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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

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

For the quarterly period ended September 30, 2019

OR

☐	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. 000-50028

 WYNN RESORTS, LIMITED

(Exact name of registrant as specified in its charter)

Nevada		46-0484987
(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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01		WYNN		Nasdaq Global Select Market

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 ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No ☒

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

Class		Outstanding at October 31, 2019
Common stock, par value $0.01		107,354,606

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

FORM 10-Q

INDEX

 

Part I.	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets - September 30, 2019 (unaudited) and December 31, 2018	3
	Condensed Consolidated Statements of Operations (unaudited) - Three and Nine Months Ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - Three and Nine Months Ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - Three and Nine Months Ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended September 30, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51
Part II.	Other Information
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signature		54

	2

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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30, 2019				December 31, 2018
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,676,110			$	2,215,001
Receivables, net	286,611				276,644
Inventories	80,486				66,627
Prepaid expenses and other	68,045				83,104
Total current assets	2,111,252				2,641,376
Property and equipment, net	9,621,268				9,385,920
Restricted cash	6,182				4,322
Intangible assets, net	148,972				222,506
Operating lease assets	444,157				—
Deferred income taxes, net	719,614				736,452
Other assets	225,613				225,693
Total assets	$	13,277,058			$	13,216,269
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and construction payables	$	292,140			$	321,796
Customer deposits	956,744				955,450
Gaming taxes payable	188,496				247,341
Accrued compensation and benefits	162,752				163,966
Accrued interest	74,340				61,595
Current portion of long-term debt	116,118				11,960
Other accrued liabilities	139,794				119,955
Total current liabilities	1,930,384				1,882,063
Long-term debt	9,421,845				9,411,140
Long-term operating lease liabilities	149,970				—
Other long-term liabilities	108,980				108,277
Total liabilities	11,611,179				11,401,480
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock, par value $0.01; 40,000,000 shares authorized; zero shares issued and outstanding	—				—
Common stock, par value $0.01; 400,000,000 shares authorized; 122,826,131 and 122,115,585 shares issued; 107,362,502 and 107,232,026 shares outstanding, respectively	1,228				1,221
Treasury stock, at cost; 15,463,629 and 14,883,559 shares, respectively	(1,409,717		)		(1,344,012		)
Additional paid-in capital	2,507,870				2,457,079
Accumulated other comprehensive loss	(2,700		)		(1,950		)
Retained earnings	822,070				921,785
Total Wynn Resorts, Limited stockholders' equity	1,918,751				2,034,123
Noncontrolling interests	(252,872		)		(219,334		)
Total stockholders' equity	1,665,879				1,814,789
Total liabilities and stockholders' equity	$	13,277,058			$	13,216,269

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

	3

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Operating revenues:
Casino	$	1,108,364			$	1,222,029			$	3,435,968			$	3,564,195
Rooms	205,876				183,044				595,953				559,405
Food and beverage	228,508				193,874				619,749				580,963
Entertainment, retail and other	105,014				110,125				305,970				325,511
Total operating revenues	1,647,762				1,709,072				4,957,640				5,030,074
Operating expenses:
Casino	722,692				783,171				2,197,750				2,254,766
Rooms	75,188				62,965				205,042				189,837
Food and beverage	196,661				162,311				527,502				468,265
Entertainment, retail and other	42,078				44,028				129,636				138,647
General and administrative	246,442				192,327				665,988				545,543
Litigation settlement	—				—				—				463,557
Provision for doubtful accounts	4,036				3,285				13,039				2,586
Pre-opening	1,616				13,714				99,212				35,255
Depreciation and amortization	172,998				137,458				449,824				411,685
Property charges and other	8,216				18,830				17,920				30,672
Total operating expenses	1,469,927				1,418,089				4,305,913				4,540,813
Operating income	177,835				290,983				651,727				489,261
Other income (expense):
Interest income	6,427				6,948				19,979				21,029
Interest expense, net of amounts capitalized	(114,652		)		(93,007		)		(300,981		)		(281,132		)
Change in derivatives fair value	(2,101		)		(54		)		(6,914		)		(54		)
Change in Redemption Note fair value	—				—				—				(69,331		)
(Loss) gain on extinguishment of debt	(12,196		)		(198		)		(12,196		)		2,131
Other	(8,703		)		11,216				(3,346		)		1,039
Other income (expense), net	(131,225		)		(75,095		)		(303,458		)		(326,318		)
Income before income taxes	46,610				215,888				348,269				162,943
Benefit (provision) for income taxes	(19,727		)		3,884				(19,421		)		124,631
Net income	26,883				219,772				328,848				287,574
Less: net income attributable to noncontrolling interests	(30,379		)		(63,657		)		(132,921		)		(180,010		)
Net income (loss) attributable to Wynn Resorts, Limited	$	(3,496	)		$	156,115			$	195,927			$	107,564
Basic and diluted net income (loss) per common share:
Net income (loss) attributable to Wynn Resorts, Limited:
Basic	$	(0.03	)		$	1.44			$	1.83			$	1.01
Diluted	$	(0.03	)		$	1.44			$	1.83			$	1.01
Weighted average common shares outstanding:
Basic	106,707				108,064				106,791				106,162
Diluted	106,707				108,533				107,024				106,721
Dividends declared per common share	$	1.00			$	0.75			$	2.75			$	2.00

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

	4

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Net income	$	26,883			$	219,772			$	328,848			$	287,574
Other comprehensive income (loss):
Foreign currency translation adjustments, before and after tax	(989		)		(175		)		(1,039		)		(2,121		)
Change in net unrealized (loss) gain on investment securities, before and after tax	—				(19		)		—				1,292
Redemption Note credit risk adjustment, net of tax of $2,735	—				—				—				9,211
Total comprehensive income	25,894				219,578				327,809				295,956
Less: comprehensive income attributable to noncontrolling interests	(30,104		)		(63,608		)		(132,632		)		(179,419		)
Comprehensive income (loss) attributable to Wynn Resorts, Limited	$	(4,210	)		$	155,970			$	195,177			$	116,537

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

	5

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share data)

(unaudited)

	For the Three Months Ended September 30, 2019
	Common stock
	Shares outstanding			Par value				Treasury stock				Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Total Wynn Resorts, Ltd. stockholders' equity				Noncontrolling interests				Total stockholders' equity
Balances, July 1, 2019	107,610,356			$	1,228			$	(1,379,644	)		$	2,498,316			$	(1,986	)		$	932,907			$	2,050,821			$	(199,882	)		$	1,850,939
Net income (loss)	—			—				—				—				—				(3,496		)		(3,496		)		30,379				26,883
Currency translation adjustment	—			—				—				—				(714		)		—				(714		)		(275		)		(989		)
Exercise of stock options	36,000			—				—				2,151				—				—				2,151				—				2,151
Issuance of restricted stock	27,276			—				—				—				—				—				—				—				—
Cancellation of restricted stock	(27,809	)		—				—				—				—				—				—				—				—
Shares repurchased by the Company and held as treasury shares	(283,321	)		—				(30,073		)		—				—				—				(30,073		)		—				(30,073		)
Cash dividends declared	—			—				—				—				—				(107,341		)		(107,341		)		(82,949		)		(190,290		)
Distribution to noncontrolling interest	—			—				—				—				—				—				—				(998		)		(998		)
Stock-based compensation	—			—				—				7,403				—				—				7,403				853				8,256
Balances, September 30, 2019	107,362,502			$	1,228			$	(1,409,717	)		$	2,507,870			$	(2,700	)		$	822,070			$	1,918,751			$	(252,872	)		$	1,665,879

	For the Three Months Ended September 30, 2018
	Common stock
	Shares outstanding			Par value				Treasury stock				Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Total Wynn Resorts, Ltd. stockholders' equity				Noncontrolling interests				Total stockholders' equity
Balances, July 1, 2018	108,642,371			$	1,220			$	(1,184,967	)		$	2,435,720			$	(1,938	)		$	462,950			$	1,712,985			$	106,610			$	1,819,595
Net income	—			—				—				—				—				156,115				156,115				63,657				219,772
Currency translation adjustment	—			—				—				—				(126		)		—				(126		)		(49		)		(175		)
Change in net unrealized loss on investment securities	—			—				—				—				(19		)		—				(19		)		—				(19		)
Exercise of stock options	126,190			1				—				9,740				—				—				9,741				—				9,741
Issuance of common stock	—			—				—				27				—				—				27				—				27
Issuance of restricted stock	38,695			1				—				(1		)		—				—				—				—				—
Cancellation of restricted stock	(60,714	)		(1		)		—				—				—				—				(1		)		—				(1		)
Shares repurchased by the Company and held as treasury shares	(15,460	)		—				(2,306		)		—				—				—				(2,306		)		—				(2,306		)
Cash dividends declared	—			—				—				—				—				(81,294		)		(81,294		)		(138,258		)		(219,552		)
Distribution to noncontrolling interest	—			—				—				—				—				—				—				(297,261		)		(297,261		)
Stock-based compensation	—			—				—				9,871				—				—				9,871				591				10,462
Balances, September 30, 2018	108,731,082			$	1,221			$	(1,187,273	)		$	2,455,357			$	(2,083	)		$	537,771			$	1,804,993			$	(264,710	)		$	1,540,283

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

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)

(in thousands, except share data)

(unaudited)

	For the Nine Months Ended September 30, 2019
	Common stock
	Shares outstanding			Par value				Treasury stock				Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Total Wynn Resorts, Ltd. stockholders' equity				Noncontrolling interests				Total stockholders' equity
Balances, January 1, 2019	107,232,026			$	1,221			$	(1,344,012	)		$	2,457,079			$	(1,950	)		$	921,785			$	2,034,123			$	(219,334	)		$	1,814,789
Net income	—			—				—				—				—				195,927				195,927				132,921				328,848
Currency translation adjustment	—			—				—				—				(750		)		—				(750		)		(289		)		(1,039		)
Exercise of stock options	293,690			3				—				14,693				—				—				14,696				—				14,696
Issuance of restricted stock	456,505			4				—				14,344				—				—				14,348				785				15,133
Cancellation of restricted stock	(39,649	)		—				—				—				—				—				—				—				—
Shares repurchased by the Company and held as treasury shares	(580,070	)		—				(65,705		)		—				—				—				(65,705		)		—				(65,705		)
Cash dividends declared	—			—				—				—				—				(295,642		)		(295,642		)		(165,849		)		(461,491		)
Distribution to noncontrolling interest	—			—				—				—				—				—				—				(3,725		)		(3,725		)
Stock-based compensation	—			—				—				21,754				—				—				21,754				2,619				24,373
Balances, September 30, 2019	107,362,502			$	1,228			$	(1,409,717	)		$	2,507,870			$	(2,700	)		$	822,070			$	1,918,751			$	(252,872	)		$	1,665,879

 

	For the Nine Months Ended September 30, 2018
	Common stock
	Shares outstanding			Par value				Treasury stock				Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Total Wynn Resorts, Ltd. stockholders' equity				Noncontrolling interests				Total stockholders' equity
Balances, January 1, 2018	103,005,866			$	1,164			$	(1,184,468	)		$	1,497,928			$	(1,845	)		$	635,067			$	947,846			$	130,504			$	1,078,350
Cumulative effect, change in accounting for credit risk, net of tax of $2,735	—			—				—				—				(9,211		)		9,211				—				—				—
Net income	—			—				—				—				—				107,564				107,564				180,010				287,574
Currency translation adjustment	—			—				—				—				(1,530		)		—				(1,530		)		(591		)		(2,121		)
Change in net unrealized loss on investment securities	—			—				—				—				1,292				—				1,292				—				1,292
Redemption Note settlement	—			—				—				—				9,211				—				9,211				—				9,211
Exercise of stock options	238,780			2				—				19,805				—				—				19,807				506				20,313
Issuance of common stock	5,300,000			53				—				915,187				—				—				915,240				—				915,240
Issuance of restricted stock	280,834			3				—				1,295				—				—				1,298				501				1,799
Cancellation of restricted stock	(75,908	)		(1		)		—				1				—				—				—				—				—
Shares repurchased by the Company and held as treasury shares	(18,490	)		—				(2,805		)		—				—				—				(2,805		)		—				(2,805		)
Cash dividends declared	—			—				—				—				—				(214,071		)		(214,071		)		(276,583		)		(490,654		)
Distribution to noncontrolling interest	—			—				—				—				—				—				—				(301,113		)		(301,113		)
Stock-based compensation	—			—				—				21,141				—				—				21,141				2,056				23,197
Balances, September 30, 2018	108,731,082			$	1,221			$	(1,187,273	)		$	2,455,357			$	(2,083	)		$	537,771			$	1,804,993			$	(264,710	)		$	1,540,283

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

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2019				2018
Cash flows from operating activities:
Net income	$	328,848			$	287,574
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	449,824				411,685
Deferred income taxes	16,838				(123,516		)
Stock-based compensation expense	30,444				28,762
Amortization of debt issuance costs	22,171				25,241
Loss on extinguishment of debt	12,196				2,364
Provision for doubtful accounts	13,039				2,586
Change in derivatives fair value	6,914				54
Change in Redemption Note fair value	—				69,331
Property charges and other	21,238				30,464
Increase (decrease) in cash from changes in:
Receivables, net	(23,046		)		(11,038		)
Inventories, prepaid expenses and other	(17,380		)		1,145
Customer deposits	2,355				(212,459		)
Accounts payable and accrued expenses	(83,556		)		(14,304		)
Net cash provided by operating activities	779,885				497,889
Cash flows from investing activities:
Capital expenditures, net of construction payables and retention	(878,335		)		(1,154,255		)
Purchase of intangible and other assets	(6,000		)		(102,388		)
Proceeds from the sale or maturity of investment securities	—				359,461
Purchase of investment securities	—				(34,098		)
Proceeds from sale of assets	592				2,387
Net cash used in investing activities	(883,743		)		(928,893		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	2,549,072				2,288,605
Repayments of long-term debt	(2,443,367		)		(3,030,526		)
Proceeds from note receivable from sale of ownership interest in subsidiary	—				75,000
Proceeds from issuance of common stock, net of issuance costs	—				915,187
Repurchase of common stock	(65,705		)		(2,805		)
Finance lease payment	(36		)		—
Proceeds from exercise of stock options	14,696				20,313
Dividends paid	(460,139		)		(350,694		)
Distribution to noncontrolling interest	(3,725		)		(301,113		)
Payments to acquire derivatives	—				(3,900		)
Payments for financing costs	(22,359		)		(33,787		)
Net cash used in financing activities	(431,563		)		(423,720		)
Effect of exchange rate on cash, cash equivalents and restricted cash	(1,610		)		1,090
Cash, cash equivalents and restricted cash:
Decrease in cash, cash equivalents and restricted cash	(537,031		)		(853,634		)
Balance, beginning of period	2,219,323				2,806,634
Balance, end of period	$	1,682,292			$	1,953,000
Supplemental cash flow disclosures:
Cash paid for interest, net of amounts capitalized	$	265,873			$	276,989
Capitalized stock-based compensation	$	228			$	6
Liability settled with shares of common stock	$	15,134			$	1,800
Accounts and construction payables related to property and equipment	$	202,375			$	174,530
Other liabilities related to intangible assets	$	13,463			$	—
Financing costs included in accounts payable and other liabilities	$	2,093			$	—
Dividends payable on unvested restricted stock included in other accrued liabilities	$	6,306			$	3,164
Dividends payable to noncontrolling interests	$	—			$	138,816

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

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

Note 1 - Organization

Organization

Wynn Resorts, Limited, a Nevada corporation (together with its subsidiaries, "Wynn Resorts" or the "Company") is a designer, developer, owner and operator of destination casino resorts. In the Macau Special Administrative Region of the People's Republic of China ("Macau"), the Company owns approximately 72% of Wynn Macau, Limited ("WML"), which includes the operations of the Wynn Palace and Wynn Macau resorts. The Company refers to Wynn Palace and Wynn Macau as its Macau Operations. In Las Vegas, Nevada, the Company operates and, with the exception of certain retail space, owns 100% of Wynn Las Vegas. Additionally, the Company is a 50.1% owner and managing member of a joint venture that owns and leases certain retail space at Wynn Las Vegas (the "Retail Joint Venture"). The Company refers to Wynn Las Vegas and the Retail Joint Venture as its Las Vegas Operations. On June 23, 2019, the Company opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts.

On September 20, 2019, and concurrently with the Refinancing Transactions (as defined and discussed in Note 6, "Long-Term Debt"), Wynn Resorts contributed all of its equity interests in Wynn Group Asia, Inc. ("Wynn Asia") to Wynn Resorts Finance, LLC, which was formerly known as Wynn America, LLC ("WRF"), making Wynn Asia a wholly owned subsidiary of WRF. WRF is an indirect wholly owned subsidiary of Wynn Resorts. Wynn Asia is a holding company that holds Wynn Resorts' approximately 72% controlling interest in WML.

Development Projects

The Company is currently constructing an approximately 430,000 square foot meeting and convention facility at Wynn Las Vegas. The facility will feature approximately 217,000 square feet of state-of-the-art meeting and convention space available for group reservations. The Company expects to open the additional meeting and convention facility in the first quarter of 2020. The Company opened the newly reconfigured Wynn Las Vegas golf course on October 11, 2019.

Note 2 -    Basis of Presentation and Significant Accounting Policies

Basis of Presentation

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 U.S. generally accepted accounting principles ("GAAP") 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, the accompanying condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to a fair presentation of the results for the interim periods presented. The results for the three and nine months ended September 30, 2019 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, 2018. 

