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LAS VEGAS SANDS CORP - Quarter Report: 2018 June (Form 10-Q)

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________ 
Form 10-Q
____________________________________________________ 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-32373
____________________________________________________ 
LAS VEGAS SANDS CORP.
(Exact name of registration as specified in its charter)
____________________________________________________ 
Nevada
 
27-0099920
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
3355 Las Vegas Boulevard South
 
 
Las Vegas, Nevada
 
89109
(Address of principal executive offices)
 
(Zip Code)
(702) 414-1000
(Registrant's telephone number, including area code)
 ____________________________________________________
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
ý
 
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨ (Do not check if a smaller reporting company)
 
Smaller reporting company
 
¨
 
 
 
 
 
 
 
Emerging growth company
 
¨
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date.
Class
  
Outstanding at July 23, 2018
Common Stock ($0.001 par value)
  
788,004,346 shares

Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
Table of Contents
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 6.

2
Table of Contents

PART I FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
June 30,
2018
 
December 31,
2017
 
(In millions, except par value)
(Unaudited)
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
4,350

 
$
2,419

Restricted cash and cash equivalents
12

 
11

Accounts receivable, net
555

 
615

Inventories
44

 
47

Prepaid expenses and other
114

 
115

Total current assets
5,075

 
3,207

Property and equipment, net
15,217

 
15,516

Deferred income taxes, net
1,129

 
493

Leasehold interests in land, net
1,213

 
1,237

Intangible assets, net
81

 
89

Other assets, net
140

 
145

Total assets
$
22,855

 
$
20,687

LIABILITIES AND EQUITY
Current liabilities:
 
 
 
Accounts payable
$
154

 
$
171

Construction payables
192

 
152

Other accrued liabilities
2,200

 
2,076

Income taxes payable
262

 
261

Current maturities of long-term debt
184

 
296

Total current liabilities
2,992

 
2,956

Other long-term liabilities
165

 
147

Deferred income taxes
193

 
206

Deferred amounts related to mall sale transactions
404

 
407

Long-term debt
11,139

 
9,344

Total liabilities
14,893

 
13,060

Commitments and contingencies (Note 7)

 

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, 832 and 831 shares issued, 788 and 789 shares outstanding
1

 
1

Treasury stock, at cost, 44 and 42 shares
(2,997
)
 
(2,818
)
Capital in excess of par value
6,660

 
6,580

Accumulated other comprehensive income (loss)
(44
)
 
14

Retained earnings
3,538

 
2,709

Total Las Vegas Sands Corp. stockholders' equity
7,158

 
6,486

Noncontrolling interests
804

 
1,141

Total equity
7,962

 
7,627

Total liabilities and equity
$
22,855

 
$
20,687

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

3
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions, except per share data)
(Unaudited)
Revenues:
 
 
 
 
 
 
 
Casino
$
2,346

 
$
2,243

 
$
4,945

 
$
4,400

Rooms
418

 
367

 
863

 
765

Food and beverage
219

 
195

 
447

 
407

Mall
164

 
159

 
320

 
316

Convention, retail and other
156

 
145

 
307

 
288

Net revenues
3,303

 
3,109

 
6,882

 
6,176

Operating expenses:
 
 
 
 
 
 
 
Casino
1,331

 
1,176

 
2,702

 
2,369

Rooms
111

 
101

 
221

 
202

Food and beverage
168

 
156

 
340

 
316

Mall
18

 
18

 
35

 
34

Convention, retail and other
78

 
78

 
162

 
159

Provision for (recovery of) doubtful accounts
7

 
22

 
(9
)
 
54

General and administrative
368

 
354

 
713

 
693

Corporate
33

 
42

 
89

 
84

Pre-opening
2

 
4

 
3

 
6

Development
2

 
2

 
5

 
5

Depreciation and amortization
274

 
327

 
538

 
648

Amortization of leasehold interests in land
9

 
9

 
18

 
19

Loss on disposal or impairment of assets
105

 
3

 
110

 
6

 
2,506

 
2,292

 
4,927

 
4,595

Operating income
797

 
817

 
1,955

 
1,581

Other income (expense):
 
 
 
 
 
 
 
Interest income
9

 
4

 
14

 
7

Interest expense, net of amounts capitalized
(93
)
 
(79
)
 
(182
)
 
(157
)
Other income (expense)
44

 
(25
)
 
18

 
(61
)
Loss on modification or early retirement of debt
—

 
—

 
(3
)
 
(5
)
Income before income taxes
757

 
717

 
1,802

 
1,365

Income tax (expense) benefit
(81
)
 
(78
)
 
490

 
(147
)
Net income
676

 
639

 
2,292

 
1,218

Net income attributable to noncontrolling interests
(120
)
 
(93
)
 
(280
)
 
(191
)
Net income attributable to Las Vegas Sands Corp.
$
556

 
$
546

 
$
2,012

 
$
1,027

Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.70

 
$
0.69

 
$
2.55

 
$
1.30

Diluted
$
0.70

 
$
0.69

 
$
2.55

 
$
1.29

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
789

 
792

 
789

 
793

Diluted
790

 
792

 
790

 
794

Dividends declared per common share
$
0.75

 
$
0.73

 
$
1.50

 
$
1.46

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

4
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
(Unaudited)
Net income
$
676

 
$
639

 
$
2,292

 
$
1,218

Currency translation adjustment, before and after tax
(91
)
 
9

 
(63
)
 
65

Total comprehensive income
585

 
648

 
2,229

 
1,283

Comprehensive income attributable to noncontrolling interests
(120
)
 
(87
)
 
(275
)
 
(183
)
Comprehensive income attributable to Las Vegas Sands Corp.
$
465

 
$
561

 
$
1,954

 
$
1,100

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


5
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED 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)
(Unaudited)
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
—

 
—

 
—

 
—

 
1,027

 
191

 
1,218

Currency translation adjustment
—

 
—

 
—

 
73

 
—

 
(8
)
 
65

Exercise of stock options
—

 
—

 
13

 
—

 
—

 
3

 
16

Stock-based compensation
—

 
—

 
15

 
—

 
—

 
3

 
18

Repurchase of common stock
—

 
(225
)
 
—

 
—

 
—

 
—

 
(225
)
Dividends declared
—

 
—

 
—

 
—

 
(1,156
)
 
(625
)
 
(1,781
)
Balance at June 30, 2017
$
1

 
$
(2,668
)
 
$
6,547

 
$
(46
)
 
$
2,082

 
$
881

 
$
6,797

Balance at January 1, 2018
$
1

 
$
(2,818
)
 
$
6,580

 
$
14

 
$
2,709

 
$
1,141

 
$
7,627

Net income
—

 
—

 
—

 
—

 
2,012

 
280

 
2,292

Currency translation adjustment
—

 
—

 
—

 
(58
)
 
—

 
(5
)
 
(63
)
Exercise of stock options
—

 
—

 
66

 
—

 
—

 
7

 
73

Stock-based compensation
—

 
—

 
14

 
—

 
—

 
2

 
16

Repurchase of common stock
—

 
(179
)
 
—

 
—

 
—

 
—

 
(179
)
Dividends declared
—

 
—

 
—

 
—

 
(1,183
)
 
(621
)
 
(1,804
)
Balance at June 30, 2018
$
1

 
$
(2,997
)
 
$
6,660

 
$
(44
)
 
$
3,538

 
$
804

 
$
7,962

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


6
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Six Months Ended
June 30,
 
2018
 
2017
 
(In millions)
(Unaudited)
Cash flows from operating activities:
 
 
 
Net income
$
2,292

 
$
1,218

Adjustments to reconcile net income to net cash generated from operating activities:
 
 
 
Depreciation and amortization
538

 
648

Amortization of leasehold interests in land
18

 
19

Amortization of deferred financing costs and original issue discount
20

 
21

Amortization of deferred gain on and rent from mall sale transactions
(2
)
 
(2
)
Loss on modification or early retirement of debt
3

 
5

Loss on disposal or impairment of assets
110

 
6

Stock-based compensation expense
15

 
18

Provision for (recovery of) doubtful accounts
(9
)
 
54

Foreign exchange (gain) loss
(36
)
 
23

Deferred income taxes
(646
)
 
10

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
66

 
110

Other assets
(10
)
 
23

Accounts payable
(16
)
 
(23
)
Other liabilities
161

 
(21
)
Net cash generated from operating activities
2,504

 
2,109

Cash flows from investing activities:
 
 
 
Capital expenditures
(416
)
 
(380
)
Proceeds from disposal of property and equipment
10

 
1

Net cash used in investing activities
(406
)
 
(379
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
70

 
16

Repurchase of common stock
(175
)
 
(225
)
Dividends paid
(1,804
)
 
(1,781
)
Proceeds from long-term debt (Note 4)
2,093

 
654

Repayments of long-term debt (Note 4)
(313
)
 
(250
)
Payments of financing costs
(39
)
 
(5
)
Net cash used in financing activities
(168
)
 
(1,591
)
Effect of exchange rate on cash, cash equivalents and restricted cash
2

 
40

Increase in cash, cash equivalents and restricted cash
1,932

 
179

Cash, cash equivalents and restricted cash at beginning of period
2,430

 
2,138

Cash, cash equivalents and restricted cash at end of period
$
4,362

 
$
2,317

Supplemental disclosure of cash flow information:
 
 
 
Cash payments for interest, net of amounts capitalized
$
155

 
$
129

Cash payments for taxes, net of refunds
$
135

 
$
126

Change in construction payables
$
40

 
$
(173
)
 
 
 
 

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

7
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 — Organization and Business of Company
The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Las Vegas Sands Corp. ("LVSC"), a Nevada corporation, and its subsidiaries (collectively the "Company") for the year ended December 31, 2017, and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations; however, the Company believes the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments and normal recurring accruals considered necessary for a fair statement of the results for the interim period have been included. The interim results reflected in the unaudited condensed consolidated financial statements are not necessarily indicative of expected results for the full year. The Company's 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. The Company currently owns 70.0% of SCL.
The Company has entered into various joint venture agreements with independent third parties, which have been consolidated based on accounting standards for variable interest entities. As of June 30, 2018 and December 31, 2017, the Company's consolidated joint ventures had total assets of $76 million and $77 million, respectively, and total liabilities of $211 million and $198 million, respectively. The Company's joint ventures had intercompany liabilities of $209 million and $196 million as of June 30, 2018 and December 31, 2017, respectively.
On March 8, 2018, the Company entered into a purchase and sale agreement under which PCI Gaming Authority, an unincorporated, chartered instrumentality of the Poarch Band of Creek Indians, will acquire the Sands Bethlehem property in Pennsylvania for a total enterprise value of $1.30 billion. The closing of the transaction is subject to regulatory review and other closing conditions.
Development Projects
The Company is constantly evaluating 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
In October 2017, the Company announced it will renovate, expand and rebrand 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, an expanded retail mall and approximately 370 additional luxury suites in the St. Regis Macao Tower. Design work has commenced and construction will be phased to minimize disruption during the property’s peak periods. The Company expects the project to be completed in 2020.
In October 2017, the Company also announced the tower adjacent to the Four Seasons Hotel Macao will feature approximately 280 additional premium quality suites. The Company has completed the structural work of the tower and plans to commence build out of the suites in 2018. The Company expects the project to be completed in 2019.
The completion dates for these projects are subject to change as the Company continues its planning and design work.

8

Table of Contents



LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

Capital Financing Overview
The Company funds its development projects primarily through borrowings under its credit facilities and operating cash flows.
As of June 30, 2018 and December 31, 2017, the Company held cash, cash equivalents and restricted cash of $4.36 billion and $2.43 billion, respectively. Restricted cash represents those amounts contractually reserved for substantial mall-related repairs and maintenance expenditures. Cash equivalents are short-term investments with original maturities of less than 90 days and are carried at cost, which is a reasonable estimate of their fair value. The estimated fair value of the Company's cash equivalents is based on level 1 inputs (quoted market prices in active markets). The Company believes the cash on hand and cash flow generated from operations will be sufficient to maintain compliance with the financial covenants of its credit facilities. In the normal course of its activities, the Company will continue to evaluate its capital structure and opportunities for enhancements thereof.
In March 2018, the Company amended its Singapore credit facility, which refinanced the facility in an aggregate amount of 4.80 billion Singapore dollars ("SGD," approximately $3.51 billion at exchange rates in effect on June 30, 2018), extended the maturities of the term loans and revolving loans to March 29, 2024 and September 29, 2023, respectively, and amended the amortization schedule and the leverage covenant to provide that the leverage ratio not exceed 4.0x for all quarterly periods through maturity (see "— Note 4 — Long-Term Debt — 2012 Singapore Credit Facility"). In March 2018, the Company also amended its U.S. credit facility, which refinanced the term loans in an aggregate amount of $2.16 billion, extended the maturity of the term loans to March 27, 2025, and reduced the applicable margin credit spread for borrowings under the term loans. In June 2018, the Company further amended its U.S. credit facility to, among other things, increase the amount of the term loans by $1.35 billion, to an aggregate amount of $3.51 billion (see "— Note 4 — Long-Term Debt — 2013 U.S. Credit Facility").
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update (as subsequently amended) on revenue recognition applicable to all contracts with customers. The update requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new standard on January 1, 2018, on a full retrospective basis (see disclosures at "— Note 2 — Revenue").
In February 2016, the FASB issued an accounting standard update on leases, which requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company will adopt this guidance beginning January 1, 2019. Although the Company is in the process of evaluating the impact the guidance will have on its financial condition and results of operations, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's balance sheet for real estate operating leases. The adoption of this guidance is not expected to have a material effect on net income.
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 is currently assessing the effect the guidance will have on the Company's financial condition and results of operations.
In August 2016, the FASB issued an accounting standard update to reduce the diversity on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. In November 2016, the FASB

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Table of Contents



LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

issued an accounting standard update to reduce the diversity on how changes in restricted cash are presented and classified on the statement of cash flows. The Company adopted this guidance on a retrospective basis as of January 1, 2018. The adoption did not have a material effect on the presentation of its statement of cash flows.
Reclassification
Certain amounts in the accompanying condensed consolidated balance sheet as of December 31, 2017, and the related condensed consolidated statements of operations, comprehensive income, equity and cash flows for the three and six months ended June 30, 2017, have been reclassified to be consistent with the current period presentation.
Note 2 — Revenue
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 junket operators 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 stand-alone selling price 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 income until the revenue recognition criteria are met. Cancellation fees for hotel, meeting space and food and beverage services are 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-lined 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.

