Item 7. — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 7. — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements, and the notes thereto and other financial information included in this Form 10-K. Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. See “— Special Note Regarding Forward-Looking Statements.”

Operations

We view each of our casino properties as an operating segment. Our Macao operating segments consist of The Venetian Macao, Sands Cotai Central, Four Seasons Macao, Sands Macao and other ancillary operations that support these properties. Approximately 85.3% and 83.2% of the gross revenue at The Venetian Macao for years ended December 31, 2013 and 2012, respectively, was derived from gaming activities, with the remainder derived from room, mall, food and beverage and other non-gaming sources. Approximately 85.7% and 86.6% of the gross revenue at Sands Cotai Central for the period ended December 31, 2013 and 2012, respectively, was derived from gaming activities, with the remainder derived primarily from room and food and beverage operations. Approximately 82.8% and 86.5% of the gross revenue at the Four Seasons Macao for the years ended December 31, 2013 and 2012, respectively, was derived from gaming activities, with the remainder derived primarily from mall and room operations. Approximately 94.2% and 94.5% of the gross revenue at the Sands Macao for the years ended December 31, 2013 and 2012, respectively, was derived from gaming activities, with the remainder derived primarily from food and beverage operations.

Our Singapore operating segment consists of the Marina Bay Sands. Approximately 74.6% and 74.4% of the gross revenue at the Marina Bay Sands for the years ended December 31, 2013 and 2012, respectively, was derived from gaming activities, with the remainder derived from room, food and beverage, mall and other non-gaming sources.

Our operating segments in the U.S. consist of The Venetian Las Vegas, The Palazzo and Sands Bethlehem. The Venetian Las Vegas and The Palazzo operating segments are managed as a single integrated resort and have been aggregated into our Las Vegas Operating Properties, considering their similar economic characteristics, types of customers, types of services and products, the regulatory business environment of the operations within each segment and the Company’s organizational and management reporting structure. Approximately 63.8% and 65.2% of the gross revenue at our Las Vegas Operating Properties for the years ended December 31, 2013 and 2012, respectively, was derived from room, food and beverage and other non-gaming sources, with the remainder derived from gaming activities. The percentage of non-gaming revenue reflects the integrated resort’s emphasis on the group convention and trade show business and the resulting high occupancy and room rates throughout the week, including during mid-week periods. Approximately 88.5% of the gross revenue at Sands Bethlehem for the years ended December 31, 2013 and 2012, was derived from gaming activities, with the remainder derived primarily from food and beverage and other non-gaming sources.

Summary Financial Results

The following table summarizes our results of operations:

Year Ended December 31,
2013Percent Change2012Percent Change2011
(Dollars in thousands)
Net revenues$13,769,88523.7%$11,131,13218.3%$9,410,745
Operating expenses10,361,64217.5%8,819,75025.6%7,020,858
Operating income3,408,24347.5%2,311,382(3.3)%2,389,887
Income before income taxes3,143,51252.4%2,062,576(1.5)%2,094,823
Net income2,954,67657.0%1,881,813(0.1)%1,883,119
Net income attributable to Las Vegas Sands Corp.2,305,99751.3%1,524,093(2.3)%1,560,123
Percent of Net Revenues Year Ended December 31,
201320122011
Operating expenses75.2%79.2%74.6%
Operating income24.8%20.8%25.4%
Income before income taxes22.8%18.5%22.3%
Net income21.5%16.9%20.0%
Net income attributable to Las Vegas Sands Corp.16.7%13.7%16.6%

Our historical financial results will not be indicative of our future results as we continue to develop and open new properties, including The Parisian Macao and the remaining phase of Sands Cotai Central.

Key Operating Revenue Measurements

Operating revenues at The Venetian Macao, Sands Cotai Central, Four Seasons Macao, Marina Bay Sands and our Las Vegas Operating Properties are dependent upon the volume of customers who stay at the hotel, which affects the price that can be charged for hotel rooms and our gaming volume. Operating revenues at Sands Macao and Sands Bethlehem are principally driven by casino customers who visit the properties on a daily basis.

The following are the key measurements we use to evaluate operating revenues:

Casino revenue measurements for Macao and Singapore: Macao and Singapore table games are segregated into two groups, consistent with the Macao and Singapore markets’ convention: Rolling Chip play (all VIP players) and Non-Rolling Chip play (mostly non-VIP players). The volume measurement for Rolling Chip play is non-negotiable gaming chips wagered and lost. The volume measurement for Non-Rolling Chip play is table games drop (“drop”), which is the sum of markers issued (credit instruments) less markers paid at the table, plus cash deposited in the table drop box. Rolling Chip and Non-Rolling Chip volume measurements are not comparable as the amounts wagered and lost are substantially higher than the amounts dropped. Slot handle (“handle”), also a volume measurement, is the gross amount wagered for the period cited.

We view Rolling Chip win as a percentage of Rolling Chip volume, Non-Rolling Chip win as a percentage of drop and slot hold as a percentage of slot handle. Win or hold percentage represents the percentage of Rolling Chip volume, Non-Rolling Chip drop or slot handle that is won by the casino and recorded as casino revenue. Based upon our mix of table games, our Rolling Chip win percentage (calculated before discounts and commissions) is expected to be 2.7% to 3.0%. Generally, slot machine play is conducted on a cash basis. In Macao and Singapore, 27.9% and 29.3%, respectively, of our table games play was conducted on a credit basis for the year ended December 31, 2013.

Casino revenue measurements for the U.S.: The volume measurements in the U.S. are table games drop and slot handle, as previously described. We view table games win as a percentage of drop and slot hold as a percentage of handle. Based upon our mix of table games, our table games are expected to produce a win percentage (calculated before discounts) of 20% to 22% at our Las Vegas Operating Properties and 14% to 16% at Sands Bethlehem. As in Macao and Singapore, slot machine play is generally conducted on a cash basis. Approximately 74.2% of our table games play at our Las Vegas Operating Properties, for the year ended

December 31, 2013, was conducted on a credit basis, while our table games play in Pennsylvania is primarily conducted on a cash basis.

Hotel revenue measurements: Performance indicators used are occupancy rate, which is the average percentage of available hotel rooms occupied during a period, and average daily room rate, which is the average price of occupied rooms per day. The calculations of the hotel occupancy and average daily room rates include the impact of rooms provided on a complimentary basis. Complimentary room rates are determined based on an analysis of retail (or cash) room rates by customer segment and type of room product to ensure the complimentary room rates are consistent with retail rates. Revenue per available room represents a summary of hotel average daily room rates and occupancy. Because not all available rooms are occupied, average daily room rates are normally higher than revenue per available room. Reserved rooms where the guests do not show up for their stay and lose their deposit may be re-sold to walk-in guests. These rooms are considered to be occupied twice for statistical purposes due to obtaining the original deposit and the walk-in guest revenue. In cases where a significant number of rooms are resold, occupancy rates may be in excess of 100% and revenue per available room may be higher than the average daily room rate.

Mall revenue measurements: Occupancy, base rent per square foot and tenant sales per square foot are used as performance indicators. Occupancy represents gross leasable occupied area (“GLOA”) divided by gross leasable area (“GLA”) at the end of the reporting period. GLOA is the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but paying rent. GLA does not include space that is currently under development or not on the market for lease. Base rent per square foot is the weighted average base, or minimum, rent charge in effect at the end of the reporting period for all tenants that would qualify to be included in occupancy. Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period. Only tenants that have been open for a minimum of 12 months are included in the tenant sales per square foot calculation.

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

Operating Revenues

Our net revenues consisted of the following:

Year Ended December 31,
20132012Percent Change
(Dollars in thousands)
Casino$11,386,917$9,008,15826.4%
Rooms1,380,6811,154,02419.6%
Food and beverage730,259628,52816.2%
Mall481,400396,92721.3%
Convention, retail and other515,179497,0323.7%
14,494,43611,684,66924.0%
Less — promotional allowances(724,551)(553,537)(30.9)%
Total net revenues$13,769,885$11,131,13223.7%

Consolidated net revenues were $13.77 billion for the year ended December 31, 2013, an increase of $2.64 billion compared to $11.13 billion for the year ended December 31, 2012. The increase in net revenues was driven by an increase of $1.65 billion at Sands Cotai Central due to its progressive opening that commenced in April 2012, and an increase of $813.3 million at The Venetian Macao, primarily due to increased casino revenues.

