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. Our Singapore operating segment consists of the Marina Bay Sands. 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. For the years ended December 31, 2014 and 2013, gross revenue at our reportable segments was derived as follows:

•	At The Venetian Macao, approximately 84.2% and 85.3%, respectively, was from gaming activities, with the remainder from room, mall, food and beverage and other non-gaming sources.

•	At Sands Cotai Central, approximately 83.9% and 85.7%, respectively, was from gaming activities, with the remainder primarily from room and food and beverage operations.

•	At Four Seasons Macao, approximately 81.5% and 82.8%, respectively, was from gaming activities, with the remainder primarily from mall and room operations.

•	At Sands Macao, approximately 94.0% and 94.2%, respectively, was from gaming activities, with the remainder primarily from food and beverage operations.

•	At Marina Bay Sands, approximately 75.2% and 74.6%, respectively, was from gaming activities, with the remainder from room, food and beverage, mall and other non-gaming sources.

•	At our Las Vegas Operating Properties, approximately 67.6% and 63.8%, respectively, was from room, food and beverage and other non-gaming sources, with the remainder 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.

•	At Sands Bethlehem, approximately 88.2% and 88.5%, respectively, was from gaming activities, with the remainder 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,
	2014				Percent Change			2013				Percent Change			2012
	(Dollars in thousands)
Net revenues	$	14,583,849			5.9	%		$	13,769,885			23.7	%		$	11,131,132
Operating expenses	10,484,623				1.2	%		10,361,642				17.5	%		8,819,750
Operating income	4,099,226				20.3	%		3,408,243				47.5	%		2,311,382
Income before income taxes	3,832,711				21.9	%		3,143,512				52.4	%		2,062,576
Net income	3,588,071				21.4	%		2,954,676				57.0	%		1,881,813
Net income attributable to Las Vegas Sands Corp.	2,840,629				23.2	%		2,305,997				51.3	%		1,524,093

	Percent of Net Revenues Year Ended December 31,
	2014			2013			2012
Operating expenses	71.9	%		75.2	%		79.2	%
Operating income	28.1	%		24.8	%		20.8	%
Income before income taxes	26.3	%		22.8	%		18.5	%
Net income	24.6	%		21.5	%		16.9	%
Net income attributable to Las Vegas Sands Corp.	19.5	%		16.7	%		13.7	%

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, 23.0% and 31.0%, respectively, of our table games play was conducted on a credit basis for the year ended December 31, 2014.

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 22% to 30% for Baccarat and 14% to 18% for non-Baccarat. As in Macao and Singapore, slot machine play is generally conducted on a cash basis. Approximately 72.3% of our table games play at our Las Vegas Operating Properties, for the year ended December 31, 2014, 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, 2014 Compared to the Year Ended December 31, 2013

Operating Revenues

Our net revenues consisted of the following:

	Year Ended December 31,
	2014				2013				Percent Change
	(Dollars in thousands)
Casino	$	12,004,361			$	11,386,917			5.4	%
Rooms	1,540,420				1,380,681				11.6	%
Food and beverage	778,769				730,259				6.6	%
Mall	553,534				481,400				15.0	%
Convention, retail and other	548,704				515,179				6.5	%
	15,425,788				14,494,436				6.4	%
Less — promotional allowances	(841,939		)		(724,551		)		(16.2	)%
Total net revenues	$	14,583,849			$	13,769,885			5.9	%

Consolidated net revenues were $14.58 billion for the year ended December 31, 2014, an increase of $814.0 million compared to $13.77 billion for the year ended December 31, 2013. The increase in net revenues was driven by increases of $605.0 million at our Macao operating properties and $245.8 million at Marina Bay Sands, primarily due to increased casino revenues.

Casino revenues increased $617.4 million compared to the year ended December 31, 2013, despite the challenges in the VIP market. The increase is primarily due to an increase of $474.9 million at our Macao operating properties, which were driven by increases in Non-Rolling Chip drop, partially offset by decreases in Rolling Chip volume due to decreased demand in the VIP market. The following table summarizes the results of our casino activity:

