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# UNITED STATES
SECURITIES & EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-Q

|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934
|--- | -----------------------------------------------------------------------------------------------------------

For the quarterly
period ended September 30, 2003

|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|----- | ----------------------------------------------------------------------------------------

For the Transition
period from _______________ to ________________

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Commission File Number   333-42147

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

|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Nevada                                                         | 04-3010100                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                              
|                                                              
|3355 Las Vegas Boulevard South, Room 1A                        |                                     
|Las Vegas, Nevada                                              | 89109                               
|(Address of principal executive offices)                       | (Zip Code)                          

|(702) 414-1000                                      
|----------------------------------------------------
|(Registrant's telephone number, including area code)

Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [   ] No

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

Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of November 14, 2003

|                             |                                 
|---------------------------- | --------------------------------
|Class                        | Outstanding at November 14, 2003
|Common Stock, $.10 par value | 1,000,000 shares                

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# LAS VEGAS SANDS, INC.

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# LAS VEGAS SANDS, INC.

# Part I

# FINANCIAL INFORMATION

# Item 1.   Financial
Statements

# Consolidated
Balance Sheets(Dollars in thousands)

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

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

---

# LAS VEGAS SANDS, INC.

# Consolidated
Statements of Operations(In thousands, except per share data) (Unaudited)

|                                                  | Three Months Ended | Nine Months Ended |   |        
|------------------------------------------------- | ------------------ | ----------------- | - | -------
|
|
|Revenues:                                         |                    |                   |   |        
|Casino                                            |                    |                   | $ | 69,236 
|Rooms                                             |                    |                   |   | 67,752 
|Food and beverage                                 |                    |                   |   | 22,439 
|Retail and other                                  |                    |                   |   | 20,905 
|                                                  |                    |                   |   |        
|                                                  |                    |                   |   | 180,332
|Less-promotional allowances                       |                    |                   |   | (12,068
|                                                  |                    |                   |   |        
|Net revenues                                      |                    |                   |   | 168,264
|                                                  |                    |                   |   |        
|Operating expenses:                               |                    |                   |   |        
|Casino                                            |                    |                   |   | 32,296 
|Rooms                                             |                    |                   |   | 18,114 
|Food and beverage                                 |                    |                   |   | 11,776 
|Retail and other                                  |                    |                   |   | 8,386  
|Provision for doubtful accounts                   |                    |                   |   | 778    
|General and administrative                        |                    |                   |   | 26,198 
|Corporate expense                                 |                    |                   |   | 2,441  
|Rental expense                                    |                    |                   |   | 2,538  
|Pre-opening and developmental expense             |                    |                   |   | 1,872  
|Depreciation and amortization                     |                    |                   |   | 14,183 
|                                                  |                    |                   |   |        
|                                                  |                    |                   |   | 118,582
|                                                  |                    |                   |   |        
|Operating income                                  |                    |                   |   | 49,682 
|                                                  |                    |                  
|Other income (expense):                           |                    |                   |   |        
|Interest income                                   |                    |                   |   | 402    
|Interest expense, net of amounts capitalized      |                    |                   |   | (30,356
|Interest expense on indebtedness to               |                    |                   |   |        
|Principal Stockholder                             |                    |                   |   |       
|Other income (expense)                            |                    |                   |   | 1      
|Loss on early retirement of debt                  |                    |                   |   |       
|                                                  |                    |                   |   |        
|Income (loss) before preferred return             |                    |                   |   | 19,729 
|                                                  |                    |                  
|Preferred return on Redeemable Preferred Interest |                    |                   |   |        
|in Venetian Casino Resort, LLC                    |                    |                   |   | (6,745 
|                                                  |                    |                   |   |        
|Net income (loss)                                 |                    |                   | $ | 12,984 
|                                                  |                    |                   |   |        
|                                                  |                    |                  
|Basic earnings (loss) per share                   |                    |                   | $ | 12.98  
|                                                  |                    |                   |   |        
|                                                  |                    |                  
|Diluted earnings (loss) per share                 |                    |                   | $ | 12.96  
|                                                  |                    |                   |   |        

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

---

# LAS VEGAS SANDS, INC.

# Consolidated Statements of Cash Flows(Dollars in thousands) (Unaudited)

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

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

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements

# Note 1   Organization and
Business of Company

The
accompanying consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2002. The year end balance sheet data
was derived from audited financial statements but does not include all disclosures
required by generally accepted accounting principles. In addition, certain amounts in the
2002 financial statements have been reclassified to conform with the 2003 presentation. In
the opinion of management, all adjustments and normal recurring accruals considered
necessary for a fair statement of the results for the interim period have been included.
The interim results reflected in the unaudited financial statements are not necessarily
indicative of expected results for the full year.

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 in order to construct a planned two-phase hotel-casino resort. The
first phase of the hotel-casino resort (the Casino Resort) opened on May 4,
1999, except for the mall, which opened on June 19, 1999. The Casino Resort was expanded
during the second quarter of 2003, which expansion was opened for business on June 26,
2003 (the Phase IA Addition). As expanded, the Casino Resort includes 4,049
suites, casino space approximating 116,000 square feet, approximately 650,000 square feet
of convention space, and approximately 446,000 gross leasable square feet of retail shops
and restaurants. In December 2002, the Company, through a subsidiary, began constructing a
Las Vegas-style casino in the Macau Special Administrative Region of the Peoples
Republic of China (the Macau Casino). The Macau Casino is expected to include
approximately 163,000 gross square feet of gaming facilities and to be completed by June
2004.

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

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

Various
Subsidiaries are guarantors or co-obligors of certain indebtedness related to the Casino
Resort. See Note 4  Long-Term Debt.

The
Mall II Subsidiary is an indirect, wholly-owned subsidiary of LVSI and owns and operates
the retail mall in the Casino Resort (the Mall). The Mall II Subsidiary was
formed on May 31, 2002 and became a successor to the Mall Subsidiary in connection with
the refinancing of the Malls indebtedness. See Note 4  Long-Term Debt.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 1   Organization and
Business of Company (Continued)

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

# Note 2   
Stockholders Equity and Per Share Data

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 that the Principal Stockholder may assume the
obligations of the Company under the plan and provides for the granting of up to 75,000
shares of common stock to officers and other key employees of the Company.

During
the first quarter of 2002, the Company entered into a stockholders agreement (the
Stockholders Agreement) with the employees to whom options were granted
(the Additional Stockholders) and the Principal Stockholder. The
Stockholders Agreement restricts the ability of the Additional Stockholders and any
of their permitted transferees who have agreed to be bound by the terms and conditions of
the agreement to sell, assign, pledge, encumber or otherwise dispose of any shares of
common stock of LVSI, except in accordance with the provisions of the Stockholders
Agreement. If at any time before LVSI completes an initial public offering, the Principal
Stockholder wishes to sell 20% or more of his ownership interest in LVSI to any third
party transferee, each Additional Stockholder shall have the right to participate in such
sale on the same terms as those offered to the Principal Stockholder. The Additional
Stockholders also have certain piggyback registration rights. Finally, if at any time
prior to the completion by LVSI of an initial public offering LVSI wishes to issue any new
securities, the Additional Stockholders will have the right to purchase that number of
shares of LVSI common stock, at the proposed purchase price of the new securities, such
that the Additional Stockholders percentage ownership of LVSI would remain the same
following such issuance.

Basic
and diluted income per share are calculated based upon the weighted average number of
shares outstanding. In the first quarter of 2002, the Company completed a stock split
whereby the number of shares of common stock outstanding was increased from 925,000 to
1,000,000. At the time of the stock split, the Principal Stockholder maintained 100%
ownership of the Companys common stock. All references to share and per share data
herein have been adjusted retroactively to give effect to the increase in shares of common
stock outstanding to 1,000,000. As of December 31, 2002 there were unexercised options to
purchase 5,500 shares of the Companys common stock. During the nine months ended
September 30, 2003 options to purchase 2,500 shares of common stock were exercised and
1,000 options to purchase common stock were forfeited. The impact of the unexercised
options to purchase shares of the Companys common stock have been included in the
computation of diluted earnings per share for the three and nine months ended September
30, 2003 and for the three months ended September 30, 2002, but have been excluded from
the computation of earnings per share for the nine months ended September 30, 2002 as
their impact would have been antidilutive.

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

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 2   
Stockholders Equity and Per Share Data (Continued)

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

|                                        | For the Three | For the Three | For the Nine | For the Nine
|--------------------------------------- | ------------- | ------------- | ------------ | ------------
|
|
|
|                                        |               |               |              |             
|Net income (loss), as reported          |               |               | $            | 12,984      
|Deduct: Total stock-based employee      |               |               |              |             
|compensation expense determined under   |               |               |              |             
|the minimum value method for all        |               |               |              |             
|awards, net of related tax effects      |               |               |              |            
|                                        |               |               |              |             
|Add: Forfeitures of options to          |               |               |              |             
|purchase common stock                   |               |               |              | 1           
|                                        |               |               |              |             
|                                        |               |              
|Pro forma net income                    |               |               | $            | 12,985      
|                                        |               |               |              |             
|                                        |               |              
|Basic earnings per share, as reported   |               |               | $            | 12.98       
|                                        |               |               |              |             
|Basic earnings per share, pro-forma     |               |               | $            | 12.99       
|                                        |               |               |              |             
|                                        |               |              
|Diluted earnings per share, as reported |               |               | $            | 12.96       
|                                        |               |               |              |             
|Diluted earnings per share, pro-forma   |               |               | $            | 12.96       
|                                        |               |               |              |             

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

# Note 3   Property and
Equipment

Property
and equipment consists of the following (in thousands):

|                                                          | September 30 | December 31,
|--------------------------------------------------------- | ------------ | ------------
|
|Land and land improvements                                |              |             
|Building and improvements                                 |              |             
|Equipment, furniture, fixtures and leasehold improvements |              |             
|Construction in progress                                  |              |             
|                                                          |              |             
|                                                          |              |             
|Less:     accumulated depreciation and amortization       |              |             
|                                                          |              |             
|                                                          |              |             
|                                                          |              |             

During
the three month and nine month periods ended September 30, 2003 and September 30, 2002,
the Company capitalized interest expense of $0.4 million and $5.1 million, and $0.7
million and $1.5 million, respectively.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 3   Property and
Equipment (Continued)

As
of September 30, 2003, construction in progress represented design, pre-development and
construction costs for the Macau Casino, design and shared facilities cost for the planned
second phase of the Casino Resort, to be owned by the Phase II Subsidiary (the Phase
II Resort) and on-going capital improvement projects at the Casino Resort.

