Form 10-K
Please provide liquidity disclosures to discuss the potential tax impact associated with the repatriation of undistributed earnings of foreign subsidiaries in future periodic filings. In this regard, please disclose the amount of cash that is currently held by your foreign subsidiaries and disclose the impact of repatriating the undistributed earnings of foreign subsidiaries.Rest of the question
Please provide us with the disclosure you intend to include in future periodic filings. Please refer to Item 303(A)(1) of Regulation S-K and Section IV of our Release 33-8350.
to the Staff’s comment, the Company will include disclosure similar to the following within the Liquidity and Capital Resources section in future filings:
We held unrestricted and restricted cash and cash equivalents of approximately $3.13 billion and $658.9 million, respectively, as of March 31, 2011, of which approximately $1.70 billion of the unrestricted amount is held by non-US subsidiaries. Of the $1.70 billion, approximately $975 million is available to be repatriated to the U.S.Read in the reply ↗Rest of the answer
with virtually no tax consequences due to the Company’s significant foreign taxes paid, which would ultimately generate foreign tax credits if cash is repatriated. The remaining unrestricted amounts are not available for repatriation due to bank compliance requirements or dividend requirements to third party public shareholders in the case of funds being repatriated from SCL. We believe that the cash on hand, cash flow generated from operations and available borrowings under our credit facilities will be sufficient to fund our development plans and maintain compliance with the financial covenants of our U.S., Macau and Singapore credit facilities. In the normal course of our activities, we will continue to evaluate our capital structure and opportunities for enhancements thereof. In connection with the $1.75 billion VOL credit facility to be used together with $500.0 million of proceeds from the SCL Offering, we have recommenced construction activities on our Cotai Strip development on parcels 5 and 6.
First report after the company's reply of 2011-05-23: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
Please tell us if you capitalize internal costs incurred when developing and constructing property and equipment. To the extent you capitalize such costs, please tell us the amount of these indirect costs capitalized for each fiscal year presented.
to the Staff’s comment, the Company does capitalize internal costs directly related to the construction of property and equipment. During the years ended December 31, 2010 and 2009, the Company capitalized approximately $60 million and $55 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property and equipment. The Company does not capitalize indirect costs when developing and constructing property and equipment. Read in the reply ↗
First report after the company's reply of 2011-05-23: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your adjustment to your 2009 financial statements. Please tell us how the Company determined this revision is not material. Further, please clarify for us why the Company determined an adjustment was necessary.
The Company identified this adjustment during the closing process for the first quarter of 2010 and included disclosure of the adjustment in each Form 10-Q throughout 2010 and in the Form 10-K for the year ended December 31, 2010. A copy of the Company’s contemporaneously written analysis, which describes the rationale for recording the adjustment and the related materiality considerations, will be provided to the Staff supplementally under separate cover. Read in the reply ↗
First report after the company's reply of 2011-05-23: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your disclosure beginning on page 109 regarding the various litigation matters to which the Company is exposed. For certain matters, we also note that you have not disclosed in your financial statement footnotes: (i) the possible loss or range of loss; or (ii) a statement that an estimate of the loss cannot be made ASC 450 (formerly SFAS 5) indicates that if an unfavorable outcome is determined to beRest of the question
reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, accrual would be inappropriate, but disclosure must be made regarding an estimate of the possible loss or range of possible loss or state that such an estimate cannot be made. Additionally, we note that in instances, if any, where an accrual may have been recorded as all of the criteria in ASC 450-20-25-2 have been met, you have not disclosed the amount of the accrual which may be necessary in certain circumstances for the financial statements not to be misleading, nor has there been disclosure indicating that there is an exposure to loss in excess of the amount accrued and what the additional loss may be for each particular litigation matter. Please revise your disclosures beginning in your next Form 10-Q to include all of the disclosures required by paragraphs 1 and 3-5 of ASC 450-20-50. In this regard, we do not believe that general boilerplate disclosure indicating that losses may be higher than reserves currently accrued by the Company or disclosure indicating that the outcome of a matter may be material to your operating results for a particular period satisfies the criteria in ASC 450.