	Year Ended December 31,
	2014				2013				Change
	(Dollars in thousands)
Macao Operations:
The Venetian Macao
Total casino revenues	$	3,554,352			$	3,415,327			4.1%
Non-Rolling Chip drop	$	8,960,823			$	7,201,033			24.4%
Non-Rolling Chip win percentage	25.2		%		26.8		%		(1.6) pts
Rolling Chip volume	$	47,871,382			$	54,420,394			(12.0)%
Rolling Chip win percentage	3.22		%		3.32		%		(0.10) pts
Slot handle	$	5,564,597			$	4,781,911			16.4%
Slot hold percentage	4.8		%		5.5		%		(0.7) pts
Sands Cotai Central
Total casino revenues	$	2,801,441			$	2,432,952			15.1%
Non-Rolling Chip drop	$	7,432,536			$	5,373,622			38.3%
Non-Rolling Chip win percentage	21.8		%		22.5		%		(0.7) pts
Rolling Chip volume	$	46,860,574			$	61,073,743			(23.3)%
Rolling Chip win percentage	3.08		%		2.66		%		0.42 pts
Slot handle	$	7,630,366			$	5,686,446			34.2%
Slot hold percentage	3.5		%		3.9		%		(0.4) pts
Four Seasons Macao
Total casino revenues	$	948,110			$	922,743			2.7%
Non-Rolling Chip drop	$	1,335,935			$	899,627			48.5%
Non-Rolling Chip win percentage	24.0		%		27.5		%		(3.5) pts
Rolling Chip volume	$	27,072,914			$	39,280,485			(31.1)%
Rolling Chip win percentage	3.36		%		2.46		%		0.90 pts
Slot handle	$	830,186			$	900,836			(7.8)%
Slot hold percentage	5.1		%		5.5		%		(0.4) pts
Sands Macao
Total casino revenues	$	1,148,477			$	1,206,462			(4.8)%
Non-Rolling Chip drop	$	3,937,850			$	3,488,891			12.9%
Non-Rolling Chip win percentage	18.1		%		19.8		%		(1.7) pts
Rolling Chip volume	$	17,663,497			$	23,242,588			(24.0)%
Rolling Chip win percentage	2.98		%		2.77		%		0.21 pts
Slot handle	$	3,236,093			$	2,699,247			19.9%
Slot hold percentage	3.7		%		3.9		%		(0.2) pts
Singapore Operations:
Marina Bay Sands
Total casino revenues	$	2,574,782			$	2,363,140			9.0%
Non-Rolling Chip drop	$	4,498,674			$	4,650,105			(3.3)%
Non-Rolling Chip win percentage	25.1		%		23.7		%		1.4 pts
Rolling Chip volume	$	42,558,012			$	60,095,322			(29.2)%
Rolling Chip win percentage	3.30		%		2.46		%		0.84 pts
Slot handle	$	12,368,193			$	11,118,021			11.2%
Slot hold percentage	4.9		%		5.1		%		(0.2) pts
U.S. Operations:
Las Vegas Operating Properties
Total casino revenues	$	509,205			$	584,372			(12.9)%
Table games drop	$	2,139,545			$	2,251,734			(5.0)%
Table games win percentage	19.9		%		23.3		%		(3.4) pts
Slot handle	$	2,114,522			$	2,024,147			4.5%
Slot hold percentage	8.2		%		8.7		%		(0.5) pts
Sands Bethlehem
Total casino revenues	$	467,994			$	461,921			1.3%
Table games drop	$	1,062,648			$	1,024,021			3.8%
Table games win percentage	16.8		%		16.1		%		0.7 pts
Slot handle	$	4,016,223			$	4,129,171			(2.7)%
Slot hold percentage	7.0		%		7.0		%		—

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 $159.7 million compared to the year ended December 31, 2013. The increase is primarily due to an $84.1 million increase at Sands Cotai Central, driven by increases in occupancy and average daily room rates. There were also increases of $28.0 million, $23.7 million and $19.0 million at The Venetian Macao, Marina Bay Sands and our Las Vegas Operating Properties, respectively, which were driven by an increase in average daily room rates. 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,
	2014				2013				Change
	(Room revenues in thousands)
Macao Operations:
The Venetian Macao
Total room revenues	$	258,863			$	230,822			12.1%
Occupancy rate	91.3		%		91.3		%		—
Average daily room rate	$	270			$	243			11.1%
Revenue per available room	$	246			$	222			10.8%
Sands Cotai Central
Total room revenues	$	320,875			$	236,819			35.5%
Occupancy rate	88.5		%		78.5		%		10.0 pts
Average daily room rate	$	176			$	155			13.5%
Revenue per available room	$	156			$	121			28.9%
Four Seasons Macao
Total room revenues	$	47,755			$	43,626			9.5%
Occupancy rate	87.0		%		85.3		%		1.7 pts
Average daily room rate	$	400			$	373			7.2%
Revenue per available room	$	348			$	318			9.4%
Sands Macao
Total room revenues	$	24,066			$	25,150			(4.3)%
Occupancy rate	98.6		%		96.1		%		2.5 pts
Average daily room rate	$	238			$	252			(5.6)%
Revenue per available room	$	235			$	242			(2.9)%
Singapore Operations:
Marina Bay Sands
Total room revenues	$	383,954			$	360,264			6.6%
Occupancy rate	99.0		%		98.6		%		0.4 pts
Average daily room rate	$	431			$	396			8.8%
Revenue per available room	$	427			$	390			9.5%
U.S. Operations:
Las Vegas Operating Properties
Total room revenues	$	491,493			$	472,518			4.0%
Occupancy rate	88.0		%		89.6		%		(1.6) pts
Average daily room rate	$	222			$	205			8.3%
Revenue per available room	$	196			$	184			6.5%
Sands Bethlehem
Total room revenues	$	13,414			$	11,482			16.8%
Occupancy rate	83.4		%		73.6		%		9.8 pts
Average daily room rate	$	146			$	142			2.8%
Revenue per available room	$	122			$	104			17.3%

Food and beverage revenues increased $48.5 million compared to the year ended December 31, 2013. The increase was primarily due to a $41.4 million increase at our Macao operating properties, driven by an increase in property visitation.