Casino revenues increased $2.38 billion compared to the year ended December 31, 2012. The increase is primarily attributable to an increase of $1.47 billion at Sands Cotai Central, due to its progressive opening, and a $786.5 million increase at The Venetian Macao, driven by an increase in Non-Rolling Chip drop. The following table summarizes the results of our casino activity:

Year Ended December 31,
20132012Change
(Dollars in thousands)
Macao Operations:
The Venetian Macao
Total casino revenues$3,415,327$2,628,86829.9%
Non-Rolling Chip drop$7,201,033$4,482,31860.7%
Non-Rolling Chip win percentage26.8%0.3%26.5pts
Rolling Chip volume$54,420,394$48,825,43511.46%
Rolling Chip win percentage3.32%3.05%0.27pts
Slot handle$4,781,911$4,946,114(3.3)%
Slot hold percentage5.5%5.3%0.2pts
Sands Cotai Central
Total casino revenues$2,432,952$960,286153.4%
Non-Rolling Chip drop$5,373,622$1,863,923188.3%
Non-Rolling Chip win percentage22.5%20.8%1.7pts
Rolling Chip volume$61,073,743$26,046,168134.5%
Rolling Chip win percentage2.66%2.83%(0.17)pts
Slot handle$5,686,446$2,939,42693.5%
Slot hold percentage3.9%3.5%0.4pts
Four Seasons Macao
Total casino revenues$922,743$977,616(5.6)%
Non-Rolling Chip drop$899,627$433,264107.6%
Non-Rolling Chip win percentage27.5%40.8%(13.3)pts
Rolling Chip volume$39,280,485$41,604,458(5.6)%
Rolling Chip win percentage2.46%2.79%(0.33)pts
Slot handle$900,836$962,540(6.4)%
Slot hold percentage5.5%5.3%0.2pts
Sands Macao
Total casino revenues$1,206,462$1,219,400(1.1)%
Non-Rolling Chip drop$3,488,891$2,872,46821.5%
Non-Rolling Chip win percentage19.8%21.0%(1.2)pts
Rolling Chip volume$23,242,588$25,184,583(7.7)%
Rolling Chip win percentage2.77%3.14%(0.37)pts
Slot handle$2,699,247$2,476,6739.0%
Slot hold percentage3.9%4.3%(0.4)pts
Singapore Operations:
Marina Bay Sands
Total casino revenues$2,363,140$2,271,8694.0%
Non-Rolling Chip drop$4,650,105$4,612,2270.8%
Non-Rolling Chip win percentage23.7%23.1%0.6pts
Rolling Chip volume$60,095,322$52,568,23814.3%
Rolling Chip win percentage2.46%2.47%(0.01)pts
Slot handle$11,118,021$10,793,3483.0%
Slot hold percentage5.1%5.3%(0.2)pts
U.S. Operations:
Las Vegas Operating Properties
Total casino revenues$584,372$512,64714.0%
Table games drop$2,251,734$2,084,4908.0%
Table games win percentage23.3%21.1%2.2pts
Slot handle$2,024,147$1,944,6184.1%
Slot hold percentage8.7%8.7%—pts
Sands Bethlehem
Total casino revenues$461,921$437,4725.6%
Table games drop$1,024,021$885,35915.7%
Table games win percentage16.1%15.3%0.8pts
Slot handle$4,129,171$4,029,3262.5%
Slot hold percentage7.0%7.2%(0.2)pts

In our experience, average win percentages remain steady when measured over extended periods of time, but can vary considerably within shorter time periods as a result of the statistical variances that are associated with games of chance in which large amounts are wagered.

Room revenues increased $226.7 million compared to the year ended December 31, 2012. The increase is attributable to an increase of $153.0 million at Sands Cotai Central, due to its progressive opening, an increase of $34.8 million at Marina Bay Sands, driven by an increase in average daily room rates, and an increase of $26.3 million at our Las Vegas Operating Properties, driven by an increase in occupancy. The suites at Sands Macao are primarily provided to casino patrons on a complimentary basis. The following table summarizes the results of our room activity:

Year Ended December 31,
20132012Change
(Room revenues in thousands)
Macao Operations:
The Venetian Macao
Total room revenues$230,822$224,1773.0%
Occupancy rate91.3%91.9%(0.6)pts
Average daily room rate$243$2372.5%
Revenue per available room$222$2181.8%
Sands Cotai Central
Total room revenues$236,819$83,833182.5%
Occupancy rate78.5%83.4%(4.9)pts
Average daily room rate$155$155—%
Revenue per available room$121$129(6.2)%
Four Seasons Macao
Total room revenues$43,626$39,8139.6%
Occupancy rate85.3%80.1%5.2pts
Average daily room rate$373$3623.0%
Revenue per available room$318$2909.7%
Sands Macao
Total room revenues$25,150$24,4412.9%
Occupancy rate96.1%95.3%0.8pts
Average daily room rate$252$2452.9%
Revenue per available room$242$2343.4%
Singapore Operations:
Marina Bay Sands
Total room revenues$360,264$325,47010.7%
Occupancy rate98.6%98.9%(0.3)pts
Average daily room rate$396$35511.5%
Revenue per available room$390$35111.1%
U.S. Operations:
Las Vegas Operating Properties
Total room revenues$472,518$446,2415.9%
Occupancy rate89.6%86.1%3.5pts
Average daily room rate$205$2031.0%
Revenue per available room$184$1755.1%
Sands Bethlehem
Total room revenues$11,482$10,04914.3%
Occupancy rate73.6%65.1%8.5pts
Average daily room rate$142$1401.4%
Revenue per available room$104$9114.3%

Food and beverage revenues increased $101.7 million compared to the year ended December 31, 2012. The increase was primarily attributable to a $62.3 million increase at Sands Cotai Central, due to its progressive opening, as well as a $26.3 million increase at our Las Vegas Operating Properties, driven by an increase in banquet operations.

Mall revenues increased $84.5 million compared to the year ended December 31, 2012. The increase was primarily due to an $85.3 million increase at our Macao operating properties, driven by an increase in base rents as well as the progressive opening of Sands Cotai Central. For further information related to the financial performance of our malls, see"— Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our mall activity:

Year Ended December 31,
20132012Change
(Mall revenues in thousands)
Macao Operations:
Shoppes at Venetian
Total mall revenues$169,151$139,52221.2%
Mall gross leasable area (in square feet)755,452805,976(6.3)%
Occupancy95.5%92.3%3.2pts
Base rent per square foot$179$14721.8%
Tenant sales per square foot$1,522$1,21425.4%
Shoppes at Cotai Central(1)
Total mall revenues$42,116$16,074162.0%
Mall gross leasable area (in square feet)210,143210,143—%
Occupancy100.0%100.0%—pts
Base rent per square foot$120$1127.1%
Tenant sales per square foot$1,277$——%
Shoppes at Four Seasons(2)
Total mall revenues$113,121$83,47735.5%
Mall gross leasable area (in square feet)241,895239,7180.9%
Occupancy87.7%92.1%(4.4)pts
Base rent per square foot$348$150132.0%
Tenant sales per square foot$4,726$4,3568.5%
Singapore Operations:
The Shoppes at Marina Bay Sands(3)
Total mall revenues$153,840$156,319(1.6)%
Mall gross leasable area (in square feet)642,241637,9800.7%
Occupancy90.7%96.0%(5.3)pts
Base rent per square foot$217$2150.9%
Tenant sales per square foot$1,528$1,3939.7%
U.S. Operations:
The Outlets at Sands Bethlehem(4)
Total mall revenues$3,172$1,535106.6%
Mall gross leasable area (in square feet)134,830129,2164.3%
Occupancy93.6%71.3%22.3pts
Base rent per square foot$23$——%
Tenant sales per square foot$431$——%
(1)The first and second phases of the Shoppes at Cotai Central opened in April and September 2012, respectively.
(2)Beginning in August 2013, a significant portion of the rent paid by the duty-free luxury shops was converted from overage rent to base rent in accordance with the respective lease agreements, resulting in an increase in base rent per square foot.
(3)The decrease in occupancy at The Shoppes at Marina Bay Sands is due to an ongoing repositioning of the mall that will bring in several new and expand many key luxury tenants. Approximately 37,000 square feet of gross leasable area is currently undergoing new fit-out or development and is not considered occupied as of December 31, 2013.
(4)A progressive opening of The Outlets at Sands Bethlehem began in November 2011. Base rent per square foot and tenant sales per square foot for the year ended December 31, 2012, are excluded from the table as certain co-tenancy requirements were not met during 2012 as the mall was only partially occupied.

Operating Expenses

The breakdown of operating expenses is as follows:

Year Ended December 31,
20132012Percent Change
(Dollars in thousands)
Casino$6,483,718$5,128,03626.4%
Rooms271,942237,30314.6%
Food and beverage369,570331,21011.6%
Mall73,35868,7636.7%
Convention, retail and other317,869304,2634.5%
Provision for doubtful accounts237,786239,332(0.6)%
General and administrative1,329,7401,061,93525.2%
Corporate189,535207,030(8.5)%
Pre-opening13,339143,795(90.7)%
Development15,80919,958(20.8)%
Depreciation and amortization1,007,468892,04612.9%
Amortization of leasehold interests in land40,35240,1650.5%
Impairment loss—143,674(100.0)%
Loss on disposal of assets11,1562,240398.0%
Total operating expenses$10,361,642$8,819,75017.5%

Operating expenses were $10.36 billion for the year ended December 31, 2013, an increase of $1.54 billion compared to $8.82 billion for the year ended December 31, 2012. The increase in operating expenses was primarily attributable to the progressive opening of Sands Cotai Central that commenced in April 2012.

Casino expenses increased $1.36 billion compared to the year ended December 31, 2012. Of the increase, $986.8 million was attributable to the 39% gross win tax on increased casino revenue across all of our Macao properties, as well as $211.5 million of additional casino expenses attributable to Sands Cotai Central.

Rooms and food and beverage expenses increased $34.6 million and $38.4 million, respectively, compared to the year ended December 31, 2012. These increases were driven by the associated increases in the related revenues described above.

The provision for doubtful accounts was $237.8 million for the year ended December 31, 2013, compared to $239.3 million for the year ended December 31, 2012. The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities at any given time. We believe that the amount of our provision for doubtful accounts in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.

