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# UNITED STATESSECURITIES AND
EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-K

|X| Annual Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year
ended December 31, 2002Or|   | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For The Transition
Period From        To

_________________

Commission File Number
333-42147

_________________

# LAS VEGAS SANDS, INC.(Exact name of
registration as specified in its charter)

|                                                               | 
|-------------------------------------------------------------- | 
|Nevada                                                         | 
|                                                               | 
|(State or other jurisdiction of incorporation or organization) | 
|                                                               | 
|3355 Las Vegas Boulevard South, Room 1A                        | 
|Las Vegas, Nevada                                              | 
|                                                               | 
|(Address of principal offices)                                 | 

(702) 414-1000

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Registrants
telephone number, including Area Code

Securities registered
pursuant to Section 12(b) of the Act: NoneSecurities registered pursuant to Section 12(g)
of the Act: None

Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months; and (2) has been subject
to such filing requirements for the past 90 days. Yes |X| No |   |

Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes |   |
No |X|

The aggregate market value of voting
stock held by nonaffiliates of registrant as of June 30, 2002 was $0.

The Company had 1,000,000 shares of
common stock outstanding as of March 31, 2003.

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# Las Vegas Sands,
Inc.

# Table of Contents

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|Item 5  |        | 
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|Item 7  |        | 
|Item 7A |        | 
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|Item 9  |        | 
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|Item 10 |        | 
|Item 11 |        | 
|Item 12 |        | 
|Item 13 |        | 
|Item 14 |        | 
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|Item 15 |        | 
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# PART I

ITEM 1.  BUSINESS

General

Las
Vegas Sands, Inc. (LVSI) and its subsidiaries (collectively, the
Company) own and operate the Venetian Casino Resort (the Casino
Resort), a Renaissance Venice-themed resort situated at one of the premier locations
on the Las Vegas Strip (the Strip). The Casino Resort is located across from
The Mirage and the Treasure Island Hotel and Casino. The Casino Resort includes the only
all-suites hotel on the Strip with 3,036 suites (the Hotel); a gaming facility
of approximately 116,000 square feet (the Casino); an enclosed retail, dining
and entertainment complex of approximately 446,000 net leasable square feet (the
Mall); and a meeting and conference facility of approximately 500,000 square
feet (the Congress Center).

The
Casino Resort is physically connected to the approximately 1.15 million square foot Sands
Expo and Convention Center (the Expo Center), one of the largest facilities in
the United States specifically designed for trade shows and conventions. Management
believes that the combined facilities of the Casino Resort and the Expo Center (which is
separately owned by an affiliate of the Companys principal stockholder) is one of
the largest hotel and meeting complexes in the United States.

LVSI
was incorporated in 1988 under the laws of the State of Nevada. In April 1989, LVSI
acquired the Sands Hotel and Casino (the Sands) from MGM Grand. LVSI owned and
operated the Sands from April 1989 to June 1996 when operations ceased to begin demolition
of the Sands and construction of the Casino Resort. Ground breaking for the Casino Resort
occurred in April 1997, the entire Casino Resort (excluding the Mall) opened on May 4,
1999, the Mall opened on June 19, 1999 and substantial completion of the entire Casino
Resort was achieved on November 12, 1999.

The
Company is constructing an extension to the Casino Resort to add an approximately
1,000-room hotel tower on top of the Casino Resorts existing parking garage, an
approximately 1,000-parking space expansion to the existing parking garage and
approximately 150,000 square feet of additional meeting and conference space (the
Phase IA Addition). The Phase IA Addition is expected to be completed in June
2003. See New Developments  Phase IA Addition and Risk
Factors  There are Significant Risks Associated with the Companys Planned
Construction Projects, Which Could Adversely Affect its Financial Condition, Results of
Operations or Cash Flows.

The
Government of Macau, Peoples Republic of China granted a provisional concession to
operate casinos in Macau to Galaxy Casino Company Limited, a joint venture comprised of a
subsidiary of the Company and a group of Macau and Hong Kong-based investors. The Company
is currently constructing a casino in Macau with an anticipated completion date of
February 2004. In addition to the casino the Company is currently constructing, the
Company tentatively plans to build a 500-suite hotel, casino and convention center
complex, with a Venetian-style theme similar to that of the Companys Las Vegas
property. See Risk Factors  There are Significant Risks Associated with
the Companys Planned Construction Projects, Which Could Adversely Affect its
Financial Condition, Results of Operations or Cash Flows and  The
Company May Not Be Able to Raise the Required Funds for the Macau Casino.

The
Casino Resort was developed on a stand-alone basis as the first phase of a two-phase
development. In the second phase of the development, it is contemplated that another
similarly sized themed resort (the Phase II Resort) will be constructed and
developed by a wholly-owned, indirect subsidiary of LVSI (the Phase II
Subsidiary).

LVSI
is the managing member and owner of 100% of the common equity of Venetian Casino Resort,
LLC (Venetian). Venetian is the owner and operator of the Hotel and Congress
Center, and the owner of the Casino. Under a casino lease (the Casino Lease),
Venetian leases the Casino to LVSI, which conducts all gaming operations in the Casino
Resort. Grand Canal Shops II, LLC, an indirect subsidiary of LVSI (the New Mall
Subsidiary) owns and operates the Mall. The executive offices of LVSI are located at
3355 Las Vegas Boulevard South, Room 1A, Las Vegas, Nevada 89109 and its telephone number
is (702) 414-1000.

---

This
Annual Report on Form 10-K contains certain forward-looking statements. See Item 7
 Managements Discussion and Analysis of Financial Condition and Results of
Operations  Special Note Regarding Forward  Looking Statements.

The Casino Resort

The
Hotel

The
Hotel presently has 3,036 single and multiple bedroom suites situated in a 35-story,
three-winged tower rising above the Casino. The lobby features a 65-foot domed ceiling
decorated with Venetian-themed, fresco-style paintings, a main passageway formed by a
barrel-vaulted ceiling carried on ornamental columns, and a replica of the unique three
dimensional-style marble floors found in Venetian palaces.

A
typical Hotel suite approximates 655 to 735 square feet, consisting of a raised sleeping
area and bathroom and a sunken living/working area. The suites bi-level
configuration creates a multi-function living space in which guests can sleep, work and
entertain and includes two queen-size beds or one king-size bed, a writing desk, dual-line
speaker phones, a fax machine and a sitting area. Approximately 318 of the suites are of
larger size for use by gaming customers.

The
Casino Resorts average daily room rates were $196 in each of the years ended
December 31, 2002 and 2001. Gross room revenues during the year ended December 31,
2002 were $206.7 million, representing an increase of $2.5 million when compared to $204.2
million during 2001. During 2002, the occupancy rate for available guestrooms (including
complementaries) in the Hotel was 95.6%.

The
Hotel leases space to eight restaurants to well known restaurateurs, (including Emeril
Legasse and Wolf Gang Puck), that are located adjacent to the Casino and five other food
outlets located in a Venetian-style market food court located at the casino level of the
Hotel. Live entertainment is offered at the 50,000 square foot entertainment complex,
C2K. In addition, the Hotel provides a variety of amenities for its guests,
including a state-of-the-art health spa, operated by Canyon Ranch Management, LLC, with
massage and treatment rooms, exercise and fitness areas. The Hotel features an outdoor
swimming complex (including three pools, spas, pool bars and cabanas) surrounded by
gardens, waterways, fountains and sculptures.

In
addition to the Congress Center, the Hotel includes approximately 63,000 square feet of
exhibition hall space that was completed in October 2001, including the
Guggenheim/Hermitage Museum, an art museum featuring masterpiece collections from the
Guggenheim Museum in New York, the Hermitage in Saint Petersburg, Russia and other
museums. Approximately 59,000 square feet of the exhibition hall space housed the
Guggenheim Art of the Motorcycle exhibit until January 2003. The Company is
currently evaluating the future use of this space.

The
Casino

The
Casino has 116,000 square feet of gaming space and is situated adjacent to the Hotel
lobby. The Casino floor is accessible from each of the Hotel, the Mall, the Congress
Center, the Expo Center and the Strip. The Casino is marketed to attract a broad base of
patrons, with a specific focus on frequent premium gaming customers. The Company markets
the Casino directly to this gaming market segment using database-marketing techniques,
slot clubs and traditional incentives such as reduced room rates and complimentary meals
and suites. The Company offers high roller gaming customers premium suites and
special hotel and casino services.

---

The
Casino environment is stylized to resemble a Venetian palazzo, with
architectural and interior design features representative of Venices Renaissance era
and its adjacent amenities include several signature restaurants such as
Emeril Lagasses Delmonico and Piero Selvaggios Valentino. The ceiling in the
table games area features fresco-style paintings of Venetian palaces. The gaming
facilities include approximately 2,035 slot machines of various denominations, including
popular multi-property, linked progressive games. A high-end slot area, with a private
lounge, provides slot customers with premium slot products and services. The Casinos
approximately 127 table games (excluding baccarat tables) include the traditional games of
blackjack, craps and roulette, Asian games such as Pai Gow and Pai Gow
Poker, and popular progressive table games such as Caribbean Stud Poker
and Let It Ride. In addition, the Casino offers gaming customers an upscale
sportsbook room and an upscale gaming salon featuring baccarat, blackjack and roulette
tables. The gaming salon is specially designed for premium, high roller
gaming, with baccarat, blackjack and roulette, direct access to private cash-out windows
at the Casino cage and direct access to the Casinos credit department.

The
Mall

The
Mall offers approximately 446,000 net leasable square feet of shopping, dining and
entertainment space located on two levels within the Casino Resorts main structure,
between the Casino level and the Hotel tower and in a separate approximately 38,000 square
foot retail annex adjacent to the Casino Resorts main structure and directly
accessible from the Strip. The Mall includes eight restaurants, six food court outlets,
three specialty shops and 58 retail stores. Visitors and guests can enter the Mall from
several different directions, including from the Strip via a moving sidewalk, from the
main gaming area of the Casino via escalators, from the Expo Center through the Congress
Center, from a cross-over bridge across the Strip and directly from the Hotel.

The
Mall offers an array of quality dining experiences, including upscale restaurants such as
Wolfgang Pucks Postrio, offering international and American regional cuisines. The
Malls retail offerings include exclusive showcase boutiques, popular brand name
mid-priced stores and themed entertainment concepts. Premium branded tenants in the Mall
include Mikimoto, Movado, Burberry and Jimmy Choo. The restaurants and stores are set
along an approximately one-quarter mile Venetian-themed streetscape and front on the
Venetian-themed canal running its length and grouped in piazza-style settings.
Store and restaurant facades are designed to project the Venetian theme.

In
both 2002 and 2001, the Mall leased approximately 90% of its gross leasable space at an
average of approximately $100 per leasable square foot. Additional tenants and increased
proceeds from rents raised Mall revenues to $36.5 million in 2002 from $33.5 million in
2001. The average term of a lease in the Mall is 10 years.

The
Expo Center and the Congress Center

With
over 1.15 million gross square feet of exhibit and meeting space, including four exhibit
halls and 20 meeting rooms, the separately owned and operated Expo Center is one of the
largest trade show and convention facilities in the United States (as measured by net
leasable square footage). As part of the Casino Resort, the Company owns and operates the
Congress Center, an approximately 500,000 gross square foot meeting and conference
facility which links the Expo Center and the rest of the Casino Resort. The Congress
Center includes an approximately 85,000 square foot column-free Venetian
Ballroom, an approximately 13,500 square foot Palazzo Ballroom, a
meeting complex of 42 individual rooms which can be combined to create three additional
ballrooms and an approximately 105,000 square foot exhibition hall. Together, the Expo
Center and the Congress Center offer nearly 1.65 million square feet of state-of-the-art
exhibition and meeting facilities, which can be configured to provide 108 meeting rooms or
accommodate large-scale multi-media events. The Company is also constructing 150,000
square feet of additional meeting and conference facility space to the Casino Resort. See
New Developments  Phase IA Addition.

Management
markets the Congress Center to complement the operations of the Expo Center by target
marketing the Congress Center for business conferences and upscale business events
typically held during the mid-week period, thereby generating room-night demand and
driving average daily room rates during the weekday move-in/move-out phases of Expo Center
events. The Companys goal is to draw from attendees and exhibitors at Expo Center
events and from attendees of Congress Center events to maintain weekday room-night demand
at the Hotel from this higher budget market segment, when room demand would otherwise be
derived from the lower budget tour and travel group market segment.

---

In
2002, approximately 933,000 visitors attended trade shows and conventions at the Expo
Center during 121 show days. The Expo Center hosted 17 events on the 2002 Trade Show Week
200 list of the largest trade shows in the United States in 2002, including the Spring and
Fall Western Shoe Show and JCK Jewelry Show, as well as the Automotive Service Industry
Association Week, each of which were multiple-location events.

The
Company has no ownership of or financial interest in the Expo Center or Interface
Group-Nevada, Inc. (Interface), the owner of the Expo Center, and does not
exercise any control over the business or management of the Expo Center or Interface. All
of the capital stock of Interface is beneficially owned by Sheldon G. Adelson, the
principal stockholder of the Company (the Principal Stockholder). See
Item 13  Certain Relationships and Related Transactions  Possible
Conflicts of Interest.

Venetian,
the New Mall Subsidiary, Interface and Lido Casino Resort, LLC are parties to an Amended
and Restated Reciprocal Easement, Use and Operating Agreement (the Cooperation
Agreement) which, among other things, provides for the integrated operation of all
the facilities. Interface, the New Mall Subsidiary and Venetian allocate expenses shared
by the Expo Center, the Casino Resort and the Mall. In addition, the Company and Interface
jointly market the Hotel and Casino, the Mall, the Congress Center and the Expo Center.
Until December 31, 2010, Interface will use commercially reasonable efforts to have the
Hotel designated as the headquarters hotel for trade show and convention
events at the Expo Center, and the Company will use commercially reasonable efforts to
promote the use and occupancy of the Expo Center. In order to obtain the Casino
Resorts headquarters hotel designation, the Company has agreed with
Interface that, except under certain circumstances, trade shows of the type generally held
at the Expo Center will not be held in the Congress Center. The Company will be able to
conduct or permit to be conducted at the meeting and conference space that is a part of
the Phase IA Addition and the Congress Center, tradeshows and expositions of the type
generally held at the Expo Center so long as such space is at most 125,000 square feet and
the Company enters into a preferred reservation system agreement with Interface. Trade
show and convention promoters are under no obligation to select the Casino Resort as the
headquarters hotel for their events. See Item 13  Certain
Relationships and Related Transactions  Cooperation Agreement.

New Developments

Phase
IA Addition

During
June 2002, the Company re-commenced construction of the Phase IA Addition. Due to the
travel disruption to Las Vegas during the fourth quarter of 2001 (following the terrorist
attacks of September 11, 2001), the Company had previously suspended construction of the
Phase IA Addition. The Company anticipates that the Phase IA Addition construction
will be completed in June 2003 with a remaining cost to complete of approximately $149.0
million, and an additional $8.9 million to expand the central HVAC facility (the
HVAC Plant) to accommodate the Phase IA Addition, as of December 31, 2002. Due
to the inherent risks in large construction projects, however, there can be no assurance
that the Phase IA Addition will be constructed without any substantial delays or cost
increases. See Risk Factors  There are Significant Risks Associated with
the Companys Planned Construction Projects, Which Could Adversely Affect its
Financial Condition, Results of Operations or Cash Flows.

Macau Casino Project

Concession

On
June 26, 2002, the Government of the Macau Special Administrative Region of the
Peoples Republic of China (Macau) granted a provisional concession to
operate casinos in Macau to Galaxy Casino Company Limited, a joint venture comprised of a
subsidiary of the Company (the Macau Subsidiary) and a group of Macau and Hong
Kong-based investors. Macau, the former Portuguese colony located near Hong Kong,
currently has annual gaming revenues of approximately $2.0 to $2.5 billion and is widely
regarded as one of the fastest growing gaming markets in the world. Approximately 10
million visitors arrived in Macau during 2001 (the latest available count), according to
the Macau Tourism Board. The following factors are expected to continue to significantly
improve Macaus status as a world-class gaming and resort destination: (i) the
increased ease of access from Hong Kong, China and Taiwan and other Asian regional gaming
markets (where casinos are currently banned); (ii) significant foreign and domestic
investment in new and expanded gaming products; and (iii) the development of Disneyland
China and other new resort developments in the region. The Company believes that the Macau
opportunity provides an international platform to expand its premier Venetian brand and
create increased diversification of, and a new source of significant growth for, its
revenue base.

---

Galaxy
Casino Company Limited was one of three entities to be granted a casino license in Macau.
During December 2002, the joint venture participants entered into concession,
sub-concession, and related agreements. The sub-concession agreement with the joint
venture participants provides that a wholly owned subsidiary of the Company
(Venetian Macau) will develop and operate casino projects separate from its
other joint venture partners. It is expected that the joint venture participants will in
turn develop hotel and casino projects separate from the Company.

Under
the terms of Venetian Macaus agreements with the government of Macau, Venetian Macau
has certain financial obligations to the Government of Macau or is obligated to pay for
certain costs of developing and constructing the Macau Casino in Macau. Venetian Macau is
committed to invest 4.4 billion Macau patacas (approximately $531.7 million at current
exchange rates as of December 31, 2002) under its agreement with the government of Macau
in various development projects until March 31, 2007.

The
initial term of the Venetian Macau sub-concession agreement is 20 years, beginning on June
27, 2002 and ending on June 26, 2022. The sub-concession agreement can be terminated after
the fifteenth year, upon one years prior notice and upon fair and reasonable
compensation for the balance of the term. Venetian Macau and each of the other parties
have the following obligations under the sub-concession agreement:

| |  |  | Ensuring
proper operation and conduct of casino games;
| |  | - | ------------------------------------------------------

| |  |  | Employing
people with appropriate qualifications;
| |  | - | -------------------------------------------------

| |  |  | Operating
and conducting casino games of chance in a fair and honest manner without the influence
of criminal activities; and
| |  | - | -----------------------------------------------------------------------------------------------------------------------------

| |  |  | Safeguarding
and ensuring Macaus interests in tax revenue from the operation of casinos and
other gaming areas.
| |  | - | ----------------------------------------------------------------------------------------------------------------

Additionally,
Venetian Macau is subject to reporting requirements to Macaus Gambling Inspection
and Coordination Bureau on a yearly basis, in particular with respect to the number of
gaming tables and electrical or mechanical gaming machines that it intends to operate
during the following year. As part of the granting of this concession, Venetian Macau will
have to pay a variable premium, subject to change, to Macau based on (i) a fixed yearly
payment, and (ii) variable payments based on the number and type of gaming tables used by
Venetian Macau. Venetian Macau will also have to pay a special gaming tax of 35% and
contribute 4% of gross gaming revenue to Macau.

Macau
Casino

Venetian
Macau is currently constructing a casino (Macau Casino), with an anticipated
completion date of February 2004, and in addition, tentatively plans to build a 500-suite
hotel, casino and convention center complex, with a Venetian-style theme similar to that
of the Companys Las Vegas property. The Company currently anticipates that the Macau
Casino construction will be completed at a total cost of $210.0 million. Due to inherent
risks in large construction projects in a foreign jurisdiction, however, there can be no
assurance that the Macau Casino will be constructed without substantial delays or cost
increases. See Item 7  Managements Discussion and Analysis of Financial
Condition and Results of Operations  Liquidity and Capital Resources and
Risk Factors  There are Significant Risks Associated with the
Companys Planned Construction Projects, Which Could Adversely Affect its Financial
Condition, Results of Operations or Cash Flows,  The Company May Not Be
Able to Raise the Required Funds for the Macau Casino and Certain Nevada
Gaming Laws Apply to the Companys Planned Gaming Activities and Associations in
Macau and Alderney.

During
the year ended December 31, 2002, the Company incurred $5.9 million of pre-opening and
development expenses and $2.4 million of capital expenditures associated with the
development of the Macau Casino Project.

---

Internet Gaming and
Other New Business Ventures

The
Company is actively pursuing the possibility of developing and operating an Internet
gaming site and is currently exploring other business opportunities for expansion,
including Native American gaming, and the possibility of operating casino resorts in
certain foreign jurisdictions. During January 2002, the Company entered into a joint
venture agreement to assess the feasibility of developing and operating an Internet gaming
site. Management estimates that the Company is committed to contribute approximately $1.0
million, approximately one-third of the required capital, to the joint venture during the
next year. After recovery of each partners initial capital contribution, the Company
will receive 50% to 80% of the net profit of the joint venture, based upon an increasing
scale of net profit (if any). The joint venture provides that the agreement will be
automatically terminated should the Company fail to obtain any required regulatory
approvals from the government of Alderney, the Nevada gaming authorities or any other
applicable jurisdiction prior to launching its operations. During March 2003, a subsidiary
of the Company received an interactive gaming license and an electronic betting center
license from the Alderney Gambling Control Commission. The Companys Internet and
other projects are in developmental or exploratory stages and there can be no assurance
that any of these ventures will prove to be attractive opportunities, or that if
implemented they will be successful. The Company intends to continue to explore similar
new business opportunities.

Business and Marketing
Strategy

The
Companys primary business objective is to provide a premium destination casino
resort experience in order to drive superior returns on invested capital and to increase
asset value. To achieve this objective, the Company: (i) operates a must-see
destination resort; (ii) captures premium room rates through a differentiated all-suites
product; (iii) drives hotel occupancy, casino use and mall shopping through the link to
the Expo Center and the Congress Center; (iv) caters to a higher budget customer mix by
offering a unique combination of hospitality and gaming facilities; (v) leverages the
Casino Resorts premium co-branding strategy to drive revenues; and (vi) targets
premium gaming customers.

Operate
a "Must-See" Destination Resort

The
Casino Resort, with its extensive theming, dining, shopping and entertainment, is a
must-see destination located at the heart of the Strip. The Casino Resort is
distinctly themed to provide visitors with the sense of being surrounded by the
architecture, music, art and history of Renaissance Venice. The Venetian-themed setting
along the Casino Resorts frontage on the Strip includes waterways, gondolas and
replicas of Venetian landmarks, such as the Doges Palace, the Rialto Bridge, the Ca
Doro and the Campanile Tower. The Mall features a one-quarter mile Venetian streetscape,
with intimate piazza-style settings. A 630-foot canal runs along the Venetian
streetscape, with gondolas and waterside cafes and crossed by authentically styled
Venetian bridges. Management believes that these attractions generate significant room
demand and foot traffic.

The
Casino Resort has approximately 740 feet of frontage on the east side of the Strip and is
located next to Harrahs and across from some of the most visited casino resorts and
attractions on the Strip, including The Mirage, the Treasure Island Hotel and Casino and
The Forum Shops at Caesars Palace Hotel.

Capture
Premium Room Rates through Differentiated All-Suites Product

The
typical Hotel suite ranges in size from approximately 655 square feet to 735 square feet
(compared to approximately 360 to 400 square feet on average for a standard room in
competing facilities on the Strip), and consists of a sunken living/working area and a
raised sleeping area with a marble bathroom; each area has its own television
entertainment center. Each suite living/working area includes a sitting area and a writing
desk and offers business amenities such as dual-line speakerphones, a fax machine and
dataport access. The bathrooms are oversized, featuring a separate bathtub and shower,
dual sinks and a telephone. In addition, the Hotel offers larger suites, including the
Presidential and penthouse suites.

The
Hotel offers the only all-suites product on the Strip with first-class services, amenities
for business travelers, such as in-room fax machines, two phone lines and high-end resort
facilities. In 2002, the Hotel was awarded the Exxon Mobil Four Star Award,
Conde Nasts Best 50 Hotels in North America, AAAs Four
Diamond Award and Meetings and Convention Magazines Prestigious Gold Key
Award for meeting hotels in the United States. In managements experience,
business and leisure travelers consider suites desirable, superior accommodations. For
business travelers, the Hotels suites, which accommodate informal business meetings
and social gatherings, offer guests a unique, single location in which to work and
entertain in close proximity to the Expo Center and the Strip. Leisure travelers
appreciate both the Hotels spacious suites and extensive facilities. The Company
believes that the all-suites format, together with the Casino Resorts many other
unique attributes, results in a highly differentiated destination resort product, allow
for premium pricing on rooms and provide a competitive advantage over other hotel/casino
properties on the Strip.

---

The
Companys mix of hotel sales is as follows: group and convention room sales are
37.0%; hosted casino customers 12.9%; wholesale 12.2% and free and independent travelers
37.9% of total sales. The Hotels average daily room rates were $196 in 2002.

Drive
Hotel  Occupancy,  Casino Use and Mall Shopping through the Link to the Expo Center and
the Congress Center

The
Casino Resort is the first themed entertainment resort in Las Vegas designed specifically
to accommodate large-scale trade shows, conventions, conferences and meetings. These trade
shows, conventions, conferences and meetings often draw more attendees than the Hotel can
accommodate and generate additional non-Hotel traffic. The Expo Center and the Congress
Center provide recurring, predictable demand for mid-week room nights from business
travelers. The Companys diverse business model draws convention attendees from all
parts of the United States and the world. In connection with 121 show days during 2002,
approximately 933,000 visitors attended trade shows and conventions at the Expo Center.
The Hotel had a mid-week occupancy rate of 93.8% in 2002 (compared to an 80.9% mid-week
average occupancy rate on the Strip), due in large part to the Casino Resorts trade
show and convention business. In 2001, the Hotels average daily room rate was
approximately $196. Pursuant to the Cooperation Agreement, the owner of the Expo Center
markets the Casino Resort to promoters of Expo Center trade show conventions and other
events as the headquarters hotel for such events. The Casino Resort offers
attendees of events at the Expo Center and the Congress Center the most convenient hotel
accommodations in Las Vegas.

Cater
to a  Higher-Budget  Customer  Mix by  Offering  a Unique  Combination  of  Hospitality
 and  Gaming Facilities

Management
markets the Casino Resort to attract higher-budget business travelers and free and
independent travelers, resulting in a higher-budget customer mix both on weekdays and on
weekends. By appealing to customers in these upscale market segments, the Company has
reduced its reliance on the lower-budget tour and travel market. Management believes that
business travelers typically pay more for rooms and spend more on entertainment than
weekday customers in other categories, such as tour groups. Management believes that the
Casino Resorts central location at the heart of the Strip adjacent to the Expo
Center, and its all-suites hotel product all combine to allow it to compete effectively
for the higher-budget mid-week trade show, convention and meeting attendees. On both
weekdays and weekends, the all-suites product at the Hotel appeals to free and independent
leisure travelers and high-roller gaming customers, also segments of the
travel market who spend more on rooms and entertainment.

Leverage
the Casino Resort's Premium Co-Branding Strategy to Drive Revenues

The
Company expects to build upon awareness of the Venetian brand by continuing to attract a
unique collection of signature restaurant concepts and premier global retail
brands to the Casino Resort. This strategy allows the Company to focus on its core
competency of providing first-class hotel and meeting facilities while attracting
additional guests and foot traffic because of its own brand name and its concentration of
other premier brands. The Casino Resort has been designed such that foot traffic from the
Strip, the Expo Center, the Congress Center and the Hotel are funneled through the Casino
floor in order to attract and retain a broad base of Casino patrons. The Company seeks to
maximize guest spending from the Casino Resorts target markets by offering a
concentration of fine restaurants, exclusive boutiques, the Canyon Ranch health spa and
the 50,000 square foot entertainment complex, C2K. Several well-known
restaurateurs operate signature restaurants on the premises, such as Emeril
Lagasses Delmonico and Wolfgang Pucks Postrio. The Mall includes premium
branded retailers such as Mikimoto and Burberry and nationally recognized retailers such
as Banana Republic, Kenneth Cole and Brookstone. In addition, the Casino Resort includes
the Guggenheim Hermitage Museum, which houses various art exhibits in conjunction with the
Guggenheim Museum in New York and the Hermitage Museum in St. Petersburg, Russia. The
co-branding strategy enhances the Casino Resorts appeal to the higher budget room
guests. The Company believes that the Casino Resorts premier location on the Strip,
its extensive theming as well as its established and growing concentration of
signature restaurant concepts and premier global retail brands have been an
effective strategy for driving revenues and the awareness of the Venetian brand. The
Company expects to build upon the Venetians brand awareness to provide continued
revenue growth opportunities from retail and restaurants to drive Hotel room rates and
Casino patronage.

---

Target
Premium Gaming Customers

Management
believes that the Casino Resorts all-suites product, themed atmosphere and high-end
amenities, including premium restaurants and shops, offer gaming customers a unique Las
Vegas experience. The Company actively markets the Casino to frequent premium gaming
customers. In particular, the Company seeks to attract high roller gaming
customers by offering premium suites and special hotel services. Because of the all-suites
format in the Hotel, the Casino Resort is able to offer many gaming customers
complimentary suites (considered premium accommodations in Las Vegas) during high
occupancy periods, such as weekends and holidays, when they would not be offered such
suites by the Companys competitors. The Casino Resort is the only all-suites resort
on the Strip with facilities and amenities designed to attract premium gaming customers.
The premium gaming customers generally require the issuance of casino credit and in some
instances pre-arranged discounts of losses.

The Las Vegas Market

Las
Vegas is one of the fastest-growing and largest entertainment markets in the country. Las
Vegas hotel occupancy rates are among the highest of any major market in the United
States. According to the Las Vegas Convention and Visitors Authority (the
LVCVA), the number of visitors traveling to Las Vegas has increased at a
steady and significant rate for the last ten years from 21.9 million visitors in 1992 to
35.1 million visitors in 2002, a compound annual growth rate of 4.8%. In addition, the
population of Las Vegas has grown from approximately 850,000 in 1992 to approximately
1,550,000 in 2002, a compound annual growth rate of 6.2%. Management believes that the
growth in the Las Vegas market has been enhanced by a dedicated program of the LVCVA and
major Las Vegas hotels to promote Las Vegas as an exciting vacation and convention site,
the increased capacity of McCarran International Airport and the introduction of large,
themed destination resorts in Las Vegas.

Although
visitation, demand and expectations may be impacted by international and domestic events
and other factors and conditions, the Company expects hotel occupancy rates in Las Vegas
to remain high as a result of the sustained growth in the number of visitors traveling to
Las Vegas and the lack of new construction in Las Vegas, other than Le Reve, an
approximately 2,500 room resort to be built on the site of the former Desert Inn, one
block north of the Casino Resort on the corner of Las Vegas Boulevard and Sands Avenue,
and anticipated to open in April 2005.

Las
Vegas as a Trade Show, Convention and Meeting Destination

In
2002, according to the LVCVA, Las Vegas was the most popular trade show destination (with
a 25% market share of the Trade Show Week 200 Shows in terms of net square footage) and
the fourth most popular convention destination in the United States. In 1992,
approximately 2.0 million persons attended trade shows and conventions in Las Vegas and
spent approximately $1.7 billion. In 2002, the number of trade show and convention
attendees had increased to 5.1 million and the amount spent by trade show and convention
attendees was approximately $5.9 billion.

Trade
shows are held for the purpose of getting sellers and buyers of products or services
together in order to conduct business. Trade shows differ from conventions in that trade
shows typically require substantial amounts of space for exhibition purposes and
participant circulation. Conventions generally are gatherings of companies or groups that
require less space for breakout meetings and general meetings of the overall group. Las
Vegas offers trade shows and conventions a unique infrastructure for handling the
worlds largest shows, including the concentration of 48,000 hotel rooms located on
the Strip, three convention centers (the Expo Center, Mandalay Bay Convention Center, and
the Las Vegas Convention Center (the LVCC)) with a total of approximately 6.9
million square feet of convention and exhibition space, convenient air service from major
cities throughout the United States and other countries, and significant entertainment
attractions. In addition to the Expo Center, Mandalay Bay Convention Center, and the LVCC,
the MGM Grand Hotel and Casino has a conference and meeting facility of approximately
300,000 gross square feet, and the Mirage has a 100,000 gross square feet of meeting
space. Mandalay Bay opened its approximately 1.8 million square foot convention center
during January 2003. Management believes that Las Vegas will continue to evolve as the
countrys preferred trade show and convention destination.

---

Expanding
Hotel Market

During
2002, Las Vegas was among the most popular vacation destinations in the United States. Las
Vegas has experienced a period of rapid hotel development with the number of hotel and
motel rooms in Las Vegas increasing by 65% over the last 10 years, from 76,923 in 1992 to
126,787 in 2002. The Company expects that the concentration of quality themed casino
hotels and resorts will increase visitor interest in Las Vegas as a business event and
vacation destination, and, as a result, increase overall demand for hotel rooms, gaming
and entertainment.

Growth
of Las Vegas Retail Sector and Non-Gaming Revenue Expenditures

In
order to draw additional visitors, an increasing number of destination resorts are
developing non-gaming entertainment to complement their gaming activities. According to
the LVCVA, while gaming revenues have increased from $4.4 billion in 1992 to $7.6 billion
in 2002 (a compound annual growth rate of 5.6%), non-gaming tourist revenues increased
from $10.2 billion to $23.8 billion over the same period (a compound annual growth rate of
8.8%). The newer, large themed Las Vegas destination resorts have been designed to
capitalize on this growth by providing better quality hotel rooms at higher rates and by
providing expanded shopping, dining and entertainment opportunities to their patrons in
addition to gaming.

Infrastructure
Improvements

Clark
County and metropolitan Las Vegas have completed several infrastructure improvements to
accommodate the increase in travel to Las Vegas by all modes of transportation. According
to the LVCVA, in 2002 visitors to Las Vegas arrived by the following methods of
transportation: 45% by air; 40% by auto; 8% by recreational vehicle; and 7% by bus.

McCarran
International Airport Expansion

During
the past five years, the facilities of McCarran International Airport have been expanded
to accommodate the increased number of airlines and passengers that it services. The
number of passengers traveling through McCarran International Airport has increased from
20.9 million in 1992 to 35.0 million in 2002. Long-term expansion plans for McCarran
International Airport provide for additional runway and related areas (a new runway was
completed in October 1997 and a new terminal and additional gates were completed in 1998).

Competition

The
casino/hotel industry is highly competitive. Strip hotels compete with other hotels on the
Strip and with other hotels in downtown Las Vegas. The Casino Resort also competes with a
large number of hotels and motels near Las Vegas. Many of the Companys competitors
are subsidiaries or divisions of large public companies and may have greater financial and
other resources than the Company.

Hotel/Casino
Properties

Competitors
of the Casino Resort include themed resorts on the Strip, such as The Bellagio, Mandalay
Bay and Paris. In November 2002, Steve Wynn began construction of the Le Reve. Le Reve is
a 2,500 hotel-room resort and casino being constructed on the site of the former Desert
Inn located on Sands Avenue across from the site of the anticipated Phase II Resort, with
an expected completion date of April 2005. During 2002, Mandalay Bay and Bellagio each
announced the planned construction of 1,000 hotel room additions. Management is not aware
of any other new significant developments of casino properties in Las Vegas in the near
future. The Casino Resort may also compete with the Phase II Resort, to the extent its
business is not complementary to that of the Casino Resort.

---

The
Company believes that themed resorts are generally more successful at generating higher
traffic volumes and higher revenues and operating income than the large-scale non-themed
properties in Las Vegas. Themed resorts compete on the basis of the quality of theming, as
well as on more traditional bases, such as quality of rooms, pricing and location. Themed
resorts tend to be clustered on the Strip, creating a critical mass of entertainment
experiences which generate significant traffic for the themed resorts as a group, thereby
capturing a larger portion of the Las Vegas hotel and gaming market than non-themed
properties. The Company believes that the existence of other themed resorts in close
proximity to the Casino Resort directly benefits the Casino Resort. The Casino Resort is
part of a cluster of themed properties, which includes The Mirage, the Treasure Island
Hotel and Casino, The Bellagio and The Forum Shops at Caesars Palace Hotel, and may in the
future also include Le Reve and the Phase II Resort.

In
addition to the advantages of being a centrally-located, themed resort, the Cooperation
Agreement and the Casino Resorts direct connection with the Expo Center provide the
Casino Resort with a unique tie-in to one of the premier trade show and convention
facilities in the United States. With these competitive advantages, the Casino Resort is
positioned to appeal to the mid-week meeting, trade show and convention market composed of
customers who pay higher average room rates and have higher average travel budgets than
other categories of weekday customers, such as tour groups.

The
hotel-casino operation of the Casino Resort also competes, to some extent, with other
hotel-casino facilities in Nevada and in Atlantic City, hotel/casino and other resort
facilities elsewhere in the country and the world, Internet gaming web sites and state
lotteries. In addition, certain states have legalized, and others may legalize, casino
gaming in specific areas. The passage of the Indian Gaming Regulatory Act in 1988, for
example, has led to rapid increases in Native American gaming operations. Such
proliferation of gaming venues could significantly and adversely affect the business of
the Company. In particular, the legalization of casino gaming in or near major
metropolitan areas, such as New York, Los Angeles, San Francisco and Boston, from which
the Company attracts customers, could have a material adverse effect on the business of
the Company. In October 2001, the New York legislature approved a bill for expanded casino
gaming on Native American reservations in that state. The expansion of gaming in New York
could also have a material adverse effect on the business of the Company.

Trade
Show and Convention Facilities

The
Expo Center, the Congress Center and Las Vegas generally compete with trade show and
convention facilities located in and around major U.S. cities, including Atlanta, Chicago,
New York and Orlando. Within Las Vegas, the Expo Center and the Congress Center compete
with the LVCC, which is located off the Strip and currently has 3.2 million gross square
feet of convention and exhibit facilities, including over 1.0 million square feet of new
meeting and exhibition space that was added in 2001 (the LVCC Expansion). In
addition to the LVCC competition, Mandalay Bay opened an approximately 1.8 million square
foot convention center during January 2003. The MGM Grand Hotel and Casino has a
conference and meeting facility of approximately 300,000 square feet and the Mirage has a
100,000 gross square feet of meeting space. The conference and meeting facilities at these
hotel/resorts are the Congress Centers primary competition. The Company expects that
the LVCC and the Mandalay Bay Convention Center will be the primary competitors of the
Expo Center. To the extent that any of the competitors of the Casino Resort can offer a
hotel/casino experience that is integrated with substantial trade show and convention,
conference and meeting facilities, the Casino Resorts competitive advantage in
attracting trade show and convention meeting and conference attendees could be adversely
affected. Other cities such as Boston, Orlando and Pittsburgh are also in the process of
developing, or have announced plans to develop, convention centers and other meeting,
trade and exhibition facilities. The Companys competitors discussed above could in
the long term materially adversely affect the Company.

---

Mall

The
Mall competes with both themed resorts, which offer shopping, dining and entertainment
opportunities to their patrons, and other retail malls in or near Las Vegas. The
Malls direct competition includes The Forum Shops at Caesars Palace and The Desert
Passage Shops at the Aladdin. Park Place Entertainment Corp. recently announced an
approximately a 200,000 square-foot expansion of The Forum Shops at Caesars Palace. The
Mall also competes with The Fashion Show Mall, a more traditional mall located near the
Casino Resort, which is currently undergoing an expansion that will almost double its
size. In the future, the Mall may also compete with the planned retail, dining and
entertainment facilities in the Phase II Resort. Mandalay Resort Group had also announced,
but has since suspended, the development of a retail center near its new Mandalay Bay
Resort.

Macau

In
Macau, the Company expects to compete with the other two parties granted casino licenses,
which are a group led by Steve Wynn and a group led by Stanley Ho, who, at that time, held
Macaus only existing casino license. The Company also expects to compete with its
partners in the Galaxy Casino Company Limited joint venture.