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LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

Revenue Disaggregation
The Company operates Integrated Resorts internationally, in Macao and Singapore, and domestically, in Las Vegas and Pennsylvania. The Company generates revenues at its properties by providing the following types of products and services: gaming, rooms, food and beverage, mall and convention, retail and other. Revenue disaggregated by type of revenue and geographic location is as follows:
 
Casino
 
Rooms
 
Food and Beverage
 
Mall
 
Convention, Retail and Other
 
Net Revenues
Three Months Ended June 30, 2018
(In millions)
Macao:
 
 
 
 
 
 
 
 
 
 
 
The Venetian Macao
$
677

 
$
52

 
$
18

 
$
56

 
$
27

 
$
830

Sands Cotai Central
386

 
78

 
23

 
15

 
7

 
509

The Parisian Macao
308

 
28

 
16

 
15

 
4

 
371

The Plaza Macao and Four Seasons Hotel Macao
136

 
10

 
7

 
33

 
—

 
186

Sands Macao
166

 
4

 
7

 
2

 
1

 
180

Ferry Operations and Other
—

 
—

 
—

 
—

 
42

 
42

 
1,673

 
172

 
71

 
121

 
81

 
2,118

Marina Bay Sands
494

 
93

 
51

 
42

 
25

 
705

United States:
 
 
 
 
 
 
 
 
 
 
 
Las Vegas Operating Properties
60

 
149

 
91

 
—

 
102

 
402

Sands Bethlehem
119

 
4

 
6

 
1

 
6

 
136

 
179

 
153

 
97

 
1

 
108

 
538

Intercompany eliminations(1)
—

 
—

 
—

 
—

 
(58
)
 
(58
)
Total net revenues
$
2,346

 
$
418

 
$
219

 
$
164

 
$
156

 
$
3,303

Three Months Ended June 30, 2017
 
Macao:
 
 
 
 
 
 
 
 
 
 
 
The Venetian Macao
$
538

 
$
40

 
$
17

 
$
55

 
$
24

 
$
674

Sands Cotai Central
331

 
64

 
24

 
14

 
6

 
439

The Parisian Macao
285

 
31

 
15

 
17

 
5

 
353

The Plaza Macao and Four Seasons Hotel Macao
88

 
8

 
6

 
32

 
1

 
135

Sands Macao
144

 
5

 
6

 
—

 
1

 
156

Ferry Operations and Other
—

 
—

 
—

 
—

 
41

 
41

 
1,386

 
148

 
68

 
118

 
78

 
1,798

Marina Bay Sands
651

 
80

 
41

 
40

 
22

 
834

United States:
 
 
 
 
 
 
 
 
 
 
 
Las Vegas Operating Properties
81

 
135

 
79

 
—

 
97

 
392

Sands Bethlehem
125

 
4

 
7

 
1

 
6

 
143

 
206

 
139

 
86

 
1

 
103

 
535

Intercompany eliminations(1)
—

 
—

 
—

 
—

 
(58
)
 
(58
)
Total net revenues
$
2,243

 
$
367

 
$
195

 
$
159

 
$
145

 
$
3,109

 
 
 
 
 
 
 
 
 
 
 
 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

 
Casino
 
Rooms
 
Food and Beverage
 
Mall
 
Convention, Retail and Other
 
Net Revenues
Six Months Ended June 30, 2018
 
Macao:
 
 
 
 
 
 
 
 
 
 
 
The Venetian Macao
$
1,393

 
$
109

 
$
41

 
$
109

 
$
46

 
$
1,698

Sands Cotai Central
804

 
160

 
52

 
29

 
13

 
1,058

The Parisian Macao
599

 
61

 
31

 
30

 
9

 
730

The Plaza Macao and Four Seasons Hotel Macao
278

 
19

 
15

 
64

 
1

 
377

Sands Macao
308

 
8

 
14

 
2

 
2

 
334

Ferry Operations and Other
—

 
—

 
—

 
—

 
81

 
81

 
3,382

 
357

 
153

 
234

 
152

 
4,278

Marina Bay Sands
1,146

 
193

 
103

 
84

 
51

 
1,577

United States:
 
 
 
 
 
 
 
 
 
 
 
Las Vegas Operating Properties
180

 
305

 
179

 
—

 
215

 
879

Sands Bethlehem
237

 
8

 
12

 
2

 
11

 
270

 
417

 
313

 
191

 
2

 
226

 
1,149

Intercompany eliminations(1)
—

 
—

 
—

 
—

 
(122
)
 
(122
)
Total net revenues
$
4,945

 
$
863

 
$
447

 
$
320

 
$
307

 
$
6,882

Six Months Ended June 30, 2017
 
Macao:
 
 
 
 
 
 
 
 
 
 
 
The Venetian Macao
$
1,134

 
$
82

 
$
34

 
$
106

 
$
44

 
$
1,400

Sands Cotai Central
675

 
129

 
48

 
33

 
13

 
898

The Parisian Macao
528

 
60

 
31

 
34

 
10

 
663

The Plaza Macao and Four Seasons Hotel Macao
180

 
16

 
13

 
63

 
1

 
273

Sands Macao
308

 
10

 
13

 
—

 
3

 
334

Ferry Operations and Other
—

 
—

 
—

 
—

 
79

 
79

 
2,825

 
297

 
139

 
236

 
150

 
3,647

Marina Bay Sands
1,143

 
174

 
84

 
78

 
45

 
1,524

United States:
 
 
 
 
 
 
 
 
 
 
 
Las Vegas Operating Properties
185

 
286

 
170

 
—

 
196

 
837

Sands Bethlehem
247

 
8

 
14

 
2

 
11

 
282

 
432

 
294

 
184

 
2

 
207

 
1,119

Intercompany eliminations(1)
—

 
—

 
—

 
—

 
(114
)
 
(114
)
Total net revenues
$
4,400

 
$
765

 
$
407

 
$
316

 
$
288

 
$
6,176

 
 
 
 
 
 
 
 
 
 
 
 
____________________
(1)
Intercompany eliminations include royalties and other intercompany services (see "— Note 8 — Segment Information).
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 junket operators 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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

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 are tied to the terms of the lease and typically extend beyond a year, 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)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Balance at January 1
$
478

 
$
525

 
$
63

 
$
69

 
$
714

 
$
633

Balance at June 30
676

 
553

 
65

 
63

 
724

 
642

Increase (decrease)
$
198

 
$
28

 
$
2

 
$
(6
)
 
$
10

 
$
9

 ____________________
(1)
Of this amount, $150 million, $145 million, $137 million and $131 million as of June 30, 2018, January 1, 2018, June 30, 2017, and January 1, 2017, respectively, relates to mall deposits that are accounted for based on lease terms usually greater than one year.
Significant Impacts of Adoption
The adoption of the change in accounting standards related to revenue from contracts with customers resulted in the following significant impacts: (1) promotional allowances line item was eliminated from the condensed consolidated statement of operations with the amount being deducted from casino revenue, (2) the valuation of points associated with the Company’s loyalty programs was changed from cost to fair value; the loyalty program expense, previously charged to casino expense, was deducted from casino revenue to defer revenue recognition until redemption of the loyalty program points occurs; and redemption of the loyalty program points at third parties is now deducted from the loyalty program liability and paid directly to the third party, with any discounts received from the third party recorded to other revenue, and (3) the portion of junket commissions that was previously recorded to casino expense is now deducted from casino revenue. These adjustments resulted in a decrease to net revenues and operating expenses of $32 million and $33 million, respectively, and an increase in operating income of $1 million for the three months ended June 30, 2017, and a decrease to net revenues and operating expenses of $71 million and $73 million, respectively, and an increase in operating income of $2 million for the six months ended June 30, 2017. The cumulative effect of the adoption was recognized as a decrease in retained earnings of $8 million on January 1, 2017.
Note 3 — Property and Equipment, Net
Property and equipment consists of the following:
 
June 30,
2018
 
December 31,
2017
 
(In millions)
Land and improvements
$
671

 
$
672

Building and improvements
17,703

 
17,703

Furniture, fixtures, equipment and leasehold improvements
4,108

 
3,999

Transportation
441

 
455

Construction in progress
1,166

 
1,179

 
24,089

 
24,008

Less — accumulated depreciation and amortization
(8,872
)
 
(8,492
)
 
$
15,217

 
$
15,516

 
 
 
 
During the three and six months ended June 30, 2018, the Company capitalized $1 million of interest expense and during the six months ended June 30, 2017, the Company capitalized $1 million of interest expense. During the

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

three and six months ended June 30, 2018 and the three and six months ended June 30, 2017, the Company capitalized approximately $7 million, $12 million, $6 million and $12 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property.
During the year ended December 31, 2017, the Company completed an evaluation of the estimated useful lives of its property and equipment and determined that changes to the useful lives of certain property and equipment were appropriate. This change in estimated useful lives was accounted for as a change in accounting estimate effective July 1, 2017. The impact of this change for the three months ended June 30, 2018, was a decrease in depreciation and amortization expense and an increase in operating income of $64 million, and an increase in net income attributable to LVSC of $47 million, or earnings per share of $0.06 on a basic and diluted basis. The impact of this change for the six months ended June 30, 2018, was a decrease in depreciation and amortization expense and an increase in operating income of $127 million, and an increase in net income attributable to LVSC of $93 million, or earnings per share of $0.12 on a basic and diluted basis.
During the three and six months ended June 30, 2018, the Company recognized a loss on disposal or impairment of assets of $105 million and $110 million, respectively, consisting primarily of a $92 million write-off of costs related to the tower adjacent to the Four Seasons Hotel Macao. During the three and six months ended June 30, 2017, the Company recognized a loss on disposal or impairment of assets of $3 million and $6 million, respectively.
Note 4 — Long-Term Debt
Long-term debt consists of the following:
 
June 30,
2018
 
December 31,
2017
 
(In millions)
Corporate and U.S. Related(1):
 
 
 
2013 U.S. Credit Facility — Extended Term B (net of unamortized original issue discount and deferred financing costs of $23 and $11, respectively)
$
3,479

 
$
2,150

HVAC Equipment Lease
12

 
12

Macao Related(1):
 
 
 
2016 VML Credit Facility — Term (net of unamortized deferred financing costs of $50 and $56, respectively)
4,038

 
4,043

2016 VML Credit Facility — Non-Extended Term (net of unamortized deferred financing costs of $2)
227

 
247

2016 VML Credit Facility — Revolving
497

 
—

Other
5

 
5

Singapore Related(1):
 
 
 
2012 Singapore Credit Facility — Term (net of unamortized deferred financing costs of $47 and $32, respectively)
3,065

 
3,183

 
11,323

 
9,640

Less — current maturities
(184
)
 
(296
)
Total long-term debt
$
11,139

 
$
9,344

____________________
(1)
Unamortized deferred financing costs of $22 million and $24 million as of June 30, 2018 and December 31, 2017, respectively, related to the U.S., Macao and Singapore revolving credit facilities are included in other assets, net in the accompanying condensed consolidated balance sheets.
2013 U.S. Credit Facility
During March 2018, the Company entered into an agreement (the "Fifth Amendment Agreement") to amend the existing 2013 U.S. Credit Facility to, among other things, refinance the term loans (by way of continuing or replacing existing term loans) in an aggregate amount of $2.16 billion and to lower the applicable margin credit spread for adjusted Eurodollar rate term loans from 2.0% to 1.75% per annum and for alternative base rate term loans from 1.0% to 0.75% per annum (the interest rate was set at 3.8% as of June 30, 2018). Additionally, the Fifth Amendment Agreement extended

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

the maturity date of the term loans from March 29, 2024 to March 27, 2025. The Company recorded a $3 million loss on modification of debt during the six months ended June 30, 2018, in connection with the Fifth Amendment Agreement.
During June 2018, the Company further amended the 2013 U.S. Credit Facility (the "Sixth Amendment Agreement") to, among other things, increase the amount of the term loans by $1.35 billion, to an aggregate amount of $3.51 billion. The additional $1.35 billion, which was fully drawn on the closing date, matures on March 27, 2025, and has terms substantially identical to those applicable to the term loans outstanding under the then existing credit agreement. The 2013 Extended U.S. Term B Facility is subject to quarterly amortization payments of $9 million, which began on June 30, 2018, followed by a balloon payment of $3.27 billion due on March 27, 2025.
As of June 30, 2018, the Company had $1.15 billion of available borrowing capacity under the 2013 Extended U.S. Revolving Facility, net of outstanding letters of credit.
2016 VML Credit Facility
As of June 30, 2018, the Company had $1.49 billion of available borrowing capacity under the 2016 VML Revolving Facility.
The interest rates on the term loans under the 2016 VML Credit Facility were set at 3.7% and 3.6% for loans accruing interest at an adjusted Eurodollar and Hong Kong Inter-Bank Offered Rate, respectively, as of June 30, 2018.
2012 Singapore Credit Facility
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 $3.51 billion at exchange rates in effect on June 30, 2018), 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. As of June 30, 2018, the Company had SGD 495 million (approximately $362 million at exchange rates in effect on June 30, 2018) of available borrowing capacity under the 2012 Singapore Revolving Facility, net of outstanding letters of credit. 
Commencing with the quarterly period ended June 30, 2018, and at the end of each subsequent quarter through March 31, 2022, the amended facility agreement requires the borrower to repay the outstanding 2012 Singapore Term Facility in the amount of 0.5% of the aggregate principal amount outstanding as of March 19, 2018 (the "Singapore Restatement Date"). Commencing with the quarterly period ending June 30, 2022, and at the end of each subsequent quarter through March 31, 2023, the Company is required to repay the outstanding 2012 Singapore Term Facility in the amount of 5.0% of the aggregate principal amount outstanding as of the Singapore Restatement Date. For the quarterly periods ending June 30, 2023 through the termination date of March 29, 2024, the borrower is required to repay the outstanding 2012 Singapore Term Facility in the amount of 18.0% of the aggregate principal amount outstanding as of the Singapore Restatement Date. The leverage covenant was amended to provide that the leverage ratio not exceed 4.0x on the last day of each fiscal quarter through maturity.
The interest rate on the 2012 Singapore Term Facility was set at 2.6% as of June 30, 2018.
Debt Covenant Compliance
As of June 30, 2018, management believes the Company was in compliance with all debt covenants.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

Cash Flows from Financing Activities
Cash flows from financing activities related to long-term debt and capital lease obligations are as follows:
 
Six Months Ended
June 30,
 
2018
 
2017
 
(In millions)
Proceeds from 2013 U.S. Credit Facility
$
1,347

 
$
5

Proceeds from 2016 VML Credit Facility
746

 
649

 
$
2,093

 
$
654

Repayments on 2016 VML Credit Facility
$
(269
)
 
$
(107
)
Repayments on 2012 Singapore Credit Facility
(33
)
 
(33
)
Repayments on 2013 U.S. Credit Facility
(9
)
 
(52
)
Repayments on Airplane Financings
—

 
(56
)
Repayments on HVAC Equipment Lease and Other Long-Term Debt
(2
)
 
(2
)
 
$
(313
)
 
$
(250
)
Fair Value of Long-Term Debt
The estimated fair value of the Company's long-term debt as of June 30, 2018 and December 31, 2017, was approximately $11.27 billion and $9.61 billion, respectively, compared to its carrying value of $11.42 billion and $9.72 billion, respectively. The estimated fair value of the Company's long-term debt is based on level 2 inputs (quoted prices in markets that are not active).
Note 5 — Equity and Earnings Per Share
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 30 and June 28, 2018, the Company paid a dividend of $0.75 per common share as part of a regular cash dividend program. During the six months ended June 30, 2018, the Company recorded $1.18 billion as a distribution against retained earnings (of which $648 million related to the principal stockholder and his family and the remaining $535 million related to all other shareholders).
On March 31 and June 30, 2017, the Company paid a dividend of $0.73 per common share as part of a regular cash dividend program. During the six months ended June 30, 2017, the Company recorded $1.16 billion as a distribution against retained earnings (of which $630 million related to the principal stockholder and his family and the remaining $526 million related to all other shareholders).
In July 2018, the Company's Board of Directors declared a quarterly dividend of $0.75 per common share (a total estimated to be approximately $591 million) to be paid on September 27, 2018, to shareholders of record on September 19, 2018.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

Repurchase Program
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 six months ended June 30, 2018 and 2017, the Company repurchased 2,301,800 and 3,933,737 shares, respectively, of its common stock for $175 million and $225 million, respectively, (including commissions) under the program. All share repurchases of the Company's common stock have been recorded as treasury stock.
Noncontrolling Interests
On February 23 and June 22, 2018, 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 six months ended June 30, 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 six months ended June 30, 2017).
During the six months ended June 30, 2018 and 2017, the Company distributed $6 million to certain of its noncontrolling interests.
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:

Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Weighted-average common shares outstanding (used in the calculation of basic earnings per share)
789

 
792

 
789

 
793

Potential dilution from stock options and restricted stock and stock units
1

 
—

 
1

 
1

Weighted-average common and common equivalent shares (used in the calculation of diluted earnings per share)
790

 
792

 
790

 
794

Antidilutive stock options excluded from the calculation of diluted earnings per share
1

 
7

 
1

 
7

Accumulated Other Comprehensive Loss
As of June 30, 2018 and December 31, 2017, accumulated other comprehensive loss consisted solely of foreign currency translation adjustments.
Note 6 — Income Taxes
The Company's effective income tax rate was (27.2)% for the six months ended June 30, 2018, compared to 10.8% for the six months ended June 30, 2017. The effective income tax rate for the six months ended June 30, 2018, would have been 10.0% without the discrete benefit of $670 million, as discussed further below. The effective income tax rate for the six months ended June 30, 2018, reflects a 17% statutory tax rate on the Company's Singapore operations, a 21% corporate income tax rate for its domestic operations and a zero percent tax rate on its Macao gaming operations due to the Company's income tax exemption in Macao, effective through the end of 2018.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