# Note 4   Long-Term Debt

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

|                                                 | September 30, | December 31,
|------------------------------------------------ | ------------- | ------------
|
|                                                 |               |             
|Indebtedness of the Company and its Subsidiaries |               |             
|other than the Mall II and Macau Subsidiaries:   |               |             
|                                                 |               |             
|11% Mortgage Notes, due June 15, 2010            |               |             
|Senior Secured Credit Facility - Term B          |               |             
|Senior Secured Credit Facility - Term A          |               |             
|FF&E Credit Facility                             |               |             
|                                                 |               |             
|Indebtedness of the Mall II Subsidiary:          |               |             
|                                                 |               |             
|Secured Mall Facility                            |               |             
|                                                 |               |             
|Indebtedness of the Macau Subsidiaries:          |               |             
|                                                 |               |             
|Venetian Macau Senior Secured Notes - Tranche A  |               |             
|Venetian Macau Senior Secured Notes - Tranche B  |               |             
|Venetian Intermediate Credit Facility            |               |             
|                                                 |               |             
|                                                 |               |             
|                                                 |               |             
|Less: current maturities                         |               |             
|Less: long term debt classified as current       |               |             
|                                                 |               |             
|                                                 |               |             
|Total long-term debt                             |               |             
|                                                 |               |             

On
June 4, 2002, the Company completed a series of refinancing transactions (collectively,
the Refinancing Transactions) including: (1) the issuance of
$850.0 million in aggregate principal amount of 11% mortgage notes due 2010 (the
Mortgage Notes) in a private placement; (2) entering into a new senior secured
credit facility (the Senior Secured Credit Facility) with a syndicate of
lenders in an aggregate amount of $375.0 million; and (3) entering into a secured
mall facility (the Secured Mall Facility) in an aggregate amount of $105.0
million, which was subsequently increased to $120.0 million on June 28, 2002. The Company
used the proceeds of the Refinancing Transactions to repay, redeem or repurchase all of
its previously outstanding indebtedness, to finance the construction and development of
the Phase IA Addition and to pay all fees and expenses associated with the Refinancing
Transactions. In addition, the completion guarantee provided by the Principal Stockholder
relating to the construction of the Casino Resort was terminated upon the consummation of
the Refinancing Transactions and the remaining cash collateral was returned to the
Principal Stockholder.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 4   Long-Term Debt
(Continued)

# Mortgage Notes

The
Mortgage Notes bear interest at 11%, payable each June 15th and December 15th. The
Mortgage Notes are secured by second priority liens on certain assets of the Company (the
personal property and the real estate improvements that comprise the hotel, the casino,
and the convention space, with certain exceptions). The Mortgage Notes are redeemable at
the option of LVSI and Venetian at prices ranging from 100% to 105.5% commencing on or
after June 15, 2006, as set forth in the Mortgage Notes and the indenture pursuant to
which the Mortgage Notes were issued (the Indenture). Prior to June 15, 2006,
LVSI and Venetian may redeem the Mortgage Notes at their principal amount plus an
applicable make-whole premium. Upon a change of control (as defined in the Indenture),
each Mortgage Note holder may require LVSI and Venetian to repurchase such Mortgage Notes
at 101% of the principal amount thereof plus accrued interest and other amounts which are
then due, if any. On or prior to June 15, 2005, the Company may redeem up to 35% of the
Mortgage Notes with the net cash proceeds of one or more offerings of equity securities at
a redemption price of 111% of the principal amount of the Mortgage Notes, plus accrued and
unpaid interest. Upon an event of loss or certain asset sales, the Company may also be
required to offer to purchase all or a portion of the Mortgage Notes with the proceeds of
such event of loss or sale. The Mortgage Notes are not subject to a sinking fund
requirement.

On
December 27, 2002, the Company completed an exchange offer to exchange the Mortgage Notes
for mortgage notes with substantially the same terms.

# Senior Secured Credit
Facility

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

The
Term B Facility matures on June 4, 2008 and is subject to quarterly amortization payments
in the amount of $625,000 from September 30, 2002 until September 30, 2007, followed by
four equal quarterly amortization payments of $59.4 million until the maturity date. The
$50.0 million Term A Facility was drawn in full on May 16, 2003. Pending their use, the
proceeds from this loan were deposited into the Phase IA Addition disbursement account and
pledged to the disbursement agent for the Senior Secured Credit Facility lender. The Term
A Facility matures on June 4, 2007 and is subject to quarterly amortization payments
commencing on December 31, 2003 in the amount of $1,666,667 for three quarters, $2,500,000
for the succeeding four quarters, $3,750,000 for the next four quarters and $5,000,000 for
the final four quarters.

The
Revolving Facility matures on June 4, 2007 and has no interim amortization. No amounts had
been drawn under the Revolving Facility as of September 30, 2003. However, as described
below, LVSI has guaranteed borrowings under a $50 million credit facility of Venetian
Venture Development Intermediate Limited, a wholly-owned subsidiary of the Company
(Venetian Intermediate), to fund construction and development costs of the
Macau Casino. These guarantees will be supported by $50 million letters of credit to be
issued under the Revolving Facility of which a $15.0 million letter of credit had been
issued as of September 30, 2003. In addition, LVSI is expected to guarantee funding of
certain cost overruns of the Macau Casino as further described in Note 6. It is currently
anticipated that this guaranty will be supported by a $10 million letter of credit to be
issued under the Revolving Facility. As a result of the issuance and the expected future
issuance of these letters of credit, the amounts available for working capital loans under
the Revolving Facility are expected to decrease from the $60.0 million of current
availability to $15.0 million.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 4    Long-Term Debt
(Continued)

All
amounts outstanding under the Senior Secured Credit Facility bear interest at the option
of the Company at the prime rate plus 2% per annum, or at the reserve adjusted Eurodollar
rate plus 3% per annum. Since the substantial completion of the Phase IA Addition, the
applicable margin for amounts outstanding under the Term A Facility and the Revolving
Facility is determined by a grid based upon a leverage ratio. The leverage ratio is
calculated as the ratio of consolidated total debt as of the last day of each fiscal
quarter to EBITDA (as defined in the Senior Secured Credit Facility) for the four-fiscal
quarter period ending on such date. Commitment fees equal to 0.50% per annum of the daily
average unused portion of the commitment under the Revolving Facility and 0.75% per annum
of the daily average unused portion of the Term A Facility are payable quarterly in
arrears. The average interest rate for the Senior Secured Credit Facility was 4.26% during
the first nine months of 2003.

The
Senior Secured Credit Facility is secured by a first priority lien on certain assets of
the Company (the personal property and the real estate improvements that comprise the
hotel, the casino, and the convention space, with certain exceptions). The Senior Secured
Credit Facility contains affirmative, negative and financial covenants including
limitations on indebtedness, liens, investments, guarantees, restricted junior payments,
mergers and acquisitions, sales of assets, leases, transactions with affiliates and
scope-changes and modifications to material contracts. Additionally, the Company is
required to comply with certain financial ratios and other financial covenants including
total debt to EBITDA ratios, EBITDA to interest coverage ratios, minimum net worth
covenants and maximum capital expenditure limitations. At September 30, 2003, the Company
was in compliance with all required covenants and ratios under the Senior Secured Credit
Facility.

Pursuant
to the terms of the Senior Secured Credit Facility, the Company is also required to
maintain certain funds in escrow for insurance and property taxes. At September 30, 2003,
$2.1 million was held by the lenders agent in escrow for these purposes. The amounts
in escrow are classified as restricted cash in the accompanying financial statements.

# FF&E Financing

In
September 2003, the Company and a lender entered into a credit facility (the
FF&E Credit Facility) to provide $15.0 million of financing for the Phase
IA Addition. The proceeds from the FF&E Credit Facility were used to finance certain
furniture, fixtures and equipment (the Specified FF&E) for the Phase IA
Addition and the facility is secured by the specified FF&E. The FF&E Credit
Facility provides for a 60-month basic term loan. Interest on the term loan is three month
LIBOR plus 3.00% and is payable quarterly. The FF&E Credit Facility is subject to
nineteen quarterly amortization payments of $600,000 beginning January 1, 2004, and one
final payment of $3,600,000 on October 1, 2008.

# Secured Mall Facility

In
June 2002, the Company also entered into an agreement (the Secured Mall
Facility) with certain lenders to provide for a $105.0 million loan (subsequently
increased to $120.0 million on June 28, 2002) to the Mall II Subsidiary. The initial
$105.0 million of proceeds (net of financing costs) from the Secured Mall Facility, along
with the proceeds of a $37.9 million capital contribution in Mall II Subsidiary by
Venetian, were used to repay the Mall Take-out Financing and costs previously owed by the
Mall Subsidiary. Upon the consummation of the Refinancing Transactions, the assets of the
Mall were transferred to the Mall II Subsidiary, the borrower under the Secured Mall
Facility. The additional $15.0 million of proceeds (net of financing costs) were
distributed to Venetian and used for general corporate purposes. The indebtedness under
the Secured Mall Facility is secured by a first priority lien on the assets that comprise
the Mall (the Mall Assets). The average interest rate for the Secured Mall
Facility was 3.15% during the first nine months of 2003.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 4   Long-Term Debt
(Continued)

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

The
Company is required to maintain an interest rate cap agreement to limit the impact of
increases in interest rates on its floating rate debt derived from the Secured Mall
Facility. To meet the requirements of the Secured Mall Facility, the Company entered into
a cap agreement during June 2002 (the Mall Cap Agreement) that resulted in a
premium payment to counterparties based upon notional principal amounts for a term equal
to the term of the Secured Mall Facility. The provisions of the Mall Cap Agreement entitle
the Company to receive from the counterparties the amounts, if any, by which the selected
market interest rates exceed the strike rates stated in such agreement. There was no net
effect on interest expense as a result of the Mall Cap Agreement for the nine months ended
September 30, 2003. The notional amount of the Mall Cap Agreement (which expires on June
28, 2005) at September 30, 2003 was $120.0 million.

Pursuant
to the terms of the Secured Mall Facility, the Mall II Subsidiary is also required to
maintain certain funds in escrow for debt service and property taxes. At September 30,
2003, $2.0 million was held by the lenders agent in escrow for these purposes. The
amounts in escrow are classified as restricted cash in the accompanying financial
statements.

# Venetian Intermediate
Credit Facility

As
further described in Note 6, Venetian Macau is currently constructing the Macau Casino,
which it expects to complete by June 2004. On March 27, 2003, Venetian Intermediate
entered into a credit agreement (Venetian Intermediate Credit Agreement) with
a lender to provide $50.0 million of financing for the Macau Casino. Venetian Intermediate
owns 100% of Venetian Macau. The obligations under the loans to be made under the Venetian
Intermediate Credit Agreement are guaranteed by the Company and Venetian and supported by
letters of credit to be issued under the Revolving Facility in favor of the Venetian
Intermediate Credit Agreement lenders. As a result of the expected issuance of the letters
of credit, the amounts available for working capital loans under the Revolving Facility
will be reduced on a dollar for dollar basis. The amounts outstanding under the Venetian
Intermediate Credit Facility bear interest at the base rate or the adjusted Eurodollar
rate plus 0.5% per annum. Interest is payable on the base rate loans on a quarterly basis
and is payable on Eurodollar loans at the end of the applicable interest period, and there
is no scheduled principal amortization. The credit facility is due in full on March 27,
2006. As of September 30, 2003, $15.0 million was outstanding under the Venetian
Intermediate Credit Agreement and was supported by a $15.0 million letter of credit issued
under the Revolving Facility. The average interest rate for the Venetian Intermediate
Credit Facility was 1.64% during the first nine months of 2003.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 4    Long-Term
Debt (Continued)

# Venetian Macau Senior
Secured Notes

On
August 21, 2003, a wholly-owned subsidiary of Venetian Macau, Venetian Macau Finance
Company issued $120.0 million in aggregate principal amount of floating rate senior
secured notes due August 2008 (the Notes). The Notes issued by Venetian Macau
Finance Company are guaranteed by Venetian Macau. All assets of Venetian Macau and its
subsidiaries secure the Notes and the guarantee. $75.0 million in aggregate principal
amount of the Notes bear interest at the rate of three month U.S. dollar LIBOR plus 3.25%,
payable quarterly (Tranche A Notes), and $45 million in aggregate principal
amount of the Notes bear interest at the rate of three month U.S. dollar LIBOR plus 4.00%,
payable quarterly (Tranche B Notes). The average interest rate for the Notes
was 4.76% during the first nine months of 2003.The Tranche A Notes have a
mandatory redemption of $7.5 million on August 21, 2005, $11.2 million on August 21, 2006,
$18.8 million on August 21, 2007 and $37.5 million on August 21, 2008. The Tranche B Notes
have no interim amortization and are due in full on August 21, 2008. At closing, the gross
proceeds from the Notes offering, together with interest on such Notes proceeds, were
placed into an escrow account, pending the receipt of certain regulatory approvals in
Macau, the execution of a final credit agreement for a $20.0 million revolving credit
facility and the satisfaction of certain other conditions. Upon the satisfaction of these
conditions, the net proceeds from the Notes offering will be released to Venetian Macau to
fund the construction and development of the Macau Casino. The escrow had an initial term
of 60 days with two additional 30- day extension options. The Company has exercised one
extension option. If the escrow conditions are not satisfied by December 19, 2003, the
Notes will be redeemed at 100% of their principal amount plus unpaid interest.
Accordingly, the Tranche A Notes and Tranche B Notes are classified as current liabilities
in the accompanying balance sheet.

