Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Reports of Independent Registered Public Accounting Firm			58
Consolidated Balance Sheets			61
Consolidated Statements of Income			62
Consolidated Statements of Comprehensive Income			63
Consolidated Statements of Stockholders’ Equity			64
Consolidated Statements of Cash Flows			65
Notes to Consolidated Financial Statements			66
Quarterly Consolidated Financial Information (Unaudited)			110

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Wynn Resorts, Limited and subsidiaries

Opinion on Internal Control Over Financial Reporting

We have audited Wynn Resorts, Limited and subsidiaries’ internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wynn Resorts, Limited and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a)2 and our report dated February 28, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Las Vegas, Nevada

February 28, 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Wynn Resorts, Limited and subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Wynn Resorts, Limited and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), and the related amendments.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

Valuation of Deferred Tax Assets

Description of the Matter			As more fully described in Note 12 to the consolidated financial statements, at December 31, 2019, the Company had deferred tax assets related to foreign tax credit carryforwards, disallowed interest expense carryforwards and other U.S. and foreign deferred tax assets of $3.4 billion, net of a $2.8 billion valuation allowance. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Auditing management’s assessment of the realizability of the Company’s deferred tax assets was complex and highly judgmental due to the significant estimation required in measuring deferred tax assets. These deferred tax assets are affected by assumptions, including forecasted taxable domestic and foreign-sourced income and related royalties, the amount of interest expense and other expenses allocated to foreign sourced income and the effect of tax planning strategies. Fluctuations in actual results from those forecasted can have a material impact on the recoverability of these deferred tax assets.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s process for evaluating the realization of the Company’s deferred tax assets, including controls over management’s review of the forecast and significant assumptions described above and identification and reasonableness of available tax planning strategies. To test the valuation of deferred tax assets, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to the Company’s business plans and current industry and economic trends and evaluated whether changes to the company’s business model, economic trends and other factors would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the valuation allowance that would result from changes in the assumptions. We involved our tax professionals to evaluate the application of tax law in the Company’s available tax planning strategies, and carryforward amounts, and the evaluation of the carryforward lives of its deferred tax assets.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006.

Las Vegas, Nevada

February 28, 2020

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

			December 31,
			2019						2018
ASSETS
Current assets:
Cash and cash equivalents			$	2,351,904					$	2,215,001
Receivables, net			346,429						276,644
Inventories			88,519						66,627
Prepaid expenses and other			69,485						83,104
Total current assets			2,856,337						2,641,376
Property and equipment, net			9,623,832						9,385,920
Restricted cash			6,388						4,322
Intangible assets, net			146,414						222,506
Operating lease assets			452,919						—
Deferred income taxes, net			562,262						736,452
Other assets			223,129						225,693
Total assets			$	13,871,281					$	13,216,269
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and construction payables			$	262,437					$	321,796
Customer deposits			824,269						955,450
Gaming taxes payable			168,043						247,341
Accrued compensation and benefits			180,140						163,966
Accrued interest			73,136						61,595
Current portion of long-term debt			323,876						11,960
Other accrued liabilities			150,983						119,955
Total current liabilities			1,982,884						1,882,063
Long-term debt			10,079,983						9,411,140
Long-term operating lease liabilities			159,182						—
Other long-term liabilities			107,760						108,277
Total liabilities			12,329,809						11,401,480
Commitments and contingencies (Note 17)
Stockholders' equity:
Preferred stock, par value $0.01; 40,000,000 shares authorized; zero shares issued and outstanding			—						—
Common stock, par value $0.01; 400,000,000 shares authorized; 122,837,930 and 122,115,585 shares issued; 107,363,943 and 107,232,026 shares outstanding, respectively			1,228						1,221
Treasury stock, at cost; 15,473,987 and 14,883,559 shares, respectively			(1,410,998)						(1,344,012)
Additional paid-in capital			2,512,676						2,457,079
Accumulated other comprehensive loss			(1,679)						(1,950)
Retained earnings			641,818						921,785
Total Wynn Resorts, Limited stockholders' equity			1,743,045						2,034,123
Noncontrolling interests			(201,573)						(219,334)
Total stockholders' equity			1,541,472						1,814,789
Total liabilities and stockholders' equity			$	13,871,281					$	13,216,269

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

			Years Ended December 31,
			2019						2018						2017
Operating revenues:
Casino			$	4,573,924					$	4,784,990					$	4,244,303
Rooms			804,162						751,800						670,957
Food and beverage			818,822						754,128						732,115
Entertainment, retail and other			414,191						426,742						422,785
Total operating revenues			6,611,099						6,717,660						6,070,160
Operating expenses:
Casino			2,924,254						3,036,907						2,718,120
Rooms			276,095						254,549						244,828
Food and beverage			696,498						611,706						567,690
Entertainment, retail and other			170,206						183,113						196,547
General and administrative			896,670						761,415						685,485
Litigation settlement			—						463,557						—
Provision (benefit) for doubtful accounts			21,898						6,527						(6,711)
Pre-opening			102,009						53,490						26,692
Depreciation and amortization			624,878						550,596						552,368
Property charges and other			20,286						60,256						29,576
Total operating expenses			5,732,794						5,982,116						5,014,595
Operating income			878,305						735,544						1,055,565
Other income (expense):
Interest income			24,449						29,866						31,193
Interest expense, net of amounts capitalized			(414,030)						(381,849)						(388,664)
Change in derivatives fair value			(3,228)						(4,520)						(1,056)
Change in Redemption Note fair value			—						(69,331)						(59,700)
(Loss) gain on extinguishment of debt			(12,437)						104						(55,360)
Other			15,159						(4,074)						(21,709)
Other income (expense), net			(390,087)						(429,804)						(495,296)
Income before income taxes			488,218						305,740						560,269
(Provision) benefit for income taxes			(176,840)						497,344						328,985
Net income			311,378						803,084						889,254
Less: net income attributable to noncontrolling interests			(188,393)						(230,654)						(142,073)
Net income attributable to Wynn Resorts, Limited			$	122,985					$	572,430					$	747,181
Basic and diluted net income per common share:
Net income attributable to Wynn Resorts, Limited:
Basic			$	1.15					$	5.37					$	7.32
Diluted			$	1.15					$	5.35					$	7.28
Weighted average common shares outstanding:
Basic			106,745						106,529						102,071
Diluted			106,985						107,032						102,598

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

			Years Ended December 31,
			2019						2018						2017
Net income			$	311,378					$	803,084					$	889,254
Other comprehensive income (loss):
Foreign currency translation adjustments, before and after tax			376						(1,936)						(3,832)
Change in net unrealized loss (gain) on investment securities, before and after tax			—						1,292						(563)
Redemption Note credit risk adjustment, net of tax of $2,735			—						9,211						—
Total comprehensive income			311,754						811,651						884,859
Less: comprehensive income attributable to noncontrolling interests			(188,498)						(230,115)						(141,007)
Comprehensive income attributable to Wynn Resorts, Limited			$	123,256					$	581,536					$	743,852

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share data)

			Common stock
			Shares outstanding						Par value						Treasury stock						Additional paid-in capital						Accumulated other comprehensive income (loss)						Retained earnings						Total Wynn Resorts, Limited stockholders' equity						Noncontrolling interests						Total stockholders' equity
Balances, January 1, 2017			101,799,471						$	1,150					$	(1,166,697)					$	1,226,915					$	1,484					$	95,097					$	157,949					$	99,932					$	257,881
Cumulative effect, change in accounting for stock-based compensation			—						—						—						2,807						—						(2,696)						111						—						111
Net income			—						—						—						—						—						747,181						747,181						142,073						889,254
Currency translation adjustment			—						—						—						—						(2,766)						—						(2,766)						(1,066)						(3,832)
Change in net unrealized gain on investment securities			—						—						—						—						(563)						—						(563)						—						(563)
Exercise of stock options			661,800						7						—						61,988						—						—						61,995						214						62,209
Issuance of restricted stock			706,341						7						—						18,565						—						—						18,572						653						19,225
Cancellation of restricted stock			(13,333)						—						—						—						—						—						—						—						—
Shares repurchased by the Company and held as treasury shares			(148,413)						—						(17,771)						—						—						—						(17,771)						—						(17,771)
Shares of subsidiary repurchased for share award plan			—						—						—						(283)						—						—						(283)						(109)						(392)
Sale of ownership interest in subsidiary, net of income tax of $17.8 million			—						—						—						149,259						—						—						149,259						13,238						162,497
Cash dividends declared			—						—						—						—						—						(204,515)						(204,515)						(116,568)						(321,083)
Distribution to noncontrolling interest			—						—						—						—						—						—						—						(11,436)						(11,436)
Stock-based compensation			—						—						—						38,677						—						—						38,677						3,573						42,250
Balances, December 31, 2017			103,005,866						1,164						(1,184,468)						1,497,928						(1,845)						635,067						947,846						130,504						1,078,350
Cumulative effect, change in accounting for credit risk, net of tax of $2,735			—						—						—						—						(9,211)						9,211						—						—						—
Net income			—						—						—						—						—						572,430						572,430						230,654						803,084
Currency translation adjustment			—						—						—						—						(1,397)						—						(1,397)						(539)						(1,936)
Change in net unrealized loss on investment securities			—						—						—						—						1,292						—						1,292						—						1,292
Redemption Note settlement			—						—						—						—						9,211						—						9,211						—						9,211
Exercise of stock options			261,470						2						—						21,463						—						—						21,465						506						21,971
Issuance of common stock			5,300,000						53						—						915,187						—						—						915,240						—						915,240
Issuance of restricted stock			288,270						3						—						1,295						—						—						1,298						501						1,799
Cancellation of restricted stock			(125,908)						(1)						—						1						—						—						—						—						—
Shares repurchased by the Company and held as treasury shares			(1,497,672)						—						(159,544)						—						—						—						(159,544)						—						(159,544)
Shares of subsidiary repurchased for share award plan			—						—						—						(4,497)						—						—						(4,497)						(1,735)						(6,232)
Cash dividends declared			—						—						—						—						—						(294,923)						(294,923)						(276,528)						(571,451)
Distribution to noncontrolling interest			—						—						—						—						—						—						—						(305,372)						(305,372)
Stock-based compensation			—						—						—						25,702						—						—						25,702						2,675						28,377
Balances, December 31, 2018			107,232,026						1,221						(1,344,012)						2,457,079						(1,950)						921,785						2,034,123						(219,334)						1,814,789
Net income			—						—						—						—						—						122,985						122,985						188,393						311,378
Currency translation adjustment			—						—						—						—						271						—						271						105						376
Exercise of stock options			293,690						3						—						14,693						—						—						14,696						—						14,696
Issuance of restricted stock			472,480						5						—						14,343						—						—						14,348						785						15,133
Cancellation of restricted stock			(43,825)						(1)						—						1						—						—						—						—						—
Shares repurchased by the Company and held as treasury shares			(590,428)						—						(66,986)						—						—						—						(66,986)						—						(66,986)
Shares of subsidiary repurchased for share award plan			—						—						—						(3,885)						—						—						(3,885)						(1,499)						(5,384)
Cash dividends declared			—						—						—						—						—						(402,952)						(402,952)						(165,835)						(568,787)
Distribution to noncontrolling interest			—						—						—						—						—						—						—						(7,745)						(7,745)
Stock-based compensation			—						—						—						30,445						—						—						30,445						3,557						34,002
Balances, December 31, 2019			107,363,943						$	1,228					$	(1,410,998)					$	2,512,676					$	(1,679)					$	641,818					$	1,743,045					$	(201,573)					$	1,541,472

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

			Years Ended December 31,
			2019						2018						2017
Cash flows from operating activities:
Net income			$	311,378					$	803,084					$	889,254
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			624,878						550,596						552,368
Deferred income taxes			174,190						(498,654)						(310,854)
Stock-based compensation expense			40,372						35,040						43,971
Amortization of debt issuance costs			28,954						36,917						25,013
Loss on extinguishment of debt			12,437						4,391						55,360
Provision (benefit) for doubtful accounts			21,898						6,527						(6,711)
Change in derivatives fair value			3,228						4,520						1,056
Change in Redemption Note fair value			—						69,331						59,700
Property charges and other			5,122						56,974						44,004
Increase (decrease) in cash from changes in:
Receivables, net			(86,712)						(59,157)						829
Inventories, prepaid expenses and other			(37,907)						(5,212)						(4,372)
Customer deposits			(134,858)						(92,395)						456,005
Accounts payable and accrued expenses			(61,910)						49,527						70,954
Net cash provided by operating activities			901,070						961,489						1,876,577
Cash flows from investing activities:
Capital expenditures, net of construction payables and retention			(1,063,293)						(1,475,972)						(935,474)
Purchase of intangible and other assets			(6,000)						(126,414)						(13,571)
Proceeds from the sale or maturity of investment securities			—						359,461						200,366
Purchase of investment securities			—						(34,098)						(229,328)
Proceeds from sale of assets			695						54,213						20,374
Net cash used in investing activities			(1,068,598)						(1,222,810)						(957,633)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			3,893,778						2,788,925						2,429,988
Repayments of long-term debt			(2,930,015)						(3,032,267)						(2,959,843)
Proceeds from note receivable from sale of ownership interest in subsidiary			—						75,000						180,000
Proceeds from issuance of common stock, net of issuance costs			—						915,240						—
Repurchase of common stock			(66,986)						(159,544)						(17,771)
Finance lease payment			(73)						—						—
Proceeds from exercise of stock options			14,696						21,971						62,209
Shares of subsidiary repurchased for share award plan			(5,384)						(6,232)						(392)
Dividends paid			(566,521)						(569,781)						(320,760)
Distribution to noncontrolling interest			(7,745)						(305,372)						(11,436)
Income taxes paid from sale of ownership interest in subsidiary			—						—						(25,176)
Payment to acquire derivatives			—						(3,900)						—
Payments for financing costs			(32,738)						(48,297)						(91,174)
Net cash provided by (used in) financing activities			299,012						(324,257)						(754,355)
Effect of exchange rate on cash, cash equivalents and restricted cash			7,485						(1,733)						(3,900)
Cash, cash equivalents and restricted cash:
Increase (decrease) in cash, cash equivalents and restricted cash			138,969						(587,311)						160,689
Balance, beginning of period			2,219,323						2,806,634						2,645,945
Balance, end of period			$	2,358,292					$	2,219,323					$	2,806,634
Supplemental cash flow disclosures
Cash paid for interest, net of amounts capitalized			$	373,052					$	378,023					$	367,074
Capitalized stock-based compensation			$	350					$	11					$	80
(Income tax refunds received) cash paid for income taxes			$	(16,811)					$	1,885					$	37,089
Property and equipment acquired under capital lease			$	1,413					$	—					$	16,593
Liability settled with shares of common stock			$	15,134					$	1,800					$	19,225
Accounts and construction payables related to property and equipment			$	163,471					$	202,981					$	166,790
Other liabilities related to intangible assets			$	13,945					$	—					$	—
Financing costs included in accounts payable and other liabilities			$	1,857					$	—					$	—
Dividends payable on unvested restricted stock included in other accrued liabilities			$	6,690					$	4,375					$	3,220

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

Table of Contents

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and Business

Organization

Wynn Resorts, Limited, a Nevada corporation (together with its subsidiaries, "Wynn Resorts" or the "Company") is a designer, developer, and operator of integrated resorts featuring luxury hotel rooms, high-end retail space, an array of dining and entertainment options, meeting and convention facilities, and gaming.