In December 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Act"). The Company recorded a discrete benefit of $526 million in the fourth quarter of 2017 related 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%. This discrete benefit was the provisional impact of enactment of the Act subject to Staff Accounting Bulletin ("SAB") 118, which provides for a 12-month remeasurement period to complete the accounting required under Accounting Standards Codification ("ASC") 740.
The Act made significant changes to U.S. income tax laws, including transitioning from a worldwide tax system to a territorial tax system. This change in the U.S. international tax system included the introduction of several new tax regimes that are effective as of January 1, 2018. One of the new taxes introduced is the Global Intangible Low-Taxed Income ("GILTI"), which effectively taxes the foreign earnings of U.S. multinational companies at 10.5%, half of the current corporate tax rate. During the three months ended March 31, 2018, the Company concluded how the foreign tax credits associated with this income, and allowed against the U.S. tax liability, would be utilized and the potential impact on the foreign tax credit deferred tax asset and related valuation allowance. As a result, the Company recorded a tax benefit of $670 million relating to the reduction of the valuation allowance on certain U.S. foreign tax credit assets generated prior to 2018 that were previously determined not likely to be utilized.
While management believes the provisional amounts recorded during the six months ended June 30, 2018 and the year ended December 31, 2017, represent reasonable estimates of the ultimate impact U.S. tax reform will have on the Company's consolidated financial statements, it is possible the Company may continue to materially adjust these amounts for related administrative guidance, notices, implementation regulations, potential legislative amendments and interpretations as the Act continues to evolve. These adjustments could have an impact on the Company's tax assets and liabilities, effective tax rate, net income and earnings per share.
Note 7 — 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 and has accrued a nominal amount for such costs as of June 30, 2018. 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.
Round Square Company Limited v. Las Vegas Sands Corp.
On October 15, 2004, Richard Suen and Round Square Company Limited ("Roundsquare") filed an action against LVSC, Las Vegas Sands, Inc. ("LVSI"), Sheldon G. Adelson and William P. Weidner in the District Court of Clark County, Nevada (the "District Court"), asserting a breach of an alleged agreement to pay a success fee of $5 million and 2.0% of the net profit from the Company's Macao resort operations to the plaintiffs as well as other related claims. In March 2005, LVSC was dismissed as a party without prejudice based on a stipulation to do so between the parties. Pursuant to an order filed March 16, 2006, plaintiffs' fraud claims set forth in the first amended complaint were dismissed with prejudice against all defendants. The order also dismissed with prejudice the first amended complaint against defendants Sheldon G. Adelson and William P. Weidner. On May 24, 2008, the jury returned a verdict for the plaintiffs in the amount of $44 million. On June 30, 2008, a judgment was entered in this matter in the amount of $59 million (including pre-judgment interest). The Company appealed the verdict to the Nevada Supreme Court. On November 17, 2010, the Nevada Supreme Court reversed the judgment and remanded the case to the District Court for a new trial. In its decision reversing the monetary judgment against the Company, the Nevada Supreme Court also made several other rulings, including overturning the pre-trial dismissal of the plaintiffs' breach of contract claim and deciding several evidentiary matters, some of which confirmed and some of which overturned rulings made by the District Court. On February 27, 2012, the District Court set a date of March 25, 2013, for the new trial. On June 22, 2012, the defendants filed a request to add experts and plaintiffs filed a motion seeking additional financial data as part of their discovery. The District Court granted both requests. The retrial began on March 27 and on May 14, 2013, the jury returned a verdict in favor of Roundsquare in the amount of $70 million. On May 28, 2013, a judgment was entered in the matter

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

in the amount of $102 million (including pre-judgment interest). On June 7, 2013, the Company filed a motion with the District Court requesting the judgment be set aside as a matter of law or in the alternative that a new trial be granted. On July 30, 2013, the District Court denied the Company's motion. On October 17, 2013, the District Court entered an order granting plaintiff's request for certain costs and fees associated with the litigation in the amount of approximately $1 million. On December 6, 2013, the Company filed a notice of appeal of the jury verdict with the Nevada Supreme Court. The Company filed its opening appellate brief with the Nevada Supreme Court on June 16, 2014. On August 19, 2014, the Nevada Supreme Court issued an order granting plaintiffs additional time until September 15, 2014, to file their answering brief. On September 15, 2014, Roundsquare filed a request to the Nevada Supreme Court to file a brief exceeding the maximum number of words, which was granted. On October 10, 2014, Roundsquare filed its answering brief. On January 12, 2015, the defendants filed their reply brief. On January 27, 2015, Roundsquare filed its reply brief. The Nevada Supreme Court set oral argument for December 17, 2015, before a panel of justices only to reset it for January 26, 2016, en banc. Oral arguments were presented to the Nevada Supreme Court as scheduled. On March 11, 2016, the Nevada Supreme Court issued an order affirming the judgment of liability, but reversing the damages award and remanding for a new trial on damages. On March 29, 2016, Roundsquare filed a petition for rehearing. The Nevada Supreme Court ordered an answer by the Company, which the Company filed on May 4, 2016. On May 12, 2016, Roundsquare filed a motion for leave to file a reply brief in support of its petition for rehearing, and on May 19, 2016, the Company filed an opposition to that motion. On June 24, 2016, the Nevada Supreme Court issued an order granting Roundsquare's petition for rehearing and submitting the appeal for decision on rehearing without further briefing or oral argument. On July 22, 2016, the Nevada Supreme Court once again ordered a new trial as to plaintiff Roundsquare on the issue of quantum merit damages. A pre-trial hearing was set in District Court for December 12, 2016. At the December 12, 2016 hearing, the District Court indicated it would allow a scope of trial and additional discovery into areas the Company opposed as inconsistent with the Nevada Supreme Court's remand. The District Court issued a written order on the scope of retrial and discovery dated December 15, 2016. On January 5, 2017, the Company moved for a stay of proceedings in the District Court, pending the Nevada Supreme Court's resolution of the Company's petition for writ of mandamus or prohibition, which was filed on January 13, 2017. On February 13, 2017, the District Court denied the motion to stay proceedings and, on February 16, 2017, the Nevada Supreme Court denied the writ. The parties are presently engaged in discovery and the damages trial date has been set to begin on March 4, 2019. The Company has accrued a nominal amount for estimated costs related to this legal matter as of June 30, 2018. In the event the Company's assumptions used to evaluate this matter change in future periods, it may be required to record an additional liability for an adverse outcome. The Company intends to defend this matter vigorously.
Frank J. Fosbre, Jr. v. Las Vegas Sands Corp., Sheldon G. Adelson and William P. Weidner
On May 24, 2010, Frank J. Fosbre, Jr. filed a purported class action complaint in the U.S. District Court, against LVSC, Sheldon G. Adelson and William P. Weidner. The complaint alleged that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 1, 2007 through November 6, 2008. The complaint sought, among other relief, class certification, compensatory damages and attorneys' fees and costs. On July 21, 2010, Wendell and Shirley Combs filed a purported class action complaint in the U.S. District Court, against LVSC, Sheldon G. Adelson and William P. Weidner. The complaint alleged that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from June 13, 2007 through November 11, 2008. The complaint, which was substantially similar to the Fosbre complaint, discussed above, sought, among other relief, class certification, compensatory damages and attorneys' fees and costs. On August 31, 2010, the U.S. District Court entered an order consolidating the Fosbre and Combs cases, and appointed lead plaintiffs and lead counsel. As such, the Fosbre and Combs cases are reported as one consolidated matter. On November 1, 2010, a purported class action amended complaint was filed in the consolidated action against LVSC, Sheldon G. Adelson and William P. Weidner. The amended complaint alleges that LVSC, through the individual defendants, disseminated or approved materially false and misleading information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 2, 2007 through November 6, 2008. The amended complaint seeks, among other relief, class certification, compensatory damages and attorneys' fees and costs. On January 10, 2011, the defendants filed a motion to dismiss the amended complaint, which, on August 24, 2011, was granted in part and denied in part, with the dismissal of certain allegations. On November 7, 2011, the defendants filed

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(UNAUDITED)

their answer to the allegations remaining in the amended complaint. On July 11, 2012, the U.S. District Court issued an order allowing defendants' Motion for Partial Reconsideration of the U.S. District Court's order dated August 24, 2011, striking additional portions of the plaintiffs' complaint and reducing the class period to a period of February 4 to November 6, 2008. On August 7, 2012, the plaintiffs filed a purported class action second amended complaint (the "Second Amended Complaint") seeking to expand their allegations back to a time period of 2007 (having previously been cut back to 2008 by the U.S. District Court) essentially alleging very similar matters that had been previously stricken by the U.S. District Court. On October 16, 2012, the defendants filed a new motion to dismiss the Second Amended Complaint. The plaintiffs responded to the motion to dismiss on November 1, 2012, and defendants filed their reply on November 12, 2012. On November 20, 2012, the U.S. District Court granted a stay of discovery under the Private Securities Litigation Reform Act pending a decision on the new motion to dismiss and therefore, the discovery process was suspended. On April 16, 2013, the case was reassigned to a new judge. On July 30, 2013, the U.S. District Court heard the motion to dismiss and took the matter under advisement. On November 7, 2013, the judge granted in part and denied in part defendants' motions to dismiss. On December 13, 2013, the defendants filed their answer to the Second Amended Complaint. Discovery in the matter resumed. On January 8, 2014, plaintiffs filed a motion to expand the certified class period, which was granted by the U.S. District Court on June 15, 2015. Fact discovery closed on July 31, 2015, and expert discovery closed on December 18, 2015. On January 22, 2016, defendants filed motions for summary judgment. Plaintiffs filed an opposition to the motions for summary judgment on March 11, 2016. Defendants filed their replies in support of summary judgment on April 8, 2016. Summary judgment in favor of the defendants was entered on January 4, 2017. The plaintiffs filed a notice of appeal on February 2, 2017, and their opening brief in support of their appeal on July 14, 2017. Defendants filed their answering briefs in opposition to the appeal on October 13, 2017. Plaintiffs filed their reply brief in support of their appeal on December 14, 2017. On May 1, 2018, a three judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously affirmed the U.S. District Court's summary judgment ruling for the defendants. The Company intends to defend this matter vigorously.
Nasser Moradi, et al. v. Adelson, et al.
On April 1, 2011, Nasser Moradi, Richard Buckman, Douglas Tomlinson and Matt Abbeduto filed a shareholder derivative action (the "Moradi action"), as amended on April 15, 2011, on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time. The complaint raises substantially similar claims as alleged in the Kohanim and Gaines actions. The complaint seeks to recover for the Company unspecified damages, including exemplary damages and restitution, and also seeks to recover attorneys' fees, costs and related expenses for the plaintiffs. On April 18, 2011, the Louisiana Municipal Police Employees Retirement System filed a shareholder derivative action (the "LAMPERS action") on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi and Gaines actions. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys' fees, costs and related expenses for the plaintiff. On April 22, 2011, John Zaremba filed a shareholder derivative action (the "Zaremba action") on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Forman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the members of the Board of Directors at the time, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi, Gaines and LAMPERS actions. The complaint seeks to recover for the Company unspecified damages, including restitution, disgorgement of profits and injunctive relief, and also seeks to recover attorneys' fees, costs and related expenses for the plaintiff. On August 25, 2011, the U.S. District Court consolidated the Moradi, LAMPERS and Zaremba actions and such actions are reported as one consolidated matter. On November 17, 2011, the defendants filed a motion to dismiss or alternatively to stay the federal action due to the parallel District Court action described above. On May 25, 2012, the case was transferred to a new judge. On August 27, 2012, the U.S. District Court granted the motion to stay pending a further update of the Special Litigation Committee due on October 30, 2012. On October 30, 2012, the defendants filed the update asking the judge to determine whether to continue the stay until January 31, 2013, or to address motions to dismiss. On November 7, 2012, the U.S. District Court denied defendants request for an extension

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

of the stay but asked the parties to brief the motion to dismiss. On November 21, 2012, defendants filed their motion to dismiss. On December 21, 2012, plaintiffs filed their opposition, and on January 18, 2013, defendants filed their reply. On May 31, 2013, the case was reassigned to a new judge. On April 11, 2014, the judge denied the motion to dismiss without prejudice and ordered the case stayed pending the outcome of the District Court action in Kohanim described above. After the Kohanim case was dismissed with prejudice at plaintiff's request and not appealed, the defendants, on April 11, 2018, filed simultaneous motions seeking to lift the stay and to dismiss this federal consolidated derivative case. On May 23, 2018, the parties filed a stipulation in which plaintiffs voluntarily dismissed this action without any settlement or compromise. Based on this stipulation, the U.S. District Court ordered the action dismissed, with all parties waiving any rights to appeal from any aspect of this action. The U.S. District Court further directed this matter and all associated cases be closed.
Asian American Entertainment Corporation, Limited v. Venetian Macau Limited, et al.
On January 19, 2012, Asian American Entertainment Corporation, Limited ("AAEC") filed a claim (the "Macao action") with the Macao Judicial Court (Tribunal Judicial de Base) against VML, LVS (Nevada) International Holdings, Inc. ("LVS (Nevada)"), Las Vegas Sands, LLC ("LVSLLC") and VCR (collectively, the "Defendants"). The claim is for 3.0 billion patacas (approximately $371 million at exchange rates in effect on June 30, 2018) as compensation for damages resulting from the alleged 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. AAEC then filed a reply that included several amendments to the original claim, although the amount of the claim was not amended. On January 4, 2013, the Defendants filed an amended defense to the amended claim with the Macao Judicial Court. On September 23, 2013, the U.S. Defendants filed a motion with the Macao Second Instance Court, seeking recognition and enforcement of the U.S. Court of Appeals ruling in the Prior Action, referred to below, given on April 10, 2009, which partially dismissed AAEC's claims against the U.S. Defendants.
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. The Macao Judicial Court further held that the existence of the pending application for recognition and enforcement of the U.S. Court of Appeals ruling before the Macao Second Instance Court did not justify a stay of the proceedings against the U.S. Defendants at the present time, although in principle an application for a stay of the proceedings against the U.S. Defendants could be reviewed after the Macao Second Instance Court had issued its decision. On June 25, 2014, the Macao Second Instance Court delivered a decision, which gave formal recognition to and allowed enforcement in Macao of the judgment of the U.S. Court of Appeals, dismissing AAEC's claims against the U.S. Defendants.
AAEC appealed against the recognition decision to the Macao Court of Final Appeal, which, on May 6, 2015, dismissed the appeal and held the U.S. judgment to be final and have preclusive effect. The Macao Court of Final Appeal's decision became final on May 21, 2015. On June 5, 2015, the U.S. Defendants applied to the Macao Judicial Court to dismiss the claims against them as res judicata. AAEC filed its response to that application on June 30, 2015. The U.S. Defendants filed their reply on July 23, 2015. On September 14, 2015, the Macao Judicial Court admitted two further legal opinions from Portuguese and U.S. law experts. On March 16, 2016, the Macao Judicial Court dismissed the defense of res judicata. An appeal against that decision was lodged on April 7, 2016, together with a request that the appeal be heard immediately. By a decision dated April 13, 2016, the Macao Judicial Court accepted that the appeal be heard immediately. Legal arguments were submitted May 23, 2016. AAEC replied to the legal arguments on or about July 14, 2016, which was three days late, upon payment of a penalty. The U.S. Defendants submitted a response on September 20, 2016. On December 13, 2016, the Macao Judicial Court confirmed its earlier decision not to stay the proceedings pending appeal. 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 has commenced by letters rogatory. On June 30, 2017, the Macao Judicial Court sent letters

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

rogatory to the Public Prosecutor's office, for onward transmission to relevant authorities in the U.S. and Hong Kong. On August 10, 2017, the Hong Kong Mutual Legal Assistance Unit, International Law Division, Hong Kong Department of Justice ("HKMLAU") responded to the Public Prosecutor and requested additional information. On August 18, 2017, the Public Prosecutor forwarded the HKMLAU request to the Macao Judicial Court. On November 14, 2017, the Public Prosecutor replied to the HKMLAU. The HKMLAU sent a further communication to the Public Prosecutor on November 29, 2017, again requesting the Macao Judicial Court provide further information to enable processing of the Hong Kong letter rogatory. On January 6, 2018, the Macao Judicial Court notified the parties accordingly. On February 10, 2018, the Macao Judicial Court notified the parties that a communication dated January 25, 2018, had been received from the U.S. Department of Justice. The Macao Judicial Court has extended the time for processing the letters rogatory until the end of June 2018. On May 7, 2018, the Macao Judicial Court further extended the time for processing one of the letters rogatory until mid-September 2018.
On March 25, 2015, application was made by the U.S. Defendants to the Macao Judicial Court to revoke the legal aid granted to AAEC, accompanied by a request for evidence taking from AAEC, relating to the fees and expenses that they incurred and paid in the U.S. subsequent action referred to below. The Macao Public Prosecutor has opposed the action on the ground of lack of evidence that AAEC's financial position has improved. No decision has been issued in respect to that application up to the present time. A complaint against AAEC's Macao lawyer arising from certain conduct in relation to recent U.S. proceedings was submitted to the Macao Lawyer's Association on October 19, 2015. A letter dated February 26, 2016, has been received from the Conselho Superior de Advocacia of the Macao Bar Association advising that disciplinary proceedings have commenced. A further letter dated April 5, 2016, was received from the Conselho Superior de Advocacia requesting confirmation that the signatories of the complaint were acting within their corporate authority. In a letter dated April 14, 2016, such confirmation was provided. On September 28, 2016, the Conselho Superior de Advocacia invited comments on the defense, which had been lodged by AAEC's Macao lawyer.
On July 9, 2014, the plaintiff filed another action in the U.S. District Court against LVSC, LVSLLC, VCR (collectively, the "LVSC entities"), Sheldon G. Adelson, William P. Weidner, David Friedman and Does 1-50 for declaratory judgment, equitable accounting, misappropriation of trade secrets, breach of confidence and conversion based on a theory of copyright law. The claim is for $5.0 billion. On November 4, 2014, plaintiff finally effected notice on the LVSC entities, which was followed by a motion to dismiss by the LVSC entities on November 10, 2014. Plaintiff failed to timely respond, and on December 2, 2014, the LVSC entities moved for immediate dismissal and sanctions against plaintiff and his counsel for bringing a frivolous lawsuit. On December 19, 2014, plaintiff filed an incomplete and untimely response, which was followed by plaintiff's December 27, 2014 notice of withdrawal of the lawsuit and the LVSC entities' December 29, 2014, reply in favor of sanctions and dismissal with prejudice. On August 31, 2015, the judge dismissed the U.S. action and the LVSC entities' sanctions motion. 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.
As previously disclosed by the Company, on February 5, 2007, AAEC brought a similar claim (the "Prior Action") in the U.S. District Court, against LVSI (now known as LVSLLC), 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 U.S. District Court entered an order on April 16, 2010, dismissing the Prior Action. On April 20, 2012, LVSLLC, VCR and LVS (Nevada) filed an injunctive action (the "Nevada Action") against AAEC in the U.S. District Court seeking to enjoin AAEC from proceeding with the Macao Action based on AAEC's filing, and the U.S. District Court's dismissal, of the Prior Action. On June 14, 2012, the U.S. District Court issued an order that denied the motions requesting the Nevada Action, thereby effectively dismissing the Nevada Action.
Note 8 — 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 Sands Bethlehem. The Company also reviews construction