Mall revenues increased $72.1 million compared to the year ended December 31, 2013. The increase was primarily due to a $56.0 million increase at our Macao operating properties, driven by an increase in base rents. 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,
	2014				2013				Change
	(Mall revenues in thousands)
Macao Operations:
Shoppes at Venetian
Total mall revenues	$	191,631			$	169,151			13.3%
Mall gross leasable area (in square feet)	771,345				755,452				2.1%
Occupancy	93.4		%		95.5		%		(2.1) pts
Base rent per square foot	$	212			$	179			18.4%
Tenant sales per square foot	$	1,673			$	1,522			9.9%
Shoppes at Cotai Central(1)
Total mall revenues	$	56,408			$	42,116			33.9%
Mall gross leasable area (in square feet)	330,258				210,143				57.2%
Occupancy	97.9		%		100.0		%		(2.1) pts
Base rent per square foot	$	136			$	120			13.3%
Tenant sales per square foot	$	1,450			$	1,277			13.5%
Shoppes at Four Seasons
Total mall revenues	$	132,326			$	113,121			17.0%
Mall gross leasable area (in square feet)	257,963				241,895				6.6%
Occupancy	99.2		%		87.7		%		11.5 pts
Base rent per square foot	$	418			$	348			20.1%
Tenant sales per square foot	$	5,689			$	4,726			20.4%
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues	$	169,257			$	153,840			10.0%
Mall gross leasable area (in square feet)	648,778				642,241				1.0%
Occupancy	96.1		%		90.7		%		5.4 pts
Base rent per square foot	$	220			$	217			1.4%
Tenant sales per square foot	$	1,426			$	1,528			(6.7)%
U.S. Operations:
The Outlets at Sands Bethlehem
Total mall revenues	$	3,912			$	3,172			23.3%
Mall gross leasable area (in square feet)	151,029				134,830				12.0%
Occupancy	97.0		%		93.6		%		3.4 pts
Base rent per square foot	$	20			$	23			(13.0)%
Tenant sales per square foot	$	365			$	431			(15.3)%

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(1)	The first, second and third phases of the Shoppes at Cotai Central opened in April and September 2012 and June 2014, respectively. At completion, the Shoppes at Cotai Central will feature up to 600,000 square feet of gross leasable area.

Operating Expenses

The breakdown of operating expenses is as follows:

	Year Ended December 31,
	2014				2013				Percent Change
	(Dollars in thousands)
Casino	$	6,705,534			$	6,483,718			3.4	%
Rooms	256,835				271,942				(5.6	)%
Food and beverage	392,560				369,570				6.2	%
Mall	69,732				73,358				(4.9	)%
Convention, retail and other	320,759				317,869				0.9	%
Provision for doubtful accounts	186,722				237,786				(21.5	)%
General and administrative	1,258,133				1,329,740				(5.4	)%
Corporate	174,750				189,535				(7.8	)%
Pre-opening	26,230				13,339				96.6	%
Development	14,325				15,809				(9.4	)%
Depreciation and amortization	1,031,589				1,007,468				2.4	%
Amortization of leasehold interests in land	40,598				40,352				0.6	%
Loss on disposal of assets	6,856				11,156				(38.5	)%
Total operating expenses	$	10,484,623			$	10,361,642			1.2	%

Operating expenses were $10.48 billion for the year ended December 31, 2014, an increase of $123.0 million compared to $10.36 billion for the year ended December 31, 2013. The increase in operating expenses was primarily attributable to an increase in casino expenses at our Macao operating properties.

Casino expenses increased $221.8 million compared to the year ended December 31, 2013. The increase was primarily due to a $229.6 million increase at our Macao operating properties, of which $104.3 million was due to the 39% gross win tax on increased casino revenues and the remaining $125.3 million was driven by an increase in payroll-related expenses.

The provision for doubtful accounts was $186.7 million for the year ended December 31, 2014, compared to $237.8 million for the year ended December 31, 2013. The decrease was driven by the overall decrease in casino receivables at our Macao operating properties due to the decrease in VIP play. 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 decreased $71.6 million compared to the year ended December 31, 2013. The decrease was primarily attributable to a $78.5 million decrease at Marina Bay Sands, driven by a $90.1 million property tax refund received in December 2014 related to the settlement of taxes assessed and paid for the years 2010 through 2014. There was also a $36.5 million decrease at our Las Vegas Operating Properties, driven by a $47.4 million legal settlement charge incurred in August 2013 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 13 — Commitments and Contingencies — Litigation”). These decreases were partially offset by a $37.0 million increase at our Macao operating properties.

Corporate expenses decreased $14.8 million compared to the year ended December 31, 2013, which was driven by a decrease in legal fees.

Pre-opening expenses were $26.2 million for the year ended December 31, 2014, compared to $13.3 million for the year ended December 31, 2013. 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, 2014 and 2013, were primarily related to activities at The Parisian Macao and Sands Cotai Central, respectively. Development expenses include the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are also expensed as incurred.

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 intersegment 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,
	2014				2013				Percent Change
	(Dollars in thousands)
Macao:
The Venetian Macao	$	1,546,323			$	1,499,937			3.1	%
Sands Cotai Central	1,001,487				739,723				35.4	%
Four Seasons Macao	374,899				305,040				22.9	%
Sands Macao	338,590				362,858				(6.7	)%
Other Asia	3,493				(3,855		)		N.M.
	3,264,792				2,903,703				12.4	%
Marina Bay Sands	1,723,147				1,384,576				24.5	%
United States:
Las Vegas Operating Properties	313,913				351,739				(10.8	)%
Sands Bethlehem	120,491				123,337				(2.3	)%
	434,404				475,076				(8.6	)%
Total adjusted property EBITDA	$	5,422,343			$	4,763,355			13.8	%

---

N.M. - Not meaningful

Adjusted property EBITDA at our Macao operations increased $361.1 million compared to the year ended December 31, 2013. As previously described, the increase was primarily due to a $605.0 million increase in net revenues at our Macao operating properties, partially offset by a $229.6 million increase in casino expenses. Additionally, there was a $55.0 million increase in expenses due to a new bonus program for non-management employees in Macao initiated during the year ended December 31, 2014.

Adjusted property EBITDA at Marina Bay Sands increased $338.6 million compared to the year ended December 31, 2013. The increase was primarily due to a $245.8 million increase in net revenues driven by an increase in casino revenues, and as previously described, a $90.1 million property tax refund received in December 2014.

Adjusted property EBITDA at our Las Vegas Operating Properties decreased $37.8 million compared to the year ended December 31, 2013. The decrease was primarily due to a $44.8 million decrease in net revenues (excluding intersegment royalty revenue) driven by a decrease in casino revenues.