# Note 5    Redeemable
Preferred Interest in Venetian Casino Resort, LLC

During
1997, Interface Holding contributed $77.1 million in cash to Venetian in exchange for a
Series A preferred interest (the Series A Preferred Interest) in Venetian. By
its terms, the Series A Preferred Interest was convertible at any time into a Series B
preferred interest in Venetian (the Series B Preferred Interest). In August
1998, the Series A Preferred Interest was converted into the Series B Preferred Interest.
The rights of the Series B Preferred Interest include the accrual of a preferred return of
12% from the date of contribution in respect of the Series A Preferred Interest. Until the
indebtedness under the Senior Secured Credit Facility is repaid and cash payments are
permitted under the restricted payment covenants of the Indenture, the preferred return on
the Series B Preferred Interest will accrue but will not be paid in cash. Commencing June
30, 2011, distributions must be made to the extent of the positive capital account of the
holder. During the second and third quarters of 1999, Interface Holding contributed $37.3
million and $7.1 million, respectively, in cash in exchange for an additional Series B
Preferred Interest. During the three and nine month periods ended September 30, 2003 and
September 30, 2002, $6.7 million and $19.5 million and $6.0 million and $17.3 million,
respectively, were accrued on the Series B Preferred Interest related to the contributions
made. Since 1997, no distributions of preferred interest or preferred return have been
paid on the Series B Preferred Interest.

Recent Accounting
Pronouncements

In
May 2003, the Financial Accounting Standards Board issued Statement No. 150 (SFAS
150) Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. The Company is considered a non-public entity, as defined by
SFAS 150 because its equity securities are not listed on a public exchange. Accordingly,
for the Company, the provisions of SFAS 150 will become effective during the quarter
ending March 31, 2004. Upon adoption of SFAS 150, the Company anticipates that the Series
B Preferred Interest in Venetian will no longer be presented in the Mezzanine
but rather will be reclassified as a liability of the Company.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 6   Commitments
and Contingencies

Construction Litigation

The
construction of the principal components of the Casino Resort was undertaken by Lehrer
McGovern Bovis, Inc. (the Construction Manager) pursuant to a construction
management agreement and certain amendments thereto (as so amended, the Construction
Management Contract). The Construction Management Contract established a final
guaranteed maximum price (the Final GMP) of $639.0 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 $639.0 million. The Construction
Management Contract also established a required substantial completion date
(the date on which the construction of the Casino Resort was sufficiently complete,
including the receipt of necessary permits, licenses and approvals, so that all components
of the Casino Resort could be open to the general public) of April 21, 1999 (subject to
extensions on account of scope changes and force majeure events), with a
per-day liquidated damages penalty for failure to meet such deadline.

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

On
July 30, 1999, Venetian filed a complaint against the Construction Manager and Bovis in
the United States District Court for the District of Nevada (the Federal Court
Action). The action alleges breach of contract by the Construction Manager of its
obligations under the Construction Management Contract and a breach of contract by Bovis
of its obligations under the Bovis Guaranty, including failure to fully pay trade
contractors and vendors and failure to meet the April 21, 1999 guaranteed completion date.
The Company amended this complaint on November 23, 1999 to add P&O as an additional
defendant. 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
State Court Action). The action alleges a breach of contract and quantum
meruit claims under the Construction Management Contract and also alleges that
Venetian defrauded the Construction Manager in connection with the construction of the
Casino Resort. The Construction Manager seeks damages, attorneys fees and costs and
punitive damages. In the lawsuit, the Construction Manager claims that it is owed
approximately $90.0 million from Venetian and its affiliates. This complaint was
subsequently amended by the Construction Manager, which also filed an additional complaint
against the Company relating to work done and funds advanced with respect to the
contemplated development of the Phase II Resort. Simultaneously, commencing in March 2000,
the Construction Manager and the Company engaged in arbitration proceedings ordered by the
Federal Court to determine the cost and schedule impact of any changes in the scope of
services of the Construction Manager under the Construction Management Contract (the
Arbitration Proceedings).

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

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 6   Commitments
and Contingencies (Continued)

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

On
June 3, 2003, an approximate 10 month trial was concluded in the State Court Action when a
jury returned a verdict awarding the Construction Manager approximately $44.0 million in
additional costs under the Construction Management Contract and awarding the Company
approximately $2.0 million in damages for defective and incomplete work performed by the
Construction Manager. The verdict also allows each party to seek pre-judgment interest and
reimbursement of attorneys costs. As of the date of this filing, the judge in the
State Court Action has not entered a final judgment on that verdict. The Company has
requested that final judgment not be entered until the conclusion of the Arbitration
Proceedings, which proceedings the Company believes will result in the lowering of the
verdict that was awarded to Construction Manager in the State Court Action and will
provide a basis to increase the amount that was awarded to the Company.

While
there are pending subcontractor claims against the Construction Manager and the Company
and related claims for indemnity by and against the Construction Manager, The Company
believes that all such claims asserted against the Company in those actions would be
subsumed within the verdict in the State Court Action and that the Companys
liability will be limited to the amount of any final judgment which may be ultimately
entered in the State Court Action. If and when the verdict in the State Court Action is
entered as a final judgment, the Company intends to file appropriate post judgment motions
and appeals. If a judgment for the Construction Manager is entered on the verdict and such
a judgment can be executed upon by the Construction Manager following the resolution of
all appeals, the Company believes its payment of such a judgment shall be in satisfaction
of and shall be capped at its $45.0 million self-insurance requirement under the Insurance
Policy. The Company intends to seek an elimination or reduction of the Construction
Managers and its subcontractors mechanics liens in an amount to be
consistent with any final judgment on the verdict.

Notwithstanding
the pendency of the verdict in the State Court Action, the Company is proceeding with the
Arbitration Proceedings to determine, among other things, the impact of certain changes
which determination by the arbitrator the Company believes may provide a basis for
reducing the amount awarded to the Construction Manager in the State Court Action and
raising the amount of the verdict for the Company or otherwise establishing a basis for
claims for the Company against the Construction Manager. The Company also intends to
pursue additional affirmative claims in the Federal Court Action and in other proceedings
that were not resolved by the verdict in the State Court Action. The Company is not able
to determine with any reasonable certainty the value of such claims or the probability of
success on such claims at this time. Accordingly, no accrual for a liability has been
reflected in the accompanying financial statements for this matter, other than
approximately $7.2 million which the Company had previously accrued in 1999 for unpaid
construction costs and which have not yet been paid pending outcome of the litigation.

Macau Casino Projects

On
June 26, 2002, the Macau government granted a provisional concession to operate
casinos in Macau to the Companys subsidiary Venetian Macau and to Galaxy Casino
Company Limited, a consortium of Macau and Hong Kong-based investors (Galaxy).
During December 2002, Venetian Macau and Galaxy entered into a subconcession
agreement. The subconcession agreement with Galaxy was recognized and approved by the
Macau government and allows Venetian Macau to develop and operate certain casino projects,
including the Macau Casino, separately from Galaxy.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 6    Commitments
and Contingencies (Continued)

In
addition to the Macau Casino, the Company also intends to build in Macau a hotel, casino
and convention center complex with a Venetian-style theme similar to the Companys
Las Vegas property (the Macau Venetian Casino Resort).

Under
the subconcession agreement, Venetian Macau is obligated to develop and open the Macau
Venetian Casino Resort by June 2006 and invest, or cause to be invested, at least
4.4 billion Patacas (approximately $533.8 million at exchange rates in effect on
September 30, 2003) in various development projects in Macau by June 2009. The
construction and development costs of the Macau Casino will be applied to the fulfillment
of this total investment obligation to the Macau government. It is expected that the
construction and development costs of the Macau Venetian Casino Resort will satisfy the
remainder of this obligation. Assuming that all of the current estimated construction and
development costs of the Macau Casino are applied towards fulfilling the investment
obligations under the subconcession agreement, remaining investment obligations under the
subconcession agreement will be approximately $293.8 million. To support this obligation,
a Macau bank and a subsidiary of the Company, Lido Casino Resort Holding Company, LLC,
have guaranteed 500 million Patacas (approximately $60.7 million at exchange rates in
effect on September 30, 2003) of Venetian Macaus legal and contractual liabilities
to the Macau government until March 31, 2007. These development and investment
obligations may be satisfied by Venetian Macau and/or its affiliates, including the
Company.

The
Company currently estimates the total cost of constructing, developing and operating the
Macau Casino, including design costs, construction costs, equipment costs, working capital
and pre-opening expenses, will be approximately $240.0 million. As of September 30,
2003, approximately $40.0 million of these costs had been expended. The Company
anticipates funding the remaining estimated costs of construction from a combination of
the following sources:

| |  | operating
cash flow of the Company (although the Senior Secured Credit Facility and the Indenture
relating to the Mortgage Notes limit the Companys ability to make investments in
the Macau projects);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | borrowings
of $50.0 million under the Venetian Intermediate Credit Agreement (See Note 4  Venetian
Intermediate Credit Facility). As of September 30, 2003, $15.0 million had been borrowed
under this facility;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | net
proceeds from the issuance and sale of $120 million in aggregate principal amount of the
Notes. The Notes were issued by a wholly-owned subsidiary of Venetian Macau and
guaranteed by Venetian Macau. The Notes and the guarantee are secured by all assets of
Venetian Macau and its subsidiaries, subject to certain exceptions;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | borrowings
under a proposed $20.0 million revolving credit facility expected to be entered into by
Venetian Macau and the issuer of the Notes with a group of lenders (the Proposed
Macau Revolver). The Proposed Macau Revolver would be secured on a pari passu basis
with the same collateral as the Notes. The facility is expected to mature in 2006. The
entire amount outstanding under this facility is expected to bear interest at LIBOR or at
a base rate, in each case plus a percentage to be agreed upon;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a
completion guaranty to be issued by LVSI and Venetian, guaranteeing payment of certain
costs of the Macau Casino in excess of available funds (the Completion Guaranty).
The Completion Guaranty is expected to be supported by a $10.0 million letter of credit
to be issued under the Companys Senior Secured Credit Facility (See Note 4  Senior
Secured Credit Facility). The remainder of the Completion Guaranty is expected to be
funded by borrowings of up to $15.0 million under the Proposed Macau Revolver;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 6    Commitments
and Contingencies (Continued)

| |  | borrowings
under proposed furnishings, fixtures & equipment facilities and vendor financings in
the aggregate principal amount of $25.0 million (the FF&E Facilities)
to finance certain equipment and other assets of the Macau Casino. If Venetian Macau is
unable to obtain the FF&E Facilities , LVSI, Venetian or another of their
subsidiaries is expected to agree either:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | to
purchase, or cause to be purchased assets with a cost of up to $25.0 million and enter
into lease or other arrangements with the Macau Subsidiary or
| |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | to
otherwise assist Venetian Macau in securing such facilities, including by issuing
guarantees in connection with any such facilities or otherwise lending such amounts to
Venetian Macau for purposes of securing such equipment
| |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | in each
case, to the extent permitted under the Senior Secured Credit Facility and the Indenture
for the Mortgage Notes.
| |  | ------------------------------------------------------------------------------------------------------------------------

On
August 21, 2003, the gross proceeds from the Notes offering, together with interest on
such Notes proceeds, were placed into an escrow account pending the receipt of certain
regulatory approvals in Macau, the execution of a final credit agreement for the Proposed
Macau Revolver and the satisfaction of certain other conditions. Upon the satisfaction of
these conditions, the net proceeds from the Notes offering will be released to Venetian
Macau to fund the remaining costs of construction and development of the Macau Casino. The
escrow had an initial term of 60 days with two additional 30-day extension options. The
Company has exercised one extension option. If the escrow conditions are not satisfied by
December 19, 2003, the Notes will be redeemed at 100% of their principal amount plus
unpaid interest. Accordingly, the Notes have been presented as a current liability in the
accompanying balance sheet. Venetian Macau is currently in the process of negotiating a
FF&E commitment with a FF&E lender.