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

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 and the additional rooms in the tower adjacent to the Four Seasons Hotel Macao 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 condensed 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 condensed consolidated financial condition. The segment information as of December 31, 2017 and for the three and six months ended June 30, 2017, has been reclassified to conform to the current presentation. The Company's segment information as of June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017, is as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Net Revenues
 
 
 
 
 
 
 
Macao:
 
 
 
 
 
 
 
The Venetian Macao
$
830

 
$
674

 
$
1,698

 
$
1,400

Sands Cotai Central
509

 
439

 
1,058

 
898

The Parisian Macao
371

 
353

 
730

 
663

The Plaza Macao and Four Seasons Hotel Macao
186

 
135

 
377

 
273

Sands Macao
180

 
156

 
334

 
334

Ferry Operations and Other
42

 
41

 
81

 
79

 
2,118

 
1,798

 
4,278

 
3,647

Marina Bay Sands
705

 
834

 
1,577

 
1,524

United States:
 
 
 
 
 
 
 
Las Vegas Operating Properties
402

 
392

 
879

 
837

Sands Bethlehem
136

 
143

 
270

 
282

 
538

 
535

 
1,149

 
1,119

Intersegment eliminations
(58
)
 
(58
)
 
(122
)
 
(114
)
Total net revenues
$
3,303

 
$
3,109

 
$
6,882

 
$
6,176


 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Intersegment Revenues
 
 
 
 
 
 
 
Macao:
 
 
 
 
 
 
 
The Venetian Macao
$
1

 
$
1

 
$
2

 
$
2

Ferry Operations and Other
6

 
6

 
12

 
11

 
7

 
7

 
14

 
13

Marina Bay Sands
3

 
2

 
5

 
4

Las Vegas Operating Properties
48

 
49

 
103

 
97

Total intersegment revenues
$
58

 
$
58

 
$
122

 
$
114



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In millions)
Adjusted Property EBITDA
 
 
 
 
 
 
 
Macao:
 
 
 
 
 
 
 
The Venetian Macao
$
331

 
$
256

 
$
679

 
$
545

Sands Cotai Central
176

 
134

 
377

 
277

The Parisian Macao
114

 
106

 
230

 
188

The Plaza Macao and Four Seasons Hotel Macao
72

 
60

 
145

 
111

Sands Macao
52

 
39

 
99

 
93

Ferry Operations and Other
5

 
5

 
9

 
12

 
750

 
600

 
1,539

 
1,226

Marina Bay Sands
368

 
492

 
909

 
856

United States:
 
 
 
 
 
 
 
Las Vegas Operating Properties
77

 
79

 
218

 
201

Sands Bethlehem
30

 
37

 
59

 
73

 
107

 
116

 
277

 
274

Consolidated adjusted property EBITDA(1)
1,225

 
1,208

 
2,725

 
2,356

Other Operating Costs and Expenses
 
 
 
 
 
 
 
Stock-based compensation
(3
)
 
(4
)
 
(7
)
 
(7
)
Corporate
(33
)
 
(42
)
 
(89
)
 
(84
)
Pre-opening
(2
)
 
(4
)
 
(3
)
 
(6
)
Development
(2
)
 
(2
)
 
(5
)
 
(5
)
Depreciation and amortization
(274
)
 
(327
)
 
(538
)
 
(648
)
Amortization of leasehold interests in land
(9
)
 
(9
)
 
(18
)
 
(19
)
Loss on disposal or impairment of assets
(105
)
 
(3
)
 
(110
)
 
(6
)
Operating income
797

 
817

 
1,955

 
1,581

Other Non-Operating Costs and Expenses
 
 
 
 
 
 
 
Interest income
9

 
4

 
14

 
7

Interest expense, net of amounts capitalized
(93
)
 
(79
)
 
(182
)
 
(157
)
Other income (expense)
44

 
(25
)
 
18

 
(61
)
Loss on modification or early retirement of debt
—

 
—

 
(3
)
 
(5
)
Income tax (expense) benefit
(81
)
 
(78
)
 
490

 
(147
)
Net income
$
676

 
$
639

 
$
2,292

 
$
1,218

 ____________________
(1)
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 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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

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.
 
Six Months Ended
June 30,
 
2018
 
2017
 
(In millions)
Capital Expenditures
 
 
 
Corporate and Other
$
54

 
$
4

Macao:
 
 
 
The Venetian Macao
69

 
61

Sands Cotai Central
53

 
34

The Parisian Macao
68

 
111

The Plaza Macao and Four Seasons Hotel Macao
22

 
13

Sands Macao
8

 
3

Ferry Operations and Other
—

 
2

 
220

 
224

Marina Bay Sands
72

 
92

United States:
 
 
 
Las Vegas Operating Properties
58

 
50

Sands Bethlehem
12

 
10

 
70

 
60

Total capital expenditures
$
416

 
$
380


 
June 30,
2018
 
December 31,
2017
 
(In millions)
Total Assets
 
 
 
Corporate and Other
$
2,419

 
$
953

Macao:
 
 
 
The Venetian Macao
2,492

 
2,640

Sands Cotai Central
3,778

 
3,891

The Parisian Macao
2,459

 
2,496

The Plaza Macao and Four Seasons Hotel Macao
857

 
930

Sands Macao
279

 
282

Ferry Operations and Other
262

 
275

 
10,127

 
10,514

Marina Bay Sands
4,744

 
5,054

United States:
 
 
 
Las Vegas Operating Properties
4,934

 
3,530

Sands Bethlehem
631

 
636

 
5,565

 
4,166

Total assets
$
22,855

 
$
20,687



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

 
June 30,
2018
 
December 31,
2017
 
(In millions)
Total Long-Lived Assets(1)
 
 
 
Corporate and Other
$
268

 
$
249

Macao:
 
 
 
The Venetian Macao
1,721

 
1,728

Sands Cotai Central
3,497

 
3,516

The Parisian Macao
2,332

 
2,375

The Plaza Macao and Four Seasons Hotel Macao(2)
776

 
853

Sands Macao
220

 
222

Ferry Operations and Other
138

 
146

 
8,684

 
8,840

Marina Bay Sands
4,166

 
4,336

United States:
 
 
 
Las Vegas Operating Properties
2,761

 
2,779

Sands Bethlehem
551

 
549

 
3,312

 
3,328

Total long-lived assets
$
16,430

 
$
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)
During the three months ended June 30, 2018, the Company recognized a loss on disposal or impairment of assets of $92 million related to the tower adjacent to the Four Seasons Hotel Macao (see "— Note 3 — Property and Equipment, Net").

26
Table of Contents

LAS VEGAS SANDS CORP. AND SUBSIDIARIES
ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto, and other financial information included in this Form 10-Q. Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. See "—Special Note Regarding Forward-Looking Statements."
Operations
Generally, we view each of our integrated resort properties as an operating segment. Our operating segments in the Macao Special Administrative Region ("Macao") of the People's Republic of China consist of The Venetian Macao; Sands Cotai Central; The Parisian Macao; The Plaza Macao and Four Seasons Hotel Macao; and the Sands Macao. Our operating segment in Singapore is the Marina Bay Sands. Our operating segments in the U.S. consist of the Las Vegas Operating Properties, which includes The Venetian Las Vegas, The Palazzo and the Sands Expo Center, and the Sands Bethlehem.
On March 8, 2018, we entered into a purchase and sale agreement under which PCI Gaming Authority, an unincorporated, chartered instrumentality of the Poarch Band of Creek Indians, will acquire the Sands Bethlehem property in Pennsylvania for a total enterprise value of $1.30 billion. The closing of the transaction is subject to regulatory review and other closing conditions.
Critical Accounting Policies and Estimates
The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our financial condition and results of operations. We believe these critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. For a discussion of our significant accounting policies and estimates, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" presented in our 2017 Annual Report on Form 10-K filed on February 23, 2018.
There were no newly identified significant accounting estimates during the six months ended June 30, 2018, nor were there any material changes to the critical accounting policies and estimates discussed in our 2017 Annual Report.
Recent Accounting Pronouncements
See related disclosure at "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 1 — Organization and Business of Company — Recent Accounting Pronouncements."

27
Table of Contents

Summary Financial Results
The following table summarizes our results of operations:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
Percent
Change
 
2018
 
2017
 
Percent
Change
 
 
(Dollars in millions)
Net revenues
 
$
3,303

 
$
3,109

 
6.2
 %
 
$
6,882

 
$
6,176

 
11.4
%
Operating expenses
 
2,506

 
2,292

 
9.3
 %
 
4,927

 
4,595

 
7.2
%
Operating income
 
797

 
817

 
(2.4
)%
 
1,955

 
1,581

 
23.7
%
Income before income taxes
 
757

 
717

 
5.6
 %
 
1,802

 
1,365

 
32.0
%
Net income
 
676

 
639

 
5.8
 %
 
2,292

 
1,218

 
88.2
%
Net income attributable to Las Vegas Sands Corp.
 
556

 
546

 
1.8
 %
 
2,012

 
1,027

 
95.9
%
The decrease in operating income for the three months ended June 30, 2018, was primarily due to softer rolling volume and win percentage in Singapore and a loss on disposal or impairment of assets. These items were offset by stronger operating performance in our Macao business due to a 17.8% increase in revenues and the impact of the change in useful lives of certain property and equipment.
The increase in operating income for the six months ended June 30, 2018, was due to stronger results across our Macao, Singapore and Las Vegas property portfolio and the impact of the change in useful lives of certain property and equipment. The increase in net income and net income attributable to Las Vegas Sands Corp. for the six months ended June 30, 2018, reflects a nonrecurring non-cash discrete income tax benefit of $670 million, as further described below.
Operating Results
Revenue Recognition
We adopted the new revenue recognition standard on January 1, 2018, on a full retrospective basis. Revenue from contracts with customers primarily consists of casino wagers, room sales, food and beverage transactions, rental income from our 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 junket operators 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 our loyalty programs.
When a patron earns points under our loyalty programs, the estimated stand-alone selling price of the points earned is deferred until redemption. Once redeemed, revenue is recognized in its respective revenue type. Similarly, revenue is also allocated to its respective revenue type for complimentaries provided at management's discretion. After the aforementioned allocations, the residual amount is recorded to casino revenue.
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 income until the revenue recognition criteria are met. Cancellation fees for hotel, meeting space and food and beverage services are 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 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 until the threshold is met.

28
Table of Contents

Key Operating Revenue Measurements
Operating revenues at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Marina Bay Sands and our Las Vegas Operating Properties are dependent upon the volume of customers who stay at the hotel, which affects the price that can be charged for hotel rooms and our gaming volume. Operating revenues at Sands Macao and Sands Bethlehem are principally driven by gaming patrons who visit the properties on a daily basis.
The following are the key measurements we use to evaluate operating revenues:
Casino revenue measurements for Macao and Singapore: Macao and Singapore table games are segregated into two groups: Rolling Chip play (composed of VIP players) and Non-Rolling Chip play (mostly non-VIP players). The volume measurement for Rolling Chip play is non-negotiable gaming chips wagered and lost. The volume measurement for Non-Rolling Chip play is table games drop ("drop"), which is net markers issued (credit instruments), cash deposited in the table drop boxes and gaming chips purchased and exchanged at the cage. Rolling Chip and Non-Rolling Chip volume measurements are not comparable as they are two distinct measures of volume. The amounts wagered and lost for Rolling Chip play are substantially higher than the amounts dropped for Non-Rolling Chip play. Slot handle ("handle"), also a volume measurement, is the gross amount wagered for the period cited.
We view Rolling Chip win as a percentage of Rolling Chip volume, Non-Rolling Chip win as a percentage of drop and slot hold (amount won by the casino) as a percentage of slot handle. Win or hold percentage represents the percentage of Rolling Chip volume, Non-Rolling Chip drop or slot handle that is won by the casino and recorded as casino revenue. Our win and hold percentages are calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis. Our Rolling Chip win percentage is expected to be 3.0% to 3.3% in Macao and 2.7% to 3.0% in Singapore, and our Non-Rolling Chip table games have produced a trailing 12-month win percentage of 24.6%, 21.0%, 20.1%, 23.7%, 18.5% and 19.4% at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Macao and Marina Bay Sands, respectively. As of January 1, 2018, Non-Rolling Chip drop at Marina Bay Sands includes chips purchased and exchanged at the cage, consistent with our Macao properties. Prior period amounts have been updated to conform to the current presentation. Our slot machines have produced a trailing 12-month hold percentage of 5.0%, 4.2%, 2.8%, 7.3%, 3.3% and 4.4% at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Macao and Marina Bay Sands, respectively. Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages. Generally, slot machine play is conducted on a cash basis. In Macao and Singapore, 15.0% and 24.1%, respectively, of our table games play was conducted on a credit basis for the six months ended June 30, 2018.
Casino revenue measurements for the U.S.: The volume measurements in the U.S. are slot handle, as previously described, and table games drop, which is the total amount of cash and net markers issued that are deposited in the table drop box. We view table games win as a percentage of drop and slot hold as a percentage of handle. Our win and hold percentages are calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis. Based upon our mix of table games, our table games are expected to produce a win percentage of 18% to 26% for Baccarat and 16% to 24% for non-Baccarat. Table games at Sands Bethlehem have produced a trailing 12-month win percentage of 18.9%. Our slot machines have produced a trailing 12-month hold percentage of 8.5% and 6.5% at our Las Vegas Operating Properties and at Sands Bethlehem, respectively. Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages. Similar to Macao and Singapore, slot machine play is generally conducted on a cash basis. Approximately 61.6% of our table games play at our Las Vegas Operating Properties, for the six months ended June 30, 2018, was conducted on a credit basis, while our table games play in Pennsylvania is primarily conducted on a cash basis.
Hotel revenue measurements: Performance indicators used are occupancy rate (a volume indicator), which is the average percentage of available hotel rooms occupied during a period and average daily room rate ("ADR," a price indicator), which is the average price of occupied rooms per day. Available rooms exclude those rooms unavailable for occupancy during the period due to renovation, development or other requirements. Revenue per available room ("RevPAR") represents a summary of hotel ADR and occupancy. Because not all available rooms are occupied, ADR is normally higher than RevPAR. Reserved rooms where the guests do not show up for their stay and lose their deposit, or where guests check out early, may be resold to walk-in guests.