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

On September 20, 2019, and concurrently with the Refinancing Transactions (as defined and discussed in Note 7, "Long-Term Debt"), Wynn Resorts contributed all of its equity interests in Wynn Group Asia, Inc. ("Wynn Asia") to Wynn Resorts Finance, LLC, which was formerly known as Wynn America, LLC ("WRF"), making Wynn Asia a wholly owned subsidiary of WRF. WRF is an indirect wholly owned subsidiary of Wynn Resorts. Wynn Asia is a holding company that holds Wynn Resorts' approximately 72% controlling interest in WML.

Macau Operations

Wynn Palace, which opened in August 2016, features a luxury hotel tower with 1,706 guest rooms, suites and villas, approximately 424,000 square feet of casino space, 14 food and beverage outlets, approximately 37,000 square feet of meeting and convention space, approximately 106,000 square feet of retail space, public attractions including a performance lake and floral art displays, and recreation and leisure facilities.

Wynn Macau features two luxury hotel towers with a total of 1,010 guest rooms and suites, approximately 252,000 square feet of casino space, 12 food and beverage outlets, approximately 31,000 square feet of meeting and convention space, approximately 59,000 square feet of retail space, a rotunda show and recreation and leisure facilities.

Las Vegas Operations

Wynn Las Vegas features two luxury hotel towers with a total of 4,748 guest rooms, suites and villas, approximately 192,000 square feet of casino space, 33 food and beverage outlets, approximately 507,000 square feet of meeting and convention space (including the 217,000 square foot Meeting and Convention Expansion that opened in February 2020, as discussed in Development Projects below), approximately 160,000 square feet of retail space (the majority of which is owned and operated under a joint venture of which the Company owns 50.1%), as well as two theaters, three nightclubs and a beach club and recreation and leisure facilities.

In December 2016, the Company entered into a joint venture arrangement (the "Retail Joint Venture") with Crown Acquisitions Inc. ("Crown") to own and operate approximately 88,000 square feet of existing retail space. In November 2017, the Company contributed approximately 74,000 square feet of additional retail space to the Retail Joint Venture. The Company opened the additional retail space during the fourth quarter of 2018. For more information on the Retail Joint Venture, see Note 18, "Retail Joint Venture."

Encore Boston Harbor

On June 23, 2019, the Company opened Encore Boston Harbor, an integrated resort in Everett, Massachusetts, adjacent to Boston along the Mystic River. The property features a luxury hotel tower with a total of 671 guest rooms and suites, approximately 210,000 square feet of casino space, 16 food and beverage outlets, approximately 71,000 square feet of meeting and convention space, and approximately 8,000 square feet of retail space. Public attractions include a waterfront park, floral displays, and water shuttle service to downtown Boston.

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Development Projects

In February 2020, the Company opened its meeting and convention space expansion at Wynn Las Vegas (the "Meeting and Convention Expansion"). The facility features approximately 217,000 square feet of state-of-the-art meeting and convention space available for group reservations.

Subsequent Events

In January 2020, an outbreak of a new strain of coronavirus, COVID-19, was identified in Wuhan, China. Currently, no fully effective vaccines have been developed and there can be no assurance that an effective vaccine can be discovered in time to protect against a potential pandemic.

In response, on February 4, 2020, the Macau government announced the closure of all casino operations in Macau, including those at Wynn Palace and Wynn Macau, for a period of 15 days. On February 20, 2020, the Company's casino operations at Wynn Palace and Wynn Macau reopened on a reduced basis, and are expected to fully reopen by March 20, 2020 (the deadline set by the Macau government for Macau casinos to fully reopen). Since reopening, all casinos in Macau are subject to a number of government procedures which address the health and safety of staff and patrons, including limitations on the spacing of open tables and slot machines to ensure adequate distance between people, stopping patrons from congregating together, limiting the number of players and spectators at a table to three to four, temperature checks, mask protection, and health declarations.

Visitation to Macau has fallen precipitously since the outbreak of Coronavirus, driven by the Chinese government's suspension of its visa and group tour schemes that allow mainland Chinese residents to travel to Macau, quarantines in certain cities in mainland China, and the suspension by the Hong Kong government of ferry service from Hong Kong to Macau until further notice.

The US government has put in place restrictions on travel to the US from mainland China, and could expand the restrictions. A significant portion of the Company's US business relies on the willingness and ability of premium international customers to travel to the US, including from mainland China. As such, the Company's Las Vegas Operations and operations at Encore Boston Harbor may also be adversely impacted.

The Coronavirus outbreak has had and will have an adverse effect on the Company's results of operations. Given the uncertainty around the extent and timing of the potential future spread or mitigation of the Coronavirus and around the imposition or relaxation of protective measures, management cannot reasonably estimate the impact to the Company's future results of operations, cash flows, or financial condition.

Note 2 - Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and include the accounts of the Company, its majority-owned subsidiaries, and entities the Company identifies as variable interest entities ("VIEs") of which the Company is determined to be the primary beneficiary. For information on the Company's VIEs, see Note 18, "Retail Joint Venture." All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less and include both U.S. dollar-denominated and foreign currency-denominated securities. Cash equivalents are carried at cost,

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which approximates fair value. Restricted cash primarily represents those amounts reserved in accordance with WML's share award plan.

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.

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

Inventories

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

Property and Equipment

Purchases of property and equipment are stated at cost, and when placed into service, are depreciated over the estimated useful lives of the assets using the straight-line method as follows:

			Estimated Useful Life in Years
Buildings and improvements			10 - 45
Land improvements			10 - 45
Furniture, fixtures and equipment			3 - 20
Leasehold interest in land			25
Airplanes			20

Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in property charges and other.

Capitalized Interest

The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. When no debt is specifically identified as being incurred in connection with a construction project, the Company capitalizes interest on amounts expended on the project using the weighted average cost of the Company's outstanding borrowings. Interest of $53.9 million, $57.3 million, and $18.4 million was capitalized for the years ended December 31, 2019, 2018, and 2017, respectively.

Intangible Assets

The Company's intangible assets consist primarily of finite-lived intangible assets, including its Macau gaming concession and Massachusetts gaming license. Finite-lived intangible assets are amortized over the shorter of their contractual terms or estimated useful lives. The Company's indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually.

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Long-Lived Assets

Long-lived assets, which are to be held and used, including finite-lived intangible assets and property and equipment, are periodically reviewed by management for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If an indicator of impairment exists, the Company compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then impairment is measured as the difference between fair value and carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs.

Leases

Lessee Arrangements

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

Lessor Arrangements

The Company is the lessor under non-cancelable operating leases for retail and food and beverage outlet space at its integrated resorts, which represents approximately 100,000, 59,000, 140,000, and 35,500 square feet of space at Wynn Palace, Wynn Macau, Wynn Las Vegas, and Encore Boston Harbor, respectively. The lease arrangements generally include minimum base rent and contingent rental clauses based on a percentage of net sales. Generally, the terms of the leases range between five and 10 years. The Company records revenue on a straight-line basis over the term of the lease, and recognizes revenue for contingent rentals when the contingency has been resolved. The Company has elected to combine lease and nonlease components for the purpose of measuring lease revenue. Lease revenue is recorded in Entertainment, retail and other revenue in the accompanying Consolidated Statements of Income.

Debt Issuance Costs

Direct and incremental costs and original issue discounts and premiums incurred in connection with the issuance of long-term debt are deferred and amortized to interest expense using the effective interest method or, if the amounts approximate the effective interest method, on a straight-line basis. Debt issuance costs incurred in connection with the issuance of the Company's revolving credit facilities are presented in noncurrent assets on the Consolidated Balance Sheets. All other debt issuance costs are presented as a direct reduction of long-term debt on the Consolidated Balance Sheets. Approximately $29.0 million, $36.9 million, and $25.0 million was amortized to interest expense during the years ended December 31, 2019, 2018, and 2017, respectively.

Redemption Price Promissory Note

On February 18, 2012, pursuant to its articles of incorporation, the Company redeemed and canceled all Aruze USA, Inc.’s ("Aruze") 24,549,222 shares of Wynn Resorts’ common stock. In connection with the redemption of the shares, the Company issued a promissory note (the "Redemption Note") with a principal amount of $1.94 billion, a maturity date of February 18, 2022 and an interest rate of 2% per annum, payable annually in arrears on each anniversary of the date of the Redemption Note. The Redemption Note was recorded at fair value in accordance with applicable accounting guidance. The Company repaid the principal amount in full on March 30, 2018. As of December 31, 2017, the fair value of the Redemption Note was $1.88 billion.

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In determining this fair value, the Company estimated the Redemption Note's present value using discounted cash flows with a probability weighted expected return for redemption assumptions and a discount rate, which included time value and non-performance risk adjustments commensurate with the risk of the Redemption Note.

In determining the appropriate discount rate to be used to calculate the estimated present value, the Company considered the Redemption Note's subordinated position and credit risk relative to all other debt in the Company's capital structure and credit ratings associated with the Company's traded debt. Observable inputs for the risk free rate were based on Federal Reserve rates for U.S. Treasury securities and the credit risk spread was based on a yield curve index of similarly rated debt.

Derivative Financial Instruments

The Company has an interest rate collar to manage interest rate exposure on its Retail Term Loan (as defined in Note 7, "Long-Term Debt"). The Company measures the fair value of the interest rate collar at each balance sheet date based on a Black-Scholes option pricing model, which incorporates observable market inputs such as market volatility and interest rates. The fair value of the interest rate collar is recognized as an asset or liability at each balance sheet date, with changes in fair value recorded in earnings as the Company's interest rate collar does not qualify for hedge accounting. The fair value approximates the amount the Company would pay if the interest rate collar was settled at the respective valuation date.

Revenue Recognition

The Company's revenue from contracts with customers primarily consists of casino wagers and sales of rooms, food and beverage, entertainment, retail and other goods and services.

Gross casino revenues are measured by the aggregate net difference between gaming wins and losses. The Company applies a practical expedient by accounting for its casino wagering transactions on a portfolio basis versus an individual basis as all wagers have similar characteristics. Commissions rebated to customers either directly or indirectly through games promoters and cash discounts and other cash incentives earned by customers are recorded as a reduction of casino revenues. In addition to the wager, casino transactions typically include performance obligations related to complimentary goods or services provided to incentivize future gaming or in exchange for points earned under the Company's loyalty programs.

For casino transactions that include complimentary goods or services provided by the Company to incentivize future gaming, the Company allocates the standalone selling price of each good or service to the appropriate revenue type based on the good or service provided. Complimentary goods or services that are provided under the Company's control and discretion and supplied by third parties are recorded as an operating expense.

The Company offers loyalty programs at each of its resorts. Under the programs at Encore Boston Harbor and the Company's Macau Operations, customers earn points based on their level of table games and slots play, which can be redeemed for free play, gifts and complimentary goods or services provided by the Company. Under the program at its Las Vegas Operations, customers earn points based on their level of slots play, which can be redeemed for free play. For casino transactions that include points earned under the Company's loyalty programs, the Company defers a portion of the revenue by recording the estimated standalone selling price of the earned points that are expected to be redeemed as a liability.

Upon redemption of the points for Company-owned goods or services, the standalone selling price of each good or service is allocated to the appropriate revenue type based on the good or service provided. Upon the redemption of points with third parties, the redemption amount is deducted from the liability and paid directly to the third party with any difference between the amount paid and the stand-alone selling price recorded as Entertainment, retail and other revenue in the accompanying Consolidated Statements of Income.

After allocating amounts to the complimentary goods or services provided and to the points earned under the Company's loyalty programs, the residual amount is recorded as casino revenue when the wager is settled.

The transaction price for rooms, food and beverage, entertainment, retail and other transactions is the net amount collected from the customer for such goods and services and is recorded as revenue when the goods are provided, services are performed or events are held. Sales tax and other applicable taxes collected by the Company are excluded from revenues. Advance deposits on rooms and advance ticket sales are performance obligations that are recorded as customer deposits until services are provided to the customer. Revenues from contracts with multiple goods or services are allocated to each good or service based on its relative standalone selling price. As previously noted, Entertainment, retail and other revenue also includes lease revenue, which is recognized in accordance with Topic 842.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Gaming Taxes

The Company is subject to taxes based on gross gaming revenues in the jurisdictions in which it operates, subject to applicable jurisdictional adjustments. These gaming taxes are recorded as casino expenses in the accompanying Consolidated Statements of Income. These taxes totaled $2.24 billion, $2.44 billion, and $2.17 billion for the years ended December 31, 2019, 2018, and 2017, respectively.

Advertising Costs

The cost of advertising is expensed as incurred, and totaled $61.3 million, $40.6 million, and $37.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Pre-opening Expenses

Pre-opening expenses represent personnel, advertising, and other costs incurred prior to the opening of new ventures and are expensed as incurred. During the years ended December 31, 2019, 2018, and 2017, the Company incurred pre-opening expenses primarily in connection with the development of Encore Boston Harbor.

Income Taxes

The Company is subject to income taxes in the U.S. and foreign jurisdictions where it operates. Accounting standards require the recognition of deferred tax assets, net of applicable reserves, and liabilities for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on the income tax provision and deferred tax assets and liabilities generally is recognized in the results of operations in the period that includes the enactment date. Accounting standards also require recognition of a future tax benefit to the extent that realization of such benefit is more likely than not; otherwise, a valuation allowance is applied.

The Company's income tax returns are subject to examination by the Internal Revenue Service ("IRS") and other tax authorities in the locations where it operates. The Company assesses potentially unfavorable outcomes of such examinations based on accounting standards for uncertain income taxes. The accounting standards prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

Uncertain tax position accounting standards apply to all tax positions related to income taxes. These accounting standards utilize a two-step approach for evaluating tax positions. If a tax position, based on its technical merits, is deemed more likely than not to be sustained, then the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon settlement.

As applicable, the Company will recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes.

Foreign Currency

Gains or losses from foreign currency remeasurements are included in Other income (expense) in the accompanying Consolidated Statements of Income. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date and income statement accounts are translated at the average rate of exchange prevailing during the year. Translation adjustments resulting from this process are charged or credited to other comprehensive income (loss).

Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

Comprehensive income includes net income and all other non-stockholder changes in equity or other comprehensive income (loss). Components of the Company's comprehensive income are reported in the accompanying Consolidated Statements of Stockholders' Equity and Consolidated Statements of Comprehensive Income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Measurements

The Company measures certain of its financial assets and liabilities, at fair value on a recurring basis pursuant to accounting standards for fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These accounting standards establish a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include:

• Level 1** - Observable inputs such as quoted prices in active markets.

• Level 2** - Inputs other than quoted prices in active markets that are either directly or indirectly observable.

