarily related activities marina bay sands cotai strip parcels 5 6 development expenses material years ended december 31 2010 2009 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 1089 million compared year ended december 31 2009 increase primarily result opening marina bay sands full year depreciation expense sands bethlehem contributed 1191 million 106 million respectively impairment loss 161 million year ended december 31 2010 compared 1695 million year ended december 31 2009 impairment loss year ended december 31 2010 related equipment macau expected disposed loss disposal assets 386 million year ended december 31 2010 compared 92 million year ended december 31 2009 loss year ended december 31 2010 related disposition construction materials macau las vegas adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net income loss attributable las vegas sands corp stockbased compensation expense corporate expense rental expense preopening expense development expense depreciation amortization impairment loss disposal assets interest expense loss modification early retirement debt income taxes net income loss attributable noncontrolling interests following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 18 segment information” discussion operating segments reconciliation adjusted property ebitda net income loss attributable las vegas sands corp adjusted property ebitda macau operations increased 4082 million compared year ended december 31 2009 led increase 2533 million venetian macao previously described increase across properties primarily attributable combined increase net revenues 8495 million partially offset increase 4082 million gross win tax increased casino revenues well increases associated operating expenses adjusted property ebitda las vegas operating properties increased 510 million compared year ended december 31 2009 increase primarily attributable increase net revenues 1068 million partially offset increases associated operating expenses adjusted property ebitda sands bethlehem opened may 2009 marina bay sands opened april 2010 comparable prioryear period results operations sands bethlehem marina bay sands previously described interest expense following table summarizes information related interest expense longterm debt interest cost increased 256 million compared year ended december 31 2009 increase primarily attributable increase weighted average interest rate driven new vol credit facility amendment us credit facility partially offset decrease weighted average debt balance result repayments us vml credit facilities increase capitalized interest driven recommencement activities cotai strip parcels 5 6 macau 2010 factors effecting earnings expense 83 million year ended december 31 2010 compared 99 million year ended december 31 2009 expense year ended december 31 2010 primarily attributable foreign exchange losses decreases fair value interest rate cap agreements macau singapore loss modification early retirement debt 186 million year ended december 31 2010 primarily related 211 million loss related amendment us credit facility august 2010 partially offset gain early retirement debt 34 million related repurchase 603 million outstanding principal senior notes see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” effective income tax rate 87 year ended december 31 2010 compared beneficial rate 10 year ended december 31 2009 effective income tax rate year ended december 31 2010 reflects 17 statutory tax rate singapore operations zero percent tax rate macau gaming operations due income tax exemption macau set expire 2013 nonrealizable deferred tax assets us certain foreign jurisdictions unfavorably impacted effective income tax rate effective income tax rate year ended december 31 2009 includes recording valuation allowance net deferred tax assets us operations management anticipate recording income tax benefit related deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes likely deferred tax assets realizable able reduce valuation allowances net income attributable noncontrolling interests 1822 million year ended december 31 2010 compared net loss 143 million year ended december 31 2009 amounts primarily related noncontrolling interest scl year ended december 31 2009 compared year ended december 31 2008 operating revenues net revenues consisted following consolidated net revenues 456 billion year ended december 31 2009 increase 1732 million compared 439 billion year ended december 31 2008 increase net revenues due primarily full year operations four seasons macao opened august 2008 opening sands bethlehem may 2009 casino revenues increased 3327 million compared year ended december 31 2008 increase 1611 million attributable full year operations four seasons macao 1418 million attributable opening sands bethlehem 891 million venetian macao primarily due increase nonrolling chip win percentage increases partially offset decreases las vegas operating properties sands macao following table summarizes results casino activity experience average win percentages remain steady measured extended periods time vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues decreased 1093 million compared year ended december 31 2008 room revenues decreased room rates reduced maintain occupancy las vegas operating properties venetian macao decrease partially offset 166 million increase revenues attributable full year operations four seasons macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues decreased 414 million compared year ended december 31 2008 decrease due 662 million decrease across operating properties driven decrease banquet insuite dining operations resulting lower occupancy properties noted lower proportion group corporate businesses decrease offset 133 million attributable sands bethlehem increase 115 million attributable full year operations four seasons macao convention retail revenues increased 123 million compared year ended december 31 2008 increase primarily due increase 242 million attributable mall four seasons macao due full year operations 211 million asia segment driven passenger ferry service operations macau increased frequency sailings commenced night sailings summer 2008 increases partially offset decrease 270 million las vegas operating properties 79 million venetian macao primarily driven decrease convention operations resulting decline global economic conditions operating expenses breakdown operating expenses follows operating expenses 459 billion year ended december 31 2009 increase 3656 million compared 423 billion year ended december 31 2008 increase operating expenses primarily attributable full year operations four seasons macao opening sands bethlehem recognizing impairment losses legal settlement included corporate expense increases provision doubtful accounts depreciation amortization partially offset decrease operating expenses driven decreased revenues well costcutting measures casino expenses increased 1352 million compared year ended december 31 2008 increase 1032 million attributable sands bethlehem 951 million due 390 gross win tax casino revenues macau properties driven primarily increases four seasons macao venetian macao previously described well 365 million exclusive 390 gross win tax casino revenues attributable full year operations four seasons macao increases partially offset combined decrease 996 million operating properties driven costcutting measures rooms expense decreased 335 million food beverage expense decreased 206 million compared year ended december 31 2008 decreases driven associated decreases related revenues described well costcutting measures convention retail expense increased 270 million compared year ended december 31 2008 increase primarily attributable 434 million increase passenger ferry service operations macau partially offset 153 million decrease las vegas operating properties driven associated decrease related revenues well costcutting measures provision doubtful accounts 1038 million year ended december 31 2009 compared 419 million year ended december 31 2008 increase 390 million related casino operations granted credit premium players macau response opening new properties 166 million related mall operations tenants experienced difficulties driven reduced visitation consumer spending result economic downturn amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses decreased 243 million compared year ended december 31 2008 decrease primarily attributable 558 million decrease across operating properties driven costcutting measures 256 million 193 million 109 million las vegas operating properties venetian macao sands macao respectively well 177 million decrease asia decrease partially offset expenses 250 million 242 million attributable sands bethlehem four season macao respectively corporate expense increased 277 million compared year ended december 31 2008 increase attributable 425 million legal settlement partially offset decrease 148 million corporate costs driven costcutting measures preopening expenses 1577 million year ended december 31 2009 compared 1623 million year ended december 31 2008 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2009 primarily related activities marina bay sands bethlehem well costs associated suspension activities cotai strip developments development expenses material years ended december 31 2009 2008 include costs associated company’s evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 791 million compared year ended december 31 2008 increase primarily attributable full year depreciation expense related four seasons macao opening sands bethlehem contributed 376 million 175 million respectively additionally increases 118 million 79 million attributable venetian macao palazzo respectively properties unopened areas entire year ended december 31 2008 impairment loss 1695 million year ended december 31 2009 consisting primarily 940 million related reduction expected proceeds received sale shoppes palazzo 572 million related indefinite suspension plans expand sands expo center 150 million related certain real estate previously utilized connection marketing activities asia adjusted property ebitda adjusted property ebitda used management primary measure operating performance segments adjusted property ebitda net loss attributable las vegas sands corp interest income taxes depreciation amortization preopening expense development expense income expense loss modification early retirement debt impairment loss disposal assets rental expense corporate expense stockbased compensation expense net loss attributable noncontrolling interests following table summarizes information related segments see “item 8 financial statements supplementary data notes consolidated financial statements note 18 segment information” discussion operating segments reconciliation adjusted property ebitda net loss attributable las vegas sands corp adjusted property ebitda venetian macao increased 575 million compared year ended december 31 2008 increase primarily due increase net revenues 474 million well reduced expenses driven costcutting measures previously described adjusted property ebitda sands macao increased 304 million compared year ended december 31 2008 increase primarily due decrease operating expenses driven costcutting measures 317 million decrease casino expenses exclusive 39 gross win tax casino revenues 109 million decrease general administrative expenses decreases expenses partially offset increase 177 million provision doubtful accounts adjusted property ebitda asia segment increased 169 million compared year ended december 31 2008 previously described passenger ferry service operations increased due increased number sailings adjusted property ebitda las vegas operating properties decreased 1329 million compared year ended december 31 2008 decrease primarily due decrease net revenues 2347 million partially offset decreases associated operating expenses decrease 256 million general administrative expenses driven costcutting measures 108 million payrollrelated expenses adjusted property ebitda four seasons macao sands bethlehem comparable prioryear period results operations four seasons macao sands bethlehem previously described interest expense following table summarizes information related interest expense longterm debt interest cost decreased 1657 million compared year ended december 31 2008 resulting decrease weighted average interest rate partially offset increase weighted average longterm debt balances capitalized interest decreased 658 million compared year ended december 31 2008 primarily due suspension cotai strip developments completion four seasons macao sands bethlehem decrease weighted average interest rate factors effecting earnings expense 99 million year ended december 31 2009 compared income 195 million year ended december 31 2008 expense year ended december 31 2009 primarily attributable decrease fair value interest rate cap agreements held singapore loss modification early retirement debt 232 million year ended december 31 2009 compared 91 million year ended december 31 2008 year ended december 31 2009 171 million loss resulted early retirement 6000 million exchangeable bonds see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt macau related debt exchangeable bonds” 60 million loss resulted writeoff deferred financing costs related 5000 million required pay vml credit facility connection scl offering see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt macau related debt vml credit facility” effective income tax rate beneficial rate 10 year ended december 31 2009 compared beneficial rate 262 year ended december 31 2008 effective income tax rate year ended december 31 2009 includes recording valuation allowance net deferred tax assets us operations zero percent tax rate macau gaming operations due income tax exemption macau set expire 2013 nondeductible preopening expenses foreign subsidiaries nonrealizable deferred tax assets us foreign jurisdictions unfavorably impacted effective income tax rate management anticipate recording income tax benefit related deferred tax assets generated us operations however extent financial results us operations improve becomes likely deferred tax assets realizable able reduce valuation allowance earnings liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play us macau singapore properties conducted cash credit basis slot machine play primarily conducted cash basis retail hotel rooms business generally conducted cash basis group hotel rooms business conducted cash credit basis banquet business conducted primarily credit basis resulting operating cash flows generally affected changes operating income accounts receivable net cash provided operating activities increased 123 billion compared year ended december 31 2009 increase attributable primarily increase operating income year ended december 31 2010 previously described favorable changes working capital cash flows investing activities capital expenditures year ended december 31 2010 totaled 202 billion including 153 billion construction development activities singapore 4142 million construction development activities macau primarily cotai strip development parcels 5 6 457 million construction activities sands bethlehem 339 million las vegas operating properties corporate activities year ended december 31 2010 paid 282 million singapore gaming license 165 million pennsylvania table games certificate cash flows financing activities net cash flows used financing activities 113 billion year ended december 31 2010 primarily attributable repayments 181 billion us credit facility 5723 million vml credit facility 1211 million ffe credit facility payments 567 million purchase portion senior notes dividends paid preferred stockholders 934 million offset proceeds 7493 million vol credit facility 6480 million singapore credit facility december 31 2010 160 billion available borrowing revolving portions us macau singapore credit facilities net letters credit outstanding banker’s guarantees undrawn amounts committed funded lehman brothersrelated subsidiaries development financing strategy december 31 2010 funded development projects primarily borrowings us macau singapore credit facilities see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” operating cash flows proceeds recent equity offerings proceeds disposition noncore assets us credit facility amended august 2010 requires las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 65x quarterly periods ended december 31 2010 june 30 2011 decreases 60x quarterly periods ended september 30 december 31 2011 decreases 55x quarterly periods ended march 31 june 30 2012 decreases 50x quarterly periods thereafter maturity vml credit facility amended august 2009 requires certain macau operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly period ended december 31 2010 decreases 30x quarterly periods thereafter maturity elect contribute 50 million 20 million cash hand las vegas relevant macau operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” singapore credit facility requires operations marina bay sands comply similar financial covenants commencing quarterly period ending september 30 2011 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 55x quarterly period ending september 30 2011 decreases 025x every quarter decreases remains 375x quarterly periods thereafter maturity commencing quarterly period ending september 30 2014 unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default senior notes default vml credit facility would trigger crossdefault ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations 2008 completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering preferred stock becomes redeemable option november 2011 2009 completed 6000 million exchangeable bond offering 25 billion scl offering see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt macau related debt exchangeable bonds” “item 8 financial statements supplementary data notes consolidated financial statements note 10 equity” portion proceeds offerings used us pay 7759 million revolving portion us credit facility march 2010 10 billion term loan portions us credit facility august 2010 exercise ebitda trueup provision quarterly periods ended march 31 september 30 2010 contributed las vegas sands llc reduce net debt order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2010 december 31 2010 us leverage ratio 52x compared maximum leverage ratio allowed 65x macau leverage ratio 16x compared maximum leverage ratio allowed 35x held unrestricted restricted cash equivalents approximately 304 billion 8099 million respectively december 31 2010 management believes cash hand cash flow operations available borrowings credit facilities sufficient fund development plan described “item 1 business development projects” maintain compliance financial covenants us macau singapore credit facilities normal course activities continue evaluate capital structure opportunities enhancements thereof august 2010 completed amendment us credit facility included 10 billion pay term loans reduction revolving credit facility commitments exchange extension certain maturities modifications credit agreement thereby increasing financial flexibility additionally connection 175 billion vol credit facility used together 5000 million proceeds scl offering recommenced construction activities cotai strip development parcel 5 6 aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2010 1 see “item 8 financial statements supplementary data notes consolidated financial statements note 9 longterm debt” details financing transactions 2 based december 31 2010 london interbank offered rate “libor” 030 hong kong interbank offered rate “hibor” 030 singapore swap offer rate “sor” 028 plus applicable interest rate spread accordance respective debt agreements 3 july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception 4 party tenant lease termination asset purchase agreements agreement grand canal shoppes sale obligated fulfill lease termination asset purchase agreements 5 party employment agreements five executive officers remaining terms one two years 6 party longterm land leases 25 years automatic extensions option 10 years thereafter accordance macau law 7 party certain leaseback agreements blue man group theater gondola certain office retail space related sales grand canal shoppes palazzo 8 addition 39 gross gaming win tax macau included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2010 annual premium approximately 325 million payable macau government termination gaming subconcession june 2022 9 party longterm lease agreement 99 years parking structure located adjacent venetian las vegas 10 party certain operating leases real estate various equipment service arrangements 11 december 31 2010 358 million liability related unrecognized tax benefits related interest expense unable reasonably estimate timing liability interest payments individual years beyond 12 months due uncertainties timing effective settlement tax positions offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macau singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders inflation believe inflation changing prices material impact sales revenues income continuing operations past three fiscal years special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • substantial leverage debt service debt covenant compliance including sensitivity fluctuations interest rates significant portion debt variablerate debt capital markets trends • disruptions global financing markets ability obtain sufficient funding current future developments including cotai strip singapore pennsylvania las vegas developments • general economic business conditions may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • increased competition labor materials due planned construction projects macau • impact suspensions certain development projects ability meet certain development deadlines • uncertainty tourist behavior related spending vacationing casinoresorts las vegas macau singapore • regulatory policies mainland china countries customers reside including visa restrictions limiting number visits length stay visitors mainland china macau restrictions foreign currency exchange importation currency • dependence upon properties primarily las vegas macau singapore cash flow • relationship ggp successor owner shoppes palazzo grand canal shoppes ability ggp perform purchase sale agreement shoppes palazzo amended • new developments construction ventures including cotai strip developments marina bay sands bethlehem • passage new legislation receipt governmental approvals proposed developments macau jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage able obtain additional coverage significantly increased rates • disruptions reductions travel due acts terrorism • disruptions reductions travel well disruptions operations due outbreaks infectious diseases severe acute respiratory syndrome avian flu swine flu • government regulation casino industry including gaming license regulation legalization gaming jurisdictions regulation gaming internet • increased competition las vegas macau including recent upcoming increases hotel rooms meeting convention space retail space • fluctuations demand allsuites rooms occupancy rates average daily room rates las vegas macau singapore • popularity las vegas macau singapore convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation • ability maintain gaming licenses certificates subconcession • completion infrastructure projects macau singapore • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts us macau singapore regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 642 369 352 table games play las vegas properties macau properties marina bay sands respectively year ended december 31 2010 allowance doubtful casino accounts 251 299 gross casino receivables customers years ended december 31 2010 2009 respectively credit extended junkets offset commissions payable said junkets allowance doubtful accounts related receivables junkets material allowance doubtful accounts hotel receivables also material litigation accrual subject various claims legal actions estimate accruals claims legal actions accordance accounting standards regarding contingencies include accruals accrued liabilities consolidated balance sheets property equipment december 31 2010 net property equipment 1450 billion representing 689 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects capitalize interest amounts expended using weightedaverage cost outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets december 31 2010 company 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized fair value sands bethlehem gaming license table games certificate estimated using expected adjusted property ebitda combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashincentive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based combination historical volatility historical volatilities selection companies peer group due lack historical information used simplified method estimating expected option life options qualify “plainvanilla” options continue use simplified method beyond december 31 2010 due lack historical information allowed related accounting standards believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted judgment also required estimating amount stockbased awards expected forfeited prior vesting actual forfeitures differ significantly estimates stockbased compensation expense could materially impacted employee stock options granted exercise price equal fair market value defined company’s 2004 equity award plan years ended december 31 2010 2009 recorded stockbased compensation expense 580 million 455 million respectively december 31 2010 2004 plan 791 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 161 million unrecognized compensation cost related unvested restricted stock option restricted stock costs expected recognized weighted average period 27 years 19 years respectively december 31 2010 scl equity plan 151 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 34 years income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes requires reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring unused tax planning alternatives us operations cumulative loss position threeyear period ended december 31 2009 purposes assessing realization us deferred tax assets considered scheduled reversal deferred tax liabilities sources taxable income tax planning strategies based related accounting standards cumulative loss position caused management conclude likely us deferred tax assets fully realized recorded valuation allowance net deferred tax assets us operations 1149 million 969 million december 31 2010 2009 respectively management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results operations improve becomes likely deferred tax assets realizable able reduce valuation allowance significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes major tax jurisdictions us macau singapore us currently examination 2009 year participating internal revenue service appeals process years 2005 2008 subject examination years 2005 macau singapore recent accounting pronouncements see related disclosure “item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies” item 7aitem 7 managements discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements managements discussion analysis financial condition results operations forwardlooking statements see special note regarding forwardlooking statements operations generally view integrated resorts operating segment operating segments macao consist venetian macao sands cotai central parisian macao opened september 13 2016 plaza macao four seasons hotel macao sands macao operating segment singapore marina bay sands operating segments us consist las vegas operating properties includes venetian las vegas palazzo sands expo center sands bethlehem summary financial results following table summarizes results operations key operating revenue measurements operating revenues venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao sands bethlehem principally driven casino customers visit properties daily basis following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups rolling chip play composed vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop net markers issued credit instruments cash deposited table drop boxes gaming chips purchased cage rolling chip nonrolling chip volume measurements comparable two distinct measures volume amounts wagered lost rolling chip play substantially higher amounts dropped nonrolling chip play slot handle also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold amount casino percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue beginning three months ended march 31 2017 revised expected range macao operations due rolling chip win percentage experienced last several years rolling chip win percentage calculated discounts commissions expected 30 33 macao 27 30 singapore actual win percentage may vary expected win percentage trailing 12month win hold percentages generally slot machine play conducted cash basis macao singapore 154 341 respectively table games play conducted credit basis year ended december 31 2017 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop box view table games win percentage drop slot hold percentage handle beginning three months ended march 31 2017 revised expected range las vegas operating properties due win percentage experienced last several years based upon mix table games table games expected produce win percentage calculated discounts 18 26 baccarat 16 24 nonbaccarat actual win percentage may vary expected win percentage trailing 12month win hold percentages similar macao singapore slot machine play generally conducted cash basis approximately 598 table games play las vegas operating properties year ended december 31 2017 conducted credit basis table games play pennsylvania primarily conducted cash basis hotel revenue measurements performance indicators used occupancy rate volume indicator average percentage available hotel rooms occupied period average daily room rate adr price indicator average price occupied rooms per day available rooms exclude rooms unavailable occupancy period due renovation development requirements calculations occupancy rate adr include impact rooms provided complimentary basis complimentary room rates determined based analysis retail cash room rates type customer room product ensure complimentary room rates consistent retail rates revenue per available room revpar represents summary hotel adr occupancy available rooms occupied adr normally higher revpar reserved rooms guests show stay lose deposit guests check early may resold walkin guests mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area gloa divided gross leasable area gla end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2017 compared year ended december 31 2016 operating revenues net revenues consisted following consolidated net revenues 1288 billion year ended december 31 2017 increase 147 billion compared 1141 billion year ended december 31 2016 increase primarily due increases 102 billion parisian macao opened september 2016 355 million marina bay sands primarily due increased casino revenues casino revenues increased 129 billion compared year ended december 31 2016 increase due increases 911 million parisian macao opened september 2016 357 million marina bay sands driven increases rolling chip win percentage volume following table summarizes results casino activity experience average win percentages remain fairly consistent measured extended periods time significant volume wagers vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 92 million compared year ended december 31 2016 increase primarily due increases 95 million parisian macao opened september 2016 21 million sands cotai central driven increased occupancy average daily room rates partially offset 18 million decrease marina bay sands driven decreased occupancy suites sands macao primarily provided casino patrons complimentary basis year ended december 31 2017 approximately 9 8 4 fewer rooms available plaza macao four seasons hotel macao venetian macao marina bay sands respectively compared year ended december 31 2016 following table summarizes results room activity food beverage revenues increased 69 million compared year ended december 31 2016 increase primarily due increases 44 million parisian macao opened september 2016 26 million las vegas operating properties driven increase banquet operations associated convention customers mall revenues increased 60 million compared year ended december 31 2016 increase primarily attributable 43 million increase revenues shoppes parisian information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity nm meaningful 1 shoppes cotai central feature approximately 600000 square feet gross leasable area upon completion phases sands cotai centrals renovation rebranding expansion londoner macao 2 shoppes parisian opened september 2016 operating expenses operating expenses consisted following operating expenses 942 billion year ended december 31 2017 increase 503 million compared 892 billion year ended december 31 2016 increase operating expenses driven opening parisian macao september 2016 casino expenses increased 564 million compared year ended december 31 2016 increase primarily attributable increases 585 million parisian macao 40 million marina bay sands driven increase gaming tax partially offset 48 million decrease macao operations excluding parisian macao driven 22 million decrease gaming taxes due decreased casino revenues provision doubtful accounts 96 million year ended december 31 2017 compared 173 million year ended december 31 2016 decrease resulted increased collections previously reserved customer balances year ended december 31 2017 compared prior year period continuing improvement quality casino credit currently extended amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses increased 131 million compared year ended december 31 2016 increase primarily due 89 million increase parisian macao increases 18 million las vegas operating properties driven increase marketing advertising efforts 12 million venetian macao driven increase payroll related expenses corporate expenses decreased 82 million compared year ended december 31 2016 decrease primarily due nonrecurring legal costs incurred year ended december 31 2016 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses decreased 121 million compared year ended december 31 2016 primarily due parisian macao development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 60 million compared year ended december 31 2016 increase primarily attributable 144 million increase parisian macao partially offset 112 million decrease resulting change estimated useful lives certain property equipment see item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies property equipment loss disposal impairment assets 20 million year ended december 31 2017 compared 79 million year ended december 31 2016 loss year ended december 31 2017 primarily related dispositions macao us operations adjusted property ebitda consolidated adjusted property ebitda nongaap financial measure used management primary measure operating performance segments consolidated adjusted property ebitda net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result presentation consolidated adjusted property ebitda may directly comparable similarly titled measures presented companies following table summarizes information related segments see item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information discussion operating segments reconciliation consolidated adjusted property ebitda net income adjusted property ebitda integrated resorts primarily driven casino room mall operations previously discussed adjusted property ebitda macao operations increased 363 million compared year ended december 31 2016 increase primarily due 298 million increase parisian macao opened september 2016 43 million venetian macao mainly due increased casino operations driven increase nonrolling chip drop adjusted property ebitda marina bay sands increased 366 million compared year ended december 31 2016 increase primarily due increased casino revenues driven increases rolling chip win percentage volume increase partially offset decrease room revenues driven fewer rooms available due renovations adjusted property ebitda las vegas operating properties increased 35 million compared year ended december 31 2016 increase primarily due 49 million increase net revenues excluding intersegment royalty revenue driven increased convention group meeting events benefiting food beverage results higher hold driving casino revenues partially offset increase marketing advertising costs interest expense following table summarizes information related interest expense interest cost increased 21 million compared year ended december 31 2016 resulting primarily increase weighted average total debt balance slight increase weighted average interest rate capitalized interest decreased 32 million compared year ended december 31 2016 primarily due opening parisian macao september 2016 factors effecting earnings expense 94 million year ended december 31 2017 compared income 31 million year ended december 31 2016 expense year ended december 31 2017 primarily attributable depreciation us dollar versus singapore dollar period resulted 83 million foreign currency transaction losses driven singapore dollar denominated intercompany debt reported us dollars 12 million fair value adjustment singapore forward contracts loss modification early retirement debt 5 million year ended december 31 2017 primarily related amendment 2013 us credit facility see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility effective income tax rate 68 year ended december 31 2017 compared 106 year ended december 31 2016 decrease effective income tax rate relates primarily release certain valuation allowances result us tax reform act made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries effective tax rate 2017 would 104 without onetime discrete benefit 526 million recorded result us tax reform effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao expires end 2018 december 2017 requested additional income tax exemption either additional 5year period june 26 2022 end subconcession agreement recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes morelikelythannot deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate net income attributable noncontrolling interests 455 million year ended december 31 2017 compared 346 million year ended december 31 2016 amounts primarily related noncontrolling interest scl reflect increased net income generated scl 2017 year ended december 31 2016 compared year ended december 31 2015 operating revenues net revenues consisted following consolidated net revenues 1141 billion year ended december 31 2016 decrease 278 million compared 1169 billion year ended december 31 2015 decrease net revenues driven decreases 168 million macao operations 153 million marina bay sands primarily due decreased casino revenues partially offset 29 million increase las vegas operating properties driven increased room revenues casino revenues decreased 312 million compared year ended december 31 2015 decrease primarily due decreases 522 million macao properties excluding parisian macao driven decrease rolling chip volume demand decreased vip market 152 million marina bay sands driven decrease rolling chip volume win percentage well decrease nonrolling chip drop decreases partially offset 359 million revenues attributable parisian macao following table summarizes results casino activity experience average win percentages remain fairly consistent measured extended periods time significant volume wagers vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues increased 57 million compared year ended december 31 2015 increase primarily due increases 43 million las vegas operating properties 17 million marina bay sands driven increased occupancy average daily room rates macao properties decreased 3 million due 39 million decrease properties excluding parisian macao driven slowdown overall macao gaming industry partially offset 36 million revenues attributable parisian macao suites sands macao primarily provided casino patrons complimentary basis following table summarizes results room activity food beverage revenues increased 17 million compared year ended december 31 2015 increase primarily attributable 20 million revenues parisian macao opened september 2016 mall revenues increased 27 million compared year ended december 31 2015 increase primarily attributable 23 million revenues shoppes parisian information related financial performance malls see additional information regarding retail mall operations following table summarizes results mall activity 1 shoppes cotai central feature approximately 600000 square feet gross leasable area upon completion phases sands cotai centrals renovation rebranding expansion londoner macao 2 shoppes parisian opened september 2016 operating expenses operating expenses consisted following operating expenses 892 billion year ended december 31 2016 increase 70 million compared 885 billion year ended december 31 2015 increase primarily attributable operating expenses 299 million parisian macao opened september 2016 112 million increase depreciation amortization 82 million increase preopening expenses related opening parisian macao increases partially offset 419 million decrease casino expenses macao operations excluding parisian macao casino expenses decreased 276 million compared year ended december 31 2015 decrease 114 million due 39 gross win tax decreased casino revenues macao properties remaining decrease primarily due decreases junket commissions cost control cost avoidance initiatives macao properties excluding parisian macao including transition personnel preopening advance connection opening parisian macao decreases casino expenses las vegas operating properties marina bay sands decreases partially offset casino expenses attributable parisian macao provision doubtful accounts 173 million year ended december 31 2016 compared 156 million year ended december 31 2015 amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision doubtful accounts future depend upon state economy credit standards risk assessments judgment employees responsible granting credit corporate expenses increased 80 million compared year ended december 31 2015 increase primarily due nonrecurring legal costs preopening expenses 130 million year ended december 31 2016 compared 48 million year ended december 31 2015 preopening expense represents personnel costs incurred prior opening new ventures expensed incurred preopening expenses year ended december 31 2016 primarily related activities parisian macao development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred depreciation amortization expense increased 112 million compared year ended december 31 2015 increase primarily attributable 57 million expenses parisian macao 38 million increase marina bay sands driven acceleration depreciation certain assets due room renovations loss disposal impairment assets 79 million year ended december 31 2016 compared 35 million year ended december 31 2015 loss year ended december 31 2016 consisted primarily 49 million writeoff assets related las vegas condo tower well asset dispositions macao properties adjusted property ebitda following table summarizes information related segments adjusted property ebitda integrated resorts primarily driven casino room mall operations previously discussed adjusted property ebitda macao operations increased 22 million compared year ended december 31 2015 increase primarily attributable 114 million adjusted property ebitda generated parisian macao opened september 2016 cost control cost avoidance initiatives macao properties increase partially offset decreases sands macao sands cotai central plaza macao four seasons hotel macao driven decreased casino revenues due lower demand vip market adjusted property ebitda marina bay sands decreased 118 million compared year ended december 31 2015 decrease primarily due decrease casino operations driven decreases rolling chip volume win percentage well decrease nonrolling chip drop adjusted property ebitda las vegas operating properties increased 51 million compared year ended december 31 2015 increase primarily due increased room revenues partially offset decrease casino operations adjusted property ebitda sands bethlehem increased 5 million compared year ended december 31 2015 increase primarily due 22 million increase net revenues driven increase casino revenues partially offset increase associated expenses interest expense following table summarizes information related interest expense interest cost increased 15 million compared year ended december 31 2015 resulting primarily increase weighted average total debt balance capitalized interest increased 6 million compared year ended december 31 2015 primarily due construction parisian macao factors effecting earnings income 31 million years ended december 31 2016 2015 income year ended december 31 2016 primarily attributable 20 million foreign currency transaction gains driven singapore dollar denominated intercompany debt held us 10 million fair value adjustment singapore forward contracts gains resulted appreciation us dollar versus singapore dollar loss modification early retirement debt 5 million year ended december 31 2016 primarily related amendments 2013 us credit facility see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility effective income tax rate 106 year ended december 31 2016 compared 90 year ended december 31 2015 increase effective income tax rate relates primarily valuation allowances recorded year ended december 31 2016 determined certain deferred tax assets longer morelikelythannot realizable effective income tax rates reflect 17 statutory tax rate singapore operations zero percent tax rate macao gaming operations due income tax exemption macao expires end 2018 recorded valuation allowance related certain deferred tax assets generated operations us certain foreign jurisdictions however extent financial results operations improve becomes morelikelythannot deferred tax assets portion thereof realizable reduce valuation allowances period determination made appropriate net income attributable noncontrolling interests 346 million year ended december 31 2016 compared 420 million year ended december 31 2015 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations years ended december 31 2017 2016 2015 1 shoppes parisian opened september 2016 2 revenues cam levies direct recoveries included minimum rents outlets sands bethlehem 3 minimum rents include base rents straightline adjustments base rents 4 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property also eligible obtain additional sixyear exemption provided certain qualifications met date venetian macao plaza macao four seasons hotel macao obtained second exemption extending property tax exemption july 2019 end july 2020 respectively initial exemption parisian macao tax exempt end july 2022 sands cotai central distinct exemption hotel tower varying expiration dates range end march 2018 end november 2021 company currently working obtaining second exemption parisian macao sands cotai central 5 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision doubtful accounts excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income noi useful supplemental measure malls operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs tables believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies development projects constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well revenue generating additions integrated resorts macao december 31 2017 capitalized aggregate 1258 billion construction costs land premiums cotai strip developments include venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao well investments transportation infrastructure including passenger ferry service operations october 2017 announced renovate expand rebrand sands cotai central new destination integrated resort londoner macao adding extensive thematic elements externally internally londoner macao feature new attractions features london including londons recognizable landmarks expanded retail mall additional 350 luxury suites project commence 2018 phased minimize disruption propertys peak periods expect project completed 2020 october 2017 announced tower adjacent four seasons hotel macao feature additional 295 premium quality suites completed structural work tower plan commence build suites 2018 expect project completed 2019 united states constructing las vegas condo tower located las vegas strip palazzo venetian las vegas 2008 suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions continue evaluate highest return opportunity project intend recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project could record charge portion 122 million capitalized construction costs december 31 2017 continue evaluate current development projects pursue new development opportunities globally liquidity capital resources cash flows summary cash flows consisted following cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis rooms food beverage nongaming revenues conducted primarily cash basis trade receivable resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2017 net cash generated operating activities increased 499 million compared year ended december 31 2016 increase primarily attributable increase operating cash flows generated macao singapore operations year ended december 31 2016 net cash generated operating activities increased 585 million compared year ended december 31 2015 increase primarily attributable changes working capital accounts consisting primarily changes accounts receivable accrued liabilities partially offset decrease net income cash flows investing activities capital expenditures year ended december 31 2017 totaled 837 million including 479 million macao consisted primarily 204 million parisian macao 153 million venetian macao 86 million sands cotai central 196 million singapore 123 million las vegas operating properties 39 million corporate activities capital expenditures year ended december 31 2016 totaled 140 billion including 119 billion macao consisted primarily 925 million parisian macao 128 million sands cotai central 92 million las vegas operating properties 83 million singapore 38 million corporate activities additionally year ended december 31 2016 paid sgd 66 million approximately 47 million exchange rates effect time transaction renew singapore gaming license threeyear term capital expenditures year ended december 31 2015 totaled 153 billion including 129 billion macao consisted primarily 767 million parisian macao 403 million sands cotai central 130 million singapore 78 million las vegas operating properties 29 million corporate activities cash flows financing activities net cash flows used financing activities 349 billion year ended december 31 2017 primarily attributable 294 billion dividend payments 375 million common stock repurchases net repayments 204 million various credit facilities partially offset proceeds 40 million exercise stock options net cash flows used financing activities 263 billion year ended december 31 2016 primarily attributable 292 billion dividend payments partially offset 309 million net proceeds various credit facilities net cash flows used financing activities 322 billion year ended december 31 2015 primarily attributable 271 billion dividend payments net repayment 413 million 2013 us credit facility 205 million common stock repurchases partially offset 179 million net proceeds 2011 vml credit facility december 31 2017 351 billion available borrowing us macao singapore credit facilities net letters credit capital financing overview fund development projects primarily borrowings credit facilities see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt operating cash flows us macao singapore credit facilities amended contain various financial covenants us credit facility requires las vegas operations comply financial covenant end quarter extent revolving loans certain letters credit outstanding financial covenant requires las vegas operations maintain maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined adjusted ebitda maximum leverage ratio 55x quarterly periods maturity elect contribute cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio macao credit facility requires macao operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods maturity singapore credit facility requires marina bay sands operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly periods ending december 31 2017 september 30 2019 decreases remains 30x quarterly periods thereafter maturity december 31 2017 us macao singapore leverage ratios defined per respective credit facility agreements 05x 17x 18x respectively compared maximum leverage ratios allowed 55x 35x respectively unable maintain compliance financial covenants credit facilities would default respective credit facilities defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents approximately 242 billion restricted cash equivalents approximately 11 million december 31 2017 approximately 167 billion unrestricted amount held nonus subsidiaries 167 billion approximately 130 billion available repatriated us minimal taxes owed amounts us tax reform created onetime mandatory tax previously unremitted earnings foreign subsidiaries upon transitioning worldwide tax system territorial tax system foreign taxes paid earnings created us foreign tax credit offsets onetime tax foreign earnings repatriated us future exempt us income tax expect significant withholding foreign taxes apply repatriation earnings remaining unrestricted amounts held nonus subsidiaries available repatriation primarily due dividend requirements thirdparty public shareholders case funds repatriated scl believe cash hand cash flow generated operations well 351 billion available borrowing us macao singapore credit facilities net outstanding letters credit december 31 2017 sufficient maintain compliance financial covenants credit facilities fund working capital needs committed planned capital expenditures development opportunities debt obligations dividend commitments normal course activities continue evaluate capital structure opportunities enhancements thereof march 2017 amended us credit facility refinanced term loans aggregate amount 218 billion extended maturity term loans march 2024 removed requirement prepay outstanding revolving loans andor permanently reduce revolving commitments certain circumstances lowered applicable margin credit spread borrowings term loans see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt 2013 us credit facility year ended december 31 2017 net repayments 67 million 58 million singapore us credit facilities respectively subsequent yearend borrowed 249 million 2016 vml revolving facility year ended december 31 2017 paid quarterly dividend 073 per common share part regular cash dividend program recorded 231 billion distribution retained earnings year ended december 31 2016 paid quarterly dividend 072 per common share recorded 229 billion distribution retained earnings year ended december 31 2015 paid quarterly dividend 065 per common share recorded 207 billion distribution retained earnings january 2018 board directors declared quarterly dividend 075 per common share total estimated approximately 592 million paid march 30 2018 shareholders record march 22 2018 expect level dividend continue quarterly remainder 2018 board directors continually assess level appropriateness cash dividends february 24 june 23 2017 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders february 26 june 24 2016 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders february 27 july 15 2015 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders dividends totaled 207 billion retained 145 billion three years ended december 31 2017 january 2018 board directors scl declared dividend hkd 099 per share total 102 billion retain approximately 717 million scl shareholders record february 5 2018 expected paid february 23 2018 october 2014 board directors authorized stock repurchase program 20 billion outstanding common stock expired october 2016 repurchased 4383793 shares common stock 205 million including commissions program year ended december 31 2015 november 2016 board directors authorized repurchase 156 billion outstanding common stock expires november 2018 year ended december 31 2017 repurchased 6194137 shares common stock 375 million including commissions program year ended december 31 2016 shares repurchased share repurchases common stock recorded treasury stock repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings legal requirements investment opportunities market conditions aggregate indebtedness known contractual obligations total longterm indebtedness known contractual obligations summarized december 31 2017 1 december 31 2017 30 million liability related unrecognized tax benefits expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table 2 see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt details financing transactions 3 based 1month rates december 31 2017 london interbank offered rate libor 156 hong kong interbank offered rate hibor 119 singapore swap offer rate sor 099 plus applicable interest rate spread accordance respective debt agreements 4 addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2017 annual premium payable macao government approximately 41 million termination gaming subconcession june 2022 5 mall deposits consist refundable security deposits received mall tenants 6 party certain operating leases real estate various equipment service arrangements primarily include 136 million related 99year lease agreement 86 years remaining parking structure located adjacent venetian las vegas 94 million related certain leaseback agreements related sale grand canal shoppes 80 million related longterm land leases 25 years automatic extensions option 10 years thereafter accordance macao law offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions interest rate caps foreign currency forward contracts restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries debt instruments us macao singapore subsidiaries contain certain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell assets company without prior approval lenders noteholders special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words anticipates believes estimates seeks expects plans intends similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated • general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall sales • uncertainty consumer behavior related discretionary spending vacationing integrated resorts macao singapore las vegas bethlehem pennsylvania • extensive regulations subject costs compliance failure comply regulations • leverage debt service debt covenant compliance including pledge assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due obtain sufficient funding planned future development projects • fluctuations currency exchange rates interest rates • increased competition labor materials due planned construction projects macao quota limits hiring foreign workers • ability obtain required visas work permits management employees outside countries work macao ability compete managers employees skills required perform services offer properties • new developments construction projects ventures including cotai strip developments • regulatory policies mainland china countries customers reside operations including visa restrictions limiting number visits length stay visitors mainland china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts • dependence upon properties primarily macao singapore las vegas cash flow • passage new legislation receipt governmental approvals operations macao singapore jurisdictions planning operate • insurance coverage including risk obtained sufficient coverage may able obtain sufficient coverage future able obtain additional coverage significantly increased rates • disruptions reductions travel well disruptions operations due natural manmade disasters outbreaks infectious diseases terrorist activity war • ability collect gaming receivables credit players • relationship junket operators macao • dependence chance theoretical win rates • fraud cheating • ability establish protect ip rights • conflicts interest arise certain directors officers also directors scl • government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet • increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming • popularity macao singapore las vegas convention trade show destinations • new taxes changes existing tax rates proposed changes tax legislation impact us tax reform • ability maintain gaming licenses certificate subconcession macao singapore las vegas bethlehem pennsylvania • continued services key management personnel • potential conflict interests principal stockholder us • ability subsidiaries make distribution payments us • labor actions labor problems • failure maintain integrity customer company data including past future cybersecurity attacks litigation disruption operations resulting loss data integrity • completion infrastructure projects macao • relationship ggp successor owner grand canal shoppes • outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements allowance doubtful casino accounts maintain allowance reserve doubtful casino accounts operating casino resorts macao singapore us regularly evaluate specifically analyze collectability account balance specified dollar amount based upon age account customers financial condition collection history known information apply standard reserve percentages aged account balances specified dollar amount also monitor regional global economic conditions forecasts evaluation adequacy recorded reserves credit marker play 154 341 598 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2017 table games play pennsylvania primarily conducted cash basis allowance doubtful casino accounts 515 477 gross casino receivables december 31 2017 2016 respectively credit extended junket operators offset commissions payable said junket operators considered establishment allowance doubtful accounts allowance doubtful accounts hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2017 net property equipment 1552 billion representing 750 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets estimated useful lives assets periodically reviewed adjusted necessary prospective basis assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based managements estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale year ended december 31 2017 completed evaluation estimated useful lives property equipment see item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies property equipment indefinite useful life assets december 31 2017 50 million asset related sands bethlehem gaming license 17 million asset related sands bethlehem table games certificate determined indefinite useful lives assets indefinite useful lives assessed regularly ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis may first conduct qualitative assessment determine whether believe morelikelythannot asset impaired elect perform qualitative assessment determine morelikelythannot asset impaired assessing qualitative factors perform impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference determine qualitative assessment performed assess certain qualitative factors including limited results recent fair value calculation operating results projected operating results macroeconomic industry conditions future changes estimates assumptions based upon changes operating results macroeconomic factors managements intentions may result future changes fair value gaming license table games certificate stockbased compensation accounting standards regarding sharebased payments require recognition compensation expense consolidated statements operations related fair value employee stockbased compensation determining fair value stockbased awards grant date requires judgment including estimating expected term stock options outstanding prior exercise associated volatility expected dividends expected volatilities based historical volatility expected option life based contractual term option well historical exercise forfeiture behavior expected dividend yield based estimate annual dividends expected paid time grant believe valuation technique approach utilized develop underlying assumptions appropriate calculating fair values stock options granted elected account forfeitures occur rather based upon estimated rate employee stock options granted exercise price equal fair market value defined companys equity award plans years ended december 31 2017 2016 recorded stockbased compensation expense 34 million 35 million respectively december 31 2017 lvsc 2004 plan 32 million unrecognized compensation cost related unvested stock options unvested restricted stock units collectively stock option restricted stock unit costs expected recognized weighted average period 22 years 04 years respectively december 31 2017 scl equity plan 20 million unrecognized compensation cost related unvested stock options unvested restricted stock units collectively stock option restricted stock unit costs expected recognized weighted average period 26 years 02 years respectively income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards foreign us tax rate differential reflects fact income earned singapore macao taxed local rates lower us tax rates received 5year income tax exemption macao exempts us paying corporate income tax profits generated gaming operations continue benefit tax exemption end 2018 december 2017 requested additional income tax exemption either additional 5year period june 26 2022 date subconcession agreement expires accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring implementation tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 261 million 234 million december 31 2017 2016 respectively valuation allowance certain net deferred tax assets us operations 443 billion 396 billion december 31 2017 2016 respectively management reassess realization deferred tax assets based applicable accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable able reduce valuation allowance period determination made appropriate significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions tax treatment uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations recorded unrecognized tax benefits 92 million 74 million december 31 2017 2016 respectively consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore subject examination years beginning 2010 us years beginning 2013 macao singapore us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries result recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 recorded impact enactment us tax reform subject staff accounting bulletin sab 118 provides twelvemonth remeasurement period complete accounting required accounting standards codification asc 740 believe provisional amounts represent reasonable estimate ultimate enactmentrelated impact us tax reform consolidated financial statements possible may materially adjust amounts related administrative guidance notices implementing regulations potential legislative amendments interpretations new tax law evolves adjustments could impact tax assets liabilities effective tax rate earnings per share recent accounting pronouncements see related disclosure item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies item 7aitem 7 managements discussion analysis financial condition results operations following discussion read conjunction qualified entirety audited consolidated financial statements notes thereto financial information included form 10k certain statements managements discussion analysis financial condition results operations forwardlooking statements see special note regarding forwardlooking statements overview view integrated resorts operating segment operating segments macao consist venetian macao londoner macao parisian macao plaza macao four seasons hotel macao sands macao operating segment singapore marina bay sands operating segments us consist las vegas operating properties includes venetian resort las vegas sands expo center may 30 2019 sands bethlehem 2020 achieved milestones advancing several strategic objectives continued progress key development projects macao conversion sands cotai central londoner macao opened grand suites four seasons october 2020 featuring gaming spaces 289 luxury suites singapore initiated development activities associated mbs expansion project finally continued strengthen balance sheet issuance scl 2026 2030 senior notes provide funds incremental liquidity general corporate purposes covid19 pandemic early january 2020 outbreak respiratory illness caused novel coronavirus identified disease since spread rapidly across world causing world health organization declare march 12 2020 outbreak pandemic “covid19 pandemic” result people across globe advised avoid nonessential travel steps also taken various countries including operate restrict inbound international travel implement closures nonessential operations including integrated resorts certain periods 2020 jurisdictions operate contain spread virus visitation macao decreased substantially throughout 2020 result various government policies limiting travel restrictions quarantine requirements varying response changes circumstances countries complete ban entry need undergo enhanced quarantine requirements depending person’s residency recent travel history remains place macao residents foreign workers residing macao international travelers countries mainland china beginning december 21 2020 travelers overseas territory including hong kong including mainland china taiwan past 14 days subject 21day compulsory quarantine designated location arriving macao travelers arriving mainland china taiwan subject 14day quarantine people low risk cities china may enter macao quarantine free subject holding appropriate travel documents negative covid19 test result green healthcode foreign nationals including holding temporary work permit still permitted enter macao china individual visit scheme china ivs recommenced certain regions august 12 2020 extended jurisdictions within mainland china effective september 23 2020 general travel restrictions within mainland china continue exist updated revised based evolving public health consideraions within china following suspension gaming operations february 5 2020 macao government macao casino operations resumed february 20 2020 except operations londoner macao resumed february 27 2020 additional health safeguards requirement present negative covid19 test certificate prior entering casino implemented well ongoing limitation number seats per table game slot machine spacing temperature checks mandatory mask protection management currently unable determine measures modified cease necessary macao hotel facilities also closed casino suspension response drop visitation exception conrad macao cotai strip reopened june 13 2020 hotels gradually reopened february 20 2020 support macao government’s initiatives fight covid19 pandemic provided one tower approximately 2000 hotel rooms quarantine purposes sheraton grand macao hotel cotai strip macao government house individuals returned macao tower utilized quarantine purposes several occasions including march 28 april 30 2020 june 7 august 14 2020 december 20 2020 february 6 2021 resume february 20 2021 notice operating hours restaurants across macao properties continuously adjusted line movements guest visitation majority retail outlets various shopping malls open reduced operating hours timing manner areas return full operation currently unknown hong kong government temporarily closed hong kong china ferry terminal kowloon january 30 2020 hong kong macao ferry terminal hong kong february 4 2020 response suspended macao ferry operations macao hong kong timing manner normal ferry operations able resume currently unknown operations macao significantly impacted lack visitation macao government announced total visitation mainland china macao decreased 830 2020 compared 2019 macao government also announced gross gaming revenue decreased 793 2020 compared 2019 beginning april 7 2020 singapore government suspended casino nonessential operations including operations marina bay sands due covid19 pandemic singapore operations permitted reopen beginning june 19 2020 however included certain restaurants retail mall operations casino operations reopened july 1 2020 however entry initially limited annual levy holders certain sands rewards club “src” members casino opened src members july 9 2020 public october 23 2020 operations currently subject capacity limitations may 28 2020 support singapore government’s initiatives fight covid19 pandemic marina bay sands entered agreement singapore government utilize three hotel towers house singapore residents quarantine upon initial return jurisdictions government’s use first tower ceased june 26 2020 usage second third towers continued july 26 2020 beginning july 17 2020 first tower reopened normal operations second third towers reopened august 1 2020 september 7 2020 stb announced event organizers would allowed apply pilot events limited capacities 250 attendees october 1 2020 date nightlife venues may reopen unknown time december 2020 singapore entered phase 3 reopening among things increased casino operating capacity marina bay sands 3000 players 3750 players visitation marina bay sands declined significantly due covid19 pandemic stb announced 12 months ended november 30 2020 latest information publicly available time filing total visitation singapore decreased approximately 766 compared period 2019 nevada government suspended casino nonessential operations including operations las vegas operating properties beginning march 18 2020 due covid19 pandemic nevada government allowed casinos reopen june 4 2020 strict guidelines issued gaming control board state nevada reopened casino suites within venetian tower palazzo tower select food beverage outlets june 4 2020 certain operations subject reduced capacity beginning october 1 2020 limit public private events increased 50 people lesser 250 people 50 room’s capacity excluding employees organizers performers provided social distancing measures various safety related protocols followed mice events 250 people 1000 people allowed subject certain requirements larger venues defined 2500 fixedseating capacity allowed host gathering 10 total capacity provided met additional requirements result requirements lack customer demand connection impact covid19 pandemic held mice events las vegas operating properties since reopening june 4 2020 november 2020 nevada government tightened capacity restrictions included among things 25 capacity limit gaming establishments lesser 25 50 people mice events increased restrictions place least february 14 2021 visitation las vegas operating properties declined due covid19 pandemic lvcva announced 12 months ended november 30 2020 latest information publicly available time filing total visitation las vegas decreased 498 compared period 2019 lvcva also announced 12 months ended november 30 2020 latest information publicly available time filing gross gaming revenue las vegas strip decreased 385 compared period 2019 connection reopening singapore las vegas properties adhering social distancing requirements include reduced seating table games decreased number active slot machines casino floor additionally uncertainty around impact covid19 pandemic continue operations future periods example number mice event cancellations rescheduling end 2021 may additional restrictions placed services nightclubs entertainment venues las vegas properties integrated resorts permitted resume normal operations travel restrictions related inbound travel countries modified eliminated china ivs visa programs suspended global response contain covid19 pandemic escalates unsuccessful operations cash flows financial condition additionally materially impacted properties currently open operating reduced levels due lower visitation implementation required safety measures described current economic regulatory environment global basis jurisdictions continues evolve cannot predict manner governments react global regional impact covid19 changes time could significantly alter current operations strong balance sheet sufficient liquidity place including total cash equivalents balance excluding restricted cash equivalents 212 billion access 150 billion 202 billion 448 million available borrowing capacity lvsc revolving facility 2018 scl revolving facility 2012 singapore revolving facility respectively sgd 369 billion approximately 279 billion exchange rates effect december 31 2020 singapore delayed draw term facility exclusively capital expenditures mbs expansion project december 31 2020 january 25 2021 scl entered agreement lenders increase commitments 2018 scl credit facility hkd 383 billion approximately 494 million exchange rates effect date transaction subsequently january 29 2021 scl drew 29 million hkd 213 billion approximately 274 million exchange rates effect january 29 2021 facility general corporate purposes resulting remaining available borrowing capacity 221 billion believe able support continuing operations complete major construction projects underway respond current covid19 pandemic challenges taken various mitigating measures manage current environment including cost capital expenditure reduction program minimize cash outflow nonessential items key operating revenue measurements operating revenues venetian macao londoner macao parisian macao plaza macao four seasons hotel macao marina bay sands las vegas operating properties dependent upon volume customers stay hotel affects price charged hotel rooms gaming volume operating revenues sands macao principally driven casino customers visit property daily basis management utilizes following volume pricing measures order evaluate past performance assist forecasting future revenues various volume measurements indicate ability attract customers integrated resorts casino operations win hold percentages indicate amount revenue expected based volume hotel operations average daily rate revenue per available room indicate demand rooms ability capture demand mall operations base rent per square foot indicates ability attract maintain profitable tenants leasable space following key measurements use evaluate operating revenues casino revenue measurements macao singapore macao singapore table games segregated two groups rolling chip play composed vip players nonrolling chip play mostly nonvip players volume measurement rolling chip play nonnegotiable gaming chips wagered lost volume measurement nonrolling chip play table games drop net markers issued credit instruments cash deposited table drop boxes gaming chips purchased exchanged cage rolling chip nonrolling chip volume measurements comparable two distinct measures volume amounts wagered lost rolling chip play substantially higher amounts dropped nonrolling chip play slot handle also volume measurement gross amount wagered period cited view rolling chip win percentage rolling chip volume nonrolling chip win percentage drop slot hold amount casino percentage slot handle win hold percentage represents percentage rolling chip volume nonrolling chip drop slot handle casino recorded casino revenue win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis rolling chip win percentage expected 315 345 macao singapore actual win percentage may vary expected win percentage historical win hold percentages generally slot machine play conducted cash basis macao singapore 240 146 respectively table games play conducted credit basis year ended december 31 2020 casino revenue measurements us volume measurements us slot handle previously described table games drop total amount cash net markers issued deposited table drop box view table games win percentage drop slot hold percentage slot handle win hold percentages calculated discounts commissions deferring revenue associated loyalty programs allocating casino revenues related goods services provided patrons complimentary basis based upon mix table games table games expected produce win percentage 18 26 baccarat 16 24 nonbaccarat actual win percentage may vary expected win percentage historical win hold percentages similar macao singapore slot machine play generally conducted cash basis approximately 688 table games play las vegas operating properties conducted credit basis year ended december 31 2020 hotel revenue measurements performance indicators used occupancy rate volume indicator average percentage available hotel rooms occupied period average daily room rate adr price indicator average price occupied rooms per day available rooms exclude rooms unavailable occupancy period due renovation development requirements government mandated closure lodging team members usage macao singapore governments quarantine measures calculations occupancy rate adr include impact rooms provided complimentary basis revenue per available room revpar represents summary hotel adr occupancy available rooms occupied adr normally higher revpar reserved rooms guests show stay lose deposit guests check early may resold walkin guests mall revenue measurements occupancy base rent per square foot tenant sales per square foot used performance indicators occupancy represents gross leasable occupied area gloa divided gross leasable area gla end reporting period gloa sum 1 tenant occupied space lease 2 tenants longer occupying space paying rent gla include space currently development market lease base rent per square foot weighted average base minimum rent charge excluding rent concessions effect end reporting period tenants would qualify included occupancy tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period tenants open minimum 12 months included tenant sales per square foot calculation year ended december 31 2020 compared year ended december 31 2019 summary financial results financial results adversely impacted decreased visitation operating properties due covid19 pandemic see “covid19 pandemic” information net revenues year ended december 31 2020 361 billion compared 1374 billion year ended december 31 2019 operating loss 169 billion compared operating income 370 billion year ended december 31 2019 net loss 214 billion year ended december 31 2020 compared net income 330 billion year ended december 31 2019 operating revenues net revenues consisted following consolidated net revenues 361 billion year ended december 31 2020 decrease 1013 billion compared 1374 billion year ended december 31 2019 due decreases 712 billion 184 billion 940 million macao operations marina bay sands las vegas operating properties respectively decreases driven decreased visitation temporary property closures result covid19 pandemic described additionally 227 million decrease due sale sands bethlehem may 31 2019 net casino revenues decreased 756 billion compared year ended december 31 2019 driven temporary property closures decreased visitation properties reopened result covid19 pandemic described additionally casinos properties continue operate reduced capacity due social distancing measures revenues macao operations marina bay sands decreased 585 billion 130 billion respectively driven decreases nonrolling chip drop rolling chip volume revenues las vegas operating properties decreased 217 million due decreases table games drop win percentage slot handle additionally decrease 199 million attributable sale sands bethlehem may 31 2019 following table summarizes results casino activity experience average win percentages remain fairly consistent measured extended periods time significant volume wagers vary considerably within shorter time periods result statistical variances associated games chance large amounts wagered room revenues decreased 125 billion compared year ended december 31 2019 decrease primarily result temporary property closures decreased visitation properties due covid19 pandemic additionally certain rooms within londoner macao marina bay sands utilized quarantine purposes certain rooms across macao properties used team members due travel restrictions following table summarizes results room activity 1 includes grand suites four seasons opened october 2020 food beverage revenues decreased 614 million compared year ended december 31 2019 decrease primarily due decreases 239 million 220 million 144 million macao properties las vegas operating properties marina bay sands respectively result covid19 pandemic described mall revenues decreased 335 million compared year ended december 31 2019 decrease primarily due 272 million rent concessions granted mall tenants macao singapore well 59 million decrease overage rents resulting lower traffic malls result covid19 pandemic macao operations also impacted lower occupancy due impact covid19 pandemic information related financial performance malls see additional information regarding retail mall operations following table summarizes results malls cotai strip macao singapore note table excludes results mall operations sands macao 1tenant sales per square foot sum reported comparable sales trailing 12 months divided comparable square footage period 2the shoppes londoner feature approximately 600000 square feet gross leasable area upon completion phases renovation rebranding expansion londoner macao convention retail revenues decreased 364 million compared year ended december 31 2019 driven decreases 111 million 102 million 61 million las vegas operating properties macao properties marina bay sands respectively result cancellation mice events decreased visitation across properties due covid19 pandemic described additionally 76 million decrease related ferry operations due temporary closure hong kong china ferry terminal since late january 2020 hong kong macao ferry terminal since early february 2020 response covid19 pandemic operating expenses operating expenses consisted following operating expenses 530 billion year ended december 31 2020 decrease 474 billion compared 1004 billion year ended december 31 2019 decrease primarily driven 355 billion decrease casino expenses additionally general administrative expenses decreased 409 million food beverage expenses decreased 331 million decreases mainly driven covid19 pandemic described although management implemented certain cost reduction programs operating margins business segment negatively impacted due employee costs incurred period decreased visitation property closures maintained staffing levels across jurisdictions significantly reduced visitation level payroll costs 2020 reduced 109 million connection job support scheme singapore employee retention credit coronavirus aid relief economic security “cares” act us also implemented payroll cost saving initiatives across properties including utilization paid time voluntary unpaid leave finally bonus incentive expense 2020 decreased 262 million 2019 due meeting certain performance criteria due impact covid19 pandemic casino expenses decreased 355 billion compared year ended december 31 2019 decrease primarily attributable decrease 306 billion gaming taxes due decreased casino revenues previously described additionally sale sands bethlehem may 2019 resulted 127 million decrease room expenses decreased 173 million compared year ended december 31 2019 decrease driven decreases 90 million 54 million 27 million macao properties las vegas operating properties marina bay sands respectively decreases consistent reduction room revenue food beverage expenses decreased 331 million compared year ended december 31 2019 due decreases 135 million 99 million 87 million macao properties las vegas operating properties marina bay sands respectively decreases consistent reduction food beverage revenues convention retail expenses decreased 155 million compared year ended december 31 2019 driven 69 million decrease related temporary closure ferry terminals previously described additionally macao properties las vegas operating properties marina bay sands decreased 35 million 31 million 17 million respectively result covid19 pandemic described provision credit losses 99 million year ended december 31 2020 compared 30 million year ended december 31 2019 increase driven aging receivables premium players macao properties marina bay sands 2020 travel restrictions limited ability patrons redeem markers amount provision vary short periods time factors specific customers owe us money gaming activities given time believe amount provision credit losses future depend upon state economy credit standards risk assessments judgment employees responsible granting credit general administrative expenses decreased 409 million compared year ended december 31 2019 due decreases 169 million 116 million 92 million macao properties marina bay sands las vegas operating properties respectively decreases primarily driven decreases marketing payroll property operation costs additionally sale sands bethlehem may 2019 resulted 32 million decrease corporate expenses decreased 145 million compared year ended december 31 2019 decrease primarily driven nonrecurring legal settlement recorded 2019 decrease payroll costs described preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated evaluation pursuit new business opportunities also expensed incurred loss disposal impairment assets 80 million year ended december 31 2020 compared 90 million year ended december 31 2019 loss year ended december 31 2020 consisted primarily asset disposals demolition costs related londoner macao loss year ended december 31 2019 consisted primarily 65 million impairment ferries macao segment adjusted property ebitda following table summarizes information related segments see item 8 financial statements supplementary data notes consolidated financial statements note 17 segment information discussion operating segments reconciliation consolidated adjusted property ebitda net incomeloss 1we completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 2consolidated adjusted property ebitda nongaap financial measure used management primary measure operating performance segments consolidated adjusted property ebitda net incomeloss stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain sale sands bethlehem gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result presentation consolidated adjusted property ebitda may directly comparable similarly titled measures presented companies adjusted property ebitda macao operations decreased 362 billion compared year ended december 31 2019 due decrease operations driven governmentmandated travel restrictions property closures overall reduced visitation since late january 2020 resulting covid19 pandemic adjusted property ebitda marina bay sands decreased 128 billion compared year ended december 31 2019 due decrease operations driven temporary closure property reduced visitation resulting covid19 pandemic adjusted property ebitda las vegas operating properties decreased 611 million compared year ended december 31 2019 primarily due mice events first quarter 2020 decreased room casino revenues driven temporary closure properties overall reduced visitation resulting covid19 pandemic interest expense following table summarizes information related interest expense interest cost decreased 5 million compared year ended december 31 2019 resulting primarily decreases weighted average interest rate offset increase weighted average total debt balance decrease weighted average interest rate due decrease singapore offer rate sor weighted average debt balance increased connection issuance scl 2026 2030 senior notes june 2020 borrowings singapore delayed draw term loan september 2020 see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt factors affecting earnings income 22 million year ended december 31 2020 compared 23 million year ended december 31 2019 income year ended december 31 2020 primarily attributable 20 million foreign currency transaction gains driven us dollardenominated debt held scl income tax benefit 38 million loss income taxes 218 billion year ended december 31 2020 resulting 17 effective income tax rate compares 124 effective income tax rate year ended december 31 2019 effective income tax rate year ended december 31 2019 would 95 without discrete income tax expense 161 million resulting sale sands bethlehem income tax benefit year ended december 31 2020 reflects 17 statutory tax rate singapore operations 21 corporate income tax rate us operations zero percent tax rate macao gaming operations due income tax exemption macao us operations recorded tax benefit associated pretax book losses incurred year ended december 31 2020 us tax benefit partially offset valuation allowance recorded certain us foreign tax credits longer expect utilize due lower royalty income resulting decrease revenues macao singapore operations compared prior estimates macao nongaming operations noncash income tax expense 14 million due reversal certain deferred tax assets related fixed assets primarily disposed part londoner macao project net loss attributable noncontrolling interests 458 million year ended december 31 2020 compared net income attributable noncontrolling interest 606 million year ended december 31 2019 amounts primarily related noncontrolling interest scl additional information regarding retail mall operations following tables summarize results mall operations cotai strip marina bay sands years ended december 31 2020 2019 note table excludes results mall operations sands macao sands bethlehem sold may 2019 1 minimum rents include base rents straightline adjustments base rents 2 rent concessions provided tenants result covid19 pandemic related impact mall operations 3 commercial property generates rental income exempt property tax first six years newly constructed buildings cotai property also eligible obtain additional sixyear exemption provided certain qualifications met date venetian macao plaza macao four seasons hotel macao londoner macao parisian macao obtained second exemption venetian macao plaza macao four seasons hotel macao expired august 2019 august 2020 respectively exemption londoner macao parisian macao expiring december 2027 september 2028 respectively 4 mallrelated expenses consist cam marketing fees direct operating expenses property taxes provision credit losses excludes depreciation amortization general administrative costs common mall operating industry companies disclose mall net operating income noi useful supplemental measure malls operating performance noi excludes general administrative expenses interest expense impairment losses depreciation amortization gains losses property dispositions allocations noncontrolling interests provision income taxes provides performance measure compared year reflects revenues expenses directly associated owning operating commercial real estate properties impact operations trends occupancy rates rental rates operating costs table believe taking total mall revenues less mallrelated expenses provides operating performance measure malls mall operating companies may use different methodologies deriving mallrelated expenses calculation may comparable noi mall operating companies year ended december 31 2019 compared year ended december 31 2018 discussion changes results operations 2019 2018 omitted form 10k found item 7 managements discussion analysis financial condition results operations year ended december 31 2019 compared year ended december 31 2018 companys annual report form 10k fiscal year ended december 31 2019 liquidity capital resources cash flows summary cash flows consisted following discussion changes cash flows 2019 2018 omitted form 10k found item 7 managements discussion analysis financial condition results operations liquidity capital resources companys annual report form 10k fiscal year ended december 31 2019 cash flows operating activities table games play properties conducted cash credit basis slot machine play primarily conducted cash basis rooms food beverage nongaming revenues conducted primarily cash basis trade receivable resulting operating cash flows generally affected changes operating income accounts receivable year ended december 31 2020 cash used operations 131 billion decrease 435 billion compared 304 billion cash flow operations year ended december 31 2019 main factor driving decrease impact covid19 pandemic operations significantly reduced visitation properties caused temporary shutdown properties various times 2020 described covid19 pandemic impacted working capital cash outflow year ended december 31 2020 amount receivables collected less settlement operating accrued liabilities outstanding chip liability significantly reduced 2020 addition cash flow operations prior year impacted land lease payment made 2019 connection mbs expansion project cash flows investing activities capital expenditures year ended december 31 2020 totaled 133 billion including 106 billion macao consisted 739 million londoner macao 157 million plaza macao four seasons hotel macao primarily grand suites four seasons 140 million venetian macao 164 million singapore 103 million las vegas operating properties 5 million corporate activities capital expenditures year ended december 31 2019 totaled 122 billion including 762 million macao consisted 298 million plaza macao four seasons hotel macao primarily grand suites four seasons 282 million londoner macao 131 million venetian macao 198 million las vegas operating properties 195 million singapore 61 million corporate activities cash flows financing activities net cash flows generated financing activities 560 million year ended december 31 2020 primarily attributable issuance 150 billion unsecured notes scl partially offset 911 million dividend payments net cash flows used financing activities 337 billion year ended december 31 2019 primarily attributable 30 billion dividend payments 754 million common stock repurchases 132 million payments financing costs partially offset proceeds 495 million issuance 2025 lvsc senior notes december 31 2020 396 billion available borrowing us macao singapore revolving facilities net letters credit additionally 279 billion available borrowing 2012 singapore delayed draw term facility finance construction costs incurred connection mbs expansion project capital financing overview fund development projects primarily borrowings debt instruments see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt operating cash flows june 2020 scl issued private offering two series senior unsecured notes aggregate principal amount 150 billion net proceeds offering used incremental liquidity general corporate purposes see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt corporate us related debt scl senior notes us scl singapore credit facilities amended contain various financial covenants include maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined september 2020 lvsc entered amendment pursuant lenders among things removed lvsc’s requirement maintain maximum leverage ratio last day fiscal quarter period beginning october 31 2020 including december 31 2021 march 2020 scl entered waiver amendment request letter pursuant lenders among things waived scl’s requirement ensure leverage ratio exceed 40x interest coverage ratio greater 250x period beginning including january 1 2020 ending including july 1 2021 respect financial year ended december 31 2019 september 2020 scl entered waiver extension amendment request letter pursuant aforementioned waiver period extended january 1 2022 june 2020 mbs entered amendment letter mbs comply leverage interest coverage covenants financial quarters ending including september 30 2020 including december 31 2021 defaults debt agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance would able repay refinance amounts may become due payable agreements could force us restructure alter operations debt obligations held unrestricted cash equivalents 212 billion restricted cash equivalents 16 million december 31 2020 approximately 121 billion unrestricted amount held nonus subsidiaries 121 billion approximately 946 million available repatriated us expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise remaining unrestricted amounts held nonus subsidiaries available repatriation primarily due dividend requirements thirdparty public stockholders case funds repatriated scl believe cash hand cash flow generated operations well 396 billion available borrowing us macao singapore credit facilities net outstanding letters credit sgd 369 billion approximately 279 billion exchange rates effect december 31 2020 2012 singapore delayed draw term facility december 31 2020 sufficient maintain compliance financial covenants credit facilities fund working capital needs committed planned capital expenditures development opportunities debt obligations normal course activities continue evaluate global capital markets consider future opportunities enhancements capital structure january 25 2021 increased amount available scl revolving credit facility hkd 383 billion approximately 494 million exchange rates effect time transaction enhance liquidity subsequently january 29 2021 scl drew 29 million hkd 213 billion approximately 274 million exchange rates effect january 29 2021 facility general corporate purposes resulting remaining available borrowing capacity 221 billion quarter ended march 31 2020 paid quarterly dividend 079 per common share part regular cash dividend program recorded 603 million distribution retained earnings february 21 2020 scl paid dividend 099 hkd scl stockholders total 103 billion retained 717 million year ended december 31 2020 suspended quarterly dividend program scl pay final dividend 2019 due impact covid19 pandemic june 2018 board directors authorized repurchase 250 billion outstanding common stock expire november 2020 october 2020 board directors authorized extension expiration date remaining repurchase amount 916 million november 2022 year ended december 31 2020 shares common stock repurchased program share repurchases common stock recorded treasury stock repurchases common stock made discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including financial position earnings cash flows legal requirements investment opportunities market conditions aggregate indebtedness contractual obligations total longterm indebtedness contractual obligations summarized december 31 2020 1as december 31 2020 71 million liability related uncertain tax positions expect liability result payment cash within next 12 months unable reasonably estimate timing liability individual years beyond 12 months due uncertainties timing effective settlement tax positions therefore amounts included table 2see item 8 financial statements supplementary data notes consolidated financial statements note 8 longterm debt details financing transactions item 8 financial statements supplementary data notes consolidated financial statements note 13 leases details finance leases 3based 1month rate december 31 2020 singapore swap offer rate sor 013 plus applicable interest rate spread accordance respective debt agreements 4we party certain operating leases real estate various equipment primarily include 331 million related longterm land leases macao anticipated lease term 50years 132 million related 99year lease agreement 83 years remaining parking structure located adjacent venetian resort las vegas 70 million related certain leaseback agreements related sale grand canal shoppes see item 8 financial statements supplementary data notes consolidated financial statements note 13 leases details operating leases 5mall deposits consist refundable security deposits received mall tenants 6in addition 39 gross gaming win tax macao included table amount pay variable nature required pay annual premium fixed portion variable portion based number type gaming tables gaming machines operate based gaming tables gaming machines operation december 31 2020 annual premium payable macao government approximately 41 million year ended december 31 2021 approximately 21 million termination gaming subconcession june 2022 7primarily consists noncancellable contractual obligations primarily relates certain hotel restaurant management service agreements amounts exclude open purchase orders suppliers yet received agreements generally allow us option cancel reschedule adjust terms based business needs prior delivery goods performance services offbalance sheet arrangements entered transactions special purpose entities engaged derivative transactions restrictions distributions parent company limited business operations main asset stock membership interests subsidiaries certain debt instruments contain restrictions among things limit ability certain subsidiaries incur additional indebtedness issue disqualified stock equity interests pay dividends make distributions repurchase equity interests certain indebtedness create certain liens enter certain transactions affiliates enter certain mergers consolidations sell certain assets company without prior approval lenders noteholders special note regarding forwardlooking statements report contains forwardlooking statements made pursuant safe harbor provisions private securities litigation reform act 1995 forwardlooking statements include discussions business strategies expectations concerning future operations margins profitability liquidity capital resources addition certain portions included report words “anticipates” “believes” “estimates” “seeks” “expects” “plans” “intends” similar expressions relate company management intended identify forwardlooking statements although believe forwardlooking statements reasonable cannot assure forwardlooking statements prove correct forwardlooking statements involve known unknown risks uncertainties factors beyond control may cause actual results performance achievements materially different future results performance achievements expressed implied forwardlooking statements factors include among others risks associated •the uncertainty extent duration effects covid19 pandemic response governments third parties including governmentmandated property closures increased operational regulatory requirements travel restrictions business results operations cash flows liquidity development prospects •general economic business conditions us internationally may impact levels disposable income consumer spending group meeting business pricing hotel rooms retail mall tenant sales •disruptions reductions travel operations due natural manmade disasters pandemics epidemics outbreaks infectious contagious diseases political instability civil unrest terrorist activity war •the uncertainty consumer behavior related discretionary spending vacationing integrated resorts macao singapore las vegas •the extensive regulations subject costs compliance failure comply regulations •our ability maintain gaming licenses subconcession macao singapore las vegas •new developments construction projects ventures including cotai strip developments mbs expansion project •regulatory policies china countries customers reside operations including visa restrictions limiting number visits length stay visitors china macao restrictions foreign currency exchange importation currency judicial enforcement gaming debts •the ability subsidiaries make distribution payments us •our leverage debt service debt covenant compliance including pledge certain assets equity interests subsidiaries security indebtedness ability refinance debt obligations come due obtain sufficient funding planned future development projects •fluctuations currency exchange rates interest rates •increased competition labor materials due planned construction projects macao singapore quota limits hiring foreign workers •our ability compete limited management labor resources macao singapore policies governments may also affect ability employ imported managers labor countries •our dependence upon properties primarily macao singapore las vegas cash flow •the passage new legislation receipt governmental approvals operations macao singapore jurisdictions planning operate •our insurance coverage may adequate cover possible losses properties could suffer insurance costs may increase future •our ability collect gaming receivables credit players •our relationship gaming promoters macao •our dependence chance theoretical win rates •fraud cheating •our ability establish protect intellectual property rights •conflicts interest arise certain directors officers also directors scl •government regulation casino industry well new laws regulations changes existing laws regulations including gaming license regulation requirement certain beneficial owners securities found suitable gaming authorities legalization gaming jurisdictions regulation gaming internet •increased competition macao las vegas including recent upcoming increases hotel rooms meeting convention space retail space potential additional gaming licenses online gaming •the popularity macao singapore las vegas convention trade show destinations •new taxes changes existing tax rates proposed changes tax legislation impact us tax reform •the continued services key officers •any potential conflict interests principal stockholders us •labor actions labor problems •our failure maintain integrity information systems comply applicable privacy data security requirements regulations could harm reputation adversely affect business •the completion infrastructure projects macao •our relationship brookfield successor owner grand canal shoppes •the outcome ongoing future litigation future written verbal forwardlooking statements attributable us person acting behalf expressly qualified entirety cautionary statements contained referred section new risks uncertainties arise time impossible us predict events may affect us readers cautioned place undue reliance forwardlooking statements assume obligation update forwardlooking statements date report result new information future events developments except required federal securities laws critical accounting policies estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires management make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available us various assumptions management believes reasonable circumstances actual results could vary estimates may change estimates assumptions future evaluations changes estimates assumptions may material effect results operations financial condition believe critical accounting policies discussed affect significant judgments estimates used preparation consolidated financial statements provision expected credit losses maintain provision expected credit losses casino hotel mall receivables regularly evaluate balances apply standard reserve percentages aged account balances grouped based shared credit risk characteristics days past due reserve percentages based estimated loss rates supported historical observed default rates expected life receivable adjusted forwardlooking information also specifically analyze collectability account balance specified dollar amount based upon age account customers financial condition collection history known information adjust aforementioned reserve results individual reserve analysis also monitor regional global economic conditions forecasts include impact covid19 pandemic evaluation adequacy recorded reserves year ended december 31 2020 delay payments casino receivables due inability patrons travel properties accomplish financial transactions due travel restrictions caused covid19 pandemic collection casino receivables also impacted liquidity issues faced certain patrons also stemming covid19 pandemic increased provision credit losses jurisdiction accordingly account expected credit losses due covid19 pandemic although believe provision casino receivables adequate december 31 2020 possible provisions could increase experience delays payments patrons account balances written provision believe probable receivable recovered credit marker play 240 146 688 table games play macao properties marina bay sands las vegas operating properties respectively year ended december 31 2020 provision casino credit losses 583 323 gross casino receivables december 31 2020 2019 respectively credit extended gaming promoters offset commissions payable said gaming promoters considered establishment provision credit losses provision credit losses hotel receivables material litigation accrual subject various claims legal actions estimate accruals claims legal actions based relevant facts circumstances currently available include accruals accrued liabilities consolidated balance sheets determined contingencies probable reasonably estimable property equipment december 31 2020 net property equipment 1511 billion representing 726 total assets depreciate property equipment straightline basis estimated useful lives estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner use certain assets requiring change estimated useful lives assets estimated useful lives assets periodically reviewed adjusted necessary prospective basis assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists first group assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly estimate undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group estimate undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows asset groups consider potential cash flows scenarios probability weighted based managements estimates given current conditions determining recoverability asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups due substantial reduction cash flows generated operating properties ongoing travel restrictions due covid19 pandemic determined triggering event occurred 2020 impairment assessment warranted asset groups macao singapore las vegas tested longlived assets held use operating properties macao singapore las vegas recoverability december 31 2020 resulting impairment estimated undiscounted future cash flows exceeded carrying values believe made reasonable estimates judgments performing analysis light uncertainties surrounding covid19 pandemic however effects covid19 pandemic persist prolonged duration projected operating results decline future periods could required recognize impairment loss assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale income taxes subject income taxes us including federal state numerous foreign jurisdictions operate record income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards foreign us tax rate differential reflects fact us tax rates higher statutory tax rates singapore macao 17 12 respectively august 2018 received additional exemption macaos corporate income tax profits generated operation casino games chance period january 1 2019 june 26 2022 date subconcession agreement expires additionally entered agreement macao government april 2019 effective june 26 2022 providing annual payment 38 million patacas approximately 5 million exchange rates effect december 31 2020 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits intend request extensions tax arrangements however assurance receive extensions accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring tax planning strategies recorded valuation allowance net deferred tax assets certain foreign jurisdictions 342 million 279 million december 31 2020 2019 respectively valuation allowance certain net deferred tax assets us operations 458 billion 451 billion december 31 2020 2019 respectively due impact covid19 pandemic resulting reduction estimated royalty income expected decrease macao singapore operations recorded valuation allowance certain us foreign tax credits longer expect utilize period 2021 2027 expiration believe made reasonable estimates judgments performing analysis light uncertainties surrounding covid19 pandemic however effects covid19 pandemic persist prolonged duration could required record additional valuation allowances management reassess realization deferred tax assets reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable able reduce valuation allowance period determination made appropriate significant judgment required evaluating tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations recorded unrecognized tax benefits 131 million 134 million december 31 2020 2019 respectively consider many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different major tax jurisdictions us macao singapore could subject examination tax years beginning 2016 macao singapore tax years 2010 2015 2017 2019 us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends foreign subsidiaries subject us income tax therefore longer generating us foreign tax credits recent accounting pronouncements see related disclosure item 8 financial statements supplementary data notes consolidated financial statements note 2 summary significant accounting policies recent accounting pronouncements item 7a item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated longterm debt attempt manage interest rate risk managing mix longterm fixedrate borrowings variable rate borrowings use interest rate cap agreements ability enter interest rate cap agreements allows us manage interest rate risk associated variable rate debt hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facility management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates twelve month periods ended december 31 1 fair values based borrowing rates currently available debt instruments similar terms maturities market quotes publicly traded debt 2 based upon contractual interest rates fixed rate indebtedness current libor rates variable rate indebtedness 3 december 31 2004 one interest rate cap agreement fair value 01 million zero notional amount las vegas sands opco entered 1010 billion senior secured credit facility august 20 2004 used portion proceeds facility refinance prior senior secured credit facility borrowings prior senior secured credit facility bore interest election either libor plus 250 base rate plus 150 per annum subject downward adjustments based upon achieving certain levels leverage february 22 2005 las vegas sands opco amended senior secured credit facility amended senior secured credit facility provides increased aggregate borrowings 1620 billion consisting 1170 billion term loan facility 4500 million revolving credit facility las vegas sands opco required within 90 days amending senior secured credit facility obtain interest rate protection increases interest rates respect notional amount indebtedness less 50 total indebtedness including las vegas sands opco subsidiaries macau subsidiaries outstanding time shall either subject interest protection agreements period less three years shorter remaining term amended senior secured credit facility ii fixed rate indebtedness subsidiaries company also entered 2500 million construction loan facility fund portion construction costs phase ii mall borrowings facility bear interest election either base rate plus 075 per annum libor plus 175 per annum required obtain interest rate protection increases interest rates respect notional amount indebtedness less 50 phase ii mall construction loan outstanding time subject interest rate protection agreements prior december 31 2004 entered required interest rate agreement december 22 2004 foreign currency translation gains losses material results operations year ended december 31 2004 may future periods relation activity associated macau subsidiaries hedge exposure foreign currency see also “liquidity capital resources” “note 7long term debt” consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated longterm debt attempt manage interest rate risk managing mix longterm fixedrate borrowings variable rate borrowings use interest rate cap agreements ability enter interest rate cap agreements allows us manage interest rate risk associated variable rate debt hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates years ending december 31 1 fair values based borrowing rates currently available debt instruments similar terms maturities market quotes publicly traded debt 2 based upon contractual interest rates fixed rate indebtedness current libor rates variable rate indebtedness 3 december 31 2005 three interest rate cap agreements fair value 06 million based quoted market value institution holding agreement borrowings senior secured credit facility bear interest election either libor plus 175 base rate plus 075 per annum subject downward adjustments based upon credit rating borrowings 2500 million phase ii mall construction loan facility bear interest election either base rate plus 075 per annum libor plus 175 per annum borrowings interface mortgage loan bear interest rate equal libor plus 375 foreign currency transaction gains losses material results operations year ended december 31 2005 may future periods relation activity associated macao subsidiaries hedge exposure foreign currency however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “liquidity capital resources” “note 7 long term debt” consolidated financial statements item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated longterm debt attempt manage interest rate risk managing mix longterm fixedrate borrowings variable rate borrowings use interest rate cap agreements ability enter interest rate cap agreements allows us manage interest rate risk associated variable rate debt hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2007 libor hibor singapore swap offer rates plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 fair values based borrowing rates currently available debt instruments similar terms maturities market quotes publicly traded debt 2 based upon contractual interest rates fixed rate indebtedness current libor hibor singapore swap offer rates variable rate indebtedness based variable rate debt levels december 31 2007 assumed 100 basis point change libor hibor singapore swap offer rates would cause annual interest cost change approximately 743 million 3 december 31 2007 eight interest rate cap agreements aggregate fair value 01 million based quoted market value institutions holding agreements borrowings 50 billion senior secured credit facility bear interest election either adjusted eurodollar rate alternative base rate plus credit spread revolving facility term loans bear interest alternative base rate plus 05 075 per annum respectively adjusted eurodollar rate plus 15 per annum 175 per annum respectively subject downward adjustments based upon credit rating borrowings macao credit facility bear interest election either adjusted eurodollar rate case local term loan adjusted hibor plus 225 per annum alternative base rate plus 125 per annum subject downward adjustment 025 per annum beginning first interest period following substantial completion venetian macao borrowings singapore permanent facilities bear interest singapore swap offer rate plus spread 225 per annum 698 million 197 million borrowings airplane financings bear interest libor plus 15 125 per annum respectively foreign currency transaction losses year ended december 31 2007 53 million primarily due us denominated debt held macao may vulnerable changes us dollarpataca exchange rate based balances december 31 2007 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 284 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated longterm debt attempt manage interest rate risk managing mix longterm fixedrate borrowings variablerate borrowings use interest rate cap agreements ability enter interest rate cap agreements allows us manage interest rate risk associated variablerate debt hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2008 libor hibor singapore swap offer rates plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based quoted market prices available pricing models based value related cash flows discounted current market interest rates 2 based upon contractual interest rates fixed rate indebtedness current libor hibor singapore swap offer rates variable rate indebtedness based variable rate debt levels december 31 2008 assumed 100 basis point change libor hibor singapore swap offer rates would cause annual interest cost change approximately 1028 million 3 december 31 2008 fourteen interest rate cap agreements aggregate fair value 37 million based quoted market values institutions holding agreements borrowings 50 billion senior secured credit facility bear interest election either adjusted eurodollar rate alternative base rate plus credit spread revolving facility term loans bear interest alternative base rate plus 05 per annum 075 per annum respectively adjusted eurodollar rate plus 15 per annum 175 per annum respectively subject downward adjustments based upon credit rating borrowings macao credit facility bear interest election either adjusted eurodollar rate case local term loan adjusted hibor plus 225 per annum alternative base rate plus 125 per annum subject downward adjustment 025 per annum beginning first interest period following substantial completion venetian macao certain maximum leverage ratios satisfied borrowings singapore permanent facility bear interest singapore swap offer rate plus spread 225 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum borrowings ferry financing bear interest hibor plus 20 per annum borrowings made hong kong dollars libor plus 20 per annum borrowings made us dollars borrowings ferry financing made hong kong dollars december 31 2008 foreign currency transaction gains year ended december 31 2008 264 million primarily due us denominated debt held macao may vulnerable changes us dollarpataca exchange rate based balances december 31 2008 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 414 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt attempt manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates interest rate cap agreements notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2009 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based quoted market prices available pricing models based value related cash flows discounted current market interest rates 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2009 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 1079 million 3 december 31 2009 twenty four interest rate cap agreements aggregate fair value 25 million based quoted market values institutions holding agreements borrowings 50 billion senior secured credit facility bear interest election either adjusted eurodollar rate alternative base rate plus credit spread revolving facility term loans bear interest alternative base rate plus 05 per annum 075 per annum respectively adjusted eurodollar rate plus 15 per annum 175 per annum respectively subject downward adjustments based upon credit rating borrowings macau credit facility amended bear interest election either adjusted eurodollar rate case local term loan adjusted hibor plus 45 per annum alternative base rate plus 35 per annum applicable spreads macau revolving facility local term loan subject downward adjustment certain consolidated leverage ratios satisfied borrowings singapore credit facility bear interest sor plus spread 225 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum borrowings ferry financing amended bear interest hibor plus 25 per annum foreign currency transaction losses year ended december 31 2009 07 million primarily due us denominated debt held macau may vulnerable changes us dollarpataca exchange rate based balances december 31 2009 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 256 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt attempt manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2011 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based quoted market prices available pricing models based value related cash flows discounted current market interest rates 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2011 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 975 million 3 december 31 2011 38 interest rate cap agreements aggregate fair value 12 million based quoted market values institutions holding agreements borrowings us credit facility amended bear interest election either adjusted eurodollar rate alternative base rate plus credit spread portions revolving facility term loans extended bear interest alternative base rate plus 025 per annum 05 per annum respectively adjusted eurodollar rate plus 125 per annum 15 per annum respectively extended revolving facility extended term loans bear interest alternative base rate plus 10 per annum 15 per annum respectively adjusted eurodollar rate plus 20 per annum 25 per annum respectively applicable spreads us credit facility subject downward adjustments based upon credit rating borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus spread 225 may 13 2012 first 180 days closing date beginning may 14 2012 spread borrowings subject reduction based specified consolidated leverage ratio borrowings singapore credit facility bear interest sor plus spread 225 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum borrowings ferry financing amended bear interest hibor plus 25 per annum foreign currency transaction losses year ended december 31 2011 10 million primarily due us denominated debt held macao may vulnerable changes us dollarpataca exchange rate based balances december 31 2011 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 149 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt attempt manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2012 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based level 2 inputs quoted prices markets active 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2012 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 1023 million 3 december 31 2012 30 interest rate cap agreements aggregate fair value 02 million based quoted market values institutions holding agreements borrowings us credit facility amended bear interest election either adjusted eurodollar rate alternative base rate plus credit spread portions revolving facility term loans extended bear interest alternative base rate plus 025 per annum 05 per annum respectively adjusted eurodollar rate plus 125 per annum 15 per annum respectively extended revolving facility extended term loans bear interest alternative base rate plus 10 per annum 15 per annum respectively adjusted eurodollar rate plus 20 per annum 25 per annum respectively applicable spreads us credit facility subject downward adjustments based upon credit rating borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus spread 15 per annum 225 per annum based specified consolidated leverage borrowings 2012 singapore credit facility bear interest sor plus spread 185 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum foreign currency transaction gains year ended december 31 2012 11 million primarily due us denominated debt held macao may vulnerable changes us dollarpataca exchange rate based balances december 31 2012 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 149 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt attempt manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2013 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based level 2 inputs quoted prices markets active 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2013 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 863 million 3 december 31 2013 22 interest rate cap agreements aggregate fair value 02 million based quoted market values institutions holding agreements borrowings 2013 us credit facility amended bear interest election either adjusted eurodollar rate alternative base rate plus credit spread revolving facility term loan bear interest alternative base rate plus 05 per annum 15 per annum respectively adjusted eurodollar rate term loan subject eurodollar floor 075 plus 15 per annum 25 per annum respectively borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus spread 15 per annum 225 per annum based specified consolidated leverage borrowings 2012 singapore credit facility bear interest sor plus spread 185 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum foreign currency transaction gains year ended december 31 2013 42 million primarily due us denominated debt held macao may vulnerable changes us dollarpataca exchange rate based balances december 31 2013 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 146 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt may manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2014 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based level 2 inputs quoted prices markets active 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2014 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 892 million 3 december 31 2014 4 interest rate cap agreements nominal aggregate fair value based quoted market values institutions holding agreements borrowings 2013 us credit facility amended bear interest option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 15 per annum 2013 us revolving facility 2013 us term b facility respectively eurodollar rate borrowings initial credit spread 15 per annum 25 per annum 2013 us revolving facility 2013 us term b facility subject eurodollar rate floor 075 respectively borrowings 2011 vml credit facility bear interest option either adjusted eurodollar rate hibor plus credit spread alternative base rate plus credit spread credit spread case determined based maximum leverage ratio set forth credit facility agreement amended credit spread extended 2011 vml term revolving facilities ranges 025 1125 per annum loans accruing interest base rate credit spread extended 2011 vml term revolving facilities ranges 125 2125 per annum loans accruing interest adjusted eurodollar hibor rate borrowings 2012 singapore credit facility bear interest sor plus spread 185 per annum subject reduction based ratio debt adjusted ebitda borrowings airplane financings bear interest libor plus 125 15 per annum foreign currency transaction gains year ended december 31 2014 18 million primarily due singapore dollar denominated intercompany debt held us partially offset us dollar denominated debt held macao may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2014 assumed 10 change us dollarsgd exchange rate would cause foreign currency transaction gainloss approximately 324 million assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 137 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt foreign currency exchange rate risk associated operations outside united states may manage use interest rate swaps futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments currently consist exclusively interest rate cap agreements foreign currency forward contracts none designated hedging instruments manage exposure counterparty credit risk interest rate cap agreements foreign currency forward contracts enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2015 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based level 2 inputs quoted prices markets active 2 based upon contractual interest rates current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2015 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 920 million 3 december 31 2015 one interest rate cap agreement nominal aggregate fair value based quoted market values institutions holding agreement foreign currency transaction gains year ended december 31 2015 194 million primarily due singapore dollar denominated intercompany debt held us partially offset us dollar denominated debt held macao may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2015 assumed 10 change us dollarsgd exchange rate would cause foreign currency transaction gainloss approximately 311 million assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 128 million maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations additionally manage exposure currency fluctuations foreign currency forward contracts december 31 2015 19 foreign currency forward contracts total notional value 6727 million total asset fair value 42 million see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt foreign currency exchange rate risk associated operations outside united states may manage use interest rate swaps futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments currently consist exclusively foreign currency forward contracts none designated hedging instruments accounting purposes manage exposure counterparty credit risk foreign currency forward contracts enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance december 31 2016 estimated fair value longterm debt approximately 958 billion compared carrying value 970 billion estimated fair value longterm debt based level 2 inputs quoted prices markets active longterm debt obligations primarily variablerate debt change libor hibor sor expected material impact fair value longterm debt based variablerate debt levels december 31 2016 hypothetical 100 basis point change libor hibor sor would cause annual interest cost change approximately 97 million foreign currency transaction gains year ended december 31 2016 20 million primarily due singapore dollar denominated intercompany debt held us dollar denominated debt held macao may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2016 hypothetical 10 strengthening weakening us dollar sgd would cause foreign currency transaction gain approximately 61 million loss approximately 74 million hypothetical 100 basis point change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 17 million maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations additionally manage portion exposure currency fluctuations foreign currency forward contracts december 31 2016 18 foreign currency forward contracts total notional value 427 million contract expirations december 2017 total asset fair value 12 million december 31 2016 hypothetical unfavorable 10 change us dollarsgd exchange rate would increased unrealized loss approximately 44 million see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposures market risk interest rate risk associated longterm debt interest rate swap contracts foreign currency exchange rate risk associated operations outside united states may manage use futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments currently consist interest rate swap contracts certain fixedrate longterm debt designated hedging instruments accounting purposes december 31 2018 estimated fair value longterm debt approximately 1165 billion compared carrying value 1208 billion estimated fair value longterm debt based level 2 inputs quoted prices markets active hypothetical 100 basis point change market rates would cause fair value longterm debt change 396 million inclusive impact interest rate swaps hypothetical 100 basis point change libor sor would cause annual interest cost longterm debt change approximately 121 million total notional amount fixedtovariable interest rate swaps 550 billion december 31 2018 fair value interest rate swaps standalone basis december 31 2018 asset 56 million hypothetical 100 basis point change libor would cause fair value interest rate swaps change approximately 88 million foreign currency transaction gains year ended december 31 2018 25 million primarily due singapore dollar denominated intercompany debt reported us dollars us dollar denominated debt issued scl may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2018 hypothetical 10 weakening us dollarsgd exchange rate would cause foreign currency transaction loss approximately 129 million hypothetical 1 weakening us dollarpataca exchange rate would cause foreign currency transaction loss approximately 40 million pataca pegged hong kong dollar hong kong dollar pegged us dollar within range maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposures market risk interest rate risk associated longterm debt interest rate swap contracts foreign currency exchange rate risk associated operations outside united states may manage use futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments currently consist interest rate swap contracts certain fixedrate longterm debt designated hedging instruments accounting purposes december 31 2019 estimated fair value longterm debt approximately 1321 billion compared contractual value 1258 billion estimated fair value longterm debt based recent trades available indicative pricing market information level 2 inputs hypothetical 100 basis point change market rates would cause fair value longterm debt change 525 million hypothetical 100 basis point change libor sor would cause annual interest cost longterm debt change approximately 86 million total notional amount fixedtovariable interest rate swaps 550 billion december 31 2019 fair value interest rate swaps standalone basis december 31 2019 asset 81 million hypothetical 100 basis point change libor would cause fair value interest rate swaps change approximately 34 million foreign currency transaction gains year ended december 31 2019 24 million primarily due us dollar denominated debt issued scl offset singapore dollar denominated intercompany debt reported us dollars may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2019 hypothetical 10 weakening us dollarsgd exchange rate would cause foreign currency transaction loss approximately 40 million hypothetical 1 weakening us dollarpataca exchange rate would cause foreign currency transaction loss approximately 49 million pataca pegged hong kong dollar hong kong dollar pegged us dollar within range maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated longterm debt attempt manage interest rate risk managing mix longterm fixedrate borrowings variable rate borrowings use interest rate cap agreements ability enter interest rate cap agreements allows us manage interest rate risk associated variable rate debt hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2006 libor rates plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 fair values based borrowing rates currently available debt instruments similar terms maturities market quotes publicly traded debt 2 based upon contractual interest rates fixed rate indebtedness current libor rates variable rate indebtedness 3 december 31 2006 five interest rate cap agreements fair value 06 million based quoted market value institution holding agreement borrowings senior secured credit facility bear interest election libor plus 175 base rate plus 075 per annum subject downward adjustments based upon credit rating weighted average interest rate senior secured credit facility 70 year ended december 31 2006 borrowings 2500 million phase ii mall construction loan facility bear interest election either base rate plus 075 per annum libor plus 175 per annum weighted average interest rate phase ii mall construction loan 71 year ended december 31 2006 borrowings sands expo center mortgage loan bear interest rate equal libor plus 375 weighted average interest rate sands expo center mortgage loan 88 year ended december 31 2006 borrowings macao credit facility bear interest election either adjusted eurodollar rate case local term loan adjusted hibor plus 275 per annum alternative base rate plus 175 per annum subject downward adjustment 025 per annum beginning first interest period following substantial completion venetian macao weighted average interest rates macao local term facility macao term b facility 69 81 respectively year ended december 31 2006 borrowings singapore credit facility bear interest singapore swap offer rate plus spread 135 per annum first twelve months amounts outstanding spread 16 per annum second twelve months amounts outstanding weighted average interest rate singapore floating rate notes singapore term loan 50 year ended december 31 2006 foreign currency transaction gains losses material results operations year ended december 31 2006 may future periods relation activity associated macao singapore subsidiaries therefore may vulnerable changes us dollarpataca us dollarsingapore dollar exchange rates hedge exposure foreign currency however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt attempt manage use interest rate cap agreements hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions derivative financial instruments consist exclusively interest rate cap agreements qualify hedge accounting interest differentials resulting agreements recorded accrual basis adjustment interest expense manage exposure counterparty credit risk interest rate cap agreements enter agreements highly rated institutions expected fully perform terms agreements frequently institutions also members bank group providing credit facilities management believes minimizes risk nonperformance table provides information financial instruments sensitive changes interest rates debt obligations table presents notional amounts weighted average interest rates contractual maturity dates notional amounts used calculate contractual payments exchanged contract weighted average variable rates based december 31 2010 libor hibor sor plus applicable interest rate spread accordance respective debt agreements information presented us dollar equivalents company’s reporting currency years ending december 31 1 estimated fair values based quoted market prices available pricing models based value related cash flows discounted current market interest rates 2 based upon contractual interest rates fixed rate indebtedness current libor hibor sor variable rate indebtedness based variable rate debt levels december 31 2010 assumed 100 basis point change libor hibor sor would cause annual interest cost change approximately 979 million 3 december 31 2010 thirty four interest rate cap agreements aggregate fair value 16 million based quoted market values institutions holding agreements borrowings us credit facility amended bear interest election either adjusted eurodollar rate alternative base rate plus credit spread portions revolving facility term loans extended bear interest alternative base rate plus 05 per annum 075 per annum respectively adjusted eurodollar rate plus 15 per annum 175 per annum respectively extended revolving facility extended term loans bear interest alternative base rate plus 125 per annum 175 per annum respectively adjusted eurodollar rate plus 225 per annum 275 per annum respectively applicable spreads us credit facility subject downward adjustments based upon credit rating borrowings vml credit facility amended bear interest election either adjusted eurodollar rate case local term loan adjusted hibor plus 45 per annum alternative base rate plus 35 per annum applicable spreads vml revolving facility subject downward adjustment certain consolidated leverage ratios satisfied borrowings vol credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macau pataca denominated loans applicable plus spread 45 per annum borrowings singapore credit facility bear interest sor plus spread 225 per annum borrowings airplane financings bear interest libor plus approximately 15 per annum borrowings ferry financing amended bear interest hibor plus 25 per annum foreign currency transaction losses year ended december 31 2010 37 million primarily due us denominated debt held macau may vulnerable changes us dollarpataca exchange rate based balances december 31 2010 assumed 1 change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 212 million hedge exposure foreign currencies however maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also “ liquidity capital resources” “item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposure market risk interest rate risk associated variable rate longterm debt foreign currency exchange rate risk associated operations outside united states may manage use interest rate swaps futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions december 31 2017 estimated fair value longterm debt approximately 961 billion compared carrying value 972 billion estimated fair value longterm debt based level 2 inputs quoted prices markets active longterm debt obligations primarily variablerate debt change libor hibor sor expected material impact fair value longterm debt based variablerate debt levels december 31 2017 hypothetical 100 basis point change libor hibor sor would cause annual interest cost change approximately 98 million foreign currency transaction losses year ended december 31 2017 83 million primarily due singapore dollar denominated intercompany debt reported us dollars us dollar denominated intercompany debt held macao may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2017 hypothetical 100 basis points change us dollarsgd exchange rate would cause foreign currency transaction gainloss approximately 12 million hypothetical 100 basis points change us dollarpataca exchange rate would cause foreign currency transaction gainloss approximately 15 million maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations see also liquidity capital resources item 8item 7a quantitative qualitative disclosures market risk market risk loss arising adverse changes market rates prices interest rates foreign currency exchange rates commodity prices primary exposures market risk interest rate risk associated longterm debt foreign currency exchange rate risk associated operations outside united states may manage use futures options caps forward contracts similar instruments hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions december 31 2020 estimated fair value longterm debt approximately 1515 billion compared contractual value 1412 billion estimated fair value longterm debt based recent trades available indicative pricing market information level 2 inputs hypothetical 100 basis point change market rates would cause fair value longterm debt change 557 million hypothetical 100 basis point change sor would cause annual interest cost longterm debt change approximately 31 million foreign currency transaction gains year ended december 31 2020 22 million primarily due us dollar denominated debt issued scl singapore dollar denominated intercompany debt reported us dollars may vulnerable changes us dollarsgd us dollarpataca exchange rates based balances december 31 2020 hypothetical 10 weakening us dollarsgd exchange rate would cause foreign currency transaction loss approximately 23 million hypothetical 1 weakening us dollarpataca exchange rate would cause foreign currency transaction loss approximately 67 million pataca pegged hong kong dollar hong kong dollar pegged us dollar within narrow range maintain significant amount operating funds currencies obligations thereby reducing exposure currency fluctuations item 8 item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion accompanying consolidated balance sheets related consolidated statements operations stockholders’ equity deficit cash flows present fairly material respects financial position las vegas sands corp subsidiaries december 31 2004 2003 results operations cash flows three years period ended december 31 2004 conformity accounting principles generally accepted united states america financial statements responsibility company’s management responsibility express opinion financial statements based audits conducted audits statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion pricewaterhousecoopers llp las vegas nevada february 11 2005 except note 15subsequent events date march 24 2005 las vegas sands corp subsidiaries consolidated balance sheets thousands except share data accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations thousands except share per share data accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements stockholder’s equity dollars thousands accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows dollars thousands accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes financial statements note 1organization business company las vegas sands corp “lvsc” incorporated nevada august 2004 completed initial public offering common stock december 20 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc acquisition las vegas sands inc lvsc accounted reorganization entities common control manner similar poolingofinterests lvsc traded nyse symbol lvs lvsc subsidiaries collectively “company” operate venetian casino resort “casino resort” renaissance venicethemed resort situated las vegas strip “strip” casino resort located across mirage treasure island hotel casino resort includes first allsuites hotel strip 4027 suites “hotel” gaming facility approximately 116000 square feet “casino” enclosed retail dining entertainment complex approximately 446000 net leasable square feet “mall” meeting conference facility approximately 650000 square feet “congress center” expo convention center approximately 1150000 square feet “sands expo center” company begun design construction work completed demolition clearing site palazzo casino resort “palazzo” second resort similar size casino resort situated 15acre site situated adjacent casino resort expo center across sands boulevard wynn resort palazzo expected consist allsuites 50floor luxury hotel tower approximately 3025 rooms gaming facility approximately 105000 square feet enclosed shopping dining entertainment complex approximately 375000 square feet additional meeting conference space approximately 450000 square feet part mall sale see note 14“mall sale” company entered agreement construct sell multilevel retail space palazzo “phase ii mall” approximately 2500 million subject upward adjustment based operating income performance upon completion construction palazzo “phase ii mall sale” company entered new 101 billion senior secured credit facility “senior secured credit facility” consisting revolving facility term loan facilities new 2500 million phase ii mall construction loan proceeds along existing cash future operating cash flows used among things fund design development construction preopening costs palazzo phase ii mall palazzo phase ii mall expected completed 2007 senior secured credit facility amended february 2005 see note 15“subsequent events” macau properties company intends develop “las vegasstyle” collection properties macau may 18 2004 company opened portion macao casino remaining portion macao casino excluding pearl casino opened late august 2004 macao casino consists approximately 152000 gross square feet gaming facilities including approximately 348 table games 860 slot machines similar electronic devices well numerous restaurants private vip gaming room facilities addition company begun design planning construction work macao venetian casino resort 3000suite hotel casino convention center complex venetianstyle theme similar casino resort located area macau known cotai “macao venetian casino resort” interface holding lvsc’s principal stockholder “principal stockholder” also sole stockholder interface group holding company inc “interface” july 29 2004 company acquired capital stock interface principal stockholder exchange issuance principal stockholder 58625638 additional shares common stock lvsc interface indirectly owns sands expo center holds 2552 million redeemable preferred interest venetian casino resort llc eliminated consolidated financial statements see note 8“acquisition interface redeemable preferred interest venetian casino resort llc” acquisition interface company accounted reorganization entities common control manner similar poolingofinterests las vegas sands corp subsidiaries notes financial statements continued note 1organization business company continued company involved significant litigation relating cost construction casino resort see “note 12commitments contingencies” consolidated financial statements include accounts lvsc subsidiaries “subsidiaries” including las vegas sands inc “lvsi” “las vegas sands opco” venetian casino resort llc “venetian” interface groupnevada inc “interface” interface group holding company inc interface groupnevada parent inc interface employee leasing llc “iel” mall intermediate holding company llc “mall intermediate” grand canal shops mall subsidiary llc “new mall subsidiary” grand canal shops mall mm subsidiary inc venetian hotel operations llc “mall construction” las vegas sands wolverhampton limited las vegas sands stoke city limited las vegas sands sunderland city limited las vegas sands ibrox limited las vegas sands sheffield limited las vegas sands murrayfield limited las vegas sands reading limited las vegas sands uk limited lido intermediate holding company llc “lido intermediate” lido casino resort holding company llc lido casino resort llc “phase ii subsidiary” lido casino resort mm inc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc venetian transport llc “venetian transport” venetian venture development llc “venetian venture” venetian venture development intermediate limited venetian venture development intermediate venetian venture development intermediate ii venetian global holdings limited venetian macau finance company vi limited venetian macau limited “venetian macau” venetian cotai limited venetian marketing inc “venetian marketing” venetian far east limited venetian operating company llc “venetian operating” venetian resort development limited yona venetian llc “yona” collectively including direct indirect subsidiaries lvsc “company” lvsc subsidiaries separate legal entity assets entity intended available creditors entity except extent guarantees indebtedness see “note 7longterm debt” various subsidiaries guarantors coobligors certain indebtedness related casino resort see “note 7longterm debt” note 2summary significant accounting policies principles consolidation consolidated financial statements include accounts company subsidiaries significant intercompany balances transactions eliminated significant accounting policies estimates preparation consolidated financial statements accordance generally accepted accounting principles requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities going basis management evaluates estimates including related asset impairment accruals slot marketing points selfinsurance compensation related benefits revenue recognition allowance doubtful accounts contingencies litigation company bases estimates historical experience various assumptions believed reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates different assumptions conditions las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued cash equivalents cash equivalents consist cash shortterm investments original maturities excess 90 days inventory inventories stated lower cost market cost determined firstin firstout specific identification methods inventories consist primarily food beverage retail products accounts receivable accounts receivable principally comprised casino hotel receivables bear interest recorded cost allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company feels probable receivable recovered deferred revenue deferred revenue future services convention facility rental recorded extent installments paid billed pursuant contractual terms revenue recorded income related services performed event held property equipment property equipment stated cost depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows building improvements 15 40 years furniture fixtures equipment 3 15 years leasehold improvements 5 10 years maintenance repairs renewals neither materially add value property appreciably prolong life charged expense incurred gains losses disposition property equipment included statements operations management reviews possible impairment longlived assets whenever events changes circumstances indicate carrying amount assets exceeds fair value impairment losses recognized estimated future undiscounted cash flows expected result use assets eventual disposition less carrying amounts capitalized interest costs associated major construction projects capitalized debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued corporate expense corporate expense represents unallocated payroll aircraft costs professional fees various expenses directly related company’s casino resort operations preopening developmental costs preopening costs representing primarily direct personnel costs incurred prior opening new ventures expensed incurred developmental costs include costs associated company’s evaluation pursuit new business opportunities expensed incurred development specific project become probable debt discount deferred offering costs debt discount deferred offering costs amortized based terms related debt instruments using effective interest method earnings loss per share stockbased employee compensation described note 9 first quarter 2002 company completed stock split whereby number common shares outstanding increased 266032755 246080299 earnings per share calculations adjusted retroactively give effect increase shares outstanding 266032755 july 29 2004 issuance 58625638 shares common stock connection acquisition interface see note 8“acquisition interface redeemable preferred interest venetian casino resort llc” issuance 27380953 shares connection initial public offering see note 1“organization business company” exercise 2121345 stock options 2004 see note 9“stockbased employee compensation” basic diluted income loss per share calculated based upon weighted average number shares outstanding dilutive impact 3170105 532065 unexercised options purchase shares company’s common stock included computation diluted earnings per share using treasury stock method twelve months ended december 31 2004 2003 respectively impact 1463181 unexercised options excluded computation earnings per share twelve months ended december 31 2002 impact would antidilutive las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued company elected follow accounting principles board opinion 25 entitled “accounting stock issued employees” accounts stockbased compensation employees using intrinsic value method compensation expense difference fair value company’s common stock option’s exercise price measurement date apb 25 exercise price stock options equal greater fair value underlying stock date grant compensation expense recognized company’s stockbased employee compensation plan fully discussed note 9 july 2004 fully vested options purchase 3052460 shares company’s common stock granted employees company board directors company’s stock option plan exercise price 564 per share fair value common stock dates grant stock options granted july 2004 originally estimated management based principally upon may 31 2004 valuation fair value common stock company unaffiliated valuation specialist company deem necessary obtain additional third party valuation time option grants july already received independent valuation date may 31 close time option grant dates however retrospective review given proximity july 2004 grant dates proposed initial public offering date company believed time company prepared third quarter financial statements fair value common stock 2177 per share based upon midpoint preliminary estimated range proposed valuation connection initial public offering best estimate fair value common stock underlying options date grant result intrinsic value fully vested options granted year ended december 31 2004 492 million 1613 per share recorded compensation expense included corporate expense accompanying statement operations principal factors used determine midpoint preliminary estimated range shares sold company’s initial public offering projections company’s three operating properties casino resort macao casino sands expo center two future projects macao venetian casino resort palazzo ii trading multiples gaming hospitality leisure industry companies iii discount rates appropriate comparable projects company recorded compensation expense corresponding 2003 2002 periods company accounted plan fair value method allowed statement financial accounting standards 123 “accounting stockbased compensation” “sfas 123” company’s net income earnings per share would reduced following pro forma amounts dollars thousands except per share data las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued estimated fair value 2185783 options granted 2004 plan 2004 1278 per share computed using black scholes optionpricing model following weighted average assumptions risk free interest rate 366 expected dividend yields expected volatility 40 expected lives 6 years estimated fair value 3052460 options granted 1997 plan 2004 2144 per share computed minimum value method following weighted average assumptions risk free interest rate 384 expected dividend yields expected lives ½ year estimated fair value options granted 2003 2002 1 per share computed using minimum value method following weighted average assumptions risk free interest rate 384 noexpected dividend yields expected life 2½ years casino revenue promotional allowances casino revenue aggregate gaming wins losses cash discounts cash incentives related gaming play recorded reduction gross casino revenues accordance industry practice retail value accommodations food beverage services furnished hotelcasino guests without charge included gross revenue deducted promotional allowances estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands estimated retail value promotional allowances included operating revenues follows thousands las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued rental convention revenues minimum rental revenues recognized straightline basis terms related lease percentage rents recognized period tenants exceed respective percentage rent thresholds charges tenants real estate taxes insurance retail operating expenses recognized revenues period billed approximates period applicable costs incurred convention revenues recognized related service rendered event held hotel food beverage revenues hotel revenue recognition criteria generally met time occupancy food beverage revenue recognition criteria generally met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer defined written contract entered customer slot club promotion progressive jackpot payouts company established promotional club encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash company accrues club points reduction revenue based upon estimates expected redemptions company maintains number progressive slot machines table games wagers made respective progressive games amount available win paid appropriate jackpots hit increases company recorded progressive jackpots liability corresponding charge casino revenue income taxes prior merger wholly owned subsidiary lvsc “merger” december 2004 lvsi elected taxed corporation wholly owned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes nevada levy corporate income tax company income tax holiday macau 2008 accordingly provision federal state foreign income taxes included statements operations years ended december 31 2003 2002 period january 1 2004 merger december 2004 lvsi’s debt instruments provided dividends paid stockholders pay income taxes associated taxable income company attributable stockholder period lvsi taxed corporation 2004 2003 lvsi declared accrued 1290 million 42 million tax dividends respectively tax dividends declared 2002 result merger completion lvsc’s initial public offering december 17 2004 company subject federal state income taxes information purposes consolidated statements operations also include pro forma amounts income taxes would recorded company historically c corporation company adopted statement financial accounting standards 109 “accounting income taxes” “sfas 109” effective date merger sfas 109 deferred tax assets liabilities recognized based differences financial statement tax bases assets liabilities using enacted tax rates sfas 109 requires recognition deferred tax assets net applicable valuation allowances related net operating loss carryforwards tax credits temporary differences standard requires recognition future tax benefit extent realization benefit likely otherwise valuation allowance applied las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued company’s income tax returns subject examination internal revenue service “irs” tax authorities positions taken tax returns sometimes subject uncertainty tax laws take positions unless “substantial authority” internal revenue code applicable regulations may take positions tax returns based substantial authority ultimately accepted irs currently examining federal income tax returns years ended december 31 1998 1999 2000 company believes liability arising examinations material impact financial position results operations company assesses potential unfavorable outcomes based criteria statement financial accounting standards 5 “accounting contingencies” “sfas 5” establish tax reserve unfavorable outcome probable amount unfavorable outcome reasonably estimated assess potential outcomes tax uncertainties quarterly basis determining whether probable criterion sfas 5 met presume taxing authority focus exposure assess probable outcome particular issue based upon relevant legal technical merits also apply judgment regarding potential actions tax authorities resolution settlement process appropriate maintain required tax reserves time underlying issue resolved actual results differ reserve estimates adjust income tax provision tax reserves period resolved tax indemnification connection conversion las vegas sands opco subchapter corporation taxable “c” corporation income tax purposes las vegas sands opco entered indemnification agreement pursuant agreed • make payment stockholders las vegas sands opco prior conversion amount based estimated taxable income las vegas sands opco fiscal 2004 highest aggregate effective marginal rate federal state local income tax applicable alternative minimum tax stockholder las vegas sands opco immediately prior conversion would subject payment required made stockholder extent las vegas sands opco made prior distributions stockholder respect estimated taxable income las vegas sands opco fiscal 2004 • indemnify stockholders las vegas sands opco immediately prior conversion certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands opco respect taxable periods las vegas sands opco subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred principal stockholder result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface holdings respect taxable periods interface holdings subchapter corporation income tax purposes advertising costs advertising expensed incurred except costs directresponse advertising capitalized amortized period related program directresponse advertising consists primarily mailing costs associated directmail programs capitalized advertising costs included prepaid expense immaterial december 31 2004 2003 advertising costs expensed 23 million 28 million 37 million 2004 2003 2002 respectively las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued concentrations credit risk financial instruments potentially subject company concentrations credit risk consist principally shortterm investments casino receivables shortterm investments including restricted cash equivalents placed high credit quality financial institutions primarily money market funds us treasury securities concentration credit risk associated casino receivables principally relates receivables customers foreign countries company mitigates risk issuing credit customers reviewed creditworthiness management believes concentrations credit risk allowance established accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period losses retirement indebtedness april 2002 financial accounting standards board issued statement 145 “sfas 145” “rescission fasb statements nos 4 44 64 amendment fasb statement 13” sfas 145 addresses presentation losses early retirements debt statement operations 2002 company adopted sfas 145 presented losses early retirements debt extraordinary item additionally 2002 prior period extraordinary losses reclassified conform new presentation adoption sfas 145 impact company’s financial condition cash flows las vegas sands corp subsidiaries notes financial statements continued note 2summary significant accounting policies continued recent accounting pronouncements december 2004 fasb issued sfas 123 revised 2004 “sharebased payment” “sfas 123r” supersedes fasb opinion 25 “accounting stock issued employees” statement requires compensation costs related share based payment transactions recognized financial statements provisions statement effective first interim annual reporting period begins june 15 2005 statement requires public entities measure cost employee services received exchange award equity instruments based grantdate fair value award limited exceptions cost recognized period employee required provide service exchange award statement also addresses accounting tax effects sharebased compensation awards statement apply us july 1 2005 currently expect adopt standard date using blackscholes model blackscholes model expect expense cost sharebased compensation awards issued july 1 2005 additionally expect recognize compensation cost portion awards outstanding july 1 2005 requisite service rendered requisite service rendered july 1 2005 currently evaluating provisions sfas 123r determine impact future financial statements note 3restricted cash equivalents senior secured credit facility entered august 20 2004 provided 6650 million single draw senior secured term loan facility “term b facility” term b facility proceeds 3545 million deposited restricted accounts invested cash permitted investments pledged disbursement agent senior secured credit facility lenders 3545 million used required phase ii project costs disbursement terms specified senior secured credit facility disbursement account subject security interest favor lenders senior secured credit facility december 31 2004 phase ii disbursement account balance 3569 million venetian macau senior secured notes issued august 21 2003 provided 1200 million single draw venetian macau senior secured notes proceeds 1171 million net financing fees costs deposited restricted accounts invested cash permitted investments pledged holders venetian macau senior secured notes restricted cash equivalents december 31 2003 included 1171 million expended 2004 connection completion macao casino projects restricted cash equivalent includes advance customer deposits convention facility rentals paid pursuant contractual terms december 31 2004 2003 restricted cash equivalents included advance customer deposits 193 million 193 million respectively additionally company certain restricted cash balances 12 million 54 million december 31 2004 2003 respectively las vegas sands corp subsidiaries notes financial statements continued note 4accounts receivable components accounts receivable follows thousands company extends credit approved casino customers following background checks investigations creditworthiness december 31 2004 substantial portion company’s casino receivables due customers residing foreign countries business economic conditions legal enforceability gaming debts significant events countries could affect collectibility receivables estimated allowance doubtful accounts discounts maintained reduce company’s receivables estimated net realizable value although management believes allowance adequate possible estimated amount cash collections respect casino accounts receivable could change note 5property equipment net property equipment includes costs incurred construct casino resort amount disputed litigation “see note 12commitments contingencies” new ventures consist following thousands las vegas sands corp subsidiaries notes financial statements continued note 5property equipment net continued construction progress consists following capital expenditures years ended december 31 2004 2003 2002 4657 million 2799 million 1367 million comprised company’s construction activities 1013room venezia hotel tower phase ia addition macao casino palazzo phase ii mall years ended december 31 2004 2003 2002 company capitalized interest expense 46 million 56 million 26 million respectively note 6other accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt see also note 15”subsequent events” consolidated financial statements longterm debt consists following thousands mortgage notes june 4 2002 lvsi venetian issued 8500 million aggregate principal amount 110 mortgage notes due 2010 “mortgage notes” mortgage notes bear interest 11 payable june 15th december 15th mortgage notes secured second priority liens certain assets company personal property real estate improvements comprise hotel casino convention space certain exceptions mortgage notes redeemable option lvsi venetian prices ranging 100 1055 commencing june 15 2006 set forth mortgage notes indenture pursuant mortgage notes issued “indenture” prior june 15 2006 lvsi venetian may redeem mortgage notes principal amount plus applicable makewhole premium prior june 15 2005 company may redeem 35 mortgage notes net cash proceeds one offerings equity securities redemption price 111 principal amount mortgage notes plus accrued unpaid interest upon event loss certain asset sales company may also required offer purchase portion mortgage notes proceeds event loss sale mortgage notes subject sinking fund requirement las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt continued result consummation mall sale may 17 2004 described note 14 lvsi venetian obligated use excess proceeds defined indenture mall sale make offer purchase maximum principal amount mortgage notes may purchased excess proceeds mall sale offer price cash equal 100 principal amount mortgage notes plus accrued unpaid interest liquidated damages closing date offer “asset sale offer” asset sale offer closed june 6 2004 64 million mortgage notes tendered repurchased company see “note 15subsequent events” description retirement full remaining mortgage notes 2005 senior secured credit facility august 20 2004 lvsi venetian entered senior secured credit facility syndicate lenders aggregate amount 1010 billion senior secured credit facility provides 6650 million single draw senior secured term loan facility “term b facility” 1050 million senior secured delayed draw facility “term b delayed draw facility” required drawn within six months 1150 million senior secured delayed draw facility “term delayed draw facility” required drawn within eighteen months 1250 million senior secured revolving facility “revolving facility” portion proceeds 6650 million term b facility used pay prior senior secured credit facility term b loans aggregate amount 2900 million 195 million financing costs balance 3545 million deposited disbursement account construction palazzo invested cash permitted investments pledged disbursement agent senior secured credit facility lenders funds used required palazzo project costs disbursement agreement related agreements december 31 2004 6650 million indebtedness outstanding senior secured credit facility term b facility term b delayed draw facility mature june 15 2011 fully drawn subject quarterly amortization payments amount 19 million first full fiscal quarter following substantial completion palazzo june 30 2010 followed four equal quarterly amortization payments 1867 million maturity date term delayed draw facility undrawn december 31 2004 matures august 20 2009 subject quarterly amortization payments commencing april 15 2006 amount 29 million first four quarters 43 million succeeding four quarters 72 million next four quarters 192 million final three quarters revolving facility matures august 20 2009 interim amortization amounts drawn revolving facility december 31 2004 however described lvsi guaranteed borrowings 500 million credit facility wholly owned subsidiary venetian intermediate fund construction development costs macao casino guarantees supported 500 million letters credit issued revolving facility addition lvsi guaranteed funding certain cost overruns macao casino described note 12 guaranty supported 100 million letter credit issued prior revolving facility january 2004 result issuance letters credit amount available working capital loans revolving facility 650 million december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt continued amounts outstanding senior secured credit facility prior substantial completion palazzo bear interest option company prime rate plus 150 per annum reserve adjusted eurodollar rate plus 250 per annum interest payable base rate loans quarterly basis payable eurodollar loans end applicable interest period substantial completion palazzo applicable margin amounts outstanding term delayed draw facility revolving facility determined grid based upon leverage ratio leverage ratio calculated ratio consolidated total debt last day fiscal quarter ebitda defined senior secured credit facility fourfiscal quarter period ending date commitment fees equal 075 150 per annum daily average unused portion commitment revolving facility term b delayed draw facility term delayed draw facility respectively payable quarterly arrears average interest rate senior secured credit facility 46 twelve months ended december 31 2004 senior secured credit facility secured first priority lien substantially assets company securing mortgage notes namely personal property real estate improvements comprise hotel casino convention space certain exceptions senior secured credit facility contains affirmative negative financial covenants including limitations indebtedness liens investments guarantees restricted junior payments mergers acquisitions sales assets leases transactions affiliates scopechanges modifications material contracts additionally company required comply certain financial ratios financial covenants including total debt ebitda ratios ebitda interest coverage ratios minimum net worth covenants maximum capital expenditure limitations december 31 2004 company compliance required covenants ratios senior secured credit facility company required maintain interest rate cap agreement limit impact increases interest rates floating rate debt derived senior secured credit facility fixed portion company’s outstanding indebtedness falls 50 company obligated fix portion floating rate debt meet 50 requirement ffe financing september 2003 company lender entered credit facility “ffe credit facility” provide 150 million financing phase ia addition proceeds ffe credit facility used finance certain furniture fixtures equipment “specified ffe” phase ia addition facility secured specified ffe credit facility provides 60month basic term loan interest term loan three month libor plus 300 payable quarterly ffe credit facility subject nineteen quarterly amortization payments 600000 beginning january 1 2004 one final payment 3600000 october 1 2008 average interest rate ffe credit facility 45 year ended december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt continued interface mortgage loan july 30 2004 interface entered mortgage loan “interface mortgage loan” pursuant borrowed 1000 million proceeds loan cash 270 million equity contribution lvsi used repay full amounts outstanding prior mortgage loan pay related fees expenses interface’s obligations loan secured first priority mortgage sands expo center certain related collateral interface must repay full amounts outstanding interface mortgage loan august 10 2006 unless exercises renewal options event loan must repaid february 10 2009 loan amortize pursuant 20year mortgage schedule based 925 interest rate amortization cash flow interface defined loan agreement available payment interest mandatory amortization tax insurance reserve amounts operating expenses capital expenditures reserve advanced customer deposits additional principal payments must made equal difference principal payments necessary amortize loan pursuant 15year schedule based 700 interest rate ii amortization payment required aforementioned 925 amortization schedule loan bears interest rate equal libor plus 375 twelve months loan may prepaid whole part average interest rate interface mortgage loan 550 year ended december 31 2004 venetian intermediate credit facility march 27 2003 venetian intermediate entered credit agreement “venetian intermediate credit agreement” lender provide 500 million financing macao casino venetian intermediate owns 90 capital stock 100 economic interest shares venetian macau owner operator macao casino obligations loans made venetian intermediate credit agreement guaranteed lvsi venetian supported letters credit issued revolving facility favor venetian intermediate credit agreement lender result issuance letters credit amounts available working capital loans revolving facility reduced dollar basis amounts outstanding venetian intermediate credit agreement bear interest base rate adjusted eurodollar rate plus 05 per annum interest payable base rate loans quarterly basis payable eurodollar loans end applicable interest period scheduled principal amortization credit facility due full march 27 2006 december 31 2004 500 million outstanding venetian intermediate credit agreement supported 500 million letters credit issued revolving facility average interest rate venetian intermediate credit facility 18 year ended december 31 2004 venetian macao senior secured notes august 21 2003 wholly owned subsidiary venetian macau venetian macau finance company issued 1200 million aggregate principal amount floating rate senior secured notes due august 2008 “venetian macau senior secured notes” venetian macau senior secured notes issued venetian macau finance company guaranteed venetian macau assets venetian macau subsidiaries secure venetian macau senior secured notes restrictions placed payment dividends lvsi subsidiaries venetian macau subsidiaries december 31 2004 proceeds issuance venetian macau senior secured notes utilized construction macao casino result restrictions dividend payments described approximately 736 million net assets venetian macau december 31 2004 available parent level considered restricted net assets subsidiaries date las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt continued 750 million aggregate principal amount venetian macau senior secured notes bear interest rate three month libor plus 325 payable quarterly “tranche notes” 450 million aggregate principal amount venetian macau senior secured notes bear interest rate three month libor plus 400 payable quarterly “tranche b notes” tranche notes mandatory redemption 75 million august 21 2005 112 million august 21 2006 188 million august 21 2007 375 million august 21 2008 tranche b notes interim amortization due full august 21 2008 average interest rate venetian macau senior secured notes 51 year ended december 31 2004 phase ii mall construction loan september 30 2004 phase ii mall holding llc phase ii mall subsidiary llc entered construction loan agreement group lenders agreement provides delayed draw loans aggregate principal amount 2500 million proceeds used fund financing design development construction phase ii mall loan secured firstpriority security interest substantially borrowers’ assets capital stock loan bears interest borrowers’ option either adjusted eurodollar rate plus 175 alternative base rate plus 075 interest payable base rate loans quarterly basis payable eurodollar loans end applicable interest period loan due full march 31 2008 interim amortization company agreed repay loan proceeds phase ii mall sale see note 14 “mall sale” amounts outstanding facility december 31 2004 meet requirement phase ii mall construction loan company entered cap agreement december 2004 “the phase ii mall cap agreement” resulted premium payment counterparties based upon 125 million principal amount term equal term phase ii mall construction loan provisions phase ii mall cap agreement entitle company receive counterparties amounts selected market interest rates exceed strike rates stated agreement net effect interest expense result phase ii mall cap agreement twelve months ended december 31 2004 notional amount phase ii mall cap agreement expires june 1 2007 december 31 2004 zero scheduled maturities longterm maturities longterm debt outstanding december 31 2004 summarized follows thousands las vegas sands corp subsidiaries notes financial statements continued note 7longterm debt continued estimated fair values company’s debt related financial instruments follows thousands fair values mortgage notes based quoted market prices fair values indebtedness ffe credit facility approximate respective carrying amounts based variable nature facilities fair value cap agreement based upon quotes brokers note 8acquisition interface redeemable preferred interest venetian casino resort llc july 29 2004 lvsi acquired capital stock interface principal stockholder exchange issuance principal stockholder 220370 additional shares lvsi’s common stock converted 58625638 shares lvsc merger interface indirectly owns sands expo center holds 2552 million redeemable preferred interest venetian casino resort llc acquisition interface lvsi accounted reorganization entities common control manner similar poolingofinterests 1997 interface contributed 771 million cash venetian exchange series preferred interest “series preferred interest” venetian terms series preferred interest convertible time series b preferred interest venetian “series b preferred interest” “redeemable preferred interest” august 1998 series preferred interest converted series b preferred interest rights series b preferred interest include accrual preferred return 12 date contribution respect series preferred interest indebtedness senior secured credit facility repaid cash payments permitted restricted payment covenants indenture relating mortgage notes preferred return series b preferred interest accrue paid cash commencing june 30 2011 distributions must made extent positive capital account holder second third quarters 1999 interface contributed 373 million 71 million respectively cash exchange additional series b preferred interest years ended december 31 2004 2003 2002 168 million 262 million 233 million respectively accrued series b preferred interest related contributions made distributions preferred interest preferred return paid 2004 2003 2002 due acquisition interface company preferred interest preferred return eliminated consolidated financial statements series b preferred interest retired first quarter 2005 see “note 15subsequent events” las vegas sands corp subsidiaries notes financial statements continued note 8acquisition interface redeemable preferred interest venetian casino resort llc continued following information presents certain income statement data separate companies periods preceding merger thousands companies provided certain facilities usage travel charges revenues expenses eliminated consolidation noted table adjustments conform accounting policies companies since companies shared fiscal year end adjustments necessary related changing fiscal year interface note 9stockbased employee compensation company two nonqualified stock option plans provide granting stock options pursuant applicable provisions internal revenue code regulations las vegas sands opco 1997 fixed stock option plan las vegas sands opco 1997 fixed stock option plan “1997 plan” provides 19952457 shares postsplit basis common stock las vegas sands opco reserved issuance officers key employees consultants las vegas sands opco las vegas sands opco affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted las vegas sands opco board directors 1997 plan respect