10-Q 1 rrr-20240630.htm 10-Q rrr-20240630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
For the quarterly period ended June 30, 2024
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to     
Commission file number 001-37754
RED ROCK RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware47-5081182
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1505 South Pavilion Center Drive, Las Vegas, Nevada
(Address of principal executive offices)
89135
(Zip Code)
(702495-3000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, $.01 par valueRRRNASDAQ Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company

Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at July 31, 2024
Class A Common Stock, $0.01 par value59,618,824
Class B Common Stock, $0.00001 par value45,985,804


RED ROCK RESORTS, INC.
INDEX



Part I.    Financial Information
Item 1.    Financial Statements
RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
 June 30,
2024
December 31, 2023
(unaudited)
ASSETS  
Current assets:  
Cash and cash equivalents$136,449 $137,586 
Receivables, net65,825 61,930 
Income tax receivables7,146 14,443 
Inventories15,539 15,255 
Prepaid gaming tax30,361 24,888 
Prepaid expenses and other current assets30,573 28,190 
Total current assets285,893 282,292 
Property and equipment, net of accumulated depreciation of $1,337,609 and $1,288,470 at June 30, 2024 and December 31, 2023, respectively
2,804,833 2,771,818 
Goodwill195,676 195,676 
Intangible assets, net of accumulated amortization of $20,583 and $19,794 at June 30, 2024 and December 31, 2023, respectively
82,017 82,806 
Land held for development454,729 451,010 
Native American development costs51,133 45,879 
Deferred tax asset, net50,972 43,381 
Other assets, net87,995 81,650 
Total assets$4,013,248 $3,954,512 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:  
Accounts payable$22,726 $25,353 
Accrued interest payable35,674 15,607 
Other accrued liabilities 224,785 280,493 
Current portion of payable pursuant to tax receivable agreement1,166 1,662 
Current portion of long-term debt 20,975 26,104 
Total current liabilities305,326 349,219 
Long-term debt, less current portion 3,419,431 3,301,658 
Other long-term liabilities43,549 39,319 
Payable pursuant to tax receivable agreement, less current portion19,263 20,429 
Total liabilities3,787,569 3,710,625 
Commitments and contingencies (Note 12)
Stockholders’ equity:  
Preferred stock, par value $0.01 per share, 100,000,000 shares authorized; none issued and outstanding
  
Class A common stock, par value $0.01 per share, 500,000,000 shares authorized; 59,548,042 and 58,866,439 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively
595 589 
Class B common stock, par value $0.00001 per share, 100,000,000 shares authorized; 45,985,804 shares issued and outstanding at June 30, 2024 and December 31, 2023
1 1 
Additional paid-in capital8,282 7,345 
Retained earnings150,092 160,904 
Total Red Rock Resorts, Inc. stockholders’ equity 158,970 168,839 
Noncontrolling interest66,709 75,048 
Total stockholders’ equity 225,679 243,887 
Total liabilities and stockholders’ equity$4,013,248 $3,954,512 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Operating revenues:
Casino$319,629 $269,507 $636,483 $557,747 
Food and beverage91,718 77,623 184,996 155,770 
Room50,142 44,892 103,030 88,831 
Other24,914 24,108 50,791 47,418 
Net revenues486,403 416,130 975,300 849,766 
Operating costs and expenses:
Casino87,853 69,583 172,822 141,294 
Food and beverage74,267 60,883 147,714 120,995 
Room16,075 13,473 31,946 27,080 
Other7,760 8,994 15,027 16,706 
Selling, general and administrative111,318 93,480 216,123 185,985 
Depreciation and amortization46,703 32,738 91,576 63,833 
Write-downs and other, net2,193 10,066 4,334 29,685 
346,169 289,217 679,542 585,578 
Operating income140,234 126,913 295,758 264,188 
Earnings from joint ventures721 754 1,444 1,653 
Operating income and earnings from joint ventures140,955 127,667 297,202 265,841 
Other expense:
Interest expense, net(57,434)(44,340)(114,635)(86,796)
Loss on extinguishment/modification of debt  (14,402) 
Change in fair value of derivative instruments(1,923) (1,923) 
(59,357)(44,340)(130,960)(86,796)
Income before income tax81,598 83,327 166,242 179,045 
Provision for income tax(11,788)(8,417)(18,061)(18,608)
Net income69,810 74,910 148,181 160,437 
Less: net income attributable to noncontrolling interests34,134 35,397 69,670 76,248 
Net income attributable to Red Rock Resorts, Inc.$35,676 $39,513 $78,511 $84,189 
Earnings per common share (Note 11):
Earnings per share of Class A common stock, basic$0.60 $0.68 $1.33 $1.46 
Earnings per share of Class A common stock, diluted$0.59 $0.65 $1.29 $1.40 
Weighted-average common shares outstanding:
Basic59,069 57,828 58,935 57,741 
Diluted60,748 103,329 103,720 103,260 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands)
(unaudited)
Red Rock Resorts, Inc. Stockholders’ Equity
Common stockAdditional paid-in capitalRetained earningsNoncontrolling interestTotal stockholders’ equity
Class AClass B
SharesAmountSharesAmount
Balances,
March 31, 2024
59,610 $596 45,986 $1 $5,327 $129,321 $50,233 $185,478 
Net income— — — — — 35,676 34,134 69,810 
Share-based compensation— — — — 11,947 — — 11,947 
Distributions— — — — — — (22,422)(22,422)
Dividends— — — — — (14,905)— (14,905)
Stock option exercises and issuance of restricted stock, net13  — —  — —  
Repurchase of Class A common stock(75)(1)— — (3,921) — (3,922)
Withholding tax on share-based compensation — — — (307)— — (307)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco— — — — (4,764)— 4,764  
Balances,
June 30, 2024
59,548 $595 45,986 $1 $8,282 $150,092 $66,709 $225,679 