• Level 3** - Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with accounting standards, which require the compensation cost relating to share-based payment transactions be recognized in the Company's Consolidated Statements of Income. The cost is measured at the grant date, based on the estimated fair value of the award using the Black-Scholes option pricing model for stock options, and based on the closing share price of the Company's stock on the grant date for nonvested share awards. Dividend yield is based on the estimate of annual dividends expected to be paid at the time of the grant. Expected volatility is based on implied and historical factors related to the Company's common stock. The risk-free interest rate used for each period presented is based on the U.S. Treasury yield curve for stock options issued under the Omnibus Plan (as defined in Note 12, "Stock-Based Compensation") and the Hong Kong Exchange Fund rates for stock options issued under the Share Option Plan (as defined in Note 12, "Stock-Based Compensation"), both at the time of grant for the period equal to the expected term. Expected term represents the weighted average time between the option's grant date and its exercise date. The Company uses historical award exercise activity and termination activity in estimating the expected term for the Omnibus Plan and Share Option Plan. The cost is recognized as an expense on a straight-line basis over the employee's requisite service period (the vesting period of the award), and forfeitures are recognized as they occur. The Company's stock-based employee compensation arrangements are more fully discussed in Note 12, "Stock-Based Compensation."

Recently Adopted Accounting Standards

Leases

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

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

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

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounting Standards Issued But Not Yet Adopted

Financial Instruments - Credit Losses

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

Cloud Computing Arrangement Implementation Costs

In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The ASU is intended to eliminate potential diversity in practice in accounting for costs incurred to implement cloud computing arrangements that are service contracts by requiring customers in such arrangements to follow internal-use software guidance with respect to such costs, with any resulting deferred implementation costs recognized over the term of the contract in the same income statement line item as the fees associated with the hosting element of the arrangement. The Company adopted the guidance effective January 1, 2020, and this adoption did not have a material effect on its Consolidated Financial Statements.

Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the guidance effective January 1, 2020, and this adoption did not have a material effect on its Consolidated Financial Statements.

Note 3 - Cash, Cash Equivalents and Restricted Cash

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

			December 31,
			2019						2018
Cash and cash equivalents:
Cash (1)			$	1,265,502					$	1,455,744
Cash equivalents (2)			1,086,402						759,257
Total cash and cash equivalents			2,351,904						2,215,001
Restricted cash (3)			6,388						4,322
Total cash, cash equivalents and restricted cash			$	2,358,292					$	2,219,323

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

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 4 - Receivables, net

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

			December 31,
			2019						2018
Casino			$	304,137					$	229,594
Hotel			22,114						22,086
Other			59,495						57,658
			385,746						309,338
Less: allowance for doubtful accounts			(39,317)						(32,694)
			$	346,429					$	276,644

As of December 31, 2019 and 2018, approximately 79.0% and 85.0%, respectively, of the Company's markers were due from customers residing outside the United States, primarily in Asia. Business or economic conditions or other significant events in the countries in which our customers reside could affect the collectability of such receivables.

Note 5 - Property and Equipment, net

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

			December 31,
			2019						2018
Buildings and improvements			$	9,367,241					$	7,707,467
Land and improvements			1,246,679						1,141,032
Furniture, fixtures and equipment			2,932,483						2,288,370
Leasehold interests in land			—						313,516
Airplanes			110,623						110,623
Construction in progress			477,333						1,912,801
			14,134,359						13,473,809
Less: accumulated depreciation			(4,510,527)						(4,087,889)
			$	9,623,832					$	9,385,920

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

Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $602.9 million, $546.1 million, and $547.9 million, respectively.

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

Land Acquisition

During the first quarter of 2018, the Company acquired approximately 38 acres of land on the Las Vegas Strip directly across from Wynn Las Vegas for $336.2 million, approximately 16 acres of which are subject to a ground lease that expires in 2097. The Company expects to use this land for future development.

In accordance with asset acquisition accounting standards, the Company allocated the purchase price to the identifiable assets acquired based on the relative fair value of each component. As a result, the Company recorded $247.0 million of the purchase price as land and $89.1 million of the purchase price as a finite-lived intangible asset, which was reclassified to Operating lease assets upon the adoption of Topic 842 on January 1, 2019. For more information regarding the lease, see Note 15,"Leases."

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 6 - Intangible Assets, net

Intangible assets, net consisted of the following (in thousands):

			December 31,
			2019						2018
Finite-lived intangible assets:
Macau gaming concession			$	42,300					$	42,300
Less: accumulated amortization			(36,348)						(33,965)
			5,952						8,335
Massachusetts gaming license			117,700						117,700
Less: accumulated amortization			(4,098)						—
			113,602						117,700
Undeveloped land - Las Vegas			—						89,101
Less: accumulated amortization			—						(1,027)
			—						88,074
Total finite-lived intangible assets			119,554						214,109
Indefinite-lived intangible assets:
Water rights and other			26,860						8,397
Total indefinite-lived intangible assets			26,860						8,397
Total intangible assets, net			$	146,414					$	222,506

The Macau gaming concession is a finite-lived intangible asset that is being amortized over the 20 year life of the concession. The Company expects that amortization of the Macau gaming concession will be $2.4 million each year in 2020 and 2021, and $1.2 million in 2022.

The Massachusetts gaming license is a finite-lived intangible asset that is being amortized over the 15 year life of the license. The Company expects that amortization of the Massachusetts gaming license will be $7.8 million each year from 2020 through 2033, and $3.7 million in 2034.

On January 1, 2019, the Company reclassified the Undeveloped land - Las Vegas, net of related accumulated amortization to operating lease assets with the adoption of Topic 842.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 7 - Long-Term Debt

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

			December 31,
			2019						2018
Macau Related:
Wynn Macau Credit Facilities:
Wynn Macau Term Loan, due 2022 (1)			$	2,302,540					$	2,296,999
Wynn Macau Revolver, due 2022 (2)			350,232						623,921
WML 4 7/8% Senior Notes, due 2024			600,000						600,000
WML 5 1/2% Senior Notes, due 2027			750,000						750,000
WML 5 1/8% Senior Notes, due 2029			1,000,000						—
U.S. and Corporate Related:
WRF Credit Facilities (3):
WRF Term Loan, due 2024			987,500						—
WRF Revolver, due 2024			—						—
WLV 4 1/4% Senior Notes, due 2023			500,000						500,000
WLV 5 1/2% Senior Notes, due 2025			1,780,000						1,780,000
WLV 5 1/4% Senior Notes, due 2027			880,000						880,000
WRF 5 1/8% Senior Notes, due 2029			750,000						—
Retail Term Loan, due 2025 (4)			615,000						615,000
Wynn America Senior Term Loan Facility, due 2021 (5)			—						994,780
Wynn Resorts Term Loan, due 2024 (5)			—						500,000
			10,515,272						9,540,700
Less: Unamortized debt issuance costs and original issue discounts and premium, net			(111,413)						(117,600)
			10,403,859						9,423,100
Less: Current portion of long-term debt			(323,876)						(11,960)
Total long-term debt, net of current portion			$	10,079,983					$	9,411,140

(1) Approximately $1.31 billion and $997.5 million of the Wynn Macau Term Loan bears interest at a rate of LIBOR plus 1.75% per year and HIBOR plus 1.75% per year, respectively. As of December 31, 2019 and 2018, the weighted average interest rate was approximately 3.95% and 4.17%, respectively.

(2) Approximately $199.5 million and $150.7 million of the Wynn Macau Revolver bears interest at a rate of LIBOR plus 1.75% per year and HIBOR plus 1.75% per year, respectively. As of December 31, 2019 and 2018, the weighted average interest rate was approximately 3.92% and 4.17%, respectively. As of December 31, 2019, the available borrowing capacity under the Wynn Macau Revolver was $399.3 million.

(3) The WRF Credit Facilities bear interest at a rate of LIBOR plus 1.75% per year. As of December 31, 2019, the interest rate was 3.55%. Additionally, as of December 31, 2019, the available borrowing capacity under the WRF Revolver was $831.9 million, net of $18.1 million in outstanding letters of credit.

(4) The Retail Term Loan bears interest at a rate of LIBOR plus 1.70% per year. As of December 31, 2019 and 2018, the interest rate was 3.41% and 4.78%, respectively.

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Macau Related Debt

Wynn Macau Credit Facilities

The Company's Wynn Macau credit facilities consist of an approximately $2.30 billion equivalent senior secured term loan facility (the "Wynn Macau Term Loan") and an approximately $750 million equivalent senior secured revolving credit facility (the "Wynn Macau Revolver" and together with the Wynn Macau Term Loan, the "Wynn Macau Credit Facilities"). The borrower is Wynn Resorts (Macau) S.A. ("Wynn Macau SA"), an indirect subsidiary of WML. Wynn Macau SA has the ability to upsize the Wynn Macau Credit Facilities by an additional $1.0 billion in equivalent senior secured loans upon satisfaction of various conditions. Wynn Macau SA borrows and repays its revolving credit facility from time to time as cash needs permit.

In December 2018, Wynn Macau SA amended the Wynn Macau Credit Facilities by entering into the Amended Common Terms Agreement. The Wynn Macau Term Loan was previously repayable in graduating installments of between 2.50% to 7.33% of the principal amount on a quarterly basis commencing December 2018, with a final installment of 50% of the principal amount repayable in September 2021; and the final maturity of any outstanding borrowings from the Wynn Macau Revolver was previously repayable by September 2020. Following the execution of the Amended Common Terms Agreement, the Wynn Macau Term Loan is repayable in graduating installments of between 2.875% to 4.50% of the principal amount on a quarterly basis commencing September 30, 2020, with a final installment of 75% of the principal amount repayable in June 2022; and the final maturity of any outstanding borrowings from the Wynn Macau Revolver is in June 2022. The commitment fee required to be paid for unborrowed amounts under the Wynn Macau Revolver, if any, is between 0.52% and 0.79%, per annum, based on Wynn Macau SA's Leverage Ratio. The annual commitment fee is payable quarterly in arrears and is calculated based on the daily average of the unborrowed amounts.

The Wynn Macau Credit Facilities contain a requirement that Wynn Macau SA must make mandatory repayments of indebtedness from specified percentages of excess cash flow. If Wynn Macau SA's Leverage Ratio is greater than 4.5 to 1, then 25% of Excess Cash Flow (as defined in the Wynn Macau Credit Facilities) must be used for prepayment of indebtedness and cancellation of available borrowings under the Wynn Macau Credit Facilities. There is no mandatory prepayment in respect of Excess Cash Flow if Wynn Macau SA's Leverage Ratio is equal to or less than 4.5 to 1. The Wynn Macau Credit Facilities contain customary covenants restricting certain activities including, but not limited to: the incurrence of additional indebtedness, the incurrence or creation of liens on any of its property, sale and leaseback transactions, the ability to dispose of assets, and making loans or other investments. In addition, Wynn Macau SA is required by the financial covenants to maintain a Leverage Ratio of not greater than 4.25 to 1 and 4.00 to 1 for the fiscal years ending December 31, 2019 and December 31, 2020 and thereafter, respectively, and an Interest Coverage Ratio (as defined in the Wynn Macau Credit Facilities) of not less than 2.00 to 1 at any time.

Borrowings under the Wynn Macau Credit Facilities are guaranteed by Palo Real Estate Company Limited ("Palo"), a subsidiary of Wynn Macau SA, and by certain subsidiaries of the Company that own equity interests in Wynn Macau SA, and are secured by substantially all of the assets of Wynn Macau SA and Palo, and the equity interests in Wynn Macau SA. Borrowings under the Wynn Macau Credit Facilities are not guaranteed by the Company or WML.

In connection with the gaming concession contract of Wynn Macau SA, Wynn Macau SA entered into a Bank Guarantee Reimbursement Agreement with Banco Nacional Ultramarino, S.A. ("BNU") for the benefit of the Macau government. This guarantee assures Wynn Macau SA's performance under the casino concession agreement, including the payment of premiums, fines and indemnity for any material failure to perform under the terms of the concession agreement and the payment of any gaming taxes. As of December 31, 2019, the guarantee was in the amount of 300 million Macau patacas ("MOP") (approximately $37.4 million) and will remain at such amount until 180 days after the end of the term of the concession agreement in 2022. BNU, as issuer of the guarantee, is currently secured by a second priority security interest in the senior lender collateral package. From and after repayment of all indebtedness under the Wynn Macau Credit Facilities, Wynn Macau SA is obligated to promptly, upon demand by BNU, repay any claim made on the guarantee by the Macau government. BNU is paid an annual fee for the guarantee of MOP 2.3 million (approximately $0.3 million).

The Company expects to repay the Wynn Macau Term Loan in an aggregate amount equivalent to the $1.0 billion of gross proceeds from the issuance of the 2029 WML Notes, as defined below, over the next two years, subject to generating sufficient future operating cash flows from its Macau Operations. In February 2020, the Company prepaid $150.0 million of the Wynn Macau Term Loan, and accordingly, has presented that amount as a current liability on the accompany Consolidated Balance Sheet as of December 31, 2019.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

WML 4 7/8% Senior Notes due 2024 and 5 1/2% Senior Notes due 2027

On September 20, 2017, WML issued the $600 million 4 7/8% Senior Notes due 2024 (the "2024 WML Notes") and the $750 million of 5 1/2% Senior Notes due 2027 (the "2027 WML Notes" and together with the 2024 WML Notes, the "WML Notes"). WML used the net proceeds from the WML Notes and cash on hand to fund the cost of extinguishing the 5 1/4% Senior Notes due 2021.

The 2024 WML Notes bear interest at the rate of 4 7/8% per annum and mature on October 1, 2024. The 2027 WML Notes bear interest at the rate of 5 1/2% per annum and mature on October 1, 2027. Interest on the WML Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2018.

At any time prior to October 1, 2020 and October 1, 2022, WML may redeem the 2024 WML Notes and 2027 WML Notes, respectively, in whole or in part, at a redemption price equal to the greater of (a) 100% of the principal amount of the WML Notes or (b) a "make-whole" amount as determined by an independent investment banker in accordance with the terms of the indentures for the WML Notes, dated as of September 20, 2017 (the "WML Indentures"). In either case, the redemption price would include accrued and unpaid interest. In addition, at any time prior to October 1, 2020, WML may use the net cash proceeds from certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2024 WML Notes and the 2027 WML Notes, at a redemption price equal to 104.875% of the aggregate principal amount of the 2024 WML Notes and 105.5% of the aggregate principal amount of the 2027 WML Notes, as applicable.

On or after October 1, 2020 and October 1, 2022, WML may redeem the 2024 WML Notes and 2027 WML Notes, respectively, in whole or in part, at a premium decreasing annually from 102.438% and 102.75%, respectively, of the applicable principal amount to 100% of the applicable principal amount, plus accrued and unpaid interest. If WML undergoes a change of control (as defined in the WML Indentures), it must offer to repurchase the WML Notes at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest. In addition, WML may redeem the WML Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, in response to any change in or amendment to certain tax laws or tax positions. Further, if a holder or beneficial owner of the WML Notes fails to meet certain requirements imposed by any Gaming Authority (as defined in the WML Indentures), WML may require the holder or beneficial owner to dispose of or redeem its WML Notes.