29
Table of Contents

Mall revenue measurements: Occupancy, base rent per square foot and tenant sales per square foot are used as performance indicators. Occupancy represents gross leasable occupied area ("GLOA") divided by gross leasable area ("GLA") at the end of the reporting period. GLOA is the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but paying rent. GLA does not include space that is currently under development or not on the market for lease. Base rent per square foot is the weighted average base, or minimum, rent charge in effect at the end of the reporting period for all tenants that would qualify to be included in occupancy. Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period. Only tenants that have been open for a minimum of 12 months are included in the tenant sales per square foot calculation.
Three Months Ended June 30, 2018 Compared to the Three Months Ended June 30, 2017
Operating Revenues
Our net revenues consisted of the following:
 
Three Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Casino
$
2,346

 
$
2,243

 
4.6
%
Rooms
418

 
367

 
13.9
%
Food and beverage
219

 
195

 
12.3
%
Mall
164

 
159

 
3.1
%
Convention, retail and other
156

 
145

 
7.6
%
Total net revenues
$
3,303

 
$
3,109

 
6.2
%
Consolidated net revenues were $3.30 billion for the three months ended June 30, 2018, an increase of $194 million compared to $3.11 billion for the three months ended June 30, 2017. The increase was primarily driven by an increase of $319 million at our Macao operating properties, primarily due to increased casino revenues. The increase was partially offset by a $129 million decrease at Marina Bay Sands, primarily due to decreased casino revenues.
Net casino revenues increased $103 million compared to the three months ended June 30, 2017. The increase was primarily attributable to a $287 million increase in Macao, primarily driven by increases in Non-Rolling Chip drop and Rolling Chip volume at each of our Macao operating properties, partially offset by a $157 million decrease at Marina Bay Sands, driven by a decrease in Rolling Chip volume and win percentage. The following table summarizes the results of our casino activity:
 
Three Months Ended June 30,
 
2018
 
2017
 
Change
 
(Dollars in millions)
Macao Operations:
 
 
 
 
 
The Venetian Macao
 
 
 
 
 
Total net casino revenues
$
677

 
$
538

 
25.8
 %
Non-Rolling Chip drop
$
2,245

 
$
1,695

 
32.4
 %
Non-Rolling Chip win percentage
25.1
%
 
25.7
%
 
(0.6
)pts
Rolling Chip volume
$
7,464

 
$
5,172

 
44.3
 %
Rolling Chip win percentage
3.10
%
 
3.61
%
 
(0.51
)pts
Slot handle
$
819

 
$
681

 
20.3
 %
Slot hold percentage
4.5
%
 
5.3
%
 
(0.8
)pts
Sands Cotai Central
 
 
 
 
 
Total net casino revenues
$
386

 
$
331

 
16.6
 %
Non-Rolling Chip drop
$
1,635

 
$
1,367

 
19.6
 %
Non-Rolling Chip win percentage
21.0
%
 
21.1
%
 
(0.1
)pts
Rolling Chip volume
$
2,592

 
$
2,522

 
2.8
 %
Rolling Chip win percentage
3.24
%
 
3.15
%
 
0.09
 pts
Slot handle
$
1,236

 
$
1,139

 
8.5
 %
Slot hold percentage
4.1
%
 
4.0
%
 
0.1
 pts

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Table of Contents

 
Three Months Ended June 30,
 
2018
 
2017
 
Change
 
(Dollars in millions)
The Parisian Macao
 
 
 
 
 
Total net casino revenues
$
308

 
$
285

 
8.1
 %
Non-Rolling Chip drop
$
1,057

 
$
973

 
8.6
 %
Non-Rolling Chip win percentage
19.6
%
 
19.7
%
 
(0.1
)pts
Rolling Chip volume
$
4,479

 
$
3,760

 
19.1
 %
Rolling Chip win percentage
3.76
%
 
3.89
%
 
(0.13
)pts
Slot handle
$
1,173

 
$
935

 
25.5
 %
Slot hold percentage
2.4
%
 
3.3
%
 
(0.9
)pts
The Plaza Macao and Four Seasons Hotel Macao
 
 
 
 
 
Total net casino revenues
$
136

 
$
88

 
54.5
 %
Non-Rolling Chip drop
$
318

 
$
295

 
7.8
 %
Non-Rolling Chip win percentage
27.0
%
 
24.3
%
 
2.7
 pts
Rolling Chip volume
$
2,649

 
$
2,417

 
9.6
 %
Rolling Chip win percentage
3.75
%
 
1.97
%
 
1.78
 pts
Slot handle
$
135

 
$
97

 
39.2
 %
Slot hold percentage
7.8
%
 
7.5
%
 
0.3
 pts
Sands Macao
 
 
 
 
 
Total net casino revenues
$
166

 
$
144

 
15.3
 %
Non-Rolling Chip drop
$
659

 
$
626

 
5.3
 %
Non-Rolling Chip win percentage
18.6
%
 
18.8
%
 
(0.2
)pts
Rolling Chip volume
$
1,374

 
$
968

 
41.9
 %
Rolling Chip win percentage
4.48
%
 
3.80
%
 
0.68
 pts
Slot handle
$
641

 
$
614

 
4.4
 %
Slot hold percentage
3.3
%
 
3.2
%
 
0.1
 pts
Singapore Operations:
 
 
 
 
 
Marina Bay Sands
 
 
 
 
 
Total net casino revenues
$
494

 
$
651

 
(24.1
)%
Non-Rolling Chip drop(1)
$
1,337

 
$
1,267

 
5.5
 %
Non-Rolling Chip win percentage(1)
20.5
%
 
20.1
%
 
0.4
 pts
Rolling Chip volume
$
5,870

 
$
8,709

 
(32.6
)%
Rolling Chip win percentage
2.84
%
 
4.42
%
 
(1.58
)pts
Slot handle
$
3,619

 
$
3,403

 
6.3
 %
Slot hold percentage
4.6
%
 
4.3
%
 
0.3
 pts
U.S. Operations:
 
 
 
 
 
Las Vegas Operating Properties
 
 
 
 
 
Total net casino revenues
$
60

 
$
81

 
(25.9
)%
Table games drop
$
342

 
$
352

 
(2.8
)%
Table games win percentage
7.7
%
 
16.3
%
 
(8.6
)pts
Slot handle
$
683

 
$
606

 
12.7
 %
Slot hold percentage
8.4
%
 
8.8
%
 
(0.4
)pts
Sands Bethlehem
 
 
 
 
 
Total net casino revenues
$
119

 
$
125

 
(4.8
)%
Table games drop
$
290

 
$
276

 
5.1
 %
Table games win percentage
17.7
%
 
20.8
%
 
(3.1
)pts
Slot handle
$
1,224

 
$
1,179

 
3.8
 %
Slot hold percentage
6.5
%
 
6.6
%
 
(0.1
)pts
____________________
(1)
As of January 1, 2018, Non-Rolling Chip drop includes chips purchased and exchanged at the cage. Prior period amounts have been updated to conform to the current period presentation.

31
Table of Contents

In our experience, average win percentages remain fairly consistent when measured over extended periods of time with a significant volume of wagers, but can vary considerably within shorter time periods as a result of the statistical variances that are associated with games of chance in which large amounts are wagered.
Room revenues increased $51 million compared to the three months ended June 30, 2017. The increase was primarily due to increases of $14 million at our Las Vegas Operating Properties and Sands Cotai Central, $13 million at Marina Bay Sands and $12 million at The Venetian Macao, driven by increases in occupancy and ADR. During the three months ended June 30, 2018, there were approximately 26% fewer rooms available at The Parisian Macao compared to the three months ended June 30, 2017, due to the construction work of combining and converting standard rooms to suites. The following table summarizes the results of our room activity:
 
Three Months Ended June 30,
 
2018
 
2017
 
Change
 
(Room revenues in millions)
Macao Operations:
 
 
 
 
 
The Venetian Macao
 
 
 
 
 
Total room revenues
$
52

 
$
40

 
30.0
 %
Occupancy rate
95.6
%
 
93.3
%
 
2.3
 pts
Average daily room rate (ADR)
$
217

 
$
202

 
7.4
 %
Revenue per available room (RevPAR)
$
208

 
$
189

 
10.1
 %
Sands Cotai Central
 
 
 
 
 
Total room revenues
$
78

 
$
64

 
21.9
 %
Occupancy rate
93.0
%
 
81.4
%
 
11.6
 pts
Average daily room rate (ADR)
$
150

 
$
141

 
6.4
 %
Revenue per available room (RevPAR)
$
140

 
$
114

 
22.8
 %
The Parisian Macao
 
 
 
 
 
Total room revenues
$
28

 
$
31

 
(9.7
)%
Occupancy rate
96.4
%
 
88.0
%
 
8.4
 pts
Average daily room rate (ADR)
$
149

 
$
137

 
8.8
 %
Revenue per available room (RevPAR)
$
143

 
$
120

 
19.2
 %
The Plaza Macao and Four Seasons Hotel Macao
 
 
 
 
 
Total room revenues
$
10

 
$
8

 
25.0
 %
Occupancy rate
86.8
%
 
81.3
%
 
5.5
 pts
Average daily room rate (ADR)
$
310

 
$
347

 
(10.7
)%
Revenue per available room (RevPAR)
$
269

 
$
282

 
(4.6
)%
Sands Macao
 
 
 
 
 
Total room revenues
$
4

 
$
5

 
(20.0
)%
Occupancy rate
99.0
%
 
98.5
%
 
0.5
 pts
Average daily room rate (ADR)
$
159

 
$
191

 
(16.8
)%
Revenue per available room (RevPAR)
$
158

 
$
188

 
(16.0
)%
Singapore Operations:
 
 
 
 
 
Marina Bay Sands
 
 
 
 
 
Total room revenues
$
93

 
$
80

 
16.3
 %
Occupancy rate
96.9
%
 
94.3
%
 
2.6
 pts
Average daily room rate (ADR)
$
418

 
$
396

 
5.6
 %
Revenue per available room (RevPAR)
$
405

 
$
374

 
8.3
 %
U.S. Operations:
 
 
 
 
 
Las Vegas Operating Properties
 
 
 
 
 
Total room revenues
$
149

 
$
135

 
10.4
 %
Occupancy rate
97.3
%
 
92.7
%
 
4.6
 pts
Average daily room rate (ADR)
$
241

 
$
232

 
3.9
 %
Revenue per available room (RevPAR)
$
235

 
$
215

 
9.3
 %
Sands Bethlehem
 
 
 
 
 
Total room revenues
$
4

 
$
4

 
—

Occupancy rate
94.4
%
 
93.9
%
 
0.5
 pts
Average daily room rate (ADR)
$
163

 
$
162

 
0.6
 %
Revenue per available room (RevPAR)
$
154

 
$
152

 
1.3
 %

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Table of Contents

Food and beverage revenues increased $24 million compared to the three months ended June 30, 2017. The increase is primarily attributable to increases of $12 million and $10 million at our Las Vegas Operating Properties and Marina Bay Sands, respectively, driven by an increase in banquet operations and the opening of new restaurants.
Mall revenues were relatively consistent with the three months ended June 30, 2017. For further information related to the financial performance of our malls, see "— Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our malls on the Cotai Strip in Macao and in Singapore:
 
Three Months Ended June 30,
 
2018
 
2017
 
Change
 
(Mall revenues in millions)
Macao Operations:
 
 
 
 
 
Shoppes at Venetian
 
 
 
 
 
Total mall revenues
$
56

 
$
55

 
1.8
 %
Mall gross leasable area (in square feet)
786,652

 
779,025

 
1.0
 %
Occupancy
91.4
%
 
97.7
%
 
(6.3
)pts
Base rent per square foot
$
262

 
$
245

 
6.9
 %
Tenant sales per square foot
$
1,656

 
$
1,340

 
23.6
 %
Shoppes at Cotai Central(1)
 
 
 
 
 
Total mall revenues
$
15

 
$
14

 
7.1
 %
Mall gross leasable area (in square feet)
517,238

 
425,630

 
21.5
 %
Occupancy
90.9
%
 
93.5
%
 
(2.6
)pts
Base rent per square foot
$
114

 
$
120

 
(5.0
)%
Tenant sales per square foot
$
849

 
$
676

 
25.6
 %
Shoppes at Parisian
 
 
 
 
 
Total mall revenues
$
15

 
$
17

 
(11.8
)%
Mall gross leasable area (in square feet)
295,896

 
299,053

 
(1.1
)%
Occupancy
90.7
%
 
92.7
%
 
(2.0
)pts
Base rent per square foot
$
192

 
$
221

 
(13.1
)%
Tenant sales per square foot(2)
$
649

 
—

 
N/M

Shoppes at Four Seasons
 
 
 
 
 
Total mall revenues
$
33

 
$
32

 
3.1
 %
Mall gross leasable area (in square feet)
258,264

 
259,533

 
(0.5
)%
Occupancy
98.8
%
 
99.5
%
 
(0.7
)pts
Base rent per square foot
$
460

 
$
455

 
1.1
 %
Tenant sales per square foot
$
4,078

 
$
3,097

 
31.7
 %
Singapore Operations:
 
 
 
 
 
The Shoppes at Marina Bay Sands
 
 
 
 
 
Total mall revenues
$
42

 
$
40

 
5.0
 %
Mall gross leasable area (in square feet)
609,142

 
608,947

 
—

Occupancy
94.1
%
 
97.4
%
 
(3.3
)pts
Base rent per square foot
$
260

 
$
223

 
16.6
 %
Tenant sales per square foot
$
1,773

 
$
1,482

 
19.6
 %
__________________________
N/M - Not Meaningful
Note:
This table excludes the results of our mall operations at Sands Macao and Sands Bethlehem.
(1)
The Shoppes at Cotai Central will feature up to approximately 600,000 square feet of gross leasable area upon completion of all phases of Sands Cotai Central's renovation, rebranding and expansion to The Londoner Macao.
(2)
The Shoppes at Parisian opened in September 2016. Tenant sales per square foot reflect sales from tenants only after the tenant has been open for a period of 12 months.

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Table of Contents

Operating Expenses
Our operating expenses consisted of the following:
 
Three Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Casino
$
1,331

 
$
1,176

 
13.2
 %
Rooms
111

 
101

 
9.9
 %
Food and beverage
168

 
156

 
7.7
 %
Mall
18

 
18

 
—
 %
Convention, retail and other
78

 
78

 
—
 %
Provision for doubtful accounts
7

 
22

 
(68.2
)%
General and administrative
368

 
354

 
4.0
 %
Corporate
33

 
42

 
(21.4
)%
Pre-opening
2

 
4

 
(50.0
)%
Development
2

 
2

 
—
 %
Depreciation and amortization
274

 
327

 
(16.2
)%
Amortization of leasehold interests in land
9

 
9

 
—
 %
Loss on disposal or impairment of assets
105

 
3

 
N/M

Total operating expenses
$
2,506

 
$
2,292

 
9.3
 %
__________________________
N/M - Not Meaningful
Operating expenses were $2.51 billion for the three months ended June 30, 2018, an increase of $214 million compared to $2.29 billion for the three months ended June 30, 2017. The increase in operating expenses was primarily driven by an increase in casino expenses at our Macao operating properties due to increased casino revenues and visitation.
Casino expenses increased $155 million compared to the three months ended June 30, 2017. The increase was primarily attributable to a $160 million increase at our Macao operating properties, driven by an increase in gaming tax due to increased casino revenues.
The provision for doubtful accounts was $7 million for the three months ended June 30, 2018, compared to $22 million for the three months ended June 30, 2017. The decrease primarily resulted from increased collections of previously reserved customer balances. The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities. We believe the amount of our provision for doubtful accounts in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.
Corporate expenses decreased $9 million compared to the three months ended June 30, 2017. The decrease was primarily due to legal fee insurance recoveries.
Depreciation and amortization expense decreased $53 million compared to the three months ended June 30, 2017. The decrease was primarily driven by a $64 million decrease resulting from a change in the estimated useful lives of certain property and equipment (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 3 — Property and Equipment, Net").
The loss on disposal or impairment of assets of $105 million for the three months ended June 30, 2018, consisted primarily of a $92 million write-off of costs related to the tower adjacent to the Four Seasons Hotel Macao.
Adjusted Property EBITDA
Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is used by management as the primary measure of the operating performance of our segments. Consolidated adjusted property EBITDA 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 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

34
Table of Contents

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. We have 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, our presentation of consolidated adjusted property EBITDA may not be directly comparable to similarly titled measures presented by other companies.
The following table summarizes information related to our segments (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 8 — Segment Information" for discussion of our operating segments and a reconciliation of consolidated adjusted property EBITDA to net income):
 
Three Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Macao:
 
 
 
 
 
The Venetian Macao
$
331

 
$
256

 
29.3
 %
Sands Cotai Central
176

 
134

 
31.3
 %
The Parisian Macao
114

 
106

 
7.5
 %
The Plaza Macao and Four Seasons Hotel Macao
72

 
60

 
20.0
 %
Sands Macao
52

 
39

 
33.3
 %
Ferry Operations and Other
5

 
5

 
—
 %
 
750

 
600

 
25.0
 %
Marina Bay Sands
368

 
492

 
(25.2
)%
United States:
 
 
 
 
 
Las Vegas Operating Properties
77

 
79

 
(2.5
)%
Sands Bethlehem
30

 
37

 
(18.9
)%
 
107

 
116

 
(7.8
)%
Consolidated adjusted property EBITDA
$
1,225

 
$
1,208

 
1.4
 %
Adjusted property EBITDA at our Integrated Resorts is primarily driven by our casino, room and food and beverage operations, as previously discussed.
Adjusted property EBITDA at our Macao operations increased $150 million compared to the three months ended June 30, 2017. As previously described, the increase was primarily due to increased casino revenues, driven by increases in Non-Rolling Chip drop and Rolling Chip volume.
Adjusted property EBITDA at Marina Bay Sands decreased $124 million compared to the three months ended June 30, 2017. As previously described, the decrease was primarily due to decreased casino revenues, driven by a decrease in Rolling Chip volume and win percentage.
Adjusted property EBITDA at our Las Vegas Operating Properties decreased $2 million compared to the three months ended June 30, 2017. The decrease was primarily due to decreased casino revenues, driven by a decrease in table games win percentage, partially offset by an increase in room revenues due to increases in occupancy and ADR.
Adjusted property EBITDA at Sands Bethlehem decreased $7 million compared to the three months ended June 30, 2017. The decrease was primarily due to decreased casino revenues, driven by a decrease in table games win percentage.

