Item 8. — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

184K characters. Original on sec.gov · Markdown

Item 8. — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS



Financial Statements:
Reports of Independent Registered Public Accounting Firm	66
Consolidated Balance Sheets at December 31, 2019 and 2018	69
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2019	70
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2019	71
Consolidated Statements of Equity for each of the three years in the period ended December 31, 2019	72
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2019	73
Notes to Consolidated Financial Statements	75
Financial Statement Schedule:
Schedule II — Valuation and Qualifying Accounts	116

The financial information included in the financial statement schedule should be read in conjunction with the consolidated financial statements. All other financial statement schedules have been omitted because they are not applicable or the required information is included in the consolidated financial statements or the notes thereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Las Vegas Sands Corp.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Las Vegas Sands Corp. and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 7, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Casino Receivables — Refer to Notes 2 and 4 to the financial statements

Critical Audit Matter Description

As discussed in Note 2 to the financial statements, accounts receivable at December 31, 2019 include credit extended to casino patrons and junket operators. The Company records an allowance for doubtful accounts based on the amount of probable credit losses. The Company determines the allowance by analyzing the collectability of patron and junket operator accounts using several factors including, age of the account, collection history, patron and junket operator financial condition, and other available information.

Auditing the valuation of accounts receivable involved a high degree of subjectivity in evaluating management’s judgments related to the collectability of patron and junket operator accounts receivable, especially as it relates to the evaluation of patron and junket operator assets available to repay amounts owed.

How the Critical Audit Matter Was Addressed in the Audit

We planned and performed the following procedures in connection with forming our overall opinion on the financial statements:


•	We tested the operating effectiveness of controls over the granting of casino credit, controls over the collection processes and management’s review controls over the assessment of the collectability of casino receivables, including the information used by management in those controls.


•	For a selection of casino receivables, we (1) obtained evidence related to payment history and correspondence with patron or junket operator, (2) evaluated management’s use of this information in establishing allowance for doubtful accounts, and (3) examined subsequent settlement, if any.


•	Performed a retrospective analysis of historical reserves evaluating subsequent collections and write-offs.



/s/ Deloitte & Touche LLP

Las Vegas, Nevada
February 7, 2020

We have served as the Company's auditor since 2013.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Las Vegas Sands Corp.:

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Las Vegas Sands Corp. and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2019 of the Company and our report dated February 7, 2020, expressed an unqualified opinion on those financial statements and financial statement schedule.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



/s/ Deloitte & Touche LLP

Las Vegas, Nevada
February 7, 2020

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



	December 31,
	2019			2018
	(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	4,226		$	4,648
Restricted cash and cash equivalents	16			13
Accounts receivable, net	844			726
Inventories	37			35
Prepaid expenses and other	182			144
Total current assets	5,305			5,566
Property and equipment, net	14,844			15,154
Deferred income taxes, net	282			368
Leasehold interests in land, net	2,272			1,198
Intangible assets, net	42			72
Other assets, net	454			189
Total assets	$	23,199		$	22,547
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	149		$	178
Construction payables	334			189
Other accrued liabilities	2,396			2,435
Income taxes payable	275			244
Current maturities of long-term debt	70			111
Total current liabilities	3,224			3,157
Other long-term liabilities	513			179
Deferred income taxes	183			191
Deferred amounts related to mall sale transactions	350			401
Long-term debt	12,422			11,874
Total liabilities	16,692			15,802
Commitments and contingencies (Note 15)
Equity:
Preferred stock, $0.001 par value, 50 shares authorized, zero shares issued and outstanding	—			—
Common stock, $0.001 par value, 1,000 shares authorized, 833 and 832 shares issued, 764 and 775 shares outstanding	1			1
Treasury stock, at cost, 69 and 57 shares	(4,481		)	(3,727		)
Capital in excess of par value	6,569			6,680
Accumulated other comprehensive loss	(3		)	(40		)
Retained earnings	3,101			2,770
Total Las Vegas Sands Corp. stockholders' equity	5,187			5,684
Noncontrolling interests	1,320			1,061
Total equity	6,507			6,745
Total liabilities and equity	$	23,199		$	22,547

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

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS



	Year Ended December 31,
	2019			2018			2017
	(In millions, except per share data)
Revenues:
Casino	$	9,828		$	9,819		$	9,086
Rooms	1,752			1,733			1,586
Food and beverage	897			865			828
Mall	716			690			651
Convention, retail and other	546			622			577
Net revenues	13,739			13,729			12,728
Operating expenses:
Casino	5,304			5,448			4,876
Rooms	444			438			411
Food and beverage	702			673			640
Mall	78			79			77
Convention, retail and other	304			336			325
Provision for doubtful accounts	30			5			96
General and administrative	1,502			1,483			1,417
Corporate	313			202			173
Pre-opening	34			6			8
Development	24			12			13
Depreciation and amortization	1,165			1,111			1,171
Amortization of leasehold interests in land	51			35			37
Loss on disposal or impairment of assets	90			150			20
	10,041			9,978			9,264
Operating income	3,698			3,751			3,464
Other income (expense):
Interest income	74			59			16
Interest expense, net of amounts capitalized	(555		)	(446		)	(327		)
Other income (expense)	23			26			(94		)
Gain on sale of Sands Bethlehem	556			—			—
Loss on modification or early retirement of debt	(24		)	(64		)	(5		)
Income before income taxes	3,772			3,326			3,054
Income tax (expense) benefit	(468		)	(375		)	209
Net income	3,304			2,951			3,263
Net income attributable to noncontrolling interests	(606		)	(538		)	(455		)
Net income attributable to Las Vegas Sands Corp.	$	2,698		$	2,413		$	2,808
Earnings per share:
Basic	$	3.50		$	3.07		$	3.55
Diluted	$	3.50		$	3.07		$	3.55
Weighted average shares outstanding:
Basic	771			786			792
Diluted	771			786			792

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

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Year Ended December 31,
	2019			2018			2017
	(In millions)
Net income	$	3,304		$	2,951		$	3,263
Currency translation adjustment	42			(58		)	125
Total comprehensive income	3,346			2,893			3,388
Comprehensive income attributable to noncontrolling interests	(611		)	(534		)	(447		)
Comprehensive income attributable to Las Vegas Sands Corp.	$	2,735		$	2,359		$	2,941

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

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY



	Las Vegas Sands Corp. Stockholders' Equity
	Common Stock		Treasury Stock			Capital in Excess of Par Value			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Noncontrolling Interests			Total
	(In millions)
Balance at January 1, 2017	$	1	$	(2,443	)	$	6,516		$	(119	)	$	2,213		$	1,318		$	7,486
Cumulative effect adjustment from change in accounting principle	—		—			3			—			(2		)	(1		)	—
Net income	—		—			—			—			2,808			455			3,263
Currency translation adjustment	—		—			—			133			—			(8		)	125
Exercise of stock options	—		—			35			—			—			5			40
Conversion of equity awards to liability awards	—		—			(3		)	—			—			(1		)	(4		)
Stock-based compensation	—		—			29			—			—			5			34
Repurchase of common stock	—		(375		)	—			—			—			—			(375		)
Dividends declared ($2.92 per share) (Note 10)	—		—			—			—			(2,310		)	(632		)	(2,942		)
Balance at December 31, 2017	1		(2,818		)	6,580			14			2,709			1,141			7,627
Net income	—		—			—			—			2,413			538			2,951
Currency translation adjustment	—		—			—			(54		)	—			(4		)	(58		)
Exercise of stock options	—		(4		)	74			—			—			9			79
Stock-based compensation	—		—			26			—			—			4			30
Repurchase of common stock	—		(905		)	—			—			—			—			(905		)
Dividends declared ($3.00 per share) (Note 10)	—		—			—			—			(2,352		)	(627		)	(2,979		)
Balance at December 31, 2018	1		(3,727		)	6,680			(40		)	2,770			1,061			6,745
Net income	—		—			—			—			2,698			606			3,304
Currency translation adjustment	—		—			—			37			—			5			42
Exercise of stock options	—		—			43			—			—			11			54
Stock-based compensation	—		—			31			—			—			4			35
Disposition of interest in majority-owned subsidiary, net of taxes	—		—			(185		)	—			—			266			81
Repurchase of common stock	—		(754		)	—			—			—			—			(754		)
Dividends declared ($3.08 per share) and noncontrolling interest payments (Note 10)	—		—			—			—			(2,367		)	(633		)	(3,000		)
Balance at December 31, 2019	$	1	$	(4,481	)	$	6,569		$	(3	)	$	3,101		$	1,320		$	6,507

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

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31,
	2019			2018			2017
	(In millions)
Cash flows from operating activities:
Net income	$	3,304		$	2,951		$	3,263
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation and amortization	1,165			1,111			1,171
Amortization of leasehold interests in land	51			35			37
Amortization of deferred financing costs and original issue discount	33			35			42
Amortization of deferred gain on mall sale transactions	(5		)	(5		)	(4		)
Loss on modification or early retirement of debt	24			64			5
Loss on disposal or impairment of assets	82			149			20
Gain on sale of Sands Bethlehem	(556		)	—			—
Stock-based compensation expense	35			30			34
Provision for doubtful accounts	30			5			96
Foreign exchange (gain) loss	(21		)	(26		)	53
Deferred income taxes	157			113			(497		)
Changes in operating assets and liabilities:
Accounts receivable	(150		)	(119		)	83
Other assets	(63		)	(25		)	26
Leasehold interests in land	(969		)	(15		)	(4		)
Accounts payable	(26		)	8			40
Other liabilities	(53		)	390			178
Net cash generated from operating activities	3,038			4,701			4,543
Cash flows from investing activities:
Net proceeds from sale of Sands Bethlehem	1,161			—			—
Capital expenditures	(1,216		)	(949		)	(837		)
Proceeds from disposal of property and equipment	5			19			15
Acquisition of intangible assets	(53		)	—			—
Net cash used in investing activities	(103		)	(930		)	(822		)
Cash flows from financing activities:
Proceeds from exercise of stock options	54			79			40
Repurchase of common stock	(754		)	(905		)	(375		)
Dividends paid and noncontrolling interest payments	(3,000		)	(2,979		)	(2,943		)
Proceeds from long-term debt (Note 8)	4,000			7,593			654
Repayments of long-term debt (Note 8)	(3,536		)	(5,178		)	(858		)
Payments of financing costs	(132		)	(132		)	(5		)
Net cash used in financing activities	(3,368		)	(1,522		)	(3,487		)
Effect of exchange rate on cash, cash equivalents and restricted cash	14			(18		)	58
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents	(419		)	2,231			292
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year	4,661			2,430			2,138
Cash, cash equivalents and restricted cash and cash equivalents at end of year	$	4,242		$	4,661		$	2,430

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)



	Year Ended December 31,
	2019		2018		2017
	(In millions)
Supplemental disclosure of cash flow information:
Cash payments for interest, net of amounts capitalized	$	462	$	326	$	269
Cash payments for taxes, net of refunds	$	253	$	264	$	230
Changes in construction payables	$	145	$	37	$	(232	)

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

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organization and Business of Company

Las Vegas Sands Corp. ("LVSC" or together with its subsidiaries, the "Company") is incorporated in Nevada and its common stock is traded on the New York Stock Exchange under the symbol "LVS."

The ordinary shares of the Company's subsidiary, Sands China Ltd. ("SCL," the indirect owner and operator of the majority of the Company's operations in the Macao Special Administrative Region ("Macao") of the People's Republic of China) are listed on The Main Board of The Stock Exchange of Hong Kong Limited ("SEHK"). The shares were not, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent a registration under the Securities Act of 1933, as amended, or an applicable exception from such registration requirements.

Operations

The Company is a developer of destination properties ("Integrated Resorts") that feature premium accommodations, world-class gaming, entertainment and retail malls, convention and exhibition facilities, celebrity chef restaurants and other amenities.

Macao

The Company currently owns 70.0% of SCL, which includes the operations of The Venetian Macao Resort Hotel ("The Venetian Macao"), Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Cotai Strip (the "Four Seasons Hotel Macao"), Sands Macao and other ancillary operations that support these properties, as further discussed below. The Company operates the gaming areas within these properties pursuant to a 20-year gaming subconcession agreement, which expires in June 2022.

The Company owns and operates The Venetian Macao, which anchors the Cotai Strip, the Company's master-planned development of Integrated Resorts on an area of approximately 140 acres in Macao. The Venetian Macao includes a 39-floor luxury hotel with over 2,900 suites; approximately 374,000 square feet of gaming space; a 15,000-seat arena; an 1,800-seat theater; a Paiza Club, a mall with retail and dining space of approximately 943,000 square feet; and a convention center and meeting room complex of approximately 1.2 million square feet.

The Company owns the Sands Cotai Central, an Integrated Resort situated across the street from The Venetian Macao, The Parisian Macao and The Plaza Macao and Four Seasons Hotel Macao. The Sands Cotai Central opened in phases, beginning in April 2012. The property features four hotel towers: the first hotel tower, consisting of approximately 650 rooms and suites under the Conrad brand and approximately 600 London-themed suites upon completion of The Londoner Macao Hotel; the second hotel tower, consisting of approximately 1,800 rooms and suites under the Sheraton brand; the third hotel tower, consisting of approximately 2,100 rooms and suites under the Sheraton brand; and the fourth hotel tower, consisting of approximately 400 rooms and suites under the St. Regis brand. Within Sands Cotai Central, the Company also owns and currently operates approximately 367,000 square feet of gaming space, approximately 369,000 square feet of meeting space and approximately 525,000 square feet of retail space, as well as entertainment and dining facilities.

The Company owns The Parisian Macao, an Integrated Resort connected to The Venetian Macao and The Plaza Macao and Four Seasons Hotel Macao, which includes approximately 253,000 square feet of gaming space. The Parisian Macao also features approximately 2,500 rooms and suites; approximately 296,000 square feet of retail and dining space; a meeting room complex of approximately 63,000 square feet; and a 1,200-seat theater.