Red Rock Resorts, Inc. Stockholders’ Equity
Common stockAdditional paid-in capitalRetained earningsNoncontrolling interestTotal stockholders’ equity
Class AClass B
SharesAmountSharesAmount
Balances,
March 31, 2023
58,219 $582 45,986 $1 $1,166 $73,327 $18,557 $93,633 
Net income— — — — — 39,513 35,397 74,910 
Share-based compensation— — — — 4,933 — — 4,933 
Distributions— — — — — — (32,807)(32,807)
Dividends— — — — — (14,542)— (14,542)
Stock option exercises and issuance of restricted stock, net172 2 — — (2)— —  
Withholding tax on share-based compensation — — — (5,420)— — (5,420)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco— — — — 427 — (427) 
Balances,
June 30, 2023
58,391 $584 45,986 $1 $1,104 $98,298 $20,720 $120,707 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(amounts in thousands)
(unaudited)
Red Rock Resorts, Inc. Stockholders’ Equity
Common stockAdditional paid-in capitalRetained earningsNoncontrolling interestTotal stockholders’ equity
Class AClass B
SharesAmountSharesAmount
Balances,
December 31, 2023
58,866 $589 45,986 $1 $7,345 $160,904 $75,048 $243,887 
Net income— — — — — 78,511 69,670 148,181 
Share-based compensation— — — — 17,942 — — 17,942 
Distributions— — — — — — (79,904)(79,904)
Dividends— — — — — (89,323)— (89,323)
Stock option exercises and issuance of restricted stock, net774 7 — — (7)— —  
Repurchase of Class A common stock(75)(1)— — (3,921) — (3,922)
Withholding tax on share-based compensation(17)— — — (11,182)— — (11,182)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco— — — — (1,895)— 1,895  
Balances,
June 30, 2024
59,548 $595 45,986 $1 $8,282 $150,092 $66,709 $225,679 


Red Rock Resorts, Inc. Stockholders’ Equity
Common stockAdditional paid-in capitalRetained earningsNoncontrolling interest (deficit)Total stockholders’ equity
Class AClass B
SharesAmountSharesAmount
Balances,
December 31, 2022
58,013 $580 45,986 $1 $ $43,203 $(11,541)$32,243 
Net income— — — — — 84,189 76,248 160,437 
Share-based compensation— — — — 10,317 — — 10,317 
Distributions— — — — — — (44,303)(44,303)
Dividends— — — — — (29,094)— (29,094)
Stock option exercises and issuance of restricted stock, net407 4 — — (4)— —  
Withholding tax on share-based compensation(29)— — — (8,893)— — (8,893)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco— — — — (316)— 316  
Balances,
June 30, 2023
58,391 $584 45,986 $1 $1,104 $98,298 $20,720 $120,707 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Six Months Ended
June 30,
20242023
Cash flows from operating activities: 
Net income
$148,181 $160,437 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization91,576 63,833 
Write-downs and other, net 216 (1,138)
Amortization of debt discount and debt issuance costs3,961 4,752 
Share-based compensation17,681 10,125 
Loss on extinguishment/modification of debt3,092  
Change in fair value of derivative instruments1,923  
Deferred income tax(7,591)(1,150)
Changes in assets and liabilities:
Receivables, net(3,843)1,892 
Inventories and prepaid expenses(8,633)(7,764)
Accounts payable(2,796)572 
Accrued interest payable20,067 (155)
Income tax receivable/payable7,297 4,914 
Other accrued liabilities(2,375)(2,265)
Other, net247 1,128 
Net cash provided by operating activities
269,003 235,181 
Cash flows from investing activities:
Capital expenditures, net of related payables(176,667)(377,104)
Acquisition of land held for development(1,944)(2,108)
Native American development costs(4,986)(2,678)
Other, net(1,475)(2,244)
Net cash used in investing activities
(185,072)(384,134)















7


RED ROCK RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(amounts in thousands)
(unaudited)
Six Months Ended
June 30,
20242023
Cash flows from financing activities: 
Borrowings under credit agreements with original maturity dates greater than three
   months
1,946,853 270,000 
Payments under credit agreements with original maturity dates greater than three
   months
(2,322,327)(47,390)
Proceeds from issuance of 6.625% Senior Notes500,000  
Payment of debt issuance costs(23,413) 
Distributions to noncontrolling interests(79,904)(44,303)
Repurchases of Class A common stock(3,922) 
Withholding tax on share-based compensation(11,182)(8,893)
Dividends paid(88,855)(29,532)
Payments on tax receivable agreement liability(1,662)(6,632)
Other, net(656)(637)
Net cash (used in) provided by financing activities
(85,068)132,613 
Decrease in cash and cash equivalents
(1,137)(16,340)
Balance, beginning of period137,586 117,289 
Balance, end of period$136,449 $100,949 
Supplemental cash flow disclosures: 
Cash paid for interest, net of $0 and $11,867 capitalized, respectively
$90,672 $82,330 
Cash paid for income taxes$9,600 $14,800 
Non-cash investing and financing activities:
Capital expenditures incurred but not yet paid$46,495 $114,540 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8


RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.    Organization, Basis of Presentation and Significant Accounting Policies
Organization
Red Rock Resorts, Inc. (“Red Rock,” or the “Company”) was formed as a Delaware corporation in 2015 to own an indirect equity interest in and manage Station Casinos LLC (“Station LLC”), a Nevada limited liability company. Station LLC is a gaming, development and management company established in 1976 that owns and operates seven major gaming facilities and ten smaller casino properties (three of which are 50% owned) in the Las Vegas regional market. In December 2023, the Company opened Durango Casino & Resort (“Durango”).
The Company owns all of the outstanding voting interests in Station LLC and has an indirect equity interest in Station LLC through its ownership of limited liability interests in Station Holdco LLC (“Station Holdco,” and such interests, “LLC Units”), which owns all of the economic interests in Station LLC. At June 30, 2024, the Company held 58% of the economic interests and 100% of the voting power in Station Holdco, subject to certain limited exceptions, and is designated as the sole managing member of both Station Holdco and Station LLC. The Company controls and operates all of the business and affairs of Station Holdco and Station LLC, and conducts all of its operations through these entities.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments necessary for a fair presentation of the results for the interim periods have been made, and such adjustments were of a normal recurring nature. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. These financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Principles of Consolidation
Station Holdco and Station LLC are variable interest entities, of which the Company is the primary beneficiary. Accordingly, the Company consolidates the financial position and results of operations of Station LLC and its consolidated subsidiaries and Station Holdco, and presents the interests in Station Holdco not owned by Red Rock within noncontrolling interest in the condensed consolidated financial statements. All significant intercompany accounts and transactions have been eliminated. Investments in all 50% or less owned affiliated companies are accounted for using the equity method.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported and disclosed. Actual results could differ from those estimates.
Significant Accounting Policies
A description of the Company’s significant accounting policies is included in the audited financial statements within its Annual Report on Form 10-K for the year ended December 31, 2023.
9