assumed obligations principal stockholder assumed las vegas sands opco’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 las vegas sands opco responsible obligations 1997 plan lvsc assumed obligations las vegas sands opco principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering las vegas sands corp subsidiaries notes financial statements continued note 9stockbased employee compensation continued consummation initial public offering issuance shares common stock connection exercise options subject approval nevada gaming authorities purpose 1997 plan promote interest company 1 attracting retaining exceptional officers key employees consultants company affiliates subsidiaries 2 enabling individuals participate longterm growth financial success company board directors company authority determine participants options granted number shares covered option repurchase disposition shares thereunder exercise price therefore conditions limitations applicable exercise option board directors company authorized make adjustments terms conditions criteria included options case certain unusual nonrecurring events whenever board directors company determines adjustments appropriate order prevent dilution enlargement benefits potential benefits 1997 plan event “acceleration event” defined 1997 plan outstanding options held participants unexercisable otherwise unvested automatically become fully vested shall exercisable pursuant applicable award agreement board directors company may amend alter suspend discontinue terminate 1997 plan portion thereof time provided action may taken without stockholder approval necessary comply tax regulatory requirement applicable 1997 plan provided amendment alteration suspension discontinuance termination would impair rights holder option already granted effective without holder’s consent 2004 awards 1997 plan july 30 2004 fully vested options purchase 3052460 shares common stock granted board directors 1997 plan exercise price 564 per share options may exercised delivery cash check equivalent messrs weidner stone goldstein another employee received options purchase 942820 707115 471410 931115 respectively shares common stock august 2 2004 mr weidner exercised options granted mr stone exercised options granted acquire 353558 shares common stock august 2 2004 353558 shares common stock november 30 2004 mr goldstein exercised options granted purchase 235705 shares common stock august 2 2004 235705 shares common stock november 30 2004 board directors agreed grant additional options 1997 plan following initial public offering las vegas sands corp 2004 equity award plan company adopted las vegas sands corp 2004 equity award plan “2004 plan” grants common stock made participants immediately prior following consummation initial public offering purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide us stock plan providing incentives directly related increases stockholder value administration company’s compensation committee administers 2004 plan except case awards nonemployee directors administered board directors compensation committee authority determine terms conditions agreements evidencing awards granted 2004 plan adopt alter repeal rules guidelines practices relating 2004 plan company’s compensation committee full discretion administer interpret 2004 plan adopt rules regulations procedures deems necessary advisable determine among things time times awards may exercised whether circumstances award may exercised las vegas sands corp subsidiaries notes financial statements continued note 9stockbased employee compensation continued eligibility company’s subsidiaries’ affiliates’ employees directors officers consultants eligible awards 2004 plan company’s compensation committee sole complete authority determine granted award 2004 plan except case awards nonemployee directors made board directors number shares authorized 2004 plan provides aggregate 26344000 shares company’s common stock available awards participant may granted awards options stock appreciation rights respect 3000000 shares common stock one year 3000000 shares common stock may granted 2004 plan respect performance compensation awards one year award forfeited option terminates expires lapses without exercised shares common stock subject award available future grant change corporate capitalization compensation committee sole discretion may make substitutions adjustments number shares reserved issuance 2004 plan number shares covered awards outstanding 2004 plan limitations awards 2004 plan exercise price outstanding options equitable substitution adjustments may determine appropriate 2004 plan term ten years awards may granted expiration term awards available grant compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2004 plan 24158217 options available grant options awards options granted prior january 1 2002 summary status 1997 plan 2004 plan years ended december 31 2004 2003 2002 presented las vegas sands corp subsidiaries notes financial statements continued note 9stockbased employee compensation continued following tables summarize additional information regarding options granted 1997 plan 2004 plan outstanding december 31 2004 2003 2002 note 10employee savings plan participation venetian casino resort llc 401k employee savings plan available full time employees savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund venetian matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 3 participating employee’s eligible gross wages year ended december 31 2004 2003 2002 contributions accrued savings plan 27 million 22 million 21 million respectively note 11related party transactions principal stockholder partner four entities operate restaurants casino resort terms conditions leases granted company restaurants amounts management believes would less favorable negotiated independent third parties valentino las vegas llc night market llc paid venetian 05 million 10 million 11 million postrio las vegas llc carnevale coffee bar llc paid mall subsidiary 05 million 11 million 10 million years ended december 31 2004 2003 2002 respectively casino resort purchased lease interest assets carnevale coffee bar llc 2003 31 million payable 625000 2003 250000 annually ten years beginning 2004 september 1 2013 2003 company purchased tower cranes principal stockholder 08 million paid principal stockholder 12 million rent tower cranes use phase ia addition construction period las vegas sands corp subsidiaries notes financial statements continued note 11related party transactions december 31 2003 company certain receivables principal stockholder totaling 13 million advances interface made behalf related aircraft described note 17 certain assets including receivable distributed principal stockholder immediately prior lvsi’s acquisition interface july 2004 december 31 2004 company incurred certain expenses certain payables totaling 17 million 09 million respectively principal stockholder related company’s use personal aircraft business purposes april 2003 company made loans totaling approximately 841000 certain executive officers loans bore interest greater 4 per annum applicable shortterm federal rate loans mature earlier december 31 2010 date public offering company’s shares commences pursuant registration statement date borrower disposes shares company loans repaid september 2004 note 12commitments contingencies energy services agreements 1997 venetian mall subsidiary interface entered separate energy service agreements heating ventilation air conditioning “hvac” provider “hvac provider” terms energy services agreement separate energy services agreements hvac energy services purchased venetian new mall subsidiary mall tenants interface initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods pursuant company’s construction management contract fully defined “litigation” hvac plant constructed construction manager land owned company leased hvac provider hvac equipment owned hvac provider paid costs “hvac costs” connection purchase installation hvac equipment total hvac costs 700 million charges payable separate energy services agreements include fixed component applied hvac costs paid hvac provider reimbursement operational related costs management fee las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued december 31 2004 venetian interface obligated energy services agreements make future minimum payments follows thousands expenses incurred energy services agreements 74 million 85 million 64 million years ended december 31 2004 2003 2002 respectively operating lease agreements company party operating lease agreements shortterm variable rate nature expenses incurred operating lease agreements totaled 17 million 17 million 17 million years ended december 31 2004 2003 2002 respectively construction litigation construction principal components venetian casino resort undertaken lehrer mcgovern bovis inc pursuant construction management agreement certain amendments thereto construction management contract established final guaranteed maximum price 6450 million subject certain exceptions including exception cost overruns due “scope changes” construction manager responsible costs work covered construction management contract excess 6450 million construction management contract also established required “substantial completion” date construction venetian casino resort sufficiently complete including receipt necessary permits licenses approvals components venetian casino resort could open general public april 21 1999 subject extensions account “scope changes” force majeure events perday liquidated damages penalty failure meet deadline obligations construction manager construction management contract guaranteed bovis inc construction manager’s direct parent time construction management contract entered bovis’ obligations bovis guaranty guaranteed peninsula oriental steam navigation company po british public company construction manager’s ultimate parent time construction management contract entered las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued july 30 1999 venetian casino resort llc filed complaint construction manager bovis united states district court district nevada action alleges breach contract construction manager obligations construction management contract breach contract bovis obligations bovis guaranty including failure fully pay trade contractors vendors failure meet april 21 1999 guaranteed completion date company amended complaint november 23 1999 add po additional defendant response venetian casino resort llc’s breach contract claims construction manager bovis po construction manager filed complaint august 3 1999 venetian casino resort llc district court clark county nevada action alleges breach contract quantum meruit claims construction management contract also alleges venetian casino resort llc defrauded construction manager connection construction venetian casino resort quantum meruit claim one seeks abandon contract recover reasonable value services theory sometimes pursued contractors could otherwise recover damages express terms conditions contract construction manager seeks compensatory damages attorneys’ fees costs punitive damages lawsuit construction manager claims owed approximately 900 million venetian casino resort llc affiliates complaint subsequently amended construction manager also filed additional complaint us relating work done funds advanced respect contemplated development palazzo casino resort simultaneously commencing march 2000 construction manager engaged arbitration proceedings ordered federal court determine cost scheduled impact changes scope services construction manager construction management contract connection disputes december 31 1999 construction manager subcontractors filed mechanics liens venetian casino resort 1456 million 1822 million respectively company believes major reason lien amounts exceeded construction manager’s claims 900 million based upon duplication liens inclusion lowertier claims subcontractors liens highertier contractors including lien construction manager purchased surety bonds virtually claims underlying liens approximately 150 million claims respect construction manager purchased bonds result foreclosure venetian casino resort connection claims construction manager subcontractors however required pay immediately reimburse bonding company extent underlying claims judicially determined valid claims settled likely take significant amount time validity judicially determined june 2000 company purchased insurance policy loss coverage connection litigation relating construction venetian casino resort insurance policy insure first 450 million losses excluding defense costs insurer insure defense costs covered losses next 800 million insurance policy provides coverage subject certain exceptions amounts determined construction litigation owed construction manager subcontractors relating claimed delays inefficiencies disruptions lack productivityunauthorized overtime schedule impact allegedly caused us construction venetian casino resort lien claims acquired construction manager well defense costs june 3 2003 approximate ninemonth trial concluded state court action jury returned verdict awarded construction manager approximately 440 million additional costs construction management contract awarded us approximately 20 million damages defective incomplete work performed construction manager verdict also returned defense verdict favor construction manager’s fraud claim denied construction manager’s claim punitive damages verdict address prejudgment interest reimbursement attorney’s costs sought state court parties prior entry verdict state court judge dismissed construction manager’s quantum meruit claim las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued judge state court action directed clerk file verdict december 24 2003 unclear whether filing verdict alone constitutes entry judgment state law verdict special interrogatories make total amount judgment unclear abundance caution parties treated filing verdict final judgment filed motions requesting state court reconsider entry judgment stay verdict conclusion arbitration proceedings contend must considered determination final award parties request stay denied believe arbitration proceedings may result lowering verdict awarded construction manager state court action may provide basis increase amount awarded us orders dated filed june 17 july 19 2004 post trial motions denied material respects filed notice appeal nevada supreme court several motions reconsideration trial court yet ruled upon state court judge pending subcontractor claims construction manager us related claims indemnity construction manager believe claims asserted us actions subsumed within verdict state court action liability limited amount final judgment may ultimately entered state court action judgment construction manager entered verdict judgment executed upon construction manager following resolution appeals believe payment judgment applied towards satisfaction 450 million selfinsured retention insurance policy intend seek elimination reduction construction manager’s subcontractors’ mechanic’s liens amount consistent final judgment verdict notwithstanding entry judgment state court action continued pursue certain claims arbitration proceedings determine among things impact certain changes determination arbitrator believe may provide basis reducing amount awarded construction manager state court action raising amount verdict us otherwise establishing offsetting claims us construction manager also intend pursue additional affirmative claims federal court action proceedings resolved verdict state court action magnitude remaining open items arbitration proceedings believe must considered ultimate award parties able determine reasonable certainty value claims probability success claims time accordingly accrual liability reflected accompanying financial statements matter approximately 72 million previously accrued 1999 unpaid construction costs yet paid pending outcome litigation las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued based judgment state court action remaining open items arbitration proceedings estimate range loss matter zero gain remaining matters determined favor considering existing accrual approximately 72 million unpaid construction costs approximately 700 million original verdict 420 million plus 280 million representing remaining indemnity claims arbitration matters lose remaining arbitration matters related pending actions appeals counsel advised possible loss already included state court action range loss attorneys’ fees costs interest awarded court orders dated march 18 2005 march 21 2005 amount 197 million prejudgment interest 92 million costs 96 million attorneys’ fees appealing awards entitlement amount substantially attorneys’ fees costs related defense prosecution claims arising construction management agreement incurred since june 28 2000 paid insurance company special insurance policy obtained mitigate losses incurred approximately 22 million attorneys’ fees related construction litigation prior june 28 2000 covered insurance state court’s orders denying post trial motions could viewed increasing possibility exposed loss litigation appellate issues intend pursue ongoing arbitration proceedings believe impact amount loss award may entitled two ways state court judgment may change executed construction manager first credit claims contract ordered arbitration already obtained interim credit awards 51 million arbitration related allowance reconciliations credits work required contract never completed construction manager addition claims 230 million submitted arbitration within next 12 months largest credit claims amount 100 million relates reconciliation contract allowance credits due construction manager workers’ compensation general liability insurance provided construction manager trade contractors us owner controlled insurance program credit claims principally relate defective incomplete work completed us construction manager stopped performing project successful proving remaining credit claims arbitration credit awards total could offset 280 million verdict likely certain elements verdict preempted duplicative items ordered arbitration federal court state court jury trial began example jury verdict includes award 80 million trade contractor overtime incurred construction manager arbitrator found construction manager entitled award zero dollars exact overtime claims position arbitration awards substituted portions verdict overlap march 30 2004 hearing state court judge acknowledged verdict judgment verdict need adjusted completion arbitrations possibility offsetting credits may awarded arbitration elimination duplicative claims substitution arbitration awards verdict single amount within range loss reasonably determined estimated loss could material results operations period estimate recorded las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued interface nevada litigation october 17 2003 bear stearns funding inc filed lawsuit interface groupnevada plaintiff seeking damages interface groupnevada alleged breach contract amount approximately 15 million plus interest costs claim asserts amount due agreedupon fee connection interface groupnevada’s prior 1410 million mortgage loan paid july 2004 interface groupnevada asserted six counterclaims plaintiff counterclaims bear stearns allege bear stearns’ sale subordinated component loan competitor constituted breach loan agreement related agreement transmission information connection sale constituted misappropriation interface groupnevada’s trade secrets misrepresented interface groupnevada certain facts regarding purchaser subordinated component counterclaims also allege bear stearns’ demand interface groupnevada purchase insurance required loan agreement motivated bear stearns’ exclusion participating another financing action constituted prima facie tort new york law together actions alleged counterclaims constituted breach bear stearns’ duty good faith fair dealing counterclaims seek damages amount determined trial less 15 million plus punitive damages less 30 million fraud prima facie tort causes action plaintiff filed motion summary judgment complaint seeking judgment complaint approximate amount 15 million plus interest costs attorneys fees ii dismissal counterclaims two breach contract counterclaims “motion” opinion order dated march 21 2005 motion denied part granted part court denied request judgment compliant granted request dismiss counterclaims alleging misappropriation trade secrets prima facie tort fraud granted request dismiss one two bases counterclaim alleging breach covenant good faith fair dealing interface groupnevada legal counsel currently able determine probability outcome matters litigation relating macao casino october 15 2004 richard suen round square company limited filed action lvsc lvsi sheldon adelson william weidner district court clark county nevada suit asserts cause action breach alleged agreement pay success fee 5 million 2 net profit company’s macau resort operations plaintiffs connection alleged assistance securing gaming concession macau suit also alleges fraud quantum meruit connection allegations quantum meruit claim one seeks abandon contract recover reasonable value services plaintiffs seeking unspecified damages punitive damages costs although plaintiffs claim damages could excess 100 million intend defend vigorously filed motion dismiss fraud quantum meruit claims “motion dismiss” behalf defendants motion summary judgment claims behalf lvsc las vegas sands opco “motion summary judgment” order entered march 1 2005 dismissing motion dismiss without prejudice dismissing lvsc party without prejudice based stipulation parties dismissing motion summary judgment moot requiring filing answer remaining defendants within 30 days service amended compliant plaintiffs action preliminary stage company’s legal counsel currently able determine probability outcome action company involved litigation arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claim material effect company’s financial position results operations cash flows las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued macao casino projects june 26 2002 macau government granted concession operate casinos macau june 26 2027 galaxy casino company limited consortium macau hong kongbased investors “galaxy” condition venetian macau management company december 2002 venetian macau galaxy entered subconcession agreement recognized approved macau government allows venetian macau develop operate casino projects including macao casino separately galaxy macao casino opened may 18 2004 additional facilities including restaurants entertainment venues 49 52 highend suites opened late august 2004 addition macao casino company also intends build macao venetian casino resort macau hotel casino convention center complex venetianstyle theme similar company’s las vegas property subconcession agreement venetian macau obligated develop open macao venetian casino resort june 2006 invest cause invested least 44 billion patacas approximately 5346 million exchange rates effect december 31 2004 various development projects macau june 2009 construction development costs macao casino applied fulfillment total investment obligation macau government company currently estimates total cost constructing developing opening macao casino including design costs construction costs equipment costs working capital preopening expenses approximately 2650 million qualifies meet investment obligation macau government assuming current estimated construction development costs macao casino applied towards fulfilling investment obligations subconcession agreement remaining investment obligations subconcession agreement approximately 2696 million expected construction development costs macao venetian casino resort satisfy remainder obligation company need extension june 2006 construction deadline macao venetian casino resort currently expects open first quarter 2007 unless obtain extension may lose right continue operate macao casino facilities developed subconcession support obligation macau bank subsidiary company lido casino resort holding company llc guaranteed 500 million patacas approximately 608 million exchange rates effect december 31 2004 venetian macau’s legal contractual obligations macau government march 31 2007 venetian macau received consents june 2004 holders venetian macau senior secured notes permit creation junior lien venetian macao’s rights land upon macao casino constructed macau support guarantee issued macau bank venetian macau subconcession venetian macau’s development investment obligations subconcession agreement may satisfied venetian macau andor affiliates including company venetian macau venetian intermediate company’s macau subsidiaries guarantors mortgage notes senior secured credit facility subject certain limited exceptions restricted subsidiaries indenture mortgage notes senior secured credit facility restrictions placed payment dividends lvsi subsidiaries venetian macau subsidiaries las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued 2003 venetian macau entered 25year land lease agreement macau government land macao casino constructed december 31 2004 venetian macau obligated leases make future payments follows thousands subconcession obligated pay macau government annual premium fixed portion variable portion based number type gaming tables employed gaming machines operated us fixed portion premium equal 30 million patacas approximately 36 million exchange rates effect december 31 2004 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 36453 18227 122 respectively exchange rates effect december 31 2004 subject minimum 45 million patacas 55 million exchange rates effect december 31 2004 variable portion premium subject renegotiations 2005 also pay special gaming tax 35 gross gaming revenues applicable withholding taxes must also contribute 4 gross gaming revenue utilities designated macau government portion must used promotion tourism macau percentage subject change 2010 currently gaming tax macau calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result extend credit customers macau unable collect related receivables pay taxes winnings customers even though unable collect related receivables laws changed business macau may able realize full benefits extending credit customers although proposals revise gaming tax laws macau assurance laws changed received concession macau government use sixacre parcel land sands macao land concession expire 2028 renewable land concession requires us pay premium payable number years addition also obligated pay rent annually term land concession rent amount may revised every five years macau government see note entitled “commitments contingenciesmacau casino projects” consolidated financial statements information payment obligation concession applied macau government land concession west side cotai strip including site macao venetian casino resort land concession require us pay certain premiums rent las vegas sands corp subsidiaries notes financial statements continued note 12commitments contingencies continued ventures commitments 2003 company entered three lease termination asset purchase agreements grand canal shops mall tenants first agreement provided payments company tenant 800000 2003 27 additional annual payments 400000 thereafter second agreement provided initial deposit 50 million paid company may 2003 15 subsequent monthly payments totaling 100 million beginning january 2004 plus interest 6 per annum third agreement asset purchase agreement provided initial payment 500000 2003 subsequent quarterly payments 62500 ten years case company obtained title leasehold improvements fixed assets originally purchased grand canal shops mall tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants note 13segment information company reviews results operations based following distinct segments casino resort las vegas strip sands expo center las vegas macao casino macau company’s segments based geographic locations las vegas macau type business casino resort operations convention operations company’s segment information follows three years ended december 31 2004 2003 2002 thousands 1 adjusted ebitda earnings interest taxes depreciation amortization preopening expenses adjusted ebitda used management primary measure operating performance properties compare operating performance properties competitors las vegas sands corp subsidiaries notes financial statements continued note 13segment information continued las vegas sands corp subsidiaries notes financial statements continued note 14mall sale mall sale related matters april 12 2004 company entered agreement sell grand canal shops mall lease certain restaurant retail assets casino resort “master lease” approximately 7660 million “mall sale” mall sale closed may 17 2004 company realized gain 4176 million connection mall sale conjunction mall sale company repaid 1200 million secured mall facility redeemed 64 million mortgage notes pursuant asset sale offer master lease agreement provides casino resort lease nineteen spaces currently occupied various tenants general growth properties “ggp” 89years annual rent one dollar per year ggp assume various leases gaap master lease agreement qualify sale related assets separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments casino resort amortize income straightline basis 89year lease term year ended december 31 2004 08 million deferred item amortized company addition company continue obligated fulfill certain lease termination asset purchase agreements ii lease c2k showroom space located within grand canal shops mall ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent 860350 lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv 772 million gaap portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases year ended december 31 2004 21 million deferred item amortized company phase ii mall company formed phase ii mall subsidiary july 1 2004 develop construct phase ii mall connection mall sale company entered agreement ggp construct sell phase ii mall amount equal greater 2500 million ii phase ii mall’s net operating income months 19 30 operations assuming rent due tenants month 30 actually due months 19 30 divided capitalization rate capitalization rate 06 every dollar net operating income 380 million 08 every dollar net operating income 380 million date phase ii mall opens public ggp obligated make initial purchase price payment based projected net operating income first 12 months operations event less 2500 million every six months thereafter 24 month anniversary opening date required purchase price adjusted never less 2500 million based projected net operating income upcoming 12 months “final” purchase price adjustment subject audit thereafter made 30month anniversary phase ii mall’s opening date based formula described first two sentences paragraph purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting purposes calculating final purchase price adjustment applying base rent payable tenants last month applicable 12month period entire 12month period phase ii mall expected cost approximately 2750 million excluding incentive payments described phase ii mall constructed using proceeds recently entered 2500 million phase ii mall construction loan see note 7 approximately 250 million investment company mall sale agreement company agreed substantially complete construction phase ii mall earlier 36 months date sufficient permits received allow phase ii mall subsidiary begin construction phase ii mall march 1 2008 dates may extended due force majeure certain delays event company substantially complete construction phase ii mall las vegas sands corp subsidiaries notes financial statements continued note 14mall sale continued earlier two dates may extended described preceding sentences company must pay liquidated damages 5000 per day first six months 10000 per day following six months substantial completion occur end six months completion deadline substantial completion occurred one year deadline company required pay total liquidated damages amount 1000 million addition failure substantially complete construction phase ii mall agreedupon deadline would constitute event default senior secured credit facility company’s disbursement agreement event company complies obligations aforementioned agreement ggp concerning phase ii mall ggp fails acquire membership interests entity owning phase ii mall company entitled • sue ggp specific performance • liquidated damages amount 1000 million • purchase interest ggp grand canal shops mall lesser 7660 million ii fair market value minus b 1000 million company made equity contribution phase ii mall subsidiary 632 million july 15 2004 used make certain incentive payments pay related payroll taxes principal stockholder senior executives company work connection phase ii mall sale related financing transactions company made additional equity contribution approximately 250 million september 30 2004 required phase ii mall construction loan agreement see note 7“phase ii mall construction loan” note 15subsequent events stock option issuances february 2005 options purchase additional 22820 shares company’s common stock granted employee two new directors company board directors company’s stock option plan average exercise price 4716 per share options may exercised delivery cash check equivalent debt refinancing 6375 senior notes february 10 2005 company sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 “senior notes” original issue discount 23 million net proceeds offering costs original issue discount 2448 million senior notes mature february 15 2015 company option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter company option redeem portion senior notes time fixed prices decline time addition february 15 2008 company may redeem 35 aggregate principal amount senior notes proceeds certain equity offerings redemption price equal 106375 principal amount senior notes senior notes unsecured senior obligations company jointly severally guaranteed senior unsecured basis certain company’s existing domestic subsidiaries including lvsi las vegas sands corp subsidiaries notes financial statements continued note 15subsequent events continued venetian senior notes indenture contains covenants subject certain exceptions conditions limit ability company subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets net proceeds senior notes offering utilized complete retirement 11 mortgage notes described february 10 2005 company subsidiary guarantors including lvsi venetian initial purchasers senior notes also entered registration rights agreement registration rights agreement company subsidiary guarantor granted certain exchange registration rights holders senior notes amended restated credit agreement february 22 2005 lvsi venetian amended restated 1620 billion senior secured credit facility amended senior secured credit facility consists 9700 million funded term loan 2000 million delayeddraw term loan available august 20 2005 4500 million revolving credit facility amended senior secured credit facility also contains revised covenants provide greater financial flexibility funded term loan drawn closing provided borrowers 9700 million proceeds portion proceeds along net proceeds recently completed senior note offering cash hand used repay term indebtedness prior senior secured credit facility repurchase 5423 million principal amount mortgage notes described pay related premiums accrued unpaid interest mortgage notes fees expenses associated transactions indebtedness amended senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations amended senior secured credit facility guarantees guarantors secured firstpriority security interest substantially company’s guarantors’ assets capital stock borrowings term loan facilities revolving loan facilities bear interest company’s option either adjusted eurodollar rate alternative base rate plus spread 175 075 respectively spreads decrease 025 loans achieve rating ba2 higher moody’s bb higher sp subject certain additional conditions amended senior secured credit facility contains affirmative negative financial covenants customary financings also requires company maintain following financial ratios last day fiscal quarter • minimum ratio consolidated adjusted ebitda consolidated interest expense less 15 10 last day fiscal quarter construction palazzo substantially complete increasing thereafter provided credit facility • maximum ratio consolidated total debt outstanding including certain debt lvsc guaranteed borrowers consolidated adjusted ebitda 725 10 last day fiscal quarter construction palazzo substantially complete decreasing thereafter provided amended senior secured credit facility • minimum consolidated net worth less 4100 million plus 85 consolidated net income borrowers guarantors fiscal quarters • maximum consolidated capital expenditures excluding certain palazzorelated construction costs periods february 22 2005 december 31 2005 800 million plus carryforward unused amounts prior years decreasing fiscal years thereafter set forth amended senior secured credit facility las vegas sands corp subsidiaries notes financial statements continued note 15subsequent events continued amended senior secured credit facility contains events default customary financings including limited nonpayment principal interest fees amounts due violation covenants failure representation warranty true material respects made deemed made cross default cross acceleration certain erisa events change control dissolution insolvency bankruptcy events material judgments actual asserted invalidity guarantees security documents events default allow grace periods materiality concepts 11 mortgage notes lvsi venetian exercised equity claw back mortgage notes indenture described note 7 pursuant company retired 2911 million mortgage notes paid 320 million redemption premiums proceeds initial public offering february 2005 lvsi venetian retired 5423 million aggregate principal amount mortgage notes pursuant tender offer plus makewhole premium accrued interest 903 million proceeds 2500 million senior notes offering cash hand proceeds amended senior secured credit facility total consideration paid certain tendering holders 116656 per 1000 principal amount mortgage notes including consent payment 30 per 1000 principal amount mortgage notes tendered prior february 1 2005 march 24 2005 lvsi venetian redeemed remaining 102 million aggregate principal amount outstanding mortgage notes price equal 100 principal amount thereof plus makewhole premium accrued interest company expects incur charge approximately 1326 million loss early retirement indebtedness first quarter 2005 result amending senior secured credit facility retiring mortgage notes note 16income taxes company accounts income taxes accordance statement financial accounting standards 109 “accounting income taxes” “sfas 109” sfas 109 requires recognition deferred income tax assets net applicable reserves related net operating loss carryforwards certain temporary differences standard requires recognition future tax benefit extend realization benefit likely otherwise valuation allowance applied described note 2 prior completion company’s initial public offering december 2004 lvsi elected taxed corporation following completion merger initial public offering company became subject federal income taxes time conversion c corporation income tax purposes company recognized deferred tax assets liabilities required sfas 109 components provision benefit income taxes december 31 2004 follows thousands las vegas sands corp subsidiaries notes financial statements continued note 16income taxes continued reconciliation statutory federal income tax rate company’s effective tax rate c corporation conversion date december 31 2004 follows major tax affected components company’s net deferred tax assets follows thousands december 31 2004 60 million valuation allowance provided certain foreign net operating loss carryforwards foreign deferred tax assets management believes assets meet “more likely not” criteria recognition sfas 109 management believes deferred tax assets likely realized future reversal existing taxable temporary differences expected future taxable income accordingly valuation allowances provided december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 16income taxes continued december 2004 fasb issued fsp 1092 “accounting disclosure guidance foreign earnings repatriation provision american jobs creation act 2004 “ajca”” ajca provides onetime 85 dividends received deduction certain foreign earnings repatriated plan reinvestment united states provided certain criteria met fsp 1092 effective immediately provides accounting disclosure guidance repatriation provision fsp 1092 allows companies additional time evaluate effects law unremitted earnings purpose applying “indefinite reversal criteria” apb opinion 23 “accounting income taxes special areas” requires explanatory disclosures companies yet completed evaluation company currently evaluating effects repatriation provision impact consolidated financial statements december 31 2004 company provided deferred taxes foreign earnings intended indefinitely reinvested outside us whether company ultimately take advantage provision depends number factors including reviewing future congressional guidance decision made time company make change current intention indefinitely reinvest accumulated earnings foreign subsidiaries range possible amounts unremitted earnings considered repatriation zero 500 million related potential range income tax zero 262 million us federal income tax return purposes company net operating loss carryforward 42 million expire 2025 equates deferred tax asset 14 million federal tax effect note 17dividends immediately prior july 29 2004 acquisition interface lvsi fully described notes 1 8 interface distributed approximately 152 million sole stockholder also principal stockholder lvsc distribution comprised 129 million cash 19 million receivables due principal stockholder 4 million certain fixed assets additionally described note 2 company declared tax distributions stockholders 1290 million 42 million 2004 2003 respectively dividends declared 2002 note 18condensed consolidating financial information accordance rule 310 regulation sx securities exchange commission condensed consolidating financial information company subsidiary guarantors defined nonguarantor subsidiaries combined basis december 31 2004 2003 three years period ended december 31 2004 follows thousands lvsi venetian coobligors mortgage notes indebtedness senior secured credit facility jointly severally liable indebtedness lvsi venetian iel yona phase ii subsidiary mall intermediate mall construction lido intermediate venetian venture venetian transport venetian marketing venetian operating collectively “subsidiary guarantors” subsidiaries lvsc capital stock owned lvsi lvsc subsidiary guarantors jointly severally guaranteed debt full unconditional basis las vegas sands corp subsidiaries notes financial statements continued note 18condensed consolidating financial information continued condensed balance sheets december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 18condensed consolidating financial information continued condensed balance sheets december 31 2003 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statement operations year ended december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statement operations year ended december 31 2003 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statement operations year ended december 31 2002 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statements cash flows year ended december 31 2004 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statements cash flows year ended december 31 2003 las vegas sands corp subsidiaries notes financial statements continued note 18summarized financial information continued condensed statements cash flows year ended december 31 2002 las vegas sands corp subsidiaries notes financial statements continued note 19selected quarterly financial results unaudited income loss per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total income per share amounts respective year report independent registered public accounting firm financial statement schedule board directors las vegas sands corp audits consolidated financial statements referred report dated february 11 2005 except note 15subsequent events date march 24 2005 appearing annual report form 10k also included audit financial statement schedule listed item 15 a2 form 10k opinion financial statement schedule presents fairly material respects information set forth therein read conjunction related consolidated financial statements pricewaterhousecoopers llp las vegas nevada february 11 2005 las vegas sands corp subsidiaries financial statement schedule ii valuation qualifying accounts thousands item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp completed integrated audit las vegas sands corp’s 2005 consolidated financial statements internal control financial reporting december 31 2005 audits 2004 2003 consolidated financial statements accordance standards public company accounting oversight board united states opinions based audits presented consolidated financial statements opinion financial statements listed index appearing item 15a1 present fairly material respects financial position las vegas sands corp subsidiaries “company” december 31 2005 2004 results operations cash flows three years period ended december 31 2005 conformity accounting principles generally accepted united states america financial statements responsibility company’s management responsibility express opinion financial statements based audits conducted audits statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit financial statements includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion internal control financial reporting also opinion management’s assessment included management’s annual report internal control financial reporting appearing item 9a company maintained effective internal control financial reporting december 31 2005 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission “coso” fairly stated material respects based criteria furthermore opinion company maintained material respects effective internal control financial reporting december 31 2005 based criteria established internal control integrated framework issued coso company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting responsibility express opinions management’s assessment effectiveness company’s internal control financial reporting based audit conducted audit internal control financial reporting accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit internal control financial reporting includes obtaining understanding internal control financial reporting evaluating management’s assessment testing evaluating design operating effectiveness internal control performing procedures consider necessary circumstances believe audit provides reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada march 1 2006 las vegas sands corp consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements stockholders’ equity comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 acquisition lvsllc lvsc accounted reorganization entities common control manner similar poolingofinterests lvsc traded new york stock exchange symbol “lvs” las vegas properties lvsc subsidiaries collectively “company” operate venetian resort hotel casino “the venetian” renaissance venicethemed resort situated las vegas strip “strip” venetian located across mirage treasure island hotel casino next wynn las vegas resort venetian includes first allsuites hotel strip 4027 suites gaming facility approximately 116000 square feet enclosed retail dining entertainment complex approximately 440000 net leasable square feet “grand canal shops” “mall” sold third party 2004 see note 14 mall sale meeting conference facility recently expanded approximately 11 million square feet expo convention center approximately 1150000 square feet “the sands expo center” company commenced construction work site palazzo resort hotel casino “the palazzo” second resort similar size venetian situated 14 acre site adjacent venetian sands expo center next wynn las vegas resort palazzo expected consist allsuites 50floor luxury hotel tower approximately 3025 suites gaming facility approximately 105000 square feet enclosed shopping dining entertainment complex approximately 450000 square feet “phase ii mall” company contracted sell third party see note 14 mall sale macao projects company also owns operates sands macao las vegasstyle casino macao china opened may 18 2004 addition sands macao company also constructing venetian macao resort hotel casino “the venetian macao” 3000 allsuites hotel casino convention center complex venetianstyle theme similar las vegas property gaming subconcession macao company obligated develop open venetian macao june 2006 convention center december 2006 invest cause invested least 44 billion patacas approximately 5274 million exchange rates effect december 31 2005 various development projects macao june 2009 company spent required minimum amount subsequent december 31 2005 company received extension june december 2006 construction deadlines venetian macao convention center december 2007 company currently expects open venetian macao convention center mid2007 fails meet december 2007 deadline company could lose right continue operate sands macao facilities developed macao gaming subconcession investment date construction venetian macao could lost company commenced construction venetian macao prior obtaining land concession macao government holds title land company applied macao government land concession portion west side cotai strip including site venetian macao land concession require company pay certain premiums rent company negotiation macao government cost land concession company believes successful obtaining land concession however event company unable successfully conclude negotiations macao government regard land underlying las vegas sands corp subsidiaries notes consolidated financial statements continued venetian macao company could lose substantial part investment creation land constructing venetian macao interface holding lvsc’s principal stockholder “principal stockholder” also sole stockholder interface group holding company inc “interface” july 29 2004 lvsc acquired capital stock interface principal stockholder exchange issuance principal stockholder consideration equal 58625638 additional shares common stock lvsc interface indirectly owns sands expo center held 2552 million redeemable preferred interest venetian casino resort llc cancelled february 2005 eliminated applicable consolidated financial statements see note 8 acquisition interface redeemable preferred interest venetian casino resort llc acquisition interface company accounted reorganization entities common control manner similar poolingofinterests note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts lvsc subsidiaries significant intercompany balances transactions eliminated use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities ongoing basis company evaluates estimates including related allowance doubtful accounts discounts accruals slot marketing points selfinsurance litigation asset impairment useful lives depreciable amortizable assets stock option values pro forma information related stock options income taxes estimates based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days due short maturities carrying value investments approximates fair value inventories stated lower cost market cost determined firstin firstout specific identification methods inventories consist primarily food beverage retail products accounts receivable accounts receivable principally comprised casino hotel receivables bear interest recorded cost allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered las vegas sands corp subsidiaries notes consolidated financial statements continued property equipment property equipment stated cost depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows maintenance repairs renewals neither materially add value property appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance financial accounting standards board’s “fasb” statement financial accounting standards “sfas” 144 “accounting impairment disposal longlived assets” assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists estimated future cash flows asset undiscounted basis compared carrying value asset undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete deferred offering costs original issue discounts deferred offering costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method hotel food beverage revenues hotel revenue recognition criteria generally met time occupancy food beverage revenue recognition criteria generally met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention rental revenues convention revenues recognized related service rendered event held minimum rental revenues included retail revenue recognized straightline basis terms related lease percentage rents recognized period tenants exceed las vegas sands corp subsidiaries notes consolidated financial statements continued respective percentage rent thresholds charges tenants real estate taxes insurance retail operating expenses recognized revenues period billed approximates period applicable costs incurred slot club promotion progressive jackpot payouts company established promotional club encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash company accrues club points reduction revenue based upon estimates expected redemptions company maintains number progressive slot machines table games wagers made respective progressive games amount available win paid appropriate jackpots hit increases company recorded progressive jackpots liability corresponding charge casino revenue casino revenue promotional allowances casino revenue aggregate gaming wins losses cash discounts cash incentives related gaming play recorded reduction gross casino revenues accordance industry practice retail value accommodations food beverage services furnished hotelcasino guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands preopening development expenses preopening expense represents direct personnel costs incurred prior opening new ventures expensed incurred development expense includes costs associated company’s evaluation pursuit new business opportunities also expensed incurred las vegas sands corp subsidiaries notes consolidated financial statements continued advertising costs advertising expensed incurred advertising costs included general administrative expense 46 million 33 million 28 million years ended december 31 2005 2004 2003 respectively currency translation company accounts currency translation accordance sfas 52 “foreign currency translation” balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average rate exchange prevailing period translation adjustments resulting process charged credited comprehensive income comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income elements company’s comprehensive income reported accompanying consolidated statements stockholders’ equity comprehensive income cumulative balance elements consisted solely foreign currency translation adjustments earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following years ended december 31 2005 2004 2003 outstanding options purchase 42820 zero 1463181 shares common stock respectively included calculation diluted earnings per share effect antidilutive stockbased employee compensation company elected follow accounting principles board opinion “apb” 25 “accounting stock issued employees” accounts stockbased compensation employees using intrinsic value method compensation expense difference fair value company’s common stock option’s exercise price measurement date apb 25 exercise price stock options equal greater fair value underlying stock date grant compensation expense recognized company’s stockbased employee compensation plan fully discussed note 9 july 2004 fully vested options purchase 3052460 shares common stock granted employees company board directors company’s stock option plan exercise price 564 per share fair value common stock dates grant stock options granted july las vegas sands corp subsidiaries notes consolidated financial statements continued 2004 originally estimated management based principally upon may 31 2004 valuation fair value common stock lvsllc subsidiaries unaffiliated valuation specialist company deem necessary obtain additional third party valuation time option grants july already received independent valuation date may 31 close time option grant dates however retrospective review given proximity july 2004 grant dates proposed initial public offering date company believed time prepared third quarter financial statements fair value common stock 2177 per share based upon midpoint preliminary estimated range proposed valuation connection initial public offering best estimate fair value common stock underlying options date grant result intrinsic value fully vested options granted year ended december 31 2004 492 million 1613 per share recorded compensation expense included corporate expense accompanying consolidated statements operations principal factors used determine midpoint preliminary estimated range shares sold company’s initial public offering projections company’s three operating properties venetian sands macao sands expo center two future projects venetian macao palazzo ii trading multiples gaming hospitality leisure industry companies iii discount rates appropriate comparable projects company accounted plans fair value method allowed sfas 123 “accounting stockbased compensation” company’s net income earnings per share would reduced following pro forma amounts thousands except per share data estimated grant date fair value options granted las vegas sands corp 2004 equity award plan “2004 plan” 2005 1387 per share computed using black scholes optionpricing model following weighted average assumptions risk free interest rate 414 expected dividend yield expected volatility 3145 expected life 6 years estimated grant date fair value 2185783 options granted 2004 plan 2004 1278 per share computed using black scholes optionpricing model following weighted average assumptions risk free interest rate 366 expected dividend yield expected volatility 40 expected life 6 years estimated grant date fair value 3052460 options granted lvsllc 1997 fixed stock option plan “1997 plan” 2004 2144 per share computed las vegas sands corp subsidiaries notes consolidated financial statements continued minimum value method following weighted average assumptions risk free interest rate 384 expected dividend yield expected life 12 year estimated fair value options granted 2003 1 per share computed using minimum value method following weighted average assumptions risk free interest rate 384 noexpected dividend yield expected life 212 years income taxes prior merger wholly owned subsidiary lvsc “merger” december 2004 conversion llc 2005 lvsllc elected taxed corporation wholly owned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes nevada levy corporate income tax company income tax holiday macao 2008 accordingly provision federal state foreign income taxes included consolidated statements operations year ended december 31 2003 period january 1 2004 merger december 2004 lvsllc’s debt instruments provided dividends paid stockholders pay income taxes associated taxable income attributable stockholder period lvsllc taxed corporation 2004 2003 lvsllc declared accrued 1290 million 42 million tax dividends respectively result merger completion lvsc’s initial public offering december 2004 company subject federal certain state income taxes information purposes consolidated statements operations also include pro forma amounts income taxes would recorded company historically c corporation company adopted sfas 109 “accounting income taxes” effective date merger sfas 109 deferred tax assets liabilities recognized based differences financial statement tax basis assets liabilities using enacted tax rates sfas 109 requires recognition deferred tax assets net applicable valuation allowances related net operating loss carryforwards tax credits temporary differences standard requires recognition future tax benefit extent realization benefit likely otherwise valuation allowance applied company’s income tax returns subject examination internal revenue service “irs” tax authorities positions taken tax returns sometimes subject uncertainty tax laws company take positions unless “substantial authority” internal revenue code applicable regulations company may take positions tax returns based substantial authority ultimately accepted irs currently examining federal income tax returns years ended december 31 2000 1999 1998 company believes liability arising examinations material impact financial position results operations cash flows company assesses potential unfavorable outcomes based criteria sfas 5 “accounting contingencies” company establishes tax reserve unfavorable outcome probable amount unfavorable outcome reasonably estimated company assesses potential outcomes tax uncertainties quarterly basis determining whether probable criterion sfas 5 met company presumes taxing authority focus exposure assesses probable outcome particular issue based upon relevant legal technical merits company also applies judgment regarding potential actions tax authorities resolution settlement process company maintains required tax reserves time underlying issue resolved actual results differ reserve estimates company adjust income tax provision tax reserves period resolved tax years examined taxing authorities company adjust las vegas sands corp subsidiaries notes consolidated financial statements continued tax reserves year tax examinations settled tax years examined taxing authorities company adjust tax reserves year statute limitations expires company’s estimate potential outcome uncertain tax issue highly judgmental believes adequately provided reasonable foreseeable outcomes related uncertain tax matters tax indemnification connection conversion lvsllc subchapter corporation taxable c corporation income tax purposes lvsllc entered indemnification agreement pursuant agreed • indemnify stockholders las vegas sands inc prior 2004 initial public offering certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands inc respect taxable periods las vegas sands inc subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface holdings respect taxable periods interface holdings subchapter corporation income tax purposes concentrations credit risk financial instruments potentially subject company concentrations credit risk consist principally cash equivalents casino receivables cash equivalents including restricted cash equivalents placed high credit quality financial institutions primarily money market funds us treasury securities concentration credit risk associated casino receivables principally relates receivables customers foreign countries company mitigates risk issuing credit customers reviewed creditworthiness management believes concentrations credit risk allowance established accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income las vegas sands corp subsidiaries notes consolidated financial statements continued loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements december 2004 fasb issued sfas 123r “sharebased payment” supersedes apb 25 amends sfas 95 “statement cash flows” statement requires compensation costs related sharebased payment transactions recognized financial statements statement also requires benefits tax deductions excess recognized compensation cost reported financing cash flow rather operating cash flow provisions statement effective first annual reporting period begins june 15 2005 statement requires public entities measure cost employee services received exchange award equity instruments based grantdate fair value award limited exceptions cost recognized period employee required provide service exchange award statement also addresses accounting tax effects sharebased compensation awards company adopted standard january 1 2006 using modified prospective application method modified prospective application method company expense cost sharebased compensation awards issued january 1 2006 additionally company recognize compensation cost portion awards outstanding january 1 2006 requisite service rendered requisite service rendered january 1 2006 based stock options outstanding december 31 2005 company estimates options record approximately 50 million 46 million 42 million 12 million stock option expense years ending december 31 2006 2007 2008 2009 respectively company provide assurances actual amount stock option expense recorded future years approximate current estimates may 2005 fasb issued sfas 154 “accounting changes error corrections replacement apb opinion 20 fasb statement 3” changes requirements accounting reporting change accounting principle sfas 154 applies voluntary changes accounting principles well changes required accounting pronouncement include specific transition provisions statement requires retrospective application prior periods’ financial statements changes accounting principles sfas 154 effective accounting changes corrections errors made fiscal years beginning december 15 2005 company expect adoption sfas 154 material effect consolidated financial position results operations cash flows note 3 restricted cash equivalents required company’s senior secured credit facility see note 7longterm debtsenior secured credit facility certain proceeds pursuant draws facility deposited restricted accounts invested cash equivalents pledged disbursement agent senior secured credit facility lenders restricted cash amount used required palazzo project costs disbursement terms specified facility disbursement account subject security interest favor lenders senior secured credit facility december 31 2005 2004 palazzo disbursement account balance 5711 million 3569 million respectively current restricted cash equivalents includes 217 million 193 million consisting primarily advance customer deposits convention facility rentals paid pursuant contractual terms years ended december 31 2005 2004 respectively classified restricted accordance interface mortgage loan see note 7longterm debtinterface mortgage loan addition current restricted cash equivalents includes restricted cash deposit 500 million related las vegas sands corp subsidiaries notes consolidated financial statements continued proposal obtain gaming license pennsylvania december 31 2005 certain restricted cash balances 12 million december 31 2004 note 4 accounts receivable net accounts receivable consists following thousands company extends credit approved casino customers following background checks investigations creditworthiness december 31 2005 2004 substantial portion company’s casino receivables due customers residing foreign countries business economic conditions legal enforceability gaming debts significant events countries could affect collectibility receivables estimated allowance doubtful accounts discounts maintained reduce company’s receivables estimated net realizable value although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change note 5 property equipment net property equipment consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued construction progress consists following thousands capital expenditures years ended december 31 2005 2004 2003 8606 million 4657 million 2799 million respectively 2005 expenditures primarily comprised construction palazzo phase ii mall venetian macao expansion maintenance activities venetian sands macao 2004 2003 expenditures primarily comprised construction activities 1013room venezia tower sands macao palazzo phase ii mall years ended december 31 2005 2004 2003 company capitalized interest expense 227 million 46 million 56 million respectively note 6 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 7 longterm debt longterm debt consists following thousands senior secured credit facility august 20 2004 lvsllc venetian casino resort llc entered senior secured credit facility syndicate lenders aggregate amount 101 billion “prior senior secured credit facility” prior senior secured credit facility provided 6650 million single draw senior secured term loan facility 1050 million senior secured delayed draw facility required drawn within six months 1150 million senior secured delayed draw facility required drawn within eighteen months 1250 million senior secured revolving facility december 31 2004 6650 million indebtedness outstanding prior senior secured credit facility february 22 2005 lvsllc venetian casino resort llc entered amended restated senior secured credit facility syndicate lenders aggregate amount 162 billion “senior secured credit facility” senior secured credit facility amended restated prior senior secured credit facility provides 9700 million single draw senior secured term loan facility “term b facility” 2000 million senior secured delayed draw facility “term b delayed draw facility” drawn full august 2005 4500 million senior secured revolving facility “revolving facility” new proceeds 3050 million term b facility used retire 11 mortgage notes discussed term b facility term b delayed draw facility mature june 15 2011 fully drawn subject quarterly amortization payments amount 29 million first full fiscal quarter following substantial completion palazzo june 30 2010 followed estimated four equal quarterly amortization payments approximately 2845 million maturity date revolving facility matures february 2010 interim amortization december 31 2005 310 million las vegas sands corp subsidiaries notes consolidated financial statements continued drawn revolving facility lvsllc guaranteed borrowings 500 million credit facility wholly owned subsidiary venetian venture development intermediate limited “venetian intermediate” fund construction development costs sands macao guarantee supported 500 million letter credit issued revolving facility result issuance letter credit 310 million draw amount available working capital loans revolving facility 3690 million december 31 2005 indebtedness senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors secured firstpriority security interest substantially lvsllc’s wholly owned subsidiary venetian casino resort llc’s owner venetian guarantors’ assets capital stock venetian macau limited venetian intermediate company’s macao subsidiaries guarantors senior secured credit facility restricted subsidiaries senior secured credit facility borrowings term loan facilities revolving loan facilities bear interest company’s option either adjusted eurodollar rate alternative base rate plus spread 175 075 respectively spreads decrease 025 loans achieve rating ba2 higher moody’s bb higher standard poor’s subject certain additional conditions senior secured credit facility contains affirmative negative financial covenants customary financings covenants include restrictions among things ability borrowers incur additional debt dispose assets enter sale leaseback transactions financial covenants include minimum consolidated net worth test minimum consolidated interest coverage ratio maximum consolidated capital expenditure test maximum consolidated leverage ratio addition provisions limit prohibit certain payments dividends distributions lvsc december 31 2005 net assets lvsllc 14 billion substantial portion restricted terms senior secured credit facility weighted average interest rate senior secured credit facility 53 year ended december 31 2005 prior senior secured credit facility 46 year ended december 31 2004 company required maintain interest rate cap agreement limit impact increases interest rates floating rate debt derived senior secured credit facility fixed portion company’s outstanding indebtedness falls 50 company obligated fix portion floating rate debt meet 50 requirement meet requirement company entered interest rate cap agreement 2005 “senior secured credit facility cap agreement” resulted 18 million premium payment counterparties based upon 5000 million notional amount three year term provisions senior secured credit facility cap agreement entitle company receive counterparties amounts selected market interest rates exceed strike rate 575 stated agreement net effect interest expense result senior secured credit facility cap agreement years ended december 31 2005 2004 notional amount senior secured credit facility cap agreement expires march 30 2008 december 31 2005 5000 million senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 “senior notes” original issue discount 23 million net proceeds offering costs original issue discount 2448 million senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline time addition las vegas sands corp subsidiaries notes consolidated financial statements continued february 15 2008 lvsc may redeem 35 aggregate principal amount senior notes proceeds certain equity offerings redemption price equal 106375 principal amount senior notes senior notes unsecured senior obligations lvsc jointly severally guaranteed senior unsecured basis certain lvsc’s existing domestic subsidiaries including lvsllc venetian casino resort llc senior notes indenture contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets net proceeds senior notes offering utilized complete retirement 11 mortgage notes described june 2005 senior notes exchanged substantially similar senior notes registered federal securities laws interface mortgage loan july 30 2004 interface entered mortgage loan “interface mortgage loan” pursuant borrowed 1000 million repay portion prior indebtedness interface’s obligations loan secured first priority mortgage sands expo center certain related collateral interface must repay full amounts outstanding interface mortgage loan august 1 2006 unless exercises renewal options interface two oneyear one sixmonth renewal options interface exercises renewal options loan must repaid later january 30 2009 loan amortizes pursuant 20year mortgage schedule based 925 interest rate amortization cash flow interface defined loan agreement available payment interest mandatory amortization tax insurance reserve amounts operating expenses capital expenditures reserve advanced customer deposits additional principal payments must made equal difference principal payments necessary amortize loan pursuant 15year schedule based 70 interest rate ii amortization payment required aforementioned 925 amortization schedule loan bears interest rate equal libor plus 375 loan may prepaid whole part par weighted average interest rate interface mortgage loan 69 55 years ended december 31 2005 2004 respectively december 31 2005 company classified debt longterm ability intent exercise first oneyear renewal option phase ii mall construction loan september 30 2004 two wholly owned subsidiaries company phase ii mall holding llc phase ii mall subsidiary llc “phase ii mall subsidiary” entered construction loan agreement group lenders agreement provides delayed draw loans aggregate principal amount 2500 million proceeds used fund design development construction phase ii mall loan secured firstpriority security interest substantially borrowers’ assets capital stock loan bears interest borrowers’ option either adjusted eurodollar rate plus 175 alternative base rate plus 075 interest payable base rate loans quarterly basis payable eurodollar loans end applicable interest period loan due full march 31 2008 interim amortization company agreed repay loan proceeds phase ii mall sale see note 14 mall sale december 31 2005 285 million outstanding facility amounts outstanding facility december 31 2004 weighted average interest rate phase ii mall construction loan 55 year ended december 31 2005 meet requirements phase ii mall construction loan company entered interest rate cap agreement december 2004 “phase ii mall cap agreement” resulted premium payment counterparties based upon 125 million notional amount term equal term phase ii mall construction loan provisions phase ii mall cap agreement entitle company las vegas sands corp subsidiaries notes consolidated financial statements continued receive counterparties amounts selected market interest rates exceed strike rate 60 stated agreement net effect interest expense result phase ii mall cap agreement years ended december 31 2005 2004 notional amount phase ii mall cap agreement expires june 1 2007 december 31 2005 366 million ffe financing september 2003 company lender entered credit facility “ffe credit facility” provide 150 million financing expansion venetian proceeds ffe credit facility used finance certain furniture fixtures equipment “specified ffe” expansion facility secured specified ffe credit facility provides 60month basic term loan interest term loan threemonth libor plus 30 payable quarterly ffe credit facility subject nineteen quarterly amortization payments 600000 beginning january 1 2004 one final payment 3600000 october 1 2008 weighted average interest rate ffe credit facility 63 45 years ended december 31 2005 2004 respectively mortgage notes june 4 2002 lvsllc venetian casino resort llc issued 8500 million aggregate principal amount 11 mortgage notes due 2010 “mortgage notes” mortgage notes bore interest 11 payable june 15th december 15th mortgage notes redeemable option lvsllc venetian casino resort llc prices ranging 100 1055 commencing june 15 2006 set forth mortgage notes indenture pursuant mortgage notes issued “indenture” prior june 15 2006 lvsllc venetian casino resort llc could redeem mortgage notes principal amount plus applicable makewhole premium prior june 15 2005 company could redeem 35 mortgage notes net cash proceeds one offerings equity securities redemption price 111 principal amount mortgage notes plus accrued unpaid interest result consummation mall sale may 17 2004 described note 14 mall sale lvsllc venetian casino resort llc obligated use excess proceeds defined indenture mall sale make offer purchase maximum principal amount mortgage notes could purchased excess proceeds mall sale offer price cash equal 100 principal amount mortgage notes plus accrued unpaid interest liquidated damages closing date offer “asset sale offer” asset sale offer closed june 6 2004 64 million mortgage notes tendered repurchased company february 2005 lvsllc venetian casino resort llc exercised equity claw back indenture pursuant company retired 2911 million mortgage notes paid 320 million redemption premiums proceeds lvsc’s initial public offering additionally lvsllc venetian casino resort llc retired 5423 million aggregate principal amount mortgage notes pursuant tender offer plus makewhole premium accrued interest 903 million proceeds senior notes offering cash hand proceeds senior secured credit facility total consideration paid tendering holders 116656 per 1000 principal amount mortgage notes including consent payment 30 per 1000 principal amount mortgage notes tendered prior february 1 2005 march 2005 lvsllc venetian casino resort llc redeemed remaining 102 million aggregate principal amount outstanding mortgage notes price equal 100 principal amount thereof plus makewhole premium accrued interest company incurred charge approximately 1328 million loss early retirement indebtedness 2005 result retiring mortgage notes las vegas sands corp subsidiaries notes consolidated financial statements continued venetian intermediate credit facility march 27 2003 venetian intermediate entered credit agreement “venetian intermediate credit agreement” lender provide 500 million financing sands macao venetian intermediate owns 90 capital stock 100 economic interest shares venetian macau limited “venetian macau” owner operator sands macao obligations loans made venetian intermediate credit agreement guaranteed lvsllc venetian casino resort llc supported letter credit issued revolving facility favor venetian intermediate credit agreement lender result issuance letter credit amounts available working capital loans revolving facility reduced dollar basis amounts outstanding venetian intermediate credit agreement bear interest base rate adjusted eurodollar rate plus 05 per annum interest payable base rate loans quarterly basis payable eurodollar loans end applicable interest period scheduled principal amortization credit facility due full march 27 2006 company intends refinance facility due utilizing availability revolving facility accordingly 500 million classified longterm december 31 2005 2004 500 million outstanding venetian intermediate credit agreement supported 500 million letter credit issued revolving facility weighted average interest rate venetian intermediate credit facility 38 18 years ended december 31 2005 2004 respectively venetian macao senior secured notes august 21 2003 wholly owned subsidiary venetian macau venetian macau finance company issued 1200 million aggregate principal amount floating rate senior secured notes due august 2008 “venetian macao senior secured notes” venetian macao senior secured notes issued venetian macau finance company guaranteed venetian macau assets venetian macau subsidiaries secured venetian macao senior secured notes restrictions placed payment dividends lvsllc subsidiaries venetian macau subsidiaries proceeds issuance venetian macao senior secured notes utilized construction sands macao 750 million aggregate principal amount venetian macao senior secured notes bore interest rate three month libor plus 325 payable quarterly 450 million aggregate principal amount venetian macao senior secured notes bore interest rate three month libor plus 400 payable quarterly weighted average interest rate venetian macao senior secured notes 62 51 years ended december 31 2005 2004 respectively may 23 2005 company utilized existing cash retire venetian macao senior secured notes incurred charge 42 million loss early retirement indebtedness las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities longterm debt maturities longterm debt outstanding december 31 2005 summarized follows thousands estimated fair values company’s debt related financial instruments follows thousands fair values mortgage notes senior notes based quoted market prices fair values indebtedness approximate respective carrying amounts based variable interest rate nature facilities fair value interest rate cap agreements based upon quotes brokers note 8 acquisition interface redeemable preferred interest venetian casino resort llc july 29 2004 lvsllc acquired capital stock interface principal stockholder exchange issuance principal stockholder 220370 additional shares lvsllc’s common stock converted 58625638 shares lvsc merger interface indirectly owned sands expo center held 2552 million redeemable preferred interest venetian casino resort llc acquisition interface lvsllc accounted reorganization entities common control manner similar poolingofinterests las vegas sands corp subsidiaries notes consolidated financial statements continued following information presents certain income statement data separate companies periods preceding merger thousands companies provided certain facilities usage travel charges revenues expenses eliminated consolidation noted table adjustments conform accounting policies companies since companies shared fiscal year end adjustments necessary related changing fiscal year interface note 9 stockbased employee compensation company two nonqualified stock option plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering 2004 awards 1997 plan july 30 2004 fully vested options purchase 3052460 shares lvsllc’s common stock granted board directors 1997 plan exercise price 564 per share options could exercised delivery cash check equivalent four employees company received options purchase 942820 707115 471410 931115 respectively shares common stock august 2 2004 one employee exercised options granted another employee exercised options granted acquire 353558 shares common stock august 2 2004 353558 shares common stock november 30 2004 another employee exercised options granted purchase 235705 shares common stock august 2 2004 235705 shares common stock november 30 2004 final employee exercised options las vegas sands corp subsidiaries notes consolidated financial statements continued granted 2005 board directors agreed grant additional options 1997 plan following initial public offering options remain outstanding 1997 plan december 31 2005 las vegas sands corp 2004 equity award plan company adopted 2004 plan grants common stock made participants immediately prior following consummation initial public offering purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value administration company’s compensation committee administers 2004 plan except case awards nonemployee directors administered company’s board directors compensation committee authority determine terms conditions agreements evidencing awards granted 2004 plan adopt alter repeal rules guidelines practices relating 2004 plan compensation committee full discretion administer interpret 2004 plan adopt rules regulations procedures deems necessary advisable determine among things time times awards may exercised whether circumstances award may exercised compensation committee formed subcommittee administer portions 2004 plan require administration directors meeting certain independence standards eligibility company’s subsidiaries’ affiliates’ employees directors officers consultants eligible awards 2004 plan compensation committee sole complete authority determine granted award 2004 plan except case awards nonemployee directors made board directors number shares authorized 2004 plan provides aggregate 26344000 shares company’s common stock available awards participant may granted awards options stock appreciation rights respect 3000000 shares common stock one year award forfeited option terminates expires lapses without exercised shares company’s common stock subject award available future grant change company’s corporate capitalization compensation committee sole discretion may make substitutions adjustments number shares reserved issuance 2004 plan number shares covered awards outstanding 2004 plan limitations awards 2004 plan exercise price outstanding options equitable substitution adjustments may determine appropriate 2004 plan term ten years awards may granted expiration term awards available grant compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2005 24227152 shares available grant 2004 plan las vegas sands corp subsidiaries notes consolidated financial statements continued option awards summary status 1997 plan 2004 plan years ended december 31 2005 2004 2003 presented following tables summarize additional information regarding options granted 1997 plan 2004 plan outstanding december 31 2005 2004 2003 restricted stock awards restricted stock grants totaling 8088 shares issued 2004 plan year ended december 31 2005 grants occurred years ended december 31 2004 2003 grant price per share awards 3709 vest one year effect grants increase issued outstanding shares company’s common stock decrease number shares available grant 2004 plan deferred compensation recorded restricted stock grants equal market value company’s common stock date grant deferred compensation amortized period restricted stock vests recorded compensation expense accompanying las vegas sands corp subsidiaries notes consolidated financial statements continued consolidated statements operations year ended december 31 2005 02 million recorded compensation expense note 10 employee savings plan participation venetian casino resort llc 401k employee savings plan available fulltime employees savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 3 participating employee’s eligible gross wages years ended december 31 2005 2004 2003 company’s matching contributions savings plan 31 million 27 million 22 million respectively note 11 related party transactions principal stockholder partner four entities operate restaurants venetian terms conditions leases granted company restaurants amounts management believed would less favorable negotiated independent third parties valentino las vegas llc night market llc paid venetian 05 million 10 million postrio las vegas llc carnevale coffee bar llc paid grand canal shops ii llc “mall subsidiary” 05 million 11 million years ended december 31 2004 2003 respectively company purchased lease interest assets carnevale coffee bar llc 2003 31 million payable installments 06 million 2003 03 million annually ten years beginning 2004 september 1 2013 result sale mall see note 14 mall sale amounts paid company year ended december 31 2005 entities noted 2003 company purchased tower cranes principal stockholder 08 million prior purchase paid principal stockholder 12 million rent tower cranes use expansion project venetian company paid approximately 31 million 30 million 2004 2005 respectively gwv travel agent charter tour operator travel related services gwv travel controlled principal stockholder year ended december 31 2005 principal stockholder purchased certain banquet room catering goods services venetian approximately 10 million company purchased hotel guest amenities company controlled principal stockholder’s brother total amount paid approximately 18 million 24 million years ended december 31 2005 2004 respectively 2004 company also paid principal stockholder’s brother finder’s fee 13 million connection securing agreement laundry provider year ended december 31 2005 company incurred paid certain expenses totaling 07 million principal stockholder related company’s use personal aircraft business purposes addition year ended december 31 2005 company charged received principal stockholder 12 million related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes december 31 2004 company incurred certain expenses certain payables totaling 17 million 09 million respectively principal stockholder related company’s use personal aircraft business purposes las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2003 company certain receivables principal stockholder totaling 13 million advances interface made behalf related aircraft described note 16 certain assets including receivable distributed principal stockholder immediately prior lvsllc’s acquisition interface july 2004 april 2003 company made loans totaling 08 million certain executive officers loans bore interest greater 4 per annum applicable shortterm federal rate loans mature earlier december 31 2010 date public offering company’s shares commences pursuant registration statement date borrower disposes shares company loans repaid september 2004 note 12 commitments contingencies construction litigation construction principal components venetian undertaken lehrer mcgovern bovis inc “bovis” pursuant construction management agreement bovis’ obligations guaranteed corporate parent companies 1999 venetian casino resort llc filed complaint bovis united states district court district nevada relating construction venetian response bovis filed complaint venetian casino resort llc district court clark county nevada “state court action” commencing 2000 company participated bovis certain arbitration proceedings ordered federal court pursuant agreement parties certain claims brought bovis relating infrastructure palazzo currently construction “lido claims” severed state court action settled discussed company purchased insurance policy loss coverage connection litigation relating construction venetian “insurance policy” insurance policy company selfinsured first 450 million covered losses excluding defense costs insurance company “insurer” insured defense costs covered losses next 800 million principal exclusions coverage insurance policy lien claims bovis’ subcontractors directly company “direct claims” lido claims year ended december 31 2005 company paid 135 million 58 million resolve lido claims three direct claims respectively parts applied 450 million selfinsured retention amount addition company entered global settlement “agreement” bovis insurer pursuant agreement bovis released company liability litigation exchange certain payments described addition insurer agreed indemnify company liability ongoing direct claims except described connection claims owner controlled insurance program “ocip” project pursuant agreement company paid 307 million represents balance selfinsured retention insurance policy part bovis part bovis subcontractor resolve subcontractor’s direct claim company liabilities connection matter except described regard ocip claims pursuant agreement company assigned rights remaining construction defect claims bovis’ subcontractors insurer agreed indemnify company hold harmless remaining exposure outstanding direct claims except certain exposures might created connection ocip claims described company also agreed dismiss construction defect claims bovis addition company agreed insurer insurance policy would deemed satisfied terminated upon satisfaction certain conditions relating formal dismissals various matters covered settlement las vegas sands corp subsidiaries notes consolidated financial statements continued agreement company retained right bring claims certain bovis subcontractors amounts owed company provision insurance coverage subcontractors project ocip neither bovis insurer indemnified company subcontractor brings ocip claim counterclaims company response company decided time whether bring ocip claims however believes ocip related counterclaim exposure material various dismissals required agreement filed appropriate courts soon become final first quarter 2006 connection aforementioned aggregate 500 million settlement payments company capitalized 373 million amounts building related construction costs treated 127 million amounts interest expense addition company recorded 70 million depreciation expense year associated additional capitalized building related construction costs company expect incur charges connection matter litigation relating macao operations october 15 2004 richard suen round square company limited filed action lvsc lvsllc sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties may 17 2005 plaintiffs filed amended complaint defendants responded motion dismiss failure state claim upon relief granted august 23 2005 court postponed ruling motion dismiss allowed limited discovery order address defendant’s assertion plaintiffs cannot plead fraud sufficient particularity hearing motion dismiss scheduled march 6 2006 motion dismiss currently pending activity matter action preliminary stage company’s legal counsel advised based proceedings date probability recovery plaintiffs remote company intends defend matter vigorously january 26 2006 clive basset jones darryl steven turok aka dax turok cheong jose vai chi aka cliff cheong filed action las vegas sands corp las vegas sands llc venetian venture development llc various unspecified individuals companies district court clark county nevada plaintiffs assert breach agreement pay success fee amount equal fivepercent ownership interest lvsc entity owns operates macau sar gaming subconcession well related claims complaint filed company’s answer currently pending activity matter action preliminary stage company’s legal counsel advised based proceedings date probability recovery plaintiffs remote company intends defend matter vigorously interface nevada litigation october 17 2003 bear stearns funding inc filed lawsuit interface groupnevada company’s subsidiary owns sands expo center plaintiff seeking damages interface groupnevada alleged breach contract amount approximately 15 million plus interest costs claim asserts amount due agreedupon additional fee connection interface groupnevada’s prior 1410 million mortgage loan paid july 2004 interface groupnevada asserted six counterclaims plaintiff counterclaims bear stearns allege bear stearns’ sale subordinated component loan competitor constituted breach loan agreement related agreement transmission information connection sale constituted misappropriation interface groupnevada’s trade secrets misrepresented las vegas sands corp subsidiaries notes consolidated financial statements continued interface groupnevada certain facts regarding purchaser subordinated component counterclaims also allege bear stearns’ demand interface groupnevada purchase insurance required loan agreement motivated bear stearns’ exclusion participating another financing action constituted prima facie tort new york law together actions alleged counterclaims constituted breach bear stearns’ duty good faith fair dealing counterclaims sought damages amount determined trial less 15 million plus punitive damages less 30 million fraud prima facie tort causes action plaintiff filed motion summary judgment complaint seeking judgment complaint approximate amount 15 million plus interest costs attorneys fees ii dismissal counterclaims two breach contract counterclaims “motion” opinion order dated march 21 2005 motion denied part granted part court denied bear stearns’ motion judgment complaint granted bear stearns’ motion dismiss counterclaims alleging misappropriation trade secrets prima facie tort fraud granted request dismiss one two bases counterclaim alleging breach covenant good faith fair dealing matter discovery phase interface groupnevada legal counsel currently able determine probability outcome matters shareholder derivative litigation two shareholder derivative complaints brought plaintiffs lily walker james roberts jr filed district court clark county nevada august 2005 las vegas sands corp nominal defendant several officers directors including sheldon g adelson irwin chafetz charles forman robert g goldstein michael leven james j purcell irwin siegel bradley h stone william p weidner two actions consolidated lead case captioned “in las vegas sands corp shareholder litigation” case a507820 consolidated complaint alleges breach fiduciary duty unjust enrichment causes action including compensation paid certain company’s officers pursuant employment agreements excessive approval compensation certain directors improper individual defendants filed motion dismiss allegations consolidated complaint failure state claim october 2005 company filed joinder following hearing motion court dismissed complaint january 30 2006 ending matter company involved litigation arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial position results operations cash flows macao projects june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited consortium macao hong kongbased investors “galaxy” condition venetian macau management company december 2002 venetian macau galaxy entered subconcession agreement recognized approved macao government allows venetian macau develop operate casino projects including sands macao separately galaxy sands macao opened may 18 2004 additional facilities including restaurants entertainment venues 49 52 highend suites opened late august 2004 additional improvements opened time throughout 2005 addition sands macao company also intends build venetian macao las vegas sands corp subsidiaries notes consolidated financial statements continued subconcession agreement venetian macau obligated develop open venetian macao june 2006 convention center december 2006 invest cause invested least 44 billion patacas approximately 5274 million exchange rates effect december 31 2005 various development projects macao june 2009 company spent required minimum amount subsequent december 31 2005 company received extension june december 2006 construction deadlines venetian macao convention center december 2007 company currently expects open venetian macao convention center mid2007 company fails meet december 2007 deadline company could lose right continue operate sands macao facilities developed macao gaming subconcession investment date construction venetian macao could lost support obligation macao bank subsidiary company lido casino resort holding company llc guaranteed 500 million patacas approximately 599 million exchange rates effect december 31 2005 venetian macau’s legal contractual obligations macao government march 31 2007 venetian macau granted junior lien venetian macau’s rights land upon sands macao constructed support guarantee issued macao bank venetian macau subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 36 million exchange rates effect december 31 2005 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 35959 17980 120 respectively exchange rates effect december 31 2005 subject minimum 45 million patacas 54 million exchange rates effect december 31 2005 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao december 31 2005 company obligated subconcession make minimum future payments approximately 90 million next five years approximately 1034 million thereafter june 2022 currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed las vegas sands corp subsidiaries notes consolidated financial statements continued 2003 venetian macau entered 25year land lease agreement macao government six acre parcel land sands macao constructed land concession expire 2028 renewable land concession requires company pay premium payable number years addition company also obligated pay rent annually term land concession rent amount may revised every five years macao government december 31 2005 venetian macau obligated leases make future payments follows thousands years ended december 31 2005 2004 company recorded 07 million 05 million rental expense related land lease company commenced construction venetian macao prior obtaining land concession macao government holds title land company applied macao government land concession portion west side cotai strip including site venetian macao land concession require company pay certain premiums rent company negotiation macao government cost land concession company believes successful obtaining land concession however event company unable successfully conclude negotiations macao government regard land underlying venetian macao company could lose substantial part investment creation land constructing venetian macao energy services agreements 1997 venetian casino resort llc interface others entered separate energy service agreements heating ventilation air conditioning “hvac” provider “hvac provider” terms energy services agreement separate energy services agreements hvac energy services purchased venetian casino resort llc interface others initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods hvac plant constructed land owned company leased hvac provider hvac equipment owned hvac provider paid costs “hvac costs” connection purchase installation hvac equipment total hvac costs 700 million charges payable separate energy services agreements include fixed component applied hvac costs paid hvac provider reimbursement operational related costs management fee las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2005 venetian casino resort llc interface obligated energy services agreements make future minimum payments follows thousands expenses incurred energy services agreements 68 million 74 million 85 million years ended december 31 2005 2004 2003 respectively operating lease agreements company party operating lease agreements shortterm variablerate nature expenses incurred operating lease agreements totaled 16 million 17 million 17 million years ended december 31 2005 2004 2003 respectively ventures commitments 2003 company entered three lease termination asset purchase agreements grand canal shops mall tenants first agreement provided payments company tenant 08 million 2003 27 additional annual payments 04 million thereafter second agreement provided initial deposit 50 million paid company may 2003 15 subsequent monthly payments totaling 100 million beginning january 2004 plus interest 60 per annum third agreement provided initial payment 05 million 2003 subsequent quarterly payments 01 million ten years case company obtained title leasehold improvements fixed assets originally purchased grand canal shops mall tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2005 company obligated agreements make future payments 07 million next five years 87 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued note 13 segment information company reviews results operations based following distinct segments venetian strip sands expo center las vegas sands macao company’s segments based geographic locations las vegas macao type business casino resort operations convention operations company’s segment information follows three years ended december 31 2005 2004 2003 thousands 1 adjusted ebitda net income interest income taxes depreciation amortization preopening expense development expense income expense gain loss disposal assets loss early retirement debt corporate expense adjusted ebitda used management primary measure operating performance properties compare operating performance properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued note 14 mall sale mall sale related matters april 12 2004 company entered agreement sell grand canal shops mall lease certain restaurant retail space casino level venetian “master lease” general growth properties “ggp” approximately 7660 million “mall sale” mall sale closed may 17 2004 company realized gain 4176 million connection mall sale conjunction mall sale company repaid 1200 million secured mall facility redeemed 64 million mortgage notes pursuant asset sale offer master lease agreement venetian leased nineteen spaces casino level venetian currently occupied various tenants ggp 89years annual rent one dollar per year ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale related assets separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian amortize income straightline basis 89year lease term years ended december 31 2005 2004 12 million 08 million respectively deferred item amortized included retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described note 12commitments contingenciesother ventures commitments ii lease blue man group theater space located within grand canal shops mall ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent 860350 lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back las vegas sands corp subsidiaries notes consolidated financial statements continued agreements deferred gain amortized reduce lease expense straightline basis life leases years ended december 31 2005 2004 35 million 21 million respectively deferred item amortized included offset retail expense december 31 2005 company obligated ii iii iv make future payments follows thousands phase ii mall company formed phase ii mall subsidiary july 1 2004 develop construct phase ii mall connection mall sale company entered agreement ggp construct sell phase ii mall amount equal greater 2500 million ii phase ii mall’s net operating income months 19 30 operations assuming rent due tenants month 30 actually due months 19 30 divided capitalization rate capitalization rate 006 every dollar net operating income 380 million 008 every dollar net operating income 380 million date phase ii mall opens public ggp obligated make initial purchase price payment based projected net operating income first 12 months operations event less 2500 million every six months thereafter 24 month anniversary opening date required purchase price adjusted never less 2500 million based projected net operating income upcoming 12 months “final” purchase price adjustment subject audit thereafter made 30month anniversary phase ii mall’s opening date based formula described purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting purposes calculating final purchase price adjustment applying base rent payable tenants last month applicable 12month period entire 12month period phase ii mall expected cost approximately 2800 million excluding incentive payments described mall sale agreement company agreed substantially complete construction phase ii mall earlier x 36 months date sufficient permits received allow phase ii mall subsidiary begin construction phase ii mall march 1 2008 dates may extended due force majeure certain delays event company substantially complete construction phase ii mall earlier two dates may extended described preceding sentences company must pay liquidated damages 5000 per day first six months 10000 per day following six months substantial completion occur end six months completion deadline substantial completion occurred one year deadline company required pay total liquidated damages amount 1000 million addition failure substantially complete construction phase ii mall agreedupon deadline would constitute event default senior secured credit facility company’s disbursement agreement las vegas sands corp subsidiaries notes consolidated financial statements continued event company complies obligations aforementioned agreement ggp concerning phase ii mall ggp fails acquire membership interests entity owning phase ii mall company entitled • sue ggp specific performance • liquidated damages amount 1000 million • purchase interest ggp grand canal shops mall lesser 7660 million ii fair market value minus 1000 million company made equity contribution phase ii mall subsidiary 632 million july 15 2004 used make certain incentive payments pay related payroll taxes principal stockholder senior executives company work connection phase ii mall sale related financing transactions company made additional equity contributions 258 million 2004 required phase ii mall construction loan agreement see note 7 phase ii mall construction loan equity contributions 79 million 2005 note 15 income taxes described note 2 prior completion company’s initial public offering december 2004 lvsllc elected taxed corporation following completion merger initial public offering company became subject federal income taxes time conversion c corporation income tax purposes company recognized deferred tax assets liabilities required sfas 109 components benefit provision income taxes follows thousands reconciliation statutory federal income tax rate company’s effective tax rate year ended december 31 2005 c corporation conversion date december 17 2004 december 31 2004 follows las vegas sands corp subsidiaries notes consolidated financial statements continued consolidated income taxes us international operations follows thousands primary tax affected components company’s net deferred tax assets follows thousands domestic operating loss carryforwards 87 million 82 million years ended december 31 2005 2004 respectively operating loss carryforwards used begin expire 2024 operating loss carryforwards foreign subsidiaries 1183 million 291 million years ended december 31 2005 2004 respectively losses begin expire 2006 december 31 2005 2004 174 million 62 million valuation allowance provided foreign net operating loss carryforwards foreign deferred tax assets management believes assets meet “more likely not” criteria recognition sfas 109 management believes deferred tax assets likely realized future reversal existing taxable temporary differences expected future taxable income accordingly valuation allowances provided december 31 2005 2004 undistributed earnings subsidiary accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiary deemed indefinitely reinvested foreign jurisdiction company plan reinvestment undistributed las vegas sands corp subsidiaries notes consolidated financial statements continued earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans would required record significant amount deferred tax liabilities years ended december 31 2005 2004 amount undistributed earnings foreign subsidiaries company intend repatriate 3731 million 878 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions described note 2 company income tax holiday macao 2008 company required pay income taxes macao consolidated net income would reduced 353 million 122 million diluted earning per share would reduced 010 004 per share years ended december 31 2005 2004 respectively note 16 dividends immediately prior july 29 2004 acquisition interface lvsllc fully described notes 1 8 interface distributed approximately 152 million sole stockholder also principal stockholder lvsc distribution comprised 129 million cash 19 million receivables due principal stockholder 04 million certain fixed assets additionally described note 2 company declared tax distributions stockholders 1290 million 42 million 2004 2003 respectively dividends declared 2005 note 17 condensed consolidating financial information accordance rule 310 regulation sx securities exchange commission condensed consolidating financial information company guarantor subsidiaries defined nonguarantor subsidiaries combined basis december 31 2005 2004 three years period ended december 31 2005 follows thousands lvsc obligor senior notes lvsllc venetian casino resort llc mall intermediate holding company llc venetian venture development llc venetian transport llc venetian marketing inc venetian operating company llc lido intermediate holding company llc lido casino resort llc collectively “guarantor subsidiaries” jointly severally guaranteed senior notes full unconditional basis condensed balance sheets december 31 2005 condensed balance sheets december 31 2004 condensed statements operations year ended december 31 2005 condensed statements operations year ended december 31 2004 condensed statements operations year ended december 31 2003 condensed statements cash flows year ended december 31 2005 condensed statements cash flows year ended december 31 2004 condensed statements cash flows year ended december 31 2003 note 18 selected quarterly financial results unaudited earnings loss per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year report independent registered public accounting firm financial statement schedule board directors las vegas sands corp audits consolidated financial statements management’s assessment effectiveness internal control financial reporting effectiveness internal control financial reporting referred report dated march 1 2006 appearing annual report form 10k also included audit financial statement schedule listed item 15 a2 form 10k opinion financial statement schedule presents fairly material respects information set forth therein read conjunction related consolidated financial statements pricewaterhousecoopers llp las vegas nevada march 1 2006 financial statement schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2005 2004 2003 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries december 31 2007 2006 results operations cash flows three years period ended december 31 2007 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2007 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s annual report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions discussed note 2 consolidated financial statements company changed manner accounts income tax uncertainties 2007 manner accounts stockbased compensation 2006 company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 28 2008 las vegas sands corp consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements stockholders’ equity comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 lvsc’s common stock traded new york stock exchange symbol “lvs” operations company owns operates venetian resort hotel casino “the venetian” renaissance venicethemed resort situated las vegas strip “strip” venetian includes first allsuites hotel strip 4027 suites gaming facility approximately 120000 square feet enclosed retail dining entertainment complex approximately 440000 net leasable square feet “the grand canal shops” sold general growth partners “ggp” 2004 meeting conference facility approximately 11 million square feet “the congress center” expo convention center approximately 12 million square feet “the sands expo center” company owns operates palazzo resort hotel casino “the palazzo” second resort similar size venetian situated 14acre site next venetian palazzo partially opened december 2007 includes 50floor luxury hotel tower 3066 suites gaming facility approximately 105000 square feet entertainment center enclosed shopping dining complex approximately 400000 square feet “the shoppes palazzo” company contracted sell ggp company anticipates transaction close february 29 2008 shortly thereafter company also owns operates sands macao first las vegasstyle casino macao china pursuant 20year gaming subconcession sands macao offers 229000 square feet gaming space well several restaurants vip facilities theater highend services amenities addition completion hotel tower september 2007 increased number suites 51 289 august 28 2007 company opened venetian macao resort hotel “the venetian macao” cotai striptm masterplanned development resort properties macao china theme similar venetian macao includes 39floor luxury hotel 2900 suites casino floor approximately 550000 square feet 15000seat arena retail space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet united states development projects las vegas condominiums company early stages constructing highrise residential condominium tower approximately 10 million saleable square feet situated palazzo venetian condominium tower currently expected open late 2009 sands bethworks december 20 2006 pennsylvania gaming control board announced company’s subsidiary sands bethworks gaming llc “sands bethworks gaming” awarded pennsylvania gaming license sands bethworks gaming develop gaming hotel shopping dining complex called sands bethworks located site historic bethlehem steel works bethlehem pennsylvania 70 miles midtown manhattan new york first phase 124acre development expected feature 300room hotel 200000 square feet retail space 5000 slot machines 50000squarefoot multipurpose event center variety dining options sands bethworks also expected home national museum industrial las vegas sands corp subsidiaries notes consolidated financial statements continued history arts cultural center broadcast home local pbs affiliate july 2007 company paid 500 million licensing fee commonwealth pennsylvania august 2007 issued gaming license pennsylvania gaming control board company property joint venture bethworks llc yet contribute land joint venture company expects contribution take place 2008 however assurances given timing contribution land contributed required company’s agreement bethworks llc company could lose substantial portion 1169 million investment sands bethworks december 31 2007 sands bethworks expected open summer 2009 macao development projects company submitted development plans macao government six integrated resort developments addition venetian macao area approximately 200 acres located cotai strip referred parcels 2 3 5 6 7 8 developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas restaurants entertainment facilities attractions amenities well public common areas company commenced construction preconstruction six parcels cotai strip plans operate casinos developments macao gaming subconcession specifically company intends develop cotai strip properties follows • parcel 2 intended four seasons hotel casino development “the four seasons macao” adjacent venetian macao expected boutique hotel four seasons brand approximately 400 luxury hotel rooms including 19 paizatm mansions distinctive dining experiences full service spa amenities approximately 70000 square feet gaming space approximately 220000 square feet upscale retail offerings approximately 10 million square feet four seasonsserviced branded luxury apartment hotel units company entire development company entered exclusive nonbinding letter intent currently negotiating definitive agreements four seasons hotels inc manage hotel serviced luxury apartment hotel four seasons brand four seasons macao expected open summer 2008 paiza mansions coming line spring 2009 serviced luxury apartment hotel completed summer 2009 • parcel 5 intended include threehotel complex approximately 2300 luxury midscale hotel rooms casino retail shopping mall approximately 320 serviced luxury apartment hotel units company entire development entered management agreements shangrila hotels resorts manage two hotels shangrila traders brands starwood hotels resorts worldwide manage hotel serviced luxury apartment hotel st regis brand • parcel 6 intended include twohotel complex approximately 4100 luxury midscale hotel rooms casino retail shopping mall physically connected mall shangrilatraders hotel podium company entire development entered management agreement starwood hotels resorts worldwide manage hotels sheraton brand • parcels 7 8 intended include multihotel complexes total approximately 6150 luxury midscale hotel rooms casino retail shopping malls approximately 450 serviced luxury apartment hotel units physically connected hotel complexes company entire development entered nonbinding agreements hilton hotels manage hilton conrad brand hotels serviced luxury apartment hotels parcel 7 fairmont raffles holdings manage fairmont raffles brand hotels serviced luxury apartment hotels parcel 8 company currently negotiating definitive agreements hilton hotels fairmont raffles holdings las vegas sands corp subsidiaries notes consolidated financial statements continued • parcel 3 company signed nonbinding memorandum agreement independent developer company currently negotiating definitive agreement pursuant partner developer build multihotel complex may include cosmopolitan hotel addition company signed nonbinding letter intent intercontinental hotels group manage hotels intercontinental holiday inn international brands approximately 205 serviced luxury apartment hotel units intercontinental brand site company currently negotiating definitive agreements intercontinental hotels group total multihotel complex intended include approximately 3940 hotel rooms casino retail shopping mall serviced luxury apartment hotels four seasons macao currently planned feature approximately 130 table games 225 slot machines casinos parcels 3 5 6 7 8 currently planned include total approximately 2025 table games 9250 slot machines upon completion company’s developments cotai strip including venetian macao currently planned feature approximately 19750 suitesrooms 16 million square feet gaming space capacity approximately 3300 table games 16470 slot machines company received concession macao government build parcels 1 2 3 cotai strip including site company owns operates venetian macao parcel 1 site building four seasons macao parcel 2 company land sites macao however land concession term 25 years renewable company’s option grants company exclusive use land specified land concession company required pay premiums payable four years due upon completion corresponding resort well annual rent term land concession company yet necessary macao government approvals need order develop planned cotai strip developments company commenced construction preconstruction projects parcels 5 6 7 8 cotai strip yet granted land concessions company process negotiating macao government obtain land concession parcels 5 6 subsequently negotiate land concession parcels 7 8 company obtain land concessions could forfeit substantial part 6230 million capitalized construction costs related cotai strip projects december 31 2007 hengqin island development project company entered nonbinding letter intent zhuhai municipal people’s government people’s republic china work together create master plan develop leisure convention destination resort hengqin island located within mainland china approximately one mile cotai strip january 2007 company informed zhuhai government established project coordination committee act government liaison empowered work directly company advance development project company interfaced committee working actively committee continues advance plans project remains subject number conditions including governmental approvals singapore development project august 2006 company’s whollyowned subsidiary marina bay sands pte ltd “mbs” entered development agreement “development agreement” singapore tourism board “stb” build operate integrated resort called marina bay sands singapore marina bay sands expected include three 50 story hotel towers totaling approximately 2700 rooms casino enclosed retail dining entertainment complex approximately 850000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum marina bay sands expected open late 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued united kingdom development projects united kingdom government announced approval country’s first regional super casino rescinded government approve alternative super casino site company intends evaluate efficacy participating tender process site addition company existing agreement develop lease gaming entertainment facility glasgow rangers football club united kingdom company’s ability eventually develop lease gaming entertainment facility agreement subject number conditions including passage appropriate legislation ability obtain gaming license development projects company currently exploring possibility developing operating additional properties including integrated resorts asian us jurisdictions europe december 2007 company submitted applications kansas lottery commission gaming license successful company plans develop casino resort kansas city kansas metropolitan area development financing strategy previously described company number significant development projects underway united states macao singapore construction expected continue 2011 united states estimated costs build las vegas condominium tower sands bethworks project approximately 6000 million company capitalized approximately 821 million 669 million respectively macao estimated cost build company’s developments cotai strip including venetian macao approximately 120 billion company capitalized approximately 291 billion singapore although construction started marina bay sands company continuing work singapore government finalize various design aspects integrated resort process finalizing cost estimates project company expects cost design develop construct marina bay sands excess 40 billion inclusive payments made 2006 land premium taxes fees company capitalized approximately 139 billion company principally funded global development projects borrowings bank credit facilities operating subsidiaries operating cash flows proceeds disposition noncore assets 2007 company began execute financing strategy secure additional borrowing capacity fund existing future development projects operations asia including macao singapore united states april 2007 company increased size macao credit facility fund company’s macao development projects 25 billion 33 billion exercising right access additional 8000 million incremental facilities accordion feature provided macao credit facility incremental 8000 million consisted additional 6000 million term loans increase 2000 million revolving credit facility 7000 million connection increase macao credit facility lenders also approved reduction interest rate margin classes loans 50 basis points thereby reducing company’s overall interest expense macao credit facility december 31 2007 company approximately 4490 million available revolving credit facility portion macao credit facility company currently preliminary stages exploring options respect refinancing macao credit facility proceeds would used refinance amount currently outstanding macao credit facility well provide incremental borrowings continue fund development projects cotai strip macao may 2007 company initiated us refinancing efforts entering 50 billion senior secured credit facility portion proceeds facility used refinance indebtedness secured las vegas sands corp subsidiaries notes consolidated financial statements continued company’s las vegas integrated resort including venetian palazzo shoppes palazzo sands expo center fund design development construction costs incurred connection completion palazzo partially opened december 30 2007 shoppes palazzo las vegas condominiums company completed us refinancing efforts entering 1670 million amended restated ffe credit facility august 2007 proceeds used finance refinance acquisition furniture fixtures equipment located venetian palazzo december 31 2007 company approximately 197 billion 1050 million available borrowing capacity senior secured credit facility amended restated ffe credit facility respectively senior secured credit facility permits company make investments foreign subsidiaries development projects outside las vegas amount exceed 21 billion permits company invest sands bethworks project long 30 investment form equity december 31 2007 company used approximately 7058 million permitted 21 billion fund portion required equity contribution marina bay sands project investments respect asian development projects including macao december 2007 company entered 544 billion singapore dollar credit facility “sgd” approximately 376 billion exchange rates effect december 31 2007 fund construction costs expenses marina bay sands closed funded january 2008 portion proceeds facility together portion initial sgd 8000 million approximately 5534 million exchange rates effect december 31 2007 equity contribution used repay outstanding borrowings approximately sgd 192 billion approximately 133 billion exchange rates effect december 31 2007 existing singapore bridge facility remaining funds available borrowing singapore credit facility used fund significant portion design development construction costs marina bay sands project terms singapore credit facility company obligated fund least 20 total costs expenses incurred connection design development construction marina bay sands project equity contributions subordinated intercompany loans remaining 80 funded debt including debt singapore credit facility company funded current equity contribution requirement borrowings us senior secured credit facility due substantial development activities included current liabilities construction payables approximately 7175 million december 31 2007 portion current liabilities funded company’s longterm borrowing capacity company working capital deficit approximately 1142 million december 31 2007 subsequent yearend company borrowed approximately 4500 million credit facilities approximately 2250 million used pay construction payables outstanding december 31 2007 company held unrestricted restricted cash equivalents approximately 8572 million 4118 million respectively december 31 2007 company believes existing cash balances operating cash flows venetian palazzo proceeds anticipated sale shoppes palazzo ggp las vegas condominium units together available borrowing capacity us senior secured credit facility ffe credit facility sufficient fund estimated development construction costs las vegas condominiums sands bethworks projects 2008 addition company believes funds also enable fund company’s equity contribution requirement marina bay sands project provide additional capital macao subsidiaries fund portion development projects cotai strip macao time period existing restricted unrestricted cash balances company’s macao subsidiaries operating cash flows sands macao venetian macao available borrowing capacity macao credit facility together funds made available company’s us senior secured credit facility used fund current development construction costs cotai strip development activities short term however company need arrange additional debt andor equity financing near term continue fund las vegas sands corp subsidiaries notes consolidated financial statements continued design development construction activities remaining cotai strip development projects company expects complete refinancing 2008 near term company continue borrow significant amounts existing future bank credit facilities funds global construction development projects connection borrowing needs company regularly evaluates conditions global credit markets however company may able obtain additional borrowings necessary credit terms favorable company’s existing credit facilities company able obtain requisite financing terms favorable anticipates company may required slow suspend global development activities including cotai strip development financing sources funds become available note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary equity attributable minority shareholders’ interests subsidiaries material included longterm liabilities accompanying consolidated balance sheets significant intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based financial accounting standards board “fasb” interpretation “fin” 46r “consolidation variable interest entities interpretation arb 51” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered several joint ventures formed wellknown highlyregarded chefs restaurateurs operate restaurants located within venetian palazzo connection joint ventures company obtained financial interests based upon evaluation company determined primary beneficiary accordance fin 46r company consolidated entities year ended december 31 2007 use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost approximates fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable principally comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness business economic conditions legal enforceability gaming debts las vegas sands corp subsidiaries notes consolidated financial statements continued significant events foreign countries could affect collectibility receivables customers residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated cost depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance statement financial accounting standards “sfas” 144 “accounting impairment disposal longlived assets” assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale las vegas sands corp subsidiaries notes consolidated financial statements continued disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2007 2006 2005 company capitalized interest expense 2232 million 946 million 227 million respectively deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interest land leasehold interest land represents payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest indefinite useful life assets indefinite useful lives subject amortization tested impairment annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized revenue recognition promotional allowances casino revenue aggregate gaming wins losses cash discounts commissions cash incentives customers related gaming play recorded reduction gross casino revenues hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention revenues recognized related service rendered event held minimum rental revenues adjusted contractual base rent escalations included convention retail revenue recognized straightline basis terms related lease accordance industry practice retail value accommodations food beverage services furnished hotelcasino guests without charge included gross revenue deducted las vegas sands corp subsidiaries notes consolidated financial statements continued promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash free play company accrues club points reduction gaming revenue based upon estimates expected redemptions preopening development expenses company accounts costs incurred development preopening phases new ventures accordance statement position 985 “reporting costs startup activities” preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs ongoing operations included general administrative expense totaled 122 million 60 million 46 million years ended december 31 2007 2006 2005 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations foreign currency company accounts currency translation accordance sfas 52 “foreign currency translation” gains losses foreign currency remeasurements currently included net income balance sheet accounts translated exchange rate effect balance sheet date income statement accounts las vegas sands corp subsidiaries notes consolidated financial statements continued translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income elements company’s comprehensive income reported accompanying consolidated statements stockholders’ equity comprehensive income cumulative balance comprehensive income consisted solely foreign currency translation adjustments earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation effective january 1 2006 company adopted provisions sfas 123r “sharebased payment” establishes accounting equity instruments exchanged employee services provisions sfas 123r stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant prior january 1 2006 company accounted stockbased compensation employees accordance accounting principles board “apb” opinion 25 “accounting stock issued employees” related interpretations company also followed disclosure requirements sfas 123 “accounting stockbased compensation” amended sfas 148 “accounting stockbased compensation transition disclosure” company elected adopt modified prospective application transition method provided sfas 123r accordingly financial statement amounts prior periods presented form 10k restated reflect fair value method recording stockbased compensation company’s stockbased employee compensation plan fully discussed “ note 12 stockbased employee compensation” las vegas sands corp subsidiaries notes consolidated financial statements continued company previously adopted provisions sfas 123 amended sfas 148 disclosure purposes company accounted plan fair value method allowed sfas 123 company’s net income earnings per share would adjusted following pro forma amounts year ended december 31 2005 dollars thousands except per share data income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates deferred income tax balances reflect effects temporary differences carrying amounts assets liabilities tax bases stated enacted tax rates expected effect taxes actually paid recovered sfas 109 “accounting income taxes” requires deferred tax assets evaluated future realization reduced valuation allowance extent company believes portion realized company considers many factors assessing likelihood future realization deferred tax assets including recent cumulative earnings experience expectations future taxable income taxing jurisdiction carryforward periods available tax reporting purposes relevant factors significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain effective january 1 2007 company adopted provisions fin 48 “accounting uncertainty income taxes interpretation fasb statement 109” fin 48 contains twostep approach recognizing measuring uncertain tax positions accounted accordance sfas 109 first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely realized upon ultimate settlement company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes company subject income tax examination tax authorities years 2003 currently income tax returns examined internal revenue service major tax authorities las vegas sands corp subsidiaries notes consolidated financial statements continued tax indemnification connection conversion lvsllc subchapter corporation taxable c corporation income tax purposes 2004 lvsllc entered indemnification agreement pursuant agreed • indemnify company’s stockholders las vegas sands inc prior 2004 initial public offering certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands inc respect taxable periods las vegas sands inc subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface group holding company inc respect taxable periods subchapter corporation income tax purposes accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements september 2006 fasb issued sfas 157 “fair value measurements” defines fair value establishes framework measuring fair value expands disclosures fair value measurements sfas 157 applies accounting pronouncements require permit fair value measurement sfas 157 require new fair value measurements provisions sfas 157 effective financial statements issued fiscal years beginning november 15 2007 interim periods within fiscal years january 2008 fasb deferred effective date one year certain nonfinancial assets nonfinancial liabilities except recognized disclosed fair value financial statements recurring basis least annually company still evaluating impact standard however company expect adoption sfas 157 material effect financial condition results operations cash flows february 2007 fasb issued sfas 159 “the fair value option financial assets liabilities including amendment fasb statement 115” sfas 159 company may elect measure many financial instruments certain items fair value otherwise currently required measured fair value decision measure items fair value made specific election dates las vegas sands corp subsidiaries notes consolidated financial statements continued irrevocable instrumentbyinstrument basis requires recognition changes fair value earnings expensing upfront costs fees associated item fair value option elected fair value instruments fair value option elected similar instruments measured using another measurement attribute distinguished face statement financial position sfas 159 effective financial statements beginning november 15 2007 company still evaluating impact standard however company expect adoption sfas 159 material effect financial condition results operations cash flows december 2007 fasb issued sfas 141r “business combinations” replaces fasb statement 141 “business combinations” sfas 141r requires acquirer recognize identifiable assets acquired liabilities assumed noncontrolling interest acquiree acquisition date measured fair values date limited exceptions specified statement sfas 141r applies prospectively business combinations acquisition date beginning entity’s fiscal year begins december 15 2008 company process evaluating impact standard however company expect adoption sfas 141r material effect financial condition results operations cash flows december 2007 fasb issued sfas 160 “noncontrolling interests consolidated financial statements amendment arb 51” sfas 160 establishes accounting reporting standards noncontrolling interest subsidiary deconsolidation subsidiary specifically statement requires recognition noncontrolling interest minority interest equity consolidated financial statements separate parent’s equity amount net income attributable noncontrolling interest included consolidated net income face income statement sfas 160 clarifies changes parent’s ownership interest subsidiary result deconsolidation equity transactions parent retains controlling financial interest addition statement requires parent recognize gain loss net income subsidiary deconsolidated also requires expanded disclosures regarding interests parent interests noncontrolling owners provisions sfas 160 effective fiscal years interim periods within fiscal years beginning december 15 2008 company process evaluating impact standard however company expect adoption sfas 160 material effect financial condition results operations cash flows note 3 restricted cash connection company’s new us senior secured credit facility see “ note 8 longterm debt corporate us related debt new senior secured credit facility” restrictions cash proceeds related prior senior secured credit facility sands expo center mortgage loan fund construction shoppes palazzo eliminated december 31 2006 restricted cash balances related eliminated restrictions 4188 million required company’s macao credit facility entered may 2006 see “ note 8 longterm debt macao related debt macao credit facility” certain loan proceeds available facility certain cash flows generated existing macao operations deposited restricted accounts invested cash equivalents pledged collateral agent macao credit facility lenders restricted cash amount used required fund construction sands macao venetian macao cotai strip project costs accordance terms specified facility restricted accounts subject security interest favor lenders macao credit facility december 31 2007 2006 cash balances restricted accounts 592 million 4654 million respectively required company’s singapore bridge facility entered august 2006 see “ note 8 longterm debt singapore related debt singapore bridge facility” proceeds available facility deposited accounts invested cash equivalents pledged security trustee benefit singapore bridge facility lenders restricted cash amount used required fund construction las vegas sands corp subsidiaries notes consolidated financial statements continued operating development costs marina bay sands accounts subject security interest favor lenders singapore bridge facility december 31 2007 2006 restricted cash balance 3381 million 196 million respectively addition restricted cash includes 145 million related items december 31 2007 year ended december 31 2007 company issued gaming license pennsylvania 500 million restricted cash december 31 2006 transferred pennsylvania gaming control board payment license see “ note 1 organization business company united states development projects sands bethworks” restricted cash balances classified current primarily equivalent related construction payables also classified current note 4 accounts receivable net accounts receivable consists following thousands note 5 property equipment net property equipment consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued construction progress consists following thousands december 31 2007 portions venetian macao palazzo shoppes palazzo construction scheduled completed 2008 approximately 4290 million construction progress december 31 2007 related shoppes palazzo sold ggp see “ note 10 mall sale shoppes palazzo” 2232 million construction progress consists primarily construction sands bethworks las vegas condominiums airplanerelated purchases corporate projects las vegas december 31 2007 cost property equipment company leasing tenants part macao mall operations 2164 million accumulated depreciation 34 million three months ended june 30 2007 company recorded charge 48 million properly account preopening expenses previously capitalized balance sheets years ended december 31 2005 2006 three months ended march 31 2007 amounts involved material company’s financial statements individual prior period cumulative amount material results operations year ended december 31 2007 company recorded effect correcting item increased preopening expense reduced property equipment 48 million three months ended june 30 2007 note 6 leasehold interests land net leasehold interests land consists following thousands company amortize leasehold interests land marina bay sands macao three parcels cotai strip straightline basis expected term leases approximately 142 million 12 million 103 million respectively annually exchange rates effect december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued year ended december 31 2007 company made payments 132 billion patacas approximately 1638 million exchange rates effect december 31 2007 full payment land premium parcel 1 partial payments 2242 million patacas 2399 million patacas approximately 279 million 298 million respectively exchange rates effect december 31 2007 towards land premiums parcels 2 3 respectively balance parcel 2 due upon completion four seasons macao expected completed summer 2008 balance parcel 3 either due upon completion resorts parcel payable seven equal semiannual payments one made 2007 bearing interest 5 per annum company received credit amount 1934 million patacas approximately 241 million exchange rates effect december 31 2007 towards aggregate land premium related reclamation work works done land installation costs electrical substation addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2007 company obligated concessions make future premium rental payments follows thousands note 7 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following thousands corporate us related debt new senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “new senior secured credit facility” consists 30 billion funded term loan “term b facility” 6000 million delayed draw term loan available 12 months closing “delayed draw facility” 4000 million delayed draw term loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” term b facility delayed draw facility mature may 23 2014 term b facility subject quarterly amortization payments 75 million began september 2007 followed balloon payment 280 billion due may 23 2014 delayed draw facility subject quarterly amortization payments 15 million begin september 30 2008 followed balloon payment 5655 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 10 million begin march 31 2009 followed balloon payment 3830 million due may 23 2013 revolving facility matures may 23 2012 interim amortization december 31 2007 amounts outstanding revolving facility amounts drawn delayed draw facilities las vegas sands corp subsidiaries notes consolidated financial statements continued new senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations new senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially lvsllc’s guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings new senior secured credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively 66 december 31 2007 spreads reduced 025 company’s “corporate rating” defined new senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group subject certain additional conditions spread revolving facility reduced 025 company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate new senior secured credit facility 71 year ended december 31 2007 company pay commitment fee 0375 per annum undrawn amounts revolving facility reduced 0125 certain ratings achieved subject certain additional conditions company also pay commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw facility delayed draw ii facility respectively new senior secured credit facility contains affirmative negative covenants customary financings including limited minimum ratios adjusted earnings interest taxes depreciation amortization “ebitda” interest expense maximum ratios total debt outstanding adjusted ebitda new senior secured credit facility also contains conditions events default customary financings addition provisions limit prohibit certain payments dividends distributions lvsc december 31 2007 net assets lvsllc 586 billion substantial portion restricted distributed terms new senior secured credit facility meet requirements new senior secured credit facility company entered interest rate cap agreement august 2007 notional amount 164 billion expires may 31 2009 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 675 company three additional interest rate cap agreements entered part prior senior secured credit facility notional amounts 5000 million 500 million 100 million expire march 30 2008 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rates 575 65 6375 respectively net effect interest expense result four interest rate cap agreements year ended december 31 2007 portion proceeds term b facility used refinance prior senior secured credit facility repay construction loan related shoppes palazzo sands expo center mortgage loan pay certain construction development related expenses incurred connection palazzo fees expenses related new senior secured credit facility company incurred charge approximately 107 million loss early retirement debt 2007 result refinancing facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 “senior notes” original issue discount 23 million net proceeds offering costs original issue discount 2448 million senior notes mature las vegas sands corp subsidiaries notes consolidated financial statements continued february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes unsecured senior obligations lvsc jointly severally guaranteed senior unsecured basis certain lvsc’s existing domestic subsidiaries includes lvsllc venetian casino resort llc “vcr” indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets june 2005 senior notes exchanged substantially similar senior notes registered federal securities laws connection entering new senior secured credit facility senior notes collateralized equal ratable basis obligations new senior secured credit facility airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others already owned notes consist balloon payment promissory notes amortizing promissory notes ten year maturities collateralized related aircraft notes bear interest threemonth libor plus 15 per annum 66 december 31 2007 amortizing notes totaling 288 million subject quarterly principal interest payments began june 1 2007 balloon notes totaling 432 million subject quarterly interest payments began june 1 2007 principal payments due full march 1 2017 weighted average interest rate notes 70 year ended december 31 2007 april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes ten year maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum 61 december 31 2007 81 million amortizing note subject quarterly principal interest payments began june 30 2007 122 million balloon note subject quarterly interest payments began june 30 2007 principal payment due full march 31 2017 weighted average interest rate notes 66 year ended december 31 2007 ffe financings december 2006 certain company’s subsidiaries including lvsllc vcr entered ffe credit facility agreement “ffe facility” group lenders general electric capital corporation administrative agent provide 1429 million finance refinance acquisition certain furniture fixtures equipment “ffe” located venetian palazzo ffe facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties ffe facility entered amended restated ffe credit guarantee agreement “amended restated ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan ffe facility conformed affirmative negative covenants events default set forth new senior secured credit facility delayed draw term loan commitment amended restated ffe facility terminates june 30 2008 december 31 2007 614 million drawn delayed draw term loan remaining proceeds amended restated ffe facility may used lvsllc vcr finance andor refinance acquisition certain ffe located venetian palazzo amended restated ffe facility collateralized ffe financed andor refinanced proceeds las vegas sands corp subsidiaries notes consolidated financial statements continued amended restated ffe facility guaranteed subsidiaries company guarantee obligations new senior secured credit facility borrowings amended restated ffe facility bear interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate 68 december 31 2007 applicable margins may reduced 025 certain circumstances similar set forth new senior secured credit facility company also pay commitment fee 050 per annum undrawn amount term delayed draw loan delayed draw term loan matures june 2011 company required make principal payments quarterly installments commencing july 1 2008 amount equal 50 aggregate principal amount delayed draw term loan outstanding july 1 2008 remainder due four equal quarterly installments ending maturity date amended restated ffe facility also requires company make mandatory prepayments delayed draw term loan certain specified circumstances weighted average interest rate amended restated ffe facility 74 year ended december 31 2007 macao related debt macao credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “macao credit facility” macao credit facility originally consisted 12 billion funded term b loan “macao term b facility” 7000 million delayed draw term b loan “macao term b delayed draw facility” 1000 million funded local currency term loan “macao local term facility” 5000 million revolving credit facility “macao revolving facility” march 2007 macao credit facility amended expand use proceeds remove certain restrictive covenants april 2007 lenders macao credit facility approved reduction interest rate margin classes loans 50 basis points borrower exercised rights macao credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded macao term b facility 6000 million macao revolving facility 2000 million total macao credit facility 33 billion december 31 2007 company fully drawn 7000 million macao term b delayed draw facility 2510 million macao revolving facility indebtedness macao credit facility guaranteed vml venetian cotai limited certain company’s foreign subsidiaries “macao guarantors” obligations macao credit facility guarantees macao guarantors collateralized firstpriority security interest substantially borrower’s macao guarantors’ assets 1 capital stock borrower macao guarantors 2 assets secure permitted furniture fixtures equipment financings 3 vml’s gaming subconcession contract 4 certain excluded assets borrowings macao credit facility bear interest company’s option either adjusted eurodollar rate case macao local term facility adjusted hibor alternative base rate plus spread 225 125 respectively 57 macao local term facility 71 remainder macao credit facility december 31 2007 borrower also pays standby commitment fee 05 undrawn amounts macao revolving facility years ended december 31 2007 2006 weighted average interest rates macao local term facility 68 69 respectively weighted average interest rates remainder macao credit facility 78 81 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued meet requirements macao credit facility company entered four separate interest rate cap agreements september 2006 may 2007 october 2007 collectively “macao cap agreements” notional amounts 10 billion 3250 million 1650 million 1600 million expire september 21 2009 provisions macao cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate 675 stated agreement net effect interest expense result macao cap agreements year ended december 31 2007 macao revolving facility macao local term facility five year maturity macao term b delayed draw facility macao term b facility mature six seven years respectively macao term b delayed draw macao term b facility subject nominal amortization first five six years respectively commencing first quarter following substantial completion venetian macao occurred 2007 remainder loans payable four equal installments last year immediately preceding maturity dates subsequent substantial completion venetian macao local term facility subject quarterly amortization amount approximately 63 million per quarter remainder loan payable four equal quarterly installments last year immediately preceding maturity date macao credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets macao credit facility also requires borrower macao guarantors comply financial covenants including limited generating minimum ebitda period time thereafter ratios ebitda interest expense total indebtedness ebitda well maximum annual capital expenditures macao credit facility also contains events default customary financings ferry financing subsequent yearend company entered 121 billion hong kong dollar approximately 1550 million exchange rates effect december 31 2007 secured credit facility finance purchase ten ferries proceeds secured credit facility used reimburse company cash spent date construction ferries finance progress payments ferries yet delivered manufacturer facility secured ferries guaranteed vml singapore related debt mbs entered singapore bridge facility august 2006 detailed bridge financing commence construction marina bay sands facility would mature full 2008 company signed singapore permanent facilities detailed december 2007 upon closing january 2008 portion borrowings singapore permanent facilities well contributions made company mbs used repay outstanding balances singapore bridge facility pay fees costs expenses related entering singapore permanent facilities agreement result closing permanent financing january 2008 singapore bridge facility balances outstanding december 31 2007 classified longterm accordance terms permanent facility singapore bridge facility august 18 2006 mbs entered agreements together “singapore bridge facility” providing sgd 11 billion approximately 7636 million exchange rates effect december 31 2007 floating rate notes facility “singapore floating rate notes” sgd 11 billion approximately 7636 million exchange rates effect december 31 2007 term loan facility “singapore term loan” singapore floating rate notes consist funded sgd 7886 million approximately 5455 million exchange rates las vegas sands corp subsidiaries notes consolidated financial statements continued effect december 31 2007 facility sgd 3154 million approximately 2182 million exchange rates effect december 31 2007 delayed draw facility singapore term loan consists funded sgd 5960 million approximately 4123 million exchange rates effect december 31 2007 facility sgd 3154 million approximately 2182 million exchange rates effect december 31 2007 delayed draw facility sgd 1926 million approximately 1332 million exchange rates effect december 31 2007 facility provide bank guarantees security deposit required delivered stb development agreement december 31 2007 sgd 106 billion approximately 7294 million exchange rates effect december 31 2007 drawn singapore floating rate notes sgd 8599 million approximately 5944 million exchange rates effect december 31 2007 drawn singapore term loan sgd 1926 million approximately 1332 million exchange rates effect december 31 2007 singapore term loan committed provide guarantee security deposit required delivered stb development agreement indebtedness singapore floating rate notes guaranteed lvsc unsecured basis indebtedness singapore term loan collateralized firstpriority security interest substantially mbs’ assets capital stock certain assets borrowings singapore floating rate notes singapore term loan bear interest singapore swap offer rate plus spread 135 per annum first twelve months amounts outstanding facilities spread 160 per annum second twelve months amounts outstanding 41 35 singapore floating rate notes singapore term loan respectively december 31 2007 mbs also pay standby fee 0375 per annum undrawn amounts singapore bridge facility singapore bridge facility two year maturity aggregate amount outstanding matures full august 22 2008 mbs permitted option redeem prepay portion outstanding singapore bridge facility par without premium penalty certain circumstances weighted average interest rate singapore floating rate notes 44 50 years ended december 31 2007 2006 respectively weighted average interest rate singapore term loan 43 50 years ended december 31 2007 2006 respectively singapore bridge facility contains affirmative negative covenants customary financings including limited limitations liens indebtedness investments acquisitions asset sales restricted payments affiliate transactions use proceeds facility well requirements comply applicable law maintain adequate insurance singapore permanent facilities december 2007 mbs signed facility agreement “singapore permanent facility agreement” providing sgd 20 billion approximately 138 billion exchange rates effect december 31 2007 term loan “singapore permanent facility a” funded january 2008 sgd 275 billion approximately 190 billion exchange rates effect december 31 2007 term loan “singapore permanent facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1332 million exchange rates effect december 31 2007 banker’s guarantee facility “singapore permanent facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 3459 million exchange rates effect december 31 2007 revolving credit facility “singapore permanent facility d” collectively “singapore permanent facilities” available february 28 2015 indebtedness singapore permanent facility agreement collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets las vegas sands corp subsidiaries notes consolidated financial statements continued singapore permanent facilities mature march 31 2015 mbs required repay prepay singapore permanent facilities certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore permanent facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 865 million exchange rates effect december 31 2007 per quarter addition commencing end third full quarter operations marina bay sands mbs required prepay outstanding singapore permanent facility b loans pro rata basis percentage excess free cash flow defined singapore permanent facility agreement borrowings singapore permanent facilities bear interest singapore swap offer rate plus spread 225 per annum mbs pay standby interest fee 1125 per annum 090 per annum undrawn amounts singapore permanent facility b facility respectively mbs pay commission 225 per annum bankers’ guarantees outstanding singapore permanent facilities period banker’s guarantees outstanding singapore permanent facility agreement contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities singapore permanent facility agreement also requires mbs comply financial covenants end first full quarter beginning less 183 days commencement operations marina bay sands including maximum ratios total indebtedness ebitda minimum ratios ebitda interest expense minimum ebitda requirements positive net worth singapore permanent facility agreement also contains events default customary financings las vegas sands corp subsidiaries notes consolidated financial statements continued cash flows financing activities cash flows financing activities related longterm debt follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities longterm debt maturities longterm debt outstanding december 31 2007 summarized follows thousands fair values longterm debt fair value senior notes december 31 2007 2006 2325 million 2434 million respectively fair value senior notes based quoted market prices fair values indebtedness approximate respective carrying amounts based nature variable interest rate facilities fair values interest rate cap agreements based upon quotes brokers 01 million 06 million december 31 2007 2006 respectively note 9 income taxes components provision income taxes follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows las vegas sands corp subsidiaries notes consolidated financial statements continued effective tax rate year significantly lower federal statutory rate due primarily zero effective tax rate macao net income result income tax exemption macao gaming operations set expire end 2008 based macanese law treatment gaming operators company believes income tax exemption extended additional fiveyear term company required pay income taxes macao consolidated net income would reduced 439 million 452 million diluted earning per share would reduced 012 per share years ended december 31 2007 2006 respectively consolidated income taxes domestic international operations follows thousands primary tax affected components company’s net deferred tax assets follows thousands company adopted provisions fin 48 january 1 2007 result implementation fin 48 company recognized 41 million increase liability unrecognized tax benefits accounted reduction opening retained earnings adoption date january 1 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued company 86 million unrecognized tax benefits reconciliation beginning ending amounts unrecognized tax benefits follows thousands included balance december 31 2007 98 million uncertain tax benefits would affect effective income tax rate recognized company files income tax returns us various states foreign jurisdictions company subject federal state local foreign income tax examinations tax authorities years 2003 company presently examination major tax jurisdiction company recognizes interest penalties related unrecognized tax positions provision income taxes statement operations january 1 2007 date adoption company accrue significant interest penalties company approximately 06 million interest accrued december 31 2007 penalties accrued december 31 2007 company expect significant increase decrease unrecognized tax benefits next twelve months operating loss carryforwards company’s foreign subsidiaries 2822 million 1952 million years ended december 31 2007 2006 respectively begin expire 2008 december 31 2007 2006 valuation allowance 463 million 236 million respectively provided foreign net operating loss carryforwards foreign deferred tax assets management believes assets meet “more likely not” criteria recognition sfas 109 management believes deferred tax assets likely realized future reversal existing taxable temporary differences expected future taxable income accordingly valuation allowances provided december 31 2007 2006 undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans would required record significant amount deferred tax liabilities years ended december 31 2007 2006 amount undistributed earnings foreign subsidiaries company intend repatriate 8372 million 7191 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions note 10 mall sale grand canal shops venetian april 12 2004 company entered agreement sell grand canal shops lease certain restaurant retail space casino level venetian “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 17 2004 company realized gain 4176 million connection mall sale master lease agreement venetian leased nineteen spaces casino level venetian currently occupied various tenants ggp 89 years annual las vegas sands corp subsidiaries notes consolidated financial statements continued rent one dollar per year ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale related assets separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian amortize income straightline basis 89year lease term years ended december 31 2007 2006 2005 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described note 11 commitments contingencies ventures commitments ii lease blue man group theater space located within grand canal shops ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases 35 million deferred item amortized years ended december 31 2007 2006 2005 included offset convention retail expense december 31 2007 company obligated ii iii iv make future payments follows thousands shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open company selling shoppes palazzo ggp pursuant purchase sale agreement dated april 12 2004 amended regarding development sale shoppes palazzo “amended agreement” total purchase price paid ggp shoppes palazzo determined taking shoppes palazzo’s net operating income defined amended agreement months 19 30 operations assuming rent periodic payments due tenants month 30 actually due months 19 30 divided capitalization rate capitalization rate 006 every dollar net operating income 380 million 008 every dollar net operating income 380 million closing date sale shoppes palazzo ggp company expects february 29 2008 shortly thereafter ggp obligated make initial purchase price payment based projected net operating income first 12 months operations event less 2500 million taking account tenants open business paying rent closing date company process finalizing amount initial payment however company expects range 2850 million 2950 million pursuant amended agreement fourth eighth 12th 18th 24th month closing required purchase price adjusted never less 2500 million based projected net operating income upcoming 12 months subject adjustments certain audit las vegas sands corp subsidiaries notes consolidated financial statements continued issues final adjustment purchase price made 30month anniversary closing date based formula described purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting final purchase price adjustment calculated applying base rent periodic payments payable tenants 30th month entire 12month period defined based company’s continuing relationship ggp related ownership grand canal shops knowledge local market conditions discussions tenants management believes total purchase price paid ggp excess 7000 million note 11 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows palazzo construction litigation lido casino resort llc “lido” formerly whollyowned subsidiary company merged venetian casino resort llc “vcr” construction manager taylor international corp “taylor” filed suit march 2006 united states district court district nevada “district court” malcolm drilling company inc “malcolm” contractor palazzo project responsible completing certain foundation work “district court case” lido taylor claim district court case malcolm default contract performing defective work failing correct defective work failing complete work causing delay project malcolm responded filing notice lien clerk clark county nevada march 2006 amount approximately 190 million “lien” april 2006 lido taylor moved district court case strike alternative reduce amount lien claiming among things lien excessive including claims disruption delay lido taylor claim lienable nevada law “lien motion” malcolm responded april 2006 filing complaint lido taylor district court clark county nevada seeking foreclose lien taylor claiming breach contract cardinal change underlying contract unjust enrichment lido taylor bad faith fraud taylor “state court case” simultaneously filed motion district court case seeking dismiss district court case abstention grounds “abstention motion” response june 2006 lido filed motion dismiss state court case based principle “prior pending” district court case “motion dismiss” june 2006 abstention motion granted part united states district court district court case stayed pending outcome motion dismiss state court case lien motion denied without prejudice january 2008 parties agreed dismissal district court case without prejudice prior agreeing dismissal lido malcolm entered stipulation lido withdrew motion dismiss july 2006 filed replacement lien motion state court case lien motion state court case denied august 2006 lido taylor filed permitted interlocutory notice appeal supreme court nevada september 2006 april 2007 malcolm filed amended notice lien clerk clark county nevada amount approximately 167 million plus interest costs attorney’s fees august 2007 malcolm filed motion partial summary judgment seeking dismissal counterclaim filed state court case lido extent claim sought lost profits argument motion partial summary judgment denied without prejudice october 23 2007 conforming order entered december 2007 parties agreed complete limited additional discovery end february 2008 argument appeal denial lien motion state court scheduled supreme court march 2008 initial trial call state court case also scheduled march 2008 january 2008 malcolm filed series las vegas sands corp subsidiaries notes consolidated financial statements continued three motions sought summary judgment counterclaim filed state court case based upon advice legal counsel management determined based proceedings date adverse outcome probable lido intends defend claims pending state court case litigation relating macao operations october 15 2004 richard suen round square company limited filed action las vegas sands corp “lvsc” las vegas sands inc sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties may 17 2005 plaintiffs filed first amended complaint february 2 2006 defendants filed motion partial summary judgment respect plaintiffs’ fraud claims defendants march 16 2006 order filed court granting defendants’ motion partial summary judgment pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner action currently set trial april 2008 based upon advice legal counsel management believes plaintiff’s case company without merit company intends defend matter vigorously january 26 2006 clive basset jones darryl steven turok aka dax turok cheong jose vai chi aka cliff cheong filed action lvsc las vegas sands llc venetian venture development llc various unspecified individuals companies district court clark county nevada plaintiffs assert breach agreement pay success fee amount equal 5 ownership interest entity owns operates macao gaming subconcession well related claims april 2006 lvsc dismissed party without prejudice based stipulation parties discovery begun matter case currently set trial december 2008 based upon advice legal counsel management believes plaintiff’s case company without merit company intends defend matter vigorously february 5 2007 asian american entertainment corporation limited “aaec” filed action las vegas sands inc “lvsi” vcr venetian venture development llc “venetian venture development” william p weidner david friedman united states district court district nevada plaintiffs assert breach contract lvsi vcr venetian venture development agreement aaec would work obtain gaming license macao successful aaec would jointly operate casino hotel related facilities macao venetian venture development venetian venture development would receive fees minority equity interest venture breach fiduciary duties defendants plaintiffs requested unspecified amount actual compensatory punitive damages disgorgement profits related macao gaming license company filed motion dismiss july 11 2007 august 1 2007 court granted defendants’ motion dismiss complaint defendants without prejudice plaintiffs appealed decision based upon advice legal counsel management believes plaintiff’s case company without merit company intends defend matter vigorously macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino las vegas sands corp subsidiaries notes consolidated financial statements continued projects including sands macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 37 million exchange rates effect december 31 2007 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37314 18657 124 respectively exchange rates effect december 31 2007 subject minimum 450 million patacas 56 million exchange rates effect december 31 2007 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao december 31 2007 company obligated subconcession make minimum future payments approximately 352 million next five years approximately 3343 million thereafter june 2022 amounts expected increase substantially company completes cotai strip properties planned approximately 2100 table games approximately 9500 slot machines total currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed singapore development project august 23 2006 company entered development agreement requires construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement although construction started company continuing work singapore government finalize various design aspects integrated resort process finalizing cost estimates project cost design develop construct marina bay sands expected excess 40 billion inclusive land premium taxes fees previously paid discussed “ note 8 longterm debt singapore related debt singapore permanent facilities” company entered sgd 544 billion approximately 376 billion exchange rates effect december 31 2007 singapore permanent facilities fund construction operating development costs marina bay sands leases energy services agreements 1997 vcr interface groupnevada inc “interface” others entered separate energy service agreements heating ventilation air conditioning “hvac” provider “hvac provider” terms energy services agreement separate energy services agreements hvac energy services purchased vcr interface others initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods hvac plant constructed land owned company leased hvac provider hvac equipment owned hvac provider paid costs “hvac costs” connection purchase installation hvac equipment total hvac costs 700 million charges payable separate energy services las vegas sands corp subsidiaries notes consolidated financial statements continued agreements include fixed component applied hvac costs paid hvac provider reimbursement operational related costs management fee december 31 2007 vcr interface obligated energy services agreements make future minimum payments 68 million 51 million years ended december 31 2008 2009 respectively expenses incurred energy services agreements 68 million three years ended december 31 2007 operating lease agreements company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2007 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements totaled 122 million 83 million 70 million years ended december 31 2007 2006 2005 respectively company party operating lease agreements shortterm variablerate nature expenses incurred operating lease agreements totaled 21 million 15 million 16 million years ended december 31 2007 2006 2005 respectively ventures commitments company entered employment agreements five company’s senior executives remaining terms two years december 31 2007 company obligated make future payments 80 million 76 million years ended december 31 2008 2009 respectively 2003 company entered three lease termination asset purchase agreements grand canal shops tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shops tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2007 company obligated agreements make future payments 07 million next five years 74 million thereafter 2006 company entered agreements purchase ten ferries built macao operations total remaining payments related construction ferries december 31 2007 287 million subsequent yearend company agreed purchase additional four ferries las vegas sands corp subsidiaries notes consolidated financial statements continued grand canal shops venetian macao company leases mall space grand canal shops venetian macao various retailers leases noncancellable operating leases lease periods vary 6 months 10 years leases include minimum base rents escalated contingent rent clauses december 31 2007 minimum future rentals noncancelable leases follows thousands exchange rates effect december 31 2007 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 03 million period august 27 2007 december 31 2007 note 12 stockbased employee compensation company two nonqualified stock option plans 1997 plan 2004 plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2007 2006 total intrinsic value options exercised 1997 plan year ended december 31 2005 382 million las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate las vegas sands corp subsidiaries notes consolidated financial statements continued 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2007 18307565 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years 10year contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based historical volatilities selection companies company’s peer group due company’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary status company’s 2004 plan year ended december 31 2007 presented las vegas sands corp subsidiaries notes consolidated financial statements continued restricted stock awards summary status company’s nonvested restricted shares year ended december 31 2007 presented december 31 2007 1137 million unrecognized compensation cost net estimated forfeitures 80 related nonvested stock options 41 million unrecognized compensation cost related nonvested restricted stock option restricted stock costs expected recognized weighted average period 33 years 17 years respectively stockbased compensation activity 2004 plan follows three years ended december 31 2007 thousands except weighted average grant date fair values 1 accordance apb opinion 25 company recognize compensation expense employee stock option awards year ended december 31 2005 options exercise price company’s employee stock awards equaled market price underlying stock date grant years ended december 31 2007 2006 basic diluted earnings per share 007 003 lower respectively company continued account stockbased compensation apb opinion 25 las vegas sands corp subsidiaries notes consolidated financial statements continued note 13 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheet participation vcr 401k employee savings plan available fulltime employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages years ended december 31 2007 2006 2005 company’s matching contributions savings plan 50 million 45 million 31 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years year ended december 31 2007 2006 vml’s contributions provident fund 85 million 49 million respectively contributions made 2005 note 14 related party transactions company paid approximately 59 million 43 million 30 million years ended december 31 2007 2006 2005 respectively travel agent charter tour operator travel related services controlled principal stockholder year ended december 31 2005 principal stockholder purchased certain banquet room catering goods services venetian approximately 10 million goods services purchased 2007 2006 company purchased hotel guest amenities company controlled principal stockholder’s brother total amount paid approximately 10 million 12 million 18 million years ended december 31 2007 2006 2005 respectively years ended december 31 2007 2006 2005 company incurred paid certain expenses totaling 20 million 13 million 07 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2007 2006 2005 company charged received principal stockholder 53 million 33 million 12 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes note 15 segment information company’s principal operating developmental activities occur three geographic areas las vegas macao singapore company reviews results operations key operating segments venetian includes sands expo center congress center palazzo sands macao venetian macao asia comprised primarily ferry operations company also reviews construction development activities primary projects venetian palazzo sands macao venetian macao four seasons macao asia comprised various operations ancillary properties macao marina bay sands singapore development projects parcels 3 5 6 7 8 cotai strip corporate comprised airplanes sands bethworks las vegas condominium projects information years ended december 31 2006 2005 reclassified las vegas sands corp subsidiaries notes consolidated financial statements continued conform current presentation company’s segment information follows three years ended december 31 2007 thousands 1 adjusted ebitdar net income interest income taxes depreciation amortization preopening expense development expense loss disposal assets loss early retirement debt rental expense corporate expense stockbased compensation expense included general administrative expense adjusted ebitdar used management primary measure operating performance properties compare operating performance properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued note 16 condensed consolidating financial information lvsc obligor 6375 senior notes due 2015 issued lvsc february 10 2005 lvsllc vcr mall intermediate holding company llc venetian venture development venetian transport llc venetian marketing inc interface palazzo condo tower llc sands pennsylvania inc lido intermediate holding company llc lido casino resort holding company llc phase ii mall holding llc phase ii mall subsidiary llc lido casino resort llc merged vcr march 2007 collectively “guarantor subsidiaries” jointly severally guaranteed 6375 senior notes full unconditional basis conjunction entering new senior secured credit facility lvsc guarantor subsidiaries trustee entered supplemental indenture related senior notes whereby following subsidiaries included guarantors interface palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc result change guarantor las vegas sands corp subsidiaries notes consolidated financial statements continued subsidiaries nonguarantor subsidiaries company reclassified prior periods conform current presentation entities common control condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2007 2006 three years period ended december 31 2007 follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2005 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2005 las vegas sands corp subsidiaries notes consolidated financial statements continued note 17 selected quarterly financial results unaudited 1 venetian macao opened august 28 2007 2 palazzo partially opened december 30 2007 earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2007 2006 2005 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries december 31 2008 2007 results operations cash flows three years period ended december 31 2008 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2008 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s annual report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions discussed note 2 consolidated financial statements company changed manner accounts income tax uncertainties 2007 manner accounts stockbased compensation 2006 company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 26 2009 las vegas sands corp consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements stockholders’ equity comprehensive income loss accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 lvsc’s common stock traded new york stock exchange symbol “lvs” operations company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design reminiscent italian affluent living expo convention center approximately 12 million square feet “sands expo center” opening palazzo december 2007 las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet enclosed retail dining entertainment complex located within venetian las vegas approximately 440000 net leasable square feet “the grand canal shoppes” sold general growth partners “ggp” 2004 enclosed retail dining complex located within palazzo approximately 400000 net leasable square feet “the shoppes palazzo” sold ggp february 29 2008 company also owns operates sands macao first las vegasstyle casino macao china pursuant 20year gaming subconcession sands macao offers approximately 229000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities august 28 2007 company opened venetian macao resort hotel “the venetian macao” anchors cotai striptm masterplanned development resort properties macao china theme similar venetian las vegas venetian macao includes 39floor luxury hotel 2900 suites approximately 550000 square feet gaming space 15000seat arena retail dining space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet august 28 2008 company opened four seasons hotel macao cotai striptm “four seasons macao” located adjacent venetian macao four seasons macao features 360 rooms suites managed four seasons hotels inc approximately 70000 square feet gaming space several food beverage offerings conference banquet facilities retail space approximately 211000 square feet connected mall venetian macao property also feature 19 paiza mansions currently expected open second quarter 2009 four seasons apartments macao cotai striptm “four seasons apartments” consists approximately 10 million square feet four seasonsserviced branded luxury apartment hotel units common areas units intended sale currently expected open third quarter 2009 december 31 2008 company capitalized construction costs 8734 million project including 1100 million outstanding construction payables company expects spend approximately 360 million costs complete paiza mansions four seasons apartments including ffe preopening costs additional land premiums pay outstanding construction payables development projects given current conditions capital markets global economy impact company’s ongoing operations november 10 2008 company announced revised development plan suspend portions development projects focus development efforts projects highest rates las vegas sands corp subsidiaries notes consolidated financial statements continued expected return invested capital general economic conditions improve company unable obtain sufficient funding completion suspended projects probable management decide abandon certain projects portion company’s investment