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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-K

                                   ----------

                 Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the fiscal year ended December 31, 1999

                                  -----------

                        Commission File Number 333-42147

                              LAS VEGAS SANDS, INC.
               Incorporated pursuant to the Laws of Nevada State

                                   ----------

                 IRS -- Employer Identification No. 04-3010100

        3355 Las Vegas Boulevard South, Room 1A, Las Vegas, Nevada 89109
                                 (702) 414-1000

                                   ----------

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

        Securities 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. [ ]

The aggregate  market value of voting stock held by  nonaffiliates of registrant
as of March 30, 2000 was $0.

The Company had 925,000 shares of Common Stock outstanding as of March 30, 2000.

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                              Las Vegas Sands, Inc.

                                Table of Contents

                                     Part I

Item 1.      Business ...................................................1
Item 2.      Properties ................................................18
Item 3.      Legal Proceedings .........................................19
Item 4.      Submission of Matters to a Vote of
             Security Holders ..........................................20

                                     Part II

Item 5.      Market for Registrant's Common Equity and Related
             Stockholder Matters .......................................21
Item 6.      Selected Financial Data ...................................22
Item 7.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations .............23
Item 7A.     Quantitative and Qualitative Disclosures
             About Market Risk .........................................29
Item 8.      Financial Statements and Supplementary Data ...............30
Item 9.      Changes In and Disagreements With Accountants
             On Accounting and Financial Disclosure ....................49

                                    Part III

Item 10.     Directors and Executive Officers of the Registrant ........50
Item 11.     Executive Compensation ....................................51
Item 12.     Security Ownership of Certain Beneficial Owners and
             Management ................................................53
Item 13.     Certain Relationships and Related Transactions ............54

                                     Part IV

Item 14.     Exhibits, Financial Statement Schedules and Reports
             on Form 8-K ...............................................57
             Signatures ................................................61

<PAGE>

                                     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 at the site of the former Sands
Hotel and Casino (the "Sands").  The Casino Resort includes the first 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  445,000 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)  is one of the  largest  hotel  and  meeting
complexes in the United States.  Ground  breaking for the Casino Resort occurred
in April 1997,  the Casino Resort opened on May 4, 1999, the Mall opened on June
19, 1999 and substantial completion was achieved on November 12, 1999.

        LVSI was incorporated in 1988 under the laws of the State of Nevada.  In
April 1989, LVSI acquired the Sands from MGM Grand.  LVSI owned and operated the
Sands from April 1989 to June 1996 when  operations  ceased to begin  demolition
and construction of the Casino Resort.  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  Mall  Subsidiary,  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 phone 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 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 or 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 Hotel leases space to eight  restaurants  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, with massage and treatment rooms, exercise
and  fitness  areas.  The  Hotel  also  features  an  outdoor  swimming  complex
(including  three pools,  spas,  pool bars and cabanas)  surrounded  by gardens,
waterways,  fountains and sculptures. The Hotel has been designed to accommodate
future expansion, including a 1,500-seat showcase theater.

       The Casino
       ----------

      The Casino has 116,000  square feet 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
services.

<PAGE>

       The Casino and its adjacent amenities are stylized to resemble a Venetian
"palazzo," with  architectural  and interior design features  representative  of
Venice's   Renaissance  era.  The  ceiling  in  the  table  games  area  feature
fresco-style  paintings  of  Venetian  palaces.  The gaming  facilities  include
approximately  2,150 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 119 table games (excluding  baccarat tables) feature 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, a poker area and an upscale baccarat pit
with 4 baccarat  tables.  The baccarat  pit 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  445,000  net  leasable  square  feet of
shopping,  dining and  entertainment  space located (i) on two levels within the
Casino  Resort's main  structure,  between the Casino level and the Hotel tower,
and (ii) in a separate approximately 38,000 square foot retail annex adjacent to
the Casino  Resort's main  structure  and  accessible  from the Strip.  The Mall
includes  six  dining  establishments,  five food  court  outlets  and 60 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, and directly from the Hotel.

       The Mall offers an array of quality dining experiences, including upscale
restaurants that offer international and American regional cuisines.  The Mall's
retail  offerings  include  exclusive  showcase  boutiques,  popular  brand name
mid-priced stores and themed entertainment  concepts. 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.

         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 existing 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 80,000 square foot column-free "Venetian Ballroom," an
approximately  13,500 square foot "Palazzo Ballroom" and a meeting complex of 42
individual  rooms which can be combined to create  three  additional  ballrooms.
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.  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.  The
Company  markets the Congress  Center to generate  room night demand  during the
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 1999,  approximately  1,168,000  visitors  attended  trade  shows  and
conventions  at the Expo Center during 123 show days.  The Expo Center hosted 17
events on the 1999 Trade Show Week 200 list of the  largest  trade  shows in the
United States in 1999, including the COMDEX Fall Trade Show, the Spring and Fall
Western Shoe Show and JCK Jewelry  Show,  as well as the  convention of National
Association of Broadcasters,  the Automotive  Service Industry  Association Week
and the  International  Consumer  Electronics  Show, each of which were multiple
location events.

      It should be noted that the Company has no ownership 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 sole stockholder of
the Company (the "Sole Stockholder").  See "Item 13 - Certain  Relationships and
Related Transactions."

      Venetian,  the New Mall Subsidiary and Interface 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.  Under the Cooperation  Agreement,  Interface,  the New Mall
Subsidiary  and  Venetian  allocate  expenses  shared by the Expo Center and the
Casino Resort. In addition, the Company and Interface jointly market the Hotel

<PAGE>

and Casino,  the Mall, the Congress Center and the Expo Center.  The Cooperation
Agreement provides that 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. It should be noted that 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."

Business and Marketing Strategy
-------------------------------

      The Company's business strategy is to (i) operate a "must-see" destination
resort  at a  premier  location  at the  heart  of the  Strip,  (ii)  provide  a
differentiated  superior all-suites product, (iii) capitalize on the link to the
Expo Center and the Congress  Center,  (iv) utilize the Casino  Resort's  unique
assets and  facilities  to appeal to a higher  budget  customer mix, (v) use the
Casino Resort's  themed  facilities and location to generate Casino revenues and
(vi) target premium gaming customers.

      Create a "Must-See" Destination Casino Resort at the Heart of the Las
      ---------------------------------------------------------------------
Vegas Strip
-----------

      The Casino  Resort,  with its  extensive  theming,  dining,  shopping  and
entertainment,  is a "must-see"  destination  resort located at the heart of the
Strip. The Casino Resort is operated to provide visitors with the sense of being
surrounded by the festivity and splendor of Renaissance  Venice's  architecture,
music, art and history.  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 and a 630-foot canal running its length, with
gondolas  and  waterside  cafes and  crossed by  authentically  styled  Venetian
bridges.

       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.

        Provide a Differentiated Superior All-Suites Product
        ----------------------------------------------------

      The Hotel offers the only all-suites product with first-class services and
facilities  on the Strip.  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,  result in a highly differentiated resort product,
and provide a competitive advantage over other Strip hotel/casino properties and
resorts.

       The typical Hotel suite ranges in size from approximately 655 square feet
to 735 square feet (compared to 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. The suite
living/working  areas  include  a  sitting  area and a  writing  desk and  offer
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 phone. In addition,  the Hotel offers larger suites,  including
the "Presidential" and penthouse suites.

       Capitalize on 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.  The Expo  Center and the  Congress  Center  provide
recurring,  predictable demand for mid-week room nights from business travelers.
During  1999,   approximately   1,168,000  visitors  attended  trade  shows  and
conventions at the Expo Center. 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.

<PAGE>

      Appeal to a Higher Budget Customer Mix
      --------------------------------------

      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  weekends.  By appealing to customers in these
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  adjacent to the Expo Center and the Strip and its  all-suites
hotel  product  will  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 that spend more on rooms and entertainment.

      Use the Casino Resort's Themed Facilities and Location to Generate Casino
      -------------------------------------------------------------------------
Revenues
--------

      Management  believes the Casino captures gaming revenues from (i) the foot
traffic generated by Expo Center and Congress Center events,  (ii) Hotel guests,
(iii) the foot  traffic  generated  by shoppers  and diners at the Mall and (iv)
visitors  attracted to the Casino Resort's unique,  Venetian-themed  facilities.
The Casino Resort includes a concentration of some of the finest  restaurants in
Las Vegas, brand name and exclusive boutique shopping,  and themed entertainment
concepts.   Restaurants   are  leased  and   operated   by  several   well-known
restaurateurs,  such as Wolfgang Puck, to operate their "signature"  restaurants
at the Casino  Resort.  In addition,  the Casino  Resort has leased out a 50,000
square foot entertainment complex,  "C2K", located partly in the Mall and partly
in the Hotel.  The  combination  of brand name  awareness and extensive  theming
generates  significant foot traffic for the Casino Resort. The Casino Resort has
been designed so 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.

       Target Premium Gaming Customers
       -------------------------------

       Management believes that the Casino Resort's  all-suites product,  themed
atmosphere and amenities offer gaming  customers a unique Las Vegas  experience.
The  Company  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
complementary  suites  (considered  premium  accommodations in Las Vegas) during
high  occupancy  periods  such as  weekends  and  holidays  when they  would not
otherwise  be offered  such  suites by the  Company's  competitors.  The Company
believes that the premium gaming  customer is a significant  market segment that
has been inadequately  addressed by the Casino Resort's competitors.  The Casino
Resort is the first all-suites resort on the Strip with facilities and amenities
designed from inception to attract and serve premium gaming customers.

 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 ("LVCVA"),  the number of visitors traveling to Las Vegas has
increased  at a steady  and  significant  rate for the last ten years  from 18.1
million  visitors in 1989 to 33.8 million  visitors in 1999,  a compound  annual
growth rate of 5.3%.  In addition,  the  population  of Las Vegas has grown from
approximately  863,000 in 1990 to  approximately  1,321,319  in 1999, a compound
growth rate of 4.8%. Management believes that the growth in the Las Vegas market
has been enhanced as a result of a dedicated  program by the LVCVA and major Las
Vegas hotels to promote Las Vegas as a major vacation and  convention  site, the
increased  capacity of McCarran  International  Airport and the  introduction of
large, themed destination resorts in Las Vegas.

      Las Vegas as a Trade Show, Convention and Meeting Destination
      -------------------------------------------------------------

      In 1999, 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
1989,  approximately 1.5 million persons attended trade shows and conventions in
Las Vegas and spent  approximately  $1.1 billion.  In 1999,  the number of trade
show and  convention  attendees  had  increased to more than 3.8 million and the
amount  spent by trade show and  convention  attendees  was  approximately  $4.0
billion.

<PAGE>

       Trade  shows are held for the  purpose of getting  sellers  and buyers of
products or services  together  for the purpose of  conducting  business.  Trade
shows differ from conventions in that trade shows typically require  substantial
amounts of space for exhibition purposes and circulation.  Conventions generally
are group 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 45,000 hotel rooms  located on the Strip,  two
convention  centers (the Las Vegas Convention Center and the Expo Center) with a
total of  approximately  3.0 million  square feet of convention  and  exhibition
space, convenient air service from major cities throughout the United States and
other countries and  significant  entertainment  opportunities.  Plans have been
announced for the addition of 1.0 million  square feet of meeting and convention
space  to the Las  Vegas  Convention  Center.  The  expansion  of the Las  Vegas
Convention Center is expected to bring convention and exhibit space in Las Vegas
to over 4.5 million square feet. In addition, The MGM Grand Hotel and Casino has
constructed a conference  and meeting  facility of  approximately  300,000 gross
square feet.  Management  believes that Las Vegas will continue to evolve as the
country's preferred trade show and convention destination.

       Expanding Hotel Market
       ----------------------

       During 1999, 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
84%, from 67,391 in 1989 to 120,000 in 1999. Other major properties on the Strip
opened  during  1998 and 1999  include The  Bellagio,  Paris  Casino  Resort and
Mandalay  Bay Resort.  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
      ---------------------------------------------------------------------

      An increasing  number of  destination  resorts are  developing  non-gaming
entertainment to complement their gaming  activities in order to draw additional
visitors. According to the LVCVA, while gaming revenues have increased from $3.4
billion in 1989 to $7.2 billion in 1999, the percentage of an average  tourist's
budget  spent on gaming has declined  from 29.0% in 1989 to 26.0% in 1998,  with
non-gaming  tourist  revenues  increasing  from  $8.5  billion  in 1989 to $18.2
billion in 1998. The newer large themed Las Vegas destination  resorts have been
designed to capitalize on this  development  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 1999 visitors to Las
Vegas arrived by the  following  methods of  transportation:  44% by air; 41% by
auto; 7% by bus; and 8% by recreational vehicle.

       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 which it services. The number of
passengers traveling through McCarran  International  Airport has increased from
17.1  million in 1989 to 33.7  million in 1999.  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).

      Spring  Mountain  Road  Improvements.   A  new  high-speed  off-ramp  from
Interstate  15 (the  primary  vehicular  access  from Los  Angeles)  onto Spring
Mountain  Road to ease traffic  congestion  on the Strip was  completed in 1999.
Spring  Mountain Road becomes Sands Avenue and  intersects the Strip adjacent to
the Venetian's  44-acre site.  This major  interchange is located  approximately
one-half mile from the Casino Resort.

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 in and near
Las Vegas.  Many of the competitors of the Company are subsidiaries or divisions
of large public  companies and may have greater  financial  and other  resources
than the Company.

<PAGE>

       Hotel/Casino Properties
       -----------------------

      Competitors  of the Casino Resort include new themed resorts on the Strip,
such as The  Bellagio,  Mandalay  Bay  Resort  and Paris  Casino  Resort.  These
projects  and others  added  approximately  11,000  hotel rooms to the Las Vegas
inventory  in 1998 and 1999.  The Casino  Resort may also compete with a planned
second  casino  resort to be owned by a subsidiary of the Company (the "Phase II
Resort"),  to the extent its business is not complementary to that of the Casino
Resort.  The future operating results of the Company could be adversely affected
by excess Las Vegas room, gaming, conference center and trade show capacity.

       The Company believes that themed resorts are generally more successful at
generating  high volume  traffic and higher  revenues and operating  income when
compared with large-scale non-themed properties in Las Vegas.

      The Company  also  believes  that  recently  developed  integrated  themed
resorts have been more  successful  than  expansions  to existing  Strip hotels.
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  competitive  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. The
Company  believes that the Casino Resort benefits from the  significant  traffic
drawn to these  properties.  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 provides the Casino Resort a unique tie-in with
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,  convention and meeting  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, with
hotel/casino  facilities  elsewhere  in the world and with state  lotteries.  In
addition,  certain  states have  recently  legalized,  and others may  legalize,
casino gaming in specific areas, and passage of the Indian Gaming Regulatory Act
in 1988 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  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 March 2000,  voters in  California
approved  expanded casino gaming on Native American  Reservations in that state.
The expansion of gaming in California  could 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  cities,
including  Atlanta,  Chicago,  New York and Orlando.  Within Las Vegas, the Expo
Center and the Congress Center compete with the Las Vegas Convention Center (the
"LVCC")  which is located  off the Strip and  currently  has 1.3  million  gross
square feet of convention  and exhibit  facilities.  An additional  expansion of
over 1.0 million square feet of meeting and exhibition  space is planned for the
Las Vegas Convention Center in 2001 (the "LVCC Expansion"). In addition, The MGM
Grand  Hotel and Casino has opened a new  conference  and  meeting  facility  of
approximately  300,000  square feet and several other  existing or planned major
Strip  hotel/casino  properties are intending to expand or construct  conference
facilities. The conference and meeting facilities at these hotel/resorts are the
Congress  Center's  primary   competition.   However,   because  none  of  these
hotel/resorts  plan to offer  convention  and trade show  facilities on the same
relative size as the Expo Center (over 1.15 million gross square feet), the LVCC
is expected  to remain the  primary  competitor  of the Expo  Center.  See "Item
3-Legal  Proceedings".  To the extent that any of the  competitors of the Casino
Resort  can  offer  substantial  integrated  hotel/casino  and  trade  show  and
convention or conference and meeting facilities, the Casino Resort's competitive
advantage  in  attracting  trade  show and  convention  meeting  and  conference
attendees could be adversely affected.

      If the  LVCC  Expansion  is  successful,  the  LVCC  will  be a much  more
formidable  competitor  of the Expo  Center and will be able to solely host many
large trade shows which had split space between the LVCC and the Expo Center. To
the extent that the LVCC is able to capture a  substantially  larger  portion of
the trade show and convention business in Las Vegas, there could be a materially
adverse  impact on the Company's  financial  position,  results of operations or
cash  flows.  The  Company is  currently  challenging  the  legality of the LVCC
Expansion. See "Item 3-Legal Proceedings".

<PAGE>

       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  Hotel  and  other  similar  themed  mall   attractions   under
construction,  such as the mall under  construction  on the site of the  Aladdin
Hotel and Casino. The Forum Shops at Caesars Palace Hotel may undergo additional
expansions  in the future.  The Mall also competes with The Fashion Show Mall, a
more  traditional  mall located near the Casino Resort which  currently plans to
undergo  expansions  which will almost  double  such  facility's  size,  and the
planned retail,  dining and entertainment mall in the Phase II Resort.  Mandalay
Group  has  also  announced  the  development  of a retail  center  near its new
Mandalay Bay Resort.

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
for 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  continues  to use 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
----------------------------------------

      Portions of the Casino  Resort  (excluding  the Mall) first  opened to the
general public on May 4, 1999, and the Mall opened to the general public on June
19, 1999.  Substantial  completion of the Casino Resort was achieved on November
12, 1999, and as of December 31, 1999, construction of the Casino Resort and the
Mall was virtually  complete  (with only minor  punchlist  items  remaining) and
virtually  all  construction  costs had been paid for.  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."

      Construction Management Contract and Construction Manager's Contract
      --------------------------------------------------------------------
Guaranty
--------

      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 are 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
1 1/2% of the Final GMP, payable in monthly installments.

       The  obligations  of the  Construction  Manager  under  the  Construction
Management  Contract are 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's  obligations under
the Bovis Guaranty are guaranteed by The Peninsula and Oriental Steam Navigation
Company ("P&O"), a British public company and the Constructor Manager's ultimate
parent at the time the Construction  Management  Contract was entered into (such
guaranty,  the "P&O  Guaranty").  With  respect  to the  Construction  Manager's
obligation to complete  construction  on schedule:  (i) for the first 30 days of
any delay in such scheduled completion, the Construction Manager solely (and not
Bovis or P&O) is liable  for  liquidated  damages,  (ii) for the  90-day  period
thereafter and subject to certain  conditions and exceptions,  only the insurers
under the LD Policy described below (and not the Construction Manager,  Bovis or
P&O), are liable for liquidated  damages,  and (iii) the  Construction  Manager,
Bovis and P&O are liable for liquidated  damages to the extent, if any, that the
Construction Manager misses the required deadline by more than 120 days.

<PAGE>

      Liquidated Damages Insurance
      ----------------------------

       The  Construction  Manager  obtained on behalf of the Company (and at the
Company's  expense) a liquidated damage 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  is required to be achieved
under the Construction Management Contract.

      Cooperation Agreement
      ---------------------

      The Hotel, the Casino and Congress  Center,  the Mall and the Expo Center,
respectively,  though  separately  owned,  are  part  of an  integrally  related
project.  In order to  establish  terms for the  integrated  operation  of these
facilities,  Venetian (as owner of the Hotel,  Casino and Congress Center),  the
New Mall  Subsidiary (as owner of the Mall ) and Interface (as owner of the Expo
Center)  are  parties  to the  Cooperation  Agreement.  See  "Item 13 -  Certain
Relationships and Related Transactions - Cooperation Agreement."

      Mall Management Contract
      ------------------------

      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  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.  Forest City  receives a management  fee of 2% of all
gross rents  received from the operation of the Mall;  provided that Forest City
will receive a minimum fee of $450,000 per year.  Forest City is not  affiliated
with the Sole Stockholder or any of his affiliates.

HVAC Services Agreement and Related Documents
---------------------------------------------

       Atlantic  Pacific  Las  Vegas,  LLC (the "HVAC  Provider")  is a Delaware
limited  liability  company  whose  members  are (a) an indirect  subsidiary  of
Atlantic Energy,  Inc., a utility holding company and (b) an indirect subsidiary
of Pacific Enterprises, 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 other energy-related services.  Pursuant to
the  Construction  Management  Contract,  the central HVAC  facility  (the "HVAC
Plant") was constructed by the  Construction  Manager on land owned by Venetian,
which land and HVAC  Plant has 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.  Venetian acted as the HVAC Provider's agent to
cause such purchase and installation to be  accomplished.  The HVAC Provider has
entered  into  separate  service  contracts  (collectively,  the  "HVAC  Service
Agreements")  with  (i)  Venetian;  (ii)  Interface;  and  (iii)  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  derived using
a fixed annual  interest rate of 7.1% applied to the HVAC Costs paid by the HVAC
Provider to recover a portion of the fair value of the HVAC  Equipment  over the
initial term of the service  contracts and leave an agreed-upon  residual value.
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  have an initial  term of ten years,  and
provide that upon expiration of such term 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 service contracts.

<PAGE>

Agreements Relating to the Phase II Resort
------------------------------------------

      The Casino Resort was developed on a stand-alone  basis as the first phase
of the planned  two-phase  redevelopment at the site of the demolished Sands. In
the  planned  second  phase  of the  redevelopment,  it is  contemplated  that a
wholly-owned,  indirect  subsidiary of Venetian (the "Phase II Subsidiary") will
construct and develop the Phase II Resort,  which also is planned to be a themed
resort.  In the event the Phase II Resort is not constructed,  the Casino Resort
has all the attributes and  facilities to operate as a stand-alone  resort.  See
"Item 13 - Certain  Relationships and Related  Transactions - Possible Conflicts
of Interest."

      If the Phase II Resort is  constructed,  the following  agreements  may be
entered into by the Phase II Subsidiary and its  subsidiaries,  on the one hand,
and the Company, Venetian and the New Mall Subsidiary, on the other hand:

      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 that
they  shall  operate  the  casino  in the  Phase II  Resort  and the  Casino  in
substantially  similar manners, and the Company or Venetian, as the case may be,
may agree to have common  gaming and  surveillance  operations  in such  casinos
(based on equal allocations of revenues and 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."

       Phase I - Phase II Joint Operation Arrangements
       -----------------------------------------------

       With  respect  to the  future  development  of the Phase II  Resort,  the
Cooperation  Agreement  provides that, prior to the commencement of construction
of the Phase II Resort,  Venetian may approve the plans and  specifications  for
the Phase II Resort,  subject to the rights of certain lenders of the Company to
approve any  construction  or operation  of a restaurant  or retail mall complex
located in the Phase II Resort and connected to the Mall. Additionally, Venetian
and the Phase II  Subsidiary  will agree in good  faith,  and upon  commercially
reasonable terms, on: (i) appropriate  mutual operating  covenants for the Hotel
and the  Casino  and the  Phase II  Resort  other  than the mall in the Phase II
Casino Resort (the "Phase II Mall"), (ii) joint marketing and advertising of the
Hotel and the Casino and the Phase II Resort other than the Phase II Mall, (iii)
certain  shared  casino  operations at the Hotel and the Casino and the Phase II
Resort  other than the Phase II Mall,  (iv) the sharing of customer  information
with  respect to the Hotel and the Casino and the Phase II Resort other than the
Phase II Mall,  (v) the  joint  purchasing  of  insurance  for the Hotel and the
Casino  and the  Phase II  Resort  other  than the  Phase II Mall,  (vi)  shared
security  operations  for the Hotel and the Casino and the Phase II Resort other
than the  Phase II Mall and  (vii) any  other  matters  that  would be of mutual
benefit in owning and operating the Hotel and the Casino and the Phase II Resort
other than the Phase II Mall.