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and entities the Company identifies as variable interest entities ("VIEs") of which the Company is determined to be the primary beneficiary. For information on the Company's VIEs, see Note 15 "Retail Joint Venture." All significant intercompany accounts and transactions have been eliminated.

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Leases

Lessee Arrangements    

The Company is the lessee under non-cancelable real estate and equipment leases. Beginning on January 1, 2019 (the date of the Company's adoption of Topic 842, as defined and discussed further in "Recently Adopted Accounting Standards"), operating lease assets and liabilities are measured and recorded upon lease commencement at the present value of the future minimum lease payments. The Company combines lease and nonlease components in its determination of minimum lease payments, except for certain asset classes that have significant nonlease components. As the interest rate implicit in its leases is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of lease payments. The Company does not record an asset or liability for operating leases with a term of less than one year. Variable lease costs generally arise from changes in an index, such as the consumer price index. Variable lease costs are expensed as incurred and are not included in the determination of lease assets or liabilities. Prior to the adoption of Topic 842 on January 1, 2019, the Company did not record an asset or liability for any of its operating leases.

Lessor Arrangements

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space at its integrated resorts, which represents approximately 101,000, 59,000, 142,000, and 36,000 square feet of space at Wynn Palace, Wynn Macau, Wynn Las Vegas, and Encore Boston Harbor, respectively. The lease arrangements generally include minimum base rent and contingent rental clauses based on a percentage of net sales. Generally, the terms of the leases range between five and 10 years. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and nonlease components for the purpose of measuring lease revenue. Revenue is recorded in entertainment, retail and other revenue on the Condensed Consolidated Statements of Operations.

Gaming Taxes

The Company is subject to taxes based on gross gaming revenues in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes are recorded as casino expenses in the accompanying Condensed Consolidated Statements of Operations. These taxes totaled $543.9 million and $638.4 million for the three months ended September 30, 2019 and 2018, and $1.69 billion and $1.81 billion for the nine months ended September 30, 2019 and 2018, respectively.

Pre-opening expenses

Pre-opening expenses represent personnel, advertising, and other costs incurred prior to the opening of new ventures and are expensed as incurred. During the nine months ended September 30, 2019 and 2018, the Company incurred pre-opening expenses primarily in connection with the development of Encore Boston Harbor.

Recently Adopted Accounting Standards

Leases

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases ("Topic 842"), which requires recognition of lease assets and liabilities on the balance sheet and disclosure of additional information about leasing activities. The Company adopted this standard using a modified retrospective transition approach with an initial application date of January 1, 2019. As a result, prior periods were not retrospectively adjusted and are not comparable to current periods. The Company elected the practical expedient permitting lessees to carry forward historical lease classifications for existing arrangements. The following is a summary of the significant impacts on the Company's balance sheet as of January 1, 2019:

•	The Company recognized operating lease assets and liabilities of $154.1 million, which represented the discounted future minimum lease payments of all existing leases on the initial application date.

•	The net carrying amount of a definite-lived intangible asset, which related to a leasehold interest in land and totaled $88.1 million, was reclassified to operating lease assets.

•	Leasehold interests in land, net, which totaled $206.9 million, were reclassified to operating lease assets from property and equipment, net.

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

•	Certain other initial direct cost assets, prepaid lease assets, and deferred rent accrued liabilities were reclassified to operating lease assets.

As the Company elected to carry forward historical lease classifications, an arrangement concluded to contain a capital lease under the previous standard was deemed a finance lease under Topic 842, with no resultant change in accounting other than the reclassification of associated initial direct costs from other assets to property and equipment, net. There was no impact on the Company's operating income, net income or cash flows as a result of adopting Topic 842.

Accounting Standards Issued But Not Yet Adopted

Financial Instruments - Credit Losses

The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for the Company beginning January 1, 2020. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently assessing the impact that the adoption of the new guidance will have on its Consolidated Financial Statements, but does not expect that it will have a material impact.

Note 3 -    Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following (in thousands):

	September 30, 2019				December 31, 2018
Cash and cash equivalents:
Cash (1)	$	1,191,948			$	1,455,744
Cash equivalents (2)	484,162				759,257
Total cash and cash equivalents	1,676,110				2,215,001
Restricted cash (3)	6,182				4,322
Total cash, cash equivalents and restricted cash	$	1,682,292			$	2,219,323

(1) Cash consists of cash on hand and bank deposits.

(2) Cash equivalents consist of bank time deposits and money market funds.

(3) Restricted cash consists of cash collateral associated with obligations and cash held in a trust in accordance with WML's share award plan.

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 4 -    Receivables, net

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

	September 30, 2019				December 31, 2018
Casino	$	239,813			$	229,594
Hotel	21,272				22,086
Other	58,407				57,658
	319,492				309,338
Less: allowance for doubtful accounts	(32,881		)		(32,694		)
	$	286,611			$	276,644

As of September 30, 2019 and December 31, 2018, approximately 80.2% and 85.0%, respectively, of the Company's markers were due from customers residing outside the United States, primarily in Asia. Business or economic conditions or other significant events in the countries in which our customers reside could affect the collectability of such receivables.

Note 5 -    Property and Equipment, net

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

	September 30, 2019				December 31, 2018
Buildings and improvements	$	9,288,609			$	7,707,467
Land and improvements	1,225,849				1,141,032
Furniture, fixtures and equipment	2,923,900				2,288,370
Leasehold interests in land	—				313,516
Airplanes	110,623				110,623
Construction in progress	445,098				1,912,801
	13,994,079				13,473,809
Less: accumulated depreciation	(4,372,811		)		(4,087,889		)
	$	9,621,268			$	9,385,920

As of September 30, 2019, construction in progress consisted primarily of costs capitalized, including interest, for the construction of the additional meeting and convention space at Wynn Las Vegas. As of December 31, 2018, construction in progress consisted primarily of costs capitalized, including interest, for the construction of Encore Boston Harbor. On June 23, 2019, Encore Boston Harbor opened and its associated construction in progress balance was placed into service.

The Company capitalized interest of $3.3 million for the three months ended September 30, 2019, primarily in connection with the construction of the additional meeting and convention space at Wynn Las Vegas. The Company capitalized interest of $16.2 million for the three months ended September 30, 2018, and $50.2 million and $37.7 million for the nine months ended September 30, 2019 and 2018, respectively, primarily in connection with the construction of Encore Boston Harbor.

Beginning January 1, 2019, leasehold interests in land, net of related accumulated amortization were reclassified to operating lease assets with the adoption of Topic 842.

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 6 -    Long-Term Debt

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

	September 30, 2019				December 31, 2018
Macau Related:
Wynn Macau Credit Facilities:
Senior Term Loan Facility, due 2022 (1)	$	2,295,759			$	2,296,999
Senior Revolving Credit Facility, due 2022 (2)	448,982				623,921
4 7/8% Senior Notes, due 2024	600,000				600,000
5 1/2% Senior Notes, due 2027	750,000				750,000
U.S. and Corporate Related:
WRF Senior Secured Credit Facilities (3):
WRF Term Loan, due 2024	1,000,000				—
WRF Revolver, due 2024	25,000				—
WLV 4 1/4% Senior Notes, due 2023	500,000				500,000
WLV 5 1/2% Senior Notes, due 2025	1,780,000				1,780,000
WLV 5 1/4% Senior Notes, due 2027	880,000				880,000
WRF 5 1/8% Senior Notes, due 2029	750,000				—
Retail Term Loan, due 2025 (4)	615,000				615,000
Wynn America Senior Term Loan Facility, due 2021 (5)	—				994,780
Wynn Resorts Term Loan, due 2024 (5)	—				500,000
	9,644,741				9,540,700
Less: Unamortized debt issuance costs and original issue discounts and premium, net	(106,778		)		(117,600		)
	9,537,963				9,423,100
Less: Current portion of long-term debt	(116,118		)		(11,960		)
Total long-term debt, net of current portion	$	9,421,845			$	9,411,140

(1) Approximately $1.31 billion and $990.8 million of the Wynn Macau Senior Term Loan Facility bears interest at a rate of LIBOR plus 1.75% per year and HIBOR plus 1.75% per year, respectively. As of September 30, 2019, the weighted average interest rate was approximately 3.73%.

(2) Approximately $256.5 million and $192.4 million of the Wynn Macau Senior Revolving Credit Facility bears interest at a rate of LIBOR plus 1.75% per year and HIBOR plus 1.75% per year, respectively. As of September 30, 2019, the weighted average interest rate was approximately 3.80%, and the available borrowing capacity was $298.3 million.

(3) The Wynn Resorts Finance Credit Facilities bear interest at a rate of LIBOR plus 1.75% per year. As of September 30, 2019, the interest rate was 3.80%. Additionally, as of September 30, 2019, the available borrowing capacity under the Revolving Credit Facility was $806.9 million, net of $18.1 million in outstanding letters of credit.

(4) The Retail Term Loan bears interest at a rate of LIBOR plus 1.70% per year. As of September 30, 2019, the interest rate was 3.80%.

(5) The Wynn America Credit Facilities, which included the Wynn America Senior Term Loan Facility, and the Wynn Resorts Term Loan were prepaid in full on September 20, 2019, in connection with the Refinancing Transactions, as defined and discussed below.

Refinancing Transactions

On September 20, 2019, WRF and its subsidiary Wynn Resorts Capital Corp. (collectively with WRF, the "WRF Issuers"), each an indirect wholly owned subsidiary of the Company, issued $750.0 million aggregate principal amount of 5 1/8% Senior Notes due 2029 (the "2029 Notes") pursuant to an indenture (the "2029 Indenture") among the WRF Issuers, the guarantors party thereto, and U.S. Bank National Association, as trustee (the "Trustee"), in a private offering. The 2029 Notes were issued at par.

Concurrently with the issuance of the 2029 Notes, WRF entered into a credit agreement (the "WRF Credit Agreement") providing for a new first lien term loan facility in an aggregate principal amount of $1.0 billion (the "WRF Term Loan") and a new first lien revolving credit facility in an aggregate principal amount of $850.0 million (the "WRF Revolver" and together with the WRF Term Loan, the "WRF Senior Secured Credit Facilities") (the WRF Senior Secured Credit Facilities and 2029 Notes are collectively referred to as the "Refinancing Transactions").

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

WRF used the net proceeds from the Refinancing Transactions to refinance the existing Wynn America credit facilities and the Wynn Resorts term loan and to pay related fees and expenses totaling $18.8 million, of which $14.8 million was recorded as debt issuance costs within the Condensed Consolidated Balance Sheet. The Company recognized the Refinancing Transactions primarily as a modification of existing debt with the related unamortized debt issuance costs reallocated to the new debt instruments. For those components of debt that were deemed extinguished, the Company recognized a loss on extinguishment of debt of $12.2 million.

WRF Senior Secured Credit Facilities

Subject to certain exceptions, the WRF Senior Secured Credit Facilities bear interest at LIBOR plus 1.75% per annum. The annual fee required to pay for unborrowed amounts under the WRF Revolver, if any, is 0.25% per annum, payable quarterly in arrears, calculated based on the daily average of the unborrowed amounts under such credit facilities. The Company is required to make quarterly repayments on the WRF Term Loan of $12.5 million beginning in the fourth quarter of 2019, with any remaining principal amount outstanding repayable in full on September 20, 2024.

The WRF Credit Agreement contains customary representations and warranties, events of default and negative and affirmative covenants, including, but not limited to, covenants that restrict our ability to pay dividends or distributions to any direct or indirect subsidiaries, to incur and/or repay indebtedness, to make certain restricted payments, and to enter into mergers and acquisitions, negative pledges, liens, transactions with affiliates, and sales of assets. In addition, Wynn Resorts Finance is subject to financial covenants, including maintaining a Consolidated First Lien Net Leverage Ratio, as defined in the WRF Credit Agreement. Commencing with the fourth quarter of 2019, the Consolidated Senior Secured Net Leverage Ratio is not to exceed 3.75 to 1.00.

The WRF Credit Facilities are guaranteed by each of WRF's existing and future wholly owned domestic restricted subsidiaries (the "Guarantors"), subject to certain exceptions, and are secured by a first priority lien on substantially all of WRF's and each of the guarantors' existing and future property and assets, subject to certain exceptions, including a limitation on the amount of collateral granted by Wynn Las Vegas, LLC ("WLV") and its subsidiaries so as to not violate the indenture governing WLV's outstanding senior notes.

2029 Notes

The 2029 Notes will mature on October 1, 2029 and bear interest at the rate of 5 1/8% per annum, payable in arrears semi-annually on April 1 and October 1 of each year, beginning on April 1, 2020. The WRF Issuers may redeem some or all of the 2029 Notes at any time at a redemption price equal to 100% of the aggregate principal amount of the 2029 Notes to be redeemed plus a make-whole premium, as defined in the 2029 Indenture, and accrued and unpaid interest. On or after July 1, 2029, the WRF Issuers may redeem some or all of the 2029 Notes at the redemption prices set forth in the 2029 Indenture plus accrued and unpaid interest. In the event of a change of control triggering event, the WRF Issuers will be required to offer to repurchase the 2029 Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The 2029 Notes are also subject to disposition and redemption requirements imposed by gaming laws and regulations of applicable gaming regulatory authorities.

The 2029 Notes are the WRF Issuers' senior unsecured obligations and rank pari passu in right of payment with the WLV senior notes due 2023, 2025, and 2027, and rank equally in right of payment with Wynn Las Vegas' guarantee of the WRF Senior Secured Credit Facilities, and rank senior in right of payment to all of the Issuers' existing and future subordinated debt. The 2029 Notes are effectively subordinated in right of payment to all of the WRF Issuers' existing and future secured debt (to the extent of the value of the collateral securing such debt), and structurally subordinated to all of the liabilities of any of the WRF Issuers' subsidiaries that do not guarantee the 2029 Notes, including WML and its subsidiaries.

The 2029 Notes are jointly and severally guaranteed by each of WRF's existing domestic restricted subsidiaries that guarantee indebtedness under the Credit Agreement, including Wynn Las Vegas, LLC and each of its subsidiaries that guarantees its existing senior notes due 2023, 2025, and 2027. The guarantees are senior unsecured obligations of the Guarantors and rank senior in right of payment to all of their future subordinated debt. The guarantees rank equally in right of payment with all existing and future liabilities of the Guarantors that are not so subordinated and will be effectively subordinated in right of payment to all of such Guarantors' existing and future secured debt (to the extent of the collateral securing such debt).

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(unaudited)

The 2029 Indenture contains covenants that limit the ability of the WRF Issuers and the guarantors to, among other things, enter into sale-leaseback transactions, create or incur liens to secure debt, and merge, consolidate or sell all or substantially all of the WRF Issuers' assets. These covenants are subject to exceptions and qualifications set forth in the 2029 Indenture.

The 2029 Indenture also contains customary events of default, including, but not limited to, failure to make required payments, failure to comply with certain covenants, certain events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the 2029 Indenture allows either the Trustee or the holders of at least 25% in aggregate principal amount of the 2029 Notes, as applicable, issued under such 2029 Indenture to accelerate the amounts due under the 2029 Notes, or in the case of bankruptcy or insolvency, will automatically cause the acceleration of the amounts due under the 2029 Notes.

The 2029 Notes were offered pursuant to an exemption under the Securities Act of 1933, as amended (the "Securities Act"). The 2029 Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act or outside the United States to certain persons in reliance on Regulation S under the Securities Act. The 2029 Notes have not been and will not be registered under the Securities Act or under any state securities laws. Therefore, the 2029 Notes may not be offered or sold 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.

Wynn America Credit Facilities

On September 20, 2019, the Wynn America credit facilities were repaid in full in connection with the Refinancing Transactions and the Wynn America credit agreement was terminated.

Wynn Resorts Term Loan

On October 30, 2018, the Company and certain subsidiaries of the Company entered into a credit agreement (as subsequently amended, the "WRL Credit Agreement") to provide for a $500.0 million six year term loan facility (the "WRL Term Loan I"). On March 8, 2019, the Company, certain subsidiaries of the Company, and certain incremental term facility lenders entered into an incremental joinder agreement that amended the WRL Credit Agreement to, among other things, provide the Company with an additional $250.0 million term loan (the "WRL Term Loan II," and, collectively with the WRL Term Loan I, the "Wynn Resorts Term Loan"), on substantially similar terms as the WRL Term Loan I. On September 20, 2019, the Wynn Resorts Term Loan was prepaid in full in connection with the Refinancing Transactions and the WRL Credit Agreement was terminated.

Commitment Letter

On March 8, 2019, in connection with the WRL Term Loan II, the Company agreed to terminate the remaining $250.0 million of the lenders' commitments under the commitment letter. Accordingly, there are no remaining commitments under the commitment letter.

Redemption Price Promissory Note

On February 18, 2012, pursuant to its articles of incorporation, the Company redeemed and canceled all Aruze USA, Inc.'s ("Aruze") 24,549,222 shares of Wynn Resorts' common stock. In connection with the redemption of the shares, the Company issued a promissory note (the "Redemption Note") with a principal amount of $1.94 billion, a maturity date of February 18, 2022 and an interest rate of 2% per annum, payable annually in arrears on each anniversary of the date of the Redemption Note. The Redemption Note was recorded at fair value in accordance with applicable accounting guidance. The Company repaid the principal amount in full on March 30, 2018. On March 30, 2018, the Company also paid an additional $463.6 million in settlement of certain legal claims concerning the Redemption Note, which is recorded as a litigation settlement expense on the Condensed Consolidated Statements of Operations. 