date suspended projects could lost would result impairment charge addition company may subject penalties termination clauses construction contracts united states development projects sands bethlehem company process developing sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania approximately 70 miles midtown manhattan new york sands bethlehem also expected home national museum industrial history arts cultural center broadcast home local pbs affiliate august 2007 company’s indirect majorityowned subsidiary sands bethworks gaming llc “sands bethworks gaming” issued pennsylvania gaming license pennsylvania gaming control board company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming 35 economic interest retail portion property ownership interest sands bethworks retail llc “sands bethworks retail” company continuing construction casino component 124acre development open 3000 slot machines ability increase 5000 slot machines six months opening date include variety dining options well parking garage surface parking part company’s revised development plan construction activities remaining components include 300room hotel approximate 200000squarefoot retail facility 50000squarefoot multipurpose event center variety additional dining options temporarily suspended intended recommence capital markets general economic conditions improve december 31 2008 company capitalized construction costs 4178 million project including 683 million outstanding construction payables company expects spend approximately 360 million additional costs complete construction casino parking components costs prepare remaining portion site delay ffe including additional 2000 slot machines added six months opening date preopening costs pay outstanding construction payables company expects open casino parking components second quarter 2009 impact suspension estimated overall cost project’s remaining components currently determinable st regis residences company constructing st regisbranded highrise residential condominium tower st regis residences venetian palazzo “st regis residences” situated palazzo venetian las vegas las vegas strip expected feature approximately 400 luxury residences part company’s revised development plan suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction conditions improve expects take approximately 18 months construction recommences complete project december 31 2008 company capitalized construction costs 1730 million project including 498 million outstanding construction payables company expects spend approximately 60 million additional costs prepare site delay complete construction podium portion part shoppes palazzo includes already leased retail entertainment space pay outstanding construction payables impact suspension estimated overall cost project currently determinable las vegas sands corp subsidiaries notes consolidated financial statements continued macao development projects company submitted plans macao government cotai strip developments represent five integrated resort developments addition venetian macao four seasons macao area approximately 200 acres referred parcels 3 5 6 7 8 developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas restaurants entertainment facilities amenities company commenced construction preconstruction five parcels planned operate casinos developments company’s macao gaming subconcession part revised development plan company suspended construction phase parcels 5 6 includes shangrila traders tower one two sheraton towers along podium encompasses casino associated public areas portions shopping mall approximately 100000 square feet meeting space company pursues projectlevel financing however assurance financing obtained financing obtained company expects take approximately twelve months complete construction phase construction phase ii project includes second sheraton tower st regis hotel serviced luxury apartment hotel suspended conditions capital markets general economic conditions improve december 31 2008 company capitalized construction costs 165 billion project including 1526 million outstanding construction payables company expects spend approximately 540 million additional costs prepare site delay pay outstanding construction payables impact revised development plan estimated overall cost project currently determinable company commenced preconstruction parcels 7 8 3 capitalized construction costs 1193 million parcels 7 8 356 million parcel 3 december 31 2008 company intends commence construction necessary government approvals obtained regional global economic conditions improve future demand warrants additional financing obtained impact delayed construction company’s cotai strip developments overall estimated cost build currently determinable december 31 2008 company capitalized aggregate 53 billion costs cotai strip projects including venetian macao four seasons macao company need arrange additional financing fund balance cotai strip developments assurance company able obtain additional financing required company received land concession macao government build parcels 1 2 3 including sites venetian macao parcel 1 four seasons macao parcel 2 located company land sites macao however land concession initial term 25 years renewable company’s option accordance macao law grants company exclusive use land specified land concession company required pay premiums either payable four years due upon completion corresponding integrated resort well annual rent term land concession october 2008 macao government amended company’s land concession separate retail hotel portions four seasons macao parcel allowed company subdivide parcel four separate components consisting retail hotelcasino four seasons apartments parking areas consideration amendment company paid additional land premium approximately 178 million pay adjusted annual rent remaining term concession increased slightly due revised allocation parcel use company yet necessary macao government approvals need order develop planned cotai strip developments parcels 3 5 6 7 8 company received land concession parcel 3 previously noted yet granted land concessions parcels 5 6 7 8 company process negotiating macao government obtain land concession parcels 5 6 subsequently negotiate land concession parcels 7 8 based historical experience macao government respect company’s land concessions sands macao parcels 1 2 3 management believes land concessions parcels 5 6 7 8 granted however company las vegas sands corp subsidiaries notes consolidated financial statements continued obtain land concessions company could forfeit substantial part 177 billion capitalized costs related developments parcels 5 6 7 8 december 31 2008 company’s land concession parcels 1 2 3 company required complete development parcel 3 august 2011 company believes able complete development parcel 3 deadline able obtain extension however assurances given extension granted macao government company unable meet august 2011 deadline extended portion land concession related parcel 3 separated portions related parcels 1 2 could lose land concession parcels 1 2 3 would prohibit company continuing operate venetian macao four seasons macao facilities developed land concession company could forfeit substantial portion 353 billion capitalized costs related developments parcels 1 2 3 december 31 2008 singapore development project august 2006 company’s whollyowned subsidiary marina bay sands pte ltd “mbs” entered development agreement “development agreement” singapore tourism board “stb” build operate integrated resort called marina bay sands singapore marina bay sands expected include three 50 story hotel towers totaling approximately 2600 rooms casino enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 13 million square feet theaters landmark iconic structure bayfront promenade contain artscience museum company continuing finalize various design aspects integrated resort process finalizing cost estimates project december 31 2008 company capitalized 324 billion singapore dollars “sgd” approximately 225 billion exchange rates effect december 31 2008 costs project including land premium sgd 3784 million approximately 2630 million exchange rates effect december 31 2008 outstanding construction payables december 31 2008 company expects spend approximately sgd 47 billion approximately 327 billion exchange rates effect december 31 2008 additional costs complete construction integrated resort ffe preopening costs pay outstanding construction payables 2011 approximately sgd 259 billion approximately 180 billion exchange rates effect december 31 2008 expected spent 2009 project opens company obtained singaporedenominated financing primarily pay costs singapore dollars exposure foreign exchange gains losses expected minimal based company’s current development plan company intends continue construction existing timeline majority project targeted open late 2009 early 2010 hengqin island development project company entered nonbinding letter intent zhuhai municipal people’s government china work together create master plan develop leisure convention destination resort hengqin island located within mainland china approximately one mile cotai strip january 2007 company informed zhuhai government established project coordination committee act government liaison empowered work directly company advance development project revised development plan company indefinitely suspended project development projects current economic environment access capital improve company may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe july 2008 company withdrew previously submitted application develop casino resort kansas city kansas metropolitan area las vegas sands corp subsidiaries notes consolidated financial statements continued development financing strategy december 31 2008 company principally funded development projects borrowings us macao singapore bank credit facilities see “ note 8 longterm debt” operating cash flows proceeds disposition noncore assets commencing september 30 2008 us senior secured credit facility ffe financings require company’s las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio decreases 75x december 31 2008 70x quarterly periods ending march 31 june 30 2009 65x quarterly periods ending september 30 december 31 2009 macao company’s credit facility also requires company comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio decreases 45x december 31 2008 40x quarterly periods ending march 31 june 30 2009 35x quarterly periods ending september 30 december 31 2009 company unable maintain compliance financial covenants credit facilities company would default respective credit facilities default company’s domestic credit facilities would trigger crossdefault company’s airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default company’s senior notes default company’s macao credit facilities would trigger crossdefault company’s ferry financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance company would able pay refinance amounts may become accelerated agreements could force company restructure alter operations debt obligations company’s las vegas properties achieve levels adjusted ebitda necessary maintain compliance maximum leverage ratio quarterly periods ended september 30 december 31 2008 company completed private placement 4750 million convertible senior notes september 2008 21 billion common preferred stock warrants offering november 2008 see “ note 8 longterm debt” “ note 9 stockholders’ equity” respectively portion proceeds convertible senior notes used exercise ebitda trueup provision defined quarterly period ended september 30 2008 would sufficient maintain compliance maximum leverage ratio applied quarterly periods ended september 30 december 31 2008 accordingly additional proceeds offerings contributed lvsllc reduce net debt parties domestic credit facilities order maintain compliance maximum leverage ratio quarterly periods ended september 30 december 31 2008 adjusted ebitda generated company’s macao operations sufficient maintain compliance respective maximum leverage ratio quarterly periods ended 2008 order fund company’s revised development plan discussed comply maximum leverage ratio covenants us macao credit facilities quarterly periods 2009 beyond company utilize cash hand cash flow operations available borrowings credit facilities company also need execute combination following measures achieve increased levels adjusted ebitda las vegas macao properties primarily aggressive costcutting measures ii successfully complete sale certain noncore assets eg four seasons apartments malls venetian macao four seasons macao portion proceeds would used repay debt iii elect contribute 50 million 20 million cash hand las vegas macao operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating maximum leverage las vegas sands corp subsidiaries notes consolidated financial statements continued ratio “ebitda trueup” iv execute debt reduction plan aforementioned measures sufficient fund company’s revised development plan maintain compliance financial covenants company may also need execute combination following measures decrease rate spending global development projects ii obtain additional financing parent company level proceeds could used reduce repay debt las vegas andor macao iii consider asset sales iv elect delay payment dividends preferred stock v seek waivers amendments las vegas macao credit facilities however assurance company able obtain waivers amendments management believes successful execution combination measures sufficient company fund commitments maintain compliance financial covenants throughout 2009 note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary equity attributable minority shareholders’ interests subsidiaries material included longterm liabilities accompanying consolidated balance sheets significant intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based financial accounting standards board “fasb” interpretation “fin” 46r “consolidation variable interest entities interpretation arb 51” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties whereby third parties operate variety restaurants venetian las vegas palazzo due company’s significant investment joint ventures operations restaurants consolidated company accordance fin 46r company evaluates investments joint ventures assess appropriateness consolidation company events occurred would trigger analysis december 31 2008 2007 company’s restaurant joint ventures total current assets 55 million 28 million respectively fixed assets 499 million 122 million respectively following summarized results operations data consolidated joint ventures years ended december 31 2008 2007 2006 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost equivalent fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company recently begun extending credit junkets macao receivable offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued company evaluates property equipment longlived assets impairment accordance statement financial accounting standards “sfas” 144 “accounting impairment disposal longlived assets” assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale company’s recent suspension certain development projects due difficult global economic credit market environment company tested assets impairment december 31 2008 december 31 2008 company recognized impairment loss 376 million primarily related certain real estate transportation assets previously utilized connection marketing activities asia capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2008 2007 2006 company capitalized interest expense 1312 million 2232 million 946 million respectively deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest las vegas sands corp subsidiaries notes consolidated financial statements continued indefinite useful life assets indefinite useful lives subject amortization tested impairment annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2008 2007 company 500 million asset related sands bethlehem gaming license determined indefinite useful life recorded longterm assets accompanying consolidated balance sheets impairment charges related asset recorded years ended december 31 2008 2007 revenue recognition promotional allowances casino revenue aggregate gaming wins losses cash discounts commissions cash incentives customers related gaming play recorded reduction gross casino revenues hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention revenues recognized related service rendered event held minimum rental revenues adjusted contractual base rent escalations included convention retail revenue recognized straightline basis terms related lease accordance industry practice retail value accommodations food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected las vegas sands corp subsidiaries notes consolidated financial statements continued redeemed free goods services casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance statement position 985 “reporting costs startup activities” preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statement operations 482 million 349 million 69 million years ended december 31 2008 2007 2006 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations foreign currency company accounts currency translation accordance sfas 52 “foreign currency translation” gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income loss comprehensive income loss includes net income loss nonstockholder changes equity comprehensive income elements company’s comprehensive income loss reported accompanying consolidated statements stockholders’ equity comprehensive income loss cumulative balance comprehensive income loss consisted solely foreign currency translation adjustments las vegas sands corp subsidiaries notes consolidated financial statements continued earnings loss per share weighted average number common equivalent shares used calculation basic diluted earnings loss per share consisted following stockbased employee compensation company accounts stockbased employee compensation sfas 123r “sharebased payment” establishes accounting equity instruments exchanged employee services provisions sfas 123r stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards sfas 109 “accounting income taxes” requires reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed periodically based sfas 109 morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods experience operating loss tax credit carryforwards expiring unused tax planning alternatives significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain effective january 1 2007 company adopted provisions fin 48 “accounting uncertainty income taxes interpretation fasb statement 109” fin 48 provides twostep approach recognizing measuring uncertain tax positions accounted accordance sfas 109 first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained las vegas sands corp subsidiaries notes consolidated financial statements continued examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes tax indemnification connection conversion lvsllc subchapter corporation taxable c corporation income tax purposes 2004 lvsllc entered indemnification agreement pursuant agreed • indemnify company’s stockholders las vegas sands inc prior 2004 initial public offering certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands inc respect taxable periods las vegas sands inc subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface group holding company inc respect taxable periods subchapter corporation income tax purposes accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements september 2006 fasb issued sfas 157 “fair value measurements” defines fair value establishes framework measuring fair value expands disclosures fair value measurements sfas 157 applies accounting pronouncements require permit fair value measurement sfas 157 require new fair value measurements provisions sfas 157 effective financial statements issued fiscal years beginning november 15 2007 interim periods within fiscal years january 2008 fasb deferred effective date one year certain nonfinancial assets nonfinancial liabilities except recognized disclosed fair value financial statements recurring basis least annually company adopted provisions standard application material effect financial condition results operations cash flows see “ note 11 fair value measurements” disclosures required standard las vegas sands corp subsidiaries notes consolidated financial statements continued december 2007 fasb issued sfas 141r “business combinations” requires acquirer recognize identifiable assets acquired liabilities assumed noncontrolling interest acquiree acquisition date measured fair values date limited exceptions specified statement sfas 141r applies prospectively business combinations acquisition date beginning entity’s fiscal year begins december 15 2008 company expect adoption sfas 141r material effect financial condition results operations cash flows december 2007 fasb issued sfas 160 “noncontrolling interests consolidated financial statements amendment arb 51” establishes accounting reporting standards noncontrolling interest subsidiary deconsolidation subsidiary specifically statement requires recognition noncontrolling interest minority interest equity consolidated financial statements separate parent’s equity amount net income loss attributable noncontrolling interest included consolidated net income loss face consolidated statement operations sfas 160 clarifies changes parent’s ownership interest subsidiary result deconsolidation equity transactions parent retains controlling financial interest addition statement requires parent recognize gain loss net income loss subsidiary deconsolidated also requires expanded disclosures regarding interests parent interests noncontrolling owners sfas 160 effective fiscal years interim periods within fiscal years beginning december 15 2008 company expect adoption sfas 160 material effect financial condition results operations cash flows march 2008 fasb issued sfas 161 “disclosures derivative instruments hedging activities” requires enhanced disclosures entity’s derivative hedging activities thereby improves transparency financial reporting objective guidance provide users financial statements enhanced understanding entity uses derivative instruments derivative instruments related hedged items accounted derivative instruments related hedged items affect entity’s financial position financial performance cash flows sfas 161 also requires several added quantitative disclosures financial statements sfas 161 effective fiscal years beginning november 15 2008 company expect adoption sfas 161 material effect disclosures april 2008 fasb issued staff position “fsp” 1423 “determination useful life intangible assets” amends factors considered developing renewal extension assumptions used determine useful life recognized intangible asset sfas 142 “goodwill intangible assets” intent fsp improve consistency useful life recognized intangible asset sfas 142 period expected cash flows used measure fair value asset sfas 141r fsp 1423 effective fiscal years interim periods within fiscal years beginning december 15 2008 company expect adoption fsp 1423 material effect financial condition results operations cash flows december 2008 fasb issued fsp fas 1404 fin 46r8 “disclosures public entities enterprises transfers financial assets interests variable interest entities” fsp expands disclosure requirements sfas 140 fin 46r requiring additional information company’s involvement vies continuing involvement transferred financial assets new accounting standard effective reporting periods ending december 15 2008 adoption fsp fas 1404 fin 46r8 material impact company’s disclosures charges year ended december 31 2008 company recorded net charge 17 million properly account 52 million casino convention retail preopening general administrative expenses accrued offset 24 million casino convention retail revenues las vegas sands corp subsidiaries notes consolidated financial statements continued 11 million tax benefit recorded december 31 2007 amounts involved material company’s consolidated financial statements individual prior period cumulative amount material results operations year ending december 31 2008 company recorded cumulative effect correcting items year ended december 31 2008 note 3 restricted cash required company’s macao credit facility entered may 2006 see “ note 8 longterm debt macao related debt macao credit facility” certain loan proceeds available facility certain cash flows generated company’s existing macao operations deposited restricted accounts invested cash equivalents pledged collateral agent macao credit facility lenders restricted cash amount used required fund future construction four seasons macao cotai strip project costs accordance terms specified facility restricted accounts subject security interest favor lenders macao credit facility december 31 2008 2007 cash balances restricted accounts 1241 million 592 million respectively required company’s singapore permanent facilities entered december 2007 see “ note 8 longterm debt singapore related debt singapore permanent facilities” proceeds available facility deposited accounts invested cash equivalents pledged security trustee benefit singapore facility lenders restricted cash amount used required fund construction operating development costs marina bay sands accounts subject security interest favor lenders singapore permanent facilities december 31 2008 2007 restricted cash balance 619 million 3381 million respectively restricted cash also includes 88 million 145 million december 31 2008 2007 respectively related items restricted cash balances classified current primarily equivalent related construction payables also classified current note 4 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 5 property equipment net property equipment consists following thousands construction progress consists following thousands december 31 2008 portions palazzo shoppes palazzo construction scheduled completed 2009 approximately 1942 million building improvements 273 million furniture fixtures equipment leasehold improvements total accumulated depreciation 89 million 1480 million construction progress december 31 2008 related shoppes palazzo sold ggp see “ note 12 mall sale shoppes palazzo” 2625 million construction progress consists primarily construction st regis residences projects las vegas venetian macao see “ note 1 organization business company development projects” discussion regarding company’s projects development projects suspended cost property equipment company leasing tenants part macao mall operations december 31 2008 2720 million accumulated depreciation 203 million las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land marina bay sands macao three parcels cotai strip straightline basis expected term leases approximately 143 million 11 million 108 million respectively annually exchange rates effect december 31 2008 year ended december 31 2008 company made payments 960 million 1077 million patacas approximately 120 million 135 million respectively exchange rates effect december 31 2008 partial payments land premium parcels 2 3 respectively company also made payment 1423 million patacas approximately 178 million exchange rates effect december 31 2008 consideration four seasons land concession amendment separated retail mall hotel portions parcel allowed company subdivide parcel four separate components consisting retail hotelcasino four seasons apartments parking areas construction still progress parcels 2 3 balance either due upon completion resorts parcels four seasons apartments expected completed third quarter 2009 payable seven equal semiannual payments three made december 31 2008 bearing interest 50 per annum addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2008 company obligated land concessions make future premium rental payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 7 accrued liabilities accrued liabilities consist following thousands note 8 longterm debt longterm debt consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” consists 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” december 31 2008 company 1163 million available borrowing capacity revolving facility net outstanding letters credit including approximately 76 million committed funded lehman brothers commercial paper inc senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially lvsllc’s guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets term b facility delayed draw facility mature may 23 2014 term b facility subject quarterly amortization payments 75 million began september 30 2007 followed balloon payment 280 billion due may 23 2014 delayed draw facility subject quarterly amortization payments 15 million began september 30 2008 followed balloon payment 5655 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 10 million begin march 31 2009 followed balloon payment 3830 million due may 23 2013 revolving facility matures may 23 2012 interim amortization borrowings senior secured credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively set 20 22 december 31 2008 respectively spreads reduced 025 per annum company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions spread revolving facility reduced 025 per annum company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 52 71 years ended december 31 2008 2007 respectively company pays commitment fee 0375 per annum undrawn amounts revolving facility reduced 0125 per annum certain ratings achieved subject certain additional conditions company also pays commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw facility delayed draw ii facility respectively meet requirements senior secured credit facility company entered interest rate cap agreement august 2007 notional amount 164 billion expires may 31 2009 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 675 company three additional interest rate cap agreements entered part prior senior secured credit facility notional amounts 5000 million 500 million 100 million expired march 30 2008 provisions interest rate cap agreements entitled company receive counterparties amounts selected market interest rates exceed strike rates 575 65 6375 respectively net las vegas sands corp subsidiaries notes consolidated financial statements continued effect interest expense result four interest rate cap agreements years ended december 31 2008 2007 senior secured credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets senior secured credit facility also requires guarantors comply financial covenants including limited minimum ratios adjusted ebitda interest expense maximum ratios total debt outstanding adjusted ebitda senior secured credit facility also contains conditions events default customary financings see “ note 1 organization business company development financing strategy” discussion addition provisions limit prohibit certain payments dividends distributions lvsc december 31 2008 net assets lvsllc 411 billion substantial portion restricted distributed terms senior secured credit facility portion proceeds term b facility used refinance prior senior secured credit facility repay construction loan related shoppes palazzo sands expo center mortgage loan pay certain construction development related expenses incurred connection palazzo fees expenses related senior secured credit facility company incurred charge approximately 107 million loss early retirement debt 2007 result refinancing facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 “senior notes” original issue discount 23 million net proceeds offering costs original issue discount 2448 million senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes unsecured senior obligations lvsc jointly severally guaranteed senior unsecured basis certain lvsc’s existing domestic subsidiaries includes lvsllc venetian casino resort llc “vcr” indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets june 2005 senior notes exchanged substantially similar senior notes registered federal securities laws connection entering senior secured credit facility senior notes collateralized equal ratable basis obligations senior secured credit facility assets lvsllc guarantors ffe financings december 2006 certain company’s subsidiaries including lvsllc vcr entered ffe credit facility agreement “ffe facility” group lenders general electric capital corporation administrative agent provide 1429 million finance refinance acquisition certain ffe located venetian las vegas palazzo ffe facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties ffe facility entered amended restated ffe credit guarantee agreement “amended restated ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan ffe facility conformed affirmative negative covenants events default set forth senior secured credit facility delayed draw las vegas sands corp subsidiaries notes consolidated financial statements continued term loan commitment amended restated ffe facility terminated june 30 2008 december 31 2008 company fully drawn delayed draw term loan amended restated ffe facility collateralized ffe financed andor refinanced proceeds amended restated ffe facility guaranteed guarantors senior secured credit facility delayed draw term loan matures june 2011 company required make principal payments quarterly installments commencing july 1 2008 amount equal 50 aggregate principal amount delayed draw term loan outstanding july 1 2008 remainder due four equal quarterly installments ending maturity date amended restated ffe facility also requires company make mandatory prepayments delayed draw term loan certain specified circumstances borrowings amended restated ffe facility bear interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate set 25 december 31 2008 applicable margins may reduced 025 per annum certain circumstances similar set forth senior secured credit facility company also pay commitment fee 050 per annum undrawn amount term delayed draw loan weighted average interest rate amended restated ffe facility 55 74 years ended december 31 2008 2007 respectively airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others already owned notes consist balloon payment promissory notes amortizing promissory notes ten year maturities collateralized related aircraft notes bear interest threemonth london interbank offer rate “libor” plus 15 per annum set 37 december 31 2008 amortizing notes totaling 288 million subject quarterly principal interest payments began june 1 2007 balloon notes totaling 432 million subject quarterly interest payments began june 1 2007 principal payments due full march 1 2017 weighted average interest rate notes 48 70 years ended december 31 2008 2007 respectively april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes ten year maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 27 december 31 2008 81 million amortizing note subject quarterly principal interest payments began june 30 2007 122 million balloon note subject quarterly interest payments began june 30 2007 principal payment due full march 31 2017 weighted average interest rate notes 49 66 years ended december 31 2008 2007 respectively convertible senior notes september 2008 company sold principal stockholder’s family private placement transaction 4750 million 65 convertible senior notes due 2013 “convertible senior notes” convertible senior notes subject quarterly interest payments commencing january 1 2009 would mature october 1 2013 unless earlier converted repurchased company initial conversion rate 20141 shares common stock per 1000 principal amount equivalent conversion price approximately 4965 per share common stock subject adjustment certain circumstances following fundamental change defined agreement occurs prior maturity date company would required make offer purchase convertible senior notes principal stockholder’s family granted preemptive las vegas sands corp subsidiaries notes consolidated financial statements continued rights respect future proposed issuance sale company equity interests including convertible exchangeable securities pursuant would able purchase portion offered equity interests based fully diluted common stock ownership company november 2008 concurrent company’s issuance common preferred stock warrants see “ note 9 stockholders’ equity” convertible senior notes retired conversion feature utilized acquire 86363636 shares company’s common stock conversion price 550 per share conversion rate approximately 181818 shares per 1000 principal amount result company incurred charge approximately 51 million loss early retirement notes december 31 2008 additionally company paid interest principal stockholder’s family 37 million period convertible senior notes outstanding macao related debt macao credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “macao credit facility” macao credit facility originally consisted 12 billion funded term b loan “macao term b facility” 7000 million delayed draw term b loan “macao term b delayed draw facility” 1000 million funded local currency term loan “macao local term facility” 5000 million revolving credit facility “macao revolving facility” march 2007 macao credit facility amended expand use proceeds remove certain restrictive covenants april 2007 lenders macao credit facility approved reduction interest rate margin classes loans 50 basis points borrower exercised rights macao credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded macao term b facility 6000 million macao revolving facility 2000 million total macao credit facility 33 billion december 31 2008 macao credit facility fully funded except 47 million committed funded lehman brothers commercial paper inc indebtedness macao credit facility guaranteed vml venetian cotai limited certain company’s foreign subsidiaries “macao guarantors” obligations macao credit facility guarantees macao guarantors collateralized firstpriority security interest substantially borrower’s macao guarantors’ assets 1 capital stock borrower macao guarantors 2 assets secure permitted furniture fixtures equipment financings 3 vml’s gaming subconcession contract 4 certain excluded assets macao revolving facility macao local term facility mature may 25 2011 macao term b delayed draw facility macao term b facility mature may 25 2012 2013 respectively macao term b delayed draw macao term b facility subject nominal amortization first five six years respectively expected commence june 2009 remainder loans payable four equal installments last year immediately preceding maturity dates macao local term facility subject quarterly amortization amount approximately 63 million per quarter expected commence july 2009 remainder loan payable four equal quarterly installments last year immediately preceding maturity date borrowings macao credit facility bear interest company’s option either adjusted eurodollar rate case macao local term facility adjusted hong kong interbank offer rate “hibor” alternative base rate plus spread 225 per annum 125 per annum respectively set 25 macao local term facility 27 remainder macao credit facility december 31 2008 subject downward adjustment 025 per annum beginning first principal payment certain maximum leverage ratios satisfied borrower also pays standby commitment fee las vegas sands corp subsidiaries notes consolidated financial statements continued 05 per annum undrawn amounts macao revolving facility years ended december 31 2008 2007 weighted average interest rates macao local term facility 51 68 respectively weighted average interest rates remainder macao credit facility 58 78 respectively meet requirements macao credit facility company entered four separate interest rate cap agreements september 2006 may 2007 october 2007 september 2008 collectively “macao cap agreements” notional amounts 10 billion 3250 million 1650 million 1600 million respectively expire september 21 2009 provisions macao cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate 675 stated agreement net effect interest expense result macao cap agreements years ended december 31 2008 2007 2006 macao credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets macao credit facility also requires borrower macao guarantors comply financial covenants including limited generating minimum adjusted ebitda period time thereafter ratios adjusted ebitda interest expense total indebtedness adjusted ebitda well maximum annual capital expenditures macao credit facility also contains events default customary financings see “ note 1 organization business company development financing strategy” discussion ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1560 million exchange rates effect december 31 2008 secured credit facility available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date construction ferries finance completion remaining ferries facility collateralized ferries guaranteed vml facility matures january 2018 subject 34 quarterly payments commencing end 18month availability period july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 725 million exchange rates effect december 31 2008 company drawn hkd 4850 million approximately 626 million exchange rates effect december 31 2008 december 31 2008 proceeds supplemental facility used reimburse company cash spent date construction four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml borrowings facility bear interest hibor plus 20 per annum borrowings made hong kong dollars set 23 december 31 2008 libor plus 20 per annum borrowings made us dollars borrowings facility fully drawn december 31 2008 made hong kong dollars weighted average interest rate facility 47 year ended december 31 2008 singapore related debt mbs entered singapore bridge facility august 2006 pay land premium stb development agreement commence construction marina bay sands facility would mature august 2008 company entered singapore permanent facilities december 2007 upon closing january 2008 portion borrowings singapore permanent facilities well contributions made las vegas sands corp subsidiaries notes consolidated financial statements continued company mbs used repay outstanding balances singapore bridge facility pay fees costs expenses related entering singapore permanent facilities agreement company incurred charge approximately 40 million loss early retirement debt january 2008 result refinancing singapore bridge facility singapore permanent facilities december 2007 mbs signed facility agreement “singapore permanent facility agreement” providing sgd 20 billion approximately 139 billion exchange rates effect december 31 2008 term loan “singapore permanent facility a” funded january 2008 sgd 275 billion approximately 191 billion exchange rates effect december 31 2008 term loan “singapore permanent facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1339 million exchange rates effect december 31 2008 banker’s guarantee facility “singapore permanent facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 3475 million exchange rates effect december 31 2008 revolving credit facility “singapore permanent facility d” collectively “singapore permanent facilities” available february 28 2015 december 31 2008 company sgd 261 billion approximately 182 billion exchange rates effect december 31 2008 available borrowing net outstanding banker’s guarantees undrawn amounts committed funded lehman brothers finance asia pte ltd singapore permanent facilities indebtedness singapore permanent facility agreement collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets singapore permanent facilities mature march 31 2015 mbs required repay prepay singapore permanent facilities certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore permanent facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 869 million exchange rates effect december 31 2008 per quarter addition commencing end third full quarter operations marina bay sands mbs required prepay outstanding singapore permanent facility b loans pro rata basis percentage excess free cash flow defined singapore permanent facility agreement borrowings singapore permanent facilities bear interest singapore swap offer rate plus spread 225 per annum set 34 december 31 2008 mbs pays standby interest fee 1125 per annum 090 per annum undrawn amounts singapore permanent facility b facility respectively mbs pays commission 225 per annum bankers’ guarantees outstanding singapore permanent facilities period banker’s guarantees outstanding year ended december 31 2008 weighted average interest rate singapore permanent facilities 37 meet requirements singapore permanent facility agreement company entered three interest rate cap agreements june 2008 notional amounts 3000 million 2350 million 1500 million expire june 2011 july august 2008 company entered four additional interest rate cap agreements notional amounts 750 million 1750 million 1750 million 2000 million expire july august 2011 december 2008 company entered two additional interest rate cap agreements notional amounts 500 million expire december 2011 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 40 50 stated las vegas sands corp subsidiaries notes consolidated financial statements continued agreements net effect interest expense result interest rate cap agreements december 31 2008 singapore permanent facility agreement contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities singapore permanent facility agreement also requires mbs comply financial covenants end first full quarter beginning less 183 days commencement operations marina bay sands including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense minimum adjusted ebitda requirements positive net worth requirement singapore permanent facility agreement also contains events default customary financings las vegas sands corp subsidiaries notes consolidated financial statements continued cash flows financing activities cash flows financing activities related longterm debt follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities longterm debt maturities longterm debt outstanding excluding discounts december 31 2008 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2008 approximately 63 billion compared carrying value 105 billion december 31 2007 estimated fair value company’s longterm debt approximately 76 billion consistent carrying value estimated fair value company’s longterm debt based quoted market prices available pricing models based value related cash flows discounted current market interest rates note 9 stockholders’ equity common stock november 2008 company issued public offering 200000000 shares common stock 550 per share received gross proceeds 110 billion 105 billion net transaction costs concurrent issuance principal stockholder’s family converted 4750 million convertible senior notes 86363636 shares company’s common stock preferred stock november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit preferred stock redeemable november 15 2011 company’s option whole part redemption price equal sum 110 per share accrued unpaid dividends minimum number shares preferred stock may redeemed time lesser 1000000 shares preferred stock ii number shares preferred stock outstanding holders preferred stock rights exchange convert shares securities holders preferred stock preemptive rights voting rights except required applicable nevada laws certain circumstances holders preferred stock right require company redeem shares preferred stock except described preferred stock ranks payment dividends distributions assets upon dissolution liquidation winding • junior company’s existing future debt obligations • junior class series company’s capital stock terms provide class series rank senior preferred stock las vegas sands corp subsidiaries notes consolidated financial statements continued • senior company’s common stock class series capital stock terms provide class series ranks junior preferred stock either payment dividends andor distribution assets liquidation dissolution winding company • parity class series company’s capital stock terms provide class series rank equally preferred stock payment dividends distribution assets liquidation dissolution winding company nevada law company may declare pay dividends preferred stock extent total assets exceed total liabilities long company able pay debts become due usual course business declared company’s board directors holders preferred stock entitled receive cumulative cash dividends quarterly february 15 may 15 august 15 november 15 beginning february 15 2009 preferred stock issued public 10446300 shares preferred stock issued company issued public 5196300 shares warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued principal stockholder’s family 5250000 shares warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity accompanying consolidated balance sheet principal stockholder family greater 50 ownership company therefore potential ability require company redeem preferred stock beginning november 15 2011 preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years addition 69 million accumulated undeclared dividends recorded summary company’s preferred stock issued principal stockholder’s family year ended december 31 2008 presented thousands except number shares las vegas sands corp subsidiaries notes consolidated financial statements continued subsequent events subsequent yearend holders preferred stock exercised 662601 warrants purchase aggregate 11043370 shares company’s common stock 600 per share tendered 662601 shares preferred stock settlement february 5 2009 company’s board directors declared dividend 250 per preferred share holders preferred stock record date total amount 245 million paid february 17 2009 first business day following february 15 2009 payment date note 10 income taxes consolidated income loss taxes noncontrolling interest domestic foreign operations follows thousands components benefit provision income taxes follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows las vegas sands corp subsidiaries notes consolidated financial statements continued company received 5year income tax exemption set expire 2013 gaming operations macao company required pay income taxes macao consolidated net income would reduced 464 million 439 million 452 million respectively diluted earnings per share would reduced 012 per share years ended december 31 2008 2007 2006 respectively primary tax affected components company’s net deferred tax assets follows thousands operating loss carryforwards company’s foreign subsidiaries 6437 million 2822 million years ended december 31 2008 2007 respectively begin expire 2009 december 31 2008 company available alternative minimum tax credit carryforwards 104 million may used indefinitely reduce regular federal income tax exhausted valuation allowances 928 million 463 million december 31 2008 2007 respectively provided foreign net operating loss carryforwards foreign deferred tax assets management believes assets meet “more likely not” criteria recognition sfas 109 management believes deferred tax assets likely realized due future reversal existing taxable temporary differences expected future taxable income company’s operating results less currently projected objectively verifiable evidence support realization deferred tax asset valuation allowance may required reduce deferred tax asset reduction deferred tax asset could increase company’s income tax expense adverse effect company’s results operations tangible net worth period allowance recorded december 31 2008 2007 valuation allowance established company’s us deferred tax asset however company continue assess need allowance future periods las vegas sands corp subsidiaries notes consolidated financial statements continued undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans would required record significant amount deferred tax liabilities years ended december 31 2008 2007 amount undistributed earnings foreign subsidiaries company intend repatriate 8409 million 8372 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions company adopted provisions fin 48 january 1 2007 reconciliation beginning ending amounts unrecognized tax benefits recorded longterm liabilities follows thousands included balance december 31 2008 2007 141 million 98 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore us company examination years 2004 macao singapore company subject examination years 2003 company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations company approximately 07 million 06 million interest accrued december 31 2008 2007 respectively penalties accrued december 31 2008 2007 company expect significant increase decrease unrecognized tax benefits next twelve months note 11 fair value measurements discussed “ note 2 summary significant accounting policies” company adopted provisions sfas 157 respect fair value measurements nonfinancial assets liabilities recognized disclosed fair value company’s financial statements recurring basis least annually b financial assets liabilities deferred fasb january 2008 certain nonfinancial assets liabilities recognized nonrecurring basis follow sfas 157 framework measuring fair value beginning january 1 2009 sfas 157 fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date sfas 157 also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly las vegas sands corp subsidiaries notes consolidated financial statements continued level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value measured recurring basis december 31 2008 thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 company fourteen interest rate cap agreements aggregate fair value approximately 37 million based quoted market values institutions holding agreements december 31 2008 note 12 mall sale grand canal shoppes venetian las vegas april 12 2004 company entered agreement sell grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 17 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen spaces casino level venetian las vegas currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2008 2007 2006 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease blue man group theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases 35 million deferred item amortized years ended december 31 2008 2007 2006 included offset convention retail expense las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2008 company obligated ii iii iv make future payments follows thousands shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open construction certain portions mall yet completed company contracted sell shoppes palazzo ggp pursuant purchase sale agreement dated april 12 2004 amended “amended agreement” total purchase price paid ggp shoppes palazzo determined taking shoppes palazzo’s net operating income defined amended agreement months 19 30 operations assuming rent periodic payments due tenants month 30 actually due months 19 30 provided 12month period delayed certain conditions satisfied divided capitalization rate capitalization rate 006 every dollar net operating income 380 million 008 every dollar net operating income 380 million closing date sale february 29 2008 ggp made initial purchase price payment 2908 million based projected net operating income first 12 months operations taking account tenants open business paying rent february 29 2008 pursuant amended agreement periodic adjustments purchase price never less 2500 million made based projected net operating income upcoming 12 months subject adjustments certain audit issues final adjustment purchase price made 30month anniversary closing date later certain conditions satisfied based previously described formula purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting pursuant amended agreement company received additional 46 million june 2008 representing adjustment payment fourth month closing subsequent yearend company agreed principle ggp suspend scheduled purchase price adjustments subsequent june 2008 payment march 2010 due general downturn national local retail economic market conditions assurance final purchase price although based current estimates company believes excess costs incurred constructing developing shoppes palazzo 3606 million capitalized december 31 2008 circumstances change company may required record impairment charge future based ggp’s current financial condition assurance ggp make future periodic payments amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level palazzo currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces generally accepted accounting principles palazzo master lease qualify sale real property real property separately legally demised accordingly 418 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term las vegas sands corp subsidiaries notes consolidated financial statements continued additional 70 million total proceeds mall sale transaction deferred unearned revenues december 31 2008 balance increase additional purchase price proceeds received addition company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2008 company obligated make future payments approximately 07 million two years ended december 31 2009 2010 respectively 08 million years ended december 31 2011 2012 2013 respectively 40 million thereafter generally accepted accounting principles gain sale recorded company continuing involvement transaction related completion construction remainder shoppes palazzo certain activities performed behalf ggp uncertainty final sales price determined 2010 previously described therefore 2439 million mall sale transaction recorded deferred proceeds sale december 31 2008 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp property sold ggp remain assets company depreciation continuing recorded final sales price determination made note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows palazzo construction litigation lido casino resort llc “lido” formerly whollyowned subsidiary company merged vcr construction manager taylor international corp “taylor” filed suit march 2006 united states district court district nevada “district court” malcolm drilling company inc “malcolm” contractor palazzo project responsible completing certain foundation work “district court case” lido taylor claimed district court case malcolm default contract performing defective work failing correct defective work failing complete work causing delay project malcolm responded filing notice lien clerk clark county nevada march 2006 amount approximately 190 million “lien” april 2006 lido taylor moved district court case strike alternative reduce amount lien claiming among things lien excessive including claims disruption delay lido taylor claim lienable nevada law “lien motion” malcolm responded april 2006 filing complaint lido taylor district court clark county nevada seeking foreclose lien taylor claiming breach contract cardinal change underlying contract unjust enrichment lido taylor bad faith fraud taylor “state court case” simultaneously filed motion district court case seeking dismiss district court case abstention grounds “abstention motion” response june 2006 lido filed motion dismiss state court case based principle “prior pending” district court case “motion dismiss” june 2006 abstention motion granted part united states district court district court case stayed pending outcome motion dismiss state court case lien motion denied without prejudice january 2008 parties agreed dismissal district court case without prejudice prior agreeing dismissal lido malcolm entered stipulation lido withdrew motion dismiss july 2006 filed replacement lien motion state court case lien motion state court case denied august 2006 lido taylor filed permitted interlocutory notice appeal supreme court nevada september 2006 april 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued malcolm filed amended notice lien clerk clark county nevada amount approximately 167 million plus interest costs attorney’s fees august 2007 malcolm filed motion partial summary judgment seeking dismissal counterclaim filed state court case lido extent claim sought lost profits argument motion partial summary judgment denied without prejudice october 2007 conforming order entered december 2007 argument appeal denial lien motion state court heard supreme court march 2008 january 2008 malcolm filed series motions sought summary judgment counterclaim filed state court case vcr successor interest lido taylor sought summary judgment certain malcolm’s claims motions summary judgment denied without prejudice except claims malcolm totaling approximately 675000 dismissed may 2008 supreme court vacated order denying motion strike mechanic’s lien remanded trial court decision lien upcoming trial case currently trial november 2008 court denied series motions filed lido taylor seeking dismiss number malcolm’s claims except bad faith fraudulent concealment claims dismissed management determined based proceedings date adverse outcome probable vcr successor interest lido intends defend claims pending state court case litigation relating macao operations october 15 2004 richard suen round square company limited filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties may 17 2005 plaintiffs filed first amended complaint february 2 2006 defendants filed motion partial summary judgment respect plaintiffs’ fraud claims defendants march 16 2006 order filed court granting defendants’ motion partial summary judgment pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company begun appeals process including filings july 15 2008 trial court motion judgment matter law alternative new trial motion strike alter andor amend judgment grounds motions include 1 insufficient evidence suen conferred benefit lvsi 2 improper admission testimony 3 court’s refusal give jury instructions law presumes government officials performed duties regularly law obeyed 4 jury instructions improperly permitted plaintiff recover services others motions heard trial court december 8 2008 denied company intends continue vigorously pursue available appeals nevada supreme court company believes valid bases law fact overturn appeal verdict result company believes likelihood amount judgment affirmed probable accordingly amount loss cannot reasonably estimated time company believes potential loss probable estimable recorded reserves contingencies related legal matter event company’s assumptions used evaluate matter neither probable estimable change future periods may required record liability adverse outcome january 26 2006 clive basset jones darryl steven turok aka dax turok cheong jose vai chi aka cliff cheong filed action lvsc lvsllc venetian venture development llc “venetian venture development” various unspecified individuals companies district court clark county nevada plaintiffs assert breach agreement pay success fee amount equal 5 ownership interest entity owns operates macao gaming subconcession well related claims las vegas sands corp subsidiaries notes consolidated financial statements continued april 2006 lvsc dismissed party without prejudice based stipulation parties discovery concluded matter case currently set trial june 2009 management believes plaintiff’s case company without merit company intends defend matter vigorously february 5 2007 asian american entertainment corporation limited “aaec” filed action lvsi vcr venetian venture development william p weidner david friedman united states district court district nevada plaintiffs assert breach contract lvsi vcr venetian venture development agreement aaec would work obtain gaming license macao successful aaec would jointly operate casino hotel related facilities macao venetian venture development venetian venture development would receive fees minority equity interest venture breach fiduciary duties defendants plaintiffs requested unspecified amount actual compensatory punitive damages disgorgement profits related macao gaming license company filed motion dismiss july 11 2007 august 1 2007 court granted defendants’ motion dismiss complaint defendants without prejudice plaintiffs appealed decision management believes plaintiff’s case company without merit company intends defend matter vigorously january 2 2008 hong kong ferry operator norte oeste expresso ltd “northwest express” filed action chief executive macao special administrative region people’s republic china company’s indirect whollyowned subsidiary cotai waterjets macau limited “cotai waterjets” interested party challenging award ferry concession cotai waterjets operate ferry service hong kong macao basis legal challenge macao law concessions related provision public service must awarded public tender process february 19 2009 court second instance macao held unlawful macao government granted ferry concession cotai waterjets without engaging public tender process ferry concession award cotai waterjets void company relied advice counsel obtaining ferry concession believes complied applicable laws procedures macao practice company believes concessions operate ferries macao awarded fashion concession awarded cotai waterjets company intends appeal decision court final appeal macao company believes macao government likely appeal decision well company advised counsel appeals process could take several months cooperate macao government period resolve matter company expects continue operate ferry service decision appeal rendered matter otherwise resolved decision upheld court final appeal cotai waterjets ferry concession void absent action macao government company unable continue operate ferry service need develop alternative means attracting transporting visitors cotai strip properties company unable resulting significant loss visitors cotai strip properties could material adverse effect company’s financial condition results operations cash flows stockholder derivative litigation november 26 2008 shmyer breuer david barfield filed shareholder derivative action “breuer action” behalf company district court clark county nevada sheldon g adelson irwin chafetz charles forman george p koo michael leven james l purcell irwin siegel william p weidner current members board directors complaint alleges among things breaches fiduciary duties connection company’s ongoing construction development projects b company’s securing debt equity financing 2008 motion dismiss complaint filed january 2009 behalf directors company january 16 2009 caleb hartmann filed shareholder derivative action “hartmann action” behalf company district court clark county nevada messrs adelson chafetz forman koo las vegas sands corp subsidiaries notes consolidated financial statements continued leven purcell siegel weidner current members board directors complaint raises claims breuer action hartmann action consolidated breuer action february 6 2009 frank fosbre jr filed shareholder derivative action “fosbre action” behalf company district court clark county nevada messrs adelson chafetz forman koo leven purcell siegel weidner andrew heyer former member board directors complaint raises substantially claims breuer action hartmann action fosbre action consolidated breuer action plaintiffs consolidated breuer hartmann fosbre actions advised company file single amended consolidated complaint march 2009 company defendants anticipate bringing motion dismiss complaint china matters state administration foreign exchange china “safe” regulates foreign currency exchange transactions business dealings china safe made inquiries requested obtained documents relating certain payments made company’s whollyowned foreign enterprises “wofes” counterparties vendors china wofes established conduct nongaming marketing activities china create goodwill china macao company’s operations macao company fully cooperating pending inquiries company believe resolution pending inquiries material adverse effect financial condition results operations cash flows macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including sands macao venetian macao four seasons macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2008 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37580 18790 125 respectively exchange rates effect december 31 2008 subject minimum 450 million patacas 56 million exchange rates effect december 31 2008 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2008 company obligated subconcession make minimum future payments approximately 331 million next five years approximately 2812 million thereafter june 2022 amounts expected increase substantially company completes cotai strip properties currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes las vegas sands corp subsidiaries notes consolidated financial statements continued winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed singapore development project august 23 2006 company entered development agreement stb requires company construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement company continuing finalize various design aspects integrated resort process finalizing cost estimates project discussed “ note 8 longterm debt singapore related debt singapore permanent facilities” company entered sgd 544 billion approximately 378 billion exchange rates effect december 31 2008 singapore permanent facility agreement fund significant portion construction operating development costs marina bay sands leases energy services agreements 1997 vcr interface groupnevada inc “interface” others entered separate energy service agreements heating ventilation air conditioning “hvac” provider “hvac provider” terms energy services agreement separate energy services agreements hvac energy services purchased vcr interface others initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods hvac plant constructed land owned company leased hvac provider hvac equipment owned hvac provider paid costs “hvac costs” connection purchase installation hvac equipment total hvac costs 700 million charges payable separate energy services agreements include fixed component applied hvac costs paid hvac provider reimbursement operational related costs management fee subsequent yearend company hvac provider agreed principle extension hvac agreement additional tenyear term december 31 2008 vcr interface obligated energy services agreements make future minimum payments 34 million year ended december 31 2009 expenses incurred energy services agreements 68 million three years ended december 31 2008 operating lease agreements company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2008 company obligated noncancelable operating leases make future minimum lease payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued expenses incurred operating lease agreements totaled 215 million 122 million 83 million years ended december 31 2008 2007 2006 respectively company party operating lease agreements shortterm variablerate nature expenses incurred operating lease agreements totaled 17 million 21 million 15 million years ended december 31 2008 2007 2006 respectively ventures commitments company entered employment agreements seven company’s corporate senior executives remaining terms one four years december 31 2008 company obligated make future payments 69 million 30 million 31 million 11 million years ended december 31 2009 2010 2011 2012 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2008 company obligated agreements make future payments 07 million next four years 06 million fifth year 68 million thereafter january 2008 company entered agreements purchase four ferries aggregate cost 720 million built macao operations december 31 2008 company obligated make future payments 108 million company entered agreements starwood hotels resorts worldwide “starwood” shangrila hotels resorts “shangrila” manage hotels serviced luxury apartment hotel units company’s cotai strip parcels 5 6 starwood brand company’s las vegas condominium project st regis residences connection sales marketing condominium units due recent suspension company’s projects macao las vegas company negotiating standstill agreements starwood expects finalized first quarter 2009 negotiations unsuccessful company obtain similar agreement shangrila starwood shangrila would right terminate agreements company would result company find new managers brands abovedescribed projects measures could material adverse effect company’s financial condition results operations cash flows including requiring company writeoff 200 million investment related st regis residences malls venetian macao four seasons macao company leases mall space venetian macao four seasons macao various retailers leases noncancellable operating leases lease periods vary 6 months 10 years leases include minimum base rents escalated contingent rent clauses december 31 2008 minimum future rentals noncancelable leases follows thousands exchange rates effect december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 21 million 03 million year ended december 31 2008 period ended december 31 2007 described “ note 1 organization business company development financing strategy” company considering sale one malls note 14 stockbased employee compensation company two nonqualified stock option plans 1997 plan 2004 plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2008 2007 las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2008 14370825 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based combination company’s historical volatility historical volatilities selection companies company’s peer group due company’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant las vegas sands corp subsidiaries notes consolidated financial statements continued fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary status company’s 2004 plan year ended december 31 2008 presented restricted stock awards summary status company’s unvested restricted shares year ended december 31 2008 presented december 31 2008 1543 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 27 million unrecognized compensation cost related unvested restricted stock option restricted stock costs expected recognized weighted average period 33 years 15 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity 2004 plan follows three years ended december 31 2008 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheet participation vcr 401k employee savings plan available fulltime employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages years ended december 31 2008 2007 2006 company’s matching contributions savings plan 62 million 50 million 45 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2008 2007 2006 vml’s contributions provident fund 184 million 85 million 49 million respectively note 16 related party transactions company paid approximately 59 million 43 million years ended december 31 2007 2006 respectively travelrelated services travel agent charter tour operator controlled principal stockholder immaterial amount paid travel agent charter tour operator year ended december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued year ended december 31 2008 principal stockholder purchased certain banquet room catering goods services company approximately 10 million goods services purchased years ended december 31 2007 2006 company purchased hotel guest amenities company controlled principal stockholder’s brother total amount paid approximately 10 million 12 million years ended december 31 2007 2006 respectively goods purchased year ended december 31 2008 years ended december 31 2008 2007 2006 company incurred paid certain expenses totaling 64 million 20 million 13 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2008 2007 2006 company charged received principal stockholder 89 million 53 million 33 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes quarter ended december 31 2008 senior vice president company received constructionrelated services one company’s subsidiaries although final value services determined amount material accompanying consolidated financial statements year ended december 31 2008 company sold principal stockholder’s family private placement transaction 4750 million convertible senior notes november 2008 concurrent company’s issuance common stock preferred stock warrants principal stockholder’s family exercised conversion feature convertible senior notes 86363636 shares company’s common stock conversion price 550 per share see “ note 8 longterm debt corporate us related debt convertible senior notes” “ note 9 stockholders’ equity” year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas las vegas macao singapore company reviews results operations key operating segments venetian las vegas includes sands expo center palazzo sands macao venetian macao four seasons macao asia comprised primarily ferry operations company also reviews construction development activities primary projects venetian las vegas palazzo sands macao venetian macao four seasons macao asia comprised ferry operations various operations ancillary company’s properties macao marina bay sands singapore development projects cotai strip parcels 3 5 6 7 8 corporate comprised primarily airplanes st regis residences sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment collectively “las vegas operating properties” considering similar economic characteristics types customers types service products regulatory business environment operations within segment company’s organizational management reporting structure information years ended december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued 2006 reclassified conform current presentation company’s segment information follows december 31 2008 2007 2006 three years ended december 31 2008 thousands 1 adjusted ebitdar net income loss interest income taxes depreciation amortization preopening expense development expense income expense loss early retirement debt loss disposal assets impairment loss rental expense corporate expense stockbased compensation expense included general administrative expense noncontrolling interest adjusted ebitdar used las vegas sands corp subsidiaries notes consolidated financial statements continued management primary measure operating performance company’s properties compare operating performance company’s properties competitors note 18 condensed consolidating financial information lvsc obligor senior notes due 2015 issued february 10 2005 lvsllc vcr mall intermediate holding company llc venetian venture development venetian transport llc venetian marketing inc lido intermediate holding company llc lido casino resort holding company llc collectively “original guarantors” jointly severally guaranteed senior notes full unconditional basis effective may 23 2007 conjunction entering senior secured credit facility lvsc original guarantors trustee entered supplemental indenture related senior notes whereby following subsidiaries added full unconditional guarantors joint several basis interface groupnevada inc palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc collectively original guarantors “guarantor subsidiaries” february 29 2008 capital stock phase ii mall subsidiary llc sold ggp connection therewith released guarantor senior notes described “ note 12 mall sale shoppes palazzo” sale complete accounting perspective due company’s continuing involvement transaction related completion construction remainder shoppes las vegas sands corp subsidiaries notes consolidated financial statements continued palazzo certain activities performed behalf ggp uncertainty final sales price certain assets liabilities operating results cash flows related ownership operation mall phase ii subsidiary llc subsequent sale continue accounted guarantor subsidiaries final sales price determined therefore included “guarantor subsidiaries” columns following condensed consolidating financial information result net assets 1164 million consisting 3606 million fixed assets offset 2442 million liabilities consisting primarily deferred proceeds sale december 31 2008 net loss 78 million consisting primarily depreciation expense year ended december 31 2008 related mall accounted guarantor subsidiaries however balances amounts collateral senior notes considered credit support guarantees senior notes result supplemental indenture related senior notes sale phase ii mall subsidiary llc change group subsidiaries guarantor subsidiaries accordingly company reclassified prior periods conform current presentation guarantor subsidiaries las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2008 2007 three years period ended december 31 2008 follows thousands condensed consolidating balance sheets december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2007 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 four seasons macao venetian macao opened august 28 2008 2007 respectively 2 palazzo partially opened december 30 2007 earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2008 2007 item 9item 8 financial statements supplementary data financial statements report independent registered public accounting firm consolidated balance sheets december 31 2009 2008 consolidated statements operations three years period ended december 31 2009 consolidated statements equity comprehensive income loss three years period ended december 31 2009 consolidated statements cash flows three years period ended december 31 2009 notes consolidated financial statements financial statement schedule ii valuation qualifying accounts financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries december 31 2009 2008 results operations cash flows three years period ended december 31 2009 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2009 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions discussed note 2 consolidated financial statements company changed manner accounts noncontrolling interests 2009 company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 26 2010 las vegas sands corp consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements equity comprehensive income loss accompanying notes integral part condensed consolidated financial statements las vegas sands corp consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 lvsc’s common stock traded new york stock exchange symbol “lvs” november 2009 company’s newly formed subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macau special administrative region “macau” people’s republic china completed initial public offering listing ordinary shares “scl offering” main board stock exchange hong kong limited “sehk” immediately following scl offering several transactions consummated connection offering see “ note 9 equity noncontrolling interests” company owned 703 issued outstanding ordinary shares scl shares scl registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet enclosed retail dining entertainment complex located within venetian las vegas approximately 440000 net leasable square feet “the grand canal shoppes” sold ggp limited partnership “ggp” 2004 enclosed retail dining complex located within palazzo approximately 400000 net leasable square feet “the shoppes palazzo” sold ggp february 2008 see “ note 12 mall sale shoppes palazzo” pennsylvania company process developing sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem also expected home national museum industrial history arts cultural center broadcast home local pbs affiliate company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc may 22 2009 company opened casino component sands bethlehem features 3250 slot machines several food beverage offerings well parking garage surface parking construction activities remaining components include 300room hotel approximate 200000squarefoot retail facility 50000squarefoot multipurpose event center variety additional dining options suspended temporarily intended recommence capital markets general economic conditions improve suspended components able financed december 31 2009 company capitalized construction costs 6286 million project including 316 million outstanding construction payables company expects spend approximately 45 million furniture fixtures equipment “ffe” costs pay outstanding construction payables noted february 2010 company submitted petition pennsylvania gaming control board “pagcb” seeking certificate add table games based revision pennsylvania act 2010 authorized table games approved pagcb company expects spend additional approximately 27 million add table games including 165 million license fee impact suspension estimated overall cost project’s remaining components currently determinable certainty macau company owns operates sands macao first las vegasstyle casino macau sands macao offers approximately 229000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities company also owns operates venetian macao resort hotel “the venetian macao” anchors cotai striptm company’s masterplanned development integrated resort properties macau theme similar venetian las vegas venetian macao includes 39floor luxury hotel 2900 suites approximately 550000 square feet gaming space 15000seat arena retail dining space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet company opened four seasons hotel macao cotai striptm “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” features approximately 70000 square feet gaming space 19 paiza mansions retail space approximately 211000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartments macao cotai striptm “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower expects subsequently monetize units within four seasons apartments various potential methods subject market conditions obtaining relevant government approvals december 31 2009 company capitalized construction costs 105 billion entire project including 280 million outstanding construction payables company expects spend approximately 165 million primarily additional costs complete four seasons apartments including ffe preopening costs additional land premiums pay outstanding construction payables noted development projects given challenging conditions capital markets global economy impact company’s ongoing operations company revised development plan suspend portions development projects focus development efforts projects highest expected rates return invested capital general economic conditions fail improve company unable obtain sufficient funding completion suspended projects probable management decide abandon certain projects portion company’s investment date suspended projects could lost would result impairment charge addition company may subject penalties termination clauses construction contracts termination rights management contracts certain hotel management companies united states development project company constructing st regisbranded highrise residential condominium tower st regis residences venetian palazzo “st regis residences” located las vegas strip palazzo venetian las vegas part revised development plan company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve expects take approximately 18 months thereafter complete construction project december 31 2009 company capitalized construction costs 1848 million project including 48 million outstanding construction payables company expects spend approximately 10 million additional costs pay outstanding construction payables noted impact suspension estimated overall cost project currently determinable certainty macau development projects company submitted plans macau government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres referred parcels 3 5 6 7 8 subject approval macau government developments expected include hotels exhibition conference facilities gaming areas showrooms shopping malls spas restaurants entertainment facilities amenities company commenced construction preconstruction developments plans operate related gaming areas company’s macau gaming subconcession part revised development plan company sequencing construction integrated resort development parcels 5 6 due difficulties capital markets overall decline general economic conditions upon completion phases ii project integrated resort expected feature approximately 6000 hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining facilities exhibition conference facilities multipurpose theater phase project expected include two hotel towers approximately 3700 hotel rooms managed shangrila international hotel management limited “shangrila” shangrila traders brands sheraton international inc sheraton overseas management co collectively “starwood” sheraton brand well completion structural work adjacent hotel tower approximately 2300 rooms managed starwood sheraton brand phase also include gaming space theater partial opening retail exhibition conference facilities total cost complete phase expected approximately 20 billion phase ii project includes completion sheraton hotel tower well remaining retail facilities total cost expected approximately 235 million phase iii project expected include fourth hotel mixeduse tower managed starwood st regis brand total cost expected approximately 450 million connection receiving commitments 175 billion project financing november 2009 company expects close march 2010 used together portion proceeds scl offering company recommencing construction phases ii expects take approximately 16 months complete phase additional six months thereafter complete adjacent sheraton tower phase ii additional 24 months thereafter complete remaining retail facilities phase ii company intends commence construction phase iii project demand market conditions warrant december 31 2009 company capitalized construction costs 173 billion entire project including 1380 million outstanding construction payables company’s management agreements starwood shangrila impose certain construction deadlines opening obligations company certain past andor anticipated delays described may represent default respective agreements would allow starwood shangrila terminate respective agreements see “ note 13 commitments contingencies ventures commitments” company commenced preconstruction parcels 7 8 3 capitalized construction costs 1162 million parcels 7 8 357 million parcel 3 december 31 2009 company intends commence construction integrated resort parcels 5 6 complete necessary government approvals obtained regional global economic conditions improve future demand warrants additional financing obtained impact delayed construction company’s previously estimated cost complete cotai strip developments currently determinable certainty december 31 2009 company capitalized aggregate 582 billion costs cotai strip developments including venetian macao four seasons macao well company’s investments transportation infrastructure including passenger ferry service operations addition commitments project financing company received phases ii parcels 5 6 november 2009 company need arrange additional financing fund balance cotai strip developments assurance company able obtain additional financing required land concessions macau generally initial term 25 years automatic extensions 10 years thereafter accordance macau law company received land concession macau government build parcels 1 2 3 including sites venetian macao parcel 1 four seasons macao parcel 2 located company land sites macau however land concession grants company exclusive use land specified land concession company required pay premiums parcel either payable single lump sum upon acceptance land concession macau government seven semiannual installments provided outstanding balance due upon completion corresponding integrated resort well annual rent term land concession october 2008 macau government amended company’s land concession allow company subdivide parcel 2 four separate units macau’s horizontal property regime consisting retail hotelcasino four seasons apartments parking areas company’s land concession parcel 3 company initially required complete corresponding development august 2011 macau government granted company twoyear extension complete development parcel 3 must completed april 2013 company believes able complete development revised deadline able obtain another extension macau government however assurances given additional extension granted company unable meet april 2013 deadline extended could lose land concession parcel 3 would prohibit company operating facilities developed land concession parcel 3 result company could forfeit substantial portion 357 million capitalized costs december 31 2009 related development parcel 3 november 2009 company received final draft land concession agreement macau government parcels 5 6 company formally accepted terms conditions draft land concession made initial premium payment 7000 million patacas approximately 876 million exchange rates effect december 31 2009 land concession become effective date published macau’s official gazette land concession becomes effective company required make additional land premium annual rent payments amounts times specified land concession see “ note 6 leasehold interests land net” land concession requires company complete development integrated resort parcels 5 6 within 48 months date published macau’s official gazette company able meet deadline need obtain extension complete development parcels 5 6 however assurances given extension granted company unable meet deadline extended company could lose land concession parcels 5 6 would prohibit company operating facilities developed land concession result company could forfeit substantial part 173 billion capitalized costs december 31 2009 related development parcels 5 6 company yet necessary macau government approvals develop planned cotai strip developments parcels 3 5 6 7 8 company received land concession parcel 3 negotiate land concession parcels 7 8 land concession parcels 5 6 previously noted finalized based historical experience macau government respect company’s land concessions sands macao parcels 1 2 3 5 6 management believes land concessions parcels 7 8 granted however company obtain land concessions company could forfeit substantial part 1162 million capitalized costs december 31 2009 related developments parcels 7 8 singapore development project company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered development agreement “development agreement” singapore tourism board “stb” build operate integrated resort called marina bay sands singapore marina bay sands expected include three 55story hotel towers totaling approximately 2600 rooms suites casino enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 13 million square feet theaters landmark iconic structure bayfront promenade contain artscience museum december 31 2009 company capitalized 563 billion singapore dollars “sgd” approximately 401 billion exchange rates effect december 31 2009 costs project including land premium sgd 7453 million approximately 5306 million exchange rates effect december 31 2009 outstanding construction payables company expects spend approximately sgd 32 billion approximately 23 billion exchange rates effect december 31 2009 2011 additional costs complete construction integrated resort ffe preopening costs pay outstanding construction payables noted approximately sgd 26 billion approximately 18 billion exchange rates effect december 31 2009 expected spent 2010 company obtained singaporedenominated financing primarily pays costs singapore dollars exposure foreign exchange gains losses expected minimal based current development plan company expects open marina bay sands april 27 2010 development projects current economic environment access capital improve company may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe development financing strategy december 31 2009 company funded development projects primarily borrowings us macau singapore credit facilities see “ note 8 longterm debt” operating cash flows proceeds recent equity offerings proceeds disposition noncore assets us credit facility ffe facility require company’s las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 65x quarterly period ended december 31 2009 decreases 05x every quarter decreases remains 50x quarterly periods maturity commencing quarterly period ending march 31 2011 macau credit facility amended august 2009 requires company’s macau operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly period ended december 31 2009 decreases 05x every quarter decreases remains 30x quarterly periods maturity commencing quarterly period ending march 31 2011 company elect contribute 50 million 20 million cash hand las vegas macau operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” company unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facilities would trigger crossdefault company’s airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default company’s senior notes default macau credit facility would trigger crossdefault company’s ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance company would able repay refinance amounts may become due payable agreements could force company restructure alter operations debt obligations 2008 company completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering 2009 company completed 6000 million exchangeable bond offering 25 billion scl offering see “ note 8 longterm debt macau related debt exchangeable bonds” “ note 9 equity noncontrolling interests” portion proceeds offerings used us exercise ebitda trueup provision quarterly periods ended march 31 september 30 2009 additional proceeds contributed lvsllc reduce net debt order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2009 proceeds also used macau exercise ebitda trueup provision quarterly period ended june 30 2009 cash hand used pay 1250 million indebtedness macau credit facility march 2009 order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2009 november 2009 connection scl offering company required repay permanently reduce 5000 million borrowings macau credit facility company held unrestricted restricted cash equivalents approximately 496 billion 1186 million respectively december 31 2009 company believes cash hand cash flow operations available borrowings credit facilities sufficient fund revised development plan maintain compliance financial covenants us macau credit facilities normal course activities company continue evaluate capital structure opportunities enhancements thereof additionally connection receiving proceeds proposed 175 billion project financing credit facility company expects close march 2010 used together 5000 million proceeds scl offering company recommencing construction phases ii company’s cotai strip development parcels 5 6 note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary effective january 1 2009 company adopted accounting standards noncontrolling interests reclassified equity attributable noncontrolling interests component equity accompanying consolidated balance sheets significant intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties whereby third parties operate variety restaurants venetian las vegas palazzo due company’s significant investment joint ventures operations restaurants consolidated company accordance revised accounting standards company evaluates investments joint ventures assess appropriateness consolidation company events occurred would trigger analysis december 31 2009 2008 company’s restaurant joint ventures total assets 456 million 560 million respectively total liabilities 343 million 428 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macau receivable offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale company’s continued suspension certain development projects due difficult global economic credit market environment company tested assets impairment december 31 2009 year ended december 31 2009 company recognized impairment loss 1695 million 940 million related shoppes palazzo 572 million related indefinite suspension planned expansion sands expo center 150 million related real estate previously utilized connection marketing activities asia capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2009 2008 2007 company capitalized interest expense 654 million 1312 million 2232 million respectively deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements assets considered qualifying assets purposes capitalizing interest included base used determine capitalized interest indefinite useful life assets indefinite useful lives subject amortization tested impairment annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2009 company 500 million asset related sands bethlehem gaming license determined indefinite useful life recorded within longterm assets accompanying consolidated balance sheets fair value company’s gaming license estimated using company’s expected adjusted property ebitdar defined “note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth methodology discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general impairment charges related asset recorded december 31 2009 adjusted property ebitdar discounted cash flows common measures used value cashincentive businesses casinos determining fair value gaming license judgmental nature requires use significant estimates assumptions including adjusted property ebitdar growth rates discount rates future market conditions among others future changes company’s estimates assumptions based upon unanticipated changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention revenues recognized related service rendered event held minimum rental revenues adjusted contractual base rent escalations included convention retail revenue recognized straightline basis terms related lease accordance industry practice retail value accommodations food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 567 million 482 million 349 million years ended december 31 2009 2008 2007 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income loss comprehensive income loss includes net income loss nonstockholder changes equity comprehensive income elements company’s comprehensive income loss reported accompanying consolidated statements stockholders’ equity comprehensive income loss cumulative balance comprehensive income loss consisted solely foreign currency translation adjustments earnings loss per share weighted average number common equivalent shares used calculation basic diluted earnings loss per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed periodically based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring unused tax planning alternatives company’s us operations cumulative loss position threeyear period ended december 31 2009 purposes assessing realization us deferred tax assets company considered scheduled reversal deferred tax liabilities sources taxable income tax planning strategies based related accounting standards company’s cumulative loss position caused management conclude likely us deferred tax assets fully realized company recorded valuation allowance net deferred tax assets company’s us operations valuation allowance 969 million december 31 2009 management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results us operations improve becomes likely deferred tax assets realizable company able reduce valuation allowance earnings significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes tax indemnification connection conversion lvsllc subchapter corporation taxable c corporation income tax purposes 2004 lvsllc entered indemnification agreement pursuant agreed • indemnify company’s stockholders las vegas sands inc prior 2004 initial public offering certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands inc respect taxable periods las vegas sands inc subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface group holding company inc respect taxable periods subchapter corporation income tax purposes accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements september 2006 fasb issued authoritative guidance fair value measurements defines fair value establishes framework measuring fair value expands disclosures fair value measurements applies authoritative guidance require permit fair value measurement however require new fair value measurements guidance effective financial statements issued fiscal years beginning november 15 2007 interim periods within fiscal years january 2008 fasb deferred effective date one year certain nonfinancial assets nonfinancial liabilities except recognized disclosed fair value financial statements recurring basis least annually adoption guidance material effect company’s financial condition results operations cash flows see “ note 11 fair value measurements” required disclosure december 2007 fasb issued revised authoritative guidance business combinations requires acquirer recognize identifiable assets acquired liabilities assumed noncontrolling interest acquiree acquisition date measured fair values date limited exceptions guidance applies prospectively business combinations acquisition date beginning first annual reporting period beginning december 15 2008 application guidance material effect company’s financial condition results operations cash flows december 2007 fasb issued authoritative guidance noncontrolling interests establishes accounting reporting standards noncontrolling interest subsidiary deconsolidation subsidiary specifically guidance requires recognition noncontrolling interest previously referred minority interest equity consolidated financial statements separate parent’s equity amount net income loss attributable noncontrolling interest included consolidated net income face income statement guidance clarifies changes parent’s ownership interest subsidiary result deconsolidation equity transactions parent retains controlling financial interest addition guidance requires parent recognize gain loss net income subsidiary deconsolidated requires expanded disclosures regarding interests parent interests noncontrolling owners guidance effective fiscal years interim periods within fiscal years beginning december 15 2008 required upon application guidance prior period noncontrolling interests amounts reclassified conform current period presentation however amounts changed march 2008 fasb issued authoritative guidance derivative hedging activities requires enhanced disclosures entity’s derivative hedging activities thereby improving transparency financial reporting objective guidance provide users financial statements enhanced understanding entity uses derivative instruments derivative instruments related hedged items accounted derivative instruments related hedged items affect entity’s financial position financial performance cash flows guidance also requires several additional quantitative disclosures financial statements guidance effective financial statements issued fiscal years interim periods beginning november 15 2008 application guidance material effect company’s financial condition results operations cash flows april 2008 fasb supplemented authoritative guidance intangible assets amends factors considered developing renewal extension assumptions used determine useful life recognized intangible asset previously issued guidance intent guidance improve consistency useful life recognized intangible asset previously issued guidance period expected cash flows used measure fair value asset new guidance effective fiscal years interim periods within fiscal years beginning december 15 2008 application guidance effect company’s financial condition results operations cash flows may 2009 fasb issued authoritative guidance subsequent events establishes general standards accounting disclosure events occur balance sheet date financial statements issued available issued guidance effective interim reporting periods ending june 15 2009 application guidance material effect company’s financial condition result operations cash flows see “ subsequent events” required disclosures june 2009 fasb issued authoritative guidance vie’s changes approach determining primary beneficiary vie requires companies frequently assess whether must consolidate vies guidance effective annual reporting periods beginning november 15 2009 company expect application guidance material effect company’s financial condition results operations cash flows note 3 restricted cash required company’s singapore credit facility entered december 2007 see “ note 8 longterm debt singapore related debt singapore credit facility” proceeds available credit facility deposited accounts invested cash equivalents pledged security trustee benefit singapore credit facility lenders restricted cash amount used fund construction operating development costs marina bay sands accordance terms specified singapore credit facility accounts subject security interest favor lenders singapore credit facility december 31 2009 2008 restricted cash balance 883 million 619 million respectively required company’s macau credit facility entered may 2006 see “ note 8 longterm debt macau related debt macau credit facility” certain loan proceeds made available facility certain cash flows generated company’s existing macau operations deposited restricted accounts invested cash equivalents pledged collateral agent security favor lenders macau credit facility restricted cash amount used fund ongoing construction four seasons macao company’s cotai strip project costs accordance terms specified macau credit facility well fund interest principal payments due macau credit facility december 31 2009 2008 cash balances restricted accounts 172 million 1241 million respectively restricted cash also includes 131 million 88 million december 31 2009 2008 respectively related items restricted cash balances classified current primarily equivalent related construction payables also classified current note 4 accounts receivable net accounts receivable consists following thousands note 5 property equipment net property equipment consists following thousands construction progress consists following thousands december 31 2009 company received proceeds 2954 million sale shoppes palazzo see “ note 12 mall sale shoppes palazzo” however final purchase price determined accordance agreement venetian casino resort llc “vcr” ggp based net operating income “noi” shoppes palazzo calculated 30 months closing date sale defined agreement subject certain later audit adjustments april 2009 ggp subsidiary owns shoppes palazzo filed voluntary petitions chapter 11 us bankruptcy code “chapter 11 cases” additionally given economic market conditions facing retailers national local level tenants facing economic challenges effected may effect future calculation noi year ended december 31 2009 company learned one tenant filed voluntary petition relief chapter 7 us bankruptcy code another tenant delayed construction plans creating question whether rent latter tenant included noi calculation tenants leased significant space shoppes palazzo management adjusted projection ultimate proceeds company receive amount costs incurred construct develop shoppes palazzo based upon estimates noi capitalization rates company recognized impairment loss 940 million year ended december 31 2009 approximately 2911 million property equipment net 202 million accumulated depreciation sold ggp included consolidated balance sheet december 31 2009 company continue review chapter 11 cases projected financial performance tenants included noi calculation adjust estimates noi capitalization rates additional information received company may required record impairment charges future depending changes projections based ggp’s current financial condition assurance ggp make future periodic payments 1985 million construction progress consists primarily construction st regis residences projects las vegas venetian macao year ended december 31 2009 company recognized impairment loss 572 million 150 million capitalized costs included construction progress related indefinite suspension planned expansion sands expo center certain real estate previously utilized connection marketing activities asia respectively cost accumulated depreciation property equipment company leasing tenants part macau mall operations 3857 million 479 million respectively december 31 2009 cost accumulated depreciation property equipment company leasing tenants part macau mall operations 2720 million 203 million respectively december 31 2008 cost accumulated depreciation property equipment company leasing capital lease arrangement 256 million 09 million respectively december 31 2009 described “ note 1 organization business company development projects” company revised development plan suspend portions development projects given conditions capital markets global economy impact company’s ongoing operations circumstances change company may required record impairment charge related developments future note 6 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land marina bay sands macao parcels cotai strip straightline basis expected term leases approximately 147 million 11 million 186 million respectively annually exchange rates effect december 31 2009 year ended december 31 2009 company made payments 1008 million patacas 1132 million patacas approximately 126 million 142 million respectively exchange rates effect december 31 2009 partial payments land premium parcels 2 3 respectively construction still progress parcels 2 3 balance either due upon completion integrated resorts parcels four seasons apartments expected completed 2010 payable remaining two seven equal semiannual payments bearing interest 50 per annum november 2009 company made initial payment 7000 million patacas approximately 876 million exchange rates effect december 31 2009 upon formal acceptance final draft land concession agreement parcels 5 6 macau government remaining land premium payments aggregating total 117 billion patacas approximately 1465 million exchange rates effect december 31 2009 accrue interest rate 5 per annum payable seven semiannual installments amount 1843 million patacas approximately 231 million exchange rates effect december 31 2009 first installment payment due six month anniversary date land concession becomes effective date land concession published macau’s official gazette currently expected occur first quarter 2010 addition land premium payments macau leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macau government december 31 2009 company obligated land concessions make future premium rental payments follows thousands note 7 accrued liabilities accrued liabilities consist following thousands note 8 longterm debt longterm debt consists following thousands corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” consists 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” april 15 2009 company amended senior secured credit facility allow company repurchase 8000 million aggregate stated principal amount term loans prior september 30 2010 amendment provides term loans purchased company shall immediately forgiven cancelled december 31 2009 company fully drawn delayed draw ii facilities 1153 million available borrowing capacity revolving facility net outstanding letters credit undrawn amounts committed funded lehman brothers commercial paper inc senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially lvsllc’s guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets term b facility delayed draw facility mature may 23 2014 term b facility subject quarterly amortization payments 75 million began september 30 2007 followed balloon payment 280 billion due may 23 2014 delayed draw facility subject quarterly amortization payments 15 million began september 30 2008 followed balloon payment 5655 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 10 million began march 31 2009 followed balloon payment 3830 million due may 23 2013 revolving facility matures may 23 2012 interim amortization payments borrowings senior secured credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively set 18 20 december 31 2009 respectively spreads reduced 025 per annum company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions spread revolving facility reduced 025 per annum company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 21 52 years ended december 31 2009 2008 respectively company pays commitment fee 0375 per annum undrawn amounts revolving facility reduced 0125 per annum certain ratings achieved subject certain additional conditions company also paid commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw ii facilities respectively company entered interest rate cap agreement august 2007 notional amount 164 billion expired may 31 2009 provisions interest rate cap agreement entitled company receive counterparty amounts selected market interest rate exceeded strike rate 675 net effect interest expense result interest rate cap agreement years ended december 31 2009 2008 2007 senior secured credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets senior secured credit facility also requires guarantors comply financial covenants including limited minimum ratios adjusted ebitda interest expense maximum ratios net debt outstanding adjusted ebitda senior secured credit facility also contains conditions events default customary financings see “ note 1 organization business company development financing strategy” discussion december 31 2009 approximately 501 billion net assets lvsllc restricted distributed terms senior secured credit facility portion proceeds term b facility used refinance prior senior secured credit facility repay construction loan related shoppes palazzo sands expo center mortgage loan pay certain construction development related expenses incurred connection palazzo fees expenses related senior secured credit facility company incurred charge approximately 107 million loss early retirement debt year ended december 31 2007 result refinancing facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 original issue discount 23 million net proceeds offering costs original issue discount 2448 million june 2005 senior notes exchanged substantially similar senior notes “senior notes” registered federal securities laws senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes senior obligations lvsc connection entering senior secured credit facility senior notes jointly severally guaranteed certain lvsc’s domestic subsidiaries including lvsllc venetian casino resort llc “vcr” collateralized equal ratable basis obligations senior secured credit facility assets lvsllc guarantors indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets ffe facility december 2006 certain company’s subsidiaries including lvsllc vcr entered ffe credit facility agreement group lenders general electric capital corporation administrative agent provide 1429 million finance refinance acquisition certain ffe located venetian las vegas palazzo facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties facility entered amended restated ffe credit guarantee agreement “ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan previous facility conformed affirmative negative covenants events default set forth senior secured credit facility december 31 2009 company fully drawn delayed draw term loan ffe facility collateralized ffe financed andor refinanced proceeds ffe facility guaranteed guarantors senior secured credit facility delayed draw term loan matures june 2011 july 1 2008 company required begin make quarterly installment principal payments 84 million amount equal 50 aggregate principal amount delayed draw term loan outstanding july 1 2008 remainder due four equal quarterly installments ending maturity date ffe facility also requires company make mandatory prepayments delayed draw term loan certain specified circumstances borrowings ffe facility bear interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate set 23 december 31 2009 applicable margins may reduced 025 per annum certain circumstances similar set forth senior secured credit facility company also paid commitment fee 050 per annum undrawn amount term delayed draw loan weighted average interest rate ffe facility 24 55 years ended december 31 2009 2008 respectively airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes ten year maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 18 december 31 2009 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 25 48 years ended december 31 2009 2008 respectively april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes ten year maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 15 december 31 2009 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 22 49 years ended december 31 2009 2008 respectively hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception convertible senior notes september 2008 company sold principal stockholder’s family private placement transaction 4750 million 65 convertible senior notes due 2013 “convertible senior notes” convertible senior notes subject quarterly interest payments commencing january 1 2009 would mature october 1 2013 unless earlier converted repurchased company initial conversion rate 20141 shares common stock per 1000 principal amount equivalent conversion price approximately 4965 per share common stock subject adjustment certain circumstances following fundamental change defined agreement occurs prior maturity date company would required make offer purchase convertible senior notes principal stockholder’s family granted preemptive rights respect future proposed issuance sale company equity interests including convertible exchangeable securities pursuant would able purchase portion offered equity interests based fully diluted common stock ownership company november 2008 concurrent company’s issuance common preferred stock warrants see “ note 9 equity” convertible senior notes retired conversion feature utilized acquire 86363636 shares company’s common stock conversion price 550 per share conversion rate approximately 181818 shares per 1000 principal amount result company incurred charge approximately 51 million loss early retirement notes december 31 2008 additionally company paid interest principal stockholder’s family 37 million period convertible senior notes outstanding macau related debt macau credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “macau credit facility” macau credit facility originally consisted 12 billion funded term b loan “macau term b facility” 7000 million delayed draw term b loan “macau term b delayed draw facility” 1000 million funded local currency term loan “macau local term facility” 5000 million revolving credit facility “macau revolving facility” march 2007 macau credit facility amended expand use proceeds remove certain restrictive covenants april 2007 lenders macau credit facility approved reduction interest rate margin classes loans 50 basis points borrower exercised rights macau credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded macau term b facility 6000 million macau revolving facility 2000 million total macau credit facility 33 billion august 12 2009 macau credit facility amended among things allow scl offering modify certain financial covenants definitions including increasing maximum leverage ratio quarterly periods end 2010 see “ note 1 organization business company development financing strategy” part amendment credit spread increased 325 basis points borrowings bearing interest company’s option either adjusted eurodollar rate case local term loan adjusted hong kong interbank offered rate “hibor” alternate base rate plus spread 55 per annum 45 per annum respectively november 2009 connection scl offering company required repay permanently reduce 5000 million term loan revolving borrowings pro rata basis macau credit facility conjunction 5000 million repayment credit spread reduced 100 basis points set 46 macau local term facility 48 remainder macau credit facility december 31 2009 result repayment august amendment company recorded charge 61 million year ended december 31 2009 loss modification early retirement debt credit spreads macau local term facility macau revolving facility subject downward adjustments certain consolidated leverage ratios achieved december 31 2009 company 1204 million available borrowing capacity macau revolving facility net outstanding letters credit undrawn amounts committed funded lehman brothers commercial paper inc indebtedness macau credit facility guaranteed vml venetian cotai limited certain company’s foreign subsidiaries “macau guarantors” obligations macau credit facility guarantees macau guarantors collateralized firstpriority security interest substantially borrower’s macau guarantors’ assets 1 capital stock borrower macau guarantors 2 assets secure permitted furniture fixtures equipment financings 3 vml’s gaming subconcession contract 4 certain excluded assets macau revolving facility macau local term facility mature may 25 2011 macau term b delayed draw facility macau term b facility mature may 25 2012 2013 respectively macau term b delayed draw macau term b facility subject nominal quarterly amortization payments 18 million 45 million respectively first five six years respectively commenced june 2009 remainder loans payable four equal quarterly installments last year immediately preceding maturity dates macau local term facility subject quarterly amortization payments 63 million commenced june 2009 remainder loan payable four equal quarterly installments last year immediately preceding maturity date macau revolving facility interim amortization payments borrower also pays standby commitment fee 05 per annum undrawn amounts macau revolving facility years ended december 31 2009 2008 weighted average interest rates macau local term facility 36 51 respectively weighted average interest rates remainder macau credit facility 39 58 respectively meet requirements macau credit facility company entered four interest rate cap agreements september 2006 may 2007 october 2007 september 2008 notional amounts 10 billion 3250 million 1650 million 1600 million respectively expired september 21 2009 provisions interest rate cap agreements entitled company receive counterparties amounts selected market interest rates exceed strike rate 675 company entered additional interest rate cap agreement september 2009 notional amount 159 billion expires september 2012 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 95 net effect interest expense result interest rate cap agreements years ended december 31 2009 2008 2007 macau credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets macau credit facility also requires borrower macau guarantors comply financial covenants including limited generating minimum adjusted ebitda period time thereafter ratios adjusted ebitda interest expense total indebtedness adjusted ebitda well maximum annual capital expenditures macau credit facility also contains events default customary financings see “ note 1 organization business company development financing strategy” discussion ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1559 million exchange rates effect december 31 2009 secured credit facility available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date progress payments made ferries finance completion remaining ferries facility collateralized ferries guaranteed vml july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 724 million exchange rates effect december 31 2009 company fully drawn december 31 2009 proceeds supplemental facility used reimburse company cash spent date progress payments made four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml august 20 2009 ferry financing facility amended among things allow scl offering remove requirement comply financial covenants facility amended matures december 2015 subject 26 quarterly payments hkd 681 million approximately 88 million exchange rates effect december 31 2009 commenced october 2009 part amendment credit spread increased 50 basis points 25 per annum borrowings made hong kong dollars accruing interest hibor set 26 december 31 2009 25 per annum borrowings made us dollars accruing interest libor borrowings facility fully drawn december 31 2009 made hong kong dollars weighted average interest rate facility 24 47 years ended december 31 2009 2008 respectively exchangeable bonds september 2009 company completed 6000 million exchangeable bond offering due 2014 “exchangeable bonds” exchangeable bonds subject semiannual interest payments commencing march 2010 would mature september 2014 unless earlier redeemed exchanged purchased cancelled exchangeable bonds redeemable option company together accrued unpaid interest date redemption time beginning 30 days closing date ending day prior maturity date exchangeable bonds redeemed option company would required issue warrants “bond warrants” bondholders purchase number common shares bondholders would otherwise entitled receive upon mandatory automatic exchange exchangeable bonds upon offering addition bondholder could period less 30 days 60 days prior september 4 2012 required company redeem portion exchangeable bonds held bondholder 100 principal amount exchangeable bonds together accrued unpaid interest date redemption provided bondholders exercised redemption right would entitled bond warrants connection redemption november 2009 concurrent scl offering see “ note 9 equity noncontrolling interests” exchangeable bonds mandatorily automatically exchanged 497865084 ordinary shares scl company incurred charge approximately 171 million loss early retirement debt year ended december 31 2009 result exchanging bonds singapore related debt mbs entered singapore bridge facility august 2006 pay land premium stb development agreement commence construction marina bay sands facility would mature august 2008 company entered singapore credit facility december 2007 upon closing january 2008 portion borrowings singapore credit facility well contributions made company mbs used repay outstanding balances singapore bridge facility pay fees costs expenses related entering singapore credit facility agreement company incurred charge approximately 40 million loss early retirement debt year ended december 31 2008 result refinancing singapore bridge facility singapore credit facility december 2007 mbs signed credit facility agreement “singapore credit facility” providing sgd 20 billion approximately 142 billion exchange rates effect december 31 2009 term loan “singapore credit facility a” funded january 2008 sgd 275 billion approximately 196 billion exchange rates effect december 31 2009 term loan “singapore credit facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1371 million exchange rates effect december 31 2009 banker’s guarantee facility “singapore credit facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 3560 million exchange rates effect december 31 2009 revolving credit facility “singapore credit facility d” available february 28 2015 december 31 2009 company sgd 8672 million approximately 6174 million exchange rates effect december 31 2009 available borrowing net outstanding banker’s guarantees undrawn amounts committed funded lehman brothers finance asia pte ltd singapore credit facility indebtedness singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets singapore credit facility matures march 31 2015 mbs required repay prepay singapore credit facility certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore credit facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 890 million exchange rates effect december 31 2009 per quarter addition commencing end third full quarter operations marina bay sands mbs required prepay outstanding singapore credit facility b loans pro rata basis percentage excess free cash flow defined singapore credit facility borrowings singapore credit facility bear interest singapore swap offered rate “sor” plus spread 225 per annum set 28 29 december 31 2009 mbs pays standby interest fee 1125 per annum 090 per annum undrawn amounts singapore credit facility b facility respectively mbs pays commission 225 per annum bankers’ guarantees outstanding singapore credit facility period banker’s guarantees outstanding weighted average interest rate singapore credit facility 28 37 years ended december 31 2009 2008 respectively meet requirements singapore credit facility company entered nine interest rate cap agreements 2008 combined notional amount 141 billion threeyear terms expire june december 2011 2009 company entered fourteen additional interest rate cap agreements combined notional amount 8500 million threeyear terms expire march december 2012 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 40 50 stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2009 2008 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities singapore credit facility also requires mbs comply financial covenants end first full quarter beginning less 183 days commencement operations marina bay sands including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense minimum adjusted ebitda requirements positive net worth requirement singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt hvac equipment lease obligation follows thousands scheduled maturities longterm debt hvac equipment lease obligation maturities longterm debt excluding discounts hvac equipment lease obligation outstanding december 31 2009 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2009 approximately 966 billion compared carrying value 110 billion december 31 2008 estimated fair value company’s longterm debt approximately 631 billion compared carrying value 1047 billion estimated fair value company’s longterm debt based quoted market prices available pricing models based value related cash flows discounted current market interest rates note 9 equity common stock november 2008 company issued public offering 200000000 shares common stock 550 per share received gross proceeds 110 billion 105 billion net transaction costs concurrent issuance principal stockholder’s family converted 4750 million convertible senior notes 86363636 shares company’s common stock preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit preferred stock redeemable november 15 2011 company’s option whole part redemption price equal sum 110 per share accrued unpaid dividends minimum number shares preferred stock may redeemed time lesser 1000000 shares preferred stock ii number shares preferred stock outstanding holders preferred stock rights exchange convert shares securities holders preferred stock preemptive rights voting rights except required applicable nevada laws certain circumstances holders preferred stock right require company redeem shares preferred stock except described preferred stock ranks payment dividends distributions assets upon dissolution liquidation winding • junior company’s existing future debt obligations • junior class series company’s capital stock terms provide class series rank senior preferred stock • senior company’s common stock class series capital stock terms provide class series ranks junior preferred stock either payment dividends andor distribution assets liquidation dissolution winding company • parity class series company’s capital stock terms provide class series rank equally preferred stock payment dividends distribution assets liquidation dissolution winding company nevada law company may declare pay dividends preferred stock extent total assets exceed total liabilities long company able pay debts become due usual course business declared company’s board directors holders preferred stock entitled receive cumulative cash dividends quarterly february 15 may 15 august 15 november 15 began february 15 2009 preferred stock issued public 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively year ended december 31 2009 holders preferred stock exercised 1106301 warrants purchase aggregate 18438384 shares company’s common stock 600 per share tendered 1106301 shares preferred stock settlement warrant exercise price preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity accompanying consolidated balance sheet principal stockholder family greater 50 ownership company therefore potential ability require company redeem preferred stock beginning november 15 2011 preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years december 31 2009 2008 69 million accumulated undeclared dividends recorded summary company’s preferred stock issued principal stockholder’s family years ended december 31 2009 2008 presented thousands except number shares preferred stock dividends preferred stock dividend activity follows thousands rollfoward shares common stock preferred stock issued public summary outstanding shares common stock preferred stock issued public follows noncontrolling interests november 2009 company completed scl offering wherein company’s newly formed subsidiary scl direct indirect owner operator majority company’s macau operations including sands macao venetian macao four seasons macao ferry operations developer remaining cotai strip integrated resorts listed ordinary shares main board sehk scl offering sold 1270000000 ordinary shares public received gross proceeds 170 billion 163 billion net transaction costs concurrent scl offering company’s subsidiary scl’s direct parent venetian venture development intermediate ii “vvdi ii” sold 600000000 ordinary shares scl public received gross proceeds 8036 million 7604 million net transaction costs connection scl offering company mandatorily automatically exchanged 6000 million exchangeable bonds 497865084 ordinary shares scl issued 22185115 ordinary shares scl settle obligation company see “ note 13 commitments contingencies litigation related macau operations” immediately following completion transactions company owned 703 issued outstanding ordinary shares scl ordinary shares scl registered securities act 1933 amended may offered sold united states absent registration securities act 1933 amended applicable exception registration requirements note 10 income taxes consolidated income loss taxes noncontrolling interests domestic foreign operations follows thousands components benefit expense income taxes follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows company received 5year income tax exemption macau exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2013 company required pay income taxes macau consolidated net income loss attributable las vegas sands corp would reduced 800 million 464 million 439 million diluted earnings per share would reduced 012 per share years ended december 31 2009 2008 2007 respectively primary tax affected components company’s net deferred tax assets follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2009 company windfall tax benefits 49 million included us net operating loss carryforward reflected deferred tax assets operating loss carryforward company’s us operations 3555 million year ended december 31 2009 begin expire 2028 valuation allowance 969 million december 31 2009 provided us net operating loss carryforwards us deferred tax assets company believes assets meet “more likely not” criteria recognition company’s general business credits 25 million 06 million years ended december 31 2009 2008 respectively begin expire 2024 operating loss carryforwards company’s foreign subsidiaries 13 billion 6437 million years ended december 31 2009 2008 respectively begin expire 2010 valuation allowances 1831 million 928 million december 31 2009 2008 respectively provided foreign net operating loss carryforwards foreign deferred tax assets company believes assets meet “more likely not” criteria recognition company recorded income tax benefit result recently enacted worker homeownership business assistance act 2009 act allows businesses net operating losses incurred either 2008 2009 elect carry back losses five years also suspends limits utilization alternative minimum tax net operating losses years benefit resulted reversal company’s valuation allowance deferred tax asset alternative minimum tax credits monetized new law result act company expects refund 90 million company continues provide valuation allowance us deferred tax assets undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans would required record significant amount deferred tax liabilities years ended december 31 2009 2008 amount undistributed earnings foreign subsidiaries company intend repatriate 8588 million 8409 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions company adopted accounting standards uncertainty income tax january 1 2007 reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2009 unrecognized tax benefits 172 million recorded reductions us net operating loss deferred tax asset december 31 2009 2008 2007 unrecognized tax benefits 489 million 323 million 150 million respectively recorded longterm liabilities included balance december 31 2009 2008 2007 290 million 141 million 98 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macau singapore company examination years 2004 us subject examination years 2004 macau singapore company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations company zero interest approximately 07 million interest accrued december 31 2009 2008 respectively penalties accrued december 31 2009 2008 company expect significant increase decrease unrecognized tax benefits next twelve months note 11 fair value measurements accounting standards define fair value exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date standards also establish valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 company 24 interest rate cap agreements aggregate fair value approximately 25 million based quoted market values institutions holding agreements december 31 2009 note 12 mall sale grand canal shoppes venetian las vegas april 2004 company entered agreement sell grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen spaces casino level currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2009 2008 2007 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease blue man group theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases 35 million deferred item amortized years ended december 31 2009 2008 2007 included offset convention retail expense december 31 2009 company obligated ii iii iv make future payments follows thousands shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open construction certain portions mall yet completed company contracted sell shoppes palazzo ggp pursuant purchase sale agreement april 2004 amended “amended agreement” total purchase price paid ggp shoppes palazzo determined taking shoppes palazzo’s net operating income defined amended agreement months 19 30 operations assuming rent periodic payments due tenants month 30 actually due months 19 30 provided 12month period delayed certain conditions satisfied divided capitalization rate capitalization rate 006 every dollar net operating income 380 million 008 every dollar net operating income 380 million closing date sale february 29 2008 ggp made initial purchase price payment 2908 million based projected net operating income first 12 months operations taking account tenants open business paying rent february 29 2008 pursuant amended agreement periodic adjustments purchase price never less 2500 million made based projected net operating income upcoming 12 months subject adjustments certain audit issues final adjustment purchase price made 30month anniversary closing date later certain conditions satisfied based previously described formula purchase price purchase price adjustment calculations noi calculated using “accrual” method accounting pursuant amended agreement company received additional 46 million june 2008 representing adjustment payment fourth month closing year ended december 31 2009 company ggp agreed suspend scheduled purchase price adjustments subsequent june 2008 payment march 2010 see “ note 5 property equipment net” regarding 940 million impairment charge recognized year ended december 31 2009 related assets amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level palazzo currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces generally accepted accounting principles palazzo master lease qualify sale real property real property separately legally demised accordingly 418 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term additional 70 million total proceeds mall sale transaction deferred unearned revenues december 31 2009 balance increase additional purchase price proceeds received addition company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2009 company obligated make future payments approximately 08 million annually five years ended december 31 2014 32 million thereafter generally accepted accounting principles gain sale recorded company continuing involvement transaction related completion construction remainder shoppes palazzo certain activities performed behalf ggp uncertainty final sales price determined 2010 previously described therefore 2439 million mall sale transaction recorded deferred proceeds sale december 31 2009 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp property sold ggp remain assets company depreciation continuing recorded final sales price determination made note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows palazzo construction litigation lido casino resort llc “lido” formerly wholly owned subsidiary company merged vcr construction manager taylor international corp one side malcolm drilling company inc “malcolm” contractor palazzo project responsible completing certain foundation work filed claims action filed 2006 clark county district court april 24 2009 company reached settlement matter malcolm approximately 106 million paid may 2009 106 million 99 million capitalized buildingrelated construction costs 07 million recorded interest expense year ended december 31 2009 company expect incur charges connection matter litigation relating macau operations october 15 2004 richard suen round square company limited filed action lvsc lvsi sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macau resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court appeal fully briefed parties company believes valid bases law fact overturn appeal verdict result company believes likelihood amount judgment affirmed probable accordingly amount loss cannot reasonably estimated time company believes potential loss probable estimable recorded reserves contingencies related legal matter event company’s assumptions used evaluate matter neither probable estimable change future periods required record liability adverse outcome may include post judgment interest january 26 2006 clive basset jones darryl steven turok aka dax turok cheong jose vai chi aka cliff cheong filed action lvsc lvsllc venetian venture development llc “venetian venture development” various unspecified individuals companies district court clark county nevada plaintiffs assert breach agreement pay success fee amount equal 5 ownership interest entity owns operates macau gaming subconcession well related claims june 3 2009 company reached settlement matter 425 million 125 million paid june 2009 remaining 300 million settled 22185115 ordinary shares scl connection scl offering november 2009 charge recorded corporate expense company expect incur charges connection matter february 5 2007 asian american entertainment corporation limited “aaec” filed action lvsi vcr venetian venture development william p weidner david friedman united states district court district nevada “district court” plaintiffs assert breach contract lvsi vcr venetian venture development agreement aaec would work obtain gaming license macau successful aaec would jointly operate casino hotel related facilities macau venetian venture development venetian venture development would receive fees minority equity interest venture ii breach fiduciary duties defendants plaintiffs requested unspecified amount actual compensatory punitive damages disgorgement profits related company’s macau gaming license company filed motion dismiss july 11 2007 august 1 2007 district court granted defendants’ motion dismiss complaint defendants without prejudice plaintiffs appealed decision subsequently ninth circuit court appeals “circuit court” decided aaec barred asserting claims written agreement breached prior expiration january 15 2002 circuit court remanded case back district court proceedings issue discovery recently begun plaintiffs’ counsel filed motion withdraw representing plaintiffs december 15 2009 granted magistrate january 12 2010 february 11 2010 magistrate filed recommendation case dismissed court docket plaintiffs february 28 2010 file objections thereto none filed recommendation dismissal come district court consideration management believes aaec’s case company without merit intends defend matter vigorously january 2008 hong kong ferry operator norte oeste expresso ltd “northwest express” filed administrative action challenging order chief executive macau government respect macau government’s entry agreement cfcl defined related operation ferry service hong kong taipa administrative action named company’s indirect wholly owned subsidiary cotai ferry company limited “cfcl” previously named cotai waterjets macau limited interested party basis legal challenge macau law concessions agreements related provision public service must awarded public tender process february 2009 court second instance macau held unlawful macau government enter ferry agreement cfcl without engaging public tender process therefore ferry agreement cfcl void company macau government appealed decision court final appeal macau december 30 2009 macau government cfcl entered agreement terminate agreement operation ferry service hong kong taipa macau subject condition precedent license operate ferry services issued cfcl new legislation recently enacted macau government related ferry service operations macau license operation ferry services cfcl approval operate six routes macau hong kong valid period ten years issued january 14 2010 therefore termination ferry agreement challenged macau courts effective date result new ferry operator license granted cfcl termination ferry agreement entered macau government effective macau court final instance dismissed administrative action effective february 22 2010 matter closed october 16 2009 company received letter counsel far east consortium international ltd “fec” notifying company may pursue various claims seeking among things monetary damages entitlement ownership interest development projects parcel 3 macau company operate company believes claims based nonlegally binding memorandum agreement expired terms three years ago frivolous baseless without merit company intends vigorously contest claims lawsuits may brought fec stockholder derivative litigation november 26 2008 january 16 2009 february 6 2009 various plaintiffs filed shareholder derivative actions behalf company district court clark county nevada sheldon g adelson irwin chafetz charles forman george p koo michael leven james l purcell irwin siegel william p weidner andrew heyer current former members board directors time suits filed complaints alleged among things breaches fiduciary duties connection company’s ongoing construction development projects ii company’s securing debt equity financing 2008 motion dismiss consolidated amended complaint filed april 17 2009 motion responses replies thereto filed argued august 27 2009 district court clark county entered decision order november 4 2009 dismissing plaintiff’s consolidated amended complaint prejudice district court’s order appealed within time allotted consequence court’s decision binding final china matters state administration foreign exchange china “safe” regulates foreign currency exchange transactions business dealings china safe made inquiries requested obtained documents relating certain payments made company’s wholly foreignowned enterprises “wfoes” counterparties vendors china wfoes established conduct nongaming marketing activities china create goodwill china macau company’s operations macau company fully cooperating pending inquiries company believe resolution pending inquiries material adverse effect financial condition results operations cash flows macau concession subconcession june 26 2002 macau government granted concession operate casinos macau june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macau hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macau government allows vml develop operate casino projects including sands macao venetian macao plaza casino four seasons macao separately galaxy beginning december 26 2017 macau government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macau government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2009 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37559 18780 125 respectively exchange rates effect december 31 2009 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2009 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macau government portion must used promotion tourism macau based number types gaming tables employed gaming machines operation december 31 2009 company obligated subconcession make minimum future payments approximately 324 million next five years approximately 2427 million thereafter amounts expected increase substantially company completes cotai strip properties currently gaming tax macau calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macau unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macau may able realize full benefits extending credit customers although proposals revise gaming tax laws macau assurance laws changed singapore development project august 23 2006 company entered development agreement stb requires company construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement discussed “ note 8 longterm debt singapore related debt singapore credit facility” company entered sgd 544 billion approximately 387 billion exchange rates effect december 31 2009 singapore credit facility fund significant portion construction operating development costs marina bay sands operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2009 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements totaled 189 million 215 million 122 million years ended december 31 2009 2008 2007 respectively company party operating lease agreements shortterm variablerate nature expenses incurred operating lease agreements totaled 47 million 17 million 21 million years ended december 31 2009 2008 2007 respectively ventures commitments company entered employment agreements eight corporate senior executives remaining terms one three years december 31 2009 company obligated make future payments 94 million 70 million 22 million years ended december 31 2010 2011 2012 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2009 company obligated agreements make future payments approximately 06 million next five years 64 million thereafter company entered agreements starwood shangrila manage hotels serviced luxury aparthotel units company’s cotai strip parcels 5 6 starwood brand st regis residences connection sales marketing condominium units management agreements starwood shangrila impose certain construction opening obligations deadlines company certain past andor anticipated delays may represent default agreements would allow starwood shangrila terminate respective agreements connection receiving commitments project financing well completing scl offering company recommencing construction parcels 5 6 negotiating amendments management agreements starwood shangrila provide new opening timelines company expects finalize second quarter 2010 negotiations unsuccessful starwood shangrila would right terminate agreements company would result company find new managers brands projects measures could material adverse effect company’s financial condition results operations cash flows including requiring company writeoff 200 million investment related st regis residences malls venetian macao four seasons macao company leases mall space venetian macao four seasons macao various retailers leases noncancellable operating leases lease periods vary 6 months 10 years leases include minimum base rents escalated contingent rent clauses december 31 2009 minimum future rentals noncancelable leases follows thousands exchange rates effect december 31 2009 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 150 million 21 million 03 million years ended december 31 2009 2008 2007 respectively note 14 stockbased employee compensation company two nonqualified stock option plans 1997 plan 2004 plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2009 2008 las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2009 9981102 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based combination company’s historical volatility historical volatilities selection companies company’s peer group due company’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary status company’s 2004 plan year ended december 31 2009 presented restricted stock awards summary status company’s unvested restricted shares year ended december 31 2009 presented december 31 2009 873 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 03 million unrecognized compensation cost related unvested restricted stock option restricted stock costs expected recognized weighted average period 25 years 08 years respectively stockbased compensation activity 2004 plan follows three years ended december 31 2009 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheets participation vcr 401k employee savings plan available fulltime employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages given challenging conditions impact company’s us operations company ceased matching contributions salaried employees effective april 1 2009 years ended december 31 2009 2008 2007 company’s matching contributions savings plan 43 million 62 million 50 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2009 2008 2007 vml’s contributions provident fund 46 million 184 million 85 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company mbs contributes 145 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2009 2008 2007 mbs’s contributions provident fund 19 million 13 million 04 million respectively note 16 related party transactions company paid approximately 59 million year ended december 31 2007 travelrelated services travel agent charter tour operator controlled principal stockholder immaterial amount paid travel agent charter tour operator years ended december 31 2009 2008 years ended december 31 2009 2008 principal stockholder purchased certain banquet room catering goods services company approximately 06 million 10 million respectively goods services purchased year ended december 31 2007 company purchased hotel guest amenities company controlled principal stockholder’s brother total amount paid approximately 10 million year ended december 31 2007 goods purchased years ended december 31 2009 2008 years ended december 31 2009 2008 2007 company incurred paid certain expenses totaling 81 million 64 million 20 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2009 2008 2007 company charged received principal stockholder 77 million 89 million 53 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes year ended december 31 2008 company sold principal stockholder’s family private placement transaction 4750 million convertible senior notes november 2008 concurrent company’s issuance common stock preferred stock warrants principal stockholder’s family exercised conversion feature convertible senior notes 86363636 shares company’s common stock conversion price 550 per share see “ note 8 longterm debt corporate us related debt convertible senior notes” “ note 9 equity” year ended december 31 2008 subsidiary company performed work home owned robert g goldstein company’s executive vice president mr goldstein believed company acknowledged work performed appropriate manner matter referred independent expert concurred quality work concluded mr goldstein obligated pay 04 million incurred company costs overhead job findings accepted company mr goldstein year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas united states macau singapore company reviews results operations key operating segments venetian las vegas includes sands expo center palazzo sands bethlehem sands macao venetian macao four seasons macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macau company also reviews construction development activities primary projects venetian las vegas palazzo sands bethlehem sands macao venetian macao four seasons macao asia marina bay sands singapore development projects cotai strip parcels 3 5 6 7 8 corporate comprised primarily airplanes st regis residences venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types service products regulatory business environment operations within segment company’s organizational management reporting structure information years ended december 31 2008 2007 reclassified conform current presentation company’s segment information follows december 31 2009 2008 2007 three years ended december 31 2009 thousands 1 adjusted property ebitdar net income loss attributable las vegas sands corp interest income taxes depreciation amortization preopening expense development expense income expense loss modification early retirement debt loss disposal assets impairment loss rental expense corporate expense stockbased compensation expense net loss attributable noncontrolling interests adjusted property ebitdar used management primary measure operating performance company’s properties compare operating performance company’s properties competitors note 18 condensed consolidating financial information lvsc obligor senior notes due 2015 lvsllc vcr mall intermediate holding company llc venetian venture development venetian transport llc venetian marketing inc lido intermediate holding company llc lido casino resort holding company llc collectively “original guarantors” jointly severally guaranteed senior notes full unconditional basis effective may 23 2007 conjunction entering senior secured credit facility lvsc original guarantors trustee entered supplemental indenture related senior notes whereby following subsidiaries added full unconditional guarantors joint several basis interface groupnevada inc palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc collectively original guarantors “guarantor subsidiaries” lvs nevada international holdings inc lvs management services llc newly formed subsidiaries added september 2009 full unconditional guarantors senior notes joint several basis included group subsidiaries guarantor subsidiaries period ended december 31 2009 november 2009 venetian venture development merged lvs nevada international holdings inc voting stock entities included guarantor subsidiaries 100 owned directly indirectly las vegas sands corp noncontrolling interest amount included guarantor subsidiaries’ condensed consolidating balance sheets related nonvoting preferred stock one subsidiaries held third party february 29 2008 capital stock phase ii mall subsidiary llc sold ggp connection therewith released guarantor senior notes sale complete accounting perspective due company’s continuing involvement transaction related completion construction remainder shoppes palazzo certain activities performed behalf ggp uncertainty final sales price certain assets liabilities operating results cash flows related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted guarantor subsidiaries final sales price determined therefore included “guarantor subsidiaries” columns following condensed consolidating financial information result net assets 470 million consisting 2911 million property equipment offset 2441 million liabilities consisting primarily deferred proceeds sale 1164 million consisting 3606 million property equipment offset 2442 million liabilities consisting primarily deferred proceeds sale december 31 2009 2008 respectively net loss consisting primarily depreciation expense 125 million 78 million years ended december 31 2009 2008 respectively related mall accounted guarantor subsidiaries balances amounts collateral senior notes considered credit support guarantees senior notes condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2009 2008 three years period ended december 31 2009 follows thousands condensed consolidating balance sheets december 31 2009 condensed consolidating balance sheets december 31 2008 condensed consolidating statements operations year ended december 31 2009 condensed consolidating statements operations year ended december 31 2008 condensed consolidating statements operations year ended december 31 2007 condensed consolidating statements cash flows year ended december 31 2009 condensed consolidating statements cash flows year ended december 31 2008 condensed consolidating statements cash flows year ended december 31 2007 note 19 selected quarterly financial results unaudited earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2009 2008 2007 item 9item 8 financial statements supplementary data financial statements report independent registered public accounting firm consolidated balance sheets december 31 2011 2010 consolidated statements operations three years period ended december 31 2011 consolidated statements equity comprehensive income loss three years period ended december 31 2011 consolidated statements cash flows three years period ended december 31 2011 notes consolidated financial statements financial statement schedule ii valuation qualifying accounts financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries december 31 2011 2010 results operations cash flows three years period ended december 31 2011 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2011 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s annual report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 29 2012 las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity comprehensive income loss accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” november 2009 company’s subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china completed initial public offering listing ordinary shares “scl offering” main board stock exchange hong kong limited “sehk” immediately following scl offering several transactions consummated connection offering see “ note 10 equity noncontrolling interests” company owned 703 issued outstanding ordinary shares scl shares scl registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 703 scl includes operations venetian macao four seasons macao sands macao sands cotai central opened ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession company owns operates venetian macao resort hotel “the venetian macao” anchors cotai strip company’s masterplanned development integrated resort properties macao venetian macao includes 39floor luxury hotel 2900 suites approximately 534000 square feet gaming space 15000seat arena 1800seat theater retail dining space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet company owns four seasons hotel macao cotai strip “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” features approximately 91000 square feet gaming space 19 paiza mansions retail space approximately 211000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower expects subsequently monetize units within four seasons apartments subject market conditions obtaining necessary government approvals company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 197000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore partially opened april 27 2010 additional portions opened progressively throughout 2010 marina bay sands features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters february 2011 marina bay sands opened landmark iconic structure bayfront promenade contains artscience museum las vegas sands corp subsidiaries notes consolidated financial statements continued united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet enclosed retail dining entertainment complexes located within venetian las vegas “the grand canal shoppes” palazzo “the shoppes palazzo” sold ggp limited partnership “ggp” see “ note 13 mall sales” pennsylvania may 2009 company partially opened sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem currently features approximately 152000 square feet gaming space include table games operations commenced july 2010 300room hotel tower opened may 2011 150000squarefoot retail facility progressive opening began november 2011 arts cultural center broadcast home local pbs affiliate company initiated construction activities remaining components integrated resort includes 50000squarefoot multipurpose event center expected open second quarter 2012 sands bethlehem also expected home national museum industrial history company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects company suspended portions development projects general economic conditions fail improve company unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion company’s investment date suspended projects could lost would result impairment charge macao company submitted plans macao government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres referred sands cotai central formerly parcels 5 6 parcels 3 7 8 subject approval macao government discussed developments expected include hotels exhibition conference facilities gaming areas showrooms spas dining retail entertainment facilities amenities company commenced construction preconstruction activities developments plans operate related gaming areas company’s macao gaming subconcession addition company completing development public areas surrounding cotai strip properties behalf macao government company currently intends develop cotai strip properties follows • sands cotai central company staging construction sands cotai central integrated resort upon completion phases ii project integrated resort feature approximately 5800 hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining exhibition conference facilities multipurpose theater phase currently expected open april 2012 consists hotel tower parcel 5 managed hilton worldwide include 600 fivestar rooms suites conrad brand intercontinental hotels group include 1200 fourstar rooms suites holiday inn brand phase also includes completion structural work adjacent hotel tower located parcel 6 managed sheraton international inc sheraton overseas management co collectively “starwood” sheraton towers brand variety retail offerings 300000 square feet meeting space several food beverage establishments along 106000squarefoot casino vip gaming areas phase iia currently scheduled open third quarter 2012 includes opening first hotel tower parcel 6 feature nearly 2000 sheratonbranded rooms along second casino remaining retail entertainment dining meeting facilities phase iib projected open first quarter 2013 consists second hotel tower parcel 6 feature additional 2000 rooms suites sheraton towers brand total cost complete phases ii expected approximately 16 billion phase iii project expected include fourth hotel mixeduse tower located parcel 5 managed starwood st regis brand total cost complete expected approximately 450 million company intends commence construction phase iii project demand market conditions warrant december 31 2011 company capitalized costs 306 billion entire project including land premium net amortization 2137 million outstanding construction payables company’s management agreement starwood imposed certain construction deadlines opening obligations company certain past andor anticipated delays described would allowed starwood terminate agreement november 2011 company amended management agreement starwood among things provide new construction opening obligations deadlines see “ note 14 commitments contingencies ventures commitments” las vegas sands corp subsidiaries notes consolidated financial statements continued • parcel 3 completed integrated resort parcel 3 connected venetian macao four seasons macao multihotel complex intended include gaming area shopping mall serviced luxury aparthotel units company commenced preconstruction activities capitalized costs 960 million including land premium net amortization december 31 2011 company intends commence construction sands cotai central complete necessary government approvals obtained • parcels 7 8 consistent original plans company commenced preconstruction activities capitalized construction costs 1011 million december 31 2011 company intended commence construction sands cotai central integrated resort parcel 3 completed necessary government approvals obtained including land concession see future demand warrants additional financing obtained company successful winning judicial appeal obtaining land concession parcels 7 8 discussed able proceed portion development planned related integrated resort expected similar size scope sands cotai central impact delayed construction company’s previously estimated cost complete cotai strip developments parcels 3 7 8 currently determinable certainty december 31 2011 company capitalized aggregate 749 billion construction costs land premiums net amortization cotai strip developments including venetian macao four seasons macao sands cotai central well company’s investments transportation infrastructure including passenger ferry service operations addition funding phases ii sands cotai central borrowings company’s new 37 billion macao credit facility entered september 2011 “2011 vml credit facility” see “ note 9 longterm debt macao related debt 2011 vml credit facility” company need arrange additional financing fund balance cotai strip developments assurance company able obtain additional financing required terms suitable company land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build parcels 1 2 3 5 6 including sites venetian macao parcel 1 four seasons macao parcel 2 sands cotai central parcels 5 6 located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel either payable single lump sum upon acceptance land concessions macao government seven semiannual installments well annual rent term land concessions december 2010 company received notice macao government application land concession parcels 7 8 approved company applied chief executive macao executive review decision january 2011 company filed judicial appeal court second instance macao yet issue decision company win judicial appeal still possible chief executive macao deny land concession based upon public policy considerations company obtain land concession receive full reimbursement capitalized investment project company would record charge portion 1011 million capitalized construction costs december 31 2011 related development parcels 7 8 company’s land concession parcel 3 company initially required complete corresponding development august 2011 macao government granted company twoyear extension complete development parcel 3 must completed april 2013 land concession sands cotai central contains similar requirement corresponding development completed may 2014 company intends apply extension macao government complete parcel 3 development unable meet april 2013 deadline company determine unable complete sands cotai central may 2014 company also intends apply extension macao government assurances given additional extensions granted company unable meet applicable deadline sands cotai central deadlines either development extended could lose land concessions parcel 3 sands cotai central would prohibit company operating facilities developed respective land concessions result company could record charge portion 960 million 306 billion capitalized construction costs land premiums net amortization december 31 2011 related development parcel 3 sands cotai central respectively las vegas sands corp subsidiaries notes consolidated financial statements continued united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve december 31 2011 company capitalized construction costs 1783 million project impact suspension estimated overall cost project currently determinable certainty company continues aggressively pursue variety new development opportunities around world development financing strategy december 31 2011 company funded development projects primarily borrowings us macao singapore credit facilities operating cash flows proceeds equity offerings proceeds disposition noncore assets us credit facility amended august 2010 requires company’s las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 60x quarterly period ended december 31 2011 decreases 55x quarterly periods ended march 31 june 30 2012 decreases 50x quarterly periods thereafter maturity company elect contribute 50 million cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” singapore credit facility requires operations marina bay sands comply similar financial covenants commenced quarterly period ended september 30 2011 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 55x quarterly period ended december 31 2011 decreases 525x quarterly period ended march 31 2012 decreases 025x every quarter september 30 2014 decreases remains 375x quarterly periods thereafter maturity company’s 2011 vml credit facility entered september 2011 also require company’s macao operations comply similar financial covenants commencing quarterly period ended march 31 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly periods ended march 31 2012 june 30 2013 decreases 40x quarterly periods ended september 30 2013 december 31 2014 decreases 35x quarterly periods ended march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity company unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault company’s airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default company’s senior notes certain defaults 2011 vml credit facility would trigger crossdefault company’s ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance company would able repay refinance amounts may become due payable agreements could force company restructure alter operations debt obligations 2008 company completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering 2009 company completed 6000 million exchangeable bond offering 25 billion scl offering portion proceeds offerings used us pay 7759 million revolving portion us credit facility march 2010 10 billion term loan portions us credit facility august 2010 exercise ebitda trueup provision quarterly period ended march 31 2011 company held unrestricted restricted cash equivalents approximately 390 billion 71 million respectively december 31 2011 company believes cash hand cash flow generated operations available borrowings credit facilities sufficient fund development projects currently construction maintain compliance financial covenants us macao singapore credit facilities normal course activities company continue evaluate capital structure opportunities enhancements thereof november 2011 company completed 37 billion 2011 vml credit facility used repay outstanding indebtedness vml vol credit facilities well continue fund development construction completion certain components sands cotai central see “ note 9 longterm debt macao related debt 2011 vml credit facility” disclosure las vegas sands corp subsidiaries notes consolidated financial statements continued note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary significant intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2011 2010 company’s joint ventures total assets 1084 million 953 million respectively total liabilities 1043 million 784 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivable offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change las vegas sands corp subsidiaries notes consolidated financial statements continued inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale company’s continued suspension certain development projects company tested certain assets impairment determined assets impaired year ended december 31 2011 year ended december 31 2010 company recognized impairment loss 161 million related equipment macao disposed year ended december 31 2009 company recognized impairment loss 1695 million 940 million related shoppes palazzo 572 million related indefinite suspension planned expansion sands expo center 150 million related real estate previously utilized connection marketing activities asia las vegas sands corp subsidiaries notes consolidated financial statements continued capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2011 2010 2009 company capitalized interest expense 1271 million 1061 million 654 million respectively years ended december 31 2011 2010 2009 company capitalized approximately 198 million 451 million 447 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property equipment deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2011 company 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 18 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license impairment charge related assets recorded years ended december 31 2011 2010 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 272 billion 219 billion 151 billion years ended december 31 2011 2010 2009 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred las vegas sands corp subsidiaries notes consolidated financial statements continued advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 512 million 543 million 567 million years ended december 31 2011 2010 2009 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income loss comprehensive income loss includes net income loss nonstockholder changes equity comprehensive income elements company’s comprehensive income loss reported accompanying consolidated statements equity comprehensive income loss balance accumulated comprehensive income consisted solely foreign currency translation adjustments earnings loss per share weighted average number common equivalent shares used calculation basic diluted earnings loss per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 15 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies las vegas sands corp subsidiaries notes consolidated financial statements continued company recorded valuation allowances net deferred tax assets us operations certain foreign jurisdictions management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements january 2010 fasb issued authoritative guidance fair value measurements requires new disclosures regarding significant transfers level 1 2 fair value measurements gross presentation activity within reconciliation level 3 fair value measurements guidance also clarifies existing requirements level disaggregation required disclosures regarding inputs valuation techniques recurring nonrecurring level 2 3 fair value measurements guidance effective interim annual reporting periods beginning december 15 2009 exception gross presentation level 3 activity effective interim annual reporting periods beginning december 15 2010 adoption guidance material effect company’s financial condition results operations cash flows see “ note 12 fair value measurements” required disclosure may 2011 fasb issued authoritative guidance intended align principles fair value measurements related disclosure requirements gaap international financial reporting standards guidance effective interim annual reporting periods beginning december 15 2011 adoption guidance material effect company’s financial condition results operations cash flows june 2011 fasb issued authoritative guidance amends presentation comprehensive income financial statements requiring entity present total comprehensive income components net income components comprehensive income either single continuous statement comprehensive income two separate consecutive statements update also eliminates option present components comprehensive income part statement equity guidance effective interim annual reporting periods beginning december 15 2011 early adoption permitted adoption guidance material effect company’s financial condition results operations cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued reclassification certain amounts consolidated statements operations years ended december 31 2010 2009 reclassified consistent current year presentation mall revenue mall operating expenses previously included convention retail stated separately consolidated statements operations reclassification impact company’s financial condition results operations cash flows note 3 restricted cash equivalents required company’s vol credit facility entered may 2010 see “ note 9 longterm debt macao related debt vol credit facility” certain loan proceeds available facility certain future cash flows generated certain company’s macao operations deposited restricted accounts invested cash equivalents pledged collateral agent security favor lenders vol credit facility restricted cash amount used fund ongoing construction sands cotai central accordance terms specified vol credit facility well fund interest principal payments due vol credit facility due macao debt refinancing transaction described “ note 9 longterm debt macao related debt vml vol credit facilities refinancing” amounts outstanding vol credit facility fully repaid november 15 2011 result restricted cash held company related vol credit facility december 31 2011 december 31 2010 restricted cash balance 7757 million restricted cash also includes 71 million 342 million december 31 2011 2010 respectively related items restricted cash balances classified current primarily equivalent related construction payables also classified current note 4 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 5 property equipment net property equipment consists following thousands construction progress consists following thousands 3496 million construction progress consists primarily construction las vegas condo tower costs incurred cotai strip parcels 3 7 8 final purchase price shoppes palazzo determined accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” based net operating income “noi” shoppes palazzo calculated 30 months closing date sale defined amended agreement “final purchase price” subject certain later audit adjustments see “ note 13 mall sales shoppes palazzo” company ggp entered several amendments amended agreement defer time reach agreement final purchase price parties continued work various matters related calculation noi june 24 2011 company reached settlement ggp regarding final purchase price terms settlement company retained 2954 million proceeds previously received participates certain future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain future revenues constitutes continuing involvement shoppes palazzo therefore 2662 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 2641 million net 472 million accumulated depreciation december 31 2011 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated income statement cost accumulated depreciation property equipment company leasing tenants part mall operations 8073 million 1122 million respectively december 31 2011 cost accumulated depreciation property equipment company leasing tenants part mall operations 6784 million 766 million respectively december 31 2010 cost accumulated depreciation property equipment company leasing capital lease arrangements 295 million 60 million respectively december 31 2011 cost accumulated depreciation property equipment company leasing capital lease arrangements 298 million 35 million respectively december 31 2010 company suspended portions development projects described “ note 1 organization business company development projects” company may required record impairment charge related developments future las vegas sands corp subsidiaries notes consolidated financial statements continued company commenced preconstruction activities parcels 7 8 capitalized construction costs 1011 million december 31 2011 december 2010 company received notice macao government application land concession parcels 7 8 approved company applied chief executive macao executive review decision january 2011 company filed judicial appeal court second instance macao yet issue decision company win judicial appeal still possible chief executive macao deny land concession based upon public policy considerations based upon developments company performed impairment analysis determine recoverability investment parcels 7 8 undiscounted cash flow basis company’s analysis considered various potential outcomes appeal process included ultimate denial land concession varying levels compensation well ultimate granting concession related construction resort probability weighted approach order obtain land concession construct resort company would need win appeal avoid future denial land concession based upon public policy considerations company obtain land concession receive full reimbursement capitalized investment project company would record charge portion 1011 million capitalized construction costs december 31 2011 related development parcels 7 8 subsequent december 31 2011 company began negotiating termination zaia show venetian macao reached agreement producers zaia close show february 2012 company expects record onetime charge approximately 45 million first quarter 2012 related closure show note 6 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 434 million 413 million 270 million included rental expense years ended december 31 2011 2010 2009 respectively estimated future rental expense approximately 374 million next five years 146 billion thereafter exchange rates effect december 31 2011 part development agreement entered company’s wholly owned subsidiary marina bay sands pte ltd “mbs” singapore tourism board “stb” marina bay sands “development agreement” company required build structure house water cooling facility operated third party provide water marina bay sands buildings around resort year ended december 31 2010 structure turned third party operator order commence operations company operate facility receive substantially output company reclassified 1079 million cost asset property equipment leasehold interests land additional cost use land year ended december 31 2011 company made payments 3219 million patacas approximately 402 million exchange rates effect december 31 2011 partial payments land premium sands cotai central parcels 5 6 remaining land premium payments sands cotai central paid remaining four semiannual installments amount 1843 million patacas approximately 230 million exchange rates effect december 31 2011 bearing interest 5 per annum las vegas sands corp subsidiaries notes consolidated financial statements continued addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2011 company obligated land concessions make future premium rental payments follows thousands note 7 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2010 company issued gaming license singapore casino regulatory authority “cra” gaming operations marina bay sands acquired 375 million singapore dollars “sgd” approximately 288 million exchange rates effect december 31 2011 license amortized threeyear term renewable upon submitting renewal application paying applicable license fee meeting renewal requirements determined cra amortization expense 100 million 63 million 46000 years ended december 31 2011 2010 2009 respectively estimated future amortization expense approximately 97 million 31 million next two years 27000 thereafter note 8 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 9 longterm debt longterm debt consists following thousands corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” consists 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” august 2010 senior secured credit facility amended among things modify certain financial covenants including increasing maximum leverage ratio quarterly periods june 30 2012 see “ note 1 organization business company development financing strategy” december 31 2011 company fully drawn delayed draw ii facilities 