Upon the occurrence of (1) any event after which none of WML or any of its subsidiaries have such licenses, concessions, subconcessions or other permits or authorizations as necessary to conduct gaming activities in substantially the same scope as it does on the date of the WML Notes issuance, for a period of ten consecutive days or more, and such event has a material adverse effect on the financial condition, business, properties, or results of operations of WML and its subsidiaries, taken as a whole, or (2) the termination, rescission, revocation or modification of any such licenses, concessions, subconcessions or other permits or authorizations which has had a material adverse effect on the financial condition, business, properties, or results of operations of WML and its subsidiaries, taken as a whole, each holder of the WML Notes will have the right to require WML to repurchase all or any part of such holders' WML Notes at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The WML Notes are WML's general unsecured obligations and rank pari passu in right of payment with all of WML's existing and future senior unsecured indebtedness, will rank senior to all of WML's future subordinated indebtedness, if any; will be effectively subordinated to all of WML's future secured indebtedness to the extent of the value of the assets securing such debt; and will be structurally subordinated to all existing and future obligations of WML's subsidiaries, including the Wynn Macau Credit Facilities and the WML Finance Credit Facility. The WML Notes are not registered under the Securities Act of 1933, as amended (the "Securities Act") and the WML Notes are subject to restrictions on transferability and resale.

WML 5 1/8% Senior Notes due 2029

On December 17, 2019, WML issued $1.0 billion 5 1/8% Senior Notes due 2029 (the "2029 WML Notes") pursuant to an indenture (the "WML 2029 Indenture"). WML expects to use the net proceeds from the 2029 WML Notes to facilitate the repayment of $1.0 billion of amounts outstanding under the Wynn Macau Term Loan, as described under Wynn Macau Credit Facilities. The 2029 WML Notes bear interest at the rate of 5 1/8% per annum and mature on December 15, 2029. Interest on the 2029 WML Notes is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2020.

At any time prior to December 15, 2022, WML may use the net cash proceeds from certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2029 WML Notes at a redemption price equal to 105.125% of the aggregate

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

principal amount of the 2029 WML Notes, plus accrued and unpaid interest, if any. At any time prior to December 15, 2024, WML may redeem the 2029 WML Notes in whole or in part at a redemption price equal to the greater of (a) 100% of the aggregate principal amount of the 2029 WML Notes to be redeemed, or (b) a make-whole amount as determined by an independent investment banker in accordance with the terms of the WML 2029 Indenture, in either case, plus accrued and unpaid interest.

In addition, on or after December 15, 2024, WML may redeem the 2029 WML Notes in whole or in part at a premium decreasing annually from 102.563% of the applicable principal amount to 100.000%, plus accrued and unpaid interest. If WML undergoes a Change of Control (as defined in the WML 2029 Indenture), it must offer to repurchase the 2029 WML Notes at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest. In addition, WML may redeem the 2029 WML Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, in response to any change in or amendment to certain tax laws or tax positions. Further, if a holder or beneficial owner of the 2029 WML Notes fails to meet certain requirements imposed by any Gaming Authority (as defined in the WML 2029 Indenture), WML may require the holder or beneficial owner to dispose of or redeem its 2029 WML Notes.

Upon the occurrence of (a) any event after which none of WML or any subsidiary of WML has the applicable gaming concessions or authorizations in Macau in substantially the same manner and scope as WML and its subsidiaries are entitled to at the date on which the 2029 WML Notes are issued, for a period of ten consecutive days or more, and such event has a material adverse effect on WML and its subsidiaries, taken as a whole; or (b) the termination or modification of any such concessions or authorizations which has a material adverse effect on WML and its subsidiaries, taken as a whole, each holder of the 2029 WML Notes will have the right to require WML to repurchase all or any part of such holder's 2029 WML Notes at a purchase price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The 2029 WML Notes are WML's general unsecured obligations and rank pari passu in right of payment with all of WML's existing and future senior unsecured indebtedness; will rank senior to all of WML's future subordinated indebtedness, if any; will be effectively subordinated to all of WML's future secured indebtedness to the extent of the value of the assets securing such debt; and will be structurally subordinated to all existing and future obligations of WML's subsidiaries, including WML's existing credit facilities. The 2029 WML Notes are not registered under the Securities Act of 1933, as amended (the "Securities Act"), and the 2029 WML Notes are subject to restrictions on transferability and resale.

The WML 2029 Indenture contains covenants limiting WML's (and certain of its subsidiaries') ability to, among other things: merge or consolidate with another company; transfer or sell all or substantially all of its properties or assets; and lease all or substantially all of its properties or assets. The terms of the WML 2029 Indenture contain customary events of default, including, but not limited to: default for 30 days in the payment when due of interest on the 2029 WML Notes; default in the payment when due of the principal of, or premium, if any, on the 2029 WML Notes; failure to comply with any payment obligations relating to the repurchase by WML of the 2029 WML Notes upon a change of control; failure to comply with certain covenants in the WML 2029 Indenture; certain defaults on certain other indebtedness; failure to pay judgments against WML or certain subsidiaries that, in the aggregate, exceed $50 million; and certain events of bankruptcy or insolvency. In the case of an event of default arising from certain events of bankruptcy or insolvency, all 2029 WML Notes then outstanding in an amount up to $1.0 billion will become due and payable immediately without further action or notice.

U.S. and Corporate Related Debt

Refinancing Transactions

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

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

WRF used the net proceeds from the Refinancing Transactions to refinance the existing Wynn America credit facilities and the Wynn Resorts term loan and to pay related fees and expenses totaling $19.3 million, of which $15.1 million was recorded as debt issuance costs within the Consolidated Balance Sheet. The Company recognized the Refinancing Transactions primarily as a modification of existing debt with the related unamortized debt issuance costs reallocated to the new debt instruments. For those components of debt that were deemed extinguished, the Company recognized a loss on extinguishment of debt of $12.4 million.

WRF Credit Facilities

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

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

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

WRF 5 1/8% Senior Notes, due 2029

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

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

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

The 2029 WRF Notes were offered pursuant to an exemption under the Securities Act of 1933, as amended (the "Securities Act"). The 2029 WRF Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act or outside the United States to certain persons in reliance on Regulation S under the Securities Act. The 2029 WRF Notes have not been and will not be registered under the Securities Act or under any state securities laws. Therefore, the 2029 WRF Notes may not be offered or sold within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws.

Wynn America Credit Facilities

The Company's credit facilities included an $875.0 million fully funded senior secured term loan facility (the "WA Senior Term Loan Facility I"), a $125.0 million fully funded senior term loan facility (the "WA Senior Term Loan Facility II") and a $375.0 million senior secured revolving credit facility (the "WA Senior Revolving Credit Facility," and collectively, the "Wynn America Credit Facilities"). The borrower was Wynn America, LLC, an indirect wholly owned subsidiary of Wynn Resorts, Limited.

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

Wynn Resorts Term Loan

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

Commitment Letter

On September 19, 2018, the Company entered into a commitment letter (the "Commitment Letter") to provide for a 364-day term loan facility to the Company of up to $750.0 million. On October 24, 2018, the Company agreed to terminate $500.0 million of the lenders' commitments under the Commitment Letter, in anticipation of entering into the WRL Credit Agreement. On March 8, 2019, in connection with the WRL Term Loan II, the Company agreed to terminate the remaining $250.0 million of the lenders' commitments under the commitment letter. Accordingly, there are no remaining commitments under the commitment letter.

Redemption Price Promissory Note

On February 18, 2012, pursuant to its articles of incorporation, the Company redeemed and canceled all Aruze USA, Inc.'s ("Aruze") 24,549,222 shares of Wynn Resorts' common stock. In connection with the redemption of the shares, the Company issued a promissory note (the "Redemption Note") with a principal amount of $1.94 billion, a maturity date of February 18, 2022 and an interest rate of 2% per annum, payable annually in arrears on each anniversary of the date of the Redemption Note. The Redemption Note was recorded at fair value in accordance with applicable accounting guidance. The Company repaid the

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

principal amount in full on March 30, 2018. On March 30, 2018, the Company also paid an additional $463.6 million in settlement of certain legal claims concerning the Redemption Note, which is recorded as a Litigation settlement expense on the Consolidated Statements of Income for the year ended December 31, 2018.

WLV 4 1/4% Senior Notes due 2023

In May 2013, Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. ("Capital Corp." and together with Wynn Las Vegas, LLC, the "Issuers") issued the $500.0 million 4 1/4% Senior Notes due 2023 (the "2023 WLV Notes") pursuant to an indenture, dated as of May 22, 2013 (the "2023 Indenture"), among the Issuers, the Guarantors (as defined below) and U.S. Bank National Association, as trustee (the "Trustee"). The 2023 WLV Notes were issued at par. The Issuers used the net proceeds from the 2023 WLV Notes to cover the cost of extinguishing the 7 7/8% First Mortgage Notes due November 2017.

The 2023 WLV Notes will mature on May 30, 2023 and bear interest at the rate of 4 1/4% per annum. The Issuers may, at their option, redeem the 2023 WLV Notes, in whole or in part, at any time or from time to time prior to their stated maturity. The redemption price for the 2023 WLV Notes that are redeemed before February 28, 2023 will be equal to the greater of (a) 100% of the principal amount of the 2023 WLV Notes to be redeemed or (b) a "make-whole" amount described in the 2023 Indenture, plus in either case accrued and unpaid interest to, but not including, the redemption date. The redemption price for the 2023 WLV Notes that are redeemed on or after February 28, 2023 will be equal to 100% of the principal amount of the 2023 WLV Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. In the event of a change of control triggering event, the Issuers will be required to offer to repurchase the 2023 WLV Notes at 101% of the principal amount, plus accrued and unpaid interest to but not including the repurchase date. The 2023 WLV Notes are also subject to mandatory redemption requirements imposed by gaming laws and regulations of gaming authorities in Nevada.

The 2023 WLV Notes are the Issuers' senior unsecured obligations and rank pari passu in right of payment with the Issuers' 2025 WLV Notes and 2027 WLV Notes (both defined below). The 2023 WLV Notes are unsecured, except by the first priority pledge by Wynn Las Vegas Holdings, LLC ("WLVH"), a direct wholly owned subsidiary of Wynn Resorts Finance, LLC, of its equity interests in Wynn Las Vegas, LLC. Such equity interests in Wynn Las Vegas, LLC also secure the Issuers' 2025 WLV Notes and 2027 WLV Notes. If Wynn Resorts receives an investment grade rating from one or more ratings agencies, the first priority pledge securing the 2023 WLV Notes will be released.

The 2023 WLV Notes are jointly and severally guaranteed by all of the Issuers' subsidiaries, other than Capital Corp., which was a co-issuer (the "Guarantors"). The guarantees are senior unsecured obligations of the Guarantors and rank senior in right of payment to all of their existing and future subordinated debt. The guarantees rank equally in right of payment with all existing and future liabilities of the Guarantors that are not so subordinated and will be effectively subordinated in right of payment to all of such Guarantors' existing and future secured debt (to the extent of the collateral securing such debt).

The 2023 Indenture contains covenants limiting the Issuers' and the Guarantors' ability to create liens on assets to secure debt; enter into sale-leaseback transactions; and merge or consolidate with another company. These covenants are subject to a number of important and significant limitations, qualifications and exceptions.

Events of default under the 2023 Indenture include, among others, the following: default for 30 days in the payment of interest when due on the 2023 WLV Notes; default in payment of the principal or premium, if any, when due on the 2023 WLV Notes; failure to comply with certain covenants in the 2023 Indenture; and certain events of bankruptcy or insolvency. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Issuers or any Guarantor, all 2023 WLV Notes then outstanding will become due and payable immediately without further action or notice.

On March 20, 2018, the Issuers executed a second supplemental indenture (the "Supplemental Indenture") to the 2023 Indenture, as supplemented by the 2025 Indenture, relating to the Issuers' 2023 WLV Notes. The Supplemental Indenture amended the 2023 Indenture by conforming the definition of "Change of Control" relating to ownership of equity interests in the Company in the Indenture to the terms of the indentures governing the Issuers' other outstanding notes. As part of executing the Supplemental Indenture, the Issuers paid $25.0 million to consenting holders of the 2023 WLV Notes. The Company accounted for this transaction as a modification and recorded the $25.0 million as debt issuance costs on the Consolidated Balance Sheet.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

WLV 5 1/2% Senior Notes due 2025

In February 2015, the Issuers issued the $1.8 billion 5 1/2% Senior Notes due 2025 (the "2025 WLV Notes") pursuant to an indenture, dated as of February 18, 2015 (the "2025 Indenture"), among the Issuers, the Guarantors and the Trustee. The 2025 WLV Notes were issued at par. The Company used the net proceeds from the 2025 WLV Notes to cover the cost of extinguishing the 7 7/8% First Mortgage Notes due May 1, 2020 (the "7 7/8% 2020 Notes") and the 7 3/4% First Mortgage Notes due August 15, 2020 (the "7 3/4% 2020 Notes" and together with the 7 7/8% 2020 Notes, the "2020 Notes") and for general corporate purposes.

The 2025 WLV Notes will mature on March 1, 2025 and bear interest at the rate of 5 1/2% per annum. The Issuers may, at their option, redeem the 2025 WLV Notes, in whole or in part, at any time or from time to time prior to their stated maturity. The redemption price for the 2025 WLV Notes that are redeemed before December 1, 2024 will be equal to the greater of (a) 100% of the principal amount of the 2025 WLV Notes to be redeemed and (b) a "make-whole" amount described in the 2025 Indenture, plus in either case accrued and unpaid interest, if any, to, but not including, the redemption date. The redemption price for the 2025 WLV Notes that are redeemed on or after December 1, 2024 will be equal to 100% of the principal amount of the 2025 WLV Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In the event of a change of control triggering event, the Issuers will be required to offer to repurchase the 2025 WLV Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The 2025 WLV Notes also are subject to mandatory redemption requirements imposed by gaming laws and regulations of gaming authorities in Nevada.

The 2025 WLV Notes are the Issuers' senior unsecured obligations and rank pari passu in right of payment with the Issuers' 2023 WLV Notes and 2027 WLV Notes. The 2025 WLV Notes are unsecured, except by the first priority pledge by WLVH of its equity interests in Wynn Las Vegas, LLC. Such equity interests in Wynn Las Vegas, LLC also secure the 2023 WLV Notes and 2027 WLV Notes. If Wynn Resorts receives an investment grade rating from one or more ratings agencies, the first priority pledge securing the 2025 WLV Notes will be released.

The 2025 WLV Notes are jointly and severally guaranteed by all of the Guarantors. The guarantees are senior unsecured obligations and rank senior in right of payment to all of their existing and future subordinated debt. The guarantees rank equally in right of payment with all existing and future liabilities of the Issuers' subsidiaries that are not so subordinated and will be effectively subordinated in right of payment to all of such existing and future secured debt (to the extent of the collateral securing such debt).

The 2025 Indenture contains covenants limiting the Issuers' and the Guarantors' ability to create liens on assets to secure debt, enter into sale-leaseback transactions and merge or consolidate with another company. These covenants are subject to a number of important and significant limitations, qualifications and exceptions.

