LAS VEGAS SANDS CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

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The following discussion should be read in conjunction with, and is qualified in
its entirety by, the audited consolidated financial statements and the notes
thereto, and other financial information included in this Form 10-K. Certain
statements in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are forward-looking statements. See "Special Note
Regarding Forward-Looking Statements."
Overview
We view each of our Integrated Resorts as an operating segment. Our operating
segments in Macao consist of The Venetian Macao; The Londoner Macao; The
Parisian Macao; The Plaza Macao and Four Seasons Macao; and the Sands Macao. Our
operating segment in Singapore is Marina Bay Sands. Our operating segments in
the U.S. consist of the Las Vegas Operating Properties, which includes The
Venetian Resort Las Vegas and the Sands Expo Center.
During 2021, we achieved milestones in advancing several of our strategic
objectives. We continued progress on our key development projects in Macao for
the conversion of Sands Cotai Central into The Londoner Macao, we opened The
Londoner Macao Hotel in January 2021, featuring 594 London-themed suites, and we
opened Londoner Court in September 2021, featuring approximately 370 luxury
suites. In Singapore, we initiated development activities associated with the
MBS Expansion Project. We continued to strengthen our balance sheet with the
issuance of SCL 2027, 2029 and 2031 Senior Notes with an aggregate principal
amount of $1.95 billion. We used the net proceeds from the issuance and cash on
hand to redeem in full the outstanding principal amount of the $1.80 billion
4.600% Senior Notes due 2023, and are prepared to complete the sale of the Las
Vegas property.
On March 2, 2021, we entered into definitive agreements to sell our Las Vegas
real property and operations, including The Venetian Resort Las Vegas and the
Sands Expo and Convention Center, for a total enterprise value of $6.25 billion
to Pioneer OpCo, LLC, an affiliate of certain funds managed by affiliates of
Apollo Global Management, Inc., and VICI Properties L.P, a subsidiary of VICI
Properties Inc. The closing of the transaction is subject to regulatory review
and other closing conditions and we anticipate the closing of the transaction in
the first quarter of 2022.
COVID-19 Pandemic Update
In early January 2020, an outbreak of a respiratory illness caused by a novel
coronavirus ("COVID-19") was identified and the disease spread rapidly across
the world causing the World Health Organization to declare the outbreak of a
pandemic on March 12, 2020 (the "COVID-19 Pandemic"). Governments around the
world mandated actions to contain the spread of the virus that included
stay-at-home orders, quarantines, capacity limits, closures of non-essential
businesses, including entertainment activities, and significant restrictions on
travel. The government actions varied based upon a number of factors, including
the extent and severity of the COVID-19 Pandemic within their respective
countries and jurisdictions.
Visitation to the Macao Special Administrative Region ("Macao") of the People's
Republic of China ("China") has remained substantially below pre-COVID-19 levels
as a result of various government policies limiting or discouraging travel. As
of the date of this report, other than people from mainland China who in general
may enter Macao without quarantine subject to them holding the appropriate
travel documents, a negative COVID-19 test result issued within a specified time
period and a green health-code, there remains in place a complete ban on entry
or a need to undergo various quarantine requirements depending on the person's
residency and recent travel history. Our operations in Macao will continue to be
impacted and subject to changes in the government policies of Macao, China, Hong
Kong and other jurisdictions in Asia addressing travel and public health
measures associated with COVID-19.
On March 3, 2021, the negative COVID-19 test requirement to enter casinos was
removed; however, various other health safeguards implemented by the Macao
government remain in place, including mandatory mask protection, limitation on
the number of seats per table game, slot machine spacing and temperature checks.
Management is currently unable to determine when the remaining measures will be
eased or cease to be necessary.
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As of the date of this report, most businesses are allowed to remain open,
subject to social distancing and health code checking requirements as designated
by the Macao government. In January 2022, the Macao government commenced the
roll out and trial of a non-mandatory contact tracing QR code function at a
range of businesses including government buildings, restaurants, hotels and
other public venues.
In support of the Macao government's initiatives to fight the COVID-19 Pandemic,
we provided one tower (approximately 2,100 hotel rooms) at the Sheraton Grand
Macao to the Macao government to house individuals who returned to Macao for
quarantine purposes. This tower has been utilized for quarantine purposes on
several occasions during 2020 and 2021. From October 4, 2021 to October 30,
2021, an additional tower (approximately 1,800 hotel rooms) at the Sheraton
Grand Macao was provided.
Our Macao gaming operations remained open during the year ended December 31,
2021, compared to the same period in 2020 when our Macao gaming operations were
suspended from February 5, 2020 to February 19, 2020 due to a government
mandate, except for gaming operations at The Londoner Macao, which resumed on
February 27, 2020. Some of our Macao hotel facilities were also closed during
the casino suspension in response to the decrease in visitation and were
gradually reopened from February 20, 2020, with the exception of the Conrad
Macao at The Londoner Macao (the "Conrad hotel"), which reopened on June 13,
2020.
Operating hours at restaurants and other venues across our Macao properties are
continuously being adjusted in line with fluctuations in guest visitation. The
majority of retail outlets in our various shopping malls are open with reduced
operating hours. The timing and manner in which these areas will return to full
operation are currently unknown.
Our ferry operations between Macao and Hong Kong remain suspended. The timing
and manner in which our ferry operations will be able to resume are currently
unknown.
Our operations in Macao have been significantly impacted by the reduced
visitation to Macao. The Macao government announced total visitation from
mainland China to Macao increased 48.2% and decreased 74.8% for 2021, as
compared to 2020 and 2019, respectively. The Macao government also announced
gross gaming revenue increased by 43.7% and decreased by 70.3% for 2021, as
compared to 2020 and 2019, respectively.
As of the date of this report, entry into Singapore is largely limited to
Singapore citizens and permanent residents, with certain visitors allowed from
specified countries on a quarantine-free basis, subject to certain requirements
and health control measures. Additionally, there are no stay-at-home orders or
curfews except for certain individuals arriving into Singapore who are subject
to quarantine and individuals who may be assessed to have been exposed to
COVID-19 as a result of the government's contact tracing efforts. All operations
are currently subject to limited capacities and other social distancing
measures. As of the date of this report, Marina Bays Sands has implemented
vaccination-differentiated safe management measures ("VDS"), allowing only fully
vaccinated individuals; individuals who have recovered from COVID-19 within the
past 180 days; or individuals medically ineligible for COVID-19 vaccination to
enter the casino and other attractions.
Vaccinated Travel Lanes (VTLs) (travel corridors for vaccinated visitors in
receipt of a negative COVID-19 test) were introduced for a number of key source
markets in November and December of 2021, however, due to the emergence of the
Omicron variant, new ticket sales for the VTLs were suspended on December 23,
2021 through January 20, 2022.
Our operations at Marina Bay Sands will continue to be impacted and subject to
changes in the government policies of Singapore and other jurisdictions in Asia
addressing travel and public health measures associated with COVID-19. These
government policies will continue to impact (i) the number of people allowed at
business-to-business events, sporting events and live performances; (ii) closure
or limited seating at food and beverage or entertainment establishments; and
(iii) casino capacity limits, among other restrictions. During the year ended
December 31, 2021, gaming operations at Marina Bay Sands were closed from May 17
until May 18, and from July 22 until August 4 due to pandemic-related measures
in consultation with the Singapore government authorities.
As a result of the border closures, visitation to Marina Bay Sands continues to
be impacted by the effects of the COVID-19 Pandemic. The Singapore Tourism Board
("STB") announced for the 12 months ended December 31, 2021, total visitation to
Singapore decreased approximately 88.0% and 98.3%, as compared to the same
period in 2020 and 2019, respectively.
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Effective June 1, 2021, pursuant to State of Nevada and Nevada Gaming Control
Board decisions, all capacity limits, restrictions on large gatherings and other
restrictions, which had been implemented in response to the impact of the
COVID-19 Pandemic, were lifted and our Las Vegas Operating Properties are
operating under pre-pandemic guidelines.
During the year ended December 31, 2021, our Las Vegas Operating Properties were
open subject to various capacity limits in place at various times throughout the
year. This compares to the same period in 2020 when our Las Vegas Operating
Properties operations were suspended on March 18, 2020, due to a government
mandate, and on June 4, 2020, The Venetian Tower, The Palazzo Tower and select
food and beverage outlets reopened, with certain operations subject to reduced
capacity. Convention, meeting and certain entertainment related operations
remained closed for a portion of the year ended December 31, 2020.
Visitation to our Las Vegas Operating Properties continues to be impacted by the
effects of the COVID-19 Pandemic; however, visitation has increased since
restrictions have been lifted. The Las Vegas Convention and Visitors Authority