The
Company expects the funds provided by these sources to be sufficient to construct, develop
and operate the Macau Casino, assuming there are no delay costs or construction cost
overruns. If Venetian Macau incurs significant cost overruns, it may need to arrange for
additional financing to pay for these costs. If it requires additional financing, the
Company or its affiliates may incur additional bank borrowings or debt or equity
financing. However, no assurance can be given that such funds will be available or that
such funds will be on terms that will be favorable to the Company. In addition, the
construction and development of the Macau Venetian Casino Resort will require significant
additional debt and/or equity financing.

Other Ventures and
Commitments

During
2003, the Company entered into three lease termination and asset purchase agreements with
Mall tenants. The first agreement provided for payments by the Company to a tenant of
$800,000 during 2003, with 27 additional annual payments of $400,000. The second agreement
provided for an initial deposit of $5.0 million which was paid by the Company during May
2003 and 15 subsequent monthly payments totaling $10.0 million beginning January 2004 plus
interest at 6% per annum. The lease termination and asset transfer is expected to be
completed at the end of 2003 at which time the subsequent monthly payments will commence.
The third agreement and asset purchase agreement provided for an initial payment of
$500,000 during 2003 and subsequent quarterly payments of $62,500 for ten years. In each
case, the Company has obtained title to leasehold improvements and other fixed assets,
which have been recorded at estimated fair market value, which approximated the discounted
present value of the Companys obligation to the former tenants. The Company is
negotiating with other potential tenants for the spaces to be vacated under the
above-described agreements.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 6    Commitments
and Contingencies (Continued)

The
Company has also committed to enter into a joint venture to develop a new restaurant in
the Venetizia room tower and invest $6.5 million in the joint venture, which amount
includes tenant allowances. The investment is expected to be funded during the fourth
quarter of 2003 and the first quarter of 2004 through available cash flow provided by
operating activities.

# Note 7    Summarized
Financial Information

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

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. The following information represents the summarized financial information of
LVSI, Venetian, the Subsidiary Guarantors and the non-guarantor subsidiaries on a combined
basis as of September 30, 2003 and December 31, 2002, and for the three and nine month
periods ended September 30, 2003 and September 30, 2002. In addition, certain amounts in
the 2002 information has been reclassified to conform with the 2003 presentation.

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED BALANCE
SHEETS September 30, 2003

|                                          |  | Venetian | Other | Other Non- | Consolidating/ |  
|----------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|Cash and cash equivalents                 |  |          | $     | 91,518     |                | $
|Restricted cash                           |  |          |       |           |                |  
|Intercompany receivable                   |  |          |       | 1,455      |                |  
|Accounts receivable, net                  |  |          |       | 33,224     |                |  
|Inventories                               |  |          |       |           |                |  
|Prepaid expenses                          |  |          |       | 829        |                |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|Total current assets                      |  |          |       | 127,026    |                |  
|                                          |  |         
|Property and equipment, net               |  |          |       | 4,783      |                |  
|Investment in subsidiaries                |  |          |       | 1,030,720  |                |  
|Deferred offering costs, net              |  |          |       |           |                |  
|Other assets, net                         |  |          |       | 4,887      |                |  
|                                          |  |          |       |            |                |  
|                                          |  |          | $     | 1,167,416  |                | $
|                                          |  |          |       |            |                |  
|                                          |  |         
|Accounts payable                          |  |          | $     | 1,426      |                | $
|Construction payables                     |  |          |       |           |                |  
|Construction payables-contested           |  |          |       |           |                |  
|Intercompany payables                     |  |          |       |           |                |  
|Accrued interest payable                  |  |          |       |           |                |  
|Other accrued liabilities                 |  |          |       | 18,751     |                |  
|Current maturities of long-term debt (1)  |  |          |       | 11,800     |                |  
|Long-term debt classified as current (1)  |  |          |       |           |                |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|Total current liabilities                 |  |          |       | 31,977     |                |  
|                                          |  |         
|Other long-term liabilities               |  |          |       |           |                |  
|Long-term debt (1)                        |  |          |       | 1,150,075  |                |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|                                          |  |          |       | 1,182,052  |                |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|Redeemable Preferred Interest in Venetian |  |          |       |           |                |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|Stockholders' equity (deficit)            |  |          |       | (14,636    | )              |  
|                                          |  |          |       |            |                |  
|                                          |  |         
|                                          |  |          | $     | 1,167,416  |                | $
|                                          |  |          |       |            |                |  

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

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED BALANCE
SHEETSDecember 31, 2002

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

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

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED STATEMENT OF
OPERATIONS For the three months ended September 30, 2003

|                                              |  | Venetian | Other | Other Non- | Consolidating/ |  
|--------------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|Revenues:                                     |  |          |       |            |                |  
|Casino                                        |  |          | $     | 69,236     |                | $
|Rooms                                         |  |          |       |           |                |  
|Food and beverage                             |  |          |       |           |                |  
|Casino rental revenues from LVSI              |  |          |       |           |                |  
|Retail and other                              |  |          |       | 202        |                |  
|                                              |  |          |       |            |                |  
|Total revenues                                |  |          |       | 69,438     |                |  
|Less promotional allowances                   |  |          |       |           |                |  
|                                              |  |          |       |            |                |  
|Net revenues                                  |  |          |       | 69,438     |                |  
|                                              |  |          |       |            |                |  
|Operating expenses:                           |  |          |       |            |                |  
|Casino                                        |  |          |       | 49,687     |                |  
|Rooms                                         |  |          |       |           |                |  
|Food and beverage                             |  |          |       |           |                |  
|Retail and other                              |  |          |       |           |                |  
|Provision for doubtful accounts               |  |          |       | 530        |                |  
|General and administrative                    |  |          |       | 910        |                |  
|Corporate expense                             |  |          |       | 1,259      |                |  
|Rental expense                                |  |          |       | 196        |                |  
|Pre-opening and developmental expense         |  |          |       |           |                |  
|Depreciation and amortization                 |  |          |       | 502        |                |  
|                                              |  |          |       |            |                |  
|                                              |  |          |       | 53,084     |                |  
|                                              |  |          |       |            |                |  
|                                              |  |         
|Operating income (loss)                       |  |          |       | 16,354     |                |  
|                                              |  |          |       |            |                |  
|Other income (expense):                       |  |          |       |            |                |  
|Interest income                               |  |          |       | 121        |                |  
|Interest expense, net of amounts capitialized |  |          |       | 1          |                |  
|Other income (expense)                        |  |          |       |           |                |  
|Income from equity investment in Grand        |  |          |       |            |                |  
|Canal Shops II                                |  |          |       | 102        |                |  
|Income (loss) from equity investment          |  |          |       |            |                |  
|VCR and subsidiaries                          |  |          |       | 3,151      |                |  
|                                              |  |          |       |            |                |  
|                                              |  |         
|Income (loss) before preferred return         |  |          |       | 19,729     |                |  
|                                              |  |         
|Preferred return on Redeemable Preferred      |  |          |       |            |                |  
|Interest in Venetian Casino Resort, LLC       |  |          |       | (6,745     | )              |  
|                                              |  |          |       |            |                |  
|                                              |  |         
|Net income (loss)                             |  |          | $     | 12,984     |                | $
|                                              |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED STATEMENT OF
OPERATIONS For the three months ended September 30, 2002

|                                             |  | Venetian | Other | Other Non- | Consolidating/ |  
|-------------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|Revenues:                                    |  |          |       |            |                |  
|Casino                                       |  |          | $     | 80,086     |                | $
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Casino rental revenue from LVSI              |  |          |       |           |                |  
|Retail and other                             |  |          |       | 164        |                |  
|                                             |  |          |       |            |                |  
|Total revenue                                |  |          |       | 80,250     |                |  
|Less promotional allowances                  |  |          |       |           |                |  
|                                             |  |          |       |            |                |  
|Net revenues                                 |  |          |       | 80,250     |                |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Operating expenses:                          |  |          |       |            |                |  
|Casino                                       |  |          |       | 46,445     |                |  
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Retail and other                             |  |          |       |           |                |  
|Provision for doubtful accounts              |  |          |       | 3,891      |                |  
|General and administrative                   |  |          |       | 534        |                |  
|Corporate expense                            |  |          |       | 1,472      |                |  
|Rental expense                               |  |          |       | 211        |                |  
|Pre-opening and developmental expense        |  |          |       |           |                |  
|Depreciation and amortization                |  |          |       |           |                |  
|                                             |  |          |       |            |                |  
|                                             |  |          |       | 52,553     |                |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Operating income (loss)                      |  |          |       | 27,697     |                |  
|                                             |  |          |       |            |                |  
|Other income (expense):                      |  |          |       |            |                |  
|Interest income                              |  |          |       | 121        |                |  
|Interest expense, net of amounts capitalized |  |          |       |           |                |  
|Other income (expense)                       |  |          |       |           |                |  
|Loss on early retirement of debt             |  |          |       |           |                |  
|Loss from equity investment in               |  |          |       |            |                |  
|Grand Canal Shops II                         |  |          |       | 69         |                |  
|Loss from equity investment in               |  |          |       |            |                |  
|VCR and subsidiaries                         |  |          |       | (21,474    | )              |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Income (loss) before preferred return        |  |          |       | 6,413      |                |  
|                                             |  |         
|Preferred return on Redeemable Preferred     |  |          |       |            |                |  
|Interest in Venetian Casino Resort, LLC      |  |          |       | (6,003     | )              |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Net income (loss)                            |  |          | $     | 410        |                | $
|                                             |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED STATEMENT OF
OPERATIONSFor the nine months ended September 30, 2003

|                                             |  | Venetian | Other | Other Non- | Consolidating/ |  
|-------------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|Revenues:                                    |  |          |       |            |                |  
|Casino                                       |  |          | $     | 205,927    |                | $
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Casino rental revenues from LVSI             |  |          |       |           |                |  
|Retail and other                             |  |          |       | 327        |                |  
|                                             |  |          |       |            |                |  
|Total revenues                               |  |          |       | 206,254    |                |  
|Less promotional allowances                  |  |          |       |           |                |  
|                                             |  |          |       |            |                |  
|Net revenues                                 |  |          |       | 206,254    |                |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Operating expenses:                          |  |          |       |            |                |  
|Casino                                       |  |          |       | 144,612    |                |  
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Retail and other                             |  |          |       |           |                |  
|Provision for doubtful accounts              |  |          |       | 4,686      |                |  
|General and administrative                   |  |          |       | 2,468      |                |  
|Corporate expense                            |  |          |       | 3,787      |                |  
|Rental expense                               |  |          |       | 559        |                |  
|Pre-opening and developmental expense        |  |          |       |           |                |  
|Depreciation and amortization                |  |          |       | 1,396      |                |  
|                                             |  |          |       |            |                |  
|                                             |  |          |       | 157,508    |                |  
|                                             |  |          |       |            |                |  
|Operating income (loss)                      |  |          |       | 48,746     |                |  
|                                             |  |          |       |            |                |  
|Other income (expense):                      |  |          |       |            |                |  
|Interest income                              |  |          |       | 362        |                |  
|Interest expense, net of amounts capitalized |  |          |       | (51        | )              |  
|Other income (expense)                       |  |          |       |           |                |  
|Income from equity investment in Grand       |  |          |       |            |                |  
|Canal Shops II                               |  |          |       | 245        |                |  
|Income (loss) from equity investment         |  |          |       |            |                |  
|VCR and subsidiaries                         |  |          |       | 5,751      |                |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Income (loss) before preferred return        |  |          |       | 55,053     |                |  
|                                             |  |         
|Preferred return on Redeemable Preferred     |  |          |       |            |                |  
|Interest in Venetian Casino Resort, LLC      |  |          |       | (19,472    | )              |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Net income (loss)                            |  |          | $     | 35,581     |                | $
|                                             |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED STATEMENT OF
OPERATIONS For the nine months ended September 30, 2002