Debt Covenant Compliance

As of September 30, 2019, management believes the Company was in compliance with all debt covenants.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Fair Value of Long-Term Debt

The estimated fair value of the Company's long-term debt as of September 30, 2019 and December 31, 2018, was approximately $9.81 billion and $8.97 billion, respectively, compared to its carrying value, excluding debt issuance costs and original issue discount and premium, of $9.64 billion and $9.54 billion, respectively. The estimated fair value of the Company's long-term debt is based on recent trades, if available, and indicative pricing from market information (Level 2 inputs).

Note 7 - Stockholders' Equity

Dividends

On February 26, 2019, the Company paid a cash dividend of $0.75 and on May 30, 2019 and August 27, 2019, the Company paid cash dividends of $1.00 per share, respectively. During the three and nine months ended September 30, 2019, the Company recorded $107.3 million and $295.6 million, respectively, as a reduction of retained earnings from cash dividends declared.

On February 27, 2018, the Company paid a cash dividend of $0.50 and on May 29, 2018 and August 28, 2018, the Company paid cash dividends of $0.75 per share, respectively. During the three and nine months ended September 30, 2018, the Company recorded $81.4 million and $214.1 million, respectively, as a reduction of retained earnings from cash dividends declared.

On November 6, 2019, the Company announced a cash dividend of $1.00 per share, payable on November 22, 2019, to stockholders of record as of November 14, 2019.

Noncontrolling Interests

On September 16, 2019, WML paid a cash dividend of HK$0.45 per share for a total of $298.0 million. The Company's share of this dividend was $215.1 million with a reduction of $82.9 million to noncontrolling interest in the accompanying Condensed Consolidated Balance Sheet.

On June 19, 2019, WML paid a cash dividend of HK$0.45 per share for a total of $298.0 million. The Company's share of this dividend was $215.0 million with a reduction of $82.9 million to noncontrolling interest in the accompanying Condensed Consolidated Balance Sheet.

On August 17, 2018 WML announced a cash dividend of HK$0.75 per share for a total of $496.6 million, which was paid on October 5, 2018. The Company's share of this dividend was $358.3 million with a reduction of $138.3 million to noncontrolling interest in the accompanying Condensed Consolidated Balance Sheet.

On April 25, 2018, WML paid a cash dividend of HK$0.75 per share for a total of $497.1 million. The Company's share of this dividend was $358.8 million with a reduction of $138.3 million to noncontrolling interest in the accompanying Condensed Consolidated Balance Sheet.

During the three and nine months ended September 30, 2019, the Retail Joint Venture made aggregate distributions of $1.0 million and $3.7 million, respectively, to its non-controlling interest holder made in the normal course of business. During the three and nine months ended September 30, 2018, the Retail Joint Venture made aggregate distributions of $297.3 million, and $301.1 million, respectively, to its non-controlling interest holder in connection with the distribution of the net proceeds of the Retail Term Loan and distributions made in the normal course of business. For more information on the Retail Joint Venture, see Note 15, "Retail Joint Venture".

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

The following table presents the changes by component, net of tax and noncontrolling interests, in accumulated other comprehensive loss of the Company (in thousands): 

	Foreign currency translation
January 1, 2019	$	(1,950	)
Change in net unrealized loss	(750		)
Other comprehensive loss	(750		)
September 30, 2019	$	(2,700	)

	Foreign currency translation				Unrealized loss on investment securities				Redemption Note				Total
January 1, 2018	$	(553	)		$	(1,292	)		$	—			$	(1,845	)
Cumulative credit risk adjustment (1)	—				—				(9,211		)		(9,211		)
Change in net unrealized loss	(1,530		)		(1,510		)		7,690				4,650
Amounts reclassified to net income (2)	—				2,802				1,521				4,323
Other comprehensive income (loss)	(1,530		)		1,292				9,211				8,973
September 30, 2018	$	(2,083	)		$	—			$	—			$	(2,083	)

(1) On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2016-01, Financial Instruments. The adjustment to the beginning balance represents the cumulative effect of the change in instrument-specific credit risk on the Redemption Note.

(2) The amounts reclassified to net income include $1.8 million for other-than-temporary impairment losses and $1.0 million in realized losses, both related to investment securities, and a $1.5 million realized gain related to the repayment of the Redemption Note.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 8 -    Fair Value Measurements

The following tables present assets and liabilities carried at fair value (in thousands): 

					Fair Value Measurements Using:
	September 30, 2019				Quoted Market Prices in Active Markets (Level 1)				Other Observable Inputs (Level 2)				Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	484,162			—				$	484,162			—
Restricted cash	$	6,182			$	2,041			$	4,141			—
Liabilities:
Interest rate collar	$	7,533			—				$	7,533			—
					Fair Value Measurements Using:
	December 31, 2018				Quoted Market Prices in Active Markets (Level 1)				Other Observable Inputs (Level 2)				Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	759,257			—				$	759,257			—
Restricted cash	$	4,322			$	2,015			$	2,307			—
Liabilities:
Interest rate collar	$	619			—				$	619			—

Note 9 - Customer Contract Liabilities

In providing goods and services to its customers, there is often a timing difference between the Company receiving cash and the Company recording revenue for providing services or holding events.

The Company's primary liabilities associated with customer contracts are as follows (in thousands):

	September 30, 2019				December 31, 2018				Increase/ (Decrease)				September 30, 2018				December 31, 2017				Increase/ (Decrease)
Casino outstanding chips and front money deposits (1)	$	907,598			$	905,561			$	2,037			$	785,988			$	991,957			$	(205,969	)
Advance room deposits and ticket sales (2)	43,086				42,197				889				42,036				48,065				(6,029		)
Other gaming-related liabilities (3)	9,297				12,694				(3,397		)		13,644				12,765				879
Loyalty program and related liabilities (4)	22,918				18,148				4,770				18,756				18,421				335
	$	982,899			$	978,600			$	4,299			$	860,424			$	1,071,208			$	(210,784	)

(1) Casino outstanding chips represent amounts owed to gaming promoters and customers for chips in their possession, and casino front money deposits represent funds deposited by customers before gaming play occurs. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and may be recognized as revenue or redeemed for cash in the future.

(2) Advance room deposits and ticket sales represent cash received in advance for goods or services to be provided in the future. These amounts are included in customer deposits on the Condensed Consolidated Balance Sheets and will be recognized as revenue when the goods or services are provided or the events are held. Decreases in this balance generally represent the recognition of revenue and increases in the balance represent additional deposits made by customers. The deposits are expected to primarily be recognized as revenue within one year.

(3) Other gaming-related liabilities generally represent unpaid wagers primarily in the form of unredeemed slot, race and sportsbook tickets or wagers for future sporting events. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets.

(4) Loyalty program and related liabilities represent the deferral of revenue until the loyalty points or other complimentaries are redeemed. The amounts are included in other accrued liabilities on the Condensed Consolidated Balance Sheets and are expected to be recognized as revenue within one year of being earned by customers.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 10 - Stock-Based Compensation

The total compensation cost for stock-based compensation plans was recorded as follows (in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Casino	$	1,880			$	1,305			$	6,254			$	4,432
Rooms	296				108				737				314
Food and beverage	372				258				1,181				868
Entertainment, retail and other	9				34				115				111
General and administrative	7,719				9,914				21,487				22,540
Pre-opening	—				213				670				497
Total stock-based compensation expense	10,276				11,832				30,444				28,762
Total stock-based compensation capitalized	81				—				228				6
Total stock-based compensation costs	$	10,357			$	11,832			$	30,672			$	28,768

Certain members of the Company's executive management team receive a portion of their annual incentive bonus in shares of the Company's stock. The number of shares is determined based on the closing stock price on the date the annual incentive bonus is settled. As the number of shares is variable, the Company records a liability for the fixed monetary amount over the service period. The Company recorded stock-based compensation expense associated with these awards of $2.1 million and $1.3 million for the three months ended September 30, 2019 and 2018, respectively, and $6.3 million and $5.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Note 11 - Income Taxes

The Company recorded an income tax expense of $19.7 million and an income tax benefit of $3.9 million for the three months ended September 30, 2019 and 2018, respectively. The Company recorded an income tax expense of $19.4 million and an income tax benefit of $124.6 million for the nine months ended September 30, 2019 and 2018, respectively. The 2019 income tax expense primarily related to the increase in the valuation allowance for U.S foreign tax credits and the 2018 income tax benefit primarily related to the settlement of the Redemption Note.

The Company records valuation allowances on certain of its U.S. and foreign deferred tax assets. In assessing the need for a valuation allowance, the Company considers whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. In the assessment of the valuation allowance, appropriate consideration is given to all positive and negative evidence including recent operating profitability, forecast of future earnings and the duration of statutory carryforward periods.

Wynn Macau SA received a five year exemption from Macau's 12% Complementary Tax on casino gaming profits through December 31, 2020. Accordingly, for the three months ended September 30, 2019 and 2018, the Company was exempt from the payment of such taxes totaling $13.4 million and $26.8 million, respectively. For the nine months ended September 30, 2019 and 2018, the Company was exempt from the payment of such taxes totaling $56.0 million and $73.7 million, respectively. The Company's non-gaming profits remain subject to the Macau Complementary Tax and its casino winnings remain subject to the Macau special gaming tax and other levies in accordance with its concession agreement.

Note 12 - Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net income (loss) attributable to Wynn Resorts by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Wynn Resorts by the weighted average number of common shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potential dilutive securities had been issued. Potentially dilutive securities include outstanding stock options and unvested restricted stock.

The weighted average number of common and common equivalent shares used in the calculation of basic and diluted EPS consisted of the following (in thousands, except per share amounts): 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Numerator:
Net income (loss) attributable to Wynn Resorts, Limited	$	(3,496	)		$	156,115			$	195,927			$	107,564
Denominator:
Weighted average common shares outstanding	106,707				108,064				106,791				106,162
Potential dilutive effect of stock options and restricted stock	—				469				233				559
Weighted average common and common equivalent shares outstanding	106,707				108,533				107,024				106,721
Net income (loss) attributable to Wynn Resorts, Limited per common share, basic	$	(0.03	)		$	1.44			$	1.83			$	1.01
Net income (loss) attributable to Wynn Resorts, Limited per common share, diluted	$	(0.03	)		$	1.44			$	1.83			$	1.01
Anti-dilutive stock options and restricted stock excluded from the calculation of diluted net income per share	850				234				379				109

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 13 - Leases

Lessee Arrangements

The following table summarizes the balance sheet classification of the Company's lease assets and liabilities (in thousands):

	Balance Sheet Classification		September 30, 2019
Assets
Operating leases	Operating lease assets		$	444,157
Finance leases	Property and equipment, net		$	26,411
Current liabilities
Operating leases	Other accrued liabilities		$	15,802
Finance leases	Other accrued liabilities		$	162
Non-current liabilities
Operating leases	Long-term operating lease liabilities		$	149,970
Finance leases	Other long-term liabilities		$	17,789

The following tables disclose the components of the Company's lease cost, supplemental cash flow disclosures, and other information regarding the Company's lease arrangements (dollars in thousands):

	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
Lease cost:
Operating lease cost	$	8,367			$	24,691
Short-term lease cost	6,836				17,576
Amortization of leasehold interests in land	3,416				9,956
Variable lease cost	1,209				3,685
Finance lease interest cost	273				785
Total lease cost	$	20,101			$	56,693

	Nine Months Ended September 30, 2019
Supplemental cash flow disclosures:
Operating lease liabilities arising from obtaining operating lease assets	$	29,261
Finance lease liabilities arising from obtaining finance lease assets	$	1,413
Cash paid for amounts included in the measurement of lease liabilities:
Cash used in operating activities - Operating leases	$	23,073
Cash used in financing activities - Finance leases	$	36

	September 30, 2019
Other information:
Weighted-average remaining lease term - Operating leases	37.8 years
Weighted-average remaining lease term - Finance leases	42.9 years
Weighted-average discount rate - Operating leases	6.5	%
Weighted-average discount rate - Finance leases	6.2	%

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table presents an analysis of lease liability maturities (in thousands):

Years Ending December 31,	Operating Leases				Finance Leases
2019 (excluding the nine months ended September 30, 2019)	$	7,988			$	300
2020	26,424				1,203
2021	21,872				1,203
2022	18,106				1,203
2023	17,149				1,203
Thereafter	481,084				67,490
Total undiscounted cash flows	$	572,623			$	72,602
Present value
Short-term lease liabilities	$	15,802			$	162
Long-term lease liabilities	149,970				17,789
Total lease liabilities	$	165,772			$	17,951
Interest on lease liabilities	$	406,851			$	54,651

Ground Leases

Undeveloped Land - Las Vegas

    

The Company leases approximately 16 acres of undeveloped land on Las Vegas Boulevard directly across from Wynn Las Vegas in Las Vegas, Nevada, which expires in 2097. The ground lease payments, which increase at a fixed rate over the term of the lease, are $3.8 million per year until 2023 and total payments of $367.8 million thereafter. As of September 30, 2019, the liability associated with this lease was $62.5 million.

At September 30, 2019, operating lease assets included approximately $87.2 million related to an amount allocated to the leasehold interest in land upon the acquisition of a group of assets in 2018. The Company expects that the amortization of this amount will be $1.1 million each year from 2020 through 2096 and $0.7 million in 2097.

Macau Land Concessions

Wynn Palace and Wynn Macau were built on land that is leased under Macau land concession contracts each with terms of 25 years from May 2012 and August 2004, respectively, which may be renewed with government approval for successive 10-year periods in accordance with Macau legislation. The land concession payments are expected to be $1.6 million per year through 2023 and total payments of $17.0 million thereafter through 2037. At September 30, 2019, the total liability associated with these leases was $15.7 million.

At September 30, 2019, operating lease assets included $194.2 million of leasehold interests in land related to the Wynn Palace and Wynn Macau land concessions. The Company expects that the amortization associated with these leasehold interests will be approximately $12.5 million per year from 2020 through 2028 and approximately $9.1 million per year thereafter through 2037.

Lessor Arrangements

The following table presents the minimum and contingent operating lease income for the periods presented (in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Minimum rental income	$	33,643			$	29,901			$	100,022			$	92,204
Contingent rental income	13,589				11,177				40,505				39,795
Total rental income	$	47,232			$	41,078			$	140,527			$	131,999

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table presents the future minimum rentals to be received under operating leases (in thousands):

Years Ending December 31,	Operating Leases
2019 (excluding the nine months ended September 30, 2019)	$	34,889
2020	144,887
2021	87,673
2022	69,826
2023	53,091
Thereafter	162,779
Total future minimum rentals	$	553,145

Note 14 - Commitments and Contingencies

Litigation

In addition to the actions noted below, the Company and its affiliates are involved in litigation arising in the normal course of business. In the opinion of management, such litigation is not expected to have a material effect on the Company's financial condition, results of operations and cash flows.

Massachusetts Gaming License Related Actions

On September 17, 2014, the Massachusetts Gaming Commission ("MGC") designated Wynn MA, LLC ("Wynn MA") the award winner of the Greater Boston (Region A) gaming license (the "Boston area license"). On November 7, 2014, the gaming license became effective.

Massachusetts Gaming Commission Investigation and Adjudicatory Hearing

On January 31, 2018, the Investigations & Enforcement Bureau ("IEB") of the MGC announced it had commenced an investigation into the Company's ongoing suitability as a gaming licensee in that jurisdiction related to the alleged inappropriate workplace conduct by the Company’s former CEO Stephen A. Wynn. The Company fully cooperated with the IEB's investigation. After a three-day adjudicatory hearing before the MGC, the MGC concluded that the Company and Wynn MA are suitable to maintain a Massachusetts gaming license, subject to a fine of $35.0 million, which the Company paid during the three months ended June 30, 2019, and the Company's fulfillment of other conditions set forth in the MGC decision.

Revere Action

On October 16, 2014, the City of Revere, the host community to the unsuccessful bidder for the Boston area license, the International Brotherhood of Electrical Workers, Local 103 ("IBEW"), and several individuals, filed a complaint against the MGC and its gaming commissioners in Suffolk Superior Court in Boston, Massachusetts (the "Revere Action"). Mohegan Sun ("Mohegan") the other applicant for the Boston area license, joined the lawsuit and challenged the MGC's award of the Boston area license. On December 3, 2015, the court granted the MGC's motion to dismiss the claims asserted in the Revere Action and the court dismissed all claims except Mohegan's claim alleging procedural error by the MGC in granting the license to Wynn MA. The plaintiffs appealed. After multiple appeals and cross appeals, only two claims remained: (1) individual plaintiffs' claim for violation of the open meeting laws; and (2) Mohegan's claim for procedural error. On July 12, 2019, the Suffolk Superior Court granted the MGC's motion for summary judgment and dismissed the open meeting law claim, leaving only Mohegan's procedural claim.

On August 2, 2019, Mohegan filed a motion to file a second amended complaint, to add new claims related to the MGC's allegedly inadequate 2013 investigation, using information, documents and testimony from the Massachusetts Gaming Commission Investigation and Adjudicatory Hearing. On October 15, 2019, the court granted Mohegan's motion to amend and allowed it to file a second amended intervenor's complaint.

