CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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1. Organization and Basis of Presentation

Organization

Wynn Resorts, Limited, a Nevada corporation (together with its subsidiaries, “Wynn Resorts” or the “Company”), was formed in June 2002 and consummated an initial public offering on October 25, 2002. Wynn Resorts’ predecessor, Valvino Lamore, LLC (“Valvino”), was formed on April 21, 2000 (date of inception) as a Nevada limited liability company to acquire land and design, develop and finance Wynn Las Vegas, the Company’s first casino resort in Las Vegas, Nevada. In June 2002, Valvino’s majority owned indirect subsidiary, Wynn Resorts (Macau), S.A. (“Wynn Macau, S.A.”), entered into an agreement with the government of the Macau Special Administrative Region of the People’s Republic of China (“Macau”), granting Wynn Macau, S.A. the right to construct and operate one or more casino gaming properties in Macau. Wynn Macau, S.A.’s first casino resort in Macau is hereafter referred to as “Wynn Macau.”

On September 24, 2002, Wynn Resorts became the parent company of Valvino when all the members of Valvino contributed 100% of their membership interests in Valvino to Wynn Resorts in exchange for 40,000,000 shares of the common stock of Wynn Resorts. Hereafter, all references to “Wynn Resorts,” or the “Company” refer to Wynn Resorts and its subsidiaries, or Valvino and its subsidiaries, as its predecessor company.

Basis of Presentation

The Company has spent significant amounts of money in connection with its development activities, primarily for the acquisition of land and other assets and the design, financing and construction of Wynn Las Vegas, and in obtaining the concession in Macau, as well as the design, financing and construction of Wynn Macau. The Company has not commenced operations and therefore revenues are minimal. Consequently, as is customary for a development stage company, the Company has incurred losses in each period from inception to June 30, 2004. Management expects these losses to continue and to increase until operations have commenced with the planned opening of Wynn Las Vegas in April 2005. The acceleration of these costs is expected and is included in the project budgets for Wynn Las Vegas and Wynn Macau.

As a development stage company, the Company has risks that may impact its ability to become an operating enterprise or to remain in existence. The Company is subject to many rules and regulations in both the construction and development phases and in operating casino gaming facilities, including, but not limited to, maintaining compliance with debt covenants, receiving the appropriate permits for particular construction activities, securing state and local gaming licenses for the ownership and operation of Wynn Las Vegas and maintaining ongoing suitability requirements in Nevada and Macau, as well as fulfilling the requirements of Macau’s developing gaming regulatory framework. The completion of the Wynn Las Vegas and Wynn Macau projects is dependent upon compliance with these rules and regulations.

The accompanying consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and investments in unconsolidated affiliates which are 50% or less owned, that are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated.

The accompanying consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. 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

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adjustments) necessary for a fair presentation of the results for the interim periods have been made. The results for the three and six months ended June 30, 2004 are not necessarily indicative of results to be expected for the full fiscal year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Certain amounts in the consolidated financial statements for the three and six months ended June 30, 2003 have been reclassified to conform to the 2004 presentation. These reclassifications had no effect on the previously reported net loss accumulated during the development stage.

2. Earnings Per Share

Earnings per share are calculated in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share.” SFAS No. 128 provides for the reporting of “basic”, or undiluted earnings per share (“EPS”), and “diluted” EPS. Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the period. Diluted EPS reflects the addition of potentially dilutive securities. For all periods presented, the Company has recorded net losses. As a result, basic EPS is equal to diluted EPS for all periods presented. Potentially dilutive securities that were excluded from the calculation of diluted EPS at June 30, 2004 because including them would have been anti-dilutive, included 2,050,500 shares under stock options, 1,328,061 shares under non-vested restricted stock grants and 10,869,550 shares under the assumed conversion of the 6% convertible subordinated debentures (the “Debentures”). At June 30, 2003, potentially dilutive securities that were excluded included 1,285,000 shares under stock options and 1,328,061 shares under non-vested restricted stock grants.

3. Employee Stock-Based Compensation

As of June 30, 2004, the Company had a stock-based employee compensation plan to provide stock compensation for directors, officers, key employees and consultants. As permitted by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of SFAS No. 123,” the Company continues to apply the provisions of Accounting Principles Board (“APB”) Opinion No. 25 and related interpretations in accounting for its employee stock-based compensation. Accordingly, compensation expense is recognized only to the extent that the market value at the date of grant exceeds the exercise price. The following table illustrates the effect on the net loss if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” to stock-based employee compensation (amounts in thousands).