The Company owns The Plaza Macao and Four Seasons Hotel Macao, which features 360 rooms and suites managed and operated by Four Seasons Hotels Inc. and is located adjacent and connected to The Venetian Macao. Within the Integrated Resort, the Company owns and operates the Plaza Casino, which features approximately 105,000 square feet of gaming space; 19 Paiza mansions; retail space of approximately 242,000 square feet, which is connected to the mall at The Venetian Macao; several food and beverage offerings; and conference, banquet and other facilities.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The Company owns and operates the Sands Macao, the first Las Vegas-style casino in Macao. The Sands Macao offers approximately 213,000 square feet of gaming space and a 289-suite hotel tower, as well as several restaurants, VIP facilities, a theater and other high-end services and amenities.

Singapore

The Company owns and operates the Marina Bay Sands in Singapore ("MBS"), which features three 55-story hotel towers (totaling approximately 2,600 rooms and suites), the Sands SkyPark (which sits atop the hotel towers and features an infinity swimming pool and several dining options), approximately 160,000 square feet of gaming space, an enclosed retail, dining and entertainment complex of approximately 800,000 net leasable square feet, a convention center and meeting room complex of approximately 1.2 million square feet, a theater and a landmark iconic structure at the bay-front promenade that contains an art/science museum. The Company recently announced an expansion project at Marina Bay Sands, as further described below.

United States

Las Vegas

The Company owns and operates The Venetian Resort Hotel Casino ("The Venetian Resort Las Vegas"), with three hotel towers, which include The Venetian Tower, a Renaissance Venice-themed resort; the adjoining Venezia Tower; The Palazzo Tower, a resort featuring modern European ambience and design; and an expo and convention center of approximately 1.2 million square feet (the "Sands Expo Center," together with The Venetian Resort Las Vegas, the "Las Vegas Operating Properties"). The Las Vegas Operating Properties, situated on the Las Vegas Strip, is an Integrated Resort with approximately 7,100 suites; approximately 225,000 square feet of gaming space; 2.3 million gross square feet of state-of-the-art exhibition and meeting facilities that can be configured to provide small, mid-size or large meeting rooms and/or accommodate large-scale multi-media events or trade shows.

The Company is working with Madison Square Garden Company to bring a 400,000-square-foot venue built specifically for music and entertainment to Las Vegas. Madison Square Garden is currently building the MSG Sphere at The Venetian, an 18,000-seat venue, which will be located near, with connectivity to, the Las Vegas Operating Properties and is currently expected to open in 2021.

Pennsylvania

The Company previously owned and operated the Sands Casino Resort Bethlehem (the "Sands Bethlehem") in Bethlehem, Pennsylvania. On May 31, 2019, the Company closed the sale of Sands Bethlehem and received $1.16 billion in net cash proceeds and recorded a gain on the sale of $556 million. As there is no continuing involvement between the Company and Sands Bethlehem, the Company accounted for the transaction as a sale of a business. The Company concluded Sands Bethlehem does not have a material impact on the Company's overall operations or its consolidated financial results.

Subsequent Events

In early January 2020, an outbreak of a respiratory illness caused by a novel coronavirus was identified in Wuhan, Hubei Province, China. On February 4, 2020, the Macao government announced the suspension of casino operations from February 5, 2020. Additionally, there are travel restrictions such as those related to the China Individual Visit Scheme to Macao, the Hong Kong Macao Ferry Terminal closure and other countries restricting inbound travel from mainland China. The duration and intensity of this global health emergency and related disruptions is uncertain, including potential broader impacts outside of China if travel and visitation continues to be restricted and there is a resulting decline in Chinese tourist spending in Singapore or Las Vegas. Given the dynamic nature of these circumstances, the related impact on the Company’s operating segments in Macao and our consolidated results of operations, cash flows and financial condition will be material, but cannot be reasonably estimated at this time.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Development Projects

The Company regularly evaluates opportunities to improve its product offerings, such as refreshing its meeting and convention facilities, suites and rooms, retail malls, restaurant and nightlife mix and its gaming areas, as well as other anticipated revenue generating additions to the Company's Integrated Resorts.

Macao

The Company previously announced the renovation, expansion and rebranding of the Sands Cotai Central into a new destination Integrated Resort, The Londoner Macao, by adding extensive thematic elements both externally and internally. The Londoner Macao will feature new attractions and features from London, including some of London’s most recognizable landmarks, such as the Houses of Parliament and Big Ben. The expanded retail will be rebranded as the Shoppes at Londoner and a number of new restaurants and bars will be added. The Londoner Tower Suites will add approximately 370 luxury suites. Upon completion of the project, the Holiday Inn-branded rooms and suites will be converted to approximately 600 London-themed suites, referred to as The Londoner Macao Hotel. The Company is utilizing suites as they are completed on a simulation basis for trial and feedback purposes. Construction has commenced and is being phased to minimize disruption during the property’s peak periods. The Company expects The Londoner Tower Suites to be completed in late 2020 and The Londoner Macao project to be completed in phases throughout 2020 and 2021.

The Company also previously announced The Grand Suites at Four Seasons, which will feature approximately 290 additional premium quality suites. The Company has initiated approved gaming operations in this space and is utilizing suites as they are completed on a simulation basis for trial and feedback purposes. The Company expects the project to be completed in the first half of 2020.

The Company anticipates the total costs associated with these development projects to be approximately $2.2 billion. The ultimate costs and completion dates for these projects are subject to change as the Company finalizes its planning and design work and completes the projects.

Singapore

In April 2019, MBS entered into the Second Development Agreement with the Singapore Tourism Board pursuant to which MBS has agreed to construct a development, which will include a hotel tower with approximately 1,000 rooms and suites, a rooftop attraction, convention and meeting facilities and a state-of-the-art live entertainment arena with approximately 15,000 seats. The Second Development Agreement provides for a total project cost of approximately 4.5 billion Singapore dollar ("SGD," approximately $3.3 billion at exchange rates in effect on December 31, 2019), which investment must be completed within eight years from the effective date of the agreement. The amount of the total project cost will be finalized as the Company completes design and development and begins construction.

United States

The Company was constructing a high-rise residential condominium tower (the "Las Vegas Condo Tower"), located on the Las Vegas Strip within The Venetian Resort Las Vegas. In 2008, the Company suspended construction activities for the project due to reduced demand for Las Vegas Strip condominiums and the overall decline in general economic conditions. The Company continues to evaluate the highest return opportunity for the project. The impact of the suspension on the estimated overall cost of the project is currently not determinable with certainty. Should demand and conditions fail to improve or management decides to abandon the project, the Company could record a charge for some portion of the $129 million in capitalized construction costs (net of depreciation) as of December 31, 2019.

Other

The Company continues to evaluate current development projects in each of its markets and pursue new development opportunities globally.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and variable interest entities ("VIEs") in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company 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 currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could vary from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Such investments are carried at cost, which is a reasonable estimate of their fair value. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. Restricted cash represents those amounts contractually reserved for substantial mall-related repairs and maintenance expenditures. The estimated fair value of the Company's cash equivalents is based on level 1 inputs (quoted market prices in active markets).

Accounts Receivable and Credit Risk

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

The allowance for doubtful accounts represents the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on an analysis of 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 the Company applies standard reserve percentages to aged account balances under the specified dollar amount. The Company also monitors regional and global economic conditions and forecasts in its evaluation of the adequacy of the recorded reserves. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. Management believes there are no concentrations of credit risk for which an allowance has not been established. Although management believes the allowance is adequate, it is possible the estimated amount of cash collections with respect to accounts receivable could change.

Inventories

Inventories consist primarily of food, beverage, retail products and operating supplies, which are stated at the lower of cost or net realizable value. Cost is determined by the weighted average and specific identification methods.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization, and accumulated impairment losses, if any. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets, which do not exceed the lease term for leasehold improvements, as follows:



Land improvements, building and building improvements	10 to 50 years
Furniture, fixtures and equipment	3 to 20 years
Leasehold improvements	3 to 15 years
Transportation	5 to 20 years

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, and are periodically reviewed. Future events, such as property expansions, property developments, new competition or new regulations, could result in a change in the manner in which the Company uses certain assets requiring a change in the estimated useful lives of such assets.

Maintenance and repairs that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains or losses on disposition of property and equipment are included in the consolidated statements of operations.

The Company evaluates its property and equipment and other long-lived assets for impairment in accordance with related accounting standards. For assets to be disposed of, the Company recognizes the asset to be sold at the lower of carrying value or fair value less costs of disposal. Fair value for assets to be disposed of is estimated based on comparable asset sales, solicited offers or a discounted cash flow model.

Fixed assets are reviewed for impairment whenever indicators of impairment exist. Determining the recoverability of the Company's 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 the Company's 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 these asset groups.

Leases

Management determines if a contract is, or contains, a lease at inception or modification of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Finance and operating lease right-of-use ("ROU") assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components. For leases in which the Company is the lessee, the Company accounts for the lease components and non-lease components as a single lease component for all classes of underlying assets (primarily real estate). Leases in which the Company is the lessor are substantially all accounted for as operating leases and the lease components and non-lease components are accounted for separately. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Capitalized Interest and Internal Costs

Interest costs associated with major construction projects are capitalized and included in the cost of the projects. When no debt is incurred specifically for construction projects, interest is capitalized on amounts expended using the weighted average cost of the Company's outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or construction activity is suspended for more than a brief period. During the years ended December 31, 2019, 2018 and 2017, the Company capitalized $9 million, $3 million and $2 million, respectively, of interest expense.

During the years ended December 31, 2019, 2018 and 2017, the Company capitalized approximately $34 million, $31 million and $24 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property.

Deferred Financing Costs and Original Issue Discounts

Certain direct and incremental costs and discounts incurred in obtaining loans are capitalized and amortized to interest expense based on the terms of the related debt instruments using the effective interest method.

Leasehold Interests in Land

Leasehold interests in land represent payments 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.

Revenue Recognition

Revenue from contracts with customers primarily consists of casino wagers, room sales, food and beverage transactions, rental income from the Company’s mall tenants, convention sales and entertainment and ferry ticket sales. These contracts can be written, oral or implied by customary business practices.

Gross casino revenue is the aggregate of gaming wins and losses. The commissions rebated to gaming promoters and premium players for rolling play, cash discounts and other cash incentives to patrons related to gaming play are recorded as a reduction to gross casino revenue. Gaming contracts include a performance obligation to honor the patron’s wager and typically include a performance obligation to provide a product or service to the patron on a complimentary basis to incentivize gaming or in exchange for points earned under the Company’s loyalty programs.

For wagering contracts that include complimentary products and services provided by the Company to incentivize gaming, the Company allocates the relative stand-alone selling price of each product and service to the respective revenue type. Complimentary products or services provided under the Company's control and discretion, which are supplied by third parties, are recorded as an operating expense.

For wagering contracts that include products and services provided to a patron in exchange for points earned under the Company’s loyalty programs, the Company allocates the estimated fair value of the points earned to the loyalty program liability. The loyalty program liability is a deferral of revenue until redemption occurs. Upon redemption of loyalty program points for Company-owned products and services, the stand-alone selling price of each product or service is allocated to the respective revenue type. For redemptions of points with third parties, the redemption amount is deducted from the loyalty program liability and paid directly to the third party. Any discounts received by the Company from the third party in connection with this transaction are recorded to other revenue.

After allocation to the other revenue types for products and services provided to patrons as part of a wagering contract, the residual amount is recorded to casino revenue as soon as the wager is settled. As all wagers have similar characteristics, the Company accounts for its gaming contracts collectively on a portfolio basis versus an individual basis.

Hotel revenue recognition criteria are met at the time of occupancy. Food and beverage revenue recognition criteria are met at the time of service. Convention revenues are recognized when the related service is rendered or the event is held. Deposits for future hotel occupancy, convention space or food and beverage services contracts are recorded as deferred revenue until the revenue recognition criteria are met. Cancellation fees for convention contracts are

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

recognized upon cancellation by the customer and are included in other revenues. Ferry and entertainment revenue recognition criteria are met at the completion of the ferry trip or event, respectively. Revenue from contracts with a combination of these services is allocated pro rata based on each service’s relative stand-alone selling price.

Revenue from leases is primarily recorded to mall revenue and is generated from base rents and overage rents received through long-term leases with retail tenants. Base rent, adjusted for contractual escalations, is recognized on a straight-line basis over the term of the related lease. Overage rent is paid by a tenant when its sales exceed an agreed upon minimum amount and is not recognized by the Company until the threshold is met.

Contract and Contract Related Liabilities

The Company provides numerous products and services to its customers. There is often a timing difference between the cash payment by the customers and recognition of revenue for each of the associated performance obligations. The Company has the following main types of liabilities associated with contracts with customers: (1) outstanding chip liability, (2) loyalty program liability and (3) customer deposits and other deferred revenue for gaming and non-gaming products and services yet to be provided.

The outstanding chip liability represents the collective amounts owed to gaming promoters and patrons in exchange for gaming chips in their possession. Outstanding chips are expected to be recognized as revenue or redeemed for cash within one year of being purchased. The loyalty program liability represents a deferral of revenue until patron redemption of points earned. The loyalty program points are expected to be redeemed and recognized as revenue within one year of being earned. Customer deposits and other deferred revenue represent cash deposits made by customers for future services provided by the Company. With the exception of mall deposits, which typically extend beyond a year based on the terms of the lease, the majority of these customer deposits and other deferred revenue are expected to be recognized as revenue or refunded to the customer within one year of the date the deposit was recorded.

The following table summarizes the liability activity related to contracts with customers:



	Outstanding Chip Liability					Loyalty Program Liability				Customer Deposits and Other Deferred Revenue(1)
	2019			2018		2019		2018		2019			2018
	(In millions)
Balance at January 1	$	551		$	478	$	66	$	63	$	827		$	714
Balance at December 31	540			551		68		66		724			827
Increase (decrease)	$	(11	)	$	73	$	2	$	3	$	(103	)	$	113


(1)	Of this amount, $154 million, $152 million and $145 million as of December 31, 2019, December 31, 2018 and January 1, 2018, respectively, relates to mall deposits that are accounted for based on lease terms usually greater than one year.

Gaming Taxes

The Company is subject to taxes based on gross gaming revenue in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes, including the goods and services tax in Singapore, are an assessment on the Company's gaming revenue and are recorded as a casino expense in the accompanying consolidated statements of operations. These taxes were $3.98 billion, $4.09 billion and $3.60 billion for the years ended December 31, 2019, 2018 and 2017, respectively.