Wynn MA was not named in the Revere Action. The MGC retained private legal representation at its own nontaxpayer-funded expense.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Suffolk Action

On September 17, 2018, Sterling Suffolk Racecourse, LLC, owner of the property proposed for location of a casino by an unsuccessful bidder for the Boston area license filed a complaint in the United States District Court, District of Massachusetts, against the Company, Wynn MA, certain current and former officers of the Company, FBT Everett Realty, LLC, former owner of the land on which Encore Boston Harbor is located ("FBT"), and Paul Lohnes, a member of FBT. The complaint alleges, among other things, the defendants violated the RICO Act, conspired to circumvent the application process for the Boston area license and violated Massachusetts law with respect to unfair methods of competition. The plaintiff seeks $1.0 billion in compensatory damages and treble damages. All defendants filed motions to dismiss the complaint. On May 7, 2019, the court held a hearing on the motions to dismiss and stayed all discovery pending a decision on the motions.

The Company will vigorously defend against the claims asserted. This action is in preliminary stages and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this action or the range of reasonably possible loss, if any.

Nevada Gaming Control Board Investigation

On January 25, 2019, the Nevada Gaming Control Board filed a complaint against the Company and its indirect subsidiary, Wynn Las Vegas, LLC ("NGCB Respondents"), related to the alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. Simultaneously, the NGCB Respondents entered into a Stipulation for Settlement of the complaint, under which, among other things, the NGCB Respondents agreed to pay a fine in an amount to be determined by the Nevada Gaming Commission, and the Nevada Gaming Control Board agreed not to seek to revoke or limit the NGCB Respondents' licenses, findings of suitability or any other gaming approvals. On February 26, 2019, the Nevada Gaming Commission approved the Stipulation for Settlement and fined the Company $20.0 million, which was paid during the three months ended March 31, 2019.

Derivative Litigation

A number of stockholder derivative actions have been filed in state and federal court located in Clark County, Nevada against certain current and former members of the Company's Board of Directors and, in some cases, the Company's current and former officers. Each of the complaints alleges, among other things, breach of fiduciary duties in failing to detect, prevent and remedy alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. On September 19, 2018, the Board established a Special Litigation Committee (the "SLC") to investigate the allegations in the State Derivative Case (as defined below).

 

The actions filed in the Eighth Judicial District Court of Clark County, Nevada have been consolidated as In re Wynn Resorts, Ltd. Derivative Litigation ("State Derivative Case"). On October 26, 2018, the SLC filed a motion to intervene and stay the State Derivative Case pending completion of its investigation, which the court granted (the "SLC Stay"). A status hearing considering a number of matters related to the State Derivative Case is scheduled for November 13, 2019.

In 2018, several actions filed in the United States District Court, District of Nevada were consolidated as In re Wynn Resorts, Ltd. Derivative Litigation ("Federal Derivative Case"), which also claim corporate waste and violation of Section 14(a) of the Exchange Act. In June 2018, the Company filed a motion to dismiss and a motion to stay pending resolution of the Securities Action (described below). On March 29, 2019, the Court granted the Company's request for a stay.

 

On March 25, 2019, a separate stockholder derivative action was filed in the United States District Court, District of Nevada alleging identical causes of action as the Federal Derivative Case with the additional allegation that the Board of Directors improperly refused the stockholder's demand to commence litigation against the officers and directors of the Company. On June 10, 2019, the Company filed a motion to dismiss, or alternatively to consolidate this action into the Federal Derivative Case, which is stayed. The motion is currently pending before the court.

On June 3, 2019, a separate stockholder derivative action was filed in the Eighth Judicial District Court of Clark County, Nevada alleging substantially similar causes of action as the State Derivative Case with the additional allegation that various of the Company's attorneys committed professional malpractice, and certain current and former executives also breached fiduciary duties and aided and abetted the breach of fiduciary duties, in connection with the alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. On July 26, 2019, the plaintiff voluntarily dismissed Matt Maddox, Stephen A. Wynn, Kimmarie Sinatra, John J. Hagenbuch, Ray R. Irani, Jay L. Johnson, Robert J. Miller, Patricia Mulroy, Clark T. Randt, Jr., Alvin V. Shoemaker, J. Edward Virtue, D. Boone Wayson, and one of the Company's law firms from the action. On September 19, 2019, the court entered an order consolidating this action into the State Derivative Case, the effect of which the Company is seeking clarification.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

 

Each of the actions seeks to recover for the Company unspecified damages, including restitution and disgorgement of profits, and also seeks to recover attorneys' fees, costs and related expenses for the plaintiff. 

Individual Stockholder Actions

A number of stockholders have filed individual actions in the Eighth Judicial District Court of Clark County, Nevada against certain current and former members of the Company's Board of Directors and certain of the Company's current and former officers ("Individual Stockholder Actions"). Each of the complaints alleges that defendants, among other things, breached their fiduciary duties in failing to detect, prevent and remedy alleged inappropriate personal conduct by Stephen A. Wynn in the workplace causing injury to each of the individual stockholders.

On January 29, 2019, the defendants filed motions to dismiss each of the Individual Stockholder Actions. The court held a hearing on defendants' motions to dismiss on September 18, 2019, and took the matter under advisement.

Securities Action

 

On February 20, 2018, a putative securities class action was filed against the Company and certain current and former officers of the Company in the United States District Court, Southern District of New York (which was subsequently transferred to the United States District Court, District of Nevada) by John V. Ferris and Joann M. Ferris on behalf of all persons who purchased the Company's common stock between February 28, 2014 and January 25, 2018. The complaint alleges, among other things, certain violations of federal securities laws and seeks to recover unspecified damages as well as attorneys' fees, costs and related expenses for the plaintiffs. The defendants have filed motions to dismiss, which are currently pending before the court.

 

The defendants in these actions will vigorously defend against the claims pleaded against them. These actions are in preliminary stages and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of these actions or the range of reasonably possible loss, if any.

Aruze and Affiliates Litigation

On February 18, 2012, the Board of Directors of Wynn Resorts determined that Universal Entertainment Corp., Aruze (together with Universal Entertainment Corp, the "Universal Parties") and Kazuo Okada, and the related parties (collectively, the "Okada Parties") were "unsuitable persons" under the Company's articles and redeemed and canceled Aruze's 24,549,222 shares of Wynn Resorts' common stock, and, pursuant to its articles of incorporation, Wynn Resorts issued the Redemption Note to Aruze in redemption of the shares. The next day, Wynn Resorts filed an action alleging breaches of fiduciary duty and related claims (the "Redemption Action"). The Okada Parties denied the claims and asserted counterclaims.

On March 8, 2018, the Company entered into a settlement agreement (the "Settlement Agreement") by and between the Company and its individual directors and officers (the "Wynn Parties"), and the Universal Parties. The Settlement Agreement resolved all legal proceedings pending between the settling parties in the Redemption Action. The Universal Parties further released any claims against the Wynn Parties and their affiliates in any other jurisdiction, including a proceeding pending in Macau against Wynn Resorts (Macau) S.A. ("Wynn Macau SA") and certain related individuals ("Macau Litigation"). Subsequently the Company voluntarily dismissed its claim for breach of fiduciary duty against Kazuo Okada.

In 2015, the Okada Parties filed a complaint in the Court of First Instance of Macau ("Macau Court") against Wynn Macau SA and certain individuals who are or were directors of Wynn Macau SA or WML (collectively, the "Wynn Macau Parties"). On July 11, 2017, the Macau Court dismissed all of the Okada Parties' claims as unfounded, fined the Okada Parties, and ordered the Okada Parties to pay for court costs and the Wynn Macau Parties' attorney's fees. On or about October 16, 2017, the Okada Parties formally appealed in Macau. On February 21, 2019, the Macau Appellate Panel dismissed the appeal. Mr. Okada, who was at that time the only remaining claimant after the Universal Parties' withdrawal pursuant to the Settlement Agreement, failed to appeal within the prescribed time, resulting in the final resolution of the lawsuit in favor of the Wynn Macau Parties.

Derivative Litigation Related to Redemption Action

Two state derivative actions were commenced against the Company and all members of its Board of Directors in the Eighth Judicial District Court of Clark County, Nevada by the IBEW Local 98 Pension Fund and Danny Hinson (collectively, the "Derivative Plaintiffs") regarding the Redemption Action. On March 15, 2019, the parties filed a stipulation and order to dismiss

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

the action, with prejudice, which the court entered on March 18, 2019. Neither the Company nor any of the individual defendants made any form of payment in exchange for the dismissal of the action.

Note 15 - Retail Joint Venture

As of September 30, 2019 and December 31, 2018, the Retail Joint Venture had total assets of $95.3 million and $85.0 million, respectively, and total liabilities of $629.3 million and $619.6 million, respectively. As of September 30, 2019 and December 31, 2018, the Retail Joint Venture's liabilities included long-term debt of $611.6 million and $611.1 million, respectively, net of debt issuance costs, related to the outstanding borrowings under the Retail Term Loan.

Note 16 - Segment Information

The Company reviews the results of operations for each of its operating segments, and identifies reportable segments based upon factors such as geography, regulatory environment, and the Company's organizational and management reporting structure. Wynn Macau and Encore, an expansion at Wynn Macau, are managed as a single integrated resort and have been aggregated as one reportable segment ("Wynn Macau"). Wynn Palace is presented as a separate reportable segment and is combined with Wynn Macau for geographical presentation. Wynn Las Vegas, Encore, an expansion at Wynn Las Vegas, and the Retail Joint Venture are managed as a single integrated resort and have been aggregated as one reportable segment ("Las Vegas Operations"). On June 23, 2019, the Company opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts. Encore Boston Harbor is presented as one reportable segment.

The Company also reviews construction and development activities for each of its projects under development, in addition to its reportable segments. Other Macau primarily represents the assets for the Company's Macau holding company.

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following tables present the Company's segment information (in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Operating revenues
Macau Operations:
Wynn Palace
Casino	$	497,657			$	625,586			$	1,649,377			$	1,719,072
Rooms	44,884				44,296				131,382				125,461
Food and beverage	30,256				27,619				87,691				80,519
Entertainment, retail and other (1)	25,374				33,071				85,259				91,952
	598,171				730,572				1,953,709				2,017,004
Wynn Macau
Casino	408,820				503,557				1,340,266				1,515,859
Rooms	26,740				28,091				82,071				83,575
Food and beverage	19,584				17,693				60,688				55,193
Entertainment, retail and other (1)	19,137				30,279				61,621				86,518
	474,281				579,620				1,544,646				1,741,145
Total Macau Operations	1,072,452				1,310,192				3,498,355				3,758,149
Las Vegas Operations:
Casino	87,002				92,886				318,439				329,264
Rooms	116,072				110,657				362,715				350,369
Food and beverage	149,708				148,562				438,525				445,251
Entertainment, retail and other (1)	46,724				46,775				145,002				147,041
Total Las Vegas Operations	399,506				398,880				1,264,681				1,271,925
Encore Boston Harbor:
Casino	114,885				—				127,886				—
Rooms	18,180				—				19,785				—
Food and beverage	28,960				—				32,845				—
Entertainment, retail and other (1)	13,779				—				14,088				—
Total Encore Boston Harbor	175,804				—				194,604				—
Total operating revenues	$	1,647,762			$	1,709,072			$	4,957,640			$	5,030,074

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WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	Three Months Ended September 30,								Nine Months Ended September 30,
	2019				2018				2019				2018
Adjusted Property EBITDA (2)
Macau Operations:
Wynn Palace	$	162,167			$	226,141			$	551,918			$	617,317
Wynn Macau	138,989				182,928				478,751				565,677
Total Macau Operations	301,156				409,069				1,030,669				1,182,994
Las Vegas Operations	88,046				95,298				333,747				362,051
Encore Boston Harbor	7,744				—				7,890				—
Total	396,946				504,367				1,372,306				1,545,045
Other operating expenses
Litigation settlement	—				—				—				463,557
Pre-opening	1,616				13,714				99,212				35,255
Depreciation and amortization	172,998				137,458				449,824				411,685
Property charges and other	8,216				18,830				17,920				30,672
Corporate expenses and other	26,005				31,763				123,849				86,350
Stock-based compensation (3)	10,276				11,619				29,774				28,265
Total other operating expenses	219,111				213,384				720,579				1,055,784
Operating income	177,835				290,983				651,727				489,261
Other non-operating income and expenses
Interest income	6,427				6,948				19,979				21,029
Interest expense, net of amounts capitalized	(114,652		)		(93,007		)		(300,981		)		(281,132		)
Change in derivatives fair value	(2,101		)		(54		)		(6,914		)		(54		)
Change in Redemption Note fair value	—				—				—				(69,331		)
(Loss) gain on extinguishment of debt	(12,196		)		(198		)		(12,196		)		2,131
Other	(8,703		)		11,216				(3,346		)		1,039
Total other non-operating income and expenses	(131,225		)		(75,095		)		(303,458		)		(326,318		)
Income before income taxes	46,610				215,888				348,269				162,943
Benefit (provision) for income taxes	(19,727		)		3,884				(19,421		)		124,631
Net income	26,883				219,772				328,848				287,574
Net income attributable to noncontrolling interests	(30,379		)		(63,657		)		(132,921		)		(180,010		)
Net income (loss) attributable to Wynn Resorts, Limited	$	(3,496	)		$	156,115			$	195,927			$	107,564

(1) Includes lease revenue accounted for under lease accounting guidance. For more information on leases, see Note 13, "Leases".

(2) Adjusted Property EBITDA is net income (loss) before interest, income taxes, depreciation and amortization, litigation settlement expense, pre-opening expenses, property charges and other, management and license fees, corporate expenses and other, stock-based compensation, (loss) gain on extinguishment of debt, change in derivatives fair value, change in Redemption Note fair value and other non-operating income and expenses. Adjusted Property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted Property EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors, as well as a basis for determining certain incentive compensation. The Company also presents Adjusted Property EBITDA because it is used by some investors to measure a company's ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to GAAP. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties. However, Adjusted Property EBITDA should not be considered as an alternative to operating income as an indicator of the Company's performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, Adjusted Property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, income taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDA. Also, the Company's calculation of Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

(3) Excludes $0.7 million included in pre-opening expenses for the nine months ended September 30, 2019, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2018, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

	September 30, 2019				December 31, 2018
Assets
Macau Operations:
Wynn Palace	$	3,730,804			$	3,858,904
Wynn Macau	1,680,088				1,903,921
Other Macau	71,485				68,487
Total Macau Operations	5,482,377				5,831,312
Las Vegas Operations	2,835,398				2,792,508
Encore Boston Harbor	2,481,267				1,865,286
Corporate and other	2,478,016				2,727,163
Total	$	13,277,058			$	13,216,269

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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 Form 10-Q and the consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, 2018. Unless the context otherwise requires, all references herein to the "Company," "we," "us," or "our," or similar terms, refer to Wynn Resorts, Limited, a Nevada corporation, and its consolidated subsidiaries. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled "Special Note Regarding Forward-Looking Statements."

Overview

We are a designer, developer, owner and operator of destination casino resorts. In the Macau Special Administrative Region of the People's Republic of China ("Macau"), we own approximately 72% of Wynn Macau, Limited ("WML"), which includes the operations of the Wynn Palace and Wynn Macau resorts, which we refer to as our Macau Operations. In Las Vegas, Nevada, we operate and, with the exception of certain retail space, own 100% of Wynn Las Vegas. Additionally, we are a 50.1% owner and managing member of a joint venture that owns and leases certain retail space at Wynn Las Vegas (the "Retail Joint Venture"). We refer to Wynn Las Vegas and the Retail Joint Venture as our Las Vegas Operations. On June 23, 2019, we opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts.

Macau Operations

We operate our Macau Operations under a 20-year casino concession agreement granted by the Macau government in June 2002. We lease from the Macau government approximately 51 acres of land in the Cotai area of Macau where Wynn Palace is located and 16 acres of land in downtown Macau's inner harbor where Wynn Macau is located.

Wynn Palace features the following as of September 30, 2019:

 

•	Approximately 424,000 square feet of casino space, offering 24-hour gaming and a full range of games with 381 table games and 1,137 slot machines, private gaming salons and sky casinos;

•	A luxury hotel with a total of 1,706 guest rooms, suites and villas;

•	14 food and beverage outlets;

•	Approximately 106,000 square feet of high-end, brand-name retail space;

•	Approximately 37,000 square feet of meeting and convention space;

•	Recreation and leisure facilities, including a gondola ride, health club, spa, salon and pool; and

•	Public attractions including a performance lake, floral art displays and fine art displays.

Wynn Macau features the following as of September 30, 2019:

 

•	Approximately 272,000 square feet of casino space, offering 24-hour gaming and a full range of games with 329 table games and 706 slot machines, private gaming salons, sky casinos and a poker pit;

•	Two luxury hotel towers with a total of 1,010 guest rooms and suites;

•	12 food and beverage outlets;

•	Approximately 59,000 square feet of high-end, brand-name retail space;

•	Approximately 31,000 square feet of meeting and convention space;

•	Recreation and leisure facilities, including two health clubs, spas, a salon and a pool; and

•	A rotunda show featuring a Chinese zodiac-inspired ceiling along with gold "prosperity tree" and "dragon of fortune" attractions.

In response to our evaluation of our Macau Operations and our commitment to creating a unique customer experience, we have made and expect to continue to make enhancements and refinements to these resorts.