Regulation and Licensing
------------------------

      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 subject to the licensing and
regulatory  control of the Nevada Gaming  Commission (the "Nevada  Commission"),
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)  providing 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.

<PAGE>

     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 to 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 have been 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 continue having a relationship with the
Company or Venetian,  it 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 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,  the "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  for  investment   purposes  only.  An
institutional  investor  shall  not be  deemed  to hold  voting  securities  for
investment  purposes unless the voting  securities were acquired and are held in
the  ordinary  course of business as an  institutional  investor and not for the
purpose of causing,  directly or  indirectly,  the election of a majority of the

<PAGE>

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  for
investment purposes only. Activities that are not deemed to be inconsistent with
holding voting  securities for investment  purposes only 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. 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  unsuitable.  The  same
restrictions apply to a record owner if the record owner,  after request,  fails
to identify the  beneficial  owner.  Any  stockholder  found  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 or Venetian
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 controlling 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 a  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.

     LVSI and Venetian may not 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  will  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  will  require  the
approval of the Nevada Commission to remain effective.

     Changes in control of the Company through merger,  consolidation,  stock or
asset acquisitions,  management or consulting agreements,  or any act or conduct
by any person whereby he or she obtains control, may 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.

<PAGE>

     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: (1) 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 on 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.  A casino
entertainment  tax also is paid by the Company  where 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 is 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  investigation by
the NGCB of 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 the foreign jurisdiction pertaining to the foreign gaming operation,  fail to
conduct the 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 the 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 a Clark County gaming license.  All
licenses are revocable and are not transferable. The agencies involved have full
power to limit,  condition,  suspend  or revoke any such  license,  and any such
disciplinary  action could (and revocation would) have a material adverse effect
upon the operations of the Company.

     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  decided 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 the 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 and that such
failure would not result in a material adverse effect on the Company's result of
operations, cash flows or financial position.

<PAGE>

ITEM 2. --PROPERTIES
--------------------

     Prior to October 1998,  Venetian owned approximately 44 acres of land on or
near the Strip on the site of the former Sands.  Such property includes the site
on which the Casino Resort was constructed.  Approximately 14 acres of such land
was  transferred  to the Phase II  Subsidiary  in October  1998. On December 31,
1999, the Sole  Stockholder  indirectly  contributed an additional 1.75 acres of
land located on the Strip to the Phase II Subsidiary (at its historical  cost of
$11.8 million) as a common equity capital  contribution.  The Phase II Resort is
planned to be constructed adjacent to the Casino Resort.

ITEM 3. --LEGAL PROCEEDINGS
---------------------------

     The  Company  is party to  litigation  matters  and  claims  related to its
operations and the construction of the Casino Resort. Except as described below,
the Company does not expect that the final resolution of these matters will have
a material impact on the financial position, results of operation and cash flows
of the Company.

     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.  This  complaint  was  amended  by the  Company on
November 23, 1999 to add Bovis' guarantor,  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 $50.0 million.  The
Construction  Manager  subsequently  filed  motions  to  dismiss  the  Company's
complaint  on various  grounds,  which the  Company  opposed.  The  Construction
Manager's  principal  motions to date have  either  been  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 claim 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 $145.6  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  preliminary  review  of the  complaints,  the  fact  that  the
Construction Manager has not provided Venetian with reasonable  documentation to
support such claims, and the Company's belief that the Construction  Manager has
materially  breached its agreements with the Company,  the Company believes that
the  Construction  Manager's  claims are without merit and 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.  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
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 and is in the  process  of
investigating  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 right to file liens against
the Casino Resort.  The Company intends to vigorously  defend itself in any lien
proceedings.

<PAGE>

      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
or will assert in the above-described litigations. Liability under the LD Policy
may ultimately be determined by binding arbitration.

      On July 8, 1999, the Company and other  competitors filed an action in the
Eighth Judicial  District Court for the State of Nevada  challenging the actions
of the Board of the LVCVA  with  respect to the LVCC  Expansion,  as well as the
LVCVA's  financing through proposed sale of "revenue bonds". In that litigation,
the Company and others  alleged  inter alia that the LVCVA engaged in violations
of Nevada's Open Meeting Law, and further  alleged that the proposed  bonds were
not "revenue"  bonds and thus could not be issued  without prior approval of the
voters of Clark County,  Nevada.  After a trail on the merits of that case,  the
Court rendered a decision in favor of the LVCVA and against the  plaintiffs.  On
December  22,  1999,  the  Company  filed a Notice of Appeal of the State  Court
Action to the Supreme Court of the State of Nevada.  For more information on the
LVCC as a  competitor,  see "Item  1-Business  -  Competition  - Trade  Show and
Convention Facilities".

      All of the pending litigation described above is in preliminary stages and
it is not yet possible to determine its ultimate  outcome.  If any litigation or
other  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 effect on the financial position, results
of operations or cash flows of the Company.

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

Not applicable.

<PAGE>

                                     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 30, 2000, the Sole  Stockholder  was the only holder of record
of the common stock of LVSI.

Dividends
---------

      LVSI did not pay any  dividends  in 1999 or 1998.  The  Company's  current
long-term debt arrangements  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."

<PAGE>

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, 1999,  1998 and 1997, and the
balance  sheet data at  December  31, 1999 and 1998 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, 1996 and 1995 and the balance  sheet data at December
31,  1997,  1996 and 1995 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.

================================================================================
                          STATEMENT OF OPERATIONS DATA

                     (In thousands, except per share data)
================================================================================
<TABLE>
<CAPTION>

                                                   Year-Ended December 31,
                                                   -----------------------

                                               1999(1)     1998       1997
                                             ---------   ---------  ---------

<S>                                          <C>         <C>        <C>
Gross revenues                               $ 283,919   $     937  $     895
Promotional allowance                          (25,045)         --         --
                                             ---------   ---------  ---------
Net revenues                                   258,874         937        895
Operating expenses                             255,061       8,822    (1,727)
                                             ---------   ---------  ---------
Operating income

  (loss)                                         3,813     (7,885)      2,622
Interest expense, net                          (68,847)    (21,878)    (3,142)
                                             ---------   ---------  ---------
  Net loss before

    extraordinary item                         (65,034)    (29,763)      (520)
                                             ---------   ---------  ---------
  Loss on early

    retirement of debt                            (589)
 Net Loss                                    $ (65,623)  $ (29,763) $    (520)
                                             =========   =========  =========
Per Share Data

   Basic and diluted
     loss per share
     before extra-
     ordinary item                           $  (85.87)  $  (46.93) $  (0.56)
                                             =========   =========  =========
   Basic and diluted
     loss per share
     before extra-
     ordinary item                           $  (86.51)  $  (46.93) $  (0.56)
                                             =========   =========  =========

OTHER DATA
   Capital expenditures                      $  319,106  $  508,399 $  130,827
   Cash dividends per
     common share                            $       --  $       -- $    29.84

<CAPTION>
                                                      As of December 31
                                                      -----------------

                                                1999       1998        1997
                                                ----       ----        ----
<S>                                          <C>         <C>        <C>
BALANCE SHEET DATA
   Total assets                             $1,209,602  $1,005,944  $ 747,767
   Long-term debt                              907,754     744,154    515,612
   Stockholders' equity                         15,706      67,937    111,347

<FN>
----------
(1) Operations  of the Sands  ceased in June 1996 to  accommodate  demolition of
    the facility and the construction of the Casino Resort.  The Casino Resort
    opened May 4, 1999.
</FN>

</TABLE>
<PAGE>

================================================================================
                          STATEMENT OF OPERATIONS DATA

                     (In thousands, except per share data)
================================================================================
<TABLE>
<CAPTION>

                                             Year-Ended December 31,
                                             -----------------------

                                              1996(1)(2)  1995(3)
<S>                                           <C>         <C>
Gross revenues                                $  44,044   $  95,469
Promotional allowance                            (3,483)     (7,046)
                                              ---------   ---------
Net revenues                                     40,561      88,423
Operating expenses                               99,890      84,449
                                              ---------   ---------
Operating income

  (loss)                                        (59,329)      3,974
Interest expense, net                            (3,666)     (7,352)
                                              ---------   ---------
  Net loss before

    extraordinary item                          (62,995)     (3,378)
                                              ---------   ---------
  Loss on early
    retirement of debt
 Net Loss                                     $ (62,995)  $  (3,378)
                                              =========   =========
Per Share Data

   Basic and diluted
     loss per share
     before extra-
     ordinary item                            $  (68.10)  $  (2.54)
                                              =========   =========
   Basic and diluted
     loss per share
     after extra-
     ordinary item                            $  (68.10)  $  (2.54)
                                              =========   =========


OTHER DATA
   Capital expenditures                       $  18,829    $  1,661
   Cash dividends per
     common share                             $      --    $     --

<CAPTION>
                                                 As of December 31
                                                 -----------------

                                                 1996        1995
                                                 ----        ----
<S>                                           <C>         <C>
BALANCE SHEET DATA
   Total assets                               $114,109     $178,099
   Long-term debt                                   --      120,066
   Stockholders' equity                        106,335       45,989

<FN>
----------
(1) Operations  of the Sands  ceased in June 1996 to  accommodate  demolition of
    the facility and the construction of the Casino Resort.  The Casino Resort
    opened May 4, 1999.
(2) Results of  operations  include a charge for the  write-down of property and
    equipment of $45,042 resulting from a revaluation of the Company's assets as
    of June 30, 1996, the date the Company approved a quasi-reorganization.

(3) Financial data has been restated to reflect the December 1995 merger of LVSI
    and Nevada Funding Group, Inc. ("NFG"),  the common stock of which was owned
    entirely by the Sole Stockholder (the "NFG Merger").

</FN>
</TABLE>

<PAGE>

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 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
Venetian-themed  hotel, casino, retail, meeting and entertainment complex in Las
Vegas, Nevada.

      Construction and Construction Costs
      -----------------------------------

      Substantial  completion  of the  construction  of the  Casino  Resort  was
achieved  on  November  12,  1999.  This means that on November  12,  1999,  all
components of the Casino Resort were fully constructed and operational, with the
exception of "punchlist" items. As of December 31, 1999, most of these punchlist
items had been completed and the construction of the Casino Resort was virtually
complete.  All remaining  construction  tasks are not expected to interfere with
the day-to-day use and operation of the Casino Resort.

      The  aggregate  project and  construction  costs for the Casino  Resort is
estimated to be  approximately  $1.05 billion,  excluding the costs of acquiring
and  installing  the HVAC Equipment and land  acquisition  costs.  Virtually all
project and construction costs had been paid as of December 31, 1999. Such costs
were paid from various sources, including (a) loan proceeds under the Notes, the
Bank Credit Facility and the Mall  Construction Loan Facility (as such terms are
defined below) and (b) the Sole Stockholder's $25.0 million Completion Guaranty.
See "Item  8--Financial  Statements and Supplementary  Data - Notes to Financial
Statements - Note 8 Long-Term Debt".

      The  construction  of the  principal  components  of the Casino Resort was
undertaken  by  the  Construction  Manager  under  the  Construction  Management
Contract.  Under the Construction  Management Contract, the Construction Manager
agreed to  substantially  complete  the  Casino  Resort by April 21,  1999.  The
Construction  Management Contract also established a Final GMP for work included
within the scope of work of the Construction Manager of $645.0 million.  Subject
to  certain  exceptions,  if the cost of the work  covered  by the  Construction
Management  Contract exceeded the amount of the Final GMP plus the cost of scope
changes, the Construction Manager must pay such excess costs.

      The Company believes that substantial  completion of the Casino Resort was
not  achieved  until  November  12,  1999,  and that the total  cost of the work
covered by the Construction  Management Contract was approximately $60.0 million
in excess of the Final GMP. The Company  believes that it is entitled to receive
a per-day liquidated  damages penalty for the Construction  Manager's failure to
meet  the  April  21,  1999  deadline,  and  that the  Construction  Manager  is
responsible  for paying  the  above-described  excess  costs.  The  Construction
Manager has asserted  that it was entitled to an extension of the April 21, 1999
deadline and that such excess  costs were due to scope  changes that the Company
is  obligated  to pay for,  but the  Company  believes  that  these  claims  are
unfounded.  The  Construction  Manger has also made  other  claims  against  the
Company. As a result of this dispute,  the Company and the Construction  Manager
have filed  lawsuits  against  each other and the  Construction  Manager and its
subcontractors   filed  mechanics  liens  against  the  Casino  Resort.   For  a
description of the construction litigation, see "Item 3 -Legal 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
or will assert in the above-described litigations. Liability under the LD Policy
may ultimately be determined by binding arbitration.

<PAGE>

       All of the  pending  litigation  described  above  and in  "Item 3 -Legal
Proceedings"  is in  preliminary  stages and it is not yet possible to determine
its ultimate  outcome.  If any  litigation or other  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
effect on the  financial  position,  results of  operations or cash flows of the
Company.

      Waivers; Additional Indebtedness and Equity
      -------------------------------------------

      On November 12, 1999,  the Company  entered  into various  limited  waiver
agreements (the "Waivers") with the  administrative  agent and lenders under (1)
its secured bank credit  facility (the "Bank Credit  Facility"),  (2) its $140.0
million mall construction loan facility (the "Mall Construction Loan Facility"),
(3) its $97.7 million credit facility secured by certain furniture, fixtures and
equipment  (the  "FF&E  Credit  Facility")  and (4) its funds  disbursement  and
administration agreement (the "Disbursement Agreement").  Under the Waivers, the
various lenders waived certain defaults and events of default (to the extent, if
any,  they existed or may have  existed)  arising from the  litigation  with the
Construction  Manager,  the facts  relating to the  underlying  dispute with the
Construction  Manager and the mechanics liens that were filed against the Casino
Resort. As conditions to the  effectiveness of the Waivers,  the Company and the
Sole  Stockholder,  among  other  things (i) agreed to pay a fee to the  lenders
under the Bank  Credit  Facility  and the FF&E Credit  Facility,  (ii) agreed to
purchase surety bonds for all of the mechanics liens and cause the title company
to provide  endorsements  ensuring that the deeds of trust under the Bank Credit
Facility,  the Mall  Construction Loan Facility and the Company's $425.0 million
of 12 1/4%  Mortgage  Notes due 2004 (the  "Mortgage  Notes")  are  superior  in
priority to all mechanics  liens,  and (iii) agreed that the Sole  Stockholder's
$25.0  million  collaterized  completion  guaranty (the  "Completion  Guaranty")
would,  notwithstanding  the  prior  agreement  of  the  parties  providing  for
termination of such guaranty upon  substantial  completion of the Casino Resort,
remain in effect until "final completion" (i.e., the completion of all remaining
punchlist items and the final  resolution or settlement of all disputes with the
Construction  Manager and  subcontractors).  In order to be able to purchase the
surety bonds,  the Sole  Stockholder  had to provide a $5.0 million  irrevocable
letter of credit as collateral to the bonding company.  All of the conditions to
the  effectiveness  of the limited  waivers were satisfied on November 12, 1999.
The Waivers  under the Bank Credit  Facility and the FF&E Credit  Facility  also
each  provided  that the Company could incur  additional  indebtedness  up to an
aggregate principal amount of $15.0 million.

      On November 12, 1999, an advance of  approximately  $23.5 million was made
under the Completion Guaranty. Advances made under the Completion Guaranty up to
$25.0 million are treated as a junior loan from the Sole Stockholder to Venetian
(the "Completion Guaranty Loan") that is subordinated in right of payment to the
indebtedness  under the Bank  Credit  Facility,  the FF&E Credit  Facility,  the
Mortgage Notes and the Company's 14 1/4% Senior Subordinated Notes due 2005 (the
"Senior Subordinated Notes" and, together with the Mortgage Notes, the "Notes").
The Completion  Guaranty Loan matures on November 16, 2005 and bears interest at
a rate of 14 1/4% per annum.  Although  interest  may  accrue on the  Completion
Guaranty  Loan,  no cash  payments  with  respect to such loan may be made until
senior   indebtedness   is  repaid,   except  for  payments  made  from  certain
construction-related   recoveries   (including   payments   received   from  the
Construction  Manager and/or its  subcontractors in settlement or disposition of
the disputes described above).

      On November 12,  1999,  the Sole  Stockholder  agreed to provide a working
capital facility to LVSI in the form of a subordinated working capital note (the
"Subordinated   Note")  and  the  Company   borrowed  $15.0  million  under  the
Subordinated Note to fund its working capital  requirements  (including interest
payments under its indebtedness ). On November 15, 1999, the entire Subordinated
Note was contributed by the Sole  Stockholder to LVSI as a common equity capital
contribution.

      Because  the  Company  could not access the  revolver  portion of the Bank
Credit Facility (the  "Revolver") from August 3, 1999 to November 12, 1999 while
mechanics liens against the Casino Resort were outstanding, the Sole Stockholder
contributed $7.1 million to Venetian in return for a Series B preferred interest
(the  "Series B  Preferred  Interest")  and  $16.0  million  to LVSI  (including
conversion of the $15.0 million  Subordinated  Note) as a common equity  capital
contribution.  Also,  during the second  quarter of 1999,  the Company  received
$37.3  million  from the Phase II  Subsidiary  (which was funded  from  indirect
equity  contributions  by the Sole  Stockholder  through  Venetian as a Series B
Preferred  Interest)  to  reimburse  the  Company  for a portion  of the  shared
facilities  costs between the Casino Resort and the Phase II Resort.  During the
fourth quarter, the Sole Stockholder  indirectly  contributed 1.75 acres of land
on the Strip to the Phase II  Subsidiary,  which was recorded at its  historical
cost of $11.8 million as a common equity capital contribution.

<PAGE>

Result of Operations
--------------------

      On June 30, 1996 the Company suspended  operations and closed the Sands to
begin the construction of the Casino Resort. The Company's operating income from
June 30, 1996 to May 4, 1999 consisted  primarily of rental and royalty  income.
Pre-opening  activities  associated  with  the  opening  of  the  Casino  Resort
commenced  during the second  quarter of 1998 and related  costs are included in
operating  expenses during 1999 and 1998.  Other income and expenses during 1998
and  through  May 4, 1999  consisted  of  interest  income  and  non-capitalized
interest expense associated with financing the development of the Casino Resort.

      Year Ended December 31, 1999 compared to the Year Ended December 31, 1998
      -------------------------------------------------------------------------

      Operating Revenues
      ------------------
      During its nearly eight months of operations in 1999, the Company produced
net  revenues of $258.9  million,  of which  $134.4  million  and $89.6  million
represented casino and gross hotel revenues,  respectively.  Revenues from table
games and slots were $78.1 million and $54.8  million,  respectively.  Operating
profit before interest,  depreciation,  amortization,  rental expense, corporate
and pre-opening expenses was $59.2 million.

      For the quarter ended December 31, 1999, the Company produced net revenues
of $115.6  million.  Casino  revenues  totaled $57.0 million and included  table
games and slots revenues of $36.3 million and $19.9 million,  respectively.  The
Company has improved  operating results for its two most recent fiscal quarters.
Operating profit before interest,  depreciation,  amortization,  rental expense,
corporate  and  pre-opening  expenses was $34.9  million for the fourth  quarter
versus $22.0 million for the third quarter.

      Construction  disruptions  impacted the Company's earnings throughout most
of 1999 as a result of the on-going  major  construction  of the Casino  Resort.
Although the Casino Resort opened on May 4, 1999, substantial completion did not
occur until November 12, 1999. These construction disruptions and delays created
inefficiencies   during  the  opening  periods  of  the  Casino  Resort.   These
construction  activities  also impacted the Casino  Resort's  service levels and
public image during 1999.  In  addition,  at year-end  there were  approximately
120,000 hotel and motel rooms in Las Vegas,  compared with approximately 109,000
at  December  31,  1998.  In spite of this  increase,  there was an  increase in
citywide  occupancy from 86% to 88% (the 1999 citywide hotel occupancy  average)
as the new capacity was  absorbed.  The Casino  Resort's  occupancy  rate of 82%
generally  underperformed  the Las Vegas  averages  as a result  of the  ongoing
construction  activity at the Casino Resort. The 1999 average daily room rate of
the Casino Resort was $159. As of March 2000, all attractions,  showroom,  spas,
restaurants and retail shops were open in the Casino Resort.

      A lower win  percentage  also impacted the Company's  earnings.  The table
games win  percentage  was 17.8% in 1999,  compared  to the  Company's  budgeted
average of 20%.

      The Company  believes  that its  earnings  will  continue to improve as it
intensifies  marketing  efforts toward gaining a larger share of the table games
and slot markets on the Strip and becomes more efficient in operations.

      Operating Expenses
      ------------------

      During its nearly eight months of operations in 1999, the Company's  total
operating  expenses  were  $231.1  million.   Of  this  amount,   $79.1  million
represented  casino  operating  expenses  and $25.5  million  represented  hotel
operating  expenses.  General and  administrative  expenses  for the period were
$49.9 million.

      The  Company's  provision for bad debts and discounts was $13.7 million in
1999.  The  Company  believes it has  established  the same  credit,  collection
standards and reserves as other premium Strip resorts and that actual collection
experience  will be well within  established  reserves.  The  Company  currently
establishes  its bad debt reserve based upon a combination  of specific  account
review and  percentage of table games credit  volume.  The Company will evaluate
this process as it gains collection history over the next year.

      After  completion of the Casino Resort during the fourth  quarter of 1999,
the Company has continued to develop and implement  improvements  to its service
levels,  training of team members,  marketing and advertising efforts and profit
margins.   A  strength  of  the  Casino  Resort  is  its  excellent  design  and
completeness  as a  competitive  resort  at the  heart  of the  Strip.  Upon the
completion of  construction  and  implementation  of the above  strategies,  the
Company's earnings have shown considerable improvement.

<PAGE>

      Interest Income (Expense)
      ------------------------

      Reflecting the  investments in the Hotel,  the Casino and Congress  Center
and the Mall, the Company's debt levels and associated  interest cost have risen
significantly.   With  the  opening  of  these  new  facilities,  the  Company's
capitalization  of interest  cost has  ceased.  Net  interest  expense was $68.9
million in 1999,  compared to $21.9  million in 1998.  Subject to interest  rate
fluctuations  and the effect on the Company's  variable  rate debt,  the Company
currently estimates that its total net interest expense in 2000 will increase to
$105.7  million,  including  $90.6 million for the Casino Resort  (excluding the
Mall) and $15.1 million for the Mall.