Pre-Opening and Development Expenses

The Company accounts for costs incurred in the development and pre-opening phases of new ventures in accordance with accounting standards regarding start-up activities. Pre-opening expenses represent personnel and other costs incurred prior to the opening of new ventures and are expensed as incurred. Development expenses include the costs associated with the Company's evaluation and pursuit of new business opportunities, which are also expensed as incurred.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Advertising Costs

Costs for advertising are expensed the first time the advertising takes place or as incurred. Advertising costs included in the accompanying consolidated statements of operations were $123 million, $132 million and $129 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Corporate Expenses

Corporate expense represents payroll, travel, legal fees, professional fees and various other expenses not allocated or directly related to the Company's Integrated Resort operations and related ancillary operations.

Foreign Currency

The functional currency of most of our foreign subsidiaries is the local currency in which the subsidiary operates. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date and income statement accounts are translated at the average exchange rates during the year. Translation adjustments resulting from this process are recorded to other comprehensive income.

Gains or losses from foreign currency remeasurements that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense).

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

Comprehensive income includes net income and all other non-stockholder changes in equity, or other comprehensive income. The balance of accumulated other comprehensive income (loss) consisted solely of foreign currency translation adjustments.

Earnings Per Share

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



	Year Ended December 31,
	2019	2018	2017
	(In millions)
Weighted average common shares outstanding (used in the calculation of basic earnings per share)	771	786	792
Potential dilution from stock options and restricted stock and stock units	—	—	—
Weighted average common and common equivalent shares (used in the calculation of diluted earnings per share)	771	786	792
Antidilutive stock options excluded from the calculation of diluted earnings per share	3	2	6

Stock-Based Employee Compensation

Stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized over the employee's requisite service period (generally the vesting period of the equity grant). The Company's stock-based employee compensation plans are more fully discussed in "Note 16 — Stock-Based Employee Compensation."

Income Taxes

The Company is subject to income taxes in the U.S. (including federal and state) and numerous foreign jurisdictions in which it operates. The Company records 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.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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" 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, the Company's experience with operating loss and tax credit carryforwards not expiring and tax planning strategies.

Management will reassess the realization of deferred tax assets each reporting period and consider the scheduled reversal of deferred tax liabilities, sources of taxable income and tax planning strategies. To the extent the financial results of these operations improve and it becomes "more-likely-than-not" the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance in the period such determination is made as appropriate.

Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may be different.

Accounting for Derivative Instruments and Hedging Activities

Accounting standards require an entity to recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If specific conditions are met, a derivative may be designated as a hedge of specific financial exposures. The accounting for changes in fair value of a derivative depends on the intended use of the derivative and, if used in hedging activities, on its effectiveness as a hedge. In order to qualify for hedge accounting, the underlying hedged item must expose the Company to risks associated with market fluctuations and the financial instrument used must be designated as a hedge and must reduce the Company's exposure to market fluctuation throughout the hedge period.

Changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices, can impact the Company’s results of operations. The Company’s primary exposures to market risk are interest rate risk associated with long-term debt and foreign currency exchange rate risk associated with the Company’s operations outside the United States. The Company has a policy aimed at managing interest rate risk associated with its current and anticipated future borrowings and foreign currency exchange rate risk associated with operations of its foreign subsidiaries. This policy enables the Company to use any combination of interest rate swaps, futures, options, caps, forward contracts and similar instruments. The Company does not hold or issue financial instruments for trading purposes and does not enter into derivative transactions that would be considered speculative positions. Depending on its classification and position at the end of the reporting period, each derivative was reported as prepaid expenses and other; other assets, net; other accrued liabilities; or other long-term liabilities, as applicable, in the accompanying consolidated balance sheets. See "Note 9 — Derivative Instruments" for additional disclosures regarding derivatives.

Recent Accounting Pronouncements

In June 2016, the FASB issued an accounting standard update that revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The guidance is effective for fiscal years beginning after December 15, 2019, including interim reporting periods within that reporting period, and should be applied on a modified retrospective basis, with early adoption permitted. The Company adopted the new standard on January 1, 2020. The adoption of this guidance did not have a material impact on the Company's financial condition or net income.

Reclassification

Certain amounts in the accompanying consolidated statements of cash flows for the years ended December 31, 2018 and 2017, have been adjusted to be consistent with the current year presentation. The reclassification had no impact on the Company's financial condition, results of operations or cash flows. These adjustments resulted from land premium payments becoming material enough to require separate disclosure.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 3 — Accounts Receivable, Net

Accounts receivable consists of the following:



	December 31,
	2019			2018
	(In millions)
Casino	$	858		$	763
Rooms	88			98
Mall	93			78
Other	87			111
	1,126			1,050
Less — allowance for doubtful accounts	(282		)	(324		)
	$	844		$	726

Note 4 — Property and Equipment, Net

Property and equipment consists of the following:



	December 31,
	2019			2018
	(In millions)
Land and improvements	$	650		$	651
Building and improvements	17,662			17,861
Furniture, fixtures, equipment and leasehold improvements	4,520			4,255
Transportation	520			458
Construction in progress	1,507			1,184
	24,859			24,409
Less — accumulated depreciation and amortization	(10,015		)	(9,255		)
	$	14,844		$	15,154

The property and equipment sold to GGP totaling $184 million (net of $114 million of accumulated depreciation) as of December 31, 2019, will continue to be recorded on the Company's consolidated balance sheet and will continue to be depreciated in the Company's consolidated statement of operations. See "Note 13 — Mall Activities — The Shoppes at The Palazzo."

During the year ended December 31, 2019, the Company’s ferry operations experienced a decline in passenger volume due primarily to the opening of the Hong Kong-Zhuhai-Macao bridge, which opened in October 2018, and the ongoing situation in Hong Kong since June 2019. The continuing decline in passenger volume resulted in the Company taking two ferries out of service and implementing other cost cutting measures to maintain the overall efficiency of the ferry operations.

The Company determined the projected cash flows were not anticipated to recover the ferry assets carrying value. An impairment charge of $65 million was recorded for the excess of the carrying value over the recoverable amount of $51 million, which was determined to be the fair value less cost of disposal of the ferries. The estimated fair value of the long-lived asset group was determined using level 3 inputs based on recent offers received for the two ferries currently not in service.

During the year ended December 31, 2019, the Company recognized a loss on disposal or impairment of assets of $90 million, consisting primarily of the aforementioned $65 million ferry impairment charge. During the years ended December 31, 2018 and 2017, the Company recognized a loss on disposal or impairment of assets of $150 million and $20 million, respectively. The loss for the year ended December 31, 2018, consisted primarily of $128 million in write-

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

off of costs related to The Grand Suites at Four Seasons, as well as other dispositions at the Company's operating properties.

Depreciation expense was $1.15 billion, $1.10 billion and $1.15 billion for the years ended December 31, 2019, 2018 and 2017, respectively.

Note 5 — Leasehold Interests in Land, Net

Leasehold interests in land consist of the following:



	December 31,
	2019			2018
	(In millions)
Marina Bay Sands	$	1,986		$	1,006
Sands Cotai Central	293			237
The Venetian Macao	242			192
The Plaza Macao and Four Seasons Hotel Macao	106			91
The Parisian Macao	89			75
Sands Macao	38			31
	2,754			1,632
Less — accumulated amortization	(482		)	(434		)
	$	2,272		$	1,198

The Company amortizes the leasehold interests in land on a straight-line basis over the expected term of the lease, which includes automatic extensions in Macao as discussed further below. Amortization expense of $51 million, $35 million and $37 million was included in amortization of leasehold interests in land expense for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated future amortization expense over the expected term of the lease is approximately $52 million for each of the five years in the period ending December 31, 2024 and $2.21 billion thereafter at exchange rates in effect on December 31, 2019.

Land concessions in Macao generally have an initial term of 25 years with automatic extensions of 10 years thereafter in accordance with Macao law. The Company anticipates a useful life of 50 years related to the land concessions in Macao. The Company has received land concessions from the Macao government to build on the sites on which Sands Macao, The Venetian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Cotai Central and The Parisian Macao are located. The Company does not own these land sites in Macao; however, the land concessions grant the Company exclusive use of the land. As specified in the land concessions, the Company is required to pay premiums for each parcel, as well as make annual rent payments in the amounts and at the times specified in the land concessions. The rent amounts may be revised every five years by the Macao government. For the Company's future rental payment obligations, see "Note 14 — Leases."

Land concessions in Singapore have an initial term of 60 years. The Company has received land concessions from the Singapore Tourism Board to build on the sites on which Marina Bay Sands and the future MBS Expansion Project are located. The Company does not own these land sites in Singapore; however, the land concessions grant the Company exclusive use of the land. As specified in the land concessions, the Company was required to pre-pay the premiums for each parcel.

In April 2019, and in connection with the Second Development Agreement, MBS paid $963 million for the additional land concessions in connection with the MBS Expansion Project.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 6 — Intangible Assets, Net

Intangible assets consist of the following:



	December 31,
	2019			2018
	(In millions)
Marina Bay Sands gaming license	$	53		$	48
Trademarks and other	1			1
	54			49
Less — accumulated amortization	(12		)	(44		)
	42			5
Sands Bethlehem gaming license and certificate	—			67
Total intangible assets, net	$	42		$	72

The Company was issued a gaming license and certificate from the Pennsylvania Gaming Control Board for its slots and table games operations at Sands Bethlehem. On May 31, 2019, the Company completed the sale of Sands Bethlehem and no longer owns the gaming license or certificate.

In April 2019, the Company paid SGD 72 million (approximately $53 million at exchange rates in effect at the time of the transaction) to the Singapore Casino Regulatory Authority (the "CRA") as part of the process to renew its gaming license at Marina Bay Sands. This license is being amortized over its three-year term, which expires in April 2022, and is renewable upon submitting an application, paying the applicable license fee and meeting the requirements as determined by the CRA.

Amortization expense was $17 million, $16 million and $16 million for the years ended December 31, 2019, 2018 and 2017, respectively. The estimated future amortization expense is approximately $18 million, $18 million and $6 million for the years ending December 31, 2020, 2021 and 2022, respectively.

Note 7 — Other Accrued Liabilities

Other accrued liabilities consist of the following:



	December 31,
	2019		2018
	(In millions)
Customer deposits	$	582	$	676
Outstanding chip liability	540		551
Taxes and licenses	389		403
Payroll and related	378		359
Accrued interest payable	165		115
Other accruals	342		331
	$	2,396	$	2,435

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 8 — Long-Term Debt

Long-term debt consists of the following:



	December 31,
	2019			2018
	(In millions)
Corporate and U.S. Related(1):
3.200% Senior Notes due 2024 (net of unamortized original issue discount and deferred financing costs of $14)	$	1,736		$	—
2.900% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $5)	495			—
3.500% Senior Notes due 2026 (net of unamortized original issue discount and deferred financing costs of $12)	988			—
3.900% Senior Notes due 2029 (net of unamortized original issue discount and deferred financing costs of $8)	742			—
2013 U.S. Credit Facility — Extended Term B (net of unamortized original issue discount and deferred financing costs of $21)	—			3,464
HVAC Equipment Lease	—			12
Macao Related(1):
4.600% Senior Notes due 2023 (net of unamortized original issue discount and deferred financing costs of $11 and $14, respectively, and a positive cumulative fair value adjustment of $11 and $5, respectively)	1,800			1,791
5.125% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $13 and $16, respectively, and a positive cumulative fair value adjustment of $11 and $5, respectively)	1,798			1,789
5.400% Senior Notes due 2028 (net of unamortized original issue discount and deferred financing costs of $19 and $21, respectively, and a positive cumulative fair value adjustment of $12 and $5, respectively)	1,893			1,884
Other	17			4
Singapore Related(1):
2012 Singapore Credit Facility — Term (net of unamortized deferred financing costs of $54 and $43, respectively)	3,023			3,041
	12,492			11,985
Less — current maturities	(70		)	(111		)
Total long-term debt	$	12,422		$	11,874


(1)	Unamortized deferred financing costs of $100 million and $47 million as of December 31, 2019 and 2018, respectively, related to the Company's revolving credit facilities and the undrawn portion of the Singapore Delayed Draw Term Facility are included in other assets, net in the accompanying consolidated balance sheets.

Corporate and U.S. Related Debt

LVSC Senior Notes

On July 31, 2019, LVSC issued, in a public offering, three series of senior unsecured notes in an aggregate principal amount of $3.50 billion, consisting of $1.75 billion of 3.200% Senior Notes due August 8, 2024 (the “2024 LVSC Senior Notes”), $1.0 billion of 3.500% Senior Notes due August 18, 2026 (the “2026 LVSC Senior Notes”) and $750 million of 3.900% Senior Notes due August 8, 2029 (the “2029 LVSC Senior Notes”). A portion of the net proceeds from the offering was used to repay in full the outstanding borrowings under the 2013 U.S. Credit Facility.

On November 25, 2019, LVSC issued, in a public offering, a senior unsecured note in an aggregate principal amount of $500 million of 2.900% Senior Notes due June 25, 2025 (the “2025 LVSC Senior Notes” and, together with

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

the 2024 LVSC Senior Notes, 2026 LVSC Senior Notes and the 2029 LVSC Senior Notes, the “LVSC Senior Notes”). A portion of the net proceeds from the offering was used for general corporate purposes, including repurchases of shares of the Company's common stock.

There are no interim principal payments on the LVSC Senior Notes and interest is payable semi-annually in arrears on each February 8 and August 8, commencing on February 8, 2020, with respect to the 2024 LVSC Notes and 2029 LVSC Notes, on each February 18 and August 18, commencing on February 18, 2020, with respect to the 2026 Notes, and on each June 25 and December 25, commencing on June 25, 2020, with respect to the 2025 Notes.

The LVSC Senior Notes are senior unsecured obligations of LVSC. Each series of LVSC Senior Notes rank equally in right of payment with all of LVSC’s other unsecured and unsubordinated obligations, if any. None of LVSC’s subsidiaries guarantee the LVSC Senior Notes.