General and administrative expenses increased $267.8 million compared to the year ended December 31, 2012. The increase was primarily attributable to a $122.2 million increase at Sands Cotai Central, a $72.7 million increase at our Las Vegas Operating Properties, driven by a $47.4 million legal settlement expense (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 13 — Commitments and Contingencies — Litigation”), as well as a $63.9 million increase at The Venetian Macao, driven by an increase in advertising expense.

Corporate expense decreased $17.5 million compared to the year ended December 31, 2012, driven by a decrease in legal fees.

Pre-opening expenses were $13.3 million for the year ended December 31, 2013, compared to $143.8 million for the year ended December 31, 2012. Pre-opening expense represents personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred. Pre-opening expenses for the years ended December 31, 2013 and 2012, were primarily related to activities at Sands Cotai Central. Development expenses include the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are also expensed as incurred.

Depreciation and amortization expense increased $115.4 million compared to the year ended December 31, 2012. The increase was primarily attributable to a $146.6 million increase at Sands Cotai Central, partially offset by decreases at our Las Vegas Operating Properties and other Macao operating properties due to certain assets being fully depreciated.

The impairment loss of $143.7 million for the year ended December 31, 2012, consisted primarily of a $100.7 million write-off of capitalized construction costs related to our former Cotai Strip development (referred to as parcels 7 and 8) in Macao and a $42.9 million impairment due to the termination of the ZAiA show at The Venetian Macao.

Adjusted Property EBITDA

Adjusted property EBITDA is used by management as the primary measure of the operating performance of our segments. Adjusted property EBITDA is net income before royalty fees, stock-based compensation expense, legal settlement expense, corporate expense, pre-opening expense, development expense, depreciation and amortization, amortization of leasehold interests in land, impairment loss, loss on disposal of assets, interest, other income (expense), loss on modification or early retirement of debt and income taxes. The following table summarizes information related to our segments (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 17 — Segment Information” for discussion of our operating segments and a reconciliation of adjusted property EBITDA to net income):

Year Ended December 31,
20132012Percent Change
(Dollars in thousands)
Macao:
The Venetian Macao$1,499,937$1,143,24531.2%
Sands Cotai Central739,723213,476246.5%
Four Seasons Macao305,040288,1705.9%
Sands Macao362,858350,6393.5%
Other Asia(3,855)(15,950)75.8%
2,903,7031,979,58046.7%
Marina Bay Sands1,384,5761,366,2451.3%
United States:
Las Vegas Operating Properties351,739331,1826.2%
Sands Bethlehem123,337114,0558.1%
475,076445,2376.7%
Total adjusted property EBITDA$4,763,355$3,791,06225.6%

Adjusted property EBITDA at our Macao operations increased $924.1 million compared to the year ended December 31, 2012. The increase was primarily attributable to an increase of $526.2 million at Sands Cotai Central, due to its progressive opening that commenced in April 2012, as well as an increase of $356.7 million at The Venetian Macao, driven by an increase in casino activity.

Adjusted property EBITDA at Marina Bay Sands increased $18.3 million compared to the year ended December 31, 2012. The increase was primarily attributable to a $82.2 million increase in net revenues driven by an increase in casino revenues, partially offset by increases in the associated operating expenses.

Adjusted property EBITDA at our Las Vegas Operating Properties increased $20.6 million compared to the year ended December 31, 2012. Net revenues increased $123.2 million (excluding intersegment royalty revenue), but was offset by increases in the associated operating expenses.

Adjusted property EBITDA at Sands Bethlehem increased $9.3 million compared to the year ended December 31, 2012. The increase was primarily attributable to a $26.3 million increase in net revenues, driven by an increase in casino activity, partially offset by increases in the associated operating expenses.

Interest Expense

The following table summarizes information related to interest expense on long-term debt:

Year Ended December 31,
20132012
(Dollars in thousands)
Interest cost (which includes the amortization of deferred financing costs and original issue discounts)$260,704$292,790
Add — imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo15,16815,123
Less — capitalized interest(4,661)(49,349)
Interest expense, net$271,211$258,564
Cash paid for interest$212,903$258,440
Weighted average total debt balance$9,788,457$9,772,201
Weighted average interest rate2.7%3.0%

Interest cost decreased $32.1 million compared to the year ended December 31, 2012, resulting primarily from a decrease in our weighted average interest rate. Capitalized interest decreased $44.7 million compared to the year ended December 31, 2012, primarily due to the completion of the Conrad and Holiday Inn tower and the first and second Sheraton towers of Sands Cotai Central in April and September 2012 and January 2013, respectively.

Other Factors Effecting Earnings

Other income was $4.3 million for the year ended December 31, 2013, compared to $5.7 million for the year ended December 31, 2012. The income during the year ended December 31, 2013, was primarily attributable to foreign exchange gains.

The loss on modification or early retirement of debt of $14.2 million for the year ended December 31, 2013, related to the the refinancing of our U.S. credit facility in December 2013 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-Term Debt — Senior Secured Credit Facility”).

Our effective income tax rate was 6.0% for the year ended December 31, 2013, compared to 8.8% for the year ended December 31, 2012. The effective income tax rate for the years ended December 31, 2013 and 2012, reflects a 17% statutory tax rate on our Singapore operations and a zero percent tax rate on profits generated by our Macao gaming operations due to our income tax exemption in Macao, which was extended in October 2013 through the end of 2018. We have recorded a valuation allowance related to deferred tax assets generated by operations in the U.S. and certain foreign jurisdictions; however, to the extent that the financial results of these operations improve and it becomes “more-likely-than-not” that these deferred tax assets or a portion thereof are realizable, we will reduce the valuation allowances in the period such determination is made.

The net income attributable to our noncontrolling interests was $648.7 million for the year ended December 31, 2013, compared to $357.7 million for the year ended December 31, 2012. These amounts are primarily related to the noncontrolling interest of SCL.

Year Ended December 31, 2012 Compared to the Year Ended December 31, 2011

Operating Revenues

Our net revenues consisted of the following:

Year Ended December 31,
20122011Percent Change
(Dollars in thousands)
Casino$9,008,158$7,437,00221.1%
Rooms1,154,0241,000,03515.4%
Food and beverage628,528598,8235.0%
Mall396,927325,12322.1%
Convention, retail and other497,032501,351(0.9)%
11,684,6699,862,33418.5%
Less — promotional allowances(553,537)(451,589)(22.6)%
Total net revenues$11,131,132$9,410,74518.3%

Consolidated net revenues were $11.13 billion for the year ended December 31, 2012, an increase of $1.72 billion compared to $9.41 billion for the year ended December 31, 2011. The increase was driven by $1.05 billion of net revenues at Sands Cotai Central and increases of $408.2 million and $210.8 million at Four Seasons Macao and The Venetian Macao, respectively.

Casino revenues increased $1.57 billion compared to the year ended December 31, 2011. The increase is primarily attributable to $960.3 million of revenues at Sands Cotai Central, a $394.1 million increase at Four Seasons Macao, driven by an increase in Rolling Chip volume due to the expanded VIP gaming area and a $198.7 million increase at The Venetian Macao, driven by increases in Non-Rolling Chip drop and win percentage. The following table summarizes the results of our casino activity:

Year Ended December 31,
20122011Change
(Dollars in thousands)
Macao Operations:
The Venetian Macao
Total casino revenues$2,628,868$2,430,1448.2%
Non-Rolling Chip drop$4,482,318$4,178,8657.3%
Non-Rolling Chip win percentage30.6%27.3%3.3pts
Rolling Chip volume$48,825,435$52,016,771(6.1)%
Rolling Chip win percentage3.05%2.95%0.10pts
Slot handle$4,946,114$3,564,61238.8%
Slot hold percentage5.3%6.4%(1.1)pts
Sands Cotai Central
Total casino revenues$960,286$——%
Non-Rolling Chip drop$1,863,923$——%
Non-Rolling Chip win percentage20.8%——pts
Rolling Chip volume$26,046,168$——%
Rolling Chip win percentage2.83%——pts
Slot handle$2,939,426$——%
Slot hold percentage3.5%——pts
Four Seasons Macao
Total casino revenues$977,616$583,47667.6%
Non-Rolling Chip drop$433,264$388,29011.6%
Non-Rolling Chip win percentage40.8%40.3%0.5pts
Rolling Chip volume$41,604,458$18,983,716119.2%
Rolling Chip win percentage2.79%2.88%(0.09)pts
Slot handle$962,540$833,52515.5%
Slot hold percentage5.3%5.7%(0.4)pts
Sands Macao
Total casino revenues$1,219,400$1,251,084(2.5)%
Non-Rolling Chip drop$2,872,468$2,811,9662.2%
Non-Rolling Chip win percentage21.0%20.5%0.5pts
Rolling Chip volume$25,184,583$31,537,280(20.1)%
Rolling Chip win percentage3.14%2.79%0.35pts
Slot handle$2,476,673$2,055,91120.5%
Slot hold percentage4.3%5.5%(1.2)pts
Singapore Operations:
Marina Bay Sands
Total casino revenues$2,271,869$2,364,922(3.9)%
Non-Rolling Chip drop$4,612,227$4,445,2323.8%
Non-Rolling Chip win percentage23.1%23.0%0.1pts
Rolling Chip volume$52,568,238$49,843,6945.5%
Rolling Chip win percentage2.47%2.88%(0.41)pts
Slot handle$10,793,348$9,959,6708.4%
Slot hold percentage5.3%5.3%—pts
U.S. Operations:
Las Vegas Operating Properties
Total casino revenues$512,647$430,75819.0%
Table games drop$2,084,490$1,967,2586.0%
Table games win percentage21.1%17.9%3.2pts
Slot handle$1,944,618$1,829,9236.3%
Slot hold percentage8.7%8.7%—pts
Sands Bethlehem
Total casino revenues$437,472$376,61816.2%
Table games drop$885,359$653,20335.5%
Table games win percentage15.3%14.8%0.5pts
Slot handle$4,029,326$3,773,7346.8%
Slot hold percentage7.2%7.2%—pts

In our experience, average win percentages remain steady when measured over extended periods of time, but can vary considerably within shorter time periods as a result of the statistical variances that are associated with games of chance in which large amounts are wagered.