     Interest income decreased from $17.1 million to $2.6 million for the years
ended  December 31, 1999 and 1998,  respectively,  as a result of expending  the
proceeds from the sale of the Notes to fund construction  expenses of the Casino
Resort.  Construction  of the Casino  Resort was virtually  complete  during the
fourth quarter of 1999. The Company capitalized $31.3 million of interest during
the year ended December 31, 1999,  versus $39.7 million of interest  capitalized
during the year ended December 31, 1998.

Year Ended December 31, 1998 compared to the Year Ended December 31, 1997
-------------------------------------------------------------------------

      Operating Revenues
      ------------------

      Revenues  for the years  ended  December  31, 1998 and 1997 were each $0.9
million and consisted primarily of rental and royalty income.

      Operating Expenses
      -------------------

      Operating  expenses  during  1998  include  pre-opening  expenses  of $8.7
million.  No pre-opening  expenses were incurred in 1997.  Pre-opening  expenses
included  payroll,  advertising,  professional  services  and other  general and
administrative  expenses related to the opening of the Casino Resort. The credit
amount  reflected  in  selling,  general  and  administrative  expense of $(1.8)
million during 1997 resulted from a  re-evaluation  of the accrued closing costs
associated with the closing of the Sands.  Amortization expense was $0.1 million
for both years.

      Interest Income (Expense)
      ------------------------

      Interest  income  increased to $17.1 million during 1998 from $3.4 million
during 1997,  primarily as a result of investing proceeds received from the sale
of the Notes in the aggregate principal amount of $522.5 million on November 14,
1997. The increase in interest expense to $39.0 million,  excluding  capitalized
interest of $39.7 million, during 1998 from $6.6 million,  excluding capitalized
interest of $2.2 million,  during 1997 represents the  non-capitalized  interest
expense  resulting  from debt  incurred  related to the  financing of the Casino
Resort.

Other Factors Affecting Earnings
--------------------------------

      The Company incurred pre-opening expenses of $21.5 million during the year
ended December 31, 1999. From the inception of the project, the Company expensed
$30.2 million for pre-opening activities. Pre-opening expenses included payroll,
advertising, professional services and other general and administrative expenses
related to the opening of the Casino Resort.

      The Company  incurred a debt related  extraordinary  charge during 1999 of
$589,000, relating to the early retirement of debt for the take-out financing of
the Mall. See "Liquidity and Capital  Resources - New Mall Subsidiary,  Transfer
of Mall Assets and Mall Take-out Financing".

      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.

<PAGE>

Liquidity and Capital Resources
--------------------------------

      Venetian Hotel, Casino and Congress Center
      ------------------------------------------

      As of December 31, 1999 and  December 31, 1998,  the Company held cash and
cash equivalents of $26.3 million and $2.3 million, respectively. On such dates,
the Company  also held  restricted  cash and  investments  of $11.0  million and
$133.9 million, respectively. Net cash used in operating activities for 1999 and
1998 was $30.0 million and $26.0 million,  respectively. The Company's operating
cash flow in 1999 was  negatively  impacted by a  substantial  increase in trade
receivables  occurring  mainly at  year-end.  The revenues  associated  with the
receivables  are included in the Company's  1999  operating  income.  Due to the
normal  timing of  collections,  a large  portion  of the  receivables  remained
outstanding at the end of 1999,  especially  those associated with casino credit
granted  before the New Year.  Net trade  receivables at September 30, 1999 were
$33.1 million, and at December 31, 1999 were $43.2 million. The rate of increase
is consistent with the increase in the Company's revenues. The Company expects a
continued  increase  in trade  receivables  during 2000 in  connection  with the
extension of casino credit.

      Capital expenditures during 1999 were $319.1 million, consisting primarily
of  construction  of the Casino Resort.  Of the cost expended or incurred during
1999,  $74.5  million,  $37.3 million and $83.8 million were drawn from the Bank
Credit Facility (including a net of $30.3 million under the Revolver),  the Mall
Construction  Loan  Facility  and the FF&E Credit  Facility,  respectively.  The
balance  of the  capital  expenditures  represents  proceeds  from the Notes and
reduction of accruals for construction payables.

      On November 12, 1999, an advance of  approximately  $23.5 million was made
under the  Completion  Guaranty  and,  as noted  above,  is being  treated  as a
Completion Guaranty Loan. The Sole Stockholder has unlimited liability under the
Completion  Guaranty with respect to excess  construction  costs attributable to
scope changes.

      As of December 31, 1999,  approximately $6.3 million of construction costs
(excluding  construction costs (the "Contested Construction Costs") that are the
subject of the above-described litigations and claims) remained to be paid. Such
remaining costs (excluding the Contested  Construction Costs) will be liquidated
from restricted cash balances or settled during the course of 2000. In addition,
the Phase II Subsidiary has outstanding  project  payables in the amount of $3.9
million to be funded from future equity contributions or borrowings by the Phase
II Subsidiary.

      If the Company is required to pay any of the Contested Construction Costs,
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)  the  Sole
Stockholder,  pursuant to his  liability  under the  Completion  Guaranty,  (vi)
borrowings under the Revolver,  (vii) additional debt or equity financings,  and
(viii)  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. The Sole
Stockholder  has  remaining  liability of  approximately  $5.0 million under the
Completion  Guaranty to fund  excess  construction  costs  (which  liability  is
collaterlized with cash and cash equivalents).

      As described  below,  the Company  refinanced the Mall  Construction  Loan
Facility on December  20,  1999.  See - "New Mall  Subsidiary,  Transfer of Mall
Assets and Mall Take-out Financing".

      For the next twelve months, the Company expects to fund its operations and
debt service  requirements from existing cash balances,  operating cash flow and
borrowings  under the Revolver of the Bank Credit  Facility.  The Revolver  loan
commitment will expire on March 15, 2001. As of December 31, 1999, $39.2 million
of the $40.0 million  Revolver under the Bank Credit Facility was drawn.  During
early  2000,  approximately  $9.3  million  was  repaid  and the  balance on the
Revolver was reduced to $29.9 million.  The Company has significant debt service
payments due during 2000,  including  principal  quarterly  payments on its Bank
Credit Facility and FF&E Credit Facility aggregating $42.9 million and estimated
total interest payments of $90.6 million for indebtedness  secured by the Casino
Resort and $15.1 million for indebtedness secured by the Mall. In addition,  the
Company  estimates  capital  expenditures  for the Casino Resort of $9.0 million
during 2000.  To fund these  payments  from  improved  operating  cash flow will
require the Company to achieve  substantially  improved operating  results.  The
Company  anticipates  that its existing cash  balances,  operating cash flow and
available  borrowing capacity will provide it with sufficient  resources to meet
existing debt  obligations and foreseeable  capital  expenditures  requirements,
however,  no assurance  can be given that the Company will achieve such improved
operating results.

<PAGE>

      In addition, the Company has had discussions with the administrative agent
under the Bank Credit Facility in order to discuss modifications to the terms of
the  Bank  Credit  Facility,  including  the  expiration  date of the  Revolver,
schedule of principal payments and financial covenants. The Bank Credit Facility
and the FF&E Credit  Facility  each  provide for a variety of  financial  tests,
relating to, among other things,  the Company's  minimum  consolidated  earnings
before interest, taxes,  depreciation and amortization ("EBITDA");  consolidated
leverage ratio and fixed charge  coverage  ratio.  These  covenants  become more
stringent  over  time  to  match  the  scheduled   repayment  of  the  Company's
indebtedness.  The  purpose of the  proposed  modifications  to the Bank  Credit
Facility  would be to provide  additional  flexibility  and the  ability to fund
capital expenditures and possible working capital  requirements  associated with
the Company's premium casino table games business.  Similar  financial  covenant
modifications  would  need to be made to the  FF&E  Credit  Facility  which  has
substantially identical financial covenants.

      Although the Company has remained in compliance  with the covenants in the
Bank  Credit  Facility  and the  FF&E  Credit  Facility,  and  expects  to be in
compliance  during the  remainder  of 2000,  it will be  challenged  to meet its
minimum EBITDA,  leverage and other covenants reflected in such agreements while
also maintaining the flexibility and level of capital expenditure  spending that
management  believes is necessary  for success in the Company's  premium  casino
business.  Depending on the financial results of the next several  quarters,  no
assurance can be given that without the approval of the Company's bank syndicate
and the FF&E Lender of the proposed modifications that the Company will not need
to otherwise re-negotiate its financial covenants.

      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 indentures governing the terms of the Notes (the "Indentures") and the
terms of the Bank Credit Facility,  additional financing through bank borrowings
or debt or equity financings.  Also, there can be no assurance that new business
developments or other unforeseen  events will not occur resulting in the need to
raise additional funds. There 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,  or that the Sole
Stockholder or any of his affiliates will provide any such financing.

      New Mall Subsidiary,  Transfer of Mall Assets and Mall Take-Out Financing
      -------------------------------------------------------------------------

      On November 12, 1999, Grand Canal Shops Mall Construction, LLC transferred
the Mall and related assets ( the Mall and such assets, collectively,  the "Mall
Assets") to its subsidiary, Grand Canal Shops Mall, LLC (the "Mall Subsidiary").
Upon such  transfer,  (i) the Mall Assets were released by the trustee under the
Mortgage  Notes and the  agent  under the Bank  Credit  Facility  and so were no
longer  security to the holders of the  Mortgage  Notes or for the  indebtedness
under  the  Bank  Credit  Facility,   (ii)  the  indebtedness   under  the  Mall
Construction  Loan  Facility was assumed by the Mall  Subsidiary,  and (iii) all
entities comprising the Company,  other than the Mall Subsidiary,  were released
from all obligations under the Mall Construction Loan Facility.

      On December 20, 1999, the Mall  Construction Loan Facility was paid off in
full with the proceeds of (a) a $105.0 million first priority take-out loan (the
"Tranche A Take-out Loan") made by Goldman Sachs Mortgage  Company,  the Bank of
Nova Scotia and others lenders  (collectively,  the "Tranche A Take-out Lender")
and (b) a $35.0 million second  priority  take-out loan (the "Tranche B Take-out
Loan"  and,  together  with the  Tranche A  Take-out  Loan,  the "Mall  Take-out
Financing")  made by an  entity  wholly  owned  by the  Sole  Stockholder  ( the
"Tranche  B  Take-out  Lender").  The Mall  Take-out  Financing  is  secured  by
mortgages on the Mall Assets, and the Tranche A Take-out Loan is also secured by
a $20.0  million  guaranty  made by the Sole  Stockholder  (the  "Mall  Take-out
Guaranty"). The annual interest rate on the Tranche A Take-out Loan is 350 basis
points over 30 day LIBOR. The Tranche A Take-out Loan is due in full on December
20, 2002 and no  principal  payments  are due  thereunder  until such date.  The
Tranche B Take-out Loan bears  interest at 14% per annum.  The initial  maturity
date is December 20, 2004 with a right of  extension  to December  20, 2007.  No
principal  payments are due until maturity.  Also on December 20, 1999, the Mall
Assets were transferred from the Mall Subsidiary to the New Mall Subsidiary, the
obligor under the Mall Take-out Financing.

<PAGE>

      Because the New Mall Subsidiary is not a guarantor of any  indebtedness of
the Company (other than the Mall Take-out  Financing),  creditors of the Company
(including  the  holders of the Notes but  excluding  creditors  of the New Mall
Subsidiary)  do not have a direct claim  against the Mall  Assets.  As a result,
indebtedness  of the  entities  comprising  the Company  other than the New Mall
Subsidiary  (including  the  Notes) is now,  with  respect  to the Mall  Assets,
effectively  subordinated to indebtedness  of the New Mall  Subsidiary.  The New
Mall  Subsidiary  is not  restricted  by any of the  debt  instruments  of LVSI,
Venetian or the Company's other subsidiary guarantors (including the Indentures)
from  incurring  any  indebtedness.  The terms of the  Tranche A  Take-out  Loan
prohibit the New Mall Subsidiary from paying  dividends or making  distributions
to any of the other entities  comprising  the Company unless  payments under the
Tranche A Take-out  Loan are  current,  and,  with certain  limited  exceptions,
prohibit the New Mall  Subsidiary  from making any loans to such  entities.  Any
additional  indebtedness  incurred  by  the  New  Mall  Subsidiary  may  include
additional  restrictions  on the ability of the New Mall  Subsidiary  to pay any
such dividends and make any such distributions or loans.

       Phase II Resort and Transfer of Phase II Land
       ---------------------------------------------

      If the Phase II  Subsidiary  determines  to construct the Phase II Resort,
the Phase II Subsidiary will be required to raise substantial debt and/or equity
financings.  Currently,  there are no  commitments  to fund any  portion  of the
construction and development costs of the Phase II Resort. The Phase II Land was
transferred to the Phase II Subsidiary in October 1998. On December 31, 1999, an
additional 1.75 acres of land was contributed indirectly by the Sole Stockholder
to the Phase II Subsidiary.

      The  development of the Phase II Resort may require  obtaining  additional
regulatory  approvals.  The Company does not expect to begin construction on the
Phase II Resort until at least the fourth quarter of 2000 or some time in 2001.

      Because  the  Phase II  Subsidiary  is not a  guarantor  of the  Company's
indebtedness,  creditors of the Company  (including the holders of the Notes) do
not have a direct  claim  against  the assets of the Phase II  Subsidiary.  As a
result,  the  indebtedness  of the Company  (including the Notes) is effectively
subordinated to indebtedness of the Phase II Subsidiary. The Phase II Subsidiary
is not subject to any of the  restrictive  covenants of the debt  instruments of
the Company (including,  without  limitation,  the covenants with respect to the
limitations on indebtedness  and restrictions on the ability to pay dividends or
to make  distributions  or  loans  to the  Company  and its  subsidiaries).  Any
indebtedness   incurred  by  the  Phase  II  Subsidiary  may  include   material
restrictions  on the ability of the Phase II Subsidiary to pay dividends or make
distributions or loans to the Company and its subsidiaries.

      The debt instruments of the Company limit the ability of LVSI, Venetian or
any of their  subsidiaries  to  guarantee  or  otherwise  become  liable for any
indebtedness of the Phase II Subsidiary. Such debt instruments also restrict the
sale or other  disposition by the Company and its  subsidiaries of capital stock
of the Phase II Subsidiary,  including the sale of any such capital stock to the
Sole Stockholder or any affiliate of the Sole Stockholder. In addition, prior to
commencement of  construction of the Phase II Resort,  Venetian has the right to
approve the plans and specifications for the Phase II Resort.

Risk Related to the Subordination Structure of the Mortgage Notes
-----------------------------------------------------------------

      The Mortgage Notes represent  senior secured debt  obligations of LVSI and
Venetian,  secured  by second  priority  liens on the  collateral  securing  the
Mortgage Notes (the "Note Collateral").  However, the guarantees of the Mortgage
Notes by its  subsidiaries,  Mall  Intermediate  Holding  Company,  LLC and Lido
Intermediate Holding Company, LLC (collectively, the "Subordinated Guarantors"),
are unsecured, subordinated debt obligations of the guarantors. The structure of
these  guarantees  present certain risks for holders of the Mortgage Notes.  For
example,  if the Note  Collateral  were  insufficient to pay the debt secured by
such liens, or such liens were found to be invalid, then holders of the Mortgage
Notes  would  have a senior  claim  against  any  remaining  assets  of LVSI and
Venetian.  In contrast,  because of the subordination  provision with respect to
the Subordinated Guarantors,  holders of the Mortgage Notes will always be fully
subordinated to the claims of holders of senior indebtedness of the Subordinated
Guarantors.

<PAGE>

Special Note Regarding Forward-Looking Statements
-------------------------------------------------

      Certain  statements in this section 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,  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 a new venture and new
construction,   competition  and  other  planned   construction  in  Las  Vegas,
government regulation related to the casino industry (including the legalization
of gaming in certain jurisdictions,  such as Native American reservations in the
State of  California),  leverage  and debt  service  (including  sensitivity  to
fluctuations in interest rates),  uncertainty of casino spending and vacationing
in casino resorts in Las Vegas,  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, the completion of infrastructure projects
in Las Vegas, including the current expansion of the Las Vegas Convention Center
and the recent expansion of McCarran  International  Airport,  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 of consumers 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  under  the  Bank  Credit  Facility,   the  Mall
Construction Loan Facility and the FF&E Credit Facility,  and by use of interest
rate cap and floor  agreements.  The ability to enter into interest rate cap and
floor  agreements  will  allow the  Company  to manage  its  interest  rate risk
associated  with its variable rate debt. 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."

<PAGE>

ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
---------------------------------------------------

INDEX TO FINANCIAL STATEMENTS
-----------------------------

Financial Statements:

Report of Independent Accountants......................................27

Consolidated Balance Sheets at December 31, 1999 and 1998..............28

Consolidated Statements of Operations for each of the three
years in the period ended December 31, 1999............................29

Consolidated Statements of Stockholder's Equity for each of the
three years in the period ended December 31, 1999......................30

Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1999............................31

Notes to Financial Statements..........................................32

Financial Statement Schedules:
    Report of Independent Accountants..................................52
    Schedule II - Valuation and Qualifying Accounts....................53

<PAGE>

                        Report of Independent Accountants
                        ---------------------------------

To the Directors and Sole Stockholder of Las Vegas Sands, Inc.


      In our  opinion,  the  accompanying  consolidated  balance  sheets and the
related  consolidated  statements of operations,  of stockholder's equity and of
cash flows present fairly, in all material  respects,  the financial position of
Las Vegas Sands,  Inc. and its  subsidiaries  at December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 1999, in conformity with accounting  principles
generally  accepted in the United  States.  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,  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 the opinion expressed above.

PricewaterhouseCoopers LLP

Las Vegas, Nevada
February 15, 2000

<PAGE>

================================================================================
                             LAS VEGAS SANDS, INC.
                           Consolidated Balance Sheets

                             (Dollars in thousands)
================================================================================
<TABLE>
<CAPTION>
                                                           December 31
                                                           -----------

                                                      1999              1998
                                                  ----------         ----------
<S>                                               <C>                <C>
ASSETS
Current assets:

    Cash and cash equivalents                     $   26,252         $    2,285
    Restricted cash and
     investments                                      10,980            133,936
    Accounts receivable, net                          43,203                112
    Inventories                                        4,516                 73
    Prepaid expenses                                   4,072                  2
                                                  ----------         ----------
Total current assets                                  89,023            136,408

    Property and equipment,
     net                                           1,079,192            833,054
    Deferred offering costs,
     net                                              29,865             35,101
    Other assets, net                                 11,522              1,381
                                                  ----------         ----------
                                                  $1,209,602         $1,005,944
                                                  ==========         ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
    Accounts payable                              $   18,128         $      265
    Construction payables                             10,178             77,025
    Construction payables-contested                    7,232
    Accrued interest payable                          12,490              9,069
    Other accrued liabilities                         43,392              3,005
    Current maturities of
     long-term debt                                   42,859             13,788
                                                  ----------         ----------
Total current liabilities                            134,279            103,152
Other long-term liabilities                            2,333
Long-term debt                                       907,754            744,154
                                                  ----------         ----------
                                                   1,044,366            847,306
                                                  ----------         ----------
Redeemable Preferred Interest in
 Venetian Casino Resort, LLC,
 a wholly owned subsidiary                           149,530             90,701
                                                  ----------         ----------
Commitments and contingencies

Stockholder's equity:
   Common stock, $.10 par value,
    3,000,000 shares authorized,
    925,000 shares issued and
    outstanding                                           92                 92
   Capital in excess of par
    value                                            112,722             99,330
   Accumulated deficit since June
    30, 1996                                         (97,108)           (31,485)
                                                  ----------         ----------
                                                      15,706             67,937
                                                  ----------         ----------
                                                  $1,209,602         $1,005,944
                                                  ==========         ==========
</TABLE>

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

<PAGE>

================================================================================
                             LAS VEGAS SANDS, INC.
                      Consolidated Statements of Operations

                     (In thousands, except per share data)
================================================================================
<TABLE>
<CAPTION>
                                                   Year Ended December 31
                                                   ----------------------

                                            1999           1998           1997
                                          --------      --------       --------
<S>                                     <C>             <C>            <C>
Revenues:
   Casino                                $ 134,381      $     -        $     -
   Rooms                                    89,585
   Food and beverage                        30,786
   Retail and other                         29,167           937            895
                                          --------      --------       --------
                                           283,919           937            895
Less--promotional allowances               (25,045)
                                          --------      --------       --------
   Net revenues                            258,874           937            895
                                          --------      --------       --------

Operating expenses:
   Casino                                   79,102
   Rooms                                    25,532
   Food and beverage                        19,134
   Retail and other                         12,294
   Provision for doubtful
     accounts and discounts                 13,655
   General and administrative               49,938                       (1,827)
   Rental expense                            6,267
   Depreciation and amortization            25,145           100            100
                                          --------      --------       --------
                                           231,067           100         (1,727)
                                          --------      --------       --------
Operating profit before corporate
 and pre-opening expenses                   27,807           837          2,622
   Corporate                                 2,510
   Pre-opening                              21,484         8,722
                                          --------      --------       --------
Operating income (loss)                      3,813       (7,885)          2,622
                                          --------      --------       --------
Other income (expense):
  Interest income                            2,551        17,137          3,439
  Interest expense, net of
   amounts capitalized                     (71,398)      (39,015)        (6,581)
                                          --------      --------       --------
Net loss before extraordinary item         (65,034)      (29,763)          (520)
   Extraordinary item-loss on early
    retirement of debt                        (589)
                                          --------      --------       --------
Net loss                                 $ (65,623)     $(29,763)      $   (520)
                                          ========      ========       ========
Basic and diluted loss
 per share before
 extraordinary item                      $  (85.87)     $ (46.93)      $  (0.56)
                                          ========      ========       ========
Basic and diluted loss
 per share after
 extraordinary item                      $  (86.51)     $ (46.93)      $  (0.56)
                                          ========      ========       ========

</TABLE>

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

<PAGE>

================================================================================
                             LAS VEGAS SANDS, INC.
                Consolidated Statements of Stockholder's Equity

                             (Dollars in thousands)
================================================================================
<TABLE>
<CAPTION>

                                         Common Stock

                                  ---------------------------
                                     Number

                                     Shares        Amount

                                  ------------- -------------
<S>                               <C>           <C>
Balance at December 31, 1996        925,000     $      92
Capital contributions
Dividends
Net loss
                                  ------------- -------------
Balance at December 31, 1997        925,000            92
Preferred interest
Net loss
                                  ------------- -------------
Balance at December 31, 1998        925,000            92
Capital contributions
Preferred interest
Net loss
                                  ------------- -------------
Balance at December 31, 1999        925,000     $      92
                                  ============= =============
</TABLE>