5206 million available borrowing capacity revolving facility net outstanding letters credit undrawn amounts committed funded lehman brothers commercial paper inc addition amendment certain lenders elected extend maturity 142 billion aggregate principal amount term b facility november 2016 “extended term b facility” 2845 million aggregate principal amount delayed draw facility november 2016 “extended delayed draw facility” 2079 million aggregate principal amount delayed draw ii facility november 2015 “extended delayed draw ii facility” collectively “extended term loans” extend availability 5325 million giving effect reductions described revolving facility may 2014 “extended revolving facility” part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million result repayment amendment company recorded 212 million loss modification early retirement debt year ended december 31 2010 extended term b facility subject quarterly amortization payments 35 million began september 30 2010 followed balloon payment 13 billion due november 23 2016 extended delayed draw facility subject quarterly amortization payments 07 million began september 30 2010 followed balloon payment 2669 million due november 23 2016 extended delayed draw ii facility subject quarterly amortization payments 05 million began september 30 2010 followed balloon payment 1971 million due november 23 2015 extended revolving facility interim amortization payments las vegas sands corp subsidiaries notes consolidated financial statements continued nonextended portions term b delayed draw facilities mature may 23 2014 term b facility subject quarterly amortization payments 19 million began september 30 2010 followed balloon payment 7231 million due may 23 2014 delayed draw facility subject quarterly amortization payments 04 million began september 30 2010 followed balloon payment 1483 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 02 million began september 30 2010 followed balloon payment 750 million due may 23 2013 revolving facility terminated company december 2011 result company recorded 05 million loss early retirement prior extension term b delayed draw delayed draw ii facilities subject quarterly amortization payments 75 million began september 30 2007 15 million began september 30 2008 10 million began march 31 2009 respectively year ended december 31 2010 company paid 7759 million revolving facility addition pay 10 billion extended term loans described senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings senior secured credit facility amended bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively term loans set 19 december 31 2011 225 per annum 275 per annum extended revolving facility extended term loans respectively extended term loans set 29 december 31 2011 spreads reduced company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions spread revolving facility reduced company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 26 23 years ended december 31 2011 2010 respectively company pays commitment fee 0375 per annum 05 per annum undrawn amounts revolving facility extended revolving facility respectively reduced certain corporate ratings achieved subject certain additional conditions company also paid commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw ii facilities respectively senior secured credit facility amended contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets senior secured credit facility also requires guarantors comply financial covenants including limited minimum ratios adjusted ebitda interest expense maximum ratios net debt outstanding adjusted ebitda senior secured credit facility also contains conditions events default customary financings see “ note 1 organization business company development financing strategy” discussion december 31 2011 approximately 724 billion net assets lvsllc restricted distributed terms senior secured credit facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 original issue discount 23 million net proceeds offering costs original issue discount 2448 million june 2005 senior notes exchanged substantially similar senior notes “senior notes” registered federal securities laws senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes senior obligations lvsc connection entering senior secured credit facility senior notes jointly severally guaranteed certain lvsc’s domestic subsidiaries including lvsllc vcr collateralized equal ratable basis obligations senior secured credit facility assets lvsllc guarantors indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets las vegas sands corp subsidiaries notes consolidated financial statements continued year ended december 31 2011 senior notes repurchased year ended december 31 2010 company repurchased 603 million outstanding principal senior notes recorded 34 million gain early retirement debt connection repurchase subsequent december 31 2011 company submitted redemption notice senior notes order redeem 1897 million outstanding balance 1917 million expects record 29 million loss extinguishment debt ffe facility december 2006 certain company’s subsidiaries including lvsllc vcr entered credit facility agreement group lenders general electric capital corporation administrative agent provide 1429 million finance refinance acquisition certain furniture fixtures equipment “ffe” located venetian las vegas palazzo facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties facility entered amended restated ffe credit guarantee agreement “ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan previous facility conformed affirmative negative covenants events default set forth senior secured credit facility ffe facility collateralized ffe financed andor refinanced proceeds ffe facility guaranteed guarantors senior secured credit facility july 1 2008 company required begin making quarterly installment principal payments 84 million amount equal 50 aggregate principal amount delayed draw term loan outstanding july 1 2008 remainder due four equal quarterly installments ending maturity date borrowings ffe facility bear interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate applicable margins reduced 025 per annum certain circumstances similar set forth senior secured credit facility company also paid commitment fee 050 per annum undrawn amount term delayed draw loan weighted average interest rate ffe facility 21 year ended december 31 2010 august 2010 company repaid 918 million outstanding balance ffe credit facility incurred 05 million loss early retirement debt year ended december 31 2010 airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes ten year maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 21 december 31 2011 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 19 years ended december 31 2011 2010 april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes ten year maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 18 december 31 2011 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 16 years ended december 31 2011 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt vml vol credit facilities refinancing company entered vml vol credit facilities described construct develop cotai strip integrated resort projects including venetian macao four seasons macao sands cotai central order reduce company’s interest expense extend debt maturities enhance company’s financial flexibility strengthen financial position company entered new credit facility macao september 2011 described borrowings new facility used repay outstanding indebtedness vml vol credit facilities used working capital requirements general corporate purposes including development construction completion certain components sands cotai central company recorded charge 221 million loss modification early retirement debt year ended december 31 2011 part refinancing vml vol credit facilities vml credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “vml credit facility” vml credit facility originally consisted 12 billion funded term b loan “vml term b facility” 7000 million delayed draw term b loan “vml term b delayed draw facility” 1000 million funded local currency term loan “vml local term facility” 5000 million revolving credit facility “vml revolving facility” march 2007 vml credit facility amended expand use proceeds remove certain restrictive covenants april 2007 lenders vml credit facility approved reduction interest rate margin classes loans 50 basis points borrower exercised rights vml credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded vml term b facility 6000 million vml revolving facility 2000 million total vml credit facility 33 billion august 12 2009 vml credit facility amended among things allow scl offering modify certain financial covenants definitions including increasing maximum leverage ratio quarterly periods end 2010 see “ note 1 organization business company development financing strategy” part amendment credit spread increased 325 basis points borrowings bearing interest company’s option either adjusted eurodollar rate case local term loan adjusted hong kong interbank offered rate “hibor” alternate base rate plus spread 55 per annum 45 per annum respectively november 2009 connection scl offering company required repay permanently reduce 5000 million term loan revolving borrowings pro rata basis vml credit facility conjunction 5000 million repayment credit spread reduced 100 basis points result repayment august amendment company recorded charge 61 million year ended december 31 2009 loss modification early retirement debt credit spreads vml local term facility vml revolving facility subject downward adjustments certain consolidated leverage ratios achieved vml revolving facility vml local term facility mature may 25 2011 vml term b delayed draw facility vml term b facility mature may 25 2012 2013 respectively vml term b delayed draw vml term b facility subject nominal quarterly amortization payments 18 million 45 million respectively first five six years respectively commenced june 2009 remainder loans payable four equal quarterly installments last year immediately preceding maturity dates vml local term facility subject quarterly amortization payments 63 million commenced june 2009 paid year ended december 31 2010 vml revolving facility interim amortization payments however year ended december 31 2010 company paid 4796 million facility borrower also paid standby commitment fee 05 per annum undrawn amounts vml revolving facility year ended december 31 2010 weighted average interest rate vml local term facility 48 years ended december 31 2011 2010 weighted average interest rates remainder vml credit facility 48 49 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued meet requirements vml credit facility company entered four interest rate cap agreements september 2006 may 2007 october 2007 september 2008 notional amounts 10 billion 3250 million 1650 million 1600 million respectively expired september 21 2009 provisions interest rate cap agreements entitled company receive counterparties amounts selected market interest rates exceed strike rate 675 company entered additional interest rate cap agreement september 2009 notional amount 159 billion expires september 2012 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 95 net effect interest expense result interest rate cap agreements years ended december 31 2011 2010 2009 vol credit facility may 17 2010 subsidiary company venetian orient limited “vol” owner developer sands cotai central entered credit agreement “vol credit facility” providing 175 billion equivalent hong kong dollars macao patacas consisted 7500 million term loan “vol term facility” fully drawn july 16 2010 7500 million delayed draw term loan available 18 months closing “vol delayed draw facility” 2500 million revolving facility “vol revolving facility” vol credit facility mature june 16 2015 vol required repay prepay vol credit facility certain circumstances commencing march 31 2013 end subsequent quarter 2013 vol would required repay outstanding vol term delayed draw facilities pro rata basis amount equal 5 aggregate principal amount term loans outstanding november 17 2011 commencing march 31 2014 end subsequent quarter 2014 vol would required repay outstanding vol term delayed draw facilities pro rata basis amount equal 75 aggregate principal amount term loans outstanding november 17 2011 addition commencing december 31 2013 end fiscal year thereafter vol would required repay outstanding vol term delayed draw facilities pro rata basis 50 subject downward adjustments certain conditions met excess free cash flow defined vol credit facility borrowings vol credit facility bore interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus spread 45 per annum vol paid standby fees 20 per annum undrawn amounts vol term delayed draw facilities 15 per annum undrawn amounts vol revolving facility weighted average interest rate vol credit facility 48 years ended december 31 2011 2010 respectively meet requirements vol credit facility company entered three interest rate cap agreements september 2010 combined notional amount 3750 million expire september 2013 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 35 net effect interest expense result interest rate cap agreements years ended december 31 2011 2010 respectively 2011 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower vml guarantor entered credit agreement “2011 vml credit facility” providing 37 billion equivalent hong kong dollars macao patacas consists 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 5000 million revolving facility “2011 vml revolving facility” none drawn december 31 2011 available october 15 2016 indebtedness 2011 vml credit facility guaranteed vml venetian cotai limited vol certain company’s foreign subsidiaries collectively “2011 vml guarantors” obligations 2011 vml credit facility collateralized firstpriority security interest substantially borrower’s 2011 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets las vegas sands corp subsidiaries notes consolidated financial statements continued 2011 vml credit facility mature november 15 2016 commencing december 31 2014 end subsequent quarter september 30 2015 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 625 aggregate principal amount outstanding november 15 2011 commencing december 31 2015 end subsequent quarter june 30 2016 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 100 aggregate principal amount outstanding november 15 2011 remaining balance 2011 vml term facility balance 2011 vml revolving facility due maturity date addition borrower required repay outstanding 2011 vml term facility portion excess free cash flow defined 2011 vml credit facility end year unless borrower compliance specified consolidated leverage ratio “clr” borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hong kong interbank offer rate case hong kong dollar macao pataca denominated loans applicable plus spread 225 may 13 2012 first 180 days november 15 2011 set 26 us dollar denominated loans 25 hong kong dollar macao pataca denominated loans december 31 2011 beginning may 14 2012 spread outstanding loans subject reduction based clr borrower also pay standby fees 05 per annum undrawn amounts 2011 vml revolving facility commenced september 30 2011 vml term facility commenced october 31 2011 weighted average interest rate 2011 vml credit facility 26 period ended december 31 2011 vml credit facility contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions certain capital expenditures use proceeds facility 2011 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense 2011 vml credit facility also contains events default customary financings ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1556 million exchange rates effect december 31 2011 secured credit facility available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date progress payments made ferries finance completion remaining ferries facility collateralized ferries guaranteed vml july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 723 million exchange rates effect december 31 2011 proceeds supplemental facility used reimburse company cash spent date progress payments made four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml august 20 2009 ferry financing facility amended among things allow scl offering remove requirement comply financial covenants facility amended matures december 2015 subject 26 quarterly payments hkd 681 million approximately 88 million exchange rates effect december 31 2011 commenced october 2009 part amendment credit spread increased 50 basis points 25 per annum borrowings made hong kong dollars accruing interest hibor set 28 december 31 2011 25 per annum borrowings made us dollars accruing interest libor borrowings facility fully drawn december 31 2011 made hong kong dollars weighted average interest rate facility 27 28 years ended december 31 2011 2010 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued exchangeable bonds september 2009 company completed 6000 million exchangeable bond offering due 2014 “exchangeable bonds” exchangeable bonds subject semiannual interest payments commencing march 2010 would mature september 2014 unless earlier redeemed exchanged purchased cancelled exchangeable bonds redeemable option company together accrued unpaid interest date redemption time beginning 30 days closing date ending day prior maturity date exchangeable bonds redeemed option company would required issue warrants “bond warrants” bondholders purchase number common shares scl bondholders would otherwise entitled receive upon mandatory automatic exchange exchangeable bonds upon offering addition bondholder could period less 30 days 60 days prior september 4 2012 required company redeem portion exchangeable bonds held bondholder 100 principal amount exchangeable bonds together accrued unpaid interest date redemption provided bondholders exercised redemption right would entitled bond warrants connection redemption november 2009 concurrent scl offering see “ note 10 equity noncontrolling interests” exchangeable bonds mandatorily automatically exchanged 497865084 ordinary shares scl company incurred charge approximately 171 million loss early retirement debt year ended december 31 2009 result exchanging bonds singapore related debt singapore credit facility december 2007 mbs signed credit facility agreement “singapore credit facility” providing sgd 20 billion approximately 154 billion exchange rates effect december 31 2011 term loan “singapore credit facility a” funded january 2008 sgd 275 billion approximately 212 billion exchange rates effect december 31 2011 term loan “singapore credit facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1482 million exchange rates effect december 31 2011 banker’s guarantee facility “singapore credit facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 3847 million exchange rates effect december 31 2011 revolving credit facility “singapore credit facility d” available february 28 2015 december 31 2011 company sgd 1030 million approximately 793 million exchange rates effect december 31 2011 available borrowing net outstanding banker’s guarantees january 2012 banker’s guarantee released stb singapore credit facility c immediately terminated indebtedness singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets singapore credit facility matures march 31 2015 mbs required repay prepay singapore credit facility certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore credit facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 962 million exchange rates effect december 31 2011 per quarter addition commencing quarter ending september 30 2011 mbs required prepay outstanding singapore credit facility b loans pro rata basis percentage excess free cash flow defined singapore credit facility initial excess free cash flow calculation performed september 30 2011 payment made fourth quarter 2011 borrowings singapore credit facility bear interest singapore swap offered rate “sor” plus spread 225 per annum set approximately 26 december 31 2011 mbs pays standby interest fee 1125 per annum 090 per annum undrawn amounts singapore credit facility b facility respectively mbs pays commission 225 per annum bankers’ guarantees outstanding singapore credit facility period banker’s guarantees outstanding weighted average interest rate singapore credit facility 25 26 years ended december 31 2011 2010 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued meet requirements singapore credit facility company entered nine interest rate cap agreements 2008 combined notional amount 141 billion threeyear terms expire june december 2011 maturity date one interest rate cap agreements notional amount 500 million extended august 2013 2009 company entered 14 additional interest rate cap agreements combined notional amount 8500 million threeyear terms expire march december 2012 2010 company entered seven additional interest rate cap agreements combined notional amount 3650 million threeyear terms expire january june 2013 2011 company entered 12 additional interest rate cap agreements combined notional amount 115 billion threeyear terms expire may august 2014 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 35 45 stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2011 2010 2009 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities singapore credit facility also requires mbs comply financial covenants commenced quarter ended september 30 2011 including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense minimum adjusted ebitda requirements positive net worth requirement singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt excluding discounts outstanding december 31 2011 summarized follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued fair value longterm debt estimated fair value company’s longterm debt december 31 2011 2010 approximately 948 billion 972 billion respectively compared carrying value 1001 billion 1012 billion respectively estimated fair value company’s longterm debt based quoted market prices available pricing models based value related cash flows discounted current market interest rates note 10 equity preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit described outstanding preferred stock redeemed whole company november 15 2011 redemption price 110 per share holders preferred stock rights exchange convert shares securities nevada law company ability declare pay dividends preferred stock extent total assets exceeded total liabilities long company able pay debts became due usual course business declared company’s board directors holders preferred stock entitled receive cumulative cash dividends quarterly february 15 may 15 august 15 november 15 began february 15 2009 preferred stock issued public 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively year ended december 31 2011 holders preferred stock exercised 1317220 warrants purchase aggregate 21953704 shares company’s common stock 600 per share tendered 1192100 shares preferred stock 125 million cash settlement warrant exercise price conjunction certain transactions company paid 169 million premiums induce exercise warrants settlement tendering preferred stock year ended december 31 2011 company also repurchased retired 736629 shares preferred stock 823 million year ended december 31 2010 holders preferred stock exercised 2730209 warrants purchase aggregate 45503562 shares company’s common stock 600 per share tendered 475076 shares preferred stock 2255 million cash settlement warrant exercise price conjunction certain transactions company paid 66 million premiums induce exercise warrants settlement tendering preferred stock year ended december 31 2009 holders preferred stock exercised 1106301 warrants purchase aggregate 18438384 shares company’s common stock 600 per share tendered 1106301 shares preferred stock settlement warrant exercise price subsequent december 31 2011 11670 warrants exercised purchase aggregate 194499 shares company’s common stock 600 per share 12 million cash tendered settlement warrant exercise price preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity accompanying consolidated balance sheet principal stockholder family greater 50 ownership company considering impact unexercised warrants stock options therefore ability require company redeem preferred stock beginning november 15 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years due redemption preferred stock november 15 2011 accumulated undeclared dividends december 31 2011 december 31 2010 69 million accumulated undeclared dividends recorded summary company’s preferred stock issued principal stockholder’s family years ended december 31 2011 2010 2009 presented thousands except number shares principal stockholder’s family indicated intent exercise outstanding warrants purchase 87500175 shares company’s common stock 600 per share tender 5250 million cash settlement warrant exercise price march 2012 redemption preferred stock august 2011 company’s board directors approved redemption outstanding preferred stock november 15 2011 company paid 7630 million redeem preferred shares outstanding recorded redemption premium 888 million year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued dividends preferred stock dividend activity follows thousands part regular cash dividend program january 31 2012 company’s board directors declared quarterly cash dividend 025 per common share paid march 30 2012 shareholders record march 20 2012 rollfoward shares common stock preferred stock issued public summary outstanding shares common stock preferred stock issued public follows noncontrolling interests november 2009 company completed scl offering wherein company’s subsidiary scl listed ordinary shares main board sehk scl offering sold 1270000000 ordinary shares public received gross proceeds 170 billion 163 billion net transaction costs concurrent scl offering company’s subsidiary scl’s direct parent venetian venture development intermediate ii “vvdi ii” sold 600000000 ordinary shares scl public received gross proceeds 8036 million 7604 million net transaction costs connection scl offering company mandatorily automatically exchanged 6000 million exchangeable bonds 497865084 ordinary shares scl issued 22185115 ordinary shares scl settle obligation company immediately following completion transactions december 31 2011 company owned 703 issued outstanding ordinary shares scl las vegas sands corp subsidiaries notes consolidated financial statements continued june 2011 company disposed interest one majority owned subsidiaries resulting loss 37 million included loss disposal assets year ended december 31 2011 addition year ended december 31 2011 company distributed 104 million certain noncontrolling interests january 31 2012 board directors scl declared dividend hkd 058 per share total approximately 6010 million exchange rates effect december 31 2011 company retain 703 amount scl shareholders record february 20 2012 paid february 28 2012 note 11 income taxes consolidated income loss taxes noncontrolling interests domestic foreign operations follows thousands components income tax benefit expense follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows las vegas sands corp subsidiaries notes consolidated financial statements continued company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2013 company received income tax exemption macao consolidated net income loss attributable las vegas sands corp would reduced 1086 million 810 million 800 million diluted earnings per share would reduced 013 010 012 per share years ended december 31 2011 2010 2009 respectively february 2011 company entered agreement macao government effective 2013 provides annual payment 144 million patacas approximately 18 million exchange rates effect december 31 2011 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits primary tax affected components company’s net deferred tax liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2011 2010 company windfall tax benefits 1122 million 397 million respectively included us net operating loss carryforward reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable federal net operating loss carryforwards company’s us operations 3597 million 5091 million december 31 2011 2010 respectively begin expire 2028 decrease us federal net operating loss relates primarily intercompany dividend paid wholly owned foreign subsidiary resulted us taxable income year ended december 31 2011 company’s state net operating loss carryforwards 1859 million 1330 million december 31 2011 2010 respectively begin expire 2024 company’s us general business credits 38 million 23 million december 31 2011 2010 respectively begin expire 2024 company’s us foreign tax credits 845 million december 31 2011 begin expire 2021 valuation allowance 1457 million 1149 million december 31 2011 2010 respectively provided net us deferred tax assets company believes assets meet “more likely not” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 138 billion 187 billion december 31 2011 2010 respectively begin expire 2012 valuation allowances 1795 million 2163 million december 31 2011 2010 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition las vegas sands corp subsidiaries notes consolidated financial statements continued undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries attributable periods january 1 2012 demonstrates earnings indefinitely reinvested applicable jurisdictions january 1 2012 company longer considers current portion tax earnings profits certain foreign subsidiaries permanently reinvested company provided deferred taxes foreign earnings company expects sufficient creditable foreign taxes offset us income tax would result repatriation foreign earnings december 31 2011 2010 amount undistributed earnings foreign subsidiaries company intend repatriate 562 billion 382 billion respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less us foreign tax credits applicable distributions reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2011 2010 2009 unrecognized tax benefits 89 million 79 million 172 million respectively recorded reductions us net operating loss deferred tax asset december 31 2011 2010 2009 unrecognized tax benefits 345 million 279 million 489 million respectively recorded longterm liabilities included balance december 31 2011 2010 2009 339 million 313 million 290 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore 2010 internal revenue service “irs” issued revenue agent’s report “rar” tax years 2005 2008 company appealing certain adjustments proposed irs year ended december 31 2011 irs completed field examination company’s 2009 income tax return issued rar proposing certain adjustments company disagrees several proposed adjustments submitted protest request appeals conference irs company subject examination tax years 2006 macao singapore tax years 2009 us company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes company believes reasonably possible total amount unrecognized tax benefits december 31 2011 may decrease range 0 24 million within next twelve months primarily due possible settlement matters presently consideration appeals connection irs audit company’s 2005 2008 consolidated federal income tax returns company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2011 2010 note 12 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement las vegas sands corp subsidiaries notes consolidated financial statements continued following table provides assets carried fair value thousands note 13 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2011 2010 2009 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 14 commitments contingencies ventures commitments” ii lease blue man group theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases years ended december 31 2011 2010 2009 35 million deferred item amortized offset convention retail expense december 31 2011 company obligated ii iii iv make future payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open construction certain portions mall yet completed pursuant amended agreement company contracted sell shoppes palazzo ggp final purchase price shoppes palazzo determined taking shoppes palazzo’s noi defined amended agreement months 19 30 operations assuming fixed rent fixed periodic payments due tenants month 30 actually due months 19 30 provided 12month period could delayed certain conditions satisfied divided capitalization rate capitalization rate 006 every dollar noi 380 million 008 every dollar noi 380 million closing date sale february 29 2008 ggp made initial purchase price payment 2908 million based projected net operating income first 12 months operations taking account tenants open business paying rent february 29 2008 pursuant amended agreement periodic adjustments purchase price never less 2500 million made based projected noi upcoming 12 months pursuant amended agreement company received additional 46 million june 2008 representing adjustment payment fourth month closing subject adjustments certain audit issues final adjustment purchase price made 30month anniversary closing date later certain conditions satisfied based previously described formula purchase price purchase price adjustment calculations noi calculated using “accrual” method accounting company ggp entered several amendments amended agreement defer time reach agreement final purchase price parties continued work various matters related calculation noi june 24 2011 company reached settlement ggp regarding final purchase price terms settlement company retained 2954 million proceeds previously received participates certain future revenues earned ggp addition company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2011 company obligated make future payments approximately 08 million annually five years ended december 31 2016 14 million thereafter generally accepted accounting principles transaction accounted sale company’s participation certain future revenues constitutes continuing involvement shoppes palazzo therefore 2670 million mall sale transaction recorded deferred proceeds sale december 31 2011 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces generally accepted accounting principles palazzo master lease qualify sale real property real property separately legally demised accordingly 225 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term 41 million total proceeds mall sale transaction represented portion proceeds excess guaranteed purchase price allocated palazzo master lease recognized contingent rent revenue included convention retail revenue year ended december 31 2011 note 14 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows october 15 2004 richard suen round square company limited filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court clark county new trial decision reversing monetary judgment company nevada supreme court also made several rulings may affect outcome new trial including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court clark county february 27 2012 district court clark county set date march 25 2013 new trial company unable time determine probability outcome range reasonably possible loss company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court clark county nevada alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 amended complaint filed added sheldon g adelson defendant alleged claim defamation per se lvsc scl june 9 2011 district court clark county dismissed defamation claim certified decision sheldon g adelson final judgment july 1 2011 plaintiff filed notice appeal regarding final judgment sheldon g adelson august 26 2011 nevada supreme court issued writ mandamus instructing district court clark county hold evidentiary hearing whether personal jurisdiction exists scl stayed case district court’s decision january 17 2012 mr jacobs filed opening brief supreme court nevada regarding appeal defamation claim mr adelson january 30 2012 mr adelson filed reply mr jacobs’ opening brief mr jacobs seeking unspecified damages action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously february 9 2011 lvsc received subpoena securities exchange commission requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice conducting similar investigation company’s belief subpoena may emanated allegations contained lawsuit filed steven c jacobs described company cooperating investigations based proceedings date management currently unable determine probability outcome matter range reasonably possible loss march 31 2011 scl filed announcement sehk stating scl informed securities futures commission hong kong “sfc” scl investigation sfc relation alleged breaches provisions hong kong securities futures ordinance requested produce certain documents december 15 2011 scl received confirmation sfc investigation concluded action taken scl time may 24 2010 frank j fosbre jr filed purported class action complaint united states district court district nevada “us district court” lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint discovery process also begun consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court clark county nevada sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court clark county nevada sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered court october 2011 extended another 90 days february 2012 set expire may 2012 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendents filed motion dismiss alternatively stay federal action due parallel state court action described consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including sands macao venetian macao plaza casino four seasons macao sands cotai central separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice las vegas sands corp subsidiaries notes consolidated financial statements continued subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 37 million exchange rates effect december 31 2011 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37495 18748 125 respectively exchange rates effect december 31 2011 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2011 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2011 company obligated subconcession make minimum future payments approximately 335 million next five years approximately 1843 million thereafter amounts expected increase substantially company completes cotai strip properties currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed singapore development project august 2006 company entered development agreement amended supplementary agreement december 11 2009 stb requires company construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement development agreement permitted marina bay sands open stages accordance agreed upon schedule financial consequences mbs failed meet agreed upon schedule provided entire integrated resort opened december 31 2011 company met schedule confirmed audit conducted behalf stb determined company satisfied requirements development agreement december 31 2011 stb would entitled draw sgd 1926 million approximately 1482 million exchange rates effect december 31 2011 security deposit singapore credit facility requirements satisfied banker’s guarantee released january 2012 operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2011 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 439 million 381 million 236 million years ended december 31 2011 2010 2009 respectively ventures commitments company entered employment agreements eight executive officers remaining terms one four years december 31 2011 company obligated make future payments 95 million 25 million 16 million 07 million years ended december 31 2012 2013 2014 2015 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2011 company obligated agreements make future payments approximately 06 million years ended december 31 2012 2013 04 million years ended december 31 2014 2015 2016 56 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued company entered agreements starwood manage hotels well brand serviced luxury aparthotel part sands cotai central macao management agreement imposed certain construction opening obligations deadlines company certain past andor anticipated delays would allowed starwood terminate agreement company recommenced construction activities sands cotai central november 2011 company amended management agreement starwood among things provide new construction opening obligations deadlines company’s agreement starwood related las vegas condo tower terminated connection suspension project management currently evaluating alternatives branding project company find new managers brands macao unsuccessful rebranding las vegas condo tower measures could material adverse effect company’s financial condition results operations cash flows malls company leases mall space several integrated resorts various retailers leases noncancellable operating leases lease periods vary 3 months 15 years leases include minimum base rents escalated contingent rent clauses december 31 2011 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2011 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 823 million 378 million 150 million years ended december 31 2011 2010 2009 respectively note 15 stockbased employee compensation company three nonqualified stock option plans 1997 plan 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2011 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2011 7423285 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model stock options granted years ended december 31 2009 2010 expected volatilities based combination company’s historical volatility historical volatilities selection companies company’s peer group due company’s lack historical information stock options granted subsequent december 31 2010 expected volatilities based company’s historical volatility period equal expected life stock options company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s compensation committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2011 779551642 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based historical volatilities selection companies scl’s peer group due scl’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based hong kong exchange fund note rate effect time grant fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued summary stock option activity company’s equity award plans year ended december 31 2011 presented restricted stock awards restricted stock units summary unvested restricted shares company’s 2004 plan year ended december 31 2011 presented summary unvested restricted stock units company’s 2004 plan year ended december 31 2011 presented december 31 2011 2004 plan 409 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 321 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 20 years 30 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2011 scl equity plan 183 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 31 years stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2011 thousands except weighted average grant date fair values note 16 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheets participation vcr 401k employee savings plan available fulltime employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages given challenging conditions impact company’s us operations company ceased matching contributions salaried employees effective april 1 2009 matching contributions salaried employees subsequently reinstated january 1 2011 years ended december 31 2011 2010 2009 company’s matching contributions savings plan 79 million 32 million 43 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years given challenging conditions impact company’s macao operations provident fund suspended years ended december 31 2010 2009 employees accepted reduced work schedule eligible benefit provident fund contributions fulltime employees subsequently reinstated january 1 2011 years ended december 31 2011 2010 2009 vml’s contributions provident fund 160 million 73 million 46 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2011 mbs contributes 160 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2011 2010 2009 mbs’s contributions provident fund 307 million 169 million 19 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 17 related party transactions years ended december 31 2011 2010 2009 principal stockholder family purchased certain lodging banquet room catering goods services procurement services company approximately 05 million 08 million 06 million respectively years ended december 31 2011 2010 2009 company incurred paid certain expenses totaling 165 million 161 million 81 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2011 2010 2009 company charged received principal stockholder 152 million 94 million 77 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes year ended december 31 2008 company sold principal stockholder’s family private placement transaction 4750 million convertible senior notes november 2008 concurrent company’s issuance common stock preferred stock warrants principal stockholder’s family exercised conversion feature convertible senior notes 86363636 shares company’s common stock conversion price 550 per share november 15 2011 company paid 5775 million redeem preferred stock held principal stockholder’s family see “ note 10 equity” year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 18 segment information company’s principal operating developmental activities occur three geographic areas macao singapore united states company reviews results operations operating segments venetian macao sands macao four seasons macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macao marina bay sands venetian las vegas includes sands expo center palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure company also reviews construction development activities primary projects development suspended addition reportable segments noted company’s primary projects development sands cotai central development projects cotai strip parcels 3 7 8 macao corporate comprised primarily airplanes las vegas condo tower us information years ended december 31 2010 2009 reclassified conform current presentation company’s segment information follows three years ended december 31 2011 2010 2009 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda net income loss royalty fees stockbased compensation expense corporate expense rent expense preopening expense development expense depreciation amortization impairment loss disposal assets interest expense loss modification early retirement debt income taxes adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 condensed consolidating financial information lvsc obligor senior notes due 2015 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 groupnevada inc palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc lvs nevada international holdings inc lvs management services llc collectively “guarantor subsidiaries” jointly severally guaranteed senior notes however full unconditional basis result subsidiaries able released guarantors certain circumstances customary arrangements voting stock entities included guarantor subsidiaries 100 owned directly indirectly las vegas sands corp noncontrolling interest amount included guarantor subsidiaries’ condensed consolidating balance sheets related nonvoting preferred stock one subsidiaries held third parties february 2008 capital stock phase ii mall subsidiary llc sold ggp connection therewith released guarantor senior notes sale complete accounting perspective due company’s continuing involvement transaction related participation certain future revenues earned ggp certain assets liabilities operating results related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted guarantor subsidiaries therefore included “guarantor subsidiaries” columns following condensed consolidating financial information result net liabilities 30 million consisting 2641 million property equipment offset 2671 million liabilities consisting primarily deferred proceeds sale net assets 380 million consisting 2821 million property equipment offset 2441 million liabilities consisting primarily deferred proceeds sale december 31 2011 2010 respectively net loss consisting primarily depreciation expense 195 million 99 million 125 million years ended december 31 2011 2010 2009 respectively related mall accounted guarantor subsidiaries balances amounts collateral senior notes considered credit support guarantees senior notes company revised condensed consolidating statements cash flows years ended december 31 2010 2009 correct classification dividends received las vegas sands corp guarantor subsidiaries revision made appropriately classify dividends received represent return investment operating activity revision resulted increase 841 million 723 million las vegas sands corp’s “net cash provided operating activities” years ended december 31 2010 2009 respectively corresponding decrease “net cash provided investing activities” company revise las vegas sands corp column unaudited condensed consolidating statements cash flows increase “net cash provided operating activities” 853 million 491 million 286 million three months ended march 31 2011 six months ended june 30 2011 nine months ended september 30 2011 respectively corresponding decrease “net cash provided investing activities” next time filed company also revise guarantor subsidiaries column unaudited condensed consolidating statements cash flows increase “net cash provided operating activities” 600 million nine months ended september 30 2011 corresponding decrease “net cash provided investing activities” next time filed revision made appropriately classify dividends received guarantor subsidiaries nonguarantor subsidiaries represent return investment revisions company determined material impact financial statements footnotes except las vegas sands corp guarantor subsidiaries columns condensed consolidating statements cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2011 2010 three years period ended december 31 2011 follows thousands condensed consolidating balance sheets december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued note 20 selected quarterly financial results unaudited earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2011 2010 2009 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries “company” december 31 2012 2011 results operations cash flows three years period ended december 31 2012 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2012 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s annual report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” november 2009 company’s subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china completed initial public offering listing ordinary shares “scl offering” main board stock exchange hong kong limited “sehk” shares scl registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 702 scl includes operations venetian macao four seasons macao sands macao sands cotai central ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession company owns operates venetian macao resort hotel “the venetian macao” anchors cotai strip company’s masterplanned development integrated resort properties area approximately 140 acres macao consisting parcels referred 1 2 3 5 6 venetian macao located parcel 1 includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater retail dining space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet company owns four seasons hotel macao cotai strip “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao located parcel 2 “four seasons macao” features approximately 108000 square feet gaming space 19 paiza mansions retail space approximately 260000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower expects monetize units within four seasons apartments necessary government approvals obtained future demand warrants company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 249000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities april september 2012 company opened phases iia respectively sands cotai central integrated resort located parcels 5 6 situated across street venetian macao four seasons macao phase consists hotel tower parcel 5 includes approximately 600 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand 350000 square feet meeting space several food beverage establishments along 230000squarefoot casino vip gaming areas phase iia includes first hotel tower parcel 6 features approximately 1800 rooms managed sheraton international inc sheraton overseas management co collectively “starwood” sheraton brand along second casino additional retail entertainment dining meeting facilities phase iib opened january 28 2013 consists second hotel tower parcel 6 features approximately 2100 rooms suites managed starwood sheraton brand completion phases ii project integrated resort features approximately 300000 square feet gaming space approximately 800000 square feet retail entertainment dining space 550000 square feet meeting facilities multipurpose theater phase iii project expected include fourth hotel mixeduse tower located parcel 5 managed starwood st regis brand total cost complete expected approximately 450 million company intends commence construction phase iii project demand market conditions warrant december 31 2012 company capitalized costs 396 billion entire project including land premium net amortization 1917 million outstanding construction payables las vegas sands corp subsidiaries notes consolidated financial statements continued singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet enclosed retail dining entertainment complexes located within venetian las vegas “the grand canal shoppes” palazzo “the shoppes palazzo” sold ggp limited partnership “ggp” see “ note 12 mall sales” pennsylvania company owns operates sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 145000 square feet gaming space 300room hotel tower opened may 2011 150000squarefoot retail facility progressive opening began november 2011 arts cultural center 50000squarefoot multipurpose event center opened may 2012 company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects company suspended portions development projects general economic conditions fail improve company unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion company’s investment date suspended projects could lost would result impairment charge macao company submitted plans macao government parisian macao formerly referred parcel 3 integrated resort connected venetian macao four seasons macao parisian macao currently expected open late 2015 intended include gaming area operated company’s gaming subconcession hotel shopping mall company expects cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium company commenced construction activities capitalized costs 1189 million including land premium net amortization december 31 2012 addition company completing development public areas surrounding cotai strip properties behalf macao government company’s land concession sands cotai central company required complete development may 2014 land concession parisian macao contains similar requirement extended macao government july 2012 development completed april 2016 company expects apply extension macao government complete sands cotai central company unable meet may 2014 deadline company determine unable complete parisian macao april 2016 company would also expect apply extension macao government company unable meet parisian macao deadline deadlines either development extended company could lose land concessions sands cotai central parisian macao would prohibit company operating facilities developed respective land concessions result company could record charge portion 396 billion 1189 million capitalized construction costs land premiums net amortization december 31 2012 related sands cotai central parisian macao respectively las vegas sands corp subsidiaries notes consolidated financial statements continued united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve december 31 2012 company capitalized construction costs 1789 million project impact suspension estimated overall cost project currently determinable certainty company continues aggressively pursue variety new development opportunities around world development financing strategy december 31 2012 company funded development projects primarily borrowings credit facilities operating cash flows proceeds equity offerings proceeds disposition noncore assets us credit facility requires company’s las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 50x quarterly periods maturity company elect contribute 50 million cash hand las vegas operations biquarterly basis contributions effect increasing adjusted ebitda applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” company’s macao facility also requires company’s macao operations comply similar financial covenants commenced quarterly period ended march 31 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 45x quarterly periods ending december 31 2012 june 30 2013 decreases 40x quarterly periods ending september 30 2013 december 31 2014 decreases 35x quarterly periods ending march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity singapore credit facility “2012 singapore credit facility” requires operations marina bay sands comply similar financial covenants commenced quarterly period ended september 30 2012 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 40x quarterly periods ending december 31 2012 september 30 2013 decreases 35x quarterly periods ending december 31 2013 december 31 2014 decreases remains 30x quarterly periods thereafter maturity company unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault company’s airplane financings defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance company would able repay refinance amounts may become due payable agreements could force company restructure alter operations debt obligations company held unrestricted cash equivalents approximately 251 billion restricted cash equivalents 65 million december 31 2012 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company need arrange additional financing fund balance cotai strip developments terms suitable company including pursuing approximately 20 billion financing parisian macao normal course activities company continue evaluate capital structure opportunities enhancements thereof including evaluating strategic alternatives related company’s pennsylvania operations june 2012 company entered 51 billion singapore dollar “sgd” approximately 418 billion exchange rates effect december 31 2012 singapore credit facility primarily used repay outstanding indebtedness prior singapore credit facility see “ note 8 longterm debt 2012 singapore credit facility” note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary significant intercompany balances transactions eliminated consolidation las vegas sands corp subsidiaries notes consolidated financial statements continued management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2012 2011 company’s joint ventures total assets 945 million 1084 million respectively total liabilities 958 million 1043 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivables offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets las vegas sands corp subsidiaries notes consolidated financial statements continued maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flow scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale year ended december 31 2012 company recognized impairment loss 1437 million primarily related 1007 million capitalized construction costs related company’s former cotai strip development referred parcels 7 8 429 million impairment due termination zaia venetian macao assets impaired year ended december 31 2011 year ended december 31 2010 company recognized impairment loss 161 million related equipment disposed macao capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2012 2011 2010 company capitalized interest expense 493 million 1271 million 1061 million respectively years ended december 31 2012 2011 2010 company capitalized approximately 203 million 198 million 451 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method las vegas sands corp subsidiaries notes consolidated financial statements continued leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company first conducts qualitative assessment determine whether “morelikelythannot” asset impaired assessing qualitative factors determined “morelikelythannot” asset impaired company performs impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2012 company assets 500 million 165 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets year ended december 31 2012 annual impairment analysis included assessment certain qualitative factors including limited results prior year fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired years ended december 31 2011 2010 quantitative analysis performed fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others although company believes qualitative factors considered impairment reasonable significant changes one assumptions could produce different result future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2012 2011 2010 revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 353 billion 272 billion 219 billion years ended december 31 2012 2011 2010 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 978 million 512 million 543 million years ended december 31 2012 2011 2010 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income consisted solely foreign currency translation adjustments year ended december 31 2012 66 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income comprehensive income net income amount included income expense accompanying consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets us operations certain foreign jurisdictions management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge las vegas sands corp subsidiaries notes consolidated financial statements continued company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements may 2011 fasb issued authoritative guidance intended align principles fair value measurements related disclosure requirements accounting standards generally accepted united states america “gaap” international financial reporting standards guidance effective interim annual reporting periods beginning december 15 2011 adoption guidance material effect company’s financial condition results operations cash flows june 2011 fasb issued authoritative guidance amends presentation comprehensive income financial statements requiring entity present total comprehensive income components net income components comprehensive income either single continuous statement comprehensive income two separate consecutive statements guidance also eliminates option present components comprehensive income part statement equity guidance effective interim annual reporting periods beginning december 15 2011 early adoption permitted see accompanying consolidated statements comprehensive income required presentation july 2012 fasb issued authoritative guidance intended simplify testing indefinite lived intangible assets goodwill impairment revised standard allows companies perform qualitative assessment determine whether impairment testing indefinite lived intangible assets necessary entity required calculate fair value indefinite lived intangible asset perform quantitative impairment test unless entity determines “morelikelythannot” asset impaired guidance effective interim annual impairment tests performed fiscal years beginning september 15 2012 early adoption permitted company elected adopt qualitative approach applied company’s annual impairment test 2012 adoption guidance material effect company’s financial condition results operations cash flows february 2013 fasb issued authoritative guidance reporting reclassifications accumulated comprehensive income guidance requires entity present either face statement net income presented notes significant amounts reclassified accumulated comprehensive income respective line items net income amount reclassified net income entirety reporting period guidance effective fiscal years beginning december 15 2012 early adoption permitted adoption guidance material effect company’s financial condition results operations cash flows note 3 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 4 property equipment net property equipment consists following thousands construction progress consists following thousands 4362 million construction progress consists primarily construction las vegas condo tower venetian macao final purchase price shoppes palazzo determined accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” based net operating income “noi” shoppes palazzo calculated 30 months closing date sale defined amended agreement “final purchase price” subject certain later audit adjustments see “ note 12 mall sales shoppes palazzo” company ggp entered several amendments amended agreement defer time reach agreement final purchase price june 24 2011 company reached settlement ggp regarding final purchase price terms settlement company retained 2954 million proceeds previously received participates certain future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain future revenues constitutes continuing involvement shoppes palazzo therefore 2662 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 2508 million net 606 million accumulated depreciation december 31 2012 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 101 billion 1542 million respectively december 31 2012 cost accumulated depreciation property equipment company leasing third parties 8073 million 1122 million respectively december 31 2011 cost accumulated depreciation property equipment company leasing capital lease arrangements 388 million 88 million respectively december 31 2012 cost accumulated depreciation property equipment company leasing capital lease arrangements 295 million 60 million respectively december 31 2011 company commenced preconstruction activities former cotai strip development parcels 7 8 december 2010 company received notice macao government application land concession parcels 7 8 approved company applied chief executive macao executive review decision january 2011 company filed judicial appeal court second instance macao may 2012 company withdrew appeal recorded impairment loss 1007 million year ended december 31 2012 related capitalized construction costs development parcels 7 8 las vegas sands corp subsidiaries notes consolidated financial statements continued company also recorded onetime impairment loss 429 million related termination zaia show venetian macao year ended december 31 2012 company suspended portions development projects described “ note 1 organization business company development projects” company may required record impairment charge related developments future note 5 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 402 million 434 million 413 million included amortization leasehold interests land expense years ended december 31 2012 2011 2010 respectively estimated future amortization expense approximately 385 million next five years 148 billion thereafter exchange rates effect december 31 2012 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build parcels 1 2 3 5 6 sites venetian macao parcel 1 four seasons macao parcel 2 sands cotai central parcels 5 6 located parisian macao parcel 3 located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well annual rent term land concessions year ended december 31 2012 company made payments 3382 million patacas approximately 424 million exchange rates effect december 31 2012 partial payments land premium sands cotai central remaining semiannual land premium payments sands cotai central 1843 million patacas approximately 231 million exchange rates effect december 31 2012 bear interest 5 per annum paid 2013 addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2012 company obligated land concessions make future premium rental payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2010 company issued gaming license singapore casino regulatory authority “cra” gaming operations marina bay sands required payment license fee sgd 375 million approximately 307 million exchange rates effect december 31 2012 license amortized threeyear term renewable upon submitting application paying applicable license fee meeting requirements determined cra company filed renewal application believes meets renewal requirements determined cra however assurance given license renewal granted period time granted amortization expense 100 million 100 million 63 million years ended december 31 2012 2011 2010 respectively estimated future amortization expense approximately 33 million 38000 years ending december 31 2013 thereafter respectively note 7 accrued liabilities accrued liabilities consist following thousands note 8 longterm debt longterm debt consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” originally consisted 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” august 2010 senior secured credit facility amended among things modify certain financial covenants including increasing maximum leverage ratio quarterly periods june 30 2012 december 31 2012 company fully drawn delayed draw ii facilities 956 million available borrowing capacity extended revolving facility described net outstanding letters credit addition amendment certain lenders elected extend maturity 142 billion aggregate principal amount term b facility november 2016 “extended term b facility” 2845 million aggregate principal amount delayed draw facility november 2016 “extended delayed draw facility” 2079 million aggregate principal amount delayed draw ii facility november 2015 “extended delayed draw ii facility” collectively “extended term loans” extend availability 5325 million giving effect reductions described revolving facility may 2014 “extended revolving facility” part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million result repayment amendment company recorded 212 million loss modification early retirement debt year ended december 31 2010 addition pay 10 billion extended term loans described company paid 7759 million revolving facility year ended december 31 2010 company paid 4000 million senior secured credit facility year ended december 31 2012 recorded 16 million loss early retirement debt result extended term b facility subject quarterly amortization payments 30 million began september 30 2012 followed balloon payment 114 billion due november 23 2016 extended delayed draw facility subject quarterly amortization payments 06 million began september 30 2012 followed balloon payment 2296 million due november 23 2016 extended delayed draw ii facility subject quarterly amortization payments 04 million began september 30 2012 followed balloon payment 1694 million due november 23 2015 extended revolving facility interim amortization payments november 7 2012 company permanently reduced extended revolving facility commitment 325 million 5000 million nonextended portions term b delayed draw facilities mature may 23 2014 term b facility subject quarterly amortization payments 16 million began september 30 2012 followed balloon payment 6215 million due may 23 2014 delayed draw facility subject quarterly amortization payments 03 million began september 30 2012 followed balloon payment 1275 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 02 million began september 30 2012 followed balloon payment 644 million due may 23 2013 company terminated revolving facility december 2011 recorded 05 million loss early retirement result senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets las vegas sands corp subsidiaries notes consolidated financial statements continued borrowings senior secured credit facility amended bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively 225 per annum 275 per annum extended revolving facility extended term loans respectively spreads reduced company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions interest rates set 18 20 28 nonextended term loans extended revolving facility extended term loans respectively december 31 2012 spread extended revolving facility reduced company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 25 26 years ended december 31 2012 2011 respectively company pays commitment fee 0375 per annum undrawn amounts extended revolving facility reduced certain corporate ratings achieved subject certain additional conditions company also paid commitment fee equal 0375 per annum 075 per annum 05 per annum undrawn amounts revolving facility delayed draw ii facilities respectively senior secured credit facility amended contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets senior secured credit facility also requires guarantors comply financial covenants including limited minimum ratios adjusted ebitda interest expense maximum ratios net debt outstanding adjusted ebitda senior secured credit facility also contains conditions events default customary financings see “ note 1 organization business company development financing strategy” discussion december 31 2012 approximately 514 billion net assets lvsllc restricted distributed terms senior secured credit facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 original issue discount 23 million net proceeds offering costs original issue discount 2448 million june 2005 senior notes exchanged substantially similar senior notes “senior notes” registered federal securities laws senior notes set mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes senior obligations lvsc year ended december 31 2010 company repurchased 603 million outstanding principal senior notes recorded 34 million gain early retirement debt connection repurchase year ended december 31 2011 senior notes repurchased march 2012 company redeemed senior notes 1917 million recorded 28 million loss early retirement debt year ended december 31 2012 ffe facility december 2006 certain company’s subsidiaries including lvsllc vcr entered credit facility agreement provide 1429 million finance refinance acquisition certain furniture fixtures equipment “ffe” located venetian las vegas palazzo facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties facility entered amended restated ffe credit guarantee agreement “ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan previous facility conformed affirmative negative covenants events default set forth senior secured credit facility borrowings ffe facility bore interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate applicable margins reduced 025 per annum certain circumstances similar set forth senior secured credit facility company also paid commitment fee 050 per annum undrawn amount term delayed draw loan august 2010 company repaid 918 million outstanding balance ffe credit facility incurred 05 million loss early retirement debt year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 18 december 31 2012 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 20 19 years ended december 31 2012 2011 respectively april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes tenyear maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 16 december 31 2012 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 17 16 years ended december 31 2012 2011 respectively hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt vml vol credit facilities refinancing company entered vml vol credit facilities described construct develop cotai strip integrated resort projects including venetian macao four seasons macao sands cotai central order reduce company’s interest expense extend debt maturities enhance company’s financial flexibility strengthen financial position company entered new credit facility macao september 2011 described borrowings new facility used repay outstanding indebtedness vml vol credit facilities used working capital requirements general corporate purposes including development construction completion certain components sands cotai central company recorded charge 221 million loss modification early retirement debt year ended december 31 2011 part refinancing vml vol credit facilities vml credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “vml credit facility” vml credit facility originally consisted 12 billion funded term b loan “vml term b facility” 7000 million delayed draw term b loan “vml term b delayed draw facility” 1000 million funded local currency term loan “vml local term facility” 5000 million revolving credit facility “vml revolving facility” april 2007 borrower exercised rights vml credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded vml term b facility 6000 million vml revolving facility 2000 million total vml credit facility 33 billion part amendment vml credit facility dated august 12 2009 credit spread increased 325 basis points borrowings bearing interest company’s option either adjusted eurodollar rate case local term loan adjusted hong kong interbank offered rate “hibor” alternate base rate plus spread 55 per annum 45 per annum respectively november 2009 connection scl offering company required repay permanently reduce 5000 million term loan revolving borrowings pro rata basis vml credit facility conjunction 5000 million repayment credit spread reduced 100 basis points credit spreads vml local term facility vml revolving facility subject downward adjustments certain consolidated leverage ratios achieved addition quarterly amortization payments commenced june 2009 company paid vml local term facility full 4796 million vml revolving facility year ended december 31 2010 borrower also paid standby commitment fee 05 per annum undrawn amounts vml revolving facility year ended december 31 2011 weighted average interest rate vml credit facility 48 las vegas sands corp subsidiaries notes consolidated financial statements continued meet requirements vml credit facility company entered interest rate cap agreement september 2009 notional amount 159 billion expired september 2012 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 95 net effect interest expense result interest rate cap agreement years ended december 31 2012 2011 2010 vol credit facility may 17 2010 subsidiary company venetian orient limited “vol” owner developer sands cotai central entered credit agreement “vol credit facility” providing 175 billion equivalent hong kong dollars macao patacas consisted 7500 million term loan “vol term facility” fully drawn july 16 2010 7500 million delayed draw term loan available 18 months closing “vol delayed draw facility” 2500 million revolving facility “vol revolving facility” borrowings vol credit facility bore interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus spread 45 per annum vol paid standby fees 20 per annum undrawn amounts vol term delayed draw facilities 15 per annum undrawn amounts vol revolving facility weighted average interest rate vol credit facility 48 year ended december 31 2011 meet requirements vol credit facility company entered three interest rate cap agreements september 2010 combined notional amount 3750 million expire september 2013 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 35 net effect interest expense result interest rate cap agreements years ended december 31 2012 2011 2010 respectively interest rate cap agreements remain effect used meet requirements 2011 vml credit facility 2011 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower vml guarantor entered credit agreement “2011 vml credit facility” providing 37 billion equivalent hong kong dollars macao patacas consists 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 5000 million revolving facility “2011 vml revolving facility” none drawn december 31 2012 available october 15 2016 indebtedness 2011 vml credit facility guaranteed vml venetian cotai limited vol certain company’s foreign subsidiaries collectively “2011 vml guarantors” obligations 2011 vml credit facility collateralized firstpriority security interest substantially borrower’s 2011 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets 2011 vml credit facility mature november 15 2016 commencing december 31 2014 end subsequent quarter september 30 2015 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 625 aggregate principal amount outstanding november 15 2011 commencing december 31 2015 end subsequent quarter june 30 2016 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 100 aggregate principal amount outstanding november 15 2011 remaining balance 2011 vml term facility balance 2011 vml revolving facility due maturity date addition borrower required repay outstanding 2011 vml term facility portion excess free cash flow defined 2011 vml credit facility end year unless borrower compliance specified consolidated leverage ratio “clr” borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macao pataca denominated loans applicable plus initial spread 225 beginning may 14 2012 spread outstanding loans subject reduction based clr interest rates set 17 us dollar denominated loans 18 hong kong dollar macao pataca denominated loans december 31 2012 borrower also pay standby fees 05 per annum undrawn amounts 2011 vml revolving facility commenced september 30 2011 vml term facility commenced october 31 2011 weighted average interest rate 2011 vml credit facility 21 26 years ended december 31 2012 2011 respectively meet requirements 2011 vml credit facility company entered four interest rate cap agreements september 2012 combined notional amount 13 billion expire november 2014 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 20 net effect interest expense result interest rate cap agreements year ended december 31 2012 company maintains interest rate cap agreements previously used meet requirements vol credit facility fully repaid november 2011 meet requirements 2011 vml credit facility las vegas sands corp subsidiaries notes consolidated financial statements continued 2011 vml credit facility contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions certain capital expenditures use proceeds facility 2011 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense 2011 vml credit facility also contains events default customary financings see “ note 1 organization business company development financing strategy” discussion ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1560 million exchange rates effect december 31 2012 secured credit facility available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date progress payments made ferries finance completion remaining ferries facility collateralized ferries guaranteed vml july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 725 million exchange rates effect december 31 2012 proceeds supplemental facility used reimburse company cash spent date progress payments made four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml august 20 2009 ferry financing facility amended among things allow scl offering remove requirement comply financial covenants facility amended set mature december 2015 subject 26 quarterly payments hkd 681 million approximately 88 million exchange rates effect december 31 2012 commenced october 2009 part amendment credit spread increased 50 basis points 25 per annum borrowings made hong kong dollars accrued interest hibor 25 per annum borrowings made us dollars accrued interest libor weighted average interest rate facility 29 27 years ended december 31 2012 2011 respectively company repaid 1316 million outstanding balance ferry financing recorded 17 million loss early retirement debt year ended december 31 2012 singapore related debt singapore credit facility december 2007 mbs signed credit facility agreement “singapore credit facility” providing sgd 20 billion approximately 164 billion exchange rates effect december 31 2012 term loan “singapore credit facility a” funded january 2008 sgd 275 billion approximately 225 billion exchange rates effect december 31 2012 term loan “singapore credit facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1577 million exchange rates effect december 31 2012 banker’s guarantee facility “singapore credit facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 4095 million exchange rates effect december 31 2012 revolving credit facility “singapore credit facility d” available february 28 2015 january 2012 banker’s guarantee released stb singapore credit facility c immediately terminated indebtedness singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets singapore credit facility mature march 31 2015 mbs required repay prepay singapore credit facility certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore credit facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 1024 million exchange rates effect december 31 2012 per quarter addition commencing quarter ending september 30 2011 mbs required prepay outstanding singapore credit facility b loans pro rata basis percentage excess free cash flow defined singapore credit facility initial excess free cash flow calculation performed september 30 2011 payment made fourth quarter 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued borrowings singapore credit facility bore interest singapore swap offered rate “sor” plus spread 225 per annum mbs paid standby interest fee 1125 per annum 090 per annum undrawn amounts singapore credit facility b facility respectively mbs paid commission 225 per annum bankers’ guarantees outstanding singapore credit facility period banker’s guarantees outstanding weighted average interest rate singapore credit facility 25 years ended december 31 2012 2011 meet requirements singapore credit facility company entered nine interest rate cap agreements 2008 combined notional amount 141 billion threeyear terms expired june december 2011 maturity date one interest rate cap agreements notional amount 500 million extended august 2013 2009 company entered 14 additional interest rate cap agreements combined notional amount 8500 million threeyear terms expired march december 2012 2010 company entered seven additional interest rate cap agreements combined notional amount 3650 million threeyear terms expire january june 2013 2011 company entered 12 additional interest rate cap agreements combined notional amount 115 billion threeyear terms expire may august 2014 2012 company entered three additional interest rate cap agreements combined notional amount 2000 million threeyear terms expire april may 2015 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 30 45 stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2012 2011 2010 june 2012 borrowings new 2012 singapore credit facility described used repay outstanding balance singapore credit facility company recorded 131 million loss modification early retirement debt year ended december 31 2012 part refinancing facility 2012 singapore credit facility june 2012 company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered sgd 51 billion approximately 418 billion exchange rates effect december 31 2012 credit agreement providing fully funded sgd 46 billion approximately 377 billion exchange rates effect december 31 2012 term loan “2012 singapore term facility” sgd 5000 million approximately 4095 million exchange rates effect december 31 2012 revolving facility “2012 singapore revolving facility” available november 25 2017 includes sgd 1000 million approximately 819 million exchange rates effect december 31 2012 ancillary facility “2012 singapore ancillary facility” december 31 2012 company sgd 995 million approximately 815 million exchange rates effect december 31 2012 available borrowing net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets 2012 singapore term facility matures june 25 2018 mbs required repay prepay 2012 singapore credit facility certain circumstances commencing september 30 2014 end quarter thereafter mbs required repay outstanding 2012 singapore term facility amount increasing 20 september 30 2014 80 march 31 2017 march 31 2018 aggregate principal amount outstanding sgd 46 billion approximately 377 billion exchange rates effect december 31 2012 remaining balance 2012 singapore term facility due maturity date 2012 singapore revolving facility matures december 25 2017 interim amortization payments borrowings 2012 singapore credit facility bear interest singapore swap offered rate “sor” plus spread 185 beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 20 december 31 2012 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 21 year ended december 31 2012 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement 2012 singapore credit facility also contains events default customary financings see “ note 1 organization business company development financing strategy” discussion las vegas sands corp subsidiaries notes consolidated financial statements continued cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2012 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2012 2011 approximately 1012 billion 948 billion respectively compared carrying value 1020 billion 1001 billion respectively estimated fair value company’s longterm debt based level 2 inputs quoted prices markets active note 9 equity preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit described outstanding preferred stock redeemed whole company november 15 2011 redemption price 110 per share holders preferred stock rights exchange convert shares securities nevada law company ability declare pay dividends preferred stock extent total assets exceeded total liabilities long company able pay debts became due usual course business declared company’s board directors holders preferred stock entitled receive cumulative cash dividends quarterly february 15 may 15 august 15 november 15 began february 15 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued preferred stock issued public 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively year ended december 31 2012 39070 warrants exercised purchase aggregate 655496 shares company’s common stock 600 per share 39 million cash received settlement warrant exercise price year ended december 31 2011 holders preferred stock exercised 1317220 warrants purchase aggregate 21953704 shares company’s common stock 600 per share tendered 1192100 shares preferred stock 125 million cash settlement warrant exercise price conjunction certain transactions company paid 169 million premiums induce exercise warrants settlement tendering preferred stock year ended december 31 2011 company also repurchased retired 736629 shares preferred stock 823 million year ended december 31 2010 holders preferred stock exercised 2730209 warrants purchase aggregate 45503562 shares company’s common stock 600 per share tendered 475076 shares preferred stock 2255 million cash settlement warrant exercise price conjunction certain transactions company paid 66 million premiums induce exercise warrants settlement tendering preferred stock preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity principal stockholder family greater 50 ownership company therefore ability require company redeem preferred stock beginning november 15 2011 preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years due redemption preferred stock november 15 2011 accumulated undeclared dividends december 31 2011 summary company’s preferred stock issued principal stockholder’s family years ended december 31 2011 2010 presented thousands except number shares march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price las vegas sands corp subsidiaries notes consolidated financial statements continued preferred stock dividends february 15 may 16 august 15 november 15 2011 company paid dividend 250 per preferred share totaling 753 million 525 million paid principal stockholder’s family february 16 may 17 august 16 november 15 2010 company paid dividend 250 per preferred share totaling 934 million 525 million paid principal stockholder’s family redemption preferred stock august 2011 company’s board directors approved redemption outstanding preferred stock november 15 2011 company paid 7630 million redeem preferred shares outstanding recorded redemption premium 888 million year ended december 31 2011 common stock march 30 june 29 september 28 december 28 2012 company paid dividend 025 per common share part regular cash dividend program december 18 2012 company paid special cash dividend 275 per common share year ended december 31 2012 company recorded 309 billion distribution retained earnings 162 billion related principal stockholder’s family amount approximately 55 million recorded liability december 31 2012 paid holders unvested restricted stock units upon vesting january 29 2013 part regular cash dividend program company’s board directors declared quarterly dividend 035 per common share total estimated approximately 289 million paid march 29 2013 shareholders record march 21 2013 rollfoward shares common stock preferred stock issued public summary outstanding shares common stock preferred stock issued public follows equity transactions july 2012 company purchased boeing 747 airplane entity controlled principal stockholder 340 million based independent third party appraisals accordance accounting standards regarding transactions entities common control company recorded cost airplane principal stockholder’s book value date transaction 154 million 186 million difference amount paid book value airplane gain principal stockholder recorded deemed distribution principal stockholder year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued company believes purchase airplane allows meet increased demand highend premium direct customer travel driven company’s expanding global gaming operations important component creating ultimate transpacific transportation experience customers company believes would costly acquire airplane open market due limited supply similar aircraft luxury features noncontrolling interests scl february 28 june 22 2012 scl paid dividend hkd 058 per share total 120 billion company retained 8444 million january 25 2013 board directors scl declared dividend hkd 067 per share total approximately 6964 million exchange rates effect december 31 2012 company retain 4891 million scl shareholders record february 19 2013 paid february 28 2013 june 2011 company disposed interest one majority owned subsidiaries resulting loss 37 million included loss disposal assets year ended december 31 2011 addition year ended december 31 2012 2011 company distributed 105 million 104 million respectively certain noncontrolling interests note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows thousands components income tax expense follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows las vegas sands corp subsidiaries notes consolidated financial statements continued company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2013 july 2012 vml requested additional 5year income tax exemption company received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 1398 million 1086 million 810 million diluted earnings per share would reduced 017 013 010 per share years ended december 31 2012 2011 2010 respectively february 2011 company entered agreement macao government effective end 2013 provides annual payment 144 million patacas approximately 18 million exchange rates effect december 31 2012 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits primary tax affected components company’s net deferred tax liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2012 2011 company windfall tax benefits 1715 million 1122 million respectively reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable year ended december 31 2012 certain wholly owned foreign subsidiaries paid dividends resulting incremental us taxable income receipt dividends result cash tax liability company incremental us taxable income fully offset utilization us federal net operating loss us foreign tax credits generated result dividends addition dividends generated excess us foreign tax credits available carried forward tax years beyond 2012 company’s us operations federal net operating loss carryforward december 31 2012 3597 million december 31 2011 company’s us foreign tax credits 120 billion 845 million december 31 2012 2011 respectively begin expire 2021 company’s state net operating loss carryforwards 2207 million 1859 million december 31 2012 2011 respectively begin expire 2024 company’s us general business credits 43 million 38 million december 31 2012 2011 respectively begin expire 2024 valuation allowance 118 billion 1457 million december 31 2012 2011 respectively provided net us deferred tax assets company believes assets meet “morelikelythannot” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 156 billion 138 billion december 31 2012 2011 respectively begin expire 2013 valuation allowances 2094 million 1795 million december 31 2012 2011 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition las vegas sands corp subsidiaries notes consolidated financial statements continued undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions year ended december 31 2012 company made special onetime repatriation prior earnings certain foreign subsidiaries form 137 billion dividend distribution resulted federal foreign income tax withholding foreign tax credits associated distribution exceeded tax due distribution foreign earnings company plan reinvestment remaining undistributed earnings foreign subsidiaries attributable periods january 1 2012 demonstrates earnings indefinitely reinvested applicable jurisdictions january 1 2012 company longer considers current portion tax earnings profits certain foreign subsidiaries permanently reinvested company provided deferred taxes foreign earnings company expects sufficient creditable foreign taxes offset us income tax would result repatriation foreign earnings december 31 2012 2011 amount undistributed earnings foreign subsidiaries company intend repatriate 427 billion 562 billion respectively earnings distributed form dividends otherwise company expects sufficient creditable foreign taxes offset us income taxes foreign taxes would result distribution reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2011 2010 unrecognized tax benefits 89 million 79 million respectively recorded reductions us net operating loss deferred tax asset amounts recorded december 31 2012 december 31 2012 2011 2010 unrecognized tax benefits 593 million 345 million 279 million respectively recorded longterm liabilities included balance december 31 2012 2011 2010 478 million 339 million 313 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore january 2013 internal revenue service “irs” completed examination tax years 2005 2009 inland revenue authority singapore performing compliance review marina bay sands tax return tax year 2010 company subject examination tax years 2007 macao singapore tax years 2009 us company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes company believes reasonably possible total amount unrecognized tax benefits december 31 2012 may decrease approximately 17 million within next twelve months primarily due conclusion irs audit company’s 2005 2009 consolidated federal income tax returns company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2012 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2012 2011 company 30 38 interest rate cap agreements respectively aggregate fair value approximately 02 million 12 million respectively based quoted market values institutions holding agreements note 12 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2012 2011 2010 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases years ended december 31 2012 2011 2010 35 million deferred item amortized offset convention retail expense las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2012 company obligated ii iii iv make future payments follows thousands shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open construction certain portions mall yet completed pursuant amended agreement company contracted sell shoppes palazzo ggp final purchase price shoppes palazzo determined taking shoppes palazzo’s noi defined amended agreement months 19 30 operations assuming fixed rent fixed periodic payments due tenants month 30 actually due months 19 30 provided 12month period could delayed certain conditions satisfied divided capitalization rate capitalization rate 006 every dollar noi 380 million 008 every dollar noi 380 million closing date sale february 29 2008 ggp made initial purchase price payment 2908 million based projected net operating income first 12 months operations taking account tenants open business paying rent february 29 2008 pursuant amended agreement periodic adjustments purchase price never less 2500 million made based projected noi upcoming 12 months pursuant amended agreement company received additional 46 million june 2008 representing adjustment payment fourth month closing subject adjustments certain audit issues final adjustment purchase price made 30month anniversary closing date later certain conditions satisfied based previously described formula purchase price purchase price adjustment calculations noi calculated using “accrual” method accounting company ggp entered several amendments amended agreement defer time reach agreement final purchase price parties continued work various matters related calculation noi june 24 2011 company reached settlement ggp regarding final purchase price terms settlement company retained 2954 million proceeds previously received participates certain future revenues earned ggp addition company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2012 company obligated make future payments approximately 08 million annually two years ended december 31 2014 approximately 09 million annually three years ended december 31 2017 05 million thereafter accordance related accounting standards transaction accounted sale company’s participation certain future revenues constitutes continuing involvement shoppes palazzo therefore 2680 million mall sale transaction recorded deferred proceeds sale december 31 2012 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 225 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term 41 million total proceeds mall sale transaction represented portion proceeds excess guaranteed purchase price allocated palazzo master lease recognized contingent rent revenue included convention retail revenue year ended december 31 2011 note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued october 15 2004 richard suen round square company limited filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada “district court clark county” asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court clark county new trial decision reversing monetary judgment company nevada supreme court also made several rulings may affect outcome new trial including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court clark county february 27 2012 district court clark county set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court clark county granted requests company unable time determine probability outcome range reasonably possible loss company intends defend matter vigorously october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court clark county alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 amended complaint filed added sheldon g adelson defendant alleged claim defamation per se lvsc scl june 9 2011 district court clark county dismissed defamation claim certified decision sheldon g adelson final judgment july 1 2011 plaintiff filed notice appeal regarding final judgment sheldon g adelson august 26 2011 nevada supreme court issued writ mandamus instructing district court clark county hold evidentiary hearing whether personal jurisdiction exists scl stayed case district court’s decision january 17 2012 mr jacobs filed opening brief nevada supreme court regarding appeal defamation claim mr adelson january 30 2012 mr adelson filed reply mr jacobs’ opening brief march 8 2012 district court clark county set hearing date week june 2529 2012 evidentiary hearing personal jurisdiction scl may 24 2012 district court clark county vacated hearing date previously set june 2529 set status conference june 28 2012 june 28 status hearing district court clark county set hearing schedule resolve discovery dispute reset date jurisdictional hearing september 10 september 12 2012 district court clark county held hearing determine outcome certain discovery disputes issued order september 14 2012 order district court clark county fined lvsc 25000 purposes jurisdictional discovery evidentiary hearing precluded defendants relying macao data privacy act objection defense discovery obligations december 21 2012 district court clark county ordered defendants produce documents former counsel lvsc containing attorney client privileged information january 23 2013 defendants filed writ nevada supreme court challenging order january 29 2013 district court clark county granted defendants motion stay order mr jacobs seeking unspecified damages action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously february 9 2011 lvsc received subpoena securities exchange commission “sec” requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice “doj” conducting similar investigation company’s belief subpoena may emanated lawsuit filed steven c jacobs described company’s receipt subpoena sec february 9 2011 board directors delegated audit committee comprised three independent members board directors authority investigate matters raised sec subpoena related inquiry doj part annual audit company’s financial statements audit committee advised company independent accountants reached certain preliminary findings including likely violations books records internal controls provisions fcpa recent years company improved practices respect books records internal controls based information provided management audit committee counsel company believes audit committee concurs preliminary findings • material impact financial statements company • warrant restatement company’s past financial statements • represent material weakness company’s internal controls financial reporting december 31 2012 investigation audit committee though largely completed remains ongoing company cooperating investigations based proceedings date management currently unable determine probability outcome matter extent materiality range reasonably possible loss may 24 2010 frank j fosbre jr filed purported class action complaint united states district court district nevada “us district court” lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint las vegas sands corp subsidiaries notes consolidated financial statements continued filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants’ motion partial reconsideration court’s order dated august 24 2011 striking additional portions plaintiff’s complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiff filed purported class action second amended complaint “second amended complaint” seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court clark county sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court clark county sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 status hearing consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel state court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued march 23 2012 ernest kleinschmidt filed shareholder derivative action “kleinschmidt action” behalf company district court clark county sheldon g adelson michael leven irwin siegel jeffrey h schwartz jason n ader charles forman irwin chafetz george p koo currently members board directors wing chao andrew r heyer james purcell bradley h stone william p weidner former members board directors andor executives company complaint alleges among things breach fiduciary duties disseminating false misleading information failure maintain internal controls failing properly oversee manage company unjust enrichment complaint seeks among relief unspecified damages direction lvsc take unspecified actions improve corporate governance internal procedures restitution disgorgement profits attorneys’ fees costs related expenses plaintiff june 29 2012 defendants served time including nominal defendant lvsc defendants michael leven irwin siegel jason n ader charles forman irwin chafetz george p koo james purcell bradley h stone william p weidner filed motion dismiss july 20 july 25 2012 defendants jeffery h schwartz wing chao respectively filed substantially similar motion dismiss october 10 2012 case transferred business court within district court clark county october 12 2012 case reassigned new judge january 14 2013 district court clark county filed order dismissing entire case failure make demand board directors lvsc 5 6 claims dismissed prejudice time barred applicable statutes limitations sixth claim unjust enrichment allowed refiled demand board directors lvsc made company received letter plaintiffs lawyers dated february 9 2013 making demand board directors lvsc unjust enrichment claim district court clark county previously dismissed without prejudice addition february 19 2013 plaintiffs filed notice appeal nevada supreme court appealing dismissal case based proceedings date management unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously january 19 2012 asian american entertainment corporation limited “aaec” filed claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” lvsllc vcr collectively “defendants” claim 30 billion patacas approximately 3758 million exchange rates effect december 31 2012 compensation damages resulting alleged breach agreements entered aaec defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim “prior action” us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action “nevada action” aaec us district court seeking enjoin aaec proceeding macao action based aaec’s filing us district court’s dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action august 1 2012 scl filed announcement sehk stating scl’s subsidiary vml received notification office personal data protection macao government “opdp” indicating opdp launched official investigation procedure relation alleged transfer macao vml united states certain data contrary personal data protection act macau company cooperated fully investigation expects opdp present finding first half 2013 based proceedings date management currently unable determine probability outcome matter range reasonably possible loss company received subpoenas us attorney’s office requesting production documents relating two prior customers company’s properties company cooperating us attorney’s office matters based proceedings date management currently unable determine probability outcome matter range reasonably possible loss las vegas sands corp subsidiaries notes consolidated financial statements continued macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including sands macao venetian macao plaza casino four seasons macao sands cotai central separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2012 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37580 18790 125 respectively exchange rates effect december 31 2012 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2012 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2012 company obligated subconcession make minimum future payments approximately 388 million next five years approximately 1748 million thereafter amounts expected increase company completes cotai strip properties currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2012 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 514 million 439 million 381 million years ended december 31 2012 2011 2010 respectively ventures commitments company entered employment agreements nine executive officers remaining terms one five years december 31 2012 company obligated make future payments 111 million 70 million 32 million 09 million 02 million years ended december 31 2013 2014 2015 2016 2017 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2012 company obligated agreements make future payments approximately 06 million year ended december 31 2013 04 million years ended december 31 2014 2015 2016 2017 52 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued malls company leases space several integrated resorts various third parties leases noncancellable operating leases lease periods vary 1 month 25 years leases include minimum base rents escalated contingent rent clauses december 31 2012 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2012 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 1090 million 823 million 378 million years ended december 31 2012 2011 2010 respectively note 14 stockbased employee compensation company three nonqualified stock option plans 1997 plan 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2012 2011 subsequent december 31 2012 board directors approved dissolution 1997 plan las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2012 6454680 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model stock options granted year ended december 31 2010 expected volatilities based combination company’s historical volatility historical volatilities selection companies company’s peer group due company’s lack historical information stock options granted subsequent december 31 2010 expected volatilities based company’s historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant las vegas sands corp subsidiaries notes consolidated financial statements continued sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s compensation committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2012 773913693 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based historical volatilities selection companies scl’s peer group due scl’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based hong kong exchange fund note rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued summary stock option activity company’s equity award plans year ended december 31 2012 presented 1 result company paying special cash dividend 275 per common share december 18 2012 common stockholders record december 10 2012 company reduced exercise price stock options outstanding december 10 2012 approximately 275 adjustment result antidilution provision company’s 2004 plan result additional compensation expense summary unvested restricted shares company’s 2004 plan year ended december 31 2012 presented summary unvested restricted stock units company’s 2004 plan year ended december 31 2012 presented december 31 2012 2004 plan 315 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 385 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 21 years 28 years respectively december 31 2012 scl equity plan 187 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 24 years las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2012 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages given challenging conditions impact company’s us operations company ceased matching contributions salaried employees effective april 1 2009 matching contributions salaried employees subsequently reinstated january 1 2011 years ended december 31 2012 2011 2010 company’s matching contributions savings plan 47 million 79 million 32 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years given challenging conditions impact company’s macao operations provident fund suspended year ended december 31 2010 employees accepted reduced work schedule eligible benefit provident fund contributions fulltime employees subsequently reinstated january 1 2011 years ended december 31 2012 2011 2010 vml’s contributions provident fund 229 million 160 million 73 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2012 mbs contributes 160 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2012 2011 2010 mbs’s contributions provident fund 328 million 307 million 169 million respectively note 16 related party transactions years ended december 31 2012 2011 2010 principal stockholder family purchased certain lodging banquet room catering goods services procurement services company approximately 13 million 05 million 08 million respectively years ended december 31 2012 2011 2010 company incurred paid certain expenses totaling 117 million 165 million 161 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2012 2011 2010 company charged received principal stockholder 154 million 152 million 94 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes see “ note 9 equity transactions” regarding company’s purchase boeing 747 airplane entity controlled principal stockholder june 2012 november 15 2011 company paid 5775 million redeem preferred stock held principal stockholder’s family march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price see “ note 9 equity preferred stock issued principal stockholder’s family” year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas macao singapore united states company reviews results operations operating segments venetian macao sands macao four seasons macao sands cotai central asia comprised primarily company’s ferry operations various operations ancillary company’s properties macao marina bay sands venetian las vegas includes sands expo center palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure company also reviews construction development activities primary projects development suspended addition reportable segments noted company’s primary projects development parisian macao phase iii sands cotai central macao las vegas condo tower included corporate us corporate activities company also included corporate information years ended december 31 2011 2010 reclassified conform current presentation company’s segment information follows years ended december 31 2012 2011 2010 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda net income royalty fees stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income expense loss modification early retirement debt income taxes adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 condensed consolidating financial information lvsllc vcr mall intermediate holding company llc venetian transport llc venetian marketing inc lido intermediate holding company llc lido casino resort holding company llc sands expo convention center inc formerly interface groupnevada inc palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc lvs nevada international holdings inc lvs management services llc collectively “restricted subsidiaries” guarantors senior secured credit facility noncontrolling interest amounts included restricted subsidiaries’ condensed consolidating financial information related nonvoting preferred stock one subsidiaries held third parties february 2008 capital stock phase ii mall subsidiary llc sold ggp however sale complete accounting perspective due company’s continuing involvement transaction related participation certain future revenues earned ggp certain assets liabilities operating results related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted restricted subsidiaries therefore included “restricted subsidiaries” columns following condensed consolidating financial information result net liabilities 173 million consisting 2508 million property equipment offset 2681 million liabilities consisting primarily deferred proceeds sale 30 million consisting 2641 million property equipment offset 2671 million liabilities consisting primarily deferred proceeds sale december 31 2012 2011 respectively net loss consisting primarily depreciation expense 151 million 195 million 99 million years ended december 31 2012 2011 2010 respectively related mall accounted restricted subsidiaries balances amounts collateral senior secured credit facility condensed consolidating financial information lvsc restricted subsidiaries nonrestricted subsidiaries combined basis december 31 2012 2011 three years period ended december 31 2012 follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 company repurchased redeemed induced holders redeem outstanding preferred stock resulted charges net income attributable common stockholders 184 million 07 million 290 million 976 million first second third fourth quarters year ended december 31 2011 respectively year ended december 31 2011 1457 million charged net income attributable common stockholders 2 first quarter 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock paid 5250 million cash settlement exercise price 3 first second quarters 2012 company recorded impairment losses 429 million 1007 million respectively 4 phases iia sands cotai central opened april september 2012 respectively earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2012 2011 2010 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm board directors stockholders las vegas sands corp audited accompanying consolidated balance sheet las vegas sands corp subsidiaries company december 31 2013 related consolidated statement operations comprehensive income equity cash flows year ended audit also included 2013 financial information financial statement schedule listed index item 15a2 financial statements financial statement schedule responsibility company’s management responsibility express opinion financial statements financial statement schedule based audit consolidated financial statements company years ended december 31 2012 2011 effects retrospective adjustments condensed consolidating financial information change composition restricted subsidiaries discussed note 18 consolidated financial statements audited auditors whose report dated march 1 2013 expressed unqualified opinion statements conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audit provides reasonable basis opinion 2013 consolidated financial statements present fairly material respects financial position las vegas sands corp subsidiaries december 31 2013 results operations cash flows year ended conformity accounting principles generally accepted united states america also opinion 2013 information financial statement schedule considered relation basic 2013 consolidated financial statements taken whole presents fairly material respects information set forth therein also audited adjustments note 18 2012 2011 consolidated financial statements retrospectively adjust condensed consolidating financial information change composition restricted subsidiaries 2013 discussed note 18 consolidated financial statements procedures included 1 comparing previously reported consolidating financial information previously issued consolidating financial information note 18 2 comparing adjustments consolidating financial information company’s underlying analysis 3 testing mathematical accuracy underlying analysis recast consolidating financial information opinion retrospective adjustments appropriate properly applied however engaged audit review apply procedures 2012 2011 consolidated financial statements company respect adjustments accordingly express opinion form assurance 2012 2011 consolidated financial statements taken whole also audited accordance standards public company accounting oversight board united states company’s internal control financial reporting december 31 2013 based criteria established internal control integrated framework 1992 issued committee sponsoring organizations treadway commission report dated february 28 2014 expressed unqualified opinion company’s internal control financial reporting report independent registered public accounting firm board directors stockholders las vegas sands corp audited internal control financial reporting las vegas sands corp subsidiaries company december 31 2013 based criteria established internal control integrated framework 1992 issued committee sponsoring organizations treadway commission companys management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s annual report internal control financial reporting appearing item 9a responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed supervision companys principal executive principal financial officers persons performing similar functions effected companys board directors management personnel provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting including possibility collusion improper management override controls material misstatements due error fraud may prevented detected timely basis also projections evaluation effectiveness internal control financial reporting future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion company maintained material respects effective internal control financial reporting december 31 2013 based criteria established internal control integrated framework 1992 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states consolidated financial statements financial statement schedule december 31 2013 year ended december 31 2013 company report dated february 28 2014 expressed unqualified opinion financial statements financial statement schedule report independent registered public accounting firm directors shareholders las vegas sands corp opinion consolidated balance sheet december 31 2012 related consolidated statements operations comprehensive income equity cash flows two years period ended december 31 2012 effects adjustments retrospectively reflect change group subsidiaries restricted subsidiaries described note 18 present fairly material respects financial position las vegas sands corp subsidiaries “company” december 31 2012 results operations cash flows two years period ended december 31 2012 conformity accounting principles generally accepted united states america 2012 financial statements effects adjustments discussed note 18 presented herein addition opinion financial statement schedule two years period ended december 31 2012 presents fairly material respects information set forth therein read conjunction related consolidated financial statements effects adjustments described financial statements financial statement schedule responsibility companys management responsibility express opinion financial statements financial statement schedule based audits conducted audits effects adjustments described statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion engaged audit review apply procedures adjustments retrospectively reflect change group subsidiaries restricted subsidiaries described note 18 accordingly express opinion form assurance whether adjustments appropriate properly applied adjustments audited auditors las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” ordinary shares company’s subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china traded main board stock exchange hong kong limited “sehk” shares scl registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 702 scl includes operations venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession company owns operates venetian macao resort hotel “the venetian macao” anchors cotai strip company’s masterplanned development integrated resort properties area approximately 140 acres macao consisting parcels referred 1 2 3 5 6 venetian macao located parcel 1 includes 39floor luxury hotel 2900 suites approximately 385000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 923000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central located parcels 5 6 integrated resort situated across street venetian macao four seasons macao described april 2012 company opened first hotel tower parcel 5 consisting approximately 600 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand company also opened 350000 square feet meeting space several food beverage establishments along 230000squarefoot casino vip gaming areas operated company september 2012 company opened first hotel tower parcel 6 consisting approximately 1800 rooms sheraton brand opened second casino additional retail entertainment dining meeting facilities operated company january 2013 second hotel tower parcel 6 opened featuring approximately 2100 rooms suites sheraton brand company begun construction remaining phase integrated resort include fourth hotel mixeduse tower located parcel 5 st regis brand total cost complete remaining phase expected approximately 700 million upon completion project integrated resort feature approximately 350000 square feet gaming space approximately 800000 square feet retail entertainment dining space 550000 square feet meeting facilities multipurpose theater open 2014 december 31 2013 company capitalized costs 415 billion entire project including land premium net amortization 876 million outstanding construction payables company owns four seasons hotel macao cotai strip “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” located parcel 2 features approximately 113000 square feet gaming space 19 paiza mansions retail space approximately 260000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower advancing plans monetize units within four seasons apartments company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 260000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities las vegas sands corp subsidiaries notes consolidated financial statements continued singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consist two enclosed retail dining entertainment complexes sold ggp limited partnership “ggp” see “ note 12 mall sales” pennsylvania company owns operates sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 145000 square feet gaming space 300room hotel tower 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center opened may 2012 company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects macao company submitted plans macao government parisian macao located parcel 3 integrated resort connected venetian macao four seasons macao parisian macao currently expected open late 2015 intended include gaming area operated company’s gaming subconcession hotel shopping mall company expects cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium company commenced construction activities capitalized costs 3760 million including land premium net amortization december 31 2013 addition company completing development public areas surrounding cotai strip properties behalf macao government company’s land concession sands cotai central company required complete development may 2014 company applied extension macao government complete sands cotai central company unable meet may 2014 deadline land concession parisian macao contains similar requirement extended macao government july 2012 development completed april 2016 company determine unable complete parisian macao april 2016 company would also expect apply another extension macao government company unable meet parisian macao deadline deadlines either development extended company could lose land concessions sands cotai central parisian macao would prohibit company operating facilities developed respective land concessions result company could record charge portion 415 billion 3760 million capitalized construction costs land premiums net amortization december 31 2013 related sands cotai central parisian macao respectively united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve december 31 2013 company capitalized construction costs 1786 million project impact suspension estimated overall cost project las vegas sands corp subsidiaries notes consolidated financial statements continued currently determinable certainty demand conditions fail improve management decide abandon project company could record charge portion 1786 million capitalized construction costs december 31 2013 company continues aggressively pursue variety new development opportunities around world capital financing overview december 31 2013 company funded development projects primarily borrowings credit facilities operating cash flows proceeds equity offerings proceeds disposition noncore assets company held unrestricted cash equivalents approximately 360 billion restricted cash equivalents 68 million december 31 2013 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company may elect arrange additional financing fund balance cotai strip developments normal course activities company continue evaluate capital structure opportunities enhancements thereof including evaluating strategic alternatives related company’s pennsylvania operations december 2013 company entered 35 billion 2013 us credit facility primarily used repay outstanding indebtedness prior senior secured credit facility see “ note 8 longterm debt corporate us related 2013 us credit facility” company currently process amending restating macao credit facility allow lender holding term loans facility extend maturity term loans 2020 provide new revolving loan commitments 20 billion company also option raise incremental senior secured unsecured debt existing baskets within amended credit facility amendment subject approval lenders certain macao government approvals anticipated close first quarter 2014 see “ note 8 longterm debt macao related 2011 vml credit facility” note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2013 2012 company’s joint ventures total assets 1039 million 945 million respectively total liabilities 1254 million 958 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates las vegas sands corp subsidiaries notes consolidated financial statements continued cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivables offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined weighted average specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs las vegas sands corp subsidiaries notes consolidated financial statements continued estimate undiscounted cash flows company’s asset groups company considers potential cash flow scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale years ended december 31 2013 2011 assets impaired december 31 2012 company recognized impairment loss 1437 million primarily related 1007 million capitalized construction costs related company’s former cotai strip development referred parcels 7 8 429 million impairment due termination zaia venetian macao capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2013 2012 2011 company capitalized interest expense 47 million 493 million 1271 million respectively years ended december 31 2013 2012 2011 company capitalized approximately 242 million 203 million 198 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company first conducts qualitative assessment determine whether “morelikelythannot” asset impaired assessing qualitative factors determined “morelikelythannot” asset impaired company performs impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2013 company assets 500 million 165 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets years ended december 31 2013 2012 annual impairment analysis included assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired year ended december 31 2011 quantitative analysis performed fair value company’s gaming license table games certificate estimated using company’s expected adjusted property las vegas sands corp subsidiaries notes consolidated financial statements continued ebitda defined “ note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others although company believes qualitative factors considered impairment analysis reasonable significant changes one assumptions could produce different result future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2013 2012 2011 revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 454 billion 353 billion 272 billion years ended december 31 2013 2012 2011 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed las vegas sands corp subsidiaries notes consolidated financial statements continued cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 1178 million 978 million 512 million years ended december 31 2013 2012 2011 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income consisted solely foreign currency translation adjustments year ended december 31 2012 66 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income comprehensive income net income amount included income expense accompanying consolidated statements operations earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation las vegas sands corp subsidiaries notes consolidated financial statements continued cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 2178 million 2094 million december 31 2013 2012 respectively valuation allowance deferred tax assets us operations 130 billion 118 billion december 31 2013 2012 respectively management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements july 2012 fasb issued authoritative guidance intended simplify testing indefinite lived intangible assets goodwill impairment revised standard allows companies perform qualitative assessment determine whether impairment testing indefinite lived intangible assets necessary entity required calculate fair value indefinite lived intangible asset perform quantitative impairment test unless entity determines las vegas sands corp subsidiaries notes consolidated financial statements continued “morelikelythannot” asset impaired guidance effective interim annual impairment tests performed fiscal years beginning september 15 2012 early adoption permitted adoption guidance material effect company’s financial condition results operations cash flows february 2013 fasb issued authoritative guidance reporting reclassifications accumulated comprehensive income guidance requires entity present either face statement net income presented notes significant amounts reclassified accumulated comprehensive income respective line items net income amount reclassified net income entirety reporting period guidance effective fiscal years beginning december 15 2012 early adoption permitted adoption guidance material effect company’s financial condition results operations cash flows july 2013 fasb issued authoritative guidance presentation unrecognized tax benefit loss tax credit carryforward exists guidance requires netting unrecognized tax benefits deferred tax asset loss tax credit carryforward would apply settlement uncertain tax positions company adopted guidance prospectively effective fiscal year ended december 31 2013 adoption guidance material effect company’s financial condition results operations cash flow see “ note 10 income taxes” discussion regarding unrecognized tax benefits note 3 accounts receivable net accounts receivable consists following thousands note 4 property equipment net property equipment consists following thousands construction progress consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 3253 million construction progress consists primarily construction las vegas condo tower various projects venetian macao accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” company sold portion grand canal shoppes located within palazzo formerly referred shoppes palazzo see “ note 12 mall sales shoppes palazzo” terms settlement ggp june 24 2011 company retained 2954 million proceeds previously received participates certain potential future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 2662 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 2393 million net 721 million accumulated depreciation december 31 2013 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 104 billion 2033 million respectively december 31 2013 cost accumulated depreciation property equipment company leasing third parties 101 billion 1542 million respectively december 31 2012 cost accumulated depreciation property equipment company leasing capital lease arrangements 410 million 125 million respectively december 31 2013 cost accumulated depreciation property equipment company leasing capital lease arrangements 388 million 88 million respectively december 31 2012 year ended december 31 2013 assets impaired may 2012 company withdrew appeal regarding company’s application approved macao government land concession related cotai strip development formerly referred parcels 7 8 recorded impairment loss 1007 million year ended december 31 2012 related capitalized construction costs development parcels 7 8 company also recorded onetime impairment loss 429 million related termination zaia show venetian macao year ended december 31 2012 company suspended portions development projects described “ note 1 organization business company” company may required record impairment charge related developments future note 5 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 404 million 402 million 434 million included amortization leasehold interests land expense years ended december 31 2013 2012 2011 respectively estimated future amortization expense approximately 424 million next five years 147 billion thereafter exchange rates effect december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build parcels 1 2 3 5 6 sites venetian macao parcel 1 four seasons macao parcel 2 sands cotai central parcels 5 6 located parisian macao parcel 3 constructed company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well annual rent term land concessions year ended december 31 2013 company made payments 3553 million patacas approximately 445 million exchange rates effect december 31 2013 final payment land premium sands cotai central addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2013 company obligated land concessions make future rental payments follows thousands note 6 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2013 company paid 570 million singapore dollars sgd approximately 449 million exchange rates effect december 31 2013 singapore casino regulatory authority “cra” part process renew gaming license marina bay sands license amortized threeyear term expires april 2016 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 136 million 100 million 100 million years ended december 31 2013 2012 2011 respectively estimated future amortization expense approximately 150 million next two years 48 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued note 7 accrued liabilities accrued liabilities consist following thousands note 8 longterm debt longterm debt consists following thousands corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” originally consisted 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million available swingline basis “revolving facility” august 2010 senior secured credit facility amended among things modify certain financial covenants including increasing maximum leverage ratio quarterly periods june 30 2012 addition amendment certain lenders elected extend maturity 142 billion aggregate principal amount term b facility november 2016 “extended term b facility” 2845 million aggregate principal amount delayed draw facility november 2016 “extended delayed draw facility” 2079 million aggregate principal amount delayed draw ii facility november 2015 “extended delayed draw ii facility” collectively “extended term loans” extend availability 5325 million giving effect reductions described revolving las vegas sands corp subsidiaries notes consolidated financial statements continued facility may 2014 “extended revolving facility” part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million addition pay 10 billion extended term loans described company paid 7759 million revolving facility year ended december 31 2010 company terminated revolving facility december 2011 recorded 05 million loss early retirement result company paid 4000 million senior secured credit facility year ended december 31 2012 recorded 16 million loss early retirement debt result borrowings senior secured credit facility amended bore interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively 225 per annum 275 per annum extended revolving facility extended term loans respectively spreads would reduced company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions spread extended revolving facility would reduced company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 23 25 years ended december 31 2013 2012 respectively company paid commitment fee 0375 per annum undrawn amounts extended revolving facility well commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw ii facilities respectively december 2013 borrowings new 2013 us credit facility described used repay outstanding balance senior secured credit facility company recorded 142 million loss modification early retirement debt year ended december 31 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility “2013 us credit facility” consists 225 billion funded term b loan “2013 us term b facility” original issue discount 113 million 125 billion revolving credit facility “2013 us revolving facility” december 31 2013 company 6555 million available borrowing capacity 2013 us revolving facility net outstanding letters credit subsequent year end company borrowed 5000 million 2013 us revolving facility 2013 us term b facility matures december 19 2020 subject quarterly amortization payments 56 million begin march 31 2014 followed balloon payment 210 billion due december 19 2020 2013 us revolving facility interim amortization payments matures december 19 2018 2013 us credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 us credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 15 per annum 2013 us revolving facility 2013 us term b facility respectively eurodollar rate borrowings initial credit spread 15 per annum 25 per annum 2013 us revolving facility 2013 us term b facility subject eurodollar rate floor 075 respectively interest rates set 33 17 2013 us term b facility 2013 us revolving facility respectively december 31 2013 weighted average interest rate 2013 us credit facility 29 period ended december 31 2013 company pays commitment fee 035 per annum undrawn amounts 2013 us revolving facility reduced certain corporate ratings achieved subject certain additional conditions las vegas sands corp subsidiaries notes consolidated financial statements continued 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply financial covenants including limited maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” extent outstanding balance 2013 us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity 2013 us credit facility also contains conditions events default customary financings december 31 2013 approximately 496 billion net assets lvsllc restricted distributed terms 2013 us credit facility senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 original issue discount 23 million june 2005 senior notes exchanged substantially similar senior notes “senior notes” registered federal securities laws senior notes set mature february 15 2015 march 2012 company redeemed remaining balance senior notes outstanding 1917 million recorded 28 million loss early retirement debt year ended december 31 2012 airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 18 december 31 2013 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 18 20 years ended december 31 2013 2012 respectively april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes tenyear maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 16 december 31 2013 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 16 17 years ended december 31 2013 2012 respectively hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt 2011 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement “2011 vml credit facility” providing 37 billion equivalent hong kong dollars macao patacas consists 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 5000 million revolving facility “2011 vml revolving facility” none drawn december 31 2013 available october 15 2016 borrowings facility used repay outstanding indebtedness previous credit facilities vml credit facility vol credit facility used working capital requirements general corporate purposes including development construction completion certain components sands cotai central company recorded charge 221 million loss modification early retirement debt year ended december 31 2011 part refinancing vml vol credit facilities las vegas sands corp subsidiaries notes consolidated financial statements continued indebtedness 2011 vml credit facility guaranteed vml venetian cotai limited venetian orient limited certain company’s foreign subsidiaries collectively “2011 vml guarantors” obligations 2011 vml credit facility collateralized firstpriority security interest substantially borrower’s 2011 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets 2011 vml term facility mature november 15 2016 commencing quarterly period ending december 31 2014 end subsequent quarter september 30 2015 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 625 aggregate principal amount outstanding november 15 2011 commencing quarterly period ending december 31 2015 end subsequent quarter june 30 2016 borrower required repay outstanding 2011 vml term facility pro rata basis amount equal 100 aggregate principal amount outstanding november 15 2011 remaining balance 2011 vml term facility balance 2011 vml revolving facility due maturity date addition borrower required repay outstanding 2011 vml term facility portion excess free cash flow defined 2011 vml credit facility end year unless borrower compliance specified consolidated leverage ratio “clr” borrowings 2011 vml credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hong kong interbank offered rate hibor case hong kong dollar macao pataca denominated loans applicable plus initial spread 225 beginning may 14 2012 spread outstanding loans subject reduction based clr interest rates set 17 us dollar hong kong dollar macao pataca denominated loans december 31 2013 borrower also pay standby fees 05 per annum undrawn amounts 2011 vml revolving facility commenced september 30 2011 vml term facility commenced october 31 2011 weighted average interest rate 2011 vml credit facility 18 21 years ended december 31 2013 2012 respectively meet requirements 2011 vml credit facility company entered four interest rate cap agreements september 2012 combined notional amount 13 billion expire november 2014 2013 company entered two additional interest rate cap agreements combined notional amount 3000 million expire november 2014 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate range 20 225 interest rate cap agreements addition following interest rate cap agreements vml vol credit facilities meet requirements previous vml credit facility company entered interest rate cap agreement september 2009 notional amount 159 billion expired september 2012 provisions interest rate cap agreement entitled company receive counterparty amounts selected market interest rate exceeded strike rate 95 meet requirements previous vol credit facility company entered three interest rate cap agreements september 2010 combined notional amount 3750 million expired september 2013 provisions interest rate cap agreement entitled company receive counterparty amounts selected market interest rate exceeded strike rate 35 net effect interest expense result interest rate cap agreements years ended december 31 2013 2012 2011 vml credit facility contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions certain capital expenditures use proceeds facility 2011 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense maximum leverage ratio 40x quarterly periods ending december 31 2013 december 31 2014 decreases 35x quarterly periods ending march 31 december 31 2015 decreases remains 30x quarterly periods thereafter maturity 2011 vml credit facility also contains events default customary financings company currently process amending restating 2011 vml credit facility amendment allow lender holding term loans 2011 vml credit facility extend maturity term loans 2020 provide new revolving loan commitments 20 billion company also option raise incremental senior secured unsecured debt existing baskets within amended credit facility proceeds amended credit facility together cash hand may used repay outstanding term loans extended amended credit facility fund ongoing development projects pursuant terms amended credit facility general corporate operations amendment subject approval lenders certain macao government approvals anticipated close first quarter 2014 conjunction amendment company anticipates recording loss modification extinguishment debt las vegas sands corp subsidiaries notes consolidated financial statements continued ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1559 million exchange rates effect december 31 2013 secured credit facility ferry financing available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date progress payments made ferries finance completion remaining ferries facility collateralized ferries guaranteed vml july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 724 million exchange rates effect december 31 2013 proceeds supplemental facility used reimburse company cash spent date progress payments made four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml facility amended august 20 2009 set mature december 2015 subject 26 quarterly payments hkd 681 million approximately 88 million exchange rates effect december 31 2013 commenced october 2009 part amendment credit spread increased 50 basis points 25 per annum borrowings made hong kong dollars accrued interest hibor 25 per annum borrowings made us dollars accrued interest libor weighted average interest rate facility 29 year ended december 31 2012 company repaid 1316 million outstanding balance ferry financing recorded 17 million loss early retirement debt year ended december 31 2012 singapore related debt 2012 singapore credit facility june 2012 company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered sgd 51 billion approximately 402 billion exchange rates effect december 31 2013 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 363 billion exchange rates effect december 31 2013 term loan “2012 singapore term facility” sgd 5000 million approximately 3942 million exchange rates effect december 31 2013 revolving facility “2012 singapore revolving facility” available november 25 2017 includes sgd 1000 million approximately 788 million exchange rates effect december 31 2013 ancillary facility “2012 singapore ancillary facility” borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility company recorded 131 million loss modification early retirement debt year ended december 31 2012 part refinancing facility december 31 2013 company sgd 4929 million approximately 3887 million exchange rates effect december 31 2013 available borrowing net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets 2012 singapore term facility matures june 25 2018 mbs required repay prepay 2012 singapore credit facility certain circumstances commencing quarterly period ending september 30 2014 end quarter thereafter mbs required repay outstanding 2012 singapore term facility amount increasing 20 september 30 2014 80 march 31 2017 march 31 2018 aggregate principal amount outstanding sgd 46 billion approximately 363 billion exchange rates effect december 31 2013 remaining balance 2012 singapore term facility due maturity date 2012 singapore revolving facility matures december 25 2017 interim amortization payments borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 18 december 31 2013 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average las vegas sands corp subsidiaries notes consolidated financial statements continued interest rate 2012 singapore credit facility 19 21 years ended december 31 2013 2012 respectively connection 2012 singapore credit facility company entered interest rate cap agreement 2013 notional amount sgd 1000 million approximately 788 million exchange rates effect december 31 2013 threeyear term expires may 2016 provisions interest rate cap agreement entitle company receive counterparties amounts selected market interest rate exceeds strike rate 35 stated agreement interest rate cap agreement addition following interest rate cap agreements entered previous singapore credit facility meet requirements previous singapore credit facility company entered nine interest rate cap agreements 2008 combined notional amount sgd 141 billion approximately 11 billion exchange rates effect december 31 2013 threeyear terms expired june december 2011 maturity date one interest rate cap agreements notional amount sgd 500 million approximately 394 million exchange rates effect december 31 2013 extended august 2013 2009 company entered 14 additional interest rate cap agreements combined notional amount sgd 8500 million approximately 6702 million exchange rates effect december 31 2013 threeyear terms expired march december 2012 2010 company entered seven additional interest rate cap agreements combined notional amount sgd 3650 million approximately 2878 million exchange rates effect december 31 2013 threeyear terms expired january june 2013 2011 company entered 12 additional interest rate cap agreements combined notional amount sgd 115 billion approximately 9067 million exchange rates effect december 31 2013 threeyear terms expire may august 2014 2012 company entered three additional interest rate cap agreements combined notional amount sgd 2000 million approximately 1577 million exchange rates effect december 31 2013 threeyear terms expire april may 2015 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 30 45 stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2013 2012 2011 2012 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio 35x quarterly periods ending december 31 2013 december 31 2014 decreases remains 30x quarterly periods thereafter maturitythe 2012 singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2013 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2013 2012 approximately 972 billion 1012 billion respectively compared carrying value 974 billion 1020 billion respectively estimated fair value company’s longterm debt based level 2 inputs quoted prices markets active note 9 equity preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit described outstanding preferred stock redeemed whole company november 15 2011 redemption price 110 per share holders preferred stock rights exchange convert shares securities preferred stock issued public 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively year ended december 31 2013 remaining 3500 warrants exercised purchase aggregate 64562 shares company’s common stock 600 per share 03 million cash received settlement warrant exercise price year ended december 31 2012 39070 warrants exercised purchase aggregate 655496 shares company’s common stock 600 per share 39 million cash received settlement warrant exercise price year ended december 31 2011 holders preferred stock exercised 1317220 warrants purchase aggregate 21953704 shares company’s common stock 600 per share tendered 1192100 shares preferred stock 125 million cash settlement warrant exercise price conjunction certain transactions company paid 169 million premiums induce exercise warrants settlement tendering preferred stock year ended december 31 2011 company also repurchased retired 736629 shares preferred stock 823 million las vegas sands corp subsidiaries notes consolidated financial statements continued preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity principal stockholder family greater 50 ownership company therefore ability require company redeem preferred stock beginning november 15 2011 preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years due redemption preferred stock november 15 2011 accumulated undeclared dividends december 31 2011 summary company’s preferred stock issued principal stockholder’s family year ended december 31 2011 presented thousands except number shares march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price preferred stock dividends february 15 may 16 august 15 november 15 2011 company paid dividend 250 per preferred share totaling 753 million 525 million paid principal stockholder’s family redemption preferred stock august 2011 company’s board directors approved redemption outstanding preferred stock november 15 2011 company paid 7630 million redeem preferred stock outstanding recorded redemption premium 888 million year ended december 31 2011 common stock dividends march 29 june 28 september 27 december 31 2013 company paid dividend 035 per common share part regular cash dividend program year ended december 31 2013 company recorded 115 billion distribution retained earnings 6042 million related principal stockholder’s family remaining 5489 million related shareholders march 30 june 29 september 28 december 28 2012 company paid dividend 025 per common share part regular cash dividend program december 18 2012 company paid special cash dividend 275 per common share year ended december 31 2012 company recorded 309 billion distribution retained earnings 162 billion related principal stockholder’s family remaining 147 billion related shareholders january 28 2014 part regular cash dividend program company’s board directors declared quarterly dividend 050 per common share total estimated approximately 406 million paid march 31 2014 shareholders record march 21 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued repurchase program june 2013 company’s board directors approved share repurchase program expires june 2015 initial authorization 20 billion repurchases company’s common stock made company’s discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including company’s financial position earnings legal requirements investment opportunities market conditions year ended december 31 2013 company repurchased 8570281 shares common stock 5705 million including commissions program subsequent year end february 28 2014 company repurchased 8224255 shares common stock 6638 million including commissions program share repurchases company’s common stock recorded treasury shares rollfoward shares common stock preferred stock issued public summary outstanding shares common stock preferred stock issued public follows equity transactions july 2012 company purchased boeing 747 airplane entity controlled principal stockholder 340 million based independent third party appraisals accordance accounting standards regarding transactions entities common control company recorded cost airplane principal stockholder’s book value date transaction 154 million 186 million difference amount paid book value airplane gain principal stockholder recorded deemed distribution principal stockholder year ended december 31 2012 company believes purchase airplane allows meet increased demand highend premium direct customer travel driven company’s expanding global gaming operations important component creating ultimate transpacific transportation experience customers company believes would costly acquire airplane open market due limited supply similar aircraft luxury features noncontrolling interests scl february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively total 138 billion scl shareholders company retained 9702 million las vegas sands corp subsidiaries notes consolidated financial statements continued february 28 june 22 2012 scl paid dividend hkd 058 per share total 120 billion scl shareholders company retained 8444 million january 24 2014 board directors scl declared dividend hkd 087 per share special dividend hkd 077 per share total 171 billion company retained 120 billion scl shareholders record february 14 2014 paid february 26 2014 june 2011 company disposed interest one majority owned subsidiaries resulting loss 37 million included loss disposal assets year ended december 31 2011 addition years ended december 31 2013 2012 2011 company distributed 119 million 105 million 104 million respectively certain noncontrolling interests note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows thousands components income tax expense follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end las vegas sands corp subsidiaries notes consolidated financial statements continued 2018 company received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 2077 million 1398 million 1086 million diluted earnings per share would reduced 025 017 013 per share years ended december 31 2013 2012 2011 respectively february 2011 company entered agreement macao government effective end 2013 provides annual payment 144 million patacas approximately 18 million exchange rates effect december 31 2013 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits company requested additional agreement macao government 2018 correspond income tax exemption gaming operations however assurance company receive agreement september 2013 company internal revenue service irs entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit primary tax affected components company’s net deferred tax liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2013 2012 company windfall tax benefits 2731 million 1715 million respectively reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable year ended december 31 2013 certain wholly owned foreign subsidiaries paid dividends resulting incremental us taxable income receipt dividends result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result dividends addition dividends generated excess us foreign tax credits available carried forward tax years beyond 2013 company’s us foreign tax credits 142 billion 120 billion december 31 2013 2012 respectively begin expire 2021 company’s state net operating loss carryforwards 2421 million 2207 million december 31 2013 2012 respectively begin expire 2024 company’s us general business credits 02 million 43 million december 31 2013 2012 respectively begin expire 2024 valuation allowance 130 billion 118 billion december 31 2013 2012 respectively provided net us deferred tax assets company believes assets meet “morelikelythannot” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 199 billion 156 billion december 31 2013 2012 respectively begin expire 2014 valuation allowances 2178 million 2094 million las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2013 2012 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries attributable periods january 1 2013 demonstrates earnings indefinitely reinvested applicable jurisdictions company consider current years tax earnings profits certain foreign subsidiaries permanently reinvested company provided deferred taxes foreign earnings company expects sufficient creditable foreign taxes offset us income tax would result repatriation foreign earnings december 31 2013 2012 amount earnings profits foreign subsidiaries company intend repatriate 594 billion 427 billion respectively earnings distributed form dividends otherwise company expects sufficient creditable foreign taxes offset us income taxes foreign taxes would result distribution companys cumulative temporary difference less earnings profits reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2013 unrecognized tax benefits 434 million recorded reductions us foreign tax credit deferred tax asset amounts recorded december 31 2012 december 31 2011 unrecognized tax benefits 89 million recorded reductions us net operating loss deferred tax asset december 31 2013 2012 2011 unrecognized tax benefits 133 million 593 million 345 million respectively recorded longterm liabilities included balance december 31 2013 2012 2011 473 million 478 million 339 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore january 2013 irs completed appeals process examination tax years 2005 2009 company decreased unrecognized tax benefits 93 million due conclusion irs audit inland revenue authority singapore performing compliance review marina bay sands tax return tax years 2010 2011 company subject examination tax years 2008 macao singapore tax years 2009 us company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2013 2012 note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted las vegas sands corp subsidiaries notes consolidated financial statements continued prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2013 2012 company 22 30 interest rate cap agreements respectively aggregate fair value approximately 02 million based quoted market values institutions holding agreements note 12 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2013 2012 2011 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2013 2012 2011 35 million deferred item amortized offset convention retail expense las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2013 company obligated ii iii iv make future payments follows thousands shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 2954 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2013 company obligated make future payments approximately 08 million annually year ended december 31 2014 approximately 09 million annually three years ended december 31 2017 05 million year ended december 31 2018 accordance related accounting standards transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 2685 million mall sale transaction recorded deferred proceeds sale december 31 2013 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 225 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term 41 million total proceeds mall sale transaction represented portion proceeds excess guaranteed purchase price allocated palazzo master lease recognized contingent rent revenue included convention retail revenue year ended december 31 2011 note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows october 15 2004 richard suen round square company limited rsc filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada “district court clark county” asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court clark county new trial decision reversing monetary judgment company nevada supreme court also las vegas sands corp subsidiaries notes consolidated financial statements continued made several rulings including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court clark county february 27 2012 district court clark county set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court clark county granted requests retrial began march 27 may 14 2013 jury returned verdict favor rsc amount 700 million may 28 2013 judgment entered matter amount 1016 million including prejudgment interest june 7 2013 company filed motion district court clark county requesting judgment set aside matter law alternative new trial granted july 30 2013 district court clark county denied company’s motion october 17 2013 court entered order granting plaintiff’s request certain costs fees associated litigation amount approximately 10 million december 6 2013 company filed notice appeal jury verdict nevada supreme court companys opening appellate brief supreme court due filed april 14 2014 company believes valid bases law fact appeal verdicts result company believes likelihood amount judgments affirmed probable accordingly amount loss cannot reasonably estimated time company believes potential loss probable estimable recorded reserves contingencies related legal matter event company’s assumptions used evaluate matter neither probable estimable change future periods may required record liability adverse outcome october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court clark county alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 amended complaint filed added sheldon g adelson defendant alleged claim defamation per se lvsc scl june 9 2011 district court clark county dismissed defamation claim certified decision sheldon g adelson final judgment july 1 2011 plaintiff filed notice appeal regarding final judgment sheldon g adelson august 26 2011 nevada supreme court issued writ mandamus instructing district court clark county hold evidentiary hearing whether personal jurisdiction exists scl stayed case district court’s decision january 17 2012 mr jacobs filed opening brief nevada supreme court regarding appeal defamation claim mr adelson january 30 2012 mr adelson filed reply mr jacobs’ opening brief march 8 2012 district court clark county set hearing date week june 2529 2012 evidentiary hearing personal jurisdiction scl may 24 2012 district court clark county vacated hearing date previously set june 2529 set status conference june 28 2012 june 28 status hearing district court clark county set hearing schedule resolve discovery dispute reset date jurisdictional hearing september 10 september 12 2012 district court clark county held hearing determine outcome certain discovery disputes issued order september 14 2012 order district court clark county fined lvsc 25000 purposes jurisdictional discovery evidentiary hearing precluded defendants relying macao data privacy act objection defense discovery obligations december 21 2012 district court clark county ordered defendants produce documents former counsel lvsc containing attorney client privileged information january 23 2013 defendants filed writ nevada supreme court challenging order “january writ” january 29 2013 district court clark county granted defendants motion stay order february 15 2013 nevada supreme court ordered plaintiff answer january writ february 28 2013 district court clark county ordered hearing plaintiff’s request sanctions additional discovery “february 28th order” april 8 2013 defendants filed writ nevada supreme court challenging february 28th order “april writ” nevada supreme court ordered plaintiff answer april writ may 20 2013 defendants also filed granted stay february 28th order district court clark county time nevada supreme court decides april writ june 18 2013 district court clark county scheduled jurisdictional hearing july 1622 2013 issued order allowing plaintiff access privileged communications counsel company “june 18th order” june 21 2013 company filed another writ nevada supreme court challenging june 18th order “june writ” nevada supreme court accepted june writ june 28 2013 issued stay june 18th order june 28 2013 district court clark county vacated jurisdictional hearing july 3 2013 company filed motion nevada supreme court consolidate pending writs fully briefed nevada supreme court date filing october 9 2013 nevada supreme court heard arguments january writ plaintiff’s appeal district court clark county’s dismissal plaintiff’s defamation claim mr adelson nevada supreme court taken matters advisement pending decision january 29 2014 defendants filed supplemental authority motion recall mandate nevada supreme court inform nevada supreme court recently decided us supreme court case involving similar jurisdictional issues matter ii given new precedent review anew august 26 2011 writ mandamus district court clark county respectively february 27 2014 nevada supreme court ruled favor company january writ march 3 2014 nevada supreme court scheduled las vegas sands corp subsidiaries notes consolidated financial statements continued hear oral arguments april june writs mr jacobs seeking unspecified damages action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously february 9 2011 lvsc received subpoena securities exchange commission “sec” requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice “doj” conducting similar investigation company’s belief subpoena may emanated lawsuit filed steven c jacobs described company’s receipt subpoena sec february 9 2011 board directors delegated audit committee comprised three independent members board directors authority investigate matters raised sec subpoena related inquiry doj part 2012 annual audit company’s financial statements audit committee advised company independent accountants reached certain preliminary findings including likely violations books records internal controls provisions fcpa recent years company improved practices respect books records internal controls based information provided management audit committee counsel company believes audit committee concurs preliminary findings • material impact financial statements company • warrant restatement company’s past financial statements • represent material weakness company’s internal controls financial reporting december 31 2013 investigation audit committee complete company cooperating investigations based proceedings date management currently unable determine probability outcome matter extent materiality range reasonably possible loss may 24 2010 frank j fosbre jr filed purported class action complaint united states district court district nevada “us district court” lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants’ motion partial reconsideration court’s order dated august 24 2011 striking additional portions plaintiff’s complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiff filed purported class action second amended complaint “second amended complaint” seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended april 16 2013 case reassigned new judge july 30 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued us district court heard motion dismiss took matter advisement november 7 2013 judge granted part denied part defendants motions dismiss december 13 2013 defendants filed answer second amended complaint discovery matter restarted january 8 2014 plaintiffs filed motion expand certified class period february 3 2014 judge agreed parties stipulation defer briefing issue expanding class period us supreme court issues decision case halliburton co v erica p john fund inc consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously march 23 2012 ernest kleinschmidt filed shareholder derivative action “kleinschmidt action” behalf company district court clark county sheldon g adelson michael leven irwin siegel jeffrey h schwartz jason n ader charles forman irwin chafetz george p koo currently members board directors wing chao andrew r heyer james purcell bradley h stone william p weidner former members board directors andor executives company complaint alleges among things breach fiduciary duties disseminating false misleading information failure maintain internal controls failing properly oversee manage company unjust enrichment complaint seeks among relief unspecified damages direction lvsc take unspecified actions improve corporate governance internal procedures restitution disgorgement profits attorneys’ fees costs related expenses plaintiff june 29 2012 defendants served time including nominal defendant lvsc defendants michael leven irwin siegel jason n ader charles forman irwin chafetz george p koo james purcell bradley h stone william p weidner filed motion dismiss july 20 july 25 2012 defendants jeffery h schwartz wing chao respectively filed substantially similar motion dismiss october 10 2012 case transferred business court within district court clark county october 12 2012 case reassigned new judge january 14 2013 district court clark county filed order dismissing entire case failure make demand board directors lvsc 5 6 claims dismissed prejudice time barred applicable statutes limitations sixth claim unjust enrichment allowed refiled demand board directors lvsc made company received letter plaintiffs lawyers dated february 9 2013 making demand board directors lvsc unjust enrichment claim district court clark county previously dismissed without prejudice addition february 19 2013 plaintiffs filed notice appeal nevada supreme court appealing dismissal case plaintiff’s opening brief nevada supreme court due august 12 2013 response briefs due per court’s calendar september 4 2013 appeal nevada supreme court dismissed march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court clark county sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court clark county sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 status hearing july 22 2013 court extended stay december 2 2013 december 2 2013 extended march 3 2014 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged las vegas sands corp subsidiaries notes consolidated financial statements continued kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel state court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply may 31 2013 case reassigned new judge consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously january 23 2014 wa sokolowski filed shareholder derivative action sokolowski action behalf company individual capacity shareholder us district court district nevada sheldon g adelson michael leven jason n ader irwin chafetz charles forman george p koo charles koppelman jeffrey h schwartz victor chaltiel irwin siegel serving company’s board directors collectively “directors” well frederick hipwell partner pricewaterhousecoopers llp “pwc” company’s former auditor complaint alleges among things directors breached fiduciary duties company attempting conceal certain alleged misrepresentations wrongdoing company’s management concealed certain facts connection audits performed pwc caused issuance false misleading proxy statement 2013 complaint seeks among things appointment conservator special master oversee company’s discussions governmental agencies well recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff company filed motion dismiss february 13 2014 action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously january 19 2012 asian american entertainment corporation limited “aaec” filed claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” lvsllc vcr collectively “defendants” claim 30 billion patacas approximately 3756 million exchange rates effect december 31 2013 compensation damages resulting alleged breach agreements entered aaec defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim “prior action” us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed las vegas sands corp subsidiaries notes consolidated financial statements continued injunctive action “nevada action” aaec us district court seeking enjoin aaec proceeding macao action based aaec’s filing us district court’s dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action august 1 2012 scl filed announcement sehk stating scl’s subsidiary vml received notification office personal data protection macao government “opdp” indicating opdp launched official investigation procedure relation alleged transfer macao vml united states certain data contrary personal data protection act macau april 13 2013 opdp presented findings vml received cumulative fine 40000 patacas approximately 5008 exchange rates effect december 31 2013 vml paid fine levied opdp company previously received subpoenas us attorney’s office central district california “usao” requesting production documents relating two prior customers company’s properties august 2013 usao completed investigation entered agreement company whereby company agreed voluntarily return 474 million us treasury represented funds received behalf one customers provide written reports usao regarding certain casinorelated activities amount paid year ended december 31 2013 matter closed february 11 2014 company disclosed victim sophisticated cyberattack computer networks united states result criminal attack us government commenced investigations source attack addition company working internal external forensic information technology systems experts connection effort result investigations company’s efforts ongoing company learned date filing annual report form 10k certain customer employee data compromised bethlehem facility data may stolen attack well attack may destroyed certain company data company cooperating fully investigations based preliminary status investigations absence claims asserted thus far management currently unable determine probability outcome matters relating cyberattack extent materiality range reasonably possible loss macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including sands macao venetian macao plaza casino four seasons macao sands cotai central separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2013 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37558 18779 125 respectively exchange rates effect december 31 2013 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2013 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2013 company obligated subconcession make minimum future payments approximately 438 million next five years approximately 1534 million thereafter amounts expected increase company completes remaining cotai strip developments currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed las vegas sands corp subsidiaries notes consolidated financial statements continued operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2013 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 675 million 514 million 439 million years ended december 31 2013 2012 2011 respectively ventures commitments company entered employment agreements nine executive officers remaining terms one four years december 31 2013 company obligated make future payments 102 million 52 million 24 million 02 million years ended december 31 2014 2015 2016 2017 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2013 company obligated agreements make future payments approximately 04 million next five years 48 million thereafter malls company leases space several integrated resorts various third parties leases noncancelable operating leases lease periods vary 1 month 25 years leases include minimum base rents escalated contingent rent clauses december 31 2013 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2013 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 1291 million 1090 million 823 million years ended december 31 2013 2012 2011 respectively note 14 stockbased employee compensation company three nonqualified stock option plans 1997 plan 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations las vegas sands corp subsidiaries notes consolidated financial statements continued lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding year ended december 31 2012 february 2013 board directors approved dissolution 1997 plan las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2013 6413843 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based company’s historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s compensation committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2013 769242301 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based combination scls historical volatilities historical volatilities selection las vegas sands corp subsidiaries notes consolidated financial statements continued companies scl’s peer group due scl’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based hong kong exchange fund note rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity company’s equity award plans year ended december 31 2013 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock units company’s equity award plans year ended december 31 2013 presented december 31 2013 2004 plan 190 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 298 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 23 years 22 years respectively december 31 2013 scl equity plan 162 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options 160 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 22 years 35 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2013 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages years ended december 31 2013 2012 2011 company’s matching contributions savings plan 82 million 47 million 79 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2013 2012 2011 vml’s contributions provident fund 286 million 229 million 160 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2013 mbs contributes 16 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2013 2012 2011 mbs’s contributions provident fund 404 million 328 million 307 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 16 related party transactions years ended december 31 2013 2012 2011 principal stockholder family purchased certain lodging banquet room catering goods services procurement services company approximately 17 million 13 million 05 million respectively years ended december 31 2013 2012 2011 company incurred paid certain expenses totaling 114 million 117 million 165 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2013 2012 2011 company charged received principal stockholder 176 million 154 million 152 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes see “ note 9 equity transactions” regarding company’s purchase boeing 747 airplane entity controlled principal stockholder june 2012 november 15 2011 company paid 5775 million redeem preferred stock held principal stockholder’s family march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price see “ note 9 equity preferred stock warrants preferred stock issued principal stockholder’s family” year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central four seasons macao sands macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macao marina bay sands venetian las vegas includes sands expo center palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure company also reviews construction development activities primary projects development addition reportable segments noted company’s primary projects development parisian macao remaining phase sands cotai central macao las vegas condo tower construction currently suspended included corporate us corporate activities company also included corporate company’s segment information follows years ended december 31 2013 2012 2011 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda net income royalty fees stockbased compensation expense legal settlement expense see note 13 commitments contingencies litigation corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income expense loss modification early retirement debt income taxes adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 condensed consolidating financial information lvsllc issuer primary obligor 2013 us credit facility vcr venetian marketing inc sands expo convention center inc formerly interface groupnevada inc sands pennsylvania inc collectively “restricted subsidiaries” guarantors 2013 us credit facility noncontrolling interest amounts included restricted subsidiaries’ condensed consolidating financial information related nonvoting preferred stock one subsidiaries held third parties february 2008 capital stock phase ii mall subsidiary llc subsidiary vcr sold ggp however sale complete accounting perspective due company’s continuing involvement transaction related participation certain potential future revenues earned ggp certain assets liabilities operating results related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted restricted subsidiaries therefore included “restricted subsidiaries” columns following condensed consolidating financial information result net liabilities 293 million consisting 2393 million property equipment offset 2686 million liabilities consisting primarily deferred proceeds sale 173 million consisting 2508 million property equipment offset 2681 million liabilities consisting primarily deferred proceeds sale december 31 2013 2012 respectively net loss consisting primarily depreciation expense 129 million 151 million 195 million years ended december 31 2013 2012 2011 respectively related mall accounted restricted subsidiaries balances amounts collateral 2013 us credit facility connection refinancing senior secured credit facility change group subsidiaries restricted subsidiaries exclude palazzo condo tower llc lvs nevada international holdings inc lvs management services llc accordingly company reclassified prior periods conform current presentation restricted subsidiaries las vegas sands corp subsidiaries notes consolidated financial statements continued following condensed consolidating financial information lvsc nonguarantor parent restricted subsidiaries including lvsllc issuer nonrestricted subsidiaries combined basis december 31 2013 2012 three years period ended december 31 2013 presented order meet reporting requirements 2013 us credit facility intended comply sec regulation sx 310 thousands condensed consolidating balance sheets