|                                             |  | Venetian | Other | Other Non- | Consolidating/ |  
|-------------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|Revenues:                                    |  |          |       |            |                |  
|Casino                                       |  |          | $     | 177,379    |                | $
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Casino rental revenue from LVSI              |  |          |       |           |                |  
|Retail and other                             |  |          |       | 1,733      |                |  
|                                             |  |          |       |            |                |  
|Total revenue                                |  |          |       | 179,112    |                |  
|Less promotional allowances                  |  |          |       |           |                |  
|                                             |  |          |       |            |                |  
|Net revenues                                 |  |          |       | 179,112    |                |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Operating expenses:                          |  |          |       |            |                |  
|Casino                                       |  |          |       | 132,487    |                |  
|Rooms                                        |  |          |       |           |                |  
|Food and beverage                            |  |          |       |           |                |  
|Retail and other                             |  |          |       |           |                |  
|Provision for doubtful accounts              |  |          |       | 9,015      |                |  
|General and administrative                   |  |          |       | 1,954      |                |  
|Corporate expense                            |  |          |       | 4,409      |                |  
|Rental expense                               |  |          |       | 673        |                |  
|Pre-opening and developmental expense        |  |          |       |           |                |  
|Depreciation and amortization                |  |          |       |           |                |  
|                                             |  |          |       |            |                |  
|                                             |  |          |       | 148,538    |                |  
|                                             |  |          |       |            |                |  
|Operating income (loss)                      |  |          |       | 30,574     |                |  
|                                             |  |          |       |            |                |  
|Other income (expense):                      |  |          |       |            |                |  
|Interest income                              |  |          |       | 281        |                |  
|Interest expense, net of amounts capitalized |  |          |       | (17        | )              |  
|Interest expense on indebtedness to          |  |          |       |            |                |  
|Principal Stockholder                        |  |          |       |           |                |  
|Other income                                 |  |          |       |           |                |  
|Loss on early retirement of debt             |  |          |       |           |                |  
|Loss from equity investment in               |  |          |       |            |                |  
|Grand Canal Shops II                         |  |          |       | 67         |                |  
|Loss from equity investment in               |  |          |       |            |                |  
|VCR and subsidiaries                         |  |          |       | (57,931    | )              |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Income (loss) before preferred return        |  |          |       | (27,026    | )              |  
|                                             |  |         
|Preferred return on Redeemable Preferred     |  |          |       |            |                |  
|Interest in Venetian Casino Resort, LLC      |  |          |       | (17,330    | )              |  
|                                             |  |          |       |            |                |  
|                                             |  |         
|Net income (loss)                            |  |          | $     | (44,356    | )              | $
|                                             |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED STATEMENTS
OF CASH FLOWS For the nine months ended September 30, 2003

|                                                    |  | Venetian | Other | Other Non- | Consolidating/ |  
|--------------------------------------------------- |  | -------- | ----- | ---------- | -------------- | -
|
|
|                                                    |  |         
|Net cash provided by (used in) operating activities |  |          | $     | 47,832     |                | $
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Cash flows from investing activities:               |  |          |       |            |                |  
|(Increase) decrease in restricted cash              |  |          |       |           |                |  
|Notes receivable from stockholders                  |  |          |       | (834       | )              |  
|Capital expenditures                                |  |          |       | (1,457     | )              |  
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Net cash used in investing activities               |  |          |       | (2,291     | )              |  
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Cash flows from financing activities:               |  |          |       |            |                |  
|Proceeds from senior secured credit facility-term A |  |          |       |           |                |  
|Repayments on senior secured                        |  |          |       |            |                |  
|credit facility-term B                              |  |          |       |           |                |  
|Proceeds from Venetian Macau senior                 |  |          |       |            |                |  
|secured notes-tranche A                             |  |          |       |           |                |  
|Proceeds from Venetian Macau senior                 |  |          |       |            |                |  
|secured notes-tranche B                             |  |          |       |           |                |  
|Proceeds from Venetian Intermediate credit facility |  |          |       |           |                |  
|Repayments on bank credit facility-revolver         |  |          |       |           |                |  
|Proceeds from bank credit facility-revolver         |  |          |       |           |                |  
|Proceeds from FF&E credit facility                  |  |          |       |           |                |  
|Payments of deferred offering costs                 |  |          |       |           |                |  
|Net change in intercompany accounts                 |  |          |       | (769       | )              |  
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Net cash provided by (used in) financing activities |  |          |       | (769       | )              |  
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Increase (decrease) in cash and cash equivalents    |  |          |       | 44,772     |                |  
|Cash and cash equivalents at beginning of period    |  |          |       | 46,746     |                |  
|                                                    |  |          |       |            |                |  
|                                                    |  |         
|Cash and cash equivalents at end of period          |  |          | $     | 91,518     |                | $
|                                                    |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Notes to Financial
Statements (Continued)

# Note 7   Summarized
Financial Information (Continued)

# CONDENSED
STATEMENTS OF CASH FLOWSFor the nine months
ended September 30, 2002

|                                                 |  | Venetian | Other | Other Non- | Consolidating/ |  
|------------------------------------------------ |  | -------- | ----- | ---------- | -------------- | -
|
|
|Net cash provided by (used in)                   |  |          |       |            |                |  
|operating activities                             |  |          | $     | 23,194     |                | $
|                                                 |  |          |       |            |                |  
|                                                 |  |         
|Cash flows from investing activities:            |  |          |       |            |                |  
|Increase in restricted cash                      |  |          |       |           |                |  
|Capital expenditures                             |  |          |       |           |                |  
|Dividend from Grand Canal Shops II LLC           |  |          |       |           |                |  
|Capital contributions to subsidiaries            |  |          |       |           |                |  
|                                                 |  |          |       |            |                |  
|Net cash used in investing activities            |  |          |       |           |                |  
|                                                 |  |          |       |            |                |  
|                                                 |  |         
|Cash flows from financing activities:            |  |          |       |            |                |  
|Dividend to Venetian Casino Resort LLC           |  |          |       |           |                |  
|Capital contribution from Venetian               |  |          |       |            |                |  
|Casino Resort LLC                                |  |          |       |           |                |  
|Repayments on 12 1⁄4% mortgage notes               |  |          |       |           |                |  
|Proceeds from 11% mortgage notes                 |  |          |       |           |                |  
|Repayments on senior subordinated notes          |  |          |       |           |                |  
|Proceeds from secured mall facility              |  |          |       |           |                |  
|Repayments on mall-tranche A take-out loan       |  |          |       |           |                |  
|Repayments on mall-tranche B take-out loan       |  |          |       |           |                |  
|Repayments on completion guaranty loan           |  |          |       |           |                |  
|Repayments on senior secured                     |  |          |       |            |                |  
|credit facility-term B                           |  |          |       |           |                |  
|Proceeds from senior secured                     |  |          |       |            |                |  
|credit facility-term B                           |  |          |       |           |                |  
|Repayments on bank credit facility-term          |  |          |       |           |                |  
|Repayments on bank credit facility-revolver      |  |          |       |           |                |  
|Proceeds from bank credit facility-revolver      |  |          |       |           |                |  
|Repayments on FF&E credit facility               |  |          |       |           |                |  
|Repayments on Phase II Subidiary credit facility |  |          |       |           |                |  
|Repayments on Phase II                           |  |          |       |            |                |  
|Subidiary unsecured bank loan                    |  |          |       |           |                |  
|Repurchase premiums incurred in connection       |  |          |       |            |                |  
|with refinancing transctions                     |  |          |       |           |                |  
|Payments of deferred offering costs              |  |          |       |           |                |  
|Net change in intercompany accounts              |  |          |       | 16,258     |                |  
|                                                 |  |          |       |            |                |  
|Net cash provided by (used in)                   |  |          |       |            |                |  
|financing activities                             |  |          |       | 16,258     |                |  
|                                                 |  |          |       |            |                |  
|Increase (decrease) in cash and cash equivalents |  |          |       | 39,452     |                |  
|Cash and cash equivalents at beginning of period |  |          |       | 37,367     |                |  
|                                                 |  |          |       |            |                |  
|                                                 |  |         
|Cash and cash equivalents at end of period       |  |          | $     | 76,819     |                | $
|                                                 |  |          |       |            |                |  

---

# LAS VEGAS SANDS, INC.

# Item 2.   Management's
Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion should be read in conjunction with, and is qualified in its entirety
by, the consolidated financial statements and the notes thereto and other financial
information included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2002. 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 Venetian Casino Resort (the "Casino Resort"), a large-scale
Renaissance Venice-themed hotel, casino, retail, meeting and entertainment complex in Las
Vegas, Nevada. The Company completed an expansion of the Casino Resort during the second
quarter of 2003, which opened for business on June 26, 2003. Following its expansion, the
Casino Resort includes the only all-suites hotel on the Las Vegas Strip with 4,049
suites; a gaming facility of approximately 116,000 square feet; an enclosed retail,
dining and entertainment complex of approximately 446,000 gross leasable square feet; and
a meeting and conference facility of approximately 650,000 square feet of convention
space.

On
June 4, 2002, the Company completed a series of refinancing transactions (collectively,
the Refinancing Transactions) including: (1) the issuance of
$850.0 million in aggregate principal amount of 11% mortgage notes due 2010 (the
Mortgage Notes) in a private placement; (2) entering into a new senior secured
credit facility (the Senior Secured Credit Facility) with a syndicate of
lenders in an aggregate amount of $375.0 million; and (3) entering into a secured
mall facility (the Secured Mall Facility) in an aggregate amount of $105.0
million, which was subsequently increased to $120.0 million on June 28, 2002, and used the
proceeds to repay, redeem or repurchase all of its previously outstanding indebtedness, to
finance the construction and development of the extension to the Casino Resort to add a
1,013-room hotel tower on top of the Casino Resorts existing parking garage, an
approximately 1,000-parking space expansion to the existing parking garage and
approximately 150,000 square feet of additional meeting and conference space (the
Phase IA Addition) and to pay all fees and expenses associated with the
Refinancing Transactions. The Phase IA Addition construction was completed during the
second quarter of 2003 and the new facilities were open for business on June 26, 2003 at a
total cost of approximately $275.0 million excluding $9.0 million to expand the Casino
Resorts heating, ventilation and air conditioning facility (the HVAC Plant
Expansion) to accommodate the Phase IA Addition.

On
June 26, 2002, the Macau government granted a provisional concession to operate
casinos in Macau to Venetian Macau and Galaxy, a consortium of Macau and Hong Kong-based
investors. During December 2002, Venetian Macau and Galaxy entered into a
subconcession agreement. The subconcession agreement with Galaxy was recognized and
approved by the Macau government and allows Venetian Macau to develop and operate certain
casino projects, including the Macau Casino, separately from Galaxy.

Under
the subconcession agreement, Venetian Macau is obligated to develop and open the Macau
Venetian Casino Resort by June 2006 and invest, or cause to be invested, at least
4.4 billion Patacas (approximately $533.8 million at exchange rates in effect on
September 30, 2003) in various development projects in Macau by June 2009. The
construction and development costs of the Macau Casino will be applied to the fulfillment
of this total investment obligation to the Macau government. It is expected that the
construction and development costs of the Macau Venetian Casino Resort will satisfy the
remainder of this obligation. Assuming that all of the current estimated construction and
development costs of the Macau Casino are applied towards fulfilling the investment
obligations under the subconcession agreement, remaining investment obligations under the
subconcession agreement will be approximately $293.8 million. To support this obligation,
a Macau bank and a subsidiary of the Company, Lido Casino Resort Holding Company, LLC,
have guaranteed 500 million Patacas (approximately $60.7 million at exchange rates in
effect on September 30, 2003) of Venetian Macaus legal and contractual liabilities
to the Macau government until March 31, 2007. These development and investment
obligations may be satisfied by Venetian Macau and/or its affiliates, including the
Company.