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4. Supplemental Disclosure of Cash Flow Information

Cash paid for interest for the six months ended June 30, 2004 and 2003, and for the period from inception to June 30, 2004 totaled approximately $49.8 million, $36.9 million and $156.9 million, respectively. Interest capitalized for the six months ended June 30, 2004 and 2003, and for the period from inception to June 30, 2004 totaled approximately $55.4 million, $39.1 million and $162.5 million, respectively.

Amortization of deferred compensation related to employees dedicated to the construction of Wynn Las Vegas and capitalized into construction in progress for the six months ended June 30, 2004 and 2003, and for the period from inception to June 30, 2004 totaled approximately $1.1 million, $1.6 million, and $3.4 million, respectively.

The increase in the fair value of interest rate swaps accounted for as cash flow hedges for the six months ended June 30, 2004 and 2003, and for the period from inception to June 30, 2004, totaled approximately $6.0 million, $265,000, and $14.8 million respectively.

Equipment purchases financed by debt totaled approximately $11.7 million, $0 and $40.2 million for the six months ended June 30, 2004 and 2003, and the period from inception to June 30, 2004, respectively.

Advances and loans converted to contributed capital amounted to $0, $0 and $32.8 million for the six months ended June 30, 2004 and 2003, and the period from inception to June 30, 2004, respectively.

During the period from inception to June 30, 2004, the Company acquired the Desert Inn Water Company, LLC, and $6.4 million of receivables originally recorded as due from a related party on the balance sheet were reclassified as water rights owned by the Company. No such amounts were recorded during the six months ended June 30, 2004 and 2003.

During the period from inception to June 30, 2004, the Company reduced the recorded amount of land by approximately $1.4 million representing the amount of excess liabilities accrued at the date of the Desert Inn Resort & Casino purchase in June 2000. No such amounts were recorded during the six months ended June 30, 2004 and 2003.

5. Related Party Transactions

The Company periodically incurs costs on behalf of Mr. Wynn and certain other officers of the Company, including costs with respect to personal use of corporate aircraft. Mr. Wynn and these other officers have deposits with the Company to prepay any such items. These deposits are replenished on an ongoing basis as needed. At June 30, 2004 and December 31, 2003, the Company’s net liability to Mr. Wynn and other officers was approximately $85,000 and $60,000, respectively.

The Company operated an art gallery and originally leased The Wynn Collection from Mr. and Mrs. Wynn at a monthly rate equal to the gross revenue received by the gallery each month, less direct expenses, subject to a monthly cap. In August 2002, the lease terms were amended to reduce the rental paid to Mr. and Mrs. Wynn to one-half of the net revenue, if any, of the gallery. Under the August 2002 amendment, Mr. and Mrs. Wynn were required to reimburse the Company for the gallery’s net losses. For the period from inception to May 31, 2003, the gallery incurred approximately $103,000 of net losses that were reimbursed by Mr. and Mrs. Wynn and, accordingly, the Company did not make any lease payments during this period. Effective June 1, 2003, the lease

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terms were further amended. Under the terms of the June 1, 2003 amendment, Mr. and Mrs. Wynn agreed to lease The Wynn Collection to the Company for an annual fee of $1, and the Company was entitled to retain all revenues from the public display of The Wynn Collection and the related merchandising revenues. The Company was responsible for all expenses incurred in exhibiting and safeguarding The Wynn Collection, including the cost of insurance (including terrorism insurance) and taxes relating to the rental of The Wynn Collection. The Company incurred a net loss of approximately $141,000 from the operation of the art gallery for the period from June 1, 2003 through December 31, 2003 and approximately $163,000 for the period from January 1, 2004 through May 6, 2004, when the gallery was closed to the public. The Company intends to open an art gallery as part of Wynn Las Vegas in April 2005.