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Las Vegas Operations

Wynn Las Vegas is located at the intersection of the Las Vegas Strip and Sands Avenue, and occupies approximately 215 acres of land fronting the Las Vegas Strip.

Wynn Las Vegas features the following as of September 30, 2019:

•	Approximately 194,000 square feet of casino space, offering 24-hour gaming and a full range of games with 236 table games and 1,789 slot machines, private gaming salons, a sky casino, a poker room, and a race and sports book;

•	Two luxury hotel towers with a total of 4,748 guest rooms, suites and villas;

•	33 food and beverage outlets;

•	Approximately 160,000 square feet of high-end, brand-name retail space (the majority of which is owned and operated by the Retail Joint Venture);

•	Approximately 290,000 square feet of meeting and convention space;

•	Two nightclubs and a beach club;

•	Recreation and leisure facilities, including swimming pools, private cabanas, two full service spas and salons, and a wedding chapel; and

•	A specially designed theater presenting "Le Rêve—The Dream," a water-based theatrical production and a theater presenting entertainment productions and various headliner entertainment acts.

In response to our evaluation of our Las Vegas Operations and our commitment to creating a unique customer experience, we have made and expect to continue to make enhancements and refinements to this resort.

Encore Boston Harbor

On June 23, 2019, the Company opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts, adjacent to Boston along the Mystic River, which occupies approximately 33 acres of land.

Encore Boston Harbor features the following as of September 30, 2019:

•	Approximately 210,000 square feet of casino space, offering 24-hour gaming and a full range of games with 145 table games and 3,101 slot machines, private and high-limit gaming areas, and a poker room;

•	A luxury hotel tower with a total of 671 guest rooms and suites;

•	13 food and beverage outlets;

•	One nightclub;

•	Approximately 8,000 square feet of retail space;

•	Approximately 71,000 square feet of meeting and convention space;

•	Recreation and leisure facilities, including a spa and salon; and

•	Public attractions including a waterfront park, floral displays, and water shuttle service to downtown Boston.

In response to our evaluation of Encore Boston Harbor and our commitment to creating a unique customer experience, we have made and expect to continue to make enhancements and refinements to this resort.

Construction and Development Opportunities

We recently completed our reconfiguration of the Wynn Las Vegas golf course and opened the golf course on October 11, 2019. We are constructing an approximately 430,000 square foot meeting and convention facility at Wynn Las Vegas. The facility will feature approximately 217,000 square feet of state-of-the-art meeting and convention space available for group reservations. Based on current designs, we estimate the total project budget to be approximately $425.0 million. As of September 30, 2019, we have incurred $302.7 million in total project costs. We expect to open the additional meeting and convention space in the first quarter of 2020.

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We are currently reconfiguring the West Casino at Wynn Macau. When completed, the enhanced space will consist of approximately 44 mass market table games, a refurbished high-limit slot area, two new restaurants and approximately 7,000 square feet of retail space, and will provide for improved pedestrian access from the boardwalk. We estimate the total project budget to be approximately $70.0 million. We expect to complete the gaming enhancements and open the new restaurants in the fourth quarter of 2019, and we expect to open the new retail space at varying times in the fourth quarter of 2019 and first quarter of 2020.

We are in the preliminary planning and design stages of developing the Crystal Pavilion at Wynn Palace. We expect the Crystal Pavilion will become a unique world-class cultural destination, incorporating an art museum, an immersive theater and interactive installations, an expansive food hall, additional hotel rooms, and several signature entertainment features. We estimate construction of the initial phase of the Crystal Pavilion will begin in late 2021.

We are exploring various development opportunities with respect to the approximately 38 acres of land located on the Las Vegas Strip directly across from Wynn Las Vegas.    

We continually seek out new opportunities for additional gaming or related businesses, in the United States, and worldwide.

    

Key Operating Measures

Certain key operating measures specific to the gaming industry are included in our discussion of our operational performance for the periods for which the Condensed Consolidated Statements of Operations are presented. These key operating measures are defined below:

•	Table drop in mass market for our Macau Operations is the amount of cash that is deposited in a gaming table's drop box plus cash chips purchased at the casino cage.

•	Table drop for our Las Vegas Operations is the amount of cash and net markers issued that are deposited in a gaming table's drop box.

•	Table drop for Encore Boston Harbor is the amount of cash and gross markers issued that are deposited in a gaming table's drop box.

•	Rolling chips are non-negotiable identifiable chips that are used to track turnover for purposes of calculating incentives within our Macau Operations' VIP program.

•	Turnover is the sum of all losing rolling chip wagers within our Macau Operations' VIP program.

•	Table games win is the amount of table drop or turnover that is retained and recorded as casino revenues. Table games win is before discounts, commissions and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis.

•	Slot machine win is the amount of handle (representing the total amount wagered) that is retained by us and is recorded as casino revenues. Slot machine win is after adjustment for progressive accruals and free play, but before discounts and the allocation of casino revenues to rooms, food and beverage and other revenues for services provided to casino customers on a complimentary basis.

•	Average daily rate ("ADR") is calculated by dividing total room revenues, including complimentaries (less service charges, if any), by total rooms occupied.

•	Revenue per available room ("REVPAR") is calculated by dividing total room revenues, including complimentaries (less service charges, if any), by total rooms available.

•	Occupancy is calculated by dividing total occupied rooms, including complimentary rooms, by the total rooms available.

Below is a discussion of the methodologies used to calculate win percentages at our resorts.

In our VIP operations in Macau, customers primarily purchase rolling chips from the casino cage and can only use them to make wagers. Winning wagers are paid in cash chips. The loss of the rolling chips in the VIP operations is recorded as turnover and provides a base for calculating VIP win percentage. It is customary in Macau to measure VIP play using this rolling chip method. We expect our win as a percentage of turnover from these operations to be within the range of 2.7% to 3.0%.

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In our mass market operations in Macau, customers may purchase cash chips at either the gaming tables or at the casino cage. The measurements from our VIP and mass market operations are not comparable as the measurement method used in our mass market operations tracks the initial purchase of chips at the table and at the casino cage, while the measurement method from our VIP operations tracks the sum of all losing wagers. Accordingly, the base measurement from the VIP operations is much larger than the base measurement from the mass market operations. As a result, the expected win percentage with the same amount of gaming win is lower in the VIP operations when compared to the mass market operations.

In Las Vegas, customers purchase chips at the gaming tables in exchange for cash and markers. Customers may then redeem markers at the gaming tables or at the casino cage. The cash and markers, net of redemptions, used to purchase chips are deposited in the gaming table's drop box. This is the base of measurement that we use for calculating win percentage. Each type of table game has its own theoretical win percentage. Our expected table games win percentage is 22% to 26%.

At Encore Boston Harbor, customers purchase chips at the gaming tables in exchange for cash and markers. Customers may then redeem markers only at the casino cage. The cash and gross markers used to purchase chips are deposited in the gaming table's drop box. This is the base of measurement that we use for calculating win percentage. Each type of table game has its own theoretical win percentage. Our expected table games win percentage is 16% to 20%.

Results of Operations

Summary of third quarter 2019 results

The following table summarizes our financial results for the periods presented (in thousands, except per share data):

	Three Months Ended September 30,															Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change			2019				2018				Increase/ (Decrease)				Percent Change
Operating revenues	$	1,647,762			$	1,709,072			$	(61,310	)		(3.6	)		$	4,957,640			$	5,030,074			$	(72,434	)		(1.4	)
Net income (loss) attributable to Wynn Resorts, Limited	(3,496		)		156,115				(159,611		)		(102.2	)		195,927				107,564				88,363				82.1
Diluted net income (loss) per share	(0.03		)		1.44				(1.47		)		(102.1	)		1.83				1.01				0.82				81.2
Adjusted Property EBITDA (1)	396,946				504,367				(107,421		)		(21.3	)		1,372,306				1,545,045				(172,739		)		(11.2	)

(1) See Item 1—"Financial Statements," Note 16, "Segment Information," for a reconciliation of Adjusted Property EBITDA to net income (loss) attributable to Wynn Resorts, Limited.

The decrease in operating revenues for the three months ended September 30, 2019 was primarily driven by decreases of $132.4 million and $105.3 million from Wynn Palace and Wynn Macau, respectively. Operating revenues from Encore Boston Harbor were $175.8 million.

The decrease in net income (loss) attributable to Wynn Resorts, Limited for the three months ended September 30, 2019 was primarily driven by a decrease in VIP turnover and VIP table games win at our Macau Operations and increased depreciation expense from Encore Boston Harbor.

The decrease in Adjusted Property EBITDA for the three months ended September 30, 2019 was driven by decreases of $64.0 million, $43.9 million, and $7.3 million from Wynn Palace, Wynn Macau and our Las Vegas Operations, respectively. Adjusted Property EBITDA from Encore Boston Harbor was $7.7 million.

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Financial results for the three months ended September 30, 2019 compared to the three months ended September 30, 2018.

Operating revenues

The following table presents our operating revenues (in thousands):

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating revenues
Macau Operations:
Wynn Palace	$	598,171			$	730,572			$	(132,401	)		(18.1	)
Wynn Macau	474,281				579,620				(105,339		)		(18.2	)
Total Macau Operations	1,072,452				1,310,192				(237,740		)		(18.1	)
Las Vegas Operations	399,506				398,880				626				0.2
Encore Boston Harbor (1)	175,804				—				175,804				—
	$	1,647,762			$	1,709,072			$	(61,310	)		(3.6	)

(1) Encore Boston Harbor opened on June 23, 2019.

The following table presents our casino and non-casino operating revenues (in thousands):

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating revenues
Casino revenues	$	1,108,364			$	1,222,029			$	(113,665	)		(9.3	)
Non-casino revenues:
Rooms	205,876				183,044				22,832				12.5
Food and beverage	228,508				193,874				34,634				17.9
Entertainment, retail and other	105,014				110,125				(5,111		)		(4.6	)
Total non-casino revenues	539,398				487,043				52,355				10.7
	$	1,647,762			$	1,709,072			$	(61,310	)		(3.6	)

Casino revenues for the three months ended September 30, 2019 were 67.3% of operating revenues, compared to 71.5% for the same period of 2018. Non-casino revenues for the three months ended September 30, 2019 were 32.7% of operating revenues, compared to 28.5% for the same period of 2018.

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Casino revenues    

Casino revenues decreased primarily due to decreased VIP turnover and VIP table games win at our Macau Operations, partially offset by increased mass market table drop and slot machine handle at our Macau Operations and casino revenues from Encore Boston Harbor totaling $114.9 million. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day):  

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Macau Operations:
Wynn Palace:
Total casino revenues	$	497,657			$	625,586			$	(127,929	)		(20.4	)
VIP:
Average number of table games	108				112				(4		)		(3.6	)
VIP turnover	$	10,517,685			$	15,525,637			$	(5,007,952	)		(32.3	)
VIP table games win	$	335,277			$	528,219			$	(192,942	)		(36.5	)
VIP win as a % of turnover	3.19		%		3.40		%		(0.21		)
Table games win per unit per day	$	33,595			$	51,463			$	(17,868	)		(34.7	)
Mass market:
Average number of table games	216				206				10				4.9
Table drop	$	1,298,827			$	1,189,895			$	108,932			9.2
Table games win	$	324,177			$	308,149			$	16,028			5.2
Table games win %	25.0		%		25.9		%		(0.9		)
Table games win per unit per day	$	16,346			$	16,291			$	55			0.3
Average number of slot machines	1,087				1,056				31				2.9
Slot machine handle	$	973,676			$	922,514			$	51,162			5.5
Slot machine win	$	47,289			$	46,044			$	1,245			2.7
Slot machine win per unit per day	$	473			$	474			$	(1	)		(0.2	)
Wynn Macau:
Total casino revenues	$	408,820			$	503,557			$	(94,737	)		(18.8	)
VIP:
Average number of table games	104				109				(5		)		(4.6	)
VIP turnover	$	8,024,990			$	13,966,931			$	(5,941,941	)		(42.5	)
VIP table games win	$	221,097			$	420,864			$	(199,767	)		(47.5	)
VIP win as a % of turnover	2.76		%		3.01		%		(0.25		)
Table games win per unit per day	$	23,036			$	42,061			$	(19,025	)		(45.2	)
Mass market:
Average number of table games	205				200				5				2.5
Table drop	$	1,319,405			$	1,183,667			$	135,738			11.5
Table games win	$	272,511			$	250,229			$	22,282			8.9
Table games win %	20.7		%		21.1		%		(0.4		)
Table games win per unit per day	$	14,440			$	13,625			$	815			6.0
Average number of slot machines	786				845				(59		)		(7.0	)
Slot machine handle	$	999,985			$	895,249			$	104,736			11.7
Slot machine win	$	46,981			$	34,769			$	12,212			35.1
Slot machine win per unit per day	$	649			$	447			$	202			45.2

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	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Las Vegas Operations:
Total casino revenues	$	87,002			$	92,886			$	(5,884	)		(6.3	)
Average number of table games	237				235				2				0.9
Table drop	$	430,837			$	404,033			$	26,804			6.6
Table games win	$	85,738			$	86,709			$	(971	)		(1.1	)
Table games win %	19.9		%		21.5		%		(1.6		)
Table games win per unit per day	$	3,927			$	4,003			$	(76	)		(1.9	)
Average number of slot machines	1,783				1,823				(40		)		(2.2	)
Slot machine handle	$	883,931			$	810,120			$	73,811			9.1
Slot machine win	$	58,176			$	55,937			$	2,239			4.0
Slot machine win per unit per day	$	355			$	334			$	21			6.3
Encore Boston Harbor (1):
Total casino revenues	$	114,885			$	—			$	114,885			—
Average number of table games	145				—				145				—
Table drop	$	379,626			$	—			$	379,626			—
Table games win	$	74,882			$	—			$	74,882			—
Table games win %	19.7		%		—		%		19.7
Table games win per unit per day	$	5,631			$	—			$	5,631			—
Average number of slot machines	3,101				—				3,101				—
Slot machine handle	$	892,706			$	—			$	892,706			—
Slot machine win	$	62,381			$	—			$	62,381			—
Slot machine win per unit per day	$	219			$	—			$	219			—

(1) Encore Boston Harbor opened on June 23, 2019.

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Non-casino revenues

The table below sets forth our room revenues and associated key operating measures:

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Macau Operations:
Wynn Palace:
Total room revenues (dollars in thousands)	$	44,884			$	44,296			$	588			1.3
Occupancy	97.2		%		96.0		%		1.2
ADR	$	273			$	275			$	(2	)		(0.7	)
REVPAR	$	265			$	264			$	1			0.4
Wynn Macau:
Total room revenues (dollars in thousands)	$	26,740			$	28,091			$	(1,351	)		(4.8	)
Occupancy	99.4		%		99.0		%		0.4
ADR	$	283			$	276			$	7			2.5
REVPAR	$	281			$	273			$	8			2.9
Las Vegas Operations:
Total room revenues (dollars in thousands)	$	116,072			$	110,657			$	5,415			4.9
Occupancy	87.9		%		89.6		%		(1.7		)
ADR	$	306			$	289			$	17			5.9
REVPAR	$	269			$	259			$	10			3.9
Encore Boston Harbor (1):
Total room revenues (dollars in thousands)	$	18,180			$	—			$	18,180			—
Occupancy	69.6		%		—		%		69.6
ADR	$	465			$	—			$	465			—
REVPAR	$	324			$	—			$	324			—

(1) Encore Boston Harbor opened on June 23, 2019.

Room revenues increased $22.8 million, primarily due to $18.2 million from Encore Boston Harbor and higher ADR at our Las Vegas Operations, partially offset by rooms out of service for renovations at Wynn Macau.

Food and beverage revenues increased $34.6 million, primarily due to $29.0 million from Encore Boston Harbor and increased covers at our high-volume restaurants at our Macau Operations.

Entertainment, retail and other revenues decreased $5.1 million, primarily due to the closure of certain owned retail outlets at Wynn Macau and their conversion to leased outlets beginning in the first quarter of 2019, the effect of which was partially offset by Entertainment, retail and other revenues of $13.8 million from Encore Boston Harbor. During the third quarter of 2018, Wynn Palace and Wynn Macau recorded business interruption insurance proceeds of $5.4 million and $5.3 million, respectively, related to the full settlement of claims from Typhoon Hato in 2017. 

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Operating expenses

The table below presents operating expenses (in thousands):

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating expenses:
Casino	$	722,692			$	783,171			$	(60,479	)		(7.7	)
Rooms	75,188				62,965				12,223				19.4
Food and beverage	196,661				162,311				34,350				21.2
Entertainment, retail and other	42,078				44,028				(1,950		)		(4.4	)
General and administrative	246,442				192,327				54,115				28.1
Provision for doubtful accounts	4,036				3,285				751				22.9
Pre-opening	1,616				13,714				(12,098		)		(88.2	)
Depreciation and amortization	172,998				137,458				35,540				25.9
Property charges and other	8,216				18,830				(10,614		)		(56.4	)
Total operating expenses	$	1,469,927			$	1,418,089			$	51,838			3.7

Total operating expenses increased $51.8 million compared to the third quarter of 2018, primarily due to operating expenses associated with the opening of Encore Boston Harbor on June 23, 2019, partially offset by decreased casino expenses and pre-opening expenses.

Casino expenses decreased commensurate with the decrease in casino revenues at our Macau Operations and Las Vegas Operations, partially offset by $64.8 million from Encore Boston Harbor.