december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 second sheraton tower sands cotai central opened january 2013 2 first quarter 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock paid 5250 million cash settlement exercise price 3 first second quarters 2012 company recorded impairment losses 429 million 1007 million respectively 4 conrad holiday tower first sheraton tower sands cotai central opened april september 2012 respectively connection opening towers company also opened gaming areas retail entertainment dining meeting facilities earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2013 2012 2011 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm board directors stockholders las vegas sands corp audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2014 2013 related consolidated statements operations comprehensive income equity cash flows years ended audits also included financial information years ended december 31 2014 2013 financial statement schedule listed index item 15a2 financial statements financial statement schedule responsibility company’s management responsibility express opinion financial statements financial statement schedule based audits consolidated financial statements company year ended december 31 2012 effects retrospective adjustments condensed consolidating financial information change composition restricted subsidiaries discussed note 18 consolidated financial statements audited auditors whose report dated march 1 2013 expressed unqualified opinion statements conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion 2014 2013 consolidated financial statements present fairly material respects financial position las vegas sands corp subsidiaries december 31 2014 2013 results operations cash flows years ended conformity accounting principles generally accepted united states america also opinion information years ended december 31 2014 2013 financial statement schedule considered relation basic consolidated financial statements taken whole periods ended present fairly material respects information set forth therein also audited adjustments note 18 2012 consolidated financial statements retrospectively adjust condensed consolidating financial information change composition restricted subsidiaries 2013 discussed note 18 consolidated financial statements procedures included 1 comparing previously reported consolidating financial information previously issued consolidating financial information note 18 2 comparing adjustments consolidating financial information company’s underlying analysis 3 testing mathematical accuracy underlying analysis recast consolidating financial information opinion retrospective adjustments appropriate properly applied however engaged audit review apply procedures 2012 consolidated financial statements company respect retrospective adjustments accordingly express opinion form assurance 2012 consolidated financial statements taken whole also audited accordance standards public company accounting oversight board united states companys internal control financial reporting december 31 2014 based criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 27 2015 expressed unqualified opinion companys internal control financial reporting report independent registered public accounting firm board directors stockholders las vegas sands corp audited internal control financial reporting las vegas sands corp subsidiaries company december 31 2014 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission companys management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting appearing item 9a responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed supervision companys principal executive principal financial officers persons performing similar functions effected companys board directors management personnel provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting including possibility collusion improper management override controls material misstatements due error fraud may prevented detected timely basis also projections evaluation effectiveness internal control financial reporting future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion company maintained material respects effective internal control financial reporting december 31 2014 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states consolidated financial statements financial statement schedule december 31 2014 year ended december 31 2014 company report dated february 27 2015 expressed unqualified opinion financial statements financial statement schedule report independent registered public accounting firm directors shareholders las vegas sands corp opinion consolidated statements operations comprehensive income equity cash flows year ended december 31 2012 effects adjustments retrospectively reflect change group subsidiaries restricted subsidiaries described note 18 present fairly material respects results las vegas sands corp subsidiaries “company” operations cash flows year ended december 31 2012 conformity accounting principles generally accepted united states america 2012 financial statements effects adjustments discussed note 18 presented herein addition opinion financial statement schedule year ended december 31 2012 presents fairly material respects information set forth therein read conjunction related consolidated financial statements effects adjustments described financial statements financial statement schedule responsibility companys management responsibility express opinion financial statements financial statement schedule based audit conducted audit effects adjustments described statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audit provides reasonable basis opinion engaged audit review apply procedures adjustments retrospectively reflect change group subsidiaries restricted subsidiaries described note 18 accordingly express opinion form assurance whether adjustments appropriate properly applied adjustments audited auditors las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” ordinary shares company’s subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china listed main board stock exchange hong kong limited “sehk” shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 701 scl includes operations venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession expires june 2022 company owns operates venetian macao resort hotel “the venetian macao” anchors cotai strip company’s masterplanned development integrated resort properties area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 376000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 925000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao four seasons macao described april 2012 company opened first hotel tower consisting approximately 600 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand company also opened approximately 350000 square feet meeting space several food beverage establishments along 230000squarefoot casino vip gaming areas operated company september 2012 company opened second hotel tower consisting approximately 1800 rooms sheraton brand opened second casino additional retail entertainment dining meeting facilities operated company january 2013 third hotel tower opened featuring approximately 2100 rooms suites sheraton brand company constructing remaining phase integrated resort includes fourth hotel mixeduse tower st regis brand total cost complete remaining phase expected approximately 550 million upon completion project integrated resort feature approximately 370000 square feet gaming space approximately 800000 square feet retail entertainment dining space 550000 square feet meeting facilities multipurpose theater open mid2015 december 31 2014 company capitalized costs 447 billion entire project including land premium net amortization 703 million outstanding construction payables company owns four seasons hotel macao cotai strip “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 258000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower advancing plans monetize units within four seasons apartments las vegas sands corp subsidiaries notes consolidated financial statements continued company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 241000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consist two enclosed retail dining entertainment complexes sold ggp limited partnership “ggp” see “ note 12 mall sales” pennsylvania company owns operates sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 145000 square feet gaming space 300room hotel tower 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects macao company submitted plans macao government parisian macao integrated resort connected venetian macao four seasons macao parisian macao intended include gaming area operated company’s gaming subconcession hotel 3000 rooms suites retail entertainment dining meeting facilities company commenced construction expects cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium projects nature company continue analyze options full phased opening facility anticipated open 2016 subject macao government approval company capitalized costs 8043 million including land premium net amortization 902 million outstanding construction payables december 31 2014 addition company completing development public areas surrounding cotai strip properties behalf macao government company’s land concession parisian macao company required complete development april 2016 land concession sands cotai central contains similar requirement development completed december 2016 company determine unable complete parisian macao sands cotai central respective deadlines company would expect apply another extension las vegas sands corp subsidiaries notes consolidated financial statements continued macao government company unable meet current deadlines either development extended company could lose land concessions parisian macao sands cotai central would prohibit company operating facilities developed respective land concessions result company could record charge portion 8043 million 447 billion capitalized construction costs land premiums net amortization december 31 2014 related parisian macao sands cotai central respectively united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decide abandon project company could record charge portion 1786 million capitalized construction costs december 31 2014 company continues aggressively pursue new development opportunities globally capital financing overview december 31 2014 company funded development projects primarily borrowings credit facilities operating cash flows proceeds equity offerings proceeds disposition noncore assets company held unrestricted cash equivalents approximately 351 billion restricted cash equivalents 66 million december 31 2014 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company may elect arrange additional financing fund balance cotai strip developments normal course activities company continue evaluate capital structure opportunities enhancements thereof march 2014 company amended macao credit facility extended portion term loans facility march 2020 provides revolving loan commitments 20 billion see “ note 8 longterm debt macao related debt 2011 vml credit facility” august 2014 company amended singapore credit facility extended term loans facility august 2020 revolving loans facility february 2020 see “ note 8 longterm debt singapore related debt 2012 singapore credit facility” note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment las vegas sands corp subsidiaries notes consolidated financial statements continued joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2014 2013 company’s joint ventures total assets 850 million 1039 million respectively total liabilities 1306 million 1254 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivables offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined weighted average specific identification methods las vegas sands corp subsidiaries notes consolidated financial statements continued property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flow scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale las vegas sands corp subsidiaries notes consolidated financial statements continued years ended december 31 2014 2013 assets impaired december 31 2012 company recognized impairment loss 1437 million primarily related 1007 million capitalized construction costs related company’s former cotai strip development referred parcels 7 8 429 million impairment due termination zaia venetian macao capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2014 2013 2012 company capitalized interest expense 93 million 47 million 493 million respectively years ended december 31 2014 2013 2012 company capitalized approximately 326 million 242 million 203 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company may first conduct qualitative assessment determine whether “morelikelythannot” asset impaired company elects perform qualitative assessment determined “morelikelythannot” asset impaired assessing qualitative factors company performs impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2014 company assets 500 million 165 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets year ended december 31 2014 company elected perform quantitative analysis given last quantitative analysis performed year ended december 31 2011 fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others years ended december 31 2013 2012 annual impairment analysis included las vegas sands corp subsidiaries notes consolidated financial statements continued assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2014 2013 2012 revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer included convention retail revenues mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated las vegas sands corp subsidiaries notes consolidated financial statements continued statements operations taxes 465 billion 454 billion 353 billion years ended december 31 2014 2013 2012 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 1404 million 1178 million 978 million years ended december 31 2014 2013 2012 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income consisted solely foreign currency translation adjustments year ended december 31 2012 66 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income comprehensive income net income amount included income accompanying consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 2152 million 2178 million december 31 2014 2013 respectively valuation allowance certain deferred tax assets us operations 227 billion 130 billion december 31 2014 2013 respectively increased current year primarily due increase us foreign tax credits management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance period determination made significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach las vegas sands corp subsidiaries notes consolidated financial statements continued recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements may 2014 fasb issued accounting standard update revenue recognition applied contracts customers update requires entity recognize revenue transfers promised goods services customers amount reflects expects exchange goods services also requires detailed disclosures enable users financial statements understand nature amount timing uncertainty revenue cash flows arising contracts customers guidance required applied retrospective basis using one two methodologies effective fiscal years beginning december 15 2016 early application permitted company currently assessing impact guidance companys financial condition results operations note 3 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 4 property equipment net property equipment consists following thousands construction progress consists following thousands 3399 million construction progress consists primarily construction las vegas condo tower various projects venetian macao accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” company sold portion grand canal shoppes located within palazzo formerly referred shoppes palazzo see “ note 12 mall sales shoppes palazzo” terms settlement ggp june 24 2011 company retained 2954 million proceeds previously received participates certain potential future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 2662 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 2285 million net 829 million accumulated depreciation december 31 2014 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 113 billion 2510 million respectively december 31 2014 cost accumulated depreciation property equipment company leasing third parties 104 billion 2033 million respectively december 31 2013 cost accumulated depreciation property equipment company leasing capital lease arrangements 384 million 146 million respectively december 31 2014 cost accumulated depreciation property equipment company leasing capital lease arrangements 410 million 125 million respectively december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued years ended december 31 2014 2013 assets impaired may 2012 company withdrew appeal regarding company’s application approved macao government land concession related cotai strip development formerly referred parcels 7 8 recorded impairment loss 1007 million year ended december 31 2012 related capitalized construction costs development company also recorded onetime impairment loss 429 million related termination zaia show venetian macao year ended december 31 2012 note 5 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 406 million 404 million 402 million included amortization leasehold interests land expense years ended december 31 2014 2013 2012 respectively estimated future amortization expense approximately 394 million next five years 140 billion thereafter exchange rates effect december 31 2014 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build sites venetian macao four seasons macao sands cotai central located parisian macao constructed company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well annual rent term land concessions addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2014 company obligated land concessions make future rental payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2013 company paid 570 million singapore dollars sgd approximately 431 million exchange rates effect december 31 2014 singapore casino regulatory authority “cra” part process renew gaming license marina bay sands license amortized threeyear term expires april 2016 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 151 million 136 million 100 million years ended december 31 2014 2013 2012 respectively estimated future amortization expense approximately 144 million 46 million years ending december 2015 2016 respectively note 7 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following thousands corporate us related debt 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility “2013 us credit facility” consists 225 billion funded term b loan “2013 us term b facility” original issue discount 113 million 125 billion revolving credit facility “2013 us revolving facility” borrowings 2013 us credit facility used repay outstanding balance senior secured credit facility described company recorded 142 million loss modification early retirement debt year ended december 31 2013 december 31 2014 company 2243 million available borrowing capacity 2013 us revolving facility net outstanding letters credit 2013 us term b facility matures december 19 2020 subject quarterly amortization payments 56 million began march 31 2014 followed balloon payment 210 billion due december 19 2020 2013 us revolving facility interim amortization payments matures december 19 2018 2013 us credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 us credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 15 per annum 2013 us revolving facility 2013 us term b facility respectively eurodollar rate borrowings initial credit spread 15 per annum 25 per annum 2013 us revolving facility 2013 us term b facility subject eurodollar rate floor 075 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued interest rates set 17 33 respectively december 31 2014 weighted average interest rate 2013 us credit facility 28 29 years ended december 31 2014 2013 company pays commitment fee 035 per annum undrawn amounts 2013 us revolving facility reduced certain corporate ratings achieved subject certain additional conditions 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply financial covenants including limited maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” extent outstanding balance 2013 us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity 2013 us credit facility also contains conditions events default customary financings december 31 2014 approximately 464 billion net assets lvsllc restricted distributed terms 2013 us credit facility senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” originally consisted 40 billion funded delayed draw term loans 10 billion revolving credit facility “revolving facility” part amendment facility august 2010 certain lenders elected extend maturity 191 billion aggregate principal amount term loans “extended term loans” extend availability 5325 million revolving facility extended revolving facility part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million addition pay 10 billion extended term loans described company paid 7759 million revolving facility year ended december 31 2010 terminated revolving facility december 2011 company paid 4000 million senior secured credit facility june 2012 recorded 16 million loss early retirement debt result year ended december 31 2012 borrowings senior secured credit facility amended bore interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 075 per annum term loans 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 175 per annum term loans 225 per annum 275 per annum extended revolving facility extended term loans respectively weighted average interest rate senior secured credit facility 23 year ended december 31 2013 senior notes march 2012 company redeemed remaining balance 6375 senior notes senior notes outstanding 1917 million recorded 28 million loss early retirement debt year ended december 31 2012 airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 18 december 31 2014 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 las vegas sands corp subsidiaries notes consolidated financial statements continued 2017 interim amortization payments weighted average interest rate notes 18 years ended december 31 2014 2013 april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes tenyear maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 16 december 31 2014 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 15 16 years ended december 31 2014 2013 respectively hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt 2011 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement “2011 vml credit facility” provided 37 billion equivalent hong kong dollars macao patacas consisted 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 5000 million revolving facility “2011 vml revolving facility” available october 15 2016 borrowings facility used repay outstanding indebtedness previous credit facilities vml credit facility vol credit facility would used working capital requirements general corporate purposes including development construction completion certain components sands cotai central march 2014 company amended 2011 vml credit facility among things modify certain financial covenants discussed addition amendment certain lenders extended maturity 239 billion aggregate principal amount 2011 vml term facility march 31 2020 extended 2011 vml term facility together new lenders provided 20 billion aggregate principal amount revolving loan commitments extended 2011 vml revolving facility portion revolving proceeds used pay 8197 million aggregate principal balance 2011 vml term facility loans extended company recorded 180 million loss modification early retirement debt year ended december 31 2014 connection pay extension borrowings extended 2011 vml revolving facility used fund development construction completion sands cotai central parisian macao working capital requirements general corporate purposes december 31 2014 company 118 billion available borrowing capacity extended 2011 vml revolving facility indebtedness 2011 vml credit facility guaranteed vml venetian cotai limited venetian orient limited certain company’s foreign subsidiaries collectively “2011 vml guarantors” obligations 2011 vml credit facility collateralized firstpriority security interest substantially borrower’s 2011 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets las vegas sands corp subsidiaries notes consolidated financial statements continued commencing quarterly period ending june 30 2017 end subsequent quarter march 31 2018 2011 vml credit facility amended requires borrower repay outstanding extended 2011 vml term facility pro rata basis amount equal 25 aggregate principal amount outstanding march 31 2014 “macao restatement date” commencing quarterly period ending june 30 2018 end subsequent quarter march 31 2019 borrower required repay outstanding extended 2011 vml term facility pro rata basis amount equal 50 aggregate principal amount outstanding macao restatement date quarterly periods ending june 30 december 31 2019 borrower required repay outstanding extended 2011 vml term facility pro rata basis amount equal 120 aggregate principal amount outstanding macao restatement date remaining balance extended 2011 vml term facility due maturity date extended 2011 vml revolving facility interim amortization payments matures march 31 2020 borrowings loans bear interest amended companys option either adjusted eurodollar rate hong kong interbank offered rate “hibor” plus credit spread alternative base rate plus credit spread credit spread case determined based maximum leverage ratio set forth credit facility agreement amended credit spread extended 2011 vml term revolving facilities ranges 025 1125 per annum loans accruing interest base rate credit spread extended 2011 vml term revolving facilities ranges 125 2125 per annum loans accruing interest adjusted eurodollar hibor rate interest rates set 14 15 respectively december 31 2014 macao restatement date credit spread extended 2011 vml term revolving facilities 0375 per annum loans accruing interest base rate 1375 per annum loans accruing interest adjusted eurodollar hibor rate borrower also pay standby fees 05 per annum undrawn amounts extended 2011 vml revolving facility weighted average interest rate 2011 vml credit facility 15 18 years ended december 31 2014 2013 respectively december 31 2014 company interest rate cap agreements place related 2011 vml credit facility december 31 2013 company interest rate cap agreements place combined notional amount 160 billion expiration date november 2014 strike rates 20 225 december 31 2012 company interest rate cap agreements place combined notional amount 170 billion expiration dates ranging september 2013 november 2014 strike rates 20 35 provisions interest rate cap agreements entitled company receive counterparty amounts selected market interest rates exceeded strike rates stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2014 2013 2012 2011 vml credit facility amended contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions use proceeds facility 2011 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense maximum leverage ratio amended 45x quarterly periods ending december 31 2014 september 30 2015 decreases 40x quarterly periods ending december 31 2015 march 31 2017 decreases remains 35x quarterly periods thereafter maturity 2011 vml credit facility also contains events default customary financings ferry financing may 2012 company repaid 1316 million outstanding balance senior secured credit facility ferry financing recorded 17 million loss early retirement debt year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued singapore related debt 2012 singapore credit facility june 2012 company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered sgd 51 billion approximately 386 billion exchange rates effect december 31 2014 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 348 billion exchange rates effect december 31 2014 term loan “2012 singapore term facility” sgd 5000 million approximately 3780 million exchange rates effect december 31 2014 revolving facility “2012 singapore revolving facility” available november 25 2017 includes sgd 1000 million approximately 756 million exchange rates effect december 31 2014 ancillary facility “2012 singapore ancillary facility” borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility company recorded 131 million loss modification early retirement debt year ended december 31 2012 part refinancing facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 company recorded 20 million loss modification early retirement debt year ended december 31 2014 connection extension december 31 2014 company sgd 4929 million approximately 3726 million exchange rates effect december 31 2014 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets commencing quarterly period ending december 31 2014 end subsequent quarter september 30 2018 company required repay outstanding 2012 singapore term facility amount 05 aggregate principal amount outstanding august 29 2014 singapore restatement date commencing quarterly period ending december 31 2018 end subsequent quarter september 30 2019 company required repay outstanding 2012 singapore term facility amount 50 aggregate principal amount outstanding singapore restatement date commencing quarterly period ending december 31 2019 end subsequent quarter june 30 2020 maturity date company required repay outstanding 2012 singapore term facility amount 180 aggregate principal amount outstanding singapore restatement date 2012 singapore revolving facility interim amortization payments matures february 28 2020 borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 per annum beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 21 december 31 2014 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 18 19 years ended december 31 2014 2013 respectively december 31 2014 company interest rate cap agreements place combined notional amount sgd 300 million approximately 2268 million exchange rates effect december 31 2014 expiration dates ranging april 2015 may 2016 strike rates 30 35 december 31 2013 company interest rate cap agreements place combined notional amount sgd 145 billion approximately 110 billion exchange rates effect december 31 2014 expiration dates ranging may 2014 may 2016 strike rates 30 35 december 31 2012 company interest rate cap agreements place combined notional amount sgd 177 billion approximately 133 billion exchange rates effect december las vegas sands corp subsidiaries notes consolidated financial statements continued 31 2014 expiration dates ranging january 2013 may 2015 strike rates ranging 30 45 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rates stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2014 2013 2012 singapore credit facility amended contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio amended 35x quarterly periods ending december 31 2014 september 30 2019 decreases remains 30x quarterly periods thereafter maturity 2012 singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2014 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2014 2013 approximately 978 billion 972 billion respectively compared carrying value 998 billion 974 billion respectively estimated fair value company’s longterm debt based level 2 inputs quoted prices markets active note 9 equity preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock november 2011 company redeemed preferred stock outstanding year ended december 31 2013 remaining 3500 warrants issued public exercised purchase aggregate 64562 shares company’s common stock 600 per share 03 million cash received settlement warrant exercise price year ended december 31 2012 39070 warrants issued public exercised purchase aggregate 655496 shares company’s common stock 600 per share 39 million cash received settlement warrant exercise price march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price las vegas sands corp subsidiaries notes consolidated financial statements continued common stock dividends march 31 june 30 september 30 december 29 2014 company paid dividend 050 per common share part regular cash dividend program year ended december 31 2014 company recorded 161 billion distribution retained earnings 8633 million related principal stockholder’s family remaining 7448 million related shareholders march 29 june 28 september 27 december 31 2013 company paid dividend 035 per common share part regular cash dividend program year ended december 31 2013 company recorded 115 billion distribution retained earnings 6042 million related principal stockholder’s family remaining 5489 million related shareholders march 30 june 29 september 28 december 28 2012 company paid dividend 025 per common share part regular cash dividend program december 18 2012 company paid special cash dividend 275 per common share year ended december 31 2012 company recorded 309 billion distribution retained earnings 162 billion related principal stockholder’s family remaining 147 billion related shareholders january 2015 part regular cash dividend program company’s board directors declared quarterly dividend 065 per common share total estimated approximately 519 million paid march 31 2015 shareholders record march 23 2015 repurchase program june 2013 company’s board directors approved stock repurchase program initial authorization 20 billion expires june 2015 completed year ended december 31 2014 october 2014 companys board directors authorized repurchase additional 20 billion outstanding common stock expires october 2016 repurchases company’s common stock made company’s discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including company’s financial position earnings legal requirements investment opportunities market conditions year ended december 31 2014 2013 company repurchased 22406655 8570281 shares respectively common stock 166 billion 5705 million respectively including commissions program share repurchases company’s common stock recorded treasury stock las vegas sands corp subsidiaries notes consolidated financial statements continued rollforward shares common stock summary outstanding shares common stock follows equity transactions addition shares repurchased share repurchase program year ended december 31 2014 company repurchased 45220 shares satisfaction tax withholding exercise price obligations vested restricted stock option exercise july 2012 company purchased boeing 747 airplane entity controlled principal stockholder 340 million based independent third party appraisals accordance accounting standards regarding transactions entities common control company recorded cost airplane principal stockholder’s book value date transaction 154 million 186 million difference amount paid book value airplane gain principal stockholder recorded deemed distribution principal stockholder year ended december 31 2012 company believes purchase airplane allows meet increased demand highend premium direct customer travel driven company’s expanding global gaming operations important component creating ultimate transpacific transportation experience customers company believes would costly acquire airplane open market due limited supply similar aircraft luxury features noncontrolling interests scl february 26 2014 scl paid dividend 087 hong kong dollar hkd per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share total 260 billion scl shareholders company retained 182 billion february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively total 138 billion scl shareholders company retained 9702 million february 28 june 22 2012 scl paid dividend hkd 058 per share total 120 billion scl shareholders company retained 8444 million las vegas sands corp subsidiaries notes consolidated financial statements continued january 2015 board directors scl declared dividend hkd 099 per share total 103 billion company retained 722 million scl shareholders record february 13 2015 paid february 27 2015 april 2014 company disposed interest one majority owned subsidiaries resulting loss 05 million included loss disposal assets year ended december 31 2014 addition years ended december 31 2014 2013 2012 company distributed 98 million 119 million 105 million respectively certain noncontrolling interests note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows thousands components income tax expense follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued reconciliation statutory federal income tax rate company’s effective tax rate follows company’s foreign us tax rate differential reflects fact income earned reinvested singapore macao taxed local rates lower us tax rates company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2018 company received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 2198 million 2077 million 1398 million diluted earnings per share would reduced 027 025 017 per share years ended december 31 2014 2013 2012 respectively may 2014 company entered agreement macao government effective end 2018 provides annual payment 424 million patacas approximately 53 million exchange rates effect december 31 2014 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2013 company internal revenue service irs entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit las vegas sands corp subsidiaries notes consolidated financial statements continued primary tax affected components company’s net deferred tax liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2014 2013 company windfall tax benefits 3546 million 2731 million respectively reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable year ended december 31 2014 certain wholly owned foreign subsidiaries paid dividends resulting incremental us taxable income receipt dividends result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result dividends addition dividends generated excess us foreign tax credits available carried forward tax years beyond 2014 company’s us foreign tax credit carryforwards 243 billion 142 billion december 31 2014 2013 respectively begin expire 2021 company’s state net operating loss carryforwards 2512 million 2421 million december 31 2014 2013 respectively begin expire 2024 company’s us general business credits 21 million 02 million december 31 2014 2013 respectively begin expire 2032 valuation allowance 227 billion 130 billion december 31 2014 2013 respectively provided certain net us deferred tax assets company believes assets meet “morelikelythannot” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 207 billion 199 billion december 31 2014 2013 respectively begin expire 2015 valuation allowances 2152 million 2178 million december 31 2014 2013 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition las vegas sands corp subsidiaries notes consolidated financial statements continued undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries attributable periods january 1 2014 demonstrates earnings indefinitely reinvested applicable jurisdictions company consider current years tax earnings profits certain foreign subsidiaries permanently reinvested company provided deferred taxes foreign earnings company expects sufficient creditable foreign taxes offset us income tax would result repatriation foreign earnings december 31 2014 2013 amount earnings profits foreign subsidiaries company intend repatriate 607 billion 594 billion respectively earnings distributed form dividends otherwise company expects sufficient creditable foreign taxes offset us income taxes foreign taxes would result distribution companys cumulative temporary difference less earnings profits reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2014 2013 unrecognized tax benefits 506 million 434 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2014 2013 2012 unrecognized tax benefits 122 million 133 million 593 million respectively recorded longterm liabilities included unrecognized tax benefit balance december 31 2014 2013 2012 524 million 473 million 478 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore company subject examination tax years beginning 2010 us macao singapore inland revenue authority singapore performing compliance review marina bay sands tax returns tax years 2010 2012 company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2014 2013 note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s las vegas sands corp subsidiaries notes consolidated financial statements continued assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2014 2013 company 4 22 interest rate cap agreements respectively aggregate fair value approximately 3000 02 million respectively based quoted market values institutions holding agreements note 12 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2014 2013 2012 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million accordance related accounting standards portion transaction las vegas sands corp subsidiaries notes consolidated financial statements continued must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2014 2013 2012 31 million 35 million 35 million deferred item amortized offset convention retail expense december 31 2014 company obligated ii iii iv make future payments follows thousands shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 2954 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2014 company obligated make future payments approximately 09 million three years ended december 31 2017 approximately 05 million year ended december 31 2018 accordance related accounting standards transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 2687 million mall sale transaction recorded deferred proceeds sale december 31 2014 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 225 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued october 15 2004 richard suen round square company limited rsc filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada “district court” asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court new trial decision reversing monetary judgment company nevada supreme court also made several rulings including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court february 27 2012 district court set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court granted requests retrial began march 27 may 14 2013 jury returned verdict favor rsc amount 700 million may 28 2013 judgment entered matter amount 1016 million including prejudgment interest june 7 2013 company filed motion district court requesting judgment set aside matter law alternative new trial granted july 30 2013 district court denied company’s motion october 17 2013 district court entered order granting plaintiff’s request certain costs fees associated litigation amount approximately 10 million december 6 2013 company filed notice appeal jury verdict nevada supreme court company filed opening appellate brief nevada supreme court june 16 2014 august 19 2014 nevada supreme court issued order granting plaintiffs additional time september 15 2014 file answering brief september 15 2014 rsc filed request nevada supreme court file brief exceeding maximum number words granted october 10 2014 rsc filed answering brief january 9 2015 defendants filed reply brief company believes valid bases law fact appeal verdicts result company believes likelihood amount judgments affirmed probable accordingly amount loss cannot reasonably estimated time company believes potential loss probable estimable recorded reserves contingencies related legal matter event company’s assumptions used evaluate matter neither probable estimable change future periods may required record liability adverse outcome october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 amended complaint filed added sheldon g adelson defendant alleged claim defamation per se lvsc scl june 9 2011 district court dismissed defamation claim certified decision sheldon g adelson final judgment july 1 2011 plaintiff filed notice appeal regarding final judgment sheldon g adelson august 26 2011 nevada supreme court issued writ mandamus instructing district court hold evidentiary hearing whether personal jurisdiction exists scl stayed case district courts decision january 17 2012 mr jacobs filed opening brief nevada supreme court regarding appeal defamation claim mr adelson january 30 2012 mr adelson filed reply mr jacobs’ opening brief march 8 2012 district court set hearing date week june 2529 2012 evidentiary hearing personal jurisdiction scl may 24 2012 district court vacated hearing date previously set june 2529 set status conference june 28 2012 june 28 status hearing district court set hearing schedule resolve discovery dispute reset date jurisdictional hearing september 10 september 12 2012 district court held hearing determine outcome certain discovery disputes issued order september 14 2012 order district court fined lvsc 25000 purposes jurisdictional discovery evidentiary hearing precluded las vegas sands corp subsidiaries notes consolidated financial statements continued defendants relying macao data privacy act objection defense discovery obligations december 21 2012 district court ordered defendants produce documents former counsel lvsc containing attorney client privileged information january 23 2013 defendants filed writ nevada supreme court challenging order “january writ” january 29 2013 district court granted defendants motion stay order february 15 2013 nevada supreme court ordered plaintiff answer january writ february 28 2013 district court ordered hearing plaintiff’s request sanctions additional discovery “february 28th order” april 8 2013 defendants filed writ nevada supreme court challenging february 28th order “april writ” nevada supreme court ordered plaintiff answer april writ may 20 2013 defendants also filed granted stay february 28th order district court time nevada supreme court decides april writ june 18 2013 district court scheduled jurisdictional hearing july 1622 2013 issued order allowing plaintiff access privileged communications counsel company “june 18th order” june 21 2013 company filed another writ nevada supreme court challenging june 18th order “june writ” nevada supreme court accepted june writ june 28 2013 issued stay june 18th order june 28 2013 district court vacated jurisdictional hearing july 3 2013 company filed motion nevada supreme court consolidate pending writs fully briefed nevada supreme court date filing october 9 2013 nevada supreme court heard arguments january writ plaintiff’s appeal district courts dismissal plaintiff’s defamation claim mr adelson nevada supreme court taken matters advisement pending decision january 29 2014 defendants filed supplemental authority motion recall mandate nevada supreme court inform nevada supreme court recently decided us supreme court case involving similar jurisdictional issues matter ii given new precedent review anew august 26 2011 writ mandamus district court respectively february 27 2014 nevada supreme court ruled favor company january writ became effective march 24 2014 march 3 2014 nevada supreme court heard oral arguments april june writs may 30 2014 nevada supreme court overturned district court’s dismissal mr jacob’s defamation claim mr adelson remanded claim determination june 17 2014 mr adelson filed petition rehearing nevada supreme court june 20 2014 nevada supreme court ordered mr jacobs answer petition rehearing july 7 2014 june 26 2014 scl filed motion summary judgment respect jurisdiction district court denied july 29 2014 june 30 2014 mr jacobs filed motion leave file second amended complaint defendants filed notice intent oppose motion leave file second amended complaint july 1 2014 mr jacobs filed motion reconsider dismissal defamation claim july 3 2014 mr adelson filed notice intent oppose motion reconsider requested oral argument also july 3 2014 defendants filed motion continue stay district court’s march 26 2013 order compelling production documents macao notice intent oppose plaintiff’s motion reconsider dismissal defamation claim lvsc scl july 22 2014 defendants filed motion leave file reply support petition rehearing defamation claim nevada supreme court july 22 2014 scl filed reply support motion summary judgment jurisdiction opposition plaintiff’s counter motion summary judgment july 25 2014 nevada supreme court granted defendants’ motion leave file reply july 29 2014 nevada supreme court heard motions summary judgment denied august 7 2014 nevada supreme court denied writ challenging district court’s order plaintiff’s march 26 2013 renewed motion sanctions august 7 2014 nevada supreme court granted part defendants’ writ respect district court’s june 19 2013 order requiring production privileged material august 7 2014 nevada supreme court also denied rehearing reversal dismissal defamation claim vote 43 august 13 2014 district court ruled plaintiff may amend complaint except defamation claim mr adelson remittitur nevada supreme court received district court also allowed sanctions hearing move forward reviewing documents camera determine whether properly withheld privilege grounds september 4 2014 scl filed prehearing memorandum regarding sanctions hearing regarding plaintiff’s march 26 2013 renewed motion sanctions september 12 2014 plaintiff filed motion release privileged documents district court appointed document custodian grounds waiver september 16 2014 plaintiff filed motion seeking stop defendants modifying privilege log seeking waiver las vegas sands corp subsidiaries notes consolidated financial statements continued privilege claims result alleged deficiencies original privilege log september 26 2014 nevada supreme court issued remittitur plaintiff filed motion leave file third amended complaint lvsc scl mr adelson september 26 2014 defendants filed opposition plaintiff’s motion release documents grounds waiver october 3 2014 plaintiff filed reply support two waiver motions relating documents held district court appointed custodian october 9 2014 district court granted plaintiffs motion part denied remainder october 17 2014 scl filed motion reconsider district court’s march 27 2013 order concerning discovery dispute october 10 2014 mr adelson filed opposition plaintiffs motion file third amended complaint scl lvsc joined october 14 2014 october 30 2014 plaintiff filed reply support motion file third amended complaint november 5 2014 district court ordered scl waived privilege three confidential reports november 7 2014 district court granted plaintiffs motion file third amended complaint november 7 2014 defendants filed motion partial reconsideration november 5 2014 order waiving privilege january 6 2015 district court scheduled sanctions hearing february 9 2015 evidentiary hearing jurisdiction april 20 2015 january 12 2015 defendants filed motions dismiss third amended complaint mr jacobs seeking unspecified damages action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously february 9 2011 lvsc received subpoena securities exchange commission “sec” requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice “doj” conducting similar investigation company’s belief subpoena may emanated lawsuit filed steven c jacobs described company’s receipt subpoena sec february 9 2011 board directors delegated audit committee comprised three independent members board directors authority investigate matters raised sec subpoena related inquiry doj part 2012 annual audit company’s financial statements audit committee advised company independent accountants reached certain preliminary findings including likely violations books records internal controls provisions fcpa recent years company improved practices respect books records internal controls based information provided management audit committee counsel company believes audit committee concurs preliminary findings • material impact financial statements company • warrant restatement company’s past financial statements • represent material weakness company’s internal controls financial reporting december 31 2014 investigation audit committee complete company cooperating investigations based proceedings date management currently unable determine probability outcome matter extent materiality range reasonably possible loss may 24 2010 frank j fosbre jr filed purported class action complaint united states district court district nevada “us district court” lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged las vegas sands corp subsidiaries notes consolidated financial statements continued lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants’ motion partial reconsideration court’s order dated august 24 2011 striking additional portions plaintiff’s complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiff filed purported class action second amended complaint “second amended complaint” seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended april 16 2013 case reassigned new judge july 30 2013 us district court heard motion dismiss took matter advisement november 7 2013 judge granted part denied part defendants motions dismiss december 13 2013 defendants filed answer second amended complaint discovery matter restarted january 8 2014 plaintiffs filed motion expand certified class period february 3 2014 judge agreed parties stipulation defer briefing issue expanding class period us supreme court issues decision case halliburton co v erica p john fund inc september 26 2014 us supreme court denied plaintiffs motion expand class period without prejudice refiling similar motion us supreme court decided halliburton case june 23 2014 october 3 2014 parties stipulated case management schedule wherein agree briefing schedule class certification november 7 2014 plaintiffs filed motion expand class period january 9 2015 defendants filed opposition motion consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice las vegas sands corp subsidiaries notes consolidated financial statements continued agreed stay proceedings 120day stay entered district court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 district court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 status hearing july 22 2013 district court extended stay december 2 2013 december 2 2013 extended march 3 2014 march 3 2014 judge extended stay status hearing set september 4 2014 judge extended stay next status hearing set march 5 2015 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel state court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply may 31 2013 case reassigned new judge april 11 2014 judge denied motion dismiss without prejudice ordered case stayed pending outcome state court action kohanim described judge also ordered parties file joint status report us district court september 10 2014 filed consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously january 23 2014 wa sokolowski filed shareholder derivative action sokolowski action purporting act behalf company individual capacity shareholder us district court district nevada sheldon g adelson michael leven jason n ader irwin chafetz charles forman george p koo charles koppelman jeffrey h schwartz victor chaltiel irwin siegel serving las vegas sands corp subsidiaries notes consolidated financial statements continued board directors collectively “directors” well frederick hipwell partner pricewaterhousecoopers llp “pwc” company’s former auditor complaint alleges among things directors breached fiduciary duties company attempting conceal certain alleged misrepresentations wrongdoing company’s management concealed certain facts connection audits performed pwc caused issuance false misleading proxy statement 2013 complaint seeks among things appointment conservator special master oversee company’s discussions governmental agencies well recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff company filed motion dismiss complaint february 13 2014 february 28 2014 defendant hipwell filed motion dismiss complaint march 12 2014 plaintiff filed response company’s motion dismiss march 26 2014 company filed reply march 31 2014 plaintiff filed response hipwell’s motion dismiss april 10 2014 hipwell filed reply april 1 2014 plaintiff filed renewed motion expedited discovery first motion filed january 24 2014 denied judge company filed response april 18 2014 may 2 2014 us district court denied second motion may 9 2014 directors ader chafetz chaltiel forman koppelman leven filed motion dismiss june 10 2014 plaintiff filed opposition directors motion dismiss june 30 2014 directors filed reply july 30 2014 us district court granted company’s motion dismiss complaint finding plaintiff failed allege stock ownership facts demonstrating standing sue leave plaintiff amend complaint demonstrate stock ownership particularity august 29 2014 plaintiff filed amended complaint september 15 2014 served defendants filed motions dismiss amended complaint plaintiffs opposition companys motion dismiss filed october 22 2014 individuals motions dismiss october 29 2014 plaintiffs also filed opposition hipwells motion november 3 2014 opposed mr adelsons joinder december 9 2014 served defendants reply briefs filed november 24 25 26 2014 action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously march 6 2014 board directors company received shareholder demand letter purported shareholder named john f scarpa foundation scarpa letter recites substantially allegations complaint filed sokolowski action demands claims asserted company delivered company counsel representing mr sokolowski company responded counsel march 26 2014 scarpa sent revised demand letter board directors march 31 2014 company responded counsel april 8 2014 scarpa sent additional demand letter dated august 14 2014 company responded august 22 2014 matter preliminary stage management determined based proceedings date currently unable determine probability outcome matter whether matter result litigation range reasonably possible loss company intends defend matter vigorously january 19 2012 asian american entertainment corporation limited “aaec” filed claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” las vegas sands llc “lvsllc” vcr collectively “defendants” claim 30 billion patacas approximately 3754 million exchange rates effect december 31 2014 compensation damages resulting alleged breach agreements entered aaec defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court september 23 2013 three us defendants filed motion macao second instance court seeking recognition enforcement us court appeals ruling prior action referred given april 10 2009 partially dismissed aaec’s claims three us defendants april 24 2014 macao judicial court issued decision despacho seneador holding aaec’s claim las vegas sands corp subsidiaries notes consolidated financial statements continued vml unfounded vml removed party proceedings claim proceed exclusively three us defendants macao judicial court held existence pending application recognition enforcement us court appeals ruling macao second instance court justify stay proceedings three us defendants present time although principle application stay proceedings three us defendants could reviewed macao second instance court issued decision june 25 2014 macao second instance court delivered decision gave formal recognition allowed enforcement macao judgment us court appeals dismissing aaecs claims us defendants subject appeal aaec us defendants intend apply macao first instance court dismiss aaecs claims full july 9 2014 plaintiff filed yet another action us district court lvsc lvsllc vcr sheldon g adelson william p weidner david friedman 150 declaratory judgment equitable accounting misappropriation trade secrets breach confidence conversion based theory copyright law claim 50 billion november 4 2014 plaintiff finally effected notice lvsc entities followed motion dismiss us defendants november 10 2014 plaintiff failed timely respond december 2 2014 us defendants moved immediate dismissal sanctions plaintiff counsel bringing frivolous lawsuit december 19 2014 plaintiff filed incomplete untimely response followed plaintiffs december 27 2014 notice withdrawal lawsuit us defendants december 29 2014 reply favor sanctions dismissal prejudice judge dismissed us action defendants sanctions motion remains pending macao action preliminary stage management determined based proceedings date currently unable determine probability outcome macao matter range reasonably possible loss company intends defend macao matter vigorously previously disclosed company february 5 2007 aaec brought similar claim “prior action” us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action “nevada action” aaec us district court seeking enjoin aaec proceeding macao action based aaec’s filing us district court’s dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action company previously received subpoenas us attorney’s office central district california “usao” requesting production documents relating two prior customers company’s properties august 2013 usao completed investigation entered agreement company whereby company agreed voluntarily return 474 million us treasury represented funds received behalf one customers provide written reports usao regarding certain casinorelated activities amount paid year ended december 31 2013 matter closed february 11 2014 company disclosed victim sophisticated cyberattack computer networks united states result criminal attack us government commenced investigations source attack addition company working internal external forensic information technology systems experts connection effort result investigations company’s efforts ongoing company learned certain customer employee data compromised bethlehem facility data may stolen attack well attack may destroyed certain company data company cooperating fully investigations based preliminary status investigations absence claims asserted thus far management currently unable determine probability outcome matters relating cyberattack extent materiality range reasonably possible loss las vegas sands corp subsidiaries notes consolidated financial statements continued macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including venetian macao sands cotai central plaza casino four seasons macao sands macao parisian macao opened separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2014 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37542 18771 125 respectively exchange rates effect december 31 2014 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2014 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2014 company obligated subconcession make minimum future payments approximately 427 million next five years approximately 1067 million thereafter amounts expected increase company completes remaining cotai strip developments currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2014 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 674 million 675 million 514 million years ended december 31 2014 2013 2012 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued ventures commitments company entered employment agreements three executive officers remaining terms one five years december 31 2014 company obligated make future payments 55 million year ending december 31 2015 33 million next four years ending december 31 2019 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2014 company obligated two agreements still effect make future payments approximately 04 million next five years 44 million thereafter malls company leases space several integrated resorts various third parties leases noncancelable operating leases lease periods vary 1 month 25 years leases include minimum base rents escalated contingent rent clauses december 31 2014 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2014 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 1039 million 1291 million 1090 million years ended december 31 2014 2013 2012 respectively note 14 stockbased employee compensation company two nonqualified stock option plans 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2014 4578311 shares available grant 2004 plan las vegas sands corp subsidiaries notes consolidated financial statements continued stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based company’s historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s compensation committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2014 758729151 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based combination scls historical volatilities historical volatilities selection companies scl’s peer group due scl’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based hong kong exchange fund note rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity company’s equity award plans year ended december 31 2014 presented 1 result scl declaring special dividend january 24 2014 exercise price scl stock options outstanding february 14 2014 reduced 010 per share adjustment result antidilution provision scl equity plan result additional compensation expense las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock units company’s equity award plans year ended december 31 2014 presented december 31 2014 2004 plan 415 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 158 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 46 years 16 years respectively december 31 2014 scl equity plan 326 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options 135 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 27 years 25 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2014 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages years ended december 31 2014 2013 2012 company’s matching contributions savings plan 87 million 82 million 47 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive upon resignation 30 contributions working three consecutive years gradually increasing las vegas sands corp subsidiaries notes consolidated financial statements continued 100 working ten years ended december 31 2014 2013 2012 vml’s contributions provident fund 314 million 286 million 229 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2014 mbs contributes 16 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2014 2013 2012 mbs’s contributions provident fund 449 million 404 million 328 million respectively note 16 related party transactions years ended december 31 2014 2013 2012 principal stockholder family purchased certain lodging banquet room catering goods services procurement services company approximately 12 million 17 million 13 million respectively years ended december 31 2014 2013 2012 company incurred paid certain expenses totaling 57 million 114 million 117 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2014 2013 2012 company charged received principal stockholder 183 million 176 million 154 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes see “ note 9 equity transactions” regarding company’s purchase boeing 747 airplane entity controlled principal stockholder june 2012 years ended december 31 2014 2013 company charged received one executive officers 03 million 01 million respectively related aviation costs incurred company executive’s use company aviation personnel assets personal purposes march 2 2012 principal stockholder’s family exercised outstanding warrants purchase 87500175 shares company’s common stock 600 per share paid 5250 million cash settlement warrant exercise price see “ note 9 equity preferred stock warrants preferred stock issued principal stockholder’s family” year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central four seasons macao sands macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macao marina bay sands venetian las vegas includes sands expo center palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure company also reviews construction development activities primary projects development addition reportable segments noted company’s primary projects development parisian macao st regis tower remaining phase sands cotai central four seasons apartments macao las vegas condo tower construction currently suspended included corporate us las vegas sands corp subsidiaries notes consolidated financial statements continued corporate activities company also included corporate company’s segment information follows years ended december 31 2014 2013 2012 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda net income intersegment royalty fees stockbased compensation expense legal settlement expense see note 13 commitments contingencies litigation corporate expense preopening expense development expense depreciation amortization leasehold interests land impairment loss disposal assets interest income loss modification early retirement debt income taxes adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 condensed consolidating financial information lvsllc issuer primary obligor 2013 us credit facility vcr venetian marketing inc sands expo convention center inc sands pennsylvania inc collectively “restricted subsidiaries” guarantors 2013 us credit facility noncontrolling interest amounts included restricted subsidiaries’ condensed consolidating financial information related nonvoting preferred stock one subsidiaries held third parties february 2008 capital stock phase ii mall subsidiary llc subsidiary vcr sold ggp however sale complete accounting perspective due company’s continuing involvement transaction related participation certain potential future revenues earned ggp certain assets liabilities operating results related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted restricted subsidiaries therefore included “restricted subsidiaries” columns following condensed consolidating financial information result net liabilities 403 million consisting 2688 million liabilities consisting primarily deferred proceeds sale partially offset 2285 million property equipment 293 million consisting 2686 million liabilities consisting primarily deferred proceeds sale partially offset 2393 million property equipment december 31 2014 2013 respectively net loss consisting primarily depreciation expense 118 million 129 million 151 million years ended december 31 2014 2013 2012 respectively related mall accounted restricted subsidiaries balances amounts collateral 2013 us credit facility connection refinancing prior us senior secured credit facility december 2013 change group subsidiaries restricted subsidiaries exclude palazzo condo tower llc lvs nevada international holdings inc lvs management services llc accordingly company reclassified 2012 financial information prior period conform current presentation restricted subsidiaries additionally lvsc holding company result ability pay dividends dependent subsidiaries’ ability provide funds restrictions imposed company’s us macao singapore credit facilities may restrict company’s key subsidiaries holding majority consolidated group’s total assets making dividends distributions subject certain exceptions defined agreements unless certain financial nonfinancial criteria satisfied lvsc received cash dividends 341 billion 184 billion 275 billion subsidiaries years ended december 31 2014 2013 2012 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued following condensed consolidating financial information lvsc nonguarantor parent restricted subsidiaries including lvsllc issuer nonrestricted subsidiaries combined basis december 31 2014 2013 three years period ended december 31 2014 presented order meet reporting requirements 2013 us credit facility intended comply sec regulation sx 310 thousands condensed consolidating balance sheets december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2012 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 second sheraton tower sands cotai central opened january 2013 2 company received 901 million refund december 2014 related property tax settlement marina bay sands years 2010 2014 earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2014 2013 2012 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm board directors stockholders las vegas sands corp audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2015 2014 related consolidated statements operations comprehensive income equity cash flows three years period ended december 31 2015 audits also included financial statement schedule listed index item 15a2 financial statements financial statement schedule responsibility company’s management responsibility express opinion financial statements financial statement schedule based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion consolidated financial statements present fairly material respects financial position las vegas sands corp subsidiaries december 31 2015 2014 results operations cash flows three years period ended december 31 2015 conformity accounting principles generally accepted united states america also opinion financial statement schedule considered relation basic consolidated financial statements taken whole presents fairly material respects information set forth therein also audited accordance standards public company accounting oversight board united states companys internal control financial reporting december 31 2015 based criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 26 2016 expressed unqualified opinion companys internal control financial reporting report independent registered public accounting firm board directors stockholders las vegas sands corp audited internal control financial reporting las vegas sands corp subsidiaries company december 31 2015 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission companys management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting appearing item 9a responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed supervision companys principal executive principal financial officers persons performing similar functions effected companys board directors management personnel provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting including possibility collusion improper management override controls material misstatements due error fraud may prevented detected timely basis also projections evaluation effectiveness internal control financial reporting future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion company maintained material respects effective internal control financial reporting december 31 2015 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states consolidated financial statements financial statement schedule year ended december 31 2015 company report dated february 26 2016 expressed unqualified opinion financial statements financial statement schedules las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” ordinary shares company’s subsidiary sands china ltd “scl” indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china listed main board stock exchange hong kong limited “sehk” shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 701 scl includes operations venetian macao sands cotai central four seasons macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 company owns operates venetian macao resort hotel “the venetian macao” anchors cotai strip company’s masterplanned development integrated resort properties area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 376000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 921000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao four seasons macao described sands cotai central opened phases beginning april 2012 property features four hotel towers first hotel tower consisting approximately 650 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand second hotel tower consisting approximately 1800 rooms suites sheraton brand third hotel tower consisting approximately 2100 rooms suites sheraton brand fourth hotel tower consisting approximately 400 rooms suites st regis brand within sands cotai central company also owns currently operates approximately 370000 square feet gaming space approximately 369000 square feet meeting space approximately 332000 square feet retail space well entertainment dining facilities company constructing remainder fourth tower aparthotel wing consists approximately 10 million square feet st regisserviced branded luxury aparthotel units common areas subject macao government approval total cost complete remainder tower expected approximately 220 million upon completion project integrated resort feature approximately 370000 square feet gaming space approximately 800000 square feet retail dining entertainment space 550000 square feet meeting facilities multipurpose theater december 31 2015 company capitalized costs 487 billion entire project including land premium net amortization 841 million outstanding construction payables company owns four seasons hotel macao cotai strip “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 259000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced las vegas sands corp subsidiaries notes consolidated financial statements continued branded luxury aparthotel units common areas company completed structural work tower advancing plans monetize units within four seasons apartments company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 216000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consist two enclosed retail dining entertainment complexes sold ggp limited partnership “ggp” see “ note 12 mall sales” pennsylvania company owns operates sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 145000 square feet gaming space 300room hotel tower 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc approximately 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects macao company constructing parisian macao integrated resort connected venetian macao four seasons macao parisian macao intended include gaming area operated company’s gaming subconcession hotel approximately 3000 rooms suites retail entertainment dining meeting facilities company expects cost design develop construct parisian macao approximately 27 billion inclusive payments made land premium projects nature company continue analyze options full phased opening facility anticipated open second half 2016 subject macao government approval company capitalized costs 165 billion including land premium net amortization 1663 million outstanding construction payables december 31 2015 addition company completing development open areas surrounding cotai strip properties las vegas sands corp subsidiaries notes consolidated financial statements continued company’s land concession parisian macao company required complete development november 2016 land concession sands cotai central contains similar requirement development completed december 2016 company determine unable complete parisian macao sands cotai central respective deadlines company would expect apply another extension macao government company unable meet current deadlines either development extended company could lose land concessions parisian macao sands cotai central would prohibit company operating facilities developed respective land concessions result company could record charge portion 165 billion 487 billion capitalized construction costs land premiums net amortization december 31 2015 related parisian macao sands cotai central respectively united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company evaluating highest return opportunity project intends recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 1786 million capitalized construction costs december 31 2015 company continues aggressively pursue new development opportunities globally capital financing overview december 31 2015 company funded development projects primarily borrowings credit facilities operating cash flows proceeds equity offerings proceeds disposition noncore assets company held unrestricted cash equivalents 218 billion restricted cash equivalents 79 million december 31 2015 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company may elect arrange additional financing fund balance cotai strip developments normal course activities company continue evaluate capital structure opportunities enhancements thereof april 2015 company entered joinder agreement 2011 vml credit facility certain lenders agreed provide term loan commitments 10 billion see “ note 8 longterm debt macao related debt 2011 vml credit facility” note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary las vegas sands corp subsidiaries notes consolidated financial statements continued company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2015 2014 company’s joint ventures total assets 794 million 850 million respectively total liabilities 1484 million 1306 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivables offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined weighted average specific identification methods las vegas sands corp subsidiaries notes consolidated financial statements continued property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flow scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale years ended december 31 2015 2014 2013 assets impaired las vegas sands corp subsidiaries notes consolidated financial statements continued capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2015 2014 2013 company capitalized interest expense 275 million 93 million 47 million respectively years ended december 31 2015 2014 2013 company capitalized approximately 311 million 326 million 242 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company may first conduct qualitative assessment determine whether “morelikelythannot” asset impaired company elects perform qualitative assessment determined “morelikelythannot” asset impaired assessing qualitative factors company performs impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference december 31 2015 company assets 500 million 165 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets years ended december 31 2015 2013 annual impairment analysis included assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired year ended december 31 2014 company elected perform quantitative analysis given last quantitative analysis performed year ended december 31 2011 fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others las vegas sands corp subsidiaries notes consolidated financial statements continued future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2015 2014 2013 revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer included convention retail revenues mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 331 billion 465 billion 454 billion years ended december 31 2015 2014 2013 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 1245 million 1404 million 1178 million years ended december 31 2015 2014 2013 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income loss comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments year ended december 31 2015 53 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income loss comprehensive income net income amount included income accompanying consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 1958 million 2152 million december 31 2015 2014 respectively valuation allowance certain deferred tax assets us operations 311 billion 227 billion december 31 2015 2014 respectively increased current year primarily due increase us foreign tax credits management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance period determination made significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition las vegas sands corp subsidiaries notes consolidated financial statements continued determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company employs financial instruments pursuant policy none currently designated hedges gains losses recognized income expense depending classification position end reporting period derivative reported prepaid expenses assets net accrued liabilities longterm liabilities applicable accompanying consolidated balance sheets see note 11 fair value measurements additional disclosures regarding derivatives recent accounting pronouncements may 2014 fasb issued accounting standard update revenue recognition applied contracts customers update requires entity recognize revenue transfers promised goods services customers amount reflects expects exchange goods services also requires detailed disclosures enable users financial statements understand nature amount timing uncertainty revenue cash flows arising contracts customers guidance required applied retrospective basis using one two methodologies effective fiscal years beginning december 15 2017 early application permitted annual reporting periods beginning december 15 2016 including interim reporting periods within reporting period company currently assessing impact guidance companys financial condition results operations april 2015 fasb issued accounting standard update simplify presentation debt issuance costs update requires debt issuance costs reported deduction face amount related debt rather asset amortization debt issuance costs continue reported interest expense august 2015 fasb issued accounting standard update clarify guidance required applied lineofcredit arrangements amendments affect guidance recognition measurement debt issuance costs guidance required applied retrospective basis effective fiscal years beginning december 15 2015 early adoption permitted financial statements previously issued adoption guidance material effect companys financial condition results operations cash flows july 2015 fasb issued accounting standard update requires inventory measured using method lastin firstout retail inventory method measured lower cost net realizable value net realizable value estimated selling price ordinary course business less reasonably predictable costs completion disposal transportation net realizable value inventory lower cost difference shall recognized loss period occurs guidance effective fiscal years beginning las vegas sands corp subsidiaries notes consolidated financial statements continued december 15 2016 applied prospectively early adoption permitted adoption guidance material effect company’s financial condition results operations cash flows november 2015 fasb issued accounting standard update simplify presentation deferred income taxes update requires deferred tax assets liabilities along related valuation allowance classified noncurrent guidance effective annual periods beginning december 15 2016 interim periods within annual periods amendments update may applied either prospectively deferred tax liabilities assets retrospectively periods presented early adoption permitted company adopted guidance retrospectively december 31 2015 see reclassification “ note 10 income taxes” adoption guidance material effect company’s financial condition results operations cash flows february 2016 fasb issued accounting standard update leases requires lessees recognize lease liability rightofuse asset measured present value future minimum lease payments lease commencement date lessor accounting remains largely unchanged new guidance effective fiscal years beginning december 15 2018 including interim reporting periods within reporting period early adoption permitted modified retrospective approach must applied leases existing entered beginning earliest comparative period presented financial statements company currently assessing impact guidance companys financial condition results operations reclassification consistent current year presentation company retrospectively adopted new guidance simplify presentation deferred income taxes result current deferred income tax liability 125 million reclassified noncurrent deferred income tax asset 76 million offset noncurrent deferred income tax liability consolidated balance sheets year ended december 31 2014 reclassification effect companys financial condition results operations cash flows note 3 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 4 property equipment net property equipment consists following thousands construction progress consists following thousands 3501 million construction progress consists primarily construction las vegas condo tower various projects venetian macao accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” company sold portion grand canal shoppes located within palazzo formerly referred shoppes palazzo see “ note 12 mall sales shoppes palazzo” terms settlement ggp june 24 2011 company retained 2954 million proceeds previously received participates certain potential future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 2662 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 2197 million net 917 million accumulated depreciation december 31 2015 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 120 billion 2999 million respectively december 31 2015 cost accumulated depreciation property equipment company leasing third parties 113 billion 2510 million respectively december 31 2014 cost accumulated depreciation property equipment company leasing capital lease arrangements 392 million 186 million respectively december 31 2015 cost accumulated depreciation property equipment company leasing capital lease arrangements 384 million 146 million respectively december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued years ended december 31 2015 2014 2013 assets impaired note 5 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 386 million 406 million 404 million included amortization leasehold interests land expense years ended december 31 2015 2014 2013 respectively estimated future amortization expense approximately 383 million next five years 131 billion thereafter exchange rates effect december 31 2015 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build sites venetian macao four seasons macao sands cotai central parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well annual rent term land concessions addition land premium payments macao leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2015 company obligated land concessions make future rental payments follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2013 company paid 570 million singapore dollars sgd approximately 403 million exchange rates effect december 31 2015 singapore casino regulatory authority “cra” part process renew gaming license marina bay sands license amortized threeyear term expires april 2016 renewable upon submitting application paying applicable license fee meeting requirements determined cra company filed renewal application believes meets renewal requirements determined cra however assurance given license renewal granted period time granted amortization expense 140 million 151 million 136 million years ended december 31 2015 2014 2013 respectively estimated future amortization expense approximately 43 million year ending december 31 2016 note 7 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following thousands corporate us related debt 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility “2013 us credit facility” consists 225 billion funded term b loan “2013 us term b facility” original issue discount 113 million 125 billion revolving credit facility “2013 us revolving facility” borrowings 2013 us credit facility used repay outstanding balance senior secured credit facility described company recorded 142 million loss modification early retirement debt year ended december 31 2013 december 31 2015 company 6179 million available borrowing capacity 2013 us revolving facility net outstanding letters credit 2013 us term b facility matures december 19 2020 subject quarterly amortization payments 56 million began march 31 2014 followed balloon payment 210 billion due december 19 2020 2013 us revolving facility interim amortization payments matures december 19 2018 2013 us credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 us credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 15 per annum 2013 us revolving facility 2013 us term b facility respectively eurodollar rate borrowings initial credit spread 15 per annum 25 per annum 2013 us revolving facility 2013 us term b facility subject eurodollar rate floor 075 respectively interest rates set 19 33 respectively december 31 2015 weighted average interest las vegas sands corp subsidiaries notes consolidated financial statements continued rate 2013 us credit facility 30 28 29 years ended december 31 2015 2014 2013 respectively company pays commitment fee 035 per annum undrawn amounts 2013 us revolving facility reduced certain corporate ratings achieved subject certain additional conditions 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply financial covenants including limited maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” extent outstanding balance 2013 us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity 2013 us credit facility also contains conditions events default customary financings december 31 2015 approximately 335 billion net assets lvsllc restricted distributed terms 2013 us credit facility senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” originally consisted 40 billion funded delayed draw term loans 10 billion revolving credit facility “revolving facility” part amendment facility august 2010 certain lenders elected extend maturity 191 billion aggregate principal amount term loans “extended term loans” extend availability 5325 million revolving facility extended revolving facility part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million borrowings senior secured credit facility amended bore interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 075 per annum term loans 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 175 per annum term loans 225 per annum 275 per annum extended revolving facility extended term loans respectively weighted average interest rate senior secured credit facility 23 year ended december 31 2013 airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 19 december 31 2015 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 18 years ended december 31 2015 2014 2013 april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes tenyear maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 19 december 31 2015 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 16 15 16 years ended december 31 2015 2014 2013 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt 2011 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement “2011 vml credit facility” provided 37 billion equivalent hong kong dollars macao patacas consisted 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 5000 million revolving facility “2011 vml revolving facility” available october 15 2016 borrowings facility used repay outstanding indebtedness previous credit facilities would used working capital requirements general corporate purposes including development construction completion certain components sands cotai central march 2014 company amended 2011 vml credit facility among things modify certain financial covenants discussed addition amendment certain lenders extended maturity 239 billion aggregate principal amount 2011 vml term facility march 31 2020 extended 2011 vml term facility together new lenders provided 20 billion aggregate principal amount revolving loan commitments extended 2011 vml revolving facility portion revolving proceeds used pay 8197 million aggregate principal balance 2011 vml term facility loans extended company recorded 180 million loss modification early retirement debt year ended december 31 2014 connection pay extension borrowings extended 2011 vml revolving facility used fund development construction completion sands cotai central parisian macao working capital requirements general corporate purposes december 31 2015 company 20 billion available borrowing capacity extended 2011 vml revolving facility subsequent year end company borrowed 3504 million extended 2011 vml revolving facility april 2015 company entered joinder agreement joinder agreement 2011 vml credit facility joinder agreement certain lenders agreed provide term loan commitments 10 billion 2011 vml accordion term funded april 30 2015 “joinder funding date” indebtedness 2011 vml credit facility guaranteed vml venetian cotai limited venetian orient limited certain company’s foreign subsidiaries collectively “2011 vml guarantors” obligations 2011 vml credit facility collateralized firstpriority security interest substantially borrower’s 2011 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets commencing quarterly period ending june 30 2017 end subsequent quarter march 31 2018 2011 vml credit facility amended requires borrower repay outstanding extended 2011 vml term facility pro rata basis amount equal 25 aggregate principal amount outstanding march 31 2014 “macao restatement date” commencing quarterly period ending june 30 2018 end subsequent quarter march 31 2019 borrower required repay outstanding extended 2011 vml term facility pro rata basis amount equal 50 aggregate principal amount outstanding macao restatement date quarterly periods ending june 30 december 31 2019 borrower required repay outstanding extended 2011 vml term facility pro rata basis las vegas sands corp subsidiaries notes consolidated financial statements continued amount equal 120 aggregate principal amount outstanding macao restatement date remaining balance extended 2011 vml term facility due maturity date extended 2011 vml revolving facility interim amortization payments matures march 31 2020 commencing quarterly period ending june 30 2018 end subsequent quarter march 31 2019 joinder agreement requires borrower repay outstanding 2011 vml accordion term pro rata basis amount equal 25 aggregate principal amount outstanding joinder funding date commencing quarterly period ending june 30 2019 end subsequent quarter march 31 2020 borrower required repay outstanding 2011 vml accordion term pro rata basis amount equal 50 aggregate principal amount outstanding joinder funding date quarterly periods ending june 30 december 31 2020 borrower required repay outstanding 2011 vml accordion term pro rata basis amount equal 120 aggregate principal amount outstanding joinder funding date remaining balance 2011 vml accordion term due maturity date march 30 2021 borrowings loans bear interest amended companys option either adjusted eurodollar rate hong kong interbank offered rate “hibor” plus credit spread alternative base rate plus credit spread credit spread case determined based maximum leverage ratio set forth respective agreements credit spread borrowings ranges 025 1125 per annum loans accruing interest base rate 125 2125 per annum loans accruing interest adjusted eurodollar hibor rate interest rates set 19 17 loans accruing interest adjusted eurodollar hibor rate respectively december 31 2015 borrower also pay standby fees 05 per annum undrawn amounts extended 2011 vml revolving facility weighted average interest rate 2011 vml credit facility 16 15 18 years ended december 31 2015 2014 2013 respectively december 31 2015 2014 company interest rate cap agreements place related 2011 vml credit facility december 31 2013 company interest rate cap agreements place combined notional amount 160 billion expiration date november 2014 strike rates 20 225 provisions interest rate cap agreements entitled company receive counterparty amounts selected market interest rates exceeded strike rates stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2015 2014 2013 2011 vml credit facility amended contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions use proceeds facility 2011 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense maximum leverage ratio amended 40x quarterly periods ending december 31 2015 march 31 2017 decreases remains 35x quarterly periods thereafter maturity 2011 vml credit facility also contains events default customary financings las vegas sands corp subsidiaries notes consolidated financial statements continued singapore related debt 2012 singapore credit facility june 2012 company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered sgd 51 billion approximately 361 billion exchange rates effect december 31 2015 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 325 billion exchange rates effect december 31 2015 term loan “2012 singapore term facility” sgd 5000 million approximately 3536 million exchange rates effect december 31 2015 revolving facility “2012 singapore revolving facility” available november 25 2017 includes sgd 1000 million approximately 707 million exchange rates effect december 31 2015 ancillary facility “2012 singapore ancillary facility” borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 company recorded 20 million loss modification early retirement debt year ended december 31 2014 connection extension december 31 2015 company sgd 4944 million approximately 3496 million exchange rates effect december 31 2015 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets commencing quarterly period ending december 31 2014 end subsequent quarter september 30 2018 company required repay outstanding 2012 singapore term facility amount 05 aggregate principal amount outstanding august 29 2014 singapore restatement date commencing quarterly period ending december 31 2018 end subsequent quarter september 30 2019 company required repay outstanding 2012 singapore term facility amount 50 aggregate principal amount outstanding singapore restatement date commencing quarterly period ending december 31 2019 end subsequent quarter june 30 2020 maturity date company required repay outstanding 2012 singapore term facility amount 180 aggregate principal amount outstanding singapore restatement date 2012 singapore revolving facility interim amortization payments matures february 28 2020 borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 per annum beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 31 december 31 2015 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 25 18 19 years ended december 31 2015 2014 2013 respectively december 31 2015 company interest rate cap agreement place notional amount sgd 100 million approximately 707 million exchange rates effect december 31 2015 expiration date may 2016 strike rate 35 december 31 2014 company interest rate cap agreements place combined notional amount sgd 300 million approximately 2122 million exchange rates effect december 31 2015 expiration dates ranging april 2015 may 2016 strike rates 30 35 december 31 2013 company interest rate cap agreements place combined notional amount sgd 145 billion approximately 103 billion exchange rates effect december 31 2015 expiration dates ranging may 2014 may 2016 strike rates 30 35 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates las vegas sands corp subsidiaries notes consolidated financial statements continued exceed strike rates stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2015 2014 2013 2012 singapore credit facility amended contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio amended 35x quarterly periods ending december 31 2015 september 30 2019 decreases remains 30x quarterly periods thereafter maturity 2012 singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2015 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2015 2014 approximately 922 billion 978 billion respectively compared carrying value 946 billion 998 billion respectively estimated fair value company’s longterm debt based level 2 inputs quoted prices markets active note 9 equity preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder family together warrants purchase aggregate approximately 87500175 shares common stock november 2011 company redeemed preferred stock outstanding year ended december 31 2013 remaining 3500 warrants issued public exercised purchase aggregate 64562 shares company’s common stock 600 per share 03 million cash received settlement warrant exercise price las vegas sands corp subsidiaries notes consolidated financial statements continued common stock dividends march 31 june 30 september 30 december 31 2015 company paid dividend 065 per common share part regular cash dividend program year ended december 31 2015 company recorded 207 billion distribution retained earnings 112 billion related principal stockholder family remaining 9492 million related shareholders march 31 june 30 september 30 december 29 2014 company paid dividend 050 per common share part regular cash dividend program year ended december 31 2014 company recorded 161 billion distribution retained earnings 8633 million related principal stockholder family remaining 7448 million related shareholders march 29 june 28 september 27 december 31 2013 company paid dividend 035 per common share part regular cash dividend program year ended december 31 2013 company recorded 115 billion distribution retained earnings 6042 million related principal stockholder family remaining 5489 million related shareholders january 2016 part regular cash dividend program company’s board directors declared quarterly dividend 072 per common share total estimated approximately 572 million paid march 31 2016 shareholders record march 22 2016 repurchase program june 2013 company’s board directors approved stock repurchase program initial authorization 20 billion expired june 2015 substantially completed year ended december 31 2014 october 2014 companys board directors authorized repurchase additional 20 billion outstanding common stock expires october 2016 repurchases company’s common stock made company’s discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including company’s financial position earnings legal requirements investment opportunities market conditions years ended december 31 2015 2014 2013 company repurchased 4383793 22406655 8570281 shares respectively common stock 2051 million 166 billion 5705 million respectively including commissions program share repurchases company’s common stock recorded treasury stock las vegas sands corp subsidiaries notes consolidated financial statements continued rollforward shares common stock summary outstanding shares common stock follows equity transactions addition shares repurchased share repurchase program year ended december 31 2014 company repurchased 45220 shares satisfaction tax withholding exercise price obligations vested restricted stock option exercise noncontrolling interests scl february 27 july 15 2015 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion february 26 2014 scl paid dividend hkd 087 per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share scl shareholders total 260 billion company retained 182 billion february 28 june 21 2013 scl paid dividend hkd 067 hkd 066 per share respectively scl shareholders total 138 billion company retained 9702 million january 2016 board directors scl declared dividend hkd 099 per share total 103 billion company retained 723 million scl shareholders record february 9 2016 paid february 26 2016 years ended december 31 2015 2014 2013 company distributed 139 million 98 million 119 million respectively certain noncontrolling interests april 2014 company disposed interest one majority owned subsidiaries resulting loss 05 million included loss disposal assets year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows thousands components income tax expense follows thousands reconciliation statutory federal income tax rate company’s effective tax rate follows company’s foreign us tax rate differential reflects fact income earned reinvested singapore macao taxed local rates lower us tax rates company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2018 company received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 1320 million 2198 million 2077 million diluted earnings per share would reduced 017 027 025 per share years ended december 31 2015 2014 2013 respectively may 2014 company entered agreement macao government effective end 2018 provides annual payment 424 million patacas approximately 53 million exchange rates effect december 31 2015 substitution 12 tax otherwise due vml shareholders dividend distributions las vegas sands corp subsidiaries notes consolidated financial statements continued paid vml gaming profits september 2013 company internal revenue service irs entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit primary tax affected components company’s net deferred tax liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2015 2014 company windfall tax benefits 3567 million 3546 million respectively reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable year ended december 31 2015 certain wholly owned foreign subsidiaries paid dividends resulting incremental us taxable income receipt dividends result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result dividends addition dividends generated excess us foreign tax credits available carried forward tax years beyond 2015 company’s us foreign tax credit carryforwards 327 billion 243 billion december 31 2015 2014 respectively begin expire 2021 company’s state net operating loss carryforwards 2586 million 2512 million december 31 2015 2014 respectively begin expire 2024 company’s us general business credits 31 million 21 million december 31 2015 2014 respectively begin expire 2032 valuation allowance 311 billion 227 billion december 31 2015 2014 respectively provided certain net us deferred tax assets company believes assets meet “morelikelythannot” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 197 billion 207 las vegas sands corp subsidiaries notes consolidated financial statements continued billion december 31 2015 2014 respectively begin expire 2016 valuation allowances 1958 million 2152 million december 31 2015 2014 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 certain company’s foreign subsidiaries distributed may continue distribute earnings excess current year’s tax earnings profits order meet company’s liquidity needs company plan foreign subsidiaries demonstrates earnings attributable periods january 1 2015 indefinitely reinvested applicable jurisdictions december 31 2015 2014 amount earnings profits foreign subsidiaries company intend repatriate 524 billion 607 billion respectively company provided deferred taxes remaining undistributed foreign earnings company expects sufficient creditable foreign taxes offset us foreign income taxes would result earnings distributed form dividends otherwise companys cumulative temporary difference less earnings profits reconciliation beginning ending amounts unrecognized tax benefits reclassified conform current presentation years ended december 31 2014 2013 follows thousands december 31 2015 2014 2013 unrecognized tax benefits 567 million 506 million 434 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2015 2014 2013 unrecognized tax benefits 30 million 122 million 133 million respectively recorded longterm liabilities december 31 2015 unrecognized tax benefits 56 million recorded income taxes payable included unrecognized tax benefit balance december 31 2015 2014 2013 532 million 524 million 473 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore company subject examination tax years beginning 2010 us singapore tax years beginning 2011 macao inland revenue authority singapore performing compliance review marina bay sands tax returns tax years 2010 2012 company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes las vegas sands corp subsidiaries notes consolidated financial statements continued company believes reasonably possible decrease 72 million company’s unrecognized tax benefits occur within next 12 months result lapses statute limitations expected settlements taxing authorities company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2015 2014 note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement see note 2 summary significant accounting policies additional disclosures regarding derivatives company currently uses certain derivatives effective economic hedges offset interest rate risk associated current anticipated future borrowings see note 8 longterm debt foreign currency forward contracts manage foreign currency exposure foreign currency forward contracts involve purchase sale designated currency agreed upon rate settlement specified date aggregate notional value foreign currency contracts 6727 million december 31 2015 derivatives designated andor qualify hedge accounting changes fair value recognized income expense accompanying consolidated statements operations following table provides assets carried fair value thousands 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2015 company 19 foreign currency forward contracts fair values based quoted market transactions institutions holding agreements 3 december 31 2015 2014 company one four interest rate cap agreements respectively nominal aggregate fair value based quoted market values institutions holding agreements las vegas sands corp subsidiaries notes consolidated financial statements continued note 12 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2015 2014 2013 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2015 2014 2013 28 million 31 million 35 million deferred item amortized offset convention retail expense december 31 2015 company obligated ii iii iv make future payments follows thousands shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 2954 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2015 company obligated make future payments approximately 09 million two years period ending december 31 2017 approximately 05 million year ending december 31 2018 accordance related accounting standards transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo las vegas sands corp subsidiaries notes consolidated financial statements continued therefore 2684 million mall sale transaction recorded deferred proceeds sale december 31 2015 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 225 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows october 15 2004 richard suen round square company limited roundsquare filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada “district court” asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court new trial decision reversing monetary judgment company nevada supreme court also made several rulings including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court february 27 2012 district court set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court granted requests retrial began march 27 may 14 2013 jury returned verdict favor roundsquare amount 700 million may 28 2013 judgment entered matter amount 1016 million including prejudgment interest june 7 2013 company filed motion district court requesting judgment set aside matter law alternative new trial granted july 30 2013 district court denied company’s motion october 17 2013 district court entered order granting plaintiff’s request certain costs fees associated litigation amount approximately 10 million december 6 2013 company filed notice appeal jury verdict nevada supreme court company filed opening appellate brief nevada supreme court june 16 2014 august 19 2014 nevada supreme court issued order granting plaintiffs additional time september 15 2014 file answering brief september 15 2014 roundsquare filed request nevada supreme court file brief exceeding maximum number words granted october 10 2014 roundsquare filed answering brief january 12 2015 defendants filed reply brief january 27 2015 roundsquare filed reply brief nevada supreme court set oral argument december 17 2015 panel justices las vegas sands corp subsidiaries notes consolidated financial statements continued reset january 26 2016 en banc oral arguments presented nevada supreme court scheduled ruling date set one estimable company believes valid bases law fact appeal verdicts result company believes likelihood amount judgments affirmed probable accordingly amount loss cannot reasonably estimated time company believes potential loss probable estimable recorded reserves contingencies related legal matter event company’s assumptions used evaluate matter neither probable estimable change future periods may required record liability adverse outcome october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 amended complaint filed added sheldon g adelson defendant alleged claim defamation per se lvsc scl june 9 2011 district court dismissed defamation claim certified decision sheldon g adelson final judgment july 1 2011 plaintiff filed notice appeal regarding final judgment sheldon g adelson august 26 2011 nevada supreme court issued writ mandamus instructing district court hold evidentiary hearing whether personal jurisdiction exists scl stayed case district courts decision january 17 2012 plaintiff filed opening brief nevada supreme court regarding appeal defamation claim mr adelson january 30 2012 mr adelson filed reply plaintiff’s opening brief march 8 2012 district court set hearing date week june 2529 2012 evidentiary hearing personal jurisdiction scl may 24 2012 district court vacated hearing date previously set june 2529 set status conference june 28 2012 june 28 status hearing district court set hearing schedule resolve discovery dispute reset date jurisdictional hearing september 10 september 12 2012 district court held hearing determine outcome certain discovery disputes issued order september 14 2012 order district court fined lvsc 25000 purposes jurisdictional discovery evidentiary hearing precluded defendants relying macao data privacy act objection defense discovery obligations december 21 2012 district court ordered defendants produce documents former counsel lvsc containing attorney client privileged information january 23 2013 defendants filed writ nevada supreme court challenging order “january writ” january 29 2013 district court granted defendants motion stay order february 15 2013 nevada supreme court ordered plaintiff answer january writ february 28 2013 district court ordered hearing plaintiff’s request sanctions additional discovery “february 28th order” april 8 2013 defendants filed writ nevada supreme court challenging february 28th order “april writ” nevada supreme court ordered plaintiff answer april writ may 20 2013 defendants also filed granted stay february 28th order district court time nevada supreme court decided april writ june 18 2013 district court scheduled jurisdictional hearing july 1622 2013 issued order allowing plaintiff access privileged communications counsel company “june 18th order” june 21 2013 company filed another writ nevada supreme court challenging june 18th order “june writ” nevada supreme court accepted june writ june 28 2013 issued stay june 18th order june 28 2013 district court vacated jurisdictional hearing july 3 2013 company filed motion nevada supreme court consolidate pending writs fully briefed nevada supreme court august 30 2013 october 9 2013 nevada supreme court heard arguments january writ plaintiff’s appeal district courts dismissal plaintiff’s defamation claim mr adelson january 29 2014 defendants filed supplemental authority motion recall mandate nevada supreme court inform nevada supreme court recently decided us supreme court case involving similar jurisdictional issues matter ii given new precedent review anew august 26 2011 writ mandamus district court respectively february 27 2014 nevada supreme court ruled favor company january writ became effective march 24 2014 march 3 2014 nevada supreme court heard oral arguments april june writs may 30 2014 nevada supreme court overturned las vegas sands corp subsidiaries notes consolidated financial statements continued district court’s dismissal mr jacob’s defamation claim mr adelson remanded claim determination june 17 2014 mr adelson filed petition rehearing nevada supreme court june 20 2014 nevada supreme court ordered mr jacobs answer petition rehearing july 7 2014 june 26 2014 scl filed motion summary judgment respect jurisdiction district court denied july 29 2014 june 30 2014 mr jacobs filed motion leave file second amended complaint defendants filed notice intent oppose motion leave file second amended complaint july 1 2014 mr jacobs filed motion reconsider dismissal defamation claim july 3 2014 mr adelson filed notice intent oppose motion reconsider requested oral argument also july 3 2014 defendants filed motion continue stay district court’s march 26 2013 order compelling production documents macao notice intent oppose plaintiff’s motion reconsider dismissal defamation claim lvsc scl july 22 2014 defendants filed motion leave file reply support petition rehearing defamation claim nevada supreme court july 22 2014 scl filed reply support motion summary judgment jurisdiction opposition plaintiff’s counter motion summary judgment july 25 2014 nevada supreme court granted defendants’ motion leave file reply july 29 2014 nevada supreme court heard motions summary judgment denied august 7 2014 nevada supreme court denied writ challenging district court’s order plaintiff’s march 26 2013 renewed motion sanctions august 7 2014 nevada supreme court granted part defendants’ writ respect district court’s june 19 2013 order requiring production privileged material august 7 2014 nevada supreme court also denied rehearing reversal dismissal defamation claim vote 43 august 13 2014 district court ruled plaintiff could amend complaint except defamation claim mr adelson remittitur nevada supreme court received district court also allowed sanctions hearing move forward reviewed documents camera determine whether properly withheld privilege grounds september 4 2014 scl filed prehearing memorandum regarding sanctions hearing regarding plaintiff’s march 26 2013 renewed motion sanctions september 12 2014 plaintiff filed motion release privileged documents district court appointed document custodian grounds waiver september 16 2014 plaintiff filed motion seeking stop defendants modifying privilege log seeking waiver privilege claims result alleged deficiencies original privilege september 26 2014 nevada supreme court issued remittitur plaintiff filed motion leave file third amended complaint lvsc scl mr adelson september 26 2014 defendants filed opposition plaintiff’s motion release documents grounds waiver october 3 2014 plaintiff filed reply support two waiver motions relating documents held district court appointed custodian october 9 2014 district court granted plaintiffs motion part denied remainder october 10 2014 mr adelson filed opposition plaintiffs motion file third amended complaint scl lvsc joined october 14 2014 october 17 2014 scl filed motion reconsider district court’s march 27 2013 order concerning discovery dispute october 30 2014 plaintiff filed reply support motion file third amended complaint november 5 2014 district court ordered scl waived privilege three confidential reports november 7 2014 district court granted plaintiffs motion file third amended complaint november 7 2014 defendants filed motion partial reconsideration november 5 2014 order waiving privilege january 6 2015 district court scheduled sanctions hearing february 9 2015 evidentiary hearing jurisdiction april 20 2015 january 12 2015 defendants filed motions dismiss third amended complaint defendants’ motions dismiss third amended complaint fully briefed february 19 2015 district court heard oral argument february 27 2015 order entered march 30 2015 district court denied mr adelson’s motion dismiss defamation claim granted motion dismiss respect plaintiff’s wrongful discharge claim ground mr adelson plaintiff’s employer district court denied lvsc’s motion dismiss strike certain allegations complaint district court reserved judgment scl’s motion dismiss ruled jurisdiction april 7 2015 lvsc filed motion las vegas sands corp subsidiaries notes consolidated financial statements continued reconsideration order limited ground district court erroneously stated lvsc fact plaintiff’s employer rather stating plaintiff alleged lvsc’s employee plaintiff conceded point response filed april 20 2015 hearing held motion reconsideration april 21 2015 sanctions hearing held six days beginning february 9 ending march 3 2015 march 6 2015 district court issued decision order imposing sanctions scl violating september 14 2012 order district court construed prohibiting scl redacting documents produced response jurisdictional discovery requests comply macao data privacy act march 6 2015 district court ordered additional discovery provided scl district court also ordered scl pay total 250000 five different lawrelated entities finally district court imposed evidentiary sanctions scl prohibiting offering affirmative evidence hearing jurisdiction scheduled begin april 20 2015 stating would adversely infer subject scl’s ability rebut inference within evidentiary constraints imposed document redacted comply macao data privacy act would support plaintiff’s assertion personal jurisdiction scl would contradict scl’s denial scl sought stay order district court march 13 2015 denied sought stay nevada supreme court march 16 2015 nevada supreme court granted partial stay march 17 2015 staying scl’s obligation pay 250000 run additional searches declining stay april 20 2015 hearing jurisdiction scl filed petition mandamus nevada supreme court march 20 2015 plaintiff filed response march 27 2015 scl filed reply march 31 2015 april 2 2015 nevada supreme court denied mandamus petition respect everything 250000 sanction lifted stay except respect sanction jurisdictional hearing began april 20 2015 concluded may 7 2015 may 28 2015 district court issued order finding specific general jurisdiction scl june 19 2015 scl filed petition writ mandamus seeking review decision june 23 2015 nevada supreme court entered order directing answer jurisdictional writ petition staying may 28 2015 order also june 23 2015 scl filed writ petition challenging district courts order requiring deposition scl independent board member us soil conjunction june 23 writ petition scl also moved stay scheduled deposition plaintiff filed opposition motion nevada supreme court filed june 23 2015 order granting emergency stay accepting writ accepting plaintiffs opposition motion stay answer june 23 petition june 26 2015 defendants filed writ petition challenging expedited trial date discovery schedule set district court followed june 29 2015 motion stay proceedings pending decision writ petition plaintiff opposed motion stay june 30 2015 july 1 2015 nevada supreme court entered order consolidating three pending writ petitions granting part stay sought conjunction june 26 petition ordering briefing petition nevada supreme courts july 1 2015 order vacated expedited trial date pretrial motions set district court july 22 2015 plaintiff filed answer writ petition challenging expedited trial date related pretrial deadlines july 23 plaintiff answered writ petition challenging may 28 jurisdiction order september 1 2015 nevada supreme court held consolidated oral argument three pending writ petitions september 18 2015 plaintiff filed leave court fifth amended complaint adding vml defendant two breach contract claims alleged complaint fifth amended complaint alleges lvsc entered term sheet plaintiff promised certain benefits event plaintiff terminated without cause plaintiff claims connection scl’s initial public offering lvsc assigned term sheet scl vml together lvsc allegedly assumed liability breaches term sheet count fifth amended complaint plaintiff alleges terminated without cause lvsc scl vml breached term sheet paying severance required circumstances count ii plaintiff claims certain stock options scl purportedly awarded vested terminated seeks damages lvsc scl vml scl’s refusal recognize options count iii claim breach implied covenant good faith fair dealing lvsc scl vml count iv repeats plaintiff’s earlier claim tortious discharge violation public policy alleged lvsc alone count v repeats plaintiff’s claims defamation per se alleged mr adelson lvsc scl count vi repeats tortious las vegas sands corp subsidiaries notes consolidated financial statements continued discharge violation public policy claim mr adelson district court previously dismissed prejudice november 13 2015 district court granted mr adelsons motion strike count vi light prior dismissal count vii alleges aiding abetting tortious discharge violation public policy scl count viii alleges conspiracy lvsc scl tortiously discharge plaintiff violation public policy lvsc scl mr adelson answered fifth amended complaint lvsc refiled previously filed counterclaim plaintiff october 19 2015 vml moved quash service summons october 21 2015 moved dismiss claims vml also filed peremptory challenge judge presiding case causing reassigned another judge october 27 2015 new judge struck peremptory challenge case reassigned original judge november 3 2015 vml filed petition writ prohibition mandamus nevada supreme court challenging decision strike peremptory challenge time vml filed motion nevada supreme court stay proceedings original judge pending outcome writ petition november 4 2015 nevada supreme court granted stay respect proceedings vml directed plaintiff answer writ petition within 30 days instead answering december 18 2015 plaintiff voluntarily dismissed vml action without prejudice filed notice nevada supreme court claiming vml’s petition moot december 30 2015 vml filed motion nevada supreme court asking grant writ petition alternative permit dismissal vml prejudice nevada supreme court yet ruled motion november 4 2015 nevada supreme court issued order granting part denying part three pending writ petitions filed scl argued september 1 2015 nevada supreme court held district court erred concluding general transient jurisdiction scl held plaintiff met burden making preliminary showing specific jurisdiction scl nevada respect particular claims plaintiff made nevada supreme court held defendants’ writ petition addressing expedited trial date moot light district court’s order vacating date nevada supreme court noted however defendants correct previous stay proceedings tolled fiveyear time period bringing case trial nevada supreme court granted scl’s writ petition overturn district court’s order compelling one scl’s independent directors appear deposition us soil nevada supreme court also ruled previously stayed 250000 sanction upholding amount requiring payment reallocated remand finally nevada supreme court denied defendants’ request case reassigned different judge november 17 2015 plaintiff filed petition rehearing en banc nevada supreme court asking nevada supreme court reconsider ruling location deposition scl’s independent director november 24 2015 scl filed petition rehearing en banc nevada supreme court asking nevada supreme court reconsider conclusion plaintiff met burden making preliminary showing specific jurisdiction scl december 23 2015 nevada supreme court issued order requiring answers petitions rehearing plaintiff filed answer january 8 2016 scl filed answer january 22 2016 february 24 2016 nevada supreme court granted plaintiff’s petition rehearing concluding scl responsible producing director noticed deposition location may determined district court day nevada supreme court denied scl’s petition rehearing regarding finding specific jurisdiction scl november 19 2015 scl filed answer plaintiffs’ fifth amended complaint denying plaintiff’s claims raising number affirmative defenses discovery ongoing respect company scl district court entered scheduling order discovery close may 5 2016 case tried jury beginning june 27 2016 december 18 2015 plaintiff served notice deposition company executive december 31 2015 counsel executive defendants filed motion protective order district court denied motion part ordered executive appear deposition prior january 12 2016 executive appeared deposition january 11 2016 questions posed deposition regarding executive’s alleged las vegas sands corp subsidiaries notes consolidated financial statements continued communications third parties including media coverage court jacobs case purchase las vegas reviewjournal members adelson family counsel executive instructed answer hearing next day district court “overruled” counsel’s instruction executive devised procedure executive’s counsel could refer objections questions alleged communications third parties including media concerning jacobs litigation discovery master andor different judge rather presiding judge january 13 2016 executive filed motion expand scope issues would referred discovery master include questions counsel instructed answer ground comments court made media called question executive’s ability obtain fair impartial hearing objections day company filed motion disqualify judge based comments court made media hearings related deposition executive raised reasonable doubts court’s impartiality january 15 2016 judge filed affidavit regarding contacts media involving case denying bias motion disqualify set hearing february 18 2016 chief judge district court january 29 2016 chief judge denied motion disqualify without providing company opportunity respond presiding judge’s affidavit february 9 2016 company filed motion requesting chief judge withdraw reconsider order denying company’s motion disqualify presiding judge february 12 2016 presiding judge filed additional affidavit denying bias toward defendants day company filed request motion reconsideration heard open court february 16 2016 support motion reconsideration company filed declaration legal scholar confirming presiding judge’s contacts media created appearance partiality february 17 2016 chambers chief judge denied company’s request reconsideration finding record showed evidence judicial bias february 19 2016 plaintiff filed reply company’s counterclaim february 23 2016 defendants filed writ petition nevada supreme court challenging chief judge’s denial disqualification presiding judge conjunction writ defendants also filed emergency motion stay proceedings district court january 29 2016 jacobs filed complaint vml united states district court district nevada us district court alleging breach contract claim similar one brought vml district court dismissed company intends defend matter vigorously mr jacobs seeking unspecified damages action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously february 9 2011 lvsc received subpoena securities exchange commission “sec” requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice “doj” conducting similar investigation company’s belief subpoena may emanated lawsuit filed steven c jacobs described company’s receipt subpoena sec february 9 2011 board directors delegated audit committee comprised three independent members board directors authority investigate matters raised sec subpoena related inquiry doj part 2012 annual audit company’s financial statements audit committee advised company independent accountants reached certain preliminary findings including likely violations books records internal controls provisions fcpa recent years company improved practices respect books records internal controls las vegas sands corp subsidiaries notes consolidated financial statements continued based information provided management audit committee counsel company believes audit committee concurs preliminary findings • material impact financial statements company • warrant restatement company’s past financial statements • represent material weakness company’s internal controls financial reporting december 31 2015 investigation audit committee complete company cooperating investigations based proceedings date management currently unable determine probability outcome matter extent materiality range reasonably possible loss may 24 2010 frank j fosbre jr filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants’ motion partial reconsideration us district court’s order dated august 24 2011 striking additional portions plaintiffs complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiffs filed purported class action second amended complaint “second amended complaint” seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended april 16 2013 case reassigned new judge july 30 2013 us district court heard motion dismiss took matter advisement november 7 2013 judge granted part denied part defendants motions dismiss december 13 2013 defendants filed answer second amended complaint discovery matter restarted january 8 2014 plaintiffs filed motion expand certified class period granted us district court june 15 2015 fact discovery closed july 31 2015 expert discovery closed december 18 2015 january 22 2016 company filed motion summary judgment codefendant mr weidner consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered district court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 district court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 district court granted several successive stays since time case currently stayed april 18 2016 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel district court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion las vegas sands corp subsidiaries notes consolidated financial statements continued dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply may 31 2013 case reassigned new judge april 11 2014 judge denied motion dismiss without prejudice ordered case stayed pending outcome district court action kohanim described following january 22 2016 status report parties january 27 2016 judge ordered another status report may 16 2016 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously january 23 2014 wa sokolowski filed shareholder derivative action sokolowski action purporting act behalf company individual capacity shareholder us district court sheldon g adelson michael leven jason n ader irwin chafetz charles forman george p koo charles koppelman jeffrey h schwartz victor chaltiel irwin siegel serving board directors collectively “directors” well frederick hipwell partner pricewaterhousecoopers llp “pwc” company’s former auditor complaint alleges among things directors breached fiduciary duties company attempting conceal certain alleged misrepresentations wrongdoing company’s management concealed certain facts connection audits performed pwc caused issuance false misleading proxy statement 2013 complaint seeks among things appointment conservator special master oversee company’s discussions governmental agencies well recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff company filed motion dismiss complaint february 13 2014 february 28 2014 defendant hipwell filed motion dismiss complaint march 12 2014 plaintiff filed response company’s motion dismiss march 26 2014 company filed reply march 31 2014 plaintiff filed response hipwell’s motion dismiss april 10 2014 hipwell filed reply april 1 2014 plaintiff filed renewed motion expedited discovery first motion filed january 24 2014 denied judge company filed response april 18 2014 may 2 2014 us district court denied second motion may 9 2014 directors ader chafetz chaltiel forman koppelman leven filed motion dismiss june 10 2014 plaintiff filed opposition directors motion dismiss june 30 2014 directors filed reply july 30 2014 us district court granted company’s motion dismiss complaint finding plaintiff failed allege stock ownership facts demonstrating standing sue leave plaintiff amend complaint demonstrate stock ownership particularity august 29 2014 plaintiff filed amended complaint september 15 2014 served defendants filed motions dismiss amended complaint plaintiffs opposition companys motion dismiss filed october 22 2014 individuals motions dismiss october 29 2014 plaintiff also filed opposition hipwells motion november 3 2014 opposed mr adelsons joinder december 9 2014 served defendants reply briefs filed november 24 25 26 2014 december 16 2014 mr adelson filed reply brief march 3 2015 us district court denied without prejudice plaintiffs motion substitute estates late messrs chaltiel schwartz order dated june 16 2015 us district court granted defendants’ motions dismiss us district court dismiss claims prejudice provide leave amend directed clerk close case june 16 2015 us district court entered “judgment civil case” pursuant us district court’s order june 29 2015 plaintiff moved reopen dismissal order request leave amend arguing judgment entered july 16 2015 company filed opposition motion july 27 2015 plaintiff filed reply support motion july 30 2015 us district court denied motion affirming entered final judgment denied leave amend july16 2015 company also filed motion requesting us district court make findings regarding federal rules civil procedure rule 11 compliance required conclusion exchange act case find plaintiffs counsel violated rule 11 filing defending amended complaint august 27 2015 plaintiff filed opposition companys motion september 21 2015 company filed reply support motion january 27 2016 judge denied companys request sanctions stage proceedings possible appeal plaintiff pending management determined based proceedings date currently unable determine probability outcome matter range las vegas sands corp subsidiaries notes consolidated financial statements continued reasonably possible loss company intends defend matter vigorously plaintiff continue pursue march 6 2014 board directors company received shareholder demand letter purported shareholder named john f scarpa foundation scarpa letter recites substantially allegations complaint filed sokolowski action demands claims asserted company delivered company counsel representing mr sokolowski company responded counsel march 26 2014 scarpa sent revised demand letter board directors march 31 2014 company responded counsel april 8 2014 scarpa sent additional demand letter dated august 14 2014 company responded august 22 2014 matter preliminary stage management determined based proceedings date currently unable determine probability outcome matter whether matter result litigation range reasonably possible loss company intends defend matter vigorously january 19 2012 asian american entertainment corporation limited “aaec” filed claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” las vegas sands llc “lvsllc” vcr collectively “defendants” claim 30 billion patacas approximately 3758 million exchange rates effect december 31 2015 compensation damages resulting alleged breach agreements entered aaec defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court september 23 2013 three us defendants filed motion macao second instance court seeking recognition enforcement us court appeals ruling prior action referred given april 10 2009 partially dismissed aaec’s claims three us defendants april 24 2014 macao judicial court issued decision despacho seneador holding aaec’s claim vml unfounded vml removed party proceedings claim proceed exclusively three us defendants may 8 2014 aaec lodged appeal decision macao judicial court held existence pending application recognition enforcement us court appeals ruling macao second instance court justify stay proceedings three us defendants present time although principle application stay proceedings three us defendants could reviewed macao second instance court issued decision june 25 2014 macao second instance court delivered decision gave formal recognition allowed enforcement macao judgment us court appeals dismissing aaecs claims us defendants aaec appealed recognition decision macao court final appeal may 6 2015 dismissed appeal held us judgment final preclusive effect macao court final appeals decision became final may 21 2015 june 5 2015 three us defendants applied macao judicial court dismiss claims res judicata aaec filed response application june 30 2015 three us defendants filed reply july 23 2015 september 14 2015 macao judicial court admitted two legal opinions portuguese us law experts representing us defendants macao judicial court considering res judicata issue march 25 2015 application made us defendants macao judicial court revoke legal aid granted aaec accompanied request evidence taking aaec relating fees expenses incurred paid us subsequent action referred macao public prosecutor opposed action ground lack evidence aaecs financial position improved decision issued respect application present time complaint aaecs macao lawyer arising certain conduct relation recent us proceedings submitted macao lawyers association october 19 2015 july 9 2014 plaintiff filed yet another action us district court lvsc lvsllc vcr sheldon g adelson william p weidner david friedman 150 declaratory judgment equitable accounting misappropriation trade secrets breach confidence conversion based theory copyright law claim 50 billion november 4 2014 plaintiff finally effected notice las vegas sands corp subsidiaries notes consolidated financial statements continued lvsc entities followed motion dismiss us defendants november 10 2014 plaintiff failed timely respond december 2 2014 us defendants moved immediate dismissal sanctions plaintiff counsel bringing frivolous lawsuit december 19 2014 plaintiff filed incomplete untimely response followed plaintiffs december 27 2014 notice withdrawal lawsuit us defendants december 29 2014 reply favor sanctions dismissal prejudice august 31 2015 judge dismissed us action defendants sanctions motion macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim “prior action” us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action “nevada action” aaec us district court seeking enjoin aaec proceeding macao action based aaec’s filing us district court’s dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action company previously received subpoenas us attorney’s office central district california “usao” requesting production documents relating two prior customers company’s properties august 2013 usao completed investigation entered agreement company whereby company agreed voluntarily return 474 million us treasury represented funds received behalf one customers provide written reports usao regarding certain casinorelated activities amount paid year ended december 31 2013 matter closed february 11 2014 company disclosed victim sophisticated cyberattack computer networks united states result criminal attack us government commenced investigations source attack addition company working internal external forensic information technology systems experts connection effort result investigations company’s efforts ongoing company learned certain customer employee data compromised bethlehem facility data may stolen attack well attack may destroyed certain company data company cooperating fully investigations based information available date absence claims asserted thus far management currently unable determine probability outcome matters relating cyberattack extent materiality range reasonably possible loss macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including venetian macao sands cotai central plaza casino four seasons macao sands macao parisian macao opened separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 38 million exchange rates effect december 31 2015 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37578 18789 125 las vegas sands corp subsidiaries notes consolidated financial statements continued respectively exchange rates effect december 31 2015 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2015 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2015 company obligated subconcession make minimum future payments approximately 396 million next five years approximately 594 million thereafter amounts expected increase company opens parisian macao anticipated open second half 2016 subject macao government approval currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2015 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 753 million 674 million 675 million years ended december 31 2015 2014 2013 respectively ventures commitments company entered employment agreements six executive officers remaining terms one five years december 31 2015 company obligated make future payments 102 million 87 million 84 million 84 million 19 million years ending december 31 2016 2017 2018 2019 2020 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2015 company obligated remaining agreement still effect make future payments approximately 05 million next five years 52 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued malls company leases space several integrated resorts various third parties leases noncancelable operating leases lease periods vary 1 month 21 years leases include minimum base rents escalated contingent rent clauses december 31 2015 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2015 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 565 million 1039 million 1291 million years ended december 31 2015 2014 2013 respectively note 14 stockbased employee compensation company two nonqualified stock option plans 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2015 4379164 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based company’s historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant las vegas sands corp subsidiaries notes consolidated financial statements continued sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2015 756474620 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model stock options granted subsequent december 31 2014 expected volatilities based scls historical volatility period equal expected life stock options stock options granted december 31 2014 expected volatilities based combination scl’s historical volatilities historical volatilities selection companies scl’s peer group due scl’s lack historical information expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant stock options granted subsequent march 31 2015 based hong kong exchange fund note rate effect time grant stock options granted march 31 2015 expected dividend yield based estimate annual dividends expected paid time grant stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued summary stock option activity company’s equity award plans year ended december 31 2015 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock units company’s equity award plans year ended december 31 2015 presented result scl cashsettling planning cashsettle certain future unvested restricted share units vesting dates 1603849 outstanding restricted stock units scl equity plan modified equity awards cashsettled liability awards year ended december 31 2015 modification affected four employees resulted additional compensation expense fair value awards remeasured reporting period vesting dates upon settlement scl pay grantees amount cash calculated based higher closing price scls shares vesting date ii average closing price scls shares five trading days immediately preceding vesting date year ended december 31 2015 scl paid 33 million settle vested restricted share units previously classified equity awards accrued liability associated cashsettled restricted stock units 19 million december 31 2015 december 31 2015 2004 plan 334 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 47 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 38 years 11 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2015 scl equity plan 193 million unrecognized compensation cost net estimated forfeitures 95 per year related unvested stock options 61 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 29 years 18 years respectively stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2015 thousands except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible las vegas sands corp subsidiaries notes consolidated financial statements continued gross wages years ended december 31 2015 2014 2013 company’s matching contributions savings plan 95 million 87 million 82 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive upon resignation 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2015 2014 2013 vml’s contributions provident fund 335 million 314 million 286 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2015 mbs contributes 17 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2015 2014 2013 mbs’s contributions provident fund 473 million 449 million 404 million respectively note 16 related party transactions years ended december 31 2015 2014 2013 principal stockholder family purchased certain services company including lodging banquet services use company personnel approximately 21 million 12 million 17 million respectively years ended december 31 2015 2014 2013 company incurred made payments 23 million 18 million 11 million respectively food beverage services provided restaurants principal stockholder ownership interest years ended december 31 2015 2014 2013 company incurred paid certain expenses totaling 35 million 57 million 114 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2015 2014 2013 company charged received principal stockholder 199 million 183 million 176 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes years ended december 31 2015 2014 2013 company charged received one executive officers approximately 7000 03 million 01 million respectively related aviation costs incurred company executive’s use company aviation personnel assets personal purposes year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 note 17 segment information company’s principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central four seasons macao sands macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macao marina bay sands venetian las vegas includes sands expo center palazzo sands bethlehem venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure company also reviews construction development activities primary projects development addition reportable segments noted company’s primary projects development parisian macao remainder las vegas sands corp subsidiaries notes consolidated financial statements continued sands cotai central four seasons apartments macao las vegas condo tower construction currently suspended included corporate us corporate activities company also included corporate company’s segment information follows years ended december 31 2015 2014 2013 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda nongaap financial measure net income intersegment royalty fees stockbased compensation expense legal settlement expense see note 13 commitments contingencies litigation corporate expense preopening expense development expense depreciation amortization leasehold interests land loss disposal assets interest income loss modification early retirement debt income taxes adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 condensed consolidating financial information lvsllc issuer primary obligor 2013 us credit facility vcr venetian marketing inc sands expo convention center inc sands pennsylvania inc collectively “restricted subsidiaries” guarantors 2013 us credit facility noncontrolling interest amounts included restricted subsidiaries’ condensed consolidating financial information related nonvoting preferred stock one subsidiaries held third parties february 2008 capital stock phase ii mall subsidiary llc subsidiary vcr sold ggp however sale complete accounting perspective due company’s continuing involvement transaction related participation certain potential future revenues earned ggp certain assets liabilities operating results related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted restricted subsidiaries therefore included “restricted subsidiaries” columns following condensed consolidating financial information result net liabilities 487 million consisting 2684 million liabilities comprised deferred proceeds sale partially offset 2197 million property equipment 403 million consisting 2688 million liabilities comprised primarily deferred proceeds sale partially offset 2285 million property equipment december 31 2015 2014 respectively net loss consisting primarily depreciation expense 94 million 118 million 129 million years ended december 31 2015 2014 2013 respectively related mall accounted restricted subsidiaries balances amounts collateral 2013 us credit facility additionally lvsc holding company result ability pay dividends dependent subsidiaries’ ability provide funds restrictions imposed company’s us macao singapore credit facilities may restrict company’s key subsidiaries holding majority consolidated group’s total assets making dividends distributions subject certain exceptions defined agreements unless certain financial nonfinancial criteria satisfied lvsc received cash dividends 236 billion 341 billion 184 billion subsidiaries years ended december 31 2015 2014 2013 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued following condensed consolidating financial information lvsc nonguarantor parent restricted subsidiaries including lvsllc issuer nonrestricted subsidiaries combined basis december 31 2015 2014 three years period ended december 31 2015 presented order meet reporting requirements 2013 us credit facility intended comply sec regulation sx 310 thousands condensed consolidating balance sheets december 31 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements comprehensive income year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 company received 901 million refund december 2014 related property taxes assessed paid marina bay sands years 2010 2014 earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2015 2014 2013 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm board directors stockholders las vegas sands corp audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2016 2015 related consolidated statements operations comprehensive income equity cash flows three years period ended december 31 2016 audits also included financial statement schedule listed index item 15a2 financial statements financial statement schedule responsibility company’s management responsibility express opinion financial statements financial statement schedule based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion consolidated financial statements present fairly material respects financial position las vegas sands corp subsidiaries december 31 2016 2015 results operations cash flows three years period ended december 31 2016 conformity accounting principles generally accepted united states america also opinion financial statement schedule considered relation basic consolidated financial statements taken whole presents fairly material respects information set forth therein also audited accordance standards public company accounting oversight board united states companys internal control financial reporting december 31 2016 based criteria established internal controlintegrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 24 2017 expressed unqualified opinion companys internal control financial reporting report independent registered public accounting firm board directors stockholders las vegas sands corp audited internal control financial reporting las vegas sands corp subsidiaries company december 31 2016 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission companys management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting appearing item 9a responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed supervision companys principal executive principal financial officers persons performing similar functions effected companys board directors management personnel provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting including possibility collusion improper management override controls material misstatements due error fraud may prevented detected timely basis also projections evaluation effectiveness internal control financial reporting future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion company maintained material respects effective internal control financial reporting december 31 2016 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states consolidated financial statements financial statement schedule year ended december 31 2016 company report dated february 24 2017 expressed unqualified opinion financial statements financial statement schedule las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada common stock traded new york stock exchange symbol “lvs” ordinary shares company’s subsidiary sands china ltd “scl” indirect owner operator majority company’s operations macao special administrative region “macao” people’s republic china listed main board stock exchange hong kong limited “sehk” shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations macao company currently owns 701 scl includes operations venetian macao resort hotel venetian macao sands cotai central parisian macao four seasons hotel macao cotai strip “four seasons hotel macao” plaza casino together four seasons hotel macao four seasons macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 company owns operates venetian macao anchors cotai strip company’s masterplanned development integrated resort properties area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 918000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao parisian macao four seasons macao sands cotai central opened phases beginning april 2012 property features four hotel towers first hotel tower consisting approximately 650 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand second hotel tower consisting approximately 1850 rooms suites sheraton brand third hotel tower consisting approximately 2100 rooms suites sheraton brand fourth hotel tower consisting approximately 400 rooms suites st regis brand within sands cotai central company also owns currently operates approximately 367000 square feet gaming space approximately 369000 square feet meeting space approximately 407000 square feet retail space well entertainment dining facilities september 13 2016 company opened parisian macao integrated resort connected venetian macao four seasons macao includes 253000 square foot casino parisian macao also features approximately 3000 rooms suites approximately 300000 square feet retail dining space meeting room complex approximately 63000 square feet 1200seat theater years ended december 31 2016 2015 2014 company recorded preopening costs parisian macao 126 million 22 million 13 million respectively company owns four seasons hotel macao features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 259000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 213000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities las vegas sands corp subsidiaries notes consolidated financial statements continued singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” together venetian las vegas palazzo las vegas operating properties las vegas operating properties situated las vegas strip integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consist two enclosed retail dining entertainment complexes sold ggp limited partnership “ggp” see “ note 12 mall activities” pennsylvania company owns operates sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 145000 square feet gaming space hotel tower 282 rooms 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc approximately 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects companys integrated resorts mature company continue reinvest portfolio properties maintain high quality products remain competitive markets operates company constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well revenue generating additions companys integrated resorts macao four seasons macao four seasons macao also feature four seasons apartment hotel macao cotai strip “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower advancing plans intention monetize units within four seasons apartments subject macao government approval las vegas sands corp subsidiaries notes consolidated financial statements continued sands cotai central company completed structural work remainder fourth tower sands cotai central aparthotel wing consists approximately 10 million square feet st regisserviced branded luxury aparthotel units common areas intention monetization units within st regis tower subject macao government approval upon completion integrated resort sands cotai central consist 137 millionsquarefoot 6400room complex featuring rooms suites aparthotel units approximately 800000 square feet retail entertainment dining space 550000 square feet meeting facilities multipurpose theater united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas 2008 company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company continues evaluate highest return opportunity project intends recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 123 million capitalized construction costs net depreciation december 31 2016 company continues pursue new development opportunities globally capital financing overview company funds development projects primarily borrowings credit facilities operating cash flows company held unrestricted cash equivalents 213 billion restricted cash equivalents 10 million december 31 2016 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company may elect arrange additional financing fund remainder planned future development projects normal course activities company continue evaluate capital structure opportunities enhancements thereof june 2016 company entered agreement amend macao credit facility became effective august 2016 agreement extended maturity portion term loans facility may 2022 provides additional term loan commitments 10 billion see note 8 longterm debt 2016 vml credit facility” august december 2016 company entered agreements amend us credit facility extended maturity portion revolving credit commitments facility september 2020 lowered applicable margin credit spread borrowings term loans see note 8 longterm debt 2013 us credit facility note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary las vegas sands corp subsidiaries notes consolidated financial statements continued company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2016 2015 company’s joint ventures total assets 79 million total liabilities 173 million 148 million respectively total liabilities companys joint ventures included intercompany balances 171 million 146 million december 31 2016 2015 respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macao receivables offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customer’s financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined weighted average specific identification methods las vegas sands corp subsidiaries notes consolidated financial statements continued property equipment property equipment stated cost net accumulated depreciation amortization accumulated impairment losses depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flow scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale las vegas sands corp subsidiaries notes consolidated financial statements continued year ended december 31 2016 company recognized loss disposal impairment assets 79 million consisting primarily 49 million writeoff costs related las vegas condo tower well asset dispositions companys operating properties years ended december 31 2015 2014 company recognized loss disposal impairment assets 35 million 7 million respectively capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2016 2015 2014 company capitalized interest expense 34 million 27 million 9 million respectively years ended december 31 2016 2015 2014 company capitalized approximately 29 million 31 million 33 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts certain direct incremental costs discounts incurred obtaining loans capitalized amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company may first conduct qualitative assessment determine whether “morelikelythannot” asset impaired company elects perform qualitative assessment determined “morelikelythannot” asset impaired assessing qualitative factors company performs impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference december 31 2016 company assets 50 million 17 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets years ended december 31 2016 2015 annual impairment analysis included assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined “morelikelythannot” indefinite lived intangible assets impaired future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2016 2015 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer included convention retail revenues mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows millions estimated departmental cost providing promotional allowances included primarily casino operating expenses follows millions gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 324 billion 331 billion 465 billion years ended december 31 2016 2015 2014 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals las vegas sands corp subsidiaries notes consolidated financial statements continued preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 121 million 124 million 140 million years ended december 31 2016 2015 2014 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income loss comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments year ended december 31 2015 5 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income loss comprehensive income net income amount included income accompanying consolidated statements operations earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following millions las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 14 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence “morelikelythannot” assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based “morelikelythannot” realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 234 million 196 million december 31 2016 2015 respectively valuation allowance certain deferred tax assets us operations 396 billion 311 billion december 31 2016 2015 respectively increased current year primarily due increase us foreign tax credits management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes “morelikelythannot” deferred tax assets realizable company able reduce valuation allowance period determination made appropriate significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates “morelikelythannot” position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company recorded unrecognized tax benefits 74 million 65 million december 31 2016 2015 respectively company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period las vegas sands corp subsidiaries notes consolidated financial statements continued company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company employs financial instruments pursuant policy none currently designated hedges accounting purposes gains losses recognized income expense depending classification position end reporting period derivative reported prepaid expenses assets net accrued liabilities longterm liabilities applicable accompanying consolidated balance sheets see note 11 fair value measurements additional disclosures regarding derivatives recent accounting pronouncements may 2014 fasb issued accounting standard update subsequently amended revenue recognition applied contracts customers update requires entity recognize revenue transfers promised goods services customers amount reflects expects exchange goods services also requires detailed disclosures enable users financial statements understand nature amount timing uncertainty revenue cash flows arising contracts customers guidance required applied retrospective basis using one two methodologies effective fiscal years beginning december 15 2017 early application permitted annual reporting periods beginning december 15 2016 including interim reporting periods within reporting period company continues assess impact new standard companys financial condition results operations cash flows related disclosures upon adoption management expects standard change presentation accounting complimentary revenues promotional allowances currently presented statements operations accordance current industry standards indicated see revenue recognition promotional allowances anticipated total promotional allowances netted related revenue categories revenues expenses allocated among respective categories differently management also anticipates change manner company assigns value accrued customer benefits related frequent players programs however expected material impact companys financial condition results operations february 2016 fasb issued accounting standard update leases requires lessees recognize lease liability rightofuse asset measured present value future minimum lease payments lease commencement date lessor accounting remains largely unchanged new guidance effective fiscal years beginning december 15 2018 including interim reporting periods within reporting period early adoption permitted modified retrospective approach must applied leases existing entered beginning earliest comparative period presented financial statements company expects adopt guidance beginning january 1 2019 continues assess impact guidance financial condition results operations primary effect update expected increase assets liabilities balance sheet company also expects reclassify portion rent expense within results operations however adoption guidance expected material impact net income march 2016 fasb issued accounting standard update simplify several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows guidance effective fiscal years beginning december 15 2016 including interim periods within annual period early adoption permitted guidance applied prospective retrospective modified retrospective approach depending specific portion guidance applied company adopted guidance january 1 2017 noted material effect company’s financial condition results operations cash flows august 2016 fasb issued accounting standard update reduce diversity certain cash receipts cash payments presented classified statement cash flows guidance effective fiscal years beginning december 15 2017 including interim reporting periods within reporting period applied retrospectively early adoption permitted company adopt guidance january 1 2018 expect material effect presentation cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued november 2016 fasb issued accounting standard update reduce diversity changes restricted cash presented classified statement cash flows guidance effective fiscal years beginning december 15 2017 including interim reporting periods within reporting period applied retrospectively early adoption permitted company adopt guidance january 1 2018 expect material effect presentation balance sheet statement cash flows reclassification certain amounts consolidated balance sheet december 31 2015 consolidated statements cash flows years ended december 31 2015 2014 reclassified consistent current year presentation reclassification impact companys financial condition results operations cash flows note 3 accounts receivable net accounts receivable consists following millions note 4 property equipment net property equipment consists following millions construction progress consists following millions 339 million construction progress consists primarily construction las vegas condo tower various projects venetian macao las vegas sands corp subsidiaries notes consolidated financial statements continued accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” company sold portion grand canal shoppes located within palazzo formerly referred shoppes palazzo see “ note 12 mall activities shoppes palazzo” terms settlement ggp june 24 2011 company retained 295 million proceeds previously received participates certain potential future revenues earned ggp generally accepted accounting principles transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 266 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property equipment legally sold ggp totaling 202 million net 98 million accumulated depreciation december 31 2016 continue recorded company’s consolidated balance sheet continue depreciated company’s consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 125 billion 353 million respectively december 31 2016 cost accumulated depreciation property equipment company leasing third parties 120 billion 300 million respectively december 31 2015 cost accumulated depreciation property equipment company leasing capital lease arrangements 44 million 23 million respectively december 31 2016 cost accumulated depreciation property equipment company leasing capital lease arrangements 39 million 19 million respectively december 31 2015 year ended december 31 2016 company recognized loss disposal impairment assets 79 million consisting primarily 49 million writeoff costs related las vegas condo tower well asset dispositions companys operating properties years ended december 31 2015 2014 company recognized loss disposal impairment assets 35 million 7 million respectively note 5 leasehold interests land net leasehold interests land consist following millions company amortizes leasehold interests land straightline basis expected term lease amortization expense 38 million 39 million 41 million included amortization leasehold interests land expense years ended december 31 2016 2015 2014 respectively estimated future amortization expense approximately 38 million five years period ending december 31 2021 126 billion thereafter exchange rates effect december 31 2016 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government las vegas sands corp subsidiaries notes consolidated financial statements continued build sites sands macao venetian macao four seasons macao sands cotai central parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2016 company obligated land concessions make future rental payments 5 million five years period ending december 31 2021 61 million thereafter total 86 million note 6 intangible assets net intangible assets consist following millions august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 50 million 17 million respectively license certificate determined indefinite lives therefore subject amortization april 2016 company paid 66 million singapore dollars sgd approximately 47 million exchange rates effect time transaction singapore casino regulatory authority “cra” part process renew gaming license marina bay sands license amortized threeyear term expires april 2019 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 15 million 14 million 15 million years ended december 31 2016 2015 2014 respectively estimated future amortization expense approximately 15 million two years period ending december 31 2018 5 million thereafter note 7 accrued liabilities accrued liabilities consist following millions las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following millions 1 unamortized deferred financing costs 35 million 46 million december 31 2016 2015 respectively related us macao singapore revolving credit facilities included assets net accompanying consolidated balance sheets corporate us related debt 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility “2013 us credit facility” consists 225 billion funded term b loan “2013 us term b facility” original issue discount 11 million 125 billion revolving credit facility “2013 us revolving facility” borrowings 2013 us credit facility used repay outstanding balance companys prior senior secured credit facility august 2016 company amended 2013 us credit facility among things obtain revolving credit commitments aggregate amount 115 billion 2013 extended us revolving facility mature september 19 2020 used replace commitments refinance amounts outstanding existing 2013 us revolving facility pay fees expenses incurred connection amendment borrowings 2013 extended us revolving facility used general corporate purposes working capital needs december 2016 company amended 2013 us credit facility lower applicable margin credit spread adjusted eurodollar rate term loans 250 225 per annum alternative base rate term loans 150 125 per annum additionally amendment lowers adjusted eurodollar rate floor 075 per annum 00 per annum thereby effectively lowers alternative base rate floor 175 per las vegas sands corp subsidiaries notes consolidated financial statements continued annum 10 per annum items noted terms conditions existing 2013 us credit facility remain unchanged december 31 2016 company 111 billion available borrowing capacity 2013 extended us revolving facility net outstanding letters credit company recorded 4 million loss early retirement debt year ended december 31 2016 connection amendments 2013 us term b facility matures december 19 2020 subject quarterly amortization payments 6 million began march 31 2014 followed balloon payment 210 billion due december 19 2020 2013 extended us revolving facility interim amortization payments matures september 19 2020 2013 us credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc “lvsllc” guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 us term b facility bear interest company’s option either adjusted eurodollar rate plus credit spread 225 per annum alternative base rate plus credit spread 125 per annum interest rate set 30 december 31 2016 borrowings 2013 us extended revolving facility bear interest companys option either adjusted eurodollar rate plus credit spread alternative base rate plus credit spread credit spread case determined based companys corporate family rating set forth pricing grid per 2013 us credit facility amended corporate rating credit spread ranges 0125 0625 per annum loans accruing interest base rate 1125 1625 per annum loans accruing interest adjusted eurodollar rate interest rate set 22 december 31 2016 company pays commitment fee undrawn amounts 2013 extended us revolving facility determined based corporate rating ranges 0125 025 per annum weighted average interest rate 2013 us credit facility 32 30 28 years ended december 31 2016 2015 2014 respectively 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply financial covenants including limited maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” extent outstanding balance 2013 extended us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity based actual leverage ratio december 31 2016 material net assets lvsllc restricted distributed terms 2013 us credit facility 2013 us credit facility also contains conditions events default customary financings airplane financings february 2007 company entered promissory notes totaling 72 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 24 december 31 2016 amortizing notes totaling 29 million subject quarterly amortization payments 1 million began june 1 2007 balloon notes totaling 43 million mature march 1 2017 interim amortization payments weighted average interest rate notes 22 year ended december 31 2016 18 years ended december 31 2015 2014 las vegas sands corp subsidiaries notes consolidated financial statements continued april 2007 company entered promissory notes totaling 20 million finance purchase additional airplane notes tenyear maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 23 december 31 2016 8 million amortizing note subject nominal quarterly amortization payments began june 30 2007 12 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 20 16 15 years ended december 31 2016 2015 2014 respectively hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt 2016 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement “2011 vml credit facility” provided 37 billion equivalent hong kong dollars macao patacas consisted 32 billion term loan “2011 vml term facility” fully drawn november 15 2011 500 million revolving facility “2011 vml revolving facility” available october 15 2016 borrowings facility used repay outstanding indebtedness previous credit facilities would used working capital requirements general corporate purposes including development construction completion certain components sands cotai central march 2014 company amended 2011 vml credit facility among things modify certain financial covenants discussed addition amendment certain lenders extended maturity 239 billion aggregate principal amount 2011 vml term facility march 31 2020 extended 2011 vml term facility together new lenders provided 20 billion aggregate principal amount revolving loan commitments extended 2011 vml revolving facility portion revolving proceeds used pay 820 million aggregate principal balance 2011 vml term facility loans extended company recorded 18 million loss modification early retirement debt year ended december 31 2014 connection pay extension borrowings extended 2011 vml revolving facility used fund development construction completion sands cotai central parisian macao working capital requirements general corporate purposes april 2015 company entered joinder agreement joinder agreement 2011 vml credit facility joinder agreement certain lenders agreed provide term loan commitments 10 billion 2011 vml accordion term funded april 30 2015 “joinder funding date” june 2016 company entered agreement vml amendment agreement amend 2011 vml credit facility among things extend maturity portion existing term loans modify scheduled amortization payment dates term loans obtain new term loan commitments amended restated vml credit agreement restated vml credit agreement became effective august 31 2016 upon satisfaction closing conditions restatement date pursuant restated vml credit agreement restatement date certain lenders extended maturity existing term loans extended initial vml term loans may 31 2022 balance 312 billion aggregate principal amount consisting 212 billion related extended 2011 vml term facility 10 billion related 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued vml accordion term addition certain lenders provided 10 billion aggregate principal amount new term loan commitments maturity date may 31 2022 “new vml term loans” together extended initial vml term loans 2016 vml term loans aggregate principal amount 412 billion terms maturity dates balance term loans 2011 vml credit facility 2016 vml term loans “2016 nonextended vml term loans” amount 269 million 20 billion extended 2011 vml revolving facility remain unchanged 2016 vml revolving facility together 2016 vml term loans 2016 nonextended vml term loans 2016 vml credit facility borrowings 2016 vml term loans used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company recorded 1 million loss modification debt year ended december 31 2016 connection vml amendment agreement december 31 2016 company 20 billion available borrowing capacity 2016 vml revolving facility subsequent yearend company borrowed 300 million 2016 vml revolving facility indebtedness 2016 vml credit facility guaranteed vml venetian cotai limited venetian orient limited certain company’s foreign subsidiaries collectively “2016 vml guarantors” obligations 2016 vml credit facility collateralized firstpriority security interest substantially borrower’s 2016 vml guarantors’ assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets commencing quarterly period ending march 31 2020 end subsequent quarter december 31 2020 restated vml credit agreement requires borrower repay outstanding 2016 vml term loans pro rata basis amount equal 25 aggregate principal amount outstanding restatement date quarterly periods ending march 31 june 30 2021 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 50 aggregate principal amount outstanding restatement date quarterly periods ending september 30 december 31 2021 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 125 aggregate principal amount outstanding restatement date quarterly period ending march 31 2022 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 200 aggregate principal amount outstanding restatement date remaining balance 2016 vml term loans due maturity date commencing quarterly period ending june 30 2017 end subsequent quarter march 31 2018 restated vml credit agreement requires borrower repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 25 aggregate principal amount outstanding restatement date quarterly periods ending june 30 2018 march 31 2019 borrower required repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 50 aggregate principal amount outstanding restatement date quarterly periods ending june 30 december 31 2019 borrower required repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 120 aggregate principal amount outstanding restatement date remaining balance 2016 nonextended vml term loans due maturity date march 31 2020 2016 vml revolving facility interim amortization payments matures march 31 2020 2016 vml term loans 2016 nonextended vml term loans bear interest companys option either adjusted eurodollar rate hong kong interbank offered rate “hibor” plus credit spread alternative base rate plus credit spread credit spread case determined based consolidated total leverage ratio set forth restated vml credit agreement credit spread ranges 025 1125 per annum loans accruing interest base rate 125 2125 per annum loans accruing interest adjusted eurodollar hibor rate set 26 loans accruing interest adjusted eurodollar hibor rate december 31 2016 borrower also pay standby fees 05 per annum undrawn amounts 2016 vml revolving facility weighted average interest rate 2016 vml credit facility 21 16 15 years ended december 31 2016 2015 2014 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued 2016 vml credit facility amended contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions use proceeds facility 2016 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense maximum leverage ratio amended 40x quarterly periods ending december 31 2016 june 30 2017 decreases remains 35x quarterly periods thereafter maturity based actual leverage ratio december 31 2016 material net assets 2016 vml guarantors restricted distributed terms 2016 vml credit facility 2016 vml credit facility also contains events default customary financings singapore related debt 2012 singapore credit facility june 2012 company’s wholly owned subsidiary marina bay sands pte ltd “mbs” entered sgd 51 billion approximately 353 billion exchange rates effect december 31 2016 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 318 billion exchange rates effect december 31 2016 term loan “2012 singapore term facility” sgd 500 million approximately 346 million exchange rates effect december 31 2016 revolving facility “2012 singapore revolving facility” available november 25 2017 includes sgd 100 million approximately 69 million exchange rates effect december 31 2016 ancillary facility “2012 singapore ancillary facility” borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 company recorded 2 million loss modification early retirement debt year ended december 31 2014 connection extension december 31 2016 company sgd 494 million approximately 342 million exchange rates effect december 31 2016 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets commencing quarterly period ending december 31 2014 end subsequent quarter september 30 2018 company required repay outstanding 2012 singapore term facility amount 05 aggregate principal amount outstanding august 29 2014 singapore restatement date commencing quarterly period ending december 31 2018 end subsequent quarter september 30 2019 company required repay outstanding 2012 singapore term facility amount 50 aggregate principal amount outstanding singapore restatement date commencing quarterly period ending december 31 2019 end subsequent quarter june 30 2020 maturity date company required repay outstanding 2012 singapore term facility amount 180 aggregate principal amount outstanding singapore restatement date 2012 singapore revolving facility interim amortization payments matures february 28 2020 borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 per annum beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 21 december 31 2016 