Events of default under the 2025 Indenture include, among others, the following: default for 30 days in the payment of interest when due on the 2025 WLV Notes; default in payment of the principal, or premium, if any, when due on the 2025 WLV Notes; failure to comply with certain covenants in the 2025 Indenture; and certain events of bankruptcy or insolvency. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Issuers or any Guarantor, all 2025 WLV Notes then outstanding will become due and payable immediately without further action or notice.

In 2018, Wynn Resorts purchased $20.0 million principal amount of the 2025 WLV Notes through open market purchases. As of December 31, 2019, Wynn Resorts holds this debt and has not contributed it to its wholly owned subsidiary, Wynn Las Vegas, LLC.

WLV 5 1/4% Senior Notes due 2027

In May 2017, the Issuers issued the $900.0 million 5 1/4% Senior Notes due 2027 (the "2027 WLV Notes") pursuant to an indenture, dated as of May 11, 2017 (the "2027 Indenture"), among the Issuers, the Guarantors and the Trustee. The 2027 WLV Notes were issued at par. The Issuers used the net proceeds from the 2027 WLV Notes and cash on hand to fund the cost of extinguishing the 5 3/8% First Mortgage Notes due 2022 (the "2022 Notes").

The 2027 WLV Notes will mature on May 15, 2027 and bear interest at the rate of 5 1/4% per annum. The Issuers may, at their option, redeem the 2027 WLV Notes, in whole or in part, at any time or from time to time prior to their stated maturity. The redemption price for 2027 WLV Notes that are redeemed before February 15, 2027 will be equal to the greater of (a) 100%

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

of the principal amount of the 2027 WLV Notes to be redeemed and (b) a "make-whole" amount described in the 2027 Indenture, plus in either case accrued and unpaid interest, if any, to, but not including, the redemption date. The redemption price for the 2027 WLV Notes that are redeemed on or after February 15, 2027 will be equal to 100% of the principal amount of the 2027 WLV Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In the event of a change of control triggering event, the Issuers will be required to offer to repurchase the 2027 WLV Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The 2027 WLV Notes are also subject to mandatory redemption requirements imposed by gaming laws and regulations of gaming authorities in Nevada.

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

The 2027 WLV Notes are unsecured, except for the first priority pledge by WLVH of its equity interests in Wynn Las Vegas, LLC. Such equity interests in Wynn Las Vegas, LLC also secure the 2023 WLV Notes and 2025 WLV Notes. If Wynn Resorts, Limited receives an investment grade rating from one or more ratings agencies, the first priority pledge securing the 2027 WLV Notes will be released.

The 2027 WLV Notes are jointly and severally guaranteed by all of the Guarantors. The guarantees are senior unsecured obligations of the Guarantors and rank senior in right of payment to all of their existing and future subordinated debt. The guarantees rank equally in right of payment with all existing and future liabilities of the Guarantors that are not so subordinated and will be effectively subordinated in right of payment to all of such Guarantors' existing and future secured debt (to the extent of the collateral securing such debt).

The 2027 Indenture contains covenants limiting the Issuers' and the Guarantors' ability to: create liens on assets to secure debt; enter into sale-leaseback transactions; and merge or consolidate with another company. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The 2027 Indenture also provides that Wynn Resorts Finance, LLC may assume all of Wynn Las Vegas, LLC's obligations under the 2027 Indenture and the 2027 WLV Notes if certain conditions set forth in the 2027 Indenture are met.

Events of default under the 2027 Indenture include, among others, the following: default for 30 days in the payment of interest when due on the 2027 WLV Notes; default in payment of the principal, or premium, if any, when due on the 2027 WLV Notes; failure to comply with certain covenants in the 2027 Indenture; and certain events of bankruptcy or insolvency. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Issuers or any Guarantor, all 2027 WLV Notes then outstanding will become due and payable immediately without further action or notice.

In 2018, Wynn Resorts purchased $20.0 million principal amount of the 2027 WLV Notes through open market purchases. As of December 31, 2019, Wynn Resorts holds this debt and has not contributed it to its wholly owned subsidiary, Wynn Las Vegas, LLC.

The Issuers and certain of their subsidiaries will guarantee and secure their obligation under the WRF Credit Facilities with liens on substantially all of their assets, with such liens limiting the amount of such obligations secured to 15% of their Total Assets (as defined in the indenture for the 2025 WLV Notes).

The 2023 WLV Notes, 2025 WLV Notes and 2027 WLV Notes were offered pursuant to an exemption under the Securities Act. The 2023 WLV Notes, 2025 WLV Notes and 2027 WLV Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act or outside the United States to certain persons in reliance on Regulation S under the Securities Act. The 2023 WLV Notes, 2025 WLV Notes and 2027 WLV Notes have not been and will not be registered under the Securities Act or under any state securities laws. Therefore, the 2023 WLV Notes, 2025 WLV Notes and 2027 WLV Notes may not be offered or sold within the United States to, or for the account or benefit of, any United States person unless the offer or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Retail Term Loan

On July 25, 2018, Wynn/CA Plaza Property Owner, LLC and Wynn/CA Property Owner, LLC (collectively, the "Retail Borrowers"), subsidiaries of the Retail Joint Venture, entered into a term loan agreement (the "Retail Term Loan Agreement").

The Retail Term Loan Agreement provides for a term loan facility to the Retail Borrowers of $615.0 million (the "Retail Term Loan"). The Retail Term Loan is secured by substantially all of the assets of the Retail Borrowers. The Retail Term Loan matures on July 24, 2025 and bears interest at a rate of LIBOR plus 1.70% per annum. In accordance with the Retail Term Loan Agreement, the Retail Borrowers entered into an interest rate collar agreement with a LIBOR floor of 1.00% and a ceiling of 3.75%. The Retail Borrowers distributed approximately $589 million of the net proceeds of the Retail Term Loan to their members on a proportionate basis to each member's ownership percentage. At any time subsequent to July 25, 2019, the Retail Borrowers may prepay the Retail Term Loan, in whole or in part, with no premium above the principal amount.

The Retail Term Loan Agreement contains customary representations and warranties, events of default and affirmative and negative covenants for debt facilities of this type, including, among other things, limitations on leasing matters, incurrence of indebtedness, distributions and transactions with affiliates. The Retail Term Loan Agreement also provides for customary sweeps of the Retail Borrowers' excess cash in the event of a default or in the event the Retail Borrowers fail to maintain certain financial ratios as defined in the Retail Term Loan Agreement. In addition, the Company will indemnify the lenders under the Retail Term Loan and be liable, in each case, for certain customary environmental and non-recourse carve out matters pursuant to a hazardous materials indemnity agreement and a recourse indemnity agreement, each entered into concurrently with the execution of the Retail Term Loan Agreement.

In accordance with the terms of the Retail Term Loan Agreement, the Retail Borrowers entered into a five year interest rate collar with a notional value of $615.0 million for a cash payment of $3.9 million in July 2018. The interest rate collar establishes a range whereby the Retail Borrowers will pay the counterparty if one-month LIBOR falls below the established floor rate of 1.00%, and the counterparty will pay the Retail Borrowers if one-month LIBOR exceeds the ceiling rate of 3.75%. The interest rate collar settles monthly commencing in August 2019 through the termination date in August 2024. No payments or receipts are exchanged on interest rate collar contracts unless interest rates rise above or fall below the pre-determined ceiling or floor rate, respectively. The Company measures the fair value of the interest rate collar at each balance sheet date based on a Black-Scholes option pricing model, which incorporates observable market inputs such as market volatility and interest rates, with changes in fair value recorded in earnings. As of December 31, 2019, the fair value of the interest rate collar was a liability of $3.8 million and was recorded in Other long-term liabilities in the accompanying Consolidated Balance Sheet.

Debt Covenant Compliance

As of December 31, 2019, management believes the Company was in compliance with all debt covenants.

Scheduled Maturities of Long-Term Debt

Scheduled maturities of long-term debt as of December 31, 2019 were as follows (in thousands):

Years Ending December 31,
2020 (1)			$	323,876
2021			367,511
2022			2,111,385
2023			550,000
2024			1,387,500
Thereafter			5,775,000
			10,515,272
Unamortized debt issuance costs and original issue discounts and premium, net			(111,413)
			$	10,403,859

(1) Includes $150.0 million related to the prepayment of the Wynn Macau Term Loan paid in February 2020. The remaining contractual amortization payments were reduced on a pro rata basis by $150.0 million.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value of Long-Term Debt

The estimated fair value of the Company's long-term debt as of December 31, 2019 and 2018, was approximately $10.80 billion and $8.97 billion, respectively, compared to its carrying value, excluding debt issuance costs and original issue discount and premium, of $10.52 billion, and $9.54 billion, respectively. The estimated fair value of the Company's long-term debt is based on recent trades, if available, and indicative pricing from market information (Level 2 inputs).

Note 8 - Stockholders' Equity

Equity Offering

On April 3, 2018, the Company completed a registered public offering (the "Equity Offering") of 5,300,000 newly issued shares of its common stock, par value $0.01 per share, at a price of $175 per share for proceeds of $915.2 million, net of $11.7 million in underwriting discounts and $0.6 million in offering expenses. The Company used the net proceeds from the Equity Offering to repay all amounts borrowed under a Wynn Resorts bridge facility, together with all interest accrued thereon, and used the remaining net proceeds to repay certain other indebtedness of the Company in April 2018.

Common Stock

The Company's Board of Directors has authorized an equity repurchase program of up to $1.0 billion, which may include repurchases from time to time through open market purchases or negotiated transactions, depending on market conditions. During the years ended December 31, 2019 and December 31, 2018, the Company repurchased 413,439 and 1,478,552 shares, respectively, at a net cost of $43.2 million and $156.7 million, respectively, under the equity repurchase program. During the year ended December 31, 2017, no repurchases were made under the equity repurchase program. As of December 31, 2019, the Company had $800.1 million in repurchase authority under the program.

During the years ended December 31, 2019, 2018, and 2017, the Company withheld a total of 176,989 shares, 19,120 shares, and 148,413 shares, respectively, in satisfaction of tax withholding obligations on vested restricted stock and stock option exercises.

Dividends

During the first quarter of 2019, the Company paid a cash dividend of $0.75 per share and $1.00 per share for the three subsequent quarters, for annual cash dividends of $3.75 per share. During the first quarter of 2018, the Company paid a cash dividend of $0.50 per share and $0.75 per share for the three subsequent quarters, for annual cash dividends of $2.75 per share. In each quarter of 2017, the Company paid a cash dividend of $0.50 per share, for annual cash dividends of $2.00 per share. During the years ended December 31, 2019, 2018 and 2017, the Company recorded $403.0 million, $294.9 million, and $204.5 million, respectively, as a reduction of retained earnings from cash dividends declared.

On February 6, 2020, the Company announced a cash dividend of $1.00 per share, payable on March 6, 2020, to stockholders of record as of February 26, 2020.

Noncontrolling Interests

In October 2009, WML, the developer, owner and operator of Wynn Macau and Wynn Palace, listed its ordinary shares of common stock on The Stock Exchange of Hong Kong Limited through an initial public offering. The Company currently owns approximately 72% of this subsidiary's common stock. The shares of WML were not and will not be registered under the Securities Act and may not be offered or sold in the United States absent a registration under the Securities Act, or an applicable exception from such registration requirements.

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

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

On September 15, 2017, WML paid a dividend of HK$0.21 per share for a total of $139.4 million. The Company's share of this dividend was $100.6 million with a reduction of $38.8 million to noncontrolling interest in the accompanying Consolidated Balance Sheet.

On June 20, 2017, WML paid a dividend of HK$0.42 per share for a total of $279.9 million. The Company's share of this dividend was $202.0 million with a reduction of $77.9 million to noncontrolling interest in the accompanying Consolidated Balance Sheet.

During the year ended December 31, 2019, the Retail Joint Venture made aggregate distributions of $7.7 million to its non-controlling interest holder made in the normal course of business. During the year ended December 31, 2018, the Retail Joint Venture made aggregate distributions of $305.4 million to its non-controlling interest holder in connection with the distribution of the net proceeds of the Retail Term Loan and distributions made in the normal course of business. For more information on the Retail Joint Venture, see Note 18, "Retail Joint Venture".

Redemption of Securities

Wynn Resorts' articles of incorporation provide that, to the extent a gaming authority makes a determination of unsuitability or to the extent the Board of Directors determines, in its sole discretion, that a person is likely to jeopardize the Company or any affiliates application for, receipt of, approval for, right to the use of, or entitlement to, any gaming license, Wynn Resorts may redeem shares of its capital stock that are owned or controlled by an unsuitable person or its affiliates. The redemption price will be the amount, if any, required by the gaming authority or, if the gaming authority does not determine the price, the sum deemed by the Board of Directors to be the fair value of the securities to be redeemed. If Wynn Resorts determines the redemption price, the redemption price will be capped at the closing price of the shares on the principal national securities exchange on which the shares are listed on the trading day before the redemption notice is given. If the shares are not listed on a national securities exchange, the redemption price will be capped at the closing sale price of the shares as quoted on The Nasdaq Global Select Market or if the closing price is not reported, the mean between the bid and ask prices, as quoted by any other generally recognized reporting system. Wynn Resorts' right of redemption is not exclusive of any other rights that it may have or later acquire under any agreement, its bylaws or otherwise. The redemption price may be paid in cash, by promissory note, or both, as required, and pursuant to the terms established by, the applicable Gaming Authority and, if not, as the Board of Directors of Wynn Resorts elects.

Based on the Board of Directors' finding of "unsuitability," on February 18, 2012, Wynn Resorts redeemed and canceled Aruze's 24,549,222 shares of Wynn Resorts' common stock.

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

			Foreign currency translation						Unrealized loss on investment securities						Redemption Note						Total
January 1, 2017			$	2,213					$	(729)					$	—					$	1,484
Change in net unrealized loss			(2,766)						(563)						—						(3,329)
December 31, 2017			(553)						(1,292)						—						(1,845)
Cumulative credit risk adjustment (1)			—						—						(9,211)						(9,211)
Change in net unrealized gain (loss)			(1,397)						(1,510)						7,690						4,783
Amounts reclassified to net income (2)			—						2,802						1,521						4,323
Other comprehensive income (loss)			(1,397)						1,292						9,211						9,106
December 31, 2018			(1,950)						—						—						(1,950)
Change in net unrealized gain			271						—						—						271
Other comprehensive income			271						—						—						271
December 31, 2019			$	(1,679)					$	—					$	—					$	(1,679)

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

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

Note 9 - Fair Value Measurements

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

									Fair Value Measurements Using:
			December 31, 2019						Quoted Market Prices in Active Markets (Level 1)						Other Observable Inputs (Level 2)						Unobservable Inputs (Level 3)
Assets:
Cash equivalents			$	1,086,402					$	—					$	1,086,402					$	—
Restricted cash			$	6,388					$	2,048					$	4,340					$	—
Liabilities:
Interest rate collar			$	3,847					$	—					$	3,847					$	—
									Fair Value Measurements Using:
			December 31, 2018						Quoted Market Prices in Active Markets (Level 1)						Other Observable Inputs (Level 2)						Unobservable Inputs (Level 3)
Assets:
Cash equivalents			$	759,257					$	—					$	759,257					$	—
Restricted cash			$	4,322					$	2,015					$	2,307					$	—
Liabilities:
Interest rate collar			$	619					$	—					$	619					$	—

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 10 - Benefit Plans

Defined Contribution Plans

The Company established a retirement savings plan under Section 401(k) of the Internal Revenue Code covering its U.S. non-union employees in July 2000. The plan allows employees to defer, within prescribed limits, a percentage of their income on a pre-tax basis through contributions to this plan. The Company matches 50% of employee contributions, up to 6% of employees' eligible compensation. During the years ended December 31, 2019, 2018 and 2017, the Company recorded matching contribution expenses of $6.9 million, $6.4 million, and $6.1 million, respectively.