35
Table of Contents

Interest Expense
The following table summarizes information related to interest expense:
 
Three Months Ended June 30,
 
2018
 
2017
 
(Dollars in millions)
Interest cost (which includes the amortization of deferred financing costs and original issue discount)
$
90

 
$
75

Add — imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo
4

 
4

Less — capitalized interest
(1
)
 
—

Interest expense, net
$
93

 
$
79

Cash paid for interest
$
81

 
$
65

Weighted average total debt balance
$
10,179

 
$
9,955

Weighted average interest rate
3.5
%
 
3.0
%
Interest cost increased $15 million compared to the three months ended June 30, 2017, resulting primarily from an increase in our weighted average interest rate.
Other Factors Affecting Earnings
Other income was $44 million for the three months ended June 30, 2018, compared to other expense of $25 million for the three months ended June 30, 2017. Other income during the three months ended June 30, 2018, was primarily attributable to $44 million of foreign currency transaction gains, driven by Singapore dollar denominated intercompany debt reported in U.S. dollars. These gains resulted from the appreciation of the U.S. dollar versus the Singapore dollar during the period.
Our effective income tax rate was 10.7% for the three months ended June 30, 2018, compared to 10.9% for the three months ended June 30, 2017. The effective income tax rate for the three months ended June 30, 2018, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax rate on our U.S. operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao, effective through the end of 2018. We have recorded a valuation allowance related to certain deferred tax assets previously generated by operations in the U.S. and certain foreign jurisdictions; however, to the extent that the financial results of our operations improve or we determine related administrative guidance, notices, implementation regulations, potential legislative amendments and interpretations of the Tax Cuts and Jobs Act (the "Act") require changes to positions we have taken and it becomes “more-likely-than-not” these deferred tax assets, or a portion thereof, are realizable, we will reduce the valuation allowances in the period such determination is made, as appropriate.
The net income attributable to our noncontrolling interests was $120 million for the three months ended June 30, 2018, compared to $93 million for the three months ended June 30, 2017. These amounts are primarily related to the noncontrolling interest of Sands China Ltd. ("SCL").
Six Months Ended June 30, 2018 Compared to the Six Months Ended June 30, 2017
Operating Revenues
Our net revenues consisted of the following:
 
Six Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Casino
$
4,945

 
$
4,400

 
12.4
%
Rooms
863

 
765

 
12.8
%
Food and beverage
447

 
407

 
9.8
%
Mall
320

 
316

 
1.3
%
Convention, retail and other
307

 
288

 
6.6
%
Total net revenues
$
6,882

 
$
6,176

 
11.4
%

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Table of Contents

Consolidated net revenues were $6.88 billion for the six months ended June 30, 2018, an increase of $706 million compared to $6.18 billion for the six months ended June 30, 2017. The increase was primarily driven by a $629 million increase at our Macao operating properties, primarily due to increased casino revenues, and a $53 million increase at Marina Bay Sands, primarily driven by increased room and food and beverage revenues.
Net casino revenues increased $545 million compared to the six months ended June 30, 2017. The increase is primarily attributable to a $557 million increase at our Macao operating properties, driven by an increase in Non-Rolling Chip drop and Rolling Chip volume. The following table summarizes the results of our casino activity:
 
Six Months Ended June 30,
 
2018
 
2017
 
Change
 
(Dollars in millions)
Macao Operations:
 
 
 
 
 
The Venetian Macao
 
 
 
 
 
Total net casino revenues
$
1,393

 
$
1,134

 
22.8
 %
Non-Rolling Chip drop
$
4,489

 
$
3,423

 
31.1
 %
Non-Rolling Chip win percentage
24.4
%
 
25.6
%
 
(1.2
) pts
Rolling Chip volume
$
15,329

 
$
11,321

 
35.4
 %
Rolling Chip win percentage
3.66
%
 
3.80
%
 
(0.14
) pts
Slot handle
$
1,656

 
$
1,334

 
24.1
 %
Slot hold percentage
4.8
%
 
5.3
%
 
(0.5
) pts
Sands Cotai Central
 
 
 
 
 
Total net casino revenues
$
804

 
$
675

 
19.1
 %
Non-Rolling Chip drop
$
3,395

 
$
2,836

 
19.7
 %
Non-Rolling Chip win percentage
21.2
%
 
20.5
%
 
0.7
  pts
Rolling Chip volume
$
5,000

 
$
5,421

 
(7.8
)%
Rolling Chip win percentage
3.33
%
 
3.05
%
 
0.28
  pts
Slot handle
$
2,512

 
$
2,328

 
7.9
 %
Slot hold percentage
4.0
%
 
4.0
%
 
—

The Parisian Macao
 
 
 
 
 
Total net casino revenues
$
599

 
$
528

 
13.4
 %
Non-Rolling Chip drop
$
2,143

 
$
1,956

 
9.6
 %
Non-Rolling Chip win percentage
19.9
%
 
18.9
%
 
1.0
  pts
Rolling Chip volume
$
9,077

 
$
7,482

 
21.3
 %
Rolling Chip win percentage
3.26
%
 
3.36
%
 
(0.10
) pts
Slot handle
$
2,217

 
$
1,789

 
23.9
 %
Slot hold percentage
2.5
%
 
3.6
%
 
(1.1
) pts
The Plaza Macao and Four Seasons Hotel Macao
 
 
 
 
 
Total net casino revenues
$
278

 
$
180

 
54.4
 %
Non-Rolling Chip drop
$
734

 
$
597

 
22.9
 %
Non-Rolling Chip win percentage
24.8
%
 
23.1
%
 
1.7
  pts
Rolling Chip volume
$
5,704

 
$
4,247

 
34.3
 %
Rolling Chip win percentage
3.49
%
 
2.66
%
 
0.83
  pts
Slot handle
$
270

 
$
194

 
39.2
 %
Slot hold percentage
7.3
%
 
7.4
%
 
(0.1
) pts
Sands Macao
 
 
 
 
 
Total net casino revenues
$
308

 
$
308

 
—

Non-Rolling Chip drop
$
1,316

 
$
1,239

 
6.2
 %
Non-Rolling Chip win percentage
18.4
%
 
19.4
%
 
(1.0
) pts
Rolling Chip volume
$
2,271

 
$
2,881

 
(21.2
)%
Rolling Chip win percentage
3.80
%
 
3.01
%
 
0.79
  pts
Slot handle
$
1,281

 
$
1,210

 
5.9
 %
Slot hold percentage
3.2
%
 
3.3
%
 
(0.1
) pts

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Table of Contents

 
Six Months Ended June 30,
 
2018
 
2017
 
Change
 
(Dollars in millions)
Singapore Operations:
 
 
 
 
 
Marina Bay Sands
 
 
 
 
 
Total net casino revenues
$
1,146

 
$
1,143

 
0.3
 %
Non-Rolling Chip drop
$
2,735

 
$
2,553

 
7.1
 %
Non-Rolling Chip win percentage
19.4
%
 
21.1
%
 
(1.7
) pts
Rolling Chip volume
$
13,246

 
$
17,625

 
(24.8
)%
Rolling Chip win percentage
3.91
%
 
3.46
%
 
0.45
  pts
Slot handle
$
7,504

 
$
6,824

 
10.0
 %
Slot hold percentage
4.5
%
 
4.3
%
 
0.2
  pts
U.S. Operations:
 
 
 
 
 
Las Vegas Operating Properties
 
 
 
 
 
Total net casino revenues
$
180

 
$
185

 
(2.7
)%
Table games drop
$
833

 
$
785

 
6.1
 %
Table games win percentage
16.6
%
 
19.2
%
 
(2.6
) pts
Slot handle
$
1,301

 
$
1,210

 
7.5
 %
Slot hold percentage
8.4
%
 
8.5
%
 
(0.1
) pts
Sands Bethlehem
 
 
 
 
 
Total net casino revenues
$
237

 
$
247

 
(4.0
)%
Table games drop
$
571

 
$
545

 
4.8
 %
Table games win percentage
17.9
%
 
20.5
%
 
(2.6
) pts
Slot handle
$
2,395

 
$
2,340

 
2.4
 %
Slot hold percentage
6.6
%
 
6.6
%
 
—

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


38
Table of Contents

Room revenues increased $98 million compared to the six months ended June 30, 2017. The increase is primarily due to increases of $31 million, $27 million, $19 million and $19 million at Sands Cotai Central, The Venetian Macao, Marina Bay Sands and our Las Vegas Operating Properties, respectively, driven by increased occupancy and ADR. During the six months ended June 30, 2018, there were approximately 18% fewer rooms available at The Parisian Macao compared to the six months ended June 30, 2017, due to the construction work of combining and converting standard rooms to suites. The following table summarizes the results of our room activity:
 
Six Months Ended June 30,
 
2018
 
2017
 
Change
 
(Room revenues in millions)
Macao Operations:
 
 
 
 
 
The Venetian Macao
 
 
 
 
 
Total room revenues
$
109

 
$
82

 
32.9
 %
Occupancy rate
95.8
%
 
89.6
%
 
6.2
  pts
Average daily room rate (ADR)
$
225

 
$
203

 
10.8
 %
Revenue per available room (RevPAR)
$
215

 
$
182

 
18.1
 %
Sands Cotai Central
 
 
 
 
 
Total room revenues
$
160

 
$
129

 
24.0
 %
Occupancy rate
93.2
%
 
80.4
%
 
12.8
  pts
Average daily room rate (ADR)
$
154

 
$
144

 
6.9
 %
Revenue per available room (RevPAR)
$
144

 
$
116

 
24.1
 %
The Parisian Macao
 
 
 
 
 
Total room revenues
$
61

 
$
60

 
1.7
 %
Occupancy rate
95.4
%
 
84.9
%
 
10.5
  pts
Average daily room rate (ADR)
$
150

 
$
136

 
10.3
 %
Revenue per available room (RevPAR)
$
143

 
$
115

 
24.3
 %
The Plaza Macao and Four Seasons Hotel Macao
 
 
 
 
 
Total room revenues
$
19

 
$
16

 
18.8
 %
Occupancy rate
87.8
%
 
80.2
%
 
7.6
  pts
Average daily room rate (ADR)
$
316

 
$
357

 
(11.5
)%
Revenue per available room (RevPAR)
$
277

 
$
286

 
(3.1
)%
Sands Macao
 
 
 
 
 
Total room revenues
$
8

 
$
10

 
(20.0
)%
Occupancy rate
98.9
%
 
98.2
%
 
0.7
  pts
Average daily room rate (ADR)
$
162

 
$
193

 
(16.1
)%
Revenue per available room (RevPAR)
$
161

 
$
189

 
(14.8
)%
Singapore Operations:
 
 
 
 
 
Marina Bay Sands
 
 
 
 
 
Total room revenues
$
193

 
$
174

 
10.9
 %
Occupancy rate
96.8
%
 
95.6
%
 
1.2
  pts
Average daily room rate (ADR)
$
436

 
$
418

 
4.3
 %
Revenue per available room (RevPAR)
$
423

 
$
400

 
5.8
 %
U.S. Operations:
 
 
 
 
 
Las Vegas Operating Properties
 
 
 
 
 
Total room revenues
$
305

 
$
286

 
6.6
 %
Occupancy rate
96.6
%
 
93.5
%
 
3.1
  pts
Average daily room rate (ADR)
$
249

 
$
245

 
1.6
 %
Revenue per available room (RevPAR)
$
241

 
$
229

 
5.2
 %
Sands Bethlehem
 
 
 
 
 
Total room revenues
$
8

 
$
8

 
—

Occupancy rate
91.3
%
 
92.0
%
 
(0.7
) pts
Average daily room rate (ADR)
$
161

 
$
160

 
0.6
 %
Revenue per available room (RevPAR)
$
147

 
$
147

 
—



39
Table of Contents

Food and beverage revenues increased $40 million compared to the six months ended June 30, 2017. The increase is primarily attributable to increases of $19 million and $9 million at Marina Bay Sands and our Las Vegas Operating Properties, respectively, driven by an increase in banquet operations and the opening of new restaurants.
Mall revenues increased $4 million compared to the six months ended June 30, 2017. The increase was primarily due to a $6 million increase at the Shoppes at Marina Bay Sands, driven by an increase in base rents. For further information related to the financial performance of our malls, see "— Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our malls on the Cotai Strip in Macao and in Singapore:
 
Six Months Ended June 30,(1)
 
2018
 
2017
 
Change
 
(Mall revenues in millions)
Macao Operations:
 
 
 
 
 
Shoppes at Venetian
 
 
 
 
 
Total mall revenues
$
109

 
$
106

 
2.8
 %
Mall gross leasable area (in square feet)
786,652

 
779,025

 
1.0
 %
Occupancy
91.4
%
 
97.7
%
 
(6.3
) pts
Base rent per square foot
$
262

 
$
245

 
6.9
 %
Tenant sales per square foot
$
1,656

 
$
1,340

 
23.6
 %
Shoppes at Cotai Central(2)
 
 
 
 
 
Total mall revenues
$
29

 
$
33

 
(12.1
)%
Mall gross leasable area (in square feet)
517,238

 
425,630

 
21.5
 %
Occupancy
90.9
%
 
93.5
%
 
(2.6
) pts
Base rent per square foot
$
114

 
$
120

 
(5.0
)%
Tenant sales per square foot
$
849

 
$
676

 
25.6
 %
Shoppes at Parisian
 
 
 
 
 
Total mall revenues
$
30

 
$
34

 
(11.8
)%
Mall gross leasable area (in square feet)
295,896

 
299,053

 
(1.1
)%
Occupancy
90.7
%
 
92.7
%
 
(2.0
) pts
Base rent per square foot
$
192

 
$
221

 
(13.1
)%
Tenant sales per square foot(3)
$
649

 
—

 
N/M

Shoppes at Four Seasons
 
 
 
 
 
Total mall revenues
$
64

 
$
63

 
1.6
 %
Mall gross leasable area (in square feet)
258,264

 
259,533

 
(0.5
)%
Occupancy
98.8
%
 
99.5
%
 
(0.7
) pts
Base rent per square foot
$
460

 
$
455

 
1.1
 %
Tenant sales per square foot
$
4,078

 
$
3,097

 
31.7
 %
Singapore Operations:
 
 
 
 
 
The Shoppes at Marina Bay Sands
 
 
 
 
 
Total mall revenues
$
84

 
$
78

 
7.7
 %
Mall gross leasable area (in square feet)
609,142

 
608,947

 
—

Occupancy
94.1
%
 
97.4
%
 
(3.3
) pts
Base rent per square foot
$
260

 
$
223

 
16.6
 %
Tenant sales per square foot
$
1,773

 
$
1,482

 
19.6
 %
__________________________
N/M - Not Meaningful
Note:
This table excludes the results of our mall operations at Sands Macao and Sands Bethlehem.
(1)
As GLA, occupancy, base rent per square foot and tenant sales per square foot are calculated as of June 30, 2018 and 2017, they are identical to the summary presented herein for the three months ended June 30, 2018 and 2017, respectively.
(2)
The Shoppes at Cotai Central will feature up to approximately 600,000 square feet of gross leasable area upon completion of all phases of Sands Cotai Central's renovation, rebranding and expansion to The Londoner Macao.
(3)
The Shoppes at Parisian opened in September 2016. Tenant sales per square foot reflect sales from tenants only after the tenant has been open for a period of 12 months.