Advertising and
Marketing

The
Company advertises in many types of media, including television, radio, newspapers,
magazines and billboards, to promote general market awareness of the Casino Resort as a
unique vacation, business and convention destination due to its first-class hotel, casino,
retail stores and restaurants. The Mall tenants also pursue their own general advertising
and promotional activity, which benefits the Mall. The Company actively engages in direct
marketing which is targeted at specific market segments, such as the meeting, convention
and trade show market and the premium gaming market, and database marketing which focuses
on high-frequency, high-margin market segments such as the high-roller gaming
market. The Company uses a preview center featuring a full-scale model suite in the Expo
Center to market Casino Resort and Expo Center events.

Agreements Relating to
the Casino Resort

As
of December 31, 1999, construction of the Casino Resort and the Mall was complete and
virtually all construction costs had been paid. The Company is currently involved in
various lawsuits, has asserted various claims against various parties, and has had various
claims asserted against it by various parties, in connection with the construction of the
Casino Resort. The Company is vigorously pursuing these claims and vigorously defending
itself in all relevant legal proceedings. See Item 3  Legal Proceedings.

Cooperation
Agreement

The
Companys business plan calls for each of the Casino Resort, the Mall, the Expo
Center and if built, the Phase II Resort, though separately owned, to be
integrally-related components of one facility. In establishing the terms for the
integrated operation of these components, the Cooperation Agreement sets forth agreements
regarding, among other things, encroachments, easements, operating standards, maintenance
requirements, insurance requirements, casualty and condemnation, joint marketing, the
construction of the Phase II Resort, and the sharing of some facilities and related costs.
Subject to applicable law, the Cooperation Agreement binds all current and future owners
of the Expo Center, the Casino Resort, the Mall and the Phase II Resort (and the land on
which the Phase II Resort is expected to be built), and has priority over the liens
securing the Companys new credit facility and the Companys 11% mortgage notes
due 2010 (the Mortgage Notes) and any liens securing any indebtedness of the
Mall, the Expo Center or Phase II Resort. Accordingly, subject to applicable law, the
obligations in the Cooperation Agreement will run with the land if any of the
components change hands.

---

Operating
Covenants

The
Cooperation Agreement regulates certain aspects of the operation of the Expo Center, the
Mall and the Casino Resort. For example, Under the Cooperation Agreement, the Company is
obligated to operate the Casino Resort continuously and to use it exclusively in
accordance with standards of first-class Las Vegas Boulevard style hotels, casinos and
retail and restaurant complexes. In turn, the New Mall Subsidiary is obligated to operate
the Mall exclusively in accordance with standards of first-class restaurant and retail
complexes, and Interface is obligated to operate and to use the Expo Center exclusively in
accordance with standards of first-class convention, trade show and exposition centers.
The Cooperation Agreement also provides that the Company will not and the New Mall
Subsidiary will not (and will not permit any other person to) own, operate, lease, license
or manage any building or other facility, at or in the Casino Resort, Phase II Resort, the
Mall or the land on which the Casino Resort, the Phase II Resort or the Mall sits, that
provides space for shows or expositions of the type generally held at the Expo Center. The
Company will be able to conduct or permit to be conducted at the meeting and conference
space that is a part of the Phase IA Addition, and at the Phase II Resort, tradeshows or
expositions of the type generally held at the Expo Center so long as such space is at most
125,000 square feet, and the Company enters into preferred reservation system agreements
with Interface that will govern the booking of exposition and tradeshows in the Phase IA
Addition meeting space and in the Phase II Resort, and agreements for Interface to provide
audio-visual, telecommunications, electrical, janitorial and other related services to
group customers of the Phase IA Addition meeting space or the Phase II Resort. See
Item 13  Certain Relationships and Related Transactions  Preferred
Reservation System Agreement and Meeting Services Agreement.

Additionally,
until December 31, 2010, Interface, upon the Companys request, will use commercially
reasonable efforts to have the Casino Resort designated as the headquarters
hotel for trade show and convention events at the Expo Center. In turn, the Company
will use commercially reasonable efforts to promote the use and occupancy of the Expo
Center.

Further,
Interface agreed under the Cooperation Agreement that, until such time as the indebtedness
under the Mortgage Notes has been paid in full, Interface will not incur additional debt
secured by the Expo Center if such additional debt will cause the aggregate indebtedness
secured by the Expo Center to exceed the greater of 85% of the then fair market value of
the Expo Center or $140.0 million plus any additional amounts permitted to be advanced for
equipment leases or equipment financings under the terms of the mortgages encumbering the
Expo Center in 1997.

In
addition, subject to certain exceptions, until December 31, 2010, Interface will not
voluntarily dispose of its interest in the Expo Center and interest in Interface, except
to a buyer of the Casino Resort.

Maintenance
and Repair

Venetian
must maintain the Casino Resort as well as some common areas and common facilities that
are to be shared with the Mall and the Expo Center. The cost of maintenance of all shared
common areas and common facilities is to be shared by the Company, the New Mall Subsidiary
and Interface. The New Mall Subsidiary must maintain, repair and restore the Mall and all
common areas and common facilities located in the Mall, and Interface must maintain,
repair and restore the Expo Center and all common areas and common facilities located in
the Expo Center.

Insurance

The
owners of the Casino Resort, the owner of the Mall and the owner of the Expo Center must
also maintain minimum types and levels of insurance, including property damage, general
liability and business interruption insurance.

The
Cooperation Agreement establishes an insurance trustee to assist in the implementation of
the insurance requirements.

---

The
Cooperation Agreement provides that in the event of a casualty affecting all or part of
the Casino Resort, the Expo Center or the Mall, then (a) all insurance proceeds above $1.5
million shall be paid to an insurance trustee to be disbursed in accordance with the
provisions of the cooperation agreement and (b) the owners of the affected properties will
(subject to certain conditions in the case of the Expo Center) agree to permit such
proceeds to be used to restore such property as nearly as reasonably possible to its
condition immediately preceding the casualty; provided, however, that no mortgagee of a
damaged property shall be required to permit such application of the resulting insurance
proceeds unless within 90 days after the casualty (a) the mortgagee receives an opinion
from an independent expert to the effect the damaged property may be completed within one
year after the delivery of the opinion and (b) the mortgagee receives evidence that the
insurance proceeds (together with any other funds committed by the owner) are sufficient
to cover the anticipated costs of the restoration (including scheduled debt service
payments through the anticipated date of completion of the restorations). If the owner of
the affected property is unable to satisfy the foregoing conditions, then the owners
equitable share of the insurance proceeds shall be applied in accordance with the
provisions of its mortgage(s).

In
the event of a condemnation of a part of the Casino Resort, a part of the Mall or a part
of the Expo Center, the Cooperation Agreement requires that the affected owner restore the
affected property as nearly as reasonably possible to its condition at the time of the
partial condemnation less the portion condemned.

The
Cooperation Agreement also requires that insurance proceeds payable in connection with a
casualty that is the result of a terrorist act be allocated equitably among the Casino
Resort, the Mall and the Expo Center in accordance with the damages suffered by each so
long as (a) proceeds in an amount not to exceed the lesser of (i) $105 million, (ii) the
cost of restoring the Mall and the rental income lost by the Mall as a result of the
terrorist act (and covered by such insurance), and (iii) the total amount of such
insurance proceeds, are paid first to the mortgagee of the Mall, and (b) proceeds in an
amount not to exceed the lesser of (i) $137 million, (ii) the cost of restoring the Expo
Center and the income lost by the Expo Center as a result of the terrorist act (and
covered by such insurance, and (iii) the total amount of such insurance proceeds, are paid
second to the mortgagee of the Expo Center. The mortgagee of the Mall also has the benefit
of $15 million of terrorism coverage that is solely for the benefit of the Mall property.

Parking

The
Cooperation Agreement also addresses issues relating to the use of the Casino
Resorts parking facilities, the use of parking facilities planned in connection with
the Phase II Resort and easements for access. The Casino Resort, the Mall and the Expo
Center may use the parking spaces in the Casino Resorts parking garage on a
first come, first served basis, as long as each property retains use of
sufficient spaces to comply with minimum parking standards. This means that each property
uses sufficient spaces to comply with applicable laws to conduct its business. The Casino
Resorts parking garage is owned, maintained, and operated by the Company, with the
operating costs allocated among the Company, the Mall and Interface. After the completion
of the parking garage planned to be built in connection with the Phase II Resort, the
Casino Resort, the Mall and the Expo Center will have the right to use the Phase II Resort
parking garage, with the operating costs allocated among each facility. All property
owners have granted each other non-exclusive easements and rights to use the roadways and
walkways on their properties for vehicular and pedestrian access to the parking garages.

Utility
Easements

All
property owners have also granted each other all appropriate and necessary easement rights
to utility lines servicing the Casino Resort, the Phase II Resort and the Expo Center.

---

Relations
between the Casino Resort and the Phase II Resort

The
Company must approve the plans and specifications (such approval not to be unreasonably
withheld) for all portions of the Phase II Resort that will connect with or adjoin the
Casino Resort prior to the commencement of construction of the Phase II Resort. The owner
of the Phase II Resort must use commercially reasonable efforts to minimize such
constructions interference with the operation of the Casino Resort.

Additionally,
prior to construction of the Phase II Resort, there must be agreement on:

| |  |  | appropriate
mutual operating covenants for the Casino Resort and the Phase II Resort;
| |  | - | -------------------------------------------------------------------------------------

| |  |  | joint
marketing and advertising of the Casino Resort and the Phase II Resort;
| |  | - | -----------------------------------------------------------------------------

| |  |  | certain
shared casino operations at the Casino Resort and the Phase II Resort;
| |  | - | ------------------------------------------------------------------------------

| |  |  | the
sharing of customer information regarding the Casino Resort and the Phase II Resort;
| |  | - | ----------------------------------------------------------------------------------------

| |  |  | the
joint purchasing of insurance for the Casino Resort and the Phase II Resort;
| |  | - | --------------------------------------------------------------------------------

| |  |  | shared
security operations for the Casino Resort and the Phase II Resort; and
| |  | - | -----------------------------------------------------------------------------

| |  |  | any
other matters that would be of mutual benefit in owning and operating the Casino Resort
and the Phase II Resort.
| |  | - | --------------------------------------------------------------------------------------------------------------------

Coordinated
Relations with HVAC Provider

As
discussed under HVAC Services Agreement and Related Documents, the
owners of the Casino Resort, the Mall, the Expo Center and the Phase II Resort have or
will have separate services agreements with Sempra Energy Solutions (the HVAC
Provider), the provider of thermal energy.

The
Cooperation Agreement provides mechanisms for these parties to deal with the HVAC Provider
in a coordinated manner. In particular, the cooperation agreement establishes conditions
for the owner of the Phase II Resort receiving thermal energy services from the HVAC
Plant. These conditions include the payment by the owner of the Phase II Resort of all
incremental costs attributable to such services and any additional capital improvements
required for such services.

The
Cooperation Agreement also provides mechanisms for the owners of the various properties to
make decisions regarding the termination or extension of the HVAC services agreements. In
general, these provisions permit a property owner that is not receiving adequate HVAC
services to replace the HVAC Provider, as long as the property owner:

| |  |  | arranges
for an experienced substitute utility operator to take over operation of the HVAC Plant;
and
| |  | - | -----------------------------------------------------------------------------------------------------

| |  |  | indemnifies
the other property owners against additional payment obligations arising as a consequence
of the termination of the previous operator of the HVAC Plant.
| |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Consents,
Approvals and Disputes

If
any property owner has a consent or approval right or has discretion to act or refrain
from acting, consent or approval will only be granted and action will be taken or not
taken only if a commercially reasonable owner would do so and such consent, approval,
action or inaction would not have a material adverse effect on the property owned by such
property owner. The Cooperation Agreement provides for the appointment of an independent
expert to resolve some disputes between the parties, as well as for expedited arbitration
for other disputes.

HVAC
Services Agreement and Related Documents

Sempra
Energy Solutions, successor to Atlantic Pacific Las Vegas, LLC, is a California company
and is beneficially owned by Sempra Energy, a utility holding company.

Thermal
energy (i.e., heating and air conditioning) is provided to the Casino Resort and the Expo
Center by the HVAC Provider using certain heating and air conditioning-related and other
equipment (the HVAC Equipment). In addition, the HVAC Provider provides the
Company with other energy-related services. The central HVAC Plant is located on land
owned by the Company, which land and HVAC Plant have been leased to the HVAC Provider for
a nominal annual rent. The HVAC Equipment is owned by the HVAC Provider, and the HVAC
Provider has been granted appropriate easements and other rights so as to be able to use
the HVAC Plant and the HVAC Equipment to supply thermal energy to the Casino Resort and
the Expo Center (and, potentially, other buildings), so long as such easements do not
materially interfere with the operations of the Casino Resort and the Expo Center. The
HVAC Provider paid all costs (HVAC Costs) in connection with the purchase and
installation of the HVAC Equipment, which costs totaled $70 million. The HVAC Provider has
entered into separate service contracts (collectively, the HVAC Service
Agreements) with: (i) Venetian; (ii) Interface; and (iii) the predecessor to the New
Mall Subsidiary, for the provision of heat and cooling requirements at agreed-to rates.
The charges payable by all users include a fixed component that enables the HVAC Provider
to recover 85% of the HVAC Costs over the initial term of the service contracts, with
interest at a fixed annual rate of 7.1%. In addition, the users reimburse the HVAC
Provider for the annual cost of operating and maintaining the HVAC Equipment and providing
certain other energy related services, and pay the HVAC Provider a management fee of
$500,000 per year. Each user is allocated a portion of the total agreed-to charges and
fees through its service contract, which portion includes paying 100% of the cost of
services in connection with the HVAC Equipment relating solely to such user. Each user is
not liable for the obligations of the other users; provided, however, that the New Mall
Subsidiary is liable for the obligations of each Mall tenant. The HVAC Service Agreements
expire in 2009, at which time the users will have the right, but not the obligation, to
collectively either extend the term of their agreements for two consecutive periods of
five years each or purchase the HVAC Equipment in accordance with purchase provisions set
forth in the HVAC Service Agreements.

---

The
Companys rights under the HVAC Service Agreements and related documents were
collaterally assigned to The Bank of Nova Scotia, as agent for the lenders under the
Companys senior secured credit facility entered into on June 4, 2002 (the
Senior Secured Credit Facility) and the holders of the Mortgage Notes as
security for its obligations under the Senior Secured Credit Facility and the Mortgage
Notes, and the Malls rights under the HVAC Services Agreement and related documents
were collaterally assigned to Archon Financial, L.P. as lender under the secured mall
facility that the Company is a party to (the Secured Mall Facility). The HVAC
Provider has consented to the Companys collateral assignment pursuant to a consent
and agreement agreed to by the HVAC Provider. Under the HVAC consent and agreement, the
HVAC Provider has agreed: (i) to acknowledge that the Company has granted a security
interest in its agreements with the HVAC Provider; (ii) under certain conditions, to
recognize the Companys secured lenders rights to step in to the
Companys rights under these agreements, and to keep from exercising termination and
other rights for a time; (iii) not to terminate these agreements or to consent to any
termination or suspension of these agreements without written notice to The Bank of Nova
Scotia, as agent for the lenders, and providing the Companys secured lenders an
opportunity to correct any default or breach that the Company commits; (iv) under certain
conditions, to consent to the transfer of the Companys interest to any of the
secured lenders or a purchaser or grantee at a foreclosure sale and to any purchasers in
lieu of foreclosure; and (v) that in the event one or more of the service contracts is
rejected in any bankruptcy or insolvency proceedings, to execute and deliver to the
secured lenders a new contract that is on the same terms and conditions as the original
HVAC Service Agreements.

Mall
 Management Contract

The
predecessor to the New Mall Subsidiary has entered into an agreement with Forest City
Enterprises (Forest City), a subsidiary of Forest City Ratner Enterprises, a
leading developer and manager of retail and commercial real estate developments, whereby
Forest City manages the Mall and supervises and assists in the creation of an advertising
and promotional program and a marketing plan for the Mall. Forest City is also responsible
for, among other things, preparation of a detailed plan for the routine operation of the
Mall, collection and deposit procedures for rents and other tenant charges, supervision of
maintenance and repairs and, on an annual basis, preparation of a detailed budget
(including any anticipated nonrecurring expenses and capital expenditures) for the Mall.
The term of the management contract is five years from June 19, 1999, the date the Mall
opened to the public. Forest City currently receives a management fee of 2% of all gross
rents received from the operation of the Mall, provided that Forest City receives a
minimum fee of $600,000 per year. Forest City is not affiliated with the Principal
Stockholder or any of his affiliates.

Agreements Related to
the Macau Casino Construction

The
Company has entered into preliminary contracts in Macau for architectural and engineering
services and for site work to construct the Macau Casino. The Company plans to enter into
other contracts during 2003 to complete construction of the Macau Casino by February 2004.
The Company expects to enter into a construction management agreement during 2003 to
facilitate construction of the Macau Casino.

---

Agreements Relating to
the Phase II Resort

The
Casino Resort was developed on a stand-alone basis as the first phase of a planned
two-phase development. In the second phase of the development, it is contemplated that the
Phase II Subsidiary will construct and develop the Phase II Resort, which also is
planned to be a themed resort. In the event that the Phase II Resort is not constructed,
the Casino Resort has all the attributes and facilities to continue to operate as a
stand-alone resort. See Item 13  Certain Relationships and Related
Transactions  Possible Conflicts of Interest.

Phase
II Resort

The
Company has not yet set a date to begin construction of the Phase II Resort. If the
Company determines to construct the Phase II Resort, it will be required to raise
substantial debt and/or equity financings. Currently, the Company has no commitments to
fund the hard construction costs of the Phase II Resort. In addition, the development
of the Phase II Resort may require obtaining additional regulatory approvals. The
Companys debt instruments limit its ability to guarantee or otherwise become liable
for any indebtedness of the Phase II Subsidiary. These debt instruments also restrict
the Companys and its subsidiaries ability to sell or otherwise dispose of the
capital stock of the Phase II Subsidiary, including a sale to the Principal
Stockholder or to any of his affiliates. In addition, the indenture governing the Mortgage
Notes (the Indenture) allows the Company to make investments of up to
$20.0 million for the development of the Phase II Resort and to incur up to
$20.0 million of additional debt to fund such investment.

Phase
II Casino Lease

If
the Phase II Resort is constructed, in order to avoid the need for a separate gaming
license for the Phase II Subsidiary, LVSI or Venetian may operate the casino for the Phase
II Resort pursuant to a lease (the Phase II Casino Lease). The Phase II Casino
Lease may have terms substantially similar to the Casino Lease. The Company or Venetian,
as the case may be, may agree to operate the casino in the Phase II Resort and the Casino
in a substantially similar manner, and the Company or Venetian, as the case may be, may
agree to have common gaming and surveillance operations in such casinos (based on pro rata
allocations of operating costs).

Phase
II HVAC Services Agreement

The
Cooperation Agreement permits the owner of the land on which the Phase II Resort will be
built (the Phase II Land) to enter into an HVAC Services Agreement to receive
HVAC services from the HVAC Plant. Any such agreement would have to be on terms
satisfactory to the HVAC Provider. See Item 13  Certain Relationships and
Related Transactions  Cooperation Agreement.

Regulation and
Licensing

State
of Nevada

The
ownership and operation of casino gaming facilities in the State of Nevada are subject to
the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively,
the Nevada Act) and various local regulations. The Companys gaming
operations are also subject to the licensing and regulatory control of the Nevada Gaming
Commission (the Nevada Commission), the Nevada Gaming Control Board (the
NGCB) and the Clark County Liquor and Gaming Licensing Board (the
CCLGLB and, together with the Nevada Commission and the NGCB, the Nevada
Gaming Authorities).

The
laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based
upon declarations of public policy that are concerned with, among other things: (i) the
prevention of unsavory or unsuitable persons from having a direct or indirect involvement
with gaming at any time or in any capacity; (ii) the establishment and maintenance of
responsible accounting practices and procedures; (iii) the maintenance of effective
controls over the financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and revenues,
providing reliable record-keeping and requiring the filing of periodic reports with the
Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and
(v) the establishment of a source of state and local revenues through taxation and
licensing fees. Any change in such laws, regulations and procedures could have an adverse
effect on the Companys gaming operations or on the operation of the Casino Resort.

---

The
Company is required to be licensed by the Nevada Gaming Authorities to operate a casino,
and is currently so licensed. The gaming license requires the periodic payment of fees and
taxes and is not transferable. The Company was registered by the Nevada Commission as a
publicly-traded corporation (Registered Corporation) and as such, must
periodically submit detailed financial and operating reports to the Nevada Gaming
Authorities and furnish any other information that the Nevada Gaming Authorities may
require. No person may become a stockholder of, or receive any percentage of profits from,
the Company without first obtaining licenses and approvals from the Nevada Gaming
Authorities. The Company operates the Casino pursuant to the Casino Lease between LVSI and
Venetian, which provides for a fixed monthly rental payment. The Company possesses all
state and local government registrations, approvals, permits and licenses required in
order for the Company to engage in gaming activities at the Casino Resort.

The
Nevada Gaming Authorities may investigate any individual who has a material relationship
to, or material involvement with, the Company or Venetian to determine whether such
individual is suitable or should be licensed as a business associate of a gaming licensee.
Officers, directors and certain key employees of the Company must file applications and be
licensed by the Nevada Gaming Authorities

The
Nevada Gaming Authorities may deny an application for licensing or a finding of
suitability for any cause they deem reasonable. A finding of suitability is comparable to
licensing; both require submission of detailed personal and financial information followed
by a thorough investigation. The applicant for licensing or a finding of suitability, or
the gaming licensee by whom the applicant is employed or for whom the applicant serves,
must pay all the costs of the investigation. Changes in licensed positions must be
reported to the Nevada Gaming Authorities, and in addition to their authority to deny an
application for a finding of suitability or licensure, the Nevada Gaming Authorities have
jurisdiction to disapprove a change in a corporate position.

If
the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable
for licensing or to have an inappropriate relationship with the Company, the Company would
have to sever all relationships with such person. In addition, the Nevada Commission may
require the Company to terminate the employment of any person who refuses to file
appropriate applications. Determinations of suitability or of questions pertaining to
licensing are not subject to judicial review in Nevada.

The
Company is required to submit periodic detailed financial and operating reports to the
Nevada Commission. Substantially all material loans, leases, sales of securities and
similar financing transactions by the Company must be reported to or approved by the
Nevada Commission.

If
it were determined that the Nevada Act was violated by the Company, the registration and
gaming licenses it then holds could be limited, conditioned, suspended or revoked, subject
to compliance with certain statutory and regulatory procedures. In addition, the Company
and the persons involved could be subject to substantial fines for each separate violation
of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could
be appointed by the Nevada Commission to operate the Casino Resort and, under certain
circumstances, earnings generated during the supervisors appointment (except for the
reasonable rental value of the Casino Resort) could be forfeited to the State of Nevada.
Limitation, conditioning or suspension of any gaming registration or license or the
appointment of a supervisor could (and revocation of any gaming license would) materially
adversely affect the gaming operations of the Company.

Any
beneficial holder of the Companys voting securities, regardless of the number of
shares owned, may be required to file an application, be investigated, and have their
suitability as a beneficial holder of the Companys voting securities determined if
the Nevada Commission has reason to believe that such ownership would otherwise be
inconsistent with the declared policies of the State of Nevada. The applicant must pay all
costs of investigation incurred by the Nevada Gaming Authorities in conducting any such
investigation.

The
Nevada Act requires any person who acquires more than 5% of the Companys voting
securities to report the acquisition to the Nevada Commission. The Nevada Act requires
that beneficial owners of more than 10% of the Companys voting securities apply to
the Nevada Commission for a finding of suitability within thirty days after the Chairman
of the Nevada Board mails the written notice requiring such filing. Under certain
circumstances, an institutional investor as defined in the Nevada Act, which
acquires more than 10% but not more than 15% of the Companys voting securities, may
apply to the Nevada Commission for a waiver of such finding of suitability if such
institutional investor holds the voting securities only for investment purposes. An
institutional investor shall not be deemed to hold voting securities only for investment
purposes unless the voting securities were acquired and are held in the ordinary course of
business as an institutional investment and not for the purpose of causing, directly or
indirectly, the election of a majority of the members of the board of directors of the
Company, any change in the Companys corporate charter, bylaws, management, policies
or operations of the Company or any of its gaming affiliates, or any other action which
the Nevada Commission finds to be inconsistent with holding the Companys voting
securities only for investment purposes. Activities that are not deemed to be inconsistent
with holding voting securities only for investment purposes include: (i) voting on all
matters voted on by stockholders; (ii) making financial and other inquiries of management
of the type normally made by securities analysts for informational purposes and not to
cause a change in its management, policies or operations; and (iii) such other activities
as the Nevada Commission may determine to be consistent with such investment intent. If
the beneficial holder of voting securities who must be found suitable is a corporation,
partnership or trust, it must submit detailed business and financial information including
a list of beneficial owners.

---

Under
a provision of the Nevada Act, under certain circumstances, an institutional
investor as defined in the Nevada Act, which intends to acquire not more than 15% of
any class of nonvoting securities of a privately-held corporation, limited partnership or
limited liability company that is also a registered holder or intermediary company of the
holder of a gaming license, may apply to the Nevada Commission for a waiver of the usual
prior licensing or finding of suitability requirements if such institutional investor
holds such nonvoting securities only for investment purposes. An institutional investor
shall not be deemed to hold nonvoting securities only for investment purposes unless the
nonvoting securities were acquired and are held in the ordinary course of business as an
institutional investor, do not give the institutional investor management authority, and
do not, directly or indirectly, allow the institutional investor to vote for the election
or appointment of members of the board of directors, a general partner or manager, cause
any change in the articles of organization, operating agreement, other organic document,
management, polices or operations, or cause any other action that the Nevada Commission
finds to be inconsistent with holding nonvoting securities only for investment purposes.
Activities that are not deemed to be inconsistent with holding nonvoting securities only
for investment purposes include: (i) nominating any candidate for election or appointment
to the entitys board of directors or equivalent in connection with a debt
restructuring; (ii) making financial and other inquiries of management of the type
normally made by securities analysts for informational purposes and not to cause a change
in the entitys management, polices or operations; and (iii) such other activities as
the Nevada Commission may determine to be consistent with such investment intent. If the
beneficial holder of nonvoting securities who must be licensed or found suitable is a
corporation, partnership or trust, it must submit detailed business and financial
information including a list of beneficial owners. The applicant is required to pay all
costs of investigation.

Any
person who fails or refuses to apply for a finding of suitability or a license within
thirty days after being ordered to do so by the Nevada Commission or the Chairman of the
Nevada Board may be found to be unsuitable. The same restrictions apply to a record owner
if the record owner, after request, fails to identify the beneficial owner. Any
stockholder found to be unsuitable and who holds, directly or indirectly, any beneficial
ownership of the common stock of a Registered Corporation beyond such period of time as
may be prescribed by the Nevada Commission may be guilty of a criminal offense. The
Company is subject to disciplinary action if, after it receives notice that a person is
unsuitable to be a stockholder or to have any other relationship with the Company, it: (i)
pays that person any dividend or interest upon voting securities of the Company; (ii)
allows that person to exercise, directly or indirectly, any voting right conferred through
securities held by that person; (iii) pays remuneration in any form to that person for
services rendered or otherwise; or (iv) fails to pursue all lawful efforts to require such
unsuitable person to relinquish his voting securities for cash at fair market value.
Additionally, the CCLGLB has taken the position that it has the authority to approve all
persons owning or controlling the stock of any corporation holding a gaming license.

The
Nevada Commission may, in its discretion, require the holder of any debt security of a
Registered Corporation to file an application, be investigated and be found suitable to
own the debt security of such Registered Corporation. If the Nevada Commission determines
that a person is unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its approvals, if without
the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any
dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by
such unsuitable person in connection with such securities; (iii) pays the unsuitable
person remuneration in any form; or (iv) makes any payment to the unsuitable person by way
of principal, redemption, conversion, exchange, liquidation, or similar transaction.

LVSI
is required to maintain a current stock ledger in Nevada that may be examined by the
Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or
by a nominee, the record holder may be required to disclose the identity of the beneficial
owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds
for finding the record holder unsuitable. The Company is also required to disclose the
identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such
disclosure may be grounds for finding the record holder unsuitable. The Company is also
required to render maximum assistance in determining the identity of the beneficial owner.
LVSI stock certificates bear a legend indicating that such securities are subject to the
Nevada Act.

---

Neither
LVSI nor Venetian may make a public offering of any securities without the prior approval
of the Nevada Commission if the securities or the proceeds therefrom are intended to be
used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend
obligations incurred for such purposes. The hypothecation of the Companys assets and
restrictions on stock in connection with any public offering also require the prior
approval of the Nevada Commission. In addition, the hypothecation of Venetians
assets and restrictions on stock in respect of any public offering require the approval of
the Nevada Commission to remain effective.

Changes
in control of the Company through a merger, consolidation, stock or asset acquisition,
management or consulting agreement, or any act or conduct by any person whereby he or she
obtains control, shall not occur without the prior approval of the Nevada Commission.
Entities seeking to acquire control of a Registered Corporation must satisfy the NGCB and
the Nevada Commission concerning a variety of stringent standards prior to assuming
control of such Registered Corporation. The Nevada Commission may also require controlling
stockholders, officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control, to be investigated and licensed
as part of the approval process of the transaction.

The
Nevada legislature has declared that some corporate acquisitions opposed by management,
repurchases of voting securities and corporate defense tactics affecting Nevada gaming
licensees, and Registered Corporations that are affiliated with those operations, may be
injurious to stable and productive corporate gaming. The Nevada Commission has established
a regulatory scheme to ameliorate the potentially-adverse effects of these business
practices upon Nevadas gaming industry and to further Nevadas policy to: (i)
assure the financial stability of corporate gaming operators and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form; and (iii)
promote a neutral environment for the orderly governance of corporate affairs. Approvals
are, in certain circumstances, required from the Nevada Commission before the Company can
make exceptional repurchases of voting securities above the current market price thereof
and before a corporate acquisition opposed by management can be consummated.

The
Nevada Act also requires prior approval of a plan of recapitalization proposed by the
Companys board of directors in response to a tender offer made directly to the
Registered Corporations stockholders for the purposes of acquiring control of the
Registered Corporation.

License
fees and taxes, computed in various ways depending upon the type of gaming or activity
involved, are payable to the State of Nevada and to Clark County, Nevada. Depending upon
the particular fee or tax involved, these fees and taxes are payable either monthly,
quarterly or annually and are based upon either: (i) a percentage of the gross revenues
received; (ii) the number of gaming devices operated; or (iii) the number of table games
operated. Also, a casino entertainment tax is paid by the Company to the extent that
certain entertainment is provided in a cabaret, nightclub, cocktail lounge or casino
showroom in connection with the serving or selling of food, refreshments or merchandise.

Any
person who is licensed, required to be licensed, registered, required to be registered, or
under common control with such persons (collectively, Licensees), and who
proposes to become involved in a gaming venture outside of Nevada, is required to deposit
with the NGCB, and thereafter maintain, a revolving fund in the amount of $10,000 to pay
the expenses of any investigation by the NGCB into their participation in such foreign
gaming. The revolving fund is subject to increase or decrease at the discretion of the
Nevada Commission. Thereafter, Licensees are also required to comply with certain
reporting requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws of any
foreign jurisdiction pertaining to such foreign gaming operation, fail to conduct such
foreign gaming operation in accordance with the standards of honesty and integrity
required of Nevada gaming operations, engage in activities that are harmful to the State
of Nevada or its ability to collect gaming taxes and fees, or employ a person in such
foreign operation who has been denied a license or a finding of suitability in Nevada on
the ground of personal unsuitability.

The
sale of alcoholic beverages by the Company on the premises of the Casino Resort is subject
to licensing, control, and regulation by the applicable local authorities. The Company has
obtained Clark County gaming and liquor licenses. All licenses are revocable and are not
transferable. The agencies involved have full power to limit, condition, suspend or revoke
any such licenses, and any such disciplinary action could (and revocation of such licenses
would) have a material adverse effect upon the operations of the Company.

---

Macau

The
Company is also subject to licensing and control in other jurisdictions. The Company is
constructing a casino in Macau. Venetian Macau is subject to laws, regulations and
controls as implemented and administered by the government of Macau. In addition, Venetian
Macau is subject to reporting requirements to Macaus Gambling Inspection and
Coordination Bureau on a yearly basis, in particular with respect to the number of gaming
tables and electrical or mechanical gaming machines that it intends to operate during the
following year.

Alderney

During
March 2003, a subsidiary of the Company received an interactive gaming license and an
electronic betting center license from the Alderney Gambling Control Commission, and is
subject to the laws, regulations and controls as implemented and administered by the
Government of Alderney.

Employees

The
Company directly employs approximately 4,000 employees in connection with the Casino
Resort. The Casino Resorts employees are not covered by collective bargaining
agreements. Most, but not all, major casino resorts situated on the Strip have collective
bargaining contracts covering at least some of the labor force at such sites. The unions
currently on the Strip include the Local 226 of the Hotel Employees and Restaurant
Employees International Union (the Local), the Operating Engineers Union and
the Teamsters Union. Although no assurances can be given, if employees decide to be
represented by labor unions, management does not believe that such representation would
have a material impact upon the Companys results of operations, cash flows or
financial position.

The
Local has requested the Company to recognize it as the bargaining agent for employees of
the Casino Resort. The Company has declined to do so, believing that current and future
employees are entitled to select their own bargaining agent, if any. In the past, when
other hotel-casino operators have taken a similar position, the Local has engaged in
certain confrontational and obstructive tactics, including contacting potential customers,
tenants and investors, objecting to various administrative approvals and picketing. The
Local has engaged in such tactics with respect to the Casino Resort and may continue to do
so. Although the Company believes it will be able to operate despite such dispute, no
assurance can be given that it will be able to do so or that the failure to do so would
not result in a material adverse effect on the Companys results of operations, cash
flows or financial position.

Risk Factors

The
following risk factors should be read carefully in connection with evaluating the Company
and the forward-looking statements contained in this Annual Report on Form 10-K. Any of
the following risks could materially adversely affect the Company, its operating results,
its financial condition and the actual outcome of matters as to which forward-looking
statements are made in this Annual Report on Form 10-K. Certain statements in Risk
Factors constitute forward-looking statements. Actual results could
differ materially from those projected in the forward-looking statements as a result of
certain factors and uncertainties set forth below and elsewhere in this Annual Report on
Form 10-K. See Item 7  Managements Discussion and Analysis of Financial
Condition and Results of Operations  Special Note Regarding Forward  Looking
Statements.

The
Company's Substantial Debt Could Impair its Financial Condition

The
Company is highly leveraged and has substantial debt service obligations. As of December
31, 2002, the Company had approximately $1.219 billion of indebtedness outstanding. In
addition, there was approximately $75.0 million available for borrowing by Venetian under
the $75.0 million senior secured revolving facility (the Revolving Facility)
of the Senior Secured Credit Facility. The availability under the Revolving Facility may
be reduced, eventually to $25.0 million, in the event that borrowings are made under the
credit agreement recently entered into by one of the Companys Macau subsidiaries.
The Companys Macau subsidiaries may also incur substantial indebtedness to
construct various projects in Macau. See Item 8  Financial Statements and
Supplementary Data  Notes to Financial Statements  Note 8  Long-Term
Debt.

---

This
substantial indebtedness could have important consequences to the Company. For example, it
could:

| |  |  | make
it more difficult for the Company to satisfy its debt obligations;
| |  | - | -----------------------------------------------------------------------

| |  |  | increase
the Company's vulnerability to general adverse economic and industry conditions;
| |  | - | -----------------------------------------------------------------------------------------

| |  |  | impair
the Companys ability to obtain additional financing in the future for working
capital needs, capital expenditures, acquisitions or general corporate purposes;
| |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | require
the Company to dedicate a significant portion of its cash flow from operations to the
payment of principal and interest on its debt, which would reduce the funds available for
its operations;
| |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | limit
the Companys flexibility in planning for, or reacting to, changes in the business
and the industry in which it operates;
| |  | - | -------------------------------------------------------------------------------------------------------------------------------

| |  |  | place
the Company at a competitive disadvantage compared to its competitors that have less
debt; and
| |  | - | ----------------------------------------------------------------------------------------------------

| |  |  | subject
the Company to higher interest expense in the event of increases in interest rates to the
extent a portion of its debt is and will continue to be at variable rates of interest.
| |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Terms of the Company's  Debt  Instruments  May Restrict the Company's  Current and Future
 Operations, Particularly its Ability to Respond to Changes or to Take Some Actions

The
Senior Secured Credit Facility contains, and any future refinancing of this facility
likely would contain, a number of restrictive covenants that impose significant operating
and financial restrictions on the Company. The credit facility includes covenants
restricting, among other things, the Companys ability to:

| |  |  | incur
additional debt, including guarantees;
| |  | - | --------------------------------------------

| |  |  | incur
liens;
| |  | - | ------------

| |  |  | dispose
of assets;
| |  | - | ------------------

| |  |  | make
certain acquisitions;
| |  | - | --------------------------

| |  |  | pay
dividends and make other restricted payments;
| |  | - | -------------------------------------------------

| |  |  | enter
into sale and leaseback transactions;
| |  | - | -------------------------------------------

| |  |  | engage
in any new businesses;
| |  | - | -----------------------------

| |  |  | issue
preferred stock; and
| |  | - | --------------------------

| |  |  | enter
into transactions with its shareholders and its affiliates.
| |  | - | -----------------------------------------------------------------

The
Indenture also contains numerous covenants including, among other things, restrictions on
the Companys ability and that of its restricted subsidiaries to:

| |  |  | incur
additional debt, including guarantees;
| |  | - | --------------------------------------------

| |  |  | use
assets as security in other transactions;
| |  | - | ---------------------------------------------

| |  |  | create
liens or other encumbrances;
| |  | - | -----------------------------------

| |  |  | make
certain payments and investments;
| |  | - | --------------------------------------

| |  |  | sell
or otherwise dispose of assets;
| |  | - | ------------------------------------

---

| |  |  | engage
in transactions with its affiliates;
| |  | - | -------------------------------------------

| |  |  | enter
into certain leases;
| |  | - | --------------------------

| |  |  | merge
or consolidate with another entity; and
| |  | - | ---------------------------------------------

| |  |  | transfer
all or substantially all assets.
| |  | - | -----------------------------------------

The
Senior Secured Credit Facility also includes financial covenants, including requirements
that the Company satisfy:

| |  |  | a
minimum net worth test;
| |  | - | -------------------------

| |  |  | a
maximum capital expenditure test;
| |  | - | -----------------------------------

| |  |  | a
minimum interest coverage ratio; and
| |  | - | --------------------------------------

| |  |  | a
maximum leverage ratio.
| |  | - | -------------------------

In
addition, the Companys other debt and future debt or other contracts could contain
financial or other covenants more restrictive than those applicable to the above
instruments.

The
Companys Business is Subject to Significant Contingencies Beyond its Control,
Including the Aftermath of Terrorist Acts, Which May Significantly and Adversely Affect
its Financial Condition, Results Of Operations or Cash Flows

The
Companys operations are subject to significant business, economic and regulatory
uncertainties and contingencies, many of which are beyond its control. On September 11,
2001, acts of terrorism occurred in New York City, Pennsylvania and Washington D.C. As a
result of these terrorist acts, domestic and international travel was severely disrupted.
As approximately 48% of the Companys customers use air travel to come to Las Vegas,
these terrorist acts and travel disruptions decreased customer visitation to the Casino
Resort. In addition, the war with Iraq could have a similar effect on domestic and
international travel. Management cannot predict the extent to which any further terrorist
act, outbreak of hostilities or escalation of war, could have a material adverse effect on
the economy in general and on the hotel/casino business in particular or could further
disrupt air travel, which would adversely affect the Companys financial condition,
results of operations or cash flows. There can be no assurance that the Company will
continue to manage the Casino Resort on a profitable basis or that it will be able to
attract a sufficient number of guests, gaming customers and other visitors to the Casino
Resort to make its various operations profitable independently or as a whole.