Wynn Macau SA also operates a defined contribution retirement benefit plan (the "Wynn Macau Plan"). Eligible employees are allowed to contribute 5% of their base salary to the Wynn Macau Plan and the Company matches any contributions. On July 1 2019, the Company offered the option for the eligible Macau resident employees to join the non-mandatory central provident fund (the "CPF") system. Eligible Macau resident employees joining the Company from July 1, 2019 onwards will enroll in the CPF system while the Company's existing Macau resident employees who are currently members of the Wynn Macau Plan will be provided with the option of joining the CPF system or staying in the existing Wynn Macau Plan, which will continue to be in effect in parallel. The CPF system allows eligible employees to contribute 5% or more of their base salary to the CPF while the Company matches with a 5% of such salary as employer's contribution to the CPF. The Company's matching contributions vest to the employee at 10% per year with full vesting in ten years. The assets of the Wynn Macau Plan and the CPF are held separately from those of the Company in independently administered funds, and the assets of the CPF are also overseen by the Macau government.

Forfeitures of unvested contributions are used to reduce the Company's liability for its contributions payable. During the years ended December 31, 2019, 2018 and 2017, the Company recorded matching contribution expenses of $17.8 million, $16.6 million, and $15.8 million, respectively.

Multi-Employer Pension Plan

Wynn Las Vegas, LLC contributes to a multi-employer defined benefit pension plan for certain of its union employees under the terms of the Southern Nevada Culinary and Bartenders Union collective-bargaining agreement, which expires in July 2021. The legal name of the multi-employer pension plan is the Southern Nevada Culinary and Bartenders Pension Plan (the "Plan") (EIN: 88-6016617 Plan Number: 1). The Company recorded expenses of $11.9 million, $11.9 million, and $11.5 million for contributions to the Plan for the years ended December 31, 2019, 2018 and 2017, respectively. For the 2018 plan year, the most recent for which plan data is available, the Company's contributions were identified by the Plan to exceed 5% of total contributions for that year. Based on information the Company received from the Plan, it was certified to be in neither endangered nor critical status for the 2018 plan year. Risks of participating in a multi-employer plan differ from single-employer plans for the following reasons: (1) assets contributed to a multi-employer plan by one employer may be used to provide benefits to employees of other participating employers; (2) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; (3) if a participating employer stops participating, it may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability; and (4) if the plan is terminated by withdrawal of all employers and if the value of the nonforfeitable benefits exceeds plan assets and withdrawal liability payments, employers are required by law to make up the insufficient difference.

Note 11 - Customer Contract Liabilities

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

			December 31, 2019						December 31, 2018						Increase/ (Decrease)						December 31, 2018						December 31, 2017						Increase/ (Decrease)
Casino outstanding chips and front money deposits (1)			$	769,053					$	905,561					$	(136,508)					$	905,561					$	991,957					$	(86,396)
Advance room deposits and ticket sales (2)			49,834						42,197						7,637						42,197						48,065						(5,868)
Other gaming-related liabilities (3)			13,970						12,694						1,276						12,694						12,765						(71)
Loyalty program and related liabilities (4)			21,148						18,148						3,000						18,148						18,421						(273)
			$	854,005					$	978,600					$	(124,595)					$	978,600					$	1,071,208					$	(92,608)

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

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

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

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

Note 12 - Stock-Based Compensation

Wynn Resorts, Limited

The Company's 2002 Stock Incentive Plan, as amended and restated (the "WRL 2002 Plan"), allowed it to grant stock options and nonvested shares of Wynn Resorts' common stock to eligible directors, officers, employees, and consultants of the Company. Under the WRL 2002 Plan, a maximum of 12,750,000 shares of the Company's common stock was reserved for issuance.

On May 16, 2014, the Company adopted the Wynn Resorts, Limited 2014 Omnibus Incentive Plan (the "Omnibus Plan") after approval from its stockholders. The Omnibus Plan allows for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other share-based awards to the same eligible participants as the WRL 2002 Plan. Under the approval of the Omnibus Plan, no new awards may be made under the WRL 2002 Plan. The outstanding awards under the WRL 2002 Plan were transferred to the Omnibus Plan and will remain pursuant to their existing terms and related award agreements. The Company reserved 4,409,390 shares of its common stock for issuance under the Omnibus Plan. These shares were transferred from the remaining available amount under the WRL 2002 Plan.

The Omnibus Plan is administered by the Compensation Committee (the "Committee") of the Wynn Resorts Board of Directors. The Committee has discretion under the Omnibus Plan regarding which type of awards to grant, the vesting and service requirements, exercise price, and other conditions, in all cases subject to certain limits. For stock options, the exercise price of stock options must be at least equal to the fair market value of the stock on the date of grant and the maximum term of such an award is 10 years.

As of December 31, 2019, the Company had an aggregate of 2,640,796 shares of its common stock available for grant as share-based awards under the Omnibus Plan.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Stock Options

The summary of stock option activity under the Omnibus Plan for the year ended December 31, 2019 is presented below:

			Options						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding as of January 1, 2019			345,790						$	60.99
Granted			—						—
Exercised			(293,690)						50.04
Forfeited or expired			(28,400)						158.09
Outstanding as of December 31, 2019			23,700						$	80.42					6.16						$	1,385,194
Fully vested and expected to vest as of December 31, 2019			23,700						$	80.42					6.16						$	1,385,194
Exercisable as of December 31, 2019			23,700						$	80.42					6.16						$	1,385,194

The following is provided for stock options under the Omnibus Plan (in thousands):

			Years Ended December 31,
			2019						2018						2017
Intrinsic value of stock options exercised			$	24,731					$	22,387					$	29,716
Cash received from the exercise of stock options			$	14,696					$	20,148					$	61,506

As of December 31, 2019, there was no unamortized compensation expense related to stock options.

Nonvested and performance nonvested shares

The summary of nonvested and performance nonvested share activity under the Omnibus Plan for the year ended December 31, 2019 is presented below:

			Shares						Weighted Average Grant Date Fair Value
Nonvested as of January 1, 2019			526,387						$	127.84
Granted			413,697						119.61
Vested			(151,808)						117.88
Forfeited			(43,825)						138.78
Nonvested as of December 31, 2019			744,451						$	123.62

Certain members of the executive management team receive grants of nonvested share awards that are subject to service and performance conditions. Generally, these awards vest if certain revenue and Adjusted Property EBITDA fair share metrics (as approved by the Company's Compensation Committee of the Board of Directors) are attained over either a one or three-year performance period. The Company records expense for these awards if it determines that vesting is probable. At December 31, 2019, all performance nonvested awards were deemed to be probable of vesting; however, none of the performance criteria contingencies have been resolved. The activity for these performance nonvested shares is included in the table above.

The following is provided for the share awards under the Omnibus Plan (in thousands, except weighted average grant date fair value):

			Years Ended December 31,
			2019						2018						2017
Weighted average grant date fair value			$	119.61					$	170.13					$	109.28
Fair value of shares vested			$	19,428					$	13,024					$	45,801

As of December 31, 2019, there was $58.1 million of unamortized compensation expense related to nonvested shares, which is expected to be recognized over a weighted average period of 2.16 years.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Annual Incentive Bonus

Certain members of the Company's executive management team receive a portion of their annual incentive bonus in shares of the Company's stock. The number of shares is determined based on the closing stock price on the date the annual incentive bonus is settled. As the number of shares is variable, the Company records a liability for the fixed monetary amount over the service period. The Company recorded stock-based compensation expense associated with these awards of $6.7 million for the years ended December 31, 2019 and 2018, respectively, and $23.7 million for the year ended December 31, 2017. The Company settled its obligations for the 2019 and 2018 annual incentive bonuses by issuing 44,788 and 58,783 of vested shares, respectively, with a weighted-average grant date fair value of $150.03 and $113.55, respectively, in January of the respective following year. The Company settled the obligation for the 2017 annual incentive bonus by issuing 141,216 of vested shares with a weighted average grant date fair value of $167.82 in December 2017 and January 2018.

Wynn Macau, Limited

The Company's majority-owned subsidiary, WML, has two stock-based compensation plans that provide awards based on shares of WML's common stock. The shares available for issuance under these plans are separate and distinct from the common stock of Wynn Resorts' share plan and are not available for issuance for any awards under the Wynn Resorts share plan.

WML Share Option Plan

WML adopted a stock incentive plan, for the grant of stock options to purchase shares of WML to eligible directors and employees of WML and its subsidiaries, on September 16, 2009 ( the “Original Share Option Plan”) until it was terminated on May 30, 2019 upon the adoption of a new share option plan (the “WML Share Option Plan”) on May 30, 2019. The WML Share Option Plan is administered by WML's Board of Directors, which has the discretion on the vesting and service requirements, exercise price, performance targets to exercise if applicable and other conditions, subject to certain limits.

Upon the adoption of the WML Share Option Plan, no further options may be offered or granted under the Original Share Option Plan but in all other respects the provisions of the Original Share Option Plan shall remain in full force and effect in respect of options which are granted during the life of the Original Share Option Plan and which remain unexpired immediately prior to the termination of the operation of the Original Share Option Plan.

The WML Share Option Plan was adopted for a period of 10 years commencing from May 30, 2019. The maximum number of Shares which may be issued pursuant to the WML Share Option Plan is 519,695,860 Shares. Except for the number of the options that may be granted and the expiration date of the WML Share Option Plan, the terms of the WML Share Option Plan and Original Share Option Plan are the same in all material respects. As of December 31, 2019, no options have been granted or are outstanding under the WML Share Option Plan.

The summary of stock option activity under the Original Share Option Plan for the year ended December 31, 2019 is presented below:

			Options						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term (years)						Aggregate Intrinsic Value
Outstanding as of January 1, 2019			10,558,400						$	2.49
Granted			455,000						$	2.54
Exercised			—						$	—
Outstanding as of December 31, 2019			11,013,400						$	2.51					6.87						$	2,521,979
Fully vested and expected to vest as of December 31, 2019			11,013,400						$	2.51					6.87						$	2,521,979
Exercisable as of December 31, 2019			5,212,000						$	2.60					5.37						$	1,398,941

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following is provided for stock options under the Original Share Option Plan (in thousands, except weighted average grant date fair value):

			Years Ended December 31,
			2019						2018						2017
Weighted average grant date fair value			$	0.55					$	0.57					$	0.56
Intrinsic value of stock options exercised			$	—					$	1,715					$	369
Cash received from the exercise of stock options			$	—					$	1,823					$	703

As of December 31, 2019, there was $2.7 million of unamortized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 3.57 years.

Share Award Plan

On June 30, 2014, the Company's majority-owned subsidiary, WML, approved and adopted the WML Employee Ownership Scheme (the "Share Award Plan"). The Share Award Plan allows for the grant of nonvested shares of WML's common stock to eligible employees. The Share Award Plan is administered by WML's Board of Directors and has been mandated under the plan to allot, issue and process the transfer of a maximum of 50,000,000 shares. The Board of Directors has discretion on the vesting and service requirements, exercise price and other conditions, subject to certain limits. As of December 31, 2019, there were 31,029,177 shares available for issuance under the Share Award Plan.

The summary of nonvested share activity under the Share Award Plan for the year ended December 31, 2019 is presented below:

			Shares						Weighted Average Grant Date Fair Value
Nonvested as of January 1, 2019			9,753,267						$	2.07
Granted			3,742,418						$	2.43
Vested			(2,420,915)						$	1.44
Forfeited			(1,408,607)						$	2.26
Nonvested as of December 31, 2019			9,666,163						$	2.36

The weighted average grant date fair value for shares granted during the year and the total fair value of shares vested under the Share Award Plan is presented below (in thousands, except weighted average grant date fair value):

			Years Ended December 31,
			2019						2018						2017
Weighted average grant date fair value			$	2.43					$	3.07					$	2.22
Fair value of shares vested			$	5,139					$	12,442					$	6,884

As of December 31, 2019, there was $13.3 million of unamortized compensation expense, which is expected to be recognized over a weighted average period of 2.38 years.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Compensation Cost

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

			Years Ended December 31,
			2019						2018						2017
Casino			$	7,903					$	5,946					$	6,954
Rooms			1,046						437						655
Food and beverage			1,807						1,125						1,466
Entertainment, retail and other			174						111						147
General and administrative			28,772						28,872						34,749
Pre-opening			670						750						—
Property charges and other (1)			—						(2,201)						—
Total stock-based compensation expense			40,372						35,040						43,971
Total stock-based compensation capitalized			350						11						80
Total stock-based compensation costs			$	40,722					$	35,051					$	44,051

(1) In 2018, reflects the reversal of compensation cost previously recognized for awards forfeited in connection with the departure of an employee.

During the years ended December 31, 2019, 2018 and 2017, the Company recognized income tax benefits in the Consolidated Statements of Income of $5.8 million, $5.7 million, and $10.8 million, respectively, related to stock-based compensation expense. Additionally, during the years ended December 31, 2019, 2018, and 2017, the Company realized tax benefits of $8.4 million, $4.6 million, and $25.4 million, respectively, related to stock option exercises and restricted stock vesting that occurred in those years.

Option Valuation Inputs

There were no stock options granted under the Omnibus Plan during the years ended December 31, 2019, 2018, and 2017.

The fair value of stock options granted under WML's Share Option Plan was estimated on the date of grant using the following weighted average assumptions:

			Years Ended December 31,
			2019						2018						2017
Expected dividend yield			5.7		%				5.7		%				5.7		%
Expected volatility			40.7		%				40.2		%				41.5		%
Risk-free interest rate			1.4		%				2.3		%				1.1		%
Expected term (years)			6.5						6.5						6.5

Note 13 - Income Taxes

Consolidated income (loss) before taxes for United States ("U.S.") and foreign operations consisted of the following (in thousands):

			Years Ended December 31,
			2019						2018						2017
United States			$	(158,937)					$	(491,523)					$	90,206
Foreign			647,155						797,263						470,063
Total			$	488,218					$	305,740					$	560,269

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The income tax provision (benefit) attributable to income before income taxes is as follows (in thousands):

			December 31,
			2019						2018						2017
Current
U.S. Federal			$	(14)					$	(637)					$	(19,856)
U.S. State			868						198						51
Foreign			1,796						1,749						1,674
Total			2,650						1,310						(18,131)
Deferred
U.S. Federal			170,508						(483,681)						(309,423)
U.S. State			3,682						(14,973)						(1,431)
Total			174,190						(498,654)						(310,854)
Total income tax provision (benefit)			$	176,840					$	(497,344)					$	(328,985)

The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:

			December 31,
			2019						2018						2017
U.S. Federal statutory rate			21.0		%				21.0		%				35.0		%
Foreign tax credits, net of valuation allowance			13.1		%				(154.9)		%				(136.1)		%
Non-taxable foreign income			(27.4)		%				(48.8)		%				(20.1)		%
Foreign tax rate differential			(10.4)		%				(20.8)		%				(17.0)		%
Global intangible low-taxed income			10.1		%				28.3		%				—		%
Change in tax rate			—		%				—		%				(11.8)		%
Repatriation of foreign earnings			—		%				—		%				81.0		%
Valuation allowance, other			20.6		%				9.3		%				5.9		%
Other, net			9.2		%				3.2		%				4.4		%
Effective income tax rate			36.2		%				(162.7)		%				(58.7)		%

Wynn Macau SA received a five year exemption from Macau's 12% Complementary Tax on casino gaming profits through December 31, 2020. Accordingly, for the years ended December 31, 2019, 2018 and 2017, the Company was exempt from the payment of such taxes totaling $77.7 million, $96.8 million, and $63.0 million or $0.73, $0.90, and $0.61 per diluted share, respectively. The Company's non-gaming profits remain subject to the Macau Complementary Tax and its casino winnings remain subject to the Macau special gaming tax and other levies in accordance with its concession agreement.