("LVCVA") announced for the twelve months ended December 31, 2021, total
visitation to Las Vegas increased 69.4% and decreased 24.2%, respectively, as
compared to the same period in 2020 and 2019. The LVCVA also announced for the
twelve months ended December 31, 2021, gross gaming revenue for the Las Vegas
Strip increased 89.9%, and 7.6%, as compared to the same period in 2020 and
2019, respectively.
At our Macao properties and Marina Bay Sands, we are adhering to social
distancing requirements, which include reduced seating at table games and a
decreased number of active slot machines on the casino floor. Additionally,
there is uncertainty of the impact the COVID-19 Pandemic will continue to have
on operations in future periods. If our Integrated Resorts are not permitted to
resume normal operations, travel restrictions such as those related to inbound
travel from other countries are not modified or eliminated, there is a
resumption of the suspension of the China Individual Visit Scheme, or the global
response to contain the COVID-19 Pandemic escalates or is unsuccessful, our
operations, cash flows and financial condition will be further materially
impacted.
While our Macao and Singapore properties were open and operating at reduced
levels due to lower visitation and the implementation of required safety
measures as described above during the year ended December 31, 2021, the current
economic and regulatory environment on a global basis and in each of our
jurisdictions continues to evolve. We cannot predict the manner in which
governments will react as the global and regional impact of the COVID-19
Pandemic changes over time, which could significantly alter our current
operations.
We have a strong balance sheet and sufficient liquidity in place, including
total cash and cash equivalents balance, excluding restricted cash and cash
equivalents, of $1.85 billion and access to $1.50 billion, $1.75 billion and
$438 million of available borrowing capacity from our LVSC Revolving Facility,
2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility,
respectively, and SGD 3.69 billion (approximately $2.73 billion at exchange
rates in effect on December 31, 2021) under our Singapore Delayed Draw Term
Facility, exclusively for capital expenditures for the MBS Expansion Project
(subject to restrictions as described further in Part I - Item 1 - Business -
Development Projects), as of December 31, 2021. We believe we are able to
support continuing operations, complete the major construction projects that are
underway and respond to the current COVID-19 Pandemic challenges. We have taken
various mitigating measures to manage through the current environment, including
a cost and capital expenditure reduction program to minimize cash outflow of
non-essential items.
Macao Subconcession
Gaming in Macao is administered by the government through concession agreements
awarded to three different concessionaires and three subconcessionaires, of
which Venetian Macau Limited ("VML," a subsidiary of Sands China Ltd.) is one.
These concession agreements expire on June 26, 2022. If VML's subconcession is
not extended or renewed, VML may be prohibited from conducting gaming operations
in Macao, and VML could cease to generate revenues from the gaming operations
when the subconcession agreement expires on June 26, 2022. In addition, all of
VML's casino premises and gaming-related equipment could be automatically
transferred to the Macao government without any compensation to VML.
On January 18, 2022, the Macao Legislative Assembly published a draft bill
entitled Amendment to Law No. 16/2001 to amend Macao's gaming Law 16/2002 (the
"Gaming Law").
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Certain changes to the Gaming Law set out in the draft bill include a reduction
in the term of future gaming concessions to ten (10) years; authorization of up
to six (6) gaming concession contracts; an increase in the minimum capital
contribution of concessionaires to 5 billion patacas (approximately $622 million
at exchange rates in effect on December 31, 2021); and a prohibition of revenue
sharing arrangements between gaming promoters and concessionaires.
We are actively monitoring developments with respect to the Macao government's
Gaming Law amendment and concession renewal process and we continue to believe
we will be successful in extending the term of our subconcession and/or
obtaining a new gaming concession when our current subconcession expires;
however, it is possible the Macao government could further change or interpret
the associated gaming laws in a manner that could negatively impact us.
Under our SCL senior notes indentures, upon the occurrence of any event
resulting from any change in Gaming Law (as defined in the indentures) after
which none of Sands China Ltd. ("SCL") or any of its subsidiaries own or manage
casino or gaming areas or operate casino games of fortune and chance in Macao in
substantially the same manner as they are owning or managing casino or gaming
areas or operating casino games as of the issue date of the SCL senior notes,
for a period of 30 consecutive days or more, and such event has a material
adverse effect on the financial condition, business, properties or results of
operations of SCL and its subsidiaries, taken as a whole, each holder of the SCL
senior notes would have the right to require us to repurchase all or any part of
such holder's SCL senior notes at par, plus any accrued and unpaid interest (the
"Investor Put Option").
Additionally, under the 2018 SCL Credit Facility, the events that trigger an
Investor Put Option under the SCL senior notes (as described above) would be an
event of default, which may result in commitments being immediately cancelled,
in whole or in part, and the related outstanding balances and accrued interest,
if any, becoming immediately due and payable.
The subconcession not being extended or renewed and the potential impact if
holders of the notes and the agent have the ability to, and make the election
to, accelerate the repayment of our debt would have a material adverse effect on
our business, financial condition, results of operations and cash flows. We
intend to follow the process for a concession renewal once the process and
requirements are announced by the Macao government.
Key Operating Revenue Measurements
Operating revenues at The Venetian Macao, The Londoner Macao, The Parisian
Macao, The Plaza Macao and Four Seasons Macao, Marina Bay Sands and our Las
Vegas Operating Properties are dependent upon the volume of customers who stay
at the hotel, which affects the price charged for hotel rooms and our gaming
volume. Operating revenues at Sands Macao are principally driven by casino
customers who visit the property on a daily basis.
Management utilizes the following volume and pricing measures in order to
evaluate past performance and assist in forecasting future revenues. The various
volume measurements indicate our ability to attract customers to our Integrated
Resorts. In casino operations, win and hold percentages indicate the amount of
revenue to be expected based on volume. In hotel operations, average daily rate
and revenue per available room indicate the demand for rooms and our ability to
capture that demand. In mall operations, base rent per square foot indicates our
ability to attract and maintain profitable tenants for our leasable space.
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, 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
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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 3.15%
to 3.45% in Macao and Singapore. Actual win percentage may vary from our
expected win percentage and historical win and hold percentages. Generally, slot
machine play is conducted on a cash basis. In Macao and Singapore, 14.5% and
7.9%, respectively, of our table games play was conducted on a credit basis for
the year ended December 31, 2021.
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 deposited in the table drop box. We
view table games win as a percentage of drop and slot hold as a percentage of
slot 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. Actual win percentage may vary from our expected win
percentage and historical win and hold percentages. Similar to Macao and
Singapore, slot machine play is generally conducted on a cash basis.
Approximately 53.9% of our table games play at our Las Vegas Operating
Properties was conducted on a credit basis for the year ended December 31, 2021.
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 (such as government mandated
closure, lodging for team members and usage by the Macao and Singapore
governments for quarantine measures). The calculations of the occupancy rate and
ADR include the impact of rooms provided on a complimentary basis. 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 re-sold to walk-in
guests.
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 currently under development or not on the market for lease. Base
rent per square foot is the weighted average base or minimum rent charge,
excluding rent concessions, in effect at the end of the reporting period for all
tenants that would qualify to be included in occupancy. Tenant sales per square
foot is the sum of reported comparable sales for the trailing 12 months divided
by the comparable square footage for the same period. Only tenants that have
been open for a minimum of 12 months are included in the tenant sales per square
foot calculation.
Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020
Summary Financial Results
Our financial results continued to be adversely impacted by continued decreased
visitation at each of our operating properties in Asia due to the COVID-19
Pandemic. See "COVID-19 Pandemic" for further information. Net revenues for the
year ended December 31, 2021 were $4.23 billion, compared to $2.94 billion for
the year ended December 31, 2020. Operating loss was $689 million, compared to
operating loss of $1.39 billion for the year ended December 31, 2020. Net loss
from continuing operations was $1.47 billion for the year ended December 31,
2021, compared to net loss from continuing operations of $1.90 billion for the
year ended December 31, 2020.
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Operating Revenues
Our net revenues consisted of the following:
                                            Year Ended December 31,
                                                                       Percent
                                        2021               2020         Change