The
Company Faces Significant Competition Which Could Materially Adversely Affect its
FinancialCondition, Results of Operations or Cash Flows

The
hotel, resort and casino businesses are highly competitive. See Business
 Competition. The Casino Resort competes with a large number of major
hotel-casinos and a number of smaller casinos located on and near the Strip and in and
near Las Vegas, including other upscale destinations such as The Bellagio, Mandalay Bay
and Paris. Management expects competition to increase with the construction that began in
November 2002 of Le Reve, an approximately 2,500-room resort being built on the site of
the former Desert Inn, one block north of the Casino Resort, on the corner of Las Vegas
Boulevard and Sands Avenue (anticipated to open in April 2005) and the opening during
January 2003 of an approximately 1.8 million square foot convention center at Mandalay
Bay. The Company also competes, to some extent, with other hotel-casino facilities in
Nevada and in Atlantic City, as well as hotel-casinos and other resort facilities and
vacation destinations elsewhere in the United States and around the world. Many of the
Companys competitors are subsidiaries or divisions of large public companies and may
have greater financial and other resources than the Company has.

---

The
Company also competes with legalized gaming from casinos located on Native American tribal
lands. In March 2000, California voters approved an amendment to the California
Constitution permitting Native American tribes in California to operate a limited number
of slot and video poker machines and house-banked card games. The governor of California
has entered into compacts with numerous tribes in California. The federal government has
approved approximately 60 such compacts, and casino-style gaming is now legal on those
tribal lands. While the competitive impact on the Companys operations in Las Vegas
from the continued growth of Native American gaming establishments in California remains
uncertain, the proliferation of gaming in California and other areas located near the
Casino Resort could have an adverse effect on the Companys results of operations.

In
addition, certain states have legalized, and others may legalize, casino gaming in
specific areas, including metropolitan areas from which the Company traditionally attracts
customers, such as New York, Los Angeles, San Francisco and Boston. In October 2001, the
New York legislature approved a bill for expanded casino gaming on Native American
reservations in the State of New York. Such proliferation of gaming venues, by luring
customers close to home and away from Las Vegas, could adversely affect the Companys
financial condition, results of operations or cash flows.

Competition
will be increasing for the Congress Center and the Expo Center as a result of certain
planned additional convention and meeting facilities as well as the enhancement or
expansion of existing convention and meeting facilities in Las Vegas, which could have a
negative impact on the Companys business. With the expansion of their facilities,
the Las Vegas Convention Center, a 3.2 million square foot convention and exhibition space
facility, and the Mandalay Bay Convention Center, an approximately 1.8 million square foot
convention center that opened in January 2003, will continue to be a major competitor of
the Expo Center and will be able to solely host many large trade shows which had
previously split space between the Las Vegas Convention Center and the Expo Center. In
addition, management anticipates increased competition from the MGM Grand Hotel and Casino
and the Mirage, which have significant conference and meeting facilities. To the extent
that these competitors are able to capture a substantially larger portion of the trade
show and convention business in Las Vegas, there could be a material adverse impact on the
Congress Center and on the Expo Center and in turn, the Companys financial position,
results of operations and cash flows, given the Casino Resorts link to the Expo
Center. Other cities such as Boston, Orlando and Pittsburgh are also in the process of
developing, or have announced plans to develop, convention centers and other meeting,
trade and exhibition facilities that could in the long term materially adversely affect
the Company.

The
Company is Involved in a Lawsuit with the Construction Manager Regarding the Original
Construction of The Casino Resort, Which, if Decided Adversely to the Company, Could Have
a Material Adverse Impact on the Companys Financial Condition, Results of
Operations or Cash Flows

The
original construction of the principal components of the Casino Resort was undertaken by
Lehrer McGovern Bovis, Inc. as construction manager under a construction management
agreement. The construction management agreement established a guaranteed maximum price of
$645.0 million, subject to various exceptions, and a required substantial completion date
for the Casino Resort of April 21, 1999. In July 1999, the Company filed a lawsuit in
federal court against the construction manager for the Casino Resort, the guarantor of the
construction managers obligations and various other parties for breach of contract
and breach of guaranty, including failure to pay trade contractors and vendors and failure
to meet the April 21, 1999 substantial completion date for the Casino Resort. The Company
is seeking total damages in excess of $100.0 million. In response, the construction
manager has filed a complaint against the Company for breach of contract and quantum
meruit and also alleging that the Company defrauded the construction manager in connection
with the construction of the Casino Resort. The construction manager is seeking damages,
attorneys fees, costs and punitive damages and claims that it is owed approximately
$90.0 million from the Company.

In
connection with these disputes, the construction manager and its subcontractors filed
mechanics liens against the Casino Resort for approximately $145.6 million and $182.2
million, respectively. The Company then purchased surety bonds for all of the claims
underlying these liens other than approximately $15.0 million of claims with respect to
which the construction manager purchased bonds. As a result, there can be no foreclosure
of the Casino Resort in connection with the claims of the construction manager and its
subcontractors. However, the Company will be required to pay or immediately reimburse the
bonding company if, and to the extent that, the underlying claims are judicially
determined to be valid.

The
Company and the construction manager commenced a trial in state court in Clark County,
Nevada to litigate certain of their respective claims in August 2002. Many of the
remaining claims that are the subject of the state court action and the federal court
action have been proceeding concurrently in independent arbitration hearings. It is not
yet possible to determine the ultimate outcome of this litigation, including the
likelihood of loss or a range of loss amounts. Although the Company has purchased an
insurance policy for loss coverage for a portion of certain specified potential losses, if
this litigation or other proceedings concerning the claims of the construction manager or
its subcontractors were decided adversely to the Company and were not covered by the
insurance policy, this litigation or other proceedings could have a material adverse
effect on the Companys financial position, results of operations or cash flows.

---

There
are Significant Risks Associated with the Companys Planned Construction Projects,
Which Could Adversely Affect its Financial Condition, Results of Operations or Cash Flows

The
Companys on-going and future construction projects, such as the Phase IA Addition
and Macau Casino, entail significant risks. Construction activity requires the Company to
obtain qualified subcontractors, the availability of which may be uncertain. Contractual
projects are subject to overrun and delays not within the Companys control or the
subcontractors control such as shortages of materials or skilled labor, unforeseen
engineering, environmental and/or geological problems, work stoppages, weather
interference, unanticipated cost increases and unavailability of construction equipment.
Construction, equipment or staffing problems or difficulties in obtaining any of the
requisite licenses, permits, allocations and authorizations from governmental or
regulatory authorities could increase the total cost, delay, jeopardize or prevent the
construction or opening of such projects or otherwise affect the design and features of
the Phase IA Addition, the Macau Casino or other projects or the Companys ability to
preempt its competition.

The
anticipated costs and completion date for the Phase IA Addition and Macau Casino are based
on budgets, conceptual design documents and schedule estimates that the Company has
prepared with the assistance of architects and are subject to change as the design
documents are finalized and more actual construction work is performed. If the Company
incurs significant cost overruns that are not covered by trade contractors or insurance,
it may not be able to arrange for additional financing to pay for such costs. A failure to
complete the Phase IA Addition or the Macau Casino on budget and on schedule may adversely
affect the Companys financial condition, results of operations or cash flows.

In
addition, the construction of the Phase IA Addition is being funded in part by the lenders
under the Senior Secured Credit Facility. Pursuant to such credit facility, the Company
may obtain loan proceeds only upon satisfaction of certain conditions precedent, some of
which are subject to the discretion of the lenders. The Company cannot assure you that the
Company will be able to satisfy such conditions precedent to the satisfaction of such
lenders or that, even it does satisfy such conditions, such lenders will perform their
obligations under the facility and fund the loans. If the Company is unable to obtain loan
proceeds under the credit facility, management cannot provide assurance that the Company
will have access to other funds as may be required to complete the Phase IA Addition. The
failure to obtain the loan proceeds or such other funds to complete the Phase IA Addition
could materially and adversely affect the Companys financial condition, results of
operation and cash flows.

The
Company May Not Be Able to Raise the Required Funds for the Macau Casino

The
anticipated cost of the Macau Casino is $210.0 million. Venetian Macau must obtain these
funds in order to complete the Macau Casino by its scheduled completion date of February
2004. These funds will consist of (i) a $40.0 million cash investment from the Company
(ii) $50 million in proceeds from a credit agreement recently entered into by one of the
Companys Macau subsidiaries (which loan will be guaranteed by the Company and
Venetian) and (iii) approximately $120 million from a Venetian Macau debt financing to
occur in the future. Although Venetian Macau is engaged in discussions, there can be no
assurance that the remaining $120 million of financing will be available to Venetian Macau
to complete the Macau Casino, and, if available, that the financing will be on terms
favorable to Venetian Macau.

The
Loss of the Companys Gaming License or its Failure to Comply with the Extensive
Regulations that Govern its Operations Could Have a Material Adverse Effect on its
Financial Condition, Results of Operations or Cash Flows

The
Companys gaming operations and the ownership of its securities are subject to
extensive regulation by the Nevada Gaming Commission, the Nevada State Gaming Control
Board and the Clark County Liquor and Gaming Licensing Board. These gaming authorities
have broad authority with respect to licensing and registration of the Companys
business entities and individuals involved with the Company.

---

Although
the Company currently holds a gaming license issued by the Nevada gaming authorities,
these authorities may, among other things, revoke the gaming license of any corporate
entity or the registration of a registered corporation or any entity registered as a
holding company of a corporate licensee for violations of gaming regulations. In addition,
the Nevada gaming authorities may, under certain conditions, revoke the license or finding
of suitability of any officer, director, controlling person, shareholder, noteholder or
key employee of a licensed or registered entity. If the Companys gaming licenses
were revoked for any reason, the Nevada gaming authorities could require the closing of
the casino, which would have a material adverse effect on the Companys business.

From
time to time, the Nevada State Gaming Control Board investigates or reviews the records of
gaming companies for compliance with gaming regulations as part of its regular oversight
functions. The Company has been and is being investigated and a number of violations have
been alleged, which may result in a penalty or penalties. A majority of these incidents
occurred in the first year of the Companys operations. The Company does not believe
that these violations will result in a material adverse effect on its business or
operations.

In
addition, any future public offering of debt or equity securities by the Company,
including the hypothecation of its assets, requires the prior approval of the Nevada
Gaming Commission if the Company intends to use the securities or the proceeds from the
sale thereof to pay for construction of, or to acquire an interest in, any gaming
facilities in Nevada, to finance the gaming operations of an affiliated company or to
retire or extend obligations incurred for any such purpose.

The
Company and/or its subsidiaries are also subject to licensing and control in other
jurisdictions. The Company is constructing a casino in Macau. Venetian Macau is subject to
regulations and controls as implemented and administered by the government of Macau. A
subsidiary of the Company has received a license to operate an Internet gaming site in
Alderney and is subject to the Internet gaming regulations and controls of the government
of Alderney. The termination of the Macau concession or the Alderney licenses could have
an adverse effect on the Company.

Certain
Nevada Gaming Laws Apply to the Company's  Planned Gaming  Activities  and  Associations
 in Macau and Alderney

Certain
Nevada gaming laws also apply to the Companys gaming activities and associations in
jurisdictions outside the state of Nevada. The Company is required to comply with certain
reporting requirements concerning its proposed gaming activities and associations
occurring outside the state of Nevada, including Macau and Alderney. The Company is also
subject to disciplinary action by the Nevada Gaming Commission if it:

| |  |  | knowingly
violates any laws of the foreign jurisdiction pertaining to the foreign gaming operation;
| |  | - | ---------------------------------------------------------------------------------------------------

| |  |  | fails
to conduct the foreign gaming operation in accordance with the standards of honesty and
integrity required of Nevada gaming operations;
| |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | engages
in any activity or enter into any association that is unsuitable for the Company because
it poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to
reflect discredit or disrepute upon the State of Nevada or gaming in Nevada, or is
contrary to the gaming policies of Nevada;
| |  | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | engages
in any activity or enters into any association that interferes with the ability of the
State of Nevada to collect gaming taxes and fees; or
| |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | employs,
contracts with or associates with any person in the foreign gaming operation who has been
denied a license or a finding of suitability in Nevada on the ground of personal
unsuitability, or who has been found guilty of cheating at gambling.
| |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
addition, if the Nevada State Gaming Control Board determines that one of the
Companys actual or intended activities or associations in a foreign gaming operation
may violate one or more of the foregoing, the Company can be required by it to file an
application with the Nevada Gaming Commission for a finding of suitability of such
activity or association. If the Nevada Gaming Commission finds that the activity or
association in the foreign gaming operation is unsuitable or prohibited, the Company will
either be required to terminate the activity or association, or will be prohibited from
undertaking the activity or association. Consequently, should the Nevada Gaming Commission
find that the Companys gaming activities or associations in Macau or Alderney are
unsuitable, the Company may be prohibited from undertaking its planned gaming activities
or associations in those jurisdictions.

---

The
Company Depends on the Continued Services of Key Managers and Employees. If the Company
Does Not Retain its Key Personnel, Attract, and Retain Other Highly Skilled Employees,
its Business Will Suffer

The
Companys ability to maintain its competitive position is dependent to a large degree
on the services of its senior management team, including Sheldon G. Adelson, the Principal
Stockholder. Only William Weidner, Bradley Stone and Robert Goldstein have employment
agreements. The employment agreements do not require them to stay with the Company. The
Company cannot assure you that any of these individuals will remain with the Company. The
Company currently does not have a life insurance policy on any of the members of the
senior management team. The death or loss of the services of any of the senior managers or
the inability to attract and retain additional senior management personnel could have a
material adverse effect on the Companys business.

The
Company's  Business,  Policies,  Affairs,  and all Major  Corporate  Decisions  are
 Controlled by the Principal Stockholder

Mr.
        Adelson beneficially owns approximately 95% of the Companys outstanding
          common stock. The Companys board of directors is comprised of two
persons,           one of whom is Mr. Adelson. Mr. Adelson has two votes for all matters
before the           board of directors, whereas the other board member has only one
vote. As a           result, Mr. Adelson controls the Companys business, policies
and affairs,           including the election of directors and all major corporate
transactions and           could prevent a change of control.

Mr.
Adelson owns Interface, the owner of the Expo Center, which may result in
          potential conflicts of interest. The Exp. Center, on the one hand, and the
          Congress Center and the meeting and conference space that is a part of the
Phase           IA Addition, on the other hand, are potential competitors in the business
          conference and meetings business. Under the Cooperation Agreement, the Company
          has agreed that, except under certain circumstances with respect to the Phase
IA           Addition, it will not conduct, or permit to be conducted at the Casino
Resort,           trade shows or expositions of the type generally held at the Expo
Center.           Furthermore, marketing practices that are intended to benefit the Expo
Center           may have a detrimental effect on the Casino Resort.

The
 Construction  of the Phase II Resort and Phase IA Addition Could Have an Adverse Effect
on the Casino Resort

The
Company is currently in the process of constructing the Phase IA Addition on top of the
Casino Resorts existing parking garage and on land adjacent to it. In addition,
through the Companys subsidiary, Lido Casino Resort, LLC, the Company is planning to
construct the Phase II Resort, which would consist of a hotel, casino, restaurant, dining
and entertainment complex, and meeting and conference center space on a 15-acre site
adjacent to the Casino Resort. Although the Company intends to construct the Phase IA
Addition and the Phase II Resort with minimal impact on the Casino Resort, the Company
cannot guaranty that the construction will not disrupt the operations of the Casino Resort
or that it will be implemented as planned. Therefore, the construction of the Phase IA
Addition and the Phase II Resort may adversely impact the businesses, operations and
revenues of the Casino Resort.

---

The
Common  Ownership  and  Management  of the Casino Resort and the Phase II Resort Could
Have an Adverse Effect on the Casino Resort

The
common ownership of the Casino Resort and the Phase II Resort may result in potential
conflicts of interest because the Phase II Resort will be a potential competitor to the
Casino Resort. For example, the Company may offer discounts and other incentives for
visitors to stay at the Phase II Resort, which might result in a competitive advantage of
the Phase II Resort over the Casino Resort. In addition, the Company may also choose to
allocate certain business opportunities, such as potential restaurant, dining and
entertainment tenants or requests for room reservations, to the Phase II Resort instead of
the Casino Resort. Although common ownership of both the Casino Resort and the Phase II
Resort may result in economies of scale, efficiencies and joint business opportunities for
the two resorts, the Casino Resort may, in certain circumstances, bear the greater burden
of the expenses that are shared by both resorts. In addition, the Company expects to lease
and operate the casino for the Phase II Resort, so that managements time may be
split between overseeing the operation of each resort. In certain circumstances,
management may devote more time to the ownership and operations responsibilities of the
Phase II Resort than those of the Casino Resort.

The
Company May Be Adversely Affected by Union Activities in Las Vegas

Although
the Companys employees are not covered by collective bargaining agreements, most
major casino resorts situated on the Strip have collective bargaining agreements with
unions such as the Local 226 of the Hotel Employees and Restaurant Employees International
Union. Although the Company does not expect a strike to impact its work force or
operations directly, no assurance can be given that a strike would not adversely affect
Las Vegas business and visitation levels generally by generating negative publicity. As a
result, the Companys business may be adversely affected if such a strike were to
occur.

Entering
into New Ventures  Involves  Business and Financial  Risks,  Including  Litigation  Risks
and the Risk of Loss of the Nevada Gaming Licenses

The
Company is assessing the possibility of developing and operating an Internet gaming site
and is currently exploring other business opportunities for expansion, including Native
American gaming and the possibility of operating casino resorts in certain foreign
jurisdictions. It is unclear how long it would take, or if it would be feasible or
attractive, for the Company to develop, operate, obtain the necessary regulatory approvals
for, acquire land in connection with or take any of the other necessary business risks and
measures to complete any of these ventures. If the Company is successful in launching any
such ventures, if at all, the Company cannot assure you that any of these projects would
be successful, or that they would not have a material adverse effect on the Companys
financial position, results of operations or cash flows.

The
Company is currently in the process of constructing a casino in Macau and is developing
plans to develop and operate one or more hotel, additional casinos and convention centers
in Macau, Peoples Republic of China. The Companys Macau development and
construction is subject to significant political, economic and social risks inherent in
doing business in an emerging market such as China. Although Venetian Macau has been
granted the right to operate casinos in Macau, the Company cannot assure you that the
construction and operation of the Macau Casino will be successful, that the Company will
be able to continue to acquire permanent and temporary operating sites on acceptable terms
or at all for future planned development, or that such right will not be revoked. In
particular, some of the risks involved in the development and licensing process include:

| |  |  | diversion
of management's attention away from the other business concerns;
| |  | - | --------------------------------------------------------------------------

| |  |  | risks
associated with a new and developing regulatory process which could result in the
revocation of the concession or other required licenses in Macau;
| |  | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the
possible taking of property without agreement on fair compensation;
| |  | - | -----------------------------------------------------------------------

| |  |  | restrictions
on foreign partnerships and alliances, foreign ownership and/or possible discrimination
against foreign owned business;
| |  | - | ------------------------------------------------------------------------------------------------------------------------------------

| |  |  | delayed
implementation regarding effective controls regarding criminal organizations;
| |  | - | -------------------------------------------------------------------------------------

---

| |  |  | potential
conflicts between local and national governments;
| |  | - | -----------------------------------------------------------

| |  |  | the
risk that the Company will not be able to acquire rights to build on suitable sites; and
| |  | - | --------------------------------------------------------------------------------------------

| |  |  | risks
associated with obtaining project financing.
| |  | - | --------------------------------------------------

The
Company believes that future regulatory developments in China will not unduly limit its
planned investment. However, the Company cannot assure you at this time that all its
planned activities in Macau will be permitted or economically feasible. Therefore, the
planned investments in China could be jeopardized.

The
Companys Insurance Coverage May Not Be Adequate to Cover all Possible Losses that
the Casino Resort Could Suffer. In Addition, the Companys Insurance Costs May
Increase and the Company May Not Be Able to Obtain the Same Insurance Coverage in the
Future

The
Company is dependent on the operations of the Casino Resort, which occupies a single site.
The September 11th terrorist attacks have substantially affected the availability of
insurance coverage for certain types of damages or occurrences. In addition, insurance
premiums have increased on available coverage. It is possible that the war with Iraq could
further adversely affect available insurance coverage and result in increased premiums on
available coverage. The Company renewed its property and casualty insurance policies in
April 2002. The Company was not able to purchase new insurance policies or renew its
existing policies on terms as favorable as the terms of its prior policies. The costs of
the new insurance policies are higher as a result of the general increase in premium
levels. The new insurance policies exclude from coverage certain losses and damages that
were covered under the Companys prior insurance policies. In particular, the Company
has substantially reduced insurance coverage with respect to occurrences of terrorist acts
and any losses that could result from these acts.

If
there is an act of terrorism that affects the Casino Resort, the Mall and/or the Expo
Center, there may not be sufficient insurance proceeds to cover the costs of restoring the
property. Therefore, the Company could be exposed to heavy losses in the event that any
damages occur, directly or indirectly, as a result of terrorist acts.

In
addition to the damage caused to the Companys property by a casualty loss (such as
fire, natural disasters, acts of war or terrorism), the Company may suffer disruption of
its business in such event or be subject to claims by third parties injured or harmed.
While the Company carries business interruption insurance and general liability insurance,
such insurance may not be adequate to cover all losses in such event.

The
Companys current insurance policies terminate in April 2003 and cost an additional
$2.7 million per year as compared to the previous year 2002 policies. In addition to these
policies, the Company has obtained $257.0 million of terrorism insurance coverage should a
terrorist event occur, whereby up to $137.0 million of losses on the Expo Center and
$120.0 million of losses on the Mall would take priority under the policy. In particular,
the Company cannot be assured that losses incurred by the Casino Resort would be covered
by the existing terrorism insurance coverage or that it will be able to continue to obtain
insurance coverage with respect to occurrences of terrorist acts and any losses that could
result from these acts. This could expose the Company to heavy losses in the event that
any damages occur, directly or indirectly, as a result of terrorist acts. The cost of
coverage may become so high that the Company may need to reduce its policy limits or agree
to certain exclusions from its coverage.

ITEM 2. PROPERTIES

The
Casino Resort sits on an approximately 30-acre parcel of land owned by the Company. The
Phase II Subsidiary owns an additional approximately 15-acre adjacent parcel on which the
conference center for the Phase IA Addition is being constructed and the Phase II Resort
is planned to be constructed.

The
Senior Secured Credit Facility is, subject to certain exceptions, secured by a first
priority security interest (subject to permitted liens) in the real property owned by the
Company, including, the 30 acre parcel of land under the Casino Resort, the improvements
thereon, and the Phase IA Addition (including the airspace in which the conference center
for the Phase IA Addition is planned to be constructed). Subject to limited exceptions,
the Mortgage Notes are also secured on a second-lien basis (subject to permitted liens) by
these assets. The Secured Mall Facility is secured by first priority security interests in
all of the assets of the New Mall Subsidiary, other than the capital stock and other
equity interests of the New Mall subsidiary.

---

ITEM 3. LEGAL
PROCEEDINGS

Except
as described below the Company is party to various legal matters and claims arising in the
ordinary course of business. The Company does not expect that the final resolution of
these matters will have a material adverse impact on the financial position, results of
operations or cash flows of the Company.

Construction
Litigation

The
construction of the principal components of the Casino Resort was undertaken by Lehrer
McGovern Bovis, Inc. (the Construction Manager) pursuant to a construction
management agreement and certain amendments thereto (as so amended, the Construction
Management Contract). The Construction Management Contract established a final
guaranteed maximum price (the Final GMP) of $645.0 million, so that, subject
to certain exceptions (including an exception for cost overruns due to scope
changes), the Construction Manager was responsible for any costs of the work covered
by the Construction Management Contract in excess of $645.0 million. The Construction
Management Contract also established a required substantial completion date
(the date on which the construction of the Casino Resort was sufficiently complete,
including the receipt of necessary permits, licenses and approvals, so that all components
of the Casino Resort could be open to the general public) of April 21, 1999 (subject to
extensions on account of scope changes and force majeure events), with a
per-day liquidated damages penalty for failure to meet such deadline.

The
Company paid the Construction Manager a construction management fee of 11⁄2% of the
Final GMP, payable in monthly installments.

The
obligations of the Construction Manager under the Construction Management Contract were
guaranteed by Bovis, Inc. (Bovis), the Construction Managers direct
parent at the time the Construction Management Contract was entered into (such guaranty,
the Bovis Guaranty). Bovis obligations under the Bovis Guaranty were
guaranteed by The Peninsula and Oriental Steam Navigation Company (P&O), a
British public company and the Construction Managers ultimate parent at the time the
Construction Management Contract was entered into (such guaranty, the P&O
Guaranty).

The
Construction Manager obtained, on behalf of the Company (and at the Companys
expense), a liquidated damages insurance policy (the LD Policy). The LD Policy
covers (with certain exceptions) liquidated damages for delays of not less than one month
and not more than four months in achieving substantial completion beyond the date
substantial completion was required to be achieved under the Construction Management
Contract.

On
July 30, 1999, Venetian filed a complaint against the Construction Manager and Bovis in
United States District Court for the District of Nevada. The action alleges breach of
contract by the Construction Manager of its obligations under the Construction Management
Contract and a breach of contract by Bovis of its obligations under the Bovis Guaranty,
including failure to fully pay trade contractors and vendors and failure to meet the April
21, 1999 guaranteed completion date. The Company amended this complaint on November 23,
1999 to add P&O as an additional defendant. The suit is intended to ask the courts,
among other remedies, to require the Construction Manager and its guarantors to pay its
contractors, to compensate Venetian for the Construction Managers failure to perform
its duties under the Construction Management Contract and to pay the Company the agreed
upon liquidated damages penalty for failure to meet the guaranteed substantial completion
date. Venetian seeks total damages in excess of $100.0 million. The Construction Manager
subsequently filed motions to dismiss the Companys complaint on various grounds,
which the Company opposed. The Construction Managers motions were either denied by
the court or voluntarily withdrawn.

In
response to Venetians breach of contract claims against the Construction Manager,
Bovis and P&O, the Construction Manager filed a complaint on August 3, 1999 against
Venetian in the District Court of Clark County, Nevada. The action alleges a breach of
contract and quantum meruit claims under the Construction Management Contract and also
alleges that Venetian defrauded the Construction Manager in connection with the
construction of the Casino Resort. The Construction Manager seeks damages, attorneys
fees and costs and punitive damages. In the lawsuit, the Construction Manager claims that
it is owed approximately $90.0 million from Venetian and its affiliates. This complaint
was subsequently amended by the Construction Manager, which also filed an additional
complaint against the Company relating to work done and funds advanced with respect to the
contemplated development of the Phase II Resort. Based upon its review of the complaints,
the Company believes that the Construction Manager has not provided Venetian with
reasonable documentation to support such claims, the Construction Manager has materially
breached its agreements with the Company and the Construction Managers claims are
without merit. The Company intends to vigorously defend itself and pursue its claims
against the Construction Manager in any litigation.

---

In
connection with these disputes, as of December 31, 1999 the Construction Manager and its
subcontractors filed mechanics liens against the Casino Resort for $145.6 million and
$182.2 million, respectively. The Company believes that a major reason these lien amounts
exceed the Construction Managers claims of $90.0 million is based upon a duplication
of liens through the inclusion of lower-tier claims by subcontractors in the liens of
higher-tier contractors, including the lien of the Construction Manager. As of December
31, 1999, the Company had purchased surety bonds for virtually all of the claims
underlying these liens (other than approximately $15.0 million of claims with respect to
which the Construction Manager purchased bonds). As a result, there can be no foreclosure
of the Casino Resort in connection with the claims of the Construction Manager and its
subcontractors. However, the Company will be required to pay or immediately reimburse the
bonding company if and to the extent that the underlying claims are judicially determined
to be valid. If such claims are not settled, it is likely to take a significant amount of
time for their validity to be judicially determined.

The
Company believes that these claims are, in general, unsubstantiated, without merit,
overstated, and/or duplicative. The Construction Manager itself has publicly acknowledged
that at least some of the claims of its subcontractors are without merit. In addition, the
Company believes that pursuant to the Construction Management Contract and the Final GMP,
the Construction Manager is responsible for payment of any subcontractors claims to
the extent they are determined to be valid. The Company may also have a variety of other
defenses to the liens that have been filed, including, for example, the fact that the
Construction Manager and its subcontractors previously waived or released their rights to
file liens against the Casino Resort. The Company intends to vigorously defend itself in
any lien proceedings.

On
August 9, 1999, the Company notified the insurance companies providing coverage under
the LD Policy that it has a claim under the LD Policy. The LD Policy provides insurance
coverage for the failure of the Construction Manager to achieve substantial completion of
the portions of the Casino Resort covered by the Construction Management Contract within
30 days of the April 21, 1999 deadline, with a maximum liability under the LD Policy
of approximately $24.1 million and with coverage being provided, on a per-day basis, for
days 31-120 of the delay in the achievement of substantial completion. Because the Company
believes that substantial completion was not achieved until November 12, 1999, the
Companys claim under the LD Policy is likely to be for the above-described maximum
liability of $24.1 million. The Company expects the LD Policy insurers to assert many of
the same claims and defenses that the Construction Manager has asserted or will assert in
the above-described litigations. Liability under the LD Policy may ultimately be
determined by binding arbitration.

In
June 2000, the Company purchased an insurance policy (the Insurance Policy)
for loss coverage in connection with all litigation relating to the construction of the
Casino Resort (the Construction Litigation). Under the Insurance Policy, the
Company will self-insure the first $45.0 million and the insurer will insure up to the
next $80.0 million of any possible covered losses. The Insurance Policy provides coverage
for any amounts determined in the Construction Litigation to be owed to the Construction
Manager or its subcontractors relating to claimed delays, inefficiencies, disruptions,
lack of productivity/unauthorized overtime or schedule impact, allegedly caused by the
Company during construction of the Casino Resort, as well as any defense costs.

The
Company and the Construction Manager commenced a trial in state court in Clark County,
Nevada to litigate certain of their respective claims in August 2002. Many of the
remaining claims between the parties that are the subject of the state court action and
the federal court action will be proceeding concurrently in independent arbitration
hearings.

All
of the pending litigation described above is in preliminary stages and it is not yet
possible to determine a range of loss or its ultimate outcome. If any litigation or other
lien proceedings concerning the claims of the Construction Manager or its subcontractors
were decided adversely to the Company, such litigation or other lien proceedings could
have a material adverse effect on the financial position, results of operations or cash
flows of the Company, to the extent such litigation or lien proceedings are not covered by
the Insurance Policy.

ITEM 4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not
applicable.

---

# PART II

ITEM 5.MARKET
FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

There
is no established trading market for the common stock of LVSI and the Company is not aware
of any bid quotations for the common stock of LVSI.

Holders

As
of March 31, 2003, there were five holders of record of the common stock of LVSI.

Dividends

LVSI
did not pay any dividends in 2001 or 2002. The Companys current long-term debt
arrangements generally prohibit or restrict the payment of cash dividends. See Item
7  Managements Discussion and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources and Item 8  Financial
Statements and Supplementary Data  Notes to Financial Statements  Note 8
 Long-Term Debt.

---

ITEM 6. SELECTED
FINANCIAL DATA

The
historical selected financial data set forth below should be read in conjunction with
Item 7  Managements Discussion and Analysis of Financial Condition and
Results of Operations and the Financial Statements and Notes thereto included
elsewhere in this Annual Report on Form 10-K. The statement of operations data for the
years ended December 31, 2002, 2001 and 2000, and the balance sheet data at December 31,
2002 and 2001 are derived from, and are qualified by reference to, the audited financial
statements included elsewhere in this Annual Report on Form 10-K. The statement of
operations data for the years ended December 31, 1999 and 1998 and the balance sheet data
at December 31, 2000, 1999 and 1998 are derived from the Companys audited financial
statements that do not appear herein. The historical results are not necessarily
indicative of the results of operations to be expected in the future.

|                                         | Year Ended December 31, |  |   |           |  
|---------------------------------------- | ----------------------- |  | - | --------- | -
|
|                                         |                         | 
|
|                                         |                         | 
|STATEMENT OF OPERATIONS DATA             |                         |  |   |           |  
|Gross revenues                           |                         |  | $ | 605,885   |  
|Promotional allowances                   |                         |  |   | (34,208   | )
|                                         |                         |  |   |           |  
|                                         |                         | 
|Net revenues                             |                         |  |   | 571,677   |  
|Operating expenses                       |                         |  |   | (424,595  | )
|                                         |                         |  |   |           |  
|Operating income (loss)                  |                         |  |   | 147,082   |  
|Interest expense, net                    |                         |  |   | (111,794  | )
|Other income (expense)                   |                         |  |   | 1,045     |  
|Loss on early retirement of debt (2)     |                         |  |   | (51,392   | )
|                                         |                         |  |   |           |  
|                                         |                         | 
|Income (loss) before preferred return    |                         |  |   | (15,059   | )
|Preferred return on Redeemable Preferred |                         | 
|Interest inVenetian Casino Resort, LLC   |                         |  |   | (23,333   | )
|                                         |                         |  |   |           |  
|                                         |                         | 
|Net income (loss)                        |                         |  | $ | (38,392   | )
|                                         |                         |  |   |           |  
|                                         |                         | 
|Per Share Data                           |                         |  |   |           |  
|                                         |                         | 
|Basic and diluted loss per share (3)     |                         |  | $ | (38.39    | )
|                                         |                         |  |   |           |  
|                                         |                         | 
|OTHER DATA                               |                         |  |   |           |  
|Capital expenditures                     |                         |  | $ | 135,848   |  
|                                         |                         | 
|
|                                         |                         |  |   | 2002      |  
|                                         |                         | 
|BALANCE SHEET DATA                       |                         |  |   |           |  
|Total assets                             |                         |  | $ | 1,516,681 |  
|Longterm debt                           |                         |  | $ | 1,216,250 |  
|Stockholders' equity (deficit)           |                         |  | $ | (49,383   | )

---

| | (1) | The
Casino Resort opened May 4, 1999.
| | --- | -------------------------------------

| | (2) | In
April 2002, the Financial Accounting Standards Board issued statement No. 145
          (SFAS 145) Recession of FASB Statements Nos. 4, 44 and 64 and
          Amendment of FASB Statement No. 13. SFAS 145 addresses the presentation
          for losses on early retirements of debt in the statement of operations to the
          extent they do not meet the requirements of APB Opinion No. 30. The Company has
          adopted SFAS 145 and no longer present losses on early retirements of debt as
an           extraordinary item. Accordingly, prior period losses on early retirement of
debt           have been reclassified to other income (expense) to conform to this new
          presentation in the accompanying table.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Net
income (loss) per share and shares outstanding for all periods presented
          retroactively reflect the impact of the Companys first quarter 2002 stock
          split which increased the number of shares of common stock outstanding from
          925,000 to 1,000,000. The impact of the granting of options to purchase 5,500
          shares of the Companys common stock during 2002 has not been included in
          the computation of diluted earnings per share as their impact would have been
          antidilutive.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

ITEM 7.MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion should be read in conjunction with, and is qualified in its entirety
by, the consolidated financial statements and the notes thereto and other financial
information included elsewhere in this Annual Report on 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.

General

The
Company owns and operates the Casino Resort, a large-scale Renaissance Venice-themed
hotel, casino, retail, meeting and entertainment complex in Las Vegas, Nevada. The Casino
Resort includes the only all-suites hotel on the Las Vegas Strip with 3,036 suites; a
gaming facility of approximately 116,000 square feet; an enclosed retail, dining and
entertainment complex of approximately 446,000 gross leasable square feet; and a meeting
and conference facility of approximately 500,000 square feet of convention space. The
Company is party to litigation matters and claims related to its operations and
construction of the Casino Resort that could have a material adverse effect on the
financial position, results of operations or cash flows of the Company to the extent such
litigation is not covered by the Insurance Policy. See Item 3  Legal
Proceedings.

During
the first two quarters of 2002, the Companys operating results were negatively
impacted by a decline in tourism following the terrorist attacks of September 11, 2001 and
an economic downturn. Despite the decline in tourism and economic downturn early in 2002,
several of the Companys financial indicators improved in the last two quarters of
2002 due in large part to: (1) forward hotel room and meeting space bookings from
conventions and trade shows at the Casino Resort; (2) increased room occupancies; (3) a
recurring revenue stream from the Mall; and (4) successful cost-cutting initiatives.
Although the Company expects its results to continue to compare favorably with the first
and second quarters of 2002, the extent to which decreased tourism and an economic
downturn will directly or indirectly impact operating results in the future cannot be
predicted, nor can the Company predict the extent to which future security alerts and/or
additional terrorist attacks may impact operations. In particular, the war with Iraq could
have a material adverse impact on the Companys business if it disrupts domestic and
international air travel to Las Vegas.

In
June 2002, the Company entered into the Senior Secured Credit Facility and issued $850
million of Mortgage Notes and used the proceeds to repurchase or redeem all its remaining
121⁄4% Mortgage Notes due 2004 (the Old Mortgage Notes) and its
141⁄4% Senior Subordinated Notes due 2005 (the Old Subordinated Notes
and, together with the Old Mortgage Notes, the Old Notes) and to repay all of
its other outstanding indebtedness, (collectively, the Refinancing
Transactions). See Liquidity and Capital Resources Refinancing
Transactions. In connection with the Refinancing Transactions, the Company incurred
a loss on early retirement of indebtedness of $51.4 million during the fiscal year ended
December 31, 2002 which was comprised of $33.0 million of call premiums paid in connection
with the Refinancing Transactions and the write-off of $18.4 million related to the
write-off of unamortized debt offering costs and unamortized original issue discount.

During
June 2002, the Company re-commenced construction of the Phase IA Addition consisting of
1,000 additional hotel rooms, 150,000 square feet of meeting space and a 1,000 parking
space addition to the existing parking garage. Due to the travel disruption to Las Vegas
during the fourth quarter of 2001, the Company decided to suspend construction of the
Phase IA Addition at that time. The Company currently anticipates that the Phase IA
Addition construction will be completed and the new facilities will be open for business
in June 2003 with a remaining cost to complete of approximately $149.0 million plus, $8.9
million to expand the HVAC Plant (the HVAC Plant Expansion) to accommodate the
Phase IA Addition, as of December 31, 2002. Due to the inherent risks in large
construction projects, however, there can be no assurance that the Phase IA Addition or
the HVAC Plant Expansion will be constructed without any substantial delays or cost
increases. See Item 1  Business  Risk Factors  There are
Significant Risks Associated with the Companys Planned Construction Projects, Which
Could Adversely Affect its Financial Condition, Results of Operations or Cash Flows.