Adjusted property EBITDA at Sands Bethlehem decreased $2.8 million compared to the year ended December 31, 2013. Net revenues increased $7.5 million, but were offset by increases of $6.2 million and $5.8 million in general and administrative expenses and casino expenses, respectively.

Interest Expense

The following table summarizes information related to interest expense:

	Year Ended December 31,
	2014				2013
	(Dollars in thousands)
Interest cost (which includes the amortization of deferred financing costs and original issue discounts)	$	268,299			$	260,704
Add — imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo	15,190				15,168
Less — capitalized interest	(9,308		)		(4,661		)
Interest expense, net	$	274,181			$	271,211
Cash paid for interest	$	215,929			$	212,903
Weighted average total debt balance	$	9,991,874			$	9,788,457
Weighted average interest rate	2.7		%		2.7		%

Interest cost increased $7.6 million compared to the year ended December 31, 2013, due to an increase in our weighted average debt balance. Capitalized interest increased $4.6 million compared to the year ended December 31, 2013, primarily due to the construction of The Parisian Macao.

Other Factors Effecting Earnings

Other income was $2.0 million for the year ended December 31, 2014, compared to $4.3 million for the year ended December 31, 2013. The amounts in both periods were primarily due to foreign exchange gains.

The loss on modification or early retirement of debt was $19.9 million for the year ended December 31, 2014, and was primarily due to an $18.0 million loss related to the amendment of our 2011 VML Credit Facility in March 2014 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-term Debt — 2011 VML Credit Facility”).

Our effective income tax rate was 6.4% for the year ended December 31, 2014, compared to 6.0% for the year ended December 31, 2013. The effective income tax rates reflect 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 certain 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 $747.4 million for the year ended December 31, 2014, compared to $648.7 million for the year ended December 31, 2013. These amounts are primarily related to the noncontrolling interest of SCL.

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,
	2013				2012				Percent Change
	(Dollars in thousands)
Casino	$	11,386,917			$	9,008,158			26.4	%
Rooms	1,380,681				1,154,024				19.6	%
Food and beverage	730,259				628,528				16.2	%
Mall	481,400				396,927				21.3	%
Convention, retail and other	515,179				497,032				3.7	%
	14,494,436				11,684,669				24.0	%
Less — promotional allowances	(724,551		)		(553,537		)		(30.9	)%
Total net revenues	$	13,769,885			$	11,131,132			23.7	%

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,
	2013				2012				Change
	(Dollars in thousands)
Macao Operations:
The Venetian Macao
Total casino revenues	$	3,415,327			$	2,628,868			29.9%
Non-Rolling Chip drop	$	7,201,033			$	4,482,318			60.7%
Non-Rolling Chip win percentage	26.8		%		0.3		%		26.5 pts
Rolling Chip volume	$	54,420,394			$	48,825,435			11.5%
Rolling Chip win percentage	3.32		%		3.05		%		0.27 pts
Slot handle	$	4,781,911			$	4,946,114			(3.3)%
Slot hold percentage	5.5		%		5.3		%		0.2 pts
Sands Cotai Central
Total casino revenues	$	2,432,952			$	960,286			153.4%
Non-Rolling Chip drop	$	5,373,622			$	1,863,923			188.3%
Non-Rolling Chip win percentage	22.5		%		20.8		%		1.7 pts
Rolling Chip volume	$	61,073,743			$	26,046,168			134.5%
Rolling Chip win percentage	2.66		%		2.83		%		(0.17) pts
Slot handle	$	5,686,446			$	2,939,426			93.5%
Slot hold percentage	3.9		%		3.5		%		0.4 pts
Four Seasons Macao
Total casino revenues	$	922,743			$	977,616			(5.6)%
Non-Rolling Chip drop	$	899,627			$	433,264			107.6%
Non-Rolling Chip win percentage	27.5		%		40.8		%		(13.3) pts
Rolling Chip volume	$	39,280,485			$	41,604,458			(5.6)%
Rolling Chip win percentage	2.46		%		2.79		%		(0.33) pts
Slot handle	$	900,836			$	962,540			(6.4)%
Slot hold percentage	5.5		%		5.3		%		0.2 pts
Sands Macao
Total casino revenues	$	1,206,462			$	1,219,400			(1.1)%
Non-Rolling Chip drop	$	3,488,891			$	2,872,468			21.5%
Non-Rolling Chip win percentage	19.8		%		21.0		%		(1.2) pts
Rolling Chip volume	$	23,242,588			$	25,184,583			(7.7)%
Rolling Chip win percentage	2.77		%		3.14		%		(0.37) pts
Slot handle	$	2,699,247			$	2,476,673			9.0%
Slot hold percentage	3.9		%		4.3		%		(0.4) pts
Singapore Operations:
Marina Bay Sands
Total casino revenues	$	2,363,140			$	2,271,869			4.0%
Non-Rolling Chip drop	$	4,650,105			$	4,612,227			0.8%
Non-Rolling Chip win percentage	23.7		%		23.1		%		0.6 pts
Rolling Chip volume	$	60,095,322			$	52,568,238			14.3%
Rolling Chip win percentage	2.46		%		2.47		%		(0.01) pts
Slot handle	$	11,118,021			$	10,793,348			3.0%
Slot hold percentage	5.1		%		5.3		%		(0.2) pts
U.S. Operations:
Las Vegas Operating Properties
Total casino revenues	$	584,372			$	512,647			14.0%
Table games drop	$	2,251,734			$	2,084,490			8.0%
Table games win percentage	23.3		%		21.1		%		2.2 pts
Slot handle	$	2,024,147			$	1,944,618			4.1%
Slot hold percentage	8.7		%		8.7		%		—
Sands Bethlehem
Total casino revenues	$	461,921			$	437,472			5.6%
Table games drop	$	1,024,021			$	885,359			15.7%
Table games win percentage	16.1		%		15.3		%		0.8 pts
Slot handle	$	4,129,171			$	4,029,326			2.5%
Slot hold percentage	7.0		%		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,
	2013				2012				Change
	(Room revenues in thousands)
Macao Operations:
The Venetian Macao
Total room revenues	$	230,822			$	224,177			3.0%
Occupancy rate	91.3		%		91.9		%		(0.6) pts
Average daily room rate	$	243			$	237			2.5%
Revenue per available room	$	222			$	218			1.8%
Sands Cotai Central
Total room revenues	$	236,819			$	83,833			182.5%
Occupancy rate	78.5		%		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			$	39,813			9.6%
Occupancy rate	85.3		%		80.1		%		5.2 pts
Average daily room rate	$	373			$	362			3.0%
Revenue per available room	$	318			$	290			9.7%
Sands Macao
Total room revenues	$	25,150			$	24,441			2.9%
Occupancy rate	96.1		%		95.3		%		0.8 pts
Average daily room rate	$	252			$	245			2.9%
Revenue per available room	$	242			$	234			3.4%
Singapore Operations:
Marina Bay Sands
Total room revenues	$	360,264			$	325,470			10.7%
Occupancy rate	98.6		%		98.9		%		(0.3) pts
Average daily room rate	$	396			$	355			11.5%
Revenue per available room	$	390			$	351			11.1%
U.S. Operations:
Las Vegas Operating Properties
Total room revenues	$	472,518			$	446,241			5.9%
Occupancy rate	89.6		%		86.1		%		3.5 pts
Average daily room rate	$	205			$	203			1.0%
Revenue per available room	$	184			$	175			5.1%
Sands Bethlehem
Total room revenues	$	11,482			$	10,049			14.3%
Occupancy rate	73.6		%		65.1		%		8.5 pts
Average daily room rate	$	142			$	140			1.4%
Revenue per available room	$	104			$	91			14.3%