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts las vegas sands corp subsidiaries notes consolidated financial statements continued 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 22 25 18 years ended december 31 2016 2015 2014 respectively december 31 2016 company interest rate cap agreements place december 31 2015 company one interest rate cap agreement place notional amount sgd 100 million approximately 69 million exchange rates effect december 31 2016 expiration date may 2016 strike rate 35 december 31 2014 company interest rate cap agreements place combined notional amount sgd 300 million approximately 208 million exchange rates effect december 31 2016 expiration dates ranging april 2015 may 2016 strike rates 30 35 provisions interest rate cap agreements entitled company receive counterparties amounts selected market interest rates exceed strike rates stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2016 2015 2014 2012 singapore credit facility amended contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio amended 35x quarterly periods ending december 31 2016 september 30 2019 decreases remains 30x quarterly periods thereafter maturity based actual leverage ratio december 31 2016 material net assets mbs restricted distributed terms 2012 singapore credit facility 2012 singapore credit facility also contains events default customary financings debt covenant compliance december 31 2016 management believes company compliance debt covenants cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows millions las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2016 summarized follows millions fair value longterm debt estimated fair value company’s longterm debt december 31 2016 2015 approximately 958 billion 922 billion respectively compared carrying value 970 billion 946 billion respectively estimated fair value company’s longterm debt based level 2 inputs quoted prices markets active note 9 equity common stock dividends march 31 june 30 september 30 december 30 2016 company paid dividend 072 per common share part regular cash dividend program year ended december 31 2016 company recorded 229 billion distribution retained earnings 124 billion related principal stockholder family remaining 105 billion related shareholders march 31 june 30 september 30 december 31 2015 company paid dividend 065 per common share part regular cash dividend program year ended december 31 2015 company recorded 207 billion distribution retained earnings 112 billion related principal stockholder family remaining 949 million related shareholders march 31 june 30 september 30 december 29 2014 company paid dividend 050 per common share part regular cash dividend program year ended december 31 2014 company recorded 161 billion distribution retained earnings 863 million related principal stockholder family remaining 745 million related shareholders january 2017 part regular cash dividend program company’s board directors declared quarterly dividend 073 per common share total estimated approximately 580 million paid march 31 2017 shareholders record march 23 2017 las vegas sands corp subsidiaries notes consolidated financial statements continued repurchase program june 2013 company’s board directors approved stock repurchase program initial authorization 20 billion expired june 2015 substantially completed year ended december 31 2014 october 2014 companys board directors authorized repurchase additional 20 billion outstanding common stock expired october 2016 november 2016 companys board directors authorized repurchase 156 billion outstanding common stock expires november 2018 repurchases company’s common stock made company’s discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including company’s financial position earnings legal requirements investment opportunities market conditions year ended december 31 2016 shares repurchased years ended december 31 2015 2014 company repurchased 4383793 22406655 shares respectively common stock 205 million 166 billion respectively including commissions companys previous programs share repurchases company’s common stock recorded treasury stock rollforward shares common stock summary outstanding shares common stock follows equity transactions addition shares repurchased share repurchase program year ended december 31 2014 company repurchased 45220 shares satisfaction tax withholding exercise price obligations vested restricted stock option exercise noncontrolling interests scl february 26 june 24 2016 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion february 27 july 15 2015 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion las vegas sands corp subsidiaries notes consolidated financial statements continued february 26 2014 scl paid dividend hkd 087 per share special dividend hkd 077 per share june 30 2014 paid dividend hkd 086 per share scl shareholders total 260 billion company retained 182 billion january 2017 board directors scl declared dividend hkd 099 per share total 103 billion company retained 722 million scl shareholders record february 8 2017 paid february 24 2017 years ended december 31 2016 2015 2014 company distributed 15 million 14 million 10 million respectively certain noncontrolling interests note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows millions components income tax expense follows millions reconciliation statutory federal income tax rate company’s effective tax rate follows company’s foreign us tax rate differential reflects fact income earned reinvested singapore macao taxed local rates lower us tax rates company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2018 company las vegas sands corp subsidiaries notes consolidated financial statements continued received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 127 million 132 million 220 million diluted earnings per share would reduced 016 017 027 per share years ended december 31 2016 2015 2014 respectively may 2014 company entered agreement macao government effective end 2018 provides annual payment 42 million patacas approximately 5 million exchange rates effect december 31 2016 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2013 company internal revenue service irs entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit primary tax affected components company’s net deferred tax liabilities follows millions company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2016 2015 company windfall tax benefits 379 million 357 million respectively reflected deferred tax assets company uses withandwithout approach determine excess tax deductions associated compensation costs reduced income taxes payable year ended december 31 2016 certain wholly owned foreign subsidiaries paid dividends resulting incremental us taxable income receipt dividends result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result dividends addition dividends generated excess us foreign tax credits available carried forward tax years beyond 2016 company’s us foreign tax credit carryforwards 414 billion 327 billion december 31 2016 2015 respectively begin expire 2021 company’s state net operating loss carryforwards 249 million 259 million december 31 2016 2015 respectively begin expire 2024 company us general business credits december 31 2016 las vegas sands corp subsidiaries notes consolidated financial statements continued company us general business credits 3 million december 31 2015 valuation allowance 396 billion 311 billion december 31 2016 2015 respectively provided certain net us deferred tax assets company believes assets meet “morelikelythannot” criteria recognition net operating loss carryforwards company’s foreign subsidiaries 201 billion 197 billion december 31 2016 2015 respectively begin expire 2017 valuation allowances 234 million 196 million december 31 2016 2015 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet “morelikelythannot” criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 company’s major foreign subsidiaries distributed may continue distribute earnings excess current year’s tax earnings profits order meet company’s liquidity needs december 31 2016 amount earnings profits foreign subsidiaries company intend repatriate 339 billion company provided deferred taxes foreign earnings indefinitely reinvested applicable foreign jurisdictions company expects sufficient creditable foreign taxes offset us foreign income taxes would result earnings distributed form dividends otherwise companys cumulative temporary difference less earnings profits reconciliation beginning ending amounts unrecognized tax benefits reclassified conform current presentation year ended december 31 2014 follows millions december 31 2016 2015 2014 unrecognized tax benefits 58 million 57 million 51 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2016 2015 2014 unrecognized tax benefits 16 million 3 million 12 million respectively recorded longterm liabilities december 31 2015 unrecognized tax benefits 5 million recorded income taxes payable included unrecognized tax benefit balance december 31 2016 2015 2014 65 million 53 million 52 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macao singapore company subject examination tax years beginning 2010 us tax years beginning 2012 macao singapore november 2016 inland revenue authority singapore completed compliance review marina bay sands tax returns tax years 2010 2012 company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2016 2015 company expect significant increase decrease unrecognized tax benefits next twelve months note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement see note 2 summary significant accounting policies additional disclosures regarding derivatives company currently uses foreign currency forward contracts effective economic hedges manage portion foreign currency exposure foreign currency forward contracts involve purchase sale designated currency agreed upon rate settlement specified date aggregate notional value foreign currency contracts 427 million 673 million december 31 2016 2015 respectively derivatives designated andor qualify hedge accounting changes fair value recognized income expense accompanying consolidated statements operations january 2017 company entered additional foreign currency forward contracts aggregate notional value 140 million following table provides assets carried fair value millions 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2016 2015 company 18 19 foreign currency forward contracts respectively fair values based recently reported market transactions forward rates assets included prepaid expenses liabilities included accrued liabilities accompanying consolidated balance sheets years ended december 31 2016 2015 company recorded gains 10 million 4 million respectively related change fair value forward contracts las vegas sands corp subsidiaries notes consolidated financial statements continued 3 december 31 2016 company interest rate cap agreements december 31 2015 company one interest rate cap agreement nominal aggregate fair value based recently reported market transactions interest rates recorded prepaid expenses accompanying consolidated balance sheets note 12 mall activities operating leases company leases space several integrated resorts various third parties leases noncancelable operating leases lease periods vary 1 month 21 years leases include minimum base rents escalated contingent rent clauses december 31 2016 future minimum rentals noncancelable leases follows millions exchange rates effect december 31 2016 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 36 million 57 million 104 million years ended december 31 2016 2015 2014 respectively grand canal shoppes venetian las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 766 million “mall sale” mall sale closed may 2004 company realized gain 418 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 109 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2016 2015 2014 1 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 13 commitments contingencies ventures commitments” ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 3 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 4 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 1 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 77 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2016 2015 2014 3 million deferred item amortized offset convention retail expense december 31 2016 company obligated ii iii iv las vegas sands corp subsidiaries notes consolidated financial statements continued make future payments amount 8 million five years period ending december 31 2021 62 million thereafter total 102 million shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 295 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 1 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2016 company obligated make future payments approximately 1 million two years period ending december 31 2018 accordance related accounting standards transaction accounted sale company’s participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 268 million mall sale transaction recorded deferred proceeds sale december 31 2016 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 23 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel accrued nominal amount costs december 31 2016 actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows richard suen round square company limited v las vegas sands corp october 15 2004 richard suen round square company limited roundsquare filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada “district court” asserting breach alleged agreement pay success fee 5 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 44 million june 30 2008 judgment entered matter amount 59 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court new trial decision reversing monetary judgment company nevada supreme court also made several rulings including overturning pretrial dismissal plaintiffs’ breach contract claim deciding several las vegas sands corp subsidiaries notes consolidated financial statements continued evidentiary matters confirmed overturned rulings made district court february 27 2012 district court set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court granted requests retrial began march 27 may 14 2013 jury returned verdict favor roundsquare amount 70 million may 28 2013 judgment entered matter amount 102 million including prejudgment interest june 7 2013 company filed motion district court requesting judgment set aside matter law alternative new trial granted july 30 2013 district court denied company’s motion october 17 2013 district court entered order granting plaintiff’s request certain costs fees associated litigation amount approximately 1 million december 6 2013 company filed notice appeal jury verdict nevada supreme court company filed opening appellate brief nevada supreme court june 16 2014 august 19 2014 nevada supreme court issued order granting plaintiffs additional time september 15 2014 file answering brief september 15 2014 roundsquare filed request nevada supreme court file brief exceeding maximum number words granted october 10 2014 roundsquare filed answering brief january 12 2015 defendants filed reply brief january 27 2015 roundsquare filed reply brief nevada supreme court set oral argument december 17 2015 panel justices reset january 26 2016 en banc oral arguments presented nevada supreme court scheduled march 11 2016 nevada supreme court issued order affirming judgment liability reversing damages award remanding new trial damages march 29 2016 roundsquare filed petition rehearing nevada supreme court ordered answer company filed may 4 2016 may 12 2016 roundsquare filed motion leave file reply brief support petition rehearing may 19 2016 company filed opposition motion june 24 2016 nevada supreme court issued order granting roundsquares petition rehearing submitting appeal decision rehearing without briefing oral argument july 22 2016 nevada supreme court ordered new trial issue damages pretrial hearing set district court december 12 2016 december 12 2016 hearing district court indicated would allow scope trial additional discovery areas lvsc opposed inconsistent nevada supreme court’s remand district court issued written order scope retrial discovery dated december 15 2016 january 13 2017 lvsc filed writ nevada supreme court challenging district court’s order supplementing writ application request stay discovery february 16 2017 nevada supreme court denied writ company accrued nominal amount estimated costs related legal matter december 31 2016 event company’s assumptions used evaluate matter change future periods may required record additional liability adverse outcome frank j fosbre jr v las vegas sands corp sheldon g adelson william p weidner may 24 2010 frank j fosbre jr filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys’ fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts las vegas sands corp subsidiaries notes consolidated financial statements continued press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants’ motion partial reconsideration us district court’s order dated august 24 2011 striking additional portions plaintiffs complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiffs filed purported class action second amended complaint “second amended complaint” seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended april 16 2013 case reassigned new judge july 30 2013 us district court heard motion dismiss took matter advisement november 7 2013 judge granted part denied part defendants motions dismiss december 13 2013 defendants filed answer second amended complaint discovery matter resumed january 8 2014 plaintiffs filed motion expand certified class period granted us district court june 15 2015 fact discovery closed july 31 2015 expert discovery closed december 18 2015 january 22 2016 defendants filed motions summary judgment plaintiffs filed opposition motions summary judgment march 11 2016 defendants filed replies support summary judgment april 8 2016 summary judgment favor defendants entered january 4 2017 plaintiffs filed notice appeal february 2 2017 company intends defend matter vigorously benyamin kohanim v adelson et al march 9 2011 benyamin kohanim filed shareholder derivative action “kohanim action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance fcpa complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys’ fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action “gaines action” behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered district court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 district court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 district court granted several successive stays since time case currently stayed april 18 2017 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued nasser moradi et al v adelson et al april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action “moradi action” amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys’ fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action “lampers action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys’ fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action “zaremba action” behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys’ fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel district court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply may 31 2013 case reassigned new judge april 11 2014 judge denied motion dismiss without prejudice ordered case stayed pending outcome district court action kohanim described following january 22 2016 status report parties january 27 2016 judge ordered another status report may 16 2016 following may 16 2016 status report parties may 17 2016 judge ordered another status report december 16 2016 submitted consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously wa sokolowski curtis action behalf las vegas sands corp v adelson et al las vegas sands corp july 5 2016 wa sokolowski filed shareholder derivative action “sokolowski iii” purported behalf company district court clark county nevada sheldon g adelson michael leven jason n ader irwin chafetz charles forman irwin siegel george p koo charles koppelman jeffrey h schwartz robert g goldstein micheline chau steven l gerard george jamieson david levi george p koo serving previously served board directors collectively “directors” well pricewaterhousecoopers llp “pwc” company’s former auditor partner pwc september 16 2016 sokolowski filed amended complaint sokolowski iv additional nominal plaintiff curtis acton adding former director wing chau defendant amended complaint alleges among things directors breached fiduciary duties company failing prevent certain alleged misrepresentations wrongdoing company’s management wasting corporate assets litigating jacobs lawsuit concealing certain alleged las vegas sands corp subsidiaries notes consolidated financial statements continued facts connection audits performed pwc amended complaint seeks among things appointment conservator special master oversee company’s discussions governmental agencies well recover company unspecified damages including restitution disgorgement compensation also seeks recover attorneys’ fees costs related expenses nominal plaintiffs many allegations duplicate allegations sokolowski made previous case sokolowski v adelson 214cv00111jcmnjk nev “sokolowski ii” final judgment entered sokolowski iv nominal plaintiffs also complain company wrongfully caused sokolowski lose sokolowski ii company filed motion dismiss october 24 2016 january 4 2017 court entered order dated december 29 2016 granting motion dismiss court also granted pwc’s motion dismiss january 24 2017 court entered final judgment claims parties dated january 23 2017 january 27 2017 amended january 31 2017 nominal plaintiffs filed appeal judgment orders matter preliminary stage management determined currently unable determine probability outcome matter whether matter result litigation range reasonably possible loss company intends defend matter vigorously john f scarpa foundation demand letter march 6 2014 board directors company received shareholder demand letter purported shareholder named john f scarpa foundation scarpa letter recites substantially allegations complaint filed sokolowski ii actions demands claims asserted company delivered company counsel representing mr sokolowski company acknowledged counsel march 26 2014 scarpa sent revised demand letter board directors march 31 2014 company acknowledged counsel april 8 2014 scarpa sent additional demand letter dated august 14 2014 company acknowledged august 22 2014 company responded demand letters dated june 4 2015 matter preliminary stage management determined based proceedings date currently unable determine probability outcome matter whether matter result litigation range reasonably possible loss company intends defend matter vigorously asian american entertainment corporation limited v venetian macau limited et al january 19 2012 asian american entertainment corporation limited “aaec” filed claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” las vegas sands llc “lvsllc” vcr collectively “defendants” claim 30 billion patacas approximately 376 million exchange rates effect december 31 2016 compensation damages resulting alleged breach agreements entered aaec lvs nevada lvsllc vcr collectively us defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court september 23 2013 us defendants filed motion macao second instance court seeking recognition enforcement us court appeals ruling prior action referred given april 10 2009 partially dismissed aaec’s claims us defendants march 24 2014 macao judicial court issued decision despacho seneador holding aaec’s claim vml unfounded vml removed party proceedings claim proceed exclusively us defendants may 8 2014 aaec lodged appeal decision macao judicial court held existence pending application recognition enforcement us court appeals ruling macao second instance court justify stay proceedings us defendants present time although principle application stay proceedings us defendants could reviewed macao second instance court issued decision evidence gathering macao judicial court commenced letters rogatory june 25 2014 macao second instance court delivered decision gave formal recognition allowed enforcement las vegas sands corp subsidiaries notes consolidated financial statements continued macao judgment us court appeals dismissing aaecs claims us defendants aaec appealed recognition decision macao court final appeal may 6 2015 dismissed appeal held us judgment final preclusive effect macao court final appeals decision became final may 21 2015 june 5 2015 us defendants applied macao judicial court dismiss claims res judicata aaec filed response application june 30 2015 us defendants filed reply july 23 2015 september 14 2015 macao judicial court admitted two legal opinions portuguese us law experts march 16 2016 macao judicial court dismissed defense res judicata appeal decision lodged april 7 2016 together request appeal heard immediately decision dated april 13 2016 macao judicial court accepted appeal heard immediately legal arguments submitted may 23 2016 aaec replied legal arguments july 14 2016 three days late upon payment penalty us defendants submitted response september 20 2016 december 13 2016 macao judicial court confirmed earlier decision stay proceedings pending appeal end december 2016 appeals including vml’s dismissal res judicata appeals transferred macao second instance court march 25 2015 application made us defendants macao judicial court revoke legal aid granted aaec accompanied request evidence taking aaec relating fees expenses incurred paid us subsequent action referred macao public prosecutor opposed action ground lack evidence aaecs financial position improved decision issued respect application present time complaint aaecs macao lawyer arising certain conduct relation recent us proceedings submitted macao lawyers association october 19 2015 letter dated february 26 2016 received conselho superior de advocacia macao bar association advising disciplinary proceedings commenced letter dated april 5 2016 received conselho superior de advocacia requesting confirmation signatories complaint acting within corporate authority letter dated april 14 2016 confirmation provided september 28 2016 conselho superior de advocacia invited comments defense lodged aaecs macao lawyer july 9 2014 plaintiff filed yet another action us district court lvsc lvsllc vcr collectively lvsc entities sheldon g adelson william p weidner david friedman 150 declaratory judgment equitable accounting misappropriation trade secrets breach confidence conversion based theory copyright law claim 50 billion november 4 2014 plaintiff finally effected notice lvsc entities followed motion dismiss lvsc entities november 10 2014 plaintiff failed timely respond december 2 2014 lvsc entities moved immediate dismissal sanctions plaintiff counsel bringing frivolous lawsuit december 19 2014 plaintiff filed incomplete untimely response followed plaintiffs december 27 2014 notice withdrawal lawsuit lvsc entities december 29 2014 reply favor sanctions dismissal prejudice august 31 2015 judge dismissed us action lvsc entities sanctions motion macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim “prior action” us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action “nevada action” aaec us district court seeking enjoin aaec proceeding macao action based aaec’s filing us district court’s dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action steven c jacobs v las vegas sands corp et al october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court alleging breach contract lvsc scl breach implied covenant las vegas sands corp subsidiaries notes consolidated financial statements continued good faith fair dealing tortious discharge violation public policy lvsc march 16 2011 september 18 2015 mr jacobs filed various amended complaints action among things added claim defamation per se sheldon g adelson lvsc scl added vml defendant two breach contract claims alleged complaint december 18 2015 plaintiff voluntarily dismissed vml action january 29 2016 mr jacobs filed complaint vml united states district court district nevada us district court alleging breach contract claim similar one brought vml state district court dismissed vml filed motion dismiss complaint fully briefed march 31 2016 may 31 2016 parties reached comprehensive confidential settlement mr jacobs dismissed claims district court nevada supreme court us district court lvsc scl vml mr sheldon g adelson released claims settlement date securities exchange commission department justice february 9 2011 lvsc received subpoena securities exchange commission “sec” requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice “doj” conducting similar investigation april 7 2016 sec announced comprehensive civil administrative settlement lvsc neither admitted denied allegations related internal controls books records provisions fcpa pursuant section 21c securities exchange act 1934 amended sec order company’s cooperation audit committee remedial actions began prior government’s investigation including separation individuals credited sec settlement included 9 million civil monetary penalty company retaining independent consultant period two years review evaluate company’s fcpa compliance procedures make recommendations adoption company january 19 2017 lvsc entered nonprosecution agreement doj “npa” pursuant lvsc agreed pay penalty 7 million certain compliance reporting cooperation obligations sec order npa resolve inquiries related government investigations commenced 2011 regarding company’s compliance fcpa macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including venetian macao sands cotai central parisian macao plaza casino four seasons macao sands macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 4 million exchange rates effect december 31 2016 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37555 18778 125 respectively exchange rates effect december 31 2016 subject minimum 45 million patacas approximately 6 million exchange rates effect december 31 2016 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued 2016 company obligated subconcession make minimum future payments approximately 41 million next five years approximately 21 million thereafter currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers operating leases company leases real estate various equipment operating lease arrangements terms excess one year december 31 2016 company obligated noncancelable operating leases make future minimum lease payments follows millions expenses incurred operating lease agreements including shortterm variablerate nature totaled 71 million 75 million 67 million years ended december 31 2016 2015 2014 respectively note 14 stockbased employee compensation company two equity award plans 2004 plan scl equity plan described plans provide granting equity awards pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2016 3240403 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based company’s historical volatility period equal expected life stock options las vegas sands corp subsidiaries notes consolidated financial statements continued expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2016 742442726 shares available grant scl equity plan stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model stock options granted subsequent december 31 2014 expected volatilities based scls historical volatility period equal expected life stock options stock options granted december 31 2014 expected volatilities based combination scl’s historical volatilities historical volatilities selection companies scl’s peer group due scl’s lack historical information expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant stock options granted subsequent march 31 2015 based hong kong exchange fund note rate effect time grant stock options granted march 31 2015 expected dividend yield based estimate annual dividends expected paid time grant stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued summary stock option activity company’s equity award plans year ended december 31 2016 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock units company’s equity award plans year ended december 31 2016 presented result scl cashsettling planning cashsettle certain future unvested restricted share units vesting dates 284103 outstanding restricted stock units scl equity plan modified equity awards cashsettled liability awards year ended december 31 2016 modification affected one employee resulted additional compensation expense fair value awards remeasured reporting period vesting dates upon settlement scl pay grantees amount cash calculated based higher closing price scls shares vesting date ii average closing price scls shares five trading days immediately preceding vesting date year ended december 31 2016 scl paid 1 million settle vested restricted share units previously classified equity awards accrued liability associated cashsettled restricted stock units 3 million december 31 2016 december 31 2016 2004 plan 33 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested stock options 1 million unrecognized compensation cost net estimated forfeitures 80 per year related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 31 years 08 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2016 scl equity plan 15 million unrecognized compensation cost net estimated forfeitures 113 per year related unvested stock options 2 million unrecognized compensation cost related unvested restricted stock units stock option restricted stock unit costs expected recognized weighted average period 29 years 10 years respectively stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2016 dollars millions except weighted average grant date fair values note 15 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 subject cap whereby amount contributions exceed 5 participating employee’s eligible gross wages years ended december 31 2016 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued 2014 company’s matching contributions savings plan 9 million 10 million 9 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive upon resignation 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2016 2015 2014 vml’s contributions provident fund 35 million 33 million 31 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company december 31 2016 mbs contributes 17 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2016 2015 2014 mbs’s contributions provident fund 35 million 32 million 30 million respectively note 16 related party transactions years ended december 31 2016 2015 2014 principal stockholder family purchased certain services company including lodging banquet services use company personnel approximately 3 million 2 million 1 million respectively years ended december 31 2016 2015 2014 company incurred made payments 2 million food beverage services provided restaurants principal stockholder ownership interest years ended december 31 2016 2015 2014 company incurred paid certain expenses totaling 3 million 4 million 6 million respectively principal stockholder related company’s use personal aircraft yacht 2016 business purposes addition years ended december 31 2016 2015 2014 company charged received principal stockholder 17 million 20 million 18 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes note 17 segment information company’s principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central parisian macao opened september 2016 four seasons macao sands macao marina bay sands las vegas operating properties sands bethlehem company also reviews construction development activities primary projects currently development addition reportable segments noted include remainder sands cotai central four seasons aparthotel tower macao las vegas condominium project construction currently suspended united states company included ferry operations comprised primarily company’s ferry operations various operations ancillary properties macao reconcile consolidated results operations financial condition company included corporate includes las vegas condo tower corporate activities company reconcile consolidated financial condition information year ended december 31 2014 reclassified conform current presentation company’s segment information follows years ended december 31 2016 2015 2014 millions las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued 1 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation gaming companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations casinos standalone basis gaming companies including las vegas sands corp historically excluded certain expenses relate management specific casino properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap company significant uses cash flow including capital expenditures dividend payments interest las vegas sands corp subsidiaries notes consolidated financial statements continued payments debt principal repayments reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result consolidated adjusted property ebitda presented las vegas sands corp may directly comparable similarly titled measures presented companies las vegas sands corp subsidiaries notes consolidated financial statements continued 1 longlived assets include property equipment net accumulated depreciation amortization leasehold interests land net accumulated amortization las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 selected quarterly financial results unaudited 1 company recorded nonrecurring corporate expense 79 million june 2016 2 q3 2016 company recorded preopening expenses 86 million connection opening parisian macao september 2016 3 q4 2016 company recognized loss disposal impairment assets 64 million primarily related writeoff costs related las vegas condo tower well dispositions companys various operating properties earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2016 2015 2014 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm stockholders board directors las vegas sands corp opinion financial statements audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2018 2017 related consolidated statements operations comprehensive income equity cash flows three years period ended december 31 2018 related notes financial statement schedule listed index item 15a2 collectively referred financial statements opinion financial statements present fairly material respects financial position company december 31 2018 2017 results operations cash flows three years period ended december 31 2018 conformity accounting principles generally accepted united states america also audited accordance standards public company accounting oversight board united states pcaob companys internal control financial reporting december 31 2018 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 22 2019 expressed unqualified opinion companys internal control financial reporting basis opinion financial statements responsibility companys management responsibility express opinion companys financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion served companys auditor since 2013 report independent registered public accounting firm stockholders board directors las vegas sands corp opinion internal control financial reporting audited internal control financial reporting las vegas sands corp subsidiaries “company” december 31 2018 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso opinion company maintained material respects effective internal control financial reporting december 31 2018 based criteria established internal control integrated framework 2013 issued coso also audited accordance standards public company accounting oversight board united states pcaob consolidated financial statements financial statement schedule year ended december 31 2018 company report dated february 22 2019 expressed unqualified opinion financial statements financial statement schedule basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp lvsc together subsidiaries company incorporated nevada common stock traded new york stock exchange symbol lvs ordinary shares companys subsidiary sands china ltd scl indirect owner operator majority companys operations macao special administrative region macao peoples republic china listed main board stock exchange hong kong limited sehk shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations company developer destination properties integrated resorts feature premium accommodations worldclass gaming entertainment retail convention exhibition facilities celebrity chef restaurants amenities macao company currently owns 700 scl includes operations venetian macao resort hotel venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao cotai strip four seasons hotel macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 company owns operates venetian macao anchors cotai strip companys masterplanned development integrated resorts area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 943000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao parisian macao plaza macao four seasons hotel macao sands cotai central opened phases beginning april 2012 property features four hotel towers first hotel tower consisting approximately 650 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand second hotel tower consisting approximately 1800 rooms suites sheraton brand third hotel tower consisting approximately 2100 rooms suites sheraton brand fourth hotel tower consisting approximately 400 rooms suites st regis brand within sands cotai central company also owns currently operates approximately 367000 square feet gaming space approximately 369000 square feet meeting space approximately 520000 square feet retail space well entertainment dining facilities september 13 2016 company opened parisian macao integrated resort connected venetian macao plaza macao four seasons hotel macao includes 253000 square foot casino parisian macao also features approximately 2500 rooms suites approximately 296000 square feet retail dining space meeting room complex approximately 63000 square feet 1200seat theater company owns plaza macao four seasons hotel macao features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao within integrated resort company owns operates plaza casino features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 242000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities las vegas sands corp subsidiaries notes consolidated financial statements continued company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 213000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theater landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino venetian resort las vegas three hotel towers include venetian tower renaissance venicethemed resort adjoining venezia tower palazzo tower resort featuring modern european ambience design expo convention center approximately 12 million square feet sands expo center together venetian resort las vegas las vegas operating properties las vegas operating properties situated las vegas strip integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consists enclosed retail dining entertainment complex sold ggp limited partnership ggp see note 14 mall activities total las vegas operating properties offer approximately 23 million gross square feet stateoftheart exhibition meeting facilities configured provide small midsize large meeting rooms andor accommodate largescale multimedia events trade shows pennsylvania company owns operates sands casino resort bethlehem sands bethlehem gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 146000 square feet gaming space hotel tower 282 rooms 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc approximately 35 economic interest retail portion property ownership interest sands bethworks retail llc march 8 2018 company entered purchase sale agreement pci gaming authority unincorporated chartered instrumentality poarch band creek indians acquire sands bethlehem total enterprise value 130 billion closing transaction subject regulatory review closing conditions development projects company constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well anticipated revenue generating additions companys integrated resorts macao company previously announced renovation expansion rebranding sands cotai central new destination integrated resort londoner macao adding extensive thematic elements externally internally londoner macao feature new attractions features london including london’s recognizable landmarks expanded retail food beverage venues company add approximately 370 luxury suites st regis tower suites macao design work nearing completion construction las vegas sands corp subsidiaries notes consolidated financial statements continued initiated phased minimize disruption property’s peak periods company expects additional st regis tower suites macao completed 2020 londoner macao project completed phases throughout 2020 2021 company also previously announced four seasons tower suites macao feature approximately 290 additional premium quality suites company completed structural work tower commenced preliminary build suites company expects project completed first quarter 2020 company anticipates total costs associated development projects approximately 22 billion ultimate costs completion dates projects subject change company finalizes planning design work completes projects united states company constructing highrise residential condominium tower las vegas condo tower located las vegas strip within venetian resort las vegas 2008 company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company continues evaluate highest return opportunity project impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 129 million capitalized construction costs net depreciation december 31 2018 company continues evaluate current development projects markets pursue new development opportunities globally note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities vies company primary beneficiary intercompany balances transactions eliminated consolidation managements determination appropriate accounting method respect companys variable interests based accounting standards vies issued financial accounting standards board fasb company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due companys significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vies status events occurred would trigger analysis december 31 2018 2017 companys consolidated joint ventures total assets 73 million 77 million respectively total liabilities 225 million 198 million respectively companys joint ventures intercompany liabilities 223 million 196 million december 31 2018 2017 respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company las vegas sands corp subsidiaries notes consolidated financial statements continued various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds restricted cash represents amounts contractually reserved substantial mallrelated repairs maintenance expenditures estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit gaming promoters macao receivables offset commissions payable respective gaming promoters business economic conditions legal enforceability gaming debts foreign currency control measures significant events foreign countries could affect collectability receivables customers gaming promoters residing countries allowance doubtful accounts represents companys best estimate amount probable credit losses companys existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customers financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost net realizable value cost determined weighted average specific identification methods property equipment property equipment stated cost net accumulated depreciation amortization accumulated impairment losses depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets year ended december 31 2017 company changed estimated useful lives certain property equipment based combination factors accumulating time provided company updated information make better estimate economic lives assets factors included 1 accumulation historical asset replacement data companys operating properties reflects actual length time company uses certain property equipment 2 stabilization operating regulatory las vegas sands corp subsidiaries notes consolidated financial statements continued competitive environment jurisdiction company operates includes meeting final land concession governmentimposed deadlines companys macao properties cotai strip 3 transitioning predictable renovation cycles companys operating properties 4 consideration estimated useful lives assigned buildings companys peers gaming hospitality industry based factors well anticipated use condition assets evaluated company determined changes useful lives certain property equipment appropriate result company revised estimated useful lives buildings building improvements land improvements range 15 40 years 10 50 years certain furniture fixtures equipment 3 6 years 5 10 years better reflect estimated periods assets expected remain service change estimated useful lives accounted change accounting estimate effective july 1 2017 impact change year ended december 31 2017 decrease depreciation amortization expense increase operating income 112 million increase net income attributable lvsc 72 million earnings per share 009 basic diluted basis maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows companys asset groups company considers potential cash flow scenarios probability weighted based managements estimates given current conditions determining recoverability companys asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes companys estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost companys outstanding borrowings capitalization interest ceases project las vegas sands corp subsidiaries notes consolidated financial statements continued substantially complete construction activity suspended brief period years ended december 31 2018 2017 2016 company capitalized 3 million 2 million 34 million respectively interest expense years ended december 31 2018 2017 2016 company capitalized approximately 31 million 24 million 29 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts certain direct incremental costs discounts incurred obtaining loans capitalized amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company may first conduct qualitative assessment determine whether morelikelythannot asset impaired company elects perform qualitative assessment determined morelikelythannot asset impaired assessing qualitative factors company performs impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference december 31 2018 company assets 50 million 17 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets years ended december 31 2018 2016 annual impairment analysis included assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined morelikelythannot indefinite lived intangible assets impaired year ended december 31 2017 company elected perform quantitative analysis last quantitative analysis performed year ended december 31 2014 fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined note 19 segment information combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others future changes companys estimates assumptions based upon changes macroeconomic factors operating results managements intentions may result future changes fair value gaming license table games certificate impairment charge related assets necessary years ended december 31 2018 2017 2016 las vegas sands corp subsidiaries notes consolidated financial statements continued revenue recognition revenue contracts customers primarily consists casino wagers room sales food beverage transactions rental income company’s mall tenants convention sales entertainment ferry ticket sales contracts written oral implied customary business practices gross casino revenue aggregate gaming wins losses commissions rebated gaming promoters premium players rolling play cash discounts cash incentives patrons related gaming play recorded reduction gross casino revenue gaming contracts include performance obligation honor patron’s wager typically include performance obligation provide product service patron complimentary basis incentivize gaming exchange points earned company’s loyalty programs wagering contracts include complimentary products services provided company incentivize gaming company allocates relative standalone selling price product service respective revenue type complimentary products services provided companys control discretion supplied third parties recorded operating expense wagering contracts include products services provided patron exchange points earned company’s loyalty programs company allocates estimated fair value points earned loyalty program liability loyalty program liability deferral revenue redemption occurs upon redemption loyalty program points companyowned products services standalone selling price product service allocated respective revenue type redemptions points third parties redemption amount deducted loyalty program liability paid directly third party discounts received company third party connection transaction recorded revenue allocation revenue types products services provided patrons part wagering contract residual amount recorded casino revenue soon wager settled wagers similar characteristics company accounts gaming contracts collectively portfolio basis versus individual basis hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service convention revenues recognized related service rendered event held deposits future hotel occupancy convention space food beverage services contracts recorded deferred revenue recognition criteria met cancellation fees hotel convention space food beverage services recognized upon cancellation customer included revenues ferry entertainment revenue recognition criteria met completion ferry trip event respectively revenue contracts combination services allocated pro rata based service’s relative standalone selling price revenue leases primarily recorded mall revenue generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightline basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company threshold met gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment companys gaming revenue recorded casino expense accompanying consolidated statements operations taxes 409 billion 360 billion 324 billion years ended december 31 2018 2017 2016 respectively preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel las vegas sands corp subsidiaries notes consolidated financial statements continued costs incurred prior opening new ventures expensed incurred development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 132 million 129 million 121 million years ended december 31 2018 2017 2016 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related companys integrated resort operations related ancillary operations foreign currency company accounts foreign currency translation accordance related accounting standards gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income loss comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employees requisite service period generally vesting period equity grant companys stockbased employee compensation plans fully discussed note 16 stockbased employee compensation income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards companys foreign us tax rate differential reflects fact income earned singapore macao taxed local rates lower us tax rates company enjoys income tax exemption macao exempts company paying corporate income tax profits generated gaming operations august 2018 company received additional exemption macaos corporate income tax profits generated operation casino games chance period january 1 2019 june 26 2022 date companys subconcession agreement expires company entered agreement macao government effective end 2018 provided annual payment 42 million patacas approximately 5 million exchange rates effect december 31 2018 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2018 vml requested additional agreement macao government june 26 2022 correspond expiration income tax exemption gaming operations however assurance vml receive additional agreement accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods companys experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 268 million 261 million december 31 2018 2017 respectively valuation allowance certain deferred tax assets us operations 450 billion 443 billion december 31 2018 2017 respectively increased current year primarily due change expected utilization us foreign tax credits primarily due guidance issued internal revenue service irs related international provisions us tax reform defined management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable company able reduce valuation allowance period determination made appropriate significant judgment required evaluating companys tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit las vegas sands corp subsidiaries notes consolidated financial statements continued largest amount 50 likely based solely technical merits sustained examinations company recorded unrecognized tax benefits 118 million 92 million december 31 2018 2017 respectively company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different december 2017 us enacted tax cuts jobs act also referred us tax reform act made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries result year ended december 31 2017 company recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation companys us deferred tax liabilities reduced corporate income tax rate 21 company recorded impact enactment us tax reform subject staff accounting bulletin sab 118 provided twelvemonth remeasurement period complete accounting required accounting standards codification asc 740 income taxes twelve month remeasurement period new tax law continued evolve company adjusted provisional amounts related administrative guidance notices implementing regulations legislative amendments interpretations company completed accounting effects act december 2018 accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities balance sheet measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce companys exposure market fluctuation throughout hedge period changes market rates prices interest rates foreign currency exchange rates commodity prices impact company’s results operations company’s primary exposures market risk interest rate risk associated longterm debt foreign currency exchange rate risk associated company’s operations outside united states company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions depending classification position end reporting period derivative reported prepaid expenses assets net accrued liabilities longterm liabilities applicable accompanying consolidated balance sheets see note 10 derivative instruments additional disclosures regarding derivatives recent accounting pronouncements february 2016 fasb issued accounting standard update leases requires lessees recognize rightofuse rou assets lease liabilities measured present value future minimum lease payments lease commencement date lessor accounting remains largely unchanged new guidance july 2018 fasb issued additional update allows optional transition approach allowing companies forgo comparative reporting instead adopt guidance prospective basis guidance effective fiscal years beginning december 15 2018 including interim reporting periods within reporting period early adoption permitted company adopted new standard january 1 2019 prospective basis significant impact recognition rou assets lease liabilities companys balance sheet real estate operating leases management estimates adoption standard result recognition rou assets lease liabilities las vegas sands corp subsidiaries notes consolidated financial statements continued operating leases approximately 330 million approximately 340 million respectively january 1 2019 difference recorded writeoff deferred rent adoption guidance material impact net income june 2016 fasb issued accounting standard update revises methodology measuring credit losses financial instruments timing losses recorded guidance effective fiscal years beginning december 15 2019 including interim reporting periods within reporting period applied modified retrospective basis early adoption permitted company currently assessing effect guidance companys financial condition results operations expect material impact reclassification certain amounts accompanying consolidated balance sheet december 31 2017 related consolidated statements operations comprehensive income equity cash flows years ended december 31 2017 2016 adjusted consistent current year presentation adjustments resulted implementation accounting standards updates revenue contracts customers presentation restricted cash statements cash flows reclassifying immaterial cost aircraft spare parts inventories assets net note 3 revenue disaggregation company operates integrated resorts internationally macao singapore domestically las vegas pennsylvania company generates revenues properties providing following types products services gaming rooms food beverage mall convention retail revenue disaggregated type revenue geographic location follows las vegas sands corp subsidiaries notes consolidated financial statements continued 1 intercompany eliminations include royalties intercompany services see note 19 segment information contract related liabilities company provides numerous products services customers often timing difference cash payment customers recognition revenue associated performance obligations company following main types liabilities associated contracts customers 1 outstanding chip liability 2 loyalty program liability 3 customer deposits deferred revenue gaming nongaming products services yet provided las vegas sands corp subsidiaries notes consolidated financial statements continued outstanding chip liability represents collective amounts owed gaming promoters patrons exchange gaming chips possession outstanding chips expected recognized revenue redeemed cash within one year purchased loyalty program liability represents deferral revenue patron redemption points earned loyalty program points expected redeemed recognized revenue within one year earned customer deposits deferred revenue represent cash deposits made customers future services provided company exception mall deposits typically extend beyond year based terms lease majority customer deposits deferred revenue expected recognized revenue refunded customer within one year date deposit recorded following table summarizes liability activity related contracts customers 1 amount 152 million 145 million 131 million december 31 2018 december 31 2017 january 1 2017 respectively relates mall deposits accounted based lease terms usually greater one year significant impacts adoption company adopted new revenue recognition standard january 1 2018 full retrospective basis adoption change accounting standards related revenue contracts customers resulted following significant impacts 1 promotional allowances line item eliminated condensed consolidated statement operations amount deducted primarily casino revenue 2 valuation points associated company’s loyalty programs changed cost fair value loyalty program expense previously charged casino expense deducted casino revenue defer revenue recognition redemption loyalty program points occurs redemption loyalty program points third parties deducted loyalty program liability paid directly third party discounts received third party recorded revenue 3 portion gaming promoter commissions previously recorded casino expense deducted casino revenue adjustments resulted decrease net revenues operating expenses 154 million 156 million respectively increase operating income 2 million year ended december 31 2017 decrease net revenues operating expenses 139 million 148 million respectively increase operating income 9 million year ended december 31 2016 cumulative effect adoption recognized decrease retained earnings 18 million decrease equity noncontrolling interests 1 million january 1 2016 note 4 accounts receivable net accounts receivable consists following note 5 property equipment net property equipment consists following property equipment legally sold ggp totaling 189 million net 111 million accumulated depreciation december 31 2018 continue recorded companys consolidated balance sheet continue depreciated companys consolidated statement operations see note 14 mall activities shoppes palazzo cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 136 billion 469 million respectively december 31 2018 cost accumulated depreciation property equipment company leasing third parties 131 billion 415 million respectively december 31 2017 cost accumulated depreciation property equipment company leasing capital lease arrangements 40 million 24 million respectively december 31 2018 cost accumulated depreciation property equipment company leasing capital lease arrangements 41 million 24 million respectively december 31 2017 year ended december 31 2018 company recognized loss disposal impairment assets 150 million consisting primarily 128 million writeoff costs related four seasons tower suites macao well dispositions companys operating properties years ended december 31 2017 2016 company recognized loss disposal impairment assets 20 million 79 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 leasehold interests land net leasehold interests land consist following company amortizes leasehold interests land straightline basis expected term lease includes automatic extensions macao discussed amortization expense 35 million 37 million 38 million included amortization leasehold interests land expense years ended december 31 2018 2017 2016 respectively estimated future amortization expense expected term lease approximately 36 million five years period ending december 31 2023 136 billion thereafter exchange rates effect december 31 2018 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build sites sands macao venetian macao plaza macao four seasons hotel macao sands cotai central parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government companys future rental payment obligations see note 15 commitments contingencies operating leases note 7 intangible assets net intangible assets consist following august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired las vegas sands corp subsidiaries notes consolidated financial statements continued 50 million 17 million respectively license certificate determined indefinite lives therefore subject amortization april 2016 company paid 66 million singapore dollars sgd approximately 47 million exchange rates effect time transaction singapore casino regulatory authority cra part process renew gaming license marina bay sands license amortized threeyear term expires april 2019 renewable upon submitting application paying applicable license fee meeting requirements determined cra company filed renewal application believes meets renewal requirements determined cra however assurance given license renewal granted period time granted amortization expense 16 million 16 million 15 million years ended december 31 2018 2017 2016 respectively estimated future amortization expense approximately 5 million year ending december 31 2019 note 8 accrued liabilities accrued liabilities consist following las vegas sands corp subsidiaries notes consolidated financial statements continued note 9 longterm debt longterm debt consists following 1 unamortized deferred financing costs 47 million 24 million december 31 2018 2017 respectively related us macao singapore revolving credit facilities included assets net accompanying consolidated balance sheets corporate us related debt 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility 2013 us credit facility consists 225 billion funded term b loan 2013 us term b facility original issue discount 11 million 125 billion revolving credit facility 2013 us revolving facility borrowings 2013 us credit facility used repay outstanding balance companys prior senior secured credit facility august 2016 company amended 2013 us credit facility among things obtain revolving credit commitments aggregate amount 115 billion 2013 extended us revolving facility mature september 19 2020 used replace commitments refinance amounts outstanding existing 2013 us revolving facility pay fees expenses incurred connection amendment borrowings 2013 extended us revolving facility used general corporate purposes las vegas sands corp subsidiaries notes consolidated financial statements continued working capital needs company recorded 2 million loss modification debt quarter ended september 30 2016 connection amendment december 2016 company amended 2013 us credit facility lower applicable margin credit spread adjusted eurodollar rate term loans 250 225 per annum alternative base rate term loans 150 125 per annum additionally amendment lowered adjusted eurodollar rate floor 075 per annum 00 per annum thereby effectively lowered alternative base rate floor 175 per annum 10 per annum items noted terms conditions existing 2013 us credit facility remained unchanged company recorded 2 million loss modification debt quarter ended december 31 2016 connection amendment march 2017 company entered agreement fourth amendment agreement amend existing 2013 us credit facility among things refinance term loans way continuing replacing existing term loans aggregate amount 218 billion 2013 extended us term b facility lower applicable margin credit spread adjusted eurodollar rate term loans 225 20 per annum alternative base rate term loans 125 10 per annum additionally fourth amendment agreement removed requirement prepay outstanding revolving loans andor permanently reduce revolving commitments certain circumstances extended maturity date term loans december 19 2020 march 29 2024 company recorded 5 million loss modification debt year ended december 31 2017 connection amendment agreement march 2018 company entered agreement fifth amendment agreement amend existing 2013 us credit facility among things refinance term loans way continuing replacing existing term loans aggregate amount 216 billion lower applicable margin credit spread adjusted eurodollar rate term loans 20 175 per annum alternative base rate term loans 10 075 per annum additionally fifth amendment agreement extended maturity date term loans march 29 2024 march 27 2025 company recorded 3 million loss modification debt year ended december 31 2018 connection fifth amendment agreement june 2018 company amended 2013 us credit facility sixth amendment agreement among things increase amount term loans 135 billion aggregate amount 351 billion additional 135 billion fully drawn closing date matures march 27 2025 terms substantially identical applicable term loans outstanding existing credit agreement 2013 extended us term b facility subject quarterly amortization payments 9 million began june 30 2018 followed balloon payment 327 billion due march 27 2025 december 31 2018 company 115 billion available borrowing capacity 2013 extended us revolving facility net outstanding letters credit 2013 us credit facility guaranteed certain companys domestic subsidiaries guarantors obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc lvsllc guarantors assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 extended us term b facility bear interest companys option either adjusted eurodollar rate plus credit spread 175 per annum alternative base rate plus credit spread 075 per annum interest rate set 43 december 31 2018 borrowings 2013 us extended revolving facility bear interest companys option either adjusted eurodollar rate plus credit spread alternative base rate plus credit spread credit spread case determined based companys corporate family rating set forth pricing grid per 2013 us credit facility amended corporate rating credit spread ranges 1125 1625 per annum loans accruing interest adjusted eurodollar rate 0125 0625 per annum loans accruing interest base rate 2013 extended us revolving facility interim amortization payments matures september 19 2020 company pays commitment fee undrawn amounts 2013 extended us revolving facility determined based las vegas sands corp subsidiaries notes consolidated financial statements continued corporate rating ranges 0125 025 per annum weighted average interest rate 2013 us credit facility 39 year ended december 31 2018 32 years ended december 31 2017 2016 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined adjusted ebitda extent outstanding balance 2013 extended us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity based actual leverage ratio december 31 2018 material net assets lvsllc restricted distributed terms 2013 us credit facility addition covenants noted 2013 us credit facility contains conditions additional events default customary financings airplane financings february 2007 company entered promissory notes totaling 72 million finance purchase one airplane finance two others company already owned notes consisted balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bore interest threemonth london interbank offered rate libor plus 15 per annum amortizing notes totaling 29 million subject quarterly amortization payments 1 million began june 1 2007 balloon notes totaling 44 million matured march 1 2017 interim amortization payments weighted average interest rate notes 24 22 years ended december 31 2017 2016 respectively april 2007 company entered promissory notes totaling 20 million finance purchase additional airplane notes tenyear maturities consisted balloon payment promissory note amortizing promissory note notes bore interest threemonth libor plus 125 per annum 8 million amortizing note subject nominal quarterly amortization payments began june 30 2007 12 million balloon note matured march 31 2017 interim amortization payments weighted average interest rate notes 23 20 years ended december 31 2017 2016 respectively march 2017 company repaid outstanding 56 million balance airplane financings hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning hvac provider hvac equipment lease provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt scl senior notes august 9 2018 scl issued private offering three series senior unsecured notes aggregate principal amount 550 billion consisting 180 billion 4600 senior notes due august 8 2023 notes 180 billion 5125 senior notes due august 8 2025 notes 190 billion 5400 senior notes due august 8 2028 notes together 2023 notes 2025 notes scl senior notes portion net proceeds offering used repay full outstanding borrowings 2016 vml credit facility defined interim principal payments scl senior notes interest payable semiannually arrears february 8 august 8 commencing february 8 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued connection scl senior notes company entered fixedtovariable interest rate swap contracts see note 10 derivative instruments scl senior notes general senior unsecured obligations scl series scl senior notes rank equally right payment scls existing future senior unsecured debt rank senior right payment scls future subordinated debt scl senior notes effectively subordinated right payment scls future secured debt extent value collateral securing debt structurally subordinated liabilities scls subsidiaries none scls subsidiaries guarantee scl senior notes scl senior notes issued pursuant indenture dated august 9 2018 indenture scl us bank national association trustee upon occurrence certain events described indenture interest rate scl senior notes may adjusted indenture contains covenants subject customary exceptions qualifications limit ability scl subsidiaries among things incur liens enter sale leaseback transactions consolidate merge sell otherwise dispose substantially scls assets consolidated basis indenture also provides customary events default 2018 scl credit facility november 20 2018 scl entered facility agreement arrangers lenders named therein bank china limited macau branch agent lenders 2018 scl credit facility pursuant lenders made available 20 billion revolving unsecured credit facility scl 2018 scl revolving facility available july 31 2023 scl may draw loans facility may consist general revolving loans consisting united states dollar component hong kong dollar component loans drawn swingline loan subfacility denominated either united states dollars hong kong dollars scl may utilize loans general corporate purposes working capital requirements scl subsidiaries loans 2018 scl revolving facility bear interest calculated reference 1 case general revolving loans denominated united states dollars libor 2 case loans denominated united states dollars drawn swingline loan subfacility united states dollar alternate base rate determined reference among things united states dollar prime lending rate federal funds effective rate 3 case general revolving loans denominated hong kong dollars hong kong interbank offered rate hibor 4 case loans denominated hong kong dollars drawn swingline loan subfacility hong kong dollar alternate base rate determined reference among things hong kong dollar prime lending rate case plus margin determined reference consolidated leverage ratio defined 2018 scl credit facility initial margin general revolving loans 20 per annum initial margin loans drawn swingline loan subfacility 10 per annum scl also required pay commitment fee 060 per annum undrawn amounts 2018 scl revolving facility december 31 2018 company 20 billion available borrowing capacity 2018 scl revolving facility 2018 scl credit facility contains affirmative negative covenants customary similar unsecured financings including limited limitations indebtedness secured liens principal properties sale leaseback transactions 2018 scl credit facility also requires scl maintain maximum ratio total indebtedness adjusted ebitda 400 throughout life facility minimum ratio adjusted ebitda net interest expense including capitalized interest 250 throughout life facility 2018 scl credit facility also contains certain events default subject grace remedy periods materiality qualifiers including limited events relating scls gaming operations loss termination certain land concession contracts 2016 vml credit facility two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement 2016 vml credit facility pursuant various amendments provided 412 billion term loan 2016 vml term loans 269 million nonextended term loan las vegas sands corp subsidiaries notes consolidated financial statements continued 2016 nonextended vml term loans 20 billion revolving facility 2016 vml revolving facility together 2016 vml term loans 2016 nonextended vml term loans 2016 vml credit facility borrowings 2016 vml term loans used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company paid standby fees 05 per annum undrawn amounts 2016 vml revolving facility weighted average interest rate 2016 vml credit facility 31 26 21 years ended december 31 2018 2017 2016 respectively previously described portion proceeds scl senior notes used repay outstanding borrowings 2016 vml credit facility result company recorded 52 million loss early retirement debt three months ended september 30 2018 november 20 2018 effective november 21 2018 2016 vml credit facility terminated result company recorded 9 million loss early retirement debt three months ended december 31 2018 singapore related debt 2012 singapore credit facility june 2012 companys wholly owned subsidiary marina bay sands pte ltd mbs entered sgd 51 billion approximately 373 billion exchange rates effect december 31 2018 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 337 billion exchange rates effect december 31 2018 term loan 2012 singapore term facility sgd 500 million approximately 366 million exchange rates effect december 31 2018 revolving facility 2012 singapore revolving facility available november 25 2017 included sgd 100 million approximately 73 million exchange rates effect december 31 2018 ancillary facility 2012 singapore ancillary facility borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 march 2018 company amended 2012 singapore credit facility refinanced facility aggregate amount sgd 480 billion approximately 351 billion exchange rates effect december 31 2018 pursuant consenting lenders borrowings 2012 singapore term facility extended maturity march 29 2024 consenting lenders borrowings 2012 singapore revolving facility extended maturity september 29 2023 december 31 2018 company sgd 495 million approximately 362 million exchange rates effect december 31 2018 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbss assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets commencing quarterly period ended june 30 2018 end subsequent quarter march 31 2022 company required repay outstanding 2012 singapore term facility amount 05 aggregate principal amount outstanding march 19 2018 singapore restatement date commencing quarterly period ending june 30 2022 end subsequent quarter march 31 2023 company required repay outstanding 2012 singapore term facility amount 50 aggregate principal amount outstanding singapore restatement date quarterly periods ending june 30 2023 termination date march 29 2024 company required repay outstanding 2012 singapore term facility amount 180 aggregate principal amount outstanding singapore restatement las vegas sands corp subsidiaries notes consolidated financial statements continued date 2012 singapore revolving facility interim amortization payments matures september 29 2023 borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 per annum beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 31 december 31 2018 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 26 year ended december 31 2018 22 years ended december 31 2017 2016 2012 singapore credit facility amended contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio amended 40x quarterly periods maturity based actual leverage ratio december 31 2018 material net assets mbs restricted distributed terms 2012 singapore credit facility addition covenants noted 2012 singapore credit facility contains conditions additional events default customary financings debt covenant compliance december 31 2018 management believes company compliance debt covenants cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2018 summarized follows fair value longterm debt estimated fair value companys longterm debt december 31 2018 2017 approximately 1165 billion 961 billion respectively compared carrying value 1208 billion 972 billion respectively estimated fair value companys longterm debt based level 2 inputs quoted prices markets active note 10 derivative instruments august 2018 company entered interest rate swap agreements ir swaps qualified designated fair value hedges swapping fixedrate variablerate interest hedge changes fair value scl senior notes ir swaps total notional value 550 billion expire august 2020 total fair value ir swaps december 31 2018 56 million accompanying condensed consolidated balance sheets 15 million recorded asset assets net equal corresponding adjustment recorded carrying value scl senior notes realized portion ir swaps 41 million recorded interest receivable accounts receivable net fair value ir swaps estimated using level 2 inputs recently reported market forecasts interest rates gains losses due changes fair value ir swaps completely offset changes fair value hedged portion underlying debt therefore gain loss recognized due hedge ineffectiveness additionally year ended december 31 2018 company recorded 9 million reduction interest expense related realized amount associated ir swaps las vegas sands corp subsidiaries notes consolidated financial statements continued note 11 equity preferred stock company authorized issue 50000000 shares preferred stock companys board directors authorized subject limitations prescribed nevada law companys articles incorporation determine terms conditions preferred stock including whether shares preferred stock issued one series number shares included series powers designations preferences rights shares companys board directors also authorized designate qualifications limitations restrictions shares without vote action stockholders common stock dividends march 30 june 28 september 27 december 27 2018 company paid dividend 075 per common share part regular cash dividend program year ended december 31 2018 company recorded 235 billion distribution retained earnings 130 billion related principal stockholder family remaining 105 billion related shareholders march 31 june 30 september 29 december 29 2017 company paid dividend 073 per common share part regular cash dividend program year ended december 31 2017 company recorded 231 billion distribution retained earnings 126 billion related principal stockholder family remaining 105 billion related shareholders march 31 june 30 september 30 december 30 2016 company paid dividend 072 per common share part regular cash dividend program year ended december 31 2016 company recorded 229 billion distribution retained earnings 124 billion related principal stockholder family remaining 105 billion related shareholders january 2019 part regular cash dividend program companys board directors declared quarterly dividend 077 per common share total estimated approximately 597 million paid march 28 2019 shareholders record march 20 2019 repurchase program october 2014 companys board directors authorized repurchase 20 billion outstanding common stock expired october 2016 november 2016 companys board directors authorized repurchase 156 billion outstanding common stock expire november 2018 june 2018 companys board directors authorized increasing remaining repurchase amount 111 billion 250 billion extending expiration date november 2020 repurchases companys common stock made companys discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including companys financial position earnings legal requirements investment opportunities market conditions years ended december 31 2018 2017 company repurchased 14998127 6194137 shares respectively common stock 905 million 375 million respectively including commissions companys current program year ended december 31 2016 shares repurchased share repurchases companys common stock recorded treasury stock las vegas sands corp subsidiaries notes consolidated financial statements continued rollforward shares common stock summary outstanding shares common stock follows equity transactions addition shares repurchased share repurchase program year ended december 31 2018 company repurchased 46493 shares satisfaction tax withholding exercise price obligations stock option exercises noncontrolling interests scl february 23 june 22 2018 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 205 billion company retained 144 billion year ended december 31 2018 february 24 june 23 2017 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2017 february 26 june 24 2016 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2016 january 2019 board directors scl declared dividend hkd 099 per share total 102 billion company retained approximately 715 million scl shareholders record february 4 2019 paid february 22 2019 years ended december 31 2018 2017 2016 company distributed 12 million 13 million 15 million respectively certain noncontrolling interests las vegas sands corp subsidiaries notes consolidated financial statements continued note 12 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows components income tax expense benefit follows reconciliation statutory federal income tax rate companys effective tax rate follows company enjoys income tax exemption macao exempts company paying corporate income tax profits generated gaming operations august 2018 vml received additional exemption macaos corporate income tax profits generated operation casino games chance june 26 2022 date vmls subconcession agreement expires company received income tax exemption macao consolidated net income attributable lvsc would reduced 184 million 158 million 127 million diluted earnings per share would reduced 023 020 016 per share years ended december 31 2018 2017 2016 respectively may 2014 company entered agreement macao government effective end 2018 provided annual payment 42 million patacas approximately 5 million exchange rates effect december 31 2018 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2018 las vegas sands corp subsidiaries notes consolidated financial statements continued vml requested additional agreement macao government june 26 2022 correspond expiration income tax exemption gaming operations however assurance vml receive additional agreement could significant impact companys tax obligation macao september 2013 company internal revenue service entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit companys foreign us tax rate differential reflects fact us tax rates higher statutory tax rates singapore macao 17 12 respectively us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax therefore longer generating us foreign tax credits result year ended december 31 2017 company recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 company recorded impact enactment us tax reform subject sab 118 provided twelvemonth measurement period complete accounting required asc 740 income taxes year ended december 31 2018 company recorded tax expense 57 million resulting recently issued guidance irs related certain international provisions us tax reform management believes amounts recorded year ended december 31 2018 reasonably represent ultimate impact us tax reform companys consolidated financial statements possible company may adjust amounts future related administrative guidance notices implementation regulations potential legislative amendments interpretations act continues evolve adjustments could impact companys tax assets liabilities effective tax rate net income earnings per share las vegas sands corp subsidiaries notes consolidated financial statements continued primary tax affected components companys net deferred tax assets liabilities follows us tax reform required company compute onetime mandatory tax previously unremitted earnings foreign subsidiaries year ended december 31 2017 onetime deemed repatriation earnings result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result deemed repatriation addition deemed repatriation generated excess us foreign tax credits carried forward tax years 2018 beyond companys us foreign tax credit carryforwards 499 billion 50 billion december 31 2018 2017 respectively begin expire 2021 companys state net operating loss carryforwards 232 million 237 million december 31 2018 2017 respectively begin expire 2029 valuation allowance 450 billion 443 billion december 31 2018 2017 respectively provided certain net us deferred tax assets company believes assets meet morelikelythannot criteria recognition net operating loss carryforwards companys foreign subsidiaries 221 billion 214 billion december 31 2018 2017 respectively begin expire 2019 valuation allowances 268 million 261 million december 31 2018 2017 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet morelikelythannot criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions us tax reform required company compute tax previously unremitted earnings foreign subsidiaries upon transition worldwide tax system territorial tax system year ended december 31 2017 company expects earnings exempt us income tax distributed earnings taxed year ended december 31 2017 us tax reform company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 companys major foreign subsidiaries distributed may continue distribute earnings las vegas sands corp subsidiaries notes consolidated financial statements continued excess current years tax earnings profits order meet companys liquidity needs december 31 2018 amount earnings profits foreign subsidiaries company intend repatriate 353 billion company expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise companys current agreement macao government provides fixed annual payment substitution 12 tax otherwise due dividend distributions companys macao gaming operations extended beyond december 31 2018 12 tax would due distributions earnings generated 2018 reconciliation beginning ending amounts unrecognized tax benefits follows december 31 2018 2017 2016 unrecognized tax benefits 67 million 62 million 58 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2018 2017 2016 unrecognized tax benefits 51 million 30 million 16 million respectively recorded longterm liabilities included unrecognized tax benefit balance december 31 2018 2017 2016 103 million 80 million 65 million respectively uncertain tax benefits would affect effective income tax rate recognized companys major tax jurisdictions us macao singapore company could subject examination tax years beginning 2010 us tax years beginning 2014 macao singapore company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different companys expected outcome could impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties 3 million 1 million accrued december 31 2018 2017 respectively interest penalties accrued december 31 2016 company expect significant increase decrease unrecognized tax benefits next twelve months note 13 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect companys assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement las vegas sands corp subsidiaries notes consolidated financial statements continued company used foreign currency forward contracts effective economic hedges manage portion foreign currency exposure last expired december 2017 foreign currency forward contracts involve purchase sale designated currency agreed upon rate settlement specified date aggregate notional value foreign currency contracts 427 million december 31 2016 derivatives designated andor qualify hedge accounting changes fair value recognized income expense accompanying consolidated statements operations years ended december 31 2017 2016 company recorded income expense 12 million loss 10 million gain respectively related change fair value forward contracts cash equivalents shortterm investments original maturities less 90 days estimated fair value 264 billion 105 billion december 31 2018 2017 respectively estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets note 14 mall activities operating leases company leases space several integrated resorts various third parties leases noncancelable operating leases remaining lease periods vary 1 month 18 years leases include minimum base rents escalated contingent rent clauses december 31 2018 future minimum rentals noncancelable leases follows millions exchange rates effect december 31 2018 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 88 million 48 million 36 million years ended december 31 2018 2017 2016 respectively grand canal shoppes venetian resort las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian resort las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian resort las vegas master lease ggp approximately 766 million mall sale mall sale closed may 2004 company realized gain 418 million connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 109 million transaction deferred prepaid operating lease payments venetian resort las vegas amortize income straightline basis 89year lease term years ended december 31 2018 2017 2016 1 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 3 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 4 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 1 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date las vegas sands corp subsidiaries notes consolidated financial statements continued sale 77 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2018 2017 2016 3 million deferred item amortized offset convention retail expense shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 295 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo transaction accounted sale accordance related accounting standards 265 million mall sale transaction recorded deferred proceeds sale december 31 2018 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo tower ggp pursuant master lease agreement palazzo master lease palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 company leased nine restaurant retail spaces casino level within palazzo tower ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 23 million mall sale transaction deferred prepaid operating lease payments company amortized income straightline basis 89year lease term note 15 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel accrued nominal amount costs december 31 2018 actual results could differ estimates however opinion management litigation claims material effect companys financial condition results operations cash flows round square company limited v las vegas sands corp october 15 2004 richard suen round square company limited roundsquare filed action lvsc las vegas sands inc lvsi sheldon g adelson william p weidner district court clark county nevada district court asserting breach alleged agreement pay success fee 5 million 20 net profit companys macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 44 million june 30 2008 judgment entered matter amount 59 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court new trial decision reversing monetary judgment company nevada supreme court also made several rulings including overturning pretrial dismissal plaintiffs breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court february 27 2012 district court set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery las vegas sands corp subsidiaries notes consolidated financial statements continued district court granted requests retrial began march 27 may 14 2013 jury returned verdict favor roundsquare amount 70 million may 28 2013 judgment entered matter amount 102 million including prejudgment interest june 7 2013 company filed motion district court requesting judgment set aside matter law alternative new trial granted july 30 2013 district court denied companys motion october 17 2013 district court entered order granting plaintiffs request certain costs fees associated litigation amount approximately 1 million december 6 2013 company filed notice appeal jury verdict nevada supreme court company filed opening appellate brief nevada supreme court june 16 2014 august 19 2014 nevada supreme court issued order granting plaintiffs additional time september 15 2014 file answering brief september 15 2014 roundsquare filed request nevada supreme court file brief exceeding maximum number words granted october 10 2014 roundsquare filed answering brief january 12 2015 defendants filed reply brief january 27 2015 roundsquare filed reply brief nevada supreme court set oral argument december 17 2015 panel justices reset january 26 2016 en banc oral arguments presented nevada supreme court scheduled march 11 2016 nevada supreme court issued order affirming judgment liability reversing damages award remanding new trial damages march 29 2016 roundsquare filed petition rehearing nevada supreme court ordered answer company filed may 4 2016 may 12 2016 roundsquare filed motion leave file reply brief support petition rehearing may 19 2016 company filed opposition motion june 24 2016 nevada supreme court issued order granting roundsquares petition rehearing submitting appeal decision rehearing without briefing oral argument july 22 2016 nevada supreme court ordered new trial plaintiff roundsquare issue quantum merit damages pretrial hearing set district court december 12 2016 december 12 2016 hearing district court indicated would allow scope trial additional discovery areas company opposed inconsistent nevada supreme courts remand district court issued written order scope retrial discovery dated december 15 2016 january 5 2017 company moved stay proceedings district court pending nevada supreme courts resolution companys petition writ mandamus prohibition filed january 13 2017 february 13 2017 district court denied motion stay proceedings february 16 2017 nevada supreme court denied writ parties presently engaged discovery damages trial date set begin march 4 2019 company accrued nominal amount estimated costs related legal matter december 31 2018 event companys assumptions used evaluate matter change future periods may required record additional liability adverse outcome company intends defend matter vigorously asian american entertainment corporation limited v venetian macau limited et al january 19 2012 asian american entertainment corporation limited aaec filed claim macao action macao judicial court tribunal judicial de base vml lvs nevada international holdings inc lvs nevada las vegas sands llc lvsllc venetian casino resort llc vcr collectively defendants claim 30 billion patacas approximately 372 million exchange rates effect december 31 2018 compensation damages resulting alleged breach agreements entered aaec lvs nevada lvsllc vcr collectively us defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court september 23 2013 us defendants filed motion macao second instance court seeking recognition enforcement us court appeals ruling prior action referred given april 10 2009 partially dismissed aaecs claims us defendants march 24 2014 macao judicial court issued decision despacho seneador holding aaecs claim vml unfounded vml removed party proceedings claim proceed exclusively us defendants may 8 2014 aaec lodged appeal decision macao las vegas sands corp subsidiaries notes consolidated financial statements continued judicial court held existence pending application recognition enforcement us court appeals ruling macao second instance court justify stay proceedings us defendants present time although principle application stay proceedings us defendants could reviewed macao second instance court issued decision june 25 2014 macao second instance court delivered decision gave formal recognition allowed enforcement macao judgment us court appeals dismissing aaecs claims us defendants aaec appealed recognition decision macao court final appeal may 6 2015 dismissed appeal held us judgment final preclusive effect macao court final appeals decision became final may 21 2015 june 5 2015 us defendants applied macao judicial court dismiss claims res judicata aaec filed response application june 30 2015 us defendants filed reply july 23 2015 september 14 2015 macao judicial court admitted two legal opinions portuguese us law experts march 16 2016 macao judicial court dismissed defense res judicata appeal decision lodged april 7 2016 together request appeal heard immediately decision dated april 13 2016 macao judicial court accepted appeal heard immediately legal arguments submitted may 23 2016 aaec replied legal arguments july 14 2016 three days late upon payment penalty us defendants submitted response september 20 2016 december 13 2016 macao judicial court confirmed earlier decision stay proceedings pending appeal end december 2016 appeals including vmls dismissal res judicata appeals transferred macao second instance court may 11 2017 macao second instance court notified parties decision refusal deal appeals present time macao second instance court ordered court file transferred back macao judicial court evidence gathering macao judicial court commenced letters rogatory june 30 2017 macao judicial court sent letters rogatory public prosecutors office onward transmission relevant authorities us hong kong august 10 2017 hong kong mutual legal assistance unit international law division hong kong department justice hkmlau responded public prosecutor requested additional information august 18 2017 public prosecutor forwarded hkmlau request macao judicial court november 14 2017 public prosecutor replied hkmlau sent communication public prosecutor november 29 2017 requesting macao judicial court provide information enable processing hong kong letter rogatory january 6 2018 macao judicial court notified parties accordingly february 10 2018 macao judicial court notified parties communication dated january 25 2018 received us department justice macao judicial court extended time processing letters rogatory end june 2018 may 7 2018 macao judicial court extended time processing one letters rogatory midseptember 2018 extended august 16 2018 midnovember 2018 trial matter scheduled macao judicial court midseptember 2019 march 25 2015 application made us defendants macao judicial court revoke legal aid granted aaec accompanied request evidence taking aaec relating fees expenses incurred paid us subsequent action referred macao public prosecutor opposed action ground lack evidence aaecs financial position improved decision issued respect application present time complaint aaecs macao lawyer arising certain conduct relation recent us proceedings submitted macao lawyers association october 19 2015 letter dated february 26 2016 received conselho superior de advocacia macao bar association advising disciplinary proceedings commenced letter dated april 5 2016 received conselho superior de advocacia requesting confirmation signatories complaint acting within corporate authority letter dated april 14 2016 confirmation provided september 28 2016 conselho superior de advocacia invited comments defense lodged aaecs macao lawyer july 9 2014 plaintiff filed another action us district court lvsc lvsllc vcr collectively lvsc entities sheldon g adelson william p weidner david friedman 150 declaratory judgment equitable accounting misappropriation trade secrets breach confidence conversion las vegas sands corp subsidiaries notes consolidated financial statements continued based theory copyright law claim 50 billion november 4 2014 plaintiff finally effected notice lvsc entities followed motion dismiss lvsc entities november 10 2014 plaintiff failed timely respond december 2 2014 lvsc entities moved immediate dismissal sanctions plaintiff counsel bringing frivolous lawsuit december 19 2014 plaintiff filed incomplete untimely response followed plaintiffs december 27 2014 notice withdrawal lawsuit lvsc entities december 29 2014 reply favor sanctions dismissal prejudice august 31 2015 judge dismissed us action lvsc entities sanctions motion macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim prior action us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action nevada action aaec us district court seeking enjoin aaec proceeding macao action based aaecs filing us district courts dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited galaxy consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including venetian macao sands cotai central parisian macao plaza casino plaza macao four seasons hotel macao sands macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least oneyear prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 4 million exchange rates effect december 31 2018 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37195 18598 124 respectively exchange rates effect december 31 2018 subject minimum 45 million patacas approximately 6 million exchange rates effect december 31 2018 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2018 company obligated subconcession make minimum future payments approximately 42 million three years period ending december 31 2021 approximately 21 million year ending december 31 2022 las vegas sands corp subsidiaries notes consolidated financial statements continued operating leases company leases real estate including macao singapore leasehold interests land various equipment operating lease arrangements terms excess one year december 31 2018 company obligated noncancelable operating leases make future minimum lease payments follows millions expenses incurred operating lease agreements including amortization leasehold interest land shortterm variablerate nature totaled 94 million 116 million 109 million years ended december 31 2018 2017 2016 respectively note 16 stockbased employee compensation company two equity award plans grants options purchase companys common stock ordinary shares scl 2004 plan scl equity plan respectively described plans provide granting equity awards pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan 2004 plan gives company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value companys subsidiaries affiliates employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares companys common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2018 917674 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan companys stock date grant outstanding stock options generally vest three four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based companys historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan scl equity plan gives scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scls subsidiaries affiliates employees directors las vegas sands corp subsidiaries notes consolidated financial statements continued officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scls common stock available awards scl equity plan term ten years awards may granted expiration term scls remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2018 714665526 shares available grant scl equity plan stock option awards granted exercise price less closing price scls stock date grant ii average closing price scls stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model expected volatilities based scls historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued summary stock option activity companys equity award plans year ended december 31 2018 presented summary unvested restricted stock units companys equity award plans year ended december 31 2018 presented december 31 2018 2004 plan 37 million unrecognized compensation cost related unvested stock options stock option restricted stock costs expected recognized weighted average period 34 years 04 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2018 scl equity plan 25 million unrecognized compensation cost related unvested stock options stock option costs expected recognized weighted average period 27 years stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2018 note 17 employee benefit plans company selfinsured health care benefits us employees workers compensation benefits employees las vegas operating properties liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation las vegas sands corp 401k retirement plan available eligible employees date hire savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 subject cap whereby amount contributions exceed 5 participating employees eligible gross wages years ended december 31 2018 2017 2016 companys matching contributions savings plan 12 million 10 million 9 million respectively participation vmls provident retirement fund available permanent employees threemonth probation period vml contributes 5 employees basic salary fund employee eligible receive upon resignation 30 contributions working three consecutive years gradually increasing las vegas sands corp subsidiaries notes consolidated financial statements continued 100 working ten years ended december 31 2018 2017 2016 vmls contributions provident fund 38 million 37 million 35 million respectively participation mbss provident retirement fund available permanent parttime employees singapore citizen permanent resident upon joining company december 31 2018 mbs contributes 17 employees basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2018 2017 2016 mbss contributions provident fund 41 million 38 million 35 million respectively note 18 related party transactions years ended december 31 2018 2017 2016 principal stockholder family purchased certain services company including lodging banquet services provided company personnel approximately 3 million year years ended december 31 2018 2017 2016 company incurred 2 million 1 million 2 million respectively food beverage services provided restaurants principal stockholder ownership interest years ended december 31 2018 2017 2016 company incurred certain expenses totaling 6 million 10 million 3 million respectively principal stockholder related companys use personal aircraft yacht business purposes years ended december 31 2018 2017 2016 company charged principal stockholder 20 million 21 million 17 million respectively related aviation costs incurred company principal stockholders use company aviation personnel assets personal purposes addition principal stockholder agreed reimburse company installation avionics aircraft systems personal aircraft cost systems expected 22 million plus taxes expenses related installation operation systems year ended december 31 2018 company paid 13 million costs reimbursed full principal stockholder related party receivables 3 million december 31 2018 less 1 million december 31 2017 related party payables less 1 million december 31 2018 2017 note 19 segment information companys principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao sands macao marina bay sands las vegas operating properties sands bethlehem company also reviews construction development activities primary projects currently development addition reportable segments noted include renovation expansion rebranding sands cotai central londoner macao four seasons tower suites macao st regis tower suites macao las vegas condo tower construction currently suspended united states company included ferry operations comprised primarily companys ferry operations various operations ancillary properties macao reconcile consolidated results operations financial condition company included corporate includes las vegas condo tower corporate activities company reconcile consolidated financial condition segment information years ended december 31 2017 2016 reclassified conform current presentation las vegas sands corp subsidiaries notes consolidated financial statements continued companys segment information years ended december 31 2018 2017 2016 follows las vegas sands corp subsidiaries notes consolidated financial statements continued 1 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate las vegas sands corp subsidiaries notes consolidated financial statements continued expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap company significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result consolidated adjusted property ebitda presented company may directly comparable similarly titled measures presented companies las vegas sands corp subsidiaries notes consolidated financial statements continued 1 longlived assets include property equipment net accumulated depreciation amortization leasehold interests land net accumulated amortization note 20 selected quarterly financial results unaudited 1 q1 2018 company recorded nonrecurring noncash discrete income tax benefit 670 million due implementation global intangible lowtaxed income gilti provision us tax reform las vegas sands corp subsidiaries notes consolidated financial statements continued q4 2018 irs issued guidance clarifying implementation gilti provisions would impact foreign tax credit utilization required increase valuation allowance related companys historical foreign tax credits result q4 2018 company recorded nonrecurring noncash discrete income tax expense 727 million 2 q4 2017 company recorded nonrecurring noncash income tax benefit 526 million due us tax reform enacted end 2017 3 information 2017 reclassified conform current presentation earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2018 2017 2016 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm stockholders board directors las vegas sands corp opinion financial statements audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2019 2018 related consolidated statements operations comprehensive income equity cash flows three years period ended december 31 2019 related notes financial statement schedule listed index item 15a2 collectively referred financial statements opinion financial statements present fairly material respects financial position company december 31 2019 2018 results operations cash flows three years period ended december 31 2019 conformity accounting principles generally accepted united states america also audited accordance standards public company accounting oversight board united states pcaob companys internal control financial reporting december 31 2019 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 7 2020 expressed unqualified opinion companys internal control financial reporting basis opinion financial statements responsibility companys management responsibility express opinion companys financial statements based audits public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion critical audit matter critical audit matter communicated matter arising currentperiod audit financial statements communicated required communicated audit committee 1 relates accounts disclosures material financial statements 2 involved especially challenging subjective complex judgments communication critical audit matters alter way opinion financial statements taken whole communicating critical audit matter providing separate opinion critical audit matter accounts disclosures relates valuation casino receivables refer notes 2 4 financial statements critical audit matter description discussed note 2 financial statements accounts receivable december 31 2019 include credit extended casino patrons junket operators company records allowance doubtful accounts based amount probable credit losses company determines allowance analyzing collectability patron junket operator accounts using several factors including age account collection history patron junket operator financial condition available information auditing valuation accounts receivable involved high degree subjectivity evaluating management’s judgments related collectability patron junket operator accounts receivable especially relates evaluation patron junket operator assets available repay amounts owed critical audit matter addressed audit planned performed following procedures connection forming overall opinion financial statements • tested operating effectiveness controls granting casino credit controls collection processes management’s review controls assessment collectability casino receivables including information used management controls • selection casino receivables 1 obtained evidence related payment history correspondence patron junket operator 2 evaluated management’s use information establishing allowance doubtful accounts 3 examined subsequent settlement • performed retrospective analysis historical reserves evaluating subsequent collections writeoffs served companys auditor since 2013 report independent registered public accounting firm stockholders board directors las vegas sands corp opinion internal control financial reporting audited internal control financial reporting las vegas sands corp subsidiaries “company” december 31 2019 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso opinion company maintained material respects effective internal control financial reporting december 31 2019 based criteria established internal control integrated framework 2013 issued coso also audited accordance standards public company accounting oversight board united states pcaob consolidated financial statements financial statement schedule year ended december 31 2019 company report dated february 7 2020 expressed unqualified opinion financial statements financial statement schedule basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp lvsc together subsidiaries company incorporated nevada common stock traded new york stock exchange symbol lvs ordinary shares companys subsidiary sands china ltd scl indirect owner operator majority companys operations macao special administrative region macao peoples republic china listed main board stock exchange hong kong limited sehk shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations company developer destination properties integrated resorts feature premium accommodations worldclass gaming entertainment retail malls convention exhibition facilities celebrity chef restaurants amenities macao company currently owns 700 scl includes operations venetian macao resort hotel venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao cotai strip four seasons hotel macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 company owns operates venetian macao anchors cotai strip companys masterplanned development integrated resorts area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater paiza club mall retail dining space approximately 943000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao parisian macao plaza macao four seasons hotel macao sands cotai central opened phases beginning april 2012 property features four hotel towers first hotel tower consisting approximately 650 rooms suites conrad brand approximately 600 londonthemed suites upon completion londoner macao hotel second hotel tower consisting approximately 1800 rooms suites sheraton brand third hotel tower consisting approximately 2100 rooms suites sheraton brand fourth hotel tower consisting approximately 400 rooms suites st regis brand within sands cotai central company also owns currently operates approximately 367000 square feet gaming space approximately 369000 square feet meeting space approximately 525000 square feet retail space well entertainment dining facilities company owns parisian macao integrated resort connected venetian macao plaza macao four seasons hotel macao includes approximately 253000 square feet gaming space parisian macao also features approximately 2500 rooms suites approximately 296000 square feet retail dining space meeting room complex approximately 63000 square feet 1200seat theater company owns plaza macao four seasons hotel macao features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao within integrated resort company owns operates plaza casino features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 242000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities las vegas sands corp subsidiaries notes consolidated financial statements continued company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 213000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore mbs features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theater landmark iconic structure bayfront promenade contains artscience museum company recently announced expansion project marina bay sands described united states las vegas company owns operates venetian resort hotel casino venetian resort las vegas three hotel towers include venetian tower renaissance venicethemed resort adjoining venezia tower palazzo tower resort featuring modern european ambience design expo convention center approximately 12 million square feet sands expo center together venetian resort las vegas las vegas operating properties las vegas operating properties situated las vegas strip integrated resort approximately 7100 suites approximately 225000 square feet gaming space 23 million gross square feet stateoftheart exhibition meeting facilities configured provide small midsize large meeting rooms andor accommodate largescale multimedia events trade shows company working madison square garden company bring 400000squarefoot venue built specifically music entertainment las vegas madison square garden currently building msg sphere venetian 18000seat venue located near connectivity las vegas operating properties currently expected open 2021 pennsylvania company previously owned operated sands casino resort bethlehem sands bethlehem pennsylvania may 31 2019 company closed sale sands bethlehem received 116 billion net cash proceeds recorded gain sale 556 million continuing involvement company sands bethlehem company accounted transaction sale business company concluded sands bethlehem material impact companys overall operations consolidated financial results subsequent events early january 2020 outbreak respiratory illness caused novel coronavirus identified wuhan hubei province china february 4 2020 macao government announced suspension casino operations february 5 2020 additionally travel restrictions related china individual visit scheme macao hong kong macao ferry terminal closure countries restricting inbound travel mainland china duration intensity global health emergency related disruptions uncertain including potential broader impacts outside china travel visitation continues restricted resulting decline chinese tourist spending singapore las vegas given dynamic nature circumstances related impact company’s operating segments macao consolidated results operations cash flows financial condition material cannot reasonably estimated time las vegas sands corp subsidiaries notes consolidated financial statements continued development projects company regularly evaluates opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well anticipated revenue generating additions companys integrated resorts macao company previously announced renovation expansion rebranding sands cotai central new destination integrated resort londoner macao adding extensive thematic elements externally internally londoner macao feature new attractions features london including london’s recognizable landmarks houses parliament big ben expanded retail rebranded shoppes londoner number new restaurants bars added londoner tower suites add approximately 370 luxury suites upon completion project holiday innbranded rooms suites converted approximately 600 londonthemed suites referred londoner macao hotel company utilizing suites completed simulation basis trial feedback purposes construction commenced phased minimize disruption property’s peak periods company expects londoner tower suites completed late 2020 londoner macao project completed phases throughout 2020 2021 company also previously announced grand suites four seasons feature approximately 290 additional premium quality suites company initiated approved gaming operations space utilizing suites completed simulation basis trial feedback purposes company expects project completed first half 2020 company anticipates total costs associated development projects approximately 22 billion ultimate costs completion dates projects subject change company finalizes planning design work completes projects singapore april 2019 mbs entered second development agreement singapore tourism board pursuant mbs agreed construct development include hotel tower approximately 1000 rooms suites rooftop attraction convention meeting facilities stateoftheart live entertainment arena approximately 15000 seats second development agreement provides total project cost approximately 45 billion singapore dollar sgd approximately 33 billion exchange rates effect december 31 2019 investment must completed within eight years effective date agreement amount total project cost finalized company completes design development begins construction united states company constructing highrise residential condominium tower las vegas condo tower located las vegas strip within venetian resort las vegas 2008 company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company continues evaluate highest return opportunity project impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 129 million capitalized construction costs net depreciation december 31 2019 company continues evaluate current development projects markets pursue new development opportunities globally las vegas sands corp subsidiaries notes consolidated financial statements continued note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities vies company primary beneficiary intercompany balances transactions eliminated consolidation use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds restricted cash represents amounts contractually reserved substantial mallrelated repairs maintenance expenditures estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit gaming promoters macao receivables offset commissions payable respective gaming promoters business economic conditions legal enforceability gaming debts foreign currency control measures significant events foreign countries could affect collectability receivables customers gaming promoters residing countries allowance doubtful accounts represents companys best estimate amount probable credit losses companys existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customers financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount company also monitors regional global economic conditions forecasts evaluation adequacy recorded reserves account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost net realizable value cost determined weighted average specific identification methods las vegas sands corp subsidiaries notes consolidated financial statements continued property equipment property equipment stated cost net accumulated depreciation amortization accumulated impairment losses depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life periodically reviewed future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model fixed assets reviewed impairment whenever indicators impairment exist determining recoverability companys asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes companys estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups leases management determines contract contains lease inception modification contract contains lease contract conveys right control use identified asset period exchange consideration control use identified asset means lessee right obtain substantially economic benefits use asset b right direct use asset finance operating lease rightofuse rou assets liabilities recognized based present value future minimum lease payments expected lease term commencement date implicit rate determinable company’s leases management uses company’s incremental borrowing rate based information available commencement date determining present value future payments expected lease terms include options extend terminate lease reasonably certain company exercise option lease expense minimum lease payments recognized straightline basis expected lease term company’s lease arrangements lease nonlease components leases company lessee company accounts lease components nonlease components single lease component classes underlying assets primarily real estate leases company lessor substantially accounted operating leases lease components nonlease components accounted separately leases expected term 12 months less accounted balance sheet related lease expense recognized straightline basis expected lease term las vegas sands corp subsidiaries notes consolidated financial statements continued capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost companys outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2019 2018 2017 company capitalized 9 million 3 million 2 million respectively interest expense years ended december 31 2019 2018 2017 company capitalized approximately 34 million 31 million 24 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts certain direct incremental costs discounts incurred obtaining loans capitalized amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements revenue recognition revenue contracts customers primarily consists casino wagers room sales food beverage transactions rental income company’s mall tenants convention sales entertainment ferry ticket sales contracts written oral implied customary business practices gross casino revenue aggregate gaming wins losses commissions rebated gaming promoters premium players rolling play cash discounts cash incentives patrons related gaming play recorded reduction gross casino revenue gaming contracts include performance obligation honor patron’s wager typically include performance obligation provide product service patron complimentary basis incentivize gaming exchange points earned company’s loyalty programs wagering contracts include complimentary products services provided company incentivize gaming company allocates relative standalone selling price product service respective revenue type complimentary products services provided companys control discretion supplied third parties recorded operating expense wagering contracts include products services provided patron exchange points earned company’s loyalty programs company allocates estimated fair value points earned loyalty program liability loyalty program liability deferral revenue redemption occurs upon redemption loyalty program points companyowned products services standalone selling price product service allocated respective revenue type redemptions points third parties redemption amount deducted loyalty program liability paid directly third party discounts received company third party connection transaction recorded revenue allocation revenue types products services provided patrons part wagering contract residual amount recorded casino revenue soon wager settled wagers similar characteristics company accounts gaming contracts collectively portfolio basis versus individual basis hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service convention revenues recognized related service rendered event held deposits future hotel occupancy convention space food beverage services contracts recorded deferred revenue recognition criteria met cancellation fees convention contracts las vegas sands corp subsidiaries notes consolidated financial statements continued recognized upon cancellation customer included revenues ferry entertainment revenue recognition criteria met completion ferry trip event respectively revenue contracts combination services allocated pro rata based service’s relative standalone selling price revenue leases primarily recorded mall revenue generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightline basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company threshold met contract related liabilities company provides numerous products services customers often timing difference cash payment customers recognition revenue associated performance obligations company following main types liabilities associated contracts customers 1 outstanding chip liability 2 loyalty program liability 3 customer deposits deferred revenue gaming nongaming products services yet provided outstanding chip liability represents collective amounts owed gaming promoters patrons exchange gaming chips possession outstanding chips expected recognized revenue redeemed cash within one year purchased loyalty program liability represents deferral revenue patron redemption points earned loyalty program points expected redeemed recognized revenue within one year earned customer deposits deferred revenue represent cash deposits made customers future services provided company exception mall deposits typically extend beyond year based terms lease majority customer deposits deferred revenue expected recognized revenue refunded customer within one year date deposit recorded following table summarizes liability activity related contracts customers 1 amount 154 million 152 million 145 million december 31 2019 december 31 2018 january 1 2018 respectively relates mall deposits accounted based lease terms usually greater one year gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment companys gaming revenue recorded casino expense accompanying consolidated statements operations taxes 398 billion 409 billion 360 billion years ended december 31 2019 2018 2017 respectively preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred las vegas sands corp subsidiaries notes consolidated financial statements continued advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 123 million 132 million 129 million years ended december 31 2019 2018 2017 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related companys integrated resort operations related ancillary operations foreign currency functional currency foreign subsidiaries local currency subsidiary operates balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process recorded comprehensive income gains losses foreign currency remeasurements arise exchange rate fluctuations transactions denominated currency functional currency included income expense comprehensive income accumulated comprehensive income loss comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation stockbased compensation cost measured grant date based calculated fair value award recognized employees requisite service period generally vesting period equity grant companys stockbased employee compensation plans fully discussed note 16 stockbased employee compensation income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards las vegas sands corp subsidiaries notes consolidated financial statements continued accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods companys experience operating loss tax credit carryforwards expiring tax planning strategies management reassess realization deferred tax assets reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable company able reduce valuation allowance period determination made appropriate significant judgment required evaluating companys tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities balance sheet measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce companys exposure market fluctuation throughout hedge period changes market rates prices interest rates foreign currency exchange rates commodity prices impact company’s results operations company’s primary exposures market risk interest rate risk associated longterm debt foreign currency exchange rate risk associated company’s operations outside united states company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions depending classification position end reporting period derivative reported prepaid expenses assets net accrued liabilities longterm liabilities applicable accompanying consolidated balance sheets see note 9 derivative instruments additional disclosures regarding derivatives recent accounting pronouncements june 2016 fasb issued accounting standard update revises methodology measuring credit losses financial instruments timing losses recorded guidance effective fiscal years beginning december 15 2019 including interim reporting periods within reporting period applied modified retrospective basis early adoption permitted company adopted new standard january 1 2020 adoption guidance material impact companys financial condition net income reclassification certain amounts accompanying consolidated statements cash flows years ended december 31 2018 2017 adjusted consistent current year presentation reclassification impact companys financial condition results operations cash flows adjustments resulted land premium payments becoming material enough require separate disclosure las vegas sands corp subsidiaries notes consolidated financial statements continued note 3 accounts receivable net accounts receivable consists following note 4 property equipment net property equipment consists following property equipment sold ggp totaling 184 million net 114 million accumulated depreciation december 31 2019 continue recorded companys consolidated balance sheet continue depreciated companys consolidated statement operations see note 13 mall activities shoppes palazzo year ended december 31 2019 company’s ferry operations experienced decline passenger volume due primarily opening hong kongzhuhaimacao bridge opened october 2018 ongoing situation hong kong since june 2019 continuing decline passenger volume resulted company taking two ferries service implementing cost cutting measures maintain overall efficiency ferry operations company determined projected cash flows anticipated recover ferry assets carrying value impairment charge 65 million recorded excess carrying value recoverable amount 51 million determined fair value less cost disposal ferries estimated fair value longlived asset group determined using level 3 inputs based recent offers received two ferries currently service year ended december 31 2019 company recognized loss disposal impairment assets 90 million consisting primarily aforementioned 65 million ferry impairment charge years ended december 31 2018 2017 company recognized loss disposal impairment assets 150 million 20 million respectively loss year ended december 31 2018 consisted primarily 128 million write las vegas sands corp subsidiaries notes consolidated financial statements continued costs related grand suites four seasons well dispositions companys operating properties depreciation expense 115 billion 110 billion 115 billion years ended december 31 2019 2018 2017 respectively note 5 leasehold interests land net leasehold interests land consist following company amortizes leasehold interests land straightline basis expected term lease includes automatic extensions macao discussed amortization expense 51 million 35 million 37 million included amortization leasehold interests land expense years ended december 31 2019 2018 2017 respectively estimated future amortization expense expected term lease approximately 52 million five years period ending december 31 2024 221 billion thereafter exchange rates effect december 31 2019 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company anticipates useful life 50 years related land concessions macao company received land concessions macao government build sites sands macao venetian macao plaza macao four seasons hotel macao sands cotai central parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government companys future rental payment obligations see note 14 leases land concessions singapore initial term 60 years company received land concessions singapore tourism board build sites marina bay sands future mbs expansion project located company land sites singapore however land concessions grant company exclusive use land specified land concessions company required prepay premiums parcel april 2019 connection second development agreement mbs paid 963 million additional land concessions connection mbs expansion project las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 intangible assets net intangible assets consist following company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem may 31 2019 company completed sale sands bethlehem longer owns gaming license certificate april 2019 company paid sgd 72 million approximately 53 million exchange rates effect time transaction singapore casino regulatory authority cra part process renew gaming license marina bay sands license amortized threeyear term expires april 2022 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 17 million 16 million 16 million years ended december 31 2019 2018 2017 respectively estimated future amortization expense approximately 18 million 18 million 6 million years ending december 31 2020 2021 2022 respectively note 7 accrued liabilities accrued liabilities consist following las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following 1 unamortized deferred financing costs 100 million 47 million december 31 2019 2018 respectively related companys revolving credit facilities undrawn portion singapore delayed draw term facility included assets net accompanying consolidated balance sheets corporate us related debt lvsc senior notes july 31 2019 lvsc issued public offering three series senior unsecured notes aggregate principal amount 350 billion consisting 175 billion 3200 senior notes due august 8 2024 “2024 lvsc senior notes” 10 billion 3500 senior notes due august 18 2026 “2026 lvsc senior notes” 750 million 3900 senior notes due august 8 2029 “2029 lvsc senior notes” portion net proceeds offering used repay full outstanding borrowings 2013 us credit facility november 25 2019 lvsc issued public offering senior unsecured note aggregate principal amount 500 million 2900 senior notes due june 25 2025 “2025 lvsc senior notes” together las vegas sands corp subsidiaries notes consolidated financial statements continued 2024 lvsc senior notes 2026 lvsc senior notes 2029 lvsc senior notes “lvsc senior notes” portion net proceeds offering used general corporate purposes including repurchases shares companys common stock interim principal payments lvsc senior notes interest payable semiannually arrears february 8 august 8 commencing february 8 2020 respect 2024 lvsc notes 2029 lvsc notes february 18 august 18 commencing february 18 2020 respect 2026 notes june 25 december 25 commencing june 25 2020 respect 2025 notes lvsc senior notes senior unsecured obligations lvsc series lvsc senior notes rank equally right payment lvsc’s unsecured unsubordinated obligations none lvsc’s subsidiaries guarantee lvsc senior notes lvsc senior notes issued pursuant indenture dated july 31 2019 amended respect series lvsc senior notes “indenture” lvsc us bank national association trustee indenture contains covenants subject customary exceptions qualifications limit ability lvsc subsidiaries among things incur liens enter sale leaseback transactions consolidate merge sell otherwise dispose substantially company’s assets consolidated basis indenture also provides customary events default lvsc revolving facility august 9 2019 lvsc entered revolving credit agreement arrangers lenders named therein bank nova scotia administrative agent lenders “lvsc revolving credit agreement” pursuant lenders provided unsecured revolving credit commitments lvsc aggregate principal amount 150 billion “lvsc revolving facility” available august 9 2024 include 150 million subfacility letters credit lvsc may utilize proceeds loans general corporate purposes working capital requirements lvsc subsidiaries purpose prohibited lvsc revolving credit agreement december 31 2019 company 150 billion available borrowing capacity lvsc revolving facility net outstanding letters credit revolving loans bear interest company’s option either adjusted eurodollar rate plus applicable margin ranging 1125 1550 per annum alternative base rate plus applicable margin ranging 0125 0550 per annum case based lvsc’s corporate family credit rating december 31 2019 applicable margin revolving loans reference adjusted eurodollar rate 14 per annum applicable margin revolving loans reference alternative base rate 04 per annum lvsc also required pay quarterly commitment fee undrawn portion lvsc revolving facility commitment fee ranges 0125 0250 per annum based lvsc’s corporate family credit rating december 31 2019 commitment fee 0200 per annum lvsc revolving credit agreement contains customary affirmative negative covenants facilities type subject customary exceptions thresholds limit ability lvsc restricted subsidiaries among things incur liens ii enter sale leaseback transactions iii sell lease sublease otherwise dispose core facility defined lvsc revolving credit agreement b certain restricted subsidiaries lvsc incur indebtedness c lvsc merge consolidate liquidate sell substantially assets lvsc revolving credit agreement also requires lvsc maintain maximum consolidated leverage ratio 40x last day fiscal quarter lvsc revolving credit agreement also contains customary events default including payment defaults cross defaults material debt bankruptcy insolvency breaches covenants inaccuracy representations warranties subject customary grace periods 2013 us credit facility company entered credit agreement 2013 us credit facility pursuant various amendments provided 351 billion term loan 2013 extended us term b facility 115 billion revolving facility 2013 extended us revolving facility together 2013 extended us term b las vegas sands corp subsidiaries notes consolidated financial statements continued facility 2013 us credit facility borrowings 2013 extended us term b facility used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company paid standby fees 02 per annum undrawn amounts 2013 extended us revolving facility weighted average interest rate 2013 us credit facility 42 39 32 years ended december 31 2019 2018 2017 respectively previously described proceeds lvsc senior notes used repay outstanding borrowings 2013 us credit facility terminated result company recorded 22 million loss early retirement debt year ended december 31 2019 hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning hvac provider hvac equipment lease provide operation maintenance services hvac equipment las vegas hvac equipment lease capitalized present value future minimum lease payments lease inception lease 10year term ended june 30 2019 macao related debt scl senior notes august 9 2018 scl issued private offering three series senior unsecured notes aggregate principal amount 550 billion consisting 180 billion 4600 senior notes due august 8 2023 notes 180 billion 5125 senior notes due august 8 2025 notes 190 billion 5400 senior notes due august 8 2028 notes together 2023 notes 2025 notes scl senior notes portion net proceeds offering used repay full outstanding borrowings 2016 vml credit facility defined interim principal payments scl senior notes interest payable semiannually arrears february 8 august 8 commencing february 8 2019 connection scl senior notes company entered fixedtovariable interest rate swap contracts see note 9 derivative instruments scl senior notes general senior unsecured obligations scl series scl senior notes rank equally right payment scls existing future senior unsecured debt rank senior right payment scls future subordinated debt scl senior notes effectively subordinated right payment scls future secured debt extent value collateral securing debt structurally subordinated liabilities scls subsidiaries none scls subsidiaries guarantee scl senior notes scl senior notes issued pursuant indenture dated august 9 2018 indenture scl us bank national association trustee upon occurrence certain events described indenture interest rate scl senior notes may adjusted indenture contains covenants subject customary exceptions qualifications limit ability scl subsidiaries among things incur liens enter sale leaseback transactions consolidate merge sell otherwise dispose substantially scls assets consolidated basis indenture also provides customary events default 2018 scl credit facility november 20 2018 scl entered facility agreement arrangers lenders named therein bank china limited macau branch agent lenders 2018 scl credit facility pursuant lenders made available 20 billion revolving unsecured credit facility scl 2018 scl revolving facility available july 31 2023 scl may draw loans facility may consist general revolving loans consisting united states dollar component hong kong dollar component loans drawn swingline loan subfacility denominated either united states dollars hong kong dollars scl may utilize loans general corporate purposes working capital requirements scl subsidiaries las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2019 company 20 billion available borrowing capacity 2018 scl revolving facility loans 2018 scl revolving facility bear interest calculated reference 1 case general revolving loans denominated united states dollars libor 2 case loans denominated united states dollars drawn swingline loan subfacility united states dollar alternate base rate determined reference among things united states dollar prime lending rate federal funds effective rate 3 case general revolving loans denominated hong kong dollars hong kong interbank offered rate hibor 4 case loans denominated hong kong dollars drawn swingline loan subfacility hong kong dollar alternate base rate determined reference among things hong kong dollar prime lending rate case plus margin determined reference consolidated leverage ratio defined 2018 scl credit facility initial margin general revolving loans 20 per annum initial margin loans drawn swingline loan subfacility 10 per annum scl also required pay commitment fee 060 per annum undrawn amounts 2018 scl revolving facility 2018 scl credit facility contains affirmative negative covenants customary similar unsecured financings including limited limitations indebtedness secured liens principal properties sale leaseback transactions 2018 scl credit facility also requires scl maintain maximum ratio total indebtedness adjusted ebitda 40x throughout life facility minimum ratio adjusted ebitda net interest expense including capitalized interest 25x throughout life facility 2018 scl credit facility also contains certain events default subject grace remedy periods materiality qualifiers including limited events relating scls gaming operations loss termination certain land concession contracts 2016 vml credit facility two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement 2016 vml credit facility pursuant various amendments provided 412 billion term loan 2016 vml term loans 269 million nonextended term loan 2016 nonextended vml term loans 20 billion revolving facility 2016 vml revolving facility together 2016 vml term loans 2016 nonextended vml term loans 2016 vml credit facility borrowings 2016 vml term loans used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company paid standby fees 05 per annum undrawn amounts 2016 vml revolving facility weighted average interest rate 2016 vml credit facility 31 26 years ended december 31 2018 2017 respectively previously described portion proceeds scl senior notes used repay outstanding borrowings 2016 vml credit facility result company recorded 52 million loss early retirement debt three months ended september 30 2018 november 20 2018 effective november 21 2018 2016 vml credit facility terminated result company recorded 9 million loss early retirement debt three months ended december 31 2018 singapore related debt 2012 singapore credit facility june 2012 companys wholly owned subsidiary marina bay sands pte ltd mbs entered sgd 510 billion approximately 378 billion exchange rates effect december 31 2019 credit agreement 2012 singapore credit facility providing fully funded sgd 460 billion approximately 341 billion exchange rates effect december 31 2019 term loan 2012 singapore term facility sgd 500 million las vegas sands corp subsidiaries notes consolidated financial statements continued approximately 371 million exchange rates effect december 31 2019 revolving facility 2012 singapore revolving facility available november 25 2017 included sgd 100 million approximately 74 million exchange rates effect december 31 2019 ancillary facility 2012 singapore ancillary facility borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 march 2018 company amended 2012 singapore credit facility refinanced facility aggregate amount sgd 480 billion approximately 356 billion exchange rates effect december 31 2019 pursuant consenting lenders borrowings 2012 singapore term facility extended maturity march 29 2024 consenting lenders borrowings 2012 singapore revolving facility extended maturity september 29 2023 august 30 2019 mbs amended restated 2012 singapore credit facility “third amendment restatement agreement” third amendment restatement agreement extended maturity date term loans 2012 singapore term facility august 31 2026 b termination date revolving credit commitments 2012 singapore revolving facility february 27 2026 also increased principal amount revolving credit commitments additional sgd 250 million approximately 185 million exchange rates effect december 31 2019 total aggregate principal amount sgd 750 million approximately 556 million exchange rates effect december 31 2019 december 31 2019 mbs sgd 592 million approximately 439 million exchange rates effect december 31 2019 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit primarily consisting banker’s guarantee connection mbs expansion project sgd 153 million approximately 113 million exchange rates effect december 31 2019 third amendment restatement agreement certain lenders committed provide new delayed draw term loan facility “singapore delayed draw term facility” aggregate principal amount sgd 375 billion approximately 278 billion exchange rates effect december 31 2019 available mbs december 30 2024 finance costs associated mbs expansion project loans borrowed singapore delayed draw term facility mature august 31 2026 loans borrowed delayed draw term facility december 31 2019 result third amendment restatement agreement company recorded 2 million loss modification debt year ended december 31 2019 indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbss assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets term loans 2012 singapore term facility subject interim quarterly amortization payments beginning fiscal quarter ending december 31 2019 amount equal including fiscal quarter ending september 30 2024 05 principal amount outstanding june 30 2019 “term facility restatement date” ii fiscal quarter ending december 31 2024 30 principal amount outstanding term facility restatement date iii fiscal quarters ending march 31 2025 september 30 2025 50 principal amount outstanding term facility restatement date iv fiscal quarters ending december 31 2025 june 30 2026 180 principal amount outstanding term facility restatement date maturity date august 31 2026 mbs required repay remaining amounts outstanding singapore term facility loans singapore delayed draw term facility subject interim quarterly amortization payments beginning fiscal quarter ending march 31 2025 amount equal including fiscal quarter ending september 30 2025 50 principal amount outstanding december 30 2024 “delayed draw las vegas sands corp subsidiaries notes consolidated financial statements continued term facility restatement date” ii fiscal quarter december 31 2025 including june 30 2026 180 principal amount outstanding delayed draw term facility restatement date maturity date august 31 2026 mbs required repay remaining amounts outstanding singapore delayed draw term facility third amendment restatement agreement outstanding loans bear interest singapore swap offered rate “sor” plus applicable margin fixed 165 per annum september 30 2020 range 115 185 per annum thereafter based mbs’s consolidated leverage ratio interest rate set approximately 31 december 31 2019 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 32 26 22 years ended december 31 2019 2018 2017 third amendment restatement agreement mbs must comply maximum consolidated leverage ratio 45x last day fiscal quarter august 30 2019 twelve months following date temporary occupation permit issued respect mbs expansion project thereafter mbs must comply maximum consolidated leverage ratio 40x last day fiscal quarter maturity debt covenant compliance december 31 2019 management believes company compliance debt covenants cash flows financing activities cash flows financing activities related longterm debt finance lease obligations follows las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities longterm debt maturities longterm debt outstanding december 31 2019 summarized follows fair value longterm debt estimated fair value companys longterm debt december 31 2019 2018 approximately 1321 billion 1165 billion respectively compared contractual value 1258 billion 1208 billion respectively estimated fair value longterm debt based recent trades available indicative pricing market information level 2 inputs note 9 derivative instruments august 2018 company entered interest rate swap agreements ir swaps qualified designated fair value hedges swapping fixedrate variablerate interest hedge changes fair value scl senior notes ir swaps total notional value 550 billion expire august 2020 total fair value ir swaps december 31 2019 81 million accompanying consolidated balance sheets 34 million recorded asset assets net equal corresponding adjustment recorded carrying value scl senior notes fair value ir swaps estimated using level 2 inputs recently reported market forecasts interest rates gains losses due changes fair value ir swaps completely offset changes fair value hedged portion underlying debt additionally years ended december 31 2019 2018 company recorded 23 million 9 million respectively reduction interest expense related realized amount associated ir swaps note 10 equity preferred stock company authorized issue 50000000 shares preferred stock companys board directors authorized subject limitations prescribed nevada law companys articles incorporation determine terms conditions preferred stock including whether shares preferred stock issued one series number shares included series powers designations preferences rights shares companys board directors also authorized designate qualifications limitations restrictions shares without vote action stockholders common stock dividends march 28 june 27 september 26 december 26 2019 company paid dividend 077 per common share part regular cash dividend program year ended december 31 2019 company recorded 237 billion distribution retained earnings 133 billion related principal stockholder family remaining 104 billion related stockholders las vegas sands corp subsidiaries notes consolidated financial statements continued march 30 june 28 september 27 december 27 2018 company paid dividend 075 per common share part regular cash dividend program year ended december 31 2018 company recorded 235 billion distribution retained earnings 130 billion related principal stockholder family remaining 105 billion related stockholders march 31 june 30 september 29 december 29 2017 company paid dividend 073 per common share part regular cash dividend program year ended december 31 2017 company recorded 231 billion distribution retained earnings 126 billion related principal stockholder family remaining 105 billion related stockholders january 2020 part regular cash dividend program companys board directors declared quarterly dividend 079 per common share total estimated approximately 603 million paid march 26 2020 stockholders record march 18 2020 share repurchases november 2016 companys board directors authorized repurchase 156 billion outstanding common stock expire november 2018 june 2018 companys board directors authorized increasing remaining repurchase amount 111 billion 250 billion extending expiration date november 2020 repurchases companys common stock made companys discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including companys financial position earnings legal requirements investment opportunities market conditions years ended december 31 2019 2018 2017 company repurchased 12556635 14998127 6194137 shares respectively common stock 754 million 905 million 375 million respectively including commissions companys current program share repurchases companys common stock recorded treasury stock addition shares repurchased share repurchase program years ended december 31 2019 2018 company repurchased 1927 46493 shares respectively satisfaction tax withholding exercise price obligations stock option exercises rollforward shares common stock summary outstanding shares common stock follows las vegas sands corp subsidiaries notes consolidated financial statements continued noncontrolling interests scl february 22 june 21 2019 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 205 billion company retained 144 billion year ended december 31 2019 february 23 june 22 2018 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 205 billion company retained 144 billion year ended december 31 2018 february 24 june 23 2017 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2017 january 2020 board directors scl declared dividend hkd 099 per share total 103 billion company retain approximately 720 million scl shareholders record february 5 2020 paid february 21 2020 years ended december 31 2019 2018 2017 company distributed 17 million 12 million 13 million respectively certain noncontrolling interests amount distributed 2019 11 million related payments companys minority interest partners purchase interests connection sale sands bethlehem note 11 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows components income tax expense benefit follows las vegas sands corp subsidiaries notes consolidated financial statements continued reconciliation statutory federal income tax rate companys effective tax rate follows company enjoys income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption june 26 2022 date vmls subconcession agreement expires company received income tax exemption macao consolidated net income attributable lvsc would reduced 200 million 184 million 158 million diluted earnings per share would reduced 026 023 020 per share years ended december 31 2019 2018 2017 respectively april 2019 company entered renewed agreement macao government effective june 26 2022 provides annual payment 38 million patacas approximately 5 million exchange rates effect december 31 2019 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2013 company internal revenue service entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit companys foreign us tax rate differential reflects fact us tax rates higher statutory tax rates singapore macao 17 12 respectively tax cuts jobs act us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax therefore longer generating us foreign tax credits result year ended december 31 2017 company recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 company recorded impact enactment us tax reform subject staff accounting bulletin 118 provided twelvemonth measurement period complete accounting required accounting standards codification 740 income taxes year ended december 31 2018 company recorded tax expense 57 million resulting recently issued guidance internal revenue service irs related certain international provisions us tax reform las vegas sands corp subsidiaries notes consolidated financial statements continued primary tax affected components companys net deferred tax assets follows us tax reform required company compute onetime mandatory tax previously unremitted earnings foreign subsidiaries year ended december 31 2017 onetime deemed repatriation earnings result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result deemed repatriation addition deemed repatriation generated excess us foreign tax credits carried forward tax years 2018 beyond companys us foreign tax credit carryforwards 484 billion 499 billion december 31 2019 2018 respectively begin expire 2022 companys state net operating loss carryforward 232 million december 31 2018 result sale sands bethlehem company state net operating loss carryforward december 31 2019 valuation allowance 451 billion 450 billion december 31 2019 2018 respectively provided certain net us deferred tax assets company believes assets meet morelikelythannot criteria recognition net operating loss carryforwards companys foreign subsidiaries 231 billion 221 billion december 31 2019 2018 respectively began expire 2020 valuation allowances 279 million 268 million december 31 2019 2018 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet morelikelythannot criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions us tax reform required company compute tax previously unremitted earnings foreign subsidiaries upon transition worldwide tax system territorial tax system year ended december 31 2017 company expects earnings exempt us income tax distributed earnings taxed year ended december 31 2017 us tax reform company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 companys major foreign subsidiaries distributed may continue distribute earnings excess current years tax earnings profits order meet companys liquidity needs december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued 2019 amount earnings profits foreign subsidiaries company intend repatriate 352 billion company expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise reconciliation beginning ending amounts unrecognized tax benefits follows december 31 2019 2018 2017 unrecognized tax benefits 53 million 67 million 62 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2019 2018 2017 unrecognized tax benefits 81 million 51 million 30 million respectively recorded longterm liabilities included unrecognized tax benefit balance december 31 2019 2018 2017 115 million 103 million 80 million respectively uncertain tax benefits would affect effective income tax rate recognized companys major tax jurisdictions us macao singapore company could subject examination tax years beginning 2010 us tax years beginning 2015 macao singapore company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different companys expected outcome could impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties 5 million 3 million 1 million accrued december 31 2019 2018 2017 respectively company expect significant increase decrease unrecognized tax benefits next twelve months note 12 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect companys assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement cash equivalents shortterm investments original maturities less 90 days estimated fair value 226 billion 264 billion december 31 2019 2018 respectively estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets las vegas sands corp subsidiaries notes consolidated financial statements continued note 13 mall activities grand canal shoppes venetian resort las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian tower formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian tower master lease ggp approximately 766 million mall sale mall sale closed may 2004 company realized gain 418 million connection mall sale master lease agreement company leased nineteen retail restaurant spaces casino level within venetian tower ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 109 million transaction deferred prepaid operating lease payments company amortize income straightline basis 89year lease term years ended december 31 2019 2018 2017 1 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 3 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 4 million iv lease certain office space ggp period 10 years subject extension options annual rent approximately 1 million lease payments clauses ii iv subject automatic increases beginning sixth lease year accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2019 2018 2017 3 million deferred item amortized offset convention retail expense shoppes palazzo company contracted sell portion grand canal shoppes located within palazzo tower formerly referred shoppes palazzo ggp pursuant purchase sale agreement dated april 12 2004 amended agreement terms settlement ggp june 24 2011 company retained 295 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo transaction accounted sale accordance related accounting standards 225 million mall sale transaction recorded deferred proceeds sale december 31 2019 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo tower ggp pursuant master lease agreement palazzo master lease palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 company leased nine restaurant retail spaces casino level within palazzo tower ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property assets real property separately legally demised accordingly 23 million mall sale transaction deferred prepaid operating lease payments company amortize income straightline basis 89year lease term note 14 leases lessee company operating finance leases various real estate including macao singapore leasehold interests land equipment certain lease agreements include rental payments based percentage las vegas sands corp subsidiaries notes consolidated financial statements continued sales specified contractual amounts rental payments adjusted periodically inflation rental payments based usage company’s leases include options extend lease term one month 40 years company’s lease agreements contain material residual value guarantees material restrictive covenants leases recorded balance sheet consist following excluding macao singapore leasehold interests land assets see note 5 leasehold interests land net 1 finance lease rou assets recorded net accumulated depreciation 6 million december 31 2019 cost accumulated depreciation property equipment company leasing capital lease arrangements 40 million 24 million respectively december 31 2018 information related lease term discount rate follows 1 upon adoption new lease standard discount rates used existing operating leases established january 1 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued components lease expense follows expenses incurred operating lease agreements including amortization leasehold interest land shortterm variable nature totaled 94 million 116 million years ended december 31 2018 2017 respectively supplemental cash flow information related leases follows property equipment acquired capital leases 1 million year ended december 31 2018 maturities lease liabilities summarized follows las vegas sands corp subsidiaries notes consolidated financial statements continued lessor company leases space several integrated resorts various third parties part mall operations well retail office space land recorded within convention retail revenues leases noncancelable operating leases remaining lease periods vary one month 50 years leases include minimum base rents escalated contingent rent clauses lease revenue consists following overage rents amounted 88 million 48 million years ended december 31 2018 2017 respectively future minimum rentals excluding escalated contingent rent clauses noncancelable leases follows cost accumulated depreciation property equipment company leasing third parties follows significant impacts adoption company adopted new lease standard january 1 2019 prospective basis forgoing comparative reporting company elected utilize transition guidance within new standard allows company carryforward historical lease classification company elected separate lease nonlease components classes underlying assets lessee made accounting policy election account leases initial term 12 months less balance sheet adoption standard resulted recording additional rou assets lease liabilities operating leases 337 million january 1 2019 adoption guidance impact net income las vegas sands corp subsidiaries notes consolidated financial statements continued note 15 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows asian american entertainment corporation limited v venetian macau limited et al february 5 2007 asian american entertainment corporation limited “aaec” “plaintiff” brought claim “prior action” us district court district nevada “us district court” las vegas sands inc known las vegas sands llc “lvsllc” venetian casino resort llc “vcr” venetian venture development llc subsidiaries company william p weidner david friedman former executives company prior action sought damages based alleged breach agreements entered aaec aforementioned defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 us district court entered order dismissing prior action april 16 2010 january 19 2012 aaec filed another claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” lvsllc vcr collectively “defendants” claim 30 billion patacas approximately 374 million exchange rates effect december 31 2019 macao action alleges breach agreements entered aaec lvs nevada lvsllc vcr collectively “us defendants” joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court amended defense january 4 2013 march 24 2014 macao judicial court issued decision despacho seneador holding aaec’s claim vml unfounded vml removed party proceedings claim proceed exclusively us defendants may 8 2014 aaec lodged appeal decision june 5 2015 us defendants applied macao judicial court dismiss claims res judicata based dismissal prior action march 16 2016 macao judicial court dismissed defense res judicata appeal decision lodged us defendants april 7 2016 end december 2016 appeals including vml’s dismissal res judicata appeals transferred macao second instance court may 11 2017 macao second instance court notified parties decision refusal deal appeals present time macao second instance court ordered court file transferred back macao judicial court evidence gathering macao judicial court commenced letters rogatory completed march 14 2019 trial matter scheduled september 2019 july 15 2019 aaec submitted request macao judicial court increase amount claim 9645 billion patacas approximately 1202 billion exchange rates effect december 31 2019 allegedly representing lost profits 2004 2018 reserving right claim lost profits 2022 due course enforcement stage september 2 2019 us defendants moved revoke legal aid granted aaec excuses aaec paying share court costs september 4 2019 macao judicial court deferred ruling us defendants’ motion regarding legal aid entry final judgment us defendants appealed deferral september 17 2019 september 26 2019 macao judicial court rejected appeal procedural grounds us defendants requested clarification order october 29 2019 order dated december 4 2019 macao judicial court stated would reconsider us defendants’ motion revoke legal aid part reconsideration would reanalyze portions record seek opinion macau public prosecutor regarding propriety legal aid consult trial court overseeing aaec’s separate litigation las vegas sands corp subsidiaries notes consolidated financial statements continued galaxy entertainment group ltd galaxy entertainment group sa messrs weidner friedman individually court yet issued final opinion motion september 4 2019 macao judicial court allowed aaec’s request increase amount claim september 17 2019 us defendants appealed decision granting aaec’s request september 26 2019 macao judicial court accepted appeal currently pending september 10 2019 aaec moved reschedule trial macao action scheduled begin september 12 2019 macao judicial court granted motion rescheduled trial begin september 16 2020 macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously macao subconcession macao subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 4 million exchange rates effect december 31 2019 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37399 18700 125 respectively exchange rates effect december 31 2019 subject minimum 45 million patacas approximately 6 million exchange rates effect december 31 2019 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2019 company obligated subconcession make minimum future payments approximately 42 million two years period ending december 31 2021 approximately 21 million year ending december 31 2022 note 16 stockbased employee compensation company two equity award plans grants options purchase companys common stock ordinary shares scl 2004 plan scl equity plan respectively described plans provide granting equity awards pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan 2004 plan gives company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value companys subsidiaries affiliates employees directors officers many consultants eligible awards 2004 plan 2004 plan provided aggregate 26344000 shares companys common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 may 2019 board directors stockholders approved adoption las vegas sands corp amended restated 2004 equity award plan “amended 2004 plan” extended term amended 2004 plan december 2024 increased number shares common stock available grants 10000000 shares compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2019 9777920 shares available grant amended 2004 plan stock option awards granted exercise price equal fair market value defined amended 2004 plan companys stock date grant outstanding stock options generally vest three four las vegas sands corp subsidiaries notes consolidated financial statements continued years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based companys historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan scl equity plan gives scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scls subsidiaries affiliates employees directors officers many consultants eligible awards scl equity plan scl 2009 equity plan provided aggregate 804786508 shares scls common stock available awards scl 2009 equity plan term ten years expired november 30 2019 awards may granted expiration term existing awards previously granted scl 2009 equity plan unexercised unvested remain valid applicable exercisable accordance terms grant despite expiration scl 2009 equity plan scls remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing effective december 1 2019 scl 2019 equity plan approved shareholders materially terms scl 2009 equity plan december 31 2019 808619139 shares available grant scl 2019 equity plan stock option awards granted exercise price less closing price scls stock date grant ii average closing price scls stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model expected volatilities based scls historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant scl 2019 equity plan scl granted restricted share units eligible employees grant vest threeyear period employees entitled future cash payment equivalent fair value restricted share unit accumulated dividends cash upon vesting las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity companys equity award plans year ended december 31 2019 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock restricted stock units companys equity award plans year ended december 31 2019 presented grant date fair value scls restricted stock unit awards share price scls ordinary shares respective grant date fair value awards remeasured reporting period vesting dates upon settlement scl pay grantees amount cash calculated based higher closing price scls shares vesting date ii average closing price scls shares five trading days immediately preceding vesting date accrued liability associated cashsettled restricted stock units 1 million december 31 2019 december 31 2019 amended 2004 plan 24 million unrecognized compensation cost related unvested stock options stock option costs expected recognized weighted average period 37 years december 31 2019 scl equity plan 29 million 7 million unrecognized compensation cost related unvested stock options unvested restricted stock units respectively stock option restricted stock unit costs expected recognized weighted average period 26 years 27 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity amended 2004 plan scl equity plan follows three years ended december 31 2019 note 17 related party transactions years ended december 31 2019 2018 2017 principal stockholder family purchased certain services company including lodging banquet services goods services 2 million 3 million 3 million respectively years ended december 31 2019 2018 2017 company incurred 3 million 2 million 1 million respectively food beverage services provided restaurants principal stockholder ownership interest years ended december 31 2019 2018 2017 company incurred certain expenses 9 million 6 million 10 million respectively related companys use principal stockholders personal aircraft yacht aircraft refurbishment maintenance services business purposes years ended december 31 2019 2018 2017 company charged principal stockholder 25 million 20 million 21 million respectively related aviation costs incurred company principal stockholders use company aviation personnel assets personal purposes addition principal stockholder agreed reimburse company installation avionics aircraft systems personal aircraft years ended december 31 2019 2018 company paid 9 million 13 million respectively costs reimbursed full principal stockholder related party receivables 3 million december 31 2019 2018 related party payables 2 million less 1 million december 31 2019 2018 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 segment information companys principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao sands macao marina bay sands las vegas operating properties may 30 2019 sands bethlehem company also reviews construction development activities primary projects currently development addition reportable segments noted include renovation expansion rebranding sands cotai central londoner macao grand suites four seasons londoner tower suites macao las vegas condo tower construction currently suspended united states company included ferry operations comprised primarily companys ferry operations various operations ancillary properties macao reconcile consolidated results operations financial condition company included corporate includes las vegas condo tower corporate activities company reconcile consolidated financial condition companys segment information years ended december 31 2019 2018 2017 follows las vegas sands corp subsidiaries notes consolidated financial statements continued 1 company completed sale sands bethlehem may 31 2019 see “note 1 organization business company” results operations include sands bethlehem may 30 2019 2 intercompany eliminations include royalties intercompany services las vegas sands corp subsidiaries notes consolidated financial statements continued las vegas sands corp subsidiaries notes consolidated financial statements continued 1 company completed sale sands bethlehem may 31 2019 see “note 1 organization business company” results operations include sands bethlehem may 30 2019 2 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain sale sands bethlehem gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap company significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result consolidated adjusted property ebitda presented company may directly comparable similarly titled measures presented companies 3 years ended december 31 2019 2018 2017 company recorded stockbased compensation expense 36 million 30 million 34 million respectively 22 million 18 million 20 million respectively included corporate expense accompanying consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued 1 company completed sale sands bethlehem may 31 2019 see “note 1 organization business company” results operations include sands bethlehem may 30 2019 1 company completed sale sands bethlehem may 31 2019 see “note 1 organization business company” results operations include sands bethlehem may 30 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued 1 longlived assets include property equipment net accumulated depreciation amortization leasehold interests land net accumulated amortization 2 company completed sale sands bethlehem may 31 2019 see “note 1 organization business company” results operations include sands bethlehem may 30 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 selected quarterly financial results unaudited 1 q1 2018 company recorded nonrecurring noncash discrete income tax benefit 670 million due implementation global intangible lowtaxed income gilti provision us tax reform q4 2018 irs issued guidance clarifying implementation gilti provisions would impact foreign tax credit utilization required increase valuation allowance related companys historical foreign tax credits result q4 2018 company recorded nonrecurring noncash discrete income tax expense 727 million 2 q2 2019 company closed sale sands bethlehem recorded gain sale 556 million earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2019 2018 2017 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp completed integrated audits las vegas sands corp’s 2006 2005 consolidated financial statements internal control financial reporting december 31 2006 audit 2004 consolidated financial statements accordance standards public company accounting oversight board united states opinions based audits presented consolidated financial statements opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries “company” december 31 2006 2005 results operations cash flows three years period ended december 31 2006 conformity accounting principles generally accepted united states america financial statements responsibility company’s management responsibility express opinion financial statements based audits conducted audits statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit financial statements includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion described note 2 consolidated financial statements company changed manner accounts sharebased payments 2006 internal control financial reporting also opinion management’s assessment included management’s annual report internal control financial reporting appearing item 9a company maintained effective internal control financial reporting december 31 2006 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission “coso” fairly stated material respects based criteria furthermore opinion company maintained material respects effective internal control financial reporting december 31 2006 based criteria established internal control integrated framework issued coso company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting responsibility express opinions management’s assessment effectiveness company’s internal control financial reporting based audit conducted audit internal control financial reporting accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit internal control financial reporting includes obtaining understanding internal control financial reporting evaluating management’s assessment testing evaluating design operating effectiveness internal control performing procedures consider necessary circumstances believe audit provides reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 27 2007 las vegas sands corp consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements stockholders’ equity comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” “company” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 acquisition lvsllc lvsc accounted reorganization entities common control manner similar poolingofinterests lvsc’s common stock traded new york stock exchange symbol “lvs” operations company owns operates venetian resort hotel casino “the venetian” renaissance venicethemed resort situated las vegas strip “strip” venetian includes first allsuites hotel strip 4027 suites gaming facility approximately 120000 gross square feet enclosed retail dining entertainment complex approximately 440000 net leasable square feet “the grand canal shops” “mall” sold third party 2004 meeting conference facility approximately 11 million square feet expo convention center approximately 12 million square feet “the sands expo center” company also owns operates sands macao casino “the sands macao” first las vegasstyle casino macao china opened may 18 2004 sands macao offers 229000 square feet gaming facilities expansion completed august 2006 well several restaurants vip facilities highend amenities addition company continues progress according plan expansion hotel tower expected completed september 2007 united states development projects palazzo company currently constructing palazzo resort hotel casino “the palazzo” second resort similar size venetian situated 14acre site next venetian sands expo center palazzo expected consist allsuites 50floor luxury hotel tower approximately 3025 suites gaming facility approximately 105000 square feet enclosed shopping dining entertainment complex approximately 450000 square feet “phase ii mall” company contracted sell third party palazzo expected open fall 2007 connection sale grand canal shops mall company entered agreement general growth partners “ggp” purchaser grand canal shops mall sell ggp phase ii mall upon completion construction purchase price ggp agreed pay phase ii mall greater 2500 million ii phase ii mall’s net operating income months 19 30 operations divided capitalization rate capitalization rate 60 first 380 million net operating income 80 net operating income 380 million company currently constructing high rise residential condominium tower consist approximately 270 luxury condominiums situated palazzo venetian condominium tower currently expected open late fall 