---

On
June 26, 2002, the Company announced that a joint venture comprised of Venetian Macau and
a group of Macau and Hong Kong-based investors had entered into a final concession
contract with the Government of the Macau Special Administrative Region of the
Peoples Republic of China to operate casinos in Macau. Venetian Macau entered into
the final terms of a joint venture, sub-concession, and management agreements in the
fourth quarter of 2002. The final terms of the joint venture and sub-concession agreements
include financial obligations to the Government of Macau. The company commenced
construction of the Macau Casino during December 2002. The Company currently anticipates
that the Macau Casino construction will be completed and open for business in February
2004 with a total cost to complete of $210.0 million. Through December 31, 2002, the
Company had incurred pre-developmental expenses of $5.9 million and Macau Casino capital
expenditure costs of $2.4 million in connection with the Macau project. See
Liquidity and Capital Resources  Macau Joint Venture and
Item 1  Business  Risk Factors  The Company May Not Be Able to
Raise the Required Funds for the Macau Casino.

The
Company has also entered into a joint venture agreement to assess the feasibility of and
develop an Internet gaming site. The Company received an interactive gaming license and an
electronic betting center license by the Alderney Gambling Control Commission during March
2003, but has not yet established any operations. Through December 31, 2002, the Company
has contributed $0.4 million to the joint venture. The Company estimates that it is
committed to contribute approximately $1.0 million, approximately one-third of the
anticipated capital cost, to the joint venture during the next year. After recovery of
each partners initial capital contribution, the Company will receive 50% to 80% of
the net profit of the joint venture, based upon an increasing scale of net profit (if
any). The joint venture provides that the agreement will be automatically terminated
should the Company fail to obtain any additional required regulatory approvals from the
government of Alderney, the Nevada gaming authorities, or any other applicable
jurisdiction prior to launching its operations.

Critical Accounting
Policies and Estimates

Management
has identified the following critical accounting policies that affect the Companys
more significant judgments and estimates used in the preparation of the Companys
consolidated financial statements. The preparation of the Companys financial
statements in conformity with accounting principles generally accepted in the United
States of America requires the Companys 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. On an on-going basis, management
evaluates those estimates, including those related to asset impairment, accruals for slot
marketing points, self-insurance, compensation and related benefits, revenue recognition,
allowance for doubtful accounts, contingencies and litigation. The Company states these
accounting policies in the notes to the consolidated financial statements and in relevant
sections in this discussion and analysis. These estimates are based on the information
that is currently available to the Company and on various other assumptions that
management believes to be reasonable under the circumstances. Actual results could vary
from those estimates.

The
Company believes that the following critical accounting policies affect significant
judgments and estimates used in the preparation of its consolidated financial statements:

| |  | The
Company maintains an allowance for doubtful accounts for estimated losses resulting from
the failure of its customers to make required payments, which results in bad debt
expense. Management determines the adequacy of this allowance by continually evaluating
individual customer receivables, considering the customers financial condition,
credit history and current economic conditions. If the financial condition of customers
were to deteriorate, or if a customer refuses to pay or disputes any such payment,
additional allowances may be required.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The
Company maintains accruals for health and workers compensation self-insurance, slot club
point redemption and group sales commissions, which are classified in other accrued
liabilities in the consolidated balance sheets. Management determines the adequacy of
these accruals by periodically evaluating the historical experience and projected trends
related to these accruals. If such information indicates that the accruals are overstated
or understated, or if business conditions indicate the Company should adjust the
assumptions utilized in the methodologies, the Company will reduce or provide for
additional accruals as appropriate.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The
Company is subject to various claims and legal actions, including lawsuits with the
Construction Manager for the original construction of the Casino Resort. Some of these
matters relate to personal injuries to customers and damage to customers personal
assets. Management estimates guest claims expense and accrues for such liabilities based
upon historical experience in the other accrued liability category in its consolidated
balance sheet.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| |  | The
Company depreciates 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. Future events, such as property expansions, property
developments, new competition, new regulations, could result in a change in the manner in
which the Company are using certain assets requiring a change in the estimated useful
lives of such assets. In assessing the recoverability of the carrying value of property
and equipment if events and circumstance warrant such an assessment, the Company must
make assumptions regarding estimated future cash flows and other factors. If these
estimates or the related assumptions change, the Company may be required to record an
impairment loss for these assets. Such an impairment loss would be recognized as a
non-cash component of operating income.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Year Ended December
31, 2002 compared to the Year Ended December 31, 2001

Operating
Revenues

Consolidated
net revenues for the year ended December 31, 2002 were $571.7 million, representing an
increase of $47.8 million when compared with $523.9 million of consolidated net revenues
during 2001. The increase in net revenues was due to: (1) an increase of casino revenue of
$29.3 million primarily the result of increased table games win percentage; (2) an
increase in rooms revenue of $2.5 million as the result of higher hotel room occupancy;
and (3) an increase in food and beverage revenue of $8.3 million which resulted from
higher room occupancy and increased banquet revenues, all of which was partially offset by
a decrease in other revenues of $0.6 million as the result of reduced group cancellation
fees.

Casino
revenues were $256.5 million in the year ended December 31, 2002, an increase of $29.3
million from 2001. The increase was attributable to several factors, including: (1) higher
table games win percentage (calculated before discounts) of 21.4% during 2002 as compared
to 15.3% during 2001 (the table games win percentage is reasonably predictable over time,
but may vary considerably during shorter periods); and (2) offset by more stringent table
games marketing parameters during 2002 that resulted in decreased table games volume.
Table games drop (volume) decreased to $867.3 million in the year ended December 31, 2002
from $966.6 million during 2001. Slot handle (volume) in the year ended December 31, 2002
decreased to $1.658 billion from $1.825 billion reported during 2001 because of more
stringent marketing parameters.

The
Casino Resort maintained an average daily room rate of $196 for each of the years ended
December 31, 2002 and 2001. Room revenues during the year ended December 31, 2002 were
$206.7 million, representing an increase of $2.5 million when compared to $204.2 million
during 2001. The increase in room revenues was the result of an increase of the occupancy
of available guestrooms to 95.6% during the year ended December 31, 2002 as compared to
94.6% during 2001.

Food
and beverage revenues were $70.3 million during the year ended December 31, 2002,
representing an increase of $8.3 million compared to $62.0 million for 2001. The increase
was attributable to higher room occupancy and related banquet sales.

Mall
revenues, which are included in retail and other revenues, were $36.5 million during 2002,
compared to $33.5 million during 2001. The increase was attributable to higher foot
traffic, additional tenants and increased proceeds from rents calculated on tenant gross
revenues.

Retail
and other revenues (excluding the Mall) decreased $3.6 million to $35.9 million in 2002
from $39.5 million in 2001. The decrease was primarily attributable to group cancellation
fees of $5.2 million during 2001. Retail and other revenue for 2002 takes into account
operating results from the Art of the Motorcycle exhibition at the Guggenheim Las Vegas
Museum. The exhibit opened to the public on October 7, 2001 and closed on January 6, 2003.

---

Operating
Expenses

Operating
expenses (including pre-opening, developmental and corporate expenses) were $424.6 million
in the year ended December 31, 2002, representing an increase of $10.0 million when
compared to $414.6 million during 2001. The increase in operating expenses was primarily
attributable to higher operating revenues and business volumes in all departments of the
Casino Resort, increased general and administrative costs and partially offset by reduced
advertising costs during 2002. Casino department expenses decreased $20.7 million as a
result of reduced drop (table games volume), and reduced casino marketing costs.
Rooms department expense increased $3.4 million resulting from higher room
occupancy. Food and beverage expense increased $5.6 million as a result of increased food
and beverage sales. General and administrative cost increased $7.5 million primarily as
the result of increased utility, property tax, and insurance costs.

Mall
operating expenses, which are included in retail and other expenses, were $22.9 million
during 2002 compared to $20.9 million during 2001. The increase in Mall operating expenses
was primarily attributable to increased utility costs during 2002 as compared to 2001.

Corporate
expense was $11.0 million in 2002, compared with $6.4 million in 2001. The increase was
due to increased incentive compensation and transportation costs.

Pre-opening
and developmental expense was $5.9 million as a result of the Companys
pre-development activity associated with the development of the Macau Casino.

Fixed
payment obligations (rent expense) primarily related to the HVAC Plant for the year ended
December 31, 2002 were $7.6 million, including $5.2 million for the Casino Resort and $2.4
million for the Mall. Fixed payment obligations were $8.1 million during 2001, including
$5.9 million for the Casino Resort and $2.2 million for the Mall.

Interest
Income (Expense)

Interest
expense net of amounts capitalized was $114.4 million for 2002, compared to $110.7 million
in 2001. Of the net interest expense incurred during 2002, $105.9 million was related to
the Casino Resort (excluding the Mall) and $8.5 million was related to the Mall. The
increase in interest expense was attributable to increased borrowings associated with the
Refinancing Transactions partially offset by decreases in interest rates on the
Companys variable rate debt during 2002.

Interest
income was $2.6 million and $1.4 million for the years ended December 31, 2002 and 2001,
respectively. The increase was due to increased cash balances and restricted cash balances
to be used for Phase IA Addition.

Year Ended December
31, 2001 compared to the Year Ended December 31, 2000

Operating
Revenues

Consolidated
net revenues for the year ended December 31, 2001 were $523.9 million, representing a
decrease of $57.1 million when compared with $581.0 million of consolidated net revenues
during 2000. The decrease in net revenues was primarily due to a decline in casino
revenue, offset by increases in hotel and other revenues.

Casino
revenues were $227.2 million in the year ended December 31, 2001, a decrease of $71.9
million from 2000. The decrease was attributable to several factors, including: (1) an
unusually low historical table games win percentage (calculated before discounts) of 15.3%
during 2001 as compared to 20.5% during 2000 (the table games win percentage is reasonably
predictable over time, but may vary considerably during shorter periods); (2) more
stringent table games marketing parameters during 2001 that resulted in decreased table
games volume; (3) decreased visitor traffic to Las Vegas after the terrorist attacks of
September 11, 2001; and (4) table games drop (volume) decreased to $966.6 million in the
year ended December 31, 2001 from $1,130.3 million during 2000. Slot handle (volume) in
the year ended December 31, 2001 decreased to $1,825.2 billion from $1,939.6 billion
reported during 2000; a result of decreased visitor traffic to Las Vegas after September
11, 2001.

---

The
Casino Resorts average daily room rates increased to $196 in the year ended December
31, 2001 as compared to $182 in 2000. Room revenues during the year ended December 31,
2001 were $204.2 million, representing an increase of $11.9 million when compared to
$192.3 million during 2000. The increase in room rates occurred in all major segments of
the Casino Resorts hotel rooms business, including the mid-week, group and
convention business, and the weekend retail business. The occupancy of available
guestrooms was 94.6% during the year ended December 31, 2001 compared to 95.2% during
2000.

Food
and beverage revenues were $62.0 million during the year ended December 31, 2001,
representing a decrease of $5.1 million compared to $67.1 million for 2000. The decrease
was attributable to lower room occupancy and banquet sales as a result of travel
disruption to Las Vegas during the fourth quarter of 2001.

Mall
revenues were $33.5 million during 2001, compared to $29.9 million during 2000. The
increase was attributable to higher foot traffic, additional tenants and increased
proceeds from rents calculated on tenant gross revenues.

Retail
and other revenues increased $4.2 million to $73.0 million in 2001 from $68.8 million in
2000. Other revenue includes $5.3 million of group cancellation fees during the year ended
December 31, 2001, including $5.2 million during the fourth quarter of 2001, as compared
to $1.9 million during all of 2000. In addition, during the fourth quarter of 2001, the
Company added $1.0 million to its provision for bad debts as an estimate of settlement
losses associated with $1.9 million of uncollected group cancellation fees.

Operating
Expenses

Operating
expenses (including pre-opening, developmental and corporate expenses) were $414.6 million
in the year ended December 31, 2001, representing a decrease of $29.6 million when
compared to $444.2 million during 2000. The decrease in operating expenses was primarily
attributable to lower operating revenues and business volumes in all departments of the
Casino Resort and reduced general & administrative costs during 2001. Provision for
bad debts for the year ended December 31, 2001 was $20.2 million compared to $19.3 million
during 2000. The increase was primarily attributable to estimates of losses associated
with hotel receivables and group cancellation fees during the fourth quarter of 2001.

Mall
operating expenses were $20.9 million during 2001 compared to $19.3 million during 2000.
The increase in Mall operating expenses was primarily attributable to increased
advertising costs during 2001 as compared to 2000.

Corporate
expense was $6.4 million in 2001, compared with $6.3 million in 2000.

Fixed
payment obligations primarily related to the HVAC Plant for the year ended December 31,
2001 were $8.1 million, including $5.9 million for the Casino Resort and $2.2 million for
the Mall. Fixed payment obligations were $8.7 million during 2000, including $6.5 million
for the Casino Resort and $2.2 million for the Mall.

Interest
Income (Expense)

Interest
expense net of amounts capitalized was $110.7 million for 2001, compared to $119.8 million
in 2000. Of the net interest expense incurred during 2001, $95.6 million was related to
the Casino Resort (excluding the Mall) and $15.1 million was related to the Mall. The
decrease in interest expense was attributable to decreases in interest rates on the
Companys variable rate debt during 2001 and capitalization of $2.0 million of
interest in connection with current construction projects.

Interest
income was $1.4 million and $1.8 million for the years ended December 31, 2001 and 2000,
respectively.

Other Factors
Affecting Earnings

Depreciation
expense for the year ended December 31, 2002 was $43.6 million as compared to $40.8
million for the year ended December 31, 2001. The increase was attributable to placing
capital improvement projects into service during the fourth quarter of 2001, including the
Guggenheim Museum projects.

During
the years ended December 31, 2002 and December 31, 2001, $23.3 million and $20.8 million,
respectively, were accrued on the Series B preferred interest in Venetian (the
Series B Preferred Interest) related to the contributions made.

---

During
early 2000, the Company initiated a change to its business strategy as it relates to
premium casino customers and marketing to foreign premium casino customers. The Company
has generally raised its betting limits for table games to be competitive with other
premium resorts on the Strip. There are additional risks associated with this change in
strategy, including risk of bad debts, risks to profitability margins in a highly
competitive market and the need for additional working capital to accommodate possible
higher levels of trade receivables and foreign currency fluctuations associated with
collection of trade receivables in other countries. The Company has opened domestic and
foreign marketing offices and bank collection accounts in several foreign countries to
accommodate this change in business strategy, thereby increasing marketing costs. The
Company continually evaluates its costs associated with marketing to the various segments
of the premium casino customer market and has recently increased selectivity of casino
customers to reduce variable marketing and incentive costs.

Liquidity and Capital
Resources

Cash
Flow and Capital Expenditures

As
of December 31, 2002 and December 31, 2001, the Company held unrestricted cash and cash
equivalents of $93.7 million and $54.9 million, respectively. Net cash provided by
operating activities for the year ended December 31, 2002 was $78.1 million, compared with
$50.8 million for 2001. The Companys operating cash flow in 2002 was positively
impacted as compared to the prior year primarily because of the $37.8 million increase in
operating income offset by a net decrease in accounts payable and accrued liabilities. Net
trade receivables were $53.3 million as of December 31, 2002 and $57.1 million as of
December 31, 2001.

Capital
expenditures during the year ended December 31, 2002 were $135.8 million, of which $106.9
million was attributable to construction of the Phase IA Addition and $2.4 million was
attributable to the Macau Casino project with the balance having been incurred for
operating capital expenditures at the Casino Resort. The Company expects capital
expenditures in 2003 to total approximately $347.9 million including Macau Casino
construction cost of $160.0 million, Phase IA construction cost of $149.0 million, HVAC
Plant Expansion cost of $8.9 million and $30.0 million for operating capital expenditures
at the Casino Resort.

The
Company also held restricted cash balances of $105.3 million as of December 31, 2002. Of
this amount, $101.2 million was held in restricted accounts and invested in cash or
permitted investments by a disbursement agent for the Senior Secured Credit Facility
lenders until required for Phase IA Addition project costs under the disbursement terms of
the Senior Secured Credit Facility. In addition to the cash in the disbursement account,
the Senior Secured Credit Facilitys senior secured delayed draw facility (the
Term A Facility) provides for a delayed draw term loan of $50.0 million which
the Company expects to draw upon in full by June 4, 2003 to pay Phase IA Addition project
costs. The Company estimated that the cost to complete the Phase IA Addition as of
December 31, 2002 was $149.0 million. In addition, the Company will spend $8.9 million to
pay for the HVAC Plant Expansion. The Company expects completion to occur by June 2003.
The Company currently anticipates that the funds in the disbursement account and the
delayed draw facility will be sufficient to pay for all of the remaining costs of the
Phase IA Addition (excluding the HVAC Plant expansion). The Company expects that the HVAC
Plant Expansion will be funded by either a new $15 million furniture, fixtures and
equipment debt facility or by operating cash flow.

---

Aggregate
Indebtedness and Fixed Payment Obligations to the HVAC Provider

The
Companys total long-term indebtedness and its fixed payment obligations to Southern
Energy Solutions, the provider of heating and air conditioning to the Casino Resort and
the Expo Center, are summarized below for the twelve month periods ended December 31:

|                                               | 2003 | 2004 | 2005 | 2006   | 2007 | Thereafter
|---------------------------------------------- | ---- | ---- | ---- | ------ | ---- | ----------
|                                               |      |     
|
|                                               |      |     
|Long -Term Indebtedness                        |      |      |      |        |      |           
|Mortgage Notes                                 |      |      | $    |       |      | $         
|Senior Secured Credit Facility (1)             |      |      |      | 2,500  |      |           
|Secured Mall Facility (2)                      |      |      |      |       |      |           
|                                               |      |     
|                                               |      |     
|Fixed Payment Obligations to the HVAC Provider |      |      |      |        |      |           
|HVAC Provider fixed payments (3)               |      |      |      | 7,657  |      |           
|                                               |      |      |      |        |      |           
|                                               |      |     
|Total indebtedness and HVAC fixed              |      |      |      |        |      |           
|payment obligations                            |      |      | $    | 10,157 |      | $         
|                                               |      |      |      |        |      |           

---

| | (1) | The
Senior Secured Credit Facility will mature on June 4, 2008 and will be           subject
to nominal quarterly amortization payments, beginning September 30, 2002           and
through June 30, 2007, and equal quarterly amortization payments of the           balance
of this facility thereafter. The senior secured delayed draw facility           was
available through June 4, 2003 and will mature on June 4, 2007 and is           subject
to quarterly amortization payments commencing on December 31, 2003.
          Indebtedness under the senior secured revolving credit facility will mature on
          June 4, 2007 with no interim amortization.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
$120.0 million Secured Mall Facility will mature on June 10, 2005 (subject           to
extension for two terms of one year each), with no amortization.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The
Company and the New Mall Subsidiary are parties to a services agreement with           a
third party for thermal energy (heating ventilating and air conditioning)
          (HVAC) for the Casino Resort. The total remaining payment obligation under
these           arrangements was $49.8 million as of December 31, 2002, payable in equal
monthly           installments through July 1, 2009.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under
the terms of its existing indebtedness, the Company has debt principal payments due
aggregating $2.5 million during the next twelve months, representing principal payments on
the Senior Secured Credit Facility. Based on current outstanding indebtedness and current
interest rates on the Senior Secured Credit Facility and the Secured Mall Facility, the
Company has estimated total interest payments during the next twelve months (excluding
noncash amortization of debt offering costs) of approximately $105.3 million for
indebtedness secured by the Casino Resort and approximately $4.0 million for indebtedness
secured by the Mall . In addition, Venetian Macau is in the process of seeking an
additional $120.0 million of indebtedness to complete the Macau Casino which would require
additional interest expense. See Item 8  Financial Statements and
Supplementary Data  Notes to Financial Statements  Note 8  Long-Term
Debt.

The
Company also has fixed payments obligations due during the next twelve months of $7.7
million under its energy service agreements with the HVAC Provider. The total remaining
payment obligation under this arrangement is $49.8 million, payable in equal monthly
installments during the period of January 1, 2003 through July 1, 2009.

---

Refinancing
Transactions

On
June 4, 2002, the Company issued $850.0 million in aggregate principal amount of
Mortgage Notes in a private placement offering and entered into the Senior Secured Credit
Facility in an aggregate amount of $375.0 million and the Secured Mall Facility in
the aggregate amount of $105.0 million (subsequently increased to $120.0 million on June
28, 2002). The Company used the proceeds of the Refinancing Transactions to repay, redeem
or repurchase all of its outstanding indebtedness (including the Old Mortgage Notes, the
Old Subordinated, the November 1997 Bank Credit Facility (the Bank Credit Facility),
the facility providing for financing for certain furniture, fixtures, and equipment and
an electrical substation (the FF&E Facility), the advance of $23.5
million under the Principal Stockholders completion guaranty, the $105.0 million
tranche A take-out loan to the New Mall Subsidiary (the Tranche A Take-out Loan)
and the $35.0 million tranche-B take out loan to the New Mall Subsidiary (the Tranche
B Take-out Loan), the Phase II Subsidiarys unsecured bank line of credit and
the Phase II Subsidiarys term and revolving loan (the Phase II Subsidiary
Credit Facility), to finance the construction and development of the Phase IA
Addition and to pay all fees and expenses associated with the Refinancing Transactions.
In addition, the Principal Stockholders completion guarantee relating to the
construction of the Casino Resort was terminated upon the consummation of the Refinancing
Transactions and the remaining cash collateral was returned to the Principal Stockholder.
In connection with the Refinancing Transactions, the Company incurred a loss on early
retirement of indebtedness of $51.4 million during the year ended December 31, 2002. See
Item 8  Financial Statements and Supplementary Data  Notes to Financial
Statements  Note 8  Long-Term Debt.

For
the next twelve months, the Company expects to fund Casino Resort operations, capital
expenditures, the Macau casino construction, Internet gaming development activities and
debt service requirements from existing cash balances, operating cash flow, borrowings
under the Revolving Facility to the extent that funds are available, borrowings by
Venetian Macau and other unrestricted subsidiaries, drawings under the Term A Facility and
distributions of excess cash from Grand Canal Shops II, LLC (the Mall II
Subsidiary) to Venetian to the extent permitted under the terms of the
Companys indebtedness. As of December 31, 2002, there was $75.0 million available
for borrowing under the Revolving Facility and $50.0 million available under the Term A
Facility. As discussed below, the availability under the Revolving facility will decrease
as loans are made under the new $50 million credit agreement entered into on March 27,
2003 by one of the Companys Macau subsidiaries.

The
Companys existing debt instruments contain certain restrictions that, among other
things, limit the ability of the Company and/or 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 assets of the Company without prior approval of the lenders or
noteholders. Financial covenants included in the Senior Secured Credit Facility include
total debt to EBITDA ratios, EBITDA to interest coverage ratios, minimum net worth
covenants and maximum capital expenditure limitations. The financial covenants in the
Senior Secured Credit Facility involving EBITDA are applied on a rolling four-quarter
basis. As of December 31, 2002, the Company was in compliance with all required covenants
and ratios under its current debt instruments. See Item 8  Financial
Statements and Supplementary Data  Notes to Financial Statements  Note 8
 Long-Term Debt.

Macau
Casino Project

The
Company is currently constructing a casino in Macau with an anticipated completion date of
February 2004 and tentatively plans to build a 500-suite hotel, casino and convention
center complex, with a Venetian-style theme similar to that of the Companys Las
Vegas property. Under the terms of Venetian Macaus agreements with the government of
Macau, Venetian Macau has certain financial obligations to the Government of Macau or is
obligated to pay for certain costs of developing and constructing the Macau Casino and
other projects in Macau. Venetian Macau is committed to invest 4.4 billion Macau patacas
(approximately $531.7 million at exchange rates as of December 31, 2002) under its
agreement with the government of Macau in various development projects until March 31,
2007. To support this obligation, Venetian Macau has caused a Macau bank to guarantee 300
million Macau patacas (approximately $36.3 million at exchange rates as of December 31,
2002) on its behalf and Lido Casino Resort Holding Company, LLC (an unrestricted
subsidiary of the Company) has guaranteed 200 million Macau patacas (approximately $24.2
million at exchange rates as of December 31, 2002) of the legal and contractual
liabilities of Venetian Macau to the Macau government until March 31, 2007. The Company
expects to use cash received from the following sources to fund the various Macau
projects:

| |  | borrowings
by Venetian under the Revolving Facility;
| | - | ----------------------------------------------------

| |  | additional
debt or equity financings; and
| | - | -----------------------------------------

| |  | operating
cash flow (subject to certain limitations contained in the Companys debt
instruments).
| | - | -------------------------------------------------------------------------------------------------

---

Specifically,
the Company estimates the cost to complete the Macau Casino to be $210.0 million and
expects completion to occur by February 2004. The Senior Secured Credit Facility and the
Indenture relating to the Mortgage Notes limits the Companys ability to make
investments in its Macau subsidiaries. As of December 31, 2002, the Company has invested
$34.4 million in its Macau subsidiaries and expects to invest an additional $5.6 million.
Of this invested amount, $25.6 million remains on deposit in Venetian Macau bank accounts
as of December 31, 2002. On March 27, 2003, Venetian Venture Development Intermediate
Limited (Venetian Intermediate), a subsidiary of the Company, entered into a
credit agreement (Venetian Intermediate Credit Agreement) with The Bank of
Nova Scotia to provide $50.0 million of financing for the Macau Casino. Venetian
Intermediate, a wholly-owned indirect subsidiary of Venetian, owns 100% of Venetian Macau.
The obligations under the loans to be made under Venetian Intermediate Credit Agreement
will be guaranteed by the Company and Venetian and supported by letters of credit to be
issued under the Senior Secured Credit Facility in favor of the Venetian Intermediate
Credit Agreement lenders. As these loans are made, the letters of credit will reduce the
amounts available for working capital loans under the Revolving Facility on a dollar for
dollar basis from the $75.0 million of current availability to $25.0 million. The amounts
outstanding under the Venetian Intermediate Credit Facility bear interest at the base rate
or the adjusted Eurodollar rate plus 0.5% per annum. Interest is payable on base rate
loans on a monthly basis and is payable on Eurodollar loans at the end of the applicable
interest period, and there is no scheduled principal amortization. The credit facility is
due in full March 27, 2006. As of March 31, 2003, the credit facility remains undrawn. In
addition, Venetian Macau is currently negotiating to obtain $120.0 million in additional
debt financing (Proposed Venetian Macau Financing Agreement). There can be no
assurance that financing will be available to the Company to complete the Macau Casino,
and, if available, that the financing will be on terms favorable to the Company. The
proceeds from the Venetian Intermediate Credit Agreement, the Proposed Venetian Macau
Credit Agreement and the direct investments of $40.0 million from Venetian will be used to
fund the $210.0 million total anticipated cost of the Macau Casino.

Through
December 31, 2002, the Company had incurred pre-opening and developmental expenses of
$5.9 million and construction costs of $4.8 million, in connection with the Macau
Casino project.

Venetian
Macau, Venetian Intermediate and the Companys other Macau subsidiaries are not
guarantors under the Mortgage Notes or the Senior Secured Credit Facility and, subject to
certain limited exceptions, are not restricted subsidiaries under the Indenture or the
Senior Secured Credit Facility.

Phase
II Resort

The
Company has not yet set a date to begin construction of the Phase II Resort. If the
Company determines to construct the Phase II Resort, it will be required to raise
substantial debt and/or equity financings. Currently, the Company has no commitments to
fund the hard construction costs of the Phase II Resort. In addition, the development
of the Phase II Resort may require obtaining additional regulatory approvals. The
Companys debt instruments limit its ability to guarantee or otherwise become liable
for any indebtedness of the Phase II Subsidiary. These debt instruments also restrict
the Companys and its subsidiaries ability to sell or otherwise dispose of the
capital stock of the Phase II Subsidiary, including a sale to the Principal
Stockholder or to any of his affiliates. In addition, the Indenture allows the Company to
make investments of up to $20.0 million for the development of the Phase II
Resort and to incur up to $20.0 million of additional debt to fund such investment.
The Phase II Subsidiary is an unrestricted subsidiary that is not subject to the
terms of the Indenture or the Senior Secured Credit Facility and is not a guarantor under
the Mortgage Notes or the Senior Secured Credit Facility.

Litigation
Contingencies and Available Resources

The
Company is a party to certain litigation matters and claims related to the construction of
the Casino Resort. If the Company is required to pay any of the Construction
Managers contested construction costs (the Contested Construction Costs)
which are not covered by the Insurance Policy, the Company may use cash received from the
following sources to fund such costs: (i) the LD Policy; (ii) the Construction Manager,
Bovis and P&O pursuant to the Construction Management Contract, the Bovis Guaranty and
the P&O Guaranty, respectively; (iii) third parties, pursuant to their liability to
the Company under their agreements with the Company; (iv) amounts received from the Phase
II Subsidiary for shared facilities designed and constructed to accommodate the operations
of the Casino Resort and the Phase II Resort; (v) borrowings under the Revolving Facility;
(vi) additional debt or equity financings; and (vii) operating cash flow. If the Company
were required to pay substantial Contested Construction Costs, and if it were unable to
raise or obtain the funds from the sources described above, there could be a material
adverse effect on the Companys financial position, results of operations or cash
flows.

---

If
the Company is required to pay certain significant contested construction costs, or if
the Company is unable to meet its debt service requirements, the Company will seek, if
necessary and to the extent permitted under the Indenture and the terms of the Senior
Secured Credit Facility or any other debt instruments then outstanding, additional
financing through bank borrowings or debt or equity financings. Also, there can be no
assurance that new business developments or unforeseen events will not occur resulting in
the need to raise additional funds. There also can be no assurance that additional or
replacement financing, if needed, will be available to the Company, and, if available,
that the financing will be on terms favorable to the Company.

Recent Accounting
Pronouncements

In
August 2001, the Financial Accounting Standards Board issued Statement No. 143 (SFAS
143), Accounting for Obligations Associated with the Retirement of Long-Lived
Assets. The objectives of SFAS 143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation and its associated asset
retirement cost. SFAS 143 is effective for fiscal years beginning after June 15, 2002.

In
June 2002, the Financial Accounting Standard Board issued Statement No. 146 (SFAS
146) Accounting for Costs Associated with Exit or Disposal Activities.
The provisions of SFAS 146 become effective for exit or disposal activities commenced
subsequent to December 31, 2002 and the Company does not expect any impact on its
financial condition, results of operations or cash flows.

The
Company does not expect the impact of the adoptions of SFAS 143 and SFAS 146 to have a
material impact on its financial condition, results of operations or cash flows.

In
November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others. This
interpretation elaborates on the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that is has
issued. It also clarifies (for guarantees issued after January 1, 2003) that a guarantor
is required to recognize at the inception of a guarantee, a liability for the fair value
of the obligations undertaken in issuing the guarantee. At December 31, 2002, the Company
does not have any guarantees outside of its consolidated group and accordingly does not
expect the adoption of FIN 45 to have a material impact on its financial condition,
results of operations or cash flows. Disclosures concerning guarantees are found in Notes
8 and 13.

In
December 2002 the Financial Accounting Standards Board issued Statement No. 148
(SFAS 148) Accounting for Stock-Based Compensation. The provisions
of SFAS 148 became effective December 15, 2002. The Company has adopted the disclosure
requirements of SFAS 148.

In
January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46
(FIN 46), Consolidation of Variable Interest Entities. This
interpretation addresses the requirements for business enterprises to consolidate related
entities in which they are determined to be the primary economic beneficiary as a result
of their variable economic interests. The interpretation is intended to provide guidance
in judging multiple economic interest in an entity and in determining the primary
beneficiary. The interpretation outlines disclosure requirements for VIEs in existence
prior to January 31, 2003, and outlines consolidation requirements for VIEs created after
January 31, 2003. The Company has reviewed its major relationships and its overall
economic interests with other companies consisting of related parties, companies in which
it has an equity position and other suppliers to determine the extent of its variable
economic interest in these parties. The Company believes it has appropriately reported the
economic impact and its share of risks of its commercial relationships through its equity
accounting along with appropriate disclosure of its other commitments.

---

Special Note Regarding
Forward-Looking Statements

Certain
statements in this section, the risk factors set forth in Item 1Business
of this Annual Report on Form 10-K for the year ended December 31, 2002 and elsewhere in
this Annual Report on Form 10-K (as well as information included in oral statements or
other written statements made or to be made by the Company) constitute
forward-looking statements. Such forward-looking statements include the
discussions of the business strategies of the Company and expectations concerning future
operations, margins, profitability, liquidity and capital resources. In addition, in
certain portions of this Form 10-K, the words: anticipates,
believes, estimates, seeks, expects,
plans, intends and similar expressions, as they relate to the
Company or its management, are intended to identify forward-looking statements. Although
the Company believes that such forward-looking statements are reasonable, it can give no
assurance that any forward-looking statements will prove to be correct. Such
forward-looking statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others, the risks
associated with entering into new construction and new ventures, including the Phase IA
Addition and the Macau Casino, increased competition and other planned construction in Las
Vegas, including the opening of a new casino resort on the site of the former Desert Inn
and upcoming increases in meeting and convention space, the completion of infrastructure
projects in Las Vegas, government regulation of the casino industry, including gaming
license approvals and regulation in foreign jurisdictions, the legalization of gaming in
certain jurisdictions, such as Native American reservations in the States of California
and New York and regulation of gaming on the Internet, leverage and debt service
(including sensitivity to fluctuations in interest rates and other capital markets
trends), uncertainty of casino spending and vacationing at casino resorts in Las Vegas,
disruptions or reductions in travel to Las Vegas due to the September 11th attacks, the
war with Iraq and any future terrorist incidents, new taxes or changes to existing tax
rates, fluctuations in occupancy rates and average daily room rates in Las Vegas, demand
for all-suites rooms, the popularity of Las Vegas as a convention and trade show
destination, insurance risks (including the risk that the Company has not obtained
sufficient coverage against acts of terrorism or will only be able to obtain additional
coverage at significantly increased rates), litigation risks, including the outcome of the
pending disputes with the Construction Manager and its subcontractors, and general
economic and business conditions which may impact levels of disposable income, consumer
spending and pricing of hotel rooms.

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. The Companys
primary exposure to market risk is interest rate risk associated with its long-term debt.
The Company attempts to manage its interest rate risk by managing the mix of its long-term
fixed-rate borrowings and variable rate borrowings, and by use of interest rate cap and
floor agreements. The ability to enter into interest rate cap and floor agreements allows
the Company to manage its interest rate risk associated with its variable rate debt.

The
Company does not hold or issue financial instruments for trading purposes and does not
enter into deliverable transactions that would be considered speculative positions. The
Companys derivative financial instruments consist exclusively of interest rate cap
and floor agreements, which do not qualify for hedge accounting. Interest differentials
resulting from these agreements are recorded on an accrual basis as an adjustment to
interest expense.

To
manage exposure to counterparty credit risk in interest rate cap and floor agreements, the
Company enters into agreements with highly-rated institutions that can be expected to
fully perform under the terms of such agreements. Frequently, these institutions are also
members of the bank group providing the Companys credit facility, which management
believes further minimizes the risk of nonperformance.

The
table below provides information about the Companys financial instruments that are
sensitive to changes in interest rates. For debt obligations, the table presents notional
amounts and weighted average interest rates by contractual maturity dates for the twelve
month periods ended December 31:

---

|                          |  |   |    |     |  |    |     | FAIR
|------------------------- |  | - | -- | --- |  | -- | --- | ----
|
|                          |  |  
|
|                          |  |  
|LIABILITIES               |  |   |    |     |  |    |     |     
|Short-term debt           |  |   |    |     |  |    |     |     
|Variable rate             |  | $ | 2  | .5  |  | -- |     |     
|Average interest rate (2) |  |   | 4  | .4% |  | -- |     |     
|Long-term debt            |  |   |    |     |  |    |     |     
|Fixed rate                |  |   | -- |     |  | -- |     |     
|Average interest rate (2) |  |   | -- |     |  | -- |     |     
|Variable rate             |  |   | -- |     |  | 2  | .5  |     
|Average interest rate (2) |  |   | -- |     |  | 4  | .4% |     

---

| | (1) | The
fair values are based on the borrowing rates currently available for debt
               instruments with similar terms and maturities and market quotes of the
               Companys publicly traded debt.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Based
upon contractual interest rates for fixed rate indebtedness or current
               LIBOR rates for variable rate indebtedness.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------

Foreign
currency translation gains and losses were not material to the Companys results of
operations for the year ended December 31, 2002, but may be in future periods in relation
to activity associated with the Macau venture.

See
also Item 7  Managements Discussion and Analysis of Financial Condition
and Results of Operations  Liquidity and Capital Resources and  Item 8
 Financial Statements and Supplementary Data  Notes to Financial Statements
 Note 8  Long-Term Debt.

---

ITEM 8FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL
STATEMENTS

Financial Statements:

|                                                                          |   
|------------------------------------------------------------------------- | --
|Report of Independent Accountants                                         | 46
|                                                                          |   
|Consolidated Balance Sheets at December 31, 2002 and 2001                 | 47
|                                                                         
|Consolidated Statements of Operations for each of the three               |   
|years in the period ended December 31, 2002                               | 48
|                                                                          |   
|Consolidated Statements of Stockholders' Equity (Deficit) for each of the
|three years in the period ended December 31, 2002                         | 49
|                                                                          |   
|Consolidated Statements of Cash Flows for each of the three               |   
|years in the period ended December 31, 2002                               | 50
|                                                                          |   
|Notes to Financial Statements                                             | 51
|                                                                          |   
|Financial Statement Schedules:                                            |   
|Report of Independent Accountants                                         | 83
|Schedule II - Valuation and Qualifying Accounts                           | 84

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

---

# Report of Independent
Accountants

To the Directors and
Stockholders of Las Vegas Sands, Inc.

In
our opinion, the accompanying consolidated balance sheets and the related consolidated
statements of operations, of stockholders equity (deficit) and of cash flows present
fairly, in all material respects, the financial position of Las Vegas Sands, Inc. and its
subsidiaries at December 31, 2002 and 2001, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Companys management; our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As
more fully described in Note 2, the Company changed its method of accounting for losses on
early retirement of debt in connection with its adoption of Financial Accounting Standards
Board Statement No. 145.