Room expenses increased primarily due to $9.5 million from Encore Boston Harbor and an increase of $2.0 million at our Las Vegas Operations. The increase at our Las Vegas Operations was primarily due to increased payroll costs.

Food and beverage expenses increased primarily due to $28.3 million from Encore Boston Harbor and increases of $2.2 million and $2.4 million at Wynn Palace and Wynn Macau, respectively. The increases at Wynn Palace and Wynn Macau were driven by incremental costs associated with opening new food and beverage outlets at Wynn Palace and increased costs of goods sold.

Entertainment, retail and other expenses decreased $2.0 million, primarily due to the closure of certain owned retail outlets at Wynn Macau and their conversion to leased outlets beginning in the first quarter of 2019.

General and administrative expenses increased primarily due to the opening of Encore Boston Harbor, partially offset by a decrease of $8.9 million primarily related to corporate and other general and administrative expenses. The decrease in corporate and other general and administrative expenses was primarily due to a decrease in legal expenses.

For the three months ended September 30, 2019, pre-opening expenses totaled $1.6 million, which primarily related to the additional meeting and convention facility at our Las Vegas Operations. For the three months ended September 30, 2018, pre-opening expenses totaled $13.7 million, which primarily related to the development of Encore Boston Harbor.

Depreciation and amortization increased primarily due to additional depreciation expense of $36.3 million associated with the opening of Encore Boston Harbor.

  

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Interest expense, net of capitalized interest

The following table summarizes information related to interest expense (dollars in thousands):

	Three Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Interest expense
Interest cost, including amortization of debt issuance costs and original issue discount and premium	$	117,960			$	109,176			$	8,784			8.0
Capitalized interest	(3,308		)		(16,169		)		12,861				(79.5	)
	$	114,652			$	93,007			$	21,645			23.3
Weighted average total debt balance	$	9,261,889			$	8,875,084
Weighted average interest rate	5.08		%		4.92		%

Interest costs increased due to an increase in the weighted average debt balance and weighted average interest rate. Capitalized interest decreased due to the completion of Encore Boston Harbor construction activities on June 23, 2019.

  

Other non-operating income and expenses

We recorded a $12.2 million loss on extinguishment of debt for the three months ended September 30, 2019 related to the Refinancing Transactions. For more information on the Refinancing Transactions, see "Liquidity and Capital Resources."

We incurred a foreign currency remeasurement loss of $8.7 million and gain of $11.2 million for the three months ended September 30, 2019 and 2018, respectively. The impact of the exchange rate fluctuation of the Macau pataca, in relation to the U.S. dollar, on the remeasurements of U.S. dollar denominated debt and other obligations from our Macau-related entities drove the variability between periods.

Income taxes

We recorded an income tax expense of $19.7 million and an income tax benefit of $3.9 million for the three months ended September 30, 2019 and 2018, respectively. The 2019 income tax expense primarily related to the increase in the valuation allowance for U.S foreign tax credits and the 2018 income tax benefit primarily related to an increase in deferred tax assets.

Net income attributable to noncontrolling interests

Net income attributable to noncontrolling interests was $30.4 million for the three months ended September 30, 2019, compared to $63.7 million for the same period of 2018. These amounts are primarily related to the noncontrolling interests' share of net income from WML.

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Financial results for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.

Operating revenues

The following table presents our operating revenues (in thousands):

	Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating revenues
Macau Operations:
Wynn Palace	$	1,953,709			$	2,017,004			$	(63,295	)		(3.1	)
Wynn Macau	1,544,646				1,741,145				(196,499		)		(11.3	)
Total Macau Operations	3,498,355				3,758,149				(259,794		)		(6.9	)
Las Vegas Operations	1,264,681				1,271,925				(7,244		)		(0.6	)
Encore Boston Harbor (1)	194,604				—				194,604				—
	$	4,957,640			$	5,030,074			$	(72,434	)		(1.4	)

(1) Encore Boston Harbor opened on June 23, 2019.

The following table presents casino and non-casino operating revenues (in thousands):

	Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating revenues
Casino revenues	$	3,435,968			$	3,564,195			$	(128,227	)		(3.6	)
Non-casino revenues:
Rooms	595,953				559,405				36,548				6.5
Food and beverage	619,749				580,963				38,786				6.7
Entertainment, retail and other	305,970				325,511				(19,541		)		(6.0	)
Total non-casino revenues	1,521,672				1,465,879				55,793				3.8
	$	4,957,640			$	5,030,074			$	(72,434	)		(1.4	)

Casino revenues for the nine months ended September 30, 2019 were 69.3% of operating revenues, compared to 70.9% for the same period of 2018. Non-casino revenues for the nine months ended September 30, 2019 were 30.7% of operating revenues, compared to 29.1% for the same period of 2018.

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Casino revenues

Casino revenues decreased primarily due to decreased VIP turnover and VIP table games win at our Macau Operations and decreased table drop at our Las Vegas Operations, partially offset by increased mass market table drop at our Macau Operations and casino revenues from Encore Boston Harbor totaling $127.9 million. The table below sets forth our casino revenues and associated key operating measures (dollars in thousands, except for win per unit per day):  

	Nine Months Ended September 30,
	2019				2018				Increase/(Decrease)				Percent Change
Macau Operations:
Wynn Palace:
Total casino revenues	$	1,649,377			$	1,719,072			$	(69,695	)		(4.1	)
VIP:
Average number of table games	111				114				(3		)		(2.6	)
VIP turnover	$	36,533,594			$	44,940,535			$	(8,406,941	)		(18.7	)
VIP table games win	$	1,232,870			$	1,348,291			$	(115,421	)		(8.6	)
VIP win as a % of turnover	3.37		%		3.00		%		0.37
Table games win per unit per day	$	40,868			$	43,302			$	(2,434	)		(5.6	)
Mass market:
Average number of table games	213				209				4				1.9
Table drop	$	3,869,904			$	3,625,959			$	243,945			6.7
Table games win	$	936,497			$	898,876			$	37,621			4.2
Table games win %	24.2		%		24.8		%		(0.6		)
Table games win per unit per day	$	16,071			$	15,750			$	321			2.0
Average number of slot machines	1,092				1,062				30				2.8
Slot machine handle	$	2,886,566			$	2,921,582			$	(35,016	)		(1.2	)
Slot machine win	$	142,257			$	145,993			$	(3,736	)		(2.6	)
Slot machine win per unit per day	$	477			$	503			$	(26	)		(5.2	)
Wynn Macau:
Total casino revenues	$	1,340,266			$	1,515,859			$	(175,593	)		(11.6	)
VIP:
Average number of table games	109				111				(2		)		(1.8	)
VIP turnover	$	27,494,650			$	44,982,849			$	(17,488,199	)		(38.9	)
VIP table games win	$	822,204			$	1,223,219			$	(401,015	)		(32.8	)
VIP win as a % of turnover	2.99		%		2.72		%		0.27
Table games win per unit per day	$	27,634			$	40,204			$	(12,570	)		(31.3	)
Mass market:
Average number of table games	205				202				3				1.5
Table drop	$	4,018,533			$	3,799,636			$	218,897			5.8
Table games win	$	816,180			$	758,748			$	57,432			7.6
Table games win %	20.3		%		20.0		%		0.3
Table games win per unit per day	$	14,551			$	13,747			$	804			5.8
Average number of slot machines	813				902				(89		)		(9.9	)
Slot machine handle	$	2,720,137			$	2,861,703			$	(141,566	)		(4.9	)
Slot machine win	$	127,690			$	116,960			$	10,730			9.2
Slot machine win per unit per day	$	575			$	475			$	100			21.1

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	Nine Months Ended September 30,
	2019				2018				Increase/(Decrease)				Percent Change
Las Vegas Operations:
Total casino revenues	$	318,439			$	329,264			$	(10,825	)		(3.3	)
Average number of table games	238				237				1				0.4
Table drop	$	1,275,676			$	1,344,344			$	(68,668	)		(5.1	)
Table games win	$	323,503			$	342,129			$	(18,626	)		(5.4	)
Table games win %	25.4		%		25.4		%		—
Table games win per unit per day	$	4,982			$	5,297			$	(315	)		(5.9	)
Average number of slot machines	1,793				1,824				(31		)		(1.7	)
Slot machine handle	$	2,484,880			$	2,332,700			$	152,180			6.5
Slot machine win	$	167,848			$	154,618			$	13,230			8.6
Slot machine win per unit per day	$	343			$	310			$	33			10.6
Encore Boston Harbor (1):
Total casino revenues	$	127,886			$	—			$	127,886			—
Average number of table games	144				—				144				—
Table drop	$	416,202			$	—			$	416,202			—
Table games win	$	81,482			$	—			$	81,482			—
Table games win %	19.6		%		—		%		19.6
Table games win per unit per day	$	5,639			$	—			$	5,639			—
Average number of slot machines	3,105				—				3,105				—
Slot machine handle	$	990,634			$	—			$	990,634			—
Slot machine win	$	70,880			$	—			$	70,880			—
Slot machine win per unit per day	$	228			$	—			$	228			—

(1) Encore Boston Harbor opened on June 23, 2019.

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Non-casino revenues

The table below sets forth our room revenues and associated key operating measures:

	Nine Months Ended September 30,
	2019				2018				Increase/(Decrease)				Percent Change
Macau Operations:
Wynn Palace:
Total room revenues (dollars in thousands)	$	131,382			$	125,461			$	5,921			4.7
Occupancy	97.3		%		96.3		%		1.0
ADR	$	270			$	261			$	9			3.4
REVPAR	$	262			$	251			$	11			4.4
Wynn Macau:
Total room revenues (dollars in thousands)	$	82,071			$	83,575			$	(1,504	)		(1.8	)
Occupancy	99.2		%		99.1		%		0.1
ADR	$	285			$	280			$	5			1.8
REVPAR	$	282			$	277			$	5			1.8
Las Vegas Operations:
Total room revenues (dollars in thousands)	$	362,715			$	350,369			$	12,346			3.5
Occupancy	86.9		%		87.1		%		(0.2		)
ADR	$	325			$	313			$	12			3.8
REVPAR	$	283			$	273			$	10			3.7
Encore Boston Harbor (1):
Total room revenues (dollars in thousands)	$	19,785			$	—			$	19,785			—
Occupancy	69.3		%		—		%		69.3
ADR	$	493			$	—			$	493			—
REVPAR	$	341			$	—			$	341			—

(1) Encore Boston Harbor opened on June 23, 2019.

Room revenues increased $36.5 million, primarily due to $19.8 million from Encore Boston Harbor and higher ADR at Wynn Palace and our Las Vegas Operations, partially offset by rooms out of service for renovations at Wynn Macau.

Food and beverage revenues increased $38.8 million, primarily due to $32.8 million from Encore Boston Harbor and increased covers at our high-volume restaurants at our Macau Operations.

Entertainment, retail and other revenues decreased $19.5 million primarily due to the closure of certain owned retail outlets at Wynn Macau and their conversion to leased outlets beginning in the first quarter of 2019, the effect of which was partially offset by Entertainment, retail and other revenues of $14.1 million from Encore Boston Harbor. During the third quarter of 2018, Wynn Palace and Wynn Macau recorded business interruption insurance proceeds of $5.4 million and $5.3 million, respectively, related to the full settlement of claims from Typhoon Hato in 2017.

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Operating expenses

The table below presents operating expenses (in thousands):

	Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Operating expenses:
Casino	$	2,197,750			$	2,254,766			$	(57,016	)		(2.5	)
Rooms	205,042				189,837				15,205				8.0
Food and beverage	527,502				468,265				59,237				12.7
Entertainment, retail and other	129,636				138,647				(9,011		)		(6.5	)
General and administrative	665,988				545,543				120,445				22.1
Litigation settlement	—				463,557				(463,557		)		(100.0	)
Provision for doubtful accounts	13,039				2,586				10,453				404.2
Pre-opening	99,212				35,255				63,957				181.4
Depreciation and amortization	449,824				411,685				38,139				9.3
Property charges and other	17,920				30,672				(12,752		)		(41.6	)
Total operating expenses	$	4,305,913			$	4,540,813			$	(234,900	)		(5.2	)

Total operating expenses decreased $234.9 million compared to the nine months ended September 30, 2018, primarily due to a prior year litigation settlement expense of $463.6 million. The decrease was partially offset by operating expenses associated with the opening of Encore Boston Harbor on June 23, 2019.

Casino expenses decreased commensurate with the decrease in casino revenues at our Macau Operations and Las Vegas Operations, partially offset by $73.0 million of casino expenses from Encore Boston Harbor.

Room expenses increased primarily due to $10.0 million from Encore Boston Harbor and increases of $3.0 million and $1.5 million from our Las Vegas Operations and Wynn Palace, respectively. The increases from Wynn Palace and our Las Vegas Operations were primarily driven by increased payroll costs.

Food and beverage expenses increased primarily due to $31.9 million from Encore Boston Harbor and increases of $11.9 million, $8.7 million and $6.6 million at Wynn Palace, Wynn Macau and our Las Vegas Operations, respectively. The increases at Wynn Palace and Wynn Macau were driven by incremental costs associated with opening new food and beverage outlets at Wynn Palace and increased cost of goods sold. The increase at our Las Vegas Operations was primarily driven by increased payroll costs.

Entertainment, retail and other expenses decreased $9.0 million, primarily due to the closure of certain owned retail outlets at Wynn Macau and their conversion to leased outlets beginning in the first quarter of 2019.

General and administrative expenses increased primarily due to $67.1 million from Encore Boston Harbor and increases of $4.7 million, $9.2 million, and $4.9 million, at Wynn Palace, Wynn Macau, and our Las Vegas Operations, respectively. These increases were primarily attributable to increased payroll costs and property taxes at our Macau Operations and increased advertising costs at our Las Vegas Operations. Corporate and other general and administrative expenses increased $34.6 million, primarily due to a fine of $35.0 million assessed by the Massachusetts Gaming Commission.

Litigation settlement expense of $463.6 million was incurred in the first quarter of 2018 in connection with the repayment of the Redemption Note for claims related to the allegedly below-market interest rate of the Redemption Note.

The provision for doubtful accounts increased $8.0 million and $1.3 million at our Las Vegas Operations and Wynn Macau, respectively. The change was primarily due to the impact of historical collection patterns and current collection trends, as well as the specific review of customer accounts, on our estimated allowance for the respective periods.

For the nine months ended September 30, 2019 and 2018, pre-opening expenses totaled $99.2 million and $35.3 million, respectively, which primarily related to the development of Encore Boston Harbor.

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Depreciation and amortization increased primarily due to additional depreciation expense of $41.6 million associated with the opening of Encore Boston Harbor.

Interest expense, net of capitalized interest

The following table summarizes information related to interest expense (dollars in thousands):

	Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change
Interest expense
Interest cost, including amortization of debt issuance costs and original issue discount and premium	$	351,135			$	318,792			$	32,343			10.1
Capitalized interest	(50,154		)		(37,660		)		(12,494		)		33.2
	$	300,981			$	281,132			$	19,849			7.1
Weighted average total debt balance	9,277,142				9,022,065
Weighted average interest rate	5.00		%		4.71		%

Interest costs increased due to an increase in the weighted average debt balance and weighted average interest rate. Capitalized interest increased due to Encore Boston Harbor construction activities. Encore Boston Harbor opened on June 23, 2019.

Other non-operating income and expenses

During the first quarter of 2018, we repaid the $1.94 billion principal amount of the Redemption Note and recorded a loss of $69.3 million from the change in the fair value of the Redemption Note.

We recorded a $12.2 million loss on extinguishment of debt for the nine months ended September 30, 2019 related to the Refinancing Transactions. For more information on the Refinancing Transactions, see "Liquidity and Capital Resources." We recorded a $2.1 million net gain on extinguishment of debt for the nine months ended September 30, 2018, related to the repayment of the Redemption Note, Wynn Resorts' purchase of $40.0 million of Wynn Las Vegas' 5 1/2% Senior Notes due 2025 and 5 1/4% Senior Notes due 2027 and the execution of the supplemental indenture related to Wynn Las Vegas' 4 1/4% Senior Notes due 2023.

We incurred a foreign currency remeasurement loss of $3.3 million and gain of $1.0 million for the nine months ended September 30, 2019 and 2018, respectively. The changes were primarily due to the impact of the exchange rate fluctuation of the Macau pataca, in relation to the U.S. dollar, on the remeasurements of U.S. dollar denominated debt and other obligations from our Macau-related entities.

Income taxes

We recorded an income tax expense of $19.4 million and an income tax benefit of $124.6 million for the nine months ended September 30, 2019 and 2018, respectively. The 2019 income tax expense is primarily related to the increase in the valuation allowance for U.S foreign tax credits and 2018 income tax benefit primarily related to the settlement of the Redemption Note.

Net income attributable to noncontrolling interests

Net income attributable to noncontrolling interests was $132.9 million for the nine months ended September 30, 2019, compared to $180.0 million for the same period of 2018. These amounts are primarily related to the noncontrolling interests' share of net income from WML.