to the Staff’s comment, the Company will include the disclosures required by paragraphs 1 and 3-5 of ASC 450-20-50 in future filings as follows:
On October 15, 2004, Richard Suen and Round Square Company Limited filed an action against LVSC, Las Vegas Sands, Inc. (“LVSI”), Sheldon G. Adelson and William P. Weidner in the District Court of Clark County, Nevada, asserting a breach of an alleged agreement to pay a success fee of $5.0 million and 2.0% of the net profit from the Company’s Macau resort operations to the plaintiffs as well as other related claims.Read in the reply ↗Rest of the answer
In March 2005, LVSC was dismissed as a party without prejudice based on a stipulation to do so between the parties. Pursuant to an order filed March 16, 2006, plaintiffs’ fraud claims set forth in the first amended complaint were dismissed with prejudice against all defendants. The order also dismissed with prejudice the first amended complaint against defendants Sheldon G. Adelson and William P. Weidner. On May 24, 2008, the jury returned a verdict for the plaintiffs in the amount of $43.8 million. On June 30, 2008, a judgment was entered in this matter in the amount of $58.6 million (including pre-judgment interest). The Company appealed the verdict to the Nevada Supreme Court. On November 17, 2010, the Nevada Supreme Court reversed the judgment and remanded the case to the District Court of Clark County for a new trial. The Company intends to defend this matter vigorously. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.
On October 20, 2010, Steven C. Jacobs, the former Chief Executive Officer of SCL, filed an action against LVSC and SCL in the District Court of Clark County, Nevada, alleging breach of contract against LVSC and SCL and breach of the implied covenant of good faith and fair dealing and tortious discharge in violation of public policy against LVSC. On March 16, 2011, an amended complaint was filed, which added Sheldon G. Adelson as a defendant and alleged a claim of defamation per se against him, LVSC and SCL. Mr. Jacobs is seeking unspecified damages. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
On February 9, 2011, LVSC received a subpoena from the Securities and Exchange Commission requesting that the Company produce documents relating to its compliance with the Foreign Corrupt Practices Act (the “FCPA”). The Company has also been advised by the Department of Justice that it is conducting a similar investigation. It is the Company’s belief that the subpoena may have emanated from allegations contained in the lawsuit filed by Steven C. Jacobs described above. The Company intends to cooperate with the investigations. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.
On March 31, 2011, SCL filed an announcement with the SEHK stating that SCL has been informed by the Securities and Futures Commission of Hong Kong (the “SFC”) that SCL is under investigation by the SFC in relation to alleged breaches of the provisions of the Hong Kong Securities and Futures Ordinance and has been requested to produce certain documents. The Company intends to cooperate with the investigation. Based on proceedings to date, management is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.
On May 24, 2010, Frank J. Fosbre, Jr. filed a purported class action complaint in the United States District Court for the District of Nevada (the “District Court”), against LVSC, Sheldon G. Adelson, and William P. Weidner. The complaint alleges that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 1, 2007 through November 6, 2008. The complaint seeks, among other relief, class certification, compensatory damages and attorneys’ fees and costs.
On July 21, 2010, Wendell and Shirley Combs filed a purported class action complaint in the District Court, against LVSC, Sheldon G. Adelson, and William P. Weidner. The complaint alleges that LVSC, through the individual defendants, disseminated or approved materially false information, or failed to disclose material facts, through press releases, investor conference calls and other means from June 13, 2007 through November 11, 2008. The complaint, which is substantially similar to the Fosbre litigation, discussed above, seeks, among other relief, class certification, compensatory damages and attorneys’ fees and costs.
On August 31, 2010, the District Court entered an order consolidating the Fosbre and Combs cases, and appointed lead plaintiffs and lead counsel. On November 1, 2010, a purported class action amended complaint was filed in the consolidated action against LVSC, Sheldon G. Adelson and William P. Weidner. The amended complaint alleges that LVSC, through the individual defendants, disseminated or approved materially false and misleading information, or failed to disclose material facts, through press releases, investor conference calls and other means from August 2, 2007 through November 6, 2008. The amended complaint seeks, among other relief, class certification, compensatory damages and attorneys’ fees and costs. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
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The Company acknowledges that:
● the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you need additional information relating to the matters discussed in this letter, please contact the undersigned at (702) 733-5544 or Gayle M. Hyman, Senior Vice President and General Counsel, at (702) 733-5322.
First report after the company's reply of 2011-05-23: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your response to our prior comment two. Please confirm for us that you will disclose the amount of capitalize internal costs in your future interim and annual periodic filings, as you have in your response to us.
to the Staff’s comment, the Company confirms that it will disclose the amount of capitalized internal costs as part of the “Property and Equipment” footnote within the Company’s financial statements included in future quarterly and annual filings similar to the following:
During the years ended December 31, 2010 and 2009, the Company capitalized approximately $60 million and $55 million, respectively, of internal costs, consisting primarily of compensation expense for individuals directly involved with the development and construction of property and equipment. Read in the reply ↗
First report after the company's reply of 2011-06-13: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your response to our prior comment three. Please tell us your basis in U.S. GAAP for your determination of the accounting treatment of the conversion of $582 million of convertible notes into shares by SCL and your issuance of another $2.2 billion in shares by SCL.
As we discussed, in response to the Staff’s comment, the Company’s response will address the underlying reason for and the basis under U.S. GAAP to support the revision. The Sands China Ltd. (“SCL”) transaction was comprised of the following transactions:
Venetian Venture Development Intermediate (II) (“VVDI (II)”), SCL’s direct parent, sold shares to the public and received net proceeds of $760.4 million; Read in the reply ↗
First report after the company's reply of 2011-06-13: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your response to our prior comment four. In light of the length of time since the matter related to Richard Suen and Round Square Company was initiated, please tell us how you are unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. Please refer to ASC 450-20.
to the Staff’s comment, although the action was filed in 2004 and the case was tried in 2008, the judgment of the trial court was appealed by the Company to the Nevada Supreme Court. On November 17, 2010, the Nevada Supreme Court reversed the trial court judgment and remanded the case to the District Court of Clark County for a new trial. The Company is unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.Read in the reply ↗Rest of the answer
Although the Company is unable at this time to determine the probability of the outcome or range of reasonably possible loss, it should be noted that the Company has disclosed the award granted in the initial trial, which was subsequently overturned.
First report after the company's reply of 2011-06-13: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your response to our prior comment four. Your response did not address the new matters discussed in your Form 10-Q for the quarterly period ended March 31, 2010 filed on May 10, 2011. For these new matters, please tell us how you intend to revise your disclosures to comply with ASC 450-20-50.
to the Staff’s comment, the Company will include the following disclosures in its future filings as required by ASC 450-20-50 for the new legal matters discussed in the Form 10-Q for the period ended March 31, 2011, with changes underlined below:
On March 9, 2011, Benyamin Kohanim filed a shareholder derivative action (the “Kohanim action”) on behalf of the Company in the District Court of Clark County, Nevada, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Foreman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A.Read in the reply ↗Rest of the answer
Siegel, the current members of the Board of Directors. The complaint alleges, among other things, breach of fiduciary duties in failing to properly implement, oversee and maintain internal controls to ensure compliance with the FCPA. The complaint seeks to recover for the Company unspecified damages, including restitution and disgorgement of profits, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
On April 1, 2011, Nasser Moradi, Richard Buckman, Douglas Tomlinson, and Matt Abbeduto filed a shareholder derivative action (the “Moradi action”), as amended on April 15, 2011, on behalf of the Company in the District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Foreman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the current members of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim action. The complaint seeks to recover for the Company unspecified damages, including exemplary damages and restitution, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiffs. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
On April 18, 2011, Ira J. Gaines, Sunshine Wire and Cable Defined Benefit Pension Plan Trust dated 1/1/92 and Peachtree Mortgage Ltd. filed a shareholder derivative action (the “Gaines action”) on behalf of the Company in the District Court of Clark County, Nevada, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Foreman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the current members of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim and Moradi actions. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiffs. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
On April 18, 2011, the Louisiana Municipal Police Employees Retirement System filed a shareholder derivative action (the “LAMPERS action”) on behalf of the Company in the District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Foreman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the current members of the Board of Directors, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi and Gaines actions. The complaint seeks to recover for the Company unspecified damages, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
On April 22, 2011, John Zaremba filed a shareholder derivative action on behalf of the Company in the District Court, against Sheldon G. Adelson, Jason N. Ader, Irwin Chafetz, Charles D. Foreman, George P. Koo, Michael A. Leven, Jeffrey H. Schwartz and Irwin A. Siegel, the current members of the Board of Directors, and Wing T. Chao, a former member of the Board of Directors. The complaint raises substantially similar claims as alleged in the Kohanim, Moradi, Gaines and LAMPERS actions. The complaint seeks to recover for the Company unspecified damages, including restitution, disgorgement of profits, and injunctive relief, and also seeks to recover attorneys’ fees, costs and related expenses for the plaintiff. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
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The Company acknowledges that:
— the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
If you need additional information relating to the matters discussed in this letter, please contact the undersigned at (702) 733-5544 or Gayle M. Hyman, Senior Vice President and General Counsel, at (702) 733-5322.
First report after the company's reply of 2011-06-13: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
We note your response to our prior comment three. It does not appear that you have provided any insight as to why management is unable to determine the probability of the outcome or the range of reasonably possible loss. As such, please provide to us the specific facts and circumstances of this case that has prohibited management from assessing the probability of the outcome or range of reasonably possible loss.Rest of the question
Within your response, please address management’s inability to determine the probability or estimate range of loss given the totality of the historical information available, including the initial award.
to the Staff’s comment, the Company does not believe that management currently is able to assess the probability of the outcome of the Suen litigation or the range of reasonably possible loss, if any for several reasons. In particular, the Company notes that on November 17, 2010, the Nevada Supreme Court reversed the trial court judgment and remanded the case to the District Court of Clark County for a new trial.Read in the reply ↗Rest of the answer
In its decision reversing the monetary judgment against the Company, the Nevada Supreme Court also made several other rulings, including overturning the pre-trial dismissal of the plaintiffs’ breach of contract claim. Therefore, while the first trial was based solely on the plaintiffs’ quantum meruit claim for the reasonable value of services allegedly provided by Mr. Suen and his colleagues, the retrial will likely focus on the plaintiffs’ breach of contract claim. In addition, the Nevada Supreme Court made several evidentiary rulings, some of which confirmed and some of which overturned rulings made by the District Court. For example, the Nevada Supreme Court ruled that while Mr. Suen can recover in quantum meruit for his associates’ efforts (instead of only recovering in quantum meruit for his own efforts), he must demonstrate his associates’ efforts and their expected payment in order to recover on their behalf. The Nevada Supreme Court also ruled that the District Court properly admitted evidence of a so-called “procurement deal,” erred by admitting a hearsay statement without giving a limiting instruction, and erred in refusing to instruct the jury on the presumptions of government regularity.
Because of the significant differences in the legal issues and evidence to be presented in a trial focusing on a breach of contract claim instead of a quantum meruit claim, as well as the different evidence to be presented at the new trial as a result of the Nevada Supreme Court’s decision, the Company does not believe that the historical information available, including the initial award, provides a sufficient basis for management to determine the probability of the outcome or an estimated range of reasonably possible loss, if any, at a second trial.
The Company will include the disclosure below in future filings, to the extent applicable. The changes from the Company’s most recent disclosure about this matter are underlined.
“On October 15, 2004, Richard Suen and Round Square Company Limited filed an action against LVSC, Las Vegas Sands, Inc. (“LVSI”), Sheldon G. Adelson and William P. Weidner in the District Court of Clark County, Nevada, asserting a breach of an alleged agreement to pay a success fee of $5.0 million and 2.0% of the net profit from the Company’s Macau resort operations to the plaintiffs as well as other related claims. In March 2005, LVSC was dismissed as a party without prejudice based on a stipulation to do so between the parties. Pursuant to an order filed March 16, 2006, plaintiffs’ fraud claims set forth in the first amended complaint were dismissed with prejudice against all defendants. The order also dismissed with prejudice the first amended complaint against defendants Sheldon G. Adelson and William P. Weidner. On May 24, 2008, the jury returned a verdict for the plaintiffs in the amount of $43.8 million. On June 30, 2008, a judgment was entered in this matter in the amount of $58.6 million (including pre-judgment interest). The Company appealed the verdict to the Nevada Supreme Court.
On November 17, 2010, the Nevada Supreme Court reversed the judgment and remanded the case to the District Court of Clark County for a new trial. In its decision reversing the monetary judgment against the Company, the Nevada Supreme Court also made several other rulings which may affect the outcome of the new trial, including overturning the pre-trial dismissal of the plaintiffs’ breach of contract claim and deciding several evidentiary matters, some of which confirmed and some of which overturned rulings made by the District Court. As such, the Company is unable at this time to determine the probability of the outcome or range of reasonably possible loss, if any. The Company intends to vigorously defend this matter.”
If you need further information relating to the matters discussed in this letter, please contact the undersigned at (702) 733-5544 or Gayle M. Hyman, Senior Vice President and General Counsel, at (702) 733-5322.
First report after the company's reply of 2011-07-14: 10-Q filed 2011-08-09 ↗, against the 10-Q filed 2011-05-10 ↗.
Tickdelta does not hold the text of both reports, so they are not compared here.
Also in this review: closing letter, 2011-07-20