During the period from January 1, 2004 through February 29, 2004, and for the six months ended June 30, 2003, the Company leased office space in Macau from a minority shareholder of Wynn Macau, S.A. on a month-to-month basis for approximately $5,500 per month. During the three and six months ended June 30, 2004, the Company leased an automobile in Macau from an agency owned by a minority investor in Wynn Macau S.A. for approximately $1,100 per month. In addition, the Company rents automobiles in Macau on a daily basis, as needed from this same agency. Furthermore, during the three and six months ended June 30, 2004, the Company leased two apartments in Macau from another investor in Wynn Macau S.A. on a month-to-month basis for a total of approximately $3,500 per month. These leases and rentals were at fair market value.

As discussed further in Note 7. Long-Term Debt, below, on June 14, 2004, the Company redeemed approximately $122.4 million of the $370 million in aggregate principal amount of the 12% Second Mortgage Notes due 2010 (the “Notes”) of Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. (collectively, the “Issuers”). The total amount of Notes redeemed included approximately $9 million in aggregate principal amount held by certain directors, officers and affiliates of the Company. Prior to the redemption, these directors, officers and affiliates held approximately $27.2 million in aggregate principal amount of the Notes.

6. Property and Equipment

Property and equipment as of June 30, 2004 and December 31, 2003, consist of the following (amounts in thousands):

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(A DEVELOPMENT STAGE COMPANY)

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In May 2004, the Company purchased a Gulfstream aircraft for approximately $11.7 million, plus certain transaction costs and capital improvements. In June 2004, the Company purchased a Boeing Business Jet (the “BBJ”) aircraft for approximately $43.5 million. The Company anticipates selling the Global Express aircraft that it owned prior to these aircraft acquisitions.

Construction in progress includes interest and other costs capitalized in conjunction with the Wynn Las Vegas project.

7. Long-Term Debt

Long-term debt as of June 30, 2004 and December 31, 2003, consists of the following (amounts in thousands):

On May 3, 2004, the Company amended documents governing its credit facilities to release from certain development and other restrictions the approximately 20 acres on which the remaining buildings of the former Desert Inn Resort and Casino currently stand (the “Phase II Land”). This allowed the Phase II Land to be used as security under the Land Loan (as defined below) and to be available for further development, including the expansion of the Wynn Las Vegas resort. The expansion will include additional casino, hotel and related amenities, and remains subject to the design, budgeting and financing process.

In connection with the amendment to the documents governing its credit facilities, on May 3, 2004 the Company borrowed $143.4 million (the “Land Loan”) under a credit agreement outside the previously existing debt agreements of Wynn Las Vegas, LLC. These amounts bear interest at London Interbank Offered Rate (“LIBOR”) plus 5.5%, will be used to fund a portion of the costs of the expansion of Wynn Las Vegas, and are secured by a first-priority security interest in the Phase II Land.

To finance the purchase of the Gulfstream aircraft, in May 2004, the Company borrowed $11.7 million under a 5.67% interest-bearing note, which requires monthly payments of principal and interest totaling approximately $97,000 for 84 months and a balloon payment in June 2011 of approximately $7.5 million. The note is secured by a lien on the aircraft. The Company has also arranged to borrow an additional $3.3 million at 5.67% during the third quarter of 2004 to fund expected refurbishments for the aircraft.

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(A DEVELOPMENT STAGE COMPANY)

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On June 14, 2004, pursuant to the indenture governing the Notes, the Issuers redeemed approximately $122.4 million of the $370 million in aggregate principal amount outstanding immediately prior to the redemption. As discussed further in Note 9. Capital Stock Transactions, on May 12, 2004, the Company completed the offering of seven million shares of its common stock, resulting in net proceeds before expenses of approximately $268.2 million. A portion of these proceeds were used to fund the redemption. The total price of the redemption was approximately $138.9 million, equal to 112.0% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest thereon. In connection with the redemption, the Company wrote off approximately $7 million of the unamortized original issue discount and approximately $3.9 million of unamortized deferred financing costs associated with the Notes. Accordingly, the Company recognized a loss on the early retirement of debt of approximately $25.6 million to reflect these writeoffs and the $14.7 million redemption premium.