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,
	2013				2012				Change
	(Mall revenues in thousands)
Macao Operations:
Shoppes at Venetian
Total mall revenues	$	169,151			$	139,522			21.2%
Mall gross leasable area (in square feet)	755,452				805,976				(6.3)%
Occupancy	95.5		%		92.3		%		3.2 pts
Base rent per square foot	$	179			$	147			21.8%
Tenant sales per square foot	$	1,522			$	1,214			25.4%
Shoppes at Cotai Central(1)
Total mall revenues	$	42,116			$	16,074			162.0%
Mall gross leasable area (in square feet)	210,143				210,143				—%
Occupancy	100.0		%		100.0		%		—
Base rent per square foot	$	120			$	112			7.1%
Tenant sales per square foot	$	1,277			$	—			—%
Shoppes at Four Seasons(2)
Total mall revenues	$	113,121			$	83,477			35.5%
Mall gross leasable area (in square feet)	241,895				239,718				0.9%
Occupancy	87.7		%		92.1		%		(4.4) pts
Base rent per square foot	$	348			$	150			132.0%
Tenant sales per square foot	$	4,726			$	4,356			8.5%
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)	642,241				637,980				0.7%
Occupancy	90.7		%		96.0		%		(5.3) pts
Base rent per square foot	$	217			$	215			0.9%
Tenant sales per square foot	$	1,528			$	1,393			9.7%
U.S. Operations:
The Outlets at Sands Bethlehem(4)
Total mall revenues	$	3,172			$	1,535			106.6%
Mall gross leasable area (in square feet)	134,830				129,216				4.3%
Occupancy	93.6		%		71.3		%		22.3 pts
Base rent per square foot	$	23			$	—			—%
Tenant sales per square foot	$	431			$	—			—%

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(1)	The first, second and third phases of the Shoppes at Cotai Central opened in April and September 2012 and June 2014, respectively. At completion, the Shoppes at Cotai Central will feature up to 600,000 square feet of gross leasable area.

(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 was due to an ongoing repositioning of the mall that brought in new tenants and expanded key luxury tenants. Approximately 37,000 square feet of gross leasable area was undergoing new fit-out or development and was 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,
	2013				2012				Percent Change
	(Dollars in thousands)
Casino	$	6,483,718			$	5,128,036			26.4	%
Rooms	271,942				237,303				14.6	%
Food and beverage	369,570				331,210				11.6	%
Mall	73,358				68,763				6.7	%
Convention, retail and other	317,869				304,263				4.5	%
Provision for doubtful accounts	237,786				239,332				(0.6	)%
General and administrative	1,329,740				1,061,935				25.2	%
Corporate	189,535				207,030				(8.5	)%
Pre-opening	13,339				143,795				(90.7	)%
Development	15,809				19,958				(20.8	)%
Depreciation and amortization	1,007,468				892,046				12.9	%
Amortization of leasehold interests in land	40,352				40,165				0.5	%
Impairment loss	—				143,674				(100.0	)%
Loss on disposal of assets	11,156				2,240				398.0	%
Total operating expenses	$	10,361,642			$	8,819,750			17.5	%

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 expenses decreased $17.5 million compared to the year ended December 31, 2012, which was 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

The following table summarizes information related to our segments:

	Year Ended December 31,
	2013				2012				Percent Change
	(Dollars in thousands)
Macao:
The Venetian Macao	$	1,499,937			$	1,143,245			31.2	%
Sands Cotai Central	739,723				213,476				246.5	%
Four Seasons Macao	305,040				288,170				5.9	%
Sands Macao	362,858				350,639				3.5	%
Other Asia	(3,855		)		(15,950		)		75.8	%
	2,903,703				1,979,580				46.7	%
Marina Bay Sands	1,384,576				1,366,245				1.3	%
United States:
Las Vegas Operating Properties	351,739				331,182				6.2	%
Sands Bethlehem	123,337				114,055				8.1	%
	475,076				445,237				6.7	%
Total adjusted property EBITDA	$	4,763,355			$	3,791,062			25.6	%

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 an $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:

	Year Ended December 31,
	2013				2012
	(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 Palazzo	15,168				15,123
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 rate	2.7		%		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 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 rates reflect 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 certain 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.