Room revenues increased $154.0 million compared to the year ended December 31, 2011. The increase is attributable to $83.8 million of revenues at Sands Cotai Central and a $57.0 million increase at Marina Bay Sands, driven by increases in occupancy and average daily room rates. The hotel tower at Sands Bethlehem opened in May 2011. The suites at Sands Macao are primarily provided to casino patrons on a complimentary basis. The following table summarizes the results of our room activity:

Year Ended December 31,
20122011Change
(Room revenues in thousands)
Macao Operations:
The Venetian Macao
Total room revenues$224,177$220,1161.8%
Occupancy rate91.9%91.4%0.5pts
Average daily room rate$237$2322.2%
Revenue per available room$218$2122.8%
Sands Cotai Central
Total room revenues$83,833$——%
Occupancy rate83.4%——pts
Average daily room rate$155$——%
Revenue per available room$129$——%
Four Seasons Macao
Total room revenues$39,813$32,23323.5%
Occupancy rate80.1%69.9%10.2pts
Average daily room rate$362$3348.4%
Revenue per available room$290$23423.9%
Sands Macao
Total room revenues$24,441$23,8202.6%
Occupancy rate95.3%90.5%4.8pts
Average daily room rate$245$251(2.4)%
Revenue per available room$234$2273.1%
Singapore Operations:
Marina Bay Sands
Total room revenues$325,470$268,48021.2%
Occupancy rate98.9%93.6%5.3pts
Average daily room rate$355$31114.1%
Revenue per available room$351$29120.6%
U.S. Operations:
Las Vegas Operating Properties
Total room revenues$446,241$450,487(0.9)%
Occupancy rate86.1%88.6%(2.5)pts
Average daily room rate$203$1992.0%
Revenue per available room$175$177(1.1)%
Sands Bethlehem
Total room revenues$10,049$4,899105.1%
Occupancy rate65.1%50.5%14.6pts
Average daily room rate$140$162(13.6)%
Revenue per available room$91$8211.0%

Food and beverage revenues increased $29.7 million compared to the year ended December 31, 2011. The increase was primarily attributable to $39.8 million of revenues at Sands Cotai Central and a $10.5 million increase at The Venetian Macao, partially offset by a $21.4 million decrease at our Las Vegas Operating Properties, driven by a decrease in banquet operations.

Mall revenues increased $71.8 million compared to the year ended December 31, 2011. The increase was primarily attributable to increases of $18.6 million at Marina Bay Sands, driven by an increase in mall occupancy and overage rents, $18.3 million at The Venetian Macao, driven by higher base rents due to renewed contracts as well as an increase in overage rents, and $17.5 million at Four Seasons Macao, driven by an increase in overage rents and the expansion of the mall during November 2012. The following table summarizes the results of our mall activity:

Year Ended December 31,
20122011Change
(Mall revenues in thousands)
Macao Operations:
Shoppes at Venetian
Total mall revenues$139,522$121,19115.1%
Mall gross leasable area (in square feet)805,976817,251(1.4)%
Occupancy92.3%90.0%2.3pts
Base rent per square foot$147$13112.2%
Tenant sales per square foot$1,214$1,08711.7%
Shoppes at Cotai Central(1)
Total mall revenues$16,074$——%
Mall gross leasable area (in square feet)210,143——%
Occupancy100.0%——pts
Base rent per square foot$112$——%
Shoppes at Four Seasons(2)
Total mall revenues$83,477$65,97326.5%
Mall gross leasable area (in square feet)239,718189,17026.7%
Occupancy92.1%92.3%(0.2)pts
Base rent per square foot$150$1481.4%
Tenant sales per square foot$4,356$3,38628.6%
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues$156,319$137,76513.5%
Mall gross leasable area (in square feet)637,980629,4281.4%
Occupancy96.0%95.3%0.7pts
Base rent per square foot$215$18615.6%
Tenant sales per square foot$1,393$1,23113.2%
U.S. Operations:
The Outlets at Sands Bethlehem(3)
Total mall revenues$1,535$194691.2%
Mall gross leasable area (in square feet)129,216129,216—%
Occupancy71.3%24.1%47.2pts
(1)The first and second phases of the Shoppes at Cotai Central opened in April and September 2012, respectively.
(2)In November 2012, the Shoppes at Four Seasons expanded the duty-free luxury shops, resulting in an additional 51,000 square feet of gross leasable space.
(3)Base rent per square foot and tenant sales per square foot are excluded from the table as a progressive opening of The Outlets at Sands Bethlehem began in November 2011.

Convention, retail and other revenues decreased $4.3 million compared to the year ended December 31, 2011. The decrease was primarily due to a $15.4 million decrease at Marina Bay Sands, driven by a decrease in entertainment revenue primarily due to the closing of a show at the property, partially offset by $8.7 million of revenues at Sands Cotai Central.

Operating Expenses

The breakdown of operating expenses is as follows:

Year Ended December 31,
20122011Percent Change
(Dollars in thousands)
Casino$5,128,036$4,007,88727.9%
Rooms237,303210,05213.0%
Food and beverage331,210307,4467.7%
Mall68,76359,18316.2%
Convention, retail and other304,263338,109(10.0)%
Provision for doubtful accounts239,332150,45659.1%
General and administrative1,061,935836,92426.9%
Corporate207,030185,69411.5%
Pre-opening143,79565,825118.5%
Development19,95811,30976.5%
Depreciation and amortization892,046794,40412.3%
Amortization of leasehold interests in land40,16543,366(7.4)%
Impairment loss143,674——
Loss on disposal of assets2,24010,203(78.0)%
Total operating expenses$8,819,750$7,020,85825.6%

Operating expenses were $8.82 billion for the year ended December 31, 2012, an increase of $1.80 billion compared to $7.02 billion for the year ended December 31, 2011. The increase in operating expenses was primarily attributable to the opening of Sands Cotai Central, an increase in casino activity at our other Macao operating properties and $143.7 million in impairment charges.

Casino expenses increased $1.12 billion compared to the year ended December 31, 2011. Of the increase, $788.9 million was due to the 39% gross win tax on increased casino revenue across all of our Macao properties, as well as $185.5 million of additional casino expenses attributable to Sands Cotai Central.

Rooms and food and beverage expenses increased $27.3 million and $23.8 million, respectively, compared to the year ended December 31, 2011. These increases were primarily attributable to the opening of Sands Cotai Central.

Convention, retail and other expenses decreased $33.8 million compared to the year ended December 31, 2011. The decrease was primarily due to decreases of $25.7 million and $14.3 million at Marina Bay Sands and The Venetian Macao, respectively, driven by a decrease in entertainment expense due to the closure of certain shows, partially offset by $7.1 million of expenses at Sands Cotai Central.

The provision for doubtful accounts was $239.3 million for the year ended December 31, 2012, compared to $150.5 million for the year ended December 31, 2011. The increase was primarily due to increases of $57.3 million and $18.1 million at Marina Bay Sands and our Macao operating properties, respectively, driven by increases in casino accounts receivable related to credit extended, as well as increases to provisions for specific customers. The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities at any given time. We believe that the amount of our provision for doubtful accounts in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.

General and administrative expenses increased $225.0 million compared to the year ended December 31, 2011. The increase was primarily attributable to $103.9 million of expenses at Sands Cotai Central and increases of $61.6 million at Marina Bay Sands, primarily driven by an increase in property taxes, and $29.7 million at The Venetian Macao.

Corporate expense increased $21.3 million compared to the year ended December 31, 2011, driven by an increase in legal fees.

Pre-opening expenses were $143.8 million for the year ended December 31, 2012, compared to $65.8 million for the year ended December 31, 2011. Pre-opening expense represents personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred. Pre-opening expenses for the years ended December 31, 2012 and 2011, were primarily related to activities at Sands Cotai Central. Development expenses include the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are also expensed as incurred.

Depreciation and amortization expense increased $97.6 million compared to the year ended December 31, 2011. The increase was primarily attributable to $107.8 million of expenses at Sands Cotai Central, partially offset by decreases at our other Macao operating properties due to certain assets being fully depreciated.

The impairment loss of $143.7 million for the year ended December 31, 2012, consisted primarily of a $100.7 million write-off of capitalized construction costs related to our former Cotai Strip development (referred to as parcels 7 and 8) in Macao and a $42.9 million impairment due to the termination of the ZAiA show at The Venetian Macao.