In June 2004, the Company drew approximately $9.7 million under its $250 million delay draw senior secured term loan facility (the “Term Loan Facility”). The proceeds were applied to Wynn Las Vegas construction costs. The Term Loan Facility is guaranteed by Wynn Resorts as the parent company, Valvino and its subsidiaries (excluding Wynn Completion Guarantor, LLC, and Desert Inn Improvement Company, LLC) and certain of Valvino’s affiliates. The Term Loan Facility also is secured by a first priority security interest in a $30.0 million liquidity reserve account, a first priority pledge of all equity interests in, and a first priority security interest in substantially all the assets of, the Issuers and certain of their affiliates, first mortgages on all real property constituting Wynn Las Vegas, and a second priority security interest on the furniture, fixtures and equipment securing the FF&E facility described below. The Term Loan Facility matures in October 2009 and, prior to the opening of Wynn Las Vegas, annual interest is charged on outstanding borrowings at LIBOR plus 5.5%. Subsequent to the opening of Wynn Las Vegas, the applicable interest rate will be adjusted based upon the Company’s leverage ratio. In addition, the Term Loan Facility requires quarterly payments on the unused available borrowings at an annual rate of 4%.

In June 2004, the Company drew an additional $22.3 million under its $188.5 million FF&E facility (the “FF&E Facility”), increasing the outstanding balance at June 30, 2004 to approximately $60.3 million. The FF&E Facility provides financing for furniture, fixtures and equipment for Wynn Las Vegas. Obligations under the FF&E Facility are guaranteed by the same guarantors as those which guarantee the obligations under the Term Loan Facility, on a senior unsecured basis. The borrowings mature in October 2009, and bear annual interest at LIBOR plus 4%. In addition, fees are charged on the unused available borrowings at an annual rate of 4%.

The Company seeks to manage the interest rate risk associated with its variable rate borrowings, through balancing fixed-rate and variable-rate borrowings and the use of derivative financial instruments. The Company’s interest rate swaps have been designated as cash flow hedges of its revolving credit facility, its Term Loan Facility and its FF&E Facility in accordance SFAS No. 133. As of June 30, 2004 and December 31, 2003, the Company recorded approximately $14.8 million and $8.8 million in other assets, respectively, to reflect their fair value. These fair value amounts approximate the amount the Company would receive if these contracts were settled at these dates. Approximately $6.3 million of the increase in fair value of $6.0 million was recorded as a component of comprehensive income for the six months ended June 30, 2004, while approximately $300,000 was recorded as a component of interest cost. The net increase in the asset was primarily due to higher short-term interest rates at June 30, 2004, compared to those rates at December 31, 2003. 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.

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(A DEVELOPMENT STAGE COMPANY)

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8. Commitments and Contingencies

Las Vegas

Wynn Las Vegas’ project budget, including amendments as of June 30, 2004, was approximately $2.7 billion. This amount includes the cost of acquiring approximately 217 acres of land, costs of design and construction, capitalized interest, pre-opening expenses and financing fees. Also included in this amount are approximately $61 million for a portion of the anticipated budget on a planned future expansion of the resort, which will include an additional hotel and casino and related amenities. Although the scope and design of the future expansion continues to be developed, the budget to date includes amounts for a parking addition, office relocation, demolition and certain interest and financing costs and professional fees.

At June 30, 2004, the Company had various contractual commitments for developing, constructing and equipping Wynn Las Vegas totaling approximately $2.3 billion of which approximately $1.6 billion has been funded. Included in the $2.3 billion of contractual commitments are guaranteed maximum price contracts with the three prime contractors for the construction of the hotel and casino for approximately $992.7 million, construction of the Wynn Las Vegas golf course for approximately $17.4 million and construction of the parking garage for approximately $10.1 million. The parking structure is substantially complete and is currently used for parking by construction personnel.

The Company has entered into leases for five retail outlets, license and distribution agreements for four additional retail outlets, and joint venture agreements for the operation of three other retail outlets. Each of these retail outlets will open concurrently with the opening of Wynn Las Vegas. In connection with these arrangements, Wynn Las Vegas has provided some of the retail tenants an allowance for improvements. These improvement allowances are included in the budgeted costs to construct Wynn Las Vegas.

In addition to the above, for its preopening efforts the Company leases office space at three locations, a hangar for its corporate aircraft and certain warehouse facilities. These leases expire at various dates between June 2005 and February 2007.