Additional Information Regarding our Retail Mall Operations

The following tables summarize the results of our mall operations for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	Shoppes at Venetian				Shoppes at Four Seasons				Shoppes at Cotai Central(1)				The Shoppes at Marina Bay Sands				The Outlets at Sands Bethlehem(2)				Total
For the year ended December 31, 2014
Mall revenues:
Minimum rents(3)	$	130,555			$	87,666			$	31,943			$	122,494			$	1,486			$	374,144
Overage rents	33,860				36,809				13,589				16,725				2,426				103,409
CAM, levies and management fees	27,216				7,851				10,876				30,038				—				75,981
Total mall revenues	191,631				132,326				56,408				169,257				3,912				553,534
Mall operating expenses:
Common area maintenance	17,471				5,802				6,451				24,983				1,238				55,945
Management fees and other direct operating expenses	6,417				1,562				1,884				3,356				568				13,787
Mall operating expenses	23,888				7,364				8,335				28,339				1,806				69,732
Property taxes(4)	(1,486		)		—				—				(1,961		)		1,201				(2,246		)
Provision for doubtful accounts	216				223				2				990				25				1,456
Mall-related expenses(5)	22,618				7,587				8,337				27,368				3,032				68,942
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 rents	39,615				58,246				11,584				16,584				1,904				127,933
CAM, levies and management fees	25,456				6,962				7,502				30,938				—				70,858
Total mall revenues	169,151				113,121				42,116				153,840				3,172				481,400
Mall operating expenses:
Common area maintenance	16,894				5,466				5,577				25,370				1,320				54,627
Management fees and other direct operating expenses	6,975				1,607				1,275				8,083				791				18,731
Mall operating expenses	23,869				7,073				6,852				33,453				2,111				73,358
Property taxes	1,486				—				—				7,123				1,093				9,702
Provision for (recovery of) doubtful accounts	(281		)		226				(245		)		(5		)		—				(305		)
Mall-related expenses(5)	25,074				7,299				6,607				40,571				3,204				82,755
For the year ended December 31, 2012
Mall revenues:
Minimum rents(3)	$	81,906			$	23,068			$	10,770			$	109,468			$	800			$	226,012
Overage rents	36,434				54,909				1,566				14,941				735				108,585
CAM, levies and management fees	21,182				5,500				3,738				31,910				—				62,330
Total mall revenues	139,522				83,477				16,074				156,319				1,535				396,927
Mall operating expenses:
Common area maintenance	15,573				4,051				2,485				25,928				1,077				49,114
Management fees and other direct operating expenses	7,344				1,895				1,226				8,828				356				19,649
Mall operating expenses	22,917				5,946				3,711				34,756				1,433				68,763
Property taxes	—				—				—				8,548				759				9,307
Provision for doubtful accounts	410				330				607				123				—				1,470
Mall-related expenses(5)	23,327				6,276				4,318				43,427				2,192				79,540

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(1)	The first, second and third phases of the Shoppes at Cotai Central opened in April and September 2012, and June 2014, respectively. At completion, the Shoppes at Cotai Central will feature up to 600,000 square feet of gross leasable area.

(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. In May 2014, the Company received an additional six-year property tax exemption for The Venetian Macao. As a result, during the year ended December 31, 2014, the Company reversed $1.5 million of previously recognized property taxes for The Venetian Macao. Additionally, as previously described, Marina Bay Sands received a $90.1 million property tax refund in December 2014, of which $9.0 million related to the mall.

(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 is intended to include a gaming area (to be operated under our gaming subconcession), a hotel with over 3,000 rooms and suites and retail, entertainment, dining and meeting facilities. 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 recommenced construction upon receiving certain government approvals, after a temporary stoppage from June through August 2014. As with projects of this nature, we will continue to analyze options for both a full and phased opening of the facility, which is anticipated to open in 2016, subject to Macao government approval. We have capitalized costs of $804.3 million, including the land premium (net of amortization), as of December 31, 2014. 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, 2014, we have capitalized an aggregate of $9.84 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 the sites on which The Venetian Macao, Sands Cotai Central, Four Seasons Macao and The Parisian Macao are 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 The Parisian Macao, we are required to complete the development by April 2016. The land concession for Sands Cotai Central contains a similar requirement that the development be completed by December 2016. Should we determine that we are unable to complete The Parisian Macao or Sands Cotai Central by

their respective deadlines, we would expect to apply for another extension from the Macao government. If we are unable to meet the current deadlines and the deadlines for either development are not extended, we could lose our land concessions for The Parisian Macao or Sands Cotai Central, 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 $804.3 million or $4.47 billion in capitalized construction costs and land premiums (net of amortization), as of December 31, 2014, related to The Parisian Macao and Sands Cotai Central, 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. 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, 2014.

Other

We continue to aggressively pursue new development opportunities globally.