PricewaterhouseCoopers
LLP

Las Vegas, Nevada
February 5, 2003, except for Note 8  Venetian IntermediateCredit Facility and Note
13  Macau Casino Project andInternet Gaming, as to which the date is March 27, 2003

---

# LAS VEGAS SANDS, INC.Consolidated
Balance Sheets(Dollars in thousands)

|                                                                                                   | December 31, | 
|-------------------------------------------------------------------------------------------------- | ------------ | 
|
|ASSETS                                                                                             |              | 
|Current assets:                                                                                    |              | 
|Cash and cash equivalents                                                                          |              | 
|Restricted cash                                                                                    |              | 
|Accounts receivable, net                                                                           |              | 
|Inventories                                                                                        |              | 
|Prepaid expenses                                                                                   |              | 
|                                                                                                   |              | 
|Total current assets                                                                               |              | 
|                                                                                                   |              | 
|Property and equipment, net                                                                        |              | 
|Deferred offering costs, net                                                                       |              | 
|Restricted cash                                                                                    |              | 
|Other assets, net                                                                                  |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                     |              | 
|Current liabilities:                                                                               |              | 
|Accounts payable                                                                                   |              | 
|Construction payables                                                                              |              | 
|Construction payables-contested                                                                    |              | 
|Accrued interest payable                                                                           |              | 
|Other accrued liabilities                                                                          |              | 
|Current maturities of long-term debt                                                               |              | 
|                                                                                                   |              | 
|Total current liabilities                                                                          |              | 
|                                                                                                   |              | 
|Other long-term liabilities                                                                        |              | 
|Long-term debt                                                                                     |              | 
|Long-term subordinated loans payable to Principal Stockholder                                      |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|Redeemable Preferred Interest in Venetian Casino Resort, LLC, a wholly owned subsidiary            |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|Stockholders' equity (deficit):                                                                    |              | 
|Common stock, $.10 par value, 3,000,000 shares authorized, 1,000,000 shares issued and outstanding |              | 
|Capital in excess of par value                                                                     |              | 
|Accumulated deficit since June 30, 1996                                                            |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 
|                                                                                                   |              | 

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

---

# LAS VEGAS SANDS, INC.Consolidated
Statements of Operations(In thousands, except per share data)

|                                                                                 | Year Ended December 31, |  |  
|-------------------------------------------------------------------------------- | ----------------------- |  | -
|
|Revenues:                                                                        |                         |  |  
|Casino                                                                           |                         |  | $
|Rooms                                                                            |                         |  |  
|Food and beverage                                                                |                         |  |  
|Retail and other                                                                 |                         |  |  
|                                                                                 |                         |  |  
|                                                                                 |                         |  |  
|Less-promotional allowances                                                      |                         |  |  
|                                                                                 |                         |  |  
|Net revenues                                                                     |                         |  |  
|                                                                                 |                         |  |  
|                                                                                 |                         | 
|Operating expenses:                                                              |                         |  |  
|Casino                                                                           |                         |  |  
|Rooms                                                                            |                         |  |  
|Food and beverage                                                                |                         |  |  
|Retail and other                                                                 |                         |  |  
|Provision for doubtful accounts                                                  |                         |  |  
|General and administrative                                                       |                         |  |  
|Corporate expense                                                                |                         |  |  
|Rental expense                                                                   |                         |  |  
|Pre-opening and developemental expense                                           |                         |  |  
|Depreciation and amortization                                                    |                         |  |  
|                                                                                 |                         |  |  
|                                                                                 |                         |  |  
|                                                                                 |                         |  |  
|Operating income                                                                 |                         |  |  
|                                                                                 |                         | 
|Other income (expense):                                                          |                         |  |  
|Interest income                                                                  |                         |  |  
|Interest expense, net of amounts capitalized                                     |                         |  |  
|Interest expense on indebtedness to Principal Stockholder                        |                         |  |  
|Other income (expense)                                                           |                         |  |  
|Loss on early retirement of debt                                                 |                         |  |  
|                                                                                 |                         |  |  
|Income (loss) before preferred return                                            |                         |  |  
|Preferred return on Redeemable Preferred Interest in Venetian Casino Resort, LLC |                         |  |  
|                                                                                 |                         |  |  
|Net loss                                                                         |                         |  | $
|                                                                                 |                         |  |  
|                                                                                 |                         | 
|Basic and diluted loss per share                                                 |                         |  | $
|                                                                                 |                         |  |  

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

---

# LAS VEGAS SANDS,
INC.Consolidated Statements of Stockholders Equity (Deficit)(Dollars in thousands)

|                             | Common Stock |  |  |           | 
|---------------------------- | ------------ |  |  | --------- | 
|
|                             |              | 
|Balance at December 31, 1999 |              |  |  | 925,000   | 
|Net loss                     |              |  |  |           | 
|                             |              |  |  |           | 
|                             |              | 
|Balance at December 31, 2000 |              |  |  | 925,000   | 
|Net loss                     |              |  |  |           | 
|                             |              |  |  |           | 
|                             |              | 
|Balance at December 31, 2001 |              |  |  | 925,000   | 
|Stock split                  |              |  |  | 75,000    | 
|Net loss                     |              |  |  |           | 
|                             |              |  |  |           | 
|                             |              | 
|Balance at December 31, 2002 |              |  |  | 1,000,000 | 
|                             |              |  |  |           | 

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

---

# LAS VEGAS SANDS, INC.Consolidated
Statements of Cash Flows(Dollars in thousands)

|                                                                         | Year Ended December 31, |  |  
|------------------------------------------------------------------------ | ----------------------- |  | -
|
|Cash flows from operating activities:                                    |                         |  |  
|Net loss                                                                 |                         |  | $
|Adjustments to reconcile net loss to net cash                            |                         |  |  
|provided by operating activities:                                        |                         |  |  
|Depreciation and amortization                                            |                         |  |  
|Amortization of debt offering costs and original issue discount          |                         |  |  
|Non-cash preferred return on Redeemable Preferred Interest               |                         |  |  
|in Venetian                                                              |                         |  |  
|Loss on early retirement of debt                                         |                         |  |  
|Loss on disposition of fixed asset                                       |                         |  |  
|Non-cash interest on completion guaranty loan                            |                         |  |  
|Provision for doubtful accounts                                          |                         |  |  
|Changes in operating assets and liabilities:                             |                         |  |  
|Accounts receivable                                                      |                         |  |  
|Inventories                                                              |                         |  |  
|Prepaid expenses                                                         |                         |  |  
|Other assets                                                             |                         |  |  
|Accounts payable                                                         |                         |  |  
|Accrued interest payable                                                 |                         |  |  
|Other accrued liabilities                                                |                         |  |  
|                                                                         |                         |  |  
|Net cash provided by operating activities                                |                         |  |  
|                                                                         |                         |  |  
|Cash flows from investing activities:                                    |                         | 
|(Increase) decrease in restricted cash ($101.2 million for Phase IA)     |                         |  |  
|Capital expenditures                                                     |                         |  |  
|Construction of Casino Resort                                            |                         |  |  
|                                                                         |                         |  |  
|Net cash used in investing activities                                    |                         |  |  
|                                                                         |                         |  |  
|Cash flows from financing activities:                                    |                         |  |  
|Repayments on 12 1⁄4% mortgage notes                                       |                         |  |  
|Proceeds from 11% mortgage notes                                         |                         |  |  
|Repayments on senior subordinated notes                                  |                         |  |  
|Proceeds from secured mall facility                                      |                         |  |  
|Repayments on mall-tranche A take-out Loan                               |                         |  |  
|Repayments on mall-tranche B take-out Loan                               |                         |  |  
|Repayments on completion guaranty loan                                   |                         |  |  
|Repayments on senior secured credit facility-term B                      |                         |  |  
|Proceeds from senior secured credit facility-term B                      |                         |  |  
|Repayments on bank credit facility-tranche A term loan                   |                         |  |  
|Repayments on bank credit facility-tranche B term loan                   |                         |  |  
|Proceeds from bank credit facility-tranche B term loan                   |                         |  |  
|Repayments on bank credit facility-tranche C term loan                   |                         |  |  
|Proceeds from bank credit facility-tranche C term loan                   |                         |  |  
|Repayments on bank credit term facility                                  |                         |  |  
|Proceeds from bank credit term facility                                  |                         |  |  
|Repayments on bank credit facility-revolver                              |                         |  |  
|Proceeds from bank credit facility-revolver                              |                         |  |  
|Repayments on FF&E credit facility                                       |                         |  |  
|Repayments on Phase II Subsidary credit facility                         |                         |  |  
|Proceeds from Phase II Subsidiary credit facility                        |                         |  |  
|Repayments on Phase II Subsidiary unsecured bank loan                    |                         |  |  
|Proceeds from Phase II Subsidiary unsecured bank loan                    |                         |  |  
|Repurchase premiums incurred in connection with refinancing transactions |                         |  |  
|Payments of deferred offering costs                                      |                         |  |  
|                                                                         |                         |  |  
|Net cash provided by (used in) financing activities                      |                         |  |  
|                                                                         |                         |  |  
|Increase in cash and cash equivalents                                    |                         |  |  
|Cash and cash equivalents at beginning of year                           |                         |  |  
|                                                                         |                         |  |  
|Cash and cash equivalents at end of year                                 |                         |  | $
|                                                                         |                         |  |  
|Supplemental disclosure of cash flow information:                        |                         |  |  
|Cash payments for interest                                               |                         |  | $
|                                                                         |                         |  |  
|Non-cash interest on completion guaranty loan                            |                         |  | $
|                                                                         |                         |  |  
|Property and equipment asset acquisitions included in accounts payable   |                         |  | $
|                                                                         |                         |  |  

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

---

LAS VEGAS
SANDS,INC.Notes to Financial Statements

Note 1 Organization
and Business of Company

Las
Vegas Sands, Inc. (LVSI) and its subsidiaries (collectively, the
Company) own and operate the Venetian Casino Resort (the Casino
Resort), a Renaissance Venice-themed resort situated at one of the premier locations
on the Las Vegas Strip (the Strip). The Casino Resort is located across from
The Mirage and the Treasure Island Hotel and Casino. The Casino Resort includes the only
all-suites hotel on the Strip with 3,036 suites (the Hotel); a gaming facility
of approximately 116,000 square feet (the Casino); an enclosed retail, dining
and entertainment complex of approximately 446,000 net leasable square feet (the
Mall); and a meeting and conference facility of approximately 500,000 square
feet (the Congress Center).

The
consolidated financial statements include the accounts of LVSI and its subsidiaries (the
Subsidiaries), including Venetian Casino Resort, LLC (Venetian),
Mall Intermediate Holding Company, LLC (Mall Intermediate), Grand Canal Shops
Mall Subsidiary, LLC (the New Mall Subsidiary), Grand Canal Shops II, LLC (the
Mall II Subsidiary), Grand Canal Shops Mall MM Subsidiary, Inc., Grand Canal
Shops Mall Construction, LLC (Mall Construction), Lido Intermediate Holding
Company, LLC (Lido Intermediate), Lido Casino Resort Holding Company, LLC,
Lido Casino Resort, LLC (the Phase II Subsidiary), Lido Casino Resort MM,
Inc., Venetian Casino Resort Athens, LLC (Venetian Athens), Venetian Venture
Development, LLC (Venetian Venture), Venetian Venture Development Intermediate
Limited, Venetian Macau Management Limited, Venetian Macau Holdings Limited
(Venetian Macau), Venetian Marketing, Inc. (Venetian Marketing),
Venetian Far East Limited and Venetian Operating Company, LLC (Venetian
Operating) (collectively, and including all other direct and indirect subsidiaries
of LVSI, the Company). Each of LVSI and the Subsidiaries is a separate legal
entity and the assets of each such entity are intended to be available only to the
creditors of such entity.

Venetian
was formed on March 20, 1997 to own and operate certain portions of the Casino Resort.
LVSI is the managing member and owns 100% of the common voting equity in Venetian. The
entire preferred interest in Venetian is owned by Interface Group Holding Company, Inc.
(Interface Holding), which is wholly-owned by LVSIs principal
stockholder (the Principal Stockholder).

Various
Subsidiaries are guarantors or co-obligors of certain indebtedness related to the Casino
Resort.  Note 8  Long-Term Debt.

The
Mall II Subsidiary is an indirect, wholly-owned subsidiary of LVSI, which owns and
operates the retail mall in the Casino Resort (the Mall). The Mall II Subsidiary was
formed on May 31, 2002 and became a successor to the Mall Subsidiary in connection with
the refinancing of the Malls indebtedness. See Note 8  Long-Term
Debt.

The
Casino Resort is physically connected to the approximately 1.15 million square foot Sands
Expo and Convention Center (the Expo Center). Interface Group-Nevada, Inc.
(IGN), the owner of the Expo Center, is beneficially owned by the Principal
Stockholder. Venetian, the Mall II Subsidiary and IGN transact business with each other
and are parties to certain agreements. The nature of such transactions and the amounts
involved are disclosed in the notes to the financial statements.

Note 2  Summary
of Significant Accounting Policies

Principles of
Consolidation

The
consolidated financial statements include the accounts of the Company and its
subsidiaries. Significant intercompany balances and transactions have been eliminated.

---

LAS VEGAS SANDS, INC.Notes
to Financial Statements

Note 2 - Summary of
Significant Accounting Policies  (Continued)

Significant Accounting
Policies and Estimates

The
preparation of the consolidated financial statements in accordance with generally accepted
accounting principles requires the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, management evaluates those
estimates, including those related to asset impairment, accruals for slot marketing
points, self-insurance, compensation and related benefits, revenue recognition, allowance
for doubtful accounts, contingencies and litigation. The Company bases its estimates on
historical experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions or
conditions.

Cash and Cash
Equivalents

Cash
and cash equivalents consist of cash and short-term investments with original maturities
not in excess of 90 days.

Inventories

Inventories
are stated at the lower of cost or market. Cost is determined by the first-in, first-out
and specific identification methods. Inventories consist primarily of food, beverage and
retail products.

Accounts Receivable

Accounts
receivable are due within one year and are recorded net of amounts estimated to be
uncollectible.

Property and Equipment

Property
and equipment are stated at cost. Depreciation and amortization are provided on a
straight-line basis over the estimated useful lives of the assets as follows:

|                                  |               
|--------------------------------- | --------------
|Building and improvements         | 15 to 40 years
|Furniture, fixtures and equipment | 3 to 15 years 
|Leasehold improvements            | 5 to 10 years 

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

Management
reviews assets for possible impairment of long-lived assets whenever events or changes in
circumstances indicate that the carrying amount of such assets exceeds their fair value.
Impairment losses are recognized when estimated future undiscounted cash flows expected to
result from the use of the assets and their eventual disposition are less than their
carrying amounts. Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 144 (SFAS 144), Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement retains the prior requirements of
SFAS No. 121, Accounting for the Impairment of Long-Lived assets and for Long-Lived
Assets to Be Disposed Of to recognize impairments on property, plant and equipment.
The adoption of SFAS No. 144 had no impact on the Companys financial condition,
results of operations or cash flows.

---

LAS VEGAS SANDS, INC.Notes
to Financial Statements (continued)

Note 2  Summary
of Significant Accounting Policies (continued)

Capitalized Interest

Interest
costs associated with major construction projects are capitalized. Interest is capitalized
on amounts expended on the Phase IA Addition using the weighted-average cost of the
Companys outstanding borrowings. Capitalization of interest ceases when the project
is substantially complete.

Pre-opening and
Developmental Costs

Pre-opening
and developmental costs, representing primarily direct personnel and other costs incurred
prior to the opening of new ventures are expensed as incurred.

Debt Discount and
Deferred Offering Costs

Debt
discount and offering costs are amortized based on the terms of the related debt
instruments using the straight-line method, which approximates the effective interest
method.

Per Share Data

Basic
and diluted loss per share are calculated based upon the weighted average number of shares
outstanding. As further described in Note 10, in the first quarter of 2002, the Company
completed a stock split whereby the number of common shares outstanding was increased to
1,000,000 from 925,000. Accordingly, all earnings per share calculations have been
adjusted to retroactively give effect to the increase in shares outstanding to 1,000,000.
The impact of the granting of options to purchase 5,500 share of the Companys common
stock during 2002 has not been included in the computation of diluted earnings per share
as their impact would have been antidilutive.

The
company has elected to follow Accounting Principles Board Opinion No. 25 entitled
Accounting For Stock Issued to Employees and accounts for its stock-based
compensation to employees using the intrinsic value method. Under this method,
compensation expense is the difference between the market value of the Companys
stock and the stock options exercise price at the measurement date. Under APB 25, if
the exercise price of the stock options is equal to or less than the market price of the
underlying stock on the date of grant, no compensation expense is recognized. The
Companys stock-based employee compensation plan is more fully discussed in Note 10.

Had
the Company accounted for the plan under the fair value method allowed by Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS 123), the Companys net income and earnings per
share would have been reduced to the following pro forma amounts:

|                                 | Year ended
|-------------------------------- | ----------
|
|
|Net loss                         |           
|As reported                      |           
|Pro forma                        |           
|                                 |           
|Basic and diluted loss per share |           
|As reported                      |           
|Pro forma                        |           

---

LAS VEGAS SANDS, INC.Notes to Financial
Statements (continued)

Note 2  Summary
of Significant Accounting Policies (continued)

The
fair value of each option grant was estimated on the date of grant using an appraisal of
the value of LVSI and its common stock. The estimated fair value of options granted in
2002 as of December 31, 2002 was $1 per share. The fair value of each option grant was
estimated on the date of grant using the minimum value method with the following
weighted-average assumptions: risk-free interest rate of 3.84%; no expected dividend
yields; and expected lives of 2 years.

Revenue Recognition

The
Company recognizes revenue when persuasive evidence of an arrangement exists, performance
of the service or delivery of the product has occurred, the sales price is fixed or
determinable and collectibility is probable.

Casino
Revenue and Promotional Allowances

Casino
revenue is the aggregate of gaming wins and losses. Effective in the fourth quarter of
2000 and the first quarter of 2001, the Company adopted Emerging Issues Task Force Issue
00-14 (EITF 00-14) and Emerging Issues Task Force Issue 00-22 (EITF
00-22), respectively. EITF 00-14 and EITF 00-22 require that cash discounts and
other cash incentives related to gaming play be recorded as a reduction of gross casino
revenues. EITF 00-14 and EITF 00-22 also require that prior periods be restated to conform
to this presentation. The Company previously recorded such discounts as an operating
expense and has reclassified prior period amounts, which has no effect on previously
reported net income. In connection with the adoption of EITF 00-22 in the first quarter of
2001, the Company reclassified $6.1 million of such discounts in the 2000 financial
statements. In addition, the retail value of accommodations, food and beverage, and other
services furnished to hotel/casino guests without charge is included in gross revenue and
then deducted as promotional allowances. The estimated departmental cost of providing such
promotional allowances is included primarily in casino operating expenses as follows (in
thousands):

|                  |  |  |  
|----------------- |  |  | -
|
|
|
|
|                  |  |  |  
|Food and Beverage |  |  | $
|Rooms             |  |  |  
|Other             |  |  |  
|                  |  |  |  
|                  |  |  | $
|                  |  |  |  

The
estimated retail value of such promotional allowances is including operating revenues as
follows (in thousands):

|                  |  |  |  
|----------------- |  |  | -
|
|
|
|
|                  |  |  |  
|Food and Beverage |  |  | $
|Rooms             |  |  |  
|Other             |  |  |  
|                  |  |  |  
|                  |  |  | $
|                  |  |  |  

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 2  Summary
of Significant Accounting Policies (continued)

Rental
Revenue

Minimum
rental revenues are recognized on a straight-line basis over the terms of the related
lease. Percentage rents are recognized in the period in which the tenants exceed their
respective percentage rent thresholds. Charges to tenants for real estate taxes, insurance
and other shopping center operating expenses are recognized as revenues in the period
billed which approximates the period in which the applicable costs are incurred.

Hotel
and Food and Beverage Revenues

Hotel
sales criteria are generally met at the time of occupancy. Deposits for future hotel
occupancy or food and beverage services contracts are recorded as deferred income until
revenue recognition criteria are met. Cancellation fees for hotel and food and beverage
services are recognized upon cancellation by the customer as defined by a written contract
entered into with the customer.

Joint
Venture Revenue

The
Company entered into an agreement during 2001 with a subsidiary of the Solomon R.
Guggenheim Foundation to operate the Guggenheim Las Vegas Museum in the Casino Resort. The
Company terminated the agreement during January 2003. The Guggenheim entity was the
manager of the Guggenheim Las Vegas Museum. The agreement required the Company to make
certain contributions of capital. The Company was to be reimbursed for certain expenses
incurred and certain advances made to open the exhibition at the Guggenheim Las Vegas
Museum. After such expenses were reimbursed, the Company was to receive 49% of the
operating income generated pursuant to the agreement. The Companys share of
operating losses generated pursuant to the agreements was also 49%. The agreement was
accounted for on the equity method of accounting. The Company has also entered into a
joint venture agreement to assess the feasibility of and develop an Internet gaming site.
The Company has obtained an Internet gaming license in Alderney, but has not yet
established any operations. The Company estimates that it is committed to contribute
approximately $1.0 million, approximately one-third of the required capital, to the
joint venture during the next year. After recovery of each partners initial capital
contribution, the Company will receive 50% to 80% of the net profit of the joint venture,
based upon an increasing scale of net profit (if any). The joint venture will be accounted
for on the equity method of accounting.

Slot Club Promotion
and Progressive Jackpot Payouts

The
Company has established a promotional club to encourage repeat business from frequent and
active slot machine customers and table games patrons. Members earn points based on gaming
activity and such points can be redeemed for cash. The Company accrues for club points as
a reduction to revenue based upon the estimates for expected redemptions. The Company
maintains a number of progressive slot machines and table games. As wagers are made on the
respective progressive games, the amount available to win (to be paid out when the
appropriate jackpots are hit) increases. The Company has recorded the progressive jackpots
as a liability with a corresponding charge against casino revenue.

Income Taxes

LVSI
has elected to be taxed as an S Corporation and its wholly owned subsidiaries are either
limited liability companies or S Corporations, each of which is a tax pass-through entity
for federal income tax purposes. Nevada does not levy a corporate income tax. Accordingly,
no provision for federal or state income taxes is included in the statement of operations.

---

LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)

Note 2  Summary
of Significant Accounting Policies (continued)

Advertising Costs

Costs
for advertising are expensed as incurred, except costs for direct-response advertising,
which are capitalized and amortized over the period of the related program.
Direct-response advertising consists primarily of mailing costs associated with the
direct-mail programs. Capitalized advertising costs, included in prepaid expense, were
immaterial at December 31, 2002 and 2001. Advertising costs that were expensed during the
year were $3.6 million, $5.6 million and $8.7 million in 2002, 2001 and 2000,
respectively.

Concentrations of
Credit Risk

Financial
instruments, which potentially subject the Company to concentrations of credit risk,
consist principally of short-term investments and receivables. The short-term investments
are placed with a high credit quality financial institution, which invests primarily in
money market funds.

Accounting for
Derivative Instruments and Hedging Activities

In
June 1998, the Financial Accounting Standards Board adopted Statement of Financial
Accounting Standards No. 133 (SFAS 133), entitled Accounting for
Derivative Instruments and Hedging Activities, which establishes accounting and
reporting standards for derivative instruments and for hedging activities. It requires
that an entity recognizes all derivatives as either assets or liabilities in the statement
of financial position and measure those instruments at fair value. If specific conditions
are met, a derivative may be specifically designated as a hedge of specific financial
exposures. The accounting for changes in the fair value of a derivative depends on the
intended use of the derivative and, if used in hedging activities, it depends on its
effectiveness as a hedge. SFAS 133 as amended is effective for all fiscal quarters of
fiscal years beginning after December 31, 2000. SFAS 133 should not be applied
retroactively to financial statements of prior periods. The Company adopted SFAS 133 on
January 1, 2001.

The
Company, from time to time, uses interest rate caps and floors and similar financial
instruments to assist in managing interest incurred on its long-term debt. The difference
between amounts received and amounts paid under such agreements, as well as any costs or
fees, is recorded as a reduction of, or addition to, interest expense as incurred over the
life of the cap and floor or similar financial instruments.

The
Company has a policy aimed at managing interest rate risk associated with its current and
anticipated future borrowings. This policy enables the Company to use any combination of
interest rate swaps, futures, options, cap and similar instruments. To the extent the
Company employs such financial instruments pursuant to this policy, and the instruments
qualify for hedge accounting, they are accounted for as hedging instruments. In order to
qualify for hedge accounting, the underlying hedged item must expose the Company to risks
associated with market fluctuations and the financial instrument used must be designated
as a hedge and must reduce the Companys exposure to market fluctuation throughout
the hedge period. If these criteria are not met, a change in the market value of the
financial instrument is recognized as a gain or loss in the period of change. Otherwise,
gains and losses are not recognized except to the extent that the financial instrument is
disposed of prior to maturity. Net interest paid or received pursuant to the financial
instrument is included as interest expense in the period.

Losses on Retirement
of Indebtedness

In
April 2002, the Financial Accounting Standards Board issued Statement No. 145 (SFAS
145) Rescission of FASB Statements Nos. 4, 44 and 64 and Amendment of FASB
Statement No. 13. SFAS 145 addresses the presentation for losses on early
retirements of debt in the statement of operations. The Company has adopted SFAS 145 and
has not presented losses on early retirements of debt as an extraordinary item.
Additionally, prior period extraordinary losses have been reclassified to conform to this
new presentation. Adoption of SFAS 145 had no impact on the Companys financial
condition or cash flows.

---

LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)

Note 2  Summary
of Significant Accounting Policies (continued)

Reclassifications

The
consolidated financial statements and footnotes for prior years reflect certain
reclassifications to conform with the current year presentation, which have no effect on
previously reported net income.

Recent Accounting
Pronouncements

In
August 2001, the Financial Accounting Standards Board issued Statement No. 143 (SFAS
143), Accounting for Obligations Associated with the Retirement of Long-Lived
Assets. The objectives of SFAS 143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation and its associated asset
retirement cost. SFAS 143 is effective for fiscal years beginning after June 15, 2002.

In
June 2002, the Financial Accounting Standard Board issued Statement No. 146 (SFAS
146) Accounting for Costs Associated with Exit or Disposal Activities.
The provisions of SFAS 146 become effective for exit or disposal activities commenced
subsequent to December 31, 2002 and the Company does not expect any impact on its
financial condition, results of operations or cash flows.

The
Company does not expect the impact of the adoptions of SFAS 143 and SFAS 146 to have a
material impact on its financial condition, results of operations or cash flows.

In
November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others. This
interpretation elaborates on the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that is has
issued. It also clarifies (for guarantees issued after January 1, 2003) that a guarantor
is required to recognize at the inception of a guarantee, a liability for the fair value
of the obligations undertaken in issuing the guarantee. At December 31, 2002, the Company
does not have any guarantees outside of its consolidated group and accordingly does not
expect the adoption of FIN 45 to have a material impact on its financial condition,
results of operations or cash flows. Disclosures concerning guarantees are found in Notes
8 & 13.

In
December 2002 the Financial Accounting Standards Board issued Statement No. 148
(SFAS 148) Accounting for Stock-Based Compensation. The provisions
of SFAS 148 became effective December 15, 2002. The Company has adopted the disclosure
requirements of SFAS 148.

In
January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46
(FIN 46), Consolidation of Variable Interest Entities. This
interpretation addresses the requirements for business enterprises to consolidate related
entities in which they are determined to be the primary economic beneficiary as a result
of their variable economic interests. The interpretation is intended to provide guidance
in judging multiple economic interests in an entity and in determining the primary
beneficiary. The interpretation outlines disclosure requirements for VIEs in existence
prior to January 31, 2003, and outlines consolidation requirements for VIEs created after
January 31, 2003. The Company has reviewed its major relationships and its overall
economic interests with other companies consisting of related parties, companies in which
it has an equity position and other suppliers to determine the extent of its variable
economic interest in these parties. The Company believes it has appropriately reported the
economic impact and its share of risks of its commercial relationships through its equity
accounting along with appropriate disclosure of its other commitments.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 3  Strategic
Redirection and Quasi-Reorganization

During
1996, in response to increasing competition and rapid market changes, management decided
to strategically redirect the Companys business. On June 30, 1996, the Company
suspended operations and closed the existing Sands property in order to construct a new
hotel-casino resort (Note 1). As a result, approximately 1,400 employee positions were
eliminated. The estimated severance and related closing costs were included in selling,
general and administrative expense for 1996. In December 1997, the Company reevaluated its
accrued closing costs resulting in a credit of $1.8 million to selling, general and
administrative expense.

In
connection with the closing of the Sands (Note 1), the Companys director and
Principal Stockholder approved a quasi-reorganization, effective as of June 30, 1996,
pursuant to which the Company revalued certain of its assets as of that date. This
revaluation, in accordance with the accounting principles applicable to a
quasi-reorganization, permitted the Company to eliminate the adjusted accumulated deficit
account as of that date, by a charge against capital in excess of par value, and to
establish a new retained earnings account for the accumulation of the results of future
operations. The quasi-reorganization resulted in an increase in the carrying value of land
of $51.7 million and a corresponding decrease of $45.0 million in buildings and other
property and equipment, net of accumulated depreciation and $6.7 million in severance and
related closing costs. The remaining accumulated depreciation against the cost basis of
the remaining property was eliminated, and the accumulated deficit of $155.0 million as of
June 30, 1996, was transferred to capital in excess of par value.

Note 4  Restricted
Cash

The
senior secured credit facility that the Company entered into on June 4, 2002 (the
Senior Secured Credit Facility) provides for a $250.0 million single draw
senior secured term loan facility (the Term B Facility), a $50.0 million
senior secured delayed draw facility (the Term A Facility) and a $75.0 million
senior secured revolving facility (the Revolving Facility). Term B Facility
proceeds of $185.0 million were deposited into restricted accounts, invested in cash or
permitted investments and pledged to a disbursement agent for the Senior Secured Credit
Facility lenders. The $185.0 million will be used as required for Phase IA Addition
project costs under disbursement terms specified in the Senior Secured Credit Facility.
The disbursement account is subject to a security interest in favor of the lenders under
the Senior Secured Credit Facility. As of December 31, 2002 the Phase IA disbursement
account balance was $101.2 million.

Pursuant
to the terms of the Secured Mall Facility, the Mall II Subsidiary is also required to
maintain certain funds in escrow for debt service and property taxes. At December 31,
2002, $1.9 million was held by the lenders agent in escrow for these purposes. The
amounts in escrow are classified as restricted cash in the accompanying financial
statements.

Note 5  Accounts
Receivable

Components
of accounts receivable were as follows (in thousands):

|                                                    | December 31, | 
|--------------------------------------------------- | ------------ | 
|
|Casino                                              |              | 
|Hotel                                               |              | 
|Other                                               |              | 
|                                                    |              | 
|                                                    |              | 
|Less: allowance for doubtful accounts and discounts |              | 
|                                                    |              | 
|                                                    |              | 
|                                                    |              | 

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 5  Accounts
Receivable

The
Company extends credit to approved casino customers following background checks and
investigations of creditworthiness. At December 31, 2002, a substantial portion of the
Companys casino receivables were due from customers residing in foreign countries.
Business or economic conditions, the legal enforceability of gaming debts, or other
significant events in these countries could affect the collectibility of such receivables.

An
estimated allowance for doubtful accounts and discounts is maintained to reduce the
Companys receivables to their estimated net realizable value. Although management
believes the allowance is adequate, it is possible that the estimated amount of cash
collections with respect to the casino accounts receivable could change.

Note 6  Property
and Equipment, Net

Property
and equipment includes costs incurred to construct the Casino Resort and other new
ventures consists of the following (in thousands):

|                                                     | December 31, | 
|---------------------------------------------------- | ------------ | 
|
|Land and land improvements                           |              | 
|Building and improvements                            |              | 
|Equipment, furniture, fixtures and leasehold improve |              | 
|Construction in progress                             |              | 
|                                                     |              | 
|                                                     |              | 
|Less: accumulated depreciation and amortization      |              | 
|                                                     |              | 
|                                                     |              | 
|                                                     |              | 

The
Casino Resort serves as collateral for various financing facilities (Note 8).

During
the years ended December 31, 2002, 2001 and 2000, the Company capitalized interest expense
of $2.6 million, $2.0 million and $0.1 million, respectively.

Note 7  Other
Accrued Liabilities

Other
accrued liabilities consist of the following (in thousands):

|                                    | December 31, | 
|----------------------------------- | ------------ | 
|
|Customer deposits                   |              | 
|Payroll and related                 |              | 
|Taxes and licenses                  |              | 
|Outstanding gaming chips and tokens |              | 
|Other accruals                      |              | 
|                                    |              | 
|                                    |              | 
|                                    |              | 

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 8  Long-Term
Debt

Long-term
debt consists of the following (in thousands):

|                                                       | December 31, | December 31,
|------------------------------------------------------ | ------------ | ------------
|
|Indebtedness of the Company and its Subsidiaries       |              |             
|other than the Mall II Subsidiary, the Mall Subsidiary |              |             
|and the Phase II Subsidiary:                           |              |             
|                                                       |              |             
|12 1⁄4% Mortgage Notes, due November 15, 2004            |              | $           
|14 1⁄4% Senior Subordinated Notes, due November          |              |             
|15, 2005 (net of unamortized discount of               |              |             
|$3,825 in 2001)                                        |              |             
|Bank Credit Facility-Revolver                          |              |             
|Bank Credit Facility-Term Loan                         |              |             
|FF&E Credit Facility                                   |              |             
|11% Mortgage Notes, due June 15, 2010                  |              |             
|Senior Secured Credit Facility - Term B                |              |             
|                                                       |              |             
|Indebtedness of the Mall II Subsidiary:                |              |             
|                                                       |              |             
|Secured Mall Facility                                  |              |             
|                                                       |              |             
|Indebtedness of the Mall Subsidiary:                   |              |             
|                                                       |              |             
|Mall Tranche A Take-out Loan                           |              |             
|                                                       |              |             
|Indebtedness of the Phase II Subsidiary:               |              |             
|                                                       |              |             
|Phase II Subsidiary Credit Facility                    |              |             
|Phase II Unsecured Bank Loan                           |              |             
|                                                       |              |             
|Less: current maturities                               |              |             
|                                                       |              |             
|Total long-term debt                                   |              | $           
|                                                       |              |             
|                                                       |              |             
|Subordinated Owner Indebtedness:                       |              |             
|                                                       |              |             
|Completion Guaranty Loan (Indebtedness of Venetian)    |              | $           
|Subordinated Mall Tranche B Take-out Loan              |              |             
|from Principal Stockholder (Indebtedness of            |              |             
|Mall Subsidiary)                                       |              |             
|                                                       |              |             
|Total long-term subordinated loans payable to          |              |             
|Principal Stockholder                                  |              | $           
|                                                       |              |             

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 8  Long-Term
Debt (continued)

In
connection with the construction financing for the Casino Resort, the Company entered into
a series of transactions during 1997 to build the Casino Resort. In November 1997, the
Company issued $425.0 million in aggregate principal amount of 121⁄4% Mortgage Notes
(the Old Mortgage Notes) and $97.5 million in aggregate principal amount of
141⁄4% Senior Subordinated Notes (the Old Subordinated Notes and,
together with the Old Mortgage Notes, the Old Notes) in a private placement.
Also in November 1997, LVSI and Venetian and a syndicate of lenders entered into a Bank
Credit Facility (the Bank Credit Facility) providing for multiple draw term
loans to the Company for construction and development of the Casino Resort. In December
1997, the Company entered into an agreement (the FF&E Facility) with
certain lenders to provide for $97.7 million of financing for certain furniture, fixtures,
and equipment and an electrical substation.

On
November 12, 1999, an advance of approximately $23.5 million was made under the Principal
Stockholders completion guaranty (the Completion Guaranty Loan), a
junior loan from the Principal Stockholder to Venetian. On December 20, 1999, certain
take-out lenders funded a $105.0 million tranche A take-out loan to the Mall Subsidiary
(the Tranche A Take-out Loan) and an entity wholly-owned by the Principal
Stockholder funded a $35.0 million loan to the Mall Subsidiary (the Tranche B
Take-out Loan and, together with the Tranche A Take-out Loan, the Mall
Take-out Financing), the proceeds of which were used to repay an existing mall
construction loan facility.

In
February 2001, the Phase II Subsidiary entered into an unsecured bank line of credit (the
Phase II Unsecured Bank Loan) of $1.1 million for Phase II Subsidiary
operating costs. On October 19, 2001, the Phase II Subsidiary also entered into a loan
agreement providing for a $17.5 million term and revolving loan (the Phase II
Subsidiary Credit Facility) for Phase II Resort pre-development expenses and loans
or distributions to the Company for other liquidity needs.

On
June 4, 2002, the Company completed a series of refinancing transactions (collectively,
the Refinancing Transactions) including (1) the issuance of
$850.0 million in aggregate principal amount of 11% mortgage notes due 2010 (the
Mortgage Notes) in a private placement, (2) entering into the Senior Secured
Credit Facility with a syndicate of lenders in an aggregate amount of $375.0 million,
and (3) entering into a secured mall facility (the Secured Mall Facility) in
an aggregate amount of $105.0 million, which was subsequently increased to $120.0 million
on June 28, 2002. The Company used the proceeds of the Refinancing Transactions to repay,
redeem or repurchase all of its outstanding indebtedness (including the Old Notes, the
Bank Credit Facility, the FF&E Facility, the Completion Guaranty Loan, the Mall
Take-out Financing, the Phase II Unsecured Bank Loan and the Phase II Subsidiary
Credit Facility), to finance the construction and development of the Phase IA Addition and
to pay all fees and expenses associated with the Refinancing Transactions. In addition,
the Principal Stockholders completion guarantee relating to the construction of the
Casino Resort was terminated upon the consummation of the Refinancing Transactions and the
remaining cash collateral was returned to the Principal Stockholder. In connection with
the Refinancing Transactions, the Company incurred a loss on early retirement of
indebtedness of $51.4 million during the year ended December 31, 2002.

As
part of the Refinancing Transactions, the Company also commenced a cash tender offer on
May 6, 2002 to repurchase the Old Notes. Upon the consummation of the Refinancing
Transactions, the Company repurchased $316.6 million of the Old Mortgage Notes and $95.7
million of the Old Subordinates Notes and effected a covenant defeasance with respect to
the remaining Mortgage Notes. The Company called all of the remaining Old Notes upon the
closing of the Refinancing Transactions and redeemed the balance of the Old Mortgage Notes
($108.4 million) and the Old Subordinated Notes ($1.8 million) on July 5, 2002.

---

LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)

Note 8  Long-Term
Debt (continued)

Mortgages Notes

The
Mortgage Notes bear interest at 11%, payable each June 15 and December 15, beginning
December 15, 2002. The Mortgage Notes are secured by second priority liens on certain
assets of the Company (the personal property and the real estate improvements that
comprise the hotel, the casino, and the convention space, with certain exceptions). The
Mortgage Notes are redeemable at the option of LVSI and Venetian at prices ranging from
100% to 105.5% commencing on or after June 15, 2006, as set forth in the Mortgage Notes
and the indenture pursuant to which the Mortgage Notes were issued (the
Indenture). Prior to June 15, 2006, LVSI and Venetian may redeem the Mortgage
Notes at their principal amount plus an applicable make-whole premium. Upon a change of
control (as defined in the Indenture), each Mortgage Note holder may require LVSI and
Venetian to repurchase such Mortgage Notes at 101% of the principal amount thereof plus
accrued interest and other amounts which are then due, if any. Upon an event of loss or
certain asset sales, the Company may also be required to offer to purchase all or a
portion of the Mortgage Notes with the proceeds of such event of loss or sale. The
Mortgage Notes are not subject to a sinking fund requirement. On December 27, 2002, the
Company completed an exchange offer to exchange the Mortgage Notes for mortgage notes with
substantially the same terms.

Senior Secured Credit
Facility

The
Senior Secured Credit Facility provides for a $250.0 million single draw senior secured
term loan facility (the Term B Facility), a $50.0 million senior secured
delayed draw facility (the Term A Facility) and a $75.0 million senior secured
revolving facility (the Revolving Facility). The net proceeds from the $250.0
million Term B Facility, after payment of financing costs and retirement of certain
existing indebtedness, were approximately $185.0 million, and were deposited into
restricted accounts, invested in cash or permitted investments and pledged to a
disbursement agent for the Senior Secured Credit Facility lenders. The $185.0 million will
be used as required for Phase IA Addition project costs under disbursement terms specified
in the Senior Secured Credit Facility. The disbursement account is subject to a security
interest in favor of the lenders under the Senior Secured Credit Facility.

The
Term B Facility matures on June 4, 2008 and is subject to quarterly amortization payments
in the amount of $625,000 from September 30, 2002 through June 30, 2007, followed by four
equal quarterly amortization payments of $59.4 million until the maturity date. The Term A
Facility is available from the closing date of the Senior Secured Credit Facility through
the first anniversary of the closing date, subject to certain conditions. The Term A
Facility matures on June 4, 2007 and is subject to quarterly amortization payments
commencing on December 31, 2003 in the amount of $1,666,667 for three quarters, $2,500,000
for the succeeding four quarters, $3,750,000 for the next four quarters and $5,000,000 for
the final four quarters. The Revolving Facility matures on June 4, 2007 and has no interim
amortization. No amounts had been drawn under the Term A Facility or the Revolving
Facility as of December 31, 2002. However, as described below, as loans are made under the
Venetian Intermediate Credit Agreement are made and letters of credit are issued as a
result, the amounts available for working capital loans under the Revolving Facility will
decrease from the $75.0 million of current availability to $25.0 million.