40
Table of Contents

Operating Expenses
Our operating expenses consisted of the following:
 
Six Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Casino
$
2,702

 
$
2,369

 
14.1
 %
Rooms
221

 
202

 
9.4
 %
Food and beverage
340

 
316

 
7.6
 %
Mall
35

 
34

 
2.9
 %
Convention, retail and other
162

 
159

 
1.9
 %
Provision for (recovery of) doubtful accounts
(9
)
 
54

 
(116.7
)%
General and administrative
713

 
693

 
2.9
 %
Corporate
89

 
84

 
6.0
 %
Pre-opening
3

 
6

 
(50.0
)%
Development
5

 
5

 
—
 %
Depreciation and amortization
538

 
648

 
(17.0
)%
Amortization of leasehold interests in land
18

 
19

 
(5.3
)%
Loss on disposal or impairment of assets
110

 
6

 
1,733.3
 %
Total operating expenses
$
4,927

 
$
4,595

 
7.2
 %
Operating expenses were $4.93 billion for the six months ended June 30, 2018, an increase of $332 million compared to $4.60 billion for the six months ended June 30, 2017. The increase in operating expenses was primarily driven by an increase in casino expenses at our Macao operating properties due to increased casino revenues and visitation.
Casino expenses increased $333 million compared to the six months ended June 30, 2017. The increase was primarily attributable to a $313 million increase at our Macao operating properties, driven by an increase in gaming taxes due to increased casino revenues.
The recovery of doubtful accounts was $9 million for the six months ended June 30, 2018, compared to the provision for doubtful accounts of $54 million for the six months ended June 30, 2017. The decrease resulted from increased collections of previously reserved customer balances during the six months ended June 30, 2018, as compared to the prior year period, and continuing improvement in the quality of casino credit currently being extended. The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities at any given time. We believe that the amount of our provision for doubtful accounts in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.
Depreciation and amortization expense decreased $110 million compared to the six months ended June 30, 2017. The decrease was primarily attributable to a $127 million decrease resulting from a change in the estimated useful lives of certain property and equipment (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 3 — Property and Equipment, Net").
The loss on disposal or impairment of assets of $110 million for the six months ended June 30, 2018, consisted primarily of a $92 million write-off of costs related to the tower adjacent to the Four Seasons Hotel Macao.

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Adjusted Property EBITDA
The following table summarizes information related to our segments (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 8 — Segment Information" for discussion of our operating segments and a reconciliation of consolidated adjusted property EBITDA to net income):
 
Six Months Ended June 30,
 
2018
 
2017
 
Percent
Change
 
(Dollars in millions)
Macao:
 
 
 
 
 
The Venetian Macao
$
679

 
$
545

 
24.6
 %
Sands Cotai Central
377

 
277

 
36.1
 %
The Parisian Macao
230

 
188

 
22.3
 %
The Plaza Macao and Four Seasons Hotel Macao
145

 
111

 
30.6
 %
Sands Macao
99

 
93

 
6.5
 %
Ferry Operations and Other
9

 
12

 
(25.0
)%
 
1,539

 
1,226

 
25.5
 %
Marina Bay Sands
909

 
856

 
6.2
 %
United States:
 
 
 
 
 
Las Vegas Operating Properties
218

 
201

 
8.5
 %
Sands Bethlehem
59

 
73

 
(19.2
)%
 
277

 
274

 
1.1
 %
Consolidated adjusted property EBITDA
$
2,725

 
$
2,356

 
15.7
 %
Adjusted property EBITDA at our Macao operations increased $313 million compared to the six months ended June 30, 2017. As previously described, the increase was primarily due to increased casino revenues, driven by increases in Non-Rolling Chip drop and Rolling Chip volume.
Adjusted property EBITDA at Marina Bay Sands increased $53 million compared to the six months ended June 30, 2017. The increase was primarily due to an increase in non-gaming operations and a decrease in the provision for doubtful accounts, driven by collections on previously reserved customer balances.
Adjusted property EBITDA at our Las Vegas Operating Properties increased $17 million compared to the six months ended June 30, 2017. The increase was primarily due to increased room revenues, driven by increased occupancy, as well as an increase in convention revenues.
Adjusted property EBITDA at Sands Bethlehem decreased $14 million compared to the six months ended June 30, 2017. The decrease was primarily due to decreased casino revenues, driven by a decrease in table games win percentage.
Interest Expense
The following table summarizes information related to interest expense:
 
Six Months Ended June 30,
 
2018
 
2017
 
(Dollars in millions)
Interest cost (which includes the amortization of deferred financing costs and original issue discounts)
$
176

 
$
150

Add — imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo
7

 
8

Less — capitalized interest
(1
)
 
(1
)
Interest expense, net
$
182

 
$
157

Cash paid for interest
$
155

 
$
130

Weighted average total debt balance
$
10,011

 
$
9,917

Weighted average interest rate
3.5
%
 
3.0
%
Interest cost increased $26 million compared to the six months ended June 30, 2017, resulting primarily from an increase in our weighted average interest rate.

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Other Factors Affecting Earnings
Other income was $18 million for the six months ended June 30, 2018, compared to other expense of $61 million for the six months ended June 30, 2017. Other income during the six months ended June 30, 2018, was primarily attributable to $18 million of foreign currency transaction gains, driven by Singapore dollar denominated intercompany debt reported in U.S. dollars. These gains resulted from the appreciation of the U.S. dollar versus the Singapore dollar during the period.
Our effective income tax rate was (27.2)% for the six months ended June 30, 2018, compared to 10.8% for the six months ended June 30, 2017. The effective income tax rate for the six months ended June 30, 2018, would have been 10.0% without the discrete benefit of $670 million recorded due to the impact of the GILTI provision of the Act. The discrete tax benefit relates to the reduction of the valuation allowance recorded on certain U.S. foreign tax credit assets as we determined these assets were realizable due to concluding how the foreign tax credits associated with this income, and allowed against the U.S. tax liability, would be utilized.
The effective income tax rate for the six months ended June 30, 2018, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax rate on our U.S. operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao, effective through the end of 2018. We have recorded a valuation allowance related to certain deferred tax assets previously generated by operations in the U.S. and certain foreign jurisdictions; however, to the extent that the financial results of our operations improve or we determine related administrative guidance, notices, implementation regulations, potential legislative amendments and interpretations of the Act require changes to positions we have taken and it becomes “more-likely-than-not” these deferred tax assets, or a portion thereof, are realizable, we will reduce the valuation allowances in the period such determination is made, as appropriate.
The net income attributable to our noncontrolling interests was $280 million for the six months ended June 30, 2018, compared to $191 million for the six months ended June 30, 2017. These amounts are primarily related to the noncontrolling interest of SCL.


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Additional Information Regarding our Retail Mall Operations
We own and operate retail malls at our Integrated Resorts at The Venetian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Cotai Central, The Parisian Macao, Sands Macao, Marina Bay Sands and Sands Bethlehem. Management believes being in the retail mall business and, specifically, owning some of the largest retail properties in Asia will provide meaningful value for us, particularly as the retail market in Asia continues to grow.
Our malls are designed to complement our other unique amenities and service offerings provided by our integrated resorts. Our strategy is to seek out desirable tenants that appeal to our customers and provide a wide variety of shopping options. We generate our mall revenues primarily from leases with tenants through minimum base rents, overage rents, and reimbursements for common area maintenance ("CAM") and other expenditures.
The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three and six months ended June 30, 2018 and 2017:
 
Shoppes at
Venetian
 
Shoppes at
Four
Seasons
 
Shoppes at
Cotai
Central
 
Shoppes at
Parisian
 
The Shoppes 
at Marina
Bay Sands
 
Total
 
(In millions)
For the three months ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Mall revenues:
 
 
 
 
 
 
 
 
 
 
 
Minimum rents(1)
$
46

 
$
28

 
$
9

 
$
11

 
$
33

 
$
127

Overage rents
3

 
2

 
2

 
1

 
3

 
11

CAM, levies and direct recoveries
7

 
3

 
4

 
3

 
6

 
23

Total mall revenues
56

 
33

 
15

 
15

 
42

 
161

Mall operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Common area maintenance
4

 
2

 
2

 
2

 
4

 
14

Marketing and other direct operating expenses
1

 
—

 
—

 
1

 
1

 
3

Mall operating expenses
5

 
2

 
2

 
3

 
5

 
17

Property taxes(2)
—

 
—

 
—

 
—

 
1

 
1

Provision for doubtful accounts
—

 
—

 
1

 
—

 
—

 
1

Mall-related expenses(3)
$
5

 
$
2

 
$
3

 
$
3

 
$
6

 
$
19

For the three months ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
Mall revenues:
 
 
 
 
 
 
 
 
 
 
 
Minimum rents(1)
$
45

 
$
28

 
$
10

 
$
14

 
$
31

 
$
128

Overage rents
2

 
1

 
1

 
—

 
3

 
7

CAM, levies and direct recoveries
8

 
3

 
3

 
3

 
6

 
23

Total mall revenues
55

 
32

 
14

 
17

 
40

 
158

Mall operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Common area maintenance
3

 
2

 
1

 
2

 
3

 
11

Marketing and other direct operating expenses
2

 
—

 
1

 
1

 
2

 
6

Mall operating expenses
5

 
2

 
2

 
3

 
5

 
17

Property taxes(2)
—

 
—

 
—

 
—

 
1

 
1

Provision for doubtful accounts
—

 
—

 
1

 
—

 
—

 
1

Mall-related expenses(3)
$
5

 
$
2

 
$
3

 
$
3

 
$
6

 
$
19


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Table of Contents

 
Shoppes at
Venetian
 
Shoppes at
Four
Seasons
 
Shoppes at
Cotai
Central
 
Shoppes at
Parisian
 
The Shoppes 
at Marina
Bay Sands
 
Total
For the six months ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Mall revenues:
 
 
 
 
 
 
 
 
 
 
 
Minimum rents(1)
$
90

 
$
56

 
$
18

 
$
23

 
$
64

 
$
251

Overage rents
4

 
3

 
3

 
1

 
7

 
18

CAM, levies and direct recoveries
15

 
5

 
8

 
6

 
13

 
47

Total mall revenues
109

 
64

 
29

 
30

 
84

 
316

Mall operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Common area maintenance
7

 
3

 
3

 
3

 
8

 
24

Marketing and other direct operating expenses
3

 
1

 
1

 
2

 
3

 
10

Mall operating expenses
10

 
4

 
4

 
5

 
11

 
34

Property taxes(2)
—

 
—

 
—

 
—

 
2

 
2

Provision for doubtful accounts
—

 
—

 
1

 
—

 
—

 
1

Mall-related expenses(3)
$
10

 
$
4

 
$
5

 
$
5

 
$
13

 
$
37

For the six months ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
Mall revenues:
 
 
 
 
 
 
 
 
 
 
 
Minimum rents(1)
$
87

 
$
57

 
$
21

 
$
28

 
$
61

 
$
254

Overage rents
3

 
1

 
1

 
—

 
5

 
10

CAM, levies and direct recoveries
16

 
5

 
11

 
6

 
12

 
50

Total mall revenues
106

 
63

 
33

 
34

 
78

 
314

Mall operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Common area maintenance
7

 
3

 
3

 
3

 
7

 
23

Marketing and other direct operating expenses
3

 
1

 
1

 
2

 
3

 
10

Mall operating expenses
10

 
4

 
4

 
5

 
10

 
33

Property taxes(2)
—

 
—

 
—

 
—

 
2

 
2

Provision for doubtful accounts
—

 
—

 
1

 
—

 
—

 
1

Mall-related expenses(3)
$
10

 
$
4

 
$
5

 
$
5

 
$
12

 
$
36

____________________
Note:
This table excludes the results of our mall operations at Sands Macao and Sands Bethlehem.
(1)
Minimum rents include base rents and straight-line adjustments of base rents.
(2)
Commercial property that generates rental income is exempt from property tax for the first six years for newly constructed buildings in Cotai. Each property is also eligible to obtain an additional six-year exemption, provided certain qualifications are met. To date, The Venetian Macao and The Plaza Macao and Four Seasons Hotel Macao have obtained a second exemption, extending the property tax exemption to the end of July 2019 and the end of July 2020, respectively. Under the initial exemption, The Parisian Macao is tax exempt until the end of July 2022 and Sands Cotai Central has a distinct exemption for each hotel tower, of which, the Holiday Inn and Conrad branded tower expired in March 2018, and the Sheraton and St. Regis branded towers have expiration dates that range from August 2018 to November 2021. The Company is currently working on obtaining the second exemption for Sands Cotai Central and The Parisian Macao.
(3)
Mall-related expenses consist of CAM, marketing fees and other direct operating expenses, property taxes and provision for doubtful accounts, but excludes depreciation and amortization and general and administrative costs.
It is common in the mall operating industry for companies to disclose mall net operating income ("NOI") as a useful supplemental measure of a mall's operating performance. Because NOI excludes general and administrative expenses, interest expense, impairment losses, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests and provision for income taxes, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.

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In the tables above, we believe taking total mall revenues less mall-related expenses provides an operating performance measure for our malls. Other mall operating companies may use different methodologies for deriving mall-related expenses. As such, this calculation may not be comparable to the NOI of other mall operating companies.
Development Projects
We are constantly evaluating opportunities to improve our product offerings, such as refreshing our meeting and convention facilities, suites and rooms, retail malls, restaurant and nightlife mix and our gaming areas, as well as other anticipated revenue generating additions to our Integrated Resorts.
Macao
In October 2017, we announced we will renovate, expand and rebrand 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, an expanded retail mall and approximately 370 additional luxury suites in the St. Regis Macao Tower. Design work has commenced and construction will be phased to minimize disruption during the property’s peak periods. We expect the project to be completed in 2020.
In October 2017, we announced the tower adjacent to the Four Seasons Hotel Macao will feature approximately 280 additional premium quality suites. We have completed the structural work of the tower and plan to commence build out of the suites in 2018. We expect the project to be completed in 2019.
The completion dates for these projects are subject to change as we continue our planning and design work. See "Item 1A — Risk Factors — Risk Factors — There are significant risks associated with any future construction projects, which could have a material adverse effect on our financial condition, results of operations and cash flows from these planned facilities" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.
Liquidity and Capital Resources
Cash Flows — Summary
Our cash flows consisted of the following:
 
Six Months Ended June 30,
 
2018
 
2017
 
(In millions)
Net cash generated from operating activities
$
2,504

 
$
2,109

Cash flows from investing activities:
 
 
 
Capital expenditures
(416
)
 
(380
)
Proceeds from disposal of property and equipment
10

 
1

Net cash used in investing activities
(406
)
 
(379
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
70

 
16

Repurchase of common stock
(175
)
 
(225
)
Dividends paid
(1,804
)
 
(1,781
)
Proceeds from long-term debt
2,093

 
654

Repayments on long-term debt
(313
)
 
(250
)
Payments of financing costs
(39
)
 
(5
)
Net cash used in financing activities
(168
)
 
(1,591
)
Effect of exchange rate on cash, cash equivalents and restricted cash
2

 
40

Increase in cash, cash equivalents and restricted cash
1,932

 
179

Cash, cash equivalents and restricted cash at beginning of period
2,430

 
2,138

Cash, cash equivalents and restricted cash at end of period
$
4,362

 
$
2,317

Cash Flows — Operating Activities
Table games play at our properties is conducted on a cash and credit basis, while slot machine play is primarily conducted on a cash basis. Our rooms, food and beverage and other non-gaming revenues are conducted primarily on a cash basis or as a trade receivable, resulting in operating cash flows being generally affected by changes in operating