Liquidity and Capital Resources

Cash Flows — Summary

Our cash flows consisted of the following:

	Year Ended December 31,
	2014				2013				2012
	(In thousands)
Net cash generated from operating activities	$	4,832,844			$	4,439,412			$	3,057,757
Cash flows from investing activities:
Change in restricted cash and cash equivalents	270				(382		)		693
Capital expenditures	(1,178,656		)		(898,111		)		(1,449,234		)
Proceeds from disposal of property and equipment	1,818				32,155				2,909
Acquisition of intangible assets	—				(45,871		)		—
Net cash used in investing activities	(1,176,568		)		(912,209		)		(1,445,632		)
Cash flows from financing activities:
Proceeds from exercise of stock options	55,650				69,596				46,240
Excess tax benefits from stock-based compensation	3,585				—				—
Repurchase of common stock	(1,676,802		)		(561,150		)		—
Proceeds from exercise of warrants	—				350				528,908
Dividends paid	(2,386,657		)		(1,564,049		)		(3,442,312		)
Distributions to noncontrolling interests	(9,773		)		(11,858		)		(10,466		)
Deemed distribution to Principal Stockholder	—				—				(18,576		)
Proceeds from long-term debt	2,497,725				3,183,107				4,351,486
Repayments of long-term debt	(2,117,466		)		(3,513,032		)		(4,399,698		)
Payments of deferred financing costs	(88,048		)		(35,414		)		(100,888		)
Net cash used in financing activities	(3,721,786		)		(2,432,450		)		(3,045,306		)
Effect of exchange rate on cash	(28,585		)		(7,105		)		43,229
Increase (decrease) in cash and cash equivalents	$	(94,095	)		$	1,087,648			$	(1,389,952	)

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 $393.4 million compared to the year ended December 31, 2013. The increase was primarily attributable to the increase in operating cash flows generated from our Macao operating properties and Marina Bay Sands.

Cash Flows — Investing Activities

Capital expenditures for the year ended December 31, 2014, totaled $1.18 billion, including $946.1 million for construction and development activities in Macao, which consisted primarily of $390.6 million for The Parisian Macao and $345.7 million for Sands Cotai Central; $108.7 million at our Las Vegas Operating Properties; $79.6 million in Singapore; and $44.3 million for corporate and other activities.

Cash Flows — Financing Activities

Net cash flows used in financing activities were $3.72 billion for the year ended December 31, 2014, which was primarily attributable to $2.39 billion in dividend payments and $1.68 billion in common stock repurchases, partially offset by net proceeds of $430.0 million from our 2013 U.S. Revolving Facility.

As of December 31, 2014, we had $1.78 billion available for borrowing under our U.S., Macao and Singapore credit facilities, net of letters of credit.

Capital Financing Overview

Through December 31, 2014, 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. Our Macao credit facility, which was amended in March 2014 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-term Debt — 2011 VML 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 4.5x for the quarterly periods ending December 31, 2014 through September 30, 2015, decreases to 4.0x for the quarterly periods ending December 31, 2015 through March 31, 2017, and then decreases to, and remains at, 3.5x for all quarterly periods thereafter through maturity. Our Singapore credit facility, which was amended in August 2014 (see “Item 8 — Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 8 — Long-term Debt — 2012 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, 2014 through September 30, 2019, and then decreases to, and remains at, 3.0x for all quarterly periods thereafter through maturity. As of December 31, 2014, our U.S., Macao and Singapore leverage ratios were 1.0x, 1.0x and 2.2x, respectively, compared to the maximum leverage ratios allowed of 5.5x, 4.5x 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 $3.51 billion and restricted cash and cash equivalents of approximately $6.6 million as of December 31, 2014, of which approximately $2.98 billion of the unrestricted amount is held by non-U.S. subsidiaries. Of the $2.98 billion, approximately $2.21 billion is available to be repatriated to the U.S. with minimal taxes owed on such amounts due to the significant foreign taxes we 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 March 2014, we amended our 2011 VML Credit Facility, which extended the maturity to March 31, 2020, and provided for revolving loan commitments of $2.0 billion, which is being used to fund the development, construction and completion of Sands Cotai Central and The Parisian Macao, and for working capital requirements and general corporate purposes. In August 2014, we amended our SGD 5.1 billion (approximately $3.86 billion at exchange rates in effect on December 31, 2014) 2012 Singapore Credit Facility, which extended the maturity of the 2012 Singapore Revolving Facility and the 2012 Singapore Term Facility to February 28 and August 28, 2020, respectively. The proceeds of the 2012 Singapore Credit Facility were used to repay the outstanding indebtedness under the prior Singapore credit facility. During the year ended December 31, 2014, we had net borrowings of $430.0 million under the revolving portion of our $3.5 billion 2013 U.S. Credit Facility, which facility was completed in December 2013 and its proceeds were primarily used to repay the outstanding indebtedness under the prior senior secured credit facility. 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.

On February 26, 2014, SCL paid a dividend of 0.87 Hong Kong dollars ("HKD") per share and a special dividend of HKD 0.77 per share, and, on June 30, 2014, paid a dividend of HKD 0.86 per share to SCL shareholders (a total of $2.60 billion, of which we retained $1.82 billion). On February 28 and June 21, 2013, SCL paid a dividend of HKD 0.67 and HKD 0.66 per share, respectively, to SCL shareholders (a total of $1.38 billion, of which we retained $970.2 million). On February 28 and June 22, 2012, SCL paid a dividend of HKD 0.58 per share to SCL shareholders (a total of $1.20 billion, of which we retained $844.4 million). On January 23, 2015, the Board of Directors of SCL declared a dividend of HKD 0.99 per share (a total of $1.03 billion, of which we retained $722 million) to SCL shareholders of record on February 13, 2015, which was paid on February 27, 2014.