All
amounts outstanding under the Senior Secured Credit Facility bear interest at the option
of the Company at the prime rate plus 2% per annum, or at the reserve adjusted Eurodollar
rate plus 3% per annum. After the Phase IA Addition is substantially complete, the
applicable margin for amounts outstanding under the Term A Facility and the Revolving
Facility will be determined by a grid based upon a leverage ratio. The leverage ratio will
be calculated as the ratio of consolidated total debt as of the last day of each fiscal
quarter to EBITDA (as defined in the Senior Secured Credit Facility) for the four-fiscal
quarter period ending on such date. Commitment fees equal to 0.50% per annum of the daily
average unused portion of the commitment under the Revolving Facility and 0.75% per annum
of the daily average unused portion of the Term A Facility are payable quarterly in
arrears. The average interest rate for the Senior Secured Credit Facility was 4.8% during
2002.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 8  Long-Term
Debt (continued)

The
Senior Secured Credit Facility is secured by a first priority lien on certain assets of
the Company (the personal property and the real estate improvements that comprise the
hotel, the casino, and the convention space, with certain exceptions). The Senior Secured
Credit Facility contains affirmative, negative and financial covenants including
limitations on indebtedness, liens, investments, guarantees, restricted junior payments,
mergers and acquisitions, sales of assets, leases, transactions with affiliates and
scope-changes and modifications to material contracts. Additionally, the Company is
required to comply with certain financial ratios and other financial covenants including
total debt to EBITDA ratios, EBITDA to interest coverage ratios, minimum net worth
covenants and maximum capital expenditure limitations. At December 31, 2002, the Company
was in compliance with all required covenants and ratios under the Senior Secured Credit
Facility.

Venetian Intermediate
Credit Facility

The
Company estimates the cost to complete the Macau Casino to be $210.0 million and expects
completion to occur by February 2004. The Senior Secured Credit Facility and the Indenture
relating to the Mortgage Notes limits the Companys ability to make investments in
its Macau subsidiaries. As of December 31, 2002, the Company has invested $34.4 million in
its Macau subsidiaries and expects to invest an additional $5.6 million. Of this invested
amount, $25.6 million remains on deposit in Venetian Macau bank accounts as of December
31, 2002. On March 27, 2003, Venetian Venture Development Intermediate Limited
(Venetian Intermediate), a subsidiary of the Company, entered into a credit
agreement (Venetian Intermediate Credit Agreement) with a lender to provide
$50.0 million of financing for the Macau Casino. Venetian Intermediate, a wholly-owned
indirect subsidiary of Venetian, owns 100% of Venetian Macau. The obligations under the
loans to be made under Venetian Intermediate Credit Agreement will be guaranteed by the
Company and Venetian and supported by letters of credit to be issued under the Senior
Secured Credit Facility in favor of the Venetian Intermediate Credit Agreement lenders. As
these loans are made, the letters of credit will reduce the amounts available for working
capital loans under the Revolving Facility on a dollar for dollar basis from the $75.0
million of current availability to $25.0 million. The amounts outstanding under the
Venetian Intermediate Credit Facility bear interest at the base rate or the adjusted
Eurodollar rate plus 0.5% per annum. Interest is payable on base rate loans on a monthly
basis and is payable on Eurodollar loans at the end of the applicable interest period, and
there is no scheduled principal amortization. The credit facility is due in full March 27,
2006. As of March 31, 2003, the credit facility remains undrawn. In addition, Venetian
Macau is currently negotiating to obtain a $120.0 million in additional debt financing
(Proposed Venetian Macau Financing Agreement). There can be no assurance that
financing will be available to the Company to complete the Macau Casino, and, if
available, that the financing will be on terms favorable to the Company. The proceeds from
the Venetian Intermediate Credit Agreement, the Proposed Venetian Macau Credit Agreement
and the direct investments of $40.0 million from Venetian will be used to fund the $210.0
million total anticipated cost of the Macau Casino.

Venetian
Macau, Venetian Intermediate and the Companys other Macau subsidiaries are not
guarantors under the Mortgage Notes or the Senior Secured Credit Facility and, subject to
certain limited exceptions, are not restricted subsidiaries under the Indenture or the
Senior Secured Credit Facility.

Secured Mall Facility

In
June 2002, the Company also entered into the Secured Mall Facility with certain lenders to
provide for a $105.0 million loan (subsequently increased to $120.0 million on June 28,
2002) to the Mall II Subsidiary. The initial $105.0 million of proceeds (net of financing
costs) from the Secured Mall Facility, along with the proceeds of a $37.9 million capital
contribution in Mall II Subsidiary by Venetian, were used to repay the Mall Take-out
Financing and costs previously owed by the Mall Subsidiary. Upon the consummation of the
Refinancing Transactions, the assets of the Mall were transferred to the Mall II
Subsidiary, the borrower under the Secured Mall Facility. The additional $15.0 million of
proceeds (net of financing costs) were distributed to Venetian and used for general
corporate purposes. The indebtedness under the Secured Mall Facility is secured by a first
priority lien on the assets that comprise the Mall (the Mall Assets). The
average interest rate for the Secured Mall Facility was 3.75% during 2002.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 8  Long-Term
Debt (continued)

The
amounts outstanding under the Secured Mall Facility bear interest at the adjusted one
month Eurodollar rate plus 1.875% per annum. Interest is paid monthly and there is no
scheduled principal amortization. The Secured Mall Facility is due in full on June 10,
2005 and provides for two one-year extensions at the option of the Company, subject to
certain criteria. The Secured Mall Facility contains affirmative, negative and financial
covenants including net operating income performance standards. Failure to meet these
financial covenants in certain circumstances allows the lenders agent to approve
operating budgets and provides for a cash sweep of excess cash flow to reduce amounts
outstanding under the Secured Mall Facility.

The
Company is required to enter into an interest rate cap agreement to limit the impact of
increases in interest rates on its floating rate debt derived from the Secured Mall
Facility. To meet the requirements of the Secured Mall Facility, the Company entered into
a cap agreement during June 2002 (the Mall Cap Agreement) that resulted in a
premium payment to counterparties based upon notional principal amounts for a term equal
to the term of the Secured Mall Facility. The provisions of the Mall Cap Agreement entitle
the Company to receive from the counterparties the amounts, if any, by which the selected
market interest rates exceed the strike rates stated in such agreement. There was no net
effect on interest expense as a result of the Mall Cap Agreement for the year ended
December 31, 2002. If the Company had terminated the Mall Cap Agreement as of December 31,
2002, the Company would have received $0.1 million based on quoted market values from the
various institutions holding the waps. The notional amount of the Mall Cap Agreement
(which expires on June 28, 2005) at December 31, 2002 was $120.0 million.

Pursuant
to the terms of the Secured Mall Facility, the Mall II Subsidiary is also required to
maintain certain funds in escrow for debt service and property taxes. At December 31,
2002, $1.9 million was held by the lenders agent in escrow for these purposes. The
amounts in escrow are classified as restricted cash in the accompanying financial
statements.

The
Company entered into interest rate cap and floor agreements related to the Bank Credit
Facility (the Bank Cap Agreement) during 1998. The notional amount of the Bank
Cap Agreement at December 31, 2002 was $76.2 million. The Bank Cap Agreement expires in
June 2003, the maturity date of the Bank Credit Facility, unless terminated earlier by the
Company. The net effect of the Bank Cap Agreement resulted in an increase of interest
expense of $2.1 million for the year ended December 31, 2002. If the Company had
terminated the Bank Cap Agreement as of December 31, 2002, the Company would have had to
pay a net amount of $0.9 million based on quoted market values from the various
institutions holding the swaps. In accordance with Financial Accounting Standards Board
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, the
Company has recorded the fair value of its obligations under the Old Rate Cap Agreements
in the accompanying financial statements and will continue to do so while the agreements
are in effect.

Scheduled
Maturities of Long-Term Debt

Scheduled
maturities of long-term debt outstanding at December 31, 2002 are summarized as follows:
$2.5 million for 2003, $2.5 million for 2004, $122.5 million for 2005, $2.5 million for
2006, $120.0 million for 2007 and $968.7 million thereafter.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 8  Long-Term
Debt (continued)

Fair
Value

Estimated
fair values of the Companys debt and related financial instruments are as follows
(in thousands) :

|                                         | December 31, |  |  |        
|---------------------------------------- | ------------ |  |  | -------
|
|
|
|12 1⁄4% Mortgage Notes                     |              |  |  |       
|14 1⁄4% Senior Subordinated Notes          |              |  |  |       
|Mall Tranche A Take-out Loan             |              |  |  |       
|Mall Tranche B Take-out Loan             |              |  |  |       
|Completion Guaranty Loan                 |              |  |  |       
|Bank Credit Facility-Tranche A Term Loan |              |  |  |       
|Bank Credit Facility-Tranche B Term Loan |              |  |  |       
|Bank Credit Facility-Term Loan           |              |  |  |       
|Bank Credit Facility-Revolver            |              |  |  |       
|Phase II Subsidiary Credit Facility      |              |  |  |       
|Phase II Subsidiary Bank Loan            |              |  |  |       
|FF&E Credit Facility                     |              |  |  |       
|11% Mortgage Notes                       |              |  |  | 850,000
|Senior Secured Credit Facility - Term B  |              |  |  | 248,750
|Secured Mall Facility                    |              |  |  | 120,000
|Cap and Floor Agreement                  |              |  |  | 887    
|Cap Agreement                            |              |  |  | (74    

The
fair values of the Mortgage Notes, the Old Mortgage Notes, and the Senior Subordinated
Notes are based on quoted market prices. The fair values of other indebtedness and the
FF&E Credit Facility approximate their respective carrying amounts based on the
variable nature of these facilities. The fair value of the Cap and Floor Agreement and the
Cap Agreement are based upon quotes from brokers.

Note 9  Redeemable
Preferred Interest in Venetian Casino Resort, LLC

During
1997, Interface Holding contributed $77.1 million in cash to Venetian in exchange for a
Series A preferred interest (the Series A Preferred Interest) in Venetian. By
its terms, the Series A Preferred Interest was convertible at any time into a Series B
preferred interest in Venetian (the Series B Preferred Interest). In August
1998, the Series A Preferred Interest was converted into the Series B Preferred Interest.
The rights of the Series B Preferred Interest include the accrual of a preferred return of
12% from the date of contribution in respect of the Series A Preferred Interest. Until the
indebtedness under the Senior Secured Credit Facility is repaid and cash payments are
permitted under the restricted payment covenants of the Indenture relating to the Mortgage
Notes, the preferred return on the Series B Preferred Interest will accrue but will not be
paid in cash. Commencing on June 30, 2011, distributions must be made to the extent of the
positive capital account of the holder. During the second and third quarters of 1999,
Interface Holding contributed $37.3 million and $7.1 million, respectively, in cash in
exchange for an additional Series B Preferred Interest. During the years ended December
31, 2002, 2001 and 2000, $23.3 million, $20.8 million and $18.5 million, respectively,
were accrued on the Series B Preferred Interest related to the contributions made. There
were no distributions of preferred interest or preferred return paid during 2002, 2001 or
2000.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 10 Stockholders Equity

Increase in Shares
Authorized and Outstanding

In
November 1997, the Companys Board of Directors increased the number of authorized
shares of LVSI from 100,000 to 3,000,000 and authorized and consented to increase the
number of shares outstanding with respect to the outstanding shares of common stock of
LVSI, so that each share of such common stock would henceforth be deemed to represent
18.4996 shares of common stock, resulting in 925,000 shares of common stock outstanding on
such date. The par value remained $.10 per share. In the first quarter of 2002, the
Company completed a stock split whereby the number of common shares held by the Principal
Stockholder was increased to 1,000,000 from 925,000. At the date of the stock split, the
Principal Stockholder maintained 100% ownership of the Companys common stock. All
references to share and per share data herein have been adjusted retroactively to give
effect to the increase in shares outstanding to 1,000,000.

1997 Fixed Stock
Option Plan

The
Company established a nonqualified stock option plan, which provides for the granting of
stock options pursuant to the applicable provisions of the Internal Revenue Code and
regulations. The stock option plan provides for the granting of up to 75,000 shares of
common stock to officers and other key employees of the Company. As of December 31, 2001,
no grants under the stock option plan had occurred. In the first quarter of 2002, options
to purchase 49,900 shares, which represented approximately 5% of LVSI outstanding common
stock, were granted from the Principal Stockholder to certain key employees of the
Company. On the date of grant, the exercise price of the options of $271 per share was
higher than the fair market value of LVSI common stock based upon a determination of the
fair market value of a per share minority interest in the common stock of LVSI, performed
by an independent third-party appraiser. The options granted were fully vested and
exercisable upon grant. All of the options were exercised immediately after issuance by
the respective employees by delivery of a notice of exercise and the exercise price of the
options were loaned to the optionees by the Principal Stockholder on a secured basis under
full recourse notes.

During
the first quarter of 2002, the Company entered into a stockholders agreement (the
Stockholders Agreement) with the employees to whom options were granted
(the Additional Stockholders) and the Principal Stockholder. The
Stockholders Agreement restricts the ability of the Additional Stockholders and any
of their permitted transferees who have agreed to be bound by the terms and conditions of
the agreement to sell, assign, pledge, encumber or otherwise dispose of any shares of
common stock of LVSI, except in accordance with the provisions of the Stockholders
Agreement. All transfers are subject to certain conditions, including:

| |  |  | compliance
with applicable state and foreign securities laws;
| |  | - | -------------------------------------------------------------

| |  |  | receipt
of necessary licenses or approvals from the Nevada gaming authorities; and
| |  | - | ----------------------------------------------------------------------------------

| |  |  | compliance
with all federal laws, rules and regulations relating to subchapter S corporations.
| |  | - | ----------------------------------------------------------------------------------------------

If
at any time before LVSI completes an initial public offering, the Principal Stockholder
wishes to sell 20% or more of his ownership interest in LVSI to any third party
transferee, each Additional Stockholder shall have the right to participate in such sale
on the same terms as those offered to the Principal Stockholder.

---

LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)

Note 10 Stockholders Equity
(continued)

The
Additional Stockholders also have certain piggyback registration rights. If at any time
LVSI completes an initial public offering or proposes to register any shares of common
stock, the Additional Stockholders may request registration of their securities. Common
stock will be included in the registration statement in the following order of priority:
first, all securities of LVSI to be sold for its own account, second, securities of
stockholders (other than the Principal Stockholder) who have demand registration rights
and third, such securities requested to be included in such registration statement by the
Principal Stockholder and the Additional Stockholders (pro rata based on the number of
registrable securities owned by such stockholders). Finally, if at any time prior to the
completion by LVSI of an initial public offering LVSI wishes to issue any new securities,
the Additional Stockholders will have the right to purchase that number of shares of LVSI
common stock, at the proposed purchase price of the new securities, such that the
Additional Stockholders percentage ownership of LVSI would remain the same following
such issuance.

During
the second quarter of 2002, fully vested options to purchase an additional 5,500 shares of
LVSIs common stock were granted under the stock option plan at an exercise price of
$271 per share, which was in excess of the estimated fair value of the Companys
common stock of $150 per share. The issuance of shares of the Companys common stock
in connection with the exercise of these options are subject to approval by the Nevada
gaming authorities.

The
Companys stock option plan is administered by the Board of Directors. Salaried
officers, directors, and other key employees of the Company and its subsidiaries are
eligible to receive options. The options have 10-year terms.

As
of December 31, 2002, the aggregate number of shares subject to options available for
grant under the plan was 19,600.

There
were no options granted prior to January 1, 2002. A summary of the status of the
Companys stock option plan for the year ended December 31, 2002 is presented below:

|                                 | 2002 | 
|-------------------------------- | ---- | 
|
|
|
|Outstanding at beginning of year |      | 
|Granted                          |      | 
|Exercised                        |      | 
|Terminated                       |      | 
|Outstanding at end of year       |      | 
|Exercisable at end of year       |      | 

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 10  Stockholders Equity
(continued)

The
following table summarizes information about stock options outstanding at December 31,
2002:

| |         | Options Outstanding |  | Options Exercisable | 
| | ------- | ------------------- |  | ------------------- | 
|
|
|
|
|
| | $271.00 |                     |  | 5,500               | 

Note 11  Employee
Savings Plan

Participation
in the Venetian Casino Resort, LLC 401 (k) employee savings plan is available for all full
time employees. The savings plan allows participants to defer, on a pre-tax basis, a
portion of their salary and accumulate tax-deferred earnings as a retirement fund.
Venetian matches 150% of the first $390 of employee contributions and 50% of employee
contributions in excess of $390 up to a maximum of 3% of participating employees
eligible gross wages. For the year ended December 31, 2002, 2001 and 2000, contributions
accrued under the savings plan were $2.1 million, $2.0 million and $1.8 million,
respectively.

Note 12  Related
Party Transactions

The
Principal Stockholder is a partner in four entities formed to operate restaurants in the
Casino Resort. The terms and conditions of the leases granted by the Company for such
restaurants are at amounts which management believes would be no less favorable than those
negotiated with independent third parties. Valentino Las Vegas LLC and Night Market, LLC
paid Venetian $1.0 million, $1.0 million and $0.7 million, and Postrio Las Vegas LLC and
Carnevale Coffee Bar LLC paid the Mall Subsidiary $1.1 million, $1.1 million and $0.8
million for the years ended December 31, 2002, 2001 and 2000 , respectively.

During
2001, the Principal Stockholder guaranteed a $2.9 million bank loan made to architects of
the Phase II Subsidiary to secure a trade payable owed to the architects by the Phase II
Subsidiary.

During
November 1999, the Principal Stockholder purchased idle construction equipment from the
Company (tower cranes) for $2.0 million, the cost basis of the equipment which was its
fair value.

In
2002, LVSI received from, and rendered to, IGN and its affiliates certain administrative
and other services such as travel. Any such services were provided at amounts which
management believes would be no less favorable than those negotiated with independent
third parties. The Company paid certain affiliates $3.7 million, $1.1 million, and $2.1
million for these services during 2002, 2001 and 2000, respectively.

IGN
provides audio visual, telecommunications, electrical, janitorial and other related
services to group customers of the Casino Resort. These services are provided pursuant to
a contract that provides for an equal sharing of revenues after direct operating expenses.
The Company received $2.6 million, $2.5 million, and $3.7 million pursuant to this
contract during 2002, 2001 and 2000, respectively.

The
Company, the New Mall Subsidiary, the Phase II Subsidiary and IGN are parties to an
Amended and Restated Reciprocal Easement, Use and Operating Agreement (the
Cooperation Agreement) which, among other things, provides for the integrated
operation of all the facilities and addresses, encroachments, joint marketing and the
sharing of certain facilities and costs related thereto.

---

LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)

Note 12  Related
Party Transactions (continued)

In
conjunction with the Phase II Subsidiary Credit Facility on October 19, 2001, the Phase II
Subsidiary leased the Phase II Land to Venetian for five years at an annual rent of $8.0
million. The lease was terminated on June 4, 2002 and the accrued rent was forgiven. Prior
to October 2001, IGN leased parking spaces on the Phase II Land from the Phase II
Subsidiary for rent of $5,000 per month.

In
2002, Venetian entered into a long-term lease, at nominal rent, with the Phase II
Subsidiary for the lease of the airspace in which the meeting and conference space for the
Phase IA Addition is being constructed. The airspace was designated as a separate legal
parcel and conveyed to the Venetian from the Phase II Subsidiary for nominal consideration
in August 2002. The lease terminated as a result of such transfer. The relationship
between the Phase IA Addition meeting space and the Expo Center will be governed by our
cooperation agreement, a preferred reservation system agreement and a meeting services
agreement with Interface Group-Nevada, Inc.

Note 13  Commitments
and Contingencies

Energy
Services Agreements and Operating Lease Agreements

During
1997, Venetian and the Mall Subsidiary entered into separate energy service agreements
with a heating and air conditioning (HVAC) provider (the HVAC
Provider). Under the terms of the energy services agreement and other separate
energy services agreements, HVAC energy and services will be purchased by Venetian, the
New Mall Subsidiary, its mall tenants and IGN over initial terms expiring in 2009 with an
option to collectively extend the terms of their agreements for two consecutive five-year
periods.

Pursuant
to the Companys construction management contract (as more fully defined under
Litigation below), the HVAC plant was constructed by the Construction Manager
on land owned by the Company and leased to the HVAC Provider. The HVAC equipment is owned
by the HVAC Provider, which paid all costs (HVAC Costs) in connection with the
purchase and installation of the HVAC equipment. The total HVAC Costs were $70.0 million.

The
charges payable under the separate energy services agreements include a fixed component
applied to the HVAC Costs paid by the HVAC Provider, reimbursement of operational and
related costs and a management fee.

As
of December 31, 2002, Venetian and the New Mall Subsidiary were obligated under the energy
services agreements to make future minimum payments as follows (in thousands):

|                          | 
|------------------------- | 
|Years Ending December 31, | 
|                          | 
|2003                      | 
|2004                      | 
|2005                      | 
|2006                      | 
|2007                      | 
|Thereafter                | 
|                          | 
|Total minimum payments    | 
|                          | 

Expenses
incurred under the energy services agreements were $5.6 million, $6.2 million and $7.0
million ($7.657 million less leasee reimbursements) for the years ended December 31, 2002,
2001 and 2000, respectively. The New Mall Subsidiary is responsible for 19% of energy
services rental payments and these amounts exclude payments by IGN. Expenses incurred
under short-term, variable rate operating lease agreements totaled $1.7 million, $1.7
million and $1.7 million for the years ended December 31, 2002, 2001and 2000,
respectively.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 13  Commitments
and Contingencies (continued)

Construction
Litigation

Except
as described below, the Company is party to various legal matters and claims arising in
the ordinary course of business. The Company does not expect that the final resolution of
these matters will have a material adverse effect on the financial position, results of
operations or cash flows of the Company to the extent such litigation is not covered by
the Insurance Policy (as defined below).

The
construction of the principal components of the Casino Resort was undertaken by Lehrer
McGovern Bovis, Inc. (the Construction Manager) pursuant to a construction
management agreement and certain amendments thereto (as so amended, the Construction
Management Contract). The Construction Management Contract established a final
guaranteed maximum price (the Final GMP) of $645.0 million, so that, subject
to certain exceptions (including an exception for cost overruns due to scope
changes), the Construction Manager was responsible for any costs of the work covered
by the Construction Management Contract in excess of $645.0 million. The Construction
Management Contract also established a required substantial completion date
(the date on which the construction of the Casino Resort was sufficiently complete,
including the receipt of necessary permits, licenses and approvals, so that all components
of the Casino Resort could be open to the general public) of April 21, 1999 (subject to
extensions on account of scope changes and force majeure events), with a
per-day liquidated damages penalty for failure to meet such deadline.

The
Company paid the Construction Manager a construction management fee of 11⁄2% of the
Final GMP, payable in monthly installments.

The
obligations of the Construction Manager under the Construction Management Contract were
guaranteed by Bovis, Inc. (Bovis), the Construction Managers direct
parent at the time the Construction Management Contract was entered into (such guaranty,
the Bovis Guaranty). Bovis obligations under the Bovis Guaranty were
guaranteed by The Peninsula and Oriental Steam Navigation Company (P&O), a
British public company and the Construction Managers ultimate parent at the time the
Construction Management Contract was entered into (such guaranty, the P&O
Guaranty).

The
Construction Manager obtained, on behalf of the Company (and at the Companys
expense), a liquidated damages insurance policy (the LD Policy). The LD Policy
covers (with certain exceptions) liquidated damages for delays of not less than one month
and not more than four months in achieving substantial completion beyond the date
substantial completion was required to be achieved under the Construction Management
Contract.

On
July 30, 1999, Venetian filed a complaint against the Construction Manager and Bovis in
United States District Court for the District of Nevada. The action alleges breach of
contract by the Construction Manager of its obligations under the Construction Management
Contract and a breach of contract by Bovis of its obligations under the Bovis Guaranty,
including failure to fully pay trade contractors and vendors and failure to meet the April
21, 1999 guaranteed completion date. The Company amended this complaint on November 23,
1999 to add P&O as an additional defendant. The suit is intended to ask the courts,
among other remedies, to require the Construction Manager and its guarantors to pay its
contractors, to compensate Venetian for the Construction Managers failure to perform
its duties under the Construction Management Contract and to pay the Company the agreed
upon liquidated damages penalty for failure to meet the guaranteed substantial completion
date. Venetian seeks total damages in excess of $100.0 million. The Construction Manager
subsequently filed motions to dismiss the Companys complaint on various grounds,
which the Company opposed. The Construction Managers motions were either denied by
the court or voluntarily withdrawn.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 13  Commitments
and Contingencies (continued)

In
response to Venetians breach of contract claims against the Construction Manager,
Bovis and P&O, the Construction Manager filed a complaint on August 3, 1999 against
Venetian in the District Court of Clark County, Nevada. The action alleges a breach of
contract and quantum meruitclaims under the Construction Management Contract and also
alleges that Venetian defrauded the Construction Manager in connection with the
construction of the Casino Resort. The Construction Manager seeks damages, attorneys
fees and costs and punitive damages. In the lawsuit, the Construction Manager claims that
it is owed approximately $90.0 million from Venetian and its affiliates. This complaint
was subsequently amended by the Construction Manager, which also filed an additional
complaint against the Company relating to work done and funds advanced with respect to the
contemplated development of the Phase II Resort. Based upon its review of the complaints,
the Company believes that the Construction Manager has not provided Venetian with
reasonable documentation to support such claims, the Construction Manager has materially
breached its agreements with the Company and the Construction Managers claims are
without merit. The Company intends to vigorously defend itself and pursue its claims
against the Construction Manager in any litigation.

In
connection with these disputes, as of December 31, 1999 the Construction Manager and its
subcontractors filed mechanics liens against the Casino Resort for $145.6 million and
$182.2 million, respectively. The Company believes that a major reason these lien amounts
exceed the Construction Managers claims of $90.0 million is based upon a duplication
of liens through the inclusion of lower-tier claims by subcontractors in the liens of
higher-tier contractors, including the lien of the Construction Manager. As of December
31, 1999, the Company had purchased surety bonds for virtually all of the claims
underlying these liens (other than approximately $15.0 million of claims with respect to
which the Construction Manager purchased bonds). As a result, there can be no foreclosure
of the Casino Resort in connection with the claims of the Construction Manager and its
subcontractors. However, the Company will be required to pay or immediately reimburse the
bonding company if and to the extent that the underlying claims are judicially determined
to be valid. If such claims are not settled, it is likely to take a significant amount of
time for their validity to be judicially determined.

The
Company believes that these claims are, in general, unsubstantiated, without merit,
overstated, and/or duplicative. The Construction Manager itself has publicly acknowledged
that at least some of the claims of its subcontractors are without merit. In addition, the
Company believes that pursuant to the Construction Management Contract and the Final GMP,
the Construction Manager is responsible for payment of any subcontractors claims to
the extent they are determined to be valid. The Company may also have a variety of other
defenses to the liens that have been filed, including, for example, the fact that the
Construction Manager and its subcontractors previously waived or released their rights to
file liens against the Casino Resort. The Company intends to vigorously defend itself in
any lien proceedings.

On
August 9, 1999, the Company notified the insurance companies providing coverage under
the LD Policy that it has a claim under the LD Policy. The LD Policy provides insurance
coverage for the failure of the Construction Manager to achieve substantial completion of
the portions of the Casino Resort covered by the Construction Management Contract within
30 days of the April 21, 1999 deadline, with a maximum liability under the LD Policy
of approximately $24.1 million and with coverage being provided, on a per-day basis, for
days 31-120 of the delay in the achievement of substantial completion. Because the Company
believes that substantial completion was not achieved until November 12, 1999, the
Companys claim under the LD Policy is likely to be for the above-described maximum
liability of $24.1 million. The Company expects the LD Policy insurers to assert many of
the same claims and defenses that the Construction Manager has asserted or will assert in
the above-described litigations. Liability under the LD Policy may ultimately be
determined by binding arbitration.

In
June 2000, the Company purchased an insurance policy (the Insurance Policy)
for loss coverage in connection with all litigation relating to the construction of the
Casino Resort (the Construction Litigation). Under the Insurance Policy, the
Company will self-insure the first $45.0 million and the insurer will insure up to the
next $80.0 million of any possible covered losses. The Insurance Policy provides coverage
for any amounts determined in the Construction Litigation to be owed to the Construction
Manager or its subcontractors relating to claimed delays, inefficiencies, disruptions,
lack of productivity/unauthorized overtime or schedule impact, allegedly caused by the
Company during construction of the Casino Resort, as well as any defense costs.

The
Company and the Construction Manager commenced a trial in state court in Clark County,
Nevada to litigate certain of their respective claims in August 2002. Many of the
remaining claims between the parties that are the subject of the state court action and
the federal court action, have been proceeding concurrently in independent arbitration
hearings.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 13  Commitments
and Contingencies (continued)

It
is not yet possible to determine a range of loss or the ultimate outcome of the litigation
or any potential litigation. If any litigation or other lien proceedings concerning the
claims of the Construction Manager or its subcontractors were decided adversely to the
Company, such litigation or other lien proceedings could have a material adverse effect on
the financial condition, results of operations or cash flows of the Company to the extent
such litigation or lien proceedings are not covered by the Insurance Policy.

Macau
Casino Project and Internet Gaming

The
Company is currently constructing a casino in Macau with an anticipated completion date of
February 2004. Under the terms of Venetian Macaus agreements with the government of
Macau, Venetian Macau has certain financial obligations to the Government of Macau or is
obligated to pay for certain costs of developing and constructing the Macau Casino and
other projects in Macau. Venetian Macau is committed to invest 4.4 billion Macau patacas
(approximately $531.7 million at exchange rates as of December 31, 2002) under its
agreement with the government of Macau in various development projects until March 31,
2007. To support this obligation, Venetian Macau has caused a Macau bank to guarantee 300
million Macau patacas (approximately $36.3 million at exchange rates as of December 31,
2002) on its behalf and Lido Casino Resort Holding Company, LLC (an unrestricted
subsidiary of the Company) has guaranteed 200 million Macau patacas (approximately $24.2
million at exchange rates as of December 31, 2002) of the legal and contractual
liabilities of Venetian Macau to the Macau government until March 31, 2007. The Company
expects to use cash received from the following sources to fund the various Macau
projects:

| |  |  | borrowings
by Venetian under the Revolving Facility;
| |  | - | ----------------------------------------------------

| |  |  | additional
debt or equity financings; and
| |  | - | -----------------------------------------

| |  |  | operating
cash flow (subject to certain limitations contained in the Companys debt
instruments).
| |  | - | -------------------------------------------------------------------------------------------------

Specially,
the Company estimates the cost to complete the Macau Casino to be $210.0 million and
expects completion to occur by February 2004. The Senior Secured Credit Facility and the
Indenture relating to the Mortgage Notes limits the Companys ability to make
investments in its Macau subsidiaries. As of December 31, 2002, the Company has invested
$34.4 million in its Macau subsidiaries and expects to invest an additional $5.6 million.
Of this invested amount, $25.6 million remains on deposit in Venetian Macau bank accounts
as of December 31, 2002. On March 27, 2003, Venetian Venture Development Intermediate
Limited (Venetian Intermediate), an unrestricted subsidiary of the Company,
entered into a credit agreement (Venetian Intermediate Credit Agreement) with
a lender to provide $50.0 million of financing for the Macau Casino. Venetian
Intermediate, a wholly-owned indirect subsidiary of Venetian, owns 100% of Venetian Macau.
The obligations under the loans to be made under Venetian Intermediate Credit Agreement
will be guaranteed by the Company and Venetian and supported by a letter of credit to be
issued under the Senior Secured Credit Facility in favor of the Venetian Intermediate
Credit Agreement lenders. As these loans are made, the letters of credit will reduce the
amounts available for working capital loans under the Revolving Facility on a dollar for
dollar basis from the $75.0 million of current availability to $25.0 million. The amounts
outstanding under the Venetian Intermediate Credit Facility bear interest at the base rate
or the adjusted Eurodollar rate plus 0.5% per annum. Interest is payable on base rate
loans on a monthly basis and is payable on Eurodollar loans at the end of the applicable
interest period, and there is no scheduled principal amortization. The credit facility is
due in full March 27, 2006. As of March 31, 2003, the credit facility remains undrawn. In
addition, Venetian Macau is currently negotiating to obtain $120.0 million in additional
debt financing (Proposed Venetian Macau Financing Agreement). There can be no
assurance that financing will be available to the Company to complete the Macau Casino,
and, if available, that the financing will be on terms favorable to the Company. The
proceeds from the Venetian Intermediate Credit Agreement, the Proposed Venetian Macau
Credit Agreement and the direct investments of $40.0 million from Venetian will be used to
fund the $210.0 million total anticipated cost of the Macau Casino.

Through
December 31, 2002, the Company had incurred pre-opening and developmental expenses of
$5.9 million and construction costs of $4.8 million, in connection with the Macau
Casino project.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 13  Commitments
and Contingencies (continued)

Venetian
Macau, Venetian Intermediate and the Companys other Macau subsidiaries are not
guarantors under the Mortgage Notes or the Senior Secured Credit Facility and, subject to
certain limited exceptions, are not restricted subsidiaries under the Indenture or the
Senior Secured Credit Facility.

The
Company has also entered into a joint venture agreement to assess the feasibility of and
develop an Internet gaming site. The Company has received an interactive gaming license
and an electronic betting center license by the Alderney Gambling Control Commission, but
has not yet established any operations. The Company estimates that it is committed to
contribute approximately $1.0 million, approximately one-third of the required
capital, to the joint venture during the next year. After recovery of each partners
initial capital contribution, the Company will receive 50% to 80% of the net profit of the
joint venture, based upon an increasing scale of net profit (if any). The joint venture
provides that the agreement will be automatically terminated should the Company fail to
obtain or maintain any required regulatory approvals or existing gaming licenses from
Alderney, the Nevada gaming authorities or any other applicable jurisdiction prior to
launching its operations or determine that any such approvals or licenses could be
jeopardized. On March 27, 2003, a subsidiary of the Company has received an interactive
gaming license and an electronic betting center license from the Alderney Gambling Control
Commission.

Note 14  Minimum
Lease Income

The
Company has entered into a number of operating leases in relation to the New Mall
Subsidiary and various retail and food and beverage outlets in the Casino Resort, which
range in length from 5 to 20 years. The future minimum lease income under these leases (of
which approximately 90% is attributable to the New Mall Subsidiary) consisted of the
following at December 31, 2002 (in thousands):

|           | 
|---------- | 
|2003       | 
|2004       | 
|2005       | 
|2006       | 
|2007       | 
|Thereafter | 
|           | 
|Total      | 
|           | 

Most
of the leases include provisions for reimbursements of other charges including real estate
taxes, utilities and other operating costs. Total reimbursements amounted to $11.8
million, $11.4 million and $9.9 million in 2002, 2001 and 2000, respectively.

A
predecessor to the New Mall Subsidiary has entered into an agreement with Forest City
Enterprises (the Mall Manager), a subsidiary of Forest City Ratner
Enterprises, a leading developer and manager of retail and commercial real estate
developments, whereby the Mall Manager manages the Mall and supervises and assists in the
creation of an advertising and promotional program and a marketing plan for the Mall. The
Mall Manager is also responsible for, among other things, preparation of a detailed plan
for the routine operation of the Mall, collection and deposit procedures for rents and
other tenant charges, supervision of maintenance and repairs and, on an annual basis,
preparation of a detailed budget (including any anticipated extraordinary expenses and
capital expenditures) for the Mall. The term of the management contract is five years from
June 19, 1999, the date the Mall opened to the public. The Mall Manager receives a
management fee of 2% of all gross rents received from the operation of the Mall; provided
that the Mall Manager will receive a minimum fee of $600,000 per year. For the years ended
December 31, 2002, 2001 and 2000, management fees paid to the Mall Manager were $525,000,
$450,000 and $450,000, respectively.

---

LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)

Note 15  Summarized
Financial Information

LVSI
and Venetian are co-obligors of the Mortgage Notes and the indebtedness under the Senior
Secured Credit Facility and are jointly and severally liable for such indebtedness.
Venetian, Mall Intermediate, Mall Construction, Lido Intermediate, Venetian Venture,
Venetian Athens, Venetian Marketing and Venetian Operating (collectively, the
Subsidiary Guarantors) are subsidiaries of LVSI, all of the capital stock of
which is owned by LVSI and Venetian. The Subsidiary Guarantors have jointly and severally
guaranteed (or are co-obligors of) such debt on a full and unconditional basis. The Mall
is owned by the Mall II Subsidiary, a non-guarantor subsidiary which is the borrower under
the Secured Mall Facility.

Separate
financial statements and other disclosures concerning each of Venetian and the Subsidiary
Guarantors are not presented below because management believes that they are not material
to investors. Summarized financial information of LVSI, Venetian, the Subsidiary
Guarantors and the non-guarantor subsidiaries on a combined basis as of December 31, 2002
and December 31, 2001, and for the three years for the period ended December 31, 2002, is
as follows (in thousands):

---

# LAS VEGAS SANDS, INC.Notes to Financial Statements (continued)Note 15  Summarized Financial Information (continued)

# CONDENSED BALANCE SHEETSDecember
31, 2002

|                                          | Las VegasSands, Inc. | Venetian CasinoResort LLC | OtherGuarantorSubsidiaries | Other Non-GuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|----------------------------------------- | -------------------- | ------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|Cash and cash equivalents                 |                      |                           | $                          | 46,746                          |                                  | $    
|Restricted cash                           |                      |                           |                            |                                |                                  |      
|Intercompany receivable                   |                      |                           |                            | 686                             |                                  |      
|Accounts receivable, net                  |                      |                           |                            | 37,853                          |                                  |      
|Inventories                               |                      |                           |                            |                                |                                  |      
|Prepaid expenses                          |                      |                           |                            | 562                             |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|Total current assets                      |                      |                           |                            | 85,847                          |                                  |      
|                                          |                      |                          
|Property and equipment, net               |                      |                           |                            | 4,722                           |                                  |      
|Investment in subsidiaries                |                      |                           |                            | 981,077                         |                                  |      
|Deferred offering costs, net              |                      |                           |                            |                                |                                  |      
|Restricted cash                           |                      |                           |                            |                                |                                  |      
|Other assets, net                         |                      |                           |                            | 4,115                           |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|                                          |                      |                           | $                          | 1,075,761                       |                                  | $    
|                                          |                      |                           |                            |                                 |                                  |      
|                                          |                      |                          
|Accounts payable                          |                      |                           | $                          | 1,655                           |                                  | $    
|Construction payable                      |                      |                           |                            |                                |                                  |      
|Construction payablecontested            |                      |                           |                            |                                |                                  |      
|Intercompany payables                     |                      |                           |                            |                                |                                  |      
|Accrued interest payable                  |                      |                           |                            |                                |                                  |      
|Other accrued liabilities                 |                      |                           |                            | 24,739                          |                                  |      
|Current maturities of longterm debt (1)  |                      |                           |                            | 2,500                           |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|Total current liabilities                 |                      |                           |                            | 28,894                          |                                  |      
|                                          |                      |                          
|Other longterm liabilities               |                      |                           |                            |                                |                                  |      
|Longterm debt (1)                        |                      |                           |                            | 1,096,250                       |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|                                          |                      |                           |                            | 1,125,144                       |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|Redeemable Preferred Interest in Venetian |                      |                           |                            |                                |                                  |      
|                                          |                      |                           |                            |                                 |                                  |      
|Stockholders' equity (deficit)            |                      |                           |                            | (49,383                         | )                                |      
|                                          |                      |                           |                            |                                 |                                  |      
|                                          |                      |                           | $                          | 1,075,761                       |                                  | $    
|                                          |                      |                           |                            |                                 |                                  |      

(1)    
As more fully described in Note 4 Long-Term Debt, LVSI and Venetian are
co-obligors of certain of the Companys indebtedness. Accordingly, such
indebtedness has been presented as an obligation of both entities in the above
balance sheets.