Adjusted Property EBITDA

We use Adjusted Property EBITDA to manage the operating results of our segments. Adjusted Property EBITDA is net income (loss) before interest, income taxes, depreciation and amortization, litigation settlement expense, pre-opening expenses, property charges and other, management and license fees, corporate expenses and other, stock-based compensation, (loss) gain on extinguishment of debt, change in derivatives fair value, change in Redemption Note fair value and other non-operating income and expenses. Adjusted Property EBITDA is presented exclusively as a supplemental disclosure because we believe that it is widely

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used to measure the performance, and as a basis for valuation, of gaming companies. We use Adjusted Property EBITDA as a measure of the operating performance of our segments and to compare the operating performance of our properties with those of our competitors, as well as a basis for determining certain incentive compensation. We also present Adjusted Property EBITDA because it is used by some investors to measure a company's ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to GAAP. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties. However, Adjusted Property EBITDA should not be considered as an alternative to operating income as an indicator of the Company's performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, Adjusted Property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, income taxes and other non-recurring charges, which are not reflected in Adjusted Property EBITDA. Also, the Company's calculation of Adjusted Property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

The following table summarizes Adjusted Property EBITDA (in thousands) for Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston Harbor as reviewed by management and summarized in Item 1—"Notes to Condensed Consolidated Financial Statements," Note 16, "Segment Information." That footnote also presents a reconciliation of Adjusted Property EBITDA to net income (loss) attributable to Wynn Resorts, Limited.

	Three Months Ended September 30,															Nine Months Ended September 30,
	2019				2018				Increase/ (Decrease)				Percent Change			2019				2018				Increase/ (Decrease)				Percent Change
Wynn Palace	$	162,167			$	226,141			$	(63,974	)		(28.3	)		$	551,918			$	617,317			$	(65,399	)		(10.6	)
Wynn Macau	138,989				182,928				(43,939		)		(24.0	)		478,751				565,677				(86,926		)		(15.4	)
Las Vegas Operations	88,046				95,298				(7,252		)		(7.6	)		333,747				362,051				(28,304		)		(7.8	)
Encore Boston Harbor	7,744				—				7,744				—			7,890				—				7,890				—

 

Adjusted Property EBITDA at Wynn Palace decreased 28.3% and 10.6% for the three and nine months ended September 30, 2019, respectively, primarily due to a decrease in VIP turnover and VIP table games win.

Adjusted Property EBITDA at Wynn Macau decreased 24.0% for the three months ended September 30, 2019, primarily due to a decrease in VIP turnover and VIP table games win. Adjusted Property EBITDA at Wynn Macau decreased 15.4% for the nine months ended September 30, 2019 primarily due to a decrease in VIP turnover and VIP table games win, a decrease in entertainment, retail and other revenues primarily related to the closure of certain owned retail outlets, and increased general and administrative expenses.

Adjusted Property EBITDA at our Las Vegas Operations decreased 7.6% for the three months ended September 30, 2019, primarily due to a decrease in table games win percentage and increases in general and administrative expenses and provision for doubtful accounts. Adjusted Property EBITDA at our Las Vegas Operations decreased 7.8% for the nine months ended September 30, 2019 primarily due to decreased table drop, increased food and beverage expenses, general and administrative expenses and provision for doubtful accounts.

Adjusted Property EBITDA at Encore Boston Harbor was $7.7 million and $7.9 million for the three and nine months ended September 30, 2019. Encore Boston Harbor opened on June 23, 2019.

Refer to the discussions above regarding the specific details of our results of operations.

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Liquidity and Capital Resources

Our cash flows were as follows (in thousands):

	Nine Months Ended September 30,
Cash Flows - Summary	2019				2018
Net cash provided by operating activities	$	779,885			$	497,889
Net cash used in investing activities:
Capital expenditures, net of construction payables and retention	(878,335		)		(1,154,255		)
Purchase of intangible and other assets	(6,000		)		(102,388		)
Proceeds from the sale or maturity of investment securities	—				359,461
Purchase of investment securities	—				(34,098		)
Proceeds from sale of assets	592				2,387
Net cash used in investing activities	(883,743		)		(928,893		)
Net cash used in financing activities:
Proceeds from issuance of long-term debt	2,549,072				2,288,605
Repayments of long-term debt	(2,443,367		)		(3,030,526		)
Proceeds from note receivable from sale of ownership interest in subsidiary	—				75,000
Proceeds from issuance of common stock, net of issuance costs	—				915,187
Repurchase of common stock	(65,705		)		(2,805		)
Finance lease payment	(36		)		—
Proceeds from exercise of stock options	14,696				20,313
Dividends paid	(460,139		)		(350,694		)
Distribution to noncontrolling interest	(3,725		)		(301,113		)
Payments to acquire derivatives	—				(3,900		)
Payments for financing costs	(22,359		)		(33,787		)
Net cash used in financing activities	(431,563		)		(423,720		)
Effect of exchange rate on cash, cash equivalents and restricted cash	(1,610		)		1,090
Decrease in cash, cash equivalents and restricted cash	$	(537,031	)		$	(853,634	)

Operating Activities

Our operating cash flows primarily consist of operating income (excluding depreciation and amortization and other non-cash charges), interest paid and earned, and changes in working capital accounts such as receivables, inventories, prepaid expenses, and payables. Our table games play is a mix of cash play and credit play, while our slot machine play is conducted primarily on a cash basis. A significant portion of our table games revenue is attributable to the play of a limited number of premium international customers who gamble on credit. The ability to collect these gaming receivables may impact our operating cash flow for the period. Our rooms, food and beverage, and entertainment, retail and other revenue is conducted on a cash and credit basis. Accordingly, operating cash flows will be impacted by changes in operating income and accounts receivable, net.

The increase in net cash provided by operations was primarily driven by changes in our working capital accounts and an increase in deferred tax assets related to the settlement of the Redemption Note during the nine months ended September 30, 2018. In the nine months ended September 30, 2018, the Company recorded and paid a $463.6 million litigation settlement expense.

Investing Activities

During the nine months ended September 30, 2019, we incurred capital expenditures of $421.4 million related to the construction of Encore Boston Harbor, $104.1 million at Wynn Macau primarily related to the room remodel and West Casino renovation, $47.2 million and $71.9 million at Wynn Palace and our Las Vegas Operations, respectively, primarily related to

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maintenance capital expenditures, and $166.4 million primarily related to the construction of the additional meeting and convention space at Wynn Las Vegas and the reconfiguration of the Wynn Las Vegas golf course. During the nine months ended September 30, 2018, we incurred $603.6 million in capital expenditures, for Encore Boston Harbor and $336.2 million for the acquisition of land on the Las Vegas Strip directly across from Wynn Las Vegas.

Financing Activities

During the nine months ended September 30, 2019, we borrowed an additional $250.0 million term loan under the Wynn Resorts Credit Agreement, and in connection with the Refinancing Transactions described below, we repaid $991.3 million of outstanding principal under the Wynn America Credit Facilities and $746.3 million of outstanding principal under the Wynn Resorts Term Loan along with related financing costs, using proceeds from the borrowing of $1.03 billion under the WRF Credit Facilities and issuance of $750.0 million of WRF 2029 notes. We also repaid $174.7 million, net of amounts borrowed, on the Wynn Macau Senior Revolving Credit Facility. In addition, we used cash of $460.1 million for the payment of dividends.

During the nine months ended September 30, 2018, we repaid the Redemption Note principal amount of $1.94 billion using cash on hand and amounts borrowed under the Bridge Facility and the WA Senior Revolving Credit Facility. In April 2018, we repaid all amounts borrowed under the Bridge Facility and the WA Senior Revolving Credit Facility using net proceeds of $915.2 million from a registered public equity offering. In addition, during the nine months ended September 30, 2018, we borrowed $624.4 million under the Macau Senior Revolving Credit Facility, $615.0 million under the Retail Term Loan, and we used cash of $350.7 million for the payment of dividends and $301.1 million for distributions to noncontrolling interest holders of the Retail Joint Venture.

Capital Resources

The following table summarizes our unrestricted cash and cash equivalents and available revolver borrowing capacity under the Company as of September 30, 2019 (in thousands):

	Total Cash and Cash Equivalents				Revolver Borrowing Capacity
Wynn Macau, Limited	$	947,206			$	298,322
Wynn Resorts Finance, LLC	17,001				806,950
Wynn Resorts, Limited and other	712,625				—
Total cash and cash equivalents	$	1,676,832			$	1,105,272

Wynn Macau, Limited generates cash from our Macau Operations, which we expect to use to service our Wynn Macau Credit Facilities and WML Notes, pay dividends to shareholders of WML (of which we own approximately 72%), and fund working capital and capital expenditure requirements. The Wynn Macau Credit Facilities contain customary negative covenants and financial covenants, including, but not limited to, covenants that restrict our ability to pay dividends or distributions to any direct or indirect subsidiaries.

Wynn Resorts Finance, LLC (formerly known as Wynn America, LLC) ("WRF") generates cash from dividends and distributions from its subsidiaries, including Wynn Macau, Limited, and contributions from Wynn Resorts as required. We expect to use WRF cash to service our WRF Senior Secured Credit Facilities, WRF 2029 Notes, and WLV Notes, make distributions to Wynn Resorts, and to fund working capital and capital expenditure requirements. The WRF Senior Secured Credit Facilities contain customary negative and financial covenants, including, but not limited to, covenants that restrict our ability to pay dividends or distributions to any direct or indirect subsidiaries.

Wynn Resorts, Limited is a holding company and, as a result, our ability to pay dividends is highly dependent on our ability to obtain funds and our subsidiaries' ability to provide funds to us. Wynn Resorts, Limited and other primarily generates cash from royalty and management agreements with our resorts, dividends and distributions from our subsidiaries, and the operations of the Retail Joint Venture of which we own 50.1%. We expect to use this cash to service our Retail Term Loan, fund the construction of the additional meeting and convention space in Las Vegas, and pay dividends.

Refinancing Transactions

On September 20, 2019, WRF and its subsidiary Wynn Resorts Capital Corp. (collectively with WRF, the "WRF Issuers"), each an indirect wholly owned subsidiary of the Company, issued $750.0 million aggregate principal amount of 5 1/8% Senior

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Notes due 2029 (the "2029 Notes") pursuant to an indenture (the "2029 Indenture") among the WRF Issuers, the guarantors party thereto, and U.S. Bank National Association, as trustee (the "Trustee"), in a private offering. The 2029 Notes were issued at par. Concurrently with the issuance of the 2029 Notes, WRF entered into a credit agreement (the "WRF Credit Agreement") providing for a new first lien term loan facility in an aggregate principal amount of $1.0 billion (the "WRF Term Loan") and a new first lien revolving credit facility in an aggregate principal amount of $850.0 million (the "WRF Revolver" and together with the WRF Term Loan, the "WRF Senior Secured Credit Facilities") (the WRF Senior Secured Credit Facilities and 2029 Notes are collectively referred to as the "Refinancing Transactions").

Subject to certain exceptions, the WRF Senior Secured Credit Facilities bear interest at LIBOR plus 1.75% per annum. The annual fee required to pay for unborrowed amounts under the WRF Revolver, if any, is 0.25% per annum, payable quarterly in arrears, calculated based on the daily average of the unborrowed amounts under such credit facilities. The Company is required to make quarterly repayments on the WRF Term Loan of $12.5 million beginning in the fourth quarter of 2019, with any remaining principal amount outstanding repayable in full on September 20, 2024.

The WRF Credit Agreement contains restrictions that limit the amount of certain restricted payments WRF and its restricted subsidiaries may make, including dividends and distributions paid to Wynn Resorts. Such restrictions include WRF's requirement to maintain a Fixed Charge Coverage Ratio (as defined in the WRF Credit Agreement) greater than or equal to 2.00 to 1.00 and a Consolidated Total Net Leverage Ratio (as defined in the WRF Credit Agreement) not to exceed 5.50 to 1.00 at each fiscal quarter. WRF may make ordinary course dividends or distributions to Wynn Resorts in an amount not to exceed $1.0 billion in any fiscal year, with certain carryover provisions for unused amounts from the two preceding fiscal years, and unlimited provided that the Consolidated Total Net Leverage Ratio does not exceed 5.50 to 1.00 on a pro forma basis for the distribution, plus certain other amounts subject to thresholds and limitations.

The 2029 Notes will mature on October 1, 2029 and bear interest at the rate of 5 1/8% per annum, payable in arrears semi-annually on April 1 and October 1 of each year, beginning on April 1, 2020. The 2029 Indenture contains covenants that limit the ability of the WRF Issuers and the guarantors to, among other things, create or incur liens to secure debt in excess of the greater of $1.85 billion or an amount that would cause the Consolidated Senior Secured Net Leverage Ratio (as defined in the 2029 Indenture) to be greater than 3.00 to 1.00.

Wynn Resorts Finance used the net proceeds from the Refinancing Transactions to refinance the existing Wynn America Credit Facilities and the Wynn Resorts Term Loan and to pay related fees and expenses.

For more information on the Refinancing Transactions, see Item 1—"Notes to Condensed Consolidated Financial Statements," Note 6, "Long-Term Debt."

Other Factors Affecting Liquidity

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 or at all.

 

Legal proceedings in which we are involved also may impact our liquidity. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Item 1—"Notes to Condensed Consolidated Financial Statements," Note 14, "Commitments and Contingencies."

Our Board of Directors has authorized an equity repurchase program of up to $1.0 billion. Under the equity repurchase program, we may repurchase the Company's outstanding shares from time to time through open market purchases, in privately negotiated transactions, and under plans complying with Rules 10b5-1 and 10b-18 under the Exchange Act. As of September 30, 2019, we had $800.1 million in repurchase authority remaining under the program.

We have in the past repurchased, and in the future, we may periodically consider repurchasing our outstanding notes for cash. The amount of any notes to be repurchased, as well as the timing of any repurchases, will be based on business, market and other conditions and factors, including price, contractual requirements or consents, and capital availability.

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 domestic and international markets. There can be no assurances regarding the business prospects with respect to any other opportunity. Any new development would require us to

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obtain additional financing. We may decide to conduct any such development through Wynn Resorts, Limited or through subsidiaries separate from the Las Vegas or Macau-related entities.

Off-Balance Sheet Arrangements

We have not entered into any transactions with special purpose entities nor do we engage in any derivatives except for an interest rate collar associated with our Retail Term Loan. We do not have any retained or contingent interest in assets transferred to an unconsolidated entity. As of September 30, 2019, we had outstanding letters of credit totaling $18.1 million.

Contractual Commitments

During the nine months ended September 30, 2019, there have been no material changes to the contractual obligations previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018, other than an increase in our fixed interest rate long-term debt obligations of $750.0 million and an increase in our annual fixed interest payments of $38.4 million, offset by a decrease in our variable interest rate long-term debt obligations of $646.0 million and a decrease in our annual estimated variable interest payments of $47.5 million, primarily in connection with the Refinancing Transactions as described above.

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, 2018. There have been no significant changes to these policies for the nine months ended September 30, 2019.

Recently Adopted Accounting Standards and Accounting Standards Issued But Not Yet Adopted

See related disclosure in Item 1—"Notes to Condensed Consolidated Financial Statements," Note 2, "Basis of Presentation and Significant Accounting Policies."

Special Note Regarding Forward-Looking Statements

We make forward-looking statements in this Quarterly Report on Form 10-Q based upon the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include, but are not limited to, information about our business strategy, development activities, competition and possible or assumed future results of operations, throughout this report and are often preceded by, followed by or include the words "may," "will," "should," "would," "could," "believe," "expect," "anticipate," "estimate," "intend," "plan," "continue" or the negative of these terms or similar expressions.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those we express in these forward-looking statements, including the risks and uncertainties in Item 1A — "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2018 and other factors we describe from time to time in our periodic filings with the Securities and Exchange Commission ("SEC"), such as:

•	controversy and litigation related to Stephen A. Wynn and his separation from the Company;

•	extensive regulation of our business and the cost of compliance or failure to comply with applicable laws and regulations;

•	pending or future claims and legal proceedings, regulatory or enforcement actions or probity investigations;

•	our ability to maintain our gaming licenses and concessions;

•	our dependence on key employees;

•	general global political and economic conditions, in the U.S. and China (including the Chinese government's ongoing anti-corruption campaign), which may impact levels of travel, leisure and consumer spending;

•	restrictions or conditions on visitation by citizens of mainland China to Macau;

•	the impact on the travel and leisure industry from factors such as an outbreak of an infectious disease, extreme weather patterns or natural disasters, military conflicts and any future security alerts and/or terrorist attacks;

•	doing business in foreign locations such as Macau;

•	our ability to maintain our customer relationships and collect and enforce gaming receivables;

•	our relationships with Macau gaming promoters;

•	our dependence on a limited number of resorts and locations for all of our cash flow and our subsidiaries' ability to pay us dividends and distributions;

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•	competition in the casino/hotel and resort industries and actions taken by our competitors, including new development and construction activities of competitors;

•	factors affecting the development and success of new gaming and resort properties (including limited labor resources, government labor and gaming policies and transportation infrastructure in Macau; and cost increases, environmental regulation, and our ability to secure necessary permits and approvals in Everett, Massachusetts);

•	construction risks (including disputes with and defaults by contractors and subcontractors; construction, equipment or staffing problems; shortages of materials or skilled labor; environment, health and safety issues; and unanticipated cost increases);

•	legalization and growth of gaming in other jurisdictions;

•	any violations by us of the anti-money laundering laws or Foreign Corrupt Practices Act;

•	changes in gaming laws or regulations;

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

•	potential violations of law by Mr. Kazuo Okada, a former stockholder of ours;

•	continued compliance with all provisions in our debt agreements;

•	conditions precedent to funding under our credit facilities;

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

•	cybersecurity risk, including misappropriation of customer information or other breaches of information security;

•	our ability to protect our intellectual property rights; and

•	our current and future insurance coverage levels.