During the year ended December 31, 2014, we paid a quarterly dividend of $0.50 per common share and recorded $1.61 billion as a distribution against retained earnings. During the year ended December 31, 2013, we paid a quarterly dividend of $0.35 per common share and recorded $1.15 billion as a distribution against retained earnings. During the year ended December 31, 2012, we paid a quarterly 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. On January 28, 2015, our Board of Directors declared a quarterly dividend of $0.65 per common share (a total estimated to be approximately $519 million) to be paid on March 31, 2015, to shareholders of record on March 23, 2015. We expect this level of dividend to continue quarterly through the remainder of 2015. Our Board of Directors will continually assess the level and appropriateness of any cash dividends.

In June 2013, our Board of Directors approved a stock repurchase program with an initial authorization of $2.0 billion, which expires in June 2015, but was completed during the year ended December 31, 2014. In October 2014, our Board of Directors authorized the repurchase of an additional $2.0 billion of our outstanding common stock, which expires in October 2016. 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, 2014 and 2013, we repurchased 22,406,655 and 8,570,281 shares, respectively, of our common stock for $1.66 billion and $570.5 million, respectively, (including commissions) under this program. All share repurchases of our common stock have been recorded as treasury stock.

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, 2014:

	Payments Due by Period Ending December 31, 2014(11)
	Less than 1 Year				2-3 Years				4-5 Years				More than 5 Years				Total
	(In thousands)
Long-Term Debt Obligations(1)
2013 U.S. Credit Facility — Term B	$	22,500			$	45,000			$	45,000			$	2,115,000			$	2,227,500
2013 U.S. Credit Facility — Revolving	—				—				1,020,000				—				1,020,000
Airplane Financings	3,688				59,983				—				—				63,671
HVAC Equipment Lease(2)	1,464				2,738				12,417				—				16,619
U.S. Other	261				140				—				—				401
2011 VML Credit Facility — Extended Term	—				179,119				1,397,123				812,002				2,388,244
2011 VML Credit Facility — Extended Revolving	—				—				—				820,024				820,024
Macao Other	2,271				3,219				204				—				5,694
2012 Singapore Credit Facility — Term	69,550				139,101				1,373,622				1,877,864				3,460,137
Fixed Interest Payments	1,372				2,175				1,297				—				4,844
Variable Interest Payments(3)	226,755				442,446				382,402				95,849				1,147,452
Contractual Obligations
Former Tenants(4)	400				800				800				4,400				6,400
Employment Agreements(5)	5,500				6,500				6,500				—				18,500
Macao Leasehold Interests in Land(6)	5,096				10,552				10,552				70,536				96,736
Mall Leases(7)	8,582				17,244				16,170				78,333				120,329
Macao Annual Premium(8)	42,682				85,364				85,364				106,704				320,114
Parking Lot Lease(9)	1,200				2,400				2,400				101,100				107,100
Other Operating Leases(10)	13,860				12,092				3,486				—				29,438
Total	$	405,181			$	1,008,873			$	4,357,337			$	6,081,812			$	11,853,203

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(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, 2014, London Inter-Bank Offered Rate (“LIBOR”) of 0.3%, Hong Kong Inter-Bank Offered Rate (“HIBOR”) of 0.4% and Singapore Swap Offer Rate (“SOR”) of 0.7% 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 three of our executive officers, with remaining terms of one to five 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, 2014, the annual premium is approximately $42.7 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 (89 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, 2014, we had a $12.2 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 23.0%, 31.0% and 72.3% of table games play at our Macao properties, Marina Bay Sands and Las Vegas Operating Properties, respectively, during the year ended December 31, 2014. Our allowance for doubtful casino accounts was 33.8% and 29.3% of gross casino receivables as of December 31, 2014 and 2013, respectively. The credit extended to our junkets can be offset by the commissions payable to said junkets, which is considered in the establishment of the allowance for doubtful accounts. Our allowance for doubtful accounts from our hotel and other receivables is 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, 2014, we had net property and equipment of $15.37 billion, representing 68.7% 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, 2014, 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 may first conduct a qualitative assessment to determine whether we believe it is “more-likely-than-not” that the asset is impaired. If we elect to perform a qualitative assessment and we determine it is “more-likely-than-not” that the asset is impaired after assessing the qualitative factors, 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.

If a quantitative impairment test is to be performed to estimate the fair value of our intangible assets, 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. If we determine a qualitative assessment is to be performed, we assess 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.

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.

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, 2014 and 2013, we recorded stock-based compensation expense of $48.1 million and $53.4 million, respectively. As of December 31, 2014, under the 2004 plan there was $41.5 million of unrecognized compensation cost, net of estimated forfeitures of 8.0% per year, related to unvested stock options and there was $15.8 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 4.6 years and 1.6 years, respectively.

As of December 31, 2014, under the SCL Equity Plan there was $32.6 million of unrecognized compensation cost, net of estimated forfeitures of 8.8% per year, related to unvested stock options and there was $13.5 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 2.7 years and 2.5 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 $215.2 million and $217.8 million, as of December 31, 2014 and 2013, respectively, and a valuation allowance on certain net deferred tax assets of our U.S. operations of $2.27 billion and $1.30 billion as of December 31, 2014 and 2013, 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 in the period such determination is made.

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. We are subject to examination for years beginning 2010 in the U.S., Macao and Singapore. The Inland Revenue Authority of Singapore is currently performing a compliance review of the Marina Bay Sands tax return for tax years 2010 through 2012.

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.”