The LVSC Senior Notes were issued pursuant to an indenture, dated July 31, 2019, as amended with respect to each of the series of the LVSC Senior Notes (the “Indenture”), between LVSC and U.S. Bank National Association, as trustee. The Indenture contains covenants, subject to customary exceptions and qualifications, that limit the ability of LVSC and its subsidiaries to, among other things, incur liens, enter into sale and leaseback transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets on a consolidated basis. The Indenture also provides for customary events of default.

LVSC Revolving Facility

On August 9, 2019, LVSC entered into a revolving credit agreement with the arrangers and lenders named therein and The Bank of Nova Scotia, as administrative agent for the lenders (the “LVSC Revolving Credit Agreement”), pursuant to which the lenders provided unsecured, revolving credit commitments to LVSC in an aggregate principal amount of $1.50 billion (the “LVSC Revolving Facility”), which are available until August 9, 2024, and include a $150 million sub-facility for letters of credit. LVSC may utilize the proceeds of the loans for general corporate purposes and working capital requirements of LVSC and its subsidiaries and any other purpose not prohibited by the LVSC Revolving Credit Agreement. As of December 31, 2019, the Company had $1.50 billion of available borrowing capacity under the LVSC Revolving Facility, net of outstanding letters of credit.

The revolving loans bear interest at the Company’s option, at either, an adjusted Eurodollar rate, plus an applicable margin ranging from 1.125% to 1.550% per annum, or at an alternative base rate, plus an applicable margin ranging from 0.125% to 0.550% per annum, in each case, based on LVSC’s corporate family credit rating. As of December 31, 2019, the applicable margin for revolving loans with reference to an adjusted Eurodollar rate is 1.4% per annum and the applicable margin for revolving loans with reference to an alternative base rate is 0.4% per annum. LVSC is also required to pay a quarterly commitment fee on the undrawn portion of the LVSC Revolving Facility, which commitment fee ranges from 0.125% to 0.250% per annum, based on the LVSC’s corporate family credit rating. As of December 31, 2019, the commitment fee is 0.200% per annum.

The LVSC Revolving Credit Agreement contains customary affirmative and negative covenants for facilities of this type, subject to customary exceptions and thresholds that limit the ability of (a) LVSC and its restricted subsidiaries to, among other things, (i) incur liens, (ii) enter into sale and leaseback transactions and (iii) sell, lease, sub-lease or otherwise dispose of any core facility (as defined in the LVSC Revolving Credit Agreement), (b) certain restricted subsidiaries of LVSC to incur indebtedness and (c) LVSC to merge, consolidate, liquidate or sell all or substantially all of its assets. The LVSC Revolving Credit Agreement also requires LVSC to maintain a maximum consolidated leverage ratio of 4.0x as of the last day of each fiscal quarter. The LVSC Revolving Credit Agreement also contains customary events of default, including payment defaults, cross defaults to material debt, bankruptcy and insolvency, breaches of covenants and inaccuracy of representations and warranties, subject to customary grace periods.

2013 U.S. Credit Facility

The Company, entered into a credit agreement (the "2013 U.S. Credit Facility"), which pursuant to various amendments, provided for a $3.51 billion term loan (the "2013 Extended U.S. Term B Facility") and a $1.15 billion revolving facility (the "2013 Extended U.S. Revolving Facility," and together with the 2013 Extended U.S. Term B

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Facility, the "2013 U.S. Credit Facility"). Borrowings under the 2013 Extended U.S. Term B Facility were used for working capital requirements and general corporate purposes, including to make any investment or payment not specifically prohibited by the terms of the loan documents.

The Company paid standby fees of 0.2% per annum on the undrawn amounts under the 2013 Extended U.S. Revolving Facility. The weighted average interest rate on the 2013 U.S. Credit Facility was 4.2%, 3.9% and 3.2% for the years ended December 31, 2019, 2018 and 2017, respectively.

As previously described, the proceeds from the LVSC Senior Notes were used to repay the outstanding borrowings under the 2013 U.S. Credit Facility and the facility was terminated. As a result, the Company recorded a $22 million loss on early retirement of debt during the year ended December 31, 2019.

HVAC Equipment Lease

In July 2009, the Company entered into a capital lease agreement with its 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 HVAC Equipment Lease was capitalized at the present value of the future minimum lease payments at lease inception. The lease had a 10-year term and ended on June 30, 2019.

Macao Related Debt

SCL Senior Notes

On August 9, 2018, SCL issued, in a private offering, three series of senior unsecured notes in an aggregate principal amount of $5.50 billion, consisting of $1.80 billion of 4.600% Senior Notes due August 8, 2023 (the "2023 Notes"), $1.80 billion of 5.125% Senior Notes due August 8, 2025 (the "2025 Notes") and $1.90 billion of 5.400% Senior Notes due August 8, 2028 (the "2028 Notes" and, together with the 2023 Notes and the 2025 Notes, the "SCL Senior Notes"). A portion of the net proceeds from the offering was used to repay in full the outstanding borrowings under the 2016 VML Credit Facility (defined below). There are no interim principal payments on the SCL Senior Notes and interest is payable semi-annually in arrears on each February 8 and August 8, commencing on February 8, 2019. In connection with the SCL Senior Notes, the Company entered into fixed-to-variable interest rate swap contracts (see "Note 9 — Derivative Instruments").

The SCL Senior Notes are general senior unsecured obligations of SCL. Each series of SCL Senior Notes rank equally in right of payment with all of SCL's existing and future senior unsecured debt and rank senior in right of payment to all of SCL's future subordinated debt, if any. The SCL Senior Notes are effectively subordinated in right of payment to all of SCL's future secured debt (to the extent of the value of the collateral securing such debt) and are structurally subordinated to all of the liabilities of SCL's subsidiaries. None of SCL's subsidiaries guarantee the SCL Senior Notes.

The SCL Senior Notes were issued pursuant to an indenture, dated August 9, 2018 (the "Indenture"), between SCL and U.S. Bank National Association, as trustee. Upon the occurrence of certain events described in the Indenture, the interest rate on the SCL Senior Notes may be adjusted. The Indenture contains covenants, subject to customary exceptions and qualifications, that limit the ability of SCL and its subsidiaries to, among other things, incur liens, enter into sale and leaseback transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of SCL's assets on a consolidated basis. The Indenture also provides for customary events of default.

2018 SCL Credit Facility

On November 20, 2018, SCL entered into a facility agreement with the arrangers and lenders named therein and Bank of China Limited, Macau Branch, as agent for the lenders, (the "2018 SCL Credit Facility") pursuant to which the lenders made available a $2.0 billion revolving unsecured credit facility to SCL (the "2018 SCL Revolving Facility"). The facility is available until July 31, 2023, and SCL may draw loans under the facility, which may consist of general revolving loans (consisting of a United States dollar component and a Hong Kong dollar component) or loans drawn under a swing-line loan sub-facility (denominated in either United States dollars or Hong Kong dollars). SCL may utilize the loans for general corporate purposes and working capital requirements of SCL and its subsidiaries. As of

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 31, 2019, the Company had $2.0 billion of available borrowing capacity under the 2018 SCL Revolving Facility.

Loans under the 2018 SCL Revolving Facility bear interest calculated by reference to (1) in the case of general revolving loans denominated in United States dollars, LIBOR, (2) in the case of loans denominated in United States dollars drawn under the swing-line loan sub-facility, a United States dollar alternate base rate (determined by reference to, among other things, the United States dollar prime lending rate and the Federal Funds Effective Rate), (3) in the case of general revolving loans denominated in Hong Kong dollars, the Hong Kong Interbank Offered Rate ("HIBOR") or (4) in the case of loans denominated in Hong Kong dollars drawn under the swing-line loan sub-facility, a Hong Kong dollar alternate base rate (determined by reference to, among other things, the Hong Kong dollar prime lending rate), in each case, plus a margin that is determined by reference to the consolidated leverage ratio as defined in the 2018 SCL Credit Facility. The initial margin for general revolving loans is 2.0% per annum and the initial margin for loans drawn under the swing-line loan sub-facility is 1.0% per annum. SCL is also required to pay a commitment fee of 0.60% per annum on the undrawn amounts under the 2018 SCL Revolving Facility.

The 2018 SCL Credit Facility contains affirmative and negative covenants customary for similar unsecured financings, including, but not limited to, limitations on indebtedness secured by liens on principal properties and sale and leaseback transactions. The 2018 SCL Credit Facility also requires SCL to maintain a maximum ratio of total indebtedness to adjusted EBITDA of 4.0x throughout the life of the facility and a minimum ratio of adjusted EBITDA to net interest expense (including capitalized interest) of 2.5x throughout the life of the facility.

The 2018 SCL Credit Facility also contains certain events of default (some of which are subject to grace and remedy periods and materiality qualifiers), including, but not limited to, events relating to SCL's gaming operations and the loss or termination of certain land concession contracts.

2016 VML Credit Facility

Two subsidiaries of the Company, VML US Finance LLC, the Borrower, and Venetian Macau Limited ("VML"), as guarantor, entered into a credit agreement (the "2016 VML Credit Facility"), which pursuant to various amendments, provided for a $4.12 billion term loan (the "2016 VML Term Loans"), a $269 million non-extended term loan (the "2016 Non-Extended VML Term Loans") and a $2.0 billion revolving facility (the "2016 VML Revolving Facility," and together with the 2016 VML Term Loans and the 2016 Non-Extended VML Term Loans, the "2016 VML Credit Facility"). Borrowings under the 2016 VML Term Loans were used for working capital requirements and general corporate purposes, including to make any investment or payment not specifically prohibited by the terms of the loan documents.

The Company paid standby fees of 0.5% per annum on the undrawn amounts under the 2016 VML Revolving Facility. The weighted average interest rate on the 2016 VML Credit Facility was 3.1% and 2.6% for the years ended December 31, 2018 and 2017, respectively.

As previously described, a portion of the proceeds from the SCL Senior Notes was used to repay the outstanding borrowings under the 2016 VML Credit Facility. As a result, the Company recorded a $52 million loss on early retirement of debt during the three months ended September 30, 2018.

On November 20, 2018, effective as of November 21, 2018, the 2016 VML Credit Facility was terminated. As a result, the Company recorded a $9 million loss on early retirement of debt during the three months ended December 31, 2018.

Singapore Related Debt

2012 Singapore Credit Facility

In June 2012, the Company's wholly owned subsidiary, Marina Bay Sands Pte. Ltd. ("MBS"), entered into a SGD 5.10 billion (approximately $3.78 billion at exchange rates in effect on December 31, 2019) credit agreement (the "2012 Singapore Credit Facility"), providing for a fully funded SGD 4.60 billion (approximately $3.41 billion at exchange rates in effect on December 31, 2019) term loan (the "2012 Singapore Term Facility") and a SGD 500 million

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(approximately $371 million at exchange rates in effect on December 31, 2019) revolving facility (the "2012 Singapore Revolving Facility") that was available until November 25, 2017, which included a SGD 100 million (approximately $74 million at exchange rates in effect on December 31, 2019) ancillary facility (the "2012 Singapore Ancillary Facility"). Borrowings under the 2012 Singapore Credit Facility were used to repay the outstanding balance under the previous Singapore credit facility.

During August 2014, the Company amended its 2012 Singapore Credit Facility, pursuant to which consenting lenders of borrowings under the 2012 Singapore Term Facility extended the maturity to August 28, 2020, and consenting lenders of borrowings under the 2012 Singapore Revolving Facility extended the maturity to February 28, 2020.

During March 2018, the Company amended its 2012 Singapore Credit Facility, which refinanced the facility in an aggregate amount of SGD 4.80 billion (approximately $3.56 billion at exchange rates in effect on December 31, 2019), pursuant to which consenting lenders of borrowings under the 2012 Singapore Term Facility extended the maturity to March 29, 2024, and consenting lenders of borrowings under the 2012 Singapore Revolving Facility extended the maturity to September 29, 2023.

On August 30, 2019, MBS amended and restated its 2012 Singapore Credit Facility (the “Third Amendment and Restatement Agreement”). The Third Amendment and Restatement Agreement extended (a) the maturity date of the term loans under the 2012 Singapore Term Facility to August 31, 2026, and (b) the termination date of the revolving credit commitments under the 2012 Singapore Revolving Facility to February 27, 2026, and also increased the principal amount of revolving credit commitments by an additional SGD 250 million (approximately $185 million at exchange rates in effect on December 31, 2019) for a total aggregate principal amount of SGD 750 million (approximately $556 million at exchange rates in effect on December 31, 2019). As of December 31, 2019, MBS had SGD 592 million (approximately $439 million at exchange rates in effect on December 31, 2019) of available borrowing capacity under the 2012 Singapore Revolving Facility, net of outstanding letters of credit, primarily consisting of a banker’s guarantee in connection with the MBS Expansion Project for SGD 153 million (approximately $113 million at exchange rates in effect on December 31, 2019).

Under the Third Amendment and Restatement Agreement, certain lenders committed to provide a new delayed draw term loan facility (the “Singapore Delayed Draw Term Facility”) in an aggregate principal amount of SGD 3.75 billion (approximately $2.78 billion at exchange rates in effect on December 31, 2019), which will be available to MBS until December 30, 2024, to finance costs associated with the MBS Expansion Project. The loans borrowed under the Singapore Delayed Draw Term Facility will mature on August 31, 2026. There were no loans borrowed under the Delayed Draw Term Facility as of December 31, 2019.

As a result of the Third Amendment and Restatement Agreement, the Company recorded a $2 million loss on modification of debt during the year ended December 31, 2019.

The indebtedness under the 2012 Singapore Credit Facility is collateralized by a first-priority security interest in substantially all of MBS's assets, other than capital stock and similar ownership interests, certain furniture, fixtures and equipment and certain other excluded assets.