Table of Contents
RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Recently Issued Accounting Standards
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The ASU is intended to improve disclosures of significant segment expenses by requiring disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”), requiring disclosure of other segment items by reportable segment, extend certain annual disclosures to interim periods, permit more than one measure of segment profit or loss to be reported under certain conditions and requiring disclosure of the CODM’s title and position and how the CODM uses reported measure(s) in assessing segment performance. The amendments are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and are required to be applied retrospectively to all periods presented. Early adoption is permitted, including adoption in any interim periods for which financial statements have not been issued. The Company is currently evaluating the guidance and its impact to the financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The ASU is intended to provide more transparency of income tax information through improvements to income tax disclosures, primarily rate reconciliation and income taxes paid. For public entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. Amendments should be applied on a prospective basis. The Company does not anticipate that this ASU will have a material impact on its financial statements.
2.    Noncontrolling Interest in Station Holdco
As discussed in Note 1, Red Rock holds a controlling interest in and consolidates the financial position and results of operations of Station LLC and its subsidiaries and Station Holdco. The interests in Station Holdco not owned by Red Rock are presented within noncontrolling interest in the condensed consolidated financial statements. Entities controlled by Frank J. Fertitta III, the Company’s Chairman of the Board and Chief Executive Officer, and Lorenzo J. Fertitta, the Company’s Vice Chairman of the Board and a vice president of the Company (the “Fertitta Family Entities”), hold 99% of the noncontrolling interest.
The ownership of the LLC Units is summarized as follows:
June 30, 2024December 31, 2023
UnitsOwnership %UnitsOwnership %
Red Rock63,837,833 58.1 %63,027,745 57.8 %
Noncontrolling interest holders45,985,804 41.9 %45,985,804 42.2 %
Total109,823,637 100.0 %109,013,549 100.0 %
The Company uses monthly weighted-average LLC Unit ownership to calculate the pretax income or loss and other comprehensive income or loss of Station Holdco attributable to Red Rock and the noncontrolling interest holders. Station Holdco equity attributable to Red Rock and the noncontrolling interest holders is rebalanced, as needed, to reflect LLC Unit ownership at period end.
3.    Native American Development
The Company, the North Fork Rancheria of Mono Indians (the “Mono”), a federally recognized Native American tribe located near Fresno, California and the North Fork Rancheria Economic Development Authority (the “Authority”) have entered into a Third Amended and Restated Management Agreement (the “Management Agreement”) and a Third Amended and Restated Development Agreement (the “Development Agreement”), each dated as of November 7, 2023. Pursuant to the Development Agreement, the Company has assisted and will assist the Mono and the Authority in developing a gaming and entertainment facility (the “North Fork Project”) to be located in Madera County, California. Pursuant to the Management Agreement, the Company will assist the Mono and the Authority in operating the North Fork Project. The Company purchased a 305-acre parcel of land adjacent to Highway 99 north of the city of Madera (the “North Fork Site”), which was taken into trust for the benefit of the Mono by the Department of the Interior (“DOI”) in February 2013.
As currently contemplated, the North Fork Project is expected to include approximately 2,000 Class III slot machines and additional Class II slot machines, approximately 40 table games and several restaurants. Future development costs of the project are expected to be between $375 million and $425 million. The following table summarizes the Company’s evaluation at June 30, 2024 of each of the critical milestones that it has identified as necessary to complete the North Fork Project. As of January 5, 2024, the date the Mono received the approval of the Management Agreement from the Chair of the National Indian Gaming Commission (“NIGC”), each of these critical milestones has substantially been resolved.
10


Table of Contents
RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The following table summarizes the Company’s evaluation at June 30, 2024 of each of the critical milestones necessary to complete the North Fork Project.
Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”)Yes
Date of recognitionFederal recognition was terminated in 1966 and restored in 1983.
Tribe has possession of or access to usable land upon which the project is to be built
The DOI accepted approximately 305 acres of land for the project into trust for the benefit of the Mono in February 2013.