---

# LAS VEGAS SANDS, INC.

# Item 2.   Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Venetian
Macau began construction of the Macau Casino in December 2002 and expects to open the main
casino portion of the Macau Casino during April 2004 and the remainder of the Macau Casino
by June 2004. The Company currently estimates that the total cost of constructing,
developing and operating the Macau Casino, including design costs, construction costs,
equipment costs, working capital and pre-opening expenses, will be approximately
$240.0 million.

Through
September 30, 2003, the Company has expended pre-opening and developmental expenses and
capital expenditures of $40.0 million, in connection with the Macau Casino project. See
Liquidity and Capital Resources  Macau Casino Projects.

The
Company is assessing the feasibility of, and developing, an Internet gaming site and
continues to pursue the feasibility of an Internet gaming site. The Company received an
interactive gaming license and an electronic betting center license from the Alderney
Gambling Control Commission during March 2003, but has not yet established any operations.
Through September 30, 2003, the Company had invested $1.3 million in development costs of
an Internet gaming site.

# Critical Accounting
Policies and Estimates

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

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

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

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

---

# LAS VEGAS SANDS, INC.

# Item 2.   Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

| |  | The Company is subject to various claims and legal actions, including lawsuits with Lehrer
McGovern Bovis, Inc. (the Construction Manager) for the original construction
of the Casino Resort. Some of these matters relate to personal injuries to customers and
damage to customers personal assets. Management has established no accrual for any
gain or loss in connection with the construction litigation because such gain or loss
while reasonably possible has not been determined to be probable, nor can it be measured
with any reasonable certainty. Management estimates guest claims expense and accrues for
such liabilities based upon historical experience in the other accrued liability category
in its consolidated balance sheet.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | At September 30, 2003, the Company had net property and equipment of $1.4 billion
representing 76.5% of its total assets. The Company depreciates property and equipment on
a straight-line basis over their estimated useful lives. The estimated useful lives are
based on the nature of the assets as well as current operating strategy. Future events,
such as property expansions, property developments, new competition, new regulations,
could result in a change in the manner in which the Company are using certain assets
requiring a change in the estimated useful lives of such assets. In assessing the
recoverability of the carrying value of property and equipment if events and circumstance
warrant such an assessment, the Company must make assumptions regarding estimated future
cash flows and other factors. If these estimates or the related assumptions change, the
Company may be required to record an impairment loss for these assets. Such an impairment
loss would be recognized as a non-cash component of operating income.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Operating Results

Three Months Ended
September 30, 2003 compared to Three Months Ended September 30, 2002

Operating Revenues

Consolidated
net revenues for the third quarter of 2003 were $168.3 million, representing an increase
of $15.5 million when compared with $152.8 million of consolidated net revenues during the
third quarter of 2002. The increase in net revenues was due primarily to an increase of
hotel, food and beverage and retail and other revenues offset by a decline in casino
revenues at the Casino Resort. This favorable comparison of net revenues for the third
quarter of 2003 with net revenues for the 2002 third quarter is the result of an improved
hotel average daily room rate, and the addition of 1,013 new hotel rooms offset by a
decline in table games revenue. The Casino Resort completed its Phase IA Addition of 1,013
hotel rooms and 150,000 square feet of additional meeting space on June 26, 2003.

The
Casino Resorts casino revenues were $69.2 million in the third quarter of 2003, a
decrease of $10.9 million when compared to $80.1 million of casino revenues during the
third quarter of 2002. The decrease was attributable to a decrease in table games win
percentage during the third quarter of 2003 as compared to the table games win percentage
in the third quarter of 2002, and a decrease in table games drop (volume) to $196.9
million in the third quarter of 2003 from $243.3 million during the third quarter of 2002.
Table games win percentage was within a normal range during the third quarter of 2003, but
was significantly higher in the third quarter of 2002. Casino win percentage is relatively
predicable over long periods of time, but can fluctuate significantly over shorter
periods, such as between fiscal quarters.

The
Casino Resort achieved hotel revenues of $67.8 million during the third quarter of 2003,
as compared to $47.6 million during the third quarter of 2002. The increase in hotel
revenues was the result of an increase in the number of available hotel rooms, and an
increase in average daily room rates. The Casino Resorts average daily room rate was
$191 in the third quarter of 2003, as compared to $178 during the third quarter of 2002.
The occupancy of available guestrooms was 96.6% during the third quarter of 2003, as
compared to 96.6% during the third quarter of 2002. Revenue per available room (REVPAR)
was $185 in the third quarter of 2003, as compared to $172 during the third quarter of
2002.

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Food
and beverage, retail and other revenues were $43.3 million during the third quarter of
2003, as compared to $33.4 million during the third quarter of 2002. The increase was
primarily attributable to an increase in food, beverage, retail and other revenue
associated with the additional 1,013 new hotel rooms and 150,000 square feet of additional
meeting space.

Operating Expenses

Consolidated
operating expenses were $118.6 million in the third quarter of 2003, as compared with
$109.6 million during the third quarter of 2002. The increase was primarily attributable
to an increase in hotel and food and beverage operating costs and additional depreciation
expense associated with the addition of 1,013 new hotel rooms offset by a decline in the
provision for bad debt during the third quarter of 2003 as compared to the third quarter
of 2002.

Casino
expenses were $32.3 million in the third quarter of 2003, as compared to $31.9 million
during the third quarter of 2002. The increase was primarily attributable to an increase
in operating expenses due to increased slot handle and revenue during the third quarter of
2003 as compared to the third quarter of 2002.

General
and administrative expenses were $26.2 million in the third quarter of 2003, as compared
to $25.3 million in the third quarter of 2002.

Food
and beverage, retail and other expenses during the third quarter of 2003 were $20.2
million as compared to $16.9 million during the third quarter of 2002. The increase was
primarily the result of increased operating cost associated with increased food and
beverage revenues.

Rental
expenses, primarily related to the Casino Resorts heating, ventilation and air
conditioning plant, rental of gaming devices and employee parking, were $2.5 million for
the third quarter of 2003, as compared to $2.0 million in the third quarter of 2002. The
increase was primarily attributable to increased cost associated with the expanded HVAC
Plant and the rental of additional parking spaces for employees of the Casino Resort.

The
provision for doubtful accounts were $0.8 million in the third quarter of 2003 as compared
to $5.3 million during the third quarter of 2002. The decrease was primarily the result of
improved collections and increased cash play in the casino, a decline in casino
receivables and an increase in hotel and convention receivables which have a more
favorable collection history as compared to casino receivables.

Interest Expense

Interest
expense was $30.4 million in the third quarter of 2003, as compared to $29.5 million in
the third quarter of 2002. Of the $30.4 million incurred during the third quarter of 2003,
$28.3 million was related to the Casino Resort (excluding the Mall), $1.4 million was
related to the Mall and $0.7 million was related to the Macau Casino. The increase in
interest expense was attributable to additional borrowings to finance construction and
development of the Phase IA Addition and the Macau Casino offset by the capitalization of
$0.4 million in interest expense.

Nine Months Ended
September 30, 2003 compared to Nine Months Ended September 30, 2002

# Operating Revenues

Consolidated
net revenues for the nine months ended September 30, 2003 were $477.4 million,
representing an increase of $60.0 million when compared with $417.4 million of
consolidated net revenues during the nine months ended September 30, 2002. The increase in
net revenues was primarily due to an increase in the number of hotel rooms and the
resulting increase of casino, hotel, food and beverage retail and other revenue at the
Casino Resort associated with the new rooms.

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The
Casino Resorts casino revenues were $205.9 million for the nine months ended
September 30, 2003; an increase of $28.5 million when compared to $177.4 million during
the nine months ended September 30, 2002. The increase was attributable to an improved
table games win percentage offset by decreased table games drop (volume) to $616.2 million
for the nine months ended September 30, 2003 from $642.1 million during the nine months
ended September 30, 2002. Casino win percentage is relatively predictable over long
periods of time, but can fluctuate significantly over shorter periods, such as between
fiscal quarters.

The
Casino Resorts hotel occupancy percentages were 97.3% during the nine months ended
September 30, 2003, as compared to 97.4% during the nine months ended September 30, 2002.
The Casino Resort achieved room revenues during the nine months ended September 30, 2003
of $181.7 million, compared to $156.6 million during the nine months ended September 30,
2002. The increase was attributable to an increase in the number of hotel rooms and higher
average daily room rates at the Casino Resort. The Casino Resorts average daily room
rate was $203 for the nine months ended September 30, 2003, compared to $195 during the
nine months ended September 30, 2002. Revenue per available room (REVPAR) was $198 during
the nine month ended September 30, 2003, as compared to $190 during the nine months ended
September 30, 2002.

Food
and beverage, retail and other revenues were $121.2 million during the nine months ended
September 30, 2003, compared to $108.4 million during the nine months ended September 30,
2002. The increase was primarily attributable to an increase in the number of hotel rooms
and the resulting increase of food and beverage retail and other revenues associated with
the new rooms.

Operating Expenses

Consolidated
operating expenses were $339.3 million for the nine months ended September 30, 2003,
compared with $309.8 million during the nine months ended September 30, 2002. The increase
in operating expenses was primarily attributable to increased operating cost associated
with the increase in the number of hotel rooms, and increased casino marketing and
incentive costs, and casino payroll costs associated with higher casino revenue.

Casino
expenses were $95.8 million for the nine months ended September 30, 2003, compared to
$86.7 million during the nine months ended September 30, 2002. The increase was primarily
attributable to increased casino marketing and incentive costs as well as increases in
payroll costs and gaming taxes due to higher gaming revenues.

Food
and beverage, retail and other expenses during the nine months ended September 30, 2003
were $55.9 million, as compared to $50.6 million during the nine months ended September
30, 2002. The increase was the result of an increase in banquet revenue and related
operating expense during the nine months ended September 30, 2003, as compared to the nine
months ended September 30, 2002.

Rental
expenses primarily related to the Casino Resorts heating, ventilation and air
conditioning plant, rental of gaming devices and employee parking for the nine months
ended September 30, 2003 were $7.6 million as compared to $5.5 million for the nine months
ended September 30, 2002. The increase in rental expenses was primarily attributable to
increased costs, associated with the expanded HVAC Plant and rental of employee parking
space.

The
provision for doubtful accounts was $5.5 million in the nine months ended September 30,
2003 as compared to $13.5 million during the nine months ended September 30, 2002. The
decrease was primarily the result of improved casino collections, increased cash play
in the casino and improved hotel related receivable collections.

---

# LAS VEGAS SANDS, INC.

Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Interest Expense

Interest
expense was $85.1 million for the nine months ended September 30, 2003, compared to $85.5
million in the nine months ended September 30, 2002. Of the $85.1 million incurred during
the nine months ended September 30, 2003, $80.5 million was related to the Casino Resort
(excluding the Mall), $3.9 million was related to the Mall and $0.7 million was related to
the Macau Subsidiary. The increase in interest expense was attributable to the increase
interest expense associated with additional borrowings associated with the Companys
Refinancing Transactions, Phase IA Addition construction, and the Macau Casino
construction offset by the capitalization of $5.1 million of interest expense.

# Other Factors Affecting
Earnings

During
the three and nine months ended September 30, 2003 and September 30, 2002, $6.7 million
and $19.5 million, and $6.0 million and $17.3 million respectively, were accrued on the
Series B preferred interest in Venetian.

During
the three and nine months ended September 30, 2003, the Company incurred $1.9 million and
$6.7 million respectively, of pre-opening and development expenses, primarily related to
pre-development expenses for the Macau Casino project.

During
early 2000, the Company modified 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 casino-populated area of Las Vegas Boulevard (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 as well as bank collection
accounts in several foreign countries to accommodate this change in business strategy,
thereby increasing marketing costs. The Company continually evaluates its costs associated
with marketing to the various segments of the premium casino customer market and has
recently increased selectivity of casino customers to reduce variable marketing and
incentive costs.