The term loans under the 2012 Singapore Term Facility are subject to interim quarterly amortization payments, beginning with the fiscal quarter ending December 31, 2019, in an amount equal to (i) until and including the fiscal quarter ending September 30, 2024, 0.5% of the principal amount outstanding on June 30, 2019 (the “Term Facility Restatement Date”), (ii) for the fiscal quarter ending December 31, 2024, 3.0% of the principal amount outstanding on the Term Facility Restatement Date, (iii) for the fiscal quarters ending March 31, 2025 through September 30, 2025, 5.0% of the principal amount outstanding on the Term Facility Restatement Date, and (iv) for the fiscal quarters ending December 31, 2025 through June 30, 2026, 18.0% of the principal amount outstanding on the Term Facility Restatement Date. On the maturity date of August 31, 2026, MBS is required to repay all remaining amounts outstanding on the Singapore Term Facility.

Loans under the Singapore Delayed Draw Term Facility are subject to interim quarterly amortization payments, beginning with the fiscal quarter ending March 31, 2025, in an amount equal to (i) until and including the fiscal quarter ending September 30, 2025, 5.0% of the principal amount outstanding on December 30, 2024 (the “Delayed Draw

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Term Facility Restatement Date”), and (ii) for each fiscal quarter from December 31, 2025, until and including June 30, 2026, 18.0% of the principal amount outstanding on the Delayed Draw Term Facility Restatement Date. On the maturity date of August 31, 2026, MBS is required to repay all remaining amounts outstanding on the Singapore Delayed Draw Term Facility.

Under the Third Amendment and Restatement Agreement, outstanding loans bear interest at the Singapore Swap Offered Rate (“SOR”) plus an applicable margin that is fixed at 1.65% per annum until September 30, 2020, and will range from 1.15% to 1.85% per annum thereafter, based on MBS’s consolidated leverage ratio (interest rate set at approximately 3.1% as of December 31, 2019). MBS pays a standby commitment fee of 35% to 40% of the spread per annum on all undrawn amounts under the 2012 Singapore Revolving Facility. The weighted average interest rate for the 2012 Singapore Credit Facility was 3.2%, 2.6% and 2.2% for the years ended December 31, 2019, 2018 and 2017.

Under the Third Amendment and Restatement Agreement, MBS must comply with a maximum consolidated leverage ratio of 4.5x on the last day of each fiscal quarter from August 30, 2019, until twelve months following the date on which a temporary occupation permit is issued with respect to the MBS Expansion Project. Thereafter, MBS must comply with a maximum consolidated leverage ratio of 4.0x as of the last day of each fiscal quarter through maturity.

Debt Covenant Compliance

As of December 31, 2019, management believes the Company was in compliance with all debt covenants.

Cash Flows from Financing Activities

Cash flows from financing activities related to long-term debt and finance lease obligations are as follows:



	Year Ended December 31,
	2019			2018			2017
	(In millions)
Proceeds from LVSC Senior Notes	$	4,000		$	—		$	—
Proceeds from SCL Senior Notes	—			5,500			—
Proceeds from 2013 U.S. Credit Facility	—			1,347			5
Proceeds from 2016 VML Credit Facility	—			746			649
	$	4,000		$	7,593		$	654


Repayments on 2013 U.S. Credit Facility	$	(3,484	)	$	(26	)	$	(63	)
Repayments on 2012 Singapore Credit Facility	(47		)	(65		)	(67		)
Repayments on 2016 VML Credit Facility	—			(5,083		)	(668		)
Repayments on Airplane Financings	—			—			(56		)
Repayments on HVAC Equipment Lease and Other Long-Term Debt	(5		)	(4		)	(4		)
	$	(3,536	)	$	(5,178	)	$	(858	)

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Scheduled Maturities of Long-Term Debt

Maturities of long-term debt outstanding as of December 31, 2019, are summarized as follows:



	Long-term Debt
	(In millions)
2020	$	62
2021	62
2022	62
2023	1,862
2024	1,889
Thereafter	8,640
Total	$	12,577

Fair Value of Long-Term Debt

The estimated fair value of the Company's long-term debt as of December 31, 2019 and 2018, was approximately $13.21 billion and $11.65 billion, respectively, compared to its contractual value of $12.58 billion and $12.08 billion, respectively. The estimated fair value of our long-term debt is based on recent trades, if available, and indicative pricing from market information (level 2 inputs).

Note 9 — Derivative Instruments

In August 2018, the Company entered into interest rate swap agreements (the "IR Swaps"), which qualified and were designated as fair value hedges, swapping fixed-rate for variable-rate interest to hedge changes in the fair value of the SCL Senior Notes. These IR Swaps have a total notional value of $5.50 billion and expire in August 2020.

The total fair value of the IR Swaps as of December 31, 2019 was $81 million. In the accompanying consolidated balance sheets, $34 million was recorded as an asset in other assets, net with an equal corresponding adjustment recorded against the carrying value of the SCL Senior Notes. The fair value of the IR Swaps was estimated using level 2 inputs from recently reported market forecasts of interest rates. Gains and losses due to changes in fair value of the IR Swaps completely offset changes in the fair value of the hedged portion of the underlying debt. Additionally, for the years ended December 31, 2019 and 2018, the Company recorded $23 million and $9 million, respectively, as a reduction to interest expense related to the realized amount associated with the IR Swaps.

Note 10 — Equity

Preferred Stock

The Company is authorized to issue up to 50,000,000 shares of preferred stock. The Company's Board of Directors is authorized, subject to limitations prescribed by Nevada law and the Company's articles of incorporation, to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares. The Company's Board of Directors also is authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders.

Common Stock

Dividends

On March 28, June 27, September 26 and December 26, 2019, the Company paid a dividend of $0.77 per common share as part of a regular cash dividend program. During the year ended December 31, 2019, the Company recorded $2.37 billion as a distribution against retained earnings (of which $1.33 billion related to the Principal Stockholder and his family and the remaining $1.04 billion related to all other stockholders).

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On March 30, June 28, September 27 and December 27, 2018, the Company paid a dividend of $0.75 per common share as part of a regular cash dividend program. During the year ended December 31, 2018, the Company recorded $2.35 billion as a distribution against retained earnings (of which $1.30 billion related to the Principal Stockholder and his family and the remaining $1.05 billion related to all other stockholders).

On March 31, June 30, September 29 and December 29, 2017, the Company paid a dividend of $0.73 per common share as part of a regular cash dividend program. During the year ended December 31, 2017, the Company recorded $2.31 billion as a distribution against retained earnings (of which $1.26 billion related to the Principal Stockholder and his family and the remaining $1.05 billion related to all other stockholders).

In January 2020, as part of a regular cash dividend program, the Company's Board of Directors declared a quarterly dividend of $0.79 per common share (a total estimated to be approximately $603 million) to be paid on March 26, 2020, to stockholders of record on March 18, 2020.

Share Repurchases

In November 2016, the Company's Board of Directors authorized the repurchase of $1.56 billion of its outstanding common stock, which was to expire in November 2018. In June 2018, the Company's Board of Directors authorized increasing the remaining repurchase amount of $1.11 billion to $2.50 billion and extending the expiration date to November 2020. Repurchases of the Company's common stock are made at the Company's 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 the Company's financial position, earnings, legal requirements, other investment opportunities and market conditions. During the years ended December 31, 2019, 2018 and 2017, the Company repurchased 12,556,635, 14,998,127 and 6,194,137 shares, respectively, of its common stock for $754 million, $905 million and $375 million, respectively, (including commissions) under the Company's current program. All share repurchases of the Company's common stock have been recorded as treasury stock.

In addition to the shares repurchased under the share repurchase program, during the years ended December 31, 2019 and 2018, the Company repurchased 1,927 and 46,493 shares, respectively, in satisfaction of tax withholding and exercise price obligations on stock option exercises.

Rollforward of Shares of Common Stock

A summary of the outstanding shares of common stock is as follows:



Balance as of January 1, 2017	794,960,092
Exercise of stock options	617,612
Issuance of restricted stock	37,270
Vesting of restricted stock units	64,150
Repurchase of common stock	(6,194,137	)
Balance as of December 31, 2017	789,484,987
Exercise of stock options	1,007,551
Issuance of restricted stock	10,296
Vesting of restricted stock units	5,000
Repurchase of common stock	(15,044,620	)
Balance as of December 31, 2018	775,463,214
Exercise of stock options	569,224
Issuance of restricted stock	11,039
Repurchase of common stock	(12,558,562	)
Balance as of December 31, 2019	763,484,915

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Noncontrolling Interests

SCL

On February 22 and June 21, 2019, SCL paid a dividend of 0.99 Hong Kong dollars ("HKD") and HKD 1.00 per share, respectively, to SCL shareholders (a total of $2.05 billion, of which the Company retained $1.44 billion during the year ended December 31, 2019).

On February 23 and June 22, 2018, SCL paid a dividend of HKD 0.99 and HKD 1.00 per share, respectively, to SCL shareholders (a total of $2.05 billion, of which the Company retained $1.44 billion during the year ended December 31, 2018).

On February 24 and June 23, 2017, SCL paid a dividend of HKD 0.99 and HKD 1.00 per share, respectively, to SCL shareholders (a total of $2.07 billion, of which the Company retained $1.45 billion during the year ended December 31, 2017).

In January 2020, the Board of Directors of SCL declared a dividend of HKD 0.99 per share (a total of $1.03 billion, of which the Company will retain approximately $720 million) to SCL shareholders of record on February 5, 2020, which will be paid on February 21, 2020.

Other

During the years ended December 31, 2019, 2018 and 2017, the Company distributed $17 million, $12 million and $13 million, respectively, to certain of its noncontrolling interests. Of the amount distributed in 2019, $11 million related to payments to the Company's minority interest partners to purchase their interests in connection with the sale of Sands Bethlehem.

Note 11 — Income Taxes

Consolidated income before taxes and noncontrolling interests for domestic and foreign operations is as follows:



	Year Ended December 31,
	2019		2018		2017
	(In millions)
Foreign	$	3,145	$	3,164	$	2,806
Domestic	627		162		248
Total income before income taxes	$	3,772	$	3,326	$	3,054

The components of the income tax expense (benefit) are as follows:



	Year Ended December 31,
	2019			2018			2017
	(In millions)
Foreign:
Current	$	245		$	245		$	258
Deferred	(10		)	(12		)	12
Federal:
Current	33			15			30
Deferred	145			135			(509		)
State:
Current	33			2			—
Deferred	22			(10		)	—
Total income tax expense (benefit)	$	468		$	375		$	(209	)

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The reconciliation of the statutory federal income tax rate and the Company's effective tax rate is as follows:



	Year Ended December 31,
	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%
Increase (decrease) in tax rate resulting from:
Tax exempt income of foreign subsidiary	(8.0	)%	(8.3	)%	(7.9	)%
Foreign and U.S. tax rate differential	(5.6	)%	(6.5	)%	(18.8	)%
Change in valuation allowance	2.7	%	4.5	%	18.3	%
Repatriation of foreign earnings	—	%	—	%	72.1	%
U.S. foreign tax credits	—	%	—	%	(105.9	)%
Other, net	2.3	%	0.6	%	0.4	%
Effective tax rate	12.4	%	11.3	%	(6.8	)%

The Company enjoys an income tax exemption in Macao that exempts the Company from paying corporate income tax on profits generated by gaming operations. The Company will continue to benefit from this tax exemption through June 26, 2022, the date VML's subconcession agreement expires. Had the Company not received the income tax exemption in Macao, consolidated net income attributable to LVSC would have been reduced by $200 million, $184 million and $158 million, and diluted earnings per share would have been reduced by $0.26, $0.23 and $0.20 per share for the years ended December 31, 2019, 2018 and 2017, respectively. In April 2019, the Company entered into a renewed agreement with the Macao government, which is effective through June 26, 2022, and provides for an annual payment of 38 million patacas (approximately $5 million at exchange rates in effect on December 31, 2019) as a substitution for a 12% tax otherwise due from VML shareholders on dividend distributions paid from VML gaming profits. In September 2013, the Company and the Internal Revenue Service entered into a Pre-Filing Agreement providing the Macao special gaming tax (35% of gross gaming revenue) qualifies as a tax paid in lieu of an income tax and could be claimed as a U.S. foreign tax credit.

The Company's foreign and U.S. tax rate differential reflects the fact that U.S. tax rates are higher than the statutory tax rates in Singapore and Macao of 17% and 12%, respectively.

The Tax Cuts and Jobs Act (the "Act" or "U.S. tax reform") made significant changes to U.S. income tax laws including lowering the U.S. corporate tax rate to 21% effective beginning in 2018 and transitioning from a worldwide tax system to a territorial tax system resulting in dividends from the Company's foreign subsidiaries not being subject to U.S. income tax and therefore, no longer generating U.S. foreign tax credits. As a result, during the year ended December 31, 2017, the Company recorded a tax benefit of $526 million relating to the reduction of the valuation allowance on certain deferred tax assets previously determined not likely to be utilized and also the revaluation of its U.S. deferred tax liabilities at the reduced corporate income tax rate of 21%. The Company recorded this impact of enactment of U.S. tax reform subject to Staff Accounting Bulletin 118, which provided for a twelve-month measurement period to complete the accounting required under Accounting Standards Codification 740, Income Taxes.