                                             (Dollars in millions)
Casino                         $      2,892              $ 2,041         41.7  %
Rooms                                   415                  280         48.2  %
Food and beverage                       199                  156         27.6  %
Mall                                    649                  381         70.3  %
Convention, retail and other             79                   82         (3.7) %
Total net revenues             $      4,234              $ 2,940         44.0  %


Consolidated net revenues were $4.23 billion for the year ended December 31,
2021, an increase of $1.29 billion compared to $2.94 billion for the year ended
December 31, 2020. The increase consists of increases of $1.19 billion and
$107 million at our Macao operations and Marina Bay Sands, respectively, due to
increased casino and rooms revenue from increased visitation related to fewer
days in which our gaming operations were closed in 2021 compared to 2020.
Net casino revenues increased $851 million compared to the year ended December
31, 2020. Revenues at our Macao properties and Marina Bay Sands increased
$818 million and $33 million, respectively, driven by increases in Non-Rolling
Chip drop and slot handle. The following table summarizes the results of our
casino activity:
                                               Year Ended December 31,
                                         2021            2020          Change

                                                (Dollars in millions)
Macao Operations:
The Venetian Macao
Total casino revenues               $      944        $   531           77.8    %
Non-Rolling Chip drop               $    3,234        $ 1,925           68.0    %
Non-Rolling Chip win percentage           27.4   %       25.4  %         2.0  pts
Rolling Chip volume                 $    4,412        $ 3,775           16.9    %
Rolling Chip win percentage               3.99   %       3.12  %        0.87  pts
Slot handle                         $    1,841        $ 1,041           76.8    %
Slot hold percentage                       3.9   %        4.2  %        (0.3) pts
The Londoner Macao
Total casino revenues               $      396        $   192          106.3    %
Non-Rolling Chip drop               $    1,755        $   881           99.2    %
Non-Rolling Chip win percentage           21.6   %       22.6  %        (1.0) pts
Rolling Chip volume                 $    3,674        $   167        2,100.0    %
Rolling Chip win percentage               3.23   %       5.85  %       (2.62) pts
Slot handle                         $      962        $   531           81.2    %
Slot hold percentage                       3.8   %        4.3  %        (0.5) pts


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                                                    Year Ended December 31,
                                               2021            2020         Change

                                                     (Dollars in millions)
The Parisian Macao
Total casino revenues                     $       244       $   180         35.6    %
Non-Rolling Chip drop                     $     1,146       $   844         35.8    %
Non-Rolling Chip win percentage                  22.3  %       23.1  %      (0.8) pts
Rolling Chip volume                       $       502       $ 3,141        (84.0)   %
Rolling Chip win percentage                      3.73  %       1.13  %      2.60  pts
Slot handle                               $       787       $   763          3.1    %
Slot hold percentage                              3.3  %        3.7  %      (0.4) pts
The Plaza Macao and Four Seasons Macao
Total casino revenues                     $       298       $   159         87.4    %
Non-Rolling Chip drop                     $     1,140       $   544        109.6    %
Non-Rolling Chip win percentage                  23.5  %       24.6  %      (1.1) pts
Rolling Chip volume                       $     2,659       $ 3,656        (27.3)   %
Rolling Chip win percentage                      4.64  %       2.46  %      2.18  pts
Slot handle                               $        42       $    37         13.5    %
Slot hold percentage                              5.7  %        4.6  %       1.1  pts
Sands Macao
Total casino revenues                     $       105       $   107         (1.9)   %
Non-Rolling Chip drop                     $       433       $   451         (4.0)   %
Non-Rolling Chip win percentage                  17.1  %       18.7  %      (1.6) pts
Rolling Chip volume                       $     1,073       $ 1,361        (21.2)   %
Rolling Chip win percentage                      4.39  %       2.44  %      1.95  pts
Slot handle                               $       606       $   549         10.4    %
Slot hold percentage                              3.1  %        3.1  %         -  pts
Singapore Operations:
Marina Bay Sands
Total casino revenues                     $       905       $   872          3.8    %
Non-Rolling Chip drop                     $     2,679       $ 2,111         26.9    %
Non-Rolling Chip win percentage                  15.0  %       18.6  %      (3.6) pts
Rolling Chip volume                       $     3,901       $ 9,495        (58.9)   %
Rolling Chip win percentage                      5.79  %       3.56  %      2.23  pts
Slot handle                               $    12,084       $ 8,915         35.5    %
Slot hold percentage                              4.2  %        4.4  %      (0.2) pts
U.S. Operations:
Las Vegas Operating Properties(1)
Total casino revenues                     $       443       $   228         94.3    %
Table games drop                          $     1,630       $ 1,258         29.6    %
Table games win percentage                       16.4  %       13.2  %       3.2  pts
Slot handle                               $     3,830       $ 1,951         96.3    %
Slot hold percentage                              8.5  %        8.0  %       0.5  pts


__________________________
(1)  The Las Vegas Operating Properties are classified as a discontinued
operation held for sale.
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 associated with games of chance in which large amounts are wagered.
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Room revenues increased $135 million compared to the year ended December 31,
2020. The increase was primarily due to increased occupancy rates driven by
higher visitation across our properties, as well as our properties being closed
for longer periods and select number of rooms being utilized for government
quarantine purposes during the year ended December 31, 2020. The following table
summarizes the results of our room activity:
                                                      Year Ended December 31,
                                              2021                   2020        Change

                                                    (Room revenues in millions)
Macao Operations:
The Venetian Macao
Total room revenues                       $      77                $  46         67.4    %
Occupancy rate                                 49.7   %             27.2  %      22.5  pts
Average daily room rate (ADR)             $     155                $ 197        (21.3)   %
Revenue per available room (RevPAR)       $      77                $  53         45.3    %
The Londoner Macao
Total room revenues                       $      90                $  42        114.3    %
Occupancy rate                                 40.3   %             18.3  %      22.0  pts
Average daily room rate (ADR)             $     160                $ 164         (2.4)   %
Revenue per available room (RevPAR)       $      64                $  30        113.3    %
The Parisian Macao
Total room revenues                       $      54                $  33         63.6    %
Occupancy rate                                 52.1   %             27.3  %      24.8  pts
Average daily room rate (ADR)             $     118                $ 145        (18.6)   %
Revenue per available room (RevPAR)       $      61                $  39         56.4    %
The Plaza Macao and Four Seasons Macao
Total room revenues                       $      45                $  17        164.7    %
Occupancy rate                                 44.3   %             28.5  %      15.8  pts
Average daily room rate (ADR)             $     438                $ 394         11.2    %
Revenue per available room (RevPAR)       $     194                $ 113         71.7    %
Sands Macao
Total room revenues                       $      10                $   6         66.7    %
Occupancy rate                                 68.2   %             39.4  %      28.8  pts
Average daily room rate (ADR)             $     138                $ 157        (12.1)   %
Revenue per available room (RevPAR)       $      94                $  62         51.6    %
Singapore Operations:
Marina Bay Sands(1)
Total room revenues                       $     139                $ 136          2.2    %
Occupancy rate                                 70.1   %             69.1  %       1.0  pts
Average daily room rate (ADR)             $     236                $ 313        (24.6)   %
Revenue per available room (RevPAR)       $     165                $ 216        (23.6)   %
U.S. Operations:
Las Vegas Operating Properties(2)
Total room revenues                       $     454                $ 218        108.3    %
Occupancy rate                                 82.4   %             56.3  %      26.1  pts
Average daily room rate (ADR)             $     221                $ 220          0.5    %
Revenue per available room (RevPAR)       $     182                $ 124    

46.8%

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(1) During the year ended December 31, 2021, 7% of rooms were under construction for renovation. (2) Las Vegas operating properties are classified as a discontinued operation held for sale.