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 available to us at the time this statement is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

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

One of our primary exposures 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, supplemented by hedging activities as believed by us to be appropriate. 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.

Interest Rate Sensitivity

As of September 30, 2019, approximately 54.5% of our long-term debt was based on fixed rates. Based on our borrowings as of September 30, 2019, an assumed 100 basis point change in the variable rates would cause our annual interest expense to change by $43.8 million.

In order to mitigate exposure to interest rate fluctuations on the Retail Term Loan, the Company entered into a five year interest rate collar with a notional value of $615.0 million. The interest rate collar establishes a range whereby the Company will pay the counterparty if one-month LIBOR falls below the established floor rate of 1.00%, and the counterparty will pay the Company if one-month LIBOR exceeds the ceiling rate of 3.75%.

Foreign Currency Risks

We expect most of the revenues and expenses for any casino that we operate in Macau will be denominated in Hong Kong dollars or Macau patacas; however, a significant portion of our Wynn Macau, Limited debt is denominated in U.S. dollars. Fluctuations in the exchange rates resulting in weakening of the Macau pataca or the Hong Kong dollar in relation to the U.S. dollar could have materially adverse effects on our results, financial condition and ability to service debt. Based on our balances

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as of September 30, 2019, an assumed 1% change in the U.S. dollar/Hong Kong dollar exchange rate would cause a foreign currency transaction gain/loss of $27.7 million.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), 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 were 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.

Management's Report on Internal Control Over Financial Reporting

There were no changes in our 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 quarter to which this report relates that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

We are occasionally party to lawsuits. As with all litigation, no assurance can be provided as to the outcome of such matters and we note that litigation inherently involves significant costs. For information regarding the Company's legal proceedings see Item 1—"Notes to Condensed Consolidated Financial Statements," Note 14, "Commitments and Contingencies" of Part I in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

A description of our risk factors can be found in Item 1A, Part I of our Annual Report on Form 10-K for the year ended December 31, 2018. There were no material changes to those risk factors during the nine months ended September 30, 2019 other than resolution of certain litigation as discussed in Item 1—"Notes to Condensed Consolidated Financial Statements," Note 14, "Commitments and Contingencies" of Part I in this Quarterly Report on Form 10-Q.

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

Issuer Purchases of Equity Securities

The following table summarizes the share repurchases made by the Company under its equity repurchase program during the quarter ended September 30, 2019:

For the Month Ended		Number of Shares Repurchased			Weighted Average Price Paid Per Share				Shares Repurchased as Part of a Publicly Announced Program			Approximate Dollar Value Remaining Under the Program (in thousands) (1)
July 31, 2019		—			$	—			—			$	828,366
August 31, 2019		269,617			$	104.63			269,617			$	800,149
September 30, 2019		—			$	—			—			$	800,149

(1) The Company's Board of Directors authorized an equity repurchase program in April of 2016 of up to $1.0 billion of our common stock. Repurchases may be made at the discretion of the Company from time to time on the open market or in privately negotiated transactions. The Company is not obligated to make any repurchases, and the repurchase program may be discontinued at any time. Any shares acquired are available for general corporate purposes. Any shares repurchased during the periods presented are recorded in Treasury Stock.

The following table summarizes the shares repurchased in satisfaction of tax withholding obligations on vested restricted stock during the quarter ended September 30, 2019, which were not part of the Company's publicly announced repurchase program:

For the Month Ended		Number of Shares Repurchased			Weighted Average Price Paid Per Share				Approximate Dollar Value of Repurchased Shares (in thousands)
July 31, 2019		11,644			$	139.37			$	1,623
August 31, 2019		1,150			$	114.73			$	132
September 30, 2019		910			$	109.97			$	101

Item 5. Other Information

None.

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Item 6. Exhibits

(a)	Exhibits

 

Exhibit No.		Description
3.1		Third Amended and Restated Articles of Incorporation of the Registrant. (Incorporated by reference from the Quarterly Report on Form 10-Q filed by the Registrant on May 8, 2015.)
3.2		Eighth Amended and Restated Bylaws of the Registrant. (Incorporated by reference from the Quarterly Report on Form 10-Q filed by the Registrant on November 6, 2015.)
*4.1		Indenture, dated as of September 20, 2019, by and among Wynn Resorts Finance, LLC, and Wynn Resorts Capital Corp., as joint and several obligors and the Guarantors named therein and U.S. Bank National Association, as trustee.
*10.1		Credit Agreement, dated as of September 20, 2019, by and among Wynn Resorts Finance, LLC, as borrower, the subsidiaries of borrower party hereto, as guarantors, Deutsche Bank AG New York Branch, as administrative agent and as collateral agent.
*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		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350.
101		The following material from Wynn Resorts, Limited's Quarterly Report on Form 10-Q, formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018; (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 and 2018; (iv) the Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2018; (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; and (vi) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104		Cover Page Interactive Data File - The cover page XBRL tags are embedded within the Inline XBRL document.

 

Wynn Resorts, Limited agrees to furnish to the U.S. Securities and Exchange Commission, upon request, a copy of each agreement with respect to long-term debt not filed herewith in reliance upon the exemption from filing applicable to any series of debt which does not exceed 10% of the total consolidated assets of the company.

*	Filed herein

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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 RESORTS, LIMITED
Dated: November 6, 2019		By:		/s/ Craig S. Billings
		Craig S. Billings
		President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

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Section 1.01	Definitions.

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(i)	provisions for taxes based on income or profits or capital gains, plus franchise or similar taxes, of the Issuers and the Guarantors for such Test Period;

(ii)	Consolidated Interest Expense of the Issuers and the Guarantors for such Test Period, whether paid or accrued and whether or not capitalized;

(iii)

any cost, charge, fee or expense (including discounts and commissions and including fees and charges incurred in respect of letters of credit or bankers acceptance financings) (or any amortization of any of the foregoing) associated with any issuance (or proposed issuance) of debt, or equity or any refinancing transaction (or proposed refinancing transaction) or any amendment or other modification of any debt instrument;

(iv)

depreciation, amortization (including amortization of goodwill and other intangibles) and any other non-cash charges or expenses, including any write off or write downs, reducing Consolidated Net Income (excluding (x) any amortization of a prepaid cash expense that was paid in a prior Test Period and (y) any non-cash charges and expenses that result in an accrual of a reserve for cash charges in any future Test Period that Wynn Resorts Finance elects not to add back in the current Test Period (it being understood that reserves may be charged in the current Test Period or when paid, as reasonably determined by Wynn Resorts Finance)) of the Issuers and the Guarantors for such Test Period; provided that if any such non-cash charges or expenses represent an accrual of a reserve for potential cash items in any future Test Period, the cash payment in respect thereof in such future Test Period shall be subtracted from Consolidated EBITDA to the extent Wynn Resorts Finance elected to previously add back such amounts to Consolidated EBITDA;

(v)	any Pre-Opening Expenses;

(vi)

the amount of any restructuring costs, charges, accruals, expenses or reserves (including those relating to severance, relocation costs and one-time compensation charges), costs incurred in connection with any non-recurring strategic initiatives, other business optimization expenses (including incentive costs and expenses relating to business optimization programs and signing, retention and completion bonuses) and any unusual or non-recurring costs, charges, accruals, reserves or items of loss or expense (including, without limitation, losses on asset sales (other than asset sales in the ordinary course of business));

(vii)	any charges, fees and expenses (or any amortization thereof) (including, without limitation, all legal, accounting, advisory or other transaction-related fees, charges, costs and expenses and any bonuses or success fee payments related to the Transactions) related to the Transactions,

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(viii)	any losses resulting from mark to market accounting of swap contracts or other derivative instruments; and

(ix)

the aggregate amount of accrued and unpaid Management Fees, IP Licensing Fees and Allocable Overhead; provided that the cash payment in respect of such accrued and unpaid Management Fees, IP Licensing Fees and Allocable Overhead (other than to the extent any such accrual occurred prior to the Issue Date) in any future Test Period shall be subtracted from Consolidated EBITDA in such Test Period to the extent Wynn Resorts Finance elected to previously add back such amounts to Consolidated EBITDA; minus

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Section 1.02	Other Definitions.

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Section 1.03	Rules of Construction.

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Section 2.01	Form and Dating.

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Section 2.02	Execution and Authentication.

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Section 2.03	Registrar and Paying Agent.

Section 2.04	Paying Agent to Hold Money in Trust.

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Section 2.05	Holder Lists.

Section 2.06	Transfer and Exchange.

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Section 2.07	Replacement Notes.

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Section 2.08	Outstanding Notes.

Section 2.09	Treasury Notes.

Section 2.10	Temporary Notes.

Section 2.11	Cancellation.

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Section 2.12	Defaulted Interest.

Section 2.13	Issuance of Additional Notes.

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Section 3.01	Notices to Trustee.

Section 3.02	Selection of Notes to Be Redeemed or Purchased.

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Section 3.03	Notice of Redemption.

Section 3.04	Effect of Notice of Redemption.

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Section 3.05	Deposit of Redemption or Purchase Price.

Section 3.06	Notes Redeemed or Purchased in Part.

Section 3.07	Optional Redemption.

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Section 3.08	Mandatory Redemption.

Section 3.09	Mandatory Disposition or Redemption Pursuant to Gaming Laws.

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Section 4.01	Payment of Notes.

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Section 4.02	Maintenance of Office or Agency.

Section 4.03	Reports.

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Section 4.04	Compliance Certificate.

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Section 4.05	Taxes.

Section 4.06	Stay, Extension and Usury Laws.

Section 4.07	Limitation on Liens Securing Indebtedness

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Section 4.08	Limitation on Sale and Leaseback Transactions.

Section 4.09	Exempted Liens and Sale and Leaseback Transactions.

Section 4.10	Corporate and Organizational Existence.

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Section 4.11	Offer to Purchase Upon Change of Control.

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Section 5.01	Merger, Consolidation, or Sale of Assets.

Section 5.02	Successor Corporation Substituted.

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Section 6.01	Events of Default.

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Section 6.02	Acceleration.

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Section 6.03	Other Remedies.

Section 6.04	Waiver of Past Defaults.

Section 6.05	Control by Majority.

Section 6.06	Limitation on Suits.

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Section 6.07	Rights of Holders of Notes to Receive Payment.

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Section 6.08	Collection Suit by Trustee.

Section 6.09	Trustee May File Proofs of Claim.

Section 6.10	Priorities.

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Section 6.11	Undertaking for Costs.

Section 7.01	Duties of Trustee.

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Section 7.02	Rights of Trustee.

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Section 7.03	Individual Rights of Trustee.

Section 7.04	Trustee’s Disclaimer.

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Section 7.05	Notice of Defaults.

Section 7.06	Compensation and Indemnity.

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Section 7.07	Replacement of Trustee.

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Section 7.08	Successor Trustee by Merger, etc.

Section 7.09	Eligibility; Disqualification; Conflicting Interests.

Section 7.10	Preferential Collection of Claims Against the Issuers.

Section 8.01	Option to Effect Legal Defeasance or Covenant Defeasance.

Section 8.02	Legal Defeasance and Discharge.

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Section 8.03	Covenant Defeasance.

Section 8.04	Conditions to Legal or Covenant Defeasance.

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Section 8.05	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

Section 8.06	Repayment to Issuers.

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Section 8.07	Reinstatement.

Section 9.01	Without Consent of Holders of Notes.

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Section 9.02	With Consent of Holders of Notes.

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Section 9.03	Revocation and Effect of Consents.

Section 9.04	Notation on or Exchange of Notes.

Section 9.05	Trustee to Sign Amendments, etc.

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Section 11.01	Note Guarantee.

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Section 11.02	Limitation on Guarantor Liability.

Section 11.03	Execution and Delivery of Note Guarantee.

Section 11.04	Guarantors May Consolidate, etc., on Certain Terms.

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Section 11.05	Release of Guarantees.

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Section 11.06	Additional Note Guarantees.

Section 12.01	Satisfaction and Discharge.

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Section 12.02	Application of Trust Money.

Section 13.01	Joint and Several Liability.

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Section 14.01	Notices.

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Section 14.02	Certificate and Opinion as to Conditions Precedent.

Section 14.03	Statements Required in Certificate or Opinion.

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Section 14.04	Rules by Trustee and Agents.

Section 14.05	No Personal Liability of Directors, Officers, Employees and Equity Holders.

Section 14.06	Governing Law.

Section 14.07	No Adverse Interpretation of Other Agreements.

Section 14.08	Successors.

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Section 14.09	Severability.

Section 14.10	Counterpart Originals.

Section 14.11	Table of Contents, Headings, etc.

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By:	Wynn Resorts Holdings, LLC, its sole member

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By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

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By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

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By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

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i.	100% of the principal amount of the Notes to be redeemed; or

ii.

as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 50 basis points,

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*	This schedule should be included only if the Note is issued in global form.

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i.	100% of the principal amount of the Notes to be redeemed; or

ii.

as determined by an Independent Investment Banker, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 50 basis points,

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*	This schedule should be included only if the Note is issued in global form.

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By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

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By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

By:	Wynn Resorts Finance, LLC, its sole member

By:	Wynn Resorts Holdings, LLC, its sole member

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ANNEX A‑1	-    Revolving Commitments

ANNEX A‑2	-    Term A Facility Commitments

SCHEDULE 1.01(a)	-    Guarantors

SCHEDULE 1.01(b)	-    Excluded Subsidiaries

SCHEDULE 1.01(c)	-    Closing Date Mortgaged Real Property

SCHEDULE 2.03(s)	-    Existing Letters of Credit

SCHEDULE 7.01	-    Jurisdictions of Local Counsel Opinions

SCHEDULE 7.01(j)	-    Approvals

SCHEDULE 8.03	-    Litigation

SCHEDULE 8.07	-    ERISA

SCHEDULE 8.10	-    Environmental Matters

SCHEDULE 8.12(a)	-    Subsidiaries

SCHEDULE 8.12(b)	-    Immaterial Subsidiaries

SCHEDULE 8.12(c)	-    Unrestricted Subsidiaries

SCHEDULE 8.13	-    Ownership

SCHEDULE 8.15	-    Licenses and Permits

SCHEDULE 8.18	-    Intellectual Property

SCHEDULE 8.19	-    Regulation H

SCHEDULE 8.21(a)	-    Real Property

SCHEDULE 8.21(b)	-    Real Property Takings, etc.

SCHEDULE 9.16	-    Post-Closing Matters

SCHEDULE 10.01	-    Existing Indebtedness

SCHEDULE 10.02	-    Certain Existing Liens

SCHEDULE 10.04	-    Investments

SCHEDULE 10.07	-    Transactions with Affiliates

EXHIBIT A‑1	-    Form of Revolving Note

EXHIBIT A‑2	-    Form of Term A Facility Note

EXHIBIT B	-    Form of Notice of Borrowing

EXHIBIT C	-    Form of Notice of Continuation/Conversion

EXHIBIT D	-    Forms of U.S. Tax Compliance Certificate

EXHIBIT E	-    Form of Compliance Certificate

EXHIBIT F	-    Form of Subordination Agreement

EXHIBIT G	-    Form of Solvency Certificate

EXHIBIT H	-    Form of Security Agreement

EXHIBIT I-1	-    Form of Massachusetts Mortgage

EXHIBIT I-2	-    Form of Nevada Mortgage

EXHIBIT J	-    Form of Assignment and Assumption Agreement

EXHIBIT K	-    Form of Letter of Credit Request

EXHIBIT L	-    Form of Joinder Agreement

EXHIBIT M	-    Form of Perfection Certificate

EXHIBIT N	-    Form of Auction Procedures

EXHIBIT O	-    Form of Open Market Assignment and Assumption Agreement

EXHIBIT P	-    Form of Term Loan Extension Amendment

EXHIBIT Q	-    Form of Revolving Extension Amendment

EXHIBIT R	-    Form of Pari Passu Intercreditor Agreement

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EXHIBIT S	-    Form of Second Lien Intercreditor Agreement

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By:	/s/ Craig. S Billings

By:	/s/ Craig. S Billings

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By:	/s/ Craig. S Billings

By:	/s/ Craig. S Billings

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By:	/s/ Craig. S Billings

By:	/s/ Craig. S Billings

By:	/s/ Craig. S Billings

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By:	/s/ Craig. S Billings

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By:	/s/ Michael Strobel

By:	/s/ Yumi Okabe

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By:	/s/ Yumi Okabe

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By:	/s/ Michael Strobel

By:	/s/ Yumi Okabe

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By:	/s/ Charles D. Johnston

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By:	/s/ Winston Lug

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By:	/s/ Brian D. Corum

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By:	/s/ Aadil Zuberi

By:	/s/ David L. Berger

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By:	/s/ Andy Tessema

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By:	/s/ Nadeige Dang

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By:	/s/ Keith Connolly

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By:	/s/ Thomas Parrott

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By:	/s/ Sean McWhinnie

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By:	/s/ Steven Jonassen

By:	/s/ Hayden Arnoux

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By:	/s/ John Davies

1.	I have reviewed this Quarterly Report on Form 10-Q of Wynn Resorts, Limited;

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	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

d.	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 fiscal 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 the 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.

1.	I have reviewed this Quarterly Report on Form 10-Q of Wynn Resorts, Limited;

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	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

d.	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 fiscal 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 the 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.

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.