The Company has entered into long-term agreements with a creative production company and its affiliated production services company for the licensing, creation, development and executive production of the water-based production show at Wynn Las Vegas. Under these agreements the Company is required to pay certain up-front creation and licensing fees, production costs and, upon opening of the production, a royalty of 10% of net ticket revenues and retail sales, and 50% of the show and retail profits to the production companies as calculated in accordance with the terms of the agreements. The term of each of the agreements is ten years after the opening date of the show, which will coincide with the opening of Wynn Las Vegas, with one five-year renewal option.

The Company also has an option with the same production and services companies for the development of a second production show for Wynn Las Vegas or for another project. The exercise of the option will require the payment of an additional $1 million and any additional project will require additional funds to develop.

In June 2004, the Company also entered into an agreement to purchase the rights to stage “Avenue Q,” a musical production currently playing on Broadway in New York. The Company also entered into a Production Services Agreement with an affiliate of the New York producer for all production services. The Company expects to present this show at Wynn Las Vegas’ second showroom, which is scheduled for completion in the second half of 2005.

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(A DEVELOPMENT STAGE COMPANY)

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At June 30, 2004 and December 31, 2003, other assets included $20.7 million and $8.7 million respectively, of amounts paid or accrued for creation and development costs in conjunction with these entertainment agreements.

Macau

Wynn Macau, S.A. has entered into a 20-year concession agreement with the government of Macau permitting it to construct and operate one or more casinos in Macau. The concession agreement obligates Wynn Macau, S.A. to invest 4 billion patacas (approximately US $498.3 million as of June 30, 2004) in one or more casino projects in Macau by June 2009, and to commence operations of its first permanent casino resort in Macau no later than December 2006. If Wynn Macau, S.A. does not invest 4 billion patacas by June 26, 2009, it is obligated to invest the remaining amount in projects related to its gaming operations in Macau that the Macau government approves, or in projects of public interest designated by the Macau government.

At June 30, 2004, Wynn Macau, S.A., had total assets, which are held in Macau, of approximately $70.4 million (including approximately $65 million of design and development work included in construction in progress), total liabilities of approximately $71.9 million and a total deficit of approximately $1.5 million (including an inception to date net loss of approximately $30.4 million).

The Legislative Assembly in Macau enacted legislation, effective July 1, 2004, that enables casinos operating in Macau to lawfully extend credit to gaming customers and to enforce gaming debts. Effective July, 2004, Wynn Macau, S.A. entered into a Land Concession Contract for the Wynn Macau project site in Macau’s inner harbor area opposite the Hotel Lisboa, Macau’s largest and best known hotel casino. Under the Land Concession Contract, Wynn Macau, S.A. leases a parcel of approximately 16 acres from the government for an initial term of 25 years, with a right to renew for additional periods. Wynn Macau is required to make an initial payment to the government of approximately $40 million (which is to be paid in 10 semi-annual installments) and to pay approximately $17 million to Nam Van Development Company for its relinquishment of rights to a portion of the land. During the term of the Land Concession Contract, Wynn Macau, S.A. is required to make annual lease payments of up to $400,000.

On June 4, 2004, the Company and Wynn Macau, S.A. entered into an underwriting agreement with Deutsche Bank AG, Hong Kong, and Société Générale Asia Limited, as Global Coordinating Lead Arrangers, for a fully underwritten senior bank facility of $397 million to finance in part the development and construction of the Wynn Macau project. The underwritten senior debt facility includes a term loan in the amount of US$382 million, which may be borrowed in either Hong Kong dollars or US dollars (in an apportionment to be determined), and a working capital facility of HK$117 million (approximately US$15 million), which may be borrowed in either Macau patacas or Hong Kong dollars (in an apportionment to be determined). Subject to the satisfaction of certain conditions precedent, each of the Global Coordinating Lead Arrangers will underwrite the equivalent of US$198.5 million for Wynn Macau. It is currently anticipated that the term loan will have a term of seven years and that the working capital facility will have a term of three years, in each case from the date of signing of the definitive financing documentation. Wynn Macau, S.A. has agreed to pay customary fees and expenses in connection with the financing.