Status of obtaining regulatory and governmental approvals:
Tribal-state compactA compact was negotiated and signed by the Governor of California and the Mono in August 2012. The California State Assembly and Senate passed Assembly Bill 277 (“AB 277”) which ratified the Compact in May 2013 and June 2013, respectively. Opponents of the North Fork Project qualified a referendum, “Proposition 48,” for a state-wide ballot challenging the legislature’s ratification of the Compact. In November 2014, Proposition 48 failed. The State took the position that the failure of Proposition 48 nullified the ratification of the Compact and, therefore, the Compact did not take effect under California law. In March 2015, the Mono filed suit against the State to obtain a compact with the State or procedures from the Secretary of the Interior under which Class III gaming may be conducted on the North Fork Site. In July 2016, the DOI issued Secretarial procedures (the “Secretarial Procedures”) pursuant to which the Mono may conduct Class III gaming on the North Fork Site.
Approval of gaming compact by DOIThe Compact was submitted to the DOI in July 2013. In October 2013, notice of the Compact taking effect was published in the Federal Register. The Secretarial Procedures supersede and replace the Compact.
Record of decision regarding environmental impact published by BIAIn November 2012, the record of decision for the Environmental Impact Statement for the North Fork Project was issued by the BIA. In December 2012, the Notice of Intent to take land into trust was published in the Federal Register.
BIA accepting usable land into trust on behalf of the tribeThe North Fork Site was accepted into trust in February 2013.
Approval of management agreement by NIGCIn December 2015, the Mono submitted a Second Amended and Restated Management Agreement, and certain related documents, to the NIGC. In July 2016, the Mono received a deficiency letter from the NIGC seeking additional information concerning the Second Amended and Restated Management Agreement. In March 2018, the Mono submitted the Management Agreement and certain related documents to the NIGC. In June 2018, the Mono received a deficiency letter from the NIGC seeking additional information concerning the Management Agreement. In April 2021, the Mono received an issues letter from the NIGC identifying issues to be addressed prior to approval of the Management Agreement. In September 2022, the Mono received an additional issues letter from the NIGC identifying remaining issues to be addressed prior to approval of the Management Agreement. Following dialogue with the NIGC, the Mono submitted executed North Fork Project agreements to the NIGC in November, 2023. On January 5, 2024, the Chairman of the NIGC approved the Management Agreement.
Gaming licenses:
TypeThe North Fork Project will include the operation of Class II and Class III gaming, which are allowed pursuant to the terms of the Secretarial Procedures and IGRA, following approval of the Management Agreement by the NIGC.
Number of gaming devices allowed
The Secretarial Procedures allow for the operation of a maximum of 2,000 Class III slot machines at the facility during the first two years of operation and thereafter up to 2,500 Class III slot machines. There is no limit on the number of Class II gaming devices that the Mono can offer.
Agreements with local authoritiesThe Mono has entered into memoranda of understanding with the City of Madera, the County of Madera and the Madera Irrigation District under which the Mono agreed to pay one-time and recurring mitigation contributions, subject to certain contingencies. The memoranda of understanding have all been amended to restructure the timing of certain payments due to delays in the development of the North Fork Project.
11


Table of Contents
RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
In addition to the critical milestones, there is a remaining unresolved legal matter related to the North Fork Project.
In March 2016, Picayune Rancheria of Chukchansi Indians (“Picayune”) filed a complaint for declaratory relief and petition for writ of mandate in California Superior Court for the County of Madera against Governor Edmund G. Brown, Jr., alleging that the referendum that invalidated the Compact also invalidated Governor Brown’s concurrence with the Secretary of the Interior’s determination that gaming on the North Fork Site would be in the best interest of the Mono and not detrimental to the surrounding community. The complaint seeks to vacate and set aside the Governor’s concurrence and was stayed from December 2016 to September 2021, when the Supreme Court of California denied the Mono’s and the State of California’s petition for review in Stand Up for California! v. Brown. As a result of the denial, litigation of this matter has resumed and a first amended complaint was filed by Picayune in December 2022. Each of the State of California and the Mono filed demurrers challenging the first amended complaint; in July 2023, the State of California’s demurrer was granted and the Mono’s demurrer was denied. The Mono has answered the first amended complaint and each of the Mono and Picayune have filed motions for summary judgment, which motions are fully briefed. In May 2024, the Superior Court of California granted Picayune’s motion for summary judgment and denied the Mono’s motion for summary judgment.
Under the terms of the Development Agreement, the Company has agreed to arrange the financing for the ongoing development costs and construction of the facility, and has contributed significant financial support to the North Fork Project. Through June 30, 2024, the Company has paid approximately $66.2 million of reimbursable advances to the Mono, primarily to complete the environmental impact study, purchase the North Fork Site and pay the costs of litigation. The repayment of the advances is expected to come from the proceeds of the North Fork Project’s financing, from cash flows from the North Fork Project’s operations, or from a combination of both. In accordance with the Company’s accounting policy, accrued interest on the advances will not be recognized in income until the carrying amount of the advances has been recovered. The carrying amount of the reimbursable advances was reduced by $15.1 million to fair value upon the Company’s adoption of fresh-start reporting in 2011. At June 30, 2024, the carrying amount of the advances was $51.1 million.
In addition to the reimbursable advances, the Company expects to receive a development fee of 4% of the costs of construction for its development services, which will be paid upon the commencement of gaming operations at the facility. The Management Agreement provides for the Company to receive a management fee of 30% of the North Fork Project’s net income. The repayment of all or a portion of the reimbursable advances is anticipated to be subordinated to the Mono’s debt service obligations under the North Fork Project’s financing. The Management Agreement has a term of seven years from the opening of the North Fork Project. The Management Agreement includes termination provisions whereby either party may terminate the agreement for cause, and may also be terminated at any time upon agreement of the parties. There is no provision in the Management Agreement allowing the tribe to buy-out the agreement prior to its expiration. The Management Agreement provides that the Company will train the Mono tribal members such that they may assume responsibility for managing the North Fork Project upon the expiration of the agreement.
The Company expects that, upon termination or expiration of the Development Agreement, the Mono will continue to be obligated to repay any unpaid principal and interest on the advances from the Company. Amounts due to the Company under the Development Agreement and Management Agreement are secured by substantially all of the assets of the North Fork Project except the North Fork Site. In addition, each of the Development Agreement and the Management Agreement contains waivers of the Mono’s sovereign immunity from suit for the purpose of enforcing the agreements or permitting or compelling arbitration and other remedies.
The timing of both the North Fork Project and of the repayment of the reimbursable advances is difficult to predict and is contingent on the achievement of the critical milestones, the financing of the North Fork Project, and the cash flows from the North Fork Project. The Company currently estimates that construction of the North Fork Project may begin in the next three months and estimates that the North Fork Project would be completed and opened for business approximately 18 to 20 months after construction begins. The Company expects to assist the Mono in obtaining financing for the North Fork Project once all necessary critical milestones have been achieved and prior to commencement of construction.
The Company has evaluated the likelihood that the North Fork Project will be successfully completed and opened, and has concluded that the likelihood of successful completion is in the range of 75% to 85% at June 30, 2024. The Company’s evaluation is based on its consideration of all available positive and negative evidence about the status of the North Fork Project, including, but not limited to, the status of required regulatory approvals, as well as the progress being made toward the achievement of any remaining critical milestones, the arrangement of financing for the North Fork Project and the status of any remaining litigation and contingencies. There can be no assurance that all the necessary governmental and regulatory approvals will be obtained, that financing will be obtained, that the financing and/or the cash flows from the North Fork Project will be sufficient to repay the advances, that the North Fork Project will be successfully completed or that future events and
12