Adjusted Property EBITDA

The following table summarizes information related to our segments:

Year Ended December 31,
20122011Percent Change
(Dollars in thousands)
Macao:
The Venetian Macao$1,143,245$1,022,77811.8%
Sands Cotai Central213,476——
Four Seasons Macao288,170217,92332.2%
Sands Macao350,639351,877(0.4)%
Other Asia(15,950)(15,143)(5.3)%
1,979,5801,577,43525.5%
Marina Bay Sands1,366,2451,530,623(10.7)%
United States:
Las Vegas Operating Properties331,182333,295(0.6)%
Sands Bethlehem114,05590,80225.6%
445,237424,0975.0%
Total adjusted property EBITDA$3,791,062$3,532,1557.3%

Adjusted property EBITDA at our Macao operations increased $402.1 million compared to the year ended December 31, 2011. The increase was primarily attributable to $213.5 million in adjusted property EBITDA generated at Sands Cotai Central and increases of $120.5 million and $70.2 million at The Venetian Macao and Four Seasons Macao, respectively, driven by an increase in casino activity.

Adjusted property EBITDA at Marina Bay Sands decreased $164.4 million compared to the year ended December 31, 2011. The decrease was primarily attributable to a $35.7 million decrease in net revenues and increases of $61.6 million and $57.3 million in general and administrative expenses and provision for doubtful accounts, respectively.

Adjusted property EBITDA at our Las Vegas Operating Properties remained relatively unchanged compared to the year ended December 31, 2011. Net revenues increased $40.4 million (excluding intersegment royalty revenue), but was offset by increases of $22.8 million, $14.5 million and $14.5 million in casino expenses, general and administrative expenses and provision for doubtful accounts, respectively.

Adjusted property EBITDA at Sands Bethlehem increased $23.3 million compared to the year ended December 31, 2011. The increase was primarily attributable to a $70.6 million increase in net revenues, driven by an increase in casino activity, partially offset by increases in the associated operating expenses.

Interest Expense

The following table summarizes information related to interest expense on long-term debt:

Year Ended December 31,
20122011
(Dollars in thousands)
Interest cost (which includes the amortization of deferred financing costs and original issue discounts)$292,790$402,076
Add — imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo15,1238,013
Less — capitalized interest(49,349)(127,140)
Interest expense, net$258,564$282,949
Cash paid for interest$258,440$373,923
Weighted average total debt balance$9,772,201$10,097,474
Weighted average interest rate3.0%4.0%

Interest cost decreased $109.3 million compared to the year ended December 31, 2011, resulting primarily from a decrease in our weighted average interest rate. Capitalized interest decreased $77.8 million compared to the year ended December 31, 2011, primarily due to the completion of the Conrad and Holiday Inn tower and the first Sheraton tower of Sands Cotai Central in April and September 2012, respectively.

Other Factors Effecting Earnings

Other income was $5.7 million for the year ended December 31, 2012, compared to other expense of $4.0 million for the year ended December 31, 2011. The income during the year ended December 31, 2012, was primarily due to a $6.6 million foreign exchange gain related to the dissolution of one of our wholly owned foreign subsidiaries, partially offset by decreases in the fair value of our interest rate cap agreements in Macao and Singapore.

The loss on modification or early retirement of debt was $19.2 million for the year ended December 31, 2012, and was primarily due to a $13.1 million loss related to the refinancing of our Singapore credit facility in June 2012 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-Term Debt — Singapore Credit Facility”).

Our effective income tax rate was 8.8% for the year ended December 31, 2012, compared to 10.1% for the year ended December 31, 2011. The effective income tax rate for the years ended December 31, 2012 and 2011, reflects a 17% statutory tax rate on our Singapore operations and a zero percent tax rate on profits generated by our Macao gaming operations due to our income tax exemption in Macao, which was extended in October 2013 through the end of 2018. We have recorded a valuation allowance related to deferred tax assets generated by operations in the U.S. and certain foreign jurisdictions; however, to the extent that the financial results of these operations improve and it becomes “more-likely-than-not” that these deferred tax assets or a portion thereof are realizable, we will reduce the valuation allowances in the period such determination is made.

The net income attributable to our noncontrolling interests was $357.7 million for the year ended December 31, 2012, compared to $323.0 million for the year ended December 31, 2011. These amounts are primarily related to the noncontrolling interest of SCL.

Additional Information Regarding our Retail Mall Operations

The following tables summarize the results of our mall operations for the years ended December 31, 2013, 2012 and 2011 (in thousands):

Shoppes at VenetianShoppes at Four SeasonsShoppes at Cotai Central(1)The Shoppes at Marina Bay SandsThe Outlets at Sands Bethlehem(2)Total
For the year ended December 31, 2013
Mall revenues:
Minimum rents(3)$104,080$47,913$23,030$106,318$1,268$282,609
Overage rents39,61558,24611,58416,5841,904127,933
CAM, levies and management fees25,4566,9627,50230,938—70,858
Total mall revenues169,151113,12142,116153,8403,172481,400
Mall operating expenses
Common area maintenance16,8945,4665,57725,3701,32054,627
Management fees and other direct operating expenses6,9751,6071,2758,08379118,731
Mall operating expenses23,8697,0736,85233,4532,11173,358
Property taxes(4)1,486——7,1231,0939,702
Provision for (recovery of) doubtful accounts(281)226(245)(5)—(305)
Mall-related expenses(5)25,0747,2996,60740,5713,20482,755
For the year ended December 31, 2012
Mall revenues:
Minimum rents(3)$81,906$23,068$10,770$109,468$800$226,012
Overage rents36,43454,9091,56614,941735108,585
CAM, levies and management fees21,1825,5003,73831,910—62,330
Total mall revenues139,52283,47716,074156,3191,535396,927
Mall operating expenses
Common area maintenance15,5734,0512,48525,9281,07749,114
Management fees and other direct operating expenses7,3441,8951,2268,82835619,649
Mall operating expenses22,9175,9463,71134,7561,43368,763
Property taxes(4)———8,5487599,307
Provision for (recovery of) doubtful accounts410330607123—1,470
Mall-related expenses(5)23,3276,2764,31843,4272,19279,540
For the year ended December 31, 2011
Mall revenues:
Minimum rents(3)$66,859$17,847$—$108,705$(592)$192,819
Overage rents32,95942,737—7,78878684,270
CAM, levies and management fees21,3735,389—21,272—48,034
Total mall revenues121,19165,973—137,765194325,123
Mall operating expenses
Common area maintenance18,2633,927—17,66217140,023
Management fees and other direct operating expenses7,1942,468—9,30819019,160
Mall operating expenses25,4576,395—26,97036159,183
Property taxes(4)———5,4111125,523
Provision for (recovery of) doubtful accounts13,504828—185—14,517
Mall-related expenses(5)38,9617,223—32,56647379,223
(1)The first and second phases of the Shoppes at Cotai Central opened in April and September 2012, respectively.
(2)Revenues from CAM, levies and management fees are included in minimum rents for The Outlets at Sands Bethlehem.
(3)Minimum rents include base rents and straight-line adjustments of base rents.
(4)Commercial property that generates rental income is exempt from property tax for the first six years for newly constructed buildings in Cotai. This property tax exemption expired in August 2013 for The Venetian Macao and we are currently in the process of requesting an extension from the Macao government.
(5)Mall-related expenses consist of CAM, management fees and other direct operating expenses, property taxes and provision for (recovery of) doubtful accounts, but excludes depreciation and amortization and general and administrative costs.

It is common in the mall operating industry for companies to disclose mall net operating income (“NOI”) as a useful supplemental measure of a mall’s operating performance. Because NOI excludes general and administrative expenses, interest expense, impairment losses, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests and provision for income taxes, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.

In the tables above, we believe that taking total mall revenues less mall-related expenses provides an operating performance measure for our malls. Other mall operating companies may use different methodologies for deriving mall-related expenses. As such, this calculation may not be comparable to the NOI of other mall operating companies.

Development Projects

Macao

We submitted plans to the Macao government for The Parisian Macao, an integrated resort that will be connected to The Venetian Macao and Four Seasons Macao. The Parisian Macao, which is currently expected to open in late 2015, is intended to include a gaming area (to be operated under our gaming subconcession), hotel and shopping mall. We expect the cost to design, develop and construct The Parisian Macao to be approximately $2.7 billion, inclusive of payments made for the land premium. We commenced construction activities and have capitalized costs of $376.0 million, including the land premium (net of amortization), as of December 31, 2013. In addition, we will be completing the development of some public areas surrounding our Cotai Strip properties on behalf of the Macao government.

As of December 31, 2013, we have capitalized an aggregate of $8.97 billion in construction costs and land premiums (net of amortization) for our Cotai Strip developments, which include The Venetian Macao, Sands Cotai Central, Four Seasons Macao and The Parisian Macao, as well as our investments in transportation infrastructure, including our passenger ferry service operations.

Land concessions in Macao generally have an initial term of 25 years with automatic extensions of 10 years thereafter in accordance with Macao law. We have received land concessions from the Macao government to build on parcels 1, 2, 3 and 5 and 6, including the sites on which The Venetian Macao, Sands Cotai Central and Four Seasons Macao are, and The Parisian Macao will be, located. We do not own these land sites in Macao; however, the land concessions grant us exclusive use of the land. As specified in the land concessions, we are required to pay premiums for each parcel, which are either payable in a single lump sum upon acceptance of the land concessions by the Macao government or in seven semi-annual installments, as well as annual rent for the term of the land concessions.