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Food and beverage revenues increased $43 million compared to the year ended
December 31, 2020. The increase was $34 million and $9 million at our Macao
properties and Marina Bay Sands, respectively. The increase was due to increased
visitation during the year ended December 31, 2021.
Mall revenues increased $268 million compared to the year ended December 31,
2020. The increase was primarily due to a $207 million decrease in rent
concessions granted to our mall tenants in Macao and Singapore compared to the
year ended December 31, 2020, as well as a $76 million increase in turnover
rents. These items were partially offset by a decrease in occupancy rates for
our Macao mall operations.
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:
                                                       Year Ended December 31,
                                                 2021             2020          Change

                                                     (Mall revenues in millions)
Macao Operations:
Shoppes at Venetian
Total mall revenues                         $       194        $    125         55.2    %
Mall gross leasable area (in square feet)       814,784         812,936          0.2    %
Occupancy                                          79.7   %        83.8  %      (4.1) pts
Base rent per square foot                   $       292        $    302         (3.3)   %
Tenant sales per square foot(1)             $     1,348        $    794         69.8    %
Shoppes at Londoner(2)
Total mall revenues                         $        55        $     37         48.6    %
Mall gross leasable area (in square feet)       532,175         525,206          1.3    %
Occupancy                                          54.4   %        83.9  %     (29.5) pts
Base rent per square foot                   $       152        $     96         58.3    %
Tenant sales per square foot(1)             $     1,462        $    409        257.5    %
Shoppes at Parisian
Total mall revenues                         $        39        $     27         44.4    %
Mall gross leasable area (in square feet)       296,322         295,963          0.1    %
Occupancy                                          74.5   %        78.5  %      (4.0) pts
Base rent per square foot                   $       133        $    156        (14.7)   %
Tenant sales per square foot(1)             $       648        $    349         85.7    %
Shoppes at Four Seasons
Total mall revenues                         $       184        $     79        132.9    %
Mall gross leasable area (in square feet)       244,208         244,104            -    %
Occupancy                                          94.3   %        94.9  %      (0.6) pts
Base rent per square foot                   $       549        $    540          1.7    %
Tenant sales per square foot(1)             $     6,300        $  2,744        129.6    %
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues                         $       176        $    112         57.1    %
Mall gross leasable area (in square feet)       622,362         620,330          0.3    %
Occupancy                                          98.2   %        98.2  %         -  pts
Base rent per square foot                   $       277        $    258          7.4    %
Tenant sales per square foot(1)             $     1,614        $  1,053     

53.3%

_________________________

Note:  This table excludes the results of mall operations at Sands Macao. As a
result of the COVID-19 Pandemic, tenants were provided rent concessions during
the year ended December 31, 2021 and 2020. Base rent per square foot presented
above excludes the impact of these rent concessions.
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(1)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.
(2)The Shoppes at Londoner will feature more than 600,000 square feet of gross
leasable area upon completion of all phases of the renovation and expansion to
The Londoner Macao.
Operating Expenses
Our operating expenses consisted of the following:
                                                                       Year Ended December 31,
                                                                                                    Percent
                                                           2021                 2020                 Change

                                                                        (Dollars in millions)
Casino                                                $      2,068          $    1,585                   30.5  %
Rooms                                                          164                 136                   20.6  %
Food and beverage                                              244                 236                    3.4  %
Mall                                                            65                  59                   10.2  %
Convention, retail and other                                    85                 103                  (17.5) %
Provision for credit losses                                      3                  86                  (96.5) %
General and administrative                                     831                 798                    4.1  %
Corporate                                                      211                 168                   25.6  %
Pre-opening                                                     19                  19                      -  %
Development                                                    109                  18                  505.6  %
Depreciation and amortization                                1,041                 997                    4.4  %
Amortization of leasehold interests in land                     56                  55                    1.8  %
Loss on disposal or impairment of assets                        27                  73                  (63.0) %
Total operating expenses                              $      4,923          $    4,333                   13.6  %


Operating expenses were $4.92 billion for the year ended December 31, 2021, an
increase of $590 million compared to $4.33 billion for the year ended December
31, 2020. The increase was driven by increased visitation due to fewer days in
which our properties were closed during 2021 compared to 2020, and an increase
in payroll-related costs due to an increase of $121 million in bonuses and
incentives and a decrease in payments from the Job Support Scheme in Singapore
received in 2021. The increase was partially offset by certain cost reduction
programs implemented by management beginning in 2020 due to the impact of the
COVID-19 Pandemic. Operating margins in each business segment remain negatively
impacted as we have maintained our staffing levels across our jurisdictions
through significantly reduced visitation. We have also continued our payroll
cost saving initiatives across each of our properties, implemented in 2020,
which included utilization of paid time off and voluntary unpaid leave.
Casino expenses increased $483 million compared to the year ended December 31,
2020. The increase was primarily attributable to an increase of $412 million in
gaming taxes due to increased casino revenues, as previously described.
Room expenses increased $28 million compared to the year ended December 31,
2020. The increase consisted of increases of $17 million and $11 million at our
Macao properties and Marina Bay Sands, respectively, consistent with the
increase in room revenue.
Convention, retail and other expenses decreased $18 million compared to the year
ended December 31, 2020, driven by a $13 million decrease in ferry expenses
resulting from decreases in contract labor costs due to a reduction in
headcount, lower repair and maintenance costs, and lower fuel costs as ferries
were under dry dock. Additionally, convention, retail and other expenses at our
Macao properties decreased $5 million as a result of the cancellation of MICE
and entertainment events.
The provision for credit losses was $3 million for the year ended December 31,
2021, compared to $86 million for the year ended December 31, 2020. The decrease
was primarily due to an increased level of provision recorded during the year
ended December 31, 2020 due to the aging of patron receivables in connection
with the impact of the
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COVID-19 Pandemic. The amount of this provision can vary over short periods of
time because of factors specific to the patrons who owe us money from gaming
activities. We believe the amount of our provision for credit losses in the
future will depend upon the state of the economy, our credit standards, our risk
assessments and the judgment of our employees responsible for granting credit.
General and administrative expenses increased $33 million compared to the year
ended December 31, 2020, consisted of increases of $18 million and $15 million
at our Macao properties and Marina Bay Sands, respectively. The increases were
primarily driven by increases in marketing, payroll and property operation
costs.
Corporate expenses increased $43 million compared to the year ended December 31,
2020. The increase was primarily driven by $36 million related to payroll and
related costs, driven by no bonus expense recorded during the year ended
December 31, 2020. In addition, travel and related expenses increased by
$8 million due to increases in corporate aircraft usage and the related fuel
costs, as well as higher fuel prices.
Pre-opening expenses represent personnel and other costs incurred prior to the
opening of new ventures, which are expensed as incurred. The majority of
pre-opening expenses incurred related to The Londoner Macao.
Development expenses were $109 million for the year ended December 31, 2021, and
include the costs associated with our evaluation and pursuit of new business
opportunities, primarily in Florida and Texas, as well as our digital gaming
efforts. Development costs are also expensed as incurred.
Loss on disposal or impairment of assets was $27 million for the year ended
December 31, 2021, compared to $73 million for the year ended December 31, 2020.
The decrease was primarily due to fewer asset disposals and related demolition
costs incurred during the construction of The Londoner Macao compared to 2020.
Segment Adjusted Property EBITDA
The following table summarizes information related to our segments (see "Item 8
- Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements - Note 18 - Segment Information" for discussion of our operating
segments and a reconciliation of consolidated adjusted property EBITDA to net
income/loss):
                                                          Year Ended December 31,
                                                                                      Percent
                                                      2021                2020         Change

                                                           (Dollars in millions)
Macao:
The Venetian Macao                         $        297                  $ (53)        (660.4) %
The Londoner Macao                                  (84)                  (184)         (54.3) %
The Parisian Macao                                  (17)                  (131)         (87.0) %
The Plaza Macao and Four Seasons Macao              219                     33          563.6  %
Sands Macao                                         (69)                   (76)          (9.2) %
Ferry Operations and Other                           (8)                   (20)         (60.0) %
                                                    338                   (431)        (178.4) %
Marina Bay Sands                                    448                    383           17.0  %
Consolidated adjusted property EBITDA(1)   $        786                  $ 

(48) (1,737.5)%

Las Vegas Operating Properties(2)                   290                   

(124) (333.9)%

_________________________

(1)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/loss 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
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performance. In particular, management utilizes consolidated adjusted property
EBITDA to compare the operating profitability of our operations with those of
our 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.
(2)The Las Vegas Operating Properties are classified as a discontinued operation
held for sale.
Adjusted property EBITDA at our Macao operations increased $769 million compared
to the year ended December 31, 2020. The increase is primarily due to an
increase in casino, mall, and rooms revenues due to fewer property closures as a
result of the COVID-19 Pandemic. The increases were due to increases in table
drop and slot handle, reduced rent concessions and increases in occupancy and
number of rooms available for sale, respectfully.
Adjusted property EBITDA at Marina Bay Sands increased $65 million compared to
the year ended December 31, 2020.The increase was primarily due to an increase
in casino revenue and mall operations due to fewer property closures as a result
of the COVID-19 Pandemic. The increases were due to increased slot handle and
reduced rent concessions, respectfully.
Adjusted property EBITDA at our Las Vegas Operating Properties increased $414
million compared to the year ended December 31, 2020. The increase was primarily
due to increased casino and room revenue due to no property closures in 2021 as
a result of the COVID-19 Pandemic. The increases were due to increases in table
drop and slot handle and increased occupancy, respectfully.
Interest Expense
The following table summarizes information related to interest expense:
                                             Year Ended December 31,
                                            2021                  2020