Table of Contents
RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
circumstances will not change the Company’s estimates of the timing, scope, and potential for successful completion or that any such changes will not be material. In addition, there can be no assurance that the Company will recover all of its investment in the North Fork Project even if it is successfully completed and opened for business.
4.    Other Accrued Liabilities
Other accrued liabilities consisted of the following (amounts in thousands):
 June 30,
2024
December 31, 2023
Contract and customer-related liabilities:
Unpaid wagers, outstanding chips and other customer-related liabilities$21,789 $23,361 
Advance deposits and future wagers13,339 20,195 
Rewards program liability11,721 11,192 
Other accrued liabilities:
Construction payables and equipment purchase accruals65,018 118,316 
Accrued payroll and related37,871 42,048 
Accrued gaming and related30,139 29,497 
Operating lease liabilities, current portion6,096 6,137 
Other38,812 29,747 
$224,785 $280,493 
Construction payables and equipment purchase accruals at June 30, 2024 and December 31, 2023 included $38.6 million and $100.2 million, respectively, related to the development of Durango.
13


Table of Contents
RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
5.    Long-term Debt
Long-term debt consisted of the following indebtedness of Station LLC (amounts in thousands):
June 30,
2024
December 31, 2023
Term Loan B Facility due March 14, 2031, interest at margin above SOFR or base rate (7.59% at June 30, 2024), net of unamortized discount and deferred costs of $22.0 million at June 30, 2024
$1,548,011 $ 
Term Loan B Facility due February 7, 2027, interest at a margin above SOFR or base rate (7.71% at December 31, 2023), net of unamortized discount and deferred issuance costs of $15.9 million at December 31, 2023
 1,442,054 
Term Loan A Facility due February 7, 2025, interest at a margin above SOFR or base rate (6.96% at December 31, 2023), net of unamortized discount and deferred issuance costs of $0.6 million at December 31, 2023
 152,955 
Revolving Credit Facility due March 14, 2029, interest at a margin above SOFR or base rate (6.84% at June 30, 2024)
178,000  
Revolving Credit Facility due February 7, 2025, interest at a margin above SOFR or base rate (6.96% at December 31, 2023)
 512,000 
6.625% Senior Notes due March 14, 2032, net of unamortized deferred issuance costs of $6.5 million at June 30, 2024
493,483  
4.625% Senior Notes due December 1, 2031, net of unamortized deferred issuance costs of $4.7 million and $4.9 million at June 30, 2024 and December 31, 2023
495,268 495,006 
4.50% Senior Notes due February 15, 2028, net of unamortized discount and deferred issuance costs of $4.1 million and $4.7 million at June 30, 2024 and December 31, 2023, respectively
686,648 686,129 
Other long-term debt, weighted-average interest of 3.88% at June 30, 2024 and December 31, 2023, net of unamortized discount and deferred issuance costs of $0.1 million at June 30, 2024 and December 31, 2023
38,996 39,618 
Total long-term debt3,440,406 3,327,762 
Current portion of long-term debt(20,975)(26,104)
Total long-term debt, net$3,419,431 $3,301,658 
Credit Facility
On March 14, 2024, Station LLC entered into an amended and restated credit agreement (the “Credit Agreement”), which amended and restated the existing credit agreement and pursuant to which the Company repaid all loans outstanding under the existing credit agreement and (a) incurred (i) a new senior secured term “B” loan facility in an aggregate principal amount of $1,570.0 million (the “New Term B Facility” and the term “B” loans funded thereunder, the “New Term B Loan”) and (ii) a new senior secured revolving credit facility in an aggregate principal amount of $1,100.0 million (the “New Revolving Credit Facility” and, together with the New Term B Facility, the “New Credit Facilities”), and (b) made certain other amendments to the existing credit agreement, including the extinguishment of the existing term loan “A” facility. The New Revolving Credit Facility will mature on March 14, 2029 and the New Term B Facility will mature on March 14, 2031.
Borrowings under the New Credit Facilities bear interest at a rate per annum, at Station LLC’s option, equal to either the forward-looking Secured Overnight Financing Rate term (“Term SOFR”) or a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the administrative agent’s “prime rate” and (iii) the one-month Term SOFR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin is, in the case of the New Term B Loan, 2.25% per annum in the case of any Term SOFR loan and 1.25% in the case of any base rate loan. The applicable margin in the case of the New Revolving Credit Facility is shown below:
Revolving Credit Facility due March 14, 2029
Consolidated Senior Secured Net Leverage RatioSOFRBase Rate
Greater than 3.00 to 1.001.75 %0.75 %
Equal to or less than 3.00 to 1.001.50 %0.50 %
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The New Credit Facilities contain a number of customary covenants, including requirements that Station LLC maintain throughout the term of such facilities and measured as of the end of each quarter, a maximum total secured net leverage ratio of 5.00 to 1.00. A breach of the financial ratio covenants shall only become an event of default if not cured and a Covenant Facility Acceleration has occurred. Management believes the Company was in compliance with all applicable covenants at June 30, 2024.
Revolving Credit Facility
At June 30, 2024, Station LLC’s borrowing availability under the New Revolving Credit Facility, subject to continued compliance with the terms of the facility, was $876.2 million, which was net of $178.0 million in outstanding borrowings and $45.8 million in outstanding letters of credit and similar obligations.
6.625% Senior Notes
On March 14, 2024, Station LLC issued $500.0 million in aggregate principal amount of 6.625% senior notes due 2032 (the “6.625% Senior Notes”) pursuant to an indenture dated as of March 14, 2024, among Station LLC, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee. The net proceeds of the sale of the 6.625% Senior Notes together with the borrowings under the New Term B Loan were used (i) to refinance all loans and commitments outstanding under the Credit Facility, (ii) to pay fees and costs associated with such transactions and (iii) for general corporate purposes. Interest on the 6.625% Senior Notes will be paid every six months in arrears on March 15 and September 15, commencing on September 15, 2024. The Company capitalized $6.7 million in new costs associated with the 6.625% Senior Notes, which were primarily lender fees.
The indenture governing the 6.625% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 6.625% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; make investments or pay dividends or distributions (other than customary tax distributions); or create restrictions on dividends or other payments by our restricted subsidiaries. These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 6.625% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 6.625% Senior Notes to be declared due and payable.
6.    Derivative Instruments
The Company’s objective in using derivative instruments is to manage its exposure to interest rate movements associated with its variable interest rate debt. To accomplish this objective, the Company uses interest rate contracts as a primary part of its cash flow hedging strategy. The Company does not use derivative financial instruments for trading or speculative purposes.
On April 9, 2024, Station LLC entered into two zero cost interest rate collar agreements with an aggregate notional amount of $750.0 million. Both interest rate collars became effective in April 2024 and include a Term SOFR cap of 5.25% and a weighted average Term SOFR floor of 2.89% and will mature in April 2029. Monthly cash settlements are received from or paid to the counterparties when interest rates rise above or fall below the contractual cap or floor rates. The interest rate collars are not designated in hedging relationships for accounting purposes.
The Company records all derivative instruments on the balance sheet at fair value, which it determines using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not offset derivative asset and liability positions when interest rate contracts are held with the same counterparty.
As the Company’s derivative instruments are not designated in hedging relationships, the changes in fair value and the related pretax gains and losses are recognized in Change in fair value of derivative instruments in the Condensed Consolidated Statements of Income in the period in which the change occurs. The Company recognizes cash settlements received or paid, if any, on the derivative instruments within Change in fair value of derivative instruments and classifies such cash flows within investing activities in the Condensed Consolidated Statements of Cash Flows.