Wynn Macau SA also entered into an agreement with the Macau government that provides for an annual payment of MOP 12.8 million (approximately $1.6 million) as complementary tax otherwise due by stockholders of Wynn Macau SA on dividend distributions through 2020. As a result of the stockholder dividend tax agreements, income tax expense includes $1.6 million for each of the years ended December 31, 2019, 2018, and 2017.

The Macau special gaming tax is 35% of gross gaming revenue. U.S. tax laws only allow a foreign tax credit ("FTC") up to 21% of foreign source income. In February 2010, the Company and the IRS entered into a Pre-Filing Agreement ("PFA") providing that the Macau special gaming tax qualifies as a tax paid in lieu of an income tax and could be claimed as a U.S. FTC.

In December 2017, the U.S. Tax Cuts and Jobs Act ("U.S. tax reform") was enacted. Also in December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. For the year ended December 31, 2017, the Company recorded a provisional net tax benefit of $339.9 million based on the Company's initial analysis of the U.S. tax reform. During the fourth quarter of 2018, the Company finalized its analysis of U.S. tax reform, which was further clarified by guidance issued by the Internal Revenue Service in the fourth quarter of 2018. The guidance addressed the treatment of foreign-sourced royalties and the allocation of interest expense and other

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

expenses to foreign source income. As a result, the Company adjusted its valuation allowance for FTC carryovers and recorded a net tax benefit of $390.9 million, which is incremental to the $339.9 million provisional net tax benefit recorded in 2017.

During the years ended December 31, 2019, 2018 and 2017, the Company recognized tax benefits of $32.9 million, $82.8 million and $746.6 million, respectively (net of valuation allowance and uncertain tax positions), for FTCs generated from the earnings of Wynn Macau SA.

Accounting standards require recognition of a future tax benefit to the extent that realization of such benefit is more likely than not; otherwise, a valuation allowance is applied. During the years ended December 31, 2019 and 2018, the aggregate valuation allowance for deferred tax assets increased by $115.5 million and decreased by $746.6 million, respectively. The 2019 increase is primarily related to the realizability of deferred tax assets related to disallowed interest expense carryforwards. The 2018 decrease is primarily related to the expiration of FTCs.

The Company recorded tax benefits resulting from the exercise of nonqualified stock options and the value of vested restricted stock and accrued dividends of $5.7 million, $2.0 million, and $2.6 million for the years ended December 31, 2019, 2018, and 2017, respectively, in excess of the amounts reported for such items as compensation costs under accounting standards related to stock-based compensation.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following (in thousands):

			December 31,
			2019						2018
Deferred tax assets—U.S.:
Foreign tax credit carryforwards			$	3,070,914					$	3,187,797
Disallowed interest expense carryforward			88,319						67,368
Lease liability			23,650						—
Construction in progress			—						42,528
Receivables, inventories, accrued liabilities and other			15,279						10,878
Stock-based compensation			6,479						5,477
Other tax credit carryforwards			7,224						4,946
Intangibles and related other			—						489
Other			4,719						2,279
			3,216,584						3,321,762
Less: valuation allowance			(2,604,497)						(2,500,027)
			612,087						821,735
Deferred tax liabilities—U.S.:
Property and equipment			(8,887)						(70,560)
Lease asset			(23,650)						—
Prepaid insurance, maintenance and taxes			(15,956)						(12,430)
Other			(1,332)						(2,293)
			(49,825)						(85,283)
Deferred tax assets—Foreign:
Net operating loss carryforwards			96,657						94,244
Property and equipment			50,709						41,520
Pre-opening expenses			6,126						8,421
Other			10,114						651
			163,606						144,836
Less: valuation allowance			(154,934)						(143,872)
			8,672						964
Deferred tax liabilities—Foreign:
Property and equipment			(8,672)						(964)
Net deferred tax asset			$	562,262					$	736,452

FTC carryforwards of $87.1 million expired on December 31, 2019. As of December 31, 2019, the Company had FTC carryforwards (net of uncertain tax positions) of $3.1 billion. Of this amount, $530.4 million will expire in 2020, $540.3 million in 2021, $756.0 million in 2023, $710.7 million in 2024, $47.2 million in 2025 and $486.3 million in 2027. The Company has a disallowed interest carryforward of $385.7 million which does not expire. The Company has no U.S. tax loss carryforwards. The Company incurred foreign tax losses of $376.8 million, $340.0 million and $319.1 million during the tax years ended December 31, 2019, 2018 and 2017, respectively. These foreign tax loss carryforwards expire in 2022, 2021 and 2020, respectively.

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2019 and 2018, the Company had valuation allowances of $2.51 billion and $2.49 billion, respectively, provided on FTCs expected to expire unutilized, and as of December 31, 2019 the Company had a valuation allowance of $88.3 million provided on disallowed interest expense carryforwards. As of December 31, 2018, the Company had no valuation allowance provided on disallowed interest expense carryforwards. The Company also had valuation allowances of $6.4 million and $5.3 million provided on other U.S. deferred tax assets. As of December 31, 2019 and 2018, the Company had valuation allowances of $154.9 million and $143.9 million, respectively, provided on its foreign deferred tax assets.

The Company had the following activity for unrecognized tax benefits as follows (in thousands):

			December 31,
			2019						2018						2017
Balance at beginning of period			$	99,470					$	95,236					$	90,523
Increases based on tax positions of the current year			8,986						8,926						8,520
Reductions due to lapse in statutes of limitations			(4,161)						(4,692)						(3,807)
Balance at end of period			$	104,295					$	99,470					$	95,236

As of December 31, 2019, 2018 and 2017, unrecognized tax benefits of $104.3 million, $99.5 million and $95.2 million, respectively, were recorded as reductions in deferred income taxes, net. The Company had no unrecognized tax benefits recorded in other long-term liabilities as of December 31, 2019, 2018 and 2017.

As of December 31, 2019, 2018 and 2017, $36.6 million, $31.0 million and $26.9 million, respectively, of unrecognized tax benefits would, if recognized, impact the effective tax rate.

The Company recognizes penalties and interest related to unrecognized tax benefits in the provision for income taxes. During each of the years ended December 31, 2019 and 2018, the Company recognized no interest and penalties. During the year ended December 31, 2017, the Company recognized $0.9 million in interest in the provision for income taxes.

The Company anticipates that the 2015 statute of limitations will expire in the next 12 months for certain foreign tax jurisdictions. Also, the Company's unrecognized tax benefits include certain income tax accounting methods, which govern the timing and deductibility of income tax deductions. As a result, the Company's unrecognized tax benefits could increase up to $5.4 million over the next 12 months.

The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company's income tax returns are subject to examination by the IRS and other tax authorities in the locations where it operates. The Company's 2002 to 2015 domestic income tax returns remain subject to examination by the IRS to the extent tax attributes carryforward to future years. The Company's 2016 to 2018 domestic income tax returns also remain subject to examination by the IRS. The Company's 2015 to 2018 Macau income tax returns remain subject to examination by the Financial Services Bureau.

The Company has participated in the IRS Compliance Assurance Program ("CAP") for the 2012 through 2019 tax years and will continue to participate in the IRS CAP for the 2020 tax year.

In February 2017, 2018, and in May 2019, the Company received notification that the IRS completed its examination of the Company's 2015, 2016, and 2017 U.S. income tax returns, respectively. There were no changes in its unrecognized tax benefits as a result of the completion of these examinations.

On December 31, 2017, 2018 and 2019, the statute of limitations for the 2012, 2013, and 2014 Macau Complementary tax return expired, respectively. As a result of the expiration of the statute of limitations for the Macau Complementary Tax return, the total amount of unrecognized tax benefits decreased by $3.8 million, $4.7 million, and $4.2 million, respectively.

In March 2017, the Financial Services Bureau commenced an examination of the 2013 and 2014 Macau income tax returns of Wynn Macau SA. In July 2018, the Financial Services Bureau issued final tax assessments for the Company for the years 2013 and 2014. While no additional tax was due, adjustments were made to the Company's tax loss carryforwards.

In July 2017, the Financial Services Bureau commenced an examination of the 2013 and 2014 Macau income tax returns of Palo. In February 2018, the Financial Services Bureau concluded its examination with no changes.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In January of 2020, the Financial Services Bureau commenced an examination of the 2015 and 2016 Macau income tax returns of Palo.

Note 14 - Earnings Per Share

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

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

			Years Ended December 31,
			2019						2018						2017
Numerator:
Net income attributable to Wynn Resorts, Limited			$	122,985					$	572,430					$	747,181
Denominator:
Weighted average common shares outstanding			106,745						106,529						102,071
Potential dilutive effect of stock options, nonvested, and performance nonvested shares			240						503						527
Weighted average common and common equivalent shares outstanding			106,985						107,032						102,598
Net income attributable to Wynn Resorts, Limited per common share, basic			$	1.15					$	5.37					$	7.32
Net income attributable to Wynn Resorts, Limited per common share, diluted			$	1.15					$	5.35					$	7.28
Anti-dilutive stock options, nonvested, and performance nonvested shares excluded from the calculation of diluted net income per share			277						102						106

Note 15 - Leases

Lessee Arrangements

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

			Balance Sheet Classification						December 31, 2019
Assets
Operating leases			Operating lease assets						$	452,919
Finance leases			Property and equipment, net						$	23,061
Current liabilities
Operating leases			Other accrued liabilities						$	18,893
Finance leases			Other accrued liabilities						$	164
Non-current liabilities
Operating leases			Long-term operating lease liabilities						$	159,182
Finance leases			Other long-term liabilities						$	17,759

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

						Year ended December 31, 2019
Lease cost:
Operating lease cost						$	33,126
Short-term lease cost						24,634
Amortization of leasehold interests in land						13,373
Variable lease cost						1,487
Finance lease interest cost						1,058
Total lease cost						$	73,678

						Year ended December 31, 2019
Supplemental cash flow disclosures:
Operating lease liabilities arising from obtaining operating lease assets						$	45,435
Finance lease liabilities arising from obtaining finance lease assets						$	1,413
Cash paid for amounts included in the measurement of lease liabilities:
Cash used in operating activities - Operating leases						$	30,409
Cash used in financing activities - Finance leases						$	73

						December 31, 2019
Other information:
Weighted-average remaining lease term - Operating leases						35.4 years
Weighted-average remaining lease term - Finance leases						42.8 years
Weighted-average discount rate - Operating leases						6.4		%
Weighted-average discount rate - Finance leases						6.2		%

The following table presents an analysis of lease liability maturities as of December 31, 2019 (in thousands):

Years Ending December 31,						Operating Leases						Finance Leases
2020						$	27,908					$	1,203
2021						25,343						1,203
2022						22,388						1,203
2023						20,036						1,203
2024						16,570						1,203
Thereafter						464,903						66,287
Total undiscounted cash flows						$	577,148					$	72,302
Present value
Short-term lease liabilities						$	18,893					$	164
Long-term lease liabilities						159,182						17,759
Total lease liabilities						$	178,075					$	17,923
Interest on lease liabilities						$	399,073					$	54,379

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2018, the Company was obligated under non-cancelable leases to make future minimum lease payments as follows (in thousands):

Years Ending December 31,						Operating Leases						Capital Leases
2019						$	29,126					$	989
2020						20,153						989
2021						17,226						989
2022						16,466						989
2023						15,868						989
Thereafter						464,838						66,743
Total minimum lease payments						$	563,677					$	71,688
Less: Amount representing interest						$	—					$	(55,140)
						$	563,677					$	16,548

Ground Leases

Undeveloped Land - Las Vegas

The Company leases approximately 16 acres of undeveloped land on Las Vegas Boulevard directly across from Wynn Las Vegas in Las Vegas, Nevada, pursuant to a lease agreement which expires in 2097. The ground lease payments, which increase at a fixed rate over the term of the lease, are $3.8 million per year until 2023 and total payments of $367.8 million thereafter. As of December 31, 2019, the liability associated with this lease was $62.6 million.

At December 31, 2019, operating lease assets included approximately $87.0 million related to an amount allocated to the leasehold interest in land upon the acquisition of a group of assets in 2018. The Company expects that the amortization of this amount will be $1.1 million each year from 2020 through 2096 and $0.7 million in 2097.

Macau Land Concessions

Wynn Palace and Wynn Macau were built on land that is leased under Macau land concession contracts each with terms of 25 years from May 2012 and August 2004, respectively, which may be renewed with government approval for successive 10-year periods in accordance with Macau legislation. The land concession payments are expected to be $1.6 million per year through 2024 and total payments of $15.5 million thereafter through 2037. At December 31, 2019, the total liability associated with these leases was $16.0 million.

At December 31, 2019, operating lease assets included $188.6 million of leasehold interests in land related to the Wynn Palace and Wynn Macau land concessions. The Company expects that the amortization associated with these leasehold interests will be approximately $12.2 million per year from 2020 through 2028 and approximately $9.3 million per year thereafter through 2037.

Rent Expense

Rent expense for the years ended December 31, 2018 and 2017 was $27.1 million and $18.3 million, respectively.

Lessor Arrangements

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

			Years Ended December 31,
			2019						2018						2017
Minimum rental income			$	136,612					$	126,192					$	122,016
Contingent rental income			57,807						52,347						35,696
Total rental income			$	194,419					$	178,539					$	157,712

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Years Ending December 31,						Operating Leases
2020						$	148,607
2021						90,672
2022						74,009
2023						58,604
2024						47,515
Thereafter						121,689
Total future minimum rentals						$	541,096

Note 16 - Related Party Transactions

Home Purchase

In May 2010, the Company entered into an employment agreement with Linda Chen ("Ms. Chen"), who is the President and Chief Operating Officer of Wynn Macau SA. Under the terms of the employment agreement, the Company purchased a home in Macau for use by Ms. Chen and has made renovations to the home with a total cost of $10.0 million. In addition, under the terms of the employment agreement, Ms. Chen has the option to purchase the home for no consideration through March 31, 2020.