                                              (Dollars in millions)
Interest cost                          $       636             $    544
Less - capitalized interest                    (15)                 (21)
Interest expense, net                  $       621             $    523
Cash paid for interest                 $       606             $    440
Weighted average total debt balance    $    14,592             $ 13,412
Weighted average interest rate                 4.4   %              4.0  %


Interest cost increased $92 million compared to the year ended December 31,
2020, resulting primarily from increases in our weighted average interest rate
and weighted average total debt balance. The weighted average debt balance
increased in connection with the issuance of the SCL 2026 and 2030 Senior Notes
in June 2020 and draws on the SCL revolver during the year ended December 31,
2021. Additionally, the weighted average interest rate increased from 4.0% to
4.4% during the year ended December 31, 2021 as a result of the expiration of
interest rate swaps in August 2020 related to the SCL senior notes (see "Item 8
- Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements - Note 10 - Long-Term Debt").
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Other Factors Affecting Earnings
Other expense was $31 million for the year ended December 31, 2021, compared to
other income of $19 million during the year ended December 31, 2020. The change
is primarily attributable to $51 million of foreign currency transaction losses,
mostly driven by the U.S. dollar-denominated debt held by SCL.
Our income tax benefit was $5 million on a loss from continuing operations
before income taxes of $1.47 billion for the year ended December 31, 2021,
resulting in a (0.3%) effective income tax rate. This compares to a 1.3%
effective income tax rate for the year ended December 31, 2020. The income tax
benefit for the year ended December 31, 2021, 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. Our U.S. operations recorded a tax benefit
associated with the pre-tax book losses incurred for the year ended December 31,
2021. Our U.S. tax benefit was partially offset by a valuation allowance
recorded on certain U.S. foreign tax credits, which we no longer expect to
utilize due to lower royalty income resulting from a decrease in revenues from
our Macao and Singapore operations compared to prior estimates.
The net loss attributable to our noncontrolling interests from continuing
operations was $315 million for the year ended December 31, 2021, compared to
net loss attributable to our noncontrolling interest from continuing operations
of $458 million for the year ended December 31, 2020. These amounts were related
to the noncontrolling interest of SCL.
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Additional Information Regarding our Retail Mall Operations
The following tables summarize the results of our mall operations on the Cotai
Strip and at Marina Bay Sands for the years ended December 31, 2021 and 2020:
                                       Shoppes at         Shoppes at Four         Shoppes at            Shoppes at           The Shoppes at
                                        Venetian              Seasons              Londoner              Parisian           Marina Bay Sands

                                                                                  (In millions)
For the year ended December 31, 2021
Mall revenues:
Minimum rents(1)                     $       181          $        121          $         29          $         29          $          144
Overage rents                                 15                    54                    15                     6                      25
Rent concessions(2)                          (31)                   (1)                   (3)                   (6)                    (24)
Other(3)                                       -                     -                     -                     -                       6
Total overage rents and rent
concessions                                  (16)                   53                    12                     -                       7
CAM, levies and direct recoveries             29                    10                    14                    10                      25
Total mall revenues                          194                   184                    55                    39                     176
Mall operating expenses:
Common area maintenance                       12                     5                     7                     4                      16
Marketing and other direct operating
expenses                                       6                     4                     3                     2                       6
Mall operating expenses                       18                     9                    10                     6                      22
Property taxes(4)                              1                     -                     -                     -                       2
Provision for (recovery of) credit
losses                                        (1)                    -                     -                     3                       -
Mall-related expenses(5)             $        18          $          9          $         10          $          9          $           24
For the year ended December 31, 2020
Mall revenues:
Minimum rents(1)                     $       192          $        121          $         37          $         34          $          137
Overage rents                                 13                    10                     4                     2                      11
Rent concessions(2)                         (111)                  (61)                  (22)                  (20)                    (56)
Total overage rents and rent
concessions                                  (98)                  (51)                  (18)                  (18)                    (45)
CAM, levies and direct recoveries             31                     9                    18                    11                      20
Total mall revenues                          125                    79                    37                    27                     112
Mall operating expenses:
Common area maintenance                       11                     4                     6                     4                      13
Marketing and other direct operating
expenses                                       5                     5                     2                     3                       5
Mall operating expenses                       16                     9                     8                     7                      18
Property taxes(4)                              2                     -                     -                     -                       2
Provision for credit losses                    1                     -                     1                     -                       -
Mall-related expenses(5)             $        19          $          9          $          9          $          7          $           20


____________________
Note:  This table excludes the results of our mall operations at Sands Macao.
(1)  Minimum rents include base rents and straight-line adjustments of base
rents.
(2)  Rent concessions were provided to tenants as a result of the COVID-19
Pandemic and the related impact on mall operations.
(3)  The amount for Marina Bay Sands of $6 million related to a grant provided
by the Singapore government to lessors to support small and medium enterprises
impacted by the COVID-19 Pandemic in connection with their rent obligations.
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(4)  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, The Plaza Macao and
Four Seasons Macao, The Londoner Macao and The Parisian Macao have obtained a
second exemption. The exemption for The Venetian Macao and The Plaza Macao and
Four Seasons Macao expired in August 2019 and August 2020, respectively, and the
exemption for The Londoner Macao and The Parisian Macao will be expiring in
December 2027 and September 2028, respectively.
(5)  Mall-related expenses consist of CAM, marketing fees and other direct
operating expenses, property taxes and provision for credit losses, but excludes
depreciation and amortization and general and administrative costs.
It is common in the mall operating industry for companies to disclose mall net
operating income ("NOI") as a useful supplemental measure of a mall's operating
performance. Because NOI excludes general and administrative expenses, interest
expense, impairment losses, depreciation and amortization, gains and losses from
property dispositions, allocations to noncontrolling interests and provision for
income taxes, it provides a performance measure that, when compared year over
year, reflects the revenues and expenses directly associated with owning and
operating commercial real estate properties and the impact on operations from
trends in occupancy rates, rental rates and operating costs.
In the table 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.
Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019
A discussion of changes in our results of operations between 2020 and 2019 has
been omitted from this Form 10-K and can be found in "Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations - Year
Ended December 31, 2020 Compared to the Year Ended December 31, 2019" of the

Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

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Liquidity and Capital Resources
Cash Flows - Summary
Our cash flows consisted of the following:
                                                                       Year Ended December 31,
                                                                      2021                 2020

                                                                            (In millions)
Net cash generated from (used in) operating activities           $       (243)         $   (1,191)
Cash flows from investing activities:
Net proceeds from sale of Sands Bethlehem                                   -                   -
Capital expenditures                                                     (828)             (1,227)
Proceeds from disposal of property and equipment                            7                   1
Acquisition of intangible assets and other                                (11)                  -
Net cash generated from (used in) investing activities                   (832)             (1,226)
Cash flows from financing activities:
Proceeds from exercise of stock options                                    19                  24
Repurchase of common stock                                                  -                   -
Dividends paid and noncontrolling interest payments                         -                (911)
Proceeds from long-term debt                                            2,702               1,945
Repayments of long-term debt                                           (1,867)               (467)
Payments of financing costs                                               (38)                (31)
Make-whole premium on early extinguishment of debt                       (131)                  -
Transaction with discontinued operations                                  178                (205)

Net cash provided by (used in) financing activities from continuing operations

                                                     863                 355

Net cash generated from (used in) discontinued operations                  16                 (19)

Effect of exchange rate on cash, cash equivalents and restricted cash

                                                                      (16)                (24)

Decrease in cash, cash equivalents and restricted cash and cash equivalents

                                                              (212)             (2,105)

Cash, cash equivalents and restricted cash and cash equivalents at the beginning of the year

                                                    2,137               4,242

Cash, cash equivalents and restricted cash and cash equivalents at year-end

                                                          1,925               2,137

Less: cash, cash equivalents and restricted cash at end of period for discontinued operations

                                        (55)                (39)

Cash, cash equivalents and restricted cash at the end of the period from continuing operations