# Liquidity and Capital
Resources

Cash Flow and Capital
Expenditures

Net
cash provided by operating activities for the nine months ended September 30, 2003 was
$112.9 million as compared to $67.6 million in the same period of 2002. The Companys
operating cash flow in the first nine months of 2003 was positively impacted as compared
to the prior years nine month period primarily because of the $30.6 million increase
in operating income, and increases in accounts payable and accrued liabilities.

Capital
expenditures during the nine months ended September 30, 2003 were $221.8 million, of which
$155.7 million was attributable to construction of the Phase IA Addition, $29.4 million
was attributable to the Macau Casino project and $4.9 million was attributable to Phase II
Resort planning, with the balance having been incurred for maintenance type capital
expenditures at the Casino Resort. During the third quarter of 2003, the Company entered
into a new $15.0 million FF&E Facility to fund certain furniture fixture and equipment
purchases and HVAC costs associated with the Phase IA Addition. Substantial completion of
the Phase 1A Addition occurred on June 26, 2003.

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

As
of September 30, 2003 and December 31, 2002, the Company held unrestricted cash and cash
equivalents of $146.0 million and $93.7 million, respectively. The Company also held
restricted cash balances of $138.6 million as of September 30, 2003. Of this amount,
$121.1 million was held in escrow for the benefit of the holders of the Venetian Macau
Notes and invested in cash or permitted investments by an escrow agent for the Venetian
Macau Senior Secured Notes until certain terms are met under the escrow agreement
governing these funds. Also, $13.5 million of restricted cash was held by the Phase IA
disbursement agent to fund final Phase IA Project costs. The remaining restricted cash,
$4.0 million was held in various insurance and property tax escrow accounts.

The
Company has also committed to enter into a joint venture to develop a new restaurant in
the Venezia room tower and invest $6.5 million in the joint venture and tenant allowances.
To date $1.2 million has been funded. The remainder will be funded during the fourth
quarter of 2003 with available cash provided by operating activities.

Aggregate Indebtedness
and Other Fixed Payment Obligations

The
Companys total long-term indebtedness and its fixed payment obligations are
summarized below for the twelve month periods ended September 30:

|                                         | 2004 | 2005 | 2006 | 2007    | 2008 | Thereafter | Total  
|---------------------------------------- | ---- | ---- | ---- | ------- | ---- | ---------- | -------
|Long - Term Indebtedness                 |      |      |      |         |      |            |        
|Mortgage Notes                           |      |      | $    |        |      | $          |       
|Senior Secured Credit Facility (1)       |      |      |      | 10,000  |      |            | 13,750 
|Secured Mall Facility (2)                |      |      |      |        |      |            | 120,000
|                                         |      |     
|FF&E Credit Facility(3)                  |      |      |      | 1,800   |      |            | 2,400  
|Venetian Intermediate Credit Facility(4) |      |      |      |        |      |            |       
|Venetian Macau Senior Secured Notes(5)   |      |      |      | 120,000 |      |            |       
|                                         |      |     
|Fixed Payment Obligations                |      |      |      |         |      |            |        
|HVAC Provider(6)                         |      |      |      | 7,657   |      |            | 7,657  
|Former Tenants(7)                        |      |      |      | 6,650   |      |            | 4,650  
|                                         |      |      |      |         |      |            |        
|                                         |      |      |      |         |      |            |        
|Total indebtedness and other fixed       |      |      |      |         |      |            |        
|payment obligations                      |      |      | $    | 146,107 |      | $          | 148,457
|                                         |      |      |      |         |      |            |        

---

|(1) | The Term B Facility will mature on June 4, 2008 and will be subject to nominal
          quarterly amortization payments, beginning September 30, 2002 and continuing
          through June 30, 2007, and equal quarterly amortization payments of the balance
          of this facility thereafter. The Term A Facility was drawn on May 16, 2003 and
          will mature on June 4, 2007 and is subject to quarterly amortization payments
          commencing on December 31, 2003. Indebtedness under the Revolving Facility will
          mature on June 4, 2007 with no interim amortization.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(3) | The FF&E Credit Facility will mature on October 1, 2008 and is subject to
          quarterly amortization payments beginning January 1, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The
Venetian Intermediate Credit Facility will mature on March 27, 2006 with no
          interim amortization.
|--- | ---------------------------------------------------------------------------------------------------------------

|(5) | The
Venetian Macau Senior Secured Notes were issued on August 21, 2003. $75 million
of the Notes are subject to annual amortization beginning August 21, 2005 with
a final payment on August 22, 2008 while $45 million of the Notes will mature
on August 21, 2008 with no interim amortization. The Notes have been classified
as a current liability of the Company as the associated escrow conditions have
not been satisfied. See Item 2  Managements Discussion and
Analysis of Financial Condition and Results of Operations  Liquidity and
Capital Resources  Macau Casino Projects.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The Company and the Mall II Subsidiary are parties to a services agreement with
          Sempra Energy Solutions for thermal energy (heating ventilating and air
          conditioning) (HVAC) for the Casino Resort. The total remaining payment
          obligation under these arrangements was $44.0 million as of September 30, 2003,
          payable in equal monthly installments through July 1, 2009.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The Company and the Mall II Subsidiary are party to tenant lease termination and
          asset purchase agreements. The total remaining payment obligations under these
          arrangements was $23.4 million as of September 30, 2003.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Under
the terms of its existing indebtedness, excluding the Venetian Macau Senior Secured Notes,
the Company has debt principal payments due aggregating $11.8million during the
next twelve months, representing principal payments on the Senior Secured Credit Facility
and the FF&E Credit Facility. Based on current outstanding indebtedness and current
interest rates on the Senior Secured Credit Facility and the Secured Mall Facility, the
Company has estimated total interest payments during the next twelve months (excluding
noncash amortization of debt offering costs) of approximately $106.2 million for
indebtedness secured by the Casino Resort and approximately $3.8 million for indebtedness
secured by the Mall. In addition, Venetian Macaus interest expense is estimated to
be $5.8 million during the next twelve months. See Item 1  Financial
Statements and Supplementary Data  Notes to Financial Statements  Note 6
 Commitments and Contingencies  Macau Casino Projects.

During
2003, the Company entered into three lease termination and asset purchase agreements with
Mall tenants. The first agreement provided for payments by the Company to a tenant of
$800,000 during 2003, with 27 additional annual payments of $400,000. The second agreement
provided for an initial deposit of $5.0 million which was paid by the Company during May
2003 and 15 subsequent monthly payments totaling $10.0 million beginning January 2004 plus
interest at 6% per annum. The lease termination and asset transfer is expected to be
completed at the end of 2003 at which time the subsequent monthly payments will commence.
The third agreement and asset purchase agreement provided for an initial payment of
$500,000 during 2003 and subsequent quarterly payments of $62,500 for ten years. In each
case, the Company has obtained title to leasehold improvements and other fixed assets,
which have been recorded at estimated fair market value, which approximated the discounted
present value of the Companys obligation to the former tenants. The Company is
negotiating with other potential tenants for the spaces to be vacated under the
above-described agreements.

The
Company also has fixed payments obligations due during the next twelve months of $7.7
million under its energy service agreements with the HVAC Provider. The total remaining
payment obligation under this arrangement is $44.0 million, payable in equal monthly
installments during the period of October 1, 2003 through July 1, 2009.

Existing Debt

On
June 4, 2002, the Company issued $850.0 million in aggregate principal amount of
Mortgage Notes in a private placement offering and entered into the Senior Secured Credit
Facility in an aggregate amount of $375.0 million and the Secured Mall Facility in
the aggregate amount of $105.0 million (subsequently increased to $120.0 million on June
28, 2002). See - Item 1  Notes to Financial Statements  Note 4 
Long-Term Debt  Mortgage Notes and -Senior Secured Credit
Facility. The Company used the proceeds of the Refinancing Transactions to repay,
redeem or repurchase all of its outstanding indebtedness, to finance the construction and
development of the Phase IA Addition and to pay all fees and expenses associated with the
Refinancing Transactions. See Item 1  Financial Statements and Supplementary
Data  Notes to Financial Statements  Note 4  Long-Term Debt.

---

# LAS VEGAS SANDS, INC.

# Item 2.   Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

For
the next twelve months, the Company expects to fund Casino Resort operations, capital
expenditures, the Macau Casino construction, other development activities and debt service
requirements from:

| |  | existing
cash balances;
| | - | -----------------------

| |  | operating
cash flow;
| | - | --------------------

| |  | borrowings
under the Revolving Facility to the extent that funds are available;
| | - | -------------------------------------------------------------------------------

| |  | borrowings
or additional debt or equity financings by Venetian Macau and other unrestricted
subsidiaries to the extent permitted under the terms of their indebtedness;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | distributions
of excess cash from the Mall II Subsidiary to Venetian to the extent permitted under the
terms of the Companys indebtedness.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------

As
of September 30, 2003, there was $60.0 million available for borrowing under the Revolving
Facility. The availability under the Revolving Facility will decrease by an additional
$45.0 million as loans are made and letters of credit are issued with respect to the $50.0
million Venetian Intermediate Credit Agreement and a $10.0 million letter of credit is
issued to secure the Completion Guaranty. See Note 6  Commitments and Contigencies.

The
Companys existing debt instruments contain certain restrictions that, among other
things, limit the ability of the Company and/or certain subsidiaries to incur additional
indebtedness, issue disqualified stock or equity interests, pay dividends or make other
distributions, repurchase equity interests or certain indebtedness, create certain liens,
enter into certain transactions with affiliates, enter into certain mergers or
consolidations or sell assets of the Company without prior approval of the lenders or
noteholders. Financial covenants included in the Senior Secured Credit Facility include
total debt to EBITDA ratios, EBITDA to interest coverage ratios, minimum net worth
covenants and maximum capital expenditure limitations. The financial covenants in the
Senior Secured Credit Facility involving EBITDA are applied on a rolling four-quarter
basis. As of September 30, 2003, the Company was in compliance with all required covenants
and ratios under its current debt instruments. See Item 1  Financial
Statements and Supplementary Data  Notes to Financial Statements  Note 4
 Long-Term Debt.

Macau Casino Projects

Under
the subconcession agreement, Venetian Macau is obligated to develop and open the Macau
Venetian Casino Resort by June 2006 and invest, or cause to be invested, at least
4.4 billion Patacas (approximately $533.8 million at exchange rates in effect on
September 30, 2003) in various development projects in Macau by June 2009. The
construction and development costs of the Macau Casino will be applied to the fulfillment
of this total investment obligation to the Macau government. It is expected that the
construction and development costs of the Macau Venetian Casino Resort will satisfy the
remainder of this obligation. Assuming that all of the current estimated construction and
development costs of the Macau Casino are applied towards fulfilling the investment
obligations under the subconcession agreement, remaining investment obligations under the
subconcession agreement will be approximately $293.8 million. To support this obligation,
a Macau bank and a subsidiary of the Company, Lido Casino Resort Holding Company, LLC,
have guaranteed 500 million Patacas (approximately $60.7 million at exchange rates in
effect on September 30, 2003) of Venetian Macaus legal and contractual liabilities
to the Macau government until March 31, 2007. These development and investment
obligations may be satisfied by Venetian Macau and/or its affiliates, including the
Company.