This financing, together with the legislation discussed above, satisfied the preconditions to commencement of construction of Wynn Macau previously established by the Company. Accordingly, June 28, 2004, was established as the date of commencement under a guaranteed maximum price construction contract with Leighton Contractors (Asia) Limited, China State Construction Engineering (Hong Kong) Limited and China Construction Engineering (Macau) Company Limited, acting together as general contractor, for the design and

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construction of the project. Under the construction contract, the contractors are responsible for both the construction and design of the project (other than certain limited portions to be designed by an affiliate of Wynn Macau) based on an existing scope of work and design specifications provided by Wynn Macau. The contractors are obligated to substantially complete the project within 26 months after the date of commencement for a guaranteed maximum price of $255.5 million (including the contractors’ fee and contingency). We anticipate that the guaranteed maximum price will be increased to approximately $285 million to reflect the addition of a parking structure and certain other site work to the project description. With the increase, the current total design and construction costs are estimated to be approximately $425 million out of the total current budget, before potential expansion and improvements, of approximately $705 million. Both the contract time and guaranteed maximum price are subject to further adjustment under the circumstances specified in the contract. The performance of the contractors will be backed by a full completion guarantee given jointly and severally by Leighton Holdings Limited and China Overseas Holdings Limited, the parent companies of the contracting entities, as well as a performance bond issued by a bank in an amount equal to ten percent of the guaranteed maximum price.

Wynn Resorts has invested approximately $23.8 million in Wynn Macau, S.A. through June 30, 2004 and, in addition, loaned Wynn Macau, S.A. a total of $10 million, bearing interest at 6.25% and currently payable on demand. Wynn Resorts intends to invest additional capital in Wynn Macau, S.A. to enable Wynn Macau, S.A. to continue to fund the design, development and construction efforts. The minority investors in Wynn Macau S.A. are obligated, subject to certain limitations, to make additional capital contributions in proportion to their economic interests (17.5% in the aggregate) to fund the construction, development and other activities of Wynn Macau, S.A. It is expected that significant additional financing will be needed to fund the development, construction and operation of one or more casinos in Macau. Wynn Macau, S.A. continues to work with the Macau government to obtain certain determinations related to Macau tax regulations. The Company cannot ensure that it will be able to obtain the determinations related to such regulations before it commences operations, or at all.

Wynn Macau, S.A. is required under the Macau concession agreement to obtain a 700 million pataca (approximately US $87.2 million as of June 30, 2004) bank guarantee for the period from the execution of the concession agreement until March 31, 2007. The amount of this required guarantee will be reduced to 300 million patacas (approximately US $37.4 million as of June 30, 2004) for the period from April 1, 2007 until 180 days after the end of the term of the concession agreement. Wynn Macau, S.A. currently has an uncollateralized bank guarantee from Banco National Ultramarino, S.A. in the required amount, which is expected to be replaced by another guarantee suitable under the concession agreement now that Wynn Macau, S.A. has commenced construction of Wynn Macau. Wynn Macau, S.A. currently pays a commission to the bank in the amount of 0.50% per year of the guarantee amount. The purpose of this bank guarantee is to guarantee Wynn Macau, S.A.’s performance under the concession agreement, including the payment of premiums, fines and any indemnity for failure to perform the concession agreement.

Self-insurance

The Company’s domestic subsidiaries are self-insured for medical and workers’ compensation up to a maximum of $40,000 per year for each insured person under the medical plan and $350,000 for each workers’ compensation claim. Amounts in excess of these thresholds are covered by the Company’s insurance programs, subject to customary policy limits.

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(A DEVELOPMENT STAGE COMPANY)

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(Unaudited)

Employment Agreements

The Company has entered into employment agreements with several executive officers, other members of management and certain key employees. These agreements generally have three- to five-year terms and typically indicate a base salary with specified annual increases, and often contain provisions for guaranteed bonuses. Certain of the executives are also entitled to a separation payment if terminated without “cause” or upon voluntary termination of employment for “good reason” following a “change of control” (as these terms are defined in the employment contracts).

Litigation

The Company occasionally is a 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.

The Company was involved in litigation related to its ownership and development of the former Desert Inn golf course and the residential lots around the golf course. Based on a settlement reached with the plaintiffs, all actions relating to the litigation were dismissed with prejudice on or prior to April 15, 2004. As part of the settlement, in March 2004, the Company purchased the ten remaining residential lots for approximately $23 million from its existing cash.