                                            $      

1,870 $2,098


A discussion of changes in cash flows between 2020 and 2019 has been omitted
from this Form 10-K and can be found in "Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" of the   Company's Annual Report on Form 10-K   for the
fiscal year ended December 31, 2020.
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 income and accounts receivable. For
the year ended December 31, 2021, cash used in operations was $243 million, a
decrease of $948 million compared to $1.19 billion for the year ended December
31, 2020, primarily resulting from a decrease in net loss as our properties
remained opened during the year ended December 31, 2021, with the exception of
the closure of the casino at Marina Bay Sands on two different occasions
(approximately 15 days total), compared to the year ended December 31, 2020, in
which our properties were closed at various times
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and for an extended period. Additionally, our net working capital requirements
decreased during the year ended December 31, 2021.
Cash Flows - Investing Activities
Capital expenditures for the year ended December 31, 2021, totaled $828 million,
including $653 million in Macao, which consisted of $551 million for The
Londoner Macao, $71 million for The Venetian Macao and $19 million for The Plaza
Macao and Four Seasons Macao; $148 million at Marina Bay Sands in Singapore; and
$27 million for corporate and other.
Capital expenditures for the year ended December 31, 2020, totaled $1.23
billion, including $1.06 billion in Macao, which consisted of $739 million for
The Londoner Macao, $157 million for The Plaza Macao and Four Seasons Macao
primarily for The Grand Suites at Four Seasons, and $140 million for The
Venetian Macao; $164 million in Singapore; and $5 million for corporate and
other.
Cash Flows - Financing Activities
Net cash flows generated from financing activities were $863 million for the
year ended December 31, 2021, which was primarily attributable to net proceeds
of $756 million, received from the drawdown of our SCL revolving facility, and
transactions with discontinued operations. These items were partially offset by
a $131 million make-whole premium for the early redemption of the SCL senior
note due 2023 and $38 million in financing costs related to the issuance of the
new unsecured notes at SCL and the covenant waivers obtained on the LVSC
Revolving Facility, 2018 SCL Credit Facility and 2012 Singapore Credit Facility.
Net cash flows generated from financing activities were $355 million for the
year ended December 31, 2020, which was primarily attributable to the issuance
of $1.50 billion of unsecured notes at SCL, partially offset by $911 million in
dividend payments, and transactions with discontinued operations.
As of December 31, 2021, we had $3.68 billion available for borrowing under our
U.S., Macao and Singapore revolving facilities, net of letters of credit.
Additionally, we had $2.73 billion available for borrowing under the 2012
Singapore Delayed Draw Term Facility to finance construction costs incurred in
connection with the MBS Expansion Project.
Capital Financing Overview
We fund our development projects primarily through borrowings from our debt
instruments (see "Item 8 - Financial Statements and Supplementary Data - Notes
to Consolidated Financial Statements - Note 10 - Long-Term Debt") and operating
cash flows.
In September 2021, SCL issued, in a private offering, three series of unsecured
notes in an aggregate principal amount of $1.95 billion. The net proceeds from
the offering, along with cash on hand, was used to redeem in full the
outstanding principal amount of the $1.80 billion 4.600% senior notes due 2023,
any accrued interest and the associated make-whole premium as determined under
the related senior notes indenture dated as of August 9, 2018. (See "Item 8 -
Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements - Note 10 - Long-Term Debt - Corporate and U.S. Related Debt - SCL
Senior Notes").
Our U.S., SCL and Singapore credit facilities, as amended, contain various
financial covenants, which include maintaining a maximum leverage ratio or net
debt, as defined, to trailing twelve-month adjusted earnings before interest,
income taxes, depreciation and amortization, as defined. In September 2021, LVSC
extended the amendment, pursuant to which lenders, among other things, removed
LVSC's requirement to maintain a maximum leverage ratio as of the last day of
the fiscal quarter, through and including December 31, 2022. In July 2021, SCL
extended the waiver and amendment request letter, pursuant to which lenders,
among other things, waived SCL's requirement to ensure the leverage ratio does
not exceed 4.0x and the interest coverage ratio is greater than 2.50x, through
January 1, 2023. In September 2021, MBS extended the amendment letter, pursuant
to which MBS will not have to comply with the leverage or interest coverage
covenants as of the last day of the fiscal quarter, through and including
December 31, 2022. Our compliance with our financial covenants for periods
beyond December 31, 2022 could be affected by certain factors beyond our
control, such as the impact of the COVID-19 Pandemic, including current travel
and border restrictions continuing in the future. We will pursue additional
waivers to meet the required financial covenant ratios, which include a maximum
leverage ratio of 4.0x, 4.0x and 4.5x under our U.S., Macao and
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Singapore credit facilities, respectively, for periods beyond December 31, 2022
for LVSC and MBS and January 1, 2023 for SCL, if deemed necessary. We believe we
will be successful in obtaining the additional waivers, although no assurance
can be provided that such waivers will be granted, which could negatively impact
our ability to be in compliance with our debt covenants for periods beyond
December 31, 2022 for LVSC and MBS and January 1, 2023 for SCL.
In addition, pursuant to the Second Amendment and subject to the satisfaction of
certain conditions specified therein, the requisite lenders under the existing
LVSC Revolving Credit Agreement consented to, and waived any applicable
restrictions prohibiting, the consummation of the announced sale of the Las
Vegas Operations.
Any defaults under our debt 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 $1.85 billion and restricted
cash and cash equivalents of $16 million as of December 31, 2021, of which
approximately $1.06 billion of the unrestricted amount is held by non-U.S.
subsidiaries. Of the $1.06 billion, approximately $706 million is available to
be repatriated to the U.S., and we do not expect withholding taxes or other
foreign income taxes to apply should these earnings be distributed in the form
of dividends or otherwise. The remaining unrestricted amounts held by non-U.S.
subsidiaries are not available for repatriation primarily due to dividend
requirements to third-party public stockholders 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 $3.68 billion available for borrowing under our U.S., Macao and Singapore
credit facilities, net of outstanding letters of credit, and SGD 3.69 billion
(approximately $2.73 billion at exchange rates in effect on December 31, 2021)
under the 2012 Singapore Delayed Draw Term Facility, as of December 31, 2021,
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 and debt obligations. If the
construction cost estimate and construction schedule to the MBS Expansion
Project are not delivered by the extended deadline, we will not be permitted to
make further draws on the Singapore Delayed Draw Term Facility after March 31,
2022 until these items are delivered to lenders. In the normal course of our
activities, we will continue to evaluate global capital markets to consider
future opportunities for enhancements of our capital structure. During 2020, we
entered into an amendment request letter on the 2018 SCL Credit Facility, which
provides us with the option to increase the total borrowing capacity by an
aggregate amount of up to $1.0 billion. Subsequently, on January 25, 2021, we
increased the amount available under the SCL revolving credit facility by HKD
3.83 billion (approximately $491 million in exchange rates in effect on December
31, 2021) to further enhance our liquidity. During the year ended December 31,
2021, SCL drew down $71 million and HKD 5.31 billion (approximately $681 million
at exchange rates in effect on December 31, 2021) under this facility for
general corporate purposes.
We have suspended our quarterly dividend program beginning in April 2020, and
SCL suspended its dividend payments after paying its interim dividend for 2019
on February 21, 2020.
In June 2018, our Board of Directors authorized the repurchase of $2.50 billion
of our outstanding common stock, which was to expire in November 2020. In
October 2020, our Board of Directors authorized the extension of the expiration
date of the remaining repurchase amount of $916 million to November 2022. During
the year ended December 31, 2021, no shares of our common stock were repurchased
under this program. All share repurchases of our common stock have been recorded
as treasury stock. 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, cash flows, legal requirements, other investment opportunities and
market conditions.
We believe we have a strong balance sheet and sufficient liquidity in place,
including access to available borrowing capacity under our credit facilities. We
also believe we are well positioned to support our continuing operations,
complete the major construction projects in Macao and Singapore that are
underway and respond to the current COVID-19 Pandemic challenges. We have taken
various mitigating measures to manage through the current
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environment, including a cost and capital expenditure reduction program to minimize cash outflow for non-essential items. Total Debt and Other Contractual Obligations Our total long-term debt and other contractual obligations are summarized below as of December 31, 2021:

                                                                            Payments Due by Period(1)
                                             2022            2023 - 2024           2025 - 2026           Thereafter            Total

                                                                                  (In millions)
Long-Term Debt Obligations(2)
LVSC Senior Notes                         $     -          $      1,750          $      1,500          $       750          $  4,000
SCL Senior Notes                                -                     -                 2,600                4,550             7,150
2018 SCL Credit Facility - Revolving            -                   753                     -                    -               753
2012 Singapore Credit Facility                 62                   200                 2,683                    -             2,945
Singapore Delayed Draw Term Facility            -                     -                    46                    -                46
Finance Leases, Including Imputed
Interest                                       10                    14                     2                    -                26
Fixed Interest Payments                       441                   890                   649                  552             2,532
Variable Interest Payments(3)                  79                   133                    71                    -               283
Contractual Obligations
Operating Leases, Including Imputed
Interest(4)                                    16                    19                    11                  310               356
Mall Deposits(5)                               58                    58                    16                   11               143
Macao Annual Premium(6)                        22                     -                     -                    -                22
Other(7)                                       92                   126                    85                  149               452
Total                                     $   780          $      3,943          $      7,663          $     6,322          $ 18,708