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Station LLC has not posted any collateral related to its interest rate collars; however, its obligations under the interest rate collars are subject to the security and guarantee arrangements applicable to the Credit Facility. The interest rate collar agreements contain cross-default provisions under which Station LLC could be declared in default on its obligations under such agreements if certain conditions of default exist on the Credit Facility. At June 30, 2024, the aggregate termination value of the interest rate collars, including accrued interest, but excluding any adjustment for nonperformance risk, was a liability of $2.2 million. Had Station LLC been in breach of the provisions of its interest rate collar agreements, it could have been required to pay the termination value to settle the obligations.
7.    Fair Value Measurements
Information about the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, is presented below (amounts in thousands):
Balance Sheet ClassificationJune 30,
2024
December 31, 2023Level of Fair Value Hierarchy
Assets
Interest rate collarsOther current assets$542 $ Level 2 – Significant unobservable inputs
Liabilities
Interest rate collarsOther long-term liabilities$2,583 $ Level 2 – Significant unobservable inputs
Fair Value of Long-term Debt
The estimated fair value of Station LLC’s long-term debt compared with its carrying amount is presented below (amounts in millions):
June 30,
2024
December 31, 2023
Aggregate fair value$3,373 $3,245 
Aggregate carrying amount3,440 3,328 
The estimated fair value of Station LLC’s long-term debt is based on quoted market prices from various banks for similar instruments, which is considered a Level 2 input under the fair value measurement hierarchy.
8.    Stockholders’ Equity    
Net Income Attributable to Red Rock Resorts, Inc. and Transfers (to) from Noncontrolling Interests
The table below presents the effect on Red Rock Resorts, Inc. stockholders’ equity from net income and transfers (to) from noncontrolling interests (amounts in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net income attributable to Red Rock Resorts, Inc.$35,676 $39,513 $78,511 $84,189 
Transfers (to) from noncontrolling interests:
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco (4,764)427 (1,895)(316)
Net transfers (to) from noncontrolling interests(4,764)427 (1,895)(316)
Change from net income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests$30,912 $39,940 $76,616 $83,873 
Dividends and Distributions
During the three and six months ended June 30, 2024 and 2023, the Company declared and paid quarterly cash dividends of $0.25 and $0.50 per share of Class A common stock, respectively, which included $2.1 million and $4.2 million, respectively, paid to Fertitta Family Entities.
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Prior to the quarterly cash dividend payments, during the three and six months ended June 30, 2024 and 2023, Station Holdco paid distributions to noncontrolling interest holders of $11.5 million and $23.0 million, respectively, which included $11.3 million and $22.7 million, respectively, paid to Fertitta Family Entities. During the three months ended June 30, 2024 and 2023, Station Holdco paid tax distributions to noncontrolling interest holders of $10.9 million and $21.3 million, respectively, including $10.8 million and $21.0 million, respectively, paid to Fertitta Family Entities.
On July 23, 2024, the Company announced that it would pay a dividend of $0.25 per share to Class A shareholders of record as of September 16, 2024 to be paid on September 30, 2024. Prior to the payment of the dividend, Station Holdco will make a cash distribution to all LLC Unit holders, including the Company, of $0.25 per LLC Unit, a portion of which will be paid to the other unit holders of Station Holdco.
Special Dividends
In February 2024, the Company declared a special cash dividend of $1.00 per share of Class A common stock to shareholders of record as of February 22, 2024, which was paid on March 4, 2024, and included $8.5 million paid to Fertitta Family Entities. Prior to the payment of the special dividend, Station Holdco made a cash distribution to all LLC unit holders, including the Company, of $1.00 per unit, of which $45.4 million was paid to Fertitta Family Entities.
Equity Repurchase Program
On May 2, 2024, the Company’s board of directors authorized the extension of the $600 million equity repurchase program for repurchases of Class A common stock through December 31, 2025. During the three and six months ended June 30, 2024, the Company repurchased 75,000 shares of its Class A common stock for an aggregate purchase price of $3.9 million and a weighted average price per share of $52.29 in open market transactions. The Company made no repurchases during the three and six months ended June 30, 2023 under the program. At June 30, 2024, the remaining amount authorized for repurchases under the program was $309.0 million.
9.    Share-based Compensation
The Company maintains an equity incentive plan designed to attract, retain and motivate employees and align the interests of those individuals with the interests of the Company. A total of 23.8 million shares of Class A common stock are reserved for issuance under the plan, of which approximately 12.3 million shares were available for issuance at June 30, 2024.
The following table presents information about the Company’s share-based compensation awards:
Restricted Class A
 Common Stock
Stock Options
SharesWeighted-average grant date fair valueSharesWeighted-average exercise price
Outstanding at January 1, 2024422,684 $42.39 6,179,510 $33.35 
Activity during the period:
Granted182,542 58.50 712,772 58.50 
Vested/exercised (a)(66,481)31.92 (1,422,656)25.86 
Forfeited/expired  (22,636)41.37 
Antidilution adjustment (b) — 101,083 n/m
Outstanding at June 30, 2024538,745 $49.14 5,548,073 $37.86 
_______________________________________________________________
(a)Stock options exercised included 831,277 options that were not converted into shares due to net share settlements to cover the aggregate exercise price and employee withholding taxes.
(b)As a result of the special dividend paid in March 2024, all outstanding stock option awards were adjusted to decrease the exercise price of the options and increase the number of shares issuable under the awards pursuant to an antidilution provision in the Equity Incentive Plan.
The Company recognized share-based compensation expense of $11.8 million and $17.7 million for the three and six months ended June 30, 2024, respectively, and $4.8 million and $10.1 million for the three and six months ended June 30, 2023,
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
respectively. At June 30, 2024, unrecognized share-based compensation cost was $62.0 million, which is expected to be recognized over a weighted-average period of 2.8 years.
10.    Income Taxes
Red Rock is a corporation and pays corporate federal, state and local taxes on its income, primarily pass-through income from Station Holdco based upon Red Rock’s economic interest held in Station Holdco. Station Holdco is a partnership for income tax reporting purposes. Station Holdco’s members, including the Company, are liable for federal, state and local income taxes based on their respective share of Station Holdco’s pass-through taxable income.
The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates the estimate of the annual effective tax rate and makes necessary cumulative adjustments to the total tax provision or benefit.
The Company’s effective tax rate for the three and six months ended June 30, 2024 was 14.4% and 10.9%, respectively, as compared to 10.1% and 10.4% for the three and six months ended June 30, 2023. The Company’s effective tax rate for the three and six months ended June 30, 2024 differs from the 21% statutory rate primarily because its effective tax rate includes a rate benefit attributable to the fact that Station Holdco operates as a limited liability company, which is not subject to federal income tax. Accordingly, the Company is not taxed on the portion of Station Holdco’s income attributable to noncontrolling interests. Additionally, the effective tax rate is impacted by the permanent tax benefit attributable to the stock compensation activity from Station Holdco.
As a result of the Company’s 2016 initial public offering (“IPO”) and certain reorganization transactions, the Company recorded a net deferred tax asset resulting from the outside basis difference of its interest in Station Holdco. The Company also recorded a deferred tax asset for its liability related to payments to be made pursuant to the tax receivable agreement (“TRA”) representing 85% of the tax savings the Company expects to realize from the amortization deductions associated with the step-up in the basis of depreciable assets under Section 754 of the Internal Revenue Code. This deferred tax asset will be recovered as cash payments are made to the TRA participants. In addition, the Company has recorded deferred tax assets related to net operating losses and other tax attributes, as applicable.
The Company considers both positive and negative evidence when measuring the need for a valuation allowance. A valuation allowance is not required to the extent that, in management’s judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more likely than not (a likelihood of more than 50%) that the Company’s deferred tax assets will be realized.