2008 sands bethworks december 20 2006 pennsylvania gaming control board announced subsidiary sands bethworks gaming llc “sands bethworks gaming” awarded pennsylvania gaming license award license subject appeal actual license awarded appeal period ends sands bethworks gaming develop gaming hotel shopping dining complex “sands bethworks” located site historic bethlehem steel works bethlehem pennsylvania 70 miles midtown manhattan new york first phase 124acre development expected feature 300room hotel 200000 square feet retail space 3000 slot machines variety dining options additional 2000 slot las vegas sands corp subsidiaries notes consolidated financial statements continued machines added subsequent phase sands bethworks also expected home national museum industrial history arts cultural center broadcast home local pbs affiliate company expects open sands bethworks 2008 macao development projects cotai strip company building venetian macao resort hotel casino “the venetian macao” macao china approximately 3000 allsuites hotel casino convention center complex venetianstyle theme similar venetian las vegas gaming subconcession macao company obligated develop open venetian macao convention center december 2007 company currently expects open venetian macao summer 2007 company fails meet december 2007 deadline extended company could lose right continue operate sands macao facilities developed macao gaming subconcession investment date venetian macao cotai striptm developments could lost february 2007 company received final draft land concession agreement macao government pursuant company awarded concession lease parcels 1 2 3 cotai strip including sites building venetian macao four seasons hotel company accepted conditions draft land concession made initial premium payment 1065 million towards aggregate land premium 3237 million additionally 241 million paid form cost reclamation work works done land installation costs electrical substation remaining amount payable time land concession become effective date published macao’s official gazette land concession effective company required make additional land premium annual rent payments relating parcels 1 2 3 amounts times specified land concession company also commenced construction cotai strip properties land yet granted land concessions company obtain land concessions could lose substantial part investment cotai strip properties addition development venetian macao company developing multiple properties cotai strip company submitted development plans macao government six casinoresort developments addition venetian macao area approximately 200 acres located cotai strip referred parcels 1 2 3 5 6 7 8 developments expected include hotels exhibition conference facilities casinos showrooms shopping malls spas worldclass restaurants entertainment facilities attractions amenities well common public areas company commenced construction preconstruction seven parcels cotai strip company plans operate casinos developments macao gaming subconcession specifically company intends develop cotai strip properties follows • parcel 2 intended four seasons hotel casino adjacent venetian macao expected boutique hotel approximately 400 luxury hotel rooms approximately 800000 square feet four seasonsserviced luxury apartments distinctive dining experiences full service spa amenities approximately 45000 square foot casino approximately 210000 square feet upscale retail offerings company entire development company entered exclusive nonbinding letter intent currently negotiating definitive agreements four seasons hotels inc manage hotel serviced luxury apartments four seasons brand • parcel 5 intended include threehotel complex approximately 2450 luxury midscale hotel rooms serviced luxury apartments casino retail shopping mall company entire development entered management agreement shangrila hotels resorts manage las vegas sands corp subsidiaries notes consolidated financial statements continued two hotels shangrila traders brands addition company negotiating starwood hotels resorts worldwide manage hotel serviced luxury apartments st regis brand • parcel 6 intended include twohotel complex approximately 4000 luxury midscale hotel rooms casino retail shopping mall physically connected mall shangrilatraders hotel podium company entire development negotiating starwood hotels resorts worldwide manage hotels sheraton brand • parcels 7 8 intended include twohotel complex approximately 3000 luxury midscale hotel rooms parcel serviced luxury vacation suites casino retail shopping malls physically connected company entire development entered nonbinding agreements hilton hotels manage hilton conrad brand hotels serviced luxury vacation suites parcel 7 fairmont raffles holdings manage fairmont raffles brand hotel complexes serviced luxury vacation suites parcel 8 company currently negotiating definitive agreements hilton hotels fairmont raffles holdings • parcel 3 company signed nonbinding memorandum agreement independent developer company currently negotiating definitive agreement pursuant partner developer build multihotel complex may include cosmopolitan hotel addition company signed nonbinding letter intent intercontinental hotels group manage hotels intercontinental holiday inn international brands serviced luxury vacation suites intercontinental brand site company currently negotiating definitive agreements intercontinental hotels group total multihotel complex intended include approximately 3600 hotel rooms serviced luxury vacation suites casino retail shopping mall hengqin island development project company entered nonbinding letter intent zhuhai municipal people’s government people’s republic china work create master plan develop leisure convention destination resort hengqin island located approximately one mile cotai strip within mainland china company actively preparing design concepts destination resort january 10 2007 zhuhai government established project coordination committee act government liaison empowered work directly company advance development project company interfaced committee actively working committee company continues advance plans project remains subject number conditions including governmental approvals singapore development project august 2006 company’s whollyowned subsidiary marina bay sands pte ltd “mbs” entered development agreement “development agreement” singapore tourism board “stb” build operate integrated resort called marina bay sands singapore marina bay sands large integrated resort includes three 54story hotel towers totaling approximately 2600 suites linked roofs skypark pools cafes recreation facilities casino enclosed retail dining entertainment complex approximately 750000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains approximately 150000 square foot artscience museum development agreement company paid 12 billion singapore dollars “sgd” approximately us7825 million exchange rates effect december 31 2006 premium payments lease las vegas sands corp subsidiaries notes consolidated financial statements continued land resort built plus additional sgd1056 million approximately us689 million exchange rates effect december 31 2006 various taxes fees combined amount 8060 million capitalized balance sheet leasehold interest land 48 million amortized december 31 2006 company amortize asset 60 years length lease agreement remaining 454 million 397 million recorded receivable collected january 2007 discussed note 4 accounts receivable net 57 million capitalized balance sheet construction progress addition fees company provided deposit sgd1926 million approximately us1256 million exchange rates effect december 31 2006 security deposit construction integrated resort currently satisfied bank guarantees also august 2006 mbs entered twoyear sgd221 billion approximately us144 billion exchange rates effect december 31 2006 bridge facility finance payments provide nearterm development expenditures see note 8 longterm debt singapore credit facility united kingdom development projects december 2006 company announced one affiliates cantor gaming affiliate global financial services company cantor fitzgerald agreed launch online casino poker site initially aimed serving united kingdom market cantor gaming provide online casino poker destination featuring las vegas sands’ brands site offer casino games including blackjack roulette baccarat video poker slots online poker offering part full endtoend gaming service including customer age location verification online payment processing customer services site expected launched second quarter 2007 site hosted operator licensed compliance laws alderney british channel islands accept us customers development projects company currently exploring possibility operating integrated resorts additional asian jurisdictions united states europe note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company subsidiaries significant intercompany balances transactions eliminated consolidation use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost approximates fair value cash equivalents placed high credit quality financial institutions primarily money market funds las vegas sands corp subsidiaries notes consolidated financial statements continued accounts receivable credit risk accounts receivable principally comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness december 31 2006 2005 887 856 respectively company’s casino receivables due customers residing foreign countries business economic conditions legal enforceability gaming debts significant events countries could affect collectibility receivables allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories stated lower cost market cost determined firstin firstout specific identification methods inventories consist primarily food beverage retail products operating supplies property equipment property equipment stated cost depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements maintenance repairs neither materially add value property appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance financial accounting standards board’s “fasb” statement financial accounting standards “sfas” 144 “accounting impairment disposal longlived assets” assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs las vegas sands corp subsidiaries notes consolidated financial statements continued capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2006 2005 company capitalized interest expense 946 million 227 million respectively deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interest land leasehold interest land represents payments made use land extended period time leasehold interest amortized straightline basis length lease agreement assets qualifying assets purposes capitalizing interest included base used determine capitalized interest revenue recognition promotional allowances casino revenue aggregate gaming wins losses cash discounts cash incentives customers related gaming play recorded reduction gross casino revenues hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention revenues recognized related service rendered event held minimum rental revenues included convention retail revenue recognized straightline basis terms related lease accordance industry practice retail value accommodations food beverage services furnished hotelcasino guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points based gaming activity points redeemed cash company accrues club points reduction gaming revenue based upon estimates expected redemptions preopening development expenses company accounts costs incurred development preopening phases new ventures accordance statement position 985 “reporting costs startup activities” preopening expense represents personnel costs incurred prior opening new ventures expensed incurred development expense includes costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed incurred advertising costs included general administrative expense 60 million 46 million 33 million years ended december 31 2006 2005 2004 respectively currency translation company accounts currency translation accordance sfas 52 “foreign currency translation” balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income comprehensive income includes net income nonstockholder changes equity comprehensive income elements company’s comprehensive income reported accompanying consolidated statements stockholders’ equity comprehensive income cumulative balance elements consisted solely foreign currency translation adjustments las vegas sands corp subsidiaries notes consolidated financial statements continued earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following years ended december 31 2006 2005 outstanding options purchase 882900 42820 common stock respectively included calculation diluted earnings per share effect antidilutive options year ended december 31 2004 stockbased employee compensation effective january 1 2006 company adopted provisions sfas 123r “sharebased payment” establishes accounting equity instruments exchanged employee services provisions sfas 123r stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant prior january 1 2006 company accounted stockbased compensation employees accordance accounting principles board “apb” opinion 25 “accounting stock issued employees” related interpretations company also followed disclosure requirements sfas 123 “accounting stockbased compensation” amended sfas 148 “accounting stockbased compensation transition disclosure” company elected adopt modified prospective application transition method provided sfas 123r accordingly financial statement amounts prior periods presented form 10k restated reflect fair value method recording stockbased compensation company’s stockbased employee compensation plan fully discussed note 12 stockbased employee compensation las vegas sands corp subsidiaries notes consolidated financial statements continued company previously adopted provisions sfas 123 amended sfas 148 disclosure purposes company accounted plan fair value method allowed sfas 123 company’s net income earnings per share would adjusted following pro forma amounts dollars thousands except per share data income taxes prior merger whollyowned subsidiary lvsc “merger” december 2004 conversion llc 2005 lvsllc elected taxed corporation whollyowned subsidiaries either limited liability companies corporations passthrough entity federal income tax purposes nevada levy corporate income tax company temporary income tax exemption macao 2008 accordingly provision federal state foreign income taxes included consolidated statements operations period january 1 2004 merger december 2004 lvsllc’s debt instruments provided dividends paid stockholders pay income taxes associated taxable income attributable stockholder period lvsllc taxed corporation 2004 lvsllc declared accrued 1290 million tax dividends result merger completion lvsc’s initial public offering december 2004 company subject federal certain state income taxes information purposes consolidated statements operations also include unaudited pro forma amounts income taxes would recorded company historically c corporation company adopted sfas 109 “accounting income taxes” effective date merger sfas 109 deferred tax assets liabilities recognized based differences financial statement tax basis assets liabilities using enacted tax rates sfas 109 requires recognition deferred tax assets net applicable valuation allowances related net operating loss carryforwards tax credits temporary deductible differences standard requires recognition future tax benefit extent realization benefit likely otherwise valuation allowance applied company’s income tax returns subject examination internal revenue service “irs” tax authorities positions taken tax returns sometimes subject uncertainty tax laws company take positions unless “substantial authority” internal revenue code applicable regulations company may take positions tax returns based substantial authority ultimately accepted irs currently income tax returns examined irs las vegas sands corp subsidiaries notes consolidated financial statements continued company assesses potential unfavorable outcomes based criteria sfas 5 “accounting contingencies” company establishes tax reserve unfavorable outcome probable amount unfavorable outcome reasonably estimated company assesses potential outcomes tax uncertainties quarterly basis determining whether probable criterion sfas 5 met company presumes taxing authority focus exposure assesses probable outcome particular issue based upon relevant legal technical merits company also applies judgment regarding potential actions tax authorities resolution settlement process company maintains required tax reserves time underlying issue resolved actual results differ reserve estimates company adjust income tax provision tax reserves period resolved tax years examined taxing authorities company adjust tax reserves year tax examinations settled tax years examined taxing authorities company adjust tax reserves year statute limitations expires company’s estimate potential outcome uncertain tax issue highly judgmental believes adequately provided reasonable foreseeable outcomes related uncertain tax matters tax indemnification connection conversion lvsllc subchapter corporation taxable c corporation income tax purposes lvsllc entered indemnification agreement pursuant agreed • indemnify company’s stockholders las vegas sands inc prior 2004 initial public offering certain tax liabilities incurred stockholders result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income las vegas sands inc respect taxable periods las vegas sands inc subchapter corporation income tax purposes • indemnify principal stockholder certain tax liabilities incurred result adjustments pursuant determination settlement taxing authority court pursuant filing amended tax return taxable income interface holdings respect taxable periods interface holdings subchapter corporation income tax purposes accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period las vegas sands corp subsidiaries notes consolidated financial statements continued recent accounting pronouncements june 2006 fasb ratified consensus reached emerging issues task force “eitf” issue 0603 “how sales collected customers remitted governmental authorities presented income statement gross versus net presentation” eitf reached consensus presentation taxes either gross net basis accounting policy decision requires disclosure eitf issue 0603 effective first interim annual reporting period beginning december 15 2006 taxes collected company’s customers recorded net basis company intention modifying accounting policy adoption eitf issue 0603 effect company’s results operations financial position july 2006 fasb issued interpretation “fin” 48 “accounting uncertainty income taxes” provides guidance accounting uncertainty income taxes recognized financial statements accordance sfas 109 fin 48 provides guidance financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance derecognition classification interest penalties accounting interim periods disclosures transition fin 48 require entities assess likelihood uncertain tax positions accepted applicable taxing authority measure amount benefit recognized purposes considered greater 50 likely sustained fin 48 effective fiscal years beginning december 15 2006 company adopt fin 48 january 1 2007 required company currently evaluating impact adopting standard believes reduction opening retained earnings amount exceed 120 million september 2006 fasb issued sfas 157 “fair value measurements” defines fair value establishes framework measuring fair value expands disclosures fair value measurements sfas 157 applies accounting pronouncements require permit fair value measurement sfas 157 require new fair value measurements company expect application standard change current practices provisions sfas 157 effective financial statements issued fiscal years beginning november 15 2007 interim periods within fiscal years reclassifications consolidated financial statements prior years reflect certain reclassifications conform current year presentation effect amounts previously reported company’s balance sheets statements operations statements cash flows casino discounts 195 million previously included allowance doubtful accounts discounts offset gross casino accounts receivable note 3 restricted cash required company’s senior secured credit facility see note 8 longterm debt senior secured credit facility certain proceeds pursuant draws facility deposited restricted accounts invested cash pledged disbursement agent senior secured credit facility lenders restricted cash amount used required palazzo project costs disbursement terms specified facility disbursement account subject security interest favor lenders senior secured credit facility december 31 2006 2005 palazzo disbursement account balance 3748 million 5711 million respectively required company’s macao credit facility entered may 2006 see note 8 longterm debt macao credit facility certain proceeds pursuant draws facility deposited restricted accounts invested cash pledged disbursement agent macao credit facility lenders restricted cash amount used required sands macao venetian macao cotai strip project costs disbursement terms specified facility disbursement account subject security las vegas sands corp subsidiaries notes consolidated financial statements continued interest favor lenders macao credit facility december 31 2006 restricted cash balance 4654 million restricted cash also includes 193 million 217 million consisting primarily advance customer deposits convention facility rentals paid pursuant contractual terms years ended december 31 2006 2005 respectively classified restricted accordance sands expo center mortgage loan see note 8 longterm debt sands expo center mortgage loan addition restricted cash includes restricted cash deposit 500 million related gaming license pennsylvania december 31 2006 2005 196 million related marina bay sands project singapore december 31 2006 248 million related palazzo phase ii mall december 31 2006 note 4 accounts receivable net accounts receivable consists following thousands december 31 2006 receivables include 397 million receivable relating goods services taxes paid connection obtaining leasehold interest land company recovered singapore government january 2007 note 5 property equipment net property equipment consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued construction progress consists following thousands note 6 leasehold interest land net august 2006 mbs entered development agreement stb build operate integrated resort called marina bay sands singapore development agreement company paid sgd12 billion approximately us7825 million exchange rates effect december 31 2006 premium payments lease land resort built plus additional sgd1056 million approximately us689 million exchange rates effect december 31 2006 various taxes fees combined amount 8060 million capitalized balance sheet leasehold interest land 48 million amortized december 31 2006 company amortize asset straightline basis 60 years length lease agreement approximately us134 million annually exchange rates effect december 31 2006 note 7 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following thousands senior secured credit facility february 22 2005 lvsllc venetian casino resort llc entered amended restated senior secured credit facility syndicate lenders aggregate amount 162 billion “senior secured credit facility” senior secured credit facility amended restated existing senior secured credit facility provides 9700 million senior secured funded term loan facility “term b facility” 2000 million senior secured delayed draw facility “term b delayed draw facility” drawn full august 2005 4500 million senior secured revolving facility “revolving facility” 2601 million drawn december 31 2006 term b facility term b delayed draw facility mature june 15 2011 subject quarterly amortization payments amount 29 million first full fiscal quarter following substantial completion palazzo june 30 2010 followed approximately four equal quarterly amortization payments approximately 2845 million maturity date revolving facility matures february 2010 interim amortization result 2601 million draw amount available working capital loans revolving facility 1899 million december 31 2006 indebtedness senior secured credit facility guaranteed certain company’s subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors secured firstpriority security interest substantially lvsllc’s whollyowned subsidiary venetian casino resort llc’s owner venetian guarantors’ assets las vegas sands corp subsidiaries notes consolidated financial statements continued capital stock venetian macau limited venetian cotai limited venetian intermediate company’s macao subsidiaries guarantors restricted subsidiaries senior secured credit facility borrowings senior secured credit facility bear interest company’s option either adjusted eurodollar rate alternative base rate plus spread 175 075 respectively spreads decrease 025 loans achieve rating ba2 higher moody’s bb higher standard poor’s subject certain additional conditions company also pay standby fee 05 per annum undrawn amounts revolving facility senior secured credit facility contains affirmative negative financial covenants customary financings covenants include restrictions among things ability borrowers incur additional debt dispose assets enter sale leaseback transactions financial covenants include minimum consolidated net worth test minimum consolidated interest coverage ratio maximum consolidated capital expenditure test maximum consolidated leverage ratio addition provisions limit prohibit certain payments dividends distributions lvsc december 31 2006 net assets lvsllc 192 billion substantial portion restricted terms senior secured credit facility weighted average interest rate senior secured credit facility 70 53 years ended december 31 2006 2005 respectively company required hedge 50 outstanding indebtedness achieved interest rate cap agreements limit impact increases interest rates floating rate debt derived senior secured credit facility fixed portion company’s outstanding indebtedness falls 50 company obligated fix portion floating rate debt meet 50 requirement meet requirement company entered interest rate cap agreement 2005 5000 million notional amount expires march 30 2008 second interest rate cap agreement 2006 500 million notional amount also expires march 30 2008 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rates 575 65 stated respective agreements net effect interest expense result interest rate cap agreements years ended december 31 2006 2005 senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 “senior notes” original issue discount 23 million net proceeds offering costs original issue discount 2448 million senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time addition february 15 2008 lvsc may redeem 35 aggregate principal amount senior notes proceeds certain equity offerings redemption price equal 106375 principal amount senior notes senior notes unsecured senior obligations lvsc jointly severally guaranteed senior unsecured basis certain lvsc’s existing domestic subsidiaries including lvsllc venetian casino resort llc indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets net proceeds senior notes offering utilized complete retirement 11 mortgage notes described june 2005 senior notes exchanged substantially similar senior notes registered federal securities laws las vegas sands corp subsidiaries notes consolidated financial statements continued sands expo center mortgage loan july 30 2004 whollyowned subsidiary company interface group holding company inc “interface” entered 1000 million mortgage loan “the sands expo center mortgage loan” interface’s obligations loan secured first priority mortgage sands expo center certain related collateral july 31 2006 interface exercised first oneyear renewal option extending maturity date august 1 2007 unless exercises remaining oneyear subsequent sixmonth renewal options interface exercises renewal options loan must repaid later january 30 2009 loan amortizes pursuant 20year mortgage schedule based 925 interest rate amortization cash flow interface defined loan agreement available payment interest mandatory amortization tax insurance reserve amounts operating expenses capital expenditures reserve advanced customer deposits additional principal payments must made equal difference principal payments necessary amortize loan pursuant 15year schedule based 70 interest rate ii amortization payment required aforementioned 925 amortization schedule loan bears interest rate equal libor plus 375 loan may prepaid whole part par weighted average interest rate sands expo center mortgage loan 88 69 years ended december 31 2006 2005 respectively december 31 2006 company classified debt longterm ability intent exercise second oneyear renewal option phase ii mall construction loan september 30 2004 two whollyowned subsidiaries company phase ii mall holding llc phase ii mall subsidiary llc “phase ii mall subsidiary” entered construction loan agreement group lenders agreement provides delayed draw loans aggregate principal amount 2500 million proceeds used fund design development construction phase ii mall loan secured firstpriority security interest substantially borrowers’ assets capital stock loan bears interest borrowers’ option either adjusted eurodollar rate plus 175 alternative base rate plus 075 interest payable base rate loans quarterly basis payable eurodollar rate loans end applicable interest period loan due full upon earlier march 31 2008 sale phase ii mall interim amortization december 31 2006 1145 million outstanding facility phase ii mall subsidiary also pay standby fee 0375 per annum undrawn amounts construction loan weighted average interest rate phase ii mall construction loan 71 55 years ended december 31 2006 2005 respectively meet requirements phase ii mall construction loan company entered interest rate cap agreement december 2004 “phase ii mall cap agreement” maximum 1250 million notional amount term equal term phase ii mall construction loan provisions phase ii mall cap agreement entitle company receive counterparties amounts selected market interest rates exceed strike rate 60 stated agreement net effect interest expense result phase ii mall cap agreement years ended december 31 2006 2005 notional amount phase ii mall cap agreement expires june 1 2007 december 31 2006 1070 million ffe financing september 2003 company lender entered credit facility “ffe term funded credit facility” provide 150 million financing expansion venetian proceeds ffe term funded credit facility used finance certain furniture fixtures equipment “term funded specified ffe” expansion facility secured term funded specified ffe term funded credit facility provides 60month basic term loan interest term loan threemonth libor plus 30 payable quarterly december 2006 facility refinanced part new credit las vegas sands corp subsidiaries notes consolidated financial statements continued facility discussed connection refinancing terms remaining amounts outstanding ffe term funded credit facility amended change interest rate threemonth libor plus 20 capitalize interest due fourth quarter 2006 principal balance term loan ffe term funded credit facility subject nineteen quarterly amortization payments 600000 beginning january 1 2004 one final payment approximately 37 million october 1 2008 weighted average interest rate ffe term funded credit facility 80 63 years ended december 31 2006 2005 respectively december 2006 company group lenders general electric capital corporation administrative agent lenders entered additional 1350 million furniture fixture equipment financing “ffe term delayed draw credit facility” proceeds ffe term delayed draw credit facility used finance certain equipment fixtures furniture goods “term delayed draw specified ffe” palazzo venetian facility secured term delayed draw specified ffe term delayed draw credit facility provides 54month delayed draw loan interest term loan either threemonth libor plus 20 base rate plus 10 payable quarterly ffe term delayed draw credit facility subject ten quarterly principal payments beginning april 1 2008 amount equal 5 aggregate principal amount april 1 2008 remaining amount due four equal installments october 1 2010 january 1 2011 april 1 2011 june 15 2011 company also pay standby fee 075 per annum undrawn amounts ffe term delayed draw credit facility weighted average interest rate ffe term delayed draw credit facility 75 year ended december 31 2006 macao credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited guarantor entered credit agreement “macao credit facility” macao credit facility consists 12 billion funded term b loan “macao term b facility” 7000 million delayed draw term b loan “macao term b delayed draw facility” 1000 million funded local currency term loan “macao local term facility” 5000 million revolving credit facility “macao revolving facility” december 31 2006 amounts outstanding macao revolving facility amounts drawn macao term b delayed draw facility macao credit facility company required secure land concession order fully draw facility february 2007 company asked lenders amend macao credit facility remove requirement among others february 2007 company received final draft land concession agreement macao government pursuant company awarded concession lease parcels 1 2 3 cotai strip including sites building venetian macao four seasons hotel company accepted conditions draft land concession made initial premium payment 1065 million towards aggregate land premium 3237 million additionally 241 million paid form cost reclamation work works done land installation costs electrical substation remaining amount payable time land concession become effective date published macao’s official gazette land concession effective company required make additional land premium annual rent payments relating parcels 1 2 3 amounts times specified land concession indebtedness macao credit facility guaranteed venetian macau limited venetian cotai limited certain company’s foreign subsidiaries “macao guarantors” obligations macao credit facility guarantees macao guarantors secured firstpriority security interest substantially borrower’s macao guarantors’ assets 1 capital stock borrower macao guarantors 2 assets secure permitted furniture fixtures equipment financings 3 venetian macau limited’s gaming subconcession contract 4 certain assets las vegas sands corp subsidiaries notes consolidated financial statements continued borrowings macao credit facility bear interest company’s option either adjusted eurodollar rate case macao local term facility adjusted hibor alternative base rate plus spread 275 175 respectively 67 macao local term facility 81 macao term b facility december 31 2006 spreads decreased 025 beginning first interest period following substantial completion venetian macao borrower also pay standby fees 05 1375 per annum undrawn amounts macao revolving facility macao term b delayed draw facility respectively weighted average interest rates macao local term facility macao term b facility 69 81 respectively year ended december 31 2006 meet requirements macao credit facility company entered interest rate cap agreement september 2006 “macao cap agreement” 10 billion notional amount expires september 21 2009 provisions macao cap agreement entitle company receive counterparties amounts selected market interest rates exceed strike rate 675 stated agreement net effect interest expense result macao cap agreement year ended december 31 2006 macao revolving facility macao local term facility five year maturity macao term b delayed draw facility macao term b facility mature six seven years respectively macao term b delayed draw facility macao term b facility subject nominal amortization first five six years respectively first quarter following substantial completion venetian macao remainder loans payable four equal installments last year immediately preceding respective maturity dates following substantial completion venetian macao local term facility subject quarterly amortization amount approximately 63 million per quarter remainder loan payable four equal installments last year immediately preceding maturity date macao credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends restricted payments acquiring selling assets macao credit facility also requires borrower macao guarantors comply financial covenants including limited minimum ebitda period time thereafter ratios ebitda interest expense total indebtedness ebitda well maximum capital expenditures macao credit facility also contains events default customary financings singapore credit facility august 18 2006 mbs entered agreements together “singapore credit facility” providing sgd11 billion approximately us7173 million exchange rates effect december 31 2006 floating rate notes facility “singapore floating rate notes” sgd11 billion approximately us7173 million exchange rates effect december 31 2006 term loan facility “singapore term loan” singapore floating rate notes consist funded sgd7886 million approximately us5142 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility singapore term loan consists funded sgd5960 million approximately us3887 million exchange rates effect december 31 2006 facility sgd3154 million approximately us2057 million exchange rates effect december 31 2006 delayed draw facility sgd1926 million approximately us1256 million exchange rates effect december 31 2006 facility provide bank guarantees security deposit required delivered stb development agreement december 31 2006 sgd7982 million approximately us5205 million exchange rates effect december 31 2006 drawn singapore floating rate notes sgd6035 million approximately us3935 million exchange rates effect december 31 2006 drawn singapore term loan sgd1926 million approximately us1256 million exchange las vegas sands corp subsidiaries notes consolidated financial statements continued rates effect december 31 2006 singapore term loan committed provide guarantee security deposit required delivered stb development agreement indebtedness singapore floating rate notes guaranteed lvsc unsecured basis indebtedness singapore term loan secured firstpriority security interest substantially mbs’ assets capital stock certain assets borrowings singapore floating rate notes singapore term loan bear interest singapore swap offer rate plus spread 135 per annum first twelve months amounts outstanding facilities spread 160 per annum second twelve months amounts outstanding 50 december 31 2006 mbs also pay standby fee 0375 per annum undrawn amounts singapore credit facility singapore credit facility two year maturity aggregate amount outstanding matures full august 22 2008 mbs permitted option redeem prepay portion outstanding singapore credit facility par without premium penalty certain circumstances weighted average interest rate singapore floating rate notes singapore term loan 50 year ended december 31 2006 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens indebtedness investments acquisitions asset sales restricted payments affiliate transactions use proceeds facility well requirements comply applicable law maintain adequate insurance mortgage notes june 4 2002 lvsllc venetian casino resort llc issued 8500 million aggregate principal amount 11 mortgage notes due 2010 “mortgage notes” mortgage notes bore interest 11 payable june 15th december 15th mortgage notes redeemable option lvsllc venetian casino resort llc prices ranging 100 1055 commencing june 15 2006 set forth mortgage notes indenture pursuant mortgage notes issued “indenture” prior june 15 2006 lvsllc venetian casino resort llc could redeem mortgage notes principal amount plus applicable makewhole premium prior june 15 2005 company could redeem 35 mortgage notes net cash proceeds one offerings equity securities redemption price 111 principal amount mortgage notes plus accrued unpaid interest result consummation mall sale may 17 2004 described note 10 mall sale lvsllc venetian casino resort llc obligated use excess proceeds defined indenture mall sale make offer purchase maximum principal amount mortgage notes could purchased excess proceeds mall sale offer price cash equal 100 principal amount mortgage notes plus accrued unpaid interest liquidated damages closing date offer “asset sale offer” asset sale offer closed june 6 2004 64 million mortgage notes tendered repurchased company february 2005 lvsllc venetian casino resort llc exercised equity claw back indenture pursuant company retired 2911 million mortgage notes paid 320 million redemption premiums proceeds lvsc’s initial public offering additionally lvsllc venetian casino resort llc retired 5423 million aggregate principal amount mortgage notes pursuant tender offer plus makewhole premium accrued interest 903 million proceeds senior notes offering cash hand proceeds senior secured credit facility total consideration paid tendering holders 116656 per 1000 principal amount mortgage notes including consent payment 30 per 1000 principal amount mortgage notes tendered prior february 1 2005 march 2005 lvsllc venetian casino resort llc redeemed remaining 102 million aggregate principal amount las vegas sands corp subsidiaries notes consolidated financial statements continued outstanding mortgage notes price equal 100 principal amount thereof plus makewhole premium accrued interest company incurred charge approximately 1328 million loss early retirement indebtedness 2005 result retiring mortgage notes venetian intermediate credit facility march 27 2003 venetian intermediate entered credit agreement “venetian intermediate credit agreement” lender provide 500 million financing sands macao credit facility paid full 2006 scheduled maturities longterm debt maturities longterm debt outstanding december 31 2006 summarized follows thousands fair values longterm debt fair value senior notes december 31 2006 2005 2434 million 2413 million respectively fair value senior notes based quoted market prices fair values indebtedness approximate respective carrying amounts based nature variable interest rate facilities fair value interest rate cap agreements based upon quotes brokers 06 million december 31 2006 2005 note 9 income taxes components benefit provision income taxes follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued reconciliation statutory federal income tax rate company’s effective tax rate years ended december 31 c corporation conversion date december 17 2004 follows consolidated income taxes us international operations years ended december 31 2006 2005 c corporation conversion date december 17 2004 december 31 2004 follows thousands primary tax affected components company’s net deferred tax assets follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued domestic operating loss carryforwards 87 million 82 million years ended december 31 2005 2004 respectively losses fully utilized year ended december 31 2006 operating loss carryforwards foreign subsidiaries 1952 million 1183 million 291 million years ended december 31 2006 2005 2004 respectively losses begin expire 2007 december 31 2006 2005 236 million 174 million respectively valuation allowance provided foreign net operating loss carryforwards foreign deferred tax assets management believes assets meet “more likely not” criteria recognition sfas 109 management believes deferred tax assets likely realized future reversal existing taxable temporary differences expected future taxable income accordingly valuation allowances provided december 31 2006 2005 undistributed earnings subsidiary accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiary deemed indefinitely reinvested foreign jurisdiction company plan reinvestment undistributed earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans would required record significant amount deferred tax liabilities years ended december 31 2006 2005 amount undistributed earnings foreign subsidiaries company intend repatriate 7191 million 3731 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions mentioned note 2 summary significant accounting policies company temporary income tax exemption macao 2008 company required pay income taxes macao consolidated net income would reduced 452 million 353 million diluted earning per share would reduced 012 010 per share years ended december 31 2006 2005 respectively note 10 mall sale mall sale related matters april 12 2004 company entered agreement sell grand canal shops mall lease certain restaurant retail space casino level venetian “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 17 2004 company realized gain 4176 million connection mall sale conjunction mall sale company repaid 1200 million secured mall facility redeemed 64 million mortgage notes pursuant asset sale offer master lease agreement venetian leased nineteen spaces casino level venetian currently occupied various tenants ggp 89 years annual rent one dollar per year ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale related assets separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian amortize income straightline basis 89year lease term years ended december 31 2006 2005 2004 12 million 12 million 08 million respectively deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described note 11 commitments contingencies ventures commitments ii lease blue man group theater space located within grand canal shops mall ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments las vegas sands corp subsidiaries notes consolidated financial statements continued clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases years ended december 31 2006 2005 2004 35 million 35 million 21 million respectively deferred item amortized included offset convention retail expense december 31 2006 company obligated ii iii iv make future payments follows thousands phase ii mall company formed phase ii mall subsidiary july 1 2004 develop construct phase ii mall connection mall sale company entered agreement ggp construct sell phase ii mall amount equal greater 2500 million ii phase ii mall’s net operating income months 19 30 operations assuming rent due tenants month 30 actually due months 19 30 divided capitalization rate capitalization rate 006 every dollar net operating income 380 million 008 every dollar net operating income 380 million date phase ii mall opens public ggp obligated make initial purchase price payment based projected net operating income first 12 months operations event less 2500 million every six months thereafter 24 month anniversary opening date required purchase price adjusted never less 2500 million based projected net operating income upcoming 12 months “final” purchase price adjustment subject audit thereafter made 30month anniversary phase ii mall’s opening date based formula described purchase price purchase price adjustment calculations “net operating income” calculated using “accrual” method accounting purposes calculating final purchase price adjustment applying base rent payable tenants last month applicable 12month period entire 12month period phase ii mall expected cost approximately 2800 million excluding incentive payments described mall sale agreement company agreed substantially complete construction phase ii mall earlier 36 months date sufficient permits received allow phase ii mall subsidiary begin construction phase ii mall march 1 2008 dates may extended due force majeure certain delays event company substantially complete construction phase ii mall earlier two dates may extended described preceding sentences company must pay liquidated damages 5000 per day first six months 10000 per day following six months substantial completion occur end six months completion deadline substantial completion occurred one year deadline company required pay total liquidated damages amount 1000 million addition failure substantially complete construction phase ii mall agreedupon deadline would constitute event default senior secured credit facility company’s disbursement agreement las vegas sands corp subsidiaries notes consolidated financial statements continued event company complies obligations aforementioned agreement ggp concerning phase ii mall ggp fails acquire membership interests entity owning phase ii mall company entitled • sue ggp specific performance • liquidated damages amount 1000 million • purchase interest ggp grand canal shops mall lesser 7660 million ii fair market value minus 1000 million company made equity contribution phase ii mall subsidiary 632 million july 15 2004 used make certain incentive payments pay related payroll taxes principal stockholder senior executives company work connection phase ii mall sale related financing transactions company made additional equity contributions 258 million 2004 required phase ii mall construction loan agreement see note 8 longterm debt phase ii mall construction loan equity contributions 79 million 130 million 2005 2006 respectively note 11 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows palazzo construction litigation lido casino resort llc “lido” whollyowned subsidiary company construction manager taylor international corp “taylor” filed suit march 2006 united states district court district nevada “district court” malcolm drilling company inc “malcolm” contractor palazzo project responsible completing certain foundation work “district court case” lido taylor claim district court case malcolm default contract performing defective work failing correct defective work failing complete work causing delay project malcolm responded filing notice lien clerk clark county nevada march 2006 amount approximately 190 million “lien” april 2006 lido taylor moved district court case strike alternative reduce amount lien claiming among things lien excessive including claims disruption delay lido taylor claim lienable nevada law “lien motion” malcolm responded april 2006 filing complaint lido taylor district court clark county nevada seeking foreclose lien taylor claiming breach contract cardinal change underlying contract unjust enrichment lido taylor bad faith fraud taylor “state court case” simultaneously filed motion district court case seeking dismiss district court case abstention grounds “abstention motion” response june 2006 lido filed motion dismiss state court case based principle “prior pending” district court case “motion dismiss” june 2006 abstention motion granted part united states district court district court case stayed pending outcome motion dismiss state court case lien motion denied without prejudice lido malcolm entered stipulation lido withdrew motion dismiss july 2006 filed replacement lien motion state court case lien motion state court case denied august 2006 lido taylor filed permitted interlocutory notice appeal supreme court nevada september 2006 matter preliminary stages based upon advice legal counsel management determined based proceedings date currently unable determine probability outcome matter lido intends defend claims pending state court case las vegas sands corp subsidiaries notes consolidated financial statements continued litigation relating macao casino october 15 2004 richard suen round square company limited filed action las vegas sands corp las vegas sands inc sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macao resort operations plaintiffs well related claims march 2005 las vegas sands corp dismissed party without prejudice based stipulation parties may 17 2005 plaintiffs filed first amended complaint february 2 2006 defendants filed motion partial summary judgment respect plaintiffs’ fraud claims defendants march 16 2006 order filed court granting defendants’ motion partial summary judgment pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner action preliminary stage based upon advice legal counsel management determined based proceedings date currently unable determine probability outcome matter company intends defend matter vigorously january 26 2006 clive basset jones darryl steven turok aka dax turok cheong jose vai chi aka cliff cheong filed action las vegas sands corp las vegas sands llc venetian venture development llc various unspecified individuals companies district court clark county nevada plaintiffs assert breach agreement pay success fee amount equal 5 ownership interest entity owns operates macau sar gaming subconcession well related claims april 2006 las vegas sands corp dismissed party without prejudice based stipulation parties complaint filed company’s answer currently pending activity matter action preliminary stage discovery begun based upon advice legal counsel management determined based proceedings date currently unable determine probability outcome matter company intends defend matter vigorously february 5 2007 asian american entertainment corporation limited “aaec” filed action las vegas sands inc “lvsi” venetian casino resort llc “vcr” venetian venture development llc “venetian venture development” william p weidner david friedman united states district court district nevada plaintiffs assert breach contract lvsi vcr venetian venture development agreement aaec would work obtain gaming license macao successful aaec would jointly operate casino hotel related facilities macao venetian venture development venetian venture development would receive fees minority equity interest venture breach fiduciary duties defendants plaintiffs requested unspecified amount actual compensatory punitive damages disgorgement profits related company’s macao gaming license complaint filed currently pending activity matter action preliminary stage based upon advice legal counsel management determined based proceedings date currently unable determine probability outcome matter company intends defend matter vigorously macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macao hong kongbased investors december 2002 venetian macau limited “venetian macau” galaxy entered subconcession agreement recognized approved macao government allows venetian macau develop operate casino projects including sands macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company lease one year prior notice las vegas sands corp subsidiaries notes consolidated financial statements continued subconcession agreement venetian macau obligated develop open venetian macao june 2006 convention center december 2006 invest cause invested least 44 billion patacas approximately 5493 million exchange rates effect december 31 2006 various development projects macao june 2009 company spent required minimum amount february 2006 company received extension june december 2006 construction deadlines venetian macao convention center december 2007 company currently expects open venetian macao convention center summer 2007 company fails meet december 2007 deadline company could lose right continue operate sands macao facilities developed macao gaming subconcession investment date construction venetian macao cotai strip properties could lost support obligation macao bank subsidiary company lido casino resort holding company llc guaranteed 5000 million patacas approximately 624 million exchange rates effect december 31 2006 venetian macau’s legal contractual obligations macao government march 31 2007 venetian macau granted junior lien venetian macau’s rights land upon sands macao constructed support guarantee issued macao bank venetian macau subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 37 million exchange rates effect december 31 2006 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37454 18727 125 respectively exchange rates effect december 31 2006 subject minimum 450 million patacas 56 million exchange rates effect december 31 2006 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao december 31 2006 company obligated subconcession make minimum future payments approximately 94 million next five years approximately 983 million thereafter june 2022 amounts expected increase substantially company completes venetian macao 2007 planned approximately 850 table games approximately 4100 slots final capacity approximately 1150 table games 7000 slot machines cotai strip properties planned approximately 1750 table games approximately 9000 slot machines total currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macao may able realize full benefits extending credit customers although proposals revise gaming tax laws macao assurance laws changed singapore development project august 23 2006 company entered development agreement requires construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement based proposal company submitted singapore government cost approximately 36 billion inclusive land premium taxes fees previously paid develop construct marina bay sands discussed note 8 longterm debt singapore credit facility company entered singapore credit facility satisfy nearterm development costs satisfy las vegas sands corp subsidiaries notes consolidated financial statements continued obligations development agreement company intends obtain longterm financing amount necessary fund construction marina bay sands leases venetian macau 2003 venetian macau entered 25year land lease agreement macao government six acre parcel land sands macao constructed land concession expire 2028 renewable land concession requires company pay premium payable number years addition company also obligated pay rent annually term land concession rent amount may revised every five years macao government december 31 2006 venetian macau obligated leases make future payments follows thousands years ended december 31 2006 2005 2004 company recorded 08 million 07 million 05 million respectively rental expense related land lease february 2007 company received final draft land concession agreement macao government pursuant company awarded concession lease parcels 1 2 3 cotai strip including sites building venetian macao four seasons hotel company accepted conditions draft land concession made initial premium payment 1065 million towards aggregate land premium 3237 million additionally 241 million paid form cost reclamation work works done land installation costs electrical substation remaining amount payable time land concession become effective date published macao’s official gazette land concession effective company required make additional land premium annual rent payments relating parcels 1 2 3 amounts times specified land concession energy services agreements 1997 venetian casino resort llc interface others entered separate energy service agreements heating ventilation air conditioning “hvac” provider “hvac provider” terms energy services agreement separate energy services agreements hvac energy services purchased venetian casino resort llc interface others initial terms expiring 2009 option collectively extend terms agreements two consecutive fiveyear periods hvac plant constructed land owned company leased hvac provider hvac equipment owned hvac provider paid costs “hvac costs” connection purchase installation hvac equipment total hvac costs 700 million charges payable separate energy services agreements include fixed component applied hvac costs paid hvac provider reimbursement operational related costs management fee las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2006 venetian casino resort llc interface obligated energy services agreements make future minimum payments follows thousands expenses incurred energy services agreements 68 million 68 million 74 million years ended december 31 2006 2005 2004 respectively operating lease agreements company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2006 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements totaled 83 million 70 million 24 million years ended december 31 2006 2005 2004 respectively company party operating lease agreements shortterm variablerate nature expenses incurred operating lease agreements totaled 15 million 16 million 17 million years ended december 31 2006 2005 2004 respectively ventures commitments company entered employment agreements seven company’s senior executives remaining terms one three years december 31 2006 company obligated make future payments follows thousands 2003 company entered three lease termination asset purchase agreements grand canal shops mall tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shops mall tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2006 company obligated agreements make future payments 07 million next five years 80 million thereafter las vegas sands corp subsidiaries notes consolidated financial statements continued 2006 company entered commitments purchase ferries built next two years company’s macao operations december 31 2006 company obligated make future payments 997 million 356 million years ended december 31 2007 2008 respectively note 12 stockbased employee compensation company two nonqualified stock option plans 1997 plan 2004 plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations compensation expense year ended december 31 2006 147 million comprised 134 million stock options 13 million restricted stock accordance apb opinion 25 company recognize compensation expense employee stock option awards years ended december 31 2005 2004 options exercise price company’s employee stock awards equaled market price underlying stock date grant total income tax benefit recognized consolidated statement operations year ended december 31 2006 stockbased compensation arrangements 36 million compensation cost associated individuals responsible construction activities capitalized part property equipment amount 21 million year ended december 31 2006 year ended december 31 2006 basic diluted earnings per share 003 lower company continued account stockbased compensation apb opinion 25 lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering july 30 2004 fully vested options purchase 3052460 shares common stock granted employees company board directors company’s stock option plan exercise price 564 per share fair value common stock dates grant stock options granted july 2004 originally estimated management based principally upon may 31 2004 valuation fair value common stock lvsllc subsidiaries unaffiliated valuation specialist company deem necessary obtain additional third party valuation time option grants july already received independent valuation date may 31 close time option grant dates however retrospective review given proximity july 2004 grant dates proposed initial public offering date company believed time prepared third quarter financial statements fair value common stock 2177 per share based upon midpoint preliminary estimated range proposed valuation connection initial public offering best estimate fair value common stock underlying options date grant result intrinsic value fully vested options granted year ended december 31 2004 492 million 1613 per share recorded compensation expense included corporate expense accompanying consolidated statements operations principal factors used determine midpoint preliminary estimated range shares sold company’s initial public offering projections company’s three operating properties venetian sands macao sands expo center two future projects venetian macao palazzo ii trading las vegas sands corp subsidiaries notes consolidated financial statements continued multiples gaming hospitality leisure industry companies iii discount rates appropriate comparable projects fully vested options purchase 3052460 shares could exercised delivery cash check equivalent four employees company received options purchase 942820 707115 471410 931115 respectively shares common stock august 2 2004 one employee exercised options granted another employee exercised options granted acquire 353558 shares common stock august 2 2004 353557 shares common stock november 30 2004 another employee exercised options granted purchase 235705 shares common stock august 2 2004 235705 shares common stock november 30 2004 final employee exercised options granted 2005 board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding year ended december 31 2006 weighted average grant date value 3052460 options granted 1997 plan 2004 2144 per share computed minimum value method following weighted average assumptions risk free interest rate 384 expected dividends expected life 12 year total intrinsic value options exercised 1997 plan years ended december 31 2005 2004 382 million 342 million respectively las vegas sands corp 2004 equity award plan company adopted 2004 plan grants option purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2006 21436738 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years 10year contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based historical volatilities selection companies company’s peer group due company’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions las vegas sands corp subsidiaries notes consolidated financial statements continued weighted average grant date fair value 3164243 options 304820 options 2185783 options granted 2004 plan years ended december 31 2006 2005 2004 respectively 2124 1387 1278 per share respectively total intrinsic value options exercised 2004 plan years ended december 31 2006 2005 103 million 01 million respectively summary status company’s 2004 plan year ended december 31 2006 presented restricted stock awards summary status company’s nonvested restricted shares year ended december 31 2006 presented december 31 2006 558 million unrecognized compensation cost net estimated forfeitures 80 related nonvested stock options 21 million unrecognized compensation cost related nonvested restricted stock option restricted stock costs expected recognized weighted average period 32 years 19 years respectively year ended december 31 2006 cash received stock option exercises 72 million tax benefit realized tax deductions exercises totaled 19 million year ended december 31 2005 cash received stock option exercises however tax benefit realized tax deduction exercises totaled 81 million note 13 employee benefit plans company selfinsured health care workers compensation benefits employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheet participation venetian casino resort llc 401k employee savings plan available fulltime employees savings plan allows participants defer pretax basis portion salary accumulate las vegas sands corp subsidiaries notes consolidated financial statements continued taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages years ended december 31 2006 2005 2004 company’s matching contributions savings plan 45 million 31 million 27 million respectively participation venetian macau’s provident retirement fund available permanent employees threemonth probation period venetian macau contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years year ended december 31 2006 venetian macau’s contributions provident fund 49 million contributions made 2005 2004 note 14 related party transactions principal stockholder partner four entities operate restaurants venetian terms conditions leases granted company restaurants amounts management believed would favorable negotiated independent third parties valentino las vegas llc night market llc paid venetian 05 million postrio las vegas llc carnevale coffee bar llc paid grand canal shops ii llc 05 million year ended december 31 2004 company purchased lease interest assets carnevale coffee bar llc 2003 31 million payable installments 06 million 2003 03 million annually ten years beginning 2004 september 1 2013 result sale mall see note 10 mall sale amounts paid company years ended december 31 2006 2005 entities noted company paid approximately 43 million 30 million 31 million years ended december 31 2006 2005 2004 respectively travel agent charter tour operator travel related services controlled principal stockholder year ended december 31 2005 principal stockholder purchased certain banquet room catering goods services venetian approximately 10 million goods services purchased 2006 company purchased hotel guest amenities company controlled principal stockholder’s brother total amount paid approximately 12 million 18 million 24 million years ended december 31 2006 2005 2004 respectively 2004 company also paid principal stockholder’s brother finder’s fee 13 million connection securing agreement laundry provider years ended december 31 2006 2005 company incurred paid certain expenses totaling 13 million 07 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2006 2005 company charged received principal stockholder 33 million 12 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes december 31 2004 company incurred certain expenses certain payables totaling 17 million 09 million respectively principal stockholder related company’s use personal aircraft business purposes las vegas sands corp subsidiaries notes consolidated financial statements continued note 15 segment information company reviews results operations based following geographic segments 1 las vegas includes venetian sands expo center palazzo currently construction 2 macao includes sands macao venetian macao currently construction development projects addition singapore includes marina bay sands currently development reported separate segment effective april 1 2006 company changed segments based upon changes information used chief operating decision maker include sands expo center within las vegas segment information years ended december 31 2005 2004 reclassified conform current presentation company’s segment information follows three years ended december 31 2006 2005 2004 thousands 1 adjusted ebitdar net income interest income taxes depreciation amortization preopening expense development expense gain loss disposal assets loss early retirement debt rental expense corporate expense adjusted ebitdar used management primary measure operating performance properties compare operating performance properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued note 16 dividends immediately prior july 29 2004 acquisition interface lvsllc interface distributed approximately 152 million sole stockholder also principal stockholder lvsc distribution comprised 129 million cash 19 million receivables due principal stockholder 04 million certain fixed assets additionally described note 2 summary significant accounting policies company declared tax distributions stockholders 1290 million 2004 dividends declared 2006 2005 note 17 condensed consolidating financial information lvsc obligor 6375 senior notes due 2015 issued lvsc february 10 2005 lvsllc venetian casino resort llc mall intermediate holding company llc venetian venture development llc venetian transport llc venetian marketing inc lido intermediate holding company llc lido casino resort llc collectively “guarantor subsidiaries” jointly severally guaranteed 6375 senior notes full unconditional basis condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2006 2005 three years period ended december 31 2006 follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2005 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2004 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2006 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2005 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2004 las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 selected quarterly financial results unaudited earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year report independent registered public accounting firm financial statement schedule board directors las vegas sands corp audits consolidated financial statements management’s assessment effectiveness internal control financial reporting effectiveness internal control financial reporting referred report dated february 27 2007 appearing annual report form 10k also included audit financial statement schedule listed item 15 a2 form 10k opinion financial statement schedule presents fairly material respects information set forth therein read conjunction related consolidated financial statements pricewaterhousecoopers llp las vegas nevada february 27 2007 schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2006 2005 2004 allowance doubtful accounts schedule prior years reclassified conform current year presentation specifically 93 million 142 million 195 million december 31 2003 2004 2005 respectively casino discounts previously included allowance excluded directly offset gross casino accounts receivable effect amounts previously reported company’s balance sheets statements operations statements cash flows item 9item 8 financial statements supplementary data financial statements report independent registered public accounting firm consolidated balance sheets december 31 2010 2009 consolidated statements operations three years period ended december 31 2010 consolidated statements equity comprehensive income loss three years period ended december 31 2010 consolidated statements cash flows three years period ended december 31 2010 notes consolidated financial statements financial statement schedule ii valuation qualifying accounts financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm directors stockholders las vegas sands corp opinion consolidated financial statements listed accompanying index present fairly material respects financial position las vegas sands corp subsidiaries december 31 2010 2009 results operations cash flows three years period ended december 31 2010 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed accompanying index presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2010 based criteria established internal control integrated framework issued committee sponsoring organizations treadway commission coso company’s management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included management’s annual report internal control financial reporting appearing item 9a responsibility express opinions financial statements financial statement schedule company’s internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions discussed note 2 consolidated financial statements company changed manner accounts noncontrolling interests 2009 company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp las vegas nevada february 28 2011 las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity comprehensive income loss accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp “lvsc” together subsidiaries “company” incorporated nevada august 2004 completed initial public offering common stock december 2004 immediately prior initial public offering lvsc acquired 100 capital stock las vegas sands inc converted nevada limited liability company las vegas sands llc “lvsllc” july 2005 lvsc’s common stock traded new york stock exchange symbol “lvs” november 2009 company’s subsidiary sands china ltd “scl” direct indirect owner operator majority company’s operations macau special administrative region “macau” people’s republic china completed initial public offering listing ordinary shares “scl offering” main board stock exchange hong kong limited “sehk” immediately following scl offering several transactions consummated connection offering see “ note 10 equity noncontrolling interests” company owned 703 issued outstanding ordinary shares scl shares scl registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations united states las vegas company owns operates venetian resort hotel casino “the venetian las vegas” renaissance venicethemed resort palazzo resort hotel casino “the palazzo” resort featuring modern european ambience design expo convention center approximately 12 million square feet “sands expo center” las vegas properties situated near las vegas strip form integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet enclosed retail dining entertainment complex located within venetian las vegas approximately 440000 net leasable square feet “the grand canal shoppes” sold ggp limited partnership “ggp” 2004 enclosed retail dining complex located within palazzo approximately 400000 net leasable square feet “the shoppes palazzo” sold ggp february 2008 see “ note 13 mall sales shoppes palazzo” pennsylvania may 2009 company partially opened sands casino resort bethlehem “sands bethlehem” gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem currently features approximately 146000 square feet gaming space include table games operations commenced july 2010 company recommenced construction 300room hotel tower april 2010 expected open second quarter 2011 subsequent yearend company initiating construction activities remaining components integrated resort include approximate 200000squarefoot retail facility 50000squarefoot multipurpose event center sands bethlehem also expected home national museum industrial history arts cultural center broadcast home local pbs affiliate company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc 35 economic interest retail portion property ownership interest sands bethworks retail llc december 31 2010 company capitalized construction costs 6541 million project including 122 million outstanding construction payables company expects spend approximately 70 million complete construction project furniture fixtures equipment “ffe” costs pay outstanding construction payables noted las vegas sands corp subsidiaries notes consolidated financial statements continued macau company currently owns 703 scl includes operations sands macao venetian macao four seasons macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession company owns operates sands macao first las vegasstyle casino macau sands macao offers approximately 197000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities company also owns operates venetian macao resort hotel “the venetian macao” anchors cotai striptm company’s masterplanned development integrated resort properties macau theme similar venetian las vegas venetian macao includes 39floor luxury hotel 2900 suites approximately 550000 square feet gaming space 15000seat arena 1800seat theater retail dining space approximately 10 million square feet convention center meeting room complex approximately 12 million square feet company owns four seasons hotel macao cotai strip tm “four seasons hotel macao” features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao connected four seasons hotel macao company owns operates plaza casino together four seasons hotel macao “four seasons macao” features approximately 70000 square feet gaming space 19 paiza mansions retail space approximately 211000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities integrated resort also feature four seasons apartment hotel macao cotai striptm “four seasons apartments” aparthotel tower consists approximately 10 million square feet four seasonsserviced branded luxury aparthotel units common areas company completed structural work tower expects subsequently monetize units within four seasons apartments subject market conditions obtaining necessary government approvals december 31 2010 company capitalized construction costs 107 billion property including 162 million outstanding construction payables company expects spend approximately 115 million primarily additional costs complete four seasons apartments including ffe preopening costs pay outstanding construction payables noted singapore company owns operates marina bay sands singapore partially opened april 27 2010 additional portions opened progressively throughout 2010 marina bay sands features three 55story hotel towers totaling approximately 2600 rooms suites sands skyparktm sits atop hotel towers features infinity swimming pool several dining options approximately 161000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 13 million square feet theaters subsequent yearend marina bay sands opened landmark iconic structure bayfront promenade contains artscience museum december 31 2010 company capitalized 740 billion singapore dollars “sgd” approximately 574 billion exchange rates effect december 31 2010 costs project including land premium sgd 4286 million approximately 3322 million exchange rates effect december 31 2010 outstanding construction payables company expects spend approximately sgd 955 million approximately 740 million exchange rates effect december 31 2010 additional costs complete construction integrated resort ffe costs pay outstanding construction payables noted company obtained singaporedenominated financing primarily pays costs singapore dollars exposure foreign exchange gains losses expected minimal development projects company suspended portions development projects focus efforts projects highest expected rates return invested capital general economic conditions fail improve company unable obtain sufficient funding applicable government approvals completion suspended projects probable management decide abandon certain projects portion company’s investment date suspended projects could lost would result impairment charge addition company may subject penalties termination clauses construction contracts termination rights management contracts certain hotel management companies las vegas sands corp subsidiaries notes consolidated financial statements continued united states company constructing highrise residential condominium tower “las vegas condo tower” located las vegas strip palazzo venetian las vegas company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company intends recommence construction demand conditions improve expects take approximately 18 months thereafter complete construction project december 31 2010 company capitalized construction costs 1764 million project impact suspension estimated overall cost project currently determinable certainty macau company submitted plans macau government cotai strip developments represent three integrated resort developments addition venetian macao four seasons macao area approximately 200 acres referred parcels 3 5 6 7 8 subject approval macau government discussed developments expected include hotels exhibition conference facilities gaming areas showrooms shopping malls spas restaurants entertainment facilities amenities company commenced construction preconstruction activities developments plans operate related gaming areas company’s macau gaming subconcession company staging construction integrated resort development parcels 5 6 upon completion phases ii project integrated resort expected feature approximately 6000 hotel rooms approximately 300000 square feet gaming space approximately 12 million square feet retail entertainment dining facilities exhibition conference facilities multipurpose theater phase project expected include two hotel towers managed shangrila international hotel management limited “shangrila” shangrila traders brands sheraton international inc sheraton overseas management co collectively “starwood” sheraton brand well completion structural work adjacent hotel tower managed starwood sheraton brand phase also include gaming space partial opening retail exhibition conference facilities total cost complete phase expected approximately 20 billion phase ii project includes completion additional sheraton hotel tower theater remaining retail facilities total cost complete phase ii expected approximately 300 million phase iii project expected include fourth hotel mixeduse tower managed starwood st regis brand total cost expected approximately 450 million connection entering 175 billion venetian orient limited “vol” credit facility see “ note 9 longterm debt vol credit facility” used together 5000 million proceeds scl offering company recommenced construction activities company currently working macau government obtain sufficient construction labor project adequate labor quotas received timing completion phases ii currently determinable however company progressing alternative scenarios completion selected portions phases ii construction labor currently onsite company intends commence construction phase iii project demand market conditions warrant december 31 2010 company capitalized construction costs 201 billion entire project including 1351 million outstanding construction payables company’s management agreements starwood shangrila impose certain construction deadlines opening obligations company certain past andor anticipated delays described would allow starwood shangrila terminate respective agreements see “ note 14 commitments contingencies ventures commitments” company currently negotiating undertaking negotiate amendments management agreements starwood shangrila provide new opening timelines company commenced preconstruction activities parcels 7 8 3 capitalized construction costs 1021 million parcels 7 8 343 million parcel 3 december 31 2010 company intends commence construction integrated resort parcels 5 6 complete necessary government approvals obtained including land concession see regional global economic conditions improve future demand warrants additional financing obtained las vegas sands corp subsidiaries notes consolidated financial statements continued impact delayed construction company’s previously estimated cost complete cotai strip developments currently determinable december 31 2010 company capitalized aggregate 61 billion costs cotai strip developments including venetian macao four seasons macao well company’s investments transportation infrastructure including passenger ferry service operations addition funding phases ii parcels 5 6 175 billion vol credit facility company need arrange additional financing fund balance cotai strip developments assurance company able obtain additional financing required land concessions macau generally initial term 25 years automatic extensions 10 years thereafter accordance macau law company received land concessions macau government build parcels 1 2 3 5 6 including sites venetian macao parcel 1 four seasons macao parcel 2 located company land sites macau however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel either payable single lump sum upon acceptance land concessions macau government seven semiannual installments provided outstanding balance due upon completion corresponding integrated resort well annual rent term land concessions december 2010 company received notice macau government application land concession parcels 7 8 approved company applied chief executive macau review decision subsequent december 31 2010 company filed appeal court second instance macau yet issue decision company win appeal still possible chief executive macau deny land concession based upon public policy considerations company obtain land concession receive full reimbursement capitalized investment project company would record charge portion 1021 million capitalized construction costs december 31 2010 related development parcels 7 8 company’s land concession parcel 3 company initially required complete corresponding development august 2011 macau government granted company twoyear extension complete development parcel 3 must completed april 2013 land concession parcels 5 6 contains similar requirement corresponding development completed may 2014 48 months date land concession became effective company believes able complete developments respective deadlines likely able obtain extensions macau government however assurances given additional extensions granted company unable meet applicable deadlines extended could lose land concessions parcels 3 5 6 would prohibit company operating facilities developed respective land concessions result company could record charge portion 343 million 201 billion capitalized construction costs december 31 2010 related developments parcels 3 5 6 respectively current economic environment access capital improve company may continue exploring possibility developing operating additional properties including integrated resorts additional asian us jurisdictions europe development financing strategy december 31 2010 company funded development projects primarily borrowings us macau singapore credit facilities operating cash flows proceeds recent equity offerings proceeds disposition noncore assets las vegas sands corp subsidiaries notes consolidated financial statements continued us credit facility amended august 2010 requires company’s las vegas operations comply certain financial covenants end quarter including maintaining maximum leverage ratio net debt defined trailing twelvemonth adjusted earnings interest income taxes depreciation amortization defined “adjusted ebitda” maximum leverage ratio 65x quarterly periods ended december 31 2010 june 30 2011 decreases 60x quarterly periods ended september 30 december 31 2011 decreases 55x quarterly periods ended march 31 june 30 2012 decreases 50x quarterly periods thereafter maturity one company’s macau credit facilities vml credit facility amended august 2009 requires certain company’s macau operations comply similar financial covenants including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 35x quarterly period ended december 31 2010 decreases 30x quarterly periods thereafter maturity company elect contribute 50 million 20 million cash hand las vegas relevant macau operations respectively biquarterly basis contributions effect increasing adjusted ebitda corresponding amount applicable quarter purposes calculating compliance maximum leverage ratio “ebitda trueup” singapore credit facility requires operations marina bay sands comply similar financial covenants commencing quarterly period ending september 30 2011 including maintaining maximum leverage ratio debt adjusted ebitda maximum leverage ratio 55x quarterly period ending september 30 2011 decreases 025x every quarter decreases remains 375x quarterly periods thereafter maturity commencing quarterly period ending september 30 2014 company unable maintain compliance financial covenants credit facilities would default respective credit facilities default us credit facility would trigger crossdefault company’s airplane financings respective lenders chose accelerate indebtedness outstanding agreements would result default company’s senior notes default vml credit facility would trigger crossdefault company’s ferry financing defaults crossdefaults agreements would allow lenders case exercise rights remedies defined respective agreements lenders exercise rights accelerate due dates indebtedness outstanding assurance company would able repay refinance amounts may become due payable agreements could force company restructure alter operations debt obligations 2008 company completed 4750 million convertible senior notes offering 21 billion common preferred stock warrants offering 2009 company completed 6000 million exchangeable bond offering 25 billion scl offering portion proceeds offerings used us pay 7759 million revolving portion us credit facility march 2010 10 billion term loan portions us credit facility august 2010 exercise ebitda trueup provision quarterly periods ended march 31 september 30 2010 contributed las vegas sands llc “lvsllc” reduce net debt order maintain compliance maximum leverage ratio quarterly periods year ended december 31 2010 company held unrestricted restricted cash equivalents approximately 304 billion 8099 million respectively december 31 2010 company believes cash hand cash flow generated operations available borrowings credit facilities sufficient fund development plans maintain compliance financial covenants us macau singapore credit facilities normal course activities company continue evaluate capital structure opportunities enhancements thereof august 2010 company completed amendment us credit facility included 10 billion pay term loans reduction revolving credit facility commitments exchange extension certain maturities modifications credit agreement thereby increasing company’s financial flexibility additionally connection 175 billion vol credit facility used together 5000 million proceeds scl offering company recommenced construction activities company’s cotai strip development parcels 5 6 note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities “vies” company primary beneficiary effective january 1 2009 company adopted accounting standards noncontrolling interests reclassified equity attributable noncontrolling interests component equity accompanying consolidated balance sheets significant intercompany balances transactions eliminated consolidation management’s determination appropriate accounting method respect company’s variable interests based accounting standards vies issued financial accounting standards board “fasb” company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary las vegas sands corp subsidiaries notes consolidated financial statements continued company entered various joint venture agreements independent third parties operations joint ventures consolidated company due company’s significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vie’s status events occurred would trigger analysis december 31 2010 2009 company’s joint ventures total assets 953 million 1056 million respectively total liabilities 784 million 753 million respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junkets macau receivable offset commissions payable respective junkets business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junkets residing countries allowance doubtful accounts represents company’s best estimate amount probable credit losses company’s existing accounts receivable company determines allowance based specific customer information historical writeoff experience current industry economic data account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost market cost determined firstin firstout specific identification methods property equipment property equipment stated lower cost fair value depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows las vegas sands corp subsidiaries notes consolidated financial statements continued estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities “asset group” secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows company’s asset groups company considers potential cash flows scenarios probability weighted based management’s estimates given current conditions determining recoverability company’s asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors regulatory environments operating results management’s intentions may result future changes recoverability asset groups assets held sale fixed assets “disposal group” measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized results sale disposal group shall recognized date sale fixed assets depreciated classified held sale company’s continued suspension certain development projects due difficult global economic credit market environment company tested certain assets impairment december 31 2010 year ended december 31 2010 company recognized impairment loss 161 million related equipment macau expected disposed year ended december 31 2009 company recognized impairment loss 1695 million 940 million related shoppes palazzo 572 million related indefinite suspension planned expansion sands expo center 150 million related real estate previously utilized connection marketing activities asia capitalized interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weightedaverage cost company’s outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2010 2009 2008 company capitalized interest expense 1061 million 654 million 1312 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued deferred financing costs original issue discounts deferred financing costs original issue discounts amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired impairment test consists comparison fair value asset carrying amount carrying amount asset recoverable exceeds fair value impairment recognized amount equal excess carrying amount asset exceed fair value impairment recognized december 31 2010 company 500 million asset related sands bethlehem gaming license 165 million asset related sands bethlehem table games certificate determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 18 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general impairment charge related assets recorded december 31 2010 adjusted property ebitda discounted cash flows common measures used value cashincentive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others future changes company’s estimates assumptions based upon changes macroeconomic factors operating results management’s intentions may result future changes fair value gaming license revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junkets customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel food beverage services recognized upon cancellation customer convention revenues recognized related service rendered event held minimum rental revenues adjusted contractual base rent escalations included convention retail revenue recognized straightline basis terms related lease las vegas sands corp subsidiaries notes consolidated financial statements continued accordance industry practice retail value rooms food beverage services furnished company’s guests without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows thousands estimated departmental cost providing promotional allowances included primarily casino operating expenses follows thousands gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment company’s gaming revenue recorded casino expense accompanying consolidated statements operations taxes 219 billion 151 billion 134 billion years ended december 31 2010 2009 2008 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine customers table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated company’s evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 543 million 567 million 482 million years ended december 31 2010 2009 2008 respectively corporate expenses corporate expense represents payroll travel professional fees various expenses allocated directly related company’s integrated resort operations related ancillary operations foreign currency company accounts currency translation accordance accounting standards regarding foreign currency translation gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income las vegas sands corp subsidiaries notes consolidated financial statements continued comprehensive income loss comprehensive income loss includes net income loss nonstockholder changes equity comprehensive income elements company’s comprehensive income loss reported accompanying consolidated statements equity comprehensive income loss balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments earnings loss per share weighted average number common equivalent shares used calculation basic diluted earnings loss per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employee’s requisite service period generally vesting period equity grant company’s stockbased employee compensation plans fully discussed “ note 15 stockbased employee compensation” income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes requires reduction carrying amounts deferred tax assets valuation allowance based available evidence likely assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods company’s experience operating loss tax credit carryforwards expiring unused tax planning alternatives company recorded valuation allowances net deferred tax assets us operations certain foreign jurisdictions management reassess realization deferred tax assets based accounting standards income taxes reporting period extent financial results operations improve becomes likely deferred tax assets realizable company able reduce valuation allowance significant judgment required evaluating company’s tax positions determining provision income taxes ordinary course business many transactions calculations ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provides twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates likely position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments may accurately anticipate actual outcomes las vegas sands corp subsidiaries notes consolidated financial statements continued accounting derivative instruments hedging activities generally accepted accounting principles require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may specifically designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities depends effectiveness hedge company policy aimed managing interest rate risk associated current anticipated future borrowings policy enables company use combination interest rate swaps futures options caps similar instruments extent company employs financial instruments pursuant policy instruments qualify hedge accounting accounted hedging instruments order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce company’s exposure market fluctuation throughout hedge period criteria met change market value financial instrument recognized gain loss results operations period change otherwise gains losses recognized comprehensive income loss except extent financial instrument disposed prior maturity net interest paid received pursuant financial instrument included interest expense period recent accounting pronouncements june 2009 fasb issued authoritative guidance vies changes approach determining primary beneficiary vie requires companies frequently assess whether must consolidate vies december 2009 fasb supplemented authoritative guidance vie’s established new criteria consolidation based power direct activities vie would significantly impact vie’s economic performance obligation absorb losses vie right receive benefits vie could potentially significant vie new guidance allow grandfathering existing structures effective january 1 2010 application guidance material effect company’s financial condition results operations cash flows january 2010 fasb issued authoritative guidance fair value measurements requires new disclosures regarding significant transfers level 1 2 fair value measurements gross presentation activity within reconciliation level 3 fair value measurements guidance also clarifies existing requirements level disaggregation required disclosures regarding inputs valuation techniques recurring nonrecurring level 2 3 fair value measurements guidance effective interim annual reporting periods beginning december 15 2009 exception gross presentation level 3 activity effective interim annual reporting periods beginning december 15 2010 adoption guidance material effect company’s financial condition results operations cash flows see “ note 12 fair value measurements” required disclosure april 2010 fasb issued authoritative guidance companies generate revenue gaming activities involve base jackpots requires companies accrue liability charge jackpot portion thereof revenue time company obligation pay jackpot guidance effective interim annual reporting periods beginning december 15 2010 base jackpots currently accrued company obligation pay jackpots application guidance material effect company’s financial condition results operations cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued revision connection preparation quarterly report form 10q quarter ended march 31 2010 company revised december 31 2009 consolidated balance sheet consolidated statements equity comprehensive income loss appropriately reflect impact issuance scl shares upon initial public offering revision resulted 6557 million increase noncontrolling interests balance corresponding reduction capital excess par value revision company determined material impact total equity results operations cash flows reclassification company reclassified intangible assets net amortization december 31 2009 previously included assets net conform current presentation see “ note 7 intangible assets net” reclassification effect company’s financial condition results operations cash flows note 3 restricted cash equivalents required company’s vol credit facility entered may 2010 see “ note 9 longterm debt macau related debt vol credit facility” certain loan proceeds made available facility certain future cash flows generated certain company’s macau operations deposited restricted accounts invested cash equivalents pledged collateral agent security favor lenders vol credit facility restricted cash amount used fund ongoing construction company’s cotai strip integrated resort development parcels 5 6 accordance terms specified vol credit facility well fund interest principal payments due vol credit facility december 31 2010 restricted cash balance 7757 million required company’s singapore credit facility entered december 2007 see “ note 9 longterm debt singapore related debt singapore credit facility” proceeds available credit facility deposited accounts invested cash equivalents pledged security trustee benefit singapore credit facility lenders restricted cash amount used fund construction operating development costs marina bay sands accordance terms specified singapore credit facility accounts subject security interest favor lenders singapore credit facility december 31 2010 2009 restricted cash balance 144 million 883 million respectively restricted cash also includes 198 million 303 million december 31 2010 2009 respectively related items restricted cash balances classified current primarily equivalent related construction payables also classified current note 4 accounts receivable net accounts receivable consists following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 5 property equipment net property equipment consists following thousands construction progress consists following thousands 3234 million construction progress consists primarily construction las vegas condo tower costs incurred cotai strip parcels 3 7 8 december 31 2010 company received proceeds 2954 million sale shoppes palazzo see “ note 13 mall sales shoppes palazzo” however final purchase price determined accordance april 2004 purchase sale agreement amended venetian casino resort llc “vcr” ggp “amended agreement” based net operating income “noi” shoppes palazzo calculated 30 months closing date sale defined amended agreement “final purchase price” subject certain later audit adjustments given economic market conditions facing retailers national local level tenants facing economic challenges effect calculation noi approximately 2821 million property equipment net 293 million accumulated depreciation sold ggp included consolidated balance sheet december 31 2010 april 2009 ggp subsidiary owns shoppes palazzo filed voluntary petitions chapter 11 us bankruptcy code “chapter 11 cases” united states bankruptcy court southern district new york entered orders approving plans reorganization ggp subsidiary owns shoppes palazzo october 21 april 29 2010 respectively effective date plans reorganization occurred november 9 may 28 2010 respectively confirmed plans reorganization impaired creditors mortgage holders company continue review chapter 11 cases adjust estimates noi capitalization rates additional information received company ggp entered several amendments amended agreement defer time reach agreement final purchase price parties continuing work various matters related calculation noi company may required record loss sale future depending resolution matters resulting agreed upon final purchase price cost accumulated depreciation property equipment company leasing tenants part mall operations 6784 million 766 million respectively december 31 2010 cost accumulated depreciation property equipment company leasing tenants part mall operations 3857 million 479 million respectively december 31 2009 cost accumulated depreciation property equipment company leasing capital lease arrangements 298 million 35 million respectively december 31 2010 cost accumulated depreciation property equipment company leasing capital lease arrangements 256 million 09 million respectively december 31 2009 described “ note 1 organization business company development projects” company suspended portions development projects given conditions capital markets global economy impact company’s ongoing operations circumstances change company may required record impairment charge related developments future las vegas sands corp subsidiaries notes consolidated financial statements continued company commenced preconstruction activities parcels 7 8 capitalized construction costs 1021 million december 31 2010 december 2010 company received notice macau government application land concession parcels 7 8 approved company applied chief executive macau review decision subsequent december 31 2010 company filed appeal court second instance macau yet issue decision company win appeal still possible chief executive macau deny land concession based upon public policy considerations based upon recent developments company performed impairment analysis determine recoverability investment parcels 7 8 undiscounted cash flow basis company’s analysis considered various potential outcomes appeal process included ultimate denial land concession varying levels compensation well ultimate granting concession related construction resort probability weighted approach order obtain land concession construct resort company would need win appeal avoid future denial land concession based upon public policy considerations company obtain land concession receive full reimbursement capitalized investment project company would record charge portion 1021 million capitalized construction costs december 31 2010 related development parcels 7 8 note 6 leasehold interests land net leasehold interests land consist following thousands company amortizes leasehold interests land straightline basis expected term lease amortization expense 413 million 270 million 262 million included rental expense years ended december 31 2010 2009 2008 respectively estimated future rental expense approximately 375 million next five years 151 billion thereafter exchange rates effect december 31 2010 part development agreement entered company’s wholly owned subsidiary marina bay sands pte ltd “mbs” singapore tourism board “stb” marina bay sands company required build structure house water cooling facility operated third party provide water marina bay sands buildings around resort year ended december 31 2010 structure turned third party operator order commence operations company operate facility receive substantially output company reclassified 1079 million cost asset property equipment leasehold interests land additional cost use land year ended december 31 2010 company made payments 1551 million patacas approximately 193 million exchange rates effect december 31 2010 partial payments land premium parcels 5 6 1059 million patacas 1189 million patacas approximately 132 million 148 million respectively exchange rates effect december 31 2010 final payments parcels 2 3 respectively remaining land premium payments parcels 5 6 either payable remaining six semiannual installments amount 1843 million patacas approximately 230 million exchange rates effect december 31 2010 bearing interest 5 per annum due upon completion integrated resort parcels las vegas sands corp subsidiaries notes consolidated financial statements continued addition land premium payments macau leasehold interests land company required make annual rent payments amounts times specified land concessions rent amounts may revised every five years macau government december 31 2010 company obligated land concessions make future premium rental payments follows thousands note 7 intangible assets net intangible assets consist following thousands august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 500 million 165 million respectively license certificate determined indefinite lives therefore subject amortization april 2010 company issued gaming license singapore casino regulatory authority “cra” gaming operations marina bay sands acquired sgd 375 million approximately 291 million exchange rates effect december 31 2010 license amortized threeyear term renewable upon submitting renewal application paying applicable license fee meeting renewal requirements determined cra amortization expense 63 million 46000 35000 years ended december 31 2010 2009 2008 respectively estimated future amortization expense approximately 97 million 97 million 31 million next three years 27000 thereafter note 8 accrued liabilities accrued liabilities consist following thousands las vegas sands corp subsidiaries notes consolidated financial statements continued note 9 longterm debt longterm debt consists following thousands corporate us related debt senior secured credit facility may 2007 company entered 50 billion senior secured credit facility “senior secured credit facility” consists 30 billion funded term b loan “term b facility” 6000 million delayed draw term b loan available 12 months closing “delayed draw facility” 4000 million delayed draw term b loan available 18 months closing “delayed draw ii facility” 10 billion revolving credit facility 1000 million may drawn swingline basis “revolving facility” august 2010 senior secured credit facility amended among things modify certain financial covenants including increasing maximum leverage ratio quarterly periods june 30 2012 see “ note 1 organization business company development financing strategy” december 31 2010 company fully drawn delayed draw ii facilities 7146 million available borrowing capacity revolving facility net outstanding letters credit undrawn amounts committed funded lehman brothers commercial paper inc addition amendment certain lenders elected extend maturity 142 billion aggregate principal amount term b facility november 2016 “extended term b facility” 2845 million aggregate principal amount delayed draw facility november 2016 “extended delayed draw facility” 2079 million aggregate principal amount delayed draw ii facility november 2015 “extended delayed draw ii facility” collectively “extended term loans” extend availability 5325 million giving effect reductions described revolving facility may 2014 “extended revolving facility” part extension company required pay 10 billion aggregate principal amount extended term loans commitments revolving facility reduced 10 billion 7500 million result repayment amendment company recorded 212 million loss modification early retirement debt year ended december 31 2010 extended term b facility subject quarterly amortization payments 35 million began september 30 2010 followed balloon payment 13 billion due november 23 2016 extended delayed draw facility subject quarterly amortization payments 07 million began september 30 2010 followed balloon payment 2669 million due november 23 2016 extended delayed draw ii facility subject quarterly amortization payments 05 million began september 30 2010 followed balloon payment 1971 million due november 23 2015 extended revolving facility interim amortization payments las vegas sands corp subsidiaries notes consolidated financial statements continued nonextended portions term b delayed draw facilities mature may 23 2014 term b facility subject quarterly amortization payments 19 million began september 30 2010 followed balloon payment 7231 million due may 23 2014 delayed draw facility subject quarterly amortization payments 04 million began september 30 2010 followed balloon payment 1483 million due may 23 2014 delayed draw ii facility matures may 23 2013 subject quarterly amortization payments 02 million began september 30 2010 followed balloon payment 750 million due may 23 2013 revolving facility matures may 23 2012 interim amortization payments prior extension term b delayed draw delayed draw ii facilities subject quarterly amortization payments 75 million began september 30 2007 15 million began september 30 2008 10 million began march 31 2009 respectively year ended december 31 2010 company paid 7759 million revolving facility addition pay 10 billion extended term loans described senior secured credit facility guaranteed certain company’s domestic subsidiaries “guarantors” obligations senior secured credit facility guarantees guarantors collateralized firstpriority security interest substantially lvsllc’s guarantors’ assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings senior secured credit facility amended bear interest company’s option either adjusted eurodollar rate alternative base rate plus credit spread base rate borrowings initial credit spread 05 per annum 075 per annum revolving facility term loans respectively 125 per annum 175 per annum extended revolving facility extended term loans respectively eurodollar rate borrowings initial credit spread 15 per annum 175 per annum revolving facility term loans respectively term loans set 20 december 31 2010 225 per annum 275 per annum extended revolving facility extended term loans respectively extended term loans set 30 december 31 2010 spreads reduced company’s “corporate rating” defined senior secured credit facility increased least ba2 moody’s least bb standard poor’s ratings group “sp” subject certain additional conditions spread revolving facility reduced company’s “corporate rating” increased least ba1 higher moody’s least bb higher sp subject certain additional conditions weighted average interest rate senior secured credit facility 23 21 years ended december 31 2010 2009 respectively company pays commitment fee 0375 per annum 05 per annum undrawn amounts revolving facility extended revolving facility respectively reduced certain corporate ratings achieved subject certain additional conditions company also paid commitment fee equal 075 per annum 05 per annum undrawn amounts delayed draw ii facilities respectively senior secured credit facility amended contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets senior secured credit facility also requires guarantors comply financial covenants including limited minimum ratios adjusted ebitda interest expense maximum ratios net debt outstanding adjusted ebitda senior secured credit facility also contains conditions events default customary financings see “ note 1 organization business company development financing strategy” discussion december 31 2010 approximately 590 billion net assets lvsllc restricted distributed terms senior secured credit facility las vegas sands corp subsidiaries notes consolidated financial statements continued senior notes february 10 2005 lvsc sold private placement transaction 2500 million aggregate principal amount 6375 senior notes due 2015 original issue discount 23 million net proceeds offering costs original issue discount 2448 million june 2005 senior notes exchanged substantially similar senior notes “senior notes” registered federal securities laws senior notes mature february 15 2015 lvsc option redeem portion senior notes time prior february 15 2010 “makewhole” redemption price thereafter lvsc option redeem portion senior notes time fixed prices decline ratably time senior notes senior obligations lvsc connection entering senior secured credit facility senior notes jointly severally guaranteed certain lvsc’s domestic subsidiaries including lvsllc vcr collateralized equal ratable basis obligations senior secured credit facility assets lvsllc guarantors indenture governing senior notes contains covenants subject certain exceptions conditions limit ability lvsc subsidiary guarantors enter sale leaseback transactions respect principal properties create liens principal properties consolidate merge sell substantially assets year ended december 31 2010 company repurchased 603 million outstanding principal senior notes recorded 34 million gain early retirement debt connection repurchase ffe facility december 2006 certain company’s subsidiaries including lvsllc vcr entered ffe credit facility agreement group lenders general electric capital corporation administrative agent provide 1429 million finance refinance acquisition certain ffe located venetian las vegas palazzo facility consisted 79 million funded term loan proceeds refinanced prior ffe loan 1350 million delayed draw term loan august 2007 parties facility entered amended restated ffe credit guarantee agreement “ffe facility” among things increased overall size delayed draw term loan facility 1670 million repaid funded term loan previous facility conformed affirmative negative covenants events default set forth senior secured credit facility ffe facility collateralized ffe financed andor refinanced proceeds ffe facility guaranteed guarantors senior secured credit facility july 1 2008 company required begin making quarterly installment principal payments 84 million amount equal 50 aggregate principal amount delayed draw term loan outstanding july 1 2008 remainder due four equal quarterly installments ending maturity date borrowings ffe facility bear interest company’s option either adjusted eurodollar rate base rate plus applicable margin initial applicable margin 10 per annum loans accruing interest base rate 20 per annum loans accruing interest adjusted eurodollar rate applicable margins reduced 025 per annum certain circumstances similar set forth senior secured credit facility company also paid commitment fee 050 per annum undrawn amount term delayed draw loan weighted average interest rate ffe facility 21 24 years ended december 31 2010 2009 respectively august 2010 company repaid 918 million outstanding balance ffe credit facility incurred 05 million loss early retirement debt year ended december 31 2010 airplane financings february 2007 company entered promissory notes totaling 720 million finance purchase one airplane finance two others company already owned notes consist balloon payment promissory notes amortizing promissory notes ten year maturities collateralized related aircraft notes bear interest threemonth london interbank offered rate “libor” plus 15 per annum set 18 december 31 2010 amortizing notes totaling 288 million subject quarterly amortization payments 07 million began june 1 2007 balloon notes totaling 432 million mature march 1 2017 interim amortization payments weighted average interest rate notes 19 25 years ended december 31 2010 2009 respectively april 2007 company entered promissory notes totaling 203 million finance purchase additional airplane notes ten year maturities consist balloon payment promissory note amortizing promissory note notes bear interest threemonth libor plus 125 per annum set 16 december 31 2010 81 million amortizing note subject quarterly amortization payments 02 million began june 30 2007 122 million balloon note matures march 31 2017 interim amortization payments weighted average interest rate notes 16 22 years ended december 31 2010 2009 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning “hvac” provider “hvac equipment lease” provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception convertible senior notes september 2008 company sold principal stockholder’s family private placement transaction 4750 million 65 convertible senior notes due 2013 “convertible senior notes” convertible senior notes subject quarterly interest payments commencing january 1 2009 would mature october 1 2013 unless earlier converted repurchased company initial conversion rate 20141 shares common stock per 1000 principal amount equivalent conversion price approximately 4965 per share common stock subject adjustment certain circumstances following fundamental change defined agreement occurs prior maturity date company would required make offer purchase convertible senior notes principal stockholder’s family granted preemptive rights respect future proposed issuance sale company equity interests including convertible exchangeable securities pursuant would able purchase portion offered equity interests based fully diluted common stock ownership company november 2008 concurrent company’s issuance common preferred stock warrants see “ note 10 equity” convertible senior notes retired conversion feature utilized acquire 86363636 shares company’s common stock conversion price 550 per share conversion rate approximately 181818 shares per 1000 principal amount result company incurred charge approximately 51 million loss early retirement notes paid interest principal stockholder’s family 37 million period convertible senior notes outstanding year ended december 31 2008 macau related debt vml credit facility may 25 2006 two subsidiaries company vml us finance llc “borrower” venetian macau limited “vml” guarantor entered credit agreement “vml credit facility” vml credit facility originally consisted 12 billion funded term b loan “vml term b facility” 7000 million delayed draw term b loan “vml term b delayed draw facility” 1000 million funded local currency term loan “vml local term facility” 5000 million revolving credit facility “vml revolving facility” march 2007 vml credit facility amended expand use proceeds remove certain restrictive covenants april 2007 lenders vml credit facility approved reduction interest rate margin classes loans 50 basis points borrower exercised rights vml credit facility access 8000 million incremental facilities accordion feature set forth therein increased funded vml term b facility 6000 million vml revolving facility 2000 million total vml credit facility 33 billion las vegas sands corp subsidiaries notes consolidated financial statements continued august 12 2009 vml credit facility amended among things allow scl offering modify certain financial covenants definitions including increasing maximum leverage ratio quarterly periods end 2010 see “ note 1 organization business company development financing strategy” part amendment credit spread increased 325 basis points borrowings bearing interest company’s option either adjusted eurodollar rate case local term loan adjusted hong kong interbank offered rate “hibor” alternate base rate plus spread 55 per annum 45 per annum respectively november 2009 connection scl offering company required repay permanently reduce 5000 million term loan revolving borrowings pro rata basis vml credit facility conjunction 5000 million repayment credit spread reduced 100 basis points set 48 vml credit facility december 31 2010 result repayment august amendment company recorded charge 61 million year ended december 31 2009 loss modification early retirement debt credit spreads vml local term facility vml revolving facility subject downward adjustments certain consolidated leverage ratios achieved december 31 2010 company 5953 million available borrowing capacity vml revolving facility net outstanding letters credit undrawn amounts committed funded lehman brothers commercial paper inc indebtedness vml credit facility guaranteed vml venetian cotai limited certain company’s foreign subsidiaries “vml guarantors” obligations vml credit facility guarantees vml guarantors collateralized firstpriority security interest substantially borrower’s vml guarantors’ assets 1 capital stock borrower vml guarantors 2 assets secure permitted furniture fixtures equipment financings 3 vml’s gaming subconcession contract 4 certain excluded assets vml revolving facility vml local term facility mature may 25 2011 vml term b delayed draw facility vml term b facility mature may 25 2012 2013 respectively vml term b delayed draw vml term b facility subject nominal quarterly amortization payments 18 million 45 million respectively first five six years respectively commenced june 2009 remainder loans payable four equal quarterly installments last year immediately preceding maturity dates vml local term facility subject quarterly amortization payments 63 million commenced june 2009 paid year ended december 31 2010 vml revolving facility interim amortization payments however year ended december 31 2010 company paid 4796 million facility borrower also pays standby commitment fee 05 per annum undrawn amounts vml revolving facility years ended december 31 2010 2009 weighted average interest rates vml local term facility 48 36 respectively weighted average interest rates remainder vml credit facility 49 39 respectively meet requirements vml credit facility company entered four interest rate cap agreements september 2006 may 2007 october 2007 september 2008 notional amounts 10 billion 3250 million 1650 million 1600 million respectively expired september 21 2009 provisions interest rate cap agreements entitled company receive counterparties amounts selected market interest rates exceed strike rate 675 company entered additional interest rate cap agreement september 2009 notional amount 159 billion expires september 2012 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 95 net effect interest expense result interest rate cap agreements years ended december 31 2010 2009 2008 vml credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments paying dividends making restricted payments acquiring selling assets vml credit facility also requires borrower vml guarantors comply financial covenants including limited generating minimum adjusted ebitda period time thereafter ratios adjusted ebitda interest expense total indebtedness adjusted ebitda well maximum annual capital expenditures vml credit facility also contains events default customary financings vol credit facility may 17 2010 subsidiary company vol owner developer integrated resort cotai strip parcels 5 6 entered credit agreement “vol credit facility” providing 175 billion equivalent hong kong dollars macau patacas consists 7500 million term loan “vol term facility” fully drawn july 16 2010 7500 million delayed draw term loan available 18 months closing “vol delayed draw facility” 2500 million revolving facility “vol revolving facility” december 31 2010 company drawn amounts vol delayed draw facility vol revolving facility las vegas sands corp subsidiaries notes consolidated financial statements continued indebtedness vol credit facility guaranteed future restricted subsidiaries vol obligations vol credit facility collateralized firstpriority security interest substantially vol’s assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets vol credit facility matures june 16 2015 vol required repay prepay vol credit facility certain circumstances commencing march 31 2013 end subsequent quarter 2013 vol required repay outstanding vol term delayed draw facilities pro rata basis amount equal 5 aggregate principal amount term loans outstanding november 17 2011 commencing march 31 2014 end subsequent quarter 2014 vol required repay outstanding vol term delayed draw facilities pro rata basis amount equal 75 aggregate principal amount term loans outstanding november 17 2011 addition commencing december 31 2013 end fiscal year thereafter vol required repay outstanding vol term delayed draw facilities pro rata basis 50 subject downward adjustments certain conditions met excess free cash flow defined vol credit facility borrowings vol credit facility bear interest either adjusted eurodollar rate alternative base rate case us dollar denominated loans hibor case hong kong dollar macau pataca denominated loans applicable plus spread 45 per annum set 48 december 31 2010 vol pay standby fees 20 per annum undrawn amounts vol term delayed draw facilities 15 per annum undrawn amounts vol revolving facility weighted average interest rate vol credit facility 48 period ended december 31 2010 meet requirements vol credit facility company entered three interest rate cap agreements september 2010 combined notional amount 3750 million expire september 2013 provisions interest rate cap agreement entitle company receive counterparty amounts selected market interest rate exceeds strike rate 35 net effect interest expense result interest rate cap agreements year ended december 31 2010 vol credit facility contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs incurrence indebtedness loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions use proceeds facility vol credit facility includes deadlines completion substantial operations defined vol credit facility certain phases integrated resort parcels 5 6 required achieved subsequent december 31 2010 company exercised right vol credit facility extend deadlines vol credit facility also requires vol comply financial covenants first full quarter beginning six months commencement substantial operations phases ii integrated resort cotai strip parcels 5 6 including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda total interest expense vol credit facility also contains events default customary financings ferry financing january 2008 order finance purchase ten ferries company entered 121 billion hong kong dollar “hkd” approximately 1554 million exchange rates effect december 31 2010 secured credit facility available borrowing 18 months closing proceeds secured credit facility used reimburse company cash spent date progress payments made ferries finance completion remaining ferries facility collateralized ferries guaranteed vml july 2008 company exercised accordion option secured credit facility agreement financed company’s original ten ferries executed supplement secured credit facility agreement supplement increased secured credit facility additional hkd 5616 million approximately 722 million exchange rates effect december 31 2010 company fully drawn december 31 2010 proceeds supplemental facility used reimburse company cash spent date progress payments made four additional ferries finance remaining progress payments ferries supplemental facility collateralized additional ferries guaranteed vml las vegas sands corp subsidiaries notes consolidated financial statements continued august 20 2009 ferry financing facility amended among things allow scl offering remove requirement comply financial covenants facility amended matures december 2015 subject 26 quarterly payments hkd 681 million approximately 88 million exchange rates effect december 31 2010 commenced october 2009 part amendment credit spread increased 50 basis points 25 per annum borrowings made hong kong dollars accruing interest hibor set 28 december 31 2010 25 per annum borrowings made us dollars accruing interest libor borrowings facility fully drawn december 31 2010 made hong kong dollars weighted average interest rate facility 28 24 years ended december 31 2010 2009 respectively exchangeable bonds september 2009 company completed 6000 million exchangeable bond offering due 2014 “exchangeable bonds” exchangeable bonds subject semiannual interest payments commencing march 2010 would mature september 2014 unless earlier redeemed exchanged purchased cancelled exchangeable bonds redeemable option company together accrued unpaid interest date redemption time beginning 30 days closing date ending day prior maturity date exchangeable bonds redeemed option company would required issue warrants “bond warrants” bondholders purchase number common shares scl bondholders would otherwise entitled receive upon mandatory automatic exchange exchangeable bonds upon offering addition bondholder could period less 30 days 60 days prior september 4 2012 required company redeem portion exchangeable bonds held bondholder 100 principal amount exchangeable bonds together accrued unpaid interest date redemption provided bondholders exercised redemption right would entitled bond warrants connection redemption november 2009 concurrent scl offering see “ note 10 equity noncontrolling interests” exchangeable bonds mandatorily automatically exchanged 497865084 ordinary shares scl company incurred charge approximately 171 million loss early retirement debt year ended december 31 2009 result exchanging bonds singapore related debt mbs entered singapore bridge facility august 2006 pay land premium stb development agreement commence construction marina bay sands facility would mature august 2008 company entered singapore credit facility december 2007 upon closing january 2008 portion borrowings singapore credit facility well contributions made company mbs used repay outstanding balances singapore bridge facility pay fees costs expenses related entering singapore credit facility agreement company incurred charge approximately 40 million loss early retirement debt year ended december 31 2008 result refinancing singapore bridge facility singapore credit facility december 2007 mbs signed credit facility agreement “singapore credit facility” providing sgd 20 billion approximately 155 billion exchange rates effect december 31 2010 term loan “singapore credit facility a” funded january 2008 sgd 275 billion approximately 213 billion exchange rates effect december 31 2010 term loan “singapore credit facility b” available delayed draw basis december 31 2010 sgd 1926 million approximately 1493 million exchange rates effect december 31 2010 banker’s guarantee facility “singapore credit facility c” provide bankers guarantees favor stb required development agreement fully drawn january 2008 sgd 5000 million approximately 3876 million exchange rates effect december 31 2010 revolving credit facility “singapore credit facility d” available february 28 2015 december 31 2010 company sgd 484 million approximately 375 million exchange rates effect december 31 2010 available borrowing net outstanding banker’s guarantees las vegas sands corp subsidiaries notes consolidated financial statements continued indebtedness singapore credit facility collateralized firstpriority security interest substantially mbs’s assets capital stock similar ownership interests certain furniture fixtures fittings equipment certain excluded assets singapore credit facility matures march 31 2015 mbs required repay prepay singapore credit facility certain circumstances commencing march 31 2011 end quarter thereafter mbs required repay outstanding singapore credit facility b loans pro rata basis aggregate amount equal sgd 1250 million approximately 969 million exchange rates effect december 31 2010 per quarter addition commencing quarter ending september 30 2011 mbs required prepay outstanding singapore credit facility b loans pro rata basis percentage excess free cash flow defined singapore credit facility initial excess free cash flow calculation performed september 30 2011 payment made fourth quarter 2011 borrowings singapore credit facility bear interest singapore swap offered rate “sor” plus spread 225 per annum set approximately 25 december 31 2010 mbs pays standby interest fee 1125 per annum 090 per annum undrawn amounts singapore credit facility b facility respectively mbs pays commission 225 per annum bankers’ guarantees outstanding singapore credit facility period banker’s guarantees outstanding weighted average interest rate singapore credit facility 26 28 years ended december 31 2010 2009 respectively meet requirements singapore credit facility company entered nine interest rate cap agreements 2008 combined notional amount 141 billion threeyear terms expire june december 2011 2009 company entered fourteen additional interest rate cap agreements combined notional amount 8500 million threeyear terms expire march december 2012 2010 company entered seven additional interest rate cap agreements combined notional amount 3650 million threeyear terms expire january june 2013 provisions interest rate cap agreements entitle company receive counterparties amounts selected market interest rates exceed strike rate range 40 50 stated agreements net effect interest expense result interest rate cap agreements years ended december 31 2010 2009 2008 singapore credit facility contains affirmative negative covenants customary financings including limited limitations liens annual capital expenditures project costs indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities singapore credit facility also requires mbs comply financial covenants commencing quarter ending september 30 2011 including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense minimum adjusted ebitda requirements positive net worth requirement singapore credit facility also contains events default customary financings cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt excluding discounts outstanding december 31 2010 summarized follows thousands fair value longterm debt estimated fair value company’s longterm debt december 31 2010 approximately 972 billion compared carrying value 101 billion december 31 2009 estimated fair value company’s longterm debt approximately 966 billion compared carrying value 110 billion estimated fair value company’s longterm debt based quoted market prices available pricing models based value related cash flows discounted current market interest rates note 10 equity common stock november 2008 company issued public offering 200000000 shares common stock 550 per share received gross proceeds 110 billion 105 billion net transaction costs concurrent issuance principal stockholder’s family converted 4750 million convertible senior notes 86363636 shares company’s common stock preferred stock warrants november 2008 company issued 10446300 shares 10 series cumulative perpetual preferred stock “preferred stock” warrants purchase aggregate approximately 174105348 shares common stock exercise price 600 per share expiration date november 16 2013 “warrants” units consisting one share preferred stock one warrant purchase 166667 shares common stock sold 100 per unit preferred stock redeemable november 15 2011 company’s option whole part redemption price equal sum 110 per share accrued unpaid dividends minimum number shares preferred stock may redeemed time lesser 1000000 shares preferred stock ii number shares preferred stock outstanding holders preferred stock rights exchange convert shares securities las vegas sands corp subsidiaries notes consolidated financial statements continued holders preferred stock preemptive rights voting rights except required applicable nevada laws certain circumstances holders preferred stock right require company redeem shares preferred stock except described preferred stock ranks payment dividends distributions assets upon dissolution liquidation winding • junior company’s existing future debt obligations • junior class series company’s capital stock terms provide class series rank senior preferred stock • senior company’s common stock class series capital stock terms provide class series ranks junior preferred stock either payment dividends andor distribution assets liquidation dissolution winding company • parity class series company’s capital stock terms provide class series rank equally preferred stock payment dividends distribution assets liquidation dissolution winding company nevada law company may declare pay dividends preferred stock extent total assets exceed total liabilities long company able pay debts become due usual course business declared company’s board directors holders preferred stock entitled receive cumulative cash dividends quarterly february 15 may 15 august 15 november 15 began february 15 2009 preferred stock issued public 10446300 shares preferred stock issued company issued 5196300 shares public together warrants purchase aggregate approximately 86605173 shares common stock received gross proceeds 5196 million 5036 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 2981 million 2215 million respectively year ended december 31 2010 holders preferred stock exercised 2255209 warrants purchase aggregate 37586880 shares company’s common stock 600 per share tendered 76 shares preferred stock 2255 million cash settlement warrant exercise price order induce additional warrant exercises year ended december 31 2010 company paid holders preferred stock 66 million exercise 475000 warrants purchase aggregate 7916682 shares company’s common stock 600 per share tendering 475000 shares preferred stock year ended december 31 2009 holders preferred stock exercised 1106301 warrants purchase aggregate 18438384 shares company’s common stock 600 per share tendered 1106301 shares preferred stock settlement warrant exercise price subsequent december 31 2010 holders preferred stock exercised 1083300 warrants purchase aggregate 18055033 shares company’s common stock 600 per share tendered 1025700 shares preferred stock 58 million cash settlement warrant exercise price conjunction certain transactions company paid 147 million premiums induce exercise warrants settlement tendering preferred stock preferred stock issued principal stockholder’s family 10446300 shares preferred stock issued company issued 5250000 shares principal stockholder’s family together warrants purchase aggregate approximately 87500175 shares common stock received gross proceeds 5250 million 5237 million net transaction costs allocated carrying values preferred stock warrants date issuance based relative fair values 3011 million 2239 million respectively preferred stock amount recorded mezzanine equity accompanying consolidated balance sheet principal stockholder family greater 50 ownership company considering impact unexercised warrants stock options therefore potential ability require company redeem preferred stock beginning november 15 2011 las vegas sands corp subsidiaries notes consolidated financial statements continued preferred stock issued principal stockholder’s family accounted redeemable option holder balance accreted redemption value 5775 million three years december 31 2010 2009 69 million accumulated undeclared dividends recorded summary company’s preferred stock issued principal stockholder’s family years ended december 31 2010 2009 2008 presented thousands except number shares preferred stock dividends preferred stock dividend activity follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued rollfoward shares common stock preferred stock issued public summary outstanding shares common stock preferred stock issued public follows noncontrolling interests november 2009 company completed scl offering wherein company’s subsidiary scl direct indirect owner operator majority company’s macau operations including sands macao venetian macao four seasons macao ferry operations developer remaining cotai strip integrated resorts listed ordinary shares main board sehk scl offering sold 1270000000 ordinary shares public received gross proceeds 170 billion 163 billion net transaction costs concurrent scl offering company’s subsidiary scl’s direct parent venetian venture development intermediate ii “vvdi ii” sold 600000000 ordinary shares scl public received gross proceeds 8036 million 7604 million net transaction costs connection scl offering company mandatorily automatically exchanged 6000 million exchangeable bonds 497865084 ordinary shares scl issued 22185115 ordinary shares scl settle obligation company immediately following completion transactions company owned 703 issued outstanding ordinary shares scl ordinary shares scl registered securities act 1933 amended may offered sold united states absent registration securities act 1933 amended applicable exception registration requirements note 11 income taxes consolidated income loss taxes noncontrolling interests domestic foreign operations follows thousands components income tax benefit expense follows thousands las vegas sands corp subsidiaries notes consolidated financial statements continued reconciliation statutory federal income tax rate company’s effective tax rate follows company received 5year income tax exemption macau exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2013 company required pay income taxes macau consolidated net income loss attributable las vegas sands corp would reduced 835 million 800 million 464 million diluted earnings per share would reduced 011 012 per share years ended december 31 2010 2009 2008 respectively primary tax affected components company’s net deferred tax assets liabilities follows thousands company recognizes tax benefits associated stockbased compensation directly stockholders’ equity realized accordingly deferred tax assets recognized net operating loss carryforwards resulting windfall tax benefits windfall tax benefit occurs actual tax benefit realized upon employee’s disposition sharebased award exceeds cumulative book compensation charge associated award december 31 2010 2009 company windfall tax benefits 397 million 49 million respectively included us net operating loss carryforward reflected deferred tax assets net operating loss carryforward company’s us operations 5091 million 3555 million december 31 2010 2009 respectively begin expire 2028 valuation allowance 1149 million 969 million december 31 2010 2009 respectively provided us net operating loss carryforwards us deferred tax assets company believes assets meet “more likely not” criteria recognition company’s general business credits 23 million 25 million december 31 2010 2009 respectively begin expire 2024 net operating loss carryforwards company’s foreign subsidiaries 187 billion 130 billion december 31 2010 2009 respectively begin expire 2011 valuation allowances 2163 million 1831 million december 31 2010 2009 respectively provided foreign net operating loss carryforwards foreign deferred tax assets company believes assets meet “more likely not” criteria recognition las vegas sands corp subsidiaries notes consolidated financial statements continued undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions company plan reinvestment undistributed earnings foreign subsidiaries demonstrates earnings indefinitely reinvested applicable jurisdictions company change plans may required record significant amount deferred tax liabilities december 31 2010 2009 amount undistributed earnings foreign subsidiaries company intend repatriate 102 billion 8588 million respectively earnings distributed form dividends otherwise distributions would subject us federal income tax statutory rate 35 less foreign tax credits applicable distributions addition distributions would subject withholding taxes various tax jurisdictions reconciliation beginning ending amounts unrecognized tax benefits follows thousands december 31 2010 2009 unrecognized tax benefits 79 million 172 million respectively recorded reductions us net operating loss deferred tax asset december 31 2010 2009 2008 unrecognized tax benefits 279 million 489 million 323 million respectively recorded longterm liabilities included balance december 31 2010 2009 2008 313 million 290 million 141 million respectively uncertain tax benefits would affect effective income tax rate recognized company’s major tax jurisdictions us macau singapore us year ended december 31 2010 internal revenue service “irs” issued revenue agent’s report years 2005 2008 proposing certain adjustments company disagrees several proposed adjustments submitted protest request appeals conference irs company anticipates appeals process take extended period time resolve management believe reasonably possible issues settled next twelve months us company currently examination 2009 year macau singapore company subject examination years 2005 company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different company’s expected outcome impact provision income taxes year ended december 31 2010 company reduced unrecognized tax benefits 303 million primarily related settlements taxing authorities partially offset current year additions company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties accrued december 31 2010 2009 company expect significant increase decrease unrecognized tax benefits next twelve months las vegas sands corp subsidiaries notes consolidated financial statements continued note 12 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect company’s assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement following table provides assets carried fair value thousands note 13 mall sales grand canal shoppes venetian las vegas april 2004 company entered agreement sell grand canal shoppes lease certain restaurant retail space casino level venetian las vegas “master lease” ggp approximately 7660 million “mall sale” mall sale closed may 2004 company realized gain 4176 million connection mall sale master lease agreement venetian las vegas leased nineteen spaces casino level currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various leases generally accepted accounting principles master lease agreement qualify sale real property assets real property separately legally demised accordingly 1092 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2010 2009 2008 12 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described “ note 14 commitments contingencies ventures commitments” ii lease blue man group theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 33 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 35 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 09 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 772 million generally accepted accounting principles portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis life leases years ended december 31 2010 2009 200835 million deferred item amortized offset convention retail expense las vegas sands corp subsidiaries notes consolidated financial statements continued december 31 2010 company obligated ii iii iv make future payments follows thousands shoppes palazzo shoppes palazzo opened january 18 2008 tenants yet open construction certain portions mall yet completed pursuant amended agreement company contracted sell shoppes palazzo ggp final purchase price shoppes palazzo determined taking shoppes palazzo’s noi defined amended agreement months 19 30 operations assuming fixed rent fixed periodic payments due tenants month 30 actually due months 19 30 provided 12month period delayed certain conditions satisfied divided capitalization rate capitalization rate 006 every dollar noi 380 million 008 every dollar noi 380 million closing date sale february 29 2008 ggp made initial purchase price payment 2908 million based projected net operating income first 12 months operations taking account tenants open business paying rent february 29 2008 pursuant amended agreement periodic adjustments purchase price never less 2500 million made based projected noi upcoming 12 months pursuant amended agreement company received additional 46 million june 2008 representing adjustment payment fourth month closing years ended december 31 2010 2009 company ggp agreed suspend scheduled purchase price adjustments subsequent june 2008 payment except final purchase price payment subject adjustments certain audit issues final adjustment purchase price made 30month anniversary closing date later certain conditions satisfied based previously described formula purchase price purchase price adjustment calculations noi calculated using “accrual” method accounting additionally given economic market conditions facing retailers national local level tenants facing economic challenges effect calculation noi year ended december 31 2010 company ggp deferred time reach agreement final purchase price parties continuing work various matters related calculation noi april 2009 ggp subsidiary owns shoppes palazzo filed voluntary petitions chapter 11 us bankruptcy code “chapter 11 cases” united states bankruptcy court southern district new york entered orders approving plans reorganization ggp subsidiary owns shoppes palazzo october 21 april 29 2010 respectively effective date plans reorganization occurred november 9 may 28 2010 respectively confirmed plans reorganization impaired creditors mortgage holders company continue review chapter 11 cases adjust estimates noi capitalization rates additional information received amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement “the palazzo master lease” palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level palazzo currently occupied various tenants ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces generally accepted accounting principles palazzo master lease qualify sale real property real property separately legally demised accordingly 418 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term additional 70 million total proceeds mall sale transaction deferred unearned revenues december 31 2010 balance adjusted upon resolution final purchase price las vegas sands corp subsidiaries notes consolidated financial statements continued addition company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 07 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2009 company obligated make future payments approximately 08 million annually five years ended december 31 2014 32 million thereafter generally accepted accounting principles gain sale recorded company continuing involvement transaction related certain activities performed behalf ggp uncertainty final sales price determined previously described therefore 2439 million mall sale transaction recorded deferred proceeds sale december 31 2010 accrued interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp property sold ggp continue recorded company’s consolidated financial statements final purchase price determined note 14 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows october 15 2004 richard suen round square company limited filed action lvsc las vegas sands inc “lvsi” sheldon g adelson william p weidner district court clark county nevada asserting breach alleged agreement pay success fee 50 million 20 net profit company’s macau resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs’ fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 438 million june 30 2008 judgment entered matter amount 586 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court clark county new trial company intends vigorously defend matter february 5 2007 asian american entertainment corporation limited “aaec” filed action lvsi vcr venetian venture development llc “venetian venture development” william p weidner david friedman united states district court district nevada “district court” plaintiffs assert breach contract lvsi vcr venetian venture development agreement aaec would work obtain gaming license macau successful aaec would jointly operate casino hotel related facilities macau venetian venture development venetian venture development would receive fees minority equity interest venture ii breach fiduciary duties defendants plaintiffs requested unspecified amount actual compensatory punitive damages disgorgement profits related company’s macau gaming license company filed motion dismiss july 11 2007 august 1 2007 district court granted defendants’ motion dismiss complaint defendants without prejudice plaintiffs appealed decision subsequently ninth circuit court appeals “circuit court” decided aaec barred asserting claims written agreement breached prior expiration january 15 2002 circuit court remanded case back district court proceedings issue discovery recently begun plaintiffs’ counsel filed motion withdraw representing plaintiffs december 15 2009 granted magistrate january 12 2010 february 11 2010 magistrate filed recommendation case dismissed court docket plaintiffs february 28 2010 file objections thereto none filed district court entered order april 16 2010 dismissing case plaintiff’s timely file appeal district court’s order dismissing case matter closed las vegas sands corp subsidiaries notes consolidated financial statements continued october 16 2009 company received letter counsel far east consortium international ltd “fec” notifying company may pursue various claims seeking among things monetary damages entitlement ownership interest development projects parcel 3 macau company operate company believes claims based nonlegally binding memorandum agreement expired terms 2005 company intends vigorously contest claims lawsuits may brought fec october 20 2010 steven c jacobs former chief executive officer scl filed action lvsc scl district court clark county nevada alleging breach contract lvsc scl breach implied covenant good faith fair dealing tortious discharge violation public policy lvsc mr jacobs seeking unspecified damages action preliminary stage company intends vigorously defend matter february 9 2011 lvsc received subpoena securities exchange commission requesting company produce documents relating compliance foreign corrupt practices act “fcpa” company also advised department justice conducting similar investigation company’s belief subpoena may emanated allegations contained lawsuit filed steven c jacobs described company intends cooperate investigations state administration foreign exchange china “safe” regulates foreign currency exchange transactions business dealings china safe made inquiries requested obtained documents relating certain payments made company’s wholly foreignowned enterprises “wfoes” counterparties vendors china wfoes established conduct nongaming marketing activities china create goodwill china macau company’s operations macau safe concluded investigation matters imposed penalty approximately 108 million renminbi approximately 16 million exchange rates effect december 31 2010 one company’s wfoes penalty paid matter closed may 24 2010 frank j fosbre jr filed purported class action complaint district court lvsc sheldon g adelson william p weidner complaint alleges lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint seeks among relief class certification compensatory damages attorneys’ fees costs july 21 2010 wendell shirley combs filed purported class action complaint district court lvsc sheldon g adelson william p weidner complaint alleges lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre litigation discussed seeks among relief class certification compensatory damages attorneys’ fees costs august 31 2010 district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys’ fees costs action preliminary stage management determined based proceedings date currently unable determine probability outcome matter company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued macau concession subconcession june 26 2002 macau government granted concession operate casinos macau june 26 2022 subject certain qualifications galaxy casino company limited “galaxy” consortium macau hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macau government allows vml develop operate casino projects including sands macao venetian macao plaza casino four seasons macao separately galaxy beginning december 26 2017 macau government may redeem subconcession agreement providing company least one year prior notice subconcession company obligated pay macau government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 300 million patacas approximately 37 million exchange rates effect december 31 2010 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37426 18713 125 respectively exchange rates effect december 31 2010 subject minimum 450 million patacas approximately 56 million exchange rates effect december 31 2010 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macau government portion must used promotion tourism macau based number types gaming tables employed gaming machines operation december 31 2010 company obligated subconcession make minimum future payments approximately 325 million next five years approximately 2114 million thereafter amounts expected increase substantially company completes cotai strip properties currently gaming tax macau calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macau unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed company’s business macau may able realize full benefits extending credit customers although proposals revise gaming tax laws macau assurance laws changed singapore development project august 2006 company entered development agreement amended supplementary agreement december 11 2009 stb requires company construct operate marina bay sands accordance company’s proposal integrated resort accordance agreement discussed “ note 9 longterm debt singapore related debt singapore credit facility” company entered sgd 544 billion approximately 422 billion exchange rates effect december 31 2010 singapore credit facility fund significant portion construction operating development costs marina bay sands development agreement permits marina bay sands open stages accordance agreed upon schedule runs march 31 2011 financial consequences mbs fails meet agreed upon schedule provided entire integrated resort opened december 31 2011 company believes meet deadline however doesn’t stb entitled draw sgd 1926 million approximately 1493 million exchange rates effect december 31 2010 security deposit singapore credit facility operating leases company leases real estate various equipment operating lease arrangements also party several service agreements terms excess one year december 31 2010 company obligated noncancelable operating leases make future minimum lease payments follows thousands expenses incurred operating lease agreements including shortterm variablerate nature totaled 381 million 236 million 232 million years ended december 31 2010 2009 2008 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued ventures commitments company entered employment agreements five corporate senior executives remaining terms one two years december 31 2010 company obligated make future payments 70 million 44 million years ended december 31 2011 2012 respectively 2003 company entered three lease termination asset purchase agreements grand canal shoppes tenants case company obtained title leasehold improvements fixed assets originally purchased grand canal shoppes tenants recorded estimated fair market value approximated discounted present value company’s obligation former tenants december 31 2010 company obligated agreements make future payments approximately 06 million years ended december 31 2011 2012 2013 04 million years ended december 31 2014 2015 60 million thereafter company entered agreements starwood shangrila manage hotels company’s cotai strip parcels 5 6 starwood brand serviced luxury aparthotel units located thereon management agreements starwood shangrila impose certain construction opening obligations deadlines company certain past andor anticipated delays would allow starwood shangrila terminate respective agreements company recommenced construction activities parcels 5 6 negotiating undertaking negotiate amendments management agreements starwood shangrila provide new opening timelines negotiations unsuccessful starwood shangrila exercise rights terminate agreements company would find new managers brands projects company’s agreement starwood related las vegas condo tower terminated connection suspension project management currently evaluating alternatives branding project company find new managers brands macau unsuccessful rebranding las vegas condo tower measures could material adverse effect company’s financial condition results operations cash flows malls macau singapore company leases mall space macau singapore various retailers leases noncancellable operating leases lease periods vary 6 months 10 years leases include minimum base rents escalated contingent rent clauses december 31 2010 future minimum rentals noncancelable leases follows thousands exchange rates effect december 31 2010 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 378 million 150 million 21 million years ended december 31 2010 2009 2008 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 15 stockbased employee compensation company three nonqualified stock option plans 1997 plan 2004 plan scl equity plan described plans provide granting stock options pursuant applicable provisions internal revenue code regulations lvsllc 1997 fixed stock option plan 1997 plan provides 19952457 shares postsplit basis common stock lvsllc reserved issuance officers key employees consultants lvsllc affiliates subsidiaries defined 1997 plan pursuant options granted 1997 plan 1997 plan provides principal stockholder may time assume 1997 plan certain obligations 1997 plan case principal stockholder rights powers responsibilities granted lvsllc board directors 1997 plan respect assumed obligations principal stockholder assumed lvsllc’s obligations 1997 plan sell shares optionees upon exercise options respect options granted prior july 15 2004 lvsllc responsible obligations 1997 plan lvsc assumed obligations lvsllc principal stockholder 1997 plan obligation principal stockholder issue 984321 shares options granted prior july 15 2004 connection initial public offering board directors agreed grant additional stock options 1997 plan following initial public offering options outstanding years ended december 31 2010 2009 las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value company’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares company’s common stock available awards 2004 plan term ten years awards may granted expiration term compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2010 7676411 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan company’s stock date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based combination company’s historical volatility historical volatilities selection companies company’s peer group due company’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant sands china ltd equity award plan company’s subsidiary scl adopted equity award plan “scl equity plan” grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scl’s subsidiaries’ affiliates’ employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scl’s common stock available awards scl equity plan term ten years awards may granted expiration term scl’s compensation committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2010 785847008 shares available grant scl equity plan las vegas sands corp subsidiaries notes consolidated financial statements continued stock option awards granted exercise price less closing price scl’s stock date grant ii average closing price scl’s stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting net estimated forfeitures recognized straightline basis awards’ respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based historical volatilities selection companies scl’s peer group due scl’s lack historical information company used simplified method estimating expected option life options qualify “plainvanilla” options riskfree interest rate periods equal expected term stock option based hong kong exchange fund note rate effect time grant fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity company’s equity award plans year ended december 31 2010 presented las vegas sands corp subsidiaries notes consolidated financial statements continued restricted stock awards summary unvested restricted shares company’s 2004 plan year ended december 31 2010 presented excluded table 350000 shares restricted stock legally issued january 1 2011 however accounting purposes deemed grant date november 13 2010 shares value 169 million expensed straightline basis 2 years december 31 2010 2004 plan 791 million unrecognized compensation cost net estimated forfeitures 100 per year related unvested stock options 161 million unrecognized compensation cost related unvested restricted stock including 350000 shares legally issued noted stock option restricted stock costs expected recognized weighted average period 27 years 19 years respectively december 31 2010 scl equity plan 151 million unrecognized compensation cost net estimated forfeitures 88 per year related unvested stock options expected recognized weighted average period 34 years stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2010 thousands except weighted average grant date fair values las vegas sands corp subsidiaries notes consolidated financial statements continued note 16 employee benefit plans company selfinsured health care workers compensation benefits us employees liability claims filed estimates claims incurred filed included accrued liabilities consolidated balance sheets participation vcr 401k employee savings plan available fulltime employees threemonth probation period savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 maximum 5 participating employee’s eligible gross wages given challenging conditions impact company’s us operations company ceased matching contributions salaried employees effective april 1 2009 years ended december 31 2010 2009 2008 company’s matching contributions savings plan 32 million 43 million 62 million respectively participation vml’s provident retirement fund available permanent employees threemonth probation period vml contributes 5 employee’s basic salary fund employee eligible receive 30 contributions working three consecutive years gradually increasing 100 working ten years given challenging conditions impact company’s macau operations provident fund suspended years ended december 31 2010 2009 employees accepted reduced work schedule eligible benefit years ended december 31 2010 2009 2008 vml’s contributions provident fund 73 million 46 million 184 million respectively participation mbs’s provident retirement fund available permanent employees singapore residents upon joining company mbs contributes 145 employee’s basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon reaching retirement age upon meeting requirements set local regulations years ended december 31 2010 2009 2008 mbs’s contributions provident fund 169 million 19 million 13 million respectively note 17 related party transactions years ended december 31 2010 2009 2008 principal stockholder family purchased certain banquet room catering goods services company approximately 08 million 06 million 10 million respectively years ended december 31 2010 2009 2008 company incurred paid certain expenses totaling 161 million 81 million 64 million respectively principal stockholder related company’s use personal aircraft business purposes addition years ended december 31 2010 2009 2008 company charged received principal stockholder 94 million 77 million 89 million respectively related aviation costs incurred company principal stockholder’s use company aviation personnel assets personal purposes year ended december 31 2008 company sold principal stockholder’s family private placement transaction 4750 million convertible senior notes november 2008 concurrent company’s issuance common stock preferred stock warrants principal stockholder’s family exercised conversion feature convertible senior notes 86363636 shares company’s common stock conversion price 550 per share see “ note 9 longterm debt corporate us related debt convertible senior notes” “ note 10 equity” year ended december 31 2008 subsidiary company performed work home owned robert g goldstein company’s executive vice president mr goldstein believed company acknowledged work performed appropriate manner matter referred independent expert concurred quality work concluded mr goldstein obligated pay 04 million incurred company costs overhead job findings accepted company mr goldstein year ended december 31 2003 company purchased lease interest assets carnevale coffee bar llc principal stockholder partner 31 million payable installments 06 million 2003 approximately 03 million annually 10 years beginning 2004 september 1 2013 las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 segment information company’s principal operating developmental activities occur three geographic areas united states macau singapore company reviews results operations key operating segments venetian las vegas includes sands expo center palazzo sands bethlehem sands macao venetian macao four seasons macao asia comprised primarily company’s ferry operations various operations ancillary company’s properties macau marina bay sands company also reviews construction development activities primary projects venetian las vegas palazzo sands bethlehem sands macao venetian macao four seasons macao asia marina bay sands development projects cotai strip parcels 3 5 6 7 8 corporate comprised primarily airplanes las vegas condo tower venetian las vegas palazzo operating segments managed single integrated resort aggregated one reportable segment “las vegas operating properties” considering similar economic characteristics types customers types services products regulatory business environment operations within segment company’s organizational management reporting structure information years ended december 31 2009 2008 reclassified conform current presentation company’s segment information follows three years ended december 31 2010 2009 2008 thousands las vegas sands corp subsidiaries notes consolidated financial statements continued 1 adjusted property ebitda net income loss attributable las vegas sands corp stockbased compensation expense corporate expense rental expense preopening expense development expense depreciation amortization impairment loss disposal assets interest income expense loss modification early retirement debt income taxes net income loss attributable noncontrolling interests adjusted property ebitda used management primary measure operating performance company’s properties compare operating performance company’s properties competitors las vegas sands corp subsidiaries notes consolidated financial statements continued note 19 condensed consolidating financial information lvsc obligor senior notes due 2015 lvsllc vcr mall intermediate holding company llc venetian venture development venetian transport llc venetian marketing inc lido intermediate holding company llc lido casino resort holding company llc interface groupnevada inc palazzo condo tower llc sands pennsylvania inc phase ii mall holding llc phase ii mall subsidiary llc collectively “guarantor subsidiaries” jointly severally guaranteed senior notes full unconditional basis lvs nevada international holdings inc lvs management services llc newly formed subsidiaries added september 2009 full unconditional guarantors senior notes joint several basis included group subsidiaries guarantor subsidiaries year ended december 31 2010 period ended december 31 2009 november 2009 venetian venture development merged lvs nevada international holdings inc voting stock entities included guarantor subsidiaries 100 owned directly indirectly las vegas sands corp noncontrolling interest amount included guarantor subsidiaries’ condensed consolidating balance sheets related nonvoting preferred stock one subsidiaries held third party february 29 2008 capital stock phase ii mall subsidiary llc sold ggp connection therewith released guarantor senior notes sale complete accounting perspective due company’s continuing involvement transaction related completion construction remainder shoppes palazzo certain activities performed behalf ggp uncertainty final sales price certain assets liabilities operating results cash flows related ownership operation mall phase ii mall subsidiary llc subsequent sale continue accounted guarantor subsidiaries final sales price determined therefore included “guarantor subsidiaries” columns following condensed consolidating financial information result net assets 380 million consisting 2821 million property equipment offset 2441 million liabilities consisting primarily deferred proceeds sale 470 million consisting 2911 million property equipment offset 2441 million liabilities consisting primarily deferred proceeds sale december 31 2010 2009 respectively net loss consisting primarily depreciation expense 99 million 125 million 78 million years ended december 31 2010 2009 2008 respectively related mall accounted guarantor subsidiaries balances amounts collateral senior notes considered credit support guarantees senior notes las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating financial information company guarantor subsidiaries nonguarantor subsidiaries combined basis december 31 2010 2009 three years period ended december 31 2010 follows thousands condensed consolidating balance sheets december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating balance sheets december 31 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements operations year ended december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2010 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2009 las vegas sands corp subsidiaries notes consolidated financial statements continued condensed consolidating statements cash flows year ended december 31 2008 las vegas sands corp subsidiaries notes consolidated financial statements continued note 20 selected quarterly financial results unaudited earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2010 2009 2008 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm stockholders board directors las vegas sands corp opinion financial statements audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2017 2016 related consolidated statements operations comprehensive income equity cash flows three years period ended december 31 2017 related notes financial statement schedule listed index item 15a2 collectively referred financial statements opinion financial statements present fairly material respects financial position company december 31 2017 2016 results operations cash flows three years period ended december 31 2017 conformity accounting principles generally accepted united states america also audited accordance standards public company accounting oversight board united states pcaob companys internal control financial reporting december 31 2017 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 23 2018 expressed unqualified opinion companys internal control financial reporting basis opinion financial statements responsibility companys management responsibility express opinion companys financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion served companys auditor since 2013 report independent registered public accounting firm stockholders board directors las vegas sands corp opinion internal control financial reporting audited internal control financial reporting las vegas sands corp subsidiaries “company” december 31 2017 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso opinion company maintained material respects effective internal control financial reporting december 31 2017 based criteria established internal control integrated framework 2013 issued coso also audited accordance standards public company accounting oversight board united states pcaob consolidated financial statements financial statement schedule year ended december 31 2017 company report dated february 23 2018 expressed unqualified opinion financial statements financial statement schedule basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements annual report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp lvsc together subsidiaries company incorporated nevada common stock traded new york stock exchange symbol lvs ordinary shares companys subsidiary sands china ltd scl indirect owner operator majority companys operations macao special administrative region macao peoples republic china listed main board stock exchange hong kong limited sehk shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements operations company developer destination properties integrated resorts feature premium accommodations worldclass gaming entertainment retail convention exhibition facilities celebrity chef restaurants amenities macao company currently owns 701 scl includes operations venetian macao resort hotel venetian macao sands cotai central parisian macao plaza macao four seasons hotel macao cotai strip four seasons hotel macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 company owns operates venetian macao anchors cotai strip companys masterplanned development integrated resorts area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater mall retail dining space approximately 926000 square feet convention center meeting room complex approximately 12 million square feet company owns sands cotai central integrated resort situated across street venetian macao parisian macao plaza macao four seasons hotel macao sands cotai central opened phases beginning april 2012 property features four hotel towers first hotel tower consisting approximately 650 fivestar rooms suites conrad brand approximately 1200 fourstar rooms suites holiday inn brand second hotel tower consisting approximately 1850 rooms suites sheraton brand third hotel tower consisting approximately 2100 rooms suites sheraton brand fourth hotel tower consisting approximately 400 rooms suites st regis brand within sands cotai central company also owns currently operates approximately 367000 square feet gaming space approximately 369000 square feet meeting space approximately 424000 square feet retail space well entertainment dining facilities september 13 2016 company opened parisian macao integrated resort connected venetian macao plaza macao four seasons hotel macao includes 253000 square foot casino parisian macao also features approximately 2800 rooms suites approximately 300000 square feet retail dining space meeting room complex approximately 63000 square feet 1200seat theater company owns plaza macao four seasons hotel macao features 360 rooms suites managed operated four seasons hotels inc located adjacent connected venetian macao within integrated resort company owns operates plaza casino features approximately 105000 square feet gaming space 19 paiza mansions retail space approximately 258000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities las vegas sands corp subsidiaries notes consolidated financial statements continued company owns operates sands macao first las vegasstyle casino macao sands macao offers approximately 213000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theaters landmark iconic structure bayfront promenade contains artscience museum united states las vegas company owns operates venetian resort hotel casino venetian las vegas renaissance venicethemed resort palazzo resort hotel casino palazzo resort featuring modern european ambience design expo convention center approximately 12 million square feet sands expo center together venetian las vegas palazzo las vegas operating properties las vegas operating properties situated las vegas strip integrated resort approximately 7100 suites approximately 225000 square feet gaming space meeting conference facility approximately 11 million square feet grand canal shoppes consists two enclosed retail dining entertainment complexes sold ggp limited partnership ggp see note 12 mall activities pennsylvania company owns operates sands casino resort bethlehem sands bethlehem gaming hotel retail dining complex located site historic bethlehem steel works bethlehem pennsylvania sands bethlehem features approximately 146000 square feet gaming space hotel tower 282 rooms 150000squarefoot retail facility arts cultural center 50000squarefoot multipurpose event center company owns 86 economic interest gaming hotel entertainment portion property ownership interest sands bethworks gaming llc approximately 35 economic interest retail portion property ownership interest sands bethworks retail llc development projects company constantly evaluating opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well anticipated revenue generating additions companys integrated resorts macao october 2017 company announced renovate expand rebrand sands cotai central new destination integrated resort londoner macao adding extensive thematic elements externally internally londoner macao feature new attractions features london including londons recognizable landmarks expanded retail mall additional 350 luxury suites project commence 2018 phased minimize disruption propertys peak periods company expects project completed 2020 october 2017 company announced tower adjacent four seasons hotel macao feature additional 295 suites company completed structural work tower plans commence build suites 2018 company expects project completed 2019 united states company constructing highrise residential condominium tower las vegas condo tower located las vegas strip palazzo venetian las vegas 2008 company suspended las vegas sands corp subsidiaries notes consolidated financial statements continued construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company continues evaluate highest return opportunity project intends recommence construction demand conditions improve impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 122 million capitalized construction costs net depreciation december 31 2017 company continues evaluate current development projects pursue new development opportunities globally capital financing overview company funds development projects primarily borrowings credit facilities operating cash flows company held unrestricted cash equivalents 242 billion restricted cash equivalents 11 million december 31 2017 company believes cash hand cash flow generated operations sufficient maintain compliance financial covenants credit facilities company may elect arrange additional financing fund planned future development projects normal course activities company continue evaluate capital structure opportunities enhancements thereof march 2017 company amended us credit facility refinanced term loans aggregate amount 218 billion extended maturity term loans march 29 2024 removed requirement prepay outstanding revolving loans andor permanently reduce revolving commitments certain circumstances lowered applicable margin credit spread borrowings term loans see note 8 longterm debt 2013 us credit facility note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities vies company primary beneficiary intercompany balances transactions eliminated consolidation managements determination appropriate accounting method respect companys variable interests based accounting standards vies issued financial accounting standards board fasb company consolidates vies primary beneficiary discloses significant variable interests vies primary beneficiary company entered various joint venture agreements independent third parties operations joint ventures consolidated company due companys significant investment joint ventures power direct activities joint ventures would significantly impact economic performance obligation absorb potentially significant losses rights receive potentially significant benefits joint ventures company evaluates primary beneficiary designation ongoing basis assess appropriateness vies status events occurred would trigger analysis december 31 2017 2016 companys consolidated joint ventures total assets 77 million 79 million respectively total liabilities 198 million 173 million respectively companys joint ventures intercompany liabilities 196 million 171 million december 31 2017 2016 respectively use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available las vegas sands corp subsidiaries notes consolidated financial statements continued company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds accounts receivable credit risk accounts receivable comprised casino hotel receivables bear interest recorded cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit junket operators macao receivables offset commissions payable respective junket operators business economic conditions legal enforceability gaming debts significant events foreign countries could affect collectability receivables customers junket operators residing countries allowance doubtful accounts represents companys best estimate amount probable credit losses companys existing accounts receivable company determines allowance based analysis collectability account balance specified dollar amount based upon age account customers financial condition collection history known information company applies standard reserve percentages aged account balances specified dollar amount account balances charged allowance company believes probable receivable recovered management believes concentrations credit risk allowance established although management believes allowance adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost net realizable value cost determined weighted average specific identification methods property equipment property equipment stated cost net accumulated depreciation amortization accumulated impairment losses depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets year ended december 31 2017 company changed estimated useful lives certain property equipment based combination factors accumulating time provided