<TABLE>
<CAPTION>

                                   Capital in

                                     Excess of    Accumulated
                                     Par Value      Deficit        Total
                                    ------------- ------------- -------------
<S>                                 <C>           <C>           <C>
Balance at December 31, 1996        $ 107,445     $ (1,202)     $ 106,335
Capital contributions                  33,132                      33,132
Dividends                             (27,600)                    (27,600)
Net loss                                              (520)          (520)
                                    ------------- ------------- -------------
Balance at December 31, 1997          112,977       (1,722)       111,347
Preferred interest                    (13,647)                    (13,647)
Net loss                                           (29,763)       (29,763)
                                    ------------- ------------- -------------
Balance at December 31, 1998           99,330      (31,485)        67,937
Capital contributions                  27,791                      27,791
Preferred interest                    (14,399)                    (14,399)
Net loss                                           (65,623)       (65,623)
                                    ------------- ------------- -------------
Balance at December 31, 1999        $ 112,722     $(97,108)     $  15,706
                                    ============= ============= =============
</TABLE>

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

<PAGE>

================================================================================
                             LAS VEGAS SANDS, INC.
                      Consolidated Statements of Cash Flows

                             (Dollars in thousands)
================================================================================
<TABLE>
<CAPTION>
                                                    Year Ended December 31

                                               1999         1998          1997
                                               ----         ----          ----
<S>                                          <C>          <C>            <C>
Cash flows from operating activities:
Net loss                                     $(65,623)    $(29,763)      $ (520)
Adjustments to reconcile net loss to net
  cash provided by (used in) operating
  activities:
     Depreciation and amortization              25,145         100          100
     Amortization of debt offering costs
       and original issue discount               7,569       7,187
     Loss on early retirement of debt              589
     Provision for doubtful accounts
       and discounts                             13,655
     Interest earned on restricted
       investments                                          (4,251)        (791)
     Changes in operating assets and
       liabilities:
      Accounts receivable                      (56,748)
      Inventories                               (4,443)
      Prepaids expenses                         (4,070)
      Other current assets                                      26          149
      Other assets                             (10,141)        (83)         137
      Accounts payable                          17,863      (1,436)         (77)
      Accrued interest payable                   3,421       1,260
      Other accrued liabilities                 42,720         901        4,861
                                                ------       -----        -----
Net cash provided by (used in) operating
  activities                                   (30,063)    (26,059)       3,859
                                               -------      -------       -----
Cash flows from investing activities:
Proceeds from sale of (purchase of)
  investments                                  122,956     297,226     (426,120)
Construction of Casino Resort                 (319,106)   (508,399)    (130,827)
                                              --------     --------    --------
Net cash used in investing activities         (196,150)   (211,173)    (556,947)
                                              --------     --------    --------
Cash flows from financing activities:

Proceeds from capital contributions             16,000                   25,500
Proceeds from preferred interest in
  Venetian                                      44,431                   77,053
Proceeds from mortgage notes                                            425,000
Proceeds from senior subordinated notes                                  90,500
Repayments on mall construction
  loan facility                               (140,000)
Proceeds from mall construction
  loan facility                                 37,287     102,713
Proceeds from Tranche A Take-out Loan          105,000
Proceeds from Tranche B Take-out Loan           35,000
Proceeds from completion guaranty loan          23,503
Repayments on bank credit
  facility-term loan                           (11,250)
Proceeds from bank credit
  facility-term loan                            34,000     116,000
Repayments on bank credit
  facility-revolver                            (10,231)
Proceeds from bank credit
  facility-revolver                             40,506       8,885
Repayments on FF&E credit facility              (5,862)
Proceeds from FF&E credit facility              83,842      13,858
Payments of deferred offering costs             (2,046)     (2,796)     (37,387)
Payment of dividends                                                    (27,600)
                                              --------     --------    --------
Net cash provided by financing activities      250,180     238,660      553,066
                                              --------     --------    --------
Increase (decrease) in cash
  and cash equivalents                          23,967       1,428          (22)
Cash and cash equivalents at
  beginning of year                              2,285         857          879
                                              --------     --------    --------
Cash and cash equivalents at end of year       $26,252     $ 2,285       $  857
                                              ========     ========     =======

</TABLE>

<PAGE>

================================================================================
                             LAS VEGAS SANDS, INC.
                      Consolidated Statements of Cash Flows, (continued)

                             (Dollars in thousands)
================================================================================
<TABLE>
<CAPTION>
                                                    Year Ended December 31

                                               1999         1998          1997
                                               ----         ----          ----
<S>                                          <C>          <C>            <C>
Supplemental disclosure of cash flow
  information:

  Cash payments for interest                   $91,611     $70,435      $   357
                                              ========     ========     =======
Non-cash investing and financing activities:

Contribution of land by Sole Stockholder       $11,791      $    --     $ 7,632
                                              ========     ========     =======
Property and equipment asset acquisitions
  included  in accounts payable                $17,410      $77,025     $32,141
                                              ========     ========     =======
</TABLE>

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

<PAGE>

LAS VEGAS SANDS, INC.
Notes to Financial Statements

-----------------------------

Note 1 - Organization and Business of Company

---------------------------------------------

      Las Vegas Sands, Inc. ("LVSI") is a Nevada corporation. On April 28, 1989,
LVSI commenced gaming  operations in Las Vegas,  Nevada,  by acquiring the Sands
Hotel and Casino  (the  "Sands").  On June 30,  1996,  LVSI closed the Sands and
subsequently  demolished  the  facility  to  make  way for a  planned  two-phase
hotel-casino  resort.  The first phase of the hotel-  casino resort (the "Casino
Resort") includes 3,036 suites,  casino space approximating 116,000 square feet,
approximately 500,000 square feet of convention space, and approximately 475,000
gross leasable square feet of retail shops and  restaurants.  In connection with
the closing of the Sands, LVSI effected a quasi-reorganization (Note 3).

      The consolidated financial statements include the accounts of LVSI and its
wholly  owned  subsidiaries  (the  "Subsidiaries"),  including  Venetian  Casino
Resort, LLC ("Venetian"),  Grand Canal Shops Mall, LLC (the "Mall  Subsidiary"),
Grand Canal Shops Mall Subsidiary, LLC (the "New Mall Subsidiary"),  Lido Casino
Resort, LLC (the "Phase II Subsidiary"),  Mall Intermediate Holding Company, LLC
("Mall  Intermediate"),   Grand  Canal  Shops  Mall  Construction,   LLC  ("Mall
Construction"),  Lido Intermediate Holding Company,  LLC ("Lido  Intermediate"),
Grand  Canal  Shops  Mall  Holding  Company,  LLC,  Grand  Canal  Shops  Mall MM
Subsidiary,  Inc.,  Lido Casino Resort Holding  Company,  LLC, Grand Canal Shops
Mall MM, Inc. and Lido Casino  Resort MM, Inc.  (collectively,  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 sole stockholder (the "Sole Stockholder") (Note 9).

      Mall  Intermediate and Lido  Intermediate  are special purpose  companies,
which  are  wholly  owned  subsidiaries  of  Venetian.  They are  guarantors  or
co-obligors of certain  indebtedness  related to the  construction of the Casino
Resort.

      The New Mall Subsidiary,  an indirect wholly-owned subsidiary of LVSI, was
formed on December 9, 1999 and owns and  operates  the retail mall in the Casino
Resort (the "Mall").

      The Company has transacted  business with a number of related parties
including  Interface  Group-Nevada,  Inc. ("IGN") and Nevada Funding Group, Inc.
("NFG").  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

---------------------------------------------------

Principals of Consolidation
----------------------------

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

Use of Estimates
----------------

      The  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

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.

<PAGE>

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

Note 2 - Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------

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:

<TABLE>
<CAPTION>

<S>                                                 <C>
  Building and improvements                         15 to 40 years
  Furniture, fixtures and equipment                  3 to 15 years
  Leasehold improvements                             5 to 10 years
</TABLE>

      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  may not be  recoverable.  Impairment  losses are  recognized  when
estimated  future  cash flows  expected to result from the use of the assets and
their eventual  disposition are less than their carrying amounts. See Note 3 for
adjustment of carrying values as a result of the quasi-reorganization.

Capitalized Interest
--------------------

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

Pre-opening Costs
-----------------

      Pre-opening costs, representing primarily direct personnel and other costs
incurred prior to the opening of the Casino Resort 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.  The weighted  average  number of shares
outstanding  used in the  computation  of loss per  share of  common  stock  was
925,000 for all periods presented. There were no options or warrants to purchase
common stock outstanding during any period presented.  The net loss available to
common  stockholders  used in computing 1999 and 1998 basic and diluted loss per
share  includes  a  preferred   return  of  $14.4  million  and  $13.6  million,
respectively.

<PAGE>

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

Note 2 - Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------

Casino Revenue and Promotional Allowances
-----------------------------------------

      In accordance  with industry  practice,  the Company  recognizes as casino
revenue  the net win from gaming  activities,  which is the  difference  between
gaming wins and losses. The retail value of  accommodations,  food and beverage,
and other services  furnished to hotel-casino  guests without charge is included
in  gross  revenues  and  deducted  as  promotional  allowances.  The  estimated
departmental cost of providing such promotional allowances is included primarily
in casino operating expenses as follows (in thousands):

<TABLE>
<CAPTION>

                                               December 31,
                            ---------------------------------------------------

                                 1999              1998             1997
                                 ----              ----             ----
  <S>                       <C>                <C>             <C>
  Food and Beverage             $     7,126      $        --       $        --
  Rooms                               5,077
  Other                                 836
                            ---------------  ---------------   ---------------
                                $    13,039      $        --       $        --
                            ===============  ===============   ===============

</TABLE>

Income Taxes
------------

      LVSI has  elected to be taxed as an S  Corporation  and its  wholly  owned
subsidiaries  are  limited  liability  companies,  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.

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  U.S.  Government-backed
repurchase agreements.

Accounting for Derivative Instruments and  Hedging Activities
-------------------------------------------------------------

      In June 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
Instruments  and Hedging  Activities".  SFAS No. 133 will require the Company to
recognize all derivatives on the balance sheet at fair value. The accounting for
the changes in the fair values of such  derivatives  would  depend on the use of
the  derivative and whether it qualifies for hedge  accounting.  SFAS No. 133 is
effective for the Company's  financial  statements  issued for periods beginning
January 1, 2000. However,  SFAS No. 137, "Accounting for Derivative  Instruments
and Hedging  Activities - Deferral of the Effective  Date of FASB  Statement No.
133",  defers the  effective  date for one year to January 1, 2002.  The Company
anticipates  that  implementing  SFAS No.  133 will not  materially  impact  the
Company's financial condition, results of operations or cash flows.

Reclassifications
-----------------

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

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  to make way for 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.

<PAGE>

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

Note 3 - Strategic Redirection and Quasi-Reorganization (continued)
------------------------------------------------------------------

      In  connection  with the  closing  of the Sands  (Note 1),  the  Company's
director and sole 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
was  eliminated  against  the cost  basis  of the  remaining  property,  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 and Investments

----------------------------------------

      The net  proceeds of the  Company's 12 1/4%  Mortgage  Notes due 2004 (the
"Mortgage  Notes")  and its 14 1/4%  Senior  Subordinated  Notes  due 2005  (the
"Senior  Subordinated Notes" and, together with the Mortgage Notes, the "Notes")
were  deposited  into  restricted  accounts  and  invested in cash or  permitted
investments by a disbursement agent for the Company's lenders until required for
project costs under the terms of the disbursement  agreement with certain of the
Company's lenders (the  "Disbursement  Agreement") (Note 8). Additional  amounts
have been deposited to other  restricted  accounts,  which are controlled by the
Company,  but  which  are  also  restricted  as to use  under  the  terms of the
Disbursement Agreement.

      At December 31, 1999, all of the Company's  investments were classified as
held-to-maturity,  which consists of securities  that management has the ability
and  intent to hold to  maturity.  These  investments  are  carried at cost plus
accrued  interest,  which  approximates  fair  value.  There  were no  sales  or
transfers of securities classified as held-to-maturity during 1999.

Note 5 - Accounts Receivable

----------------------------

      Components of accounts receivable were as follows:

<TABLE>
<CAPTION>

                                                   December 31,
                                        --------------------------------

                                            1999              1998
                                        --------------   ---------------
<S>                                    <C>              <C>
Casino                                 $       28,028   $            --
Hotel                                          17,156
Other                                           4,916               112
                                       --------------   ---------------
                                               50,100               112
Less:  allowance for doubtful
       accounts and discounts                  (6,897)               --
                                       ---------------  ---------------
                                       $       43,203   $           112
                                       ===============  ===============
</TABLE>

      The  Company  extends  credit  to  approved  casino  customers   following
background checks and investigations of credit worthiness. At December 31, 1999,
a  substantial  portion of the  Company's  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 carrying amount, which approximates
fair 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.

<PAGE>

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

Note 6 - Property and Equipment, Net

------------------------------------

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

<TABLE>
<CAPTION>

                                                    December 31,
                                        --------------------------------

                                             1999             1998
                                        ---------------   --------------
<S>                                    <C>                <C>
Land and land improvements               $     105,425      $     93,634
Building and improvements                      816,826
Equipment, furniture, fixtures
 and leasehold improvements                    139,147               426
Construction in progress                        42,649           739,028
                                       ---------------   ---------------
                                             1,104,047           833,088
Less:  accumulated depreciation

       and amortization                        (24,855)              (34)
                                       ---------------   ---------------
                                           $ 1,079,192        $  833,054
                                       ===============   ===============
</TABLE>

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

      During the years  ended  December  31,  1999,  1998 and 1997,  the Company
capitalized  interest expense of $31.3 million,  $39.7 million and $2.2 million,
respectively.

Note 7 - Other Accrued Liabilities
----------------------------------

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

<TABLE>
<CAPTION>

                                                       December 31,
                                             ----------------------------------

                                                   1999             1998
                                             ---------------   ---------------
<S>                                          <C>               <C>
 Customer deposits                                 $  15,942          $
 Payroll and related                                  10,779
 Taxes and licenses                                   10,126
 Outstanding gaming chips and tokens                   5,862
 Other accruals                                          683             3,005
                                             ---------------   ---------------
                                                   $  43,392          $  3,005
                                             ===============   ===============
</TABLE>

<PAGE>

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

Note 8 - Long-Term Debt

-----------------------

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

<TABLE>
<CAPTION>

                                                              December 31,
                                                      --------------------------
                                                          1999          1998
                                                      -----------   ------------
<S>                                                   <C>           <C>
12 1/4% Mortgage Notes, due November 15, 2004          $  425,000    $  425,000
14 1/4% Senior Subordinated Notes, due
  November 15, 2005 (net of unamortized
  discount of $5,138 in 1999 and $6,014
  in 1998)                                                 92,362        91,486
Mall Construction Loan Facility                                         102,713
Mall Tranche A Take-out Loan                              105,000
Mall  Tranche B Take-out Loan                              35,000
Completion Guaranty Loan                                   23,503
Bank Credit Facility-revolver                              39,160         8,885
Bank Credit Facility-term loan                            138,750       116,000
FF&E Credit Facility                                       91,838        13,858
Less: current maturities                                 (42,859)       (13,788)
                                                      -----------   ------------
Total long-term debt                                   $  907,754    $  744,154
                                                      ===========   ============
</TABLE>

      Mortgage Notes and Senior Subordinated Notes
      --------------------------------------------

      In November 1997, the Company  issued $425.0 million  aggregate  principal
amount of the Mortgage Notes and $97.5 million aggregate principal amount of the
Senior  Subordinated  Notes in a  private  placement.  Interest  on the Notes is
payable  each May 15 and  November 15,  commencing  on May 15, 1998.  On June 1,
1998,  LVSI and Venetian  completed an exchange  offer to exchange the Notes for
notes with substantially the same terms.

      The  Mortgage  Notes are  secured  by second  priority  liens on the "Note
Collateral" (the real estate  improvements  and personal  property that comprise
the Hotel, the Casino and the Congress  Center,  with certain  exceptions).  The
Senior Subordinated Notes are unsecured.  The Notes are redeemable at the option
of LVSI and Venetian at prices  ranging from 100% to 106.125%  during  specified
years as set forth in the Notes and the  indentures  pursuant to which the Notes
were  issued  (the  "Indentures").  Upon a change of control  (as defined in the
Indentures),  each Note holder may require LVSI and Venetian to repurchase  such
Notes at 101% of the principal  amount  thereof plus accrued  interest and other
amounts  which are then due, if any. The Notes are not subject to a sinking fund
requirement.

      The Senior  Subordinated  Notes bear cash  interest at the rate of 10% per
annum through  November 15, 1999, and thereafter at a rate of 14 1/4% per annum.
The Senior Subordinated Notes were sold at a $7.0 million discount to their face
amount  in  order to yield 14 1/4% per  annum to  maturity  and  accrued  to par
through the second anniversary date of the issuance.

      Bank Credit Facility
      --------------------

      In November 1997, LVSI, Venetian and a syndicate of lenders entered into a
bank credit  facility  (the "Bank Credit  Facility").  The Bank Credit  Facility
provided  $150.0  million  in  multiple  draw-term  loans  to  the  Company  for
construction  and  development of the Casino  Resort.  The term loans mature not
later  than  the  sixth  anniversary  of the  closing  date and are  subject  to
quarterly amortization payments,  which began on September 30, 1999 and continue
for 15 additional quarters.

      The  indebtedness  under the Bank  Credit  Facility  is  secured  by first
priority liens on the Note Collateral.  As of December 31, 1999,  $150.0 million
of the term loans had been drawn and $11.3  million  principal  repayments  were
made under the Bank Credit Facility term loan.

      Up to $40.0  million of additional  credit in the form of revolving  loans
under the Bank Credit  Facility  (the  "Revolver")  is available  generally  for
working capital.  The Revolver matures on March 15, 2001, the second anniversary
date of the first working capital Revolver  advance.  During the construction of
the Casino  Resort,  up to $15.0  million of the Revolver was  available to fund
purchases of certain  furniture,  fixtures and equipment (the "Specified  FF&E")
(including  deposits  thereon)  and provide  letters of credit for  construction
activities. Amounts borrowed to purchase the Specified FF&E were repaid from the
proceeds of a $97.7 million credit  facility  secured by the Specified FF&E (the
"FF&E Credit Facility").  As of December 31, 1999, $39.2 million was outstanding
on the Revolver.

<PAGE>

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

Note 8 - Long-Term Debt (continued)
----------------------------------

      Funds borrowed under the Bank Credit Facility bear interest  through final
completion  (completion  of all punchlist  items and  settlement of all disputes
with the Construction Manager and its subcontractors) at (i) a base rate plus 2%
per annum or (ii) a reserve  adjusted  eurodollar  rate plus 3% per annum.  Upon
final completion and for six months thereafter, the interest rate will be at (i)
a base rate plus 1 1/2% or (ii) a reserve  adjusted  Eurodollar rate plus 2 1/2%
per annum. From six months after final completion,  the interest rate will be at
a base rate or a reserve adjusted Eurodollar rate plus a margin based on certain
leverage ratios set forth in the Bank Credit Facility.

      The  Company is  required  to enter into  interest  rate cap and/or  floor
agreements  to limit the impact of increases  in interest  rates on its floating
rate debt derived from the Bank Credit Facility. To meet the requirements of the
Bank Credit Facility,  the Company entered into a cap and floor agreement during
1998 (the "Cap and Floor  Agreement")  which  resulted  in a premium  payment to
counter parties and receipt of an equal payment from the counter parties,  based
upon notional  principal amounts for a term equal to the term of the Bank Credit
Facility.  The  interest  rate cap  provisions  of the Cap and  Floor  Agreement
entitle the Company to receive from the counter parties the amounts,  if any, by
which the selected  market interest rates exceed the strike rates stated in such
agreement.  Conversely,  the interest rate floor provisions of the Cap and Floor
Agreement require the Company to pay the counter parties the amounts, if any, by
which the selected  market  interest rates are less than the strike rates stated
in such agreement. The fair value of the Cap and Floor Agreement is estimated by
obtaining  quotes  from  brokers  and  represents  the cash  requirement  if the
existing contracts had been settled at year-end.  The notional amount of the Cap
and Floor Agreement at December 31, 1999 was $69.4 million.

      Mall Construction Loan Facility
      -------------------------------

      In November 1997, LVSI,  Venetian,  Mall Construction and a major non-bank
lender  entered into a mall  construction  loan facility to provide up to $140.0
million in financing for construction of the Mall (the "Mall  Construction  Loan
Facility").  The Mall  Construction Loan Facility was repaid in full on December
20, 1999, pursuant to the Tranche A Take-out Loan and Tranche B Take-out Loan as
described below.

      Tranche A Take-out Loan
      -----------------------

      On December 20, 1999, certain take-out lenders (collectively, the "Tranche
A Take-out  Lender")  funded a $105.0 million Tranche A take-out loan to the New
Mall Subsidiary (the "Tranche A Take-out Loan"). The proceeds were used to repay
indebtedness under the Mall Construction Loan Facility.

      The  indebtedness  under the  Tranche A Take-out  Loan is secured by first
priority  liens on the assets that  comprise the Mall (the "Mall  Assets").  The
annual  interest  rate on the Tranche A Take-out  Loan is 350 basis  points over
30-day  LIBOR.  The Tranche A Take-out Loan is due in full on December 20, 2002.
No principal payments are due thereunder until December 20, 2002.

      To meet the  requirements  of the  Tranche A Take-out  Loan,  the New Mall
Subsidiary  entered into a cap  agreement  subsequent  to December 31, 1999 (the
"Cap  Agreement")  which resulted in a premium  payment to counter parties based
upon notional principal amounts for a term equal to the Tranche A Take-out Loan.
The  interest  rate cap  entitles  the New Mall  Subsidiary  to receive from the
counter parties the amounts, if any, by which the selected market interest rates
exceed the strike rates stated in the Cap Agreement.

      The New  Mall  Subsidiary  is also  required  pursuant  to the  Tranche  A
Take-out  Loan to maintain  certain  funds in escrow for mall  management  fees,
tenant  disputes,  tenant  allowances and leasing  commissions.  At December 31,
1999, $2.2 million was held in such reserves. In addition, pursuant to the terms
of the  Tranche A Take-out  Loan,  the Sole  Stockholder  has  delivered  a $5.0
million  irrevocable  letter of credit as  collateral  for an operating  reserve
until certain minimum rent thresholds are met.

      Tranche B Take-out Loan
      -----------------------

      On December 20,  1999,  the Sole  Stockholder  funded a Tranche B take-out
loan to provide  $35.0  million  in  financing  to the New Mall (the  "Tranche B
Take-out  Loan"  and,  together  with the  Tranche A  Take-out  Loan,  the "Mall
Take-out Financing").  The proceeds,  along with $105.0 million of proceeds from
the  Tranche A  Take-out  Loan,  were used to repay the Mall  Construction  Loan
Facility in full.

<PAGE>

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

Note 8 - Long-Term Debt (continued)
----------------------------------

      The  indebtedness  under the Tranche B Take-out  Loan is secured by second
priority liens on the Mall Assets. The loan bears interest at 14% per annum. The
initial maturity date is December 20, 2004 with a right of extension to December
20, 2007. No principal payments are due until maturity.