Under the 2017 U.S. federal tax year examination, the Internal Revenue Service (“IRS”) issued a Notice of Proposed Adjustment in relation to the 2017 land lease deduction. During the second quarter of 2024, Station Holdco held its appeals conference with the IRS. As a result of the preliminary appeals conference, the Company recorded a current unrecognized tax benefit liability and deferred tax asset associated with the land lease deduction.
Tax Receivable Agreement
In connection with the IPO, the Company entered into the TRA with certain owners who held LLC Units prior to the IPO. In the event that such parties exchange any or all of their LLC Units for Class A common stock or cash, at the election of the Company, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized by the Company as a result of such exchange. The Company expects to realize these tax benefits based on current projections of taxable income. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits.
At June 30, 2024 and December 31, 2023, the Company’s liability under the TRA was $20.4 million and $22.1 million, respectively, of which $5.6 million and $6.0 million, respectively, was payable to Fertitta Family Entities. No LLC Units were exchanged during the six months ended June 30, 2024 or 2023. During the six months ended June 30, 2024 the Company made payments on the TRA liability of $1.7 million and expects to pay $1.2 million of the TRA liability within the next twelve months.
The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The payment obligations under the TRA are Red Rock’s obligations and are not obligations of Station Holdco or Station LLC. Payments are generally due within a specified period of time following the filing of the Company’s annual tax return and interest on such
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
payments will accrue from the original due date (without extensions) of the income tax return until the date paid. Payments not made within the required period after the filing of the income tax return generally accrue interest.
The TRA will remain in effect until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the TRA. The TRA will also terminate if the Company breaches its obligations under the TRA or upon certain mergers, asset sales or other forms of business combinations, or other changes of control. If the Company exercises its right to terminate the TRA, or if the TRA is terminated early in accordance with its terms, the Company’s payment obligations would be accelerated based upon certain assumptions, including the assumption that the Company would have sufficient future taxable income to utilize such tax benefits, and may substantially exceed the actual benefits, if any, the Company realizes in respect of the tax attributes subject to the TRA.
11.    Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to Red Rock by the weighted-average number of shares of Class A common stock outstanding during the period. The calculation of diluted earnings per share gives effect to all potentially dilutive shares, including shares issuable pursuant to outstanding stock options and nonvested restricted shares of Class A common stock, based on the application of the treasury stock method, and outstanding Class B common stock that is exchangeable, along with an equal number of LLC Units, for Class A common stock, based on the application of the if-converted method. Dilutive shares included in the calculation of diluted earnings per share for the three months ended June 30, 2024 represented nonvested restricted shares of Class A common stock and outstanding stock options. For the six months ended June 30, 2024, dilutive shares included in the calculation of diluted earnings per share represented outstanding shares of Class B common stock, nonvested restricted shares of Class A common stock and outstanding stock options. For the three and six months ended June 30, 2023, dilutive shares included in the calculation of diluted earnings per share represented outstanding shares of Class B common stock, nonvested restricted shares of Class A common stock and outstanding stock options. All other potentially dilutive securities have been excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive.
A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share is presented below (amounts in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net income$69,810 $74,910 $148,181 $160,437 
Less: net income attributable to noncontrolling interests(34,134)(35,397)(69,670)(76,248)
Net income attributable to Red Rock, basic35,676 39,513 78,511 84,189 
Effect of dilutive securities437 27,963 55,039 60,236 
Net income attributable to Red Rock, diluted$36,113 $67,476 $133,550 $144,425 
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Weighted average shares of Class A common stock outstanding, basic59,069 57,828 58,935 57,741 
Effect of dilutive securities1,679 45,501 44,785 45,519 
Weighted average shares of Class A common stock outstanding, diluted60,748 103,329 103,720 103,260 
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The calculation of diluted earnings per share of Class A common stock excluded the following potentially dilutive securities that were outstanding at June 30, 2024 and 2023, respectively, because their inclusion would have been antidilutive (amounts in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Shares of Class B common stock and LLC Units exchangeable for Class A common stock45,986    
Stock options1,878 2,310 2,122 2,310 
Unvested restricted shares of Class A common stock87 153 87 153 
Shares of Class B common stock are not entitled to share in the earnings of the Company and are not participating securities. Accordingly, earnings per share of Class B common stock under the two-class method has not been presented.
12.    Commitments and Contingencies
The Company and its subsidiaries are defendants in various lawsuits relating to routine matters incidental to their business. No assurance can be provided as to the outcome of any legal matters and litigation inherently involves significant risks. The Company does not believe there are any legal matters outstanding that would have a material impact on its financial condition or results of operations.
13.    Segments
The Company views each of its Las Vegas casino properties and each of its Native American management arrangements as an individual operating segment. The Company aggregates all of its Las Vegas operating segments into one reportable segment because all of its Las Vegas properties offer similar products, cater to the same customer base, have the same regulatory and tax structure, share the same marketing techniques, are directed by a centralized management structure and have similar economic characteristics. The Company also aggregates its Native American management arrangements into one reportable segment. There was no Native American management activity in the current or prior year periods.
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RED ROCK RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The Company utilizes adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as its primary performance measure. The Company’s segment information and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands).
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Net revenues
Las Vegas operations:
Casino$319,629 $269,507 $636,483 $557,747 
Food and beverage91,718 77,623 184,996 155,770 
Room50,142 44,892 103,030 88,831 
Other (a)21,720 20,556 44,267 40,279 
Las Vegas operations net revenues483,209 412,578 968,776 842,627 
Corporate and other3,194 3,552 6,524 7,139 
Net revenues$486,403 $416,130 $975,300 $849,766 
Net income$69,810 $74,910 $148,181 $160,437 
Adjustments
Depreciation and amortization46,703 32,738 91,576 63,833 
Share-based compensation11,806 4,829 17,681 10,125 
Write-downs and other, net2,193 10,066 4,334 29,685 
Interest expense, net57,434 44,340 114,635 86,796 
Loss on extinguishment/modification of debt  14,402  
Change in fair value of derivative instruments1,923  1,923  
Provision for income tax11,788 8,417 18,061 18,608 
Adjusted EBITDA (b)$201,657 $175,300 $410,793 $369,484 
Adjusted EBITDA
Las Vegas operations$223,147 $193,051 $452,906 $407,140 
Corporate and other(21,490)(17,751)(42,113)(37,656)
Adjusted EBITDA$201,657 $175,300 $410,793 $369,484 
_______________________________________________________________
(a)Includes tenant lease revenue of $7.4 million and $15.1 million for the three and six months ended June 30, 2024, respectively, and $6.8 million and $12.6 million for the three and six months ended June 30, 2023, respectively. Revenue from tenant leases is accounted for under the lease accounting guidance and included in Other revenues in the Company’s Condensed Consolidated Statements of Income.
(b)Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 includes net income plus depreciation and amortization, share-based compensation, write-downs and other, net (including gains and losses on asset disposals, preopening and development, business innovation and technology enhancements, demolition costs and non-routine items), interest expense, net, loss on extinguishment/modification of debt, change in fair value of derivative instruments and provision for income tax.
21