Under our land concession for Sands Cotai Central, we are required to complete the development by May 2014. We have applied for an extension from the Macao government to complete Sands Cotai Central, as we will be unable to meet the May 2014 deadline. The land concession for The Parisian Macao contains a similar requirement, which was extended by the Macao government in July 2012, that the development be completed by April 2016. Should we determine that we are unable to complete The Parisian Macao by April 2016, we would then also expect to apply for an extension from the Macao government. If we are unable to meet The Parisian Macao deadline and the deadlines for either development are not extended, we could lose our land concessions for Sands Cotai Central or The Parisian Macao, which would prohibit us from operating any facilities developed under the respective land concessions. As a result, we could record a charge for all or some portion of the $4.15 billion or $376.0 million in capitalized construction costs and land premiums (net of amortization), as of December 31, 2013, related to Sands Cotai Central and The Parisian Macao, respectively.

United States

We were constructing the Las Vegas Condo Tower, located on the Las Vegas Strip between The Palazzo and The Venetian Las Vegas. We suspended our construction activities for the project due to reduced demand for Las Vegas Strip condominiums and the overall decline in general economic conditions. We intend to recommence construction when demand and conditions improve. As of December 31, 2013, we have capitalized construction costs of $178.6 million for this project. The impact of the suspension on the estimated overall cost of the project is currently not determinable with certainty. Should demand and conditions

fail to improve or management decide to abandon the project, we could record a charge for some portion of the $178.6 million in capitalized construction costs as of December 31, 2013.

Other

We continue to aggressively pursue a variety of new development opportunities around the world.

Liquidity and Capital Resources

Cash Flows — Summary

Our cash flows consisted of the following:

Year Ended December 31,
201320122011
(In thousands)
Net cash generated from operating activities$4,439,412$3,057,757$2,662,496
Cash flows from investing activities:
Change in restricted cash and cash equivalents(382)693804,394
Capital expenditures(898,111)(1,449,234)(1,508,493)
Proceeds from disposal of property and equipment32,1552,9096,093
Acquisition of intangible assets(45,871)—(100)
Net cash used in investing activities(912,209)(1,445,632)(698,106)
Cash flows from financing activities:
Proceeds from exercise of stock options69,59646,24025,505
Repurchase of common stock(561,150)——
Proceeds from exercise of warrants350528,90812,512
Dividends paid(1,564,049)(3,442,312)(75,297)
Distributions to noncontrolling interests(11,858)(10,466)(10,388)
Deemed distribution to Principal Stockholder—(18,576)—
Proceeds from long-term debt3,183,1074,351,4863,201,535
Repayments of long-term debt(3,513,032)(4,399,698)(3,300,310)
Repurchases and redemption of preferred stock——(845,321)
Payments of preferred stock inducement premium——(16,871)
Payments of deferred financing costs(35,414)(100,888)(84,826)
Net cash used in financing activities(2,432,450)(3,045,306)(1,093,461)
Effect of exchange rate on cash(7,105)43,229(5,292)
Increase (decrease) in cash and cash equivalents$1,087,648$(1,389,952)$865,637

Cash Flows — Operating Activities

Table games play at our properties is conducted on a cash and credit basis. Slot machine play is primarily conducted on a cash basis. The retail hotel rooms business is generally conducted on a cash basis, the group hotel rooms business is conducted on a cash and credit basis, and banquet business is conducted primarily on a credit basis resulting in operating cash flows being generally affected by changes in operating income and accounts receivable. Net cash generated from operating activities increased $1.38 billion compared to the year ended December 31, 2012. The increase was primarily attributable to the increase in operating cash flows generated from our Macao operations.

Cash Flows — Investing Activities

Capital expenditures for the year ended December 31, 2013, totaled $898.1 million, including $614.4 million for construction and development activities in Macao, which consisted primarily of $262.5 million for Sands Cotai Central and $212.8 million for The Parisian Macao; $142.7 million in Singapore; $93.2 million at our Las Vegas Operating Properties; and $47.8 million for corporate and other activities. Additionally, during the year ended December 31, 2013, we paid SGD 57.0 million (approximately $44.9 million at exchange rates in effect on December 31, 2013) to renew our Singapore gaming license.

We are continuously evaluating our portfolio of assets, including evaluating strategic alternatives related to our Pennsylvania operations.

Cash Flows — Financing Activities

Net cash flows used in financing activities were $2.43 billion for the year ended December 31, 2013, which was primarily attributable to $1.56 billion in dividend payments, $561.2 million in common stock repurchases and repayments of $430.5 million on our 2012 Singapore Credit Facility.

As of December 31, 2013, we had $1.54 billion available for borrowing under our U.S., Macao and Singapore credit facilities, net of letters of credit.

Capital Financing Overview

Through December 31, 2013, we have funded our development projects primarily through borrowings from our credit facilities (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-Term Debt”), operating cash flows, proceeds from our equity offerings and proceeds from the disposition of non-core assets.

Our U.S., Macao and Singapore credit facilities contain various financial covenants. The U.S. credit facility, which was amended in December 2013, requires our Las Vegas operations to comply with a financial covenant at the end of each quarter to the extent that any revolving loans or certain letters of credit are outstanding. This financial covenant requires our Las Vegas operations to maintain a maximum leverage ratio of net debt, as defined, to trailing twelve-month adjusted earnings before interest, income taxes, depreciation and amortization, as defined (“Adjusted EBITDA”). The maximum leverage ratio is 5.5x for all quarterly periods through maturity. We can elect to contribute cash on hand to our Las Vegas operations on a bi-quarterly basis; such contributions having the effect of increasing Adjusted EBITDA during the applicable quarter for purposes of calculating compliance with the maximum leverage ratio (the “EBITDA true-up”). Our Macao credit facility also requires our Macao operations to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.0x for the quarterly periods ending December 31, 2013 through December 31, 2014, decreases to 3.5x for the quarterly periods ending March 31 through December 31, 2015, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. Our Singapore credit facility requires operations of Marina Bay Sands to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 3.5x for the quarterly periods ending December 31, 2013 through December 31, 2014, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. As of December 31, 2013, our U.S., Macao and Singapore leverage ratios were 1.2x, 1.1x and 2.9x, respectively, compared to the maximum leverage ratios allowed of 5.5x, 4.0x and 3.5x, respectively. If we are unable to maintain compliance with the financial covenants under these credit facilities, we would be in default under the respective credit facilities. A default under the U.S. credit facility would trigger a cross-default under our airplane financings. Any defaults or cross-defaults under these agreements would allow the lenders, in each case, to exercise their rights and remedies as defined under their respective agreements. If the lenders were to exercise their rights to accelerate the due dates of the indebtedness outstanding, there can be no assurance that we would be able to repay or refinance any amounts that may become due and payable under such agreements, which could force us to restructure or alter our operations or debt obligations.

We held unrestricted cash and cash equivalents of approximately $3.60 billion and restricted cash and cash equivalents of approximately $6.8 million as of December 31, 2013, of which approximately $3.18 billion of the unrestricted amount is held by non-U.S. subsidiaries. Of the $3.18 billion, approximately $2.29 billion is available to be repatriated to the U.S. with minimal taxes owed on such amounts due to the Company’s significant foreign taxes paid, which would ultimately generate U.S. foreign tax credits if cash is repatriated. The remaining unrestricted amounts are not available for repatriation primarily due to dividend requirements to third party public shareholders in the case of funds being repatriated from SCL. We believe the cash on hand and cash flow generated from operations will be sufficient to maintain compliance with the financial covenants of our credit facilities. We may elect to arrange additional financing to fund the balance of our Cotai Strip developments. In the normal course of our activities, we will continue to evaluate our capital structure and opportunities for enhancements thereof.

In November 2011, we completed the $3.7 billion 2011 VML Credit Facility, which was used to repay the outstanding indebtedness under the VML and VOL credit facilities, as well as continue to fund the development, construction and completion of certain components of Sands Cotai Central. In March 2012, we redeemed the outstanding balance of Senior Notes for $191.7 million and in May 2012, we repaid the $131.6 million outstanding balance under our ferry financing. In June 2012, we entered into the SGD 5.1 billion (approximately $4.02 billion at exchange rates in effect on December 31, 2013) 2012 Singapore Credit Facility, which was primarily used to repay the outstanding indebtedness under the prior Singapore credit facility. In December 2013, we completed the $3.5 billion 2013 U.S. Credit Facility, which was primarily used to repay the outstanding indebtedness under the prior senior secured credit facility (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-term Debt — 2013 U.S. Credit Facility”). We are currently in the process of amending and restating our 2011 VML Credit Facility, which will allow each lender holding term loans under the 2011 VML Credit Facility to extend the maturity of its term loans to 2020 and will provide for new revolving loan commitments of $2.0 billion. We will also have the option to raise incremental senior secured and unsecured debt under existing baskets within the amended credit facility.

The amendment, which is subject to approval of the lenders and certain Macao government approvals, is anticipated to close during the first quarter of 2014.

On February 28 and June 22, 2012, SCL paid a dividend of 0.58 Hong Kong dollars (“HKD”) per share (a total of $1.20 billion) to SCL shareholders (of which we retained $844.4 million). On February 28 and June 21, 2013, SCL paid a dividend of HKD 0.67 and HKD 0.66 per share, respectively (a total of $1.38 billion) to SCL shareholders (of which we retained $970.2 million). On January 24, 2014, the Board of Directors of SCL declared a dividend of HKD 0.87 per share and a special dividend of HKD 0.77 per share (a total of $1.71 billion, of which we retained $1.20 billion) to SCL shareholders of record on February 14, 2014, which was paid on February 26, 2014.