      FF&E Financing
      --------------

      In December 1997,  the FF&E Credit  Facility was entered into with certain
lenders (the "FF&E  Lenders")  to provide  $97.7  million of  financing  for the
Specified  FF&E and an  electrical  substation.  The  financing  provides for an
interim loan during construction and a 60-month basic term loan after completion
of the Casino  Resort.  In the initial and  subsequent  draws,  the FF&E Lenders
reimbursed the Company for amounts spent by the Company for Specified FF&E prior
to the initial draw.

      Interest on the basic term loan is a floating  monthly rate  calculated at
the higher of (a) the reserve adjusted 30-day LIBOR plus 375 basis points or (b)
the eurodollar  interest rate margin in effect on the Bank Credit  Facility plus
125  basis  points.  Amortization  on the  FF&E  basic  loan  will  be 3% of the
principal for the first four quarters  beginning  September 30, 1999 and 5.5% of
the principal for the next 16 quarters.  As of December 31, 1999,  $97.7 million
had been drawn and $5.9  million  principal  repayments  had been paid under the
FF&E Credit Facility.

      Completion Guaranty Loan
      ------------------------

      In accordance  with its terms,  advances  made under the Sole  Stockholder
completion  guaranty (the  "Completion  Guaranty")  are treated as a junior loan
from the Sole Stockholder to Venetian (the  "Completion  Guaranty Loan") that is
subordinated  in right of  payment  to the  indebtedness  under the Bank  Credit
Facility,  the FF&E Credit Facility and the Notes. The Completion  Guaranty Loan
matures on November 16, 2005 and bears  interest at a rate of 14 1/4% per annum.
Although  interest may accrue on the Completion  Guaranty Loan, no cash payments
with  respect  to such loan may be made  until  senior  indebtedness  is repaid,
except  for  payments  made from  certain  construction-related  recoveries.  On
November 12, 1999, an advance of approximately  $23.5 million was made under the
Completion Guaranty and treated as a Completion Guaranty Loan.

     As support for the development and operation of the Casino Resort, the Sole
Stockholder or his affiliates currently provide the following:

(i) a  construction  completion  guaranty  unlimited  in amount with  respect to
excess  construction costs due to scope changes,  with a remaining  liability of
approximately  $5.0 million  (collateralized  by cash and cash equivalents) with
respect to all other  construction  costs.  On November 12, 1999,  approximately
$23.5  million of the  completion  guaranty  collateral  was utilized for excess
construction  costs,  leaving the $5.0 million of cash  collateral  remaining as
described above;

(ii) the $35.0 million Tranche B Take-out Loan; and

(iii) a $20.0 million unsecured guaranty of the $105.0 million Tranche A
Take-out Loan; and

(iv) collateral for a $5.0 million irrevocable letter of credit to secure lien
bonds; and

(v)  collateral  for a $5.0 million  irrevocable  letter of credit to provide an
operating reserve for the Mall.

      Scheduled  maturities of long-term  debt  outstanding at December 31, 1999
are  summarized  as follows:  $42.9  million for 2000,  $98.2  million for 2001,
$175.2  million for 2002,  $47.7 million for 2003,  $470.7  million for 2004 and
$121.0 million (which includes  unamortized  discount on the Senior Subordinated
Notes) thereafter.

<PAGE>

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

Note 8 - Long-Term Debt (continued)
----------------------------------

      Waivers
      -------

      On November 12, 1999,  the Company  entered  into various  limited  waiver
agreements (the "Waivers") with the  administrative  agent and lenders under (1)
the Bank Credit Facility,  (2) the Mall Construction Loan Facility, (3) the FF&E
Credit Facility and (4) certain parties to the Disbursement Agreement. Under the
Waivers,  the various lenders waived certain  defaults and events of default (to
the  extent,  if any,  they  existed  or may  have  existed)  arising  from  the
litigation with the Construction  Manager,  the facts relating to the underlying
dispute with the  Construction  Manager and the mechanics  liens that were filed
against the Casino Resort.  As conditions to the  effectiveness  of the Waivers,
the Company and the Sole Stockholder, among other things (i) agreed to pay a fee
to the lenders under the Bank Credit Facility and the FF&E Credit Facility, (ii)
agreed to purchase  surety  bonds for all of the  mechanics  liens and cause the
title company to provide endorsements ensuring that the deeds of trust under the
Bank Credit Facility, the Mall Construction Loan Facility and the Mortgage Notes
are superior in priority to all mechanics  liens, and (iii) agreed that the Sole
Stockholder's $25.0 million Completion Guaranty would, notwithstanding the prior
agreement  of the  parties  providing  for  termination  of such  guaranty  upon
substantial  completion  of the Casino  Resort,  remain in effect  until  "final
completion" (i.e., the completion of all remaining punchlist items and the final
resolution  or  settlement  of all disputes  with the  Construction  Manager and
subcontractors)  and be  unlimited  in amount with  respect to all  construction
costs  arising  from scope  changes.  In order to be able to purchase the surety
bonds, the Sole Stockholder had to provide a $5.0 million  irrevocable letter of
credit as  collateral  to the  bonding  company.  All of the  conditions  to the
effectiveness of the limited waivers were satisfied on November 12, 1999.

      For the year ended December 31, 1999,  the Company  incurred a significant
net loss and was required to obtain debt and equity  contributions from its Sole
Stockholder in order to meet its  obligations  and complete  construction of the
Casino Resort.  The Company has substantial debt service payments due during the
next twelve months,  including quarterly principal repayments on its Bank Credit
Facility and the FF&E Credit  Facility  aggregating  $42.9  million and interest
payments of $105.7  million  during 2000. To fund these  payments from operating
cash flow,  the Company must achieve  improved  results for its next four fiscal
quarters.  Based on  results  in the  fourth  quarter  of 1999 and  management's
business  plan,  the  Company  anticipates  that  its  existing  cash  balances,
operating  cash flow and  available  borrowing  capacity  will  provide  it with
sufficient  resources to meet existing debt obligations and foreseeable  capital
expenditure requirements.

      The  Company has  obtained  waivers or  remained  in  compliance  with the
covenants provided for in its debt instruments,  and expects to be in compliance
during  fiscal 2000.  However,  part of  management's  business plan may require
increased   flexibility  under  the  debt  covenants  provided  for  under  such
instruments.   Accordingly,   the   Company  has  held   discussions   with  the
administrative agent under the Bank Credit Facility to discuss  modifications to
the terms of the Bank Credit  Facility,  including  the  expiration  date of the
Revolver, schedule of principal payments and financial covenant.

      The debt  instruments  described  above  contain  certain  covenants  that
require the Company to pass a number of financial tests relating to, among other
things, a minimum consolidated earnings before interest, taxes, depreciation and
amortization  ("EDITDA"),  a  consolidated  leverage  ratio;  and a fixed charge
coverage   ratio  (all  as  defined  in  the  respective   credit   agreements).
Additionally,  the 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.  The Company is
also a party to certain intercreditor arrangements. The intercreditor agreements
set  forth  the  lender's  interests  and  claims  in the  Company's  assets  as
collateral for borrowings.

<PAGE>

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:

<TABLE>
<CAPTION>

                                                 December 31,
                               ---------------------------------------------

                                      1999                 1998
                                      ----                 ----

                               Carrying    Fair       Carrying     Fair
                               Amount      Value      Amount       Value
                               ---------------------------------------------
<S>                            <C>         <C>        <C>          <C>
12 1/4% Mortgage Notes         $425,000    $352,750   $425,000     $433,500
14 1/4% Senior
 Subordinated Notes              92,362      59,475     91,486       87,750
Mall Construction
 Loan Facility                                         102,713      102,713
Mall Tranche A Loan
 Facility                       105,000     105,000
Mall Tranche B Loan
 Facility                        35,000      35,000
Completion Guaranty Loan         23,503      23,503
Bank Credit Facility            177,910     177,910    124,885      124,885
FF&E Credit Facility             91,838      91,838     13,858       13,858
Cap and Floor Agreement                       (100)                   (600)


</TABLE>

     The fair values of the Mortgage Notes and the Senior Subordinated Notes are
based on quoted market prices. The fair values of the Senior  Subordinated Notes
are  based  upon the  $97.5  million  face  amounts.  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 Bank  Credit  Facility is repaid and cash  payments  are
permitted under the restricted  payment covenants of the indentures entered into
in connection  with the Notes,  the  preferred  return on the Series B Preferred
Interest will accrue and will not be paid in cash.  Commencing in November 2009,
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, 1999 and 1998, $14.4 million and $13.6 million,  respectively,  were accrued
on the Series B Preferred  Interest related to the  contributions  made.  During
1997,  1998 and 1999,  there were no  distributions  of  preferred  interest  or
preferred return paid.

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.  All  references  to share and per share data  herein  have been
adjusted retroactively to give effect to the change in shares outstanding.

<PAGE>

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

Note 10 - Stockholder's Equity (continued)
------------------------------------------

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. The Company has committed to grant options to purchase
shares of the Company's  common stock at an exercise price to be determined by a
formula involving the value of LVSI's land and certain capital contributions. If
fully   exercised,   shares   acquired   under  such  options  would   represent
approximately 5% of the Company's then  outstanding  stock. The Company does not
expect  the  exercise  price on the grant  date will be lower  than fair  market
value.

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, 1999,  contributions  accrued under the
savings plan were $800,000.

Note 12 - Related Party Transactions

------------------------------------

      On November 12, 1999, the Sole  Stockholder  made a $15.0 million  working
capital loan to the Company in the form of the  Subordinated  Note.  On November
15, 1999, the entire  Subordinated  Note was contributed by the Sole Stockholder
to LVSI as a common equity capital contribution.

      Because the Company  could not access the Revolver  from August 3, 1999 to
November  12,  1999  while  mechanics  liens  against  the  Casino  Resort  were
outstanding, the Sole Stockholder contributed $7.1 million to Venetian in return
Series B Preferred  Interest and $16.0 million to LVSI (including  conversion of
the $15.0 million  Subordinated  Note) as a common equity capital  contribution.
Also, during the second quarter of 1999, the Company received $37.3 million from
the Phase II Subsidiary (which was funded from indirect equity  contributions by
the Sole  Stockholder  through  Venetian  as a Series B Preferred  Interest)  to
reimburse the Company for a portion of the shared  facilities  costs between the
Casino  Resort and the Phase II Resort.  During  the  fourth  quarter,  the Sole
Stockholder  indirectly contributed 1.75 acres of land on the Strip to the Phase
II Subsidiary,  which was recorded at its historical  cost of $11.8 million as a
common equity capital contribution.

      The Sole  Stockholder is a partner in three  entities  formed to build out
and operate  restaurants in the Casino  Resort.  The terms and conditions of the
leases  granted  by the  Company  for  such  restaurants  are  market  and on an
arm's-length basis.

      In 1999, LVSI received from, and rendered to, Interface and its affiliates
certain administrative and other services such as travel. Any such services were
provided either on an arm's-length basis, or at a cost based on the actual costs
incurred to provide such services.  The Company paid certain affiliates $900,000
for these services during 1999.

      During  November 1999, the Sole  Stockholder  purchased idle  construction
equipment from the Company  (tower  cranes) for $2.0 million,  the cost basis of
the equipment.

      During the fourth quarter of 1999, the Sole Stockholder  purchased certain
construction claims from various contractors and subcontractors for an aggregate
price equal to the aggregate amount of the claims  (approximately $1.6 million).
On November 12, 1999,  with the approval of all of the  Company's  lenders,  the
Company paid the Sole Stockholder the aggregate amount of these claims.

<PAGE>

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

Note 13 - Commitments and Contingencies (continued)
--------------------------------------------------

Energy Services Agreement and Other 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 of 10 years  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
Company's Construction Manager (also defined below) 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,  1999,  Venetian  and the New  Mall  Subsidiary  were
obligated under the energy services  agreements to make future minimum  payments
as follows (in thousands):

<TABLE>
<CAPTION>

 Years Ending December 31,
 -------------------------
   <S>                                      <C>

   2000                                            $  7,657
   2001                                               7,657
   2002                                               7,657
   2003                                               7,657
   2004                                               7,657
   Thereafter                                        34,456
                                            ---------------
   Total minimum lease payments                     $72,741
                                            ===============
</TABLE>

      Expenses  incurred under the energy services  agreements were $4.3 million
for the year ended December 31, 1999. The New Mall Subsidiary is responsible for
19% of energy services  rental  payments and these amounts  exclude  payments by
IGN.  Expenses  incurred under other  operating  lease  agreements  totaled $2.0
million.

Litigation
----------

     The  Company  is party to  litigation  matters  and  claims  related to its
operations and the construction of the Casino Resort. Except as described below,
the Company does not expect that the final resolution of these matters will have
a material impact on the financial position, results of operation and cash flows
of the Company.

     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 the  Final  GMP.  The  obligations  of the  Construction  Manager  under  the
Construction  Management Contract are guaranteed by Bovis, Inc.  ("Bovis"),  the
Construction  Manager's  direct parent at the time the  Construction  Management
Contract was entered into.

<PAGE>

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

Note 13 - Commitments and Contingencies (continued)
--------------------------------------------------

     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 the Bovis Guaranty,  including  failure to fully pay
trade  contractors and vendors and failure to meet the April 21, 1999 guaranteed
completion  date. This complaint was amended by the Company on November 23, 1999
to add Bovis' guarantor,  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 $50.0  million.  The  Construction  Manager
subsequently  filed  motions  to  dismiss  the  Company's  complaint  on various
grounds, which the Company opposed. The Construction Manager's principal motions
to date have either been 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 claim 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 $145.6  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
preliminary review of the complaints, the fact that the Construction Manager has
not provided Venetian with reasonable  documentation to support such claims, and
the Company's belief that the Construction  Manager has materially  breached its
agreements  with  the  Company,  the  Company  believes  that  the  Construction
Manager's  claims are without merit and 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.  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
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 and is in the  process  of
investigating  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 right 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 its liquidated damages insurance policy (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 or will assert in the
above-described  litigations.  Liability  under the LD Policy may  ultimately be
determined by binding arbitration.

<PAGE>

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

Note 14 - Minimum Lease Income (continued)
-----------------------------------------

      All of the pending litigation described above is in preliminary stages and
it is not yet possible to determine its ultimate  outcome.  If any litigation or
other  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 effect on the financial position, results
of operations or cash flows of the Company.

      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  83% is attributable to
the New Mall  Subsidiary)  consisted  of the  following at December 31, 1999 (in
thousands):

<TABLE>
<CAPTION>

<S>                            <C>
  2000                              $   20,491
  2001                                  20,521
  2002                                  20,708
  2003                                  20,846
  2004                                  20,131
  Thereafter                            81,612
                               ---------------

  Total                              $ 184,309
                               ===============
</TABLE>

      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
$450,000 per year.

Note 15 - Summarized Financial Information

------------------------------------------

       Venetian  and  LVSI  are  co-obligors  of the  Notes  and  certain  other
indebtedness  related to  construction  of the Casino Resort and are jointly and
severally liable for such  indebtedness  (including the Notes).  Venetian,  Mall
Intermediate,  Mall  Construction,  and  Lido  Intermediate  (collectively,  the
"Subsidiary  Guarantors") are wholly owned  subsidiaries of LVSI. The Subsidiary
Guarantors  have jointly and severally  guaranteed (or are  co-obligors of) such
debt on a full  and  unconditional  basis.  No  other  subsidiary  of LVSI is an
obligor or guarantor of any of the Casino Resort financing.

      Because the New Mall Subsidiary is not a guarantor of any  indebtedness of
the Company (other than the Mall Take-out Financing), creditors of the Company's
entities  comprising the Company other than the New Mall  Subsidiary  (including
the holders of the Notes but excluding  creditors of the New Mall Subsidiary) do
not have a direct claim against the Mall Assets.  As a result,  indebtedness  of
the  entities  comprising  the  Company  other  than  the  New  Mall  Subsidiary
(including  the  Notes) is now,  with  respect to the Mall  Assets,  effectively
subordinated to indebtedness of the New Mall Subsidiary. The New Mall Subsidiary
is not  restricted  by any of the  debt  instruments  of LVSI,  Venetian  or the
Company's other subsidiary  guarantors (including the Indentures) from incurring
any indebtedness. The terms of the Tranche A Take-out Loan prohibit the New Mall
Subsidiary  from paying  dividends or making  distributions  to any of the other
entities  comprising  the Company  unless  payments under the Tranche A Take-out
Loan are current,  and, with certain limited  exceptions,  prohibit the New Mall
Subsidiary from making any loans to such entities.  Any additional  indebtedness
incurred by the New Mall Subsidiary may include  additional  restrictions on the
ability of the New Mall  Subsidiary to pay any such  dividends and make any such
distributions or loans.

<PAGE>

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

Note 15 - Summarized Financial Information (continued)
-----------------------------------------------------

      Prior to October 1998, Venetian owned approximately 44 acres of land on or
near  the Las  Vegas  Strip,  on the site of the  former  Sands.  Such  property
includes the site on which the Casino Resort was  constructed.  Approximately 14
acres of such land was  transferred  to the Phase II Subsidiary in October 1998.
On  December  31,  1999,  an  additional  1.75  acres  of land  was  contributed
indirectly  by the Sole  Stockholder  to the Phase II  Subsidiary.  The Phase II
Resort is planned to be constructed  adjacent to the Casino Resort.  Because the
Phase II  Subsidiary  will not be a  guarantor  of the  Company's  indebtedness,
creditors  of the Company  (including  the holders of the Notes) will not have a
direct claim  against the assets of the Phase II  Subsidiary.  As a result,  the
indebtedness   of  the  Company   (including  the  Notes)  will  be  effectively
subordinated to indebtedness of the Phase II Subsidiary. The Phase II Subsidiary
is not subject to any of the  restrictive  covenants of the debt  instruments of
the Company  (including the Notes).  Any  indebtedness  incurred by the Phase II
Subsidiary is expected to include  material  restrictions  on the ability of the
Phase II  Subsidiary  to pay  dividends  or make  distributions  or loans to the
Company and its subsidiaries.

      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, 1999 and 1998
and the three  years in the period  ended  December  31,  1999 is as follows (in
thousands):

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                            CONDENSED BALANCE SHEETS

                                December 31, 1999

<TABLE>
<CAPTION>

                                                          Venetian
                                          Las Vegas       Casino Resort
                                          Sands, Inc.     LLC
                                         -----------     -----------

<S>                                      <C>             <C>
Cash and cash equivalents                $   23,961       $    2,237
Restricted cash and investments                                8,789
Intercompany receivable                                       24,736
Accounts receivable, net                     22,279           17,519
Inventories                                                    4,516
Prepaid expenses                                629            3,229
                                         -----------     -----------
     Total current assets                    46,869           61,026

Property and equipment, net                                  853,282
Investment in Subsidiaries                  126,016           67,091
Deferred offerings costs, net                                 24,441
Other assets, net                             3,804            4,651
                                         -----------     -----------
                                         $  176,689       $1,010,491
                                         ==========       ==========

Accounts payable                         $      834       $   15,843
Construction payable                                           6,262
Construction payable-contested                                 7,232
Intercompany payables                         2,051
Accrued interest payable                                      12,327
Other accrued liabilities                    19,848           22,580
Current maturities of long
  term debt                                                   42,859
                                         -----------     -----------
    Total current liabilities                22,733          107,103

Other long-term liabilities                                    2,333
Long-term debt                                               767,754
                                         -----------     -----------
                                             22,733          877,190
Redeemable Preferred interest

  in Venetian                                                149,530
                                         -----------     -----------
Stockholder's equity                        153,956          (16,229)
                                         -----------     -----------
                                         $  176,689      $ 1,010,491
                                         ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                      CONDENSED BALANCE SHEETS, (Continued)
                                December 31, 1999

<TABLE>
<CAPTION>

                                           GUARANTOR SUBSIDIARIES
                                        ----------------------------
                                        LIDO            Mall
                                        Intermediate    Intermediate
                                        Holding         Holding
                                        Company         Company
                                        LLC             LLC
                                        -----------     -----------

<S>                                     <C>             <C>
Cash and cash equivalents              $         4      $        5
Restricted cash and investments
Intercompany receivable
Accounts receivable, net
Inventories
Prepaid expenses
                                        -----------     -----------
     Total current assets                        4               5
                                        -----------     -----------
Property and equipment, net
Investment in Subsidiaries

Deferred offerings costs, net
Other assets, net

                                        -----------     -----------
                                        $        4      $        5
                                        ===========     ===========
Accounts payable                        $               $
Construction payable
Construction payable-contested
Intercompany payables
Accrued interest payable
Other accrued liabilities
Current maturities of long
  term debt
                                        -----------     -----------
    Total current liabilities

Other long-term liabilities
Long-term debt

                                        -----------     ----------

Redeemable Preferred interest
  in Venetian

                                        -----------     ----------
Stockholder's equity                             4              5
                                        -----------     ----------
                                        $        4      $       5
                                        ===========     ==========

</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                      CONDENSED BALANCE SHEETS, (Continued)
                                December 31, 1999

<TABLE>
<CAPTION>

                                         NON-GUARANTOR SUBSIDIARIES
                                        ----------------------------
                                        (1)
                                        Grand           (2)
                                        Canal           Other
                                        Shops Mall      Non-
                                        Subsidiary      Guarantor
                                        LLC             Subsidiaries
                                        -----------     -----------

<S>                                     <C>             <C>
Cash and cash equivalents              $        --      $       45
Restricted cash and investments              2,191
Intercompany receivable
Accounts receivable, net                     3,405
Inventories
Prepaid expenses                               214
                                        -----------     -----------
     Total current assets                    5,810              45
                                        -----------     -----------
Property and equipment, net                143,965          81,945
Investment in Subsidiaries

Deferred offerings costs, net                5,424
Other assets, net                            3,067
                                        -----------     -----------
                                        $  158,266      $   81,990
                                        ===========     ===========
Accounts payable                        $    1,451      $
Construction payable                                         3,916
Construction payable-contested
Intercompany payables                       22,685
Accrued interest payable                       163
Other accrued liabilities                      964
Current maturities of long
  term debt
                                        -----------     -----------
    Total current liabilities               25,263           3,916

Other long-term liabilities
Long-term debt                             140,000
                                        -----------     -----------
                                           165,263           3,916
Redeemable Preferred interest
  in Venetian

                                        -----------     -----------
Stockholder's equity                        (6,997)         78,074
                                        -----------     -----------
                                        $  158,266      $   81,990
                                        ===========     ===========
<FN>

----------
(1) The assets and  liabilities of Grand Canal Shops Mall  Construction,  LLC, a
guarantor,  were transferred to The Mall Subsidiary, a non-guarantor subsidiary,
upon substantial completion of the Casino Resort.

(2) Land with a historical cost basis of $29,169 was  transferred  from Venetian
Casino  Resort,  LLC, a co-obligor of the Notes to Lido Casino  Resort,  LLC., a
non-guarantor subsidiary, in October 1998 and land with a value of $11.8 million
was indirectly contributed by the Sole Stockholder during December 1999.