Cooperation Agreement

On August 3, 2018, the Company entered into a Cooperation Agreement (the "Cooperation Agreement") with Elaine P. Wynn regarding the composition of the Company's Board of Directors and certain other matters, including, among other things, the appointment of Mr. Philip G. Satre to the Company's Board of Directors, standstill restrictions, releases, non-disparagement, reimbursement of expenses and the grant of certain complimentary privileges. The term of the Cooperation Agreement expires on the later of (i) the date that Mr. Satre no longer serves as Chair of the Board and (ii) the day after the conclusion of the 2020 annual meeting of the Company's stockholders, unless earlier terminated pursuant to the circumstances described in the Cooperation Agreement.

Amounts Due to Officers, Directors and Former Directors

The Company periodically provides services to certain executive officers, directors or former directors of the Company, including the personal use of employees, construction work and other personal services, for which the officers, directors or former directors reimburse the Company. The Company requires prepayment for any such services, which amounts are replenished on an ongoing basis as needed. As of December 31, 2019 and 2018, these net deposit balances with the Company were immaterial, as were the services provided.

Note 17 - Commitments and Contingencies

Wynn Las Vegas Meeting and Convention Expansion

Wynn Golf, LLC, a direct wholly owned subsidiary of the Company, entered into an agreement concerning the construction of the Meeting and Convention Expansion, which, among other things, confirmed the guaranteed maximum price for the construction work undertaken by the general contractor. The general contractor was obligated to substantially complete the Meeting and Convention Expansion by December 19, 2019, and the estimated final contract value is approximately $295 million. The Meeting and Convention Expansion opened in February 2020.

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 and often contain provisions for discretionary bonuses. Certain of the executives are also entitled to a separation payment if

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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). As of December 31, 2019, the Company was obligated to make future payments of $70.0 million, $38.3 million, $13.4 million, $2.1 million, and $0.7 million during the years ending December 31, 2020, 2021, 2022, 2023, and 2024, respectively.

Other Commitments

The Company has additional commitments for gaming tax payments in Macau, open purchase orders, construction contracts, payment obligations to communities surrounding Encore Boston Harbor, and performance and other miscellaneous contracts. As of December 31, 2019, the Company was obligated under these arrangements to make future minimum payments as follows (in thousands):

Years Ending December 31,
2020			$	396,723
2021			86,234
2022			45,277
2023			19,308
2024			13,697
Thereafter			112,496
Total minimum payments			$	673,735

Letters of Credit

As of December 31, 2019, the Company had outstanding letters of credit of $18.1 million.

Litigation

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

Massachusetts Gaming License Related Actions

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

Revere Action

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

On August 2, 2019, Mohegan filed a motion to file a second amended complaint, to add new claims related to the MGC's allegedly inadequate 2013 investigation. On October 15, 2019, the court granted Mohegan's motion to amend and allowed it to file a second amended intervenor's complaint.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Wynn MA was not named in the Revere Action.

Suffolk Action

On September 17, 2018, Sterling Suffolk Racecourse, LLC, owner of the property proposed for location of a casino by an unsuccessful bidder for the Boston area license filed a complaint in the United States District Court, District of Massachusetts, against the Company, Wynn MA, certain current and former officers of the Company, FBT Everett Realty, LLC, former owner of the land on which Encore Boston Harbor is located ("FBT"), and Paul Lohnes, a member of FBT. The complaint alleges, among other things, the defendants violated the RICO Act, conspired to circumvent the application process for the Boston area license and violated Massachusetts law with respect to unfair methods of competition. The plaintiff sought $1.0 billion in compensatory damages and treble damages. All defendants filed motions to dismiss the complaint. On November 15, 2019, the court granted the defendants' motions to dismiss and the plaintiff did not appeal.

Derivative Litigation

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

The actions filed in the Eighth Judicial District Court of Clark County, Nevada were consolidated as In re Wynn Resorts, Ltd. Derivative Litigation ("State Derivative Case"). On October 26, 2018, the SLC filed a motion to intervene and stay the State Derivative Case pending completion of its investigation, which the court granted.

On June 3, 2019, a separate stockholder derivative action was filed in the Eighth Judicial District Court of Clark County, Nevada alleging substantially similar causes of action as the State Derivative Case with the additional allegation that various of the Company's attorneys committed professional malpractice, and certain current and former executives also breached fiduciary duties and aided and abetted the breach of fiduciary duties, in connection with the alleged inappropriate personal conduct by Stephen A. Wynn in the workplace. On July 26, 2019, the plaintiff voluntarily dismissed Matt Maddox, Stephen A. Wynn, Kimmarie Sinatra, John J. Hagenbuch, Ray R. Irani, Jay L. Johnson, Robert J. Miller, Patricia Mulroy, Clark T. Randt, Jr., Alvin V. Shoemaker, J. Edward Virtue, D. Boone Wayson, and one of the Company's law firms from the action. On September 19, 2019, the court entered an order consolidating this action into the State Derivative Case, and on December 2, 2019, further clarified that this action may not proceed as a separate action apart from the State Derivative Case.

On November 27, 2019, the State Derivative Case parties agreed to terms of a settlement agreement. The court approved the settlement agreement on February 12, 2020. The settlement agreement becomes effective upon the entry of a written order and any appeals are exhausted.

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

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

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Individual Stockholder Actions

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

On January 29, 2019, the defendants filed motions to dismiss each of the Individual Stockholder Actions. On December 12, 2019, the court entered an order denying the motions to dismiss, which the defendants appealed to the Nevada Supreme Court on December 24, 2019. On January 7, 2020, the Nevada Supreme Court stayed the underlying Individual Stockholder Actions pending a decision on the defendants' appeal.

Securities Action

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

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

Note 18 - Retail Joint Venture

In December 2016, the Company entered into the Retail Joint Venture with Crown to own and operate approximately 88,000 square feet of existing retail space at Wynn Las Vegas. In connection with the transaction, the Company transferred certain assets and liabilities with a net book value of $31.8 million associated with the existing Wynn Las Vegas retail stores from Wynn Las Vegas, LLC, to the Retail Joint Venture. The Company sold Crown a 49.9% ownership interest in the Retail Joint Venture for consideration of $292.0 million, which consisted of $217.0 million in cash and a $75.0 million interest-free note that matured in full on January 3, 2018. Wynn Las Vegas, LLC transferred all interests as lessor in third-party retail store leases to the Retail Joint Venture as part of the transaction and the majority of the retail stores previously operated by Wynn Las Vegas, LLC are now operated under a master lease agreement between a newly formed retail entity owned by Wynn Resorts, as lessee, and the Retail Joint Venture, as lessor. The Company maintains a 50.1% ownership in the Retail Joint Venture and is the managing member.

In November 2017, the Company contributed approximately 74,000 square feet of additional retail space to the Retail Joint Venture. The Company opened the additional retail space during the fourth quarter of 2018. In connection with this transaction, the Company contributed certain assets with a net book value of $25.4 million, consisting primarily of construction in progress for the additional retail space, to the Retail Joint Venture, and received cash of $180.0 million from Crown. After this additional transaction, the Company maintains a 50.1% ownership in the Retail Joint Venture and remains the managing member. The Company's responsibilities with respect to the Retail Joint Venture include day-to-day business operations, property management services and a role in the leasing decisions of the retail space.

The Company assessed its ownership in the Retail Joint Venture based on consolidation accounting guidance with an evaluation being performed to determine if the Retail Joint Venture is a VIE, if the Company has a variable interest in the Retail Joint Venture and if the Company is the primary beneficiary of the Retail Joint Venture. The primary beneficiary is the party who has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity.

The Company concluded that the Retail Joint Venture is a VIE and the Company is the primary beneficiary based on its involvement in the leasing activities of the Retail Joint Venture. As a result, the Company consolidates all of the Retail Joint

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Venture's assets, liabilities and results of operations. The Company will evaluate its primary beneficiary designation on an ongoing basis and will assess the appropriateness of the Retail Joint Venture's VIE status when changes occur.

As of December 31, 2019 and 2018, the Retail Joint Venture had total assets of $90.0 million and $85.0 million, respectively, and total liabilities of $622.4 million and $619.6 million, respectively. The Retail Joint Venture's total liabilities as of December 31, 2019 included long-term debt of $611.7 million, net of debt issuance costs, related to the outstanding borrowings under the Retail Term Loan.

Note 19 - Segment Information

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

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

			Years Ended December 31,
			2019						2018						2017
Operating revenues
Macau Operations:
Wynn Palace
Casino			$	2,139,756					$	2,356,022					$	1,714,417
Rooms			174,576						170,067						121,710
Food and beverage			117,376						110,638						96,078
Entertainment, retail and other (1)			111,986						120,839						98,082
			2,543,694						2,757,566						2,030,287
Wynn Macau
Casino			1,796,209						1,994,885						2,073,793
Rooms			110,387						113,495						95,871
Food and beverage			81,576						76,369						68,111
Entertainment, retail and other (1)			81,857						109,776						99,135
			2,070,029						2,294,525						2,336,910
Total Macau Operations			4,613,723						5,052,091						4,367,197
Las Vegas Operations:
Casino			394,104						434,083						456,093
Rooms			483,055						468,238						453,376
Food and beverage			558,782						567,121						567,926
Entertainment, retail and other (1)			197,516						196,127						225,568
Total Las Vegas Operations			1,633,457						1,665,569						1,702,963
Encore Boston Harbor:
Casino			243,855						—						—
Rooms			36,144						—						—
Food and beverage			61,088						—						—
Entertainment, retail and other (1)			22,832						—						—
Total Encore Boston Harbor			363,919						—						—
Total operating revenues			$	6,611,099					$	6,717,660					$	6,070,160

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

			Years Ended December 31,
			2019						2018						2017
Adjusted Property EBITDA (2)
Macau Operations:
Wynn Palace			$	729,535					$	843,902					$	527,583
Wynn Macau			648,837						733,238						760,752
Total Macau Operations			1,378,372						1,577,140						1,288,335
Las Vegas Operations			413,886						467,273						522,397
Encore Boston Harbor			23,150						—						—
Total			1,815,408						2,044,413						1,810,732
Other operating expenses
Litigation settlement			—						463,557						—
Pre-opening			102,009						53,490						26,692
Depreciation and amortization			624,878						550,596						552,368
Property charges and other			20,286						60,256						29,576
Corporate expenses and other			150,228						144,479						102,560
Stock-based compensation (3)			39,702						36,491						43,971
Total other operating expenses			937,103						1,308,869						755,167
Operating income			878,305						735,544						1,055,565
Other non-operating income and expenses
Interest income			24,449						29,866						31,193
Interest expense, net of amounts capitalized			(414,030)						(381,849)						(388,664)
Change in derivatives fair value			(3,228)						(4,520)						(1,056)
Change in Redemption Note fair value			—						(69,331)						(59,700)
(Loss) gain on extinguishment of debt			(12,437)						104						(55,360)
Other			15,159						(4,074)						(21,709)
Total other non-operating income and expenses			(390,087)						(429,804)						(495,296)
Income before income taxes			488,218						305,740						560,269
Benefit (provision) for income taxes			(176,840)						497,344						328,985
Net income			311,378						803,084						889,254
Net income attributable to noncontrolling interests			(188,393)						(230,654)						(142,073)
Net income attributable to Wynn Resorts, Limited			$	122,985					$	572,430					$	747,181

(1)Includes lease revenue accounted for under lease accounting guidance. For more information on leases, see Note 15, "Leases".

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

(3)Excludes $0.7 million included in pre-opening expenses for the years ended December 31, 2019 and 2018. Pre-opening expenses did not include any stock-based compensation during 2017. Excludes a credit of $2.2 million included in property charges and other expenses in 2018.

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

			Years Ended December 31,
			2019						2018						2017
Capital expenditures
Macau Operations:
Wynn Palace			$	66,545					$	89,617					$	107,405
Wynn Macau			142,112						62,542						43,510
Total Macau Operations			208,657						152,159						150,915
Las Vegas Operations			96,928						73,029						139,893
Encore Boston Harbor			471,381						791,250						572,825
Corporate and other			286,327						459,534						71,841
Total			$	1,063,293					$	1,475,972					$	935,474

			December 31,
			2019						2018						2017
Assets
Macau Operations:
Wynn Palace			$	3,734,210					$	3,858,904					$	4,017,494
Wynn Macau			1,656,625						1,903,921						1,271,544
Other Macau			1,023,411						68,487						174,769
Total Macau Operations			6,414,246						5,831,312						5,463,807
Las Vegas Operations			2,806,972						2,792,508						3,266,390
Encore Boston Harbor			2,456,667						1,865,286						1,060,530
Corporate and other			2,193,396						2,727,163						2,891,012
Total			$	13,871,281					$	13,216,269					$	12,681,739

			December 31,
			2019						2018						2017
Long-lived assets
Macau			$	4,321,970					$	4,387,051					$	4,613,950
United States			5,909,847						5,166,537						4,083,555
Total			$	10,231,817					$	9,553,588					$	8,697,505

WYNN RESORTS, LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Quarterly Consolidated Financial Information (Unaudited)

The following tables (in thousands, except per share data) present selected quarterly financial information for 2019 and 2018, as previously reported. Because income (loss) per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total income per share amounts for the year.

			Year Ended December 31, 2019
			First						Second						Third						Fourth						Year
Operating revenues			$	1,651,546					$	1,658,332					$	1,647,762					$	1,653,459					$	6,611,099
Operating income			$	255,176					$	218,716					$	177,835					$	226,578					$	878,305
Net income (loss)			$	159,731					$	142,234					$	26,883					$	(17,470)					$	311,378
Net income (loss) attributable to Wynn Resorts, Limited			$	104,872					$	94,551					$	(3,496)					$	(72,942)					$	122,985
Basic income (loss) per share			$	0.98					$	0.88					$	(0.03)					$	(0.68)					$	1.15
Diluted income (loss) per share			$	0.98					$	0.88					$	(0.03)					$	(0.68)					$	1.15

			Year Ended December 31, 2018
			First (1)						Second						Third						Fourth (2)						Year
Operating revenues			$	1,715,578					$	1,605,424					$	1,709,072					$	1,687,586					$	6,717,660
Operating income (loss)			$	(81,294)					$	279,572					$	290,983					$	246,283					$	735,544
Net income (loss)			$	(137,478)					$	205,280					$	219,772					$	515,510					$	803,084
Net income (loss) attributable to Wynn Resorts, Limited			$	(204,307)					$	155,756					$	156,115					$	464,866					$	572,430
Basic income (loss) per share			$	(1.99)					$	1.44					$	1.44					$	4.32					$	5.37
Diluted income (loss) per share			$	(1.99)					$	1.44					$	1.44					$	4.31					$	5.35

(1) During the first quarter of 2018, the Company incurred a litigation settlement expense totaling $463.6 million. See Item 8—"Financial Statements and Supplementary Data," Note 17, "Commitments and Contingencies."

(2) During the fourth quarter of 2018, the Company finalized its analysis of U.S. tax reform and recorded an income tax benefit of $390.9 million, incremental to the provisional income tax benefit recorded during the fourth quarter of 2017. See Item 8—"Financial Statements and Supplementary Data," Note 13, "Income Taxes."