---

# LAS VEGAS SANDS,
INC.Notes to Financial Statements (continued)Note 15  Summarized
Financial Information (continued)

# CONDENSED BALANCE
SHEETSDecember 31, 2001

|                                                              | Las VegasSands, Inc. | VenetianCasinoResort LLC | OtherGuarantorSubsidiaries | Other Non-GuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------------- | -------------------- | ------------------------ | -------------------------- | ------------------------------- | -------------------------------- | -----
|Cash and cash equivalents                                     |                      |                          | $                          | 37,367                          |                                  | $    
|Restricted cash                                               |                      |                          |                            |                                |                                  |      
|Intercompany receivable                                       |                      |                          |                            | 6,772                           |                                  |      
|Accounts receivable, net                                      |                      |                          |                            | 37,416                          |                                  |      
|Inventories                                                   |                      |                          |                            |                                |                                  |      
|Prepaid expenses                                              |                      |                          |                            | 546                             |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|Total current assets                                          |                      |                          |                            | 82,101                          |                                  |      
|Property and equipment, net                                   |                      |                          |                            |                                |                                  |      
|Investment in subsidiaries                                    |                      |                          |                            | 692,100                         |                                  |      
|Deferred offering costs, net                                  |                      |                          |                            |                                |                                  |      
|Other assets, net                                             |                      |                          |                            | 3,771                           |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|                                                              |                      |                          | $                          | 777,972                         |                                  | $    
|                                                              |                      |                          |                            |                                 |                                  |      
|                                                              |                      |                         
|Accounts payable                                              |                      |                          | $                          | 2,880                           |                                  | $    
|Construction payable                                          |                      |                          |                            |                                |                                  |      
|Construction payablecontested                                |                      |                          |                            |                                |                                  |      
|Intercompany payables                                         |                      |                          |                            |                                |                                  |      
|Accrued interest payable                                      |                      |                          |                            |                                |                                  |      
|Other accrued liabilities                                     |                      |                          |                            | 21,249                          |                                  |      
|Current maturities of longterm debt (1)                      |                      |                          |                            | 23,021                          |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|Total current liabilities                                     |                      |                          |                            | 47,150                          |                                  |      
|                                                              |                      |                         
|Other longterm liabilities                                   |                      |                          |                            |                                |                                  |      
|Longterm debt (1)                                            |                      |                          |                            | 741,813                         |                                  |      
|Longterm subordinated loans payable to Principal Stockholder |                      |                          |                            |                                |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|                                                              |                      |                          |                            | 788,963                         |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|Redeemable Preferred Interest in Venetian                     |                      |                          |                            |                                |                                  |      
|                                                              |                      |                          |                            |                                 |                                  |      
|Stockholders' equity (deficit)                                |                      |                          |                            | (10,991                         | )                                |      
|                                                              |                      |                          |                            |                                 |                                  |      
|                                                              |                      |                          | $                          | 777,972                         |                                  | $    
|                                                              |                      |                          |                            |                                 |                                  |      

(1)    
          As more fully described in Note 4 Long-Term Debt, LVSI and Venetian are
          co-obligors of certain of the Companys indebtedness. Accordingly, such
          indebtedness has been presented as an obligation of both entities in the above
          balance sheets.

---

# LAS VEGAS SANDS, INC.Notes to Financial
Statements (continued)Note 15  Summarized Financial Information (continued)

# CONDENSED STATEMENT OF
OPERATIONSFor the year ended December 31, 2002

|                                                             | Las VegasSands, Inc. | Venetian CasinoResort LLC | OtherGuarantorSubsidiaries | OtherNon-GuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------------ | -------------------- | ------------------------- | -------------------------- | ------------------------------ | -------------------------------- | -----
|Revenues:                                                    |                      |                           |                            |                                |                                  |      
|Casino                                                       |                      |                           | $                          | 256,484                        |                                  | $    
|Rooms                                                        |                      |                           |                            |                               |                                  |      
|Food and beverage                                            |                      |                           |                            |                               |                                  |      
|Casino rental revenues from LVSI                             |                      |                           |                            |                               |                                  |      
|Retail and other                                             |                      |                           |                            | 1,743                          |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|Total revenues                                               |                      |                           |                            | 258,227                        |                                  |      
|Less promotional allowances                                  |                      |                           |                            |                               |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|Net revenues                                                 |                      |                           |                            | 258,227                        |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|Operating expenses:                                          |                      |                           |                            |                                |                                  |      
|Casino                                                       |                      |                           |                            | 232,995                        |                                  |      
|Rooms                                                        |                      |                           |                            |                               |                                  |      
|Food and beverage                                            |                      |                           |                            |                               |                                  |      
|Retail and other                                             |                      |                           |                            |                               |                                  |      
|Provision for doubtful accounts                              |                      |                           |                            | 14,470                         |                                  |      
|General and administrative                                   |                      |                           |                            | 2,553                          |                                  |      
|Corporate expense                                            |                      |                           |                            | 5,895                          |                                  |      
|Rental expense                                               |                      |                           |                            | 924                            |                                  |      
|Preopening and developmental expense                        |                      |                           |                            |                               |                                  |      
|Depreciation and amortization                                |                      |                           |                            | 429                            |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|                                                             |                      |                           |                            | 257,266                        |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|Operating income (loss)                                      |                      |                           |                            | 961                            |                                  |      
|                                                             |                      |                           |                            |                                |                                  |      
|Other income (expense):                                      |                      |                           |                            |                                |                                  |      
|Interest income                                              |                      |                           |                            | 460                            |                                  |      
|Interest expense, net of amounts capitalized                 |                      |                           |                            | (17                            | )                                |      
|Interest expense on indebtedness to Principal Stockholder    |                      |                           |                            |                               |                                  |      
|Other income (expense)                                       |                      |                           |                            |                               |                                  |      
|Loss on early retirement of debt                             |                      |                           |                            |                               |                                  |      
|Income (loss) from equity investment in Grand Canal Shops II |                      |                           |                            | 161                            |                                  |      
|Income (loss) from equity investment in VCR and subsidiaries |                      |                           |                            | (16,624                        | )                                |      
|                                                             |                      |                           |                            |                                |                                  |      
|Income (loss) before preferred return                        |                      |                           |                            | (15,059                        | )                                |      
|                                                             |                      |                          
|Preferred return on Redeemable Preferred                     |                      |                          
|Interest in Venetian Casino Resort, LLC                      |                      |                           |                            | (23,333                        | )                                |      
|                                                             |                      |                           |                            |                                |                                  |      
|Net income (loss)                                            |                      |                           | $                          | (38,392                        | )                                | $    
|                                                             |                      |                           |                            |                                |                                  |      

---

# LAS VEGAS SANDS, INC.Notes to Financial Statements (continued)Note 15  Summarized Financial Information
(continued)

# CONDENSED STATEMENT OF
OPERATIONSFor the year ended December 31, 2001

|                                                             | Las VegasSands, Inc. | Venetian CasinoResort LLC | OtherGuarantorSubsidiaries | Other Non-GuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------------ | -------------------- | ------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|Revenues:                                                    |                      |                           |                            |                                 |                                  |      
|Casino                                                       |                      |                           | $                          | 227,240                         |                                  | $    
|Rooms                                                        |                      |                           |                            |                                |                                  |      
|Food and beverage                                            |                      |                           |                            |                                |                                  |      
|Casino rental revenue from LVSI                              |                      |                           |                            |                                |                                  |      
|Retail and other                                             |                      |                           |                            | 1,417                           |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Total revenue                                                |                      |                           |                            | 228,657                         |                                  |      
|Less promotional allowances                                  |                      |                           |                            |                                |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Net revenues                                                 |                      |                           |                            | 228,657                         |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Operating expenses:                                          |                      |                           |                            |                                 |                                  |      
|Casino                                                       |                      |                           |                            | 207,587                         |                                  |      
|Rooms                                                        |                      |                           |                            |                                |                                  |      
|Food and beverage                                            |                      |                           |                            |                                |                                  |      
|Retail and other                                             |                      |                           |                            |                                |                                  |      
|Provision for doubtful accounts                              |                      |                           |                            | 18,200                          |                                  |      
|General and administrative                                   |                      |                           |                            | 2,711                           |                                  |      
|Corporate expense                                            |                      |                           |                            | 2,459                           |                                  |      
|Rental expense                                               |                      |                           |                            | 914                             |                                  |      
|Preopening and developmental expenses                       |                      |                           |                            |                                |                                  |      
|Depreciation and amortization                                |                      |                           |                            |                                |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|                                                             |                      |                           |                            | 231,871                         |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Operating income (loss)                                      |                      |                           |                            | (3,214                          | )                                |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Other income (expense):                                      |                      |                           |                            |                                 |                                  |      
|Interest income                                              |                      |                           |                            | 643                             |                                  |      
|Interest expense, net of amounts capitalized                 |                      |                           |                            |                                |                                  |      
|Interest expense on indebtedness to Principal Stockholder    |                      |                           |                            |                                |                                  |      
|Other expense                                                |                      |                           |                            |                                |                                  |      
|Loss on early retirement of debt                             |                      |                           |                            |                                |                                  |      
|Income (loss) from equity investment in Grand Canal Shops II |                      |                           |                            | (35                             | )                                |      
|Income (loss) from equity investment in VCR and subsidiaries |                      |                           |                            | (795                            | )                                |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Income (loss) before preferred return                        |                      |                           |                            | (3,401                          | )                                |      
|                                                             |                      |                          
|Preferred return on Redeemable Preferred                     |                      |                           |                            |                                 |                                  |      
|Interest in Venetian Casino Resort, LLC                      |                      |                           |                            | (20,766                         | )                                |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Net income (loss)                                            |                      |                           | $                          | (24,167                         | )                                | $    
|                                                             |                      |                           |                            |                                 |                                  |      

---

# LAS VEGAS SANDS, INC.Notes
to Financial Statements (continued)Note 15  Summarized Financial Information (continued)

# CONDENSED STATEMENT OF
OPERATIONSFor the year ended December 31, 2000

|                                                             | Las VegasSands, Inc. | Venetian CasinoResort LLC | OtherGuarantorSubsidiaries | Other NonGuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------------ | -------------------- | ------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|Revenues:                                                    |                      |                           |                            |                                 |                                  |      
|Casino                                                       |                      |                           | $                          | 299,083                         |                                  | $    
|Rooms                                                        |                      |                           |                            |                                |                                  |      
|Food and beverage                                            |                      |                           |                            |                                |                                  |      
|Casino rental revenue from LVSI                              |                      |                           |                            |                                |                                  |      
|Retail and other                                             |                      |                           |                            | 1,646                           |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Total revenue                                                |                      |                           |                            | 300,729                         |                                  |      
|Less promotional allowances                                  |                      |                           |                            |                                |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Net revenues                                                 |                      |                           |                            | 300,729                         |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Operating expenses:                                          |                      |                           |                            |                                 |                                  |      
|Casino                                                       |                      |                           |                            | 230,755                         |                                  |      
|Rooms                                                        |                      |                           |                            |                                |                                  |      
|Food and beverage                                            |                      |                           |                            |                                |                                  |      
|Retail and other                                             |                      |                           |                            |                                |                                  |      
|Provision for doubtful accounts                              |                      |                           |                            | 17,743                          |                                  |      
|General and administrative                                   |                      |                           |                            | 3,819                           |                                  |      
|Corporate expense                                            |                      |                           |                            | 2,293                           |                                  |      
|Rental expense                                               |                      |                           |                            | 714                             |                                  |      
|Depreciation and amortization                                |                      |                           |                            |                                |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|                                                             |                      |                           |                            | 255,324                         |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Operating income (loss)                                      |                      |                           |                            | 45,405                          |                                  |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Other income (expense):                                      |                      |                           |                            |                                 |                                  |      
|Interest income                                              |                      |                           |                            | 739                             |                                  |      
|Interest expense, net of amounts capitalized                 |                      |                           |                            |                                |                                  |      
|Interest expense on indebtedness to Principal Stockholder    |                      |                           |                            |                                |                                  |      
|Loss on early retirement of debt                             |                      |                           |                            |                                |                                  |      
|Income (loss) from equity investment in Grand Canal Shops II |                      |                           |                            | (188                            | )                                |      
|Income (loss) from equity investment in VCR and subsidiaries |                      |                           |                            | (30,004                         | )                                |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Income (loss) before preferred return                        |                      |                           |                            | 15,952                          |                                  |      
|                                                             |                      |                          
|Preferred return on Redeemable Preferred                     |                      |                           |                            |                                 |                                  |      
|Interest in Venetian Casino Resort, LLC                      |                      |                           |                            | (18,482                         | )                                |      
|                                                             |                      |                           |                            |                                 |                                  |      
|Net loss                                                     |                      |                           | $                          | (2,530                          | )                                | $    
|                                                             |                      |                           |                            |                                 |                                  |      

---

# LAS VEGAS SANDS, INC.
Notes to Financial Statements (continued)Note 15  Summarized Financial Information
(continued)

# CONDENSED STATEMENTS
OF CASH FLOWSFor the year ended December 31, 2002

|                                                                        | Las VegasSands, Inc. | Venetian Casino Resort LLC | OtherGuarantorSubsidiaries | Other NonGuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|----------------------------------------------------------------------- | -------------------- | -------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|Net cash provided by (used in) operating activities                     |                      |                            | $                          | 3,293                           |                                  | $    
|                                                                        |                      |                            |                            |                                 |                                  |      
|Cash flows from investing activities:                                   |                      |                            |                            |                                 |                                  |      
|Increase in restricted cash ($101.2 million for Phase 1A construction)  |                      |                            |                            |                                |                                  |      
|Capital expenditures                                                    |                      |                            |                            |                                |                                  |      
|Dividend from Grand Canal Shops II LLC                                  |                      |                            |                            |                                |                                  |      
|Capital contributions to subsidiaries                                   |                      |                            |                            |                                |                                  |      
|                                                                        |                      |                            |                            |                                 |                                  |      
|Net cash used in investing activities                                   |                      |                            |                            |                                |                                  |      
|                                                                        |                      |                            |                            |                                 |                                  |      
|Cash flows from financing activities:                                   |                      |                            |                            |                                 |                                  |      
|Dividend to Venetian Casino Resort LLC                                  |                      |                            |                            |                                |                                  |      
|Capital contribution from Venetian Casino Resort LLC                    |                      |                            |                            |                                |                                  |      
|Repayments on 12 1⁄4% mortgage notes                                      |                      |                            |                            |                                |                                  |      
|Proceeds from 11% mortgage notes                                        |                      |                            |                            |                                |                                  |      
|Repayments on senior subordinated notes                                 |                      |                            |                            |                                |                                  |      
|Proceeds from secured mall facility                                     |                      |                            |                            |                                |                                  |      
|Repayments on malltranche A takeout loan                              |                      |                            |                            |                                |                                  |      
|Repayments on malltranche B takeout loan                              |                      |                            |                            |                                |                                  |      
|Repayments on completion guaranty loan                                  |                      |                            |                            |                                |                                  |      
|Repayments on senior secured credit facilityterm B                     |                      |                            |                            |                                |                                  |      
|Proceeds from senior secured credit facilityterm B                     |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilityterm                                 |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilityrevolver                             |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit facilityrevolver                             |                      |                            |                            |                                |                                  |      
|Repayments on FF&E credit facility                                      |                      |                            |                            |                                |                                  |      
|Repayments on Phase II Subidiary credit facility                        |                      |                            |                            |                                |                                  |      
|Repayments on Phase II Subidiary unsecured bank loan                    |                      |                            |                            |                                |                                  |      
|Repurchase premiums incurred in connection with refinancing transctions |                      |                            |                            |                                |                                  |      
|Payments of deferred offering costs                                     |                      |                            |                            |                                |                                  |      
|Net change in intercompany accounts                                     |                      |                            |                            | 6,086                           |                                  |      
|                                                                        |                      |                            |                            |                                 |                                  |      
|Net cash provided by (used in) financing activities                     |                      |                            |                            | 6,086                           |                                  |      
|                                                                        |                      |                            |                            |                                 |                                  |      
|Increase (decrease) in cash and cash equivalents                        |                      |                            |                            | 9,379                           |                                  |      
|Cash and cash equivalents at beginning of year                          |                      |                            |                            | 37,367                          |                                  |      
|                                                                        |                      |                            |                            |                                 |                                  |      
|Cash and cash equivalents at end of year                                |                      |                            | $                          | 46,746                          |                                  | $    
|                                                                        |                      |                            |                            |                                 |                                  |      

---

# LAS VEGAS SANDS, INC. Notes
to Financial Statements (continued) Note 15  Summarized Financial Information (continued)

# CONDENSED STATEMENTS OF CASH FLOWSFor the year ended December 31, 2001

|                                                       | Las VegasSands, Inc. | Venetian Casino Resort LLC | OtherGuarantorSubsidiaries | Other Non-GuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------ | -------------------- | -------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|                                                       |                      |                            |                            |                                 |                                  |      
|Net cash provided by operating activities              |                      |                            | $                          | 2,444                           |                                  | $    
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash flows from investing activities:                  |                      |                            |                            |                                 |                                  |      
|Increase in restricted cash                            |                      |                            |                            |                                |                                  |      
|Capital expenditures                                   |                      |                            |                            |                                |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Net cash used in investing activities                  |                      |                            |                            |                                |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash flows from financing activities:                  |                      |                            |                            |                                 |                                  |      
|Repayments on bank credit facilitytranche A term loan |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilitytranche B term loan |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilitytranche C term loan |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit facilitytranche C term loan |                      |                            |                            |                                |                                  |      
|Repayments on bank credit term facility                |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit term facility                |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilityrevolver            |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit facilityrevolver            |                      |                            |                            |                                |                                  |      
|Repayments on FF&E credit facility                     |                      |                            |                            |                                |                                  |      
|Proceeds from Phase II Subidiary credit facility       |                      |                            |                            |                                |                                  |      
|Proceeds from Phase II Subsidiary unsecured bank loan  |                      |                            |                            |                                |                                  |      
|Payments of deferred offering costs                    |                      |                            |                            |                                |                                  |      
|Net change intercompany accounts                       |                      |                            |                            | (409                            | )                                |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Net cash provided by (used in) financing activities    |                      |                            |                            | (409                            | )                                |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Increase in cash and cash equivalents                  |                      |                            |                            | 2,035                           |                                  |      
|Cash and cash equivalents at beginning of year         |                      |                            |                            | 35,332                          |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash and cash equivalents at end of year               |                      |                            | $                          | 37,367                          |                                  | $    
|                                                       |                      |                            |                            |                                 |                                  |      

---

# LAS VEGAS SANDS, INC. Notes
to Financial Statements (continued) Note 15  Summarized Financial Information (continued)

# CONDENSED STATEMENTS
OF CASH FLOWSFor the year ended December 31, 2000

|                                                       | Las VegasSands, Inc. | Venetian Casino Resort LLC | OtherGuarantorSubsidiaries | Other NonGuarantorSubsidiaries | Consolidating/EliminatingEntries | Total
|------------------------------------------------------ | -------------------- | -------------------------- | -------------------------- | ------------------------------- | -------------------------------- | -----
|Net cash provided by (used in) operating activities    |                      |                            | $                          | 11,217                          |                                  | $    
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash flows from investing activities:                  |                      |                            |                            |                                 |                                  |      
|Decrease in restricted cash                            |                      |                            |                            |                                |                                  |      
|Capital expenditures                                   |                      |                            |                            |                                |                                  |      
|Construction of Casino Resort                          |                      |                            |                            |                                |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Net cash provided by (used in) investing activities    |                      |                            |                            |                                |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash flows from financing activities:                  |                      |                            |                            |                                 |                                  |      
|Proceeds from capital contributions                    |                      |                            |                            | (5                              | )                                |      
|Repayments on bank credit facilitytranche A term loan |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilitytranche B term loan |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit facilitytranche B term loan |                      |                            |                            |                                |                                  |      
|Repayments on bank credit facilityrevolver            |                      |                            |                            |                                |                                  |      
|Proceeds from bank credit facilityrevolver            |                      |                            |                            |                                |                                  |      
|Repayments on FF&E credit facility                     |                      |                            |                            |                                |                                  |      
|Payments of deferred offering costs                    |                      |                            |                            |                                |                                  |      
|Net change in intercompany accounts                    |                      |                            |                            | 159                             |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Net cash provided by (used in) financing activities    |                      |                            |                            | 154                             |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Increase (decrease) in cash and cash equivalents       |                      |                            |                            | 11,371                          |                                  |      
|Cash and cash equivalents at beginning of year         |                      |                            |                            | 23,961                          |                                  |      
|                                                       |                      |                            |                            |                                 |                                  |      
|Cash and cash equivalents at end of year               |                      |                            | $                          | 35,332                          |                                  | $    
|                                                       |                      |                            |                            |                                 |                                  |      

---

# Report of
Independent Accountants on Financial Statements Schedule

To the Board of
Directors of Las Vegas Sands, Inc.

Our
audits of the consolidated financial statements referred to in our report dated February
5, 2003, except for Note 8  Venetian Intermediate Credit Facility and Note 13  Macau
Casino Project and Internet Gaming, as to which the date is March 27, 2003 appearing in
this Annual Report on Form 10-K of Las Vegas Sands, Inc. also included an audit of the
financial statement schedule listed in Item 15 (a)(2) of this Form 10-K. In our opinion,
this financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related consolidated
financial statements.

PricewaterhouseCoopers
LLP

Las Vegas, NevadaFebruary
5, 2003

---

# LAS VEGAS SANDS, INC.Notes
to Financial Statements (continued)Financial Statement Schedule

# SCHEDULE II - VALUATION
AND QUALIFYING ACCOUNTS(In thousands)

|                                               |  | Additions | Deductions |       
|---------------------------------------------- |  | --------- | ---------- | ------
|
|Allowance for doubtful accounts and discounts: |  |           |            |       
|Year ended December 31:                        |  |           |            |       
|                                               |  |          
|2000                                           |  |           | $          | 6,897 
|                                               |  |           |            |       
|2001                                           |  |           | $          | 22,913
|                                               |  |           |            |       
|2002                                           |  |           | $          | 23,993
|                                               |  |           |            |       

---

ITEM 9.CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

---

# PART III

ITEM 10. DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT

LVSI
has a Board of Directors comprised of two persons. One director is the Principal
Stockholder, who has two votes for all matters before the Board of Directors. In the event
that LVSI increases the number of directors comprising the Board of Directors, the number
of votes which the Principal Stockholder has will be increased so that the Principal
Stockholder will have one more vote than the number of votes of all of the other directors
aggregated. The other director has one vote for all matters before the Board of Directors.
The other director is required to file an application for a gaming license with the Nevada
Gaming Authorities.

The
table below sets forth the executive officers and the directors of the Company.

|Name                  | Age | Position
|--------------------- | --- | --------
|Sheldon G. Adelson    |     | 69      
|Robert F. List        |     | 66      
|William P. Weidner    |     | 57      
|Bradley H. Stone      |     | 48      
|Robert G. Goldstein   |     | 47      
|David Friedman        |     | 46      
|Harry D. Miltenberger |     | 59      

Sheldon
G. Adelsonhas been the Chairman of the Board, Chief Executive Officer and a director of
the Company since April 1988 when the Company was formed to own and operate the former
Sands Hotel and Casino. Mr. Adelson has extensive experience in the convention, trade
show, tour and travel businesses. Mr. Adelson also has investments in other business
enterprises. He has been President and Chairman of Interface since the mid-1970s and
Chairman of Interface Group-Massachusetts Inc. since 1990. Mr. Adelson created and
developed the COMDEX Trade Shows, including the COMDEX/Fall Trade Show, the worlds
largest computer show, all of which were sold to Softbank Corporation in April 1995.

Robert
F. Listwas elected as Director of LVSI in April 2000. Mr. List is the Chief Executive
Officer of the Robert List Company, a Las Vegas-based consulting firm, and serves as
counsel to the law firm of Beckley, Singleton, Jemison, Cobeaga and List. Mr. List served
as Executive Vice President, Corporate Counsel and Member of the Board of Directors of
Boomtown, Inc. from 1992 to 1999. Mr. List has served in various elected positions in the
State of Nevada including Attorney General from 1970 to 1978 and Governor from 1978 to
1982.

William
P. Weidnerhas been the President and Chief Operating Officer of the Company since
December 1995. From 1985 to 1995, Mr. Weidner was President and Chief Operating Officer
and served on the board of Pratt Hotel Corporation. From February 1991 to December 1995,
Mr. Weidner was also the President of Pratts Hollywood Casino-Aurora subsidiary and
from June 1992 until December 1995, he served on the board of the Hollywood Casino
Corporation. Since September 1993, Mr. Weidner has served on the Board of Directors of
Shorewood Packaging Corporation. Mr. Weidner directed the opening of Hollywood Casino, one
of Chicagos first riverboat casino hotels, New York Citys Maxims de
Paris (now the Peninsula), and hotels in Orlando and Palm Springs.

Bradley
H. Stonehas been Executive Vice President of the Company since December 1995. From June
1984 through December 1995, Mr. Stone was President and Chief Operating Officer of the
Sands Hotel in Atlantic City. Mr. Stone also served as an Executive Vice President of the
parent Pratt Hotel Corporation from June 1986 through December 1995.

Robert
G. Goldsteinhas been Senior Vice President of the Company since December 1995. From 1992
until joining the Company in December 1995, Mr. Goldstein was the Executive Vice President
of Marketing at the Sands in Atlantic City as well as an Executive Vice President of the
parent Pratt Hotel Corporation.

---

David
Friedmanhas been Assistant to the Chairman of Interface since October 1995. Subsequently,
Mr. Friedman became both Assistant to the Chairman of the Board and Secretary of the
Company. Mr. Friedman is also an officer of other companies owned by the Principal
Stockholder. Prior to joining the Company, Mr. Friedman was the Senior Vice President of
Development and Legal Affairs for President Casinos, Inc. from May 1993 to October 1995.

Harry
D. Miltenbergeris a certified public accountant and has been Vice President-Finance of
the Company since February 1997.

ITEM 11.EXECUTIVE
COMPENSATION

The
following table sets forth certain information concerning the compensation for the last
three fiscal years of those persons who were, at December 31, 2002, the Chief Executive
Officer and the four highest paid executive officers of LVSI (the Named Executive
Officers), which is the managing member of Venetian. Under the limited liability
company agreement of Venetian, LVSI is entitled to be reimbursed for all expenses incurred
in connection with its activities as the managing member of Venetian, including all
employee compensation costs.

|                                |  | Annual Compensation | LongCompensationAwards |           | 
|------------------------------- |  | ------------------- | ---------------------- | --------- | 
|
|Sheldon G. Adelson              |  | 2002                |                        | 3,000,000 | 
|Chairman of the Board and Chief |  | 2001                |                        |          | 
|Executive Officer               |  | 2000                |                        | 1,500,000 | 
|                                | 
|William P. Weidner              |  | 2002                |                        | 1,139,600 | 
|President and Chief Operating   |  | 2001                |                        | 1,038,462 | 
|Officer                         |  | 2000                |                        | 951,284   | 
|                                | 
|Bradley H. Stone                |  | 2002                |                        | 911,680   | 
|Executive Vice President        |  | 2001                |                        | 830,769   | 
|                                |  | 2000                |                        | 726,214   | 
|                                | 
|Robert G. Goldstein             |  | 2002                |                        | 854,700   | 
|Senior Vice President           |  | 2001                |                        | 778,846   | 
|                                |  | 2000                |                        | 686,269   | 
|                                | 
|David Friedman                  |  | 2002                |                        | 496,406   | 
|Assistant to Chairman of the    |  | 2001                |                        | 415,385   | 
|Board and Secretary             |  | 2000                |                        | 359,615   | 

---

| | (1) | Represents Group
Life Insurance.
| | --- | --------------------------------

Employment Agreements

William
P. Weidner, Bradley H. Stone and Robert G. Goldstein each have entered into employment
agreements with the Company through December 31, 2005, with automatic one-year extension
rights. Pursuant to the employment agreements, these executive officers have such powers,
duties and responsibilities as are generally associated with their offices, as may be
modified or assigned by the Companys Chairman of the Board of Directors (or the
Companys President, in the case of Mr. Stone) and subject to the supervision of the
Board of Directors (and the President, in the case of Mr. Stone). During the terms of
their employment, these officers may not engage in any other business or professional
pursuit unless consented to by the Company in writing.

Mr.
Weidner, Mr. Stone and Mr. Goldstein currently receive annual base salaries of
          $1,144,000, $915,200 and $858,000 and annual bonuses based upon certain
          performance based criteria. Their base salaries are increased annually by 4%.
          These officers are also entitled to receive other employee benefits.

---

In
the event of a termination of employment for cause, voluntary termination by the employee
or similar circumstances set forth in the employment agreements, all salary and benefits
immediately cease (subject to any requirements of law) and shares of stock held by these
employees may be redeemed pursuant to the terms of the stock option plan described below.
In the event of a termination caused by breach of the employment agreements by the
Company, or similar circumstances set forth in the agreements, the Company is obligated to
pay to the executive officer his salary for the rest of the term of his employment
agreement. If the officer becomes employed elsewhere, the Company is obligated to pay the
difference, if any, in the income earned in such other employment and the salary payable
under his employment agreement with the Company.

If
a company breach termination, constructive termination or involuntary termination (each as
defined in the employment agreements) had occurred with respect to Mr. Weidner, Mr. Stone
and Mr. Goldstein on December 31, 2002, the amounts that Mr. Weidner, Mr. Stone and Mr.
Goldstein would have been entitled to receive pursuant to their employment agreements as
continued salary through December 31, 2005 would have been approximately $3,432,000,
$2,745,600 and $2,574,000. In the case of a death termination, the Company would pay
salary through the date of death, and all shares held by the officer would be redeemed by
the Company for a price payable by the Company to the officers estate equal to the
fair market value of such shares, reduced by any amounts still owed under the terms of the
secured loan from the Principal Stockholder to such officer for the stock option exercise
price, payable in 36 equal consecutive monthly installments with interest at the
applicable federal rate. See Item 13  Certain Relationships and Related Party
Transactions  Stock Option Loans. In the case of a disability termination, the
Company will continue salary, less any applicable disability insurance payments, for a
period six months following the date of termination and all options and shares will be
treated in the same way as upon a death termination. The employment agreements may not be
amended, changed or modified except by a written document signed by each of the parties.

Las Vegas Sands, Inc.
1997 Fixed Stock Option Plan

The
Las Vegas Sands, Inc. 1997 Fixed Stock Option Plan (the Plan) provides for
75,000 shares of common stock of LVSI to be reserved for issuance by the Company to
officers and other key employees or consultants of the Company or any of its Affiliates or
Subsidiaries (each as defined in the Plan) pursuant to options granted under the Plan. The
issuance of shares of the Companys common stock in connection with the exercise of
these options is subject to approval by the Nevada Gaming Authorities. The purpose of the
Plan is to promote the interest of the Company and its Principal Stockholder by (i)
attracting and retaining exceptional officers and other key employees and consultants to
the Company and its Affiliates and Subsidiaries and (ii) enabling such individuals to
participate in the long-term growth and financial success of the Company. The Board of
Directors has the authority to determine the participants to whom options are granted, the
number of shares covered by each option or any repurchase or other disposition of shares
thereunder, the exercise price therefor, and the conditions and limitations applicable to
the exercise of the option. The Board of Directors is authorized to make adjustments in
the terms and conditions of, and the criteria included in, options, in the case of certain
unusual or nonrecurring events, whenever the Board of Directors determines that such
adjustments are appropriate in order to prevent dilution or enlargement of benefits or
potential benefits under the Plan. Options granted under the Plan expire on the earlier of
(i) a specified number of years from the date of grant, (ii) the date three days prior to
a Change in Control Acceleration Event (as defined in the Plan) and (iii) the date three
days prior to a Public Offering Acceleration Event (as defined in the Plan). In the event
of any Acceleration Event (as defined in the Plan) any outstanding options then held by
the participants which are unexercisable or otherwise unvested, shall automatically become
fully vested and shall be exercisable pursuant to the applicable award agreement. The Plan
provides that the Principal Stockholder may, at any time, assume the Plan or certain
obligations under the Plan, in which case the Principal Stockholder will be the
administrator of the Plan, the issuer of the options, and will have all the rights,
powers, and responsibilities granted to the Company or the Board of Directors under the
Plan with respect to such assumed obligations.

The
Board of Directors may amend, alter, suspend, discontinue or terminate the Plan or any
portion thereof at any time, provided that any such action shall not be taken without
shareholder approval if such approval is necessary to comply with any tax or regulatory
requirement applicable to the Plan and provided that any such amendment, alteration,
suspension, discontinuance or termination that would impair the rights of any holder of an
option already granted shall not be effective without the holders consent.

---

The
Principal Stockholder has assumed the obligations of the Company under the Plan and has
granted options to Mr. Weidner, Mr. Stone, Mr. Goldstein and Mr. Friedman (the Named
Optionees) to acquire shares representing 1.996%, 1.497%, .9980%, and .4990%,
respectively, of the common stock of the Company. The specific terms and conditions of the
options were agreed to in 1999 and were memorialized in the first quarter of 2002. The
exercise price of the stock options on the grant date was not lower than the fair market
value of the common stock of the Company. The options granted to the Named Optionees were
fully vested and exercisable upon grant. The options of the Named Optionees were exercised
immediately after issuance by delivery of a notice of exercise from each of the Named
Optionees to the Principal Stockholder. The exercise price of the options were loaned to
the Named Optionees by the Principal Stockholder on a secured basis. See Item 13
 Certain Relationships and Related Transactions  Stock Option Loans.
Shares issued to the Named Optionees pursuant to the exercise of an option and held at the
time of each Named Optionees termination of employment are subject to redemption by
the Principal Stockholder.

During
the second quarter of 2002, options to purchase an additional 5,500 shares of the
Companys common stock were granted by the Principal Stockholder under the stock
option plan at an exercise price of $271 per share, which was in excess of the estimated
fair value of the Companys common stock of $150 per share. The issuance of shares of
the Companys common stock in connection with the exercise of these options are
subject to approval by the Nevada gaming authorities.

Options Granted In
Fiscal 2002

The
following table sets forth certain information with respect to options to purchase shares
of LVSI granted to the Named Executive Officers in the fiscal year ended December 31,
2002.

# Options Grants In Last Fiscal Year

|                    |  | % of Total |        |  | 
|------------------- |  | ---------- | ------ |  | 
|
|
|
|
|
|
|Sheldon G. Adelson  |  |            |       |  | 
|William P. Weidner  |  |            | 19,960 |  | 
|Bradley H. Stone    |  |            | 14,970 |  | 
|Robert G. Goldstein |  |            | 9,980  |  | 
|David Friedman      |  |            | 4,990  |  | 

---

| | (1) | The
fair value of each option grant was estimated on the date of grant to be $1 for each
option granted using the minimum value method with the following
          weighted-average assumptions: risk-free interest rate of 3.84%; no expected
          dividend yields; and expected lives of 2 years.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Option Values At End
Of Fiscal 2002

The
following table sets forth certain information concerning each exercise of options by the
Named Executive Officers during fiscal 2002, as well as the value as of December 31, 2002
of unexercised in-the-money options to purchase shares of common stock granted to the
Named Executive Officers and outstanding as of the end of fiscal 2002.

# Aggregated Option
Exercises In Last Fiscal YearAnd Fiscal Year-End Option Values

|                    |        |     | Number of |  
|------------------- | ------ | --- | --------- | -
|
|
|
|
|
|
|
|Sheldon G. Adelson  |       |    |          | 
|William P. Weidner  | 19,960 | (1) |          | 
|Bradley H. Stone    | 14,970 | (1) |          | 
|Robert G. Goldstein | 9,980  | (1) |          | 
|David Friedman      | 4,990  | (1) |          | 

---

| | (1) | The
exercised price of the options ($271 per share) was greater than the fair
               market value of the Companys common stock ($150 per share) at the
time of                exercise. As a result, no value was realized.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 12.SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Beneficial Ownership

The
following table sets forth certain information as of March 31, 2003 with respect to the
beneficial ownership of the common stock of LVSI by (i) each person who, to the knowledge
of LVSI, beneficially owns more than 5% of its outstanding common stock, (ii) the
directors of LVSI, (iii) all Named Executive Officers and (iv) all executive officers and
directors of LVSI as a group.

|                                         |  | Percentage of
|---------------------------------------- |  | -------------
|
|
|Sheldon G. Adelson                       |  | 950,100      
|Robert F. List                           |  | -            
|William P. Weidner                       |  | 19,960       
|Bradley H. Stone                         |  | 14,970       
|Robert G. Goldstein                      |  | 9,980        
|David Friedman                           |  | 4,990        
|All executive officers and the directors |  |              
|of the Company as a group                |  | 1,000,000    

---

| | * | Less
than 1%
| | - | ------------

| | (1) | The
address of each person named above is c/o the Company, 3355 Las Vegas
               Boulevard South, Room 1A, Las Vegas, NV 89109, other than Mr. List, whose
               address is 3993 Howard Hughes Parkway, Suite 850, Las Vegas, NV 89109.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | This
amount includes 1,000 shares that may be purchased from Sheldon G. Adelson           upon
exercise of options granted by the Principal Stockholder to one of the           Companys
executive officers under the Plan. See Item 11           Executive
Compensation Las Vegas Sands, Inc. 1997 Fixed Stock Option Plan.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

The
shares of common stock held by the Named Executive Officers (other than the Principal
Stockholder) have been pledged as collateral for loans made by the Principal Stockholder
in connection with the exercise of options by such Named Executive Officers. See
Item 13  Certain Relationships and Related Transactions  Stock Option
Loans.

Stockholders'
Agreement

Upon
the Named Optionees becoming stockholders of the Company, the Named Optionees, the
Principal Stockholder and the Company entered into a Stockholders Agreement (the
Stockholders Agreement). The Stockholders Agreement provides that
no Named Optionee, nor any of their permitted transferees who has agreed to be bound by
the terms and conditions of the Stockholders Agreement (together with the Named
Optionees, the Additional Stockholders), will sell, assign, pledge, encumber
or otherwise dispose of any shares of common stock of the Company, except in accordance
with the provisions of the Stockholders Agreement. The parties also expect the
Stockholders Agreement to provide the Additional Stockholders with certain tag-along
rights, piggyback registration rights and preemptive rights.

Equity Participation
Plan Information

The
following table gives information about LVSIs stock option plan as of December 31,
2002.