</FN>
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                      CONDENSED BALANCE SHEETS, (Continued)
                                December 31, 1999

<TABLE>
<CAPTION>

                                        Consolidating/
                                        Eliminating
                                        Entries         Total

                                        -----------     -----------

<S>                                     <C>             <C>
Cash and cash equivalents              $        --      $    26,252
Restricted cash and investments                              10,980
Intercompany receivable                    (24,736)
Accounts receivable, net                                     43,203
Inventories                                                   4,516
Prepaid expenses                                              4,072
                                        -----------     -----------
     Total current assets                  (24,736)          89,023
                                        -----------     -----------
Property and equipment, net                               1,079,192
Investment in Subsidiaries                (193,107)
Deferred offerings costs, net                                29,865
Other assets, net                                            11,522
                                        -----------     -----------
                                        $ (217,843)      $1,209,602
                                        ===========     ===========
Accounts payable                        $                $   18,128
Construction payable                                         10,178
Construction payable-contested                                7,232
Intercompany payables                      (24,736)
Accrued interest payable                                     12,490
Other accrued liabilities                                    43,392
Current maturities of long
  term debt                                                  42,859
                                        -----------     -----------
    Total current liabilities              (24,736)         134,279

Other long-term liabilities                                   2,333
Long-term debt                                              907,754
                                        -----------     -----------
                                           (24,736)       1,044,366
Redeemable Preferred interest

  in Venetian                                               149,530
                                        -----------     -----------
Stockholder's equity                      (193,107)          15,706
                                        -----------     -----------
                                        $ (217,843)      $1,209,602
                                        ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                            CONDENSED BALANCE SHEETS

                                December 31, 1998

<TABLE>
<CAPTION>

                                                               Venetian
                                               Las Vegas       Casino Resort
                                               Sands, Inc.     LLC
                                               -----------     -----------

<S>                                           <C>             <C>
Cash and cash equivalents                     $    1,216       $    1,025
Restricted cash and investments                                   133,936
Intercompany receivable                              563
Accounts receivable, net                                              112
Inventories                                                            73
Prepaid expenses                                                        2
                                               -----------     -----------
     Total current assets                          1,779          135,148
                                               -----------     -----------
Property and equipment, net                                       700,491
Investment in Subsidiaries                       114,225           29,331
Deferred offerings costs, net                                      28,384
Other assets, net                                  1,317               64
                                               -----------     -----------
                                              $  117,321       $  893,418
                                               ==========       ==========

Accounts payable                              $                $      265
Construction payable                                               66,402
Intercompany payables                                               3,618
Accrued interest payable                                            9,069
Other accrued liabilities                          1,948            1,057
Current maturities of long term debt                               13,788
                                               ----------     -----------
    Total current liabilities                      1,948           94,199
Long-term debt                                                    641,441
                                              -----------     -----------
                                                   1,948          735,640
Redeemable Preferred interest

  in Venetian                                                      90,701
                                              -----------     -----------
Stockholder's equity                             115,373           67,077
                                              -----------     -----------
                                              $  117,321      $   893,418
                                              ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                      CONDENSED BALANCE SHEETS, (continued)
                                December 31, 1998

<TABLE>
<CAPTION>

                                          GUARANTOR SUBSIDIARIES
                               ------------------------------------------

                                                               (1)
                                Lido            Mall           Grand
                                Intermediate    Intermediate   Canal
                                Holding         Holding        Shops Mall
                                Company         Company        Construction
                                LLC             LLC            LLC
                                -----------     -----------    -----------

<S>                             <C>             <C>             <C>
Cash and cash equivalents       $         5     $         5     $       10
Restricted cash and

  investments                                                        3,225
Intercompany receivable
Accounts receivable, net
Inventories
Prepaid expenses
                                -----------     -----------     -----------
     Total current assets                 5               5          3,235
                                -----------     -----------     -----------
Property and equipment,
   net                                                             103,394
Investment in Subsidiaries
Deferred offerings costs,
   net                                                               6,717
Other assets, net
                                -----------     -----------     ----------
                                $         5     $         5     $  113,346
                                ===========     ===========     ==========

Accounts payable                $               $               $
Construction payable                                                10,623
Intercompany payables
Accrued interest payable
Other accrued liabilities
Current maturities of
  long term debt
                                -----------     -----------     ----------
    Total current

     liabilities                                                    10,623
Long-term debt                                                     102,713
                                -----------     -----------     ----------
                                                                   113,336
Redeemable Preferred
   interest in Venetian

                                -----------     -----------     -----------
Stockholder's equity                      5               5              10
                                -----------     -----------     -----------
                                $         5     $         5     $   113,346
                                ===========     ===========     ===========
<FN>

----------
(1) The assets and  liabilities of Grand Canal Shops Mall  Construction,  LLC, a
guarantor,  were transferred to The Mall Subsidiary, a non-guarantor subsidiary,
upon substantial completion of the Casino Resort.

</FN>

</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                      CONDENSED BALANCE SHEETS, (continued)
                                December 31, 1998

<TABLE>
<CAPTION>

                                (2)

                                Other

                                Non-            Consolidating/
                                Guarantor       Eliminating
                                Subsidiaries    Entries         Total
                                -----------     -----------     -----------

<S>                             <C>             <C>             <C>
Cash and cash equivalents       $        24     $               $     2,285
Restricted cash and

  investments                                                       133,936
Intercompany receivable                              (3,788)
Accounts receivable, net                                                112
Inventories                                                              73
Prepaid expenses                                                          2
                                -----------     -----------     -----------
     Total current assets                24          (3,788)        136,408
                                -----------     -----------     -----------
Property and equipment,
   net                               29,169                         833,054
Investment in Subsidiaries                         (143,556)
Deferred offerings costs,
   net                                                               35,101
Other assets                                                          1,381
                                -----------     -----------     -----------
                                $    29,193     $  (147,344)    $ 1,005,944
                                ===========     ===========     ===========

Accounts payable                $               $               $      265
Construction payable                                                77,025
Intercompany payables                   170          (3,788)
Accrued interest payable                                             9,069
Other accrued liabilities                                            3,005
Current maturities of
  long term debt                                                    13,788
                                -----------     -----------     -----------
    Total current                       170          (3,788)

     liabilities                                                   103,152
Long-term debt                                                     744,154
                                -----------     -----------     -----------
                                        170          (3,788)       847,306

Redeemable Preferred

   interest in Venetian                                             90,701
                                -----------     -----------     -----------
Stockholder's equity                 29,023        (143,556)        67,937
                                -----------     -----------     -----------
                                $    29,193     $  (147,344)    $1,005,944
                                ===========     ===========     ===========
<FN>

----------
(2) Land with a historical cost basis of $29,169 was  transferred  from Venetian
Casino  Resort,  LLC, a co-obligor of the Notes to Lido Casino  Resort,  LLC., a
non-guarantor subsidiary, in October 1998 and land with a value of $11.8 million
was indirectly contributed by the Sole Stockholder during December 1999.

</FN>

</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                        CONDENSED STATEMENT OF OPERATIONS

                                December 31, 1999

<TABLE>
<CAPTION>

                                                     Venetian
                                     Las Vegas       Casino Resort
                                     Sands, Inc.     LLC
                                     -----------     -----------
<S>                                  <C>             <C>
Revenues:
Casino                               $   134,381     $        --
Room                                                      89,585
Food and beverage                                         30,786
Retail and other                           1,592          47,197
                                     -----------     -----------
Total revenue                            135,973         167,568
Less promotional allowance                               (25,045)
                                     -----------     -----------

Net revenue                              135,973         142,523
Operating expenses:
Casino                                   108,568
Room                                                      25,532
Food and beverage                                         19,134
Retail and other                                           7,385
Provision for doubtful
 accounts and discounts                   12,225             730
General and administrative                 1,369          48,566
Rental expense                             1,237           3,852
Depreciation and amortization                 52          22,692
                                     -----------     -----------
                                         123,451         127,891
                                     -----------     -----------
Operating profit (loss)
 before corporate pre-opening
 expenses                                 12,522          14,632
Corporate                                  1,794             716
Pre-opening expenses                         143          21,341
                                     -----------     -----------
Operating income (loss)                   10,585          (7,425)
                                     -----------     -----------
Other income (expense):
  Interest income                            209           2,336
  Interest expense, net of
   amounts capitalized                                   (63,819)
                                     -----------     -----------
Net loss before

 extraordinary item                       10,794         (68,908)
  Loss on early retirement
    of debt
                                     -----------     -----------
Net income (loss)                     $   10,794     $   (68,908)
                                     ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                 CONDENSED STATEMENT OF OPERATIONS, (continued)
                                December 31, 1999

<TABLE>
<CAPTION>

                                        GUARANTOR SUBSIDIARIES
                                     ----------------------------
                                     LIDO            Mall
                                     Intermediate    Intermediate
                                     Holding         Holding
                                     Company         Company
                                     LLC             LLC
                                     -----------     -----------
<S>                                  <C>             <C>
Revenues:
Casino                               $               $
Room
Food and beverage
Retail and other
                                     -----------     -----------
Total revenue
Less promotional allowance

                                     -----------     -----------

Net revenue
Operating expenses:
Casino
Room
Food and beverage
Retail and other
Provision for doubtful
 accounts and discounts
General and administrative                     1
Rental expense
Depreciation and amortization
                                     -----------     -----------
                                               1

                                     -----------     -----------
Operating profit (loss)
 before corporate pre-opening
 expenses                                     (1)
Corporate
Pre-opening expenses
                                     -----------     -----------
Operating income (loss)                       (1)
                                     -----------     -----------
Other income (expense):
  Interest income
  Interest expense, net of
   amounts capitalized
                                     -----------     -----------
Net loss before

 extraordinary item                           (1)
  Loss on early retirement
    of debt
                                     -----------     -----------
Net income (loss)                     $       (1)     $       --
                                     ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                        CONDENSED STATEMENT OF OPERATIONS

                                December 31, 1999

<TABLE>
<CAPTION>

                                     NON-GUARANTOR SUBSIDIARIES
                                    ----------------------------

                                       (1)

                                      Grand

                                    Canal           Other
                                    Shops Mall      Non-
                                    Subsidiary      Guarantor
                                    LLC             Subsidiaries
                                    -----------     -----------
<S>                                 <C>             <C>
Revenues:
Casino                              $               $
Room
Food and beverage
Retail and other                          9,844
                                    -----------     -----------
Total revenue                             9,844
Less promotional allowance
                                    -----------     -----------

Net revenue                               9,844
Operating expenses:
Casino
Room
Food and beverage
Retail and other                          4,909
Provision for doubtful
 accounts and discounts                     700
General and administrative                                    2
Rental expense                            1,178
Depreciation and amortization             2,401
                                    -----------     -----------
                                          9,188               2
                                    -----------     -----------
Operating profit (loss)
 before corporate and
 pre-opening expenses                       656              (2)
Corporate
Pre-opening expenses

                                    -----------     -----------
Operating income (loss)                     656              (2)
                                    -----------     -----------
Other income (expense):
  Interest income                             6
  Interest expense, net of
   amounts capitalized                   (7,579)
                                    -----------     -----------
Net loss before

 extraordinary item                      (6,917)             (2)
  Loss on early retirement
   of debt                                 (589)
                                    -----------     -----------
Net income (loss)                   $    (7,506)    $        (2)
                                    ===========     ===========
<FN>

----------
(1) The assets and  liabilities of Grand Canal Shops Mall  Construction,  LLC, a
guarantor,  were transferred to the Mall Subsidiary, a non-guarantor subsidiary,
upon substantial completion of the Casino Resort.

</FN>

</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                 CONDENSED STATEMENT OF OPERATIONS, (continued)
                                December 31, 1999


<TABLE>
<CAPTION>

                                Consolidating/
                                Eliminating
                                Entries         Total
                                -------------   -------------
<S>                             <C>             <C>
Revenues:
Casino                          $               $   134,381
Room                                                 89,585
Food and beverage                                    30,786
Retail and other                    (29,466)         29,167
                                -----------     -----------
Total revenue                       (29,466)        283,919
Less promotional allowance                          (25,045)
                                -----------     -----------

Net revenue                         (29,466)        258,874
Operating expenses:
Casino                              (29,466)         79,102
Room                                                 25,532
Food and beverage                                    19,134
Retail and other                                     12,294
Provision for doubtful
 accounts and discounts                              13,655
General and administrative                           49,938
Rental expense                                        6,267
Depreciation and amortization                        25,145
                                -----------     -----------
                                    (29,466)        231,067
                                -----------     -----------
Operating profit (loss)
 before corporate
 and pre-opening expenses                            27,807
Corporate                                             2,510
Pre-opening expenses                                 21,484
                                -----------     -----------
Operating income (loss)                               3,813
                                -----------     -----------
Other income (expense):
  Interest income                                     2,551
  Interest expense, net of
   amounts capitalized                              (71,398)
                                -----------     -----------
Net loss before

 extraordinary item                                 (65,034)
  Loss on early retirement
   of debt                                             (589)
                                -----------     -----------
Net income (loss)               $               $   (65,623)
                                ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                        CONDENSED STATEMENT OF OPERATIONS

                                December 31, 1998

<TABLE>
<CAPTION>

                                                Venetian
                                Las Vegas       Casino Resort
                                Sands, Inc.     LLC
                                -----------     -----------
<S>                             <C>             <C>
Revenues:                       $       814     $       123
Operating expenses                      100           8,341
                                -----------     -----------
Operating income (loss)                 714          (8,218)
Other income (expense):
  Interest income                        60          17,077
  Interest expense, net
   of amounts capitalized                           (39,015)
                                -----------     -----------
Net income (loss)               $       774     $   (30,156)
                                ===========     ===========

<CAPTION>
                                          GUARANTOR SUBSIDIARIES
                                -------------------------------------------
                                LIDO            Mall            Grand
                                Intermediate    Intermediate    Canal
                                Holding         Holding         Shops Mall
                                Company         Company         Construction
                                LLC             LLC             LLC
                                -----------     -----------     -----------
<S>                             <C>             <C>             <C>
Revenues:                       $      --       $        --     $        --
Operating expenses                       45              65              45
                                -----------     -----------     -----------
Operating income (loss)                 (45)            (65)            (45)
Other income (expense):
  Interest income
  Interest expense, net

   of amounts capitalized
                                -----------     -----------     -----------
Net income (loss)               $       (45)    $       (65)    $       (45)
                                ===========     ===========     ===========

<CAPTION>


                                Other

                                Non-            Consolidating/
                                Guarantor       Eliminating
                                Subsidiaries    Entries         Total
                                -----------     -----------     -----------
<S>                             <C>             <C>             <C>
Revenues:                       $               $               $       937
Operating expenses                      226                           8,822
                                -----------     -----------     -----------
Operating income (loss)                (226)                         (7,885)
Other income (expense):
  Interest income                                                    17,137
  Interest expense, net
   of amounts capitalized                                           (39,015)
                                -----------     -----------     -----------
Net income (loss)               $      (226)    $               $   (29,763)
                                ===========     ===========     ===========


</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================


                        CONDENSED STATEMENT OF OPERATIONS

                                December 31, 1997

<TABLE>
<CAPTION>

                                                Venetian
                                Las Vegas       Casino Resort
                                Sands, Inc.     LLC
                                -----------     -----------
<S>                             <C>             <C>
Revenues:                       $       895     $        --
Operating expenses                   (1,727)
                                -----------     -----------
Operating income (loss)               2,622
Other income (expense):
  Interest income                       110           3,329
  Interest expense, net
   of amounts capitalized                            (6,581)
                                -----------     -----------
Net income (loss)               $     2,732     $    (3,252)
                                ===========     ===========

<CAPTION>



                                     Consolidating/
                                     Eliminating
                                     Entries         Total
                                     -----------     -----------
<S>                                  <C>             <C>
Revenues:                            $               $       895
Operating expenses                                        (1,727)
                                     -----------     -----------
Operating income (loss)                                    2,622
Other income (expense):
  Interest income                                          3,439
  Interest expense, net
   of amounts capitalized                                 (6,581)
                                     -----------      -----------
Net income (loss)                    $                $     (520)
                                     ===========      ===========


</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                        CONDENSED STATEMENTS OF CASH FLOW

                                December 31, 1999

<TABLE>
<CAPTION>
                                                Venetian
                                Las Vegas       Casino Resort
                                Sands, Inc.     LLC
                                -----------     -----------
<S>                             <C>             <C>
Net cash provided by
 (used in) operating
 activities                     $    (7,608)    $   (64,828)
                                -----------     -----------
Cash flows from investing activities:

  Proceeds from purchases

   of investments                                   125,147
  Construction of Casino

   Resort                              (52)        (228,393)
                                -----------     -----------
Net cash used in investing
 activities                            (52)        (103,246)

Cash flows from financing activities:

  Proceeds from capital
   contributions                     27,791
  Proceeds from preferred

   interest in Venetian                              44,431
  Repayments on mall
   construction loan
   facility
  Proceeds from mall con-
   struction loan
   facility
  Proceeds from

   tranche a loan
  Proceeds from
   tranche b loan

  Proceeds from completion

   guaranty-jr                                       23,503
  Repayment on bank credit
   facility-term loan                               (11,250)
  Proceeds from bank credit
   facility-term loan                                34,000
  Repayments on bank credit
   facility-revolver                                (10,231)
  Proceeds from bank credit
   facility-revolver                                 40,506
  Repayment on FF&E

   credit facility                                   (5,862)
  Proceeds from FF&E

   credit facility                                   83,842
  Payment of deferred costs                          (1,299)
  Net increase and (decrease)
   intercompany accounts              2,614         (28,354)
                                -----------     -----------
Net cash provided by financing
 activities                          30,405         169,286
                                -----------     -----------
Increase (decrease) in cash
 and cash equivalents                22,745           1,212
Cash and cash equivalents at
 beginning of period                  1,216           1,025
                                -----------     -----------
Cash and cash equivalent at
 end of year                    $    23,961     $     2,237
                                ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                  CONDENSED STATEMENTS OF CASH FLOW (continued)
                                December 31, 1999

<TABLE>
<CAPTION>
                                            GUARANTOR SUBSIDIARIES
                                        --------------------------------
                                        LIDO                 Mall
                                        Intermediate         Intermediate
                                        Holding              Holding
                                        Company              Company
                                        LLC                  LLC
                                        -----------          -----------
<S>                                     <C>                  <C>
Net cash provided by
 (used in) operating
 activities                             $        (1)         $
                                       -----------          -----------
Cash flows from investing activities:

  Proceeds from purchases
   of investments

  Construction of Casino
   Resort

                                       -----------          -----------
Net cash used in investing
 activities

Cash flows from financing activities:

  Proceeds from capital
   contributions

  Proceeds from preferred
   interest in Venetian

  Repayments on mall construction
   loan facility
  Proceeds from mall construction
   loan facility
  Proceeds from tranche a loan
  Proceeds from tranche b loan
  Proceeds from completion
   guaranty-jr
  Repayment on bank credit
   facility-term loan
  Proceeds from bank credit
   facility-term loan
  Repayments on bank credit
   facility-revolver
  Proceeds from bank credit
   facility-revolver
  Repayment on FF&E
   credit facility
  Proceeds from FF&E
   credit facility
  Payment of deferred costs
  Net increase and (decrease)
   intercompany accounts
                                        -----------         -----------
Net cash provided by financing
 activities
                                        -----------         -----------
Increase (decrease) in cash
 and cash equivalents                            (1)
Cash and cash equivalents at
 beginning of period                              5                   5
                                        -----------         -----------
Cash and cash equivalent at
 end of year                            $         4         $         5
                                        ===========         ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                 CONDENSED STATEMENTS OF CASH FLOW, (continued)
                                December 31, 1999

<TABLE>
<CAPTION>
                                            NON-GUARANTOR SUBSIDIARIES
                                        --------------------------------
                                        (1)
                                        Grand
                                        Canal           Other
                                        Shops Mall      Non-
                                        Construction    Guarantor
                                        LLC             Subsidiaries
                                        -----------     -----------
<S>                                     <C>             <C>
Net cash provided by
 (used in) operating
 activities                             $    (7,174)    $       (3)
                                        -----------     ----------
Cash flows from investing activities:

  Proceeds from purchases

   of investments                            (2,191)
  Construction of Casino Resort             (53,593)       (37,068)
                                         -----------     ----------
Net cash used in investing
 activities                                 (55,784)       (37,068)

Cash flows from financing activities:

  Proceeds from capital

   contributions                                498         37,262
  Proceeds from preferred
   interest in Venetian
  Repayments on mall construction
   loan facility                           (140,000)
  Proceeds from mall construction
   loan facility                             37,287
  Proceeds from tranche a loan              105,000
  Proceeds from tranche b loan               35,000
  Proceeds from completion
   guaranty-jr
  Repayment on bank credit
   facility-term loan
  Proceeds from bank credit
   facility-term loan
  Repayments on bank credit
   facility-revolver
  Proceeds from bank credit
   facility-revolver
  Repayment on FF&E
   credit facility
  Proceeds from FF&E
   credit facility
  Payments of deferred offering
   cost                                        (747)
  Net increase and (decrease)
   intercompany accounts                     25,910           (170)
                                        -----------     ----------
Net cash provided by financing
 activities                                  62,948         37,092
                                        -----------     ----------
Increase (decrease) in cash
 and cash equivalents                           (10)            21
Cash and cash equivalents at
 beginning of period                             10             24
                                        -----------     ----------
Cash and cash equivalent at
 end of year                            $        --     $       45
                                        ===========     ==========
<FN>
----------
(1) The assets and  liabilities of Grand Canal Shops Mall  Construction,  LLC, a
guarantor,  were transferred to The Mall Subsidiary, a non-guarantor subsidiary,
upon substantial completion of the Casino Resort.
</FN>

</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                 CONDENSED STATEMENTS OF CASH FLOW, (continued)
                                December 31, 1999

<TABLE>
<CAPTION>

                                        Consolidating/
                                        Eliminating
                                        Entries         Total
                                        -----------     -----------
<S>                                     <C>             <C>
Net cash provided by
 (used in) operating
 activities                             $    49,551     $  (30,063)
                                        -----------     ----------
Cash flows from investing activities:

  Proceeds from purchases
   of investments                                          122,956
  Construction of Casino Resort                           (319,106)
                                        -----------     ----------
Net cash used in investing
 activities                                               (196,150)

Cash flows from financing activities:

  Proceeds from capital contributions       (49,551)        16,000
  Proceeds from preferred
   interest in Venetian                                     44,431
  Repayments on mall construction
   loan facility                                          (140,000)
  Proceeds from mall construction
   loan facility                                            37,287
  Proceeds from tranche a loan                             105,000
  Proceeds from tranche b loan                              35,000
  Proceeds from completion
   guaranty-jr                                              23,503
  Repayment on bank credit
   facility-term loan                                      (11,250)
  Proceeds from bank credit
   facility-term loan                                       34,000
  Repayments on bank credit
   facility-revolver                                       (10,231)
  Proceeds from bank credit
   facility-revolver                                        40,506
  Repayment on FF&E credit facility                         (5,862)
  Proceeds from FF&E
   credit facility                                          83,842
  Payments of deferred offering
   costs                                                    (2,046)
  Net increase and (decrease)
   intercompany accounts                -----------     ----------
Net cash provided by financing
 activities                                (49,551)        250,180
                                        -----------     ----------
Increase (decrease) in cash
 and cash equivalents                                       23,967
Cash and cash equivalents at
 beginning of period                                         2,285
                                        -----------     ----------
Cash and cash equivalent at
 end of year                            $               $   26,252
                                        ===========     ==========
</TABLE>