_______________________
(1)As of December 31, 2021, we had a $79 million liability related to uncertain
tax positions; we do not expect this liability to result in a payment of cash
within the next 12 months. We are unable to reasonably estimate the timing of
the liability in individual years beyond 12 months due to uncertainties in the
timing of the effective settlement of tax positions; therefore, such amounts are
not included in the table.
(2)See "Item 8 - Financial Statements and Supplementary Data - Notes to
Consolidated Financial Statements - Note 10 - Long-Term Debt" for further
details on these financing transactions and "Item 8 - Financial Statements and
Supplementary Data - Notes to Consolidated Financial Statements - Note 14 -
Leases" for further details on finance leases.
(3)Based on the 1-month rate as of December 31, 2021, London Inter-Bank Offered
Rate ("LIBOR") of 0.10%, Hong Kong Inter-Bank Offer Rate ("HIBOR") of 0.16% and
Singapore Swap Offer Rate ("SOR") of 0.32%, plus the applicable interest rate
spread in accordance with the respective debt agreements.
(4)We are party to certain operating leases for real estate, which primarily
include $324 million related to long-term land leases in Macao with an
anticipated lease term of 50-years and $17 million related to a long-term land
lease in Las Vegas with a 40-year lease term. See "Item 8 - Financial Statements
and Supplementary Data - Notes to Consolidated Financial Statements - Note 14 -
Leases" for further details on operating leases.
(5)Mall deposits consist of refundable security deposits received from mall
tenants.
(6)In addition to the 39% gross gaming win tax in Macao (which is not included
in this table as the amount we pay is variable in nature), we are required to
pay an annual premium with a fixed portion and a variable portion, which is
based on the number and type of gaming tables and gaming machines we operate.
Based on
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the gaming tables and gaming machines in operation as of December 31, 2021, the
annual premium payable to the Macao government is approximately $22 million
through the termination of the gaming subconcession in June 2022.
(7)Primarily consists of all other non-cancellable contractual obligations and
primarily relates to certain hotel and restaurant management and service
agreements. The amounts exclude open purchase orders with our suppliers that
have not yet been received as these agreements generally allow us the option to
cancel, reschedule and adjust terms based on our business needs prior to the
delivery of goods or performance of services.
Off-Balance Sheet Arrangements
We have not entered into any transactions with special purpose entities, nor
have we engaged in any derivative transactions other than foreign currency
swaps. Refer to Note 9 - Derivative Instruments for outstanding foreign currency
swaps as of December 31, 2021.
Restrictions on Distributions
We are a parent company with limited business operations. Our main asset is the
stock and membership interests of our subsidiaries. Certain of our debt
instruments contain 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 certain 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 any
forward-looking statements will prove to be correct. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
beyond our control, 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:
•the uncertainty of the extent, duration and effects of the COVID-19 Pandemic
and the response of governments and other third parties, including
government-mandated property closures, increased operational regulatory
requirements or travel restrictions, on our business, results of operations,
cash flows, liquidity and development prospects;
•our ability to maintain our gaming licenses and subconcession in Macao,
Singapore and Las Vegas, including the renewal or extension of the subconcession
in Macao that expires on June 26, 2022;
•our ability to invest in future growth opportunities;
•the ability to execute our previously announced capital expenditure programs in
both Macao and Singapore, and produce future returns;
•the satisfaction of the conditions precedent to the consummation of the
proposed sale of our Las Vegas real property and operations, including the
Venetian Resort Las Vegas and the Sands Expo and Convention Center (the
"Proposed Transaction"), including the receipt of regulatory approvals;
•unanticipated difficulties or expenditures relating to the Proposed
Transaction;
•legal proceedings, judgments or settlements that may be instituted in
connection with the Proposed Transaction, including those against us, our board
of directors and executive officers and others;
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•disruptions of current plans and operations caused by the announcement and
pendency of the Proposed Transaction;
•potential difficulties in employee retention due to the announcement and
pendency of the Proposed Transaction;
•the response of patrons, suppliers, business partners and regulators to the
announcement of the Proposed Transaction;
•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 tenant sales;
•disruptions or reductions in travel and our operations due to natural or
man-made disasters, pandemics, epidemics or outbreaks of infectious or
contagious diseases, political instability, civil unrest, terrorist activity or
war;
•the uncertainty of consumer behavior related to discretionary spending and
vacationing at our Integrated Resorts;
•the extensive regulations to which we are subject and the costs of compliance
or failure to comply with such regulations;
•new developments, construction projects and ventures, including our Cotai Strip
developments and MBS Expansion Project;
•regulatory policies in China or other countries in which our patrons reside, or
where we have operations, including visa restrictions limiting the number of
visits or the length of stay for visitors from China to Macao, restrictions on
foreign currency exchange or importation of currency, and the judicial
enforcement of gaming debts;
•our leverage, debt service and debt covenant compliance, including the pledge
of certain 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 Singapore and quota limits on the hiring of foreign
workers;
•our ability to compete for limited management and labor resources in Macao and
Singapore, and policies of those governments may also affect our ability to
employ imported managers or labor from other countries;
•our dependence upon properties primarily in Macao, Singapore and Las Vegas for
all of our cash flow and the ability of our subsidiaries to make distribution
payments to us;
•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 may not be adequate to cover all possible losses that
our properties could suffer and our insurance costs may increase in the future;
•our ability to collect gaming receivables from our credit players;
•our relationship with gaming promoters in Macao;
•our dependence on chance and theoretical win rates;
•fraud and cheating;
•our ability to establish and protect our intellectual property rights;
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•conflicts of interest that arise because certain of our directors and officers
are also directors and officers 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;
•the continued services of our key officers;
•any potential conflict between the interests of our Principal Stockholders and
us;
•labor actions and other labor problems;
•our failure to maintain the integrity of our information and information
systems or comply with applicable privacy and data security requirements and
regulations could harm our reputation and adversely affect our business;
•the completion of infrastructure projects in Macao;
•potential negative impacts from environmental, social and governance and
sustainability matters; 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.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires our management to make estimates and judgments that affect the reported
amounts of assets and liabilities, revenues and expenses, and related
disclosures of contingent assets and liabilities. These estimates and judgments
are based on historical information, information 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 results of operations and
financial condition. We believe the critical accounting policies discussed below
affect our more significant judgments and estimates used in the preparation of
our consolidated financial statements.
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Provision for Expected Credit Losses
We maintain a provision for expected credit losses on casino, hotel and mall
receivables and regularly evaluate the balances. We apply standard reserve
percentages to aged account balances, which are grouped based on shared credit
risk characteristics and days past due. The reserve percentages are based on
estimated loss rates supported by historical observed default rates over the
expected life of the receivable and are adjusted for forward-looking
information. We also specifically analyze the collectability of each account
with a balance over a specified dollar amount, based upon the age of the
account, the customer's financial condition, collection history and any other
known information and adjust the aforementioned reserve with the results from
the individual reserve analysis. We also monitor regional and global economic
conditions and forecasts, which include the impact of the COVID-19 Pandemic, in
our evaluation of the adequacy of the recorded reserves.
During the year ended December 31, 2021, there continued to be a delay in
payments on casino receivables due to the inability of patrons to travel to our
properties or to accomplish financial transactions due to the travel
restrictions caused by the COVID-19 Pandemic. The collection of casino
receivables has also been impacted by liquidity issues faced by certain patrons
also stemming from the COVID-19 Pandemic. We have increased the provision for
credit losses in each jurisdiction accordingly to account for the expected
credit losses due to the COVID-19 Pandemic. We continue to closely monitor any
delays in payments due to the COVID-19 Pandemic and will increase the provision
accordingly depending on the facts and circumstances. Although we believe the
provision on our casino receivables is adequate as of December 31, 2021, it is
possible our provisions could increase if we experience further delays on
payments from patrons.
Account balances are written off against the provision when we believe it is
probable the receivable will not be recovered. Credit or marker play was 14.5%,
7.9% and 53.9% of table games play at our Macao properties, Marina Bay Sands and
Las Vegas Operating Properties, respectively, during the year ended December 31,
2021. Our provision for casino credit losses was 72.5% and 59.8% of gross casino