# Equity Compensation
Plan Information

|                              | (a) | (b)   | (c)
|----------------------------- | --- | ----- | ---
|
|
|
|
|
|
|Equity compensation plans     |     |       |    
|approved by security holders  |     | 5,500 |    
|                              |    
|Equity compensation plans not |     |       |    
|approved by security holder   |     | 0     |    
|                              |     |       |    
|Total                         |     | 5,500 |    
|                              |     |       |    

ITEM 13.CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS

Redeemable Preferred
Interest

Venetian
currently has two members, the Company and Interface Group Holding Company, Inc.
(Interface Holding), which owns all of the capital stock of Interface. LVSI is
the managing member of Venetian and owns 100% of the common equity interest in Venetian.
Interface Holding currently holds the Series B Preferred Interest the Series B preferred
interest in Venetian (the Series B Preferred Interest). The rights of the
Series B Preferred Interest are non-voting, not subject to mandatory redemption or
redemption at the option of the holder and have a preferred return of 12%. Commencing on
June 30, 2011, to the extent of the positive capital account of the holders of the Series
B Preferred Interest, there must be a distribution on the Series B Preferred Interest.
Until the indebtedness under the Senior Secured Credit Facility is repaid and cash
payments are permitted under the restricted payment covenants under the Indenture relating
to the Mortgage Notes, the preferred return on the Series B Preferred Interest will accrue
but will not be paid in cash. Subject to the foregoing, distributions with respect to the
preferred capital of the holders of the Series B Preferred Interest may, at the option of
the Company, be made at any time.

Tranche B Take-Out
Loan and Principal Stockholders $20.0 Million Guaranty of Tranche A Take-Out Loan

The
Principal Stockholder guaranteed, on an unsecured basis, $20.0 million of indebtedness
under the $105.0 million Mall Tranche A Take-Out Loan. In addition, the sole lender under
the $35.0 million Mall Tranche B Take-Out Loan was the Principal Stockholder.

---

The
Company incurred approximately $2.1 million of interest expense during 2002. Both the Mall
Tranche A Take-Out Loan and the Mall Tranche B Take-Out Loan were repaid and terminated
and the related guaranty was terminated in connection with the Refinancing Transactions.

Completion Guaranty

The
Principal Stockholder had extended a completion guaranty for the construction of the
Casino Resort in November 1997. The Principal Stockholder guaranteed, subject to certain
conditions and limitations, payment of Casino Resort construction costs in excess of
available funds, up to a maximum of $25.0 million (plus interest accrued on the collateral
for such guaranty, as described below), provided that the cap on liability under the
guaranty did not apply with respect to excess construction costs attributable to scope
changes. The Principal Stockholders obligations under the guaranty were
collateralized by $25.0 million in cash and cash equivalents and the interest accrued
thereon. On November 12, 1999, an advance of approximately $23.5 million was made under
the guaranty and was being treated as a subordinated completion guaranty loan. The
completion guaranty loan matured on November 16, 2005 and bore interest at a rate of 14
1/4% per annum. Although interest might have accrued on the completion guaranty loan, no
cash payments with respect thereto could be made until senior indebtedness was repaid,
except for payments made from certain construction-related recoveries, including any
payments the Company receives from the construction manager or its subcontractors in
connection with the litigation with them. Total interest expense accrued on the completion
guarantee to the Principal Stockholder was approximately $1.9 million during 2002. As the
completion guaranty was given for the benefit of the lenders of the Companys
indebtedness that was repaid in the Refinancing Transactions, the completion guaranty was
terminated upon repayment of this indebtedness in the Refinancing Transactions and the
remaining cash collateral was returned to the Principal Stockholder.

Phase II Subsidiary
Bank Loan Guarantee

During
2001, the Principal Stockholder guaranteed a $2.9 million bank loan made to architects of
Lido Casino Resort, LLC to secure a trade payable owed to the architects by Lido Casino
Resort, LLC. This guarantee was terminated upon repayment of the indebtedness in the
Refinancing Transactions.

Cooperation Agreement

The
Companys business plan calls for each of the Hotel, the Casino and Congress Center,
the Mall and the Expo Center (and, potentially, the Phase II Resort), though separately
owned, to be part of an integrally related project. In order to establish terms for the
integrated operation of these facilities, Venetian (as owner of the Hotel and its, Casino
and Congress Center), the New Mall Subsidiary, the Phase II Subsidiary and Interface are
parties to the Cooperation Agreement. The Cooperation Agreement sets forth agreements
among the parties regarding, among other things, encroachments, easements, operating
standards, maintenance requirements, insurance requirements, casualty and condemnation,
joint marketing, the sharing of certain facilities and costs relating thereto. The
obligations set forth in the Cooperation Agreement run with the land and so
bind the respective property owners and their successors.

The
Cooperation Agreement contains cross encroachment provisions which permit the Mall to
encroach, to a limited extent, on other portions of the Casino Resort, and which will
permit other portions of the Casino Resort to encroach, to a limited extent, on the Mall.

The
Cooperation Agreement also contains certain covenants respecting the operation of the Expo
Center and the Casino Resort. Such covenants include, for example, (a) a covenant by
Venetian to operate the Hotel and Casino continuously and to use the Hotel and the Casino
exclusively in accordance with standards of first-class Las Vegas Boulevard-style hotels
and casinos; (b) a covenant by the New Mall Subsidiary to operate and to use the Mall
exclusively in accordance with standards of first-class retail and restaurant complexes;
and (c) a covenant by Interface to operate and to use the Expo Center exclusively in
accordance with standards of first-class convention, trade show and exposition centers.
Additionally, with respect to the joint marketing of the Casino Resort and the Expo
Center, the Cooperation Agreement provides that until December 31, 2010, Interface (upon
request from the owner of the Hotel and Casino) will use commercially reasonable efforts
to have the Hotel designated as the headquarters hotel for trade show and
convention events at the Expo Center, and the owner of the Hotel and Casino will use
commercially reasonable efforts to promote the use and occupancy of the Expo Center. It
should be noted that trade show and convention promoters will be under no obligation to
designate the Hotel as the headquarters hotel for their events.

---

The
Cooperation Agreement also requires each of: (a) the owners of each component of the
Casino Resort; and (b) the owner of the Expo Center, to maintain certain minimum types and
levels of insurance, including property damage, general liability and business
interruption insurance. See Item 1  Business  Agreements Relating to the
Casino Resort  Cooperation Agreement.

Administrative
Services Agreement

Pursuant
to a certain services agreement (the Services Sharing Agreement) among LVSI,
certain of its subsidiaries and Interface Holding (collectively, the
Participants), the Participants have agreed to share ratably in the costs of,
and under certain circumstances provide to one another, shared services, including legal
services, accounting services, insurance administration, benefits administration, and such
other services as each party may request of the other. In addition, under the Services
Sharing Agreement, the Participants have agreed to share ratably the costs of any shared
office space. The Company utilizes a Gulfstream III aircraft, which is operated by an
affiliate of the Principal Stockholder. The aircraft is used primarily for the benefit of
the Companys executive officers, including the Principal Stockholder. Charge-backs
to the Company in connection with this use are based on the actual costs to operate the
aircraft allocated in accordance with the purpose for which the aircraft is used. Total
payments made by the Company to Interface and its affiliates pursuant to the Services
Sharing Agreement were $3.7 million in 2002.

Temporary Lease

On
November 1, 1996, LVSI and Interface entered into a lease agreement whereby LVSI agreed to
lease approximately 5,000 square feet in the Expo Center to be used as its temporary
executive offices during the construction of the Casino Resort. Management believes that
the lease agreement, which provides for monthly rent of $5,000 to be paid by LVSI to
Interface, is at least as favorable as the Company could have obtained from an independent
third party. The initial term of the lease agreement expired on November 1, 1998, but LVSI
and Interface have extended this term for a period of 5 years and 8 months, subject to
additional extension for two consecutive terms of 1 year each. Total payments made by LVSI
to Interface pursuant to the lease agreement in 2002 totaled $60,000.

Audio Visual Services

IGN
provides audio visual services, telecommunications, electrical, janitorial and other
related services to group customers of the Casino Resort. These services are provided
pursuant to a contract that provides for an equal sharing of revenues after direct
operating expenses. The Company received $2.6 million pursuant to this contract during
2002.

Possible Conflicts of
Interest

The
common ultimate ownership of the Casino Resort, the Phase II Resort and the Expo Center
may present potential conflicts of interest. For example, management may offer discounts
and other incentives for visitors to stay at the Phase II Resort which might result in a
competitive advantage of the Phase II Resort over the Casino Resort. In addition,
management may choose to allocate certain business opportunities to the Phase II Resort
rather than to the Casino Resort. Although common ownership of both the Casino Resort and
the Phase II Resort often may result in economies, efficiencies and joint business
opportunities for the two resorts in the aggregate, the Casino Resort may, in certain
circumstances, bear the greater burden of the expenses that are shared by both resorts. In
addition, inasmuch as there may be a common management for both the Casino Resort and the
Phase II Resort, managements time may be split between overseeing the operation of
each resort, and management, in certain circumstances, may devote more time to its
ownership and operations responsibilities of the Phase II Resort than those of the Casino
Resort. Finally, because it is expected that the Company will lease and operate the casino
for the Phase II Resort, potential conflicts may arise from the common operation of the
Casino and the Phase II Resort casino, such as the allocation of managements time.
In order to share expenses and provide for efficient management and operations of the
Casino Resort and Phase II Resort and shared facilities, Venetian and the Phase II
Subsidiary entered into the Cooperation Agreement and may in the future enter into
additional cost sharing and easement agreements.

---

The
common ultimate ownership, and management, of the Casino Resort and the Expo Center also
may result in potential conflicts of interest. The Expo Center and the Congress Center are
potential competitors in the business conference and meetings business. Under the
Cooperation Agreement, Venetian has agreed that it will not conduct, or permit to be
conducted at the Casino Resort, trade shows or expositions of the type generally held at
the Expo Center. The Company will be able to conduct or permit to be conducted at the
meeting and conference space that is a part of the Phase IA Addition, and at the Casino
Resort, tradeshows and expositions of the type generally held at the Expo Center so long
as such space is at most 125,000 square feet and the Company enters into a preferred
reservation system agreement with Interface. Furthermore, marketing practices may be
implemented that are intended to benefit the Expo Center and may have a detrimental effect
on the Casino Resort.

Restaurant Leases

The
Principal Stockholder is a partner in four entities formed that operate restaurants in the
Casino Resort. The terms and conditions of the leases granted by the Company for such
restaurants are at amounts which management believes would be no less favorable than those
negotiated with independent third parties. Valentino Las Vegas LLC and Night Market, LLC
paid Venetian $1.0 million, and Postrio Las Vegas LLC and Carnevale Coffee Bar LLC paid
the Mall Subsidiary $1.1 million, for the year ended December 31, 2002.

Phase II Land Lease

On
October 19, 2001, the Lido Casino Resort, LLC leased the land for the Phase II Resort to
Venetian for five years at an annual rent of $8.0 million. Venetian incurred lease expense
to Lido Casino Resort, LLC of $3.3 million in the first nine months of 2002 under this
lease. The lease was terminated on June 4, 2002 and the accrued rent was forgiven. Prior
to October 2001, Interface leased parking spaces on the Phase II Land from the Phase II
Subsidiary for rent of $5,000 per month.

Phase IA Lease

Lido
Casino Resort, LLC as landlord, and Venetian, as tenant, entered into a lease pursuant to
which Lido Casino Resort, LLC leased to Venetian a portion of the airspace above the Phase
II Land for a nominal annual rent. The Company intends for the meeting space component of
the Phase IA Addition to be located within this airspace. Venetian owns all improvements
to be made within the portion of the building that will be constructed within this
airspace during the term of the lease. The lease provides that, when and if such airspace
becomes a separate legal and tax parcel, Lido Casino Resort, LLC will be obligated to
transfer fee title in and to this parcel of airspace to Venetian, and the lease will
terminate upon such transfer. The airspace became a separate legal parcel and fee title in
and to this parcel of airspace was transferred to Venetian in August 2002 pursuant to the
terms of the lease. The lease terminated as a result of such transfer.

Stock Option Loans

In
January 2002, the Principal Stockholder made loans to each of the other Named Executive
Officers to enable them to exercise options that they had been granted to purchase common
stock of the Company from the Principal Stockholder. Each loan is evidenced by a full
recourse demand promissory note with interest at the short term annual applicable federal
rate (as defined in Section 7872 of the Internal Revenue Code) determined to be a market
rate at the date of issuance consistent with the financial profile of the borrower, to be
adjusted each January, and compounding annually. Following termination of any of such
Named Executive Officers employment with the Company under certain circumstances,
the interest rate of the loan to that person may change to the Companys weighted
average cost of capital, if greater than the rate in effect at the time of such
termination. Payments of a portion of accrued interest are due each year ten days
following the filing of the individuals income tax return. Payments on the
outstanding principal are payable on demand or following a sale of shares by the Named
Executive Officers in excess of 25% of his holdings. A loan will immediately be due upon
an individual filing for bankruptcy or upon other similar actions. Each note is a full
recourse loan and is collateralized by a pledge of the common stock issued to the Named
Executive Officers. Other than in limited circumstances, the additional such Named
Executive Officers may not dispose of his shares of common stock prior to repayment of his
loan.

---

Preferred Reservation
System Agreement

The
Company will enter into a preferred reservation system agreement with Interface that will
govern the booking of exposition and tradeshows in the Phase IA Addition meeting space and
in the Expo Center. The agreement will provide the Expo Center with the first opportunity
or right of first refusal to book or host expositions and tradeshows prior to such
expositions and tradeshows being offered to the Phase IA Addition meeting space.

Meeting Services
Agreement

The
Company will enter into an agreement for Interface to provide audio-visual,
telecommunications, electrical, janitorial and other related services to group customers
of the Phase IA Addition meeting space. The agreement will provide for an equal sharing of
revenues after deduction of all direct operating expenses.

ITEM 14.CONTROLS
AND PROCEDURES

Controls And
Procedures

| | (a) | Evaluation
of Disclosure Controls and Procedures. The Companys Chief                Executive
Officer and its Vice President-Finance (its principal financial                officer),
after evaluating the effectiveness of the Companys disclosure
               controls and procedures (as defined in the Securities Exchange Act of 1934
               Rules 13a-14(c) and 15d-14(c) as of a date within 90 days of the
               filing date of this annual report on Form 10-K (the Evaluation
               Date), have concluded that as of the Evaluation Date, the Companys
               disclosure controls and procedures were adequate and effective.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Changes
in Internal Controls. There were no significant changes in the                Companys
internal controls or in other factors that could significantly                affect the
Companys internal controls subsequent to the date of their
               evaluation, nor any significant deficiencies or material weaknesses in
such                internal controls requiring corrective actions. As a result, no
corrective                actions were taken.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

It
should be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the system are
met. In addition, the design of any control system is based in part upon certain
assumptions about the likelihood of future events. Because of these and other inherent
limitations of control systems, there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of how
remote.

---

# PART IV

ITEM 15.EXHIBITS,
FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

|(a) | Documents
filed as part of the report.
|--- | --------------------------------------

|(1) | List
of Financial Statements
|--- | ----------------------------

|                                               
|-----------------------------------------------
|Report of Independent Accountants              
|Consolidated Balance Sheets                    
|Consolidated Statements of Operations          
|Consolidated Statements of Stockholders' Equity
|Consolidated Statements of Cash Flows          
|Notes to Financial Statements                  

|(2) | List
of Financial Statement Schedules
|--- | -------------------------------------

|                                               
|-----------------------------------------------
|Report of Independent Accountants              
|Schedule II - Valuation and Qualifying Accounts

|(3) | List
of Exhibits
|--- | ----------------

|Exhibit No. |  | Description of Document
|----------- |  | -----------------------

|3.1 |  | Amended
 and  Restated  Articles  of  Incorporation  of Las Vegas  Sands,  Inc.  (incorporated
 by                    reference  from Exhibit 3.1 to the Company's  Quarterly  Report on
Form 10-Q for the quarter ended                    June 30, 2002).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Amended
and Restated By-laws of Las Vegas Sands, Inc.  (incorporated by reference from Exhibit
3.2                    to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2002).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | Indenture,
 dated as of June 4, 2002,  by and among Las Vegas  Sands,  Inc.  and  Venetian  Casino
                   Resort,  LLC,  as  issuers,  Mall  Intermediate  Holding  Company,
 LLC,  Grand  Canal  Shops Mall                    Construction,  LLC, Lido Intermediate
 Holding Company,  LLC, Venetian Casino Resort Athens,  LLC,                    Venetian
Venture Development,  LLC, Venetian Operating Company,  LLC and Venetian Marketing,  Inc.
                   (as "Subsidiary  Guarantors")  and U.S. Bank National  Association,
 as trustee  (incorporated  by                    reference  from Exhibit 4.1 to the
Company's  Quarterly  Report on Form 10-Q for the quarter ended                    June
30, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Registration
 Rights  Agreement,  dated as of June 4, 2002,  by and among Las Vegas  Sands,  Inc.,
                   Venetian Casino Resort,  LLC, the Subsidiary  Guarantors named
therein,  Goldman,  Sachs & Co. and                    Scotia Capital (USA) Inc.
 (incorporated by reference from Exhibit 4.2 to the Company's  Quarterly
                   Report on Form 10-Q for the quarter ended June 30, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Security
Agreement,  dated as of June 4, 2002, by and among Las Vegas Sands, Inc., Venetian Casino
                   Resort,  LLC, the  Subsidiary  Guarantors  and The Bank of Nova
 Scotia,  as  Intercreditor  Agent                    (incorporated  by reference  from
Exhibit 4.3 to the Company's  Quarterly  Report on Form 10-Q for                    the
quarter ended June 30, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Deed
of Trust,  Leasehold Deed of Trust,  Assignment of Rents and Leases,  Security  Agreement
and                    Fixture  Filing,  dated as of June 4, 2002,  made by  Venetian
 Casino  Resort,  LLC and Las Vegas                    Sands,  Inc.,  jointly and
severally as trustor,  to First American Title  Insurance  Company,  as
                   trustee,  for the Mortgage Note Indenture Trustee, as beneficiary
 (incorporated by reference from                    Exhibit 4.4 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | Intercreditor
 Agreement,  dated as of June 4, 2002, by and among The Bank of Nova Scotia, as Bank
                   Agent and  Intercreditor  Agent, and U.S. Bank National  Association,
 as Mortgage Notes Indenture                    Trustee  (incorporated  by reference
 from Exhibit 4.5 to the Company's  Quarterly  Report on Form                    10-Q for
the quarter ended June 30, 2002).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Unsecured
 Indemnity  Agreement,  dated as of June 4, 2002, by and among Las Vegas Sands, Inc. and
                   Venetian  Casino Resort,  LLC, to and for the benefit of U.S. Bank
National  Association,  and the                    Indemnified  Parties defined therein
 (incorporated by reference from Exhibit 4.6 to the Company's
                   Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Exhibit No. |  | Description of Document
|----------- |  | -----------------------

|10.1 |  | Bank
Credit  Agreement,  dated as of June 4, 2002,  by and among Las Vegas Sands,  Inc.,
 Venetian                    Casino Resort,  LLC, the Subsidiary  Guarantors,  the
lenders party thereto,  Goldman Sachs Credit                    Partners,  L.P., as joint
lead arranger,  joint bookrunner and syndication  agent, and The Bank of
                   Nova  Scotia,  as joint  lead  arranger,  joint  bookrunner  and
 administrative  agent (the "Bank                    Agreement")  (incorporated  by
reference  from Exhibit 99.1 to the  Company's  report on Form 8-K,
                   dated as of June 18, 2002).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Deed
of Trust,  Assignment of Rents and Leases and Security  Agreement,  dated as of June 4,
2002,                    made by Venetian Casino Resort,  LLC and Las Vegas Sands,  Inc.,
jointly and severally as trustor,                    to First American Title Insurance
Company, as trustee,  for the benefit of The Bank of Nova Scotia                    (as
 administrative  agent),  as beneficiary  (incorporated  by reference from Exhibit 10.2
to the                    Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Subsidiary
 Guaranty,  dated as of June 4, 2002, by the  Subsidiary  Guarantors for the benefit of
                   The Bank of Nova Scotia, as Administrative  Agent  (incorporated by
reference from Exhibit 10.3 to                    the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Disbursement
 Account  Agreement,  dated as of June 4, 2002,  by and among Las Vegas Sands,  Inc.,
                   Venetian  Casino  Resort,  LLC and The  Bank of Nova  Scotia,  as
 secured  party  and  securities                    intermediary  (incorporated  by
reference from Exhibit 10.4 to the Company's  Quarterly  Report on
                   Form 10-Q for the quarter ended June 30, 2002).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | Environmental
 Indemnity  Agreement,  dated as of June 4, 2002, by and among Las Vegas Sands, Inc.
                   and  Venetian  Casino  Resort,  LLC,  to and for the  benefit  of The
 Bank  of  Nova  Scotia,  as                    Administrative  Agent for itself and for
the other lenders under the Bank Agreement  (incorporated                    by
 reference  from Exhibit 10.5 to the  Company's  Quarterly  Report on Form 10-Q for the
quarter                    ended June 30, 2002).
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Loan
Agreement,  dated as of June 4, 2002, by and between Archon Financial,  L.P., as lender,
 and                    Grand Canal Shops II, LLC (incorporated by reference from Exhibit
10.6 to the Company's  Quarterly                    Report on Form 10-Q for the quarter
ended June 30, 2002).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Amendment
 No. 1 to Loan  Agreement,  dated June 28, 2002, by and between  Goldman Sachs  Mortgage
                   Company (as successor in interest to Archon  Financial,  L.P.),  as
lender,  and Grand Canal Shops                    II, LLC, as borrower  (incorporated  by
reference  from Exhibit  10.7 to the  Company's  Quarterly                    Report on
Form 10-Q for the quarter ended June 30, 2002).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | Indemnity
 Agreement,  dated as of August 25, 2000, by and among Las Vegas Sands,  Inc.,  Venetian
                   Casino Resort,  LLC, Grand Canal Shops Mall Subsidiary,  LLC, Grand
Canal Shops Mall Construction,                    LLC,  Grand Canal Shops Mall,  LLC,
 Interface  Group  Holding  Company,  and  American  Insurance
                   Companies  (of which  American  Home  Assurance  Company  is a member
 company)  (incorporated  by                    reference from Exhibit 10.8 to the
Company's  Quarterly  Report on Form 10-Q for the quarter ended                    June
30, 2002).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Energy
 Services  Agreement,  dated as of November 14, 1997, by and between  Atlantic  Pacific
Las                    Vegas,  LLC and Venetian Casino Resort,  LLC  (incorporated  by
reference from Exhibit 10.3 to the                    Company's Registration Statement on
Form S-4 (File No. 333-42147)).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Energy
 Services  Agreement  Amendment  No. 1, dated as of July 1, 1999,  by and between
 Atlantic                    Pacific Las Vegas,  LLC and Venetian Casino Resort,  LLC
 (incorporated  by reference from Exhibit                    10.4 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1999).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Energy
 Services  Agreement,  dated as of November 14, 1997, by and between  Atlantic  Pacific
Las                    Vegas, LLC and Grand Canal Shops Mall  Construction,  LLC
 (incorporated by reference from Exhibit                    10.4 to the Company's
Registration Statement on Form S-4 (File No. 333-42147)).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | Energy
 Services  Agreement  Amendment  No. 1, dated as of July 1, 1999,  by and between
 Atlantic                    Pacific Las Vegas,  LLC and Grand Canal Shops Mall
 Construction,  LLC  (incorporated by reference                    from Exhibit  10.10 to
the Company's  Annual  Report on Form 10-K for the year ended  December 31,
                   1999).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | Ground
Lease,  dated November 14, 1997,  between Venetian Casino Resort,  LLC and Atlantic
Pacific                    Las Vegas,  LLC  (incorporated  by reference  from  Exhibit
 10.10 to the  Company's  Registration                    Statement on Form S-4 (File No.
333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Exhibit No. |  | Description of Document
|----------- |  | -----------------------

|10.14 |  | Construction
 Management Agreement,  dated as of February 15, 1997, between Las Vegas Sands, Inc.,
                   as owner,  and Lehrer  McGovern  Bovis,  Inc  (incorporated  by
reference from Exhibit 10.5 to the                    Company's Registration Statement on
Form S-4  (File No. 333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | Assignment,
 Assumption and Amendment of Construction  Management Agreement,  dated as of November
                   14, 1997, by and among Las Vegas Sands,  Inc.,  Venetian  Casino
Resort,  LLC and Lehrer  McGovern                    Bovis, Inc.  (incorporated by
reference from Exhibit 10.6 to the Company's  Registration Statement
                   on Form S-4 (File No. 333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Guaranteed
 Maximum Price Amendment to  Construction  Management  Agreement,  dated as of June 17,
                   1998  (effective  September 9, 1998),  between Lehrer  McGovern
 Bovis,  Inc. and Venetian  Casino                    Resort,  LLC  (incorporated  by
reference from Exhibit 10.1 to the Company's  Quarterly  Report on
                   Form 10-Q for the quarter ended September 30, 1998).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Guaranty
of Performance,  dated as of August 19, 1997, by Peninsular and Steam Navigation  Company
                   in favor of Las Vegas  Sands,  Inc.,  as assigned  by Las Vegas
 Sands,  Inc.  to Venetian  Casino                    Resort,  LLC by that certain
 Assignment,  Assumption and Amendment of Contracts  (incorporated by
                   reference  from  Exhibit  10.24 to the  Company's  Registration
 Statement  on Form S-4  (File No.                    333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Guaranty
of Performance and Completion,  dated as of August 19, 1997, by Bovis,  Inc., in favor of
                   Las  Vegas  Sands,   Inc.   (incorporated  by  reference  from
 Exhibit  10.25  to  the  Company's                    Registration Statement on Form S-4
(File No. 333-42147)).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Management
 Agreement,  dated as of July 24, 1997,  by and between  Grand Canal Shops Mall II, LLC
                   and Forrest  City  Commercial  Management  (incorporated  by reference
 from Exhibit  10.22 to the                    Company's Registration Statement on Form
S-4 (File No. 333-42147)).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Primary
 Liquidated  Damages Insurance  Agreement,  dated as of August 4, 1997, by and between
the                    Construction  Manager and C.J.  Coleman  Companies,  Ltd.
 (incorporated by reference from Exhibit                    10.23 to the Company's
Registration Statement on Form S-4 (File No. 333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.21 |  | Amended
and Restated Reciprocal Easement,  Use and Operating  Agreement,  dated as of November
14,                    1997, by and among Interface  Group-Nevada,  Inc.,  Grand Canal
Shops Mall  Construction,  LLC and                    Venetian  Casino  Resort,  LLC
 (incorporated  by reference  from  Exhibit  10.8 to the  Company's
                   Registration Statement on Form S-4 (File No. 333-42147)).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | First
Amendment to Amended and Restated Reciprocal Easement,  Use and Operating  Agreement,
 dated                    as of  December  20,  1999,  by and among  Interface
 Group-Nevada,  Inc.,  Grand Canal Shops Mall                    Subsidiary,  LLC,  Lido
Casino  Resort,  LLC and Venetian  Casino  Resort,  LLC  (incorporated  by
                   reference  from  Exhibit  10.16 to the  Company's  Annual  Report on
Form 10-K for the year  ended                    December 31, 1999).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | Second
Amendment to Amended and Restated Reciprocal Easement,  Use and Operating Agreement,
 dated                    as of June 4, 2002, by and among  Interface  Group-Nevada,
 Inc.,  Grand Canal Shops II, LLC, Lido                    Casino Resort,  LLC and
Venetian Casino Resort,  LLC  (incorporated by reference from Exhibit 10.9
                   to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | Casino
 Lease,  dated as of November 14, 1997,  by and between Las Vegas Sands,  Inc. and
Venetian                    Casino Resort,  LLC  (incorporated  by reference from Exhibit
10.14 to the Company's  Registration                    Statement on Form S-4 (File No.
333-42147)).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.25 |  | Amended
and  Restated  Services  Agreement,  dated as of  November  14,  1997,  by and among
LVSI,                    Venetian Casino Resort, LLC, Interface Group Holding Company,
Inc., Interface Group-Nevada,  Inc.,                    Lido Casino Resort MM, Inc.,
Grand Canal Shops Mall MM Subsidiary,  Inc. and certain  subsidiaries
                   of Venetian Casino Resort, LLC named therein  (incorporated by
reference from Exhibit 10.15 to the                    Company's Registration Statement
on Form S-4 (File No. 333-42147)).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Construction
 Agency  Agreement,  dated as of November 14, 1997,  by and between  Venetian  Casino
                   Resort,  LLC and Atlantic Pacific Las Vegas, LLC  (incorporated by
reference from Exhibit 10.21 to                    the Company's Registration Statement
on Form S-4 (File No. 333-42147)).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Sands
Resort Hotel and Casino  Agreement,  dated as of February  18,  1997,  by and between
 Clark                    County and Las Vegas Sands,  Inc.  (incorporated  by reference
from Exhibit 10.27 to the Company's                    Registration Statement on Form S-4
(File No. 333-42147)).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Exhibit No. |  | Description of Document
|----------- |  | -----------------------

|10.28 |  | Amended
and Restated Las Vegas Sands,  Inc. 1997 Fixed Stock Option Plan (the "Stock Option
Plan")                    (incorporated  by reference from Exhibit 10.10 to the Company's
 Quarterly Report on Form 10-Q for                    the quarter ended June 30, 2002).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | First
 Amendment to the Stock  Option Plan,  dated June 4, 2002  (incorporated  by reference
 from                    Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Assumption
 Agreement,  dated as of January 2, 2002,  by Sheldon G.  Adelson  with  respect to the
                   Stock Option Plan  (incorporated by reference from Exhibit 10.5 to the
Company's  Quarterly Report                    on Form 10-Q for the quarter ended March
31, 2002).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Stockholders'
Agreement,  dated as of January 2, 2002, by and among Las Vegas Sands, Inc., Sheldon
                   G.  Adelson,  William P.  Weidner,  Bradley  H.  Stone,  Robert G.
 Goldstein  and David  Friedman                    (incorporated  by reference from
Exhibit 10.6 to the Company's  Quarterly  Report on Form 10-Q for                    the
quarter ended March 31, 2002).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Amended
and Restated Employment  Agreement,  dated as of January 1, 2002, by and between Las
Vegas                    Sands, Inc. and William P. Weidner  (incorporated by reference
from Exhibit 10.12 to the Company's                    Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Stock
Option Agreement,  dated as of January 2, 2002, by and among Las Vegas Sands,  Inc.,
Sheldon                    G. Adelson and William P. Weidner  (incorporated  by reference
 from Exhibit 10.1 to the Company's                    Quarterly Report on Form 10-Q for
the quarter ended March 31, 2002).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Amended
and Restated Employment  Agreement,  dated as of January 1, 2002, by and between Las
Vegas                    Sands,  Inc. and Bradley H. Stone  (incorporated  by reference
from Exhibit 10.13 to the Company's                    Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Stock
Option  Agreement,  dated as of January 2, 2002, by and among Las Vegas Sands Inc.,
 Sheldon                    G.  Adelson and Bradley H. Stone  (incorporated  by reference
 from Exhibit 10.2 to the  Company's                    Quarterly Report on Form 10-Q for
the quarter ended March 31, 2002).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Amended
and Restated Employment  Agreement,  dated as of January 1, 2002, by and between Las
Vegas                    Sands,  Inc.  and  Robert G.  Goldstein  (incorporated  by
 reference  from  Exhibit  10.14 to the                    Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | Stock
Option Agreement, dated as of January 2, 2002, by and among Las Vegas Sands Inc., Sheldon
                   G. Adelson and Robert G. Goldstein (incorporated by reference from
Exhibit 10.3 to the Company's                    Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Stock
Option Agreement,  dated as of January 2, 2002, by and among Las Vegas Sands, Inc.,
Sheldon                    G.  Adelson and David  Friedman  (incorporated  by reference
 from  Exhibit 10.4 to the  Company's                    Quarterly Report on Form 10-Q
for the quarter ended March 31, 2002).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | Catastrophic
 Equity  Protection  Insurance  Agreement,  dated as of June 28,  2000,  by and among
                   American  Home  Assurance  Company,  Las  Vegas  Sands,  Inc.  and
 Venetian  Casino  Resort,  LLC                    (incorporated  by reference from
Exhibit 10.15 to the Company's  Quarterly Report on Form 10-Q for                    the
quarter ended June 30, 2002).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Concession
 Contract  for  Operating  Casino  Games of Chance or Games of Other Forms in the Macau
                   Special  Administrative  Region,  June 26,  2003,  by and among the
Macau  Special  Administrative                    Region and Galaxy Casino Company
Limited. (1)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.1 |  | Subsidiaries
of the registrant. (1)
|---- |  | -----------------------------------

|24.1 |  | Powers
of Attorney (included on signature pages).
|---- |  | -------------------------------------------------

---

(1)       
          Filed herewith.

---

Instruments defining the rights of
holders of certain issues of long-term debt of Las Vegas Sands, Inc. and its consolidated
subsidiaries and of any of its unconsolidated subsidiaries for which financial statements
are required to be filed with this Form 10-K, have not been filed as exhibits to this Form
10-K because the authorized principal amount of any one of such issues does not exceed 10%
of the total assets of Las Vegas Sands, Inc. and its subsidiaries on a consolidated basis.
Las Vegas Sands, Inc. agrees to furnish a copy of each of such instruments to the
Commission upon request.

|(b) | Reports
on Form 8-K
|--- | -------------------

| | On
November 8, 2002, the Company filed a report on Form 8-K to announce the filing of
certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

| |  | LAS VEGAS SANDS, INC./s/ Sheldon G. Adelson
Sheldon G. AdelsonChairman of the Board andChief Executive Officer
| |  | ----------------------------------------------------------------------------------------------------------------------------

We,
the undersigned officers and directors of Las Vegas Sands, Inc., hereby severally
constitute William P. Weidner and David Friedman and each of them singly, our true and
lawful attorneys with full power to them, and each of them singly, to sign for us and in
our names in the capacities indicated below, any and all amendments to this Annual Report
on Form 10-K, and generally do all such things in our name and behalf in such capacities
to enable Las Vegas Sands, Inc. to comply with the applicable provisions of the Securities
Exchange Act of 1934, and all requirements of the Securities and Exchange Commission, and
we hereby ratify and confirm our signatures as they may be signed by our said attorneys,
or either of them, to any and all such amendments.

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by
the following persons in the capacities and on the dates indicated.

|SIGNATURE                 | TITLE                             | DATE          
|------------------------- | --------------------------------- | --------------
|                         
|/s/ Sheldon G. Adelson    | Chairman of the Board, Chief      | March 31, 2003
|Sheldon G. Adelson        | Executive Officer and Director   
|                         
|/s/ Robert F. List        | Special Director                  | March 31, 2003
|Robert F. List           
|                         
|/s/ Harry D. Miltenberger | Vice PresidentFinance (principal | March 31, 2003
|Harry D. Miltenberger     | financial and accounting officer)

---

# CERTIFICATIONS

I, Sheldon G. Adelson, certify that:

| | 1. | I
have reviewed this annual report on Form 10-K of Las Vegas Sands, Inc. (the
          Company);
| | -- | ---------------------------------------------------------------------------------------------------

| | 2. | Based
on my knowledge, this annual report does not contain any untrue statement           of a
material fact or omit to state a material fact necessary to make the           statements
made, in light of the circumstances under which such statements were           made, not
misleading with respect to the period covered by this annual report;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Based
on my knowledge, the financial statements, and other financial           information
included in this annual report, fairly present in all material           respects the
financial condition, results of operations and cash flows of the           Company as of,
and for, the periods presented in this annual report;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | The
Companys other certifying officers and I are responsible for           establishing
and maintaining disclosure controls and procedures (as defined in           Exchange Act
Rules 13a-14 and 15d-14) for the Company and we have:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) | designed
such disclosure controls and procedures to ensure that material           information
relating to the Company, including its consolidated subsidiaries, is           made known
to us by others within those entities, particularly during the period           in which
this annual report is being prepared;
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) | evaluated
the effectiveness of the Companys disclosure controls and           procedures as
of a date within 90 days prior to the filing date of this annual           report (the
Evaluation Date); and
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c) | presented
in this annual report our conclusions about the effectiveness of the           disclosure
controls and procedures based on our evaluation as of the Evaluation           Date;
| |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | The
Companys other certifying officers and I have disclosed, based on our
          most recent evaluation, to the Companys auditors and the audit committee
          of the Companys board of directors (or persons performing the equivalent
          function):
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) | all
significant deficiencies in the design or operation of internal controls           which
could adversely affect the Companys ability to record, process,           summarize
and report financial data and have identified for the Companys           auditors
any material weaknesses in internal controls; and
| |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) | any
fraud, whether or not material, that involves management or other employees           who
have a significant role in the Companys internal controls; and
| |  | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | The
Companys other certifying officers and I have indicated in this           annual
report whether or not there were significant changes in internal controls           or in
other factors that could significantly affect internal controls subsequent           to
the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

| |  | /s/ Sheldon G. Adelson
              
Name:    Sheldon G. AdelsonTitle:      Chief Executive Officer
| |  | -------------------------------------------------------------------------------------------------------------------

---

# CERTIFICATIONS

I, Harry D. Miltenberger, certify
that:

| | 1. | I
have reviewed this annual report on Form 10-K of Las Vegas Sands, Inc. (the
          Company);
| | -- | ---------------------------------------------------------------------------------------------------

| | 2. | Based
on my knowledge, this annual report does not contain any untrue statement           of a
material fact or omit to state a material fact necessary to make the           statements
made, in light of the circumstances under which such statements were           made, not
misleading with respect to the period covered by this annual report;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Based
on my knowledge, the financial statements, and other financial           information
included in this annual report, fairly present in all material           respects the
financial condition, results of operations and cash flows of the           Company as of,
and for, the periods presented in this annual report;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | The
Companys other certifying officers and I are responsible for           establishing
and maintaining disclosure controls and procedures (as defined in           Exchange Act
Rules 13a-14 and 15d-14) for the Company and we have:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) | designed
such disclosure controls and procedures to ensure that material           information
relating to the Company, including its consolidated subsidiaries, is           made known
to us by others within those entities, particularly during the period           in which
this annual report is being prepared;
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) | evaluated
the effectiveness of the Companys disclosure controls and           procedures as
of a date within 90 days prior to the filing date of this annual           report (the
Evaluation Date); and
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c) | presented
in this annual report our conclusions about the effectiveness of the           disclosure
controls and procedures based on our evaluation as of the Evaluation           Date;
| |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | The
Companys other certifying officers and I have disclosed, based on our
          most recent evaluation, to the Companys auditors and the audit committee
          of the Companys board of directors (or persons performing the equivalent
          function):
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) | all
significant deficiencies in the design or operation of internal controls           which
could adversely affect the Companys ability to record, process,           summarize
and report financial data and have identified for the Companys           auditors
any material weaknesses in internal controls; and
| |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) | any
fraud, whether or not material, that involves management or other employees           who
have a significant role in the Companys internal controls; and
| |  | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | The
Companys other certifying officers and I have indicated in this           annual
report whether or not there were significant changes in internal controls           or in
other factors that could significantly affect internal controls subsequent           to
the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

| |  | /s/ Harry D. Miltenberger
              
Name:    Harry D. Miltenberger
Title:      Vice President-Finance
               (principal financial and accounting
               officer)
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# Supplemental
Information to be Furnished With Reports FiledPursuant to Section 15(d)
of the Act by Registrants Which Have Not RegisteredSecurities Pursuant to Section 12 of the Act

During
the last fiscal year, the Company did not provide an annual report to security holders or
send a proxy statement or other soliciting material to its stockholders.