46
Table of Contents

income and accounts receivable. Net cash generated from operating activities for the six months ended June 30, 2018, increased $395 million compared to the six months ended June 30, 2017. The increase was primarily attributable to an increase in operating income and changes in our working capital accounts, consisting primarily of a change in other accrued liabilities, driven by purchases of chips by junket operators at our Macao operating properties.
Cash Flows — Investing Activities
Capital expenditures for the six months ended June 30, 2018, totaled $416 million, including $220 million for construction and development activities in Macao, which consisted primarily of $69 million for The Venetian Macao, $68 million for The Parisian Macao and $53 million for Sands Cotai Central; $72 million at Marina Bay Sands in Singapore; $58 million at our Las Vegas Operating Properties; and $54 million for corporate and other.
Capital expenditures for the six months ended June 30, 2017, totaled $380 million, including $224 million for construction and development activities in Macao, which consisted primarily of $111 million for The Parisian Macao and $61 million for The Venetian Macao; $92 million at Marina Bay Sands in Singapore; and $50 million at our Las Vegas Operating Properties.
Cash Flows — Financing Activities
Net cash flows used in financing activities were $168 million for the six months ended June 30, 2018, which was primarily attributable to $1.80 billion in dividend payments and $175 million in common stock repurchases, partially offset by net proceeds of $1.78 billion on our various credit facilities and proceeds of $70 million from the exercise of stock options.
Net cash flows used in financing activities were $1.59 billion for the six months ended June 30, 2017, which was primarily attributable to $1.78 billion in dividend payments and $225 million in common stock repurchases, partially offset by $404 million of net proceeds from our various credit facilities.
Capital Financing Overview
We fund our development projects primarily through borrowings from our credit facilities (see, "Part I — Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 4 — Long-Term Debt") and operating cash flows.
In March 2018, we amended our SGD 4.80 billion (approximately $3.51 billion at exchange rates in effect on June 30, 2018) Singapore credit facility, which extended the maturities of the term loans and revolving loans to March 29, 2024, and September 29, 2023, respectively, and amended the amortization schedule and the leverage covenant to provide that the leverage ratio not exceed 4.0x for all quarterly periods through maturity (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 4 — Long-Term Debt — 2012 Singapore Credit Facility").
In March 2018, we amended our U.S. credit facility, which refinanced the term loans in an aggregate amount of $2.16 billion, extended the maturity of the term loans to March 27, 2025, and reduced the applicable margin credit spread for borrowings under the term loans. In June 2018, we further amended our U.S. credit facility to increase the term loans to an aggregate amount of $3.51 billion (see "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 4 — Long-Term Debt — 2013 U.S. Credit Facility").
During the three months ended June 30, 2018, we had net borrowings of $497 million on our 2016 VML Revolving Facility.
Our U.S., Macao and Singapore credit facilities, as amended, contain various financial covenants. The U.S. credit facility requires our Las Vegas operations to comply with a financial covenant at the end of each quarter to the extent any revolving loans or certain letters of credit are outstanding. This financial covenant requires our Las Vegas operations to maintain a maximum leverage ratio of net debt, as defined, to trailing 12-month adjusted earnings before interest, income taxes, depreciation and amortization, as defined ("Adjusted EBITDA"). The maximum leverage ratio is 5.5x for all quarterly periods through maturity. We can elect to contribute cash on hand to our Las Vegas operations on a bi-quarterly basis; such contributions having the effect of increasing Adjusted EBITDA during the applicable quarter for purposes of calculating compliance with the maximum leverage ratio. Our Macao credit facility requires our Macao operations to comply with similar financial covenants, including maintaining a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 3.5x for all quarterly periods through maturity. Our Singapore credit facility requires our Marina Bay Sands operations to comply with similar financial covenants, including maintaining

47
Table of Contents

a maximum leverage ratio of debt to Adjusted EBITDA. The maximum leverage ratio is 4.0x for all quarterly periods through maturity. As of June 30, 2018, our U.S., Macao and Singapore leverage ratios, as defined per the respective credit facility agreements, were 0.5x, 1.7x and 1.8x, respectively, compared to the maximum leverage ratios allowed of 5.5x, 3.5x and 4.0x, respectively. If we are unable to maintain compliance with the financial covenants under these credit facilities, we would be in default under the respective credit facilities. Any defaults under these agreements would allow the lenders, in each case, to exercise their rights and remedies as defined under their respective agreements. If the lenders were to exercise their rights to accelerate the due dates of the indebtedness outstanding, there can be no assurance we would be able to repay or refinance any amounts that may become due and payable under such agreements, which could force us to restructure or alter our operations or debt obligations.
We held unrestricted cash and cash equivalents of approximately $4.35 billion and restricted cash of approximately $12 million as of June 30, 2018, of which approximately $2.15 billion of the unrestricted amount is held by non-U.S. subsidiaries. Of the $2.15 billion, approximately $1.83 billion is available to be repatriated to the U.S. with minimal taxes owed on such amounts. U.S. tax reform created a one-time mandatory tax on the previously unremitted earnings of foreign subsidiaries upon transitioning from a worldwide tax system to a territorial tax system. The foreign taxes paid on these earnings created a U.S. foreign tax credit that offsets this one-time tax. Foreign earnings repatriated to the U.S. in the future will be exempt from U.S. income tax and we do not expect significant withholding or other foreign taxes to apply to the repatriation of these earnings. The remaining unrestricted amounts held by non-U.S. subsidiaries are not available for repatriation primarily due to dividend requirements to third-party public shareholders in the case of funds being repatriated from SCL. We believe the cash on hand and cash flow generated from operations, as well as the $3.0 billion available for borrowing under our U.S., Macao and Singapore credit facilities, net of outstanding letters of credit, as of June 30, 2018, will be sufficient to maintain compliance with the financial covenants of our credit facilities and fund our working capital needs, committed and planned capital expenditures, development opportunities, debt obligations and dividend commitments. In the normal course of our activities, we will continue to evaluate our capital structure and opportunities for enhancements thereof.
On February 23 and June 22, 2018, SCL paid a dividend of 0.99 Hong Kong dollars ("HKD") and HKD 1.00 to SCL shareholders (a total of $2.05 billion, of which we retained $1.44 billion during the six months ended June 30, 2018).
On March 30 and June 28, 2018, we paid a dividend of $0.75 per common share as part of a regular cash dividend program and recorded $1.18 billion as a distribution against retained earnings (of which $648 million related to our principal stockholder's family and the remaining $535 million related to all other shareholders) during the six months ended June 30, 2018. In July 2018, the Company's Board of Directors declared a quarterly dividend of $0.75 per common share (a total estimated to be approximately $591 million) to be paid on September 27, 2018, to shareholders of record on September 19, 2018.
In November 2016, our Board of Directors authorized the repurchase of $1.56 billion of our 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. During the six months ended June 30, 2018, we repurchased 2,301,800 shares of our common stock for $175 million (including commissions) under this program. All share repurchases of our common stock are recorded as treasury stock. As of June 30, 2018, we have remaining authorization to repurchase $1.95 billion of our outstanding common shares. Repurchases of our common stock are made at our discretion in accordance with applicable federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including our financial position, earnings, legal requirements, other investment opportunities and market conditions.

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Table of Contents

Aggregate Indebtedness and Other Known Contractual Obligations
As of June 30, 2018, there had been no material changes to our aggregated indebtedness and other known contractual obligations previously reported in our Annual Report on Form 10-K for the year ended December 31, 2017, with the exception of the amendments to our U.S. and Singapore credit facilities, as well as a drawdown of our VML revolver. These transactions are summarized below:
 
Payments Due During Period Ending December 31,
 
2018(1)
 
2019 - 2020
 
2021 - 2022
 
Thereafter
 
Total
 
(In millions)
Long-Term Debt Obligations(2)
 
 
 
 
 
 
 
 
 
2013 U.S. Credit Facility
$
18

 
$
70

 
$
70

 
$
3,344

 
$
3,502

2012 Singapore Credit Facility(3)
31

 
125

 
548

 
2,408

 
3,112

2016 VML Credit Facility - Revolving(3)
—

 
497

 
—

 
—

 
497

Variable Interest Payments(4)
198

 
752

 
562

 
339

 
1,851

Total
$
247

 
$
1,444

 
$
1,180

 
$
6,091

 
$
8,962

_______________________
(1)
Represents the six-month period ending December 31, 2018.
(2)
See "Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 4 — Long-Term Debt" for further details on these financing transactions.
(3)
Amounts reflect foreign currency exchange rates in effect on June 30, 2018.
(4)
Based on the 1-month rate as of June 30, 2018, London Inter-Bank Offered Rate ("LIBOR") of 2.09%, Hong Kong Inter-Bank Offered Rate ("HIBOR") of 2.01% and Singapore Swap Offer Rate ("SOR") of 1.38% plus the applicable interest rate spread in accordance with the respective U.S., Macao and Singapore debt agreements.
Restrictions on Distributions
We are a parent company with limited business operations. Our main asset is the stock and membership interests of our subsidiaries. The debt instruments of our U.S., Macao and Singapore subsidiaries contain certain restrictions that, among other things, limit the ability of certain subsidiaries to incur additional indebtedness, issue disqualified stock or equity interests, pay dividends or make other distributions, repurchase equity interests or certain indebtedness, create certain liens, enter into certain transactions with affiliates, enter into certain mergers or consolidations or sell our assets of our company without prior approval of the lenders or noteholders.
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the discussions of our business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources. In addition, in certain portions included in this report, the words: "anticipates," "believes," "estimates," "seeks," "expects," "plans," "intends" and similar expressions, as they relate to our company or management, are intended to identify forward-looking statements. Although we believe these forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the risks associated with:
•
general economic and business conditions in the U.S. and internationally, which may impact levels of disposable income, consumer spending, group meeting business, pricing of hotel rooms and retail and mall sales;
•
the uncertainty of consumer behavior related to discretionary spending and vacationing at our Integrated Resorts in Macao, Singapore, Las Vegas and Bethlehem, Pennsylvania;
•
the extensive regulations to which we are subject and the costs of compliance or failure to comply with such regulations;

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•
our leverage, debt service and debt covenant compliance, including the pledge of our assets (other than our equity interests in our subsidiaries) as security for our indebtedness and ability to refinance our debt obligations as they come due or to obtain sufficient funding for our planned, or any future, development projects;
•
fluctuations in currency exchange rates and interest rates;
•
increased competition for labor and materials due to planned construction projects in Macao and quota limits on the hiring of foreign workers;
•
our ability to obtain required visas and work permits for management and employees from outside countries to work in Macao, and our ability to compete for the managers and employees with the skills required to perform the services we offer at our properties;
•
new developments, construction projects and ventures, including our Cotai Strip developments;
•
regulatory policies in mainland China or other countries in which our customers reside, or where we have operations, including visa restrictions limiting the number of visits or the length of stay for visitors from mainland China to Macao, restrictions on foreign currency exchange or importation of currency, and the judicial enforcement of gaming debts;
•
our dependence upon properties primarily in Macao, Singapore and Las Vegas for all of our cash flow;
•
the passage of new legislation and receipt of governmental approvals for our operations in Macao and Singapore and other jurisdictions where we are planning to operate;
•
our insurance coverage, including the risk we have not obtained sufficient coverage, may not be able to obtain sufficient coverage in the future, or will only be able to obtain additional coverage at significantly increased rates;
•
disruptions or reductions in travel, as well as disruptions in our operations, due to natural or man-made disasters, outbreaks of infectious diseases, terrorist activity or war;
•
our ability to collect gaming receivables from our credit players;
•
our relationship with junket operators in Macao;
•
our dependence on chance and theoretical win rates;
•
fraud and cheating;
•
our ability to establish and protect our intellectual property rights;
•
conflicts of interest that arise because certain of our directors and officers are also directors of SCL;
•
government regulation of the casino industry (as well as new laws and regulations and changes to existing laws and regulations), including gaming license regulation, the requirement for certain beneficial owners of our securities to be found suitable by gaming authorities, the legalization of gaming in other jurisdictions and regulation of gaming on the Internet;
•
increased competition in Macao and Las Vegas, including recent and upcoming increases in hotel rooms, meeting and convention space, retail space, potential additional gaming licenses and online gaming;
•
the popularity of Macao, Singapore and Las Vegas as convention and trade show destinations;
•
new taxes, changes to existing tax rates or proposed changes in tax legislation and the impact of U.S. tax reform;
•
our ability to maintain our gaming licenses, certificate and subconcession in Macao, Singapore, Las Vegas and Bethlehem, Pennsylvania;
•
the continued services of our key management and personnel;
•
any potential conflict between the interests of our principal stockholder and us;
•
the ability of our subsidiaries to make distribution payments to us;
•
labor actions and other labor problems;

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•
our failure to maintain the integrity of our customer or company data, including against past or future cybersecurity attacks, and any litigation or disruption to our operations resulting from such loss of data integrity;
•
the completion of infrastructure projects in Macao;
•
our relationship with GGP Limited Partnership or any successor owner of the Grand Canal Shoppes; and
•
the outcome of any ongoing and future litigation.
All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Readers are cautioned not to place undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by federal securities laws.
Investors and others should note we announce material financial information using our investor relations website (https://investor.sands.com), our company website, SEC filings, investor events, news and earnings releases, public conference calls and webcasts. We use these channels to communicate with our investors and the public about our company, our products and services, and other issues.
In addition, we post certain information regarding SCL, a subsidiary of Las Vegas Sands Corp. with ordinary shares listed on The Stock Exchange of Hong Kong Limited, from time to time on our company website and our investor relations website. It is possible the information we post regarding SCL could be deemed to be material information.
The contents of these websites are not intended to be incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file, and any reference to these websites are intended to be inactive textual references only.
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposures to market risk are interest rate risk associated with our variable rate long-term debt and foreign currency exchange rate risk associated with our operations outside the United States, which we may manage through the use of interest rate swaps, futures, options, caps, forward contracts and similar instruments. We do not hold or issue financial instruments for trading purposes and do not enter into derivative transactions that would be considered speculative positions.
As of June 30, 2018, the estimated fair value of our long-term debt was approximately $11.27 billion, compared to its carrying value of $11.42 billion. The estimated fair value of our long-term debt is based on level 2 inputs (quoted prices in markets that are not active). As our long-term debt obligations are primarily variable-rate debt, a change in LIBOR, HIBOR and SOR is not expected to have a material impact on the fair value of our long-term debt. Based on variable-rate debt levels as of June 30, 2018, a hypothetical 100 basis point change in LIBOR, HIBOR and SOR for the duration of a year would cause our annual interest cost to change by approximately $115 million.
Foreign currency transaction gains were $18 million for the six months ended June 30, 2018, primarily due to Singapore dollar denominated intercompany debt reported in U.S. dollars and U.S. dollar denominated intercompany debt held in Macao. We may be vulnerable to changes in the U.S. dollar/SGD and U.S. dollar/pataca exchange rates. Based on balances as of June 30, 2018, a hypothetical 100 basis point change in the U.S. dollar/SGD exchange rate would cause a foreign currency transaction gain/loss of approximately $11 million and $12 million, respectively, and a hypothetical 100 basis point change in the U.S. dollar/pataca exchange rate would cause a foreign currency transaction gain/loss of approximately $13 million. We maintain a significant amount of our operating funds in the same currencies in which we have obligations thereby reducing our exposure to currency fluctuations.
See also "Liquidity and Capital Resources."

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ITEM 4 — CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and such information is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. The Company's Chief Executive Officer and its Chief Financial Officer have evaluated the disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) of the Company as of June 30, 2018, and have concluded they are effective at the reasonable assurance level.
It should be noted any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that had a material effect, or was reasonably likely to have a material effect, on the Company's internal control over financial reporting.

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PART II OTHER INFORMATION
ITEM 1 — LEGAL PROCEEDINGS
The Company is party to litigation matters and claims related to its operations. For more information, see the Company's Annual Report on Form 10-K for the year ended December 31, 2017, Quarterly Report on Form 10-Q for the three months ended March 31, 2018, and "Part I — Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 7 — Commitments and Contingencies" of this Quarterly Report on Form 10-Q.
ITEM 1A — RISK FACTORS
There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about share repurchases made by the Company of its common stock during the quarter ended June 30, 2018:
Period
Total
Number of
Shares
Purchased
 
Weighted
Average
Price Paid
per Share
 
Total Number
of Shares
Purchased as
Part of a Publicly
Announced Program
 
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Program
(in millions)(1)
April 1, 2018 — April 30, 2018
—

 
$
—

 
—

 
$
1,110

May 1, 2018 — May 31, 2018
—

 
$
—

 
—

 
$
1,110

June 1, 2018 — June 30, 2018
1,253,600

 
$
79.76

 
1,253,600

 
$
2,400

__________________________
(1)
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 on November 2, 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 2, 2020. All repurchases under the stock repurchase program are made from time to time at the Company's discretion in accordance with applicable federal securities laws in the open market or otherwise. All share repurchases of the Company's common stock have been recorded as treasury stock.

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ITEM 6 — EXHIBITS
List of Exhibits


Exhibit No.
 
Description of Document
3.1
 
3.2
 
10.1
 
10.2++
 
10.3++
 
10.4++
 
10.5++
 
10.6++
 
10.7++
 
10.8++
 
10.9++
 
31.1
 
31.2
 
32.1+
 
32.2+
 

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Exhibit No.
 
Description of Document
101
 
The following financial information from the Company’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018, formatted in Extensible Business Reporting Language (“XBRL”): (i) Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017, (iv) Condensed Consolidated Statements of Equity for the six months ended June 30, 2018 and 2017, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017, and (vi) Notes to Condensed Consolidated Financial Statements.
____________________
+
This exhibit will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
++
Denotes a management contract or compensatory plan or arrangement.

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LAS VEGAS SANDS CORP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

 
LAS VEGAS SANDS CORP.
 
 
 
 
July 25, 2018
By:
 
/S/ SHELDON G. ADELSON
 
 
 
Sheldon G. Adelson
Chairman of the Board and
Chief Executive Officer
 
 
 
 
July 25, 2018
By:
 
/S/ PATRICK DUMONT
 
 
 
Patrick Dumont
Executive Vice President and Chief Financial Officer

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