<PAGE>

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


Note 15 Summarized Financial Information (continued)
================================================================================

                        CONDENSED STATEMENTS OF CASH FLOW

                                December 31, 1998

<TABLE>
<CAPTION>

                                                          Venetian
                                          Las Vegas       Casino Resort
                                          Sands, Inc.     LLC
                                          -----------     -----------
<S>                                       <C>             <C>
Net cash provided by (used in)
 operating activities                     $     1,167     $   (27,015)
                                          -----------     -----------
Cash flows from investing activities:

  Proceeds from purchases
   of investments                                             297,226
  Investment in subsidiaries                      (93)           (162)
  Construction of Casino Resort                              (508,399)
                                          -----------     -----------
Net cash used in investing
 activities                                       (93)       (211,335)

Cash flows from financing activities:

  Proceeds from Mall Construction
   Loan Facility                                              102,713
  Proceeds from Bank Credit
   Facility-term loan                                         116,000
  Proceeds from Bank Credit
   Facility-revolver                                            8,885
  Proceeds from FF&E
   Credit Facility                                             13,858
  Payments of deferred
   offering cost                                               (2,796)
  Proceeds from capital
   contributions
                                          -----------     -----------
Net cash provided by
 financing activities                                         238,660
                                          -----------     -----------
Increase in cash
 and cash equivalents                           1,074             310
Cash and cash equivalents at
 beginning of period                              142             715
                                          -----------     -----------
Cash and cash equivalents at
 end of year                              $     1,216     $     1,025
                                          ===========     ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                  CONDENSED STATEMENTS OF CASH FLOW (continued)
                                December 31, 1998

<TABLE>
<CAPTION>

                                               GUARANTOR SUBSIDIARIES
                                    -----------------------------------------

                                    LIDO             Mall          Grand
                                    Intermediate     Intermediate  Canal
                                    Holding          Holding       Shops Mall
                                    Company          Company       Construction
                                    LLC              LLC           LLC
                                    -----------      -----------   -----------
<S>                                 <C>              <C>           <C>
Net cash provided by
 (used in) operating
 activities                         $       (45)     $       (65)  $       (40)
                                    -----------      -----------   -----------
Cash flows from investing activities:

  Proceeds from purchases
   of investments

  Investment in subsidiaries
  Construction of Casino

   Resort

                                    -----------      -----------   -----------
Net cash used in investing
 activities

Cash flows from financing activities:

  Proceeds from Mall Con-
   struction Loan
   Facility

  Proceeds from Bank Credit
   Facility-term loan

  Proceeds from Bank Credit
   Facility-revolver

  Proceeds from FF&E
   Credit Facility

  Payments of deferred offering
   cost
  Proceeds from capital

   contributions                             50               70            50
                                    -----------      -----------   -----------
Net cash provided by
 financing activities                        50               70            50
                                    -----------      -----------   -----------
Increase in cash

 and cash equivalents                         5                5            10
Cash and cash equivalents at
 beginning of period
                                    -----------      -----------   -----------
Cash and cash equivalents at
 end of year                        $         5      $         5   $        10
                                    ===========      ===========   ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                 CONDENSED STATEMENTS OF CASH FLOW, (continued)
                                December 31, 1998

<TABLE>
<CAPTION>

                                     Other
                                     Non-            Consolidating/
                                     Guarantor       Eliminating
                                     Subsidiaries    Entries        Total
                                     -----------     -----------    -----------
<S>                                 <C>              <C>            <C>
Net cash provided by
 (used in) operating
 activities                         $       (61)     $              $   (26,059)
                                     -----------     -----------    -----------
Cash flows from investing activities:

  Proceeds from purchases

   of investments                                                       297,226
  Investment in subsidiaries                                 255
  Construction of Casino
   Resort                                                              (508,399)
Net cash used in investing           -----------     -----------    -----------
 activities                                                  255       (211,173)
Cash flows from financing
 activities:

  Proceeds from Mall Con-
   struction Loan
   Facility                                                             102,713
  Proceeds from Bank Credit
   Facility-term loan                                                   116,000
  Proceeds from Bank Credit
   Facility-revolver                                                      8,885
  Proceeds from FF&E
   credit facility                                                       13,858
  Payment of deferred
   offering cost                                                         (2,796)
  Proceeds from capital
   contributions                              85            (255)
                                     -----------     -----------    -----------
Net cash provided by
 financing activities                         85            (255)       238,660
                                     -----------     -----------    -----------
Increase (decrease) in cash
 and cash equivalents                         24                          1,428
Cash and cash equivalents at
 beginning of period                                                        857
                                     -----------     -----------    -----------
Cash and cash equivalents at
 end of year                         $        24     $              $     2,285
                                     ===========     ===========    ===========
</TABLE>

<PAGE>

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

Note 15 Summarized Financial Information (continued)
================================================================================

                        CONDENSED STATEMENTS OF CASH FLOW

                                December 31, 1997

<TABLE>
<CAPTION>

                                                            Venetian
                                            Las Vegas       Casino Resort
                                            Sands, Inc.     LLC
                                            -----------     -----------

<S>                                         <C>             <C>
Net cash provided by (used in)
 operating activities                       $     (838)     $     4,697
                                            -----------     -----------
Cash flows from investing activities:

  Proceeds from purchases

   of investments                                              (426,120)
  Construction of Casino Resort                (25,399)        (105,428)
                                            ------------    -----------
Net cash used in investing activities          (25,399)        (531,548)

Cash flows from financing activities:
  Proceeds preferred interest
   Venetian                                                      77,053
  Proceeds from mortgage notes                                  425,000
  Proceeds from senior subordinated
    notes                                                        90,500
  Proceeds from capital contributions           25,500
  Proceeds (payments) of intercompany
   dividends                                    27,600          (27,600)
  Payments of deferred offering costs                           (37,387)
  Payment of dividends                         (27,600)
                                            ------------    -----------

Net cash provided by financing
  activities                                    25,500          527,566
                                            ------------    -----------
Increase (decrease) in cash
 and cash equivalents                             (737)             715
Cash and cash equivalents at
 beginning of period                               879
                                            ------------    -----------
Cash and cash equivalents at
 end of year                                $      142      $       715
                                            ============    ===========

</TABLE>

<PAGE>

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


Note 15 Summarized Financial Information (continued)
================================================================================

                  CONDENSED STATEMENTS OF CASH FLOW (continued)
                                December 31, 1997

<TABLE>
<CAPTION>

                                            Consolidating/
                                            Eliminating
                                            Entries         Total
                                            -----------     -----------

<S>                                         <C>             <C>
Net cash provided by (used in)
 operating activities                       $               $     3,859
                                            -----------     -----------
Cash flows from investing activities:

  Proceeds from purchases

   of investments                                              (426,120)
  Construction of Casino Resort                                (130,827)
                                            ------------    -----------
Net cash used in investing activities                          (556,947)

Cash flows from financing activities:
  Proceeds preferred interest
   Venetian                                                      77,053
  Proceeds from mortgage notes                                  425,000
  Proceeds from senior subordinated
   notes facility-revolver                                       90,500
  Proceeds from capital contributions                            25,500
  Proceeds (payments) of intercompany
   dividends

  Payments of deferred offering costs                           (37,387)
  Payment of dividends                                          (27,600)
                                            ------------    -----------

Net cash provided by financing
  activities                                                    553,066
                                            ------------    -----------
Increase (decrease) in cash
 and cash equivalents                                              (22)
Cash and cash equivalents at
 beginning of period                                               879
                                            ------------    -----------
Cash and cash equivalents at
 end of year                                $              $       857
                                            ============    ===========

</TABLE>

<PAGE>

       Report of Independent Accountants on Financial Statements Schedule

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

Our audits of the financial statements referred to in our opinion dated February
15, 2000 appearing in the this Annual Report on Form 10-K also included an audit
of the financial  statement schedule listed in Item 14 (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 financial statements.

PricewaterhouseCoopers LLP

Las Vegas, Nevada
February 15, 2000

<PAGE>

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


Note 15 Summarized Financial Information (continued)
================================================================================



                 SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS

                                 (In thousands)
<TABLE>
<CAPTION>
================================================================================


                                    Balance    Additions
                                    at         charged    Deductions   Balance
                                    beginning  to         Accounts     at
                                    of         cost and   charged off  end of
Description                         period     expenses   (recovered)  period
================================================================================

      Allowance for doubtful accounts and discounts:

      Year ended December 31:

               <S>                  <C>        <C>        <C>         <C>
               1997                 $                                 $
                                    =========  =========  =========   =========
               1998                 $                                 $
                                    =========  =========  =========   =========
               1999                 $             13,655     (6,758)  $   6,897
                                    =========  =========  =========   =========

</TABLE>

<PAGE>

ITEM 9.--CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------
None.


<PAGE>

                                    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 Sole  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 Sole Stockholder has will
be  increased  so that the Sole  Stockholder  will  have one more  vote than the
number of votes of all of the other directors  aggregated.  The second director,
(the "Special Director"), is unaffiliated with the Sole Stockholder or any other
affiliate of the Sole  Stockholder,  has no other position with LVSI or Venetian
and has one vote for all matters  before the Board of  Directors.  To the extent
the Special  Director  receives  compensation,  it is paid by LVSI from  sources
unrelated to and independent from the Sole Stockholder and its affiliates (other
than LVSI and Venetian). The Special 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.

<TABLE>
<CAPTION>

           Name               Age                       Position
---------------------------  ------  ------------------------------------------
<S>                          <C>     <C>
Sheldon G. Adelson            66     Chairman of the Board, Chief Executive
                                     Officer and Director
William J. Raggio             73     Special Director
William P. Weidner            54     President and Chief Operating Officer
Bradley H. Stone              44     Executive Vice President
Robert G. Goldstein           44     Senior Vice President
David Friedman                43     Assistant to Chairman of the Board and
                                    Secretary

Harry D. Miltenberger         56     Vice President-Finance


</TABLE>

      Sheldon G. Adelson has 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.  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.

      William J.  Raggio was elected as Special  Director  of the  Company  upon
consummation  of the  offering in November  1997 of the Notes.  Since 1991,  Mr.
Raggio  has  been an  attorney  and  shareholder  in the law  firm of  Vargas  &
Bartlett, and since 1998 with its successor Jones and Vargas. Since 1972, he has
served as an elected member of the Nevada State Senate, holding the positions of
Senate Majority Leader and Chairman of the Senate Finance Committee.  Mr. Raggio
has also been a member of the Board of Directors of Sierra Health Services since
1984 and was a member of the Board of Directors and an Executive  Vice President
of Santa Fe Gaming Corp. from 1987 to 1998.

      William P. Weidner has 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. Stone has 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.

<PAGE>

      Robert G.  Goldstein  has been Senior Vice  President of the Company since
December 1995 and President and Chief  Operating  Officer of Venetian  since May
1999.  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  Friedman has been  Assistant to the Chairman of Interface  since
October 1995.  Subsequently,  Mr. Friedman became both Assistant to the Chairman
of the Company and Secretary of the Company.  Mr. Friedman is also an officer of
other companies owned by the Sole 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.  Miltenberger is a certified public  accountant and has been Vice
President--Finance  of the Company since  February  1997.  From March 1995 until
February 1997 he was Senior Vice President and Chief Financial Officer of SUB, a
banking company.

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, 1999,  the five highest paid executive  officers of LVSI,  which is
the managing member of Venetian.  Sheldon G. Adelson,  the Chairman of the Board
and Chief Executive Officer of LVSI,  received no compensation in 1997, 1998 and
1999.  Notwithstanding  the  foregoing,  in future years,  LVSI plans to provide
salary,  bonus or other  compensation to Mr. Adelson in his capacity as Chairman
of the Board and Chief Executive  Officer of LVSI.  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.

<TABLE>
<CAPTION>

                                                        Long Term
                                         Annual         Compensation
                                      Compensation      Awards

                                   -------------------  ---------
                                                        Securities All
                                                        Underlying Other

 Name and Principal       Year      Salary    Bonus     Options    Compensation
      Position                                                     (1)
----------------------  ---------  -------------------  ---------  --------
<S>                     <C>        <C>       <C>        <C>        <C>
William P. Weidner        1999     797,165     --          --        1,917
   President and          1998     779,917     --          --        2,592
   Chief Operating        1997     794,915   50,000        --        6,570
   Officer

Bradley H. Stone          1999     511,882     --          --          729
   Executive Vice         1998     500,806     --          --          918
   President              1997     510,430   40,000        --          918

Robert G. Goldstein       1999     457,881     --          --          729
   Senior Vice            1998     376,970     --          --          918
   President              1997     384,220   40,000        --          918

David Friedman            1999     300,000     --          --          745
   Assistant to           1998     306,347  105,000        --          914
   Chairman of the        1997     228,654   90,000        --          816
   Board and
   Secretary

Harry D. Miltenberger     1999     195,000     --          --        2,408
   Vice  President        1998     195,000     --          --        2,848
   Finance                1997     147,769   30,000        --       12,307

<FN>

----------
(1) Represents moving expense and other miscellaneous expenses.
</FN>
</TABLE>

<PAGE>

Employment Agreements
---------------------

      William P. Weidner,  Bradley H. Stone and Robert G.  Goldstein each has an
employment  agreement  (collectively,  the  "Employment  Agreements")  with  the
Company   continuing  through  December  31,  2000  (the  "Initial  Term").  The
agreements originally had a termination date of December 31, 1998, but have been
extended by the Company  through  December 31, 2000, in accordance with two-year
extension  rights of the Company.  Pursuant to the  Employment  Agreements,  the
officers  have  such  powers,  duties  and  responsibilities  as  are  generally
associated with their offices, as may be modified or assigned by the Chairman of
the  Board of  Directors  (or the  President  in the case of Mr.  Stone  and Mr.
Goldstein),  and subject to the  supervision  of the Board of Directors (and the
President in the case of Mr. Stone and Mr.  Goldstein).  The agreements  provide
that, during the terms of their employment,  the officers will not engage in any
other business or  professional  pursuit  unless  consented to by the Company in
writing.

      The terms of the Employment  Agreements  provide for an annual base salary
for Mr. Weidner, Mr. Stone and Mr. Goldstein of $797,165, $511,882 and $457,881,
respectively.   The  foregoing   salaries   were  adjusted  for   cost-of-living
adjustments,  effective January 1, 1999. The employment  agreements also provide
for the grant of  options  to  acquire  shares of  common  stock of the  Company
representing  2%,  1.5%  and  1.0%,  respectively,  of  the  shares  issued  and
outstanding  upon the issuance of all shares for which options have been granted
under the  Employment  Agreements.  However,  none of such options have yet been
granted,  and are not effective for any purpose  whatsoever until and unless the
grant of such options has been  approved by the Nevada  Commission.  See " - Las
Vegas Sands,  Inc. 1997 Fixed Stock Option Plan." The officers are also entitled
to receive  other  employee  benefits  of the  Company.  The  agreements  may be
terminated by either the Company or the officer upon proper notice,  pursuant to
the terms of the Employment Agreements.  Under the agreements, in the event of a
Cause  Termination,  Breach  Termination,  Voluntary  Termination  or  Licensing
Termination (each as defined therein), all salary and benefits shall immediately
cease  subject to any  requirements  of law, all  unexercised  options  shall be
canceled and  forfeited and all shares of common stock held shall be redeemed by
the Company at a price equal to the lesser of the exercise  price of such shares
or the Fair  Market  Value  (as  defined  therein)  on the date of  termination,
payable in sixty equal  consecutive  monthly  installments  with interest at the
Applicable  Federal Rate (as defined therein).  In the event of a Company Breach
Termination,  Constructive  Termination  or  Involuntary  Termination  (each  as
defined  therein),  the  Company is obliged to pay to the officer  involved  his
salary for the rest of the term of the  Employment  Agreement  until the officer
becomes gainfully employed  elsewhere,  in which event the Company is obliged to
pay the difference in the income earned in such other  employment and the salary
payable  under the  agreement  with the Company.  The amount that the officer is
entitled  to  receive  upon  termination  will  depend  upon the  amount of time
remaining  in the  term  of  such  agreement  as of the  date  of the  officer's
termination  of  employment.  If  a  Company  Breach  Termination,  Constructive
Termination or Involuntary Termination occurred with respect to Mr. Weidner, Mr.
Stone and Mr. Goldstein on December 31, 1999, 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, 2000 would have
been $797,165, $511,882 and $457,881, respectively. Such amounts would have been
subject to  mitigation,  as described  above,  if the officer  became  gainfully
employed elsewhere.  In addition,  all unexercised options shall be canceled and
forfeited and all shares of the Company held by the officer shall be redeemed by
the  Company  at a price  equal to the  greater of the  exercise  price for such
shares or the Fair Market Value on the date of termination,  payable in 36 equal
consecutive  monthly  installments with interest at the Applicable Federal Rate.
In the case of a Death  Termination (as defined  therein),  salary shall be paid
through  the date of  death,  all  unexercised  options  shall be  automatically
cancelled,  and all shares of the Company held by the officer  shall be redeemed
by the Company for a price payable by the Company to the officer's  estate equal
to all sums paid by the officer for the shares plus the  difference  between (x)
the  exercise  price paid for the shares and (y) the Fair  Market  Value of such
shares,  payable in 36 equal consecutive  monthly  installments with interest at
the Applicable Federal Rate. In the case of Disability Termination, salary, less
any applicable disability insurance payments, shall be continued for a period of
six months following the date of termination and all options and shares shall 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.

<PAGE>

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 the Company 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.  None of the options  granted
under the Plan will become effective for any purpose whatsoever until and unless
the grant of such  options  has been  approved  by the  Nevada  Commission.  The
purpose of the Plan is to  promote  the  interest  of the  Company  and its Sole
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  share
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.  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 Sole  Stockholder may, at any time,  assume the Plan or certain  obligations
under the Plan, in which case the Sole 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 such shall not be
made 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 Plan expires, and no options may be
granted under the Plan after the year 2007.

      Upon approval of the Plan by the Nevada  Commission,  options are expected
to be granted under the Plan to Mr.  Weidner,  Mr.  Stone,  Mr.  Goldstein,  Mr.
Friedman  and Mr.  Miltenberger  (the  "Named  Optionees")  (as  well  as  other
individuals) to acquire shares  representing  2.0%,  1.5%,  1.0%, 0.5% and 0.1%,
respectively,  of the  common  stock of the  Company.  The  specific  terms  and
conditions  of the  options  were  agreed  to in  1999  and are  expected  to be
memorialized  in 2000.  The Company  does not expect the  exercise  price on the
grant  date will be lower  than fair  market  value of the  common  stock of the
Company.  The Plan allows the Sole  Stockholder to assume the obligations  under
the Plan  relating to such options and to enter into award  agreements  with the
Named  Optionees.  The options granted to the Named Optionees are expected to be
fully vested and exercisable  upon grant. The options will expire on the earlier
of (i) the  eighth  anniversary  of the date of grant,  (ii) the date three days
prior to a Change in Control  Acceleration  Event (as defined in the Plan) (iii)
the date three days prior to a Public Offering Acceleration Event (as defined in
the Plan) and,  (iv) in the case of Mr.  Friedman  and Mr.  Miltenberger,  on or
shortly following each Named Optionee's  termination of employment in accordance
with the terms of the applicable Award  Agreement.  The Company expects that the
options of the Named Optionees will be exercised  immediately after issuance and
that the exercise price will be loaned to the Named  Optionees by the Company or
the Sole  Stockholder.  The common stock issued upon the exercise of the options
will be subject to other  vesting  provisions  that expire on December 31, 2000,
except with respect to Mr. Miltenberger whose stock is expected to be subject to
certain other vesting provisions.  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 Company or the Sole
Stockholder,  if he so  issued  them,  in  accordance  with  the  terms  of  the
applicable  award  agreements of the Named  Optionees  and for Messrs.  Weidner,
Stone  and  Goldstein,   also  consistent  with  the  terms  of  the  Employment
Agreements, as described in "Employment Agreements" above.

<PAGE>

ITEM 12. --SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------------------------------------------------------------------------

      The following  table sets forth certain  information  as of March 30, 2000
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  executive
officers  named in the  summary  compensation  table  in  "Item  11 -  Executive
Compensation" and (iv) all executive officers and directors of LVSI as a group.

<TABLE>
<CAPTION>

                                                   Shares of

       Beneficial Owner(1)                       Common Stock     Percentage
       -------------------                       ------------     ----------
       <S>                                       <C>              <C>
       Sheldon G. Adelson                           925,000           100%
       William J. Raggio                                  0             0%
       William P. Weidner (2)                             0             0%
       Bradley H. Stone (2)                               0             0%
       Robert G. Goldstein (2)                            0             0%
       David Friedman (2)                                 0             0%
       Harry D. Miltenberger (2)                          0             0%
       All executive officers and the
         directors of the Company as
         a group                                    925,000           100%

<FN>

----------
(1)The address of each person  named  below is c/o the  Company,  3355 Las Vegas
   Boulevard South, Room 1A, Las Vegas, Nevada 89109.

(2)Does  not  include  options  to  purchase  common  stock of the  Company  not
   exercisable  within  60  days of the  date  hereof  in  connection  with  the
   development  of the Casino  Resort and pursuant to the terms of each of their
   employment  agreements or other agreements with the Company,  each of Messrs.
   Weidner,  Stone,  Goldstein,  Friedman  and  Miltenberger  are to be  granted
   options to purchase common stock of LVSI representing  2.0%, 1.5%, 1.0%, 0.5%
   and 0.1%,  respectively,  of the shares of common  stock of LVSI  outstanding
   after giving effect to the issuance of all shares for which options have been
   granted.  However,  none of  such  options  are  effective  for  any  purpose
   whatsoever  until and unless the grant of such  options has been  approved by
   the Nevada  Commission.  See "Item 11 -  Executive  Compensation  - Las Vegas
   Sands, Inc. 1997 Fixed Stock Option Plan."

</FN>
</TABLE>

ITEM 13. --CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
---------------------------------------------------------

Redeemable Preferred Interest and Equity Contributions
------------------------------------------------------

      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 interests in Venetian.  Interface Holding currently holds a Series
B Preferred Interest in Venetian.  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  will  have a  preferred  return  of 12% and  upon  the 12th
anniversary  of the closing of the  offering of the Notes,  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 Bank  Credit  Facility is repaid and cash  payments  are
permitted  under the restricted  payment  covenants  under the  Indentures,  the
preferred return on the Series B Preferred  Interest will accrue and 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.

<PAGE>

      On November 12, 1999, the Sole  Stockholder  made a $15.0 million  working
capital loan to the Company in the form of the  Subordinated  Note.  On November
15, 1999, the entire  Subordinated  Note was contributed by the Sole Stockholder
to LVSI as a common equity capital contribution.  Also during the forth quarter,
the Sole Stockholder  indirectly  contributed 1.75 acres of land on the Strip to
the Phase II  Subsidiary,  which was  recorded at its  historical  cost of $11.8
million  as a common  equity  capital  contribution.  See "Item 7  -Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations -
Waivers;  Additional  Indebtedness and Equity" and "Item 8 -Financial Statements
and Supplementary  Data - Notes to Financial  Statements - Note 12 Related Party
Transactions."