receivables as of December 31, 2021 and 2020, respectively. The credit extended
to gaming promoters can be offset by the commissions payable to said gaming
promoters, which is considered in the establishment of the provision for credit
losses. Our provision for credit losses from our hotel and other receivables is
not material.
Litigation Accrual
We are subject to various claims and legal actions. We estimate the accruals for
these claims and legal actions based on all relevant facts and circumstances
currently available and include such accruals in other accrued liabilities in
the consolidated balance sheets when it is determined such contingencies are
both probable and reasonably estimable.
Property and Equipment
As of December 31, 2021, we had net property and equipment of $11.85 billion,
representing 59.1% of our total assets. We depreciate property and equipment on
a straight-line basis over their estimated useful lives. The estimated useful
lives are based on the nature of the assets as well as current operating
strategy and legal considerations, such as contractual life. Future events, such
as property expansions, property developments, new competition or new
regulations, could result in a change in the manner in which we use certain
assets requiring a change in the estimated useful lives of such assets. The
estimated useful lives of assets are periodically reviewed and adjusted as
necessary on a prospective basis.
For assets to be held and used (including projects under development), fixed
assets are reviewed for impairment whenever indicators of impairment exist. If
an indicator of impairment exists, we first group our assets with other assets
and liabilities at the lowest level for which identifiable cash flows are
largely independent of the cash flows of other assets and liabilities (the
"asset group"). Secondly, we estimate the undiscounted future cash flows
directly associated with and expected to arise from the completion, use and
eventual disposition of such asset group. We estimate the undiscounted cash
flows over the remaining useful life of the primary asset within the asset
group. If the undiscounted cash flows exceed the carrying value, no impairment
is indicated. If the undiscounted cash flows do not exceed the carrying value,
then an impairment is measured based on fair value compared to carrying value,
with fair value typically based on a discounted cash flow model. If an asset is
still under development, future cash flows include remaining construction costs.
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To estimate the undiscounted cash flows of our asset groups, we consider all
potential cash flows scenarios, which are probability weighted based on
management's estimates given current conditions. Determining the recoverability
of our asset groups is judgmental in nature and requires the use of significant
estimates and assumptions, including estimated cash flows, probability weighting
of potential scenarios, costs to complete construction for assets under
development, growth rates and future market conditions, among others. Future
changes to our estimates and assumptions based upon changes in macro-economic
factors, regulatory environments, operating results or management's intentions
may result in future changes to the recoverability of our asset groups.
For assets to be held for sale, the fixed assets (the "disposal group") are
measured at the lower of their carrying amount or fair value less costs to sell.
Losses are recognized for any initial or subsequent write-down to fair value
less costs to sell, while gains are recognized for any subsequent increase in
fair value less costs to sell, but not in excess of the cumulative loss
previously recognized. Any gains or losses not previously recognized that result
from the sale of the disposal group shall be recognized at the date of sale.
Fixed assets are not depreciated while classified as held for sale.
Income Taxes
We are subject to income taxes in the U.S. (including federal and state) and
numerous foreign jurisdictions in which we operate. We record income taxes under
the asset and liability method, whereby deferred tax assets and liabilities are
recognized based on the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases, and attributable to operating
loss and tax credit carryforwards.
Our foreign and U.S. tax rate differential reflects the fact that U.S. tax rates
are higher than the statutory tax rates in Singapore and Macao of 17% and 12%,
respectively. In August 2018, we received an additional exemption from Macao's
corporate income tax on profits generated by the operation of casino games of
chance for the period January 1, 2019 through June 26, 2022, the date our
subconcession agreement expires. Additionally, we entered into an agreement with
the Macao government in April 2019, effective through June 26, 2022, providing
for payments as a substitution for a 12% tax otherwise due from VML shareholders
on dividend distributions paid from VML gaming profits, namely a payment of
38 million patacas (approximately $5 million at exchange rates in effect on
December 31, 2021) for each of the years 2021, 2020 and 2019, each payment to be
made on or before January 31 of the following year, and a payment of 18 million
patacas (approximately $2 million at exchange rates in effect on December 31,
2021) for the period between January 1, 2022 through June 26, 2022, to be paid
on or before July 26, 2022. There is no assurance either of these tax
arrangements will be extended beyond their expiration dates.
Accounting standards regarding income taxes require a reduction of the carrying
amounts of deferred tax assets by a valuation allowance, if based on the
available evidence, it is "more-likely-than-not" such assets will not be
realized. Accordingly, the need to establish valuation allowances for deferred
tax assets is assessed at each reporting period based on a
"more-likely-than-not" realization threshold. This assessment considers, among
other matters, the nature, frequency and severity of current and cumulative
losses, forecasts of future profitability, the duration of statutory
carryforward periods, our experience with operating loss and tax credit
carryforwards not expiring and tax planning strategies.
We recorded a valuation allowance on the net deferred tax assets of certain
foreign jurisdictions of $416 million and $342 million as of December 31, 2021
and 2020, respectively, and a valuation allowance on certain net deferred tax
assets of our U.S. operations of $4.62 billion and $4.58 billion as of December
31, 2021 and 2020, respectively. Due to the impact of the COVID-19 Pandemic and
the resulting reduction in estimated royalty income from an expected decrease in
our Macao and Singapore operations, we recorded a valuation allowance on certain
U.S. foreign tax credits, which we no longer expect to utilize during the period
2022 through 2027 before their expiration. We believe we made reasonable
estimates and judgments in performing the analysis in light of the uncertainties
surrounding the COVID-19 Pandemic; however, should the effects of the COVID-19
Pandemic persist for a prolonged duration, we could be required to record
additional valuation allowances. Management will reassess the realization of
deferred tax assets each reporting period and consider the scheduled reversal of
deferred tax liabilities, sources of taxable income and tax planning strategies.
To the extent the financial results of these operations improve and it becomes
"more-likely-than-not" the deferred tax assets are realizable, we will be able
to reduce the valuation allowance in the period such determination is made, as
appropriate.
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Significant judgment is required in evaluating our tax positions and determining
our provision for income taxes. During the ordinary course of business, there
are many transactions for which the ultimate tax determination is uncertain.
Accounting standards regarding uncertainty in income taxes provides a two-step
approach to recognizing and measuring uncertain tax positions. The first step is
to evaluate the tax position for recognition by determining if the weight of
available evidence indicates it is "more-likely-than-not" the position will be
sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step is to measure the tax benefit as the largest
amount that is more than 50% likely, based solely on the technical merits, of
being sustained on examinations. We recorded unrecognized tax benefits of $136
million and $131 million as of December 31, 2021 and 2020, respectively. We
consider many factors when evaluating and estimating our tax positions and tax
benefits, which may require periodic adjustments and for which actual outcomes
may be different.
Our major tax jurisdictions are the U.S., Macao, and Singapore. We could be
subject to examination for tax years beginning in 2017 in Macao and Singapore
and tax years 2010 through 2015 and 2018 through 2020 in the U.S.
Recent Accounting Pronouncements
See related disclosure at "Item 8 - Financial Statements and Supplementary Data
- Notes to Consolidated Financial Statements - Note 2 - Summary of Significant
Accounting Policies - Recent Accounting Pronouncements."
ITEM 7A. - 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 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
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 December 31, 2021, the estimated fair value of our long-term debt was
approximately $15.06 billion, compared to its contractual value of $14.90
billion. The estimated fair value of our long-term debt is based on recent
trades, if available, and indicative pricing from market information (level 2
inputs). A hypothetical 100 basis point change in market rates would cause the
fair value of our long-term debt to change by $515 million. A hypothetical 100
basis point change in LIBOR, HIBOR and SOR would cause our annual interest cost
on our long-term debt to change by approximately $37 million.
Foreign currency transaction losses for the year ended December 31, 2021, were
$34 million primarily due to U.S. dollar denominated debt issued by SCL and by
Singapore dollar denominated intercompany debt reported in U.S. dollars. We may
be vulnerable to changes in the U.S. dollar/SGD and U.S. dollar/pataca exchange
rates. Based on balances as of December 31, 2021, a hypothetical 10% weakening
of the U.S. dollar/SGD exchange rate would cause a foreign currency transaction
loss of approximately $22 million and a hypothetical 1% weakening of the U.S.
dollar/pataca exchange rate would cause a foreign currency transaction loss of
approximately $53 million (net of the impact from the foreign currency swap
agreements). The pataca is pegged to the Hong Kong dollar and the Hong Kong
dollar is pegged to the U.S. dollar (within a narrow range). 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.
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