On March 30, June 29, September 28 and December 28, 2012, we paid a dividend of $0.25 per common share as part of a regular cash dividend program and on December 18, 2012, we paid a special cash dividend of $2.75 per common share. During the year ended December 31, 2012, we recorded $3.09 billion as a distribution against retained earnings (of which $1.62 billion related to our Principal Stockholder’s family and the remaining $1.47 billion related to all other shareholders). On March 29, June 28, September 27 and December 31, 2013, we paid a dividend of $0.35 per common share and recorded $1.15 billion as a distribution against retained earnings (of which $604.2 million related to our Principal Stockholder’s family and the remaining $548.9 million related to all other shareholders) during the year ended December 31, 2013. On January 28, 2014, our Board of Directors declared a quarterly dividend of $0.50 per common share (a total estimated to be approximately $406 million) to be paid on March 31, 2014, to shareholders of record on March 21, 2014. We expect this level of dividend to continue quarterly through the remainder of 2014. Our Board of Directors will continually assess the level and appropriateness of any cash dividends.

In June 2013, our Board of Directors approved a share repurchase program, which expires in June 2015, with an initial authorization of $2.0 billion. Repurchases of our common stock are made at our discretion in accordance with applicable federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including our financial position, earnings, legal requirements, other investment opportunities and market conditions. During the year ended December 31, 2013, we repurchased 8,570,281 shares of our common stock for $570.5 million (including commissions) under this program. Subsequent to year end through February 28, 2014, we repurchased 8,224,255 shares of our common stock for $663.8 million (including commissions) under this program. All share repurchases of our common stock have been recorded as treasury shares.

On March 2, 2012, our Principal Stockholder’s family exercised all of their outstanding warrants to purchase 87,500,175 shares of our common stock and paid $525.0 million in cash as settlement of the exercise price.

Aggregate Indebtedness and Other Known Contractual Obligations

Our total long-term indebtedness and other known contractual obligations are summarized below as of December 31, 2013:

Payments Due by Period Ending December 31, 2013(11)
Less than 1 Year2-3 Years4-5 YearsMore than 5 YearsTotal
(In thousands)
Long-Term Debt Obligations(1)
2013 U.S. Credit Facility — Term B$22,500$45,000$45,000$2,137,500$2,250,000
2013 U.S. Credit Facility — Revolving——590,000—590,000
Airplane Financings3,6887,37456,297—67,359
HVAC Equipment Lease(2)1,5212,8662,60111,15218,140
U.S. Other1,78253221—2,335
2011 VML Credit Facility — Term B200,5543,008,315——3,208,869
Macao Other2,3874,2311,292—7,910
2012 Singapore Credit Facility — Term145,0751,523,2971,958,524—3,626,896
Fixed Interest Payments1,6712,5311,8914096,502
Variable Interest Payments(3)213,274355,806197,820134,996901,896
Contractual Obligations
Former Tenants(4)4008008004,8006,800
Employment Agreements(5)10,1847,620234—18,038
Macao Leasehold Interests in Land(6)3,4539,51010,56675,97299,501
Mall Leases(7)8,56416,75016,42283,810125,546
Macao Annual Premium(8)43,83787,67487,675153,430372,616
Parking Lot Lease(9)1,2002,4002,400102,300108,300
Other Operating Leases(10)14,33911,9245,033—31,296
Total$674,429$5,086,630$2,976,576$2,704,369$11,442,004
(1)See “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-Term Debt” for further details on these financing transactions.
(2)In July 2009, we entered into a capital lease agreement with our current heating, ventilation and air conditioning (“HVAC”) provider (the “HVAC Equipment Lease”) to provide the operation and maintenance services for the HVAC equipment in Las Vegas. The lease has a 10-year term with a purchase option at the third, fifth, seventh and tenth anniversary dates. We are obligated under the agreement to make monthly payments of approximately $300,000 for the first year with automatic decreases of approximately $14,000 per month on every anniversary date. The HVAC Equipment Lease has been capitalized at the present value of the future minimum lease payments at lease inception.
(3)Based on December 31, 2013, London Inter-Bank Offered Rate (“LIBOR”) of 0.2%, Hong Kong Inter-Bank Offered Rate (“HIBOR”) of 0.4% and Singapore Swap Offer Rate (“SOR”) of 0.2% plus the applicable interest rate spread in accordance with the respective debt agreements.
(4)We are party to tenant lease termination and asset purchase agreements. Under the agreement for The Grand Canal Shoppes sale, we are obligated to fulfill the lease termination and asset purchase agreements.
(5)We are party to employment agreements with eight of our executive officers, with remaining terms of one to four years.
(6)We are party to long-term land leases of 25 years with automatic extensions at our option of 10 years thereafter in accordance with Macao law.
(7)We are party to certain leaseback agreements for the theater, gondola and certain office and retail space related to the sales of The Grand Canal Shoppes and The Shoppes at the Palazzo.
(8)In addition to the 39% gross gaming win tax in Macao (which is not included in this table as the amount we pay is variable in nature), we are required to pay an annual premium with a fixed portion and a variable portion, which is based on the number and type of gaming tables and gaming machines we operate. Based on the gaming tables and gaming machines in operation as of December 31, 2013, the annual premium is approximately $43.8 million payable to the Macao government through the termination of the gaming subconcession in June 2022.
(9)We are party to a 99-year lease agreement (90 years remaining) for a parking structure located adjacent to The Venetian Las Vegas.
(10)We are party to certain operating leases for real estate, various equipment and service arrangements.
(11)As of December 31, 2013, we had a $13.3 million liability related to unrecognized tax benefits; we do not expect this liability to result in a payment of cash within the next 12 months. We are unable to reasonably estimate the timing of the

liability in individual years beyond 12 months due to uncertainties in the timing of the effective settlement of tax positions; therefore, such amounts are not included in the table.

Off-Balance Sheet Arrangements

We have not entered into any transactions with special purpose entities, nor have we engaged in any derivative transactions other than interest rate caps.

Restrictions on Distributions

We are a parent company with limited business operations. Our main asset is the stock and membership interests of our subsidiaries. The debt instruments of our U.S., Macao and Singapore subsidiaries contain certain restrictions that, among other things, limit the ability of certain subsidiaries to incur additional indebtedness, issue disqualified stock or equity interests, pay dividends or make other distributions, repurchase equity interests or certain indebtedness, create certain liens, enter into certain transactions with affiliates, enter into certain mergers or consolidations or sell our assets of our company without prior approval of the lenders or noteholders.

Inflation

We believe that inflation and changing prices have not had a material impact on our sales, revenues or income from continuing operations during the past three fiscal years.

Special Note Regarding Forward-Looking Statements

This report contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the discussions of our business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources. In addition, in certain portions included in this report, the words: “anticipates,” “believes,” “estimates,” “seeks,” “expects,” “plans,” “intends” and similar expressions, as they relate to our company or management, are intended to identify forward-looking statements. Although we believe that these forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward- looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the risks associated with:

•general economic and business conditions in the U.S. and internationally, which may impact levels of disposable income, consumer spending, group meeting business, pricing of hotel rooms and retail and mall sales;
•our leverage, debt service and debt covenant compliance, including the pledge of our assets (other than our equity interests in our subsidiaries) as security for our indebtedness;
•disruptions in the global financing markets and our ability to obtain sufficient funding for our current and future developments;
•the extensive regulations to which we are subject to and the costs of compliance with such regulations;
•increased competition for labor and materials due to other planned construction projects in Macao and quota limits on the hiring of foreign workers;
•our ability to meet certain development deadlines;
•the uncertainty of tourist behavior related to discretionary spending and vacationing at casino-resorts in Macao, Singapore, Las Vegas and Pennsylvania;
•regulatory policies in mainland China or other countries in which our customers reside, including visa restrictions limiting the number of visits or the length of stay for visitors from mainland China to Macao, restrictions on foreign currency exchange or importation of currency, and the judicial enforcement of gaming debts;
•our dependence upon properties primarily in Macao, Singapore and Las Vegas for all of our cash flow;
•our relationship with GGP or any successor owner of the Grand Canal Shoppes;
•new developments, construction and ventures, including our Cotai Strip developments;
•the passage of new legislation and receipt of governmental approvals for our proposed developments in Macao and other jurisdictions where we are planning to operate;
•our insurance coverage, including the risk that we have not obtained sufficient coverage or will only be able to obtain additional coverage at significantly increased rates;
•disruptions or reductions in travel, as well as disruptions in our operations, due to natural or man-made disasters, outbreaks of infectious diseases, terrorist activity or war;
•our ability to collect gaming receivables from our credit players;
•our dependence on chance and theoretical win rates;
•fraud and cheating;
•our ability to establish and protect our IP rights;
•conflicts of interest that arise because certain of our directors and officers are also directors of SCL;
•government regulation of the casino industry (as well as new laws and regulations and changes to existing laws and regulations), including gaming license regulation, the requirement for certain beneficial owners of our securities to be found suitable by gaming authorities, the legalization of gaming in other jurisdictions and regulation of gaming on the Internet;
•increased competition in Macao and Las Vegas, including recent and upcoming increases in hotel rooms, meeting and convention space, retail space, potential additional gaming licenses and online gaming;
•the popularity of Macao, Singapore and Las Vegas as convention and trade show destinations;
•new taxes, changes to existing tax rates or proposed changes in tax legislation;
•our ability to maintain our gaming licenses, certificate and subconcession;
•the continued services of our key management and personnel;
•any potential conflict between the interests of our Principal Stockholder and us;
•the ability of our subsidiaries to make distribution payments to us;
•our failure to maintain the integrity of our customer or company data, including against past or future cybersecurity attacks, and any litigation or disruption to our operations resulting from such loss of data integrity;
•the completion of infrastructure projects in Macao; and
•the outcome of any ongoing and future litigation.