During the year ended December 31, 2018, the Company recorded a tax expense of $57 million resulting from recently issued guidance by the Internal Revenue Service ("IRS") related to certain international provisions of U.S. tax reform.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The primary tax affected components of the Company's net deferred tax assets are as follows:



	December 31,
	2019			2018
	(In millions)
Deferred tax assets:
U.S. foreign tax credit carryforwards	$	4,791		$	4,919
Net operating loss carryforwards	283			271
Accrued expenses	23			16
Stock-based compensation	15			13
Allowance for doubtful accounts	14			16
Deferred gain on mall sale transactions	13			14
Pre-opening expenses	9			11
State deferred items	—			10
Other	1			1
	5,149			5,271
Less — valuation allowances	(4,786		)	(4,769		)
Total deferred tax assets	363			502
Deferred tax liabilities:
Property and equipment	(251		)	(245		)
Prepaid expenses	(5		)	(3		)
Other	(8		)	(77		)
Total deferred tax liabilities	(264		)	(325		)
Deferred tax assets, net	$	99		$	177

U.S. tax reform required the Company to compute a one-time mandatory tax on the previously unremitted earnings of its foreign subsidiaries during the year ended December 31, 2017. This one-time deemed repatriation of these earnings did not result in a cash tax liability for the Company as the incremental U.S. taxable income was fully offset by the utilization of the U.S. foreign tax credits generated as a result of the deemed repatriation. In addition, the deemed repatriation generated excess U.S. foreign tax credits, which were carried forward to tax years 2018 and beyond. The Company's U.S. foreign tax credit carryforwards were $4.84 billion and $4.99 billion as of December 31, 2019 and 2018, respectively, which will begin to expire in 2022. The Company's state net operating loss carryforward was $232 million as of December 31, 2018. As a result of the sale of Sands Bethlehem, the Company had no state net operating loss carryforward as of December 31, 2019. There was a valuation allowance of $4.51 billion and $4.50 billion as of December 31, 2019 and 2018, respectively, provided on certain net U.S. deferred tax assets, as the Company believes these assets do not meet the "more-likely-than-not" criteria for recognition. Net operating loss carryforwards for the Company's foreign subsidiaries were $2.31 billion and $2.21 billion as of December 31, 2019 and 2018, respectively, which began to expire in 2020. There are valuation allowances of $279 million and $268 million as of December 31, 2019 and 2018, respectively, provided on the net deferred tax assets of certain foreign jurisdictions, as the Company believes these assets do not meet the "more-likely-than-not" criteria for recognition.

Undistributed earnings of subsidiaries are accounted for as a temporary difference, except deferred tax liabilities are not recorded for undistributed earnings of foreign subsidiaries deemed to be indefinitely reinvested in foreign jurisdictions. U.S. tax reform required the Company to compute a tax on previously unremitted earnings of its foreign subsidiaries upon transition from a worldwide tax system to a territorial tax system during the year ended December 31, 2017. The Company expects these earnings to be exempt from U.S. income tax if distributed as these earnings were taxed during the year ended December 31, 2017, under U.S. tax reform. The Company does not consider current year's tax earnings and profits of its foreign subsidiaries to be indefinitely reinvested. Beginning with the year ended December 31, 2015, the Company's major foreign subsidiaries distributed, and may continue to distribute, earnings in excess of their current year's tax earnings and profits in order to meet the Company's liquidity needs. As of December 31,

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2019, the amount of earnings and profits of foreign subsidiaries the Company does not intend to repatriate was $3.52 billion. The Company does not expect withholding taxes or other foreign income taxes to apply should these earnings be distributed in the form of dividends or otherwise.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits, is as follows:



	December 31,
	2019		2018		2017
	(In millions)
Balance at the beginning of the year	$	118	$	92	$	74
Additions to tax positions related to prior years	1		2		1
Additions to tax positions related to current year	15		24		18
Lapse in statutes of limitations	—		—		(1		)
Balance at the end of the year	$	134	$	118	$	92

As of December 31, 2019, 2018 and 2017, unrecognized tax benefits of $53 million, $67 million and $62 million, respectively, were recorded as reductions to the U.S. foreign tax credit deferred tax asset. As of December 31, 2019, 2018 and 2017, unrecognized tax benefits of $81 million, $51 million and $30 million, respectively, were recorded in other long-term liabilities.

Included in the unrecognized tax benefit balance as of December 31, 2019, 2018 and 2017, are $115 million, $103 million and $80 million, respectively, of uncertain tax benefits that would affect the effective income tax rate if recognized.

The Company's major tax jurisdictions are the U.S., Macao and Singapore. The Company could be subject to examination for tax years beginning 2010 in the U.S. and tax years beginning in 2015 in Macao and Singapore. The Company believes it has adequately reserved for its uncertain tax positions; however, there is no assurance the taxing authorities will not propose adjustments that are different from the Company's expected outcome and it could impact the provision for income taxes.

The Company recognizes interest and penalties, if any, related to unrecognized tax positions in the provision for income taxes in the accompanying consolidated statement of operations. Interest and penalties of $5 million, $3 million and $1 million were accrued as of December 31, 2019, 2018 and 2017, respectively. The Company does not expect a significant increase or decrease in unrecognized tax benefits over the next twelve months.

Note 12 — Fair Value Measurements

Under applicable accounting guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance also establishes a valuation hierarchy for inputs in measuring fair value that maximizes the use of observable inputs (inputs market participants would use based on market data obtained from sources independent of the Company) and minimizes the use of unobservable inputs (inputs that reflect the Company's assumptions based upon the best information available in the circumstances) by requiring the most observable inputs be used when available. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the assets or liabilities, either directly or indirectly. Level 3 inputs are unobservable inputs for the assets or liabilities. Categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Cash equivalents, which are short-term investments with original maturities of less than 90 days, had an estimated fair value of $2.26 billion and $2.64 billion as of December 31, 2019 and 2018, respectively. The estimated fair value of the Company's cash equivalents is based on level 1 inputs (quoted market prices in active markets).

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 13 — Mall Activities

The Grand Canal Shoppes at The Venetian Resort Las Vegas

In April 2004, the Company entered into an agreement to sell the portion of the Grand Canal Shoppes located within The Venetian Tower (formerly referred to as "The Grand Canal Shoppes") and lease certain restaurant and other retail space at the casino level of The Venetian Tower (the "Master Lease") to GGP for approximately $766 million (the "Mall Sale"). The Mall Sale closed in May 2004, and the Company realized a gain of $418 million in connection with the Mall Sale. Under the Master Lease agreement, the Company leased nineteen retail and restaurant spaces on the casino level within The Venetian Tower to GGP for 89 years with annual rent of one dollar and GGP assumed the various tenant operating leases for those spaces. In accordance with related accounting standards, the Master Lease agreement does not qualify as a sale of the real property assets, which real property was not separately legally demised. Accordingly, $109 million of the transaction has been deferred as prepaid operating lease payments to the Company, which will amortize into income on a straight-line basis over the 89-year lease term. During each of the years ended December 31, 2019, 2018 and 2017, $1 million of this deferred item was amortized and included in convention, retail and other revenue. In addition, the Company agreed with GGP to: (i) continue to be obligated to fulfill certain lease termination and asset purchase agreements; (ii) lease theater space located within The Grand Canal Shoppes from GGP for a period of 25 years with fixed minimum rent of $3 million per year with cost of living adjustments; (iii) operate the Gondola ride under an operating agreement for a period of 25 years for an annual fee of $4 million; and (iv) lease certain office space from GGP for a period of 10 years, subject to extension options, with annual rent of approximately $1 million. The lease payments under clauses (ii) through (iv) above are subject to automatic increases beginning on the sixth lease year. In accordance with related accounting standards, a portion of the transaction must be deferred in an amount equal to the present value of the minimum lease payments set forth in the lease back agreements. This deferred gain will be amortized to reduce lease expense on a straight-line basis over the lives of the leases. During each of the years ended December 31, 2019, 2018 and 2017, $3 million of this deferred item was amortized as an offset to convention, retail and other expense.

The Shoppes at The Palazzo

The Company contracted to sell a portion of the Grand Canal Shoppes located within The Palazzo Tower (formerly referred to as The Shoppes at The Palazzo) to GGP pursuant to a purchase and sale agreement dated as of April 12, 2004, as amended (the "Amended Agreement") and under the terms of the settlement with GGP on June 24, 2011, the Company retained $295 million of proceeds received and participates in certain potential future revenues earned by GGP. Pursuant to the Amended Agreement, the Company agreed with GGP to lease certain spaces located within The Shoppes at The Palazzo. As the transaction has not been accounted for as a sale in accordance with related accounting standards, $225 million of the mall sale transaction has been recorded as deferred proceeds from the sale as of December 31, 2019, which accrues interest at an imputed interest rate, offset by (i) imputed rental income and (ii) rent payments made to GGP related to those spaces leased back from GGP.

In the Amended Agreement, the Company agreed to lease certain restaurant and retail space on the casino level of The Palazzo Tower to GGP pursuant to a master lease agreement ("The Palazzo Master Lease"). Under The Palazzo Master Lease, which was executed concurrently with, and as a part of, the closing on the sale of The Shoppes at The Palazzo to GGP on February 29, 2008, the Company leased nine restaurant and retail spaces on the casino level within The Palazzo Tower to GGP for 89 years with annual rent of one dollar and GGP assumed the various tenant operating leases for those spaces. In accordance with related accounting standards, The Palazzo Master Lease does not qualify as a sale of the real property assets, which real property was not separately legally demised. Accordingly, $23 million of the mall sale transaction has been deferred as prepaid operating lease payments to the Company, which will amortize into income on a straight-line basis over the 89-year lease term.

Note 14 — Leases

Lessee

The Company has operating and finance leases for various real estate (including the Macao and Singapore leasehold interests in land) and equipment. Certain of our lease agreements include rental payments based on a percentage of

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage. The Company’s leases include options to extend the lease term by one month to 40 years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases recorded on the balance sheet consist of the following (excluding the Macao and Singapore leasehold interests in land assets; see "Note 5 — Leasehold Interests in Land, Net"):



Leases	Classification on the Balance Sheet	December 31, 2019
		(In millions)
Assets
Operating lease ROU assets	Other assets, net	$	190
Finance lease ROU assets	Property and equipment, net(1)	$	17
Liabilities
Current
Operating	Other accrued liabilities	$	28
Finance	Current maturities of long-term debt	$	8
Noncurrent
Operating	Other long-term liabilities	$	305
Finance	Long-term debt	$	9


(1)	Finance lease ROU assets are recorded net of accumulated depreciation of $6 million as of December 31, 2019.

The cost and accumulated depreciation of property and equipment the Company is leasing under capital lease arrangements was $40 million and $24 million, respectively, as of December 31, 2018.

Other information related to lease term and discount rate is as follows:



	December 31, 2019
Weighted Average Remaining Lease Term
Operating leases	31.6 years
Finance leases	2.3 years
Weighted Average Discount Rate
Operating leases(1)	4.6	%
Finance leases	3.8	%


(1)	Upon adoption of the new lease standard, discount rates used for existing operating leases were established on January 1, 2019.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The components of lease expense are as follows:



	Year Ended December 31, 2019
	(In millions)
Operating lease cost:
Amortization of leasehold interests in land	$	51
Operating lease cost	34
Short-term lease cost	19
Variable lease cost	5
Finance lease cost:
Amortization of ROU assets	5
Interest on lease liabilities	1
Total lease cost	$	115

Expenses incurred under operating lease agreements, including amortization of leasehold interest in land and those that are short-term and variable in nature, totaled $94 million and $116 million for the years ended December 31, 2018 and 2017, respectively.

Supplemental cash flow information related to leases is as follows:



	Year Ended December 31, 2019
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	40
Operating cash flows for finance leases	$	1
Financing cash flows for finance leases	$	5
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	14
Finance leases	$	17

Property and equipment acquired under capital leases was $1 million for the year ended December 31, 2018.

Maturities of lease liabilities are summarized as follows:



	Operating Leases			Finance Leases
	(In millions)
Year ending December 31,
2020	$	36		$	9
2021	29			7
2022	26			2
2023	24			—
2024	23			—
Thereafter	535			—
Total future minimum lease payments	673			18
Less — amount representing interest	(340		)	(1		)
Present value of future minimum lease payments	333			17
Less — current lease obligations	(28		)	(8		)
Long-term lease obligations	$	305		$	9

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Lessor

The Company leases space at several of its Integrated Resorts to various third parties as part of its mall operations, as well as retail, office space and land that are recorded within convention, retail and other revenues. These leases are non-cancelable operating leases with remaining lease periods that vary from one month to 50 years. The leases include minimum base rents with escalated contingent rent clauses.

Lease revenue consists of the following:



	Year Ended December 31, 2019
	Mall		Other
	(In millions)
Minimum rents	$	518	$	15
Overage rents	98		2
	$	616	$	17

Overage rents amounted to $88 million and $48 million for the years ended December 31, 2018 and 2017, respectively.

Future minimum rentals (excluding the escalated contingent rent clauses) on non-cancelable leases are as follows:



	Mall		Other
	(In millions)
Year ending December 31,
2020	$	491	$	9
2021	398		10
2022	295		6
2023	140		5
2024	94		3
Thereafter	111		5
Total minimum future rentals	$	1,529	$	38

The cost and accumulated depreciation of property and equipment the Company is leasing to third parties is as follows:



	December 31,
	2019			2018
	(In millions)
Property and equipment, at cost	$	1,320		$	1,361
Accumulated depreciation	(532		)	(469		)
Property and equipment, net	$	788		$	892

Significant Impacts of Adoption

The Company adopted the new lease standard on January 1, 2019, on a prospective basis, forgoing comparative reporting. The Company elected to utilize the transition guidance within the new standard, which allows the Company to carryforward the historical lease classification. The Company elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee and made an accounting policy election to not account for leases with an initial term of 12 months or less on the balance sheet. Adoption of the standard resulted in the recording of additional ROU assets and lease liabilities for operating leases of $337 million as of January 1, 2019. The adoption of this guidance did not have an impact on net income.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 15 — Commitments and Contingencies

Litigation

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

Asian American Entertainment Corporation, Limited v. Venetian Macau Limited, et al.

On February 5, 2007, Asian American Entertainment Corporation, Limited (“AAEC” or “Plaintiff”) brought a claim (the “Prior Action”) in the U.S. District Court for the District of Nevada (the “U.S. District Court”) against Las Vegas Sands, Inc. (now known as Las Vegas Sands, LLC (“LVSLLC”)), Venetian Casino Resort, LLC (“VCR”) and Venetian Venture Development, LLC, which are subsidiaries of the Company, and William P. Weidner and David Friedman, who are former executives of the Company. The Prior Action sought damages based on an alleged breach of agreements entered into between AAEC and the aforementioned defendants for their joint presentation of a bid in response to the public tender held by the Macao government for the award of gaming concessions at the end of 2001. The U.S. District Court entered an order dismissing the Prior Action on April 16, 2010.