Tranche B Take-out Loan and Sole Stockholder's $20.0 million Guaranty of Tranche
--------------------------------------------------------------------------------
A Take-out Loan
---------------

      On December 20, 1999,  each of the $105.0 million  Tranche A Take-out Loan
and the $35.0  million  Tranche B Take-out  Loan were made,  and were secured by
mortgages on the Mall Assets.  The Sole Stockholder has agreed to guarantee,  on
an unsecured basis,  $20.0 million of indebtedness  under the Tranche A Take-out
Loan. In addition,  the Tranche B Take-out  Lender is  wholly-owned  by the Sole
Stockholder. The Tranche B Take-out Loan is deeply subordinated to the Tranche A
Take-out Loan, so that,  among other things,  (a) the Tranche A Take-out  Lender
has first priority liens on the Mall Assets,  and the Tranche B Take-out  Lender
has second priority liens;  (b) no payment can be made on the Tranche B Take-out
Loan unless (x) all  payments  then due under the  Tranche A Take-out  Loan have
been paid in full, (y) there is no default under the Tranche A Take-out Loan and
(z) there is available cash flow (taking into account certain required reserves)
to make such payment;  and (c) the Tranche B Take-out Lender cannot exercise any
remedies or take any  enforcement  actions under the Tranche B Take-out Loan for
so long as the  Tranche A Take-out  Loan is  outstanding,  unless the  Tranche A
Take-out Lender consents.  The Tranche B Take-out Loan is due December 16, 2004,
provided  that the New Mall  Subsidiary  has an option to extend  the loan until
December  16,  2007.  See "Item 7 -  Management's  Discussion  and  Analysis  of
Financial   Condition  and  Results  of  Operations  --  Liquidity  and  Capital
Resources".

Completion Guaranty
-------------------

      The  Completion  Guaranty with respect to the  construction  of the Casino
Resort was provided by the Sole Stockholder in November,  1997.  Pursuant to the
Completion  Guaranty,  the  Sole  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
such cap on liability under the Completion  Guaranty does not apply with respect
to  excess   construction  costs   attributable  to  scope  changes.   The  Sole
Stockholder's  obligations under the Completion  Guaranty were collateralized by
$25.0 million in cash and cash equivalents and the interest accrued thereon (the
"Guaranty Collateral").  On November 12, 1999, an advance of approximately $23.5
million  was made  under  the  Completion  Guaranty  and is being  treated  as a
Completion  Guaranty Loan that is  subordinated  in right of payment  (except as
described  below) to the indebtedness  under the Bank Credit Facility,  the FF&E
Credit Facility and the Notes. The Completion  Guaranty Loan matures on November
16, 2005 and bears  interest at a rate of 14-1/4% per annum.  Although  interest
may accrue on the  Completion  Guaranty  Loan,  no cash  payments  with  respect
thereto may be made until  senior  indebtedness  is repaid,  except for payments
made  from  certain  construction-related  recoveries  (including  any  payments
received by the Company from the Construction  Manager or its  subcontractors in
connection with the litigations discussed above). As of December 31, 1999, there
was approximately $5.0 million of Guaranty Collateral remaining, and the Company
expects that such  collateral  will be used to fund excess  construction  costs,
with a portion of such  funding  being  treated as another  completion  guaranty
loan.  Although the  Completion  Guaranty  provided that the Sole  Stockholder's
liability  thereunder  would expire upon  substantial  completion  of the Casino
Resort,  which was achieved on November 12, 1999, the Sole Stockholder agreed on
November 12, 1999 that he would  remain  liable  under the  Completion  Guaranty
until "final completion" (i.e., the completion of all remaining  punchlist items
and the final  resolution  of all  disputes  with the  Construction  Manager and
subcontractors)  is achieved.  The Completion  Guaranty does not provide for the
incurrence by the Sole Stockholder,  directly or indirectly,  of any obligation,
contingent or  otherwise,  for the payment of principal or interest on the Notes
or any other indebtedness described herein.

Letters of Credit
-----------------
      Pursuant to the terms of the Tranche A Take-out Loan, the Sole Stockholder
provided a $5.0  million  irrevocable  letter of credit to provide an  operating
reserve  for the  Mall.  Additionally,  in order to be able to  purchase  surety
bonds, the Sole Stockholder had to provide a $5.0 million  irrevocable letter of
credit as collateral to the bonding company.

<PAGE>

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,  Casino and Congress  Center,  and the Phase II
Land),  the New Mall  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,  provided  that
certain of the obligations  under the Cooperation  Agreement,  are not senior to
previously  recorded  mortgages  encumbering  the Expo  Center  and so would not
survive any foreclosure of such mortgages.

      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.

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.
Total  payments made in 1999  pursuant to the Services  Sharing  Agreement  were
$900,000.

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 on a month-to-month  basis.  Total payments made by LVSI
to Interface pursuant to the lease agreement in 1999 totaled $60,000.

Retirement Plan
---------------

      All of the employees of Interface  were eligible to participate in the Las
Vegas Sands,  Inc.  401(k)  Retirement  Plan  sponsored by LVSI through 1998. In
1999, LVSI established a new plan and Interface  assumed the original LVSI plan.
Costs related to the administration of the 1998 plan of LVSI, which were nominal
in 1999,  are  shared  with LVSI  based on the  number of  employees  of each of
Interface and LVSI participating in the plan.

<PAGE>

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. As a result, the Casino Resort could engage in
certain businesses which may have an adverse impact on the Expo Center. However,
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.  Furthermore,  management may engage
in marketing  practices  with respect to the Casino  Resort that are intended to
benefit the Expo Center and may have a detrimental effect on the Casino Resort.

Restaurant Leases
-----------------

      The Sole  Stockholder is a partner in three  entities  formed to build out
and operate  restaurants in the Casino  Resort.  The terms and conditions of the
leases  granted  by the  Company  for  such  restaurants  are  market  and on an
arm's-length basis.  Valentino Las Vegas LLC paid Venetian $54,599,  and Postrio
Las Vegas LLC and Carnevale Coffee Bar LLC paid the Mall Subsidiary  $94,904 and
$18,594, respectively, pursuant to these leases in 1999.

Purchase of Idle Construction Equipment and Construction Claims
---------------------------------------------------------------

      During  November 1999, the Sole  Stockholder  purchased idle  construction
equipment (tower cranes) from Venetian Casino Resort, LLC for $2.0 million,  the
cost basis of the equipment.

      During the fourth quarter of 1999, the Sole Stockholder  purchased certain
construction  claims  from  various  contractors  and  subcontractors,   for  an
aggregate price equal to the aggregate amount of the claims  (approximately $1.6
million).  On November  12,  1999,  with the  approval  of all of the  Company's
lenders,  the Company paid the Sole  Stockholder  the aggregate  amount of these
claims.

<PAGE>

                                     PART IV

ITEM 14.--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

      The exhibits listed in the accompanying Exhibit Index on Page to are filed
      as part of this Form 10-K.

 (b)  Reports on Form 8-K

      On October 15, 1999, the Company filed a report on Form 8-K announcing its
      expected  consolidated  earnings for the quarter ended September 30, 1999.
      In  addition,  the Company  reported  that  during  such  quarter the Sole
      Stockholder  made  available  approximately  $9 million to the Company for
      working capital purposes.

<PAGE>

================================================================================
                                   SIGNATURE


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. Adelson,
Chairman of the Board and
Chief 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.

<TABLE>
<CAPTION>

               SIGNATURE                    TITLE                      DATE
               ---------                    -----                      ----

<S>                             <C>                               <C>
/s/ Sheldon G. Adelson          Chairman of the Board, Chief      March 30, 2000
--------------------------      Executive Officer and
Sheldon  G. Adelson             Director


/s/ William J. Raggio           Special Director                  March 30, 2000
--------------------------
William J. Raggio

/s/ Harry D. Miltenberger       Vice President--Finance           March 30, 2000
--------------------------      (principal financial
Harry D. Miltenberger           and accounting officer)

</TABLE>

================================================================================
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

    Exhibit No.        Description of Document

    -----------        -----------------------
    <S>                <C>
    3.1                Amended and Restated Articles of Incorporation of LVSI.*
    3.2                Certificate of Amendment of Amended and Restated Articles
                       of Incorporation of LVSI.*
    3.3                Amended and Restated By-laws of LVSI.*
    3.4                Amended and Restated Limited Liability Company Agreement
                       of Venetian*
    4.1                Indenture,  dated as of November 14,  1997,  by and among
                       LVSI and Venetian,  as issuers, Mall Intermediate Holding
                       Company,  LLC ("Mall  Intermediate"),  Lido  Intermediate
                       Holding  Company,  LLC  ("Lido  Intermediate")  and  Mall
                       Construction,  as Mortgage Note guarantors, and U.S. Bank
                       Trust  National  Association  (previously  known as First
                       Trust  National  Association),  as Mortgage  Note trustee
                       (the "Mortgage Note Trustee").*

    4.2                Indenture,  dated as of November 14,  1997,  by and among
                       LVSI and Venetian,  as issuers,  Mall Intermediate,  Lido
                       Intermediate   and   Mall    Construction,    as   Senior
                       Subordinated  Note  guarantors,  and First Union National
                       Bank  ("First  Union"),   as  Senior   Subordinated  Note
                       trustee.*

    4.3                Registration Rights Agreement,  dated as of November 14,
                       1997, by and among LVSI,  Venetian,  Mall
                       Intermediate,  Lido Intermediate and Mall Construction,
                       and Goldman, Sachs & Co. and Bear, Stearns
                       & Co. Inc. (the "Initial Purchasers").*
    4.4                Funding   Agents'    Disbursement   and    Administration
                       Agreement,  dated as of November 14,  1997,  by and among
                       LVSI, Venetian, Mall Construction, jointly and severally,
                       the Bank  Agent,  the  Mortgage  Note  Trustee,  the HVAC
                       Provider and the Disbursement Agent.*

    4.5                FADAA Limited  Waiver,  dated as of November 12, 1999, by
                       and among LVSI,  the Sole  Stockholder,  The Bank of Nova
                       Scotia  ("Scotiabank"),  as Bank Agent, the Mortgage Note
                       Trustee,  Salomon  Brothers  Realty  Corp.  ("SBRC"),  as
                       successor-in-interest   to   GMAC   Commercial   Mortgage
                       Corporation ("GMAC"), and the HVAC Provider.*****

    4.6                Company  Security  Agreement,  dated as of November 14,
                       1997,  by and among LVSI,  Venetian,  Mall Construction
                       and Scotiabank, as the Intercreditor Agent.*
    4.7                Mall  Construction  Subsidiary  Security  Agreement,
                       dated as of November 14, 1997,  between Mall
                       Construction and Scotiabank, as the Intercreditor Agent.*
    4.8                Deed  of  Trust,  Assignment  of  Rents  and  Leases  and
                       Security Agreement made by Venetian and LVSI, jointly and
                       severally as trustor,  to Lawyers  Title of Nevada,  Inc.
                       ("Lawyer's  Title"),  as trustee,  for the benefit of the
                       Mortgage Note Trustee, as Beneficiary.*

    4.9                First Amendment to Deed of Trust, Assignment of Rents and
                       Leases and Security  Agreement made by Venetian and LVSI,
                       jointly and severally as trustor,  to Lawyer's  Title, as
                       trustee, for the benefit of the Mortgage Note Trustee, as
                       Beneficiary.***

    4.10               Leasehold  Deed of Trust,  Assignment of Rents and Leases
                       and  Security  Agreement  made by Mall  Construction,  as
                       trustor,  to Lawyer's Title, as trustee,  for the benefit
                       of the Mortgage Note Trustee, as Beneficiary.*

</TABLE>

<PAGE>

                                 EXHIBIT INDEX, (Continued)
<TABLE>
<CAPTION>

    Exhibit No.        Description of Document

    -----------        -----------------------
    <S>                <C>
    4.11               First Amendment to Leasehold Deed of Trust, Assignment of
                       Rents and  Leases  and  Security  Agreement  made by Mall
                       Construction,  as trustor, to Lawyer's Title, as trustee,
                       for  the  benefit  of  the  Mortgage  Note  Trustee,   as
                       Beneficiary.***

    4.12               Disbursement  Collateral Account  Agreement,  dated as of
                       November  14,  1997,  by and among LVSI,  Venetian,  Mall
                       Construction and Scotiabank, as Disbursement Agent and as
                       Securities Intermediary.*

    4.13               Mortgage Notes Proceeds Collateral Account Agreement,
                       dated as of November 14, 1997, by and among LVSI,
                       Venetian and Scotiabank, as Disbursement Agent.*

    4.14               Mortgage Notes Proceeds Account Third-Party  Account
                       Agreement, dated as of November 14, 1997, by and among
                       LVSI, Venetian, Scotiabank, as  Disbursement  Agent,  and
                       Goldman, Sachs & Co., as Securities Intermediary.*
    4.15               Intercreditor  Agreement,  dated as of November 14, 1997,
                       among Scotiabank,  as Bank Agent and Intercreditor Agent,
                       the Mortgage Note Trustee,  GMAC, as Interim Mall Lender,
                       and First Union, as Senior Subordinated Note trustee.*
    4.16               Completion Guaranty,  dated as of November 14, 1997, made
                       by the Sole Stockholder,  in favor of Scotiabank,  as the
                       Bank Agent acting on behalf of the Bank Lenders, GMAC, as
                       the Interim Mall Lender, and the Mortgage Note Trustee.*

    4.17               Completion Guaranty Collateral Account Agreement, dated
                       as of November 14, 1997, by and between the Sole
                       Stockholder, as Pledgor, and Scotiabank, as Disbursement
                       Agent.*
    4.18               Completion Guaranty Third-Party Account Agreement, dated
                       as of November 14, 1997, by and among the Sole
                       Stockholder, Scotiabank, as Disbursement Agent, and
                       Goldman, Sachs & Co., as Securities Intermediary.*
    4.19               Unsecured  Indemnity Agreement, dated as of November 14,
                       1997,  by and among LVSI, Venetian and Mall Construction,
                       to and for the benefit of the Mortgage Note Trustee.*
    10.1               Bank Credit Agreement,  dated as of November 14, 1997,
                       by and among LVSI, Venetian, and the lender parties
                       thereto, Goldman Sachs Credit Partners, L.P. ("GSCP"), as
                       arranger and syndication agent, and Scotiabank, as
                       administrative agent.*
    10.2               First Amendment to Credit Agreement,  dated as of January
                       30, 1998, by and among LVSI, Venetian, the lender parties
                       thereto,  GSCP, as arranger and  syndication  agent,  and
                       Scotiabank, as administrative agent.*

    10.3               Amendment to Bank Credit  Agreement,  dated as of May 10,
                       1999, by and among LVSI, Venetian, the lender parties
                       thereto, GSCP, as arranger and syndication agent, and
                       Scotiabank, as administrative agent.****
    10.4               Limited Waiver and Second Amendment to Credit  Agreement,
                       dated November 12, 1999, by and among LVSI, Venetian, the
                       lender parties thereto, GSCP, as arranger and syndication
                       agent, and Scotiabank, as administrative agent.*****

    10.5               Credit  Agreement,  dated as of November 14, 1997, by and
                       among LVSI, Venetian, Mall Construction and GMAC.*

    10.6               Limited Waiver and Second Amendment to Credit  Agreement,
                       dated  November  12, 1999,  by and among LVSI,  Venetian,
                       Mall Construction,  Mall Subsidiary, the Sole Stockholder
                       and SBRC.*****
    10.7               Energy Services Agreement, dated as of November 14, 1997,
                       by and between the HVAC Provider and Venetian.*
    10.8               Energy  Services  Agreement  Amendment No. 1, dated July
                       1, 1999, by and between the HVAC Provider and
                       Venetian.*****
    10.9               Energy Services Agreement, dated as of November 14, 1997,
                       by and between the HVAC Provider and Mall Construction.*

</TABLE>

<PAGE>

                                 EXHIBIT INDEX, (Continued)
<TABLE>
<CAPTION>

    Exhibit No.        Description of Document

    -----------        -----------------------
    <S>                <C>
    10.10              Energy  Services Agreement Amendment No. 1, dated July 1,
                       1999, by and between the HVAC Provider and Mall
                       Construction.*****
    10.11              Construction Management Agreement, dated as of February
                       15, 1997, between LVSI, as owner, and the Construction
                       Manager.*

    10.12              Assignment,  Assumption  and  Amendment  of  Construction
                       Management  Agreement,  dated as of November 14, 1997, by
                       and among LVSI, Venetian and the Construction Manager.*

    10.13              Guaranteed  Maximum Price  Amendment to Construction
                       Management Agreement, dated June 17, 1998 (effective
                       September 9, 1998), between the Construction Manager and
                       Venetian. **
    10.14              Agreement,  effective  as of  January  1,  1996,  between
                       Venetian,  as owner,  and the architect,  a collaboration
                       between the firms of TSA of Nevada, LLP and WAT&G, Inc.,
                       Nevada.*

    10.15              Amended and Restated Reciprocal Easement, Use and
                       Operating Agreement, dated as of November 14, 1997, by
                       and among Interface, Mall Construction and Venetian.*
    10.16              First  Amendment  to  Amended  and  Restated   Reciprocal
                       Easement,  Use  and  Operating  Agreement,  dated  as  of
                       December  20,  1999,  by and  among  Interface,  New Mall
                       Subsidiary, Phase II Subsidiary and Venetian.*****
    10.17              Casino Lease, dated as of November 14, 1997, by and
                       between LVSI and Venetian.*
    10.18              Amended and Restated  Services Agreement, dated as of
                       November 14, 1997, by and among Venetian, Interface
                       Holding, Interface, Lido Casino Resort MM, Inc., Grand
                       Canal Shops Mall MM, Inc. and certain subsidiaries of
                       Venetian named therein.*****
    10.19              Intercreditor  Agreement,  dated as of November 14, 1997,
                       by and among Scotiabank, as the Administrative Agent, the
                       Mortgage Note Trustee,  GMAC, as the Interim Mall Lender,
                       First  Union,   as  Subordinated   Note  trustee,   LVSI,
                       Venetian, Mall Construction and the Sole Stockholder.*

    10.20              Indemnity and Guaranty Agreement, dated as of December
                       20, 1999, made by the Sole Stockholder.*****
    10.21              Guaranty, dated as of December 20, 1999, made by Sole
                       Stockholder.*****
    10.22              Mall Scope Change Guaranty, dated as of December 20,
                       1999, made by Sole Stockholder.*****
    10.23              Note,  dated December 20, 1999, by New Mall Subsidiary in
                       favor of SGA  Development,  Inc., in the amount of
                       $35,000,000.*****

    10.24              Construction  Agency  Agreement, dated as of November 14,
                       1997, by and between Venetian and the HVAC Provider.*
    10.25              Management Agreement,  dated as of April 23, 1997, by and
                       between LVSI and Forest City Commercial Management,  Inc.
                       ("Forest City"), as assigned by LVSI to Mall Construction
                       by that certain Assignment and Assumption of Contracts.*

    10.26              Management  Agreement,  dated as of November 12, 1999, by
                       and  between  Mall   Construction  and  Forest  City,  as
                       assigned by Mall  Construction to Mall Subsidiary by that
                       certain Assignment and Assumption of Contracts.*****

    10.27              Primary  Liquidated  Damages  Insurance  Agreement, dated
                       August 4, 1997, by and between the Construction Manager
                       and C.J. Coleman & Companies, Ltd.*
    10.28              Guaranty of Performance,  dated as of August 19, 1997, by
                       P&O in favor of LVSI,  as assigned by LVSI to Venetian by
                       that  certain  Assignment,  Assumption  and  Amendment of
                       Contracts.*

</TABLE>

<PAGE>

                                 EXHIBIT INDEX, (Continued)
<TABLE>
<CAPTION>

    Exhibit No.        Description of Document

    -----------        -----------------------
    <S>                <C>
    10.29              Guaranty of Performance and Completion, dated as of
                       August 19, 1997, by Bovis, LVSI, Venetian and Mall
                       Construction, for the benefit of Scotiabank, as the
                       Intercreditor Agent.*
    10.30              Sands Resort Hotel and Casino  Agreement,  dated February
                       18, 1997, by and between  Clark County and LVSI,  and all
                       amendments thereto.*
    10.31              Las Vegas Sands, Inc. 1997 Fixed Stock Option Plan.*
    10.32              Employment Agreement, dated as of November 1, 1995,
                       between LVSI and William P. Weidner.*
    10.33              Employment Agreement, dated as of November 1, 1995,
                       between LVSI and Bradley H. Stone.*
    10.34              Employment Agreement, dated as of November 1, 1995,
                       between LVSI and Robert G. Goldstein.*
    10.35              Term Loan and Security  Agreement,  dated as of December
                       22, 1997, by and among LVSI and  Venetian,  as Borrowers,
                       the lender parties thereto,  BancBoston Leasing, Inc., as
                       co-agent,   and  General  Electric  Capital   Corporation
                       ("GECC"), as administrative agent.*

    10.36              Limited  Waiver  and  First  Amendment  to Term  Loan and
                       Security Agreement, dated November 12, 1999, by and among
                       LVSI and  Venetian,  as  Borrowers,  the  lender  parties
                       thereto, BancBoston Leasing, Inc., as co-agent, and GECC,
                       as administrative agent.******

    10.37              Intercreditor  Agreement,  dated as of December 22, 1997,
                       by and among Scotiabank,  as Bank Agent,  First Trust, as
                       Mortgage Note trustee, GMAC and GECC.*
    10.38              Loan  Agreement,  dated as of December 20, 1999, by and
                       among Goldman Sachs Mortgage Company, as Syndication
                       Agent, Scotiabank, as Administrative Agent and as
                       Collateral Agent, and New Mall Subsidiary, as
                       Borrower.*****
    10.39              Subordinated  Note,  dated November 12, 1999, by LVSI in
                       favor of the Sole Stockholder, in the amount of
                       $15,000,000.*****
    10.40              Subordination  and Intercreditor Agreement
                       (Trade Claims), dated November 12, 1999, by and among
                       Scotiabank, as Bank Agent, LVSI and the Sole
                       Stockholder.*****
    21.1               Subsidiaries of the Issuers and Guarantors.*****
    24.1               Powers of Attorney (included on signature pages).
    27.1               Financial Data Schedule.*****
<FN>

----------
          *  Incorporated by reference from  Registration  Statement on Form S-4
             of  the  Company  and  certain  of  its   subsidiaries   (File  No.
             333-42147).

         **  Incorporated  by reference from the Company's  Quarterly  Report on
             Form 10-Q for the Quarter ended September 30, 1998.

        ***  Incorporated by reference from the Company's  Annual Report on Form
             10-K for the Fiscal Year ended December 31, 1998.

       ****  Incorporated  by reference from the Company's  Quarterly  Report on
             Form 10-Q for the Quarter ended March 31, 1999.

      *****  Filed herewith.
</FN>
</TABLE>