All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Readers are cautioned not to place undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by federal securities laws.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to us and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We believe that the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Allowance for Doubtful Casino Accounts

We maintain an allowance, or reserve, for doubtful casino accounts at our operating casino resorts in Macao, Singapore and the U.S., which we regularly evaluate. We specifically analyze the collectability of each account with a balance over a specified dollar amount, based upon the age of the account, the customer’s financial condition, collection history and any other known information, and we apply standard reserve percentages to aged account balances under the specified dollar amount. We also monitor regional and global economic conditions and forecasts in our evaluation of the adequacy of the recorded reserves. Credit or marker play was 27.9%, 29.3% and 74.2% of table games play at our Macao properties, Marina Bay Sands and Las Vegas

Operating Properties, respectively, during the year ended December 31, 2013. Our allowance for doubtful casino accounts was 36.2% and 27.7% of gross casino receivables from customers as of December 31, 2013 and 2012, respectively. As the credit extended to our junkets can be offset by the commissions payable to said junkets, the allowance for doubtful accounts related to receivables from junkets is not material. Our allowance for doubtful accounts from our hotel and other receivables is also not material.

Litigation Accrual

We are subject to various claims and legal actions. We estimate the accruals for these claims and legal actions based on all relevant facts and circumstances currently available and include such accruals in other accrued liabilities in the consolidated balance sheets when it is determined that such contingencies are both probable and reasonably estimable.

Property and Equipment

At December 31, 2013, we had net property and equipment of $15.36 billion, representing 67.6% of our total assets. We depreciate property and equipment on a straight-line basis over their estimated useful lives. The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal considerations such as contractual life. Future events, such as property expansions, property developments, new competition, or new regulations, could result in a change in the manner in which we use certain assets requiring a change in the estimated useful lives of such assets.

For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, we first group our assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the “asset group”). Secondly, we estimate the undiscounted future cash flows that are directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. We estimate the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs.

To estimate the undiscounted cash flows of our asset groups, we consider all potential cash flows scenarios, which are probability weighted based on management’s estimates given current conditions. Determining the recoverability of our asset groups is judgmental in nature and requires the use of significant estimates and assumptions, including estimated cash flows, probability weighting of potential scenarios, costs to complete construction for assets under development, growth rates and future market conditions, among others. Future changes to our estimates and assumptions based upon changes in macro-economic factors, regulatory environments, operating results or management’s intentions may result in future changes to the recoverability of our asset groups.

For assets to be held for sale, the fixed assets (the “disposal group”) are measured at the lower of their carrying amount or fair value less cost to sell. Losses are recognized for any initial or subsequent write-down to fair value less cost to sell, while gains are recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized. Any gains or losses not previously recognized that result from the sale of the disposal group shall be recognized at the date of sale. Fixed assets are not depreciated while classified as held for sale.

Capitalized Interest

Interest costs associated with our major construction projects are capitalized and included in the cost of the projects. When no debt is incurred specifically for construction projects, we capitalize interest on amounts expended using the weighted average cost of our outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or construction activity is suspended for more than a brief period.

Leasehold Interests in Land

Leasehold interests in land represent payments made for the use of land over an extended period of time. The leasehold interests in land are amortized on a straight-line basis over the expected term of the related lease agreements.

Indefinite Useful Life Assets

As of December 31, 2013, we had a $50.0 million asset related to our Sands Bethlehem gaming license and a $16.5 million asset related to our Sands Bethlehem table games certificate, both of which were determined to have indefinite useful lives. Assets with indefinite useful lives are assessed regularly to ensure they continue to meet the indefinite useful life criteria. These assets

are not subject to amortization and are tested for impairment and recoverability annually or more frequently if events or circumstances indicate that the assets might be impaired. When performing our impairment analysis, we first conduct a qualitative assessment to determine whether we believe it is “more-likely-than-not” that the asset is impaired. If, after assessing the qualitative factors, we determine it is “more-likely-than-not” the asset is impaired, we then perform an impairment test that consists of a comparison of the fair value of the asset with its carrying amount. If the carrying amount of the asset is not recoverable and exceeds its fair value, an impairment will be recognized in an amount equal to that excess. If the carrying amount of the asset does not exceed the fair value, no impairment is recognized.

Our annual indefinite lived intangible asset impairment analysis on our Sands Bethlehem gaming license and table games certificate included an assessment of certain qualitative factors including, but not limited to, the results of the most recent fair value calculation, operating results and projected operating results, and macro-economic and industry conditions. We considered the qualitative factors and determined that it is not “more-likely-than-not” that the indefinite lived intangible assets are impaired. Although we believe the qualitative factors considered in the impairment are reasonable, significant changes in any one of our assumptions could produce a different result. Future changes to our estimates and assumptions based upon changes in operating results, macro-economic factors or management’s intentions may result in future changes to the fair value of the gaming license and table games certificate.

If we determine a quantitative impairment test is to be performed to estimate the fair value of our Sands Bethlehem gaming license and table games certificate, our fair value analysis would be based on expected adjusted property EBITDA, combined with estimated future tax-affected cash flows and a terminal value using the Gordon Growth Model, which are discounted to present value at rates commensurate with our capital structure and the prevailing borrowing rates within the casino industry in general. Adjusted property EBITDA and discounted cash flows are common measures used to value cash-intensive businesses such as casinos. Determining the fair value of the gaming license and table games certificate is judgmental in nature and requires the use of significant estimates and assumptions, including adjusted property EBITDA, growth rates, discount rates and future market conditions, among others.

Stock-Based Compensation

Accounting standards regarding share-based payments require the recognition of compensation expense in the consolidated statements of operations related to the fair value of employee stock-based compensation. Determining the fair value of stock-based awards at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility and the expected dividends. Expected volatilities are based on our historical volatility or combined with the historical volatilities from a selection of companies from our peer group when there is a lack of our historical information, as is the case for our SCL equity plan. The expected option life is based on the contractual term of the option as well historical exercise and forfeiture behavior. When there is a lack of historical information, as is the case for our SCL equity plan, we use the simplified method for estimating expected option life, as the options qualify as “plain-vanilla” options. The expected dividend yield is based on our estimate of annual dividends expected to be paid at the time of the grant. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options granted. Judgment is also required in estimating the amount of stock-based awards expected to be forfeited prior to vesting. If actual forfeitures differ significantly from these estimates, stock-based compensation expense could be materially impacted. All employee stock options were granted with an exercise price equal to the fair market value (as defined in the Company’s equity award plans).

During the years ended December 31, 2013 and 2012, we recorded stock-based compensation expense of $53.4 million and $65.4 million, respectively. As of December 31, 2013, under the 2004 plan there was $19.0 million of unrecognized compensation cost, net of estimated forfeitures of 8.0% per year, related to unvested stock options and there was $29.8 million of unrecognized compensation cost, net of estimated forfeitures of 8.0% per year, related to unvested restricted stock and stock units. The stock option and restricted stock and stock unit costs are expected to be recognized over a weighted average period of 2.3 years and 2.2 years, respectively.

As of December 31, 2013, under the SCL Equity Plan there was $16.2 million of unrecognized compensation cost, net of estimated forfeitures of 8.8% per year, related to unvested stock options and there was $16.0 million of unrecognized compensation cost related to unvested restricted stock units. The stock option and restricted stock unit costs are expected to be recognized over a weighted average period of 2.2 years and 3.5 years, respectively.

Income Taxes

We are subject to income taxes in the U.S. (including federal and state) and numerous foreign jurisdictions in which we operate. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of

existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes require a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is “more-likely-than-not” that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a “more-likely-than-not” realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring, and implementation of tax planning strategies.

We recorded a valuation allowance on the net deferred tax assets of certain foreign jurisdictions of $217.8 million and $209.4 million, as of December 31, 2013 and 2012, respectively, and a valuation allowance on the net deferred tax assets of our U.S. operations of $1.30 billion and $1.18 billion as of December 31, 2013 and 2012, respectively. Management will reassess the realization of deferred tax assets based on the applicable accounting standards for income taxes each reporting period and consider the scheduled reversal of deferred tax liabilities, sources of taxable income and tax planning strategies. To the extent that the financial results of these operations improve and it becomes “more-likely-than-not” that the deferred tax assets are realizable, we will be able to reduce the valuation allowance.

Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions for which the tax treatment is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is “more-likely-than-not” that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may be different.

Our major tax jurisdictions are the U.S., Macao, and Singapore. In January 2013, the Internal Revenue Service completed through the appeals process its examination of the Company’s U.S. tax returns for years 2005 through 2009. The Inland Revenue Agency of Singapore is currently performing a compliance review of the Marina Bay Sands tax return for tax years 2010 and 2011. We are subject to examination for years after 2008 in Macao and Singapore and for tax years after 2009 in the U.S.

Recent Accounting Pronouncements

See related disclosure at “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 2 — Summary of Significant Accounting Policies.”

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