On January 19, 2012, AAEC filed another claim (the “Macao Action”) with the Macao Judicial Court (Tribunal Judicial de Base) against VML, LVS (Nevada) International Holdings, Inc. (“LVS (Nevada)”), LVSLLC and VCR (collectively, the “Defendants”). The claim was for 3.0 billion patacas (approximately $374 million at exchange rates in effect on December 31, 2019). The Macao Action alleges a breach of agreements entered into between AAEC and LVS (Nevada), LVSLLC and VCR (collectively, the “U.S. Defendants”) for their joint presentation of a bid in response to the public tender held by the Macao government for the award of gaming concessions at the end of 2001. On July 4, 2012, the Defendants filed their defense to the Macao Action with the Macao Judicial Court and amended the defense on January 4, 2013.

On March 24, 2014, the Macao Judicial Court issued a Decision (Despacho Seneador) holding that AAEC’s claim against VML is unfounded and that VML be removed as a party to the proceedings, and the claim should proceed exclusively against the U.S. Defendants. On May 8, 2014, AAEC lodged an appeal against that decision.

On June 5, 2015, the U.S. Defendants applied to the Macao Judicial Court to dismiss the claims against them as res judicata based on the dismissal of the Prior Action. On March 16, 2016, the Macao Judicial Court dismissed the defense of res judicata. An appeal against that decision was lodged by U.S. Defendants on April 7, 2016. As of the end of December 2016, all appeals (including VML’s dismissal and the res judicata appeals) were being transferred to the Macao Second Instance Court. On May 11, 2017, the Macao Second Instance Court notified the parties of its decision of refusal to deal with the appeals at the present time. The Macao Second Instance Court ordered the court file be transferred back to the Macao Judicial Court. Evidence gathering by the Macao Judicial Court commenced by letters rogatory, which was completed on March 14, 2019, and the trial of this matter was scheduled for September 2019.

On July 15, 2019, AAEC submitted a request to the Macao Judicial Court to increase the amount of its claim to 96.45 billion patacas (approximately $12.02 billion at exchange rates in effect on December 31, 2019), allegedly representing lost profits from 2004 to 2018, and reserving its right to claim for lost profits up to 2022 in due course at the enforcement stage.

On September 2, 2019, the U.S. Defendants moved to revoke the legal aid granted to AAEC, which excuses AAEC from paying its share of court costs. On September 4, 2019, the Macao Judicial Court deferred ruling on the U.S. Defendants’ motion regarding legal aid until the entry of final judgment. The U.S. Defendants appealed that deferral on September 17, 2019. On September 26, 2019, the Macao Judicial Court rejected that appeal on procedural grounds; The U.S. Defendants requested clarification of that order on October 29, 2019. By order dated December 4, 2019, the Macao Judicial Court stated that it would reconsider the U.S. Defendants’ motion to revoke legal aid and, as part of that reconsideration, that it would reanalyze portions of the record, seek an opinion from the Macau Public Prosecutor regarding the propriety of legal aid, and consult with the trial court overseeing AAEC’s separate litigation against

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Galaxy Entertainment Group Ltd., Galaxy Entertainment Group S.A., and Messrs. Weidner and Friedman individually. The court has not yet issued its final opinion on this motion.

On September 4, 2019, the Macao Judicial Court allowed AAEC’s request to increase the amount of its claim. On September 17, 2019, the U.S. Defendants appealed the decision granting AAEC’s request. On September 26, 2019, the Macao Judicial Court accepted that appeal and it is currently pending. On September 10, 2019, AAEC moved to reschedule the trial of the Macao Action, which had been scheduled to begin on September 12, 2019. The Macao Judicial Court granted that motion and rescheduled the trial to begin on September 16, 2020.

The Macao Action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.

Macao Subconcession

Under the Macao subconcession, the Company is obligated to pay to the Macao government an annual premium with a fixed portion and a variable portion based on the number and type of gaming tables it employs and gaming machines it operates. The fixed portion of the premium is equal to 30 million patacas (approximately $4 million at exchange rates in effect on December 31, 2019). The variable portion is equal to 300,000 patacas per gaming table reserved exclusively for certain kinds of games or players, 150,000 patacas per gaming table not so reserved and 1,000 patacas per electrical or mechanical gaming machine, including slot machines (approximately $37,399, $18,700 and $125, respectively, at exchange rates in effect on December 31, 2019), subject to a minimum of 45 million patacas (approximately $6 million at exchange rates in effect on December 31, 2019). The Company is also obligated to pay a special gaming tax of 35% of gross gaming revenues and applicable withholding taxes. The Company must also contribute 4% of its gross gaming revenue to utilities designated by the Macao government, a portion of which must be used for promotion of tourism in Macao. Based on the number and types of gaming tables employed and gaming machines in operation as of December 31, 2019, the Company was obligated under its subconcession to make minimum future payments of approximately $42 million during each of the two years in the period ending December 31, 2021, and approximately $21 million during the year ending December 31, 2022.

Note 16 — Stock-Based Employee Compensation

The Company has two equity award plans for grants of options to purchase the Company's common stock and ordinary shares of SCL (the "2004 Plan" and the "SCL Equity Plan," respectively), which are described below. The plans provide for the granting of equity awards pursuant to the applicable provisions of the Internal Revenue Code and regulations.

Las Vegas Sands Corp. 2004 Equity Award Plan

The 2004 Plan gives the Company a competitive edge in attracting, retaining and motivating employees, directors and consultants and to provide the Company with a stock plan providing incentives directly related to increases in its stockholder value. Any of the Company's subsidiaries' or affiliates' employees, directors or officers and many of its consultants are eligible for awards under the 2004 Plan. The 2004 Plan provided for an aggregate of 26,344,000 shares of the Company's common stock to be available for awards. The 2004 Plan originally had a term of ten years, but in June 2014, the Company's Board of Directors approved an amendment to the 2004 Plan, extending the term to December 2019. In May 2019, the Board of Directors and stockholders approved the adoption of the Las Vegas Sands Corp. Amended and Restated 2004 Equity Award Plan (the “Amended 2004 Plan”), which extended the term of the Amended 2004 Plan through December 2024, and increased the number of shares of common stock available for grants by 10,000,000 shares. The compensation committee may grant awards of nonqualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards or any combination of the foregoing. As of December 31, 2019, there were 9,777,920 shares available for grant under the Amended 2004 Plan.

Stock option awards are granted with an exercise price equal to the fair market value (as defined in the Amended 2004 Plan) of the Company's stock on the date of grant. The outstanding stock options generally vest over three to four

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

years and have ten-year contractual terms. Compensation cost for all stock option grants, which all have graded vesting, is recognized on a straight-line basis over the awards' respective requisite service periods. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. Expected volatilities are based on the Company's historical volatility for a period equal to the expected life of the stock options. The expected option life is based on the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate for periods equal to the expected term of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the estimate of annual dividends expected to be paid at the time of the grant.

Sands China Ltd. Equity Award Plan

The SCL Equity Plan gives SCL a competitive edge in attracting, retaining and motivating employees, directors and consultants and to provide SCL with a stock plan providing incentives directly related to increases in its stockholder value. Subject to certain criteria as defined in the SCL Equity Plan, SCL's subsidiaries' or affiliates' employees, directors or officers and many of its consultants are eligible for awards under the SCL Equity Plan.

The SCL 2009 Equity Plan provided for an aggregate of 804,786,508 shares of SCL's common stock to be available for awards. The SCL 2009 Equity Plan had a term of ten years, which expired on November 30, 2019, and no further awards may be granted after the expiration of the term. All existing awards previously granted under the SCL 2009 Equity Plan, but which are unexercised or unvested, will remain valid and (where applicable) exercisable in accordance with their terms of grant despite the expiration of the SCL 2009 Equity Plan. SCL's remuneration committee may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards or any combination of the foregoing. Effective December 1, 2019, the SCL 2019 Equity Plan was approved by shareholders, with materially the same terms of the SCL 2009 Equity Plan. As of December 31, 2019, there were 808,619,139 shares available for grant under the SCL 2019 Equity Plan.

Stock option awards are granted with an exercise price not less than (i) the closing price of SCL's stock on the date of grant or (ii) the average closing price of SCL's stock for the five business days immediately preceding the date of grant. The outstanding stock options generally vest over four years and have ten-year contractual terms. Compensation cost for all stock option grants, which all have graded vesting is recognized on a straight-line basis over the awards' respective requisite service periods. SCL estimates the fair value of stock options using the Black-Scholes option-pricing model. Expected volatilities are based on SCL's historical volatility for a period equal to the expected life of the stock options. The expected option life is based on the contractual term of the option as well as historical exercise and forfeiture behavior. The risk-free interest rate for periods equal to the expected term of the stock option is based on the Hong Kong Government Bond rate in effect at the time of the grant. The expected dividend yield is based on the estimate of annual dividends expected to be paid at the time of the grant.

Under the SCL 2019 Equity Plan, SCL granted restricted share units to eligible employees. Each grant will vest over a three-year period. Employees are entitled to a future cash payment that is equivalent to the fair value of the restricted share unit and any accumulated dividends in cash upon vesting.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Stock-Based Employee Compensation Activity

The fair value of each option grant was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:



	Year Ended December 31,
	2019		2018		2017
LVSC Amended 2004 Plan:
Weighted average volatility	24.1	%	25.8	%	26.7	%
Expected term (in years)	5.5		6.7		5.1
Risk-free rate	2.1	%	2.9	%	1.9	%
Expected dividend yield	5.2	%	5.7	%	4.7	%
SCL Equity Plan:
Weighted average volatility	36.9	%	36.0	%	36.9	%
Expected term (in years)	4.8		4.7		4.4
Risk-free rate	1.7	%	1.7	%	1.3	%
Expected dividend yield	5.0	%	5.8	%	6.6	%

A summary of the stock option activity for the Company's equity award plans for the year ended December 31, 2019, is presented below:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in millions)
LVSC Amended 2004 Plan:
Outstanding as of January 1, 2019	7,956,364		$	55.10
Granted	1,204,145		59.42
Exercised	(569,224	)	44.45
Forfeited or expired	(75,430	)	65.10
Outstanding as of December 31, 2019	8,515,855		$	56.33	7.26	$	112
Exercisable as of December 31, 2019	3,672,863		$	57.85	5.54	$	43
SCL Equity Plan:
Outstanding as of January 1, 2019	57,382,375		$	4.81
Granted	19,409,600		5.08
Exercised	(7,748,525	)	3.65
Forfeited or expired	(4,169,300	)	5.35
Outstanding as of December 31, 2019	64,874,150		$	4.99	7.49	$	41
Exercisable as of December 31, 2019	22,214,150		$	5.10	5.95	$	18

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

A summary of the unvested restricted stock and restricted stock units under the Company's equity award plans for the year ended December 31, 2019, is presented below:



	Shares		Weighted Average Grant Date Fair Value
LVSC Amended 2004 Plan:
Unvested Restricted Stock
Balance as of January 1, 2019	41,703		$	55.77
Granted	11,039		63.40
Vested	(33,405	)	55.84
Balance as of December 31, 2019	19,337		$	60.00
SCL Equity Plan:
Unvested Restricted Stock Units
Balance as of January 1, 2019	—		$	—
Granted	1,412,400		4.99
Forfeited	(5,200	)	4.99
Balance as of December 31, 2019	1,407,200		$	4.99

The grant date fair value of SCL's restricted stock unit awards is the share price of SCL's ordinary shares at the respective grant date. The fair value of these awards is remeasured each reporting period until the vesting dates. Upon settlement, SCL will pay the grantees an amount in cash calculated based on the higher of (i) the closing price of SCL's shares on the vesting date, and (ii) the average closing price of SCL's shares for the five trading days immediately preceding the vesting date. The accrued liability associated with these cash-settled restricted stock units was $1 million as of December 31, 2019.

As of December 31, 2019, under the Amended 2004 Plan there was $24 million of unrecognized compensation cost related to unvested stock options. The stock option costs are expected to be recognized over a weighted average period of 3.7 years.

As of December 31, 2019, under the SCL Equity Plan there was $29 million and $7 million of unrecognized compensation cost related to unvested stock options and unvested restricted stock units, respectively. The stock option and restricted stock unit costs are expected to be recognized over a weighted average period of 2.6 years and 2.7 years, respectively.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The stock-based compensation activity for the Amended 2004 Plan and SCL Equity Plan is as follows for the three years ended December 31, 2019:



	Year Ended December 31,
	2019		2018		2017
	(Dollars in millions, except weighted average grant date fair values)
Compensation expense:
Stock options	$	34	$	29	$	29
Restricted stock and stock units	2		1		5
	$	36	$	30	$	34
Income tax benefit recognized in the consolidated statements of operations	$	4	$	4	$	7
Compensation cost capitalized as part of property and equipment	$	1	$	1	$	—
LVSC Amended 2004 Plan:
Stock options granted	1,204,145		3,124,168		1,027,108
Weighted average grant date fair value	$	7.23	$	7.52	$	8.95
Restricted stock granted	11,039		10,296		37,270
Weighted average grant date fair value	$	63.40	$	77.68	$	58.51
Stock options exercised:
Intrinsic value	$	11	$	16	$	11
Cash received	$	26	$	56	$	28
SCL 2019 Equity Plan:
Stock options granted	19,409,600		18,872,800		17,364,000
Weighted average grant date fair value	$	1.03	$	1.01	$	0.71
Restricted stock units granted	1,412,400		—		—
Weighted average grant date fair value	$	4.99	$	—	$	—
Stock options exercised:
Intrinsic value	$	12	$	12	$	4
Cash received	$	28	$	23	$	12

Note 17 — Related Party Transactions

During the years ended December 31, 2019, 2018 and 2017, the Principal Stockholder and his family purchased certain services from the Company including lodging, banquet services and other goods and services for $2 million, $3 million and $3 million, respectively. For the years ended December 31, 2019, 2018 and 2017, the Company incurred $3 million, $2 million and $1 million, respectively, for food and beverage services provided by restaurants the Principal Stockholder has an ownership interest in.

During the years ended December 31, 2019, 2018 and 2017, the Company incurred certain expenses of $9 million, $6 million and $10 million, respectively, related to the Company's use of its Principal Stockholder's personal aircraft and yacht and aircraft refurbishment and maintenance services for business purposes. During the years ended December 31, 2019, 2018 and 2017, the Company charged the Principal Stockholder $25 million, $20 million and $21 million, respectively, related to aviation costs incurred by the Company for the Principal Stockholder's use of Company aviation personnel and assets for personal purposes. In addition, the Principal Stockholder agreed to reimburse the Company for the installation of avionics and aircraft systems on his personal aircraft. During the years ended December 31, 2019 and 2018, the Company paid $9 million and $13 million, respectively, for such costs and was reimbursed in full by the Principal Stockholder.