Item 2.    
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of the Financial Condition and Results of Operations (the “MD&A”) of Red Rock Resorts, Inc. (“we,” “our,” “us,” “Red Rock” or the “Company”) is intended to help the reader understand the Company’s financial condition and results of operations. The MD&A is provided as a supplement to and should be read in conjunction with our condensed consolidated financial statements and related notes (the “Condensed Consolidated Financial Statements”) included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Overview
Red Rock was formed as a Delaware corporation in 2015 to own an indirect equity interest in and manage Station Casinos LLC (“Station LLC”), a Nevada limited liability company. Station LLC is a gaming, development and management company established in 1976 that owns and operates seven major gaming and entertainment facilities and ten smaller casino properties (three of which are 50% owned) in the Las Vegas regional market. In December 2023, we opened Durango Casino & Resort (“Durango”).
We own all of the outstanding voting interests in Station LLC and have an indirect equity interest in Station LLC through our ownership of limited liability company interests in Station Holdco LLC (“Station Holdco,” and such interests, (“LLC Units”), which owns all of the economic interests in Station LLC. At June 30, 2024, we held 58% of the economic interests and 100% of the voting power in Station Holdco, subject to certain limited exceptions, and we are designated as the sole managing member of both Station Holdco and Station LLC. We control and operate all of the business and affairs of Station Holdco and Station LLC, and conduct all of our operations through these entities. Other than assets and liabilities related to income taxes and the tax receivable agreement, our only material assets are our equity interest in Station Holdco, our voting interest in Station LLC and a note receivable from Station LLC. We have no operations outside of our management of Station Holdco and Station LLC.
Our Condensed Consolidated Financial Statements reflect the consolidation of Station LLC and its consolidated subsidiaries, and Station Holdco. The financial position and results of operations attributable to LLC Units we do not own are reported separately as noncontrolling interest.