1174922--3/16/2006--WYNN_RESORTS

related topics

{cost, contract, operation}

{debt, indebtedness, cash}

{regulation, change, law}

{operation, international, foreign}

{property, intellectual, protect}

{financial, litigation, operation}

{cost, operation, labor}

{condition, economic, financial}

{competitive, industry, competition}

{stock, price, operating}

{operation, natural, condition}

{product, candidate, development}

{customer, product, revenue}

{loss, insurance, financial}

{cost, regulation, environmental}

{control, financial, internal}

{investment, property, distribution}

Risks Related to our Substantial Indebtedness We are highly leveraged and future cash flow may not be sufficient for us to meet our obligations, and we might have difficulty obtaining more financing. The agreements governing our debt facilities contain covenants that restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions. Our subsidiaries indebtedness is secured by a substantial portion of their assets. Risks Relating to our Business A downturn in general economic conditions may adversely affect our results of operations. We have a limited operating history. We are entirely dependent on one property for all of our cash flow, which subjects us to greater risks than a gaming company with more operating properties. Our casino, hotel, convention and other facilities face intense competition. Competition for Wynn Las Vegas. Our business relies on high-end, international customers to whom we often extend credit, and we may not be able to collect gaming receivables from our credit players or credit play may decrease. We are subject to extensive state and local regulation, and licensing and gaming authorities have significant control over our operations, which could have a negative effect on our business. There are significant risks associated with major construction projects that may prevent completion of Encore and/or Wynn Macau on schedule and within budget. Simultaneous construction of our Wynn Macau and Encore Projects may stretch management time and resources and may impact Wynn Las Vegas. Terrorism and the uncertainty of military conflicts, as well as other factors affecting discretionary consumer spending, may harm our operating results. Our insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase. If a third party successfully challenges our ownership of, or right to use, the Wynn-related service marks, our business or results of operations could be harmed. If a third party asserts other forms of intellectual property claims against us, our business or results of operations could be adversely affected. The loss of Stephen A. Wynn could significantly harm our business. Our two largest stockholders are able to exert significant control over our operations and future direction. Because we own real property, we are subject to extensive environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities. Risks Associated with Wynn Macau A number of new casino resort developments underway or planned for the near future will require us to compete for limited labor resources in Macau. The development costs of Wynn Macau are estimates only, and actual development costs may be higher than expected. Not all of the construction costs of Wynn Macau are covered by a guaranteed maximum price construction contract, and we will be responsible for any cost overruns of these excluded items. The amended guaranteed maximum price under the Leighton/China State construction contract may increase, and we would be responsible for the amount of any increase. The financial resources of our contractor may be insufficient to fund cost overruns or liquidated damages for which it is responsible under the amended guaranteed maximum price contract. Wynn Macau may be affected by adverse political and economic conditions. Macau may not have an adequate transportation infrastructure to accommodate the demand from future development. Extreme weather conditions may have an adverse impact on Wynn Macau. Our investment in Macau may be subject to potential taxation. Currency exchange controls and currency export restrictions could negatively impact Wynn Macau. Any violation of the Foreign Corrupt Practices Act could have a negative impact on Wynn Macau. The Macau government can terminate our subconcession under certain circumstances without compensation to us, which would have a material adverse effect on our operations and financial condition. We will stop generating any revenues from our Macau gaming operations if we cannot secure an extension of our concession in 2022 or if the Macau government exercises its redemption right in 2017. The Macau government has the ability to grant additional rights to conduct gaming in the future, which could have a material adverse effect on our financial condition, results of operations and cash flows. Certain Nevada gaming laws would apply to Wynn Macau s planned gaming activities and associations. Unfavorable changes in currency exchange rates may increase Wynn Macau s obligations under the concession agreement and cause fluctuations in the value of our investment in Macau. The sale of our subconcession is subject to the approval of the Macau government. Risks Associated with the Development of Encore There are conditions precedent to the funding of the remaining components of the financing for Encore. Availability under our credit facilities will be reduced by $550.0 million if the Encore Budget, Plans and Specs are not approved by March 31, 2006. We intend to fund a substantial portion of the development costs of Encore and our substantial debt service and other obligations with cash flows generated at Wynn Las Vegas, which may not be sufficient to fund such development costs and debt service obligations.

Full 10-K form ▸

1174922--3/16/2006--WYNN_RESORTS_LTD