company updated information make better estimate economic lives assets factors included 1 accumulation historical asset replacement data companys operating properties reflects actual length time company uses certain property equipment 2 stabilization operating regulatory competitive environment jurisdiction company operates includes meeting final land concession governmentimposed deadlines companys macao properties cotai strip 3 transitioning predictable renovation cycles companys operating properties 4 consideration estimated useful lives las vegas sands corp subsidiaries notes consolidated financial statements continued assigned buildings companys peers gaming hospitality industry based factors well anticipated use condition assets evaluated company determined changes useful lives certain property equipment appropriate result company revised estimated useful lives buildings building improvements land improvements range 15 40 years 10 50 years certain furniture fixtures equipment 3 6 years 5 10 years better reflect estimated periods assets expected remain service change estimated useful lives accounted change accounting estimate effective july 1 2017 impact change year ended december 31 2017 decrease depreciation amortization expense increase operating income 112 million increase net income attributable lvsc 72 million earnings per share 009 basic diluted basis maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model assets held used including projects development fixed assets reviewed impairment whenever indicators impairment exist indicator impairment exists company first groups assets liabilities lowest level identifiable cash flows largely independent cash flows assets liabilities asset group secondly company estimates undiscounted future cash flows directly associated expected arise completion use eventual disposition asset group company estimates undiscounted cash flows remaining useful life primary asset within asset group undiscounted cash flows exceed carrying value impairment indicated undiscounted cash flows exceed carrying value impairment measured based fair value compared carrying value fair value typically based discounted cash flow model asset still development future cash flows include remaining construction costs estimate undiscounted cash flows companys asset groups company considers potential cash flow scenarios probability weighted based managements estimates given current conditions determining recoverability companys asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes companys estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups assets held sale fixed assets disposal group measured lower carrying amount fair value less cost sell losses recognized initial subsequent writedown fair value less cost sell gains recognized subsequent increase fair value less cost sell excess cumulative loss previously recognized gains losses previously recognized result sale disposal group shall recognized date sale fixed assets depreciated classified held sale year ended december 31 2017 company recognized loss disposal impairment assets 20 million primarily related dispositions macao us operations years ended december 31 2016 2015 company recognized loss disposal impairment assets 79 million 35 million respectively las vegas sands corp subsidiaries notes consolidated financial statements continued capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost companys outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2017 2016 2015 company capitalized 2 million 34 million 27 million respectively interest expense years ended december 31 2017 2016 2015 company capitalized approximately 24 million 29 million 31 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts certain direct incremental costs discounts incurred obtaining loans capitalized amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments made use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements indefinite useful life assets indefinite useful lives regularly assessed ensure continue meet indefinite useful life criteria assets subject amortization tested impairment recoverability annually frequently events circumstances indicate assets might impaired performing impairment analysis company may first conduct qualitative assessment determine whether morelikelythannot asset impaired company elects perform qualitative assessment determined morelikelythannot asset impaired assessing qualitative factors company performs impairment test consists comparison fair value asset carrying amount fair value asset exceeds carrying amount impairment recognized fair value asset exceed carrying amount impairment recognized amount equal difference december 31 2017 company assets 50 million 17 million related sands bethlehem gaming license table games certificate respectively determined indefinite useful life recorded within intangible assets accompanying consolidated balance sheets year ended december 31 2017 company elected perform quantitative analysis last quantitative analysis performed year ended december 31 2014 fair value company’s gaming license table games certificate estimated using company’s expected adjusted property ebitda defined “ note 17 segment information” combined estimated future taxaffected cash flows terminal value using gordon growth model discounted present value rates commensurate company’s capital structure prevailing borrowing rates within casino industry general adjusted property ebitda discounted cash flows common measures used value cashintensive businesses casinos determining fair value gaming license table games certificate judgmental nature requires use significant estimates assumptions including adjusted property ebitda growth rates discount rates future market conditions among others years ended december 31 2016 2015 annual impairment analysis included assessment certain qualitative factors including limited results recent fair value calculation current year projected operating results macroeconomic industry conditions company considered qualitative factors determined morelikelythannot indefinite lived intangible assets impaired future changes companys estimates assumptions based upon changes macroeconomic factors operating results managements intentions may result future changes fair value gaming license table games certificate impairment charge related assets recorded years ended december 31 2017 2016 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued revenue recognition promotional allowances casino revenue aggregate gaming wins losses commissions rebated directly indirectly junket operators customers cash discounts cash incentives customers related gaming play recorded reduction gross casino revenue hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service deposits future hotel occupancy meeting space food beverage services contracts recorded deferred income revenue recognition criteria met cancellation fees hotel meeting space food beverage services recognized upon cancellation customer included convention retail revenues mall revenue primarily generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightlined basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company thresholds met convention revenues recognized related service rendered event held accordance industry practice retail value rooms food beverage services furnished companys patrons without charge included gross revenue deducted promotional allowances estimated retail value promotional allowances included operating revenues follows estimated departmental cost providing promotional allowances included primarily casino operating expenses follows gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment companys gaming revenue recorded casino expense accompanying consolidated statements operations taxes 360 billion 324 billion 331 billion years ended december 31 2017 2016 2015 respectively frequent players program company established promotional clubs encourage repeat business frequent active slot machine table games patrons members earn points primarily based gaming activity points redeemed cash free play free goods services company accrues club points expected redeemed cash free play reduction gaming revenue accrues club points expected redeemed free goods services primarily casino expense accruals based estimates assumptions regarding mix cash free play free goods services redeemed costs providing benefits historical data used assist determination estimated accruals las vegas sands corp subsidiaries notes consolidated financial statements continued preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 129 million 121 million 124 million years ended december 31 2017 2016 2015 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related companys integrated resort operations related ancillary operations foreign currency company accounts foreign currency translation accordance related accounting standards gains losses foreign currency remeasurements included income expense balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process charged credited comprehensive income comprehensive income accumulated comprehensive income loss comprehensive income includes net income nonstockholder changes equity comprehensive income balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments year ended december 31 2015 5 million gain related dissolution wholly owned foreign subsidiary reclassified accumulated comprehensive income loss comprehensive income accompanying consolidated statements operations earnings per share weighted average number common equivalent shares used calculation basic diluted earnings per share consisted following stockbased employee compensation company accounts stockbased employee compensation accordance accounting standards regarding sharebased payment establishes accounting equity instruments exchanged employee services stockbased compensation cost measured grant date based calculated fair value award recognized employees requisite service period generally vesting period equity grant companys las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation plans fully discussed note 14 stockbased employee compensation income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards companys foreign us tax rate differential reflects fact income earned singapore macao taxed local rates lower us tax rates company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2018 december 2017 company requested additional income tax exemption either additional 5year period june 26 2022 date companys subconcession agreement expires accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods companys experience operating loss tax credit carryforwards expiring tax planning strategies company recorded valuation allowances net deferred tax assets certain foreign jurisdictions 261 million 234 million december 31 2017 2016 respectively valuation allowance certain deferred tax assets us operations 443 billion 396 billion december 31 2017 2016 respectively increased current year primarily due increase us foreign tax credits management reassess realization deferred tax assets based accounting standards income taxes reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable company able reduce valuation allowance period determination made appropriate significant judgment required evaluating companys tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain accounting standards regarding uncertainty income taxes provide twostep approach recognizing measuring uncertain tax positions first step evaluate tax position recognition determining weight available evidence indicates morelikelythannot position sustained audit including resolution related appeals litigation processes second step measure tax benefit largest amount 50 likely based solely technical merits sustained examinations company recorded unrecognized tax benefits 92 million 74 million december 31 2017 2016 respectively company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different december 2017 us enacted tax cuts jobs act also referred us tax reform act made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries result company recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation companys us deferred tax liabilities reduced corporate income tax rate 21 las vegas sands corp subsidiaries notes consolidated financial statements continued company recorded impact enactment us tax reform subject staff accounting bulletin sab 118 provides twelve month remeasurement period complete accounting required accounting standards codification asc 740 company believes provisional amounts represent reasonable estimate ultimate enactmentrelated impact us tax reform companys consolidated financial statements possible company may materially adjust amounts related administrative guidance notices implementing regulations potential legislative amendments interpretations new tax law evolves adjustments could impact companys tax assets liabilities effective tax rate earnings per share accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities statement financial position measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce companys exposure market fluctuation throughout hedge period company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company employed financial instruments pursuant policy none designated hedges accounting purposes gains losses recognized income expense depending classification position end reporting period derivative reported prepaid expenses assets net accrued liabilities longterm liabilities applicable accompanying consolidated balance sheets see note 11 fair value measurements additional disclosures regarding derivatives recent accounting pronouncements may 2014 fasb issued accounting standard update subsequently amended revenue recognition applicable contracts customers update requires entity recognize revenue transfers promised goods services customers amount reflects expects receive exchange goods services also requires detailed disclosures enable users financial statements understand nature amount timing uncertainty revenue cash flows arising contracts customers guidance required applied retrospective basis using one two methodologies effective fiscal years beginning december 15 2017 company adopted new standard january 1 2018 full retrospective basis adoption standard change presentation accounting complimentary revenues promotional allowances currently presented statements operations accordance current industry standards indicated see revenue recognition promotional allowances majority total promotional allowances netted casino revenue expenses allocated among respective categories different manner certain commission arrangements third parties reclassified operating expenses netted revenue also change manner company assigns value accrued customer benefits related frequent players programs resulting liability recorded using retail value benefits less estimated breakage offset casino revenue benefits redeemed revenue recognized resulting category goods services provided upon retrospective application january 1 2018 management estimates net revenues operating expenses amounts previously reported years ended december 31 2017 2016 decrease amount expected exceed 200 million primarily due changes accounting certain commissions frequent players programs adoption guidance expected material impact companys financial condition net income february 2016 fasb issued accounting standard update leases requires lessees recognize lease liability rightofuse asset measured present value future minimum lease payments las vegas sands corp subsidiaries notes consolidated financial statements continued lease commencement date lessor accounting remains largely unchanged new guidance effective fiscal years beginning december 15 2018 including interim reporting periods within reporting period early adoption permitted modified retrospective approach must applied leases existing entered beginning earliest comparative period presented financial statements company expects adopt guidance beginning january 1 2019 continues assess impact guidance financial condition results operations primary effect update expected increase assets liabilities balance sheet adoption guidance expected material impact net income march 2016 fasb issued accounting standard update simplify several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows electing accounting policy either estimate number forfeitures account forfeitures occur company adopted guidance effective january 1 2017 result excess tax benefits deficiencies related exercise vesting sharebased awards reflected accompanying condensed consolidated statements operations component income tax expense whereas previously recognized stockholders equity realized result prior guidance required deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits company windfall tax benefits 379 million december 31 2016 reflected deferred tax assets adoption new accounting standard company recorded deferred tax assets established full valuation allowance deferred tax assets based determination morelikelythannot deferred tax assets would realized accompanying consolidated statements cash flows present excess tax benefits operating activity retrospective basis reclassification prior period immaterial impact companys cash flows operating financing activities company elected account forfeitures occur rather account forfeitures based upon estimated rate change accounting policy adopted modified retrospective basis resulted 2 million cumulative effect adjustment retained earnings june 2016 fasb issued accounting standard update revises methodology measuring credit losses financial instruments timing losses recorded guidance effective fiscal years beginning december 15 2019 including interim reporting periods within reporting period applied modified retrospective basis early adoption permitted company currently assessing impact guidance companys financial condition results operations cash flows august 2016 fasb issued accounting standard update reduce diversity certain cash receipts cash payments presented classified statement cash flows guidance effective fiscal years beginning december 15 2017 including interim reporting periods within reporting period applied retrospectively early adoption permitted company adopted guidance january 1 2018 adoption material effect presentation cash flows november 2016 fasb issued accounting standard update reduce diversity changes restricted cash presented classified statement cash flows guidance effective fiscal years beginning december 15 2017 including interim reporting periods within reporting period applied retrospectively early adoption permitted company adopted guidance january 1 2018 adoption material effect presentation balance sheet statement cash flows reclassification certain amounts consolidated statements cash flows years ended december 31 2016 2015 reclassified consistent current year presentation reclassification impact companys financial condition results operations cash flows las vegas sands corp subsidiaries notes consolidated financial statements continued note 3 accounts receivable net accounts receivable consists following note 4 property equipment net property equipment consists following construction progress consists following 433 million construction progress december 31 2017 consists primarily construction las vegas condo tower various projects venetian macao accordance april 2004 purchase sale agreement amended venetian casino resort llc vcr ggp amended agreement company sold portion grand canal shoppes located within palazzo formerly referred shoppes palazzo see note 12 mall activities shoppes palazzo terms settlement ggp june 24 2011 company retained 295 million proceeds previously received participates certain potential future revenues earned ggp generally accepted accounting principles transaction accounted sale companys participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 266 million proceeds allocated mall sale transaction recorded deferred proceeds longterm financing obligation accrue interest imputed rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp company property las vegas sands corp subsidiaries notes consolidated financial statements continued equipment legally sold ggp totaling 194 million net 106 million accumulated depreciation december 31 2017 continue recorded companys consolidated balance sheet continue depreciated companys consolidated statement operations cost accumulated depreciation property equipment company leasing third parties primarily part mall operations 131 billion 415 million respectively december 31 2017 cost accumulated depreciation property equipment company leasing third parties 125 billion 353 million respectively december 31 2016 cost accumulated depreciation property equipment company leasing capital lease arrangements 41 million 24 million respectively december 31 2017 cost accumulated depreciation property equipment company leasing capital lease arrangements 44 million 23 million respectively december 31 2016 note 5 leasehold interests land net leasehold interests land consist following company amortizes leasehold interests land straightline basis expected term lease amortization expense 37 million 38 million 39 million included amortization leasehold interests land expense years ended december 31 2017 2016 2015 respectively estimated future amortization expense approximately 36 million five years period ending december 31 2022 140 billion thereafter exchange rates effect december 31 2017 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company received land concessions macao government build sites sands macao venetian macao plaza macao four seasons hotel macao sands cotai central parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government december 31 2017 company obligated land concessions make future rental payments 5 million five years period ending december 31 2022 55 million thereafter total 80 million las vegas sands corp subsidiaries notes consolidated financial statements continued note 6 intangible assets net intangible assets consist following august 2007 july 2010 company issued gaming license certificate pennsylvania gaming control board slots table games operations sands bethlehem respectively acquired 50 million 17 million respectively license certificate determined indefinite lives therefore subject amortization april 2016 company paid 66 million singapore dollars sgd approximately 47 million exchange rates effect time transaction singapore casino regulatory authority cra part process renew gaming license marina bay sands license amortized threeyear term expires april 2019 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 16 million 15 million 14 million years ended december 31 2017 2016 2015 respectively estimated future amortization expense approximately 16 million year ending december 31 2018 5 million thereafter note 7 accrued liabilities accrued liabilities consist following las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following 1 unamortized deferred financing costs 24 million 35 million december 31 2017 2016 respectively related us macao singapore revolving credit facilities included assets net accompanying consolidated balance sheets corporate us related debt 2013 us credit facility december 2013 company entered 35 billion senior secured credit facility 2013 us credit facility consists 225 billion funded term b loan 2013 us term b facility original issue discount 11 million 125 billion revolving credit facility 2013 us revolving facility borrowings 2013 us credit facility used repay outstanding balance companys prior senior secured credit facility august 2016 company amended 2013 us credit facility among things obtain revolving credit commitments aggregate amount 115 billion 2013 extended us revolving facility mature september 19 2020 used replace commitments refinance amounts outstanding existing 2013 us revolving facility pay fees expenses incurred connection amendment borrowings 2013 extended us revolving facility used general corporate purposes working capital needs company recorded 2 million loss early retirement debt quarter ended september 30 2016 connection amendment december 2016 company amended 2013 us credit facility lower applicable margin credit spread adjusted eurodollar rate term loans 250 225 per annum alternative base rate term loans 150 125 per annum additionally amendment lowers adjusted eurodollar rate floor 075 per annum 00 per annum thereby effectively lowers alternative base rate floor 175 per annum 10 per annum items noted terms conditions existing 2013 us credit las vegas sands corp subsidiaries notes consolidated financial statements continued facility remained unchanged company recorded 2 million loss early retirement debt quarter ended december 31 2016 connection amendment march 2017 company entered agreement amendment agreement amend existing 2013 us credit facility among things refinance term loans way continuing replacing existing term loans aggregate amount 218 billion 2013 extended us term b facility lower applicable margin credit spread adjusted eurodollar rate term loans 225 20 per annum alternative base rate term loans 125 10 per annum additionally amendment agreement removed requirement prepay outstanding revolving loans andor permanently reduce revolving commitments certain circumstances extended maturity date term loans december 19 2020 march 29 2024 2013 extended us term b facility subject quarterly amortization payments 5 million began march 31 2017 followed balloon payment 203 billion due march 29 2024 company recorded 5 million loss modification debt year ended december 31 2017 connection amendment agreement december 31 2017 company 115 billion available borrowing capacity 2013 extended us revolving facility net outstanding letters credit 2013 us credit facility guaranteed certain companys domestic subsidiaries guarantors obligations 2013 us credit facility guarantees guarantors collateralized firstpriority security interest substantially las vegas sands llc lvsllc guarantors assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets borrowings 2013 extended us term b facility bear interest companys option either adjusted eurodollar rate plus credit spread 20 per annum alternative base rate plus credit spread 10 per annum interest rate set 36 december 31 2017 borrowings 2013 us extended revolving facility bear interest companys option either adjusted eurodollar rate plus credit spread alternative base rate plus credit spread credit spread case determined based companys corporate family rating set forth pricing grid per 2013 us credit facility amended corporate rating credit spread ranges 0125 0625 per annum loans accruing interest base rate 1125 1625 per annum loans accruing interest adjusted eurodollar rate 2013 extended us revolving facility interim amortization payments matures september 19 2020 company pays commitment fee undrawn amounts 2013 extended us revolving facility determined based corporate rating ranges 0125 025 per annum weighted average interest rate 2013 us credit facility 32 years ended december 31 2017 2016 30 year ended december 31 2015 2013 us credit facility contains affirmative negative covenants customary financings including limited limitations incurring additional liens incurring additional indebtedness making certain investments acquiring selling assets 2013 us credit facility also requires guarantors comply maximum ratio net debt outstanding adjusted earnings interest income taxes depreciation amortization defined adjusted ebitda extent outstanding balance 2013 extended us revolving facility certain letters credit outstanding maximum leverage ratio 55x applicable quarterly periods maturity based actual leverage ratio december 31 2017 material net assets lvsllc restricted distributed terms 2013 us credit facility addition covenants noted 2013 us credit facility contains conditions additional events default customary financings airplane financings february 2007 company entered promissory notes totaling 72 million finance purchase one airplane finance two others company already owned notes consisted balloon payment promissory notes amortizing promissory notes tenyear maturities collateralized related aircraft notes bore interest threemonth london interbank offered rate libor plus 15 per las vegas sands corp subsidiaries notes consolidated financial statements continued annum amortizing notes totaling 29 million subject quarterly amortization payments 1 million began june 1 2007 balloon notes totaling 44 million matured march 1 2017 interim amortization payments weighted average interest rate notes 24 22 18 years ended december 31 2017 2016 2015 respectively april 2007 company entered promissory notes totaling 20 million finance purchase additional airplane notes tenyear maturities consisted balloon payment promissory note amortizing promissory note notes bore interest threemonth libor plus 125 per annum 8 million amortizing note subject nominal quarterly amortization payments began june 30 2007 12 million balloon note matured march 31 2017 interim amortization payments weighted average interest rate notes 23 20 16 years ended december 31 2017 2016 2015 respectively march 2017 company repaid outstanding 56 million balance airplane financings hvac equipment lease july 2009 company entered capital lease agreement current heating ventilation air conditioning hvac provider hvac equipment lease provide operation maintenance services hvac equipment las vegas lease 10year term purchase option third fifth seventh tenth anniversary dates company obligated agreement make monthly payments approximately 300000 first year automatic decreases approximately 14000 per month every anniversary date hvac equipment lease capitalized present value future minimum lease payments lease inception macao related debt 2016 vml credit facility september 22 2011 two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement 2011 vml credit facility provided 37 billion equivalent hong kong dollars macao patacas consisted 32 billion term loan 2011 vml term facility fully drawn november 15 2011 500 million revolving facility 2011 vml revolving facility available october 15 2016 borrowings facility used repay outstanding indebtedness previous credit facilities would used working capital requirements general corporate purposes including development construction completion certain components sands cotai central march 2014 company amended 2011 vml credit facility among things modify certain financial covenants discussed addition amendment certain lenders extended maturity 239 billion aggregate principal amount 2011 vml term facility march 31 2020 extended 2011 vml term facility together new lenders provided 20 billion aggregate principal amount revolving loan commitments extended 2011 vml revolving facility portion revolving proceeds used pay 820 million aggregate principal balance 2011 vml term facility loans extended borrowings extended 2011 vml revolving facility used fund development construction completion sands cotai central parisian macao working capital requirements general corporate purposes april 2015 company entered joinder agreement joinder agreement 2011 vml credit facility joinder agreement certain lenders agreed provide term loan commitments 10 billion 2011 vml accordion term funded april 30 2015 joinder funding date june 2016 company entered agreement vml amendment agreement amend 2011 vml credit facility among things extend maturity portion existing term loans modify scheduled amortization payment dates term loans obtain new term loan commitments amended restated vml credit agreement restated vml credit agreement became effective august 31 2016 upon satisfaction closing conditions restatement date pursuant restated vml las vegas sands corp subsidiaries notes consolidated financial statements continued credit agreement restatement date certain lenders extended maturity existing term loans extended initial vml term loans may 31 2022 balance 312 billion aggregate principal amount consisting 212 billion related extended 2011 vml term facility 10 billion related 2011 vml accordion term addition certain lenders provided 10 billion aggregate principal amount new term loan commitments maturity date may 31 2022 new vml term loans together extended initial vml term loans 2016 vml term loans aggregate principal amount 412 billion terms maturity dates balance term loans 2011 vml credit facility 2016 vml term loans 2016 nonextended vml term loans amount 269 million 20 billion extended 2011 vml revolving facility remain unchanged 2016 vml revolving facility together 2016 vml term loans 2016 nonextended vml term loans 2016 vml credit facility borrowings 2016 vml term loans used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company recorded 1 million loss modification debt year ended december 31 2016 connection vml amendment agreement december 31 2017 company 20 billion available borrowing capacity 2016 vml revolving facility subsequent yearend company borrowed 249 million 2016 vml revolving facility indebtedness 2016 vml credit facility guaranteed vml venetian cotai limited venetian orient limited certain companys foreign subsidiaries collectively 2016 vml guarantors obligations 2016 vml credit facility collateralized firstpriority security interest substantially borrowers 2016 vml guarantors assets 1 capital stock similar ownership interests 2 certain furniture fixtures fittings equipment 3 certain excluded assets commencing quarterly period ending march 31 2020 end subsequent quarter december 31 2020 restated vml credit agreement requires borrower repay outstanding 2016 vml term loans pro rata basis amount equal 25 aggregate principal amount outstanding restatement date quarterly periods ending march 31 june 30 2021 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 50 aggregate principal amount outstanding restatement date quarterly periods ending september 30 december 31 2021 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 125 aggregate principal amount outstanding restatement date quarterly period ending march 31 2022 borrower required repay outstanding 2016 vml term loans pro rata basis amount equal 200 aggregate principal amount outstanding restatement date remaining balance 2016 vml term loans due maturity date commencing quarterly period ended june 30 2017 end subsequent quarter march 31 2018 restated vml credit agreement requires borrower repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 25 aggregate principal amount outstanding restatement date quarterly periods ending june 30 2018 march 31 2019 borrower required repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 50 aggregate principal amount outstanding restatement date quarterly periods ending june 30 december 31 2019 borrower required repay outstanding 2016 nonextended vml term loans pro rata basis amount equal 120 aggregate principal amount outstanding restatement date remaining balance 2016 nonextended vml term loans due maturity date march 31 2020 2016 vml revolving facility interim amortization payments matures march 31 2020 2016 vml term loans 2016 nonextended vml term loans bear interest companys option either adjusted eurodollar rate hong kong interbank offered rate hibor plus credit spread alternative base rate plus credit spread credit spread case determined based consolidated total leverage ratio set forth restated vml credit agreement credit spread ranges 025 1125 per annum loans accruing interest base rate 125 2125 per annum loans accruing interest adjusted eurodollar hibor rate set 33 29 loans accruing interest adjusted eurodollar las vegas sands corp subsidiaries notes consolidated financial statements continued hibor rate respectively december 31 2017 borrower also pay standby fees 05 per annum undrawn amounts 2016 vml revolving facility weighted average interest rate 2016 vml credit facility 26 21 16 years ended december 31 2017 2016 2015 respectively 2016 vml credit facility amended contains affirmative negative covenants customary financings including limited limitations liens loans guarantees investments acquisitions asset sales restricted payments distributions affiliate transactions use proceeds facility 2016 vml credit facility also requires borrower vml comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda net interest expense maximum leverage ratio amended 35x quarterly periods maturity based actual leverage ratio december 31 2017 material net assets 2016 vml guarantors restricted distributed terms 2016 vml credit facility addition covenants noted 2016 vml credit facility contains conditions additional events default customary financings singapore related debt 2012 singapore credit facility june 2012 companys wholly owned subsidiary marina bay sands pte ltd mbs entered sgd 51 billion approximately 381 billion exchange rates effect december 31 2017 credit agreement 2012 singapore credit facility providing fully funded sgd 46 billion approximately 344 billion exchange rates effect december 31 2017 term loan 2012 singapore term facility sgd 500 million approximately 374 million exchange rates effect december 31 2017 revolving facility 2012 singapore revolving facility available november 25 2017 included sgd 100 million approximately 75 million exchange rates effect december 31 2017 ancillary facility 2012 singapore ancillary facility borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 company amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 december 31 2017 company sgd 495 million approximately 370 million exchange rates effect december 31 2017 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbss assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets commencing quarterly period ended december 31 2014 end subsequent quarter september 30 2018 company required repay outstanding 2012 singapore term facility amount 05 aggregate principal amount outstanding august 29 2014 singapore restatement date commencing quarterly period ending december 31 2018 end subsequent quarter september 30 2019 company required repay outstanding 2012 singapore term facility amount 50 aggregate principal amount outstanding singapore restatement date commencing quarterly period ending december 31 2019 end subsequent quarter june 30 2020 maturity date company required repay outstanding 2012 singapore term facility amount 180 aggregate principal amount outstanding singapore restatement date 2012 singapore revolving facility interim amortization payments matures february 28 2020 borrowings 2012 singapore credit facility bear interest singapore swap offered rate sor plus spread 185 per annum beginning december 23 2012 spread outstanding loans subject reduction based ratio debt adjusted ebitda interest rate set approximately 26 december 31 2017 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts las vegas sands corp subsidiaries notes consolidated financial statements continued 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 22 years ended december 31 2017 2016 25 year ended december 31 2015 december 31 2017 2016 company interest rate cap agreements place december 31 2015 company one interest rate cap agreement place notional amount sgd 100 million approximately 75 million exchange rates effect december 31 2017 expiration date may 2016 strike rate 35 provisions interest rate cap agreement entitled company receive counterparties amounts selected market interest rate exceeds strike rate stated agreement net effect interest expense result interest rate cap agreements years ended december 31 2016 2015 2012 singapore credit facility amended contains affirmative negative covenants customary financings including limited limitations liens indebtedness loans guarantees investments acquisitions asset sales restricted payments affiliate transactions use proceeds facilities 2012 singapore credit facility also requires mbs comply financial covenants including maximum ratios total indebtedness adjusted ebitda minimum ratios adjusted ebitda interest expense positive net worth requirement maximum leverage ratio amended 35x quarterly periods ended december 31 2017 september 30 2019 decreases remains 30x quarterly periods thereafter maturity based actual leverage ratio december 31 2017 material net assets mbs restricted distributed terms 2012 singapore credit facility addition covenants noted 2012 singapore credit facility contains conditions additional events default customary financings debt covenant compliance december 31 2017 management believes company compliance debt covenants cash flows financing activities cash flows financing activities related longterm debt capital lease obligations follows las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities capital lease obligations longterm debt maturities capital lease obligations longterm debt outstanding december 31 2017 summarized follows fair value longterm debt estimated fair value companys longterm debt december 31 2017 2016 approximately 961 billion 958 billion respectively compared carrying value 972 billion 970 billion respectively estimated fair value companys longterm debt based level 2 inputs quoted prices markets active note 9 equity preferred stock company authorized issue 50000000 shares preferred stock companys board directors authorized subject limitations prescribed nevada law companys articles incorporation determine terms conditions preferred stock including whether shares preferred stock issued one series number shares included series powers designations preferences rights shares companys board directors also authorized designate qualifications limitations restrictions shares without vote action stockholders common stock dividends march 31 june 30 september 29 december 29 2017 company paid dividend 073 per common share part regular cash dividend program year ended december 31 2017 company recorded 231 billion distribution retained earnings 126 billion related principal stockholder family remaining 105 billion related shareholders march 31 june 30 september 30 december 30 2016 company paid dividend 072 per common share part regular cash dividend program year ended december 31 2016 company recorded 229 billion distribution retained earnings 124 billion related principal stockholder family remaining 105 billion related shareholders march 31 june 30 september 30 december 31 2015 company paid dividend 065 per common share part regular cash dividend program year ended december 31 2015 company recorded 207 billion distribution retained earnings 112 billion related principal stockholder family remaining 949 million related shareholders las vegas sands corp subsidiaries notes consolidated financial statements continued january 2018 part regular cash dividend program companys board directors declared quarterly dividend 075 per common share total estimated approximately 592 million paid march 30 2018 shareholders record march 22 2018 repurchase program october 2014 companys board directors authorized repurchase 20 billion outstanding common stock expired october 2016 november 2016 companys board directors authorized repurchase 156 billion outstanding common stock expires november 2018 repurchases companys common stock made companys discretion accordance applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including companys financial position earnings legal requirements investment opportunities market conditions years ended december 31 2017 2015 company repurchased 6194137 4383793 shares respectively common stock 375 million 205 million respectively including commissions companys current previous programs respectively year ended december 31 2016 shares repurchased share repurchases companys common stock recorded treasury stock rollforward shares common stock summary outstanding shares common stock follows noncontrolling interests scl february 24 june 23 2017 scl paid dividend 099 hong kong dollars hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2017 february 26 june 24 2016 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2016 february 27 july 15 2015 scl paid dividend hkd 099 hkd 100 per share respectively scl shareholders total 207 billion company retained 145 billion year ended december 31 2015 las vegas sands corp subsidiaries notes consolidated financial statements continued january 2018 board directors scl declared dividend hkd 099 per share total 102 billion company retained approximately 717 million scl shareholders record february 5 2018 paid february 23 2018 years ended december 31 2017 2016 2015 company distributed 13 million 15 million 14 million respectively certain noncontrolling interests note 10 income taxes consolidated income taxes noncontrolling interests domestic foreign operations follows components income tax benefit expense follows reconciliation statutory federal income tax rate companys effective tax rate follows companys foreign us tax rate differential reflects fact income earned singapore macao taxed local rates lower us tax rates company received 5year income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption end 2018 december 2017 company requested additional income tax exemption either additional 5year period june 26 2022 date companys subconcession agreement expires company received income tax exemption macao consolidated net income attributable las vegas sands corp would reduced 158 million 127 million las vegas sands corp subsidiaries notes consolidated financial statements continued 132 million diluted earnings per share would reduced 020 016 017 per share years ended december 31 2017 2016 2015 respectively may 2014 company entered agreement macao government effective end 2018 provides annual payment 42 million patacas approximately 5 million exchange rates effect december 31 2017 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits vml intends request additional agreement macao government correspond income tax exemption gaming operations however certainty agreement granted could significant impact companys tax obligation macao material adverse effect companys financial condition cash flows september 2013 company internal revenue service irs entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax creating onetime tax previously unremitted earnings foreign subsidiaries result company recorded tax benefit 526 million relating reduction valuation allowance certain deferred tax assets previously determined likely utilized also revaluation us deferred tax liabilities reduced corporate income tax rate 21 company recorded impact enactment us tax reform subject sab 118 provides twelve month measurement period complete accounting required asc 740 company believes provisional amounts represent reasonable estimate ultimate enactmentrelated impact us tax reform companys consolidated financial statements possible company may materially adjust amounts related administrative guidance notices implementing regulations potential legislative amendments interpretations new tax law evolves adjustments could impact companys tax assets liabilities effective tax rate earnings per share primary tax affected components companys net deferred tax assets liabilities follows las vegas sands corp subsidiaries notes consolidated financial statements continued march 2016 fasb issued accounting standard update simplify several aspects accounting sharebased payment transactions including income tax consequences classification awards either equity liabilities classification statement cash flows electing accounting policy either estimate number forfeitures account forfeitures occur company adopted guidance effective january 1 2017 result excess tax benefits deficiencies related exercise vesting sharebased awards reflected accompanying condensed consolidated statements operations component income tax expense whereas previously recognized stockholders equity realized result prior guidance required deferred tax assets recognized net operating loss carryforwards credit carryforwards resulting windfall tax benefits company windfall tax benefits 379 million december 31 2016 reflected deferred tax assets adoption new accounting standard company recorded deferred tax assets established full valuation allowance deferred tax assets based determination morelikelythannot deferred tax assets would realized accompanying consolidated statements cash flows present excess tax benefits operating activity retrospective basis reclassification prior period immaterial impact companys cash flows operating financing activities company elected account forfeitures occur rather account forfeitures based upon estimated rate change accounting policy adopted modified retrospective basis resulted 2 million cumulative effect adjustment retained earnings us tax reform required company compute onetime mandatory tax previously unremitted earnings foreign subsidiaries year ended december 31 2017 onetime deemed repatriation earnings result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result deemed repatriation addition deemed repatriation generated excess us foreign tax credits available carried forward tax years beyond 2017 companys us foreign tax credit carryforwards 50 billion 414 billion december 31 2017 2016 respectively begin expire 2021 companys state net operating loss carryforwards 237 million 249 million december 31 2017 2016 respectively begin expire 2024 valuation allowance 443 billion 396 billion december 31 2017 2016 respectively provided certain net us deferred tax assets company believes assets meet morelikelythannot criteria recognition net operating loss carryforwards companys foreign subsidiaries 214 billion 201 billion december 31 2017 2016 respectively begin expire 2018 valuation allowances 261 million 234 million december 31 2017 2016 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet morelikelythannot criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions us tax reform required company compute tax previously unremitted earnings foreign subsidiaries upon transition worldwide tax system territorial tax system year ended december 31 2017 company expects earnings exempt us income tax distributed earnings taxed year ended december 31 2017 us tax reform company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 companys major foreign subsidiaries distributed may continue distribute earnings excess current years tax earnings profits order meet companys liquidity needs december 31 2017 amount earnings profits foreign subsidiaries company intend repatriate 330 billion company expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise companys current agreement macao government provides fixed annual payment substitution 12 tax otherwise due dividend distributions companys macao gaming operations extended beyond december 31 2018 12 tax would due distributions earnings generated 2018 las vegas sands corp subsidiaries notes consolidated financial statements continued reconciliation beginning ending amounts unrecognized tax benefits follows december 31 2017 2016 2015 unrecognized tax benefits 62 million 58 million 57 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2017 2016 2015 unrecognized tax benefits 30 million 16 million 3 million respectively recorded longterm liabilities december 31 2015 unrecognized tax benefits 5 million recorded income taxes payable included unrecognized tax benefit balance december 31 2017 2016 2015 80 million 65 million 53 million respectively uncertain tax benefits would affect effective income tax rate recognized companys major tax jurisdictions us macao singapore company subject examination tax years beginning 2010 us tax years beginning 2013 macao singapore company believes adequately reserved uncertain tax positions however assurance taxing authorities propose adjustments different companys expected outcome could impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties 1 million accrued december 31 2017 interest penalties accrued december 31 2016 company expect significant increase decrease unrecognized tax benefits next twelve months note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect companys assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement see note 2 summary significant accounting policies additional disclosures regarding derivatives company used foreign currency forward contracts effective economic hedges manage portion foreign currency exposure foreign currency forward contracts involve purchase sale designated currency agreed upon rate settlement specified date aggregate notional value foreign currency contracts las vegas sands corp subsidiaries notes consolidated financial statements continued 427 million december 31 2016 derivatives designated andor qualify hedge accounting changes fair value recognized income expense accompanying consolidated statements operations years ended december 31 2017 2016 2015 company recorded income expense 12 million loss 10 million gain 4 million gain respectively related change fair value forward contracts following table provides assets carried fair value 1 company shortterm investments classified cash equivalents original maturities less 90 days 2 december 31 2017 company foreign currency forward contracts december 31 2016 company 18 foreign currency forward contracts fair values based recently reported market transactions forward rates assets included prepaid expenses liabilities included accrued liabilities accompanying consolidated balance sheets note 12 mall activities operating leases company leases space several integrated resorts various third parties leases noncancelable operating leases remaining lease periods vary 1 month 19 years leases include minimum base rents escalated contingent rent clauses december 31 2017 future minimum rentals noncancelable leases follows millions exchange rates effect december 31 2017 total minimum future rentals include escalated contingent rent clauses contingent rentals amounted 48 million 36 million 57 million years ended december 31 2017 2016 2015 respectively grand canal shoppes venetian las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian las vegas formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian las vegas master lease ggp approximately 766 million mall sale mall sale closed may 2004 company realized gain 418 million las vegas sands corp subsidiaries notes consolidated financial statements continued connection mall sale master lease agreement venetian las vegas leased nineteen retail restaurant spaces casino level ggp 89 years annual rent one dollar ggp assumed various leases accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 109 million transaction deferred prepaid operating lease payments venetian las vegas amortize income straightline basis 89year lease term years ended december 31 2017 2016 2015 1 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements described note 13 commitments contingencies ventures commitments ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 3 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 4 million iv lease certain office space ggp period 10 years subject extension options period 65 years annual rent approximately 1 million lease payments clauses ii iv subject automatic increases beginning sixth lease year net present value lease payments clauses ii iv closing date sale 77 million accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2017 2016 2015 3 million deferred item amortized offset convention retail expense december 31 2017 company obligated ii iii iv make future payments amount 8 million five years period ending december 31 2022 54 million thereafter total 94 million shoppes palazzo company contracted sell portion grand canal shoppes formerly referred shoppes palazzo ggp terms settlement ggp june 24 2011 company retained 295 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo period 10 years total fixed minimum rents 1 million per year subject extension options period 10 years automatic increases beginning second lease year december 31 2017 company obligated make future payments approximately 1 million year ending december 31 2018 accordance related accounting standards transaction accounted sale companys participation certain potential future revenues constitutes continuing involvement shoppes palazzo therefore 266 million mall sale transaction recorded deferred proceeds sale december 31 2017 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo ggp pursuant master lease agreement palazzo master lease palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 palazzo leased nine restaurant retail spaces casino level ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property real property separately legally demised accordingly 23 million mall sale transaction deferred prepaid operating lease payments palazzo amortized income straightline basis 89year lease term las vegas sands corp subsidiaries notes consolidated financial statements continued note 13 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel accrued nominal amount costs december 31 2017 actual results could differ estimates however opinion management litigation claims material effect companys financial condition results operations cash flows round square company limited v las vegas sands corp october 15 2004 richard suen round square company limited roundsquare filed action lvsc las vegas sands inc lvsi sheldon g adelson william p weidner district court clark county nevada district court asserting breach alleged agreement pay success fee 5 million 20 net profit companys macao resort operations plaintiffs well related claims march 2005 lvsc dismissed party without prejudice based stipulation parties pursuant order filed march 16 2006 plaintiffs fraud claims set forth first amended complaint dismissed prejudice defendants order also dismissed prejudice first amended complaint defendants sheldon g adelson william p weidner may 24 2008 jury returned verdict plaintiffs amount 44 million june 30 2008 judgment entered matter amount 59 million including prejudgment interest company appealed verdict nevada supreme court november 17 2010 nevada supreme court reversed judgment remanded case district court new trial decision reversing monetary judgment company nevada supreme court also made several rulings including overturning pretrial dismissal plaintiffs breach contract claim deciding several evidentiary matters confirmed overturned rulings made district court february 27 2012 district court set date march 25 2013 new trial june 22 2012 defendants filed request add experts plaintiffs filed motion seeking additional financial data part discovery district court granted requests retrial began march 27 may 14 2013 jury returned verdict favor roundsquare amount 70 million may 28 2013 judgment entered matter amount 102 million including prejudgment interest june 7 2013 company filed motion district court requesting judgment set aside matter law alternative new trial granted july 30 2013 district court denied companys motion october 17 2013 district court entered order granting plaintiffs request certain costs fees associated litigation amount approximately 1 million december 6 2013 company filed notice appeal jury verdict nevada supreme court company filed opening appellate brief nevada supreme court june 16 2014 august 19 2014 nevada supreme court issued order granting plaintiffs additional time september 15 2014 file answering brief september 15 2014 roundsquare filed request nevada supreme court file brief exceeding maximum number words granted october 10 2014 roundsquare filed answering brief january 12 2015 defendants filed reply brief january 27 2015 roundsquare filed reply brief nevada supreme court set oral argument december 17 2015 panel justices reset january 26 2016 en banc oral arguments presented nevada supreme court scheduled march 11 2016 nevada supreme court issued order affirming judgment liability reversing damages award remanding new trial damages march 29 2016 roundsquare filed petition rehearing nevada supreme court ordered answer company filed may 4 2016 may 12 2016 roundsquare filed motion leave file reply brief support petition rehearing may 19 2016 company filed opposition motion june 24 2016 nevada supreme court issued order granting roundsquares petition rehearing submitting appeal decision rehearing without briefing oral argument july 22 2016 nevada supreme court ordered new trial plaintiff roundsquare issue quantum merit damages pretrial hearing set district court december 12 2016 december 12 2016 hearing district court indicated would allow scope trial additional discovery areas company opposed inconsistent nevada supreme courts remand district court issued written order scope retrial discovery dated december 15 2016 january las vegas sands corp subsidiaries notes consolidated financial statements continued 5 2017 company moved stay proceedings district court pending nevada supreme courts resolution companys petition writ mandamus prohibition filed january 13 2017 february 13 2017 district court denied motion stay proceedings february 16 2017 nevada supreme court denied writ parties presently engaged discovery damages trial date originally set march 26 2018 vacated company awaiting new trial date company accrued nominal amount estimated costs related legal matter december 31 2017 event companys assumptions used evaluate matter change future periods may required record additional liability adverse outcome company intends defend matter vigorously frank j fosbre jr v las vegas sands corp sheldon g adelson william p weidner may 24 2010 frank j fosbre jr filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means august 1 2007 november 6 2008 complaint sought among relief class certification compensatory damages attorneys fees costs july 21 2010 wendell shirley combs filed purported class action complaint us district court lvsc sheldon g adelson william p weidner complaint alleged lvsc individual defendants disseminated approved materially false information failed disclose material facts press releases investor conference calls means june 13 2007 november 11 2008 complaint substantially similar fosbre complaint discussed sought among relief class certification compensatory damages attorneys fees costs august 31 2010 us district court entered order consolidating fosbre combs cases appointed lead plaintiffs lead counsel fosbre combs cases reported one consolidated matter november 1 2010 purported class action amended complaint filed consolidated action lvsc sheldon g adelson william p weidner amended complaint alleges lvsc individual defendants disseminated approved materially false misleading information failed disclose material facts press releases investor conference calls means august 2 2007 november 6 2008 amended complaint seeks among relief class certification compensatory damages attorneys fees costs january 10 2011 defendants filed motion dismiss amended complaint august 24 2011 granted part denied part dismissal certain allegations november 7 2011 defendants filed answer allegations remaining amended complaint july 11 2012 us district court issued order allowing defendants motion partial reconsideration us district courts order dated august 24 2011 striking additional portions plaintiffs complaint reducing class period february 4 november 6 2008 august 7 2012 plaintiffs filed purported class action second amended complaint second amended complaint seeking expand allegations back time period 2007 previously cut back 2008 us district court essentially alleging similar matters previously stricken us district court october 16 2012 defendants filed new motion dismiss second amended complaint plaintiffs responded motion dismiss november 1 2012 defendants filed reply november 12 2012 november 20 2012 us district court granted stay discovery private securities litigation reform act pending decision new motion dismiss therefore discovery process suspended april 16 2013 case reassigned new judge july 30 2013 us district court heard motion dismiss took matter advisement november 7 2013 judge granted part denied part defendants motions dismiss december 13 2013 defendants filed answer second amended complaint discovery matter resumed january 8 2014 plaintiffs filed motion expand certified class period granted us district court june 15 2015 fact discovery closed july 31 2015 expert discovery closed december 18 2015 january 22 2016 defendants filed motions summary judgment plaintiffs filed opposition motions summary judgment march 11 2016 defendants filed replies support summary judgment april 8 2016 summary judgment favor defendants entered january 4 2017 plaintiffs filed notice appeal february 2 2017 opening brief support appeal july 14 2017 defendants filed answering briefs opposition appeal october 13 2017 plaintiffs filed reply brief support appeal december 14 2017 oral argument appeal scheduled april 12 2018 company intends defend matter vigorously las vegas sands corp subsidiaries notes consolidated financial statements continued benyamin kohanim v adelson et al march 9 2011 benyamin kohanim filed shareholder derivative action kohanim action behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint alleges among things breach fiduciary duties failing properly implement oversee maintain internal controls ensure compliance foreign corrupt practices act complaint seeks recover company unspecified damages including restitution disgorgement profits also seeks recover attorneys fees costs related expenses plaintiff april 18 2011 ira j gaines sunshine wire cable defined benefit pension plan trust dated 1192 peachtree mortgage ltd filed shareholder derivative action gaines action behalf company district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim action complaint seeks recover company unspecified damages also seeks recover attorneys fees costs related expenses plaintiffs kohanim gaines actions consolidated reported one consolidated matter july 25 2011 plaintiffs filed first verified amended consolidated complaint plaintiffs twice agreed stay proceedings 120day stay entered district court october 2011 extended another 90 days february 2012 expired may 2012 parties agreed extension may 2012 deadline expired october 30 2012 defendants filed motion dismiss november 1 2012 based fact plaintiffs suffered damages january 23 2013 district court denied motion dismiss part deferred remainder motion dismiss stayed proceedings july 22 2013 district court granted several successive stays since time lifted stay april 25 2017 following inchambers status check july 20 2017 district court ordered counsel record parties appear august 10 2017 status check district court subsequently ordered parties submit supplemental briefing pending motion dismiss hearing motion held november 9 2017 first entering order dismissing case without prejudice district court january 9 2018 dismissed case prejudice plaintiffs’ request plaintiffs file appeal matter closed nasser moradi et al v adelson et al april 1 2011 nasser moradi richard buckman douglas tomlinson matt abbeduto filed shareholder derivative action moradi action amended april 15 2011 behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time complaint raises substantially similar claims alleged kohanim gaines actions complaint seeks recover company unspecified damages including exemplary damages restitution also seeks recover attorneys fees costs related expenses plaintiffs april 18 2011 louisiana municipal police employees retirement system filed shareholder derivative action lampers action behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines actions complaint seeks recover company unspecified damages also seeks recover attorneys fees costs related expenses plaintiff april 22 2011 john zaremba filed shareholder derivative action zaremba action behalf company us district court sheldon g adelson jason n ader irwin chafetz charles forman george p koo michael leven jeffrey h schwartz irwin siegel members board directors time wing chao former member board directors complaint raises substantially similar claims alleged kohanim moradi gaines lampers actions complaint seeks recover company unspecified damages including restitution disgorgement profits injunctive relief also seeks recover attorneys fees costs related expenses plaintiff august 25 2011 us district court consolidated moradi lampers zaremba actions reported one consolidated matter november 17 2011 defendants filed motion dismiss alternatively stay federal action due parallel district court action described may 25 2012 case transferred new judge august 27 2012 us district court granted motion stay las vegas sands corp subsidiaries notes consolidated financial statements continued pending update special litigation committee due october 30 2012 october 30 2012 defendants filed update asking judge determine whether continue stay january 31 2013 address motions dismiss november 7 2012 us district court denied defendants request extension stay asked parties brief motion dismiss november 21 2012 defendants filed motion dismiss december 21 2012 plaintiffs filed opposition january 18 2013 defendants filed reply may 31 2013 case reassigned new judge april 11 2014 judge denied motion dismiss without prejudice ordered case stayed pending outcome district court action kohanim described pursuant series court orders parties filed number status reports pendency stay including recently january 5 2018 consolidated action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously asian american entertainment corporation limited v venetian macau limited et al january 19 2012 asian american entertainment corporation limited aaec filed claim macao action macao judicial court tribunal judicial de base vml lvs nevada international holdings inc lvs nevada las vegas sands llc lvsllc vcr collectively defendants claim 30 billion patacas approximately 373 million exchange rates effect december 31 2017 compensation damages resulting alleged breach agreements entered aaec lvs nevada lvsllc vcr collectively us defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court aaec filed reply included several amendments original claim although amount claim amended january 4 2013 defendants filed amended defense amended claim macao judicial court september 23 2013 us defendants filed motion macao second instance court seeking recognition enforcement us court appeals ruling prior action referred given april 10 2009 partially dismissed aaecs claims us defendants march 24 2014 macao judicial court issued decision despacho seneador holding aaecs claim vml unfounded vml removed party proceedings claim proceed exclusively us defendants may 8 2014 aaec lodged appeal decision macao judicial court held existence pending application recognition enforcement us court appeals ruling macao second instance court justify stay proceedings us defendants present time although principle application stay proceedings us defendants could reviewed macao second instance court issued decision june 25 2014 macao second instance court delivered decision gave formal recognition allowed enforcement macao judgment us court appeals dismissing aaecs claims us defendants aaec appealed recognition decision macao court final appeal may 6 2015 dismissed appeal held us judgment final preclusive effect macao court final appeals decision became final may 21 2015 june 5 2015 us defendants applied macao judicial court dismiss claims res judicata aaec filed response application june 30 2015 us defendants filed reply july 23 2015 september 14 2015 macao judicial court admitted two legal opinions portuguese us law experts march 16 2016 macao judicial court dismissed defense res judicata appeal decision lodged april 7 2016 together request appeal heard immediately decision dated april 13 2016 macao judicial court accepted appeal heard immediately legal arguments submitted may 23 2016 aaec replied legal arguments july 14 2016 three days late upon payment penalty us defendants submitted response september 20 2016 december 13 2016 macao judicial court confirmed earlier decision stay proceedings pending appeal end december 2016 appeals including vmls dismissal res judicata appeals transferred macao second instance court may 11 2017 macao second instance court notified parties decision refusal deal appeals present time macao second instance court ordered court file transferred back macao judicial court evidence gathering las vegas sands corp subsidiaries notes consolidated financial statements continued macao judicial court commenced letters rogatory june 30 2017 macao judicial court sent letters rogatory public prosecutors office onward transmission relevant authorities us hong kong august 10 2017 hong kong mutual legal assistance unit international law division hong kong department justice hkmlau” responded public prosecutor requested additional information august 18 2017 public prosecutor forwarded hkmlau request macao judicial court november 14 2017 public prosecutor replied hkmlau sent communication public prosecutor november 29 2017 requesting macao judicial court provide information enable processing hong kong letter rogatory january 6 2018 macao judicial court notified parties accordingly march 25 2015 application made us defendants macao judicial court revoke legal aid granted aaec accompanied request evidence taking aaec relating fees expenses incurred paid us subsequent action referred macao public prosecutor opposed action ground lack evidence aaecs financial position improved decision issued respect application present time complaint aaecs macao lawyer arising certain conduct relation recent us proceedings submitted macao lawyers association october 19 2015 letter dated february 26 2016 received conselho superior de advocacia macao bar association advising disciplinary proceedings commenced letter dated april 5 2016 received conselho superior de advocacia requesting confirmation signatories complaint acting within corporate authority letter dated april 14 2016 confirmation provided september 28 2016 conselho superior de advocacia invited comments defense lodged aaecs macao lawyer july 9 2014 plaintiff filed another action us district court lvsc lvsllc vcr collectively lvsc entities sheldon g adelson william p weidner david friedman 150 declaratory judgment equitable accounting misappropriation trade secrets breach confidence conversion based theory copyright law claim 50 billion november 4 2014 plaintiff finally effected notice lvsc entities followed motion dismiss lvsc entities november 10 2014 plaintiff failed timely respond december 2 2014 lvsc entities moved immediate dismissal sanctions plaintiff counsel bringing frivolous lawsuit december 19 2014 plaintiff filed incomplete untimely response followed plaintiffs december 27 2014 notice withdrawal lawsuit lvsc entities december 29 2014 reply favor sanctions dismissal prejudice august 31 2015 judge dismissed us action lvsc entities sanctions motion macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously previously disclosed company february 5 2007 aaec brought similar claim prior action us district court lvsi known lvsllc vcr venetian venture development llc subsidiaries company william p weidner david friedman former executives company us district court entered order april 16 2010 dismissing prior action april 20 2012 lvsllc vcr lvs nevada filed injunctive action nevada action aaec us district court seeking enjoin aaec proceeding macao action based aaecs filing us district courts dismissal prior action june 14 2012 us district court issued order denied motions requesting nevada action thereby effectively dismissing nevada action macao concession subconcession june 26 2002 macao government granted concession operate casinos macao june 26 2022 subject certain qualifications galaxy casino company limited galaxy consortium macao hong kongbased investors december 2002 vml galaxy entered subconcession agreement recognized approved macao government allows vml develop operate casino projects including venetian macao sands cotai central parisian macao plaza casino plaza macao las vegas sands corp subsidiaries notes consolidated financial statements continued four seasons hotel macao sands macao separately galaxy beginning december 26 2017 macao government may redeem subconcession agreement providing company least oneyear prior notice subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 4 million exchange rates effect december 31 2017 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37266 18633 124 respectively exchange rates effect december 31 2017 subject minimum 45 million patacas approximately 6 million exchange rates effect december 31 2017 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2017 company obligated subconcession make minimum future payments approximately 41 million four years period ending december 31 2021 approximately 21 million year ending december 31 2022 currently gaming tax macao calculated percentage gross gaming revenue however unlike nevada gross gaming revenue include deductions credit losses result company extends credit customers macao unable collect related receivables company must pay taxes winnings customers even though unable collect related receivables laws changed companys business macao may able realize full benefits extending credit customers operating leases company leases real estate various equipment operating lease arrangements terms excess one year december 31 2017 company obligated noncancelable operating leases make future minimum lease payments follows millions expenses incurred operating lease agreements including shortterm variablerate nature totaled 82 million 71 million 75 million years ended december 31 2017 2016 2015 respectively note 14 stockbased employee compensation company two equity award plans 2004 plan scl equity plan described plans provide granting equity awards pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan company adopted 2004 plan grants options purchase common stock purpose 2004 plan give company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value companys subsidiaries affiliates employees directors officers many las vegas sands corp subsidiaries notes consolidated financial statements continued consultants eligible awards 2004 plan 2004 plan provides aggregate 26344000 shares companys common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2017 3601138 shares available grant 2004 plan stock option awards granted exercise price equal fair market value defined 2004 plan companys stock date grant outstanding stock options generally vest three four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based companys historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan companys subsidiary scl adopted equity award plan scl equity plan november 2009 grants options purchase ordinary shares scl purpose scl equity plan give scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scls subsidiaries affiliates employees directors officers many consultants eligible awards scl equity plan scl equity plan provides aggregate 804786508 shares scls common stock available awards scl equity plan term ten years awards may granted expiration term scls remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2017 729981851 shares available grant scl equity plan stock option awards granted exercise price less closing price scls stock date grant ii average closing price scls stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model expected volatilities based scls historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant stock options granted subsequent march 31 2015 based hong kong exchange fund note rate effect time grant stock options granted march 31 2015 expected dividend yield based estimate annual dividends expected paid time grant las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity companys equity award plans year ended december 31 2017 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock units companys equity award plans year ended december 31 2017 presented result scl cashsettling planning cashsettle certain future unvested restricted share units vesting dates 852000 outstanding restricted stock units scl equity plan modified equity awards cashsettled liability awards year ended december 31 2017 modification affected four employees resulted additional compensation expense fair value awards remeasured reporting period vesting dates upon settlement scl pay grantees amount cash calculated based higher closing price scls shares vesting date ii average closing price scls shares five trading days immediately preceding vesting date year ended december 31 2017 scl paid 3 million settle vested restricted share units previously classified equity awards accrued liability associated cashsettled restricted stock units 4 million december 31 2017 december 31 2017 2004 plan 32 million unrecognized compensation cost related unvested stock options stock option restricted stock unit costs expected recognized weighted average period 22 years 04 years respectively december 31 2017 scl equity plan 20 million unrecognized compensation cost related unvested stock options stock option restricted stock unit costs expected recognized weighted average period 26 years 02 years respectively las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity 2004 plan scl equity plan follows three years ended december 31 2017 note 15 employee benefit plans company selfinsured health care benefits us employees workers compensation benefits employees las vegas operating properties liability claims filed estimates claims incurred filed included accrued liabilities accompanying consolidated balance sheets participation vcr 401k employee savings plan available eligible employees date hire savings plan allows participants defer pretax basis portion salary accumulate taxdeferred earnings retirement fund company matches 150 first 390 employee contributions 50 employee contributions excess 390 subject cap whereby amount contributions exceed 5 participating employees eligible gross wages years ended december 31 2017 2016 2015 companys matching contributions savings plan 10 million 9 million 10 million respectively participation vmls provident retirement fund available permanent employees threemonth probation period vml contributes 5 employees basic salary fund employee eligible receive upon resignation 30 contributions working three consecutive years gradually increasing 100 working ten years ended december 31 2017 2016 2015 vmls contributions provident fund 37 million 35 million 33 million respectively participation mbss provident retirement fund available permanent employees singapore residents upon joining company december 31 2017 mbs contributes 17 employees basic salary fund subject certain caps mandated local regulations employee eligible receive funds upon las vegas sands corp subsidiaries notes consolidated financial statements continued reaching retirement age upon meeting requirements set local regulations years ended december 31 2017 2016 2015 mbss contributions provident fund 38 million 35 million 32 million respectively note 16 related party transactions years ended december 31 2017 2016 2015 principal stockholder family purchased certain services company including lodging banquet services use company personnel approximately 3 million 3 million 2 million respectively year december 31 2017 years ended 2016 2015 company incurred made payments 1 million 2 million respectively food beverage services provided restaurants principal stockholder ownership interest years ended december 31 2017 2016 2015 company incurred paid certain expenses totaling 10 million 3 million 4 million respectively principal stockholder related companys use personal aircraft yacht 2016 2017 business purposes addition years ended december 31 2017 2016 2015 company charged received principal stockholder 21 million 17 million 20 million respectively related aviation costs incurred company principal stockholders use company aviation personnel assets personal purposes related party receivables less 1 million december 31 2017 2 million december 31 2016 related party payables less 1 million december 31 2017 2016 note 17 segment information companys principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao sands cotai central parisian macao opened september 2016 plaza macao four seasons hotel macao sands macao marina bay sands las vegas operating properties sands bethlehem company also reviews construction development activities primary projects currently development addition reportable segments noted include renovation expansion rebranding sands cotai central additional rooms tower adjacent four seasons hotel macao las vegas condo tower construction currently suspended united states company included ferry operations comprised primarily companys ferry operations various operations ancillary properties macao reconcile consolidated results operations financial condition company included corporate includes las vegas condo tower corporate activities company reconcile consolidated financial condition las vegas sands corp subsidiaries notes consolidated financial statements continued companys segment information years ended december 31 2017 2016 2015 follows las vegas sands corp subsidiaries notes consolidated financial statements continued 1 consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap company significant uses cash flow including capital expenditures dividend payments interest las vegas sands corp subsidiaries notes consolidated financial statements continued payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result consolidated adjusted property ebitda presented company may directly comparable similarly titled measures presented companies las vegas sands corp subsidiaries notes consolidated financial statements continued 1 longlived assets include property equipment net accumulated depreciation amortization leasehold interests land net accumulated amortization note 18 selected quarterly financial results unaudited 1 company recorded nonrecurring corporate expense 79 million june 2016 2 q3 2016 company recorded preopening expenses 86 million connection opening parisian macao september 2016 3 q4 2016 company recognized loss disposal impairment assets 64 million primarily related writeoff costs related las vegas condo tower well dispositions companys various operating properties las vegas sands corp subsidiaries notes consolidated financial statements continued 4 q4 2017 company recorded nonrecurring noncash income tax benefit 526 million due us tax reform enacted end 2017 earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2017 2016 2015 item 9item 8 financial statements supplementary data financial information included financial statement schedule read conjunction consolidated financial statements financial statement schedules omitted applicable required information included consolidated financial statements notes thereto report independent registered public accounting firm stockholders board directors las vegas sands corp opinion financial statements audited accompanying consolidated balance sheets las vegas sands corp subsidiaries company december 31 2020 2019 related consolidated statements operations comprehensive income loss equity cash flows three years period ended december 31 2020 related notes financial statement schedule listed index item 15a2 collectively referred financial statements opinion financial statements present fairly material respects financial position company december 31 2020 2019 results operations cash flows three years period ended december 31 2020 conformity accounting principles generally accepted united states america also audited accordance standards public company accounting oversight board united states pcaob companys internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 5 2021 expressed unqualified opinion companys internal control financial reporting basis opinion financial statements responsibility companys management responsibility express opinion companys financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation financial statements believe audits provide reasonable basis opinion critical audit matter critical audit matter communicated matter arising currentperiod audit financial statements communicated required communicated audit committee 1 relates accounts disclosures material financial statements 2 involved especially challenging subjective complex judgments communication critical audit matters alter way opinion financial statements taken whole communicating critical audit matter providing separate opinion critical audit matter accounts disclosures relates valuation casino receivables refer notes 2 3 financial statements critical audit matter description discussed note 2 financial statements accounts receivable december 31 2020 include credit extended casino patrons gaming promoters company records provision credit losses based amount expected credit losses company applies standard reserve percentages aged account balances grouped based shared credit risk characteristics days past due reserve percentages based estimated loss rates supported historical observed default rates expected life receivable adjusted forwardlooking information company also specifically analyzes collectability account balance specified dollar amount based upon age account customers financial condition collection history known information adjusts aforementioned reserve results individual reserve analysis auditing valuation accounts receivable involved high degree subjectivity evaluating management’s judgments related collectability patron gaming promoter accounts receivable especially relates evaluation patron gaming promoter assets available repay amounts owed critical audit matter addressed audit planned performed following procedures connection forming overall opinion financial statements •we tested operating effectiveness controls granting casino credit controls collection processes management’s review controls assessment collectability casino receivables including information used management controls •for selection casino receivables 1 obtained evidence related payment history correspondence patron gaming promoter 2 evaluated management’s use information establishing provision credit losses 3 examined subsequent settlement •performed retrospective analysis historical reserves evaluating subsequent collections writeoffs served companys auditor since 2013 report independent registered public accounting firm stockholders board directors las vegas sands corp opinion internal control financial reporting audited internal control financial reporting las vegas sands corp subsidiaries “company” december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso opinion company maintained material respects effective internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued coso also audited accordance standards public company accounting oversight board united states pcaob consolidated financial statements financial statement schedule year ended december 31 2020 company report dated february 5 2021 expressed unqualified opinion financial statements financial statement schedule basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s annual report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate las vegas sands corp subsidiaries consolidated balance sheets accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements operations accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements comprehensive income loss accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements equity accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries consolidated statements cash flows las vegas sands corp subsidiaries consolidated statements cash flows continued accompanying notes integral part consolidated financial statements las vegas sands corp subsidiaries notes consolidated financial statements note 1 organization business company las vegas sands corp lvsc together subsidiaries company incorporated nevada common stock traded new york stock exchange symbol lvs ordinary shares companys subsidiary sands china ltd scl indirect owner operator majority companys operations macao special administrative region macao peoples republic china listed main board stock exchange hong kong limited shares registered securities act 1933 amended may offered sold us absent registration securities act 1933 amended applicable exception registration requirements covid19 pandemic early january 2020 outbreak respiratory illness caused novel coronavirus identified disease since spread rapidly across world causing world health organization declare outbreak pandemic march 12 2020 “covid19 pandemic” result people across globe advised avoid nonessential travel steps also taken various countries including operate restrict inbound international travel implement closures nonessential operations contain spread virus macao visitation macao decreased substantially throughout 2020 result various government policies limiting travel restrictions quarantine requirements varying response changes circumstances countries complete ban entry need undergo enhanced quarantine requirements depending person’s residency recent travel history remains place macao residents foreign workers residing macao international travelers countries mainland china beginning december 21 2020 travelers overseas territory including hong kong including mainland china taiwan past 14 days subject 21day compulsory quarantine designated location arriving macao travelers arriving mainland china taiwan subject 14day quarantine people low risk cities china may enter macao quarantine free subject holding appropriate travel documents negative covid19 test result green healthcode foreign nationals including holding temporary work permit still permitted enter macao china individual visit scheme china ivs recommenced certain regions august 12 2020 extended jurisdictions within mainland china effective september 23 2020 general travel restrictions within mainland china continue exist updated revised based evolving public health consideraions within china following suspension gaming operations february 5 2020 macao government company’s macao casino operations resumed february 20 2020 except operations londoner macao resumed february 27 2020 additional health safeguards requirement present negative covid19 test certificate prior entering casino implemented well ongoing limitation number seats per table game slot machine spacing temperature checks mandatory mask protection company currently unable determine measures modified cease necessary company’s macao hotel facilities also closed casino suspension response drop visitation exception conrad macao cotai strip reopened june 13 2020 hotels gradually reopened february 20 2020 support macao government’s initiatives fight covid19 pandemic company provided one tower approximately 2000 hotel rooms sheraton grand macao hotel cotai strip macao government house individuals returned macao quarantine purposes tower utilized quarantine purposes several occasions including march 28 april 30 2020 june 7 august 14 2020 december 20 2020 february 6 2021 resume february 20 2021 notice las vegas sands corp subsidiaries notes consolidated financial statements continued operating hours restaurants across company’s macao properties continuously adjusted line movements guest visitation majority retail outlets company’s various shopping malls open reduced operating hours timing manner areas return full operation currently unknown hong kong government temporarily closed hong kong china ferry terminal kowloon january 30 2020 hong kong macao ferry terminal hong kong february 4 2020 response company suspended macao ferry operations macao hong kong timing manner company’s normal ferry operations able resume currently unknown operations macao significantly impacted lack visitation macao government announced total visitation mainland china macao decreased 830 2020 compared 2019 macao government also announced gross gaming revenue decreased 793 2020 compared 2019 singapore beginning april 7 2020 singapore government suspended casino nonessential operations including operations marina bay sands due covid19 pandemic company’s singapore operations permitted reopen beginning june 19 2020 however included certain restaurants retail mall operations casino operations reopened july 1 2020 however entry initially limited annual levy holders certain sands rewards club “src” members casino opened src members july 9 2020 public october 23 2020 operations currently subject limited capacities may 28 2020 support singapore government’s initiatives fight covid19 pandemic marina bay sands entered agreement singapore government utilize three hotel towers house singapore residents upon initial return jurisdictions quarantine government’s use first tower ceased june 26 2020 usage second third towers continued july 26 2020 beginning july 17 2020 first tower reopened normal operations second third towers reopened august 1 2020 september 7 2020 singapore tourism board stb announced event organizers allowed apply pilot events limited capacities 250 attendees october 1 2020 date nightlife venues may reopen unknown time december 2020 singapore entered phase 3 reopening among things increased casino operating capacity 3000 players 3750 players visitation marina bay sands declined significantly due covid19 pandemic stb announced 12 months ended november 30 2020 latest information publicly available time filing total visitation singapore decreased approximately 766 compared period 2019 las vegas nevada government suspended casino nonessential operations including operations las vegas operating properties later defined beginning march 18 2020 due covid19 pandemic nevada government allowed casinos reopen june 4 2020 strict guidelines issued gaming control board state nevada company reopened casino suites within venetian tower palazzo tower select food beverage outlets june 4 2020 certain operations subject reduced capacity beginning october 1 2020 limit public private events increased 50 people lesser 250 people 50 room’s capacity excluding employees organizers performers provided social distancing measures various safety related protocols followed meetings incentives conventions exhibitions “mice” 250 people 1000 people allowed subject certain requirements larger venues defined 2500 fixedseating capacity allowed host gathering 10 total capacity provided met additional requirements despite allowances mice events companys las vegas operating properties since reopening june 4 2020 november 2020 nevada government tightened capacity restrictions included among things 25 capacity limit gaming establishments lesser 25 50 people mice events increased restrictions place least february 14 2021 las vegas sands corp subsidiaries notes consolidated financial statements continued visitation company’s las vegas operating properties declined due covid19 pandemic las vegas convention visitors authority lvcva announced 12 months ended november 30 2020 latest information publicly available time filing total visitation las vegas decreased 498 compared period 2019 lvcva also announced 12 months ended november 30 2020 latest information publicly available time filing gross gaming revenue las vegas strip decreased 385 compared period 2019 summary disruptions arising covid19 pandemic significant adverse impact company’s financial condition operations cash flows year ended december 31 2020 duration intensity global health emergency related disruptions uncertain given dynamic nature circumstances impact company’s consolidated results operations cash flows financial condition may continue material future cannot reasonably estimated time unknown covid19 pandemic end quickly current travel operational restrictions modified cease necessary resulting impact company’s business willingness tourism customers spend travel entertainment business customers spend mice company’s properties currently open operating reduced levels due lower visitation implementation required safety measures current economic regulatory environment global basis company’s jurisdictions continues evolve company cannot predict manner governments react global regional impact covid19 pandemic changes time could significantly alter company’s current operations company strong balance sheet sufficient liquidity place including total cash equivalents balance excluding restricted cash equivalents 212 billion access 150 billion 202 billion 448 million available borrowing capacity lvsc revolving facility 2018 scl revolving facility 2012 singapore revolving facility respectively 369 billion singapore dollars “sgd” approximately 279 billion exchange rates effect december 31 2020 singapore delayed draw term facility exclusively capital expenditures mbs expansion project later defined december 31 2020 january 25 2021 scl entered agreement lenders increase commitments 2018 scl credit facility hong kong dollars hkd 383 billion approximately 494 million exchange rates effect date transaction subsequently january 29 2021 scl drew 29 million hkd 213 billion approximately 274 million exchange rates effect january 29 2021 facility general corporate purposes resulting remaining available borrowing capacity 221 billion company believes able support continuing operations complete major construction projects underway respond current covid19 pandemic challenges company taken various mitigating measures manage current environment including cost capital expenditure reduction program minimize cash outflow nonessential items operations company developer destination properties integrated resorts feature premium accommodations worldclass gaming entertainment retail malls convention exhibition facilities celebrity chef restaurants amenities macao company currently owns 699 scl includes operations venetian macao resort hotel venetian macao londoner macao parisian macao plaza macao four seasons hotel macao cotai strip four seasons hotel macao sands macao ancillary operations support properties discussed company operates gaming areas within properties pursuant 20year gaming subconcession agreement expires june 2022 venetian macao anchors cotai strip companys masterplanned development integrated resorts area approximately 140 acres macao venetian macao includes 39floor luxury hotel 2900 suites approximately 374000 square feet gaming space 15000seat arena 1800seat theater las vegas sands corp subsidiaries notes consolidated financial statements continued paiza club mall retail dining space approximately 943000 square feet convention center meeting room complex approximately 12 million square feet londoner macao previously sands cotai central companys largest integrated resort cotai strip located across street venetian macao parisian macao plaza macao four seasons hotel macao integrated resort opened phases beginning april 2012 features four hotel towers first hotel tower includes approximately 650 fivestar rooms suites conrad brand ii londoner macao hotel opened january 2021 600 londonthemed suites including 14 exclusive suites david beckham second hotel tower consists approximately 1800 rooms suites sheraton brand third hotel tower consists approximately 2100 rooms suites sheraton brand fourth hotel tower consists approximately 400 rooms suites st regis brand within londoner macao company also owns currently operates approximately 351000 square feet gaming space approximately 369000 square feet meeting space approximately 525000 square feet retail space well entertainment dining facilities londoner macao result previously announced renovation expansion rebranding sands cotai central described parisian macao integrated resort connected venetian macao plaza macao four seasons hotel macao includes approximately 248000 square feet gaming space parisian macao also features approximately 2500 rooms suites approximately 296000 square feet retail dining space meeting room complex approximately 63000 square feet 1200seat theater plaza macao four seasons hotel macao features 360 rooms suites managed operated fs macau lda located adjacent connected venetian macao within integrated resort plaza casino features approximately 127000 square feet gaming space 19 paiza mansions retail space approximately 244000 square feet connected mall venetian macao several food beverage offerings conference banquet facilities grand suites four seasons opened october 2020 features 289 luxury suites company initiated vip gaming operations space first quarter 2020 sands macao first las vegasstyle casino macao offers approximately 212000 square feet gaming space 289suite hotel tower well several restaurants vip facilities theater highend services amenities singapore company owns operates marina bay sands singapore features three 55story hotel towers totaling approximately 2600 rooms suites sands skypark sits atop hotel towers features infinity swimming pool several dining options approximately 160000 square feet gaming space enclosed retail dining entertainment complex approximately 800000 net leasable square feet convention center meeting room complex approximately 12 million square feet theater landmark iconic structure bayfront promenade contains artscience museum company recently announced expansion project marina bay sands described united states las vegas company owns operates venetian resort hotel casino venetian resort las vegas three hotel towers include venetian tower renaissance venicethemed resort adjoining venezia tower palazzo tower resort featuring modern european ambience design expo convention center approximately 12 million square feet sands expo center together venetian resort las vegas las vegas operating properties las vegas operating properties situated las vegas strip integrated resort approximately 7100 suites approximately 225000 square feet gaming space 23 million gross square feet stateoftheart exhibition meeting facilities configured provide small midsize large meeting rooms andor accommodate largescale multimedia events trade shows company working madison square garden company msg bring 400000squarefoot venue built specifically music entertainment las vegas msg currently building msg sphere las vegas sands corp subsidiaries notes consolidated financial statements continued venetian 18000seat venue located near connectivity las vegas operating properties currently expected open 2023 development projects company regularly evaluates opportunities improve product offerings refreshing meeting convention facilities suites rooms retail malls restaurant nightlife mix gaming areas well anticipated revenue generating additions companys integrated resorts macao construction work conversion sands cotai central new destination integrated resort londoner macao progressing project delivered phases started 2020 continue throughout 2021 upon completion londoner macao feature new attractions features internally externally london including london’s recognizable landmarks houses parliament elizabeth tower commonly known big ben londoner macao hotel opened january 2021 approximately 600 londonthemed suites including 14 exclusive suites david beckham resort also feature londoner court approximately 370 luxury suites construction londoner court complete expected open 2021 companys retail offerings expanded rebranded shoppes londoner company anticipates total costs associated londoner macao development projects described recently completed grand suites four seasons approximately 22 billion ultimate costs completion dates londoner macao development subject change company completes project singapore april 2019 companys wholly owned subsidiary marina bay sands pte ltd mbs entered second development agreement singapore tourism board pursuant mbs agreed construct development include hotel tower approximately 1000 rooms suites rooftop attraction convention meeting facilities stateoftheart live entertainment arena approximately 15000 seats “mbs expansion project” second development agreement provides total project cost approximately sgd 45 billion approximately 34 billion exchange rates effect december 31 2020 investment must completed within eight years effective date agreement amount total project cost finalized company completes design development begins construction united states company constructing highrise residential condominium tower las vegas condo tower located las vegas strip within venetian resort las vegas 2008 company suspended construction activities project due reduced demand las vegas strip condominiums overall decline general economic conditions company continues evaluate highest return opportunity project impact suspension estimated overall cost project currently determinable certainty demand conditions fail improve management decides abandon project company could record charge portion 130 million capitalized construction costs net depreciation december 31 2020 company continues evaluate current development projects markets pursue new development opportunities globally note 2 summary significant accounting policies principles consolidation consolidated financial statements include accounts company majorityowned subsidiaries variable interest entities company primary beneficiary intercompany balances transactions eliminated consolidation las vegas sands corp subsidiaries notes consolidated financial statements continued use estimates preparation consolidated financial statements conformity accounting principles generally accepted united states america requires company make estimates judgments affect reported amounts assets liabilities revenues expenses related disclosures contingent assets liabilities estimates judgments based historical information currently available company various assumptions company believes reasonable circumstances actual results could vary estimates cash equivalents cash equivalents consist cash shortterm investments original maturities less 90 days investments carried cost reasonable estimate fair value cash equivalents placed high credit quality financial institutions primarily money market funds restricted cash represents amounts contractually reserved substantial mallrelated repairs maintenance expenditures estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets accounts receivable credit risk accounts receivable comprised casino hotel mall receivables bear interest recorded amortized cost company extends credit approved casino customers following background checks investigations creditworthiness company also extends credit gaming promoters macao receivables offset commissions payable respective gaming promoters business economic conditions legal enforceability gaming debts foreign currency control measures significant events foreign countries could affect collectability receivables customers gaming promoters residing countries accounts receivable primarily consists casino receivables casino receivables concentration credit risk respect accounts receivable company believes concentration credit risk casino receivables mitigated substantially credit evaluation process credit policies credit control collection procedures also believes concentrations credit risk provision established although management believes provision adequate possible estimated amount cash collections respect accounts receivable could change inventories consist primarily food beverage retail products operating supplies stated lower cost net realizable value cost determined weighted average specific identification methods property equipment property equipment stated cost net accumulated depreciation amortization accumulated impairment losses depreciation amortization provided straightline basis estimated useful lives assets exceed lease term leasehold improvements follows estimated useful lives based nature assets well current operating strategy legal considerations contractual life periodically reviewed future events property expansions property developments new competition new regulations could result change manner company uses certain assets requiring change estimated useful lives assets maintenance repairs neither materially add value asset appreciably prolong life charged expense incurred gains losses disposition property equipment included consolidated statements operations las vegas sands corp subsidiaries notes consolidated financial statements continued company evaluates property equipment longlived assets impairment accordance related accounting standards assets disposed company recognizes asset sold lower carrying value fair value less costs disposal fair value assets disposed estimated based comparable asset sales solicited offers discounted cash flow model fixed assets reviewed impairment whenever indicators impairment exist determining recoverability companys asset groups judgmental nature requires use significant estimates assumptions including estimated cash flows probability weighting potential scenarios costs complete construction assets development growth rates future market conditions among others future changes companys estimates assumptions based upon changes macroeconomic factors regulatory environments operating results managements intentions may result future changes recoverability asset groups leases management determines contract contains lease inception modification contract contains lease contract conveys right control use identified asset period exchange consideration control use identified asset means lessee right obtain substantially economic benefits use asset b right direct use asset finance operating lease rightofuse rou assets liabilities recognized based present value future minimum lease payments expected lease term commencement date implicit rate determinable company’s leases management uses company’s incremental borrowing rate based information available commencement date determining present value future payments expected lease terms include options extend terminate lease reasonably certain company exercise option lease expense minimum lease payments recognized straightline basis expected lease term company’s lease arrangements lease nonlease components leases company lessee company accounts lease components nonlease components single lease component classes underlying assets primarily real estate leases company lessor substantially accounted operating leases lease components nonlease components accounted separately leases expected term 12 months less accounted balance sheet related lease expense recognized straightline basis expected lease term capitalized interest internal costs interest costs associated major construction projects capitalized included cost projects debt incurred specifically construction projects interest capitalized amounts expended using weighted average cost companys outstanding borrowings capitalization interest ceases project substantially complete construction activity suspended brief period years ended december 31 2020 2019 2018 company capitalized 21 million 9 million 3 million respectively interest expense years ended december 31 2020 2019 2018 company capitalized approximately 44 million 34 million 31 million respectively internal costs consisting primarily compensation expense individuals directly involved development construction property deferred financing costs original issue discounts certain direct incremental costs discounts incurred obtaining loans capitalized amortized interest expense based terms related debt instruments using effective interest method leasehold interests land leasehold interests land represent payments use land extended period time leasehold interests land amortized straightline basis expected term related lease agreements las vegas sands corp subsidiaries notes consolidated financial statements continued revenue recognition revenue contracts customers primarily consists casino wagers room sales food beverage transactions rental income company’s mall tenants convention sales entertainment ferry ticket sales contracts written oral implied customary business practices gross casino revenue aggregate gaming wins losses commissions rebated gaming promoters premium players rolling play cash discounts cash incentives patrons related gaming play recorded reduction gross casino revenue gaming contracts include performance obligation honor patron’s wager typically include performance obligation provide product service patron complimentary basis incentivize gaming exchange points earned company’s loyalty programs wagering contracts include complimentary products services provided company incentivize gaming company allocates relative standalone selling price product service respective revenue type complimentary products services provided companys control discretion supplied third parties recorded operating expense wagering contracts include products services provided patron exchange points earned company’s loyalty programs company allocates estimated fair value points earned loyalty program liability loyalty program liability deferral revenue redemption occurs upon redemption loyalty program points companyowned products services standalone selling price product service allocated respective revenue type redemptions points third parties redemption amount deducted loyalty program liability paid directly third party discounts received company third party connection transaction recorded revenue allocation revenue types products services provided patrons part wagering contract residual amount recorded casino revenue soon wager settled wagers similar characteristics company accounts gaming contracts collectively portfolio basis versus individual basis hotel revenue recognition criteria met time occupancy food beverage revenue recognition criteria met time service convention revenues recognized related service rendered event held deposits future hotel occupancy convention space food beverage services contracts recorded deferred revenue recognition criteria met cancellation fees convention contracts recognized upon cancellation customer included revenues ferry entertainment revenue recognition criteria met completion ferry trip event respectively revenue contracts combination services allocated pro rata based service’s relative standalone selling price revenue leases primarily recorded mall revenue generated base rents overage rents received longterm leases retail tenants base rent adjusted contractual escalations recognized straightline basis term related lease overage rent paid tenant sales exceed agreed upon minimum amount recognized company threshold met contract related liabilities company provides numerous products services customers often timing difference cash payment customers recognition revenue associated performance obligations company following main types liabilities associated contracts customers 1 outstanding chip liability 2 loyalty program liability 3 customer deposits deferred revenue gaming nongaming products services yet provided outstanding chip liability represents collective amounts owed gaming promoters patrons exchange gaming chips possession outstanding chips expected recognized revenue redeemed cash within one year purchased loyalty program liability represents deferral revenue patron redemption points earned loyalty program points expected redeemed recognized revenue within one year earned due travel restrictions resulting covid19 pandemic company temporarily extended redemption period points patrons able willing visit las vegas sands corp subsidiaries notes consolidated financial statements continued properties located macao singapore required redemption period expected reinstated 2021 customer deposits deferred revenue represent cash deposits made customers future services provided company exception mall deposits typically extend beyond year based terms lease majority customer deposits deferred revenue expected recognized revenue refunded customer within one year date deposit recorded following table summarizes liability activity related contracts customers 1of amount 152 million 154 million 152 million december 31 2020 2019 january 1 2019 respectively relates mall deposits accounted based lease terms usually greater one year gaming taxes company subject taxes based gross gaming revenue jurisdictions operates subject applicable jurisdictional adjustments gaming taxes including goods services tax singapore assessment companys gaming revenue recorded casino expense accompanying consolidated statements operations taxes 834 million 398 billion 409 billion years ended december 31 2020 2019 2018 respectively preopening development expenses company accounts costs incurred development preopening phases new ventures accordance accounting standards regarding startup activities preopening expenses represent personnel costs incurred prior opening new ventures expensed incurred development expenses include costs associated companys evaluation pursuit new business opportunities also expensed incurred advertising costs advertising expensed first time advertising takes place incurred advertising costs included accompanying consolidated statements operations 42 million 123 million 132 million years ended december 31 2020 2019 2018 respectively corporate expenses corporate expense represents payroll travel legal fees professional fees various expenses allocated directly related companys integrated resort operations related ancillary operations foreign currency functional currency foreign subsidiaries local currency subsidiary operates balance sheet accounts translated exchange rate effect balance sheet date income statement accounts translated average exchange rates year translation adjustments resulting process recorded comprehensive income loss gains losses foreign currency remeasurements arise exchange rate fluctuations transactions denominated currency functional currency included income expense las vegas sands corp subsidiaries notes consolidated financial statements continued comprehensive income loss accumulated comprehensive income loss comprehensive income loss includes net income loss nonstockholder changes equity comprehensive income loss balance accumulated comprehensive income loss consisted solely foreign currency translation adjustments earnings loss per share weighted average number common equivalent shares used calculation basic diluted earnings loss per share consisted following stockbased employee compensation stockbased compensation cost measured grant date based calculated fair value award recognized employees requisite service period generally vesting period equity grant companys stockbased employee compensation plans fully discussed note 15 stockbased employee compensation income taxes company subject income taxes us including federal state numerous foreign jurisdictions operates company records income taxes asset liability method whereby deferred tax assets liabilities recognized based future tax consequences attributable temporary differences financial statement carrying amounts existing assets liabilities respective tax bases attributable operating loss tax credit carryforwards accounting standards regarding income taxes require reduction carrying amounts deferred tax assets valuation allowance based available evidence morelikelythannot assets realized accordingly need establish valuation allowances deferred tax assets assessed reporting period based morelikelythannot realization threshold assessment considers among matters nature frequency severity current cumulative losses forecasts future profitability duration statutory carryforward periods companys experience operating loss tax credit carryforwards expiring tax planning strategies management reassess realization deferred tax assets reporting period consider scheduled reversal deferred tax liabilities sources taxable income tax planning strategies extent financial results operations improve becomes morelikelythannot deferred tax assets realizable company able reduce valuation allowance period determination made appropriate significant judgment required evaluating companys tax positions determining provision income taxes ordinary course business many transactions ultimate tax determination uncertain company considers many factors evaluating estimating tax positions tax benefits may require periodic adjustments actual outcomes may different las vegas sands corp subsidiaries notes consolidated financial statements continued accounting derivative instruments hedging activities accounting standards require entity recognize derivatives either assets liabilities balance sheet measure instruments fair value specific conditions met derivative may designated hedge specific financial exposures accounting changes fair value derivative depends intended use derivative used hedging activities effectiveness hedge order qualify hedge accounting underlying hedged item must expose company risks associated market fluctuations financial instrument used must designated hedge must reduce companys exposure market fluctuation throughout hedge period changes market rates prices interest rates foreign currency exchange rates commodity prices impact company’s results operations company’s primary exposures market risk interest rate risk associated longterm debt foreign currency exchange rate risk associated company’s operations outside united states company policy aimed managing interest rate risk associated current anticipated future borrowings foreign currency exchange rate risk associated operations foreign subsidiaries policy enables company use combination interest rate swaps futures options caps forward contracts similar instruments company hold issue financial instruments trading purposes enter derivative transactions would considered speculative positions august 2018 company entered interest rate swap agreements ir swaps qualified designated fair value hedges swapping fixedrate variablerate interest hedge changes fair value 2023 2025 2028 scl senior notes ir swaps total notional value 550 billion expired august 2020 years ended december 31 2020 2019 2018 company recorded 53 million 23 million 9 million respectively reduction interest expense related realized amount associated ir swaps recent accounting pronouncements january 1 2020 company adopted guidance accounting standard update “asu” 201613 issued june 2016 financial accounting standards board “fasb” asu revised methodology measuring credit losses financial instruments timing losses recorded adoption applied modified retrospective basis material impact company’s financial condition results operations therefore result adjustment retained earnings january 1 2020 note 3 accounts receivable net accounts receivable consists following las vegas sands corp subsidiaries notes consolidated financial statements continued following table shows movement provision credit losses recognized accounts receivable occurred period note 4 property equipment net property equipment consists following property equipment sold ggp totaling 179 million net 119 million accumulated depreciation december 31 2020 continue recorded companys consolidated balance sheet continue depreciated companys consolidated statement operations see note 12 mall activities shoppes palazzo year ended december 31 2020 company recognized loss disposal impairment assets 80 million consisting primarily 56 million asset writeoffs demolition costs related londoner macao years ended december 31 2019 2018 company recognized loss disposal impairment assets 90 million 150 million respectively primarily consisting 65 million due ferry impairment charge result decline passenger volume 128 million writeoff costs related grand suites four seasons well dispositions companys operating properties respectively depreciation expense 114 billion 115 billion 110 billion years ended december 31 2020 2019 2018 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 5 leasehold interests land net leasehold interests land consist following company amortizes leasehold interests land straightline basis expected term lease includes automatic extensions macao discussed amortization expense 55 million 51 million 35 million included amortization leasehold interests land expense years ended december 31 2020 2019 2018 respectively estimated future amortization expense expected term lease approximately 53 million five years period ending december 31 2025 218 billion thereafter exchange rates effect december 31 2020 land concessions macao generally initial term 25 years automatic extensions 10 years thereafter accordance macao law company anticipates useful life 50 years related land concessions macao company received land concessions macao government build sites sands macao venetian macao plaza macao four seasons hotel macao londoner macao parisian macao located company land sites macao however land concessions grant company exclusive use land specified land concessions company required pay premiums parcel well make annual rent payments amounts times specified land concessions rent amounts may revised every five years macao government companys future rental payment obligations see note 13 leases land concessions singapore initial term 60 years company received land concessions singapore tourism board build sites marina bay sands future mbs expansion project located company land sites singapore however land concessions grant company exclusive use land specified land concessions company required prepay premiums parcel april 2019 connection second development agreement mbs paid 963 million additional land concession connection mbs expansion project note 6 intangible assets net intangible assets consist following las vegas sands corp subsidiaries notes consolidated financial statements continued april 2019 company paid sgd 72 million approximately 53 million exchange rates effect time transaction singapore casino regulatory authority cra part process renew gaming license marina bay sands license amortized threeyear term expires april 2022 renewable upon submitting application paying applicable license fee meeting requirements determined cra amortization expense 17 million 17 million 16 million years ended december 31 2020 2019 2018 respectively estimated future amortization expense approximately 18 million 6 million years ending december 31 2021 2022 respectively note 7 accrued liabilities accrued liabilities consist following las vegas sands corp subsidiaries notes consolidated financial statements continued note 8 longterm debt longterm debt consists following 1unamortized deferred financing costs 91 million 100 million december 31 2020 2019 respectively related companys revolving credit facilities undrawn portion singapore delayed draw term facility included assets net accompanying consolidated balance sheets corporate us related debt lvsc senior notes july 31 2019 lvsc issued public offering three series senior unsecured notes aggregate principal amount 350 billion consisting 175 billion 3200 senior notes due august 8 2024 “2024 lvsc senior notes” 10 billion 3500 senior notes due august 18 2026 “2026 lvsc senior notes” las vegas sands corp subsidiaries notes consolidated financial statements continued 750 million 3900 senior notes due august 8 2029 “2029 lvsc senior notes” portion net proceeds offering used repay full outstanding borrowings 2013 us credit facility november 25 2019 lvsc issued public offering senior unsecured note aggregate principal amount 500 million 2900 senior notes due june 25 2025 “2025 lvsc senior notes” together 2024 lvsc senior notes 2026 lvsc senior notes 2029 lvsc senior notes “lvsc senior notes” portion net proceeds offering used general corporate purposes including repurchases shares companys common stock interim principal payments lvsc senior notes interest payable semiannually arrears february 8 august 8 commencing february 8 2020 respect 2024 lvsc notes 2029 lvsc notes february 18 august 18 commencing february 18 2020 respect 2026 notes june 25 december 25 commencing june 25 2020 respect 2025 notes lvsc senior notes senior unsecured obligations lvsc series lvsc senior notes rank equally right payment lvsc’s unsecured unsubordinated obligations none lvsc’s subsidiaries guarantee lvsc senior notes lvsc senior notes issued pursuant indenture dated july 31 2019 amended respect series lvsc senior notes “indenture” lvsc us bank national association trustee indenture contains covenants subject customary exceptions qualifications limit ability lvsc subsidiaries among things incur liens enter sale leaseback transactions consolidate merge sell otherwise dispose substantially company’s assets consolidated basis indenture also provides customary events default lvsc revolving facility august 9 2019 lvsc entered revolving credit agreement arrangers lenders named therein bank nova scotia administrative agent lenders “lvsc revolving credit agreement” pursuant lenders provided unsecured revolving credit commitments lvsc aggregate principal amount 150 billion “lvsc revolving facility” available august 9 2024 include 150 million subfacility letters credit lvsc may utilize proceeds loans general corporate purposes working capital requirements lvsc subsidiaries purpose prohibited lvsc revolving credit agreement december 31 2020 company 150 billion available borrowing capacity lvsc revolving facility net outstanding letters credit revolving loans bear interest company’s option either adjusted eurodollar rate plus applicable margin ranging 1125 1550 per annum alternative base rate plus applicable margin ranging 0125 0550 per annum case based lvsc’s corporate family credit rating december 31 2020 applicable margin revolving loans reference adjusted eurodollar rate 14 per annum applicable margin revolving loans reference alternative base rate 04 per annum lvsc also required pay quarterly commitment fee undrawn portion lvsc revolving facility commitment fee ranges 0125 0250 per annum based lvsc’s corporate family credit rating december 31 2020 commitment fee 0200 per annum lvsc revolving credit agreement contains customary affirmative negative covenants facilities type subject customary exceptions thresholds limit ability lvsc restricted subsidiaries among things incur liens ii enter sale leaseback transactions iii sell lease sublease otherwise dispose core facility defined lvsc revolving credit agreement b certain restricted subsidiaries lvsc incur indebtedness c lvsc merge consolidate liquidate sell substantially assets lvsc revolving credit agreement also requires lvsc maintain maximum consolidated leverage ratio 40x last day fiscal quarter lvsc revolving credit agreement also contains customary events default including payment defaults cross defaults material debt bankruptcy insolvency breaches covenants inaccuracy representations warranties subject customary grace periods september 23 2020 lvsc entered amendment agreement amendment lenders lvsc revolving credit agreement pursuant amendment lvsc revolving credit agreement las vegas sands corp subsidiaries notes consolidated financial statements continued amended remove requirement maintain maximum consolidated leverage ratio 40x last day fiscal quarter lvsc period commencing october 31 2020 including december 31 2021 period “relevant period” b include requirement lvsc maintain minimum liquidity 350 million last day month relevant period c include limitation lvsc’s ability declare pay dividend distribution period commencing closing date amendment including december 31 2021 unless liquidity greater 10 billion pro forma basis giving effect dividend distribution pursuant amendment lvsc agreed pay customary fee lenders consented 2013 us credit facility company entered credit agreement 2013 us credit facility pursuant various amendments provided 351 billion term loan 2013 extended us term b facility 115 billion revolving facility 2013 extended us revolving facility together 2013 extended us term b facility 2013 us credit facility borrowings 2013 extended us term b facility used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company paid standby fees 02 per annum undrawn amounts 2013 extended us revolving facility weighted average interest rate 2013 us credit facility 42 39 years ended december 31 2019 2018 respectively previously described proceeds lvsc senior notes used repay outstanding borrowings 2013 us credit facility terminated result company recorded 22 million loss early retirement debt year ended december 31 2019 macao related debt scl senior notes august 9 2018 scl issued private offering three series senior unsecured notes aggregate principal amount 550 billion consisting 180 billion 4600 senior notes due august 8 2023 scl senior notes 180 billion 5125 senior notes due august 8 2025 scl senior notes 190 billion 5400 senior notes due august 8 2028 scl senior notes portion net proceeds offering used repay full outstanding borrowings 2016 vml credit facility defined interim principal payments 2023 2025 2028 scl senior notes interest payable semiannually arrears february 8 august 8 commencing february 8 2019 june 4 2020 scl issued private offering two series senior unsecured notes aggregate principal amount 150 billion consisting 800 million 3800 senior notes due january 8 2026 “2026 scl senior notes” 700 million 4375 senior notes due june 18 2030 “2030 scl senior notes” together 2023 scl senior notes 2025 scl senior notes 2026 scl senior notes 2028 scl senior notes scl senior notes net proceeds offering used incremental liquidity general corporate purposes interim principal payments 2026 2030 scl senior notes interest payable semiannually arrears january 8 july 8 commencing january 8 2021 respect 2026 scl senior notes june 18 december 18 commencing december 18 2020 respect 2030 scl senior notes scl senior notes senior unsecured obligations scl series notes rank equally right payment scl’s existing future senior unsecured debt rank senior right payment scl’s future subordinated debt notes effectively subordinated right payment scl’s future secured debt extent value collateral securing debt structurally subordinated liabilities scl’s subsidiaries none scl’s subsidiaries guarantee notes 2023 2025 2028 scl senior notes issued pursuant indenture dated august 9 2018 scl indenture 2026 2030 scl senior notes issued pursuant indenture dated june 4 2020 “2020 scl indenture” scl us bank national association trustee upon occurrence certain events described indentures interest rate scl senior notes may adjusted indentures contain covenants subject customary exceptions qualifications limit ability scl las vegas sands corp subsidiaries notes consolidated financial statements continued subsidiaries among things incur liens enter sale leaseback transactions consolidate merge sell otherwise dispose substantially scl’s assets consolidated basis indentures also provide customary events default 2018 scl credit facility november 20 2018 scl entered facility agreement arrangers lenders named therein bank china limited macau branch agent lenders 2018 scl credit facility pursuant lenders made available 20 billion revolving unsecured credit facility scl 2018 scl revolving facility available july 31 2023 scl may draw loans facility may consist general revolving loans consisting united states dollar component hong kong dollar component loans drawn swingline loan subfacility denominated either united states dollars hong kong dollars scl may utilize loans general corporate purposes working capital requirements scl subsidiaries december 31 2020 company 202 billion available borrowing capacity 2018 scl revolving facility loans 2018 scl revolving facility bear interest calculated reference 1 case general revolving loans denominated united states dollars london interbank offered rate libor 2 case loans denominated united states dollars drawn swingline loan subfacility united states dollar alternate base rate determined reference among things united states dollar prime lending rate federal funds effective rate 3 case general revolving loans denominated hong kong dollars hong kong interbank offered rate hibor 4 case loans denominated hong kong dollars drawn swingline loan subfacility hong kong dollar alternate base rate determined reference among things hong kong dollar prime lending rate case plus margin determined reference consolidated leverage ratio defined 2018 scl credit facility initial margin general revolving loans 20 per annum initial margin loans drawn swingline loan subfacility 10 per annum scl also required pay commitment fee 060 per annum undrawn amounts 2018 scl revolving facility 2018 scl credit facility contains affirmative negative covenants customary similar unsecured financings including limited limitations indebtedness secured liens principal properties sale leaseback transactions 2018 scl credit facility also requires scl maintain maximum ratio total indebtedness adjusted ebitda 40x throughout life facility minimum ratio adjusted ebitda net interest expense including capitalized interest 25x throughout life facility march 27 2020 scl entered waiver amendment request letter “waiver letter” respect certain provisions 2018 scl credit facility pursuant lenders waived requirements scl comply requirements scl ensure maximum consolidated leverage ratio exceed 40x minimum consolidated interest coverage ratio 25x quarterly period ending period beginning including january 1 2020 ending including july 1 2021 “scl relevant period” respect financial year ended december 31 2019 b waived default may arise result breach said requirements scl relevant period respect financial year ended december 31 2019 c extended period time scl may supply agent audited consolidated financial statements financial year ended december 31 2019 april 30 2020 ii audited consolidated financial statements financial year ending december 31 2020 april 30 2021 pursuant waiver letter scl agreed pay customary fee lenders consented september 11 2020 scl entered waiver extension amendment request letter “waiver extension letter” respect certain provisions 2018 scl credit facility pursuant lenders agreed extend scl relevant period ends includes january 1 2022 instead july 1 2021 b amend restate 2018 scl credit facility form attached waiver extension letter contains following amendments 1 provides scl option increase total borrowing capacity aggregate amount 10 billion 2 imposes restriction ability scl declare make dividend payment similar distribution time period including july 1 2020 including january 1 2022 time x total borrowing capacity exceeds 20 billion operation increase referred maximum consolidated leverage ratio greater 40x las vegas sands corp subsidiaries notes consolidated financial statements continued unless giving effect payment sum aggregate amount cash equivalents scl date ii aggregate amount undrawn facility 2018 scl credit facility unused commitments credit facilities scl greater 20 billion pursuant waiver extension letter scl agreed pay customary fee lenders consented 2018 scl credit facility also contains certain events default subject grace remedy periods materiality qualifiers including limited events relating scls gaming operations loss termination certain land concession contracts january 25 2021 scl entered agreement lenders increase commitments 2018 scl credit facility hkd 383 billion approximately 494 million exchange rates effect date transaction subsequently january 29 2021 scl drew 29 million hkd 213 billion approximately 274 million exchange rates effect january 29 2021 facility general corporate purposes resulting remaining available borrowing capacity 221 billion 2016 vml credit facility two subsidiaries company vml us finance llc borrower venetian macau limited vml guarantor entered credit agreement 2016 vml credit facility pursuant various amendments provided 412 billion term loan 2016 vml term loans 269 million nonextended term loan 2016 nonextended vml term loans 20 billion revolving facility 2016 vml revolving facility together 2016 vml term loans 2016 nonextended vml term loans 2016 vml credit facility borrowings 2016 vml term loans used working capital requirements general corporate purposes including make investment payment specifically prohibited terms loan documents company paid standby fees 05 per annum undrawn amounts 2016 vml revolving facility weighted average interest rate 2016 vml credit facility 31 year ended december 31 2018 previously described portion proceeds scl senior notes used repay outstanding borrowings 2016 vml credit facility result company recorded 52 million loss early retirement debt three months ended september 30 2018 november 20 2018 effective november 21 2018 2016 vml credit facility terminated result company recorded 9 million loss early retirement debt three months ended december 31 2018 singapore related debt 2012 singapore credit facility june 2012 mbs entered sgd 510 billion approximately 385 billion exchange rates effect december 31 2020 credit agreement 2012 singapore credit facility providing fully funded sgd 460 billion approximately 348 billion exchange rates effect december 31 2020 term loan 2012 singapore term facility sgd 500 million approximately 378 million exchange rates effect december 31 2020 revolving facility 2012 singapore revolving facility available november 25 2017 included sgd 100 million approximately 76 million exchange rates effect december 31 2020 ancillary facility 2012 singapore ancillary facility borrowings 2012 singapore credit facility used repay outstanding balance previous singapore credit facility august 2014 mbs amended 2012 singapore credit facility pursuant consenting lenders borrowings 2012 singapore term facility extended maturity august 28 2020 consenting lenders borrowings 2012 singapore revolving facility extended maturity february 28 2020 march 2018 mbs amended 2012 singapore credit facility refinanced facility aggregate amount sgd 480 billion approximately 363 billion exchange rates effect december 31 2020 pursuant consenting lenders borrowings 2012 singapore term facility extended maturity march 29 2024 consenting lenders borrowings 2012 singapore revolving facility extended maturity september 29 2023 las vegas sands corp subsidiaries notes consolidated financial statements continued august 30 2019 mbs amended restated 2012 singapore credit facility “third amendment restatement agreement” third amendment restatement agreement extended maturity date term loans 2012 singapore term facility august 31 2026 b termination date revolving credit commitments 2012 singapore revolving facility february 27 2026 also increased principal amount revolving credit commitments additional sgd 250 million approximately 189 million exchange rates effect december 31 2020 total aggregate principal amount sgd 750 million approximately 567 million exchange rates effect december 31 2020 december 31 2020 mbs sgd 592 million approximately 448 million exchange rates effect december 31 2020 available borrowing capacity 2012 singapore revolving facility net outstanding letters credit primarily consisting banker’s guarantee connection mbs expansion project sgd 153 million approximately 116 million exchange rates effect december 31 2020 third amendment restatement agreement certain lenders committed provide new delayed draw term loan facility “singapore delayed draw term facility” aggregate principal amount sgd 375 billion approximately 283 billion exchange rates effect december 31 2020 available mbs december 30 2024 finance costs associated mbs expansion project loans borrowed singapore delayed draw term facility mature august 31 2026 year ended december 31 2020 mbs borrowed sgd 62 million approximately 46 million exchange rates effect time transaction singapore delayed draw term facility december 31 2020 sgd 369 billion approximately 279 billion exchange rates effect december 31 2020 remains available drawn singapore delayed draw term facility result third amendment restatement agreement company recorded 2 million loss modification debt year ended december 31 2019 indebtedness 2012 singapore credit facility collateralized firstpriority security interest substantially mbss assets capital stock similar ownership interests certain furniture fixtures equipment certain excluded assets term loans 2012 singapore term facility subject interim quarterly amortization payments beginning fiscal quarter ending december 31 2019 amount equal including fiscal quarter ending september 30 2024 05 principal amount outstanding june 30 2019 “term facility restatement date” ii fiscal quarter ending december 31 2024 30 principal amount outstanding term facility restatement date iii fiscal quarters ending march 31 2025 september 30 2025 50 principal amount outstanding term facility restatement date iv fiscal quarters ending december 31 2025 june 30 2026 180 principal amount outstanding term facility restatement date maturity date august 31 2026 mbs required repay remaining amounts outstanding singapore term facility loans singapore delayed draw term facility subject interim quarterly amortization payments beginning fiscal quarter ending march 31 2025 amount equal including fiscal quarter ending september 30 2025 50 principal amount outstanding december 30 2024 “delayed draw term facility restatement date” ii fiscal quarter december 31 2025 including june 30 2026 180 principal amount outstanding delayed draw term facility restatement date maturity date august 31 2026 mbs required repay remaining amounts outstanding singapore delayed draw term facility third amendment restatement agreement outstanding loans bear interest singapore swap offered rate “sor” plus applicable margin fixed 165 per annum september 30 2020 range 115 185 per annum thereafter based mbs’s consolidated leverage ratio interest rate set approximately 20 december 31 2020 mbs pays standby commitment fee 35 40 spread per annum undrawn amounts 2012 singapore revolving facility weighted average interest rate 2012 singapore credit facility 22 32 26 years ended december 31 2020 2019 2018 third amendment restatement agreement mbs must comply maximum consolidated leverage ratio 45x last day fiscal quarter august 30 2019 twelve months following las vegas sands corp subsidiaries notes consolidated financial statements continued date temporary occupation permit issued respect mbs expansion project thereafter mbs must comply maximum consolidated leverage ratio 40x last day fiscal quarter maturity june 18 2020 mbs “borrower” entered amendment letter “amendment letter” dbs bank ltd “dbs” agent amendment letter amends facility agreement originally dated june 25 2012 amended restated amended restated supplemented otherwise modified “facility agreement” among borrower lenders party thereto dbs agent parties thereto amendment letter modifies financial covenant provisions facility agreement borrower comply leverage interest coverage covenants financial quarters ending including september 30 2020 including december 31 2021 “waiver period” b extends june 30 2021 deadline delivering construction costs estimate construction schedule mbs expansion project c permits borrower make dividend payments waiver period unlimited amount ratio debt consolidated adjusted ebitda lower equal 425x ii sgd 500 million per fiscal year ratio debt consolidated adjusted ebitda higher 425x subject additional requirements aggregate amount borrower’s cash plus facility b availability greater equal sgd 800 million immediately following dividend payment b borrower’s interest coverage ratio higher 30x pursuant amendment letter mbs agreed pay customary fee lenders consented thereto debt covenant compliance december 31 2020 management believes company compliance debt covenants cash flows financing activities cash flows financing activities related longterm debt finance lease obligations follows las vegas sands corp subsidiaries notes consolidated financial statements continued scheduled maturities longterm debt maturities longterm debt outstanding december 31 2020 summarized follows fair value longterm debt estimated fair value companys longterm debt december 31 2020 2019 approximately 1515 billion 1321 billion respectively compared contractual value 1412 billion 1258 billion respectively estimated fair value longterm debt based recent trades available indicative pricing market information level 2 inputs note 9 equity preferred stock company authorized issue 50000000 shares preferred stock companys board directors authorized subject limitations prescribed nevada law companys articles incorporation determine terms conditions preferred stock including whether shares preferred stock issued one series number shares included series powers designations preferences rights shares companys board directors also authorized designate qualifications limitations restrictions shares without vote action stockholders common stock dividends april 2020 company suspended quarterly dividend program due impact covid19 pandemic march 26 2020 company paid dividend 079 per common share part regular cash dividend program year ended december 31 2020 company recorded 603 million distribution retained earnings 342 million related mr adelson principal stockholder family remaining 261 million related stockholders march 28 june 27 september 26 december 26 2019 company paid dividend 077 per common share part regular cash dividend program year ended december 31 2019 company recorded 237 billion distribution retained earnings 133 billion related principal stockholder family remaining 104 billion related stockholders march 30 june 28 september 27 december 27 2018 company paid dividend 075 per common share part regular cash dividend program year ended december 31 2018 company recorded 235 billion distribution retained earnings 130 billion related principal stockholder family remaining 105 billion related stockholders share repurchases june 2018 companys board directors authorized repurchase 250 billion outstanding common stock expire november 2020 october 2020 companys board directors authorized extension expiration date remaining repurchase amount 916 million november 2022 repurchases companys common stock made companys discretion accordance las vegas sands corp subsidiaries notes consolidated financial statements continued applicable federal securities laws open market otherwise timing actual number shares repurchased future depend variety factors including companys financial position earnings legal requirements investment opportunities market conditions year ended december 31 2020 shares common stock repurchased years ended december 31 2019 2018 company repurchased 12556635 14998127 shares respectively common stock 754 million 905 million respectively including commissions companys current program share repurchases companys common stock recorded treasury stock addition shares repurchased share repurchase program year ended december 31 2019 company repurchased 1927 shares satisfaction tax withholding exercise price obligations stock option exercises rollforward shares common stock summary outstanding shares common stock follows noncontrolling interests scl april 17 2020 scl announced pay final dividend 2019 due impact covid19 pandemic february 21 2020 scl paid dividend 099 hkd scl stockholders total 103 billion company retained 717 million year ended december 31 2020 february 22 june 21 2019 scl paid dividend hkd 099 hkd 100 per share respectively scl stockholders total 205 billion company retained 144 billion year ended december 31 2019 february 23 june 22 2018 scl paid dividend hkd 099 hkd 100 per share respectively scl stockholders total 205 billion company retained 144 billion year ended december 31 2018 years ended december 31 2019 2018 company distributed 17 million 12 million respectively certain noncontrolling interests amount distributed year ended december 31 2019 11 million related payments companys minority interest partners purchase interests connection sale sands casino resort bethlehem sands bethlehem las vegas sands corp subsidiaries notes consolidated financial statements continued note 10 income taxes consolidated income loss taxes noncontrolling interests domestic foreign operations follows components income tax expense benefit follows reconciliation statutory federal income tax rate companys effective tax rate follows company enjoys income tax exemption macao exempts company paying corporate income tax profits generated gaming operations company continue benefit tax exemption june 26 2022 date vmls subconcession agreement expires company received income tax exemption macao consolidated net income attributable lvsc would reduced 200 million 184 million diluted earnings per share would reduced 026 023 per share years ended december 31 2019 2018 respectively vml gaming losses incurred 2020 generate tax benefit subject tax results increase company’s overall effective tax rate april 2019 company entered renewed agreement macao government effective june 26 2022 provides annual payment 38 million patacas approximately 5 million exchange rates effect december 31 2020 substitution 12 tax otherwise due vml shareholders dividend distributions paid vml gaming profits september 2013 company internal revenue service entered prefiling agreement providing macao special gaming tax 35 gross gaming revenue qualifies tax paid lieu income tax could claimed us foreign tax credit las vegas sands corp subsidiaries notes consolidated financial statements continued companys foreign us tax rate differential reflects fact us tax rate 21 higher statutory tax rates singapore macao 17 12 respectively tax cuts jobs act us tax reform made significant changes us income tax laws including lowering us corporate tax rate 21 effective beginning 2018 transitioning worldwide tax system territorial tax system resulting dividends companys foreign subsidiaries subject us income tax therefore longer generating us foreign tax credits year ended december 31 2018 company recorded tax expense 57 million resulting guidance internal revenue service irs related certain international provisions us tax reform primary tax affected components companys net deferred tax assets follows us tax reform required company compute onetime mandatory tax previously unremitted earnings foreign subsidiaries year ended december 31 2017 onetime deemed repatriation earnings result cash tax liability company incremental us taxable income fully offset utilization us foreign tax credits generated result deemed repatriation addition deemed repatriation generated excess us foreign tax credits carried forward tax years 2018 beyond companys us foreign tax credit carryforwards 487 billion 484 billion december 31 2020 2019 respectively begin expire 2022 valuation allowance 458 billion 451 billion december 31 2020 2019 respectively provided certain net us deferred tax assets company believes assets meet morelikelythannot criteria recognition company’s us net operating loss carryforward 568 million december 31 2020 expiration date net operating loss carryforwards companys foreign subsidiaries 284 billion 231 billion december 31 2020 2019 respectively began expire 2021 valuation allowances 342 million 279 million december 31 2020 2019 respectively provided net deferred tax assets certain foreign jurisdictions company believes assets meet morelikelythannot criteria recognition undistributed earnings subsidiaries accounted temporary difference except deferred tax liabilities recorded undistributed earnings foreign subsidiaries deemed indefinitely reinvested foreign jurisdictions us tax reform required company compute tax previously unremitted earnings foreign subsidiaries upon transition worldwide tax system territorial tax system year ended december 31 2017 company expects earnings exempt us income tax distributed las vegas sands corp subsidiaries notes consolidated financial statements continued earnings taxed year ended december 31 2017 us tax reform company consider current years tax earnings profits foreign subsidiaries indefinitely reinvested beginning year ended december 31 2015 companys major foreign subsidiaries distributed may continue distribute earnings excess current years tax earnings profits order meet companys liquidity needs december 31 2020 amount earnings profits foreign subsidiaries company intend repatriate 258 billion company expect withholding taxes foreign income taxes apply earnings distributed form dividends otherwise reconciliation beginning ending amounts unrecognized tax benefits follows december 31 2020 2019 2018 unrecognized tax benefits 60 million 53 million 67 million respectively recorded reductions us foreign tax credit deferred tax asset december 31 2020 2019 2018 unrecognized tax benefits 71 million 81 million 51 million respectively recorded longterm liabilities included unrecognized tax benefit balance december 31 2020 2019 2018 123 million 115 million 103 million respectively uncertain tax benefits would affect effective income tax rate recognized companys major tax jurisdictions us macao singapore company could subject examination tax years beginning 2016 macao singapore tax years 2010 2015 2017 2019 us company believes adequately reserved provided uncertain tax positions however assurance taxing authorities propose adjustments different companys expected outcome could impact provision income taxes company recognizes interest penalties related unrecognized tax positions provision income taxes accompanying consolidated statement operations interest penalties 7 million 5 million 3 million accrued december 31 2020 2019 2018 respectively company expect significant increase decrease unrecognized tax benefits next twelve months note 11 fair value measurements applicable accounting guidance fair value defined exit price amount would received sell asset paid transfer liability orderly transaction market participants measurement date applicable accounting guidance also establishes valuation hierarchy inputs measuring fair value maximizes use observable inputs market participants would use based market data obtained sources independent company minimizes use unobservable inputs reflect companys assumptions based upon best information available circumstances requiring observable inputs used available level 1 inputs quoted prices unadjusted active markets identical assets liabilities level 2 inputs quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices observable assets liabilities either directly indirectly level 3 inputs unobservable inputs assets liabilities categorization within hierarchy based upon lowest level input significant fair value measurement cash equivalents shortterm investments original maturities less 90 days estimated fair value 726 million 226 billion december 31 2020 2019 respectively estimated fair value companys cash equivalents based level 1 inputs quoted market prices active markets las vegas sands corp subsidiaries notes consolidated financial statements continued note 12 mall activities grand canal shoppes venetian resort las vegas april 2004 company entered agreement sell portion grand canal shoppes located within venetian tower formerly referred grand canal shoppes lease certain restaurant retail space casino level venetian tower master lease ggp approximately 766 million mall sale mall sale closed may 2004 company realized gain 418 million connection mall sale master lease agreement company leased nineteen retail restaurant spaces casino level within venetian tower ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards master lease agreement qualify sale real property assets real property separately legally demised accordingly 109 million transaction deferred prepaid operating lease payments company amortize income straightline basis 89year lease term years ended december 31 2020 2019 2018 1 million deferred item amortized included convention retail revenue addition company agreed ggp continue obligated fulfill certain lease termination asset purchase agreements ii lease theater space located within grand canal shoppes ggp period 25 years fixed minimum rent 3 million per year cost living adjustments iii operate gondola ride operating agreement period 25 years annual fee 4 million iv lease certain office space ggp period 10 years subject extension options annual rent approximately 1 million lease payments clauses ii iv subject automatic increases beginning sixth lease year accordance related accounting standards portion transaction must deferred amount equal present value minimum lease payments set forth lease back agreements deferred gain amortized reduce lease expense straightline basis lives leases years ended december 31 2020 2019 2018 3 million deferred item amortized offset convention retail expense shoppes palazzo company contracted sell portion grand canal shoppes located within palazzo tower formerly referred shoppes palazzo ggp pursuant purchase sale agreement dated april 12 2004 amended agreement terms settlement ggp june 24 2011 company retained 295 million proceeds received participates certain potential future revenues earned ggp pursuant amended agreement company agreed ggp lease certain spaces located within shoppes palazzo transaction accounted sale accordance related accounting standards 224 million mall sale transaction recorded deferred proceeds sale december 31 2020 accrues interest imputed interest rate offset imputed rental income ii rent payments made ggp related spaces leased back ggp amended agreement company agreed lease certain restaurant retail space casino level palazzo tower ggp pursuant master lease agreement palazzo master lease palazzo master lease executed concurrently part closing sale shoppes palazzo ggp february 29 2008 company leased nine restaurant retail spaces casino level within palazzo tower ggp 89 years annual rent one dollar ggp assumed various tenant operating leases spaces accordance related accounting standards palazzo master lease qualify sale real property assets real property separately legally demised accordingly 23 million mall sale transaction deferred prepaid operating lease payments company amortize income straightline basis 89year lease term note 13 leases lessee company operating finance leases various real estate including macao singapore leasehold interests land equipment certain lease agreements include rental payments based percentage sales specified contractual amounts rental payments adjusted periodically inflation rental payments based usage company’s leases include options extend lease term one month 40 years las vegas sands corp subsidiaries notes consolidated financial statements continued company’s lease agreements contain material residual value guarantees material restrictive covenants leases recorded balance sheet consist following excluding macao singapore leasehold interests land assets see note 5 leasehold interests land net 1finance lease rou assets recorded net accumulated depreciation 13 million 6 million december 31 2020 2019 respectively information related lease term discount rate follows 1upon adoption new lease standard discount rates used existing operating leases established january 1 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued components lease expense follows 1lease concessions received year ended december 31 2020 result covid19 pandemic december 31 2020 company shortterm lease commitments 44 million expenses incurred operating lease agreements including amortization leasehold interest land shortterm variable nature totaled 94 million year ended december 31 2018 supplemental cash flow information related leases follows maturities lease liabilities summarized follows las vegas sands corp subsidiaries notes consolidated financial statements continued lessor company leases space several integrated resorts various third parties part mall operations recorded within mall revenues well restaurant retail space land recorded within convention retail revenues leases noncancelable operating leases remaining lease periods vary one month 50 years leases include minimum base rents escalated contingent rent clauses lease revenue consists following 1rent concessions provided periods presented tenants result covid19 pandemic impact mall operations overage rents amounted 88 million year ended december 31 2018 future minimum rentals excluding escalated contingent rent clauses noncancelable leases follows cost accumulated depreciation property equipment company leasing third parties follows las vegas sands corp subsidiaries notes consolidated financial statements continued note 14 commitments contingencies litigation company involved litigation addition noted arising normal course business management made certain estimates potential litigation costs based upon consultation legal counsel actual results could differ estimates however opinion management litigation claims material effect company’s financial condition results operations cash flows asian american entertainment corporation limited v venetian macau limited et al february 5 2007 asian american entertainment corporation limited “aaec” “plaintiff” brought claim “prior action” us district court district nevada “us district court” las vegas sands inc known las vegas sands llc “lvsllc” venetian casino resort llc “vcr” venetian venture development llc subsidiaries company william p weidner david friedman former executives company prior action sought damages based alleged breach agreements entered aaec aforementioned defendants joint presentation bid response public tender held macao government award gaming concessions end 2001 us district court entered order dismissing prior action april 16 2010 january 19 2012 aaec filed another claim “macao action” macao judicial court tribunal judicial de base vml lvs nevada international holdings inc “lvs nevada” lvsllc vcr collectively “defendants” claim 30 billion patacas approximately 376 million exchange rates effect december 31 2020 macao action alleges breach agreements entered aaec lvs nevada lvsllc vcr collectively “us defendants” joint presentation bid response public tender held macao government award gaming concessions end 2001 july 4 2012 defendants filed defense macao action macao judicial court amended defense january 4 2013 march 24 2014 macao judicial court issued decision despacho seneador holding aaec’s claim vml unfounded vml removed party proceedings claim proceed exclusively us defendants may 8 2014 aaec lodged appeal decision june 5 2015 us defendants applied macao judicial court dismiss claims res judicata based dismissal prior action march 16 2016 macao judicial court dismissed defense res judicata appeal decision lodged us defendants april 7 2016 end december 2016 appeals including vml’s dismissal res judicata appeals transferred macao second instance court may 11 2017 macao second instance court notified parties decision refusal deal appeals present time macao second instance court ordered court file transferred back macao judicial court evidence gathering macao judicial court commenced letters rogatory completed march 14 2019 trial matter scheduled september 2019 july 15 2019 aaec submitted request macao judicial court increase amount claim 9645 billion patacas approximately 1208 billion exchange rates effect december 31 2020 allegedly representing lost profits 2004 2018 reserving right claim lost profits 2022 due course enforcement stage september 2 2019 us defendants moved revoke legal aid granted aaec excuses aaec paying share court costs september 4 2019 macao judicial court deferred ruling us defendants’ motion regarding legal aid entry final judgment us defendants appealed deferral september 17 2019 september 26 2019 macao judicial court rejected appeal procedural grounds us defendants requested clarification order october 29 2019 order dated december 4 2019 macao judicial court stated would reconsider us defendants’ motion revoke legal aid part reconsideration would reanalyze portions record seek opinion macao public prosecutor regarding propriety legal aid consult trial court overseeing aaec’s separate las vegas sands corp subsidiaries notes consolidated financial statements continued litigation galaxy entertainment group ltd galaxy entertainment group sa messrs weidner friedman individually macao judicial court denied motion revoke legal aid january 14 2020 september 4 2019 macao judicial court allowed aaec’s request increase amount claim september 17 2019 us defendants appealed decision granting aaec’s request september 26 2019 macao judicial court accepted appeal currently pending macao second instance court june 18 2020 us defendants moved reschedule trial scheduled begin september 16 2020 due travel disruptions extraordinary circumstances resulting ongoing covid19 pandemic macao judicial court granted motion rescheduled trial begin june 16 2021 macao action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously daniels family 2001 revocable trust v lvsc et al october 22 2020 daniels family 2001 revocable trust putative purchaser company’s shares filed purported class action complaint us district court lvsc sheldon g adelson patrick dumont complaint asserts violations sections 10b 20a securities exchange act 1934 “exchange act” alleges lvsc made materially false misleading statements failed disclose material facts february 27 2016 september 15 2020 respect operations marina bay sands compliance singapore laws regulations disclosure controls procedures january 5 2021 us district court entered order appointing carl ciaccio donald desalvo colead plaintiffs pursuant scheduling order entered us district court plaintiffs anticipate filing amended complaint march 8 2021 company anticipates bringing motion dismiss amended complaint may 7 2021 briefing motion dismiss scheduled completed august 5 2021 action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss company intends defend matter vigorously turesky v sheldon g adelson et al december 28 2020 andrew turesky filed putative shareholder derivative action behalf company us district court sheldon g adelson patrick dumont robert g goldstein irwin chafetz micheline chau charles forman steven l gerard george jamieson charles koppelman lewis kramer david f levi current former directors andor officers lvsc complaint asserts claims breach fiduciary duty unjust enrichment waste corporate assets abuse control gross mismanagement violations sections 10b 14a 20a exchange act contribution sections 10b 21d exchange act company’s response complaint currently due february 24 2021 action preliminary stage management determined based proceedings date currently unable determine probability outcome matter range reasonably possible loss macao subconcession macao subconcession company obligated pay macao government annual premium fixed portion variable portion based number type gaming tables employs gaming machines operates fixed portion premium equal 30 million patacas approximately 4 million exchange rates effect december 31 2020 variable portion equal 300000 patacas per gaming table reserved exclusively certain kinds games players 150000 patacas per gaming table reserved 1000 patacas per electrical mechanical gaming machine including slot machines approximately 37570 18785 125 respectively exchange rates effect december 31 2020 subject minimum 45 million patacas approximately 6 million exchange rates effect december 31 2020 company also obligated pay special gaming tax 35 gross gaming revenues applicable withholding taxes company must also contribute 4 gross gaming revenue utilities designated macao government las vegas sands corp subsidiaries notes consolidated financial statements continued portion must used promotion tourism macao based number types gaming tables employed gaming machines operation december 31 2020 company obligated subconcession make minimum future payments approximately 41 million year ending december 31 2021 approximately 21 million year ending december 31 2022 note 15 stockbased employee compensation company two equity award plans grants options purchase companys common stock ordinary shares scl 2004 plan scl equity plan respectively described plans provide granting equity awards pursuant applicable provisions internal revenue code regulations las vegas sands corp 2004 equity award plan 2004 plan gives company competitive edge attracting retaining motivating employees directors consultants provide company stock plan providing incentives directly related increases stockholder value companys subsidiaries affiliates employees directors officers many consultants eligible awards 2004 plan 2004 plan provided aggregate 26344000 shares companys common stock available awards 2004 plan originally term ten years june 2014 companys board directors approved amendment 2004 plan extending term december 2019 may 2019 board directors stockholders approved adoption las vegas sands corp amended restated 2004 equity award plan “amended 2004 plan” extended term amended 2004 plan december 2024 increased number shares common stock available grants 10000000 shares compensation committee may grant awards nonqualified stock options incentive qualified stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing december 31 2020 8998486 shares available grant amended 2004 plan stock option awards granted exercise price equal fair market value defined amended 2004 plan companys stock date grant outstanding stock options generally vest three four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods company estimates fair value stock options using blackscholes optionpricing model expected volatilities based companys historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based us treasury yield curve effect time grant expected dividend yield based estimate annual dividends expected paid time grant sands china ltd equity award plan scl equity plan gives scl competitive edge attracting retaining motivating employees directors consultants provide scl stock plan providing incentives directly related increases stockholder value subject certain criteria defined scl equity plan scls subsidiaries affiliates employees directors officers many consultants eligible awards scl equity plan scl 2009 equity plan provided aggregate 804786508 shares scls common stock available awards scl 2009 equity plan term ten years expired november 30 2019 awards may granted expiration term existing awards previously granted scl 2009 equity plan unexercised unvested remain valid applicable exercisable accordance terms grant despite expiration scl 2009 equity plan scls remuneration committee may grant awards stock options stock appreciation rights restricted stock awards restricted stock units stock bonus awards performance compensation awards combination foregoing effective december 1 2019 scl 2019 equity plan approved shareholders materially terms scl 2009 equity plan december 31 2020 808619139 shares available grant scl 2019 equity plan las vegas sands corp subsidiaries notes consolidated financial statements continued stock option awards granted exercise price less closing price scls stock date grant ii average closing price scls stock five business days immediately preceding date grant outstanding stock options generally vest four years tenyear contractual terms compensation cost stock option grants graded vesting recognized straightline basis awards respective requisite service periods scl estimates fair value stock options using blackscholes optionpricing model expected volatilities based scls historical volatility period equal expected life stock options expected option life based contractual term option well historical exercise forfeiture behavior riskfree interest rate periods equal expected term stock option based hong kong government bond rate effect time grant expected dividend yield based estimate annual dividends expected paid time grant scl 2009 equity plan scl 2019 equity plan scl granted restricted share units eligible employees restricted share units vest three four years employees entitled future cash payment equivalent fair value restricted share unit accumulated dividends cash upon vesting stockbased employee compensation activity fair value option grant estimated grant date using blackscholes optionpricing model following weighted average assumptions summary stock option activity companys equity award plans year ended december 31 2020 presented las vegas sands corp subsidiaries notes consolidated financial statements continued summary unvested restricted stock restricted stock units companys equity award plans year ended december 31 2020 presented grant date fair value scls restricted stock unit awards share price scls ordinary shares respective grant date fair value awards remeasured reporting period vesting dates upon settlement scl pay grantees amount cash calculated based higher closing price scls shares vesting date ii average closing price scls shares five trading days immediately preceding vesting date accrued liability associated cashsettled restricted stock units 3 million december 31 2020 december 31 2020 amended 2004 plan 18 million unrecognized compensation cost related unvested stock options stock option costs expected recognized weighted average period 24 years december 31 2020 scl equity plan 14 million 9 million unrecognized compensation cost related unvested stock options unvested restricted stock units respectively stock option restricted stock unit costs expected recognized weighted average period 19 years las vegas sands corp subsidiaries notes consolidated financial statements continued stockbased compensation activity amended 2004 plan scl equity plan follows three years ended december 31 2020 note 16 related party transactions years ended december 31 2020 2019 2018 principal stockholder family purchased certain services company including lodging banquet services goods services 1 million 2 million 3 million respectively years ended december 31 2020 2019 2018 company incurred 2 million 3 million 3 million respectively food beverage services newspaper subscriptions security support entities principal stockholder ownership interest years ended december 31 2020 2019 2018 company incurred certain expenses 5 million 9 million 6 million respectively related companys use principal stockholders personal aircraft yacht aircraft refurbishment maintenance services business purposes years ended december 31 2020 2019 2018 company charged principal stockholder 18 million 25 million 20 million respectively related aviation costs incurred company principal stockholders use company aviation personnel assets personal purposes addition principal stockholder agreed reimburse company installation avionics aircraft systems personal aircraft years ended december 31 2019 2018 company paid 9 million 13 million respectively costs reimbursed full principal stockholder related party receivables 6 million 3 million december 31 2020 2019 respectively related party payables approximately 1 million 2 million december 31 2020 2019 respectively las vegas sands corp subsidiaries notes consolidated financial statements continued note 17 segment information companys principal operating developmental activities occur three geographic areas macao singapore us company reviews results operations operating segments venetian macao londoner macao parisian macao plaza macao four seasons hotel macao sands macao marina bay sands las vegas operating properties may 30 2019 sands bethlehem company also reviews construction development activities primary projects currently development addition reportable segments noted include renovation expansion rebranding sands cotai central londoner macao mbs expansion project las vegas condo tower construction currently suspended united states company included ferry operations comprised primarily companys ferry operations various operations ancillary properties macao reconcile consolidated results operations financial condition company included corporate includes las vegas condo tower corporate activities company reconcile consolidated financial condition companys segment information years ended december 31 2020 2019 2018 follows las vegas sands corp subsidiaries notes consolidated financial statements continued 1intercompany eliminations include royalties intercompany services 2the company completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued 1the company completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 2consolidated adjusted property ebitda nongaap financial measure net income stockbased compensation expense corporate expense preopening expense development expense depreciation amortization leasehold interests land gain loss disposal impairment assets interest income expense gain sale sands bethlehem gain loss modification early retirement debt income taxes consolidated adjusted property ebitda supplemental nongaap financial measure used management well industry analysts evaluate operations operating performance particular management utilizes consolidated adjusted property ebitda compare operating profitability operations competitors well basis determining certain incentive compensation integrated resort companies historically reported adjusted property ebitda supplemental performance measure gaap financial measures order view operations properties standalone basis integrated resort companies including las vegas sands corp historically excluded certain expenses relate management las vegas sands corp subsidiaries notes consolidated financial statements continued specific properties preopening expense development expense corporate expense adjusted property ebitda calculations consolidated adjusted property ebitda interpreted alternative income operations indicator operating performance cash flows operations measure liquidity case determined accordance gaap company significant uses cash flow including capital expenditures dividend payments interest payments debt principal repayments income taxes reflected consolidated adjusted property ebitda companies calculate adjusted property ebitda manner result consolidated adjusted property ebitda presented company may directly comparable similarly titled measures presented companies 3during years ended december 31 2020 2019 2018 company recorded stockbased compensation expense 28 million 36 million 30 million respectively 12 million 22 million 18 million respectively included corporate expense accompanying consolidated statements operations 1the company completed sale sands bethlehem may 31 2019 results operations include sands bethlehem may 30 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued 1the company completed sale sands bethlehem may 31 2019 1longlived assets include property equipment net accumulated depreciation amortization leasehold interests land net accumulated amortization 2the company completed sale sands bethlehem may 31 2019 las vegas sands corp subsidiaries notes consolidated financial statements continued note 18 selected quarterly financial results unaudited 1during q2 2019 company closed sale sands bethlehem recorded gain sale 556 million earnings per share amounts calculated using weighted average number common dilutive common equivalent shares outstanding quarter sum per share amounts four quarters may equal total earnings per share amounts respective year schedule ii valuation qualifying accounts las vegas sands corp subsidiaries years ended december 31 2020 december 31 2019 december 31 2018 item 9 item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements stockholders’ equity consolidated statements cash flows notes financial statements 2 list financial statement schedules report independent registered public accounting firm financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith file amendment confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp sheldon g adelson sheldon g adelson chairman board chief executive officer march 31 2005 pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated exhibit index filed herewith filed amendment confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements stockholders’ equity comprehensive income consolidated statements cash flows notes financial statements 2 list financial statement schedules report independent registered public accounting firm financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp march 2 2006 sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated index exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements stockholders’ equity comprehensive income consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp february 28 2008 sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated index exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements stockholders’ equity comprehensive income loss consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp february 27 2009 sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated index exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements equity comprehensive income loss consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated index exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements equity comprehensive income loss consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 v pursuant rule 406t regulation st interactive data file deemed filed part registration statement prospectus purposes sections 11 12 securities act 1933 deemed filed purposes section 18 securities exchange act 1934 otherwise subject liability sections signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firms consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firms consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp february 7 2020 sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements stockholders’ equity comprehensive income consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedules report independent registered public accounting firm financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp february 28 2007 sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated index exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933item 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements report independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements equity comprehensive income loss consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith  confidential treatment requested granted respect portions exhibit confidential portions deleted replaced “” filed separately securities exchange commission pursuant rule 406 securities act 1933 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized february 28 2011 las vegas sands corp sheldon g adelson sheldon g adelson chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † confidential treatment requested granted respect portions exhibit confidential portions deleted replaced filed separately securities exchange commission pursuant rule 406 securities act 1933 denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicateditem 15 exhibits financial statement schedules documents filed part annual report form 10k 1 list financial statements reports independent registered public accounting firm consolidated balance sheets consolidated statements operations consolidated statements comprehensive income consolidated statements equity consolidated statements cash flows notes consolidated financial statements 2 list financial statement schedule ii valuation qualifying accounts 3 list exhibits filed herewith † certain identified information excluded exhibit information material ii would competitively harmful publicly disclosed denotes management contract compensatory plan arrangement exhibit deemed filed purposes section 18 securities exchange act 1934 amended otherwise subject liability section exhibit shall deemed incorporated filing securities act 1933 amended securities exchange act 1934 amended item 16 form 10k summary none signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused annual report form 10k signed behalf undersigned thereunto duly authorized las vegas sands corp february 5 2021s robert g goldstein robert g goldstein chairman board chief executive officer pursuant requirements securities exchange act 1934 annual report form 10k signed following persons behalf registrant capacities dates indicated