9. Capital Stock Transactions

On May 12, 2004, pursuant to an effective shelf registration statement, the Company completed the offering of seven million shares of its $0.01 par value common stock at a price of $38.75 per share for gross proceeds of approximately $271.3 million. Underwriting discounts and commissions of $0.44 per share or approximately $3.1 million reduced the net proceeds to the Company, before expenses, to approximately $268.2 million. The Company used a portion of the proceeds of the offering to redeem a portion of the Notes (see Note 7. Long-Term Debt above), and intends to use remaining net proceeds to help finance Wynn Macau and for general corporate purposes.

10. Subsequent Events

Corporate Aircraft Transactions

As discussed in Note 6. Property and Equipment, in June 2004, the Company completed the purchase of the BBJ aircraft. To finance the purchase, the Company amended its FF&E Facility to increase the available commitments thereunder to $198.5 million from the previous $188.5 million and withdrew the $10 million of increased availability. In addition, the Company sold its Global Express aircraft in August 2004 for $33.0 million. The remaining $500,000 for the purchase price of the new aircraft was funded from existing corporate cash.

Land Purchase Transaction

In July 2004, the Company amended its bank credit facilities as provided for in the documents, to increase the $750 million senior secured revolving credit facility by $50 million to $800 million to finance the purchase of certain land and buildings adjacent to Wynn Las Vegas for future development of an additional parking facility for the resort. The purchase price was $45 million, and transaction, closing and certain other costs increased the required funding by an additional $5 million.

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(A DEVELOPMENT STAGE COMPANY)

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(Unaudited)

Additional Parent Loan for Wynn Macau

In July 2004, Wynn Resorts loaned Wynn Macau, S.A. an additional $25 million, bearing interest at 6.25% and payable on demand, to continue preopening and construction efforts.

11. Consolidating Financial Information of Guarantors and Issuers

The following consolidating financial statements present information related to Wynn Resorts (the “Parent”), which is the issuer of the Debentures, Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. (the “Notes Issuers”) as the issuers of the 12% Second Mortgage Notes, the Notes Guarantors (other than Wynn Resorts), Wynn Resorts Funding, LLC (the “Convertible Debentures Guarantor”) and non-guarantor subsidiaries as of June 30, 2004 and December 31, 2003, for the three- and six-month periods ended June 30, 2004 and 2003 and for the period from inception to June 30, 2004.

Guarantors of the Notes (other than Wynn Resorts) are Valvino, Wynn Design & Development, LLC, Wynn Resorts Holdings, LLC, Palo, LLC, Desert Inn Water Company, LLC, Wynn Show Performers, LLC, World Travel, LLC and Las Vegas Jet, LLC. Wynn Resorts Funding, LLC is a guarantor of the Debentures but not of the Notes. Wynn Group Asia, Inc. and all of its subsidiaries; Wynn Completion Guarantor, LLC; Desert Inn Improvement Company; Rambas Marketing, LLC; Worldwide Wynn, LLC; Toasty, LLC, Bora, LLC, Bora Bora, LLC, World Travel G-IV, LLC, World Travel BBJ, LLC, Wynn Golf, LLC and Kevyn, LLC are not guarantors of the Notes. In October 2002, Valvino transferred certain of its assets, including its equity interests in certain of its subsidiaries which do not guarantee the Notes, to Wynn Resorts. In addition, Valvino transferred certain of its assets, including its equity interests in Las Vegas Jet, LLC and World Travel, LLC directly to Wynn Las Vegas. Because these transfers were between entities under common control, in accordance with SFAS No. 141, “Business Combinations,” the assets and liabilities of the entities acquired have been recorded by the acquiring subsidiary at the carrying value at the time of the acquisition and the operating results of the entities are included in the operating statements of the Company from the earliest period presented. The Parent records the investment in its respective subsidiaries based on the equity method of accounting. Elimination of the Parent’s investment is included in the “Eliminations” column.

The following condensed consolidating financial statements are presented in the provided form because: (i) the Notes Issuers and Guarantors and the Convertible Debentures Guarantor are wholly owned subsidiaries of the Company; (ii) the guarantees are considered to be full and unconditional, that is, if the Parent or the Notes Issuers fail to make a scheduled payment, the Notes Guarantors or the Convertible Debentures Guarantor, as applicable; are obligated to make the scheduled payment immediately and, if they do not, any holder of the Notes or Debentures may immediately bring suit directly against these Guarantors for payment of all amounts due and payable; and (iii) the guarantees are joint and several.

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Table of Contents

WYNN RESORTS, LIMITED AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)