Related party receivables were $3 million as of December 31, 2019 and 2018. Related party payables were $2 million and less than $1 million as of December 31, 2019 and 2018, respectively.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 18 — Segment Information

The Company's principal operating and developmental activities occur in three geographic areas: Macao, Singapore and the U.S. The Company reviews the results of operations for each of its operating segments: The Venetian Macao; Sands Cotai Central; The Parisian Macao; The Plaza Macao and Four Seasons Hotel Macao; Sands Macao; Marina Bay Sands; Las Vegas Operating Properties; and, through May 30, 2019, Sands Bethlehem. The Company also reviews construction and development activities for each of its primary projects currently under development, in addition to its reportable segments noted above, which include the renovation, expansion and rebranding of Sands Cotai Central to The Londoner Macao, The Grand Suites at Four Seasons and The Londoner Tower Suites in Macao, and the Las Vegas Condo Tower (for which construction currently is suspended) in the United States. The Company has included Ferry Operations and Other (comprised primarily of the Company's ferry operations and various other operations that are ancillary to its properties in Macao) to reconcile to consolidated results of operations and financial condition. The Company has included Corporate and Other (which includes the Las Vegas Condo Tower and corporate activities of the Company) to reconcile to the consolidated financial condition.

The Company's segment information as of and for the years ended December 31, 2019, 2018 and 2017, is as follows:



	Casino		Rooms		Food and Beverage		Mall			Convention, Retail and Other			Net Revenues
Year Ended December 31, 2019	(In millions)
Macao:
The Venetian Macao	$	2,875	$	222	$	73	$	254		$	86		$	3,510
Sands Cotai Central	1,541		320		97		71			23			2,052
The Parisian Macao	1,376		130		70		53			21			1,650
The Plaza Macao and Four Seasons Hotel Macao	650		41		31		151			4			877
Sands Macao	576		18		27		3			4			628
Ferry Operations and Other	—		—		—		—			117			117
	7,018		731		298		532			255			8,834
Marina Bay Sands	2,167		404		241		185			104			3,101
United States:
Las Vegas Operating Properties	444		610		347		—			417			1,818
Sands Bethlehem(1)	199		7		11		1			9			227
	643		617		358		1			426			2,045
Intercompany eliminations(2)	—		—		—		(2		)	(239		)	(241		)
Total net revenues	$	9,828	$	1,752	$	897	$	716		$	546		$	13,739

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



	Casino		Rooms		Food and Beverage		Mall			Convention, Retail and Other			Net Revenues
Year Ended December 31, 2018
Macao:
The Venetian Macao	$	2,829	$	223	$	81	$	234		$	107		$	3,474
Sands Cotai Central	1,622		331		102		69			29			2,153
The Parisian Macao	1,265		124		65		57			22			1,533
The Plaza Macao and Four Seasons Hotel Macao	502		39		29		145			4			719
Sands Macao	598		17		27		3			5			650
Ferry Operations and Other	—		—		—		—			160			160
	6,816		734		304		508			327			8,689
Marina Bay Sands	2,178		393		211		179			108			3,069
United States:
Las Vegas Operating Properties	357		590		324		—			411			1,682
Sands Bethlehem	468		16		26		4			22			536
	825		606		350		4			433			2,218
Intercompany eliminations(2)	—		—		—		(1		)	(246		)	(247		)
Total net revenues	$	9,819	$	1,733	$	865	$	690		$	622		$	13,729

Year Ended December 31, 2017
Macao:
The Venetian Macao	$	2,362	$	179	$	74	$	220		$	89		$	2,924
Sands Cotai Central	1,433		291		102		63			27			1,916
The Parisian Macao	1,120		128		61		66			20			1,395
The Plaza Macao and Four Seasons Hotel Macao	391		34		28		131			3			587
Sands Macao	574		19		27		—			6			626
Ferry Operations and Other	—		—		—		—			161			161
	5,880		651		292		480			306			7,609
Marina Bay Sands	2,333		358		183		167			93			3,134
United States:
Las Vegas Operating Properties	380		561		325		—			391			1,657
Sands Bethlehem	493		16		28		4			23			564
	873		577		353		4			414			2,221
Intercompany eliminations(2)	—		—		—		—			(236		)	(236		)
Total net revenues	$	9,086	$	1,586	$	828	$	651		$	577		$	12,728


(1)	The Company completed the sale of Sands Bethlehem on May 31, 2019 (see “Note 1 — Organization and Business of Company”). Results of operations include Sands Bethlehem through May 30, 2019.


(2)	Intercompany eliminations include royalties and other intercompany services.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



	Year Ended December 31,
	2019		2018		2017
	(In millions)
Intersegment Revenues
Macao:
The Venetian Macao	$	4	$	4	$	5
Ferry Operations and Other	27		25		23
	31		29		28
Marina Bay Sands	4		9		8
Las Vegas Operating Properties	206		209		200
Total intersegment revenues	$	241	$	247	$	236



	Year Ended December 31,
	2019			2018			2017
	(In millions)
Adjusted Property EBITDA
Macao:
The Venetian Macao	$	1,407		$	1,378		$	1,133
Sands Cotai Central	726			759			633
The Parisian Macao	544			484			413
The Plaza Macao and Four Seasons Hotel Macao	345			262			233
Sands Macao	175			178			174
Ferry Operations and Other	(8		)	18			21
	3,189			3,079			2,607
Marina Bay Sands	1,661			1,690			1,755
United States:
Las Vegas Operating Properties	487			394			391
Sands Bethlehem(1)	52			116			147
	539			510			538
Consolidated adjusted property EBITDA(2)	5,389			5,279			4,900
Other Operating Costs and Expenses
Stock-based compensation(3)	(14		)	(12		)	(14		)
Corporate	(313		)	(202		)	(173		)
Pre-opening	(34		)	(6		)	(8		)
Development	(24		)	(12		)	(13		)
Depreciation and amortization	(1,165		)	(1,111		)	(1,171		)
Amortization of leasehold interests in land	(51		)	(35		)	(37		)
Loss on disposal or impairment of assets	(90		)	(150		)	(20		)
Operating income	3,698			3,751			3,464
Other Non-Operating Costs and Expenses
Interest income	74			59			16
Interest expense, net of amounts capitalized	(555		)	(446		)	(327		)
Other income (expense)	23			26			(94		)
Gain on sale of Sands Bethlehem	556			—			—
Loss on modification or early retirement of debt	(24		)	(64		)	(5		)
Income tax (expense) benefit	(468		)	(375		)	209
Net income	$	3,304		$	2,951		$	3,263

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


(1)	The Company completed the sale of Sands Bethlehem on May 31, 2019 (see “Note 1 — Organization and Business of Company”). Results of operations include Sands Bethlehem through May 30, 2019.

(2)

Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is net income before stock-based compensation expense, corporate expense, pre-opening expense, development expense, depreciation and amortization, amortization of leasehold interests in land, gain or loss on disposal or impairment of assets, interest, other income or expense, gain on sale of Sands Bethlehem, gain or loss on modification or early retirement of debt and income taxes. Consolidated adjusted property EBITDA is a supplemental non-GAAP financial measure used by management, as well as industry analysts, to evaluate operations and operating performance. In particular, management utilizes consolidated adjusted property EBITDA to compare the operating profitability of its operations with those of its competitors, as well as a basis for determining certain incentive compensation. Integrated Resort companies have historically reported adjusted property EBITDA as a supplemental performance measure to GAAP financial measures. In order to view the operations of their properties on a more stand-alone basis, Integrated Resort companies, including Las Vegas Sands Corp., have historically excluded certain expenses that do not relate to the management of specific properties, such as pre-opening expense, development expense and corporate expense, from their adjusted property EBITDA calculations. Consolidated adjusted property EBITDA should not be interpreted as an alternative to income from operations (as an indicator of operating performance) or to cash flows from operations (as a measure of liquidity), in each case, as determined in accordance with GAAP. The Company has significant uses of cash flow, including capital expenditures, dividend payments, interest payments, debt principal repayments and income taxes, which are not reflected in consolidated adjusted property EBITDA. Not all companies calculate adjusted property EBITDA in the same manner. As a result, consolidated adjusted property EBITDA as presented by the Company may not be directly comparable to similarly titled measures presented by other companies.


(3)	During the years ended December 31, 2019, 2018 and 2017, the Company recorded stock-based compensation expense of $36 million, $30 million and $34 million, respectively, of which $22 million, $18 million and $20 million, respectively, was included in corporate expense in the accompanying consolidated statements of operations.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



	Year Ended December 31,
	2019		2018		2017
	(In millions)
Capital Expenditures
Corporate and Other	$	59	$	81	$	9
Macao:
The Venetian Macao	131		180		153
Sands Cotai Central	282		131		86
The Parisian Macao	32		131		204
The Plaza Macao and Four Seasons Hotel Macao	298		63		22
Sands Macao	16		29		10
Ferry Operations and Other	3		1		4
	762		535		479
Marina Bay Sands	195		182		196
United States:
Las Vegas Operating Properties	198		127		123
Sands Bethlehem(1)	2		24		30
	200		151		153
Total capital expenditures	$	1,216	$	949	$	837


(1)	The Company completed the sale of Sands Bethlehem on May 31, 2019 (see “Note 1 — Organization and Business of Company”). Results of operations include Sands Bethlehem through May 30, 2019.



	December 31,
	2019		2018		2017
	(In millions)
Total Assets
Corporate and Other	$	1,390	$	1,296	$	953
Macao:
The Venetian Macao	3,243		3,403		2,640
Sands Cotai Central	4,504		4,295		3,891
The Parisian Macao	2,351		2,455		2,496
The Plaza Macao and Four Seasons Hotel Macao	1,239		883		930
Sands Macao	324		322		282
Ferry Operations and Other	156		259		275
	11,817		11,617		10,514
Marina Bay Sands	5,880		4,674		5,054
United States:
Las Vegas Operating Properties	4,112		4,321		3,530
Sands Bethlehem(1)	—		639		636
	4,112		4,960		4,166
Total assets	$	23,199	$	22,547	$	20,687


(1)	The Company completed the sale of Sands Bethlehem on May 31, 2019 (see “Note 1 — Organization and Business of Company”). Results of operations include Sands Bethlehem through May 30, 2019.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



	December 31,
	2019		2018		2017
	(In millions)
Total Long-Lived Assets(1)
Corporate and Other	$	311	$	281	$	249
Macao:
The Venetian Macao	1,740		1,750		1,728
Sands Cotai Central	3,591		3,414		3,516
The Parisian Macao	2,203		2,317		2,375
The Plaza Macao and Four Seasons Hotel Macao	1,112		772		853
Sands Macao	237		229		222
Ferry Operations and Other	54		130		146
	8,937		8,612		8,840
Marina Bay Sands	5,063		4,148		4,336
United States:
Las Vegas Operating Properties	2,805		2,762		2,779
Sands Bethlehem(2)	—		549		549
	2,805		3,311		3,328
Total long-lived assets	$	17,116	$	16,352	$	16,753


(1)	Long-lived assets include property and equipment, net of accumulated depreciation and amortization, and leasehold interests in land, net of accumulated amortization.


(2)	The Company completed the sale of Sands Bethlehem on May 31, 2019 (see “Note 1 — Organization and Business of Company”). Results of operations include Sands Bethlehem through May 30, 2019.

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Note 19 — Selected Quarterly Financial Results (Unaudited)



	Quarter
	First(1)		Second(2)		Third		Fourth(1)			Total
	(In millions, except per share data)
2019
Net revenues	$	3,646	$	3,334	$	3,250	$	3,509		$	13,739
Operating income	971		894		899		934			3,698
Net income	744		1,108		669		783			3,304
Net income attributable to Las Vegas Sands Corp.	582		954		533		629			2,698
Basic earnings per share	0.75		1.24		0.69		0.82			3.50
Diluted earnings per share	0.75		1.24		0.69		0.82			3.50
2018
Net revenues	$	3,579	$	3,303	$	3,372	$	3,475		$	13,729
Operating income	1,158		797		922		874			3,751
Net income (loss)	1,616		676		699		(40		)	2,951
Net income (loss) attributable to Las Vegas Sands Corp.	1,456		556		571		(170		)	2,413
Basic earnings (loss) per share	1.85		0.70		0.73		(0.22		)	3.07
Diluted earnings (loss) per share	1.84		0.70		0.73		(0.22		)	3.07

(1)

During Q1 2018, the Company recorded a nonrecurring non-cash discrete income tax benefit of $670 million due to the implementation of the Global Intangible Low-Taxed Income ("GILTI") provision of U.S. tax reform. During Q4 2018, the IRS issued guidance clarifying the implementation of the GILTI and other provisions that would impact the foreign tax credit utilization and required an increase of a valuation allowance related to the Company's historical foreign tax credits. As a result, in Q4 2018, the Company recorded a nonrecurring non-cash discrete income tax expense of $727 million.


(2)	During Q2 2019, the Company closed the sale of Sands Bethlehem and recorded a gain on the sale of $556 million.

Because earnings per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total earnings per share amounts for the respective year.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

LAS VEGAS SANDS CORP. AND SUBSIDIARIES

For the Years Ended December 31, 2019**,** 2018 and 2017



Description	Balance at Beginning of Year		Provision for Doubtful Accounts	Write-offs, Net of Recoveries		Balance at End of Year
	(In millions)
Allowance for doubtful accounts:
2017	$	576	96	(230	)	$	442
2018	$	442	5	(123	)	$	324
2019	$	324	30	(72	)	$	282



Description	Balance at Beginning of Year		Additions	Deductions		Balance at End of Year
	(In millions)
Deferred income tax asset valuation allowance:
2017	$	4,197	510	(17	)	$	4,690
2018	$	4,690	105	(26	)	$	4,769
2019	$	4,769	29	(12	)	$	4,786

Previous: Item 7A. — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK · Next: Item 9. — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE