SEC Filing | WYNN RESORTS LTD

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, 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, 2007

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 333-100768

WYNN LAS VEGAS, LLC

(Exact name of registrant as specified in its charter)

Nevada

88-0494875

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3131 Las Vegas Boulevard South - Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 770-7555

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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: Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Wynn Resorts Holdings, LLC owns all of the membership interests of the Registrant as of November 9, 2007.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

INDEX


Part I. Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – September 30, 2007 (unaudited) and December 31, 2006	3

	Condensed Consolidated Statements of Operations (unaudited) – Three and Nine months ended September 30, 2007 and 2006	4

	Condensed Consolidated Statements of Cash Flows (unaudited) – Nine months ended September 30, 2007 and 2006	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	35

Part II. Other Information

Item 1A	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 6.	Exhibits	36

Signature		37

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)


	September 30, 2007			December 31, 2006
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	62,772		$	93,820
Restricted cash and investments		16,113			24,621
Receivables, net		94,751			120,489
Inventories		53,389			49,451
Prepaid expenses and other		22,617			21,602

Total current assets		249,642			309,983
Restricted cash and investments		30,696			172,896
Note receivable from Wynn Resorts, Limited		86,879			82,379
Property and equipment, net		2,826,059			2,419,161
Intangibles assets, net		26,310			28,202
Deferred financing costs, net		39,868			45,385
Deposits and other assets		67,789			56,374
Investment in unconsolidated affiliates		5,005			5,508

Total assets	$	3,332,248		$	3,119,888

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	1,050		$	5,309
Accounts payable		33,566			28,459
Accrued interest		30,314			8,850
Accrued compensation and benefits		44,872			37,298
Other accrued expenses		19,258			21,861
Customer deposits and other liabilities		71,469			63,549
Due to affiliates, net		62,790			33,195

Total current liabilities		263,319			198,521
Long-term debt		1,656,726			1,647,092
Due to affiliates, net		63,119			31,505

Total liabilities		1,983,164			1,877,118

Commitments and contingencies (Note 8)

Member’s equity:
Contributed capital		1,460,398			1,453,918
Accumulated deficit		(111,314	)		(211,148	)

Total member’s equity		1,349,084			1,242,770

Total liabilities and member’s equity	$	3,332,248		$	3,119,888

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Operating revenues:
Casino	$	149,856		$	131,850		$	482,337		$	371,891
Rooms		68,000			64,313			215,387			201,712
Food and beverage		72,789			69,278			232,279			221,598
Entertainment, retail and other		52,287			44,808			151,837			143,482

Gross revenues		342,932			310,249			1,081,840			938,683
Less: promotional allowances		(37,134	)		(37,021	)		(109,927	)		(114,532	)

Net revenues		305,798			273,228			971,913			824,151

Operating costs and expenses:
Casino		64,989			60,468			202,320			181,624
Rooms		19,317			17,700			57,765			52,825
Food and beverage		46,545			45,334			145,513			139,516
Entertainment, retail and other		37,781			31,058			106,887			97,432
General and administrative		49,284			44,707			150,383			131,116
Provision for doubtful accounts		3,943			4,805			16,575			11,403
Management fees		4,588			4,091			14,610			12,377
Pre-opening costs		1,423			982			3,774			1,176
Depreciation and amortization		39,881			36,225			112,468			112,793
Contract termination fee		—			—			—			5,000
Property charges and other		2,404			5,739			4,105			13,064

Total operating costs and expenses		270,155			251,109			814,400			758,326

Equity in income from unconsolidated affiliates		160			321			724			1,003

Operating income		35,803			22,440			158,237			66,828

Other income (expense):
Interest and other income		2,604			5,829			10,246			17,934
Interest expense, net		(19,302	)		(29,150	)		(65,707	)		(91,964	)
Increase (decrease) in swap fair value		(2,197	)		(4,225	)		(2,785	)		1,105
Loss from extinguishment of debt		—			(10,758	)		(157	)		(10,758	)

Other income (expense), net		(18,895	)		(38,304	)		(58,403	)		(83,683	)

Net income (loss)	$	16,908		$	(15,864	)	$	99,834		$	(16,855	)

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Nine Months Ended September 30,
	2007			2006
Cash flows from operating activities:
Net income (loss)	$	99,834		$	(16,855	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		112,468			112,793
Stock-based compensation		6,480			5,918
Loss on extinguishment of debt		157			10,758
Amortization and writeoff of deferred financing costs and other		7,676			12,184
Equity in income of unconsolidated affiliates, net of distributions		503			(754	)
Provision for doubtful accounts		16,575			11,403
Property charges and other		4,105			13,064
(Increase) decrease in swap fair value		2,785			(1,105	)
Increase (decrease) in cash from changes in:
Receivables		4,663			(21,832	)
Inventories and prepaid expenses and other		(4,953	)		(4,981	)
Accounts payable and accrued expenses		39,462			6,078
Due to affiliates, net		731			12,377

Net cash provided by operating activities		290,486			139,048

Cash flows from investing activities:
Capital expenditures, net of construction payables		(444,769	)		(163,636	)
Restricted cash and investments		150,708			138,265
Purchase of intangibles and other assets		(24,303	)		(20,423	)
Due to affiliates, net		(8,545	)		4,961

Net cash used in investing activities		(326,909	)		(40,833	)

Cash flows from financing activities:
Principal payments of long-term debt		(128,101	)		(413,744	)
Proceeds from issuance of long-term debt		133,476			313,629
Proceeds from termination of interest rate swap		—			6,605
Deferred financing costs		—			(4,572	)

Net cash provided by (used in) financing activities		5,375			(98,082	)

Cash and cash equivalents:
Increase (decrease) in cash and cash equivalents		(31,048	)		133
Balance, beginning of period		93,820			87,777

Balance, end of period	$	62,772		$	87,910

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Basis of Presentation

Organization

Wynn Las Vegas, LLC was formed on April 17, 2001 as a Nevada limited liability company. Originally named Hotel A, LLC, its name was changed to Wynn Las Vegas, LLC on May 15, 2002. Unless the context otherwise requires, all references herein to the “Company” refer to Wynn Las Vegas, LLC, a Nevada limited liability company and its consolidated subsidiaries, including for periods when the Company was named Hotel A, LLC. The sole member of the Company is Wynn Resorts Holdings, LLC (“Holdings”). The sole member of Holdings is Wynn Resorts, Limited (“Wynn Resorts”). The Company was organized primarily to construct and operate “Wynn Las Vegas,” a destination resort and casino on “the Strip” in Las Vegas, Nevada. Wynn Las Vegas opened to the public on April 28, 2005. In addition, the Company is constructing “Encore at Wynn Las Vegas” or “Encore.” Encore will be fully integrated with Wynn Las Vegas and is expected to open to the public in early 2009.

Wynn Las Vegas Capital Corp. (“Wynn Capital”) is a wholly owned subsidiary of the Company incorporated on June 3, 2002, solely for the purpose of obtaining financing for Wynn Las Vegas. Wynn Capital is authorized to issue 2,000 shares of common stock, par value $0.01. As of September 30, 2007, Wynn Las Vegas, LLC owned the one share that was issued and outstanding. Wynn Capital has neither any significant net assets nor has had any operating activity. Its sole function is to serve as the co-issuer of the mortgage notes described below. Wynn Las Vegas, LLC and Wynn Capital together are hereinafter referred to as the “Issuers”.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The Company’s investment in the 50%-owned joint venture operating the Ferrari and Maserati automobile dealership inside Wynn Las Vegas is accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated.

The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods have been made. The results for the three and nine months ended September 30, 2007 are not necessarily indicative of results to be expected for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

2. Summary of Significant Accounting Policies

Accounts receivable and credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of casino accounts receivable. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. As of September 30, 2007 and December 31,

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

2006, approximately 50% and 55%, respectively, of the Company’s markers were due from customers residing in foreign countries, primarily in Asia. Business or economic conditions or other significant events in these countries could affect the collectibility of such receivables.

Accounts receivable, including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. Accounts are written off when management deems them to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The allowance is estimated based on specific review of customer accounts as well as management’s experience with collection trends in the casino industry and current economic and business conditions.

Inventories

Inventories consist of retail, food and beverage items, which are stated at the lower of cost or market value, and certain operating supplies. Cost is determined by the first-in, first-out, average and specific identification methods.

Revenue recognition and promotional allowances

Casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession. Hotel, food and beverage, entertainment and other operating revenues are recognized when services are performed. Advance deposits on rooms and advance ticket sales are recorded as deferred revenues until services are provided to the customer.

Revenues are recognized net of certain sales incentives in accordance with the Emerging Issues Task Force (“EITF”) consensus on Issue 01-9, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. EITF 01-9 requires that sales incentives be recorded as a reduction of revenue; consequently, the Company’s casino revenues are reduced by discounts and points earned in customer loyalty programs, such as the players’ club loyalty program.

The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenue and then deducted as promotional allowances. The estimated cost of providing such promotional allowances for the three and nine months ended September 30, 2007 and 2006 is primarily included in casino expenses as follows (amounts in thousands):


	Three Months Ended September 30,				Nine months Ended September 30,
	2007		2006		2007		2006
Rooms	$	6,044	$	6,530	$	18,028	$	18,574
Food & beverage		12,929		12,930		38,726		42,162
Entertainment, retail and other		2,638		2,112		6,582		6,868

Total	$	21,611	$	21,572	$	63,336	$	67,604

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Advertising costs

The Company expenses advertising costs the first time the advertising takes place. Advertising costs incurred in development periods are included in pre-opening costs. Once a project is completed, advertising costs are included in general and administrative expenses. For the three months ended September 30, 2007 and 2006, advertising costs totaled approximately $3 million and $3.7 million, respectively. For the nine months ended September 30, 2007 and 2006, advertising costs totaled approximately $14.4 million and $14.5 million, respectively.

Reclassifications

Certain amounts in the condensed consolidated financial statements for 2006 have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on the previously reported net loss.

Recently Issued Accounting Standards

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 “Accounting for Uncertainty in Income Taxes”. This interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”. The interpretation provides guidance on classification, interest and penalties, accounting in interim periods, disclosure, and translation. This interpretation is effective for fiscal years beginning after December 15, 2006. Since the Company is a pass-through entity for tax purposes, the adoption of this statement, effective January 1, 2007, did not have an impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements under other accounting pronouncements that require or permit fair value measurements. Accordingly, this Statement does not require any new fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The Company has not yet determined the impact this statement will have on its consolidated financial statements after it is adopted on January 1, 2008.

In June 2006, the FASB ratified the consensus reached on EITF Issue No. 06-03, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (that is, Gross Versus Net Presentation)”. The EITF reached a consensus that the presentation of taxes on either a gross or net basis is an accounting policy decision that requires disclosure. EITF Issue No. 06-03 is effective for the first interim or annual reporting period beginning after December 15, 2006. The Company has historically and will continue to record taxes collected from customers on a net basis. Accordingly, the adoption of EITF Issue No. 06-03 did not have an effect on the Company’s results of operations or financial position.

3. Supplemental Disclosure of Cash Flow Information

Interest paid for the nine months ended September 30, 2007 and 2006 totaled approximately $59 million and $66.5 million, respectively. Interest capitalized for the nine months ended September 30, 2007 and 2006 totaled approximately $20.1 million and $3.6 million, respectively.

Stock-based compensation related to employees dedicated to the construction of Wynn Las Vegas and Encore that was capitalized into construction in progress for the nine months ended September 30, 2007 and 2006 totaled approximately $569,000 and $1 million, respectively.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

During the nine months ended September 30, 2007 and 2006, capital expenditures includes an approximately $68.5 million increase and a $7.9 million decrease, respectively, in construction payables and retention recorded through amounts due to affiliates.

4. Receivables, net

Receivables, net consisted of the following (amounts in thousands):


	September 30, 2007			December 31, 2006
Casino	$	115,735		$	133,985
Hotel		15,317			12,154
Other		10,580			9,352

		141,632			155,491
Less: allowance for doubtful accounts		(46,881	)		(35,002	)

	$	94,751		$	120,489

5. Property and Equipment, net

Property and equipment, net consisted of the following (amounts in thousands):


	September 30, 2007			December 31, 2006
Land and improvements	$	603,837		$	603,290
Buildings and improvements		1,204,551			1,164,947
Airplanes		44,254			44,254
Furniture, fixtures and equipment		644,045			614,676
Construction in progress		642,671			214,574

		3,139,358			2,641,741
Less: accumulated depreciation		(313,299	)		(222,580	)

	$	2,826,059		$	2,419,161

As of September 30, 2007 and December 31, 2006, construction in progress includes interest and other costs capitalized in conjunction with Encore.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

6. Long-Term Debt

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


	September 30, 2007			December 31, 2006
6⁵/8% First Mortgage Notes, due December 1, 2014	$	1,300,000		$	1,300,000
$900 million Revolving Credit Facility; due August 15, 2011; interest at LIBOR plus 1.625%		91,476			88,892
$225 million Term Loan Facility; $112.5 million due September 30, 2012 with remaining $112.5 million due August 15, 2013; interest at LIBOR plus 1.875%		225,000			225,000
$44.75 million note payable; due March 31, 2010; interest at LIBOR plus 2.375%		—			38,509
$42 million note payable; due April 1, 2017; interest at LIBOR plus 1.25%		41,300			—

		1,657,776			1,652,401
Current portion of long-term debt		(1,050	)		(5,309	)

	$	1,656,726		$	1,647,092

Credit Facilities

In April 2007, the Company amended its $900 million Revolving Credit Facility and its $225 million Term Loan Facility (together the “Wynn Las Vegas Credit Facilities,” or the “Credit Facilities”) to: (a) have the Final Completion as defined in the Credit Facilities, be deemed satisfied for Wynn Las Vegas with the resulting release of (i) all amounts in excess of $30 million from the Completion Guaranty Deposit; ($24.6 million), and (ii) the balance of funds in the Project Liquidity Reserve Account ($32.8 million), (b) increase the permitted expenditures for Encore from $300 million to $500 million prior to the execution of a guaranteed maximum price contract, and (c) permit the issuance of up to $500 million of unsecured debt as and when permitted under the indenture governing the First Mortgage Notes.

In October 2007, the Company amended the Wynn Las Vegas Credit Facilities to (a) permit the issuance of up to $500 million of secured indebtedness, (b) remove certain language related to the inter-company loan made by Wynn Las Vegas to Wynn Resorts (Macau) S.A. and (c) amend certain provisions governing Wynn Las Vegas’ insurance related obligations. Also in October 2007, pursuant to the Wynn Las Vegas Credit Facilities, Wynn Las Vegas entered into a pre-agreed upon form of Amended and Restated Master Disbursement Agreement with Deutsche Bank Trust Company Americas as Bank Agent and Disbursement Agent.

$44.75 Million Note Payable

On March 30, 2007, World Travel, LLC, a subsidiary of Wynn Las Vegas, refinanced the $44.75 million note payable. The new loan has a principal balance of $42 million and is due April 1, 2017. The loan is guaranteed by Wynn Las Vegas, LLC and secured by a first priority security interest in one of the Company’s aircrafts. Principal and interest are due quarterly with a balloon payment of $28 million due at maturity. Interest is calculated at 90-day LIBOR plus 125 basis points. In connection with this transaction, the Company incurred a loss from extinguishment of debt of $157,000 related to the write-off of unamortized debt issue costs associated with the original loan.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Debt Covenant Compliance

As of September 30, 2007, the Company was in compliance with all covenants governing the Company’s debt facilities.

7. Related Party Transactions, net

Note Receivable from Wynn Resorts, Limited

On August 15, 2005, the Company loaned $80 million to Wynn Resorts who then loaned those funds through its subsidiaries to Wynn Macau, S.A. as part of the financing of Wynn Macau, Wynn Resorts’ casino resort facility in the Macau Special Administrative Region of the People’s Republic of China (“Macau”), which opened to the public on September 6, 2006. Wynn Macau, S.A. repaid to Wynn Resorts all amounts outstanding in November 2006. Interest accrues at 7.5% per annum. Unpaid principal and interest is due at maturity on August 15, 2012. Included in the balances as of September 30, 2007 and December 31, 2006, was approximately $6.9 million and $2.4 million, respectively, of accrued interest receivable related to this note.

Amounts Due to Affiliates, net

As of September 30, 2007, the Company’s net due to affiliates was primarily comprised of construction payables of approximately $66.6 million, construction retention of approximately $30.8 million, a management fee of approximately $42.5 million (equal to 1.5% of revenues and payable upon meeting certain leverage ratios as specified in the documents governing the Company’s Credit Facilities), and other net amounts receivable from affiliates totaling $14 million (including corporate allocations discussed below).

As of December 31, 2006, the Company’s net due to affiliates was primarily comprised of construction payables of approximately $20 million, construction retention of approximately $9 million, a management fee of approximately $27.9 million (equal to 1.5% of revenues and payable upon meeting certain leverage ratios as specified in the documents governing the Company’s Credit Facilities), and other net amounts payable to affiliates totaling $7.8 million (including corporate allocations discussed below).

The Company periodically settles amounts due to affiliates with cash receipts and payments, except for the management fee, which is payable upon meeting certain leverage ratios specified in the documents governing the Company’s Credit Facilities.

Corporate Allocations

The accompanying condensed consolidated statements of operations include allocations from Wynn Resorts for legal, accounting, human resource, information services, real estate, and other corporate support services. The corporate support service allocations have been determined on a basis that Wynn Resorts and the Company consider to be a reasonable estimate of the utilization of services provided or the benefit received by the Company. The allocation methods include specific identification, relative cost, square footage and headcount. Wynn Resorts maintains corporate offices at Wynn Las Vegas without charge from the Company. The Company settles these corporate allocation charges with Wynn Resorts on a periodic basis as discussed in “Amounts Due to Affiliates, Net” above. During the three months ended September 30, 2007 and 2006, approximately $5.6 million and $4.6 million, respectfully, was charged to the Company for such allocations. During the nine months ended September 30, 2007 and 2006, approximately $16.4 million and $12 million, respectively, was charged to the Company for such corporate allocations.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Amounts due to Officers, net

The Company periodically provides services to Stephen A. Wynn, Chairman of the Board, Chief Executive Officer and one of the principal stockholders of Wynn Resorts (“Mr. Wynn”), and certain other executive officers of Wynn Resorts, including household services, construction work and other personal services. The cost of these services is transferred to Wynn Resorts on a periodic basis. Mr. Wynn and these other officers have amounts on deposit with Wynn Resorts to prepay any such items, which are replenished on an ongoing basis as needed. As of September 30, 2007 and December 31, 2006, Wynn Resorts owed Mr. Wynn and the other officers approximately $326,000 and $315,000, respectively.

Villa Suite Lease

Effective July 1, 2005, Mr. Wynn and his wife, Elaine P. Wynn (“Mrs. Wynn”), who is also a director of Wynn Resorts, lease from year to year a villa suite in the Wynn Las Vegas resort as their personal residence. Rent is determined by the Audit Committee of the Board of Directors of Wynn Resorts (the “Audit Committee”), and is based on the fair market value of the use of the suite accommodations. Based on third-party appraisals, the Audit Committee determined the rent for each year in the three-year period commencing July 1, 2005 and ending June 30, 2008 to be $580,000. Substantially all services for, and maintenance of, the suite are included in the rental.

The Wynn Collection

From the opening of Wynn Las Vegas through February 2006, the resort included an art gallery that displayed rare paintings from a private collection of fine art owned by Mr. and Mrs. Wynn. The Company leased the artwork from Mr. and Mrs. Wynn for an annual fee of one dollar ($1), and the Company was entitled to retain all revenues from the public display of the artwork and the related merchandising revenues. The Company was responsible for all expenses incurred in exhibiting and safeguarding the artwork, including the cost of insurance (including terrorism insurance) and taxes relating to the rental of the art. In February 2006, the Company closed the art gallery and began converting the gallery location into additional retail stores. The Company continues to lease works of art from Mr. and Mrs. Wynn for an annual fee of one dollar ($1) and continues to display certain pieces throughout Wynn Las Vegas. All expenses in exhibiting and safeguarding the artwork displayed at Wynn Las Vegas are the responsibility of the Company.

The “Wynn” Surname Rights Agreement

On August 6, 2004, Holdings entered into agreements with Mr. Wynn that confirm and clarify Holding’s rights to use the “Wynn” name and Mr. Wynn’s persona in connection with casino resorts. Under the parties’ Surname Rights Agreement, Mr. Wynn granted Holdings an exclusive, fully paid-up, perpetual, worldwide license to use, and to own and register trademarks and service marks incorporating the “Wynn” name for casino resorts and related businesses, together with the right to sublicense the name and marks to its affiliates. Under the parties’ Rights of Publicity License, Mr. Wynn granted Holdings the exclusive, royalty-free, worldwide right to use his full name, persona and related rights of publicity for casino resorts and related businesses, together with the ability to sublicense the persona and publicity rights to its affiliates, until October 24, 2017. Holdings has sub-licensed rights to the “Wynn” name, persona and marks to the Company.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

8. Commitments and Contingencies

Encore

Encore Construction and Development. Encore’s current design includes a 2,034 all-suite hotel tower fully integrated with Wynn Las Vegas, as well as an approximately 72,000 square foot casino, additional convention and meeting space, as well as restaurants, a nightclub, swimming pools, a spa and salon and retail outlets. The Company commenced construction of Encore on April 28, 2006 and expects to open Encore to the public by early 2009.

The project budget for Encore is approximately $2.2 billion, consisting of approximately $2.1 billion for Encore and approximately $100 million for an employee parking garage on the Koval property, an associated pedestrian bridge and costs incurred in connection with the theatre remodeling and production of “Monty Python’s Spamalot” at Wynn Las Vegas. The project is being funded from the Company’s existing Credit Facilities and operating cash flow from Wynn Las Vegas. To the extent additional funds are required, the Company will provide these amounts with additional debt and equity contributions by Wynn Resorts or additional indebtedness to be incurred by Wynn Las Vegas.

On February 27, 2007, the Company entered into a Design Build Architectural, Engineering and Construction Services Agreement (the “Contract”) with Tutor-Saliba Corporation (“Tutor”) for the design and construction of Encore. The Contract sets forth all of the terms and conditions pursuant to which Tutor will design and construct Encore. In June 2007, the Company executed the First Amendment to the Contract which set the guaranteed maximum price for construction work covered by the Contract at $1.3 billion. In connection with the execution and delivery of the Contract, Tutor and the Ronald N. Tutor Separate Trust (the “Trust”) have entered into and consented to a Net Worth Agreement pursuant to which (x) the Trust agreed that it will retain its current majority holdings of Tutor and (y) the Trust and Tutor agreed that during the term of the Contract, Tutor will maintain (i) net worth of at least $100 million, and (ii) liquid assets of at least $50 million. Through September 30, 2007, the Company incurred approximately $775.8 million of project costs related to the development and construction of Encore and related capital improvements.

Completion Guarantee and Liquidity Reserve. As part of the Wynn Las Vegas financing, the Company contributed $50 million of the net proceeds of the initial public offering of Wynn Resorts’ common stock to Wynn Completion Guarantor, LLC, a special purpose subsidiary of Wynn Las Vegas, LLC formed in October 2002 and deposited those funds into a completion guarantee deposit account to secure completion of Wynn Las Vegas. As referenced in Note 6, in April 2007, all amounts in excess of $30 million were released as a result of the April 2007 amendment to the Credit Facilities. The remaining $30 million is retained as Encore’s completion guarantee.

The Company also deposited $30 million from the net proceeds of the initial public offering of the Company’s common stock into a liquidity reserve account to secure the completion and opening of Wynn Las Vegas. All funds in this account were released as a result of the April 2007 amendment to the Credit Facilities.

The released funds from the completion guarantee and the liquidity reserve are expected to be applied to construction costs to be incurred in connection with Encore.

Litigation

The Company does not have any material litigation as of September 30, 2007.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

9. Subsequent Event

6⁵/8 First Mortgage Notes

On November 6, 2007, the Issuers completed a private offering of $400 million aggregate principal amount of their 6⁵/8% First Mortgage Notes due 2014 at a price of 97.25% of the principal amount. The notes were issued under the same indenture as the 6⁵/8% First Mortgage Notes previously issued by the Issuers.

The notes rank pari passu with, and will vote on any matter submitted to noteholders with, the previously issued 6⁵/8% First Mortgage Notes The notes are senior secured obligations of the Issuers, are guaranteed by Wynn Las Vegas, LLC’s subsidiaries (subject to some exceptions), and are secured by a first priority lien on substantially all of the existing and future assets of the Issuers and guarantors.

The notes have not been registered under the Securities Act of 1933 or under any state securities laws. Therefore, the Issuers may not offer or sell the notes within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws. The Issuers have agreed to make an offer to exchange the notes for registered, publicly traded notes that have substantially identical terms as the notes.

10. Consolidating Financial Information of Guarantors and Issuers

The following consolidating information relates to the Issuers of the First Mortgage Notes and their guarantor subsidiaries (World Travel, LLC; Las Vegas Jet, LLC; Wynn Show Performers, LLC; Wynn Golf, LLC; Kevyn, LLC; and Wynn Sunrise, LLC) and non-guarantor subsidiary (Wynn Completion Guarantor, LLC) as of September 30, 2007 and December 31, 2006, and for the three and nine months ended September 30, 2007 and 2006.

The following consolidating information is presented in the form provided because: (i) the guarantor subsidiaries are wholly owned subsidiaries of Wynn Las Vegas, LLC (an issuer of the First Mortgage Notes); (ii) the guarantee is considered to be full and unconditional (that is, if the Issuers fail to make a scheduled payment, the guarantor subsidiaries are obligated to make the scheduled payment immediately and, if they do not, any holder of the First Mortgage Notes may immediately bring suit directly against the guarantor subsidiaries for payment of all amounts due and payable); and (iii) the guarantee is joint and several.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING BALANCE SHEET INFORMATION

AS OF SEPTEMBER 30, 2007

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Current assets:
Cash and cash equivalents	$	62,770		$	2		$	—	$	—		$	62,772
Restricted cash and investments		16,113			—			—		—			16,113
Receivables, net		94,748			3			—		—			94,751
Inventories		53,389			—			—		—			53,389
Prepaid expenses and other		22,230			387			—		—			22,617

Total current assets		249,250			392			—		—			249,642
Restricted cash and investments		—			—			30,696		—			30,696
Note receivable from Wynn Resorts, Limited.		86,879			—			—		—			86,879
Property and equipment, net		2,621,326			204,733			—		—			2,826,059
Intangible assets, net		20,166			6,144			—		—			26,310
Deferred financing costs, net		39,868			—			—		—			39,868
Deposits and other assets		63,168			4,621			—		—			67,789
Investment in unconsolidated affiliates		(1,173	)		5,005			—		1,173			5,005

Total assets	$	3,079,484		$	220,895		$	30,696	$	1,173		$	3,332,248

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	1,050		$	—	$	—		$	1,050
Accounts payable		33,365			201			—		—			33,566
Accrued interest		30,314			—			—		—			30,314
Accrued compensation and benefits		43,918			954			—		—			44,872
Other accrued expenses		19,241			17			—		—			19,258
Customer deposits and other liabilities		71,469			—			—		—			71,469
Due to affiliates, net		(123,724	)		186,514			—		—			62,790

Total current liabilities		74,583			188,736			—		—			263,319
Long-term debt		1,616,476			40,250			—		—			1,656,726
Due to affiliates, net		39,341			—			23,778		—			63,119

Total liabilities		1,730,400			228,986			23,778		—			1,983,164

Commitments and contingencies

Member’s equity (deficit):
Contributed capital		1,460,398			12,530			—		(12,530	)		1,460,398
Accumulated earnings (deficit)		(111,314	)		(20,621	)		6,918		13,703			(111,314	)

Total member’s equity (deficit)		1,349,084			(8,091	)		6,918		1,173			1,349,084

Total liabilities and member’s equity	$	3,079,484		$	220,895		$	30,696	$	1,173		$	3,332,248

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING BALANCE SHEET INFORMATION

AS OF DECEMBER 31, 2006

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
ASSETS
Current assets:
Cash and cash equivalents	$	93,825		$	(5	)	$	—	$	—		$	93,820
Restricted cash and investments		24,621			—			—		—			24,621
Receivables, net		120,489			—			—		—			120,489
Inventories		49,451			—			—		—			49,451
Prepaid expenses and other		21,204			398			—		—			21,602

Total current assets		309,590			393			—		—			309,983
Restricted cash and investments		118,965			—			53,931		—			172,896
Note receivable from Wynn Resorts, Limited.		82,379			—			—		—			82,379
Property and equipment, net		2,219,360			199,801			—		—			2,419,161
Intangible assets, net		22,058			6,144			—		—			28,202
Deferred financing costs, net		45,215			170			—		—			45,385
Deposits and other assets		56,360			14			—		—			56,374
Investment in unconsolidated affiliates		2,045			5,508			—		(2,045	)		5,508

Total assets	$	2,855,972		$	212,030		$	53,931	$	(2,045	)	$	3,119,888

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	5,309		$	—	$	—		$	5,309
Accounts payable		28,364			95			—		—			28,459
Accrued interest		8,833			17			—		—			8,850
Accrued compensation and benefits		36,235			1,063			—		—			37,298
Other accrued expenses		21,846			15			—		—			21,861
Customer deposits and other liabilities		63,549			—			—		—			63,549
Due to affiliates, net		(161,022	)		175,664			18,553		—			33,195

Total current liabilities		(2,195	)		182,163			18,553		—			198,521
Long-term debt		1,613,892			33,200			—		—			1,647,092
Due to affiliates, net		1,505			—			30,000		—			31,505

Total liabilities		1,613,202			215,363			48,553		—			1,877,118

Commitments and contingencies

Member’s equity (deficit):
Contributed capital		1,453,918			12,530			—		(12,530	)		1,453,918
Accumulated earnings (deficit)		(211,148	)		(15,863	)		5,378		10,485			(211,148	)

Total member’s equity (deficit)		1,242,770			(3,333	)		5,378		(2,045	)		1,242,770

Total liabilities and member’s equity	$	2,855,972		$	212,030		$	53,931	$	(2,045	)	$	3,119,888

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

THREE MONTHS ENDED SEPTEMBER 30, 2007

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Operating revenues:
Casino	$	149,856		$	—		$	—	$	—		$	149,856
Rooms		68,000			—			—		—			68,000
Food and beverage		72,789			—			—		—			72,789
Entertainment, retail and other		52,447			—			—		(160	)		52,287

Gross revenues		343,092			—			—		(160	)		342,932
Less: promotional allowances		(37,134	)		—			—		—			(37,134	)

Net revenues		305,958			—			—		(160	)		305,798

Operating costs and expenses:
Casino		64,989			—			—		—			64,989
Rooms		19,317			—			—		—			19,317
Food and beverage		46,545			—			—		—			46,545
Entertainment, retail and other		37,781			—			—		—			37,781
General and administrative		49,726			(282	)		—		(160	)		49,284
Provision for doubtful accounts		3,943			—			—		—			3,943
Management fees		4,588			—			—		—			4,588
Pre-opening costs		1,423			—			—		—			1,423
Depreciation and amortization		38,656			1,225			—		—			39,881
Property charges and other		2,404			—			—		—			2,404

Total operating costs and expenses		269,372			943			—		(160	)		270,155

Equity in income (loss) from unconsolidated affiliates		(1,100	)		160			—		1,100			160

Operating income (loss)		35,486			(783	)		—		1,100			35,803

Other income (expense):
Interest and other income		2,220			—			384		—			2,604
Interest expense, net		(18,601	)		(701	)		—		—			(19,302	)
Decrease in swap fair value		(2,197	)		—			—		—			(2,197	)

Other income (expense), net		(18,578	)		(701	)		384		—			(18,895	)

Net income (loss)	$	16,908		$	(1,484	)	$	384	$	1,100		$	16,908

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

THREE MONTHS ENDED SEPTEMBER 30, 2006

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Operating revenues:
Casino	$	131,850		$	—		$	—	$	—		$	131,850
Rooms		64,313			—			—		—			64,313
Food and beverage		69,278			—			—		—			69,278
Entertainment, retail and other		45,129			—			—		(321	)		44,808

Gross revenues		310,570			—			—		(321	)		310,249
Less: promotional allowances		(37,021	)		—			—		—			(37,021	)

Net revenues		273,549			—			—		(321	)		273,228

Operating costs and expenses:
Casino		60,468			—			—		—			60,468
Rooms		17,700			—			—		—			17,700
Food and beverage		45,334			—			—		—			45,334
Entertainment, retail and other		31,058			—			—		—			31,058
General and administrative		45,047			(19	)		—		(321	)		44,707
Provision for doubtful accounts		4,805			—			—		—			4,805
Management fees		4,091			—			—		—			4,091
Pre-opening costs		982			—			—		—			982
Depreciation and amortization		34,996			1,229			—		—			36,225
Property charges and other		5,739			—			—		—			5,739

Total operating costs and expenses		250,220			1,210			—		(321	)		251,109

Equity in income (loss) from unconsolidated affiliates		(1,028	)		321			—		1,028			321

Operating income (loss)		22,301			(889	)		—		1,028			22,440

Other income (expense):
Interest and other income		5,129			—			700		—			5,829
Interest expense, net		(28,311	)		(839	)		—		—			(29,150	)
Decrease in swap fair value		(4,225	)		—			—		—			(4,225	)
Loss on extinguishment of debt		(10,758	)		—			—		—			(10,758	)

Other income (expense), net		(38,165	)		(839	)		700		—			(38,304	)

Net income (loss)	$	(15,864	)	$	(1,728	)	$	700	$	1,028		$	(15,864	)

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

NINE MONTHS ENDED SEPTEMBER 30, 2007

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Operating revenues:
Casino	$	482,337		$	—		$	—	$	—		$	482,337
Rooms		215,387			—			—		—			215,387
Food and beverage		232,279			—			—		—			232,279
Entertainment, retail and other		152,561			—			—		(724	)		151,837

Gross revenues		1,082,564			—			—		(724	)		1,081,840
Less: promotional allowances		(109,927	)		—			—		—			(109,927	)

Net revenues		972,637			—			—		(724	)		971,913

Operating costs and expenses:
Casino		202,320			—			—		—			202,320
Rooms		57,765			—			—		—			57,765
Food and beverage		145,513			—			—		—			145,513
Entertainment, retail and other		106,887			—			—		—			106,887
General and administrative		152,187			(1,080	)		—		(724	)		150,383
Provision for doubtful accounts		16,575			—			—		—			16,575
Management fees		14,610			—			—		—			14,610
Pre-opening costs		3,774			—			—		—			3,774
Depreciation and amortization		108,220			4,248			—		—			112,468
Property charges and other		4,105			—			—		—			4,105

Total operating costs and expenses		811,956			3,168			—		(724	)		814,400

Equity in income (loss) from unconsolidated affiliates		(3,218	)		724			—		3,218			724

Operating income (loss)		157,463			(2,444	)		—		3,218			158,237

Other income (expense):
Interest and other income		8,706			—			1,540		—			10,246
Interest expense, net		(63,550	)		(2,157	)		—		—			(65,707	)
Decrease in swap fair value		(2,785	)		—			—		—			(2,785	)
Loss from extinguishment of debt		—			(157	)		—		—			(157	)

Other income (expense), net		(57,629	)		(2,314	)		1,540		—			(58,403	)

Net income (loss)	$	99,834		$	(4,758	)	$	1,540	$	3,218		$	99,834

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

NINE MONTHS ENDED SEPTEMBER 30, 2006

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Operating revenues:
Casino	$	371,891		$	—		$	—	$	—		$	371,891
Rooms		201,712			—			—		—			201,712
Food and beverage		221,598			—			—		—			221,598
Entertainment, retail and other		144,485			—			—		(1,003	)		143,482

Gross revenues		939,686			—			—		(1,003	)		938,683
Less: promotional allowances		(114,532	)		—			—		—			(114,532	)

Net revenues		825,154			—			—		(1,003	)		824,151

Operating costs and expenses:
Casino		181,624			—			—		—			181,624
Rooms		52,825			—			—		—			52,825
Food and beverage		139,516			—			—		—			139,516
Entertainment, retail and other		97,432			—			—		—			97,432
General and administrative		133,031			(912	)		—		(1,003	)		131,116
Provision for doubtful accounts		11,403			—			—		—			11,403
Management fees		12,377			—			—		—			12,377
Pre-opening costs		1,176			—			—		—			1,176
Depreciation and amortization		108,661			4,132			—		—			112,793
Contract termination fee		5,000			—			—		—			5,000
Property charges and other		13,064			—			—		—			13,064

Total operating costs and expenses		756,109			3,220			—		(1,003	)		758,326

Equity in income (loss) from unconsolidated affiliates		(2,832	)		1,003			—		2,832			1,003

Operating income (loss)		66,213			(2,217	)		—		2,832			66,828

Other income (expense):
Interest and other income		16,146			—			1,788		—			17,934
Interest expense, net		(89,561	)		(2,403	)		—		—			(91,964	)
Increase in swap fair value		1,105			—			—		—			1,105
Loss on extinguishment of debt		(10,758	)		—			—		—			(10,758	)

Other income (expense), net		(83,068	)		(2,403	)		1,788		—			(83,683	)

Net income (loss)	$	(16,855	)	$	(4,620	)	$	1,788	$	2,832		$	(16,855	)

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENTS OF CASH FLOWS INFORMATION

NINE MONTHS ENDED SEPTEMBER 30, 2007

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminating Entries			Total
Cash flows from operating activities:
Net income (loss)	$	99,834		$	(4,758	)	$	1,540		$	3,218		$	99,834
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		108,220			4,248			—			—			112,468
Stock-based compensation		6,480			—			—			—			6,480
Loss on extinguishment of debt		—			157			—			—			157
Amortization and writeoff of deferred financing costs and other		7,663			13			—			—			7,676
Equity in (income) loss from unconsolidated affiliates, net of distributions		3,218			503			—			(3,218	)		503
Provision for doubtful accounts		16,575			—			—			—			16,575
Property charges and other		4,105			—			—			—			4,105
Decrease in swap fair value		2,785			—			—			—			2,785
Increase (decrease) in cash from changes in:
Receivables		4,666			(3	)		—			—			4,663
Inventories, prepaid expenses and other		(4,964	)		11			—			—			(4,953	)
Accounts payable, accrued expenses		39,480			(18	)		—			—			39,462
Due to affiliates, net		6,161			(5,430	)		—			—			731

Net cash provided by (used in) operating activities		294,223			(5,277	)		1,540			—			290,486

Cash flows from investing activities:
Capital expenditures, net of construction payables		(435,589	)		(9,180	)		—			—			(444,769	)
Restricted cash and investments		127,473			—			23,235			—			150,708
Purchase of intangibles and other assets		(19,696	)		(4,607	)		—			—			(24,303	)
Due (to) from affiliates		(50	)		16,280			(24,775	)		—			(8,545	)

Net cash provided by (used in) investing activities		(327,862	)		2,493			(1,540	)		—			(326,909	)

Cash flows from financing activities:
Principal payments on long-term debt		(88,892	)		(39,209	)		—			—			(128,101	)
Proceeds from issuance of long-term debt		91,476			42,000			—			—			133,476

Net cash provided by financing activities		2,584			2,791			—			—			5,375

Cash and cash equivalents:
Increase (decrease) in cash and cash equivalents.		(31,055	)		7			—			—			(31,048	)
Balance, beginning of period		93,825			(5	)		—			—			93,820

Balance, end of period	$	62,770		$	2		$	—		$	—		$	62,772

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

(A WHOLLY OWNED INDIRECT SUBSIDIARY OF WYNN RESORTS, LIMITED)

CONSOLIDATING STATEMENTS OF CASH FLOWS INFORMATION

NINE MONTHS ENDED SEPTEMBER 30, 2006

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminating Entries			Total
Cash flows from operating activities:
Net income (loss)	$	(16,855	)	$	(4,620	)	$	1,788		$	2,832		$	(16,855	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		108,661			4,132			—			—			112,793
Stock-based compensation		5,918			—			—			—			5,918
Loss on extingquishment of debt		10,758			—			—			—			10,758
Amortization and writeoff of deferred financing costs and other		12,145			39			—			—			12,184
Equity in (income) loss from unconsolidated affiliates, net of distributions		2,832			(754	)		—			(2,832	)		(754	)
Provision for doubtful accounts		11,403			—			—			—			11,403
Property charges and other		13,064			—			—			—			13,064
Increase in swap fair value		(1,105	)		—			—			—			(1,105	)
Increase (decrease) in cash from changes in:
Receivables		(21,566	)		(1	)		—			(265	)		(21,832	)
Inventories, prepaid expenses and other		(4,881	)		(100	)		—			—			(4,981	)
Accounts payable, accrued expenses		5,517			286			—			275			6,078
Due to affiliates		12,377			—			—			—			12,377

Net cash provided by (used in) operating activities		138,268			(1,018	)		1,788			10			139,048

Cash flows from investing activities:
Capital expenditures, net of construction payables		(134,864	)		(28,772	)		—			—			(163,636	)
Restricted cash and investments		140,053			—			(1,788	)		—			138,265
Purchase of intangibles and other assets		(20,409	)		(14	)		—			—			(20,423	)
Due (to) from affiliates		(28,566	)		33,527			—			—			4,961

Net cash provided by (used in) investing activities		(43,786	)		4,741			(1,788	)		—			(40,833	)

Cash flows from financing activities:
Principal payments on long-term debt		(410,000	)		(3,744	)		—			—			(413,744	)
Proceeds from issuance of long-term debt		313,629			—			—			—			313,629
Proceeds from termination of interest rate swap		6,605			—			—			—			6,605
Deferred financing costs		(4,572	)		—			—			—			(4,572	)

Net cash used in financing activities		(94,338	)		(3,744	)		—			—			(98,082	)

Cash and cash equivalents:
Increase (decrease) in cash and cash equivalents		144			(21	)		—			10			133
Balance, beginning of period		87,787			—			—			(10	)		87,777

Balance, end of period	$	87,931		$	(21	)	$	—		$	—		$	87,910

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 condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context otherwise requires, all references herein to the “Company,” “we,” “us” or “our,” or similar terms, refer to Wynn Las Vegas, LLC, a Nevada limited liability company and its consolidated subsidiaries.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Quarterly Report on Form 10-Q contains statements that are forward-looking, including, but not limited to, statements relating to our business strategy and development activities as well as other capital spending, financing sources, the effects of regulation (including gaming and tax regulations), expectations concerning future operations, margins, profitability and competition. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, in some cases you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “would,” “could,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “continue” or the negative of these terms or other comparable terminology. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. These risks and uncertainties include, but are not limited to:

•

conditions precedent to funding under the agreements governing the disbursement of the proceeds of certain of our debt and equity offerings and borrowings under our Credit Facilities;

•

competition in the casino/hotel and resort industries;

•

completion of Encore on time and within budget;

•

our intention to fund a substantial portion of the development and construction costs of Encore with anticipated cash flows generated at Wynn Las Vegas;

•

new development and construction activities of competitors;

•

our dependence on Stephen A. Wynn and existing management;

•

our dependence on one property for all of our cash flow;

•

leverage and debt service (including sensitivity to fluctuations in interest rates);

•

levels of travel, leisure and casino spending;

•

general domestic or international economic conditions;

•

pending or future legal proceedings;

•

changes in federal or state tax laws or the administration of such laws;

•

changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions);

•

licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations);

•

the impact that an outbreak of an infectious disease, such as avian flu, or the impact of a natural disaster, such as the tsunami which struck southeast Asia in December 2004, may have on the travel and leisure industry; and

•

the consequences of the war in Iraq and other military conflicts in the Middle East and any future security alerts and/or terrorist attacks.

Further information on potential factors that could affect our financial condition, results of operations and business are included in this report and our other filings with the SEC. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us. We undertake no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date of this report.

Overview

We are a developer, owner and operator of destination casino resorts. We currently own and operate Wynn Las Vegas, a destination casino resort in Las Vegas, Nevada, which opened on April 28, 2005. In addition, on April 28, 2006, we commenced construction of Encore at Wynn Las Vegas (“Encore”), a hotel casino resort which, when completed, will be fully integrated with Wynn Las Vegas.

Wynn Las Vegas

We believe Wynn Las Vegas is the preeminent destination casino resort on the Strip in Las Vegas. Wynn Las Vegas features:

•

An approximately 111,000 square foot casino offering 24-hour gaming and a full range of games, including private baccarat salons, a poker room, and a race and sports book;

•

Luxury hotel accommodations in 2,716 spacious hotel rooms, suites and villas (In 2006, the Tower Suites at Wynn Las Vegas became the only casino resort in the world to receive both the Mobil Five Star and AAA Five Diamond distinctions);

•

22 food and beverage outlets featuring signature chefs, including the AAA Five Diamond and Mobil Five Star award-winning restaurant, Alex;

•

A Ferrari and Maserati automobile dealership;

•

Approximately 74,000 square feet of high-end, brand-name retail shopping, including stores and boutiques featuring Brioni, Chanel, Dior, Cartier, Graff, Louis Vuitton, and Manolo Blahnik and others;

•

Recreation and leisure facilities, including an 18-hole golf course, five swimming pools, private cabanas and full service spa and salon; and

•

Two showrooms, two nightclubs and lounges.

The resort, which is located at the intersection of the Las Vegas Strip and Sands Avenue, occupies approximately 217 acres of land fronting the Las Vegas Strip and approximately 18 additional acres across Sands Avenue, a portion of which is utilized for employee parking.

Encore at Wynn Las Vegas

We are constructing Encore on approximately 20 acres on the Las Vegas Strip, immediately adjacent to Wynn Las Vegas. Encore’s current plans include a 2,034 all-suite hotel tower fully integrated with Wynn Las Vegas, an approximately 72,000 square foot casino, additional convention and meeting space, as well as restaurants, a nightclub, swimming pools, a spa and salon and retail outlets. We continue to refine the final design of Encore. Encore is expected to open in early 2009. Our project budget is approximately $2.2 billion, consisting of approximately $2.1 billion for Encore and approximately $100 million for an employee parking garage on our Koval property, an associated pedestrian bridge and costs incurred in connection with the theatre remodeling and production of “Monty Python’s Spamalot” at Wynn Las Vegas, which opened in March 2007.

Results of Operations

We offer gaming, hotel accommodations, dining, entertainment, retail shopping, convention services and other amenities at Wynn Las Vegas. We currently rely solely upon the operations of Wynn Las Vegas for our operating cash flow. Concentration of our cash flow in one property exposes us to certain risks that competitors, whose operations are more diversified, may be better able to control. In addition to the concentration of operations in a single property, many of our customers are high-end gaming customers who wager on credit, thus exposing us to increased credit risk. High-end gaming also increases the potential for variability in our results.

We recorded net income for the three and nine months ended September 30, 2007 of $16.9 million and $99.8 million, respectively, which represents a $32.8 million increase and an $116.7 million increase, respectively, from the net losses incurred during the comparative three and nine month periods of 2006. These increases are due to significant increases in revenues and operating income primarily related to our casino operations.

Certain key operating statistics specific to the gaming industry are included in our discussions of the Company’s operational performance for the periods in which a condensed consolidated statement of operations is presented. Below are definitions of the statistics discussed:

•

Table games win is the amount of drop that is retained and recorded as casino revenue.

•

Drop is the amount of cash or net markers issued that are deposited in a gaming table’s drop box.

•

Slot win is the amount of handle (representing the total amount wagered) that is retained and is recorded as casino revenue.

•

Average Daily Rate (“ADR”) is calculated by dividing total room revenue by total rooms occupied.

•

Revenue per Available Room (“REVPAR”) is calculated by dividing total room revenue by total rooms available.

Financial results for the three months ended September 30, 2007 compared to the three months ended September 30, 2006.

Revenues

Net revenues for the three months ended September 30, 2007 are comprised of $149.9 million in casino revenues (49% of total net revenues) and $155.9 million of net non-casino revenues (51% of total net revenues). Net revenues for the three months ended September 30, 2006 were comprised of $131.9 million in casino revenues (48.3% of total net revenues) and $141.3 million of net non-casino revenues (51.7% of total net revenues). We believe the quality of our resort’s non-casino amenities, combined with providing guests an unparalleled total resort experience, has driven a premium in ADR and other non-gaming revenues as well as increased the length of casino play.

Casino revenues are comprised of the net win from our table games and slot machine operations. Casino revenues for the three months ended September 30, 2007 of approximately $149.9 million represent approximately an $18 million (or 13.7%) increase from casino revenues of $131.9 million for the three months ended September 30, 2006. During the three months ended September 30, 2007, we experienced a 3.8% increase in drop and the average table games win percentage (before discounts) of 26.4% was above the expected range of 21% to 24%. Table games win percentage was 22.3% for the three months ended September 30, 2006. Slot handle at Wynn Las Vegas decreased 4.7% during the three months ended September 30, 2007 as compared to 2006, and the slot win percentage was within the expected range of 4.5% to 5.5%.

For the three months ended September 30, 2007, room revenues were approximately $68 million, which represents a $3.7 million (or 5.7%) increase over the $64.3 million generated in the three months ended September 30, 2006. This increase is due to an increase in both occupancy and average daily rate as compared to the prior year. See the table below for key operating measures related to room revenue.


	Three Months Ended September 30,
	2007			2006
Average Daily Rate	$	282		$	271
Occupancy		96.6	%		94.9	%
REVPAR	$	272		$	257

Other non-casino revenues for the three months ended September 30, 2007 include: food and beverage revenues of approximately $72.8 million, retail revenues of approximately $23.8 million, entertainment revenues of approximately $17 million, and other revenues from outlets, including the spa and salon, of approximately $11.5 million. Other non-gaming revenues for the three months ended September 30, 2006 included food and beverage revenues of approximately $69.3 million, retail revenues of approximately $19.2 million, entertainment revenues of approximately $14.1 million, and other revenues from outlets, including the spa and salon, of approximately $11.5 million.

Departmental, administrative and other expenses

During the three months ended September 30, 2007, departmental expenses included casino expenses of $65 million, rooms expenses of $19.3 million, food and beverage expenses of $46.5 million, and entertainment, retail and other expenses of $37.8 million. Also included are general and administrative expenses of approximately $49.3 million and approximately $3.9 million charged as a provision for doubtful accounts receivable. During the three months ended September 30, 2006, departmental expenses included casino expenses of $60.5 million, rooms expenses of $17.7 million, food and beverage expenses of $45.3 million, and entertainment, retail and other expenses of $31.1 million. Also included are general and administrative expenses of approximately $44.7 million and approximately $4.8 million charged as a provision for doubtful accounts receivable. The increase in expenses is commensurate with the increase in revenues.

Management fees

Since opening Wynn Las Vegas, management fees payable to Wynn Resorts for certain corporate management services have been charged and accrued at a rate equal to 1.5% of revenues. These fees will be paid upon meeting certain leverage ratios and satisfying certain other criteria set forth in our Credit Facilities. Management fees accrued for the quarter ended September 30, 2007 were $4.6 million, compared to $4.1 million for the quarter ended September 30, 2006.

Pre-opening costs

Pre-opening costs for the three months ended September 30, 2007 were $1.4 million compared to $982,000 for the three months ended September 30, 2006. Pre-opening costs for the three months ended September 30, 2007 were incurred with the development of Encore. As Encore progresses, pre-opening costs related to this project will increase as opening approaches in 2009.

Depreciation and amortization

Depreciation and amortization for the three months ended September 30, 2007 of $39.9 million increased by $3.7 million when compared to the three months ended September 30, 2006, primarily due to the addition of a new employee parking garage and the amortization of additional show production costs.

Property charges and other

Property charges and other for the three months ended September 30, 2007 was $2.4 million compared to $5.7 million for the three months ended September 30, 2006. In response to our evaluation of Wynn Las Vegas and the reactions of our guests, we continue to make enhancements to the property. The costs relating to assets retired as a result of these enhancement and remodel efforts are expensed as property charges.

Other non-operating costs and expenses

Interest income decreased by $3.2 million to $2.6 million for the three months ended September 30, 2007 compared to the three months ended September 30, 2006. This decrease is primarily due to reduced average restricted cash balances during the three months ended September 30, 2007 compared to the prior year’s quarter as a result of spending related to the development and construction of Encore.

Interest expense, net of capitalized interest of $9.5 million, was $19.3 million for the three months ended September 30, 2007 compared to $29.2 million, net of capitalized interest of $2.2 million during the three months ended September 30, 2006. This decrease is due to lower average debt balances and lower interest rates as a result of the August 2006 bank refinancing and increased capitalized interest of $7.3 million due to the continuing construction costs of Encore. Capitalized interest continues to increase with the ongoing borrowings and construction costs related to Encore.

Our interest rate swaps are accounted for in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended. The fair value of our interest rate swap is recorded as either an asset or liability. Changes in the fair value of our interest rate swaps are recorded as an increase (or decrease) to the swap fair value in each period. We recorded an expense of approximately $2.2 million for the three months ended September 30, 2007 resulting from the decrease in the fair value of our interest rate swap from June 30, 2007 to September 30, 2007. During the three months ended September 30, 2006 we recorded an expense of $4.2 million resulting from the decrease in the fair value of interest rate swap between June 30, 2006 and September 30, 2006. For further information on our interest rate swaps, see Item 3 – “Quantitative and Qualitative Disclosures about Market Risk”.

Financial results for the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006.

Revenues

Net revenues for the nine months ended September 30, 2007 are comprised of $482.3 million in casino revenues (49.6% of total net revenues) and $489.6 million of net non-casino revenues (50.4% of total net revenues). Net revenues for the nine months ended September 30, 2006 were comprised of $371.9 million in casino revenues (45.1% of total net revenues) and $452.3 million of net non-casino revenues (54.9% of total net revenues). We believe the quality of our resort’s non-casino amenities, combined with providing guests an unparalleled total resort experience, has driven a premium in ADR and other non-gaming revenues as well as increased the length of casino play.

Casino revenues for the nine months ended September 30, 2007 of approximately $482.3 million represent approximately a $110.4 million (or 29.7%) increase from casino revenues of $371.9 million for the nine months ended September 30, 2006. During the nine months ended September 30, 2007, we experienced a 12.3% increase in drop and an increase in the average table games win percentage compared to the nine months ended September 30, 2006. The average table games win percentage (before discounts) of 26.0% was above the expected range of 21% to 24% for the nine months ended September 30, 2007. For the nine months ended September 30, 2006, our average table games win percentage (before discounts) was 20.6%. Slot handle at Wynn Las Vegas increased 1.2% during the nine months ended September 30, 2007 as compared to September 30, 2006, and the slot win percentage was within the expected range of 4.5% to 5.5%.

For the nine months ended September 30, 2007, room revenues were approximately $215.4 million, which represents a $13.7 million (or 6.8%) increase over the $201.7 million generated in the nine months ended September 30, 2006. This increase is due to an increase in both occupancy and average daily rate as compared to the prior year. See the table below for key operating measures related to room revenue.


	Nine months Ended September 30,
	2007			2006
Average Daily Rate	$	301		$	286
Occupancy		96.6	%		95.4	%
REVPAR	$	291		$	272

Other non-casino revenues for the nine months ended September 30, 2007 include: food and beverage revenues of approximately $232.3 million, retail revenues of approximately $68 million, entertainment revenues of approximately $46.7 million, and other revenues from outlets including the spa and salon, of approximately $37.1 million. Other non-gaming revenues for the nine months ended September 30, 2006 included food and beverage revenues of approximately $221.6 million, retail revenues of approximately $55.6 million, entertainment revenues of approximately $51.6 million, and other revenues from outlets, including the spa and salon, of approximately $36.3 million. The decrease in entertainment revenue is due to the closure of LeReve for approximately one month for renovations made to the theatre.

Departmental, administrative and other expenses

During the nine months ended September 30, 2007, departmental expenses included casino expenses of $202.3 million, rooms expenses of $57.8 million, food and beverage expenses of $145.5 million, and entertainment, retail and other expenses of $106.9 million. Also included are general and administrative expenses of approximately $150.4 million and approximately $16.6 million charged as a provision for doubtful accounts receivable. During the nine months ended September 30, 2006, departmental expenses included casino expenses of $181.6 million, rooms expenses of $52.8 million, food and beverage expenses of $139.5 million, and entertainment, retail and other expenses of $97.4 million. Also included are general and administrative expenses of approximately $131.1 million and approximately $11.4 million charged as a provision for doubtful accounts receivable. The increase in expenses is commensurate with the increase in revenues.

Management fees

Since opening Wynn Las Vegas, management fees payable to Wynn Resorts for certain corporate management services have been charged and accrued at a rate equal to 1.5% of revenues. These fees will be paid upon meeting certain leverage ratios and satisfying certain other criteria set forth in our Credit Facilities. Management fees accrued for the nine months ended September 30, 2007 were $14.6 million, compared to $12.4 million for the nine months ended September 30, 2006.

Pre-opening costs

Pre-opening costs for the nine months ended September 30, 2007 were $3.8 million compared to $1.2 million for the nine months ended September 30, 2006. Pre-opening costs for the nine months ended September 30, 2007 were incurred with the opening of the new show “Monty Python’s Spamalot” and the development of Encore. As Encore progresses, pre-opening costs related to this project will increase as opening approaches in 2009.

Depreciation and amortization

Depreciation and amortization for the nine months ended September 30, 2007 of $112.5 million was relatively stable decreasing by $325,000 when compared to the nine months ended September 30, 2006.

Contract termination fee

In February 2006, we agreed with the producers of Avenue Q to end their exclusive Las Vegas run at Wynn Las Vegas’ Broadway Theatre at the end of May 2006. To terminate the contract, we paid a termination fee of $5 million.

Property charges and other

Property charges and other for the nine months ended September 30, 2007 of $4.1 million decreased by approximately $9 million when compared to the nine months ended September 30, 2006.

In response to our evaluation of Wynn Las Vegas and the reactions of our guests, we continue to make enhancements to the property. The costs relating to assets retired as a result of these enhancement and remodel efforts are expensed as property charges. During the nine months ended September 30, 2007, the $4.1 million incurred primarily related to enhancements we made to the Le Rêve theatre. The $13.1 million incurred during the nine months ended September 30, 2006 related to several projects including the remodeling of six North Fairway Villas, the remodel of a portion of the former baccarat area to feature a casino bar, improved public baccarat space, and private baccarat salons, the remodel of the area of the Wynn retail esplanade formerly occupied by the art gallery at Wynn Las Vegas and the opening of a retail shop dedicated exclusively to selling Rolex watches and a men’s accessories store, and certain enhancements to our spa and salon and certain other areas.

Other non-operating costs and expenses

Interest income decreased by $7.7 million to $10.2 million for the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006. This decrease is primarily due to reduced average restricted cash balances during the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 as a result of spending related to the development and construction of Encore.

Interest expense, net of capitalized interest of $20.1 million, was $65.7 million for the nine months ended September 30, 2007 compared to $92 million, net of capitalized interest of $3.6 million during the nine months ended September 30, 2006. This decrease is due to lower average debt balances and lower interest rates as a result of the August 2006 bank refinancing and increased capitalized interest of $16.5 million due to the continuing construction costs of Encore. Capitalized interest continues to increase with the ongoing borrowings and construction costs related to Encore.

Our interest rate swaps are accounted for in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended. The fair value of our interest rate swap is recorded as either an asset or liability. Changes in the fair value of our interest rate swaps are recorded as an increase (or decrease) in the swap fair value in each period. We recorded an expense of approximately $2.8 million for the nine months ended September 30, 2007 resulting from the decrease in the fair value of our interest rate swap from December 31, 2006 to September 30, 2007. During the nine months ended September 30, 2006 we recorded a gain of $1.1 million resulting from the increase in the fair value of interest rate swap between December 31, 2005 and September 30, 2006. For further information on our interest rate swaps, see Item 3 – “Quantitative and Qualitative Disclosures about Market Risk”.

Liquidity and Capital Resources

Cash Flow from Operations

Our operating cash flows are primarily affected by our operating income generated by Wynn Las Vegas, interest paid, and non-cash charges included in operating income. Net cash provided by operations for the nine months ended September 30, 2007 was $290.5 million compared to $139 million provided by operations for the nine months ended September 30, 2006. This increase is due to the increase in operating income as a result of improved overall operational results especially in the casino department.

Capital Resources

We require a certain amount of cash on hand for operations. As of September 30, 2007, we had approximately $62.8 million of cash and cash equivalents available for new development activities, general corporate purposes, enhancements to Wynn Las Vegas, and to support the development and construction of Encore. As of September 30, 2007, we had approximately $46.8 million in cash and investments from the proceeds of our debt and equity financings, which is restricted for the following:

•

Construction, development and pre-opening expenses of Encore; and

•

$30 million restricted for the Encore completion guarantee.

Cash equivalents include investments in overnight money market funds. Restricted investments are kept in money market funds or relatively short-term, government-backed, marketable debt securities as required by agreements governing our debt facilities.

Investing Activities

Encore at Wynn Las Vegas

On April 28, 2006, we commenced construction of Encore. We expect to open Encore to the public in early 2009. Design and construction is progressing as expected at Encore. Current construction activities in the various project sections include the following:

•

The high-rise concrete pours have been completed through the 61^st floor deck.

•

The drywall, mechanical, electrical and plumbing rough-in is completed up to the 29^th floor and framing is completed up to the 31^st floor

•

Exterior glass installation is complete up to the 50^th floor.

•

The low-rise casino concrete pours and the structural steel in the meeting rooms are complete.

•

The structural steel for the lowrise is complete.

•

Concrete pours are complete for both the employee parking garage and the guest self park garage.

Our project budget is approximately $2.2 billion, consisting of approximately $2.1 billion for Encore and approximately $100 million for an employee parking garage on our Koval property, an associated pedestrian bridge and costs incurred in connection with the theatre remodeling and production of “Monty Python’s Spamalot” at Wynn Las Vegas. The project is being funded from our existing Credit Facilities, operating cash flow from Wynn Las Vegas and proceeds from the $400 million First Mortgage Notes debt offering we completed in November 2007. To the extent additional funds are required, we will provide these amounts with additional debt and equity contributions from Wynn Resorts or additional indebtedness to be incurred by Wynn Las Vegas.

On February 27, 2007, we entered into a Design Build Architectural, Engineering and Construction Services Agreement (the “Contract”) with Tutor-Saliba Corporation (“Tutor”) for the design and construction of Encore. The Contract sets forth all of the terms and conditions pursuant to which Tutor will design and construct Encore. In June 2007, we executed the First Amendment to the Contract which set the guaranteed maximum price for construction work covered by the Contract at $1.3 billion. In connection with the execution and delivery of the Contract, Tutor and the Ronald N. Tutor Separate Trust (the “Trust”) have entered into and consented to a Net Worth Agreement pursuant to which (x) the Trust agreed that it will retain its current majority holdings of Tutor and (y) the Trust and Tutor agreed that during the term of the Contract, Tutor will maintain (i) net worth of at least $100 million, and (ii) liquid assets of at least $50 million. As of September 30, 2007, we incurred approximately $775.8 million of project costs related to the development and construction of Encore and related capital improvements.

The ongoing costs of Encore will be paid with funds from the following sources and in the following order of priority:

•

First, by using agreed amounts of excess cash flow from the operations of Wynn Las Vegas and the proceeds of the $400 million First Mortgage Notes offering we completed in November 2007;

•

Second, by using the proceeds of borrowings under the Wynn Las Vegas Credit Facilities;

•

Third, by using the funds from the completion guarantee deposit account.

Wynn Las Vegas

In response to our evaluation of Wynn Las Vegas and the reaction of our guests, we continue to make certain enhancements and refinements to the property. As a result, we have incurred and will continue to incur capital expenditures relating to these enhancements and refinements. Under the terms of the Wynn Las Vegas Credit Facilities, we are permitted to make up to $172.2 million of capital expenditures in 2007, of which we have expended approximately $40.5 million through September 30, 2007. The spending limit may be increased to the extent funds are contributed to Wynn Las Vegas by Wynn Resorts, Limited.

Financing Activities

Wynn Las Vegas and Encore

As of September 30, 2007, our Credit Facilities consist of a $900 million revolving credit facility (the “Revolver”) and $225 million term loan facility (the “Term Loan”).

For borrowings under the Term Loan we have elected, and expect to continue to elect, Eurodollar loans which bear interest at the 1-month LIBOR rate and include a margin of 1.875% on that outstanding balance. We have a $200 million notional amount interest rate swap to essentially fix the interest on $200 million of this Term Loan. (For further information, see Item 3. “Quantitative and Qualitative Discussions about Market Risk”.)

As of September 30, 2007, borrowings outstanding under the Revolver totaled $91.5 million. We also had $16.7 million of outstanding letters of credit that reduce our availability under the Revolver. Consequently, $791.8 million remains available for future borrowings for the construction of Encore or for other uses as necessary. For borrowings under the Revolver, we have elected, and expect to continue to elect, Eurodollar loans, which bear interest at the 1-month LIBOR rate and currently include a margin of 1.625% on the outstanding balance. After opening Encore, the margin will fluctuate between a range of 1.0% to 1.75%, depending on our leverage ratio. In addition to interest, we also pay quarterly in arrears, an annual rate of 0.375% on the daily average of unborrowed availability under the Revolver. After the opening of Encore, the annual fee that we will be required to pay for unborrowed availability under the Revolver will be based on our leverage ratio and will range from an annual rate of 0.25% to 0.50%.

The $900 million Revolver will terminate and be payable in full on August 15, 2011. The Term Loan will mature in two installments: $112.5 million will be payable on September 30, 2012 and the remaining $112.5 million will be payable on August 15, 2013.

The Credit Facilities are obligations of Wynn Las Vegas, LLC and are guaranteed by and secured by substantially all of the assets (except the corporate aircraft) of each of its subsidiaries (other than Wynn Completion Guarantor, LLC). The obligations of Wynn Las Vegas, LLC and the guarantors under the Credit Facilities rank pari passu in right of payment with their existing and future senior indebtedness, including indebtedness with respect to the First Mortgage Notes and senior in right of payment to all of their existing and future subordinated indebtedness.

In April 2007, we amended our Credit Facilities to: (a) have the Final Completion as defined, be deemed satisfied for Wynn Las Vegas with the resulting release of (i) all amounts in excess of $30 million from the

Completion Guaranty Deposit; ($24.6 million), and (ii) the balance of funds in the Project Liquidity Reserve Account ($32.8 million), (b) increase the permitted expenditures for Encore from $300 million to $500 million prior to the execution of a guaranteed maximum price contract, and (c) permit the issuance of up to $500 million of unsecured debt as and when permitted under the indenture governing the First Mortgage Notes.

In October 2007, we amended the Wynn Las Vegas Credit Facilities to (a) permit the issuance of up to $500 million of secured indebtedness, (b) remove certain language related to the inter-company loan made by Wynn Las Vegas to Wynn Resorts (Macau) S.A. and (c) amend certain provisions governing Wynn Las Vegas’ insurance related obligations. Also in October 2007, pursuant to the Wynn Las Vegas Credit Facilities, Wynn Las Vegas entered into a pre-agreed upon form of Amended and Restated Master Disbursement Agreement with Deutsche Bank Trust Company Americas as Bank Agent and Disbursement Agent.

On November 6, 2007, we completed a private offering of $400 million aggregate principal amount of our 6⁵/8% First Mortgage Notes due 2014 at a price of 97.25% of the principal amount. The notes were issued under the same indenture as the 6⁵/8% First Mortgage Notes that we had previously issued. The notes rank pari passu with, and will vote on any matter submitted to noteholders with, the previously issued 6⁵/8% First Mortgage Notes The notes are senior secured obligations of the Issuers, are guaranteed by Wynn Las Vegas, LLC’s subsidiaries (subject to some exceptions), and are secured by a first priority lien on substantially all of the existing and future assets of the Issuers and guarantors.

The notes have not been registered under the Securities Act of 1933 or under any state securities laws. Therefore, we may not offer or sell the notes within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws. We have agreed to make an offer to exchange the notes for registered, publicly traded notes that have substantially identical terms as the notes.

$44.75 Million Note Payable

On March 30, 2007, World Travel, LLC, a subsidiary of Wynn Las Vegas, refinanced the $44.75 million note payable. The new loan has a principal balance of $42 million and is due April 1, 2017. The loan is guaranteed by Wynn Las Vegas, LLC and secured by a first priority security interest in one of our aircrafts. Principal and interest are due quarterly with a balloon payment of $28 million due at maturity. Interest is calculated at the 90-day LIBOR rate plus 125 basis points. In connection with this transaction, we incurred a loss from extinguishment of debt of $157,000 related to the write-off of unamortized debt issue costs associated with the original loan.

Contractual Obligations and Off-Balance Sheet Arrangements

There have been no material changes during the nine months ended September 30, 2007 to our contractual obligations or off-balance sheet arrangements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006. However, in June 2007, we amended our Contract with Tutor for the construction of Encore which set the guaranteed maximum price for construction work covered by the Contract at $1.3 billion and accordingly increases our obligations over the next one to two years under construction contracts.

Other Liquidity Matters

We are restricted under the indenture governing the First Mortgage Notes from making certain “restricted payments” as defined in the indenture. These restricted payments include the payments of dividends or distributions to any direct or indirect holders of equity interests of Wynn Las Vegas, LLC. These restricted payments may not be made until Wynn Las Vegas has been completed and certain other financial and non-financial criteria have been satisfied. In addition, the Credit Facilities contain similar restrictions.

If completion of Encore is delayed, then our debt service obligations accruing prior to the actual opening will increase correspondingly. We intend to fund our operations and capital requirements from operating cash flow and remaining availability under our Credit Facilities. We cannot assure you, however, that Wynn Las Vegas will generate sufficient cash flow from operations or that future borrowings available to us under the Credit Facilities will be sufficient to enable us to service and repay Wynn Las Vegas, LLC’s indebtedness and to fund its other liquidity needs. We may refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of the indebtedness on acceptable terms.

New business developments or other unforeseen events may occur, resulting in the need to raise additional funds. We continue to explore opportunities to develop additional gaming or related businesses in Las Vegas, as well as other domestic or international markets. There can be no assurances regarding the business prospects with respect to any other opportunity. Any other development would require us to obtain additional financing.

Critical Accounting Policies and Estimates

A description of our critical accounting policies is included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2006. Other than some additional information related to the allowance for estimated doubtful accounts receivable below, there have been no material change to these policies for the nine months ended September 30, 2007.

Allowance for estimated doubtful accounts receivable

A substantial portion of our outstanding receivables relates to casino credit play. Credit play, through the issuance of markers, represents a significant portion of the table games volume at Wynn Las Vegas. We maintain strict controls over the issuance of credit and aggressively pursue collection from those customers who fail to pay their balances in a timely fashion. These collection efforts may include the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies, and litigation. Markers are generally legally enforceable instruments in the United States. Markers are not legally enforceable instruments in some foreign countries, but the United States assets of foreign customers may be used to satisfy judgments entered in the United States. As of September 30, 2007 and December 31, 2006, approximately 50% and 55%, respectively, of our casino accounts receivable were owed by customers from foreign countries, primarily in Asia. The collectibility of markers given by foreign customers is affected by a number of factors including changes in currency exchange rates and economic conditions in the customers’ home countries.

We regularly evaluate our reserve for bad debts based on a specific review of customer accounts as well as management’s prior experience with collection trends in the casino industry and current economic and business conditions.

The following table presents key statistics related to our casino accounts receivables (amounts in thousands):


	September 30, 2007			December 31, 2006
Casino accounts receivables	$	115,735		$	133,985
Allowance for doubtful casino accounts receivable		46,276			34,683
Allowance as a percentage of casino accounts receivable		40	%		25.9	%
Percentage of casino accounts receivable outstanding over 180 days		28.8	%		15.4	%

The increase in the allowance for doubtful accounts as a percentage of casino accounts receivable is due to a normal increase in casino accounts receivable outstanding over 180 days. While collection efforts remain active, it is our current policy to fully reserve all accounts over one year old. As our customer payment experience

evolves, we will continue to refine our estimated reserve for bad debts. Accordingly, the associated provision for doubtful accounts charge may fluctuate. Because individual customer account balances can be significant, the reserve and the provision can change significantly between periods, as information about a certain customer becomes known or as changes in a region’s economy or legal system occur.

Recently Issued Accounting Standards

In June 2006, the FASB issued Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes”. This interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes”. The interpretation provides guidance on classification, interest and penalties, accounting in interim periods, disclosure, and translation. This interpretation is effective for fiscal years beginning after December 15, 2006. Since the Company is a pass-through entity for tax purposes, the adoption of this statement, effective January 1, 2007, did not have an impact on the Company’s condensed consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements under other accounting pronouncements that require or permit fair value measurements. Accordingly, this Statement does not require any new fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. We have not yet determined the impact this statement will have on our consolidated financial statements after it is adopted on January 1, 2008.

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.

Interest Rate Risks

Our primary exposure to market risk is interest rate risk associated with our debt facilities that bear interest based on floating rates. We attempt to manage interest rate risk by managing the mix of long-term fixed rate borrowings and variable rate borrowings, and using hedging activities. We cannot assure you that these risk management strategies will have the desired effect, and interest rate fluctuations could have a negative impact on our results of operations. We do not use derivative financial instruments, other financial instruments or derivative commodity instruments for trading or speculative purposes.

As of September 30, 2007, we have one interest rate swap arrangement to hedge the underlying interest rate risk on a total of $200 million of borrowings under the Term Loan, which bears interest at LIBOR plus 1.875%. Under this interest rate swap arrangement, we receive payments at a variable rate of LIBOR and pay a fixed rate of 3.793% on the $200 million notional amount which expires on December 31, 2008. Although this interest rate swap is highly effective economically in fixing the interest rate on this borrowing under the Term Loan at approximately 5.7%, changes in fair value of our interest rate swap for each reporting period are, and will continue to be, recorded as an increase/(decrease) in swap fair value as the swap does not qualify for hedge accounting.

Summary of Historical Fair Values

As of September 30, 2007 and December 31, 2006, our interest rate swap had an approximate asset fair value of $2 million and $4.8 million, respectively. The fair value approximates the amount we would receive if this contract were settled at the valuation date. Fair value is estimated based upon current, and predictions of future, interest rate levels along a yield curve, the remaining duration of the instruments and other market conditions, and therefore, is subject to significant estimation and a high degree of variability of fluctuation between periods.

Interest Rate Sensitivity

As of September 30, 2007, approximately 90% of our long-term debt was based on fixed rates, including the notional amount related to our interest rate swap. Based on our borrowings as of September 30, 2007, an assumed 1% change in variable rates would cause our annual interest cost to change by approximately $1.6 million.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the nine months ended September 30, 2007 to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006, and the developments disclosed in our filings with the SEC since the date of the Form 10-K that relate to the risks described in our Form 10-K. The matters described in Part I, “Item 1A. Risk Factors” of our Form 10-K address a number of risks and uncertainties which could materially affect our our business, financial condition, operating results and/or future prospects. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, operating results and/or future prospects.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Restrictions imposed by our debt instruments significantly restrict us, subject to certain exceptions for payment of allocable corporate overhead, from declaring or paying dividends or distributions. Specifically, we are restricted under the indenture governing the First Mortgage Notes from making certain “restricted payments” as defined therein. These restricted payments include the payment of dividends or distributions to any direct or indirect holders of our membership interests. These restricted payments may not be made until certain other financial and non-financial criteria have been satisfied. In addition, our Credit Facilities contain similar restrictions.

Item 6. Exhibits

• Exhibits

EXHIBIT INDEX


Exhibit No.		Description
3.1		Second Amended and Restated Articles of Organization of Wynn Las Vegas, LLC (1).

3.2		Second Amended and Restated Operating Agreement of Wynn Las Vegas, LLC (1).

*31.1		Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a – 14(a) and Rule 15d – 14(a).

*31.2		Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a – 14(a) and Rule 15d – 14(a).

*32.1		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350.

*	Filed herewith.

•	Previously filed with the Registration Statement on Form S-4 filed by the Registrant on April 13, 2005 (File No. 333-124052) and incorporated herein by reference.

SIGNATURE

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.


	WYNN LAS VEGAS
Dated: November 9, 2007	By:	/s/ DAVID R. SISK
		David R. Sisk
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

Certification of CEO pursuant to Section 302

Exhibit 31.1

Certification of Chief Executive Officer

of Periodic Report Pursuant to

Rule 13a – 14(a) and Rule 15d – 14(a)

I, Andrew Pascal, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Wynn Las Vegas, LLC;

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

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

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2007

/s/ Andrew Pascal

Andrew Pascal

President

(Principal Executive Officer)

Certification of CFO pursuant to Section 302

Exhibit 31.2

Certification of Chief Financial Officer

of Periodic Report Pursuant to

Rule 13a – 14(a) and Rule 15d – 14(a)

I, David R. Sisk, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Wynn Las Vegas, LLC;

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

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

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

(b)

(c)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2007

/s/ David R. Sisk

David R. Sisk

Senior Vice President and

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

Certification of CEO and CFO pursuant to Section 906

Exhibit 32.1

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Wynn Las Vegas, LLC (the “Company”) for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Andrew Pascal, as Chief Operating Officer of the Company and David R. Sisk, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Andrew Pascal
Name:		Andrew Pascal
Title:		President
		(Principal Executive Officer)
Date:		November 9, 2007

/s/ David R. Sisk
Name:		David R. Sisk
Title:		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)
Date:		November 9, 2007

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Wynn Resorts, Limited and will be retained by Wynn Resorts, Limited and furnished to the Securities and Exchange Commission or its staff upon request.

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