---

# LAS VEGAS SANDS, INC.

Item 2.   Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The
Company currently estimates the total cost of constructing, developing and operating the
Macau Casino, including design costs, construction costs, equipment costs, working capital
and pre-opening expenses, will be approximately $240.0 million. As of
September 30, 2003, approximately $40.0 million of these costs had been
expended. The Company anticipates funding the remaining estimated costs of construction
from a combination of the following sources:

| |  | operating
cash flow of the Company (although the Senior Secured Credit Facility and the Indenture
relating to the Mortgage Notes limit the Companys ability to make investments in
the Macau projects);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | borrowings
of $50.0 million under the Venetian Intermediate Credit Agreement (See Note 4  Venetian
Intermediate Credit Facility). As of September 30, 2003, $15.0 million had been borrowed
under this facility;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | net
proceeds from the issuance and sale of $120.0 million in aggregate principal amount of
the Notes. The Notes were issued by a wholly-owned subsidiary of Venetian Macau and
guaranteed by Venetian Macau. The Notes and the guarantee are secured by all assets of
Venetian Macau and its subsidiaries, subject to certain exceptions;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | borrowings
of up to $20.0 million under the Proposed Macau Revolver. The Proposed Macau Revolver
would be secured on a pari passu basis with the same collateral as the Notes. The
facility is expected to mature in 2006. The entire amount outstanding under this facility
is expected to bear interest at LIBOR or at a base rate, in each case plus a percentage
to be agreed upon;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the
Completion Guaranty guaranteeing payment of certain costs of the Macau Casino in excess
of available funds. The Completion Guaranty is expected to be supported by a $10.0
million letter of credit to be issued under the Companys Senior Secured Credit
Facility (See Note 4  Senior Secured Credit Facility). The remainder of the
Completion Guaranty is expected to be funded by borrowings of up to $15.0 million under
the Proposed Macau Revolver;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | borrowings
under proposed FF&E Facilities in the aggregate principal amount of $25.0 million
to finance certain equipment and other assets of the Macau Casino. If Venetian Macau is
unable to obtain the FF&E Facilities, LVSI, Venetian or another of their subsidiaries
is expected to agree either:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | to
purchase, or cause to be purchased assets with a cost of up to $25.0 million and enter
into lease or other arrangements with the Macau Subsidiary or
| |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | to
otherwise assist Venetian Macau in securing such facilities, including by issuing
guarantees in connection with any such facilities or otherwise lending such amounts to
Venetian Macau for purposes of securing such equipment
| |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | in each
case, to the extent permitted under the Senior Secured Credit Facility and the Indenture
for the Mortgage Notes.
| |  | ------------------------------------------------------------------------------------------------------------------------

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

On
August 21, 2003, the gross proceeds from the Notes offering, together with interest on
such Notes proceeds, were placed into an escrow account pending the receipt of certain
regulatory approvals in Macau, the execution of a final credit agreement for the Proposed
Macau Revolver and the satisfaction of certain other conditions. Upon the satisfaction of
these conditions, the net proceeds from the Notes offering will be released to Venetian
Macau to fund the remaining costs of construction and development of the Macau Casino. The
escrow had an initial term of 60 days with two additional 30-day extension options, The
Company has exercised one extension options. If the escrow conditions are not satisfied by
December 19, 2003 the Notes will be redeemed at 100% of their principal amount plus unpaid
interest. Accordingly, the Notes have been presented as a current liability of the Company
as of September 30, 2003. Venetian Macau is currently in the process of negotiating a
FF&E commitment with a FF&E Lender.

The
Company expects the funds provided by these sources to be sufficient to construct, develop
and operate the Macau Casino, assuming there are no delay costs or construction cost
overruns. If Venetian Macau incurs significant cost overruns, it may need to arrange for
additional financing to pay for these costs. If it requires additional financing, the
Company or its affiliates may incur additional bank borrowings or debt or equity
financing. However, no assurance can be given that such funds will be available or that
such funds will be on terms that will be favorable to the Company. In addition, the
construction and development of the Macau Venetian Casino Resort will require significant
additional debt and/or equity financing.

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

Phase II Resort

The
Company has not yet set a date to begin construction or financing of the planned second
phase of the Casino Resort (the Phase II Resort) to be owned by Lido Casino
Resort, LLC (the Phase II Subsidiary). If the Company determines to construct
the Phase II Resort, it will be required to raise substantial debt and/or equity
financings. Currently, the Company has no commitments to fund the hard construction costs
of the Phase II Resort. In addition, the development of the Phase II Resort may
require obtaining additional regulatory approvals. The Companys debt instruments
limit its ability to guarantee or otherwise become liable for any indebtedness of the
Phase II Subsidiary. These debt instruments also restrict the Companys and its
subsidiaries ability to sell or otherwise dispose of the capital stock of the
Phase II Subsidiary, including a sale to the Principal Stockholder or to any of his
affiliates. In addition, the Indenture allows the Company to make investments of up to
$20.0 million for the development of the Phase II Resort and to incur up to
$20.0 million of additional debt to fund such investment. For the nine months ended
September 30, 2003, the Company has expended $5.4 million on the Phase II development.
Until further design and pre-development work is completed, a more specific development
plan and budget cannot be established. The Phase II Subsidiary is an unrestricted
subsidiary that is not subject to the terms of the Indenture or the Senior Secured Credit
Facility and is not a guarantor under the Mortgage Notes or the Senior Secured Credit
Facility.

Litigation
Contingencies and Available Resources

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

---

# LAS VEGAS SANDS, INC.

# Item 2.    Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The
Company is not able to determine with any reasonable certainty the value of such claims or
the probability of success on such claims at this time. Accordingly, no accrual for a
liability has been reflected in the accompanying financial statements for this matter,
other than approximately $7.2 million which the Company had previously accrued in 1999 for
unpaid construction costs and which have not yet been paid pending outcome of the
litigation.

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

# Recent Accounting
Pronouncements

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

In
June 2002, the Financial Accounting Standard Board issued Statement No. 146 (SFAS
146) Accounting for Costs Associated with Exit or Disposal Activities.
The provisions of SFAS 146 become effective for exit or disposal activities commenced
subsequent to December 31, 2002.

The
adoptions of SFAS 143 and SFAS 146 did not have a material impact on its financial
condition, results of operations or cash flows.

In
November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45
(FIN 45), Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others. This
interpretation elaborates on the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that it has
issued. It also clarifies (for guarantees issued after January 1, 2003) that a guarantor
is required to recognize at the inception of a guarantee, a liability for the fair value
of the obligations undertaken in issuing the guarantee. At September 30, 2003, the Company
does not have any guarantees outside of its consolidated group and accordingly does not
expect the adoption of FIN 45 to have a material impact on its financial condition,
results of operations or cash flows.

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

In
January 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46
(FIN 46), Consolidation of Variable Interest Entities. This
interpretation addresses the requirements for business enterprises to consolidate related
entities in which they are determined to be the primary economic beneficiary as a result
of their variable economic interests. The interpretation is intended to provide guidance
in judging multiple economic interest in an entity and in determining the primary
beneficiary. The interpretation outlines disclosure requirements for variable interest
entities in existence prior to January 31, 2003, and outlines consolidation requirements
for variable interest entities created after January 31, 2003. The Company has reviewed
its major relationships and its overall economic interests with other companies consisting
of related parties, companies in which it has an equity position and other suppliers to
determine the extent of its variable economic interest in these parties. The adoption of
FIN 46 will not have a material impact on the Companys financial position, results
of operations or cash flows.

---

Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations (Continued)

In
May 2003, the Financial Accounting Standards Board issued Statement No. 150 (SFAS
150) Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. The Company is considered a non-public entity, as defined by
SFAS 150 because its equity securities are not listed on a public exchange. Accordingly,
for the Company, the provisions of SFAS 150 will become effective during the quarter
ending March 31, 2004. Upon adoption of SFAS 150, the Company anticipates that the Series
B Preferred Interest in Venetian will no longer be presented in the Mezzanine
but rather will be reclassified as a liability of the Company.

# Special Note Regarding
Forward-Looking Statements

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

---

# LAS VEGAS SANDS, INC.

# Item 3.   Quantitative
and Qualitative Disclosures about Market Risk

Market
risk is the risk of loss arising from adverse changes in market rates and prices, such as
interest rates, foreign currency exchange rates and commodity prices. The Companys
primary exposure to market risk is interest rate risk associated with its long-term debt.
The Company attempts to manage its interest rate risk by managing the mix of its long-term
fixed-rate borrowings and variable rate borrowings, and by use of interest rate cap and
floor agreements. The ability to enter into interest rate cap and floor agreements allows
the Company to manage its interest rate risk associated with its variable rate debt.

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

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

The
table below provides information about the Companys financial instruments that are
sensitive to changes in interest rates. For debt obligations, the table presents notional
amounts and weighted average interest rates by contractual maturity dates for the twelve
month periods ended September 30:

|                         |  |  |        |   |  |        |   | Fair
|------------------------ |  |  | ------ | - |  | ------ | - | ----
|
|LIABILITIES              |  |  |        |   |  |        |   |     
|Short-term debt          |  |  |        |   |  |        |   |     
|Variable rate            |  |  | $131.8 |   |  |       |   |     
|Average interest rate(2) |  |  | 4.3    | % |  |       |   |     
|Long-term debt           |  |  |        |   |  |        |   |     
|Fixed rate               |  |  |       |   |  |       |   |     
|Average interest rate(2) |  |  |       |   |  |       |   |     
|Variable rate            |  |  |       |   |  | $136.2 |   |     
|Average interest rate(2) |  |  |       |   |  | 3.9    | % |     

---

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

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

Foreign
currency translation gains and losses were not material to the Companys results of
operations for the quarter ended September 30, 2003, but may be in future periods in
relation to activity associated with the Macau venture.

See
also Item 2  Managements Discussion and Analysis of Financial Condition
and Results of Operations  Liquidity and Capital Resources and  Item 1
 Financial Statements and Supplementary Data  Notes to Financial Statements
 Note 4  Long-Term Debt.

---

# LAS VEGAS SANDS, INC.

# Item 4.   Controls
and Procedures

| | a) | Evaluation
of Disclosure Controls and Procedures. Disclosure controls and                procedures
are designed to provide reasonable assurance that information                required to
be disclosed in the reports that the Company files or submits, is
               recorded, processed, summarized and reported, within the time periods
specified                in the Securities and Exchange Commissions rules and
forms. The                Companys Chief Executive Officer and its Vice
President-Finance (its                principal financial officer) have evaluated the
disclosure controls and                procedures of the Company as of September 30, 2003
and believe that they are                effective within the reasonable assurance
threshold described above.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | Changes
in Internal Controls over Financial Reporting. There were no changes in
               our internal control over financial reporting that occurred during the
fiscal                quarter covered by this report that have materially affected, or
are reasonably                likely to materially affect, our internal control over
financial reporting.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

---

# LAS VEGAS SANDS, INC.

# Part II

# OTHER INFORMATION

# Item 1.   Legal
Proceedings

The
Company is party to litigation matters and claims related to its operations and the
construction of the Casino Resort. For more information, see the Companys Annual
Report on Form 10-K for the year ended December 31, 2002 and Part I  Item 1
 Financial Statements  Notes to Financial Statements Note 6  Commitments
and Contingencies of this Quarterly Report on Form 10-Q.

# Item 5.   Other
Information

The
Company is not required to file this Quarterly Report on Form 10-Q pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. The filing is required,
however, pursuant to the terms of the Indenture.

# Item 6.   Exhibits
and Reports on Form 8-K

|(a) | List
of Exhibits
|--- | ----------------

|31.1 |  | Certification
 of the  Chief  Executive  Officer  pursuant  to  Section  302 of the
                                 Sarbanes-Oxley Act of 2002. (1)
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
 of the Vice  President-Finance  (the  principal  financial  officer)
                                 pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. (1)
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | Filed
herewith.
|--- | ---------------

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

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

| | Current report
on Form 8-K furnished to the  Securities and Exchange  Commission on August 6,
                      2003 regarding the Company's results of operations for the quarter
ended June 30, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# LAS VEGAS SANDS, INC.

# SIGNATURES

Pursuant to the requirements 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.               
|----------------- | --- | ------------------------------------
|
|
|November 14, 2003 | By: | /s/ Sheldon G. Adelson              
|                  |     | Sheldon G. Adelson                  
|                  |     | Chairman of the Board               
|                  |     | Chief Executive Officer and Director

|                  |     |                                             
|----------------- | --- | --------------------------------------------
|
|
|November 14, 2003 | By: | /s/ Harry D. Miltenberger                   
|                  |     | Harry D. Miltenberger                       
|                  |     | Vice President-Finance                      
|                  |     | (principal financial and accounting officer)