WYNN LAS VEGAS LLC - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION OF CEO AND CFO - WYNN LAS VEGAS LLC	dex321.htm
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - WYNN LAS VEGAS LLC	dex312.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - WYNN LAS VEGAS LLC	dex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2011

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

For the transition period from to

Commission File No. 333-100768

WYNN LAS VEGAS, LLC

(Exact name of registrant as specified in its charter)


NEVADA		88-0494875
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3131 Las Vegas Boulevard South—Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 770-7555

(Registrant’s telephone number, including area code)

N/A

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ¨ No ¨

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company ¨

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

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

Wynn Resorts Holdings, LLC owns all of the membership interests of the Registrant as of May 6, 2011.

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

INDEX


Part I. Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – March 31, 2011 (unaudited) and December 31, 2010	3

	Condensed Consolidated Statements of Operations (unaudited) – Three months ended March 31, 2011 and 2010	4

	Condensed Consolidated Statements of Cash Flows (unaudited) – Three months ended March 31, 2011 and 2010	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

Part II. Other Information

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 6.	Exhibits	28

Signature		29

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)


	March 31, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	87,163		$	52,540
Receivables, net		136,613			124,814
Inventories		60,447			64,520
Prepaid expenses and other		21,043			21,188

Total current assets		305,266			263,062
Property and equipment, net		3,687,928			3,731,211
Intangible assets, net		12,287			12,804
Deferred financing costs, net		45,859			47,300
Deposits and other assets		45,322			50,070
Investment in unconsolidated affiliates		3,835			4,069

Total assets	$	4,100,497		$	4,108,516

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	1,050		$	1,050
Accounts payable		29,297			35,837
Accrued interest		43,171			54,083
Accrued compensation and benefits		52,505			39,305
Gaming taxes payable		13,586			9,963
Other accrued expenses		19,733			17,392
Customer deposits		73,024			93,355
Due to affiliates, net		31,044			28,291

Total current liabilities		263,410			279,276
Long-term debt		2,620,445			2,620,484
Due to affiliates, net		107,725			101,797
Interest rate swap		7,116			8,457

Total liabilities		2,998,696			3,010,014

Commitments and contingencies (Note 10)

Member’s equity:
Contributed capital		1,976,289			1,973,424
Accumulated deficit		(874,488	)		(874,922	)

Total member’s equity		1,101,801			1,098,502

Total liabilities and member’s equity.	$	4,100,497		$	4,108,516

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands)

(unaudited)


	Three months ended March 31,
	2011			2010
Operating revenues:
Casino	$	194,245		$	139,510
Rooms		87,956			77,595
Food and beverage		106,140			95,943
Entertainment, retail and other		55,397			51,627

Gross revenues		443,738			364,675
Less: promotional allowances		(48,701	)		(46,068	)

Net revenues		395,037			318,607

Operating costs and expenses:
Casino		84,472			76,827
Rooms		29,798			30,598
Food and beverage		61,108			57,986
Entertainment, retail and other		37,685			35,887
General and administrative		54,294			59,821
Provision for doubtful accounts		4,752			6,640
Management fees		5,928			4,774
Pre-opening costs		—			379
Depreciation and amortization		65,796			78,926
Property charges and other		2,030			1,254

Total operating costs and expenses		345,863			353,092

Operating income (loss)		49,174			(34,485	)

Other income (expense):
Interest income and other		73			91
Interest expense, net of capitalized interest		(50,310	)		(45,076	)
Increase (decrease) in swap fair value		1,341			(2,278	)
Equity in income from unconsolidated affiliates		156			56

Other income (expense), net		(48,740	)		(47,207	)

Net income (loss)	$	434		$	(81,692	)

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Three Months Ended March 31,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	434		$	(81,692	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		65,796			78,926
Stock-based compensation		2,865			2,948
Amortization and write-off of deferred financing costs and other		3,368			4,426
Equity in income from unconsolidated affiliates, net of distributions		234			(56	)
Provision for doubtful accounts		4,752			6,640
Property charges and other		2,030			1,254
(Increase) decrease in swap fair value		(1,341	)		2,278
Increase (decrease) in cash from changes in:
Receivables		(16,551	)		(14,496	)
Inventories and prepaid expenses and other		3,670			6,622
Accounts payable and accrued expenses		(18,619	)		1,470
Due to affiliates, net		(2,671	)		1,549

Net cash provided by operating activities		43,967			9,869

Cash flows from investing activities:
Capital expenditures, net of construction payables and retention		(22,015	)		(35,458	)
Purchase of other assets		(1,329	)		(382	)
Due to affiliates, net		14,408			6,473

Net cash used in investing activities		(8,936	)		(29,367	)

Cash flows from financing activities:
Principal payments on long-term debt		(350	)		(350	)
Payments of deferred financing costs		(58	)		—

Net cash used in financing activities		(408	)		(350	)

Cash and cash equivalents:
Increase (decrease) in cash and cash equivalents		34,623			(19,848	)
Balance, beginning of period		52,540			66,354

Balance, end of period	$	87,163		$	46,506

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Basis of Presentation

Organization

Wynn Las Vegas, LLC was formed on April 17, 2001 as a Nevada limited liability company. Unless the context otherwise requires, all references herein to the “Company” refer to Wynn Las Vegas, LLC, a Nevada limited liability company and its consolidated subsidiaries. The sole member of the Company is Wynn Resorts Holdings, LLC (“Holdings”). The sole member of Holdings is Wynn Resorts, Limited (“Wynn Resorts”). The Company was organized primarily to construct and operate “Wynn Las Vegas,” a destination resort and casino on the “Strip” in Las Vegas, Nevada. Wynn Las Vegas opened on April 28, 2005. On December 22, 2008, the Company expanded Wynn Las Vegas with the opening of Encore at Wynn Las Vegas (“Encore”).

Wynn Las Vegas Capital Corp. (“Wynn Capital”) is a wholly owned subsidiary of the Company incorporated on June 3, 2002, solely for the purpose of obtaining financing for Wynn Las Vegas. Wynn Capital is authorized to issue 2,000 shares of common stock, par value $0.01. At March 31, 2011, the Company owned the one share that was issued and outstanding. Wynn Capital has neither any significant net assets nor has had any operating activity. Its sole function is to serve as the co-issuer of the mortgage notes described below. Wynn Las Vegas, LLC and Wynn Capital together are hereinafter referred to as the “Issuers”.

Basis of Presentation

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

The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods have been made. The results for the three months ended March 31, 2011 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, 2010.

2. Summary of Significant Accounting Policies

Accounts Receivable and Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of casino accounts receivable. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. As of March 31, 2011 and December 31, 2010, approximately 66% and 75% respectively, of the Company’s markers were due from customers residing in foreign countries, primarily in Asia. Business or economic conditions or other significant events in these countries could affect the collectibility of such receivables.

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

Inventories

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

Revenue Recognition and Promotional Allowances

Casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs and for chips in the customers’ possession. Hotel, food and beverage, entertainment and other operating revenues are recognized when services are performed. Entertainment, retail and other revenue includes rental income which is recognized on a time proportion basis over the lease term. Contingent rental income is recognized when the right to receive such rental income is established according to the lease agreements. Advance deposits on rooms and advance ticket sales are recorded as deferred revenues until services are provided to the customer.

Revenues are recognized net of certain sales incentives which are recorded as a reduction of revenue. Consequently, the Company’s casino revenues are reduced by discounts and points earned in the players club loyalty program.

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


	Three Months Ended March 31,
	2011		2010
Rooms	$	9,926	$	10,903
Food and beverage		15,817		15,691
Entertainment, retail and other		4,052		4,821

Total	$	29,795	$	31,415

Gaming Taxes

The Company is subject to taxes based on gross gaming revenues, subject to applicable adjustments. These gaming taxes are an assessment on the Company’s gaming revenues and are recorded as an expense within the “Casino” line item in the accompanying Condensed Consolidated Statements of Operations. These taxes totaled approximately $13.8 million and $9.7 million for the three months ended March 31, 2011 and 2010, respectively.

Advertising Costs

The Company expenses advertising costs the first time the advertising takes place. Advertising costs incurred in development periods are included in pre-opening costs. Once a project is completed, advertising costs are included in general and administrative expenses. Advertising costs totaled approximately $2.9 million and $3.5 million, for the three months ended March 31, 2011 and 2010, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation related to equity shares of Wynn Resorts granted to its employees by recognizing the costs of the employee services received in exchange for the equity award instrument based on the grant date fair value of the awards over the service period. For the three months ended March 31, 2011 and 2010, the Company recorded $2.9 million and $2.9 million, respectively, in share based compensation with a corresponding credit to contributed capital.

3. Supplemental Disclosure of Cash Flow Information

Interest paid for the three months ended March 31, 2011 and 2010 totaled approximately $59.4 million and $4.3 million, respectively. Interest capitalized for the three months ended March 31, 2010 totaled approximately $0.2 million. There was no interest capitalized during the three months ended March 31, 2011.

During the three months ended March 31, 2011 and 2010, capital expenditures include a decrease of approximately $3.2 and $2 million respectively, in construction payables and retention recorded through amounts due to affiliates.

4. Receivables, net

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


	March 31, 2011			December 31, 2010
Casino	$	175,331		$	167,844
Hotel		18,540			16,512
Other		13,638			11,534

		207,509			195,890
Less: allowance for doubtful accounts		(70,896	)		(71,076	)

	$	136,613		$	124,814

5. Property and Equipment, net

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


	March 31, 2011			December 31, 2010
Land and improvements	$	719,754		$	719,753
Buildings and improvements		2,591,377			2,591,246
Airplane		44,364			44,349
Furniture, fixtures and equipment		1,362,017			1,347,601
Construction in progress		9,827			19,281

		4,727,339			4,722,230
Less: accumulated depreciation		(1,039,411	)		(991,019	)

	$	3,687,928		$	3,731,211

6. Long-Term Debt

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


	March 31, 2011			December 31, 2010
7⁷/8% First Mortgage Notes, due November 1, 2017, net of original issue discount of $9,412 at March 31, 2011 and $9,678 at December 31, 2010	$	490,588		$	490,322
7⁷/8% First Mortgage Notes, due May 1, 2020, net of original issue discount of $2,444 at March 31, 2011 and $2,489 at December 31, 2010		349,566			349,521
7³/4% First Mortgage Notes, due August 15, 2020		1,320,000			1,320,000
Revolving Credit Facility, due July 15, 2013; interest at LIBOR plus 3.0%		3,868			3,868
Revolving Credit Facility, due July 17, 2015; interest at LIBOR plus 3.0%		16,187			16,187
Term Loan Facility, due August 15, 2013; interest at LIBOR plus 1.875%		44,281			44,281
Term Loan Facility, due August 17, 2015; interest at LIBOR plus 3.0%		330,605			330,605
$42 million Note Payable due April 1, 2017; interest at LIBOR plus 1.25%		36,400			36,750
Payable to Affiliate		30,000			30,000

		2,621,495			2,621,534
Current portion of long-term debt		(1,050	)		(1,050	)

	$	2,620,445		$	2,620,484

Revolving Credit Facilities

As of March 31, 2011, $20.1 million had been borrowed under the Revolving Credit Facilities. The Company also had $19.5 million of outstanding letters of credit that reduce its availability under the Revolving Credit Facilities. Accordingly, the Company has availability of $327.4 million under the Revolving Credit Facilities as of March 31, 2011.

Debt Covenant Compliance

As of March 31, 2011, management believes the Company was in compliance with all debt covenants.

Fair Value of Long-term Debt

The net book value of the Company’s outstanding first mortgage notes was approximately $2.2 billion at both March 31, 2011 and December 31, 2010. The estimated fair value of the Company’s outstanding first mortgage notes, based on quoted market prices, was approximately $2.4 billion and $2.4 billion at March 31, 2011 and December 31, 2010, respectively. The net book value of the Company’s other debt instruments was approximately $431.3 million and $432 million at March 31, 2011 and December 31, 2010, respectively. The estimated fair value of the Company’s other debt instruments was approximately $430.8 million and $426.5 million at March 31, 2011 and December 31, 2010, respectively.

7. Interest Rate Swap

The Company has entered into floating-for-fixed interest rate swap arrangements in order to manage interest rate risk relating to certain of its debt facilities. These interest rate swap agreements modify the Company’s exposure to interest rate risk by converting a portion of the Company’s floating-rate debt to a fixed rate. These interest rate swaps essentially fix the interest rate at the percentages noted below; however, changes in the fair value of the interest rate swaps for each reporting period have been recorded as an increase/decrease in swap fair value in the accompanying Condensed Consolidated Statements of Operations, as the interest rate swaps do not qualify for hedge accounting.

The Company measures the fair value of its interest rate swaps on a recurring basis pursuant to accounting standards for fair value measurements. These standards establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company categorizes these interest rate swaps as Level 2.

The Company currently has one interest rate swap agreement to hedge a portion of the underlying interest rate risk on borrowings under the Wynn Las Vegas credit facilities. Under this swap agreement, the Company pays a fixed interest rate of 2.485% on borrowings of $250 million incurred under the Wynn Las Vegas credit facilities in exchange for receipts on the same amount at a variable interest rate based on the applicable LIBOR at the time of payment. This interest rate swap fixes the interest rate on $250 million of borrowings at approximately 5.485%. This interest rate swap agreement matures in November 2012. As of March 31, 2011 and December 31, 2010, the fair value of this interest rate swap was a liability of $7.1 million and $8.5 million, respectively.

8. Related Party Transactions, net

Amounts Due to Affiliates, net

As of March 31, 2011, the Company’s current Due to affiliates was primarily comprised of construction payables of approximately $7.4 million, construction retention of approximately $3 million and other net amounts due to affiliates totaling $20.6 million (including corporate allocations discussed below). The long-term Due to affiliates is management fees of approximately $107.7 million (equal to 1.5% of net revenues and payable upon meeting certain leverage ratios as specified in the documents governing the Company’s credit facilities and the First Mortgage Notes indentures).

As of December 31, 2010, the Company’s current Due to affiliates was primarily comprised of construction payables of approximately $10.3 million, construction retention of approximately $3.3 million and other net amounts due to affiliates totaling $14.7 million (including corporate allocations discussed below). The long-term Due to affiliates is management fees of $101.8 million (equal to 1.5% of net revenues and payable upon meeting certain leverage ratios as specified in the documents governing the Company’s credit facilities and the First Mortgage Notes indentures).

The Company periodically settles amounts due to affiliates with cash receipts and payments, except for the management fee, which is payable upon meeting certain leverage ratios specified in the documents governing the First Mortgage Notes and the credit facilities.

Corporate Allocations

The accompanying condensed consolidated statements of operations include allocations from Wynn Resorts for legal, accounting, human resources, information services, real estate, and other corporate support services. The corporate support service allocations have been determined on a basis that Wynn Resorts and the Company consider to be reasonable estimates of the utilization of service provided or the benefit received by the Company. Wynn Resorts maintains corporate offices at Wynn Las Vegas without charge from the Company. The Company settles these corporate allocation charges with Wynn Resorts on a periodic basis as discussed in “Amounts Due to Affiliates, net” above. During the three months ended March 31, 2011 and 2010, approximately $6.4 million and $6.8 million, respectively, were charged to the Company for such corporate allocations.

Amounts Due to Officers, net

The Company periodically provides services to Stephen A. Wynn, Chairman of the Board, Chief Executive Officer and one of the principal stockholders of Wynn Resorts (“Mr. Wynn”), and certain other executive officers and directors of Wynn Resorts, including household services, construction work and other personal

services. The cost of these services is transferred to Wynn Resorts on a periodic basis. Mr. Wynn and these other officers and directors have amounts on deposit with Wynn Resorts to prepay any such items, which are replenished on an ongoing basis as needed.

Villa Suite Lease

On March 18, 2010, Mr. Wynn and Wynn Las Vegas entered into an Amended and Restated Agreement of Lease (the “SW Lease”) for a villa to serve as Mr. Wynn’s personal residence. The SW Lease amends and restates a prior lease. The SW Lease was approved by the Audit Committee of the Board of Directors of the Company. The term of the SW lease commenced as of March 1, 2010 and runs concurrent with Mr. Wynn’s employment agreement with the Company; provided that either party may terminate on 90 days notice. Pursuant to the SW Lease, the rental value of the villa will be treated as imputed income to Mr. Wynn, and will be equal to the fair market value of the accommodations provided. Effective March 1, 2010, and for the first two years of the term of the SW Lease, the rental value will be $503,831 per year. The rental value for the villa will be re-determined every two years during the term of the lease by the Audit Committee, with the assistance of an independent third-party appraisal. Certain services for, and maintenance of, the villa is included in the rental.

On March 17, 2010, Elaine P. Wynn and Wynn Las Vegas entered into an Agreement of Lease (the “EW Lease”) for the lease of a villa suite as Elaine P. Wynn’s personal residence. The EW Lease was approved by the Audit Committee of the Board of Directors of the Company. Pursuant to the terms of the EW Lease, Elaine P. Wynn paid annual rent equal to $350,000, which amount was determined by the Audit Committee with the assistance of a third-party appraisal. Certain services for, and maintenance of, the villa suite were included in the rental. The EW Lease superseded the terms of a prior agreement. The term of the EW lease commenced as of March 1, 2010 and was scheduled to terminate on December 31, 2010. The lease was extended on a month-to-month basis after December 31, 2010 and was terminated on March 31, 2011.

The “Wynn” Surname Rights Agreement

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

9. Property Charges and Other

Property charges and other for the three months ended March 31, 2011 and 2010 were $2 million and $1.3 million, respectively. Property charges generally include costs related to the retirement of assets for remodels and asset abandonments. Property charges and other for the three months ended March 31, 2011 and 2010, related to miscellaneous renovations and abandonments at Wynn Las Vegas and Encore.

10. Commitments and Contingencies

Litigation

The Company does not have any material litigation as of March 31, 2011.

Sales and Use Tax on Complimentary Meals

In March 2008, the Nevada Supreme Court ruled, in the matter captioned Sparks Nugget, Inc. vs. The State of Nevada Ex Rel. Department of Taxation, that food and non-alcoholic beverages purchased for use in providing

complimentary meals to customers and to employees was exempt from sales and use tax. In July 2008, the Court denied the State’s motion for rehearing. Through April 2008, Wynn Las Vegas has paid use tax on these items and has filed for refunds for the periods from April 2005 to April 2008. The amount subject to these refunds is approximately $5.4 million. As of March 31, 2011, the Company had not recorded a receivable related to this matter.

11. Consolidating Financial Information of Guarantors and Issuers

The following consolidating information relates to the Issuers of the First Mortgage Notes and their guarantor subsidiaries (World Travel, LLC; Las Vegas Jet, LLC; Wynn Show Performers, LLC; Wynn Golf, LLC; Kevyn, LLC; and Wynn Sunrise, LLC) and non-guarantor subsidiary (Wynn Completion Guarantor, LLC) as of March 31, 2011 and December 31, 2010, and for the three months ended March 31, 2011 and 2010.

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

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION

AS OF MARCH 31, 2011

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Nonguarantor Subsidiary			Eliminating Entries			Total
ASSETS
Current assets:
Cash and cash equivalents	$	87,158		$	—		$	5		$	—		$	87,163
Receivables, net		136,613			—			—			—			136,613
Inventories		60,447			—			—			—			60,447
Prepaid expenses and other		20,434			609			—			—			21,043

Total current assets		304,652			609			5			—			305,266

Property and equipment, net		3,494,910			193,018			—			—			3,687,928
Intangible assets, net		6,143			6,144			—			—			12,287
Deferred financing costs, net		45,859			—			—			—			45,859
Deposits and other assets		43,873			—			—			1,449			45,322
Investment in unconsolidated affiliates		(20,470	)		3,835			—			20,470			3,835

Total assets	$	3,874,967		$	203,606		$	5		$	21,919		$	4,100,497

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	1,050		$	—		$	—		$	1,050
Accounts payable		29,297			—			—			—			29,297
Accrued interest		43,171			—			—			—			43,171
Accrued compensation and benefits		51,126			1,379			—			—			52,505
Gaming taxes payable		13,586			—			—			—			13,586
Other accrued expenses		19,711			22			—			—			19,733
Customer deposits		73,024			—			—			—			73,024
Due to affiliates, net		(156,685	)		194,161			(7,881	)		1,449			31,044

Total current liabilities		73,230			196,612			(7,881	)		1,449			263,410
Long-term debt		2,585,095			35,350			—			—			2,620,445
Due to affiliates, net		107,725			—			—			—			107,725
Interest rate swap		7,116			—			—			—			7,116

Total liabilities		2,773,166			231,962			(7,881	)		1,449			2,998,696

Commitments and contingencies

Member’s equity:
Contributed capital		1,976,289			12,530			—			(12,530	)		1,976,289
Retained earnings (deficit)		(874,488	)		(40,886	)		7,886			33,000			(874,488	)

Total member’s equity		1,101,801			(28,356	)		7,886			20,470			1,101,801

Total liabilities and member’s equity	$	3,874,967		$	203,606		$	5		$	21,919		$	4,100,497

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION

AS OF DECEMBER 31, 2010

(amounts in thousands)


	Issuers			Guarantor Subsidiaries			Nonguarantor Subsidiary			Eliminating Entries			Total
ASSETS
Current assets:
Cash and cash equivalents	$	52,535		$	—		$	5		$	—		$	52,540
Receivables, net		124,814			—			—			—			124,814
Inventories		64,520			—			—			—			64,520
Prepaid expenses and other		20,778			410			—			—			21,188

Total current assets		262,647			410			5			—			263,062

Property and equipment, net		3,537,264			193,947			—			—			3,731,211
Intangible assets, net		6,660			6,144			—			—			12,804
Deferred financing costs, net		47,300			—			—			—			47,300
Deposits and other assets		47,437			3			—			2,630			50,070
Investment in unconsolidated affiliates		(19,685	)		4,069			—			19,685			4,069

Total assets	$	3,881,623		$	204,573		$	5		$	22,315		$	4,108,516

LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	1,050		$	—		$	—		$	1,050
Accounts payable		35,837			—			—			—			35,837
Accrued interest		54,083			—			—			—			54,083
Accrued compensation and benefits		38,219			1,086			—			—			39,305
Gaming taxes payable		9,963			—			—			—			9,963
Other accrued expenses		17,361			31			—			—			17,392
Customer deposits		93,355			—			—			—			93,355
Due to affiliates, net		(160,735	)		194,277			(7,881	)		2,630			28,291

Total current liabilities		88,083			196,444			(7,881	)		2,630			279,276
Long-term debt		2,584,784			35,700			—			—			2,620,484
Due to affiliates		101,797			—			—			—			101,797
Interest rate swap		8,457			—			—			—			8,457

Total liabilities		2,783,121			232,144			(7,881	)		2,630			3,010,014

Commitments and contingencies

Member’s equity:
Contributed capital		1,973,424			12,530			—			(12,530	)		1,973,424
Retained earnings (deficit)		(874,922	)		(40,101	)		7,886			32,215			(874,922	)

Total member’s equity		1,098,502			(27,571	)		7,886			19,685			1,098,502

Total liabilities and member’s equity	$	3,881,623		$	204,573		$	5		$	22,315		$	4,108,516

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

THREE MONTHS ENDED MARCH 31, 2011

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Nonguarantor Subsidiary		Eliminating Entries			Total
Operating revenues:
Casino	$	194,245		$	—		$	—	$	—		$	194,245
Rooms		87,956			—			—		—			87,956
Food and beverage		106,140			—			—		—			106,140
Entertainment, retail and other		55,553			—			—		(156	)		55,397

Gross revenues		443,894			—			—		(156	)		443,738
Less: promotional allowances		(48,701	)		—			—		—			(48,701	)

Net revenues		395,193			—			—		(156	)		395,037

Operating costs and expenses:
Casino		84,472			—			—		—			84,472
Rooms		29,798			—			—		—			29,798
Food and beverage		61,108			—			—		—			61,108
Entertainment, retail and other		37,685			—			—		—			37,685
General and administrative		54,586			(136	)		—		(156	)		54,294
Provision for doubtful accounts		4,752			—			—		—			4,752
Management fees		5,928			—			—		—			5,928
Pre-opening costs		—			—			—		—			—
Depreciation and amortization		64,868			928			—		—			65,796
Property charges and other		2,030			—			—		—			2,030

Total operating costs and expenses		345,227			792			—		(156	)		345,863

Operating income (loss)		49,966			(792	)		—		—			49,174


Other income (expense):
Interest income and other		73			—			—		—			73
Interest expense, net of capitalized interest		(50,161	)		(149	)		—		—			(50,310	)
Increase in swap fair value		1,341			—			—		—			1,341
Equity in income (loss) from unconsolidated affiliates		(785	)		156			—		785			156

Other income (expense), net		(49,532	)		7			—		785			(48,740	)

Net income (loss)	$	434		$	(785	)	$	—	$	785		$	434

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION

THREE MONTHS ENDED MARCH 31, 2010

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Nonguarantor Subsidiary		Eliminating Entries			Total
Operating revenues:
Casino	$	139,510		$	—		$	—	$	—		$	139,510
Rooms		77,558			37			—		—			77,595
Food and beverage		95,943			—			—		—			95,943
Entertainment, retail and other		51,683			—			—		(56	)		51,627

Gross revenues		364,694			37			—		(56	)		364,675
Less: promotional allowances		(46,068	)		—			—		—			(46,068	)

Net revenues		318,626			37			—		(56	)		318,607

Operating costs and expenses:
Casino		76,827			—			—		—			76,827
Rooms		30,561			37			—		—			30,598
Food and beverage		57,986			—			—		—			57,986
Entertainment, retail and other		35,887			—			—		—			35,887
General and administrative		60,269			(392	)		—		(56	)		59,821
Provision for doubtful accounts		6,640			—			—		—			6,640
Management fees		4,774			—			—		—			4,774
Pre-opening costs		379			—			—		—			379
Depreciation and amortization		77,779			1,147			—		—			78,926
Property charges and other		1,254			—			—		—			1,254

Total operating costs and expenses		352,356			792			—		(56	)		353,092

Operating loss		(33,730	)		(755	)		—		—			(34,485	)


Other income (expense):
Interest income and other		82			9			—		—			91
Interest expense, net of capitalized interest		(44,916	)		(160	)		—		—			(45,076	)
Decrease in swap fair value		(2,278	)		—			—		—			(2,278	)
Equity in income (loss) from unconsolidated affiliates		(850	)		56			—		850			56

Other income (expense), net		(47,962	)		(95	)		—		850			(47,207	)

Net income (loss)	$	(81,692	)	$	(850	)	$	—	$	850		$	(81,692	)

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS INFORMATION

THREE MONTHS ENDED MARCH 31, 2011

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Cash flows from operating activities:
Net income (loss)	$	434		$	(785	)	$	—	$	785		$	434
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		64,868			928			—		—			65,796
Stock-based compensation		2,865			—			—		—			2,865
Amortization and writeoff of deferred financing costs and other		3,368			—			—		—			3,368
Equity in income (loss) from unconsolidated affiliates, net of distributions		785			234			—		(785	)		234
Provision for doubtful accounts		4,752			—			—		—			4,752
Property charges and other		2,030			—			—		—			2,030
Decrease in swap fair value		(1,341	)		—			—		—			(1,341	)
Increase (decrease) in cash from changes in:
Receivables		(16,551	)		—			—		—			(16,551	)
Inventories and prepaid expenses and other		3,869			(199	)		—		—			3,670
Accounts payable, accrued expenses and other		(18,903	)		284			—		—			(18,619	)
Due to affiliates, net		(2,540	)		(131	)		—		—			(2,671	)

Net cash provided by operating activities		43,636			331			—		—			43,967

Cash flows from investing activities:
Capital expenditures, net of construction payables and retentions		(22,019	)		4			—		—			(22,015	)
Purchase of other assets		(1,329	)		—			—		—			(1,329	)
Due to affiliates, net		14,393			15			—		—			14,408

Net cash provided by (used in) investing activities		(8,955	)		19			—		—			(8,936	)

Cash flows from financing activities:
Principal payments on long-term debt		—			(350	)		—		—			(350	)
Payments of deferred financing costs		(58	)		—			—		—			(58	)

Net cash used in financing activities		(58	)		(350	)		—		—			(408	)

Cash and cash equivalents:
Increase in cash and cash equivalents		34,623			—			—		—			34,623
Balance, beginning of period		52,535			—			5		—			52,540

Balance, end of period	$	87,158		$	—		$	5	$	—		$	87,163

WYNN LAS VEGAS, LLC AND SUBSIDIARIES

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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS INFORMATION

THREE MONTHS ENDED MARCH 31, 2010

(amounts in thousands)

(unaudited)


	Issuers			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminating Entries			Total
Cash flows from operating activities:
Net income (loss)	$	(81,692	)	$	(850	)	$	—	$	850		$	(81,692	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		77,779			1,147			—		—			78,926
Stock-based compensation		2,948			—			—		—			2,948
Amortization and writeoff of deferred financing costs and other		4,426			—			—		—			4,426
Equity in income (loss) from unconsolidated affiliates, net of distributions		850			(56	)		—		(850	)		(56	)
Provision for doubtful accounts		6,640			—			—		—			6,640
Property charges and other		1,254			—			—		—			1,254
Decrease in swap fair value		2,278			—			—		—			2,278
Increase (decrease) in cash from changes in:
Receivables		(14,496	)		—			—		—			(14,496	)
Inventories and prepaid expenses and other		6,615			7			—		—			6,622
Accounts payable, accrued expenses and other		1,603			(133	)		—		—			1,470
Due to affiliates, net		3,336			(1,787	)		—		—			1,549

Net cash provided by (used in) operating activities		11,541			(1,672	)		—		—			9,869

Cash flows from investing activities:
Capital expenditures, net of construction payables and retentions		(35,458	)		—			—		—			(35,458	)
Purchase of other assets		(382	)		—			—		—			(382	)
Due to affiliates, net		4,562			1,911			—		—			6,473

Net cash provided by (used in) investing activities		(31,278	)		1,911			—		—			(29,367	)

Cash flows from financing activities:
Principal payments on long-term debt		—			(350	)		—		—			(350	)
Capital contribution from the Parent		—			—			—		—			—

Net cash used in financing activities		—			(350	)		—		—			(350	)

Cash and cash equivalents:
Decrease in cash and cash equivalents		(19,737	)		(111	)		—		—			(19,848	)
Balance, beginning of period		65,998			351			5		—			66,354

Balance, end of period	$	46,261		$	240		$	5	$	—		$	46,506

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

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

Forward-Looking Statements

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

•

adverse tourism trends given the current domestic and international economic conditions;

•

volatility and weakness in world-wide credit and financial markets globally and from governmental intervention in the financial markets;

•

general global macroeconomic conditions;

•

decreases in levels of travel, leisure and consumer spending;

•

continued high unemployment;

•

fluctuations in occupancy rates and average daily room rates;

•

conditions precedent to funding under the agreements governing the disbursement of the proceeds of borrowings under our credit facilities;

•

continued compliance with all provisions in our credit agreements;

•

competition in the casino/hotel and resort industries and actions taken by our competitors in reaction to adverse economic conditions;

•

new development and construction activities of competitors;

•

our dependence on Stephen A. Wynn and existing management;

•

our dependence on Wynn Las Vegas and Encore for all of our cash flow;

•

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

•

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

•

changes in state law regarding water rights;

•

changes in U.S. laws regarding healthcare;

•

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

•

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

•

the impact that an outbreak of an infectious disease or the impact of a natural disaster may have on the travel and leisure industry;

•

the consequences of the wars in Iraq and Afghanistan, and other military conflicts in the Middle East and any future security alerts and/or terrorist attacks; and

•

pending or future legal proceedings.

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

Overview

We are a developer, owner and operator of destination casino resorts. We currently own and operate Wynn Las Vegas, a destination casino resort in Las Vegas, Nevada, which opened on April 28, 2005. On December 22, 2008, we expanded Wynn Las Vegas with the opening of Encore at Wynn Las Vegas (“Encore”). We believe Wynn Las Vegas is the preeminent destination casino resort on the Strip in Las Vegas.

Our Las Vegas resort complex features:

•

Approximately 186,000 square feet of casino space, offering 24-hour gaming and a full range of games, including private gaming salons, a sky casino, a poker room, and a race and sports book;

•

Two luxury hotel towers with a total of 4,750 spacious hotel rooms, suites and villas;

•

35 food and beverage outlets featuring signature chefs;

•

A Ferrari and Maserati automobile dealership;

•

Approximately 101,000 square feet of high-end, brand-name retail shopping, including stores and boutiques by Alexander McQueen, Brioni, Cartier, Chanel, Dior, Graff, Hermes, Louis Vuitton, Manolo Blahnik, Oscar de la Renta, Vertu and others;

•

Recreation and leisure facilities, including an 18-hole golf course, swimming pools, private cabanas and two full service spas and salons;

•

Two showrooms; and

•

Four nightclubs and a beach club.

Construction and Future Development

In response to our evaluation of our property and the reactions of our guests, we have and expect to continue to remodel and make enhancements and refinements to our resort complex. In January 2011, we completed a refurbishment and upgrade to the resort rooms at Wynn Las Vegas. A remodel of the suites was completed in early May 2011. These remodels were completed at a cost less than the project budget of $83 million. We expect the final cost close-out to be completed in the second quarter of 2011.

Approximately 142 acres of land immediately adjacent to Wynn Las Vegas is currently improved with a golf course. While we may develop this property in the future; due to the current economic environment and certain restrictions in our credit facilities, we have no immediate plans to develop this property.

Results of Operations

We offer gaming, hotel accommodations, dining, entertainment, retail shopping, convention services and other amenities at Wynn Las Vegas and Encore. We currently rely solely upon the operations of this resort complex for our operating cash flow. Concentration of our cash flow in one resort complex exposes us to certain

risks that competitors, whose operations are more diversified, may be better able to control. In addition to the concentration of operations in a single resort complex, many of our customers are high-end gaming customers who wager on credit, thus exposing us to credit risk. High-end gaming also increases the potential for variability in our results.

For the three months ended March 31, 2011, we benefited from a higher than normal table games win percentage, an increase in slot machine win, improved ADR, and an overall increase in all other revenue streams including entertainment, food and beverage. While we experienced a decrease in occupancy rate over the prior year, we were able to achieve an increase in average daily rate as we adjusted rates in an effort to attract customers who would take advantage of all aspects of our resort. While we benefited from higher win percentages on our table games and higher non-casino revenues during the quarter, the economic environment in the Las Vegas market is still uncertain.

We recorded net income for the quarter ended March 31, 2011 of $0.4 million compared to a net loss of $81.7 million recorded during the quarter ended March 31, 2010. This improvement was primarily a result of increased departmental profits, especially in the casino department and the hotel department, and a $13.1 million decrease in depreciation expense due to fully depreciated assets, offset by a $5.2 million increase in interest expense. See below for a more detailed discussion regarding our results.

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

•

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

•

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

•

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

•

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

•

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

Financial results for the three months ended March 31, 2011 compared to the three months ended March 31, 2010.

Revenues

Net revenues for the three months ended March 31, 2011 are composed of $194.2 million in casino revenues (49.2% of total net revenues) and $200.8 million of net non-casino revenues (50.8% of total net revenues). Net revenues for the three months ended March 31, 2010 were comprised of $139.5 million in casino revenues (43.8% of total net revenues) and $179.1 million of net non-casino revenues (56.2% of total net revenues).

Casino revenues are comprised of the net win from our table games and slot machine operations. We experienced an increase in casino revenues of approximately $54.7 million (or 39.2%) to $194.2 million for the three months ended March 31, 2011, compared to $139.5 million for the three months ended March 31, 2010. During the three months ended March 31, 2011, we experienced a 13.8% increase in drop and an increase in the average table games win percentage compared to the prior year quarter. Our average table games win percentage (before discounts) of 30.4% was above the expected range of 21% to 24% for the three months ended March 31, 2011. For the three months ended March 31, 2010, our average table games win percentage (before discounts) was 23.2%. Slot machine handle increased 6.6% during the three months ended March 31, 2011 as compared to 2010, and slot machine win increased 18.1% compared to the prior years quarter as more play shifted to higher hold machines.

For the three months ended March 31, 2011, room revenues were approximately $88 million, which represents a $10.4 million (or 13.4%) increase over the $77.6 million generated in the three months ended March 31, 2010. While we experienced a decrease in occupancy rate over the prior year, we were able to achieve an increase in Average Daily Rate (“ADR”) as we adjusted rates in an effort to attract customers who would take advantage of all aspects of our resort. See the table below for key operating measures related to our room revenue.


	Three Months Ended March 31,
	2011			2010
Average Daily Rate	$	240		$	203
Occupancy		87.9	%		89.4	%
REVPAR	$	211		$	181

Other non-gaming revenues for the three months ended March 31, 2011, which included food and beverage revenues of approximately $106.1 million, retail revenues of approximately $20 million, entertainment revenues of approximately $20.7 million, and other revenues from outlets, including the spa and salon, of approximately $14.7 million improved over the prior year period. Other non-casino revenues for the three months ended March 31, 2010 included: food and beverage revenues of approximately $95.9 million, retail revenues of approximately $18.9 million, entertainment revenues of approximately $18.2 million, and other revenues from outlets such as the spa and salon, of approximately $14.5 million. Food and beverage revenues increased primarily due to the opening of the Encore Beach Club and Surrender Nightclub in May 2010 as well our hotel restaurants and catering. Entertainment revenues increased over the prior year quarter primarily due to increased revenue from Garth Brooks in the Encore Theater and the Sinatra “Dance with Me” show. The Sinatra “Dance with Me” show ended its run on April 23, 2011.

Departmental, Administrative and Other Expenses

During the three months ended March 31, 2011, departmental expenses included casino expenses of $84.5 million, room expense of $29.8 million, food and beverage expenses of $61.1 million, and entertainment, retail and other expenses of $37.7 million. Also included are general and administrative expenses of approximately $54.3 million and approximately $4.8 million charged as a provision for doubtful accounts receivable. During the three months ended March 31, 2010, departmental expenses included casino expense of $76.8 million, room expense of $30.6 million, food and beverage expense of $58.0 million, and entertainment, retail and other expense of $35.9 million. Also included are general and administrative expenses of approximately $59.8 million and approximately $6.6 million charged as a provision for doubtful accounts receivable.

Entertainment, retail and other expense increased primarily as a result of the Sinatra “Dance with Me” show that began performances in December 2010. General and administrative expenses decreased primarily as a result of lower property tax expense and reduced property maintenance costs.

Management fees

Since opening Wynn Las Vegas, management fees payable to Wynn Resorts for certain corporate management services have been charged and accrued at a rate equal to 1.5% of net revenues. These fees will be paid upon meeting certain leverage ratios and satisfying certain other criteria set forth in our credit facilities and the First Mortgage Notes indentures. Management fees were $5.9 million for the quarter ended March 31, 2011, compared to $4.8 million for the quarter ended March 31, 2010.

Pre-opening costs

We incurred no preopening costs for the three months ended March 31, 2011. During the three months ended March 31, 2010, we incurred $0.4 million of pre-opening costs. Pre-opening costs incurred during the three months ended March 31, 2010, were related the Encore Beach Club which opened in the second quarter of 2010.

Depreciation and amortization

Depreciation and amortization for the three months ended March 31, 2011 was $65.8 million compared to $78.9 million for the three months ended March 31, 2010. This decrease is primarily due to assets with a 5-year life being fully depreciated as of April 2010 at Wynn Las Vegas, offset by depreciation of the assets of the Encore Beach Club which were placed in to service in May 2010.

Property charges and other

Property charges and other for the three months ended March 31, 2011, were $2 million compared to approximately $1.3 million for the three months ended March 31, 2010. Property charges and other for the three months ended March 31, 2011 and 2010, related to miscellaneous renovations and abandonments at Wynn Las Vegas and Encore.

In response to our evaluation of our resort complex and the reactions of our guests, we continue to make enhancements. The costs relating to assets retired as a result of these enhancement and remodel efforts will be expensed as property charges.

Other non-operating costs and expenses

Interest expense was $50.3 million, net of capitalized interest of $0, for the three months ended March 31, 2011, compared to $45.1 million net of capitalized interest of $0.2 million for the three months ended March 31, 2010. Interest expense increased approximately $5.2 million primarily due to an increase in interest rates on our first mortgage notes.

Changes in the fair value of our interest rate swaps are recorded as an increase (or decrease) in swap fair value in each period. We recorded a gain of approximately $1.3 million for the three months ended March 31, 2011, resulting from the increase in the fair value of our interest rate swap from December 31, 2010 to March 31, 2011. We recorded an expense of approximately $2.3 million for the three months ended March 31, 2010, resulting from the decrease in the fair value of our interest rate swap from December 31, 2009 to March 31, 2010.

Liquidity and Capital Resources

Cash Flow from Operations

Our operating cash flows primarily consist of our operating income generated by our resort complex (excluding depreciation and other non-cash charges), interest paid, 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 high-end international customers that 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 primarily on a cash basis or as a trade receivable. Accordingly, operating cash flows will be impacted by changes in operating income and accounts receivables.

Net cash provided by operations for the three months ended March 31, 2011 was $44 million compared to $9.9 million provided by operations for the three months ended March 31, 2010. This increase is primarily due to the increase in operating income as a result of increased casino and rooms department profitability. Cash flow from operations were negatively impacted by a $55.3 million increase in cash paid for interest as our interest payment dates changed with the refinancing we completed last year and ordinary changes in working capital.

Capital Resources

At March 31, 2011, we had approximately $87.2 million of cash and cash equivalents available for use without restriction, including for operations, debt service and retirement, new development activities,

enhancements to Wynn Las Vegas and Encore and general corporate purposes. We require a certain amount of cash on hand for operations. We anticipate such funds, together with any other cash needs during 2011 in excess of what we generate from operations or additional borrowings, will be provided with capital contributions from Wynn Resorts. As of March 31, 2011, we had approximately $327.4 million available to draw under our Wynn Las Vegas credit facilities. Except for scheduled quarterly payments on one note payable, we have no debt maturities until July 2013.

Investing Activities

Capital expenditures were approximately $22 million for the three months ended March 31, 2011 and related primarily to the room and suite remodel that began last year. Capital expenditures were approximately $35.5 million for the three months ended March 31, 2010, and related primarily to the Encore Beach Club and Surrender Nightclub.

Financing Activities

As of March 31, 2011, our Wynn Las Vegas credit facilities, as amended, consisted of a $108.5 million revolving credit facility, due July 2013 and a $258.4 million revolving credit facility due July 2015 (together the “Wynn Las Vegas Revolver”), and a fully drawn $44.3 million term loan facility due August 2013 and a fully drawn $330.6 million term loan facility due August 2015 (together the “Wynn Las Vegas Term Loan”). As of March 31, 2011, the Wynn Las Vegas Term Loan was fully drawn and we had borrowed $20.1 million under the Wynn Las Vegas Revolver. We also had $19.5 million of outstanding letters of credit that reduce our availability under the Wynn Las Vegas Revolver. Accordingly, we have availability of approximately $327.4 million under the Wynn Las Vegas Revolver as of March 31, 2011.

Contractual Obligations and Off-Balance Sheet Arrangements

There have been no material changes during the quarter to our contractual obligations or off-balance sheet arrangements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010.

Other Liquidity Matters

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

Wynn Las Vegas, LLC will fund its operations and capital requirements from operating cash flow and availability under our credit facilities. We cannot be sure that Wynn Las Vegas, LLC will generate sufficient cash flow from operations or that future borrowings that are available to us, if any, will be sufficient to enable us to service and repay Wynn Las Vegas, LLC’s indebtedness and to fund its other liquidity needs. We cannot be sure that we will be able to refinance any of our indebtedness on acceptable terms or at all.

On a continuing basis, we, our subsidiaries, and/or Wynn Resorts will evaluate, depending on market conditions, purchasing, refinancing, exchanging, tendering for or retiring certain of our outstanding debt in privately negotiated transactions, open market transactions or by other direct or indirect means.

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

Critical Accounting Policies and Estimates

A description of our critical accounting policies is included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2010. There have been no material changes to these policies for the three months ended March 31, 2011.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices.

Interest Rate Risks

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

Interest Rate Swaps

As of March 31, 2011, we have one interest rate swap agreement to hedge a portion of the underlying interest rate risk on borrowings under the Wynn Las Vegas Credit Agreement. Under this swap agreement, we pay a fixed interest rate of 2.485% on borrowings of $250 million incurred under the Wynn Las Vegas Credit Agreement in exchange for receipts on the same amount at a variable interest rate based on the applicable LIBOR at the time of payment. This interest rate swap fixes the interest rate on $250 million of borrowings under the Wynn Las Vegas Credit Agreement at approximately 5.485%. This interest rate swap agreement matures in November 2012. Changes in the fair value of this interest rate swap have and will continue to be recorded as an increase/ (decrease) in swap fair value in our Condensed Consolidated Statements of Operations as the swap does not qualify for hedge accounting.

As of March 31, 2011, our interest rate swap had an approximate liability fair value of $7.1 million and is included in long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. The fair value approximates the amount we would have paid if this contract had settled at the valuation date. Fair value is estimated based upon current, and predictions of future, interest rate levels along a yield curve, the remaining duration of the instruments and other market conditions, and therefore, is subject to significant estimation and a high degree of variability of fluctuation between periods.

Interest Rate Sensitivity

As of March 31, 2011, approximately 93.1% of our long-term debt was based on fixed rates including the notional amount of our swap. Based on our borrowings as of March 31, 2011, an assumed 1% change in variable rates would cause our annual interest cost to change by $1.8 million.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any

controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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

Part II—OTHER INFORMATION

Item 1A. Risk Factors

A description of our risk factors can be found in Item IA of our Annual Report on Form 10-K for the year ended December 31, 2010. There were no material changes to those risk factors during the three months ended March 31, 2011.

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

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

Item 6. Exhibits

(a) Exhibits

EXHIBIT INDEX


Exhibit No.		Description

	3.1	Second Amended and Restated Articles of Organization of Wynn Las Vegas, LLC. (1)

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

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

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

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

*	Filed herewith.

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

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	WYNN LAS VEGAS
Dated: May 9, 2011	By:	/s/ SCOTT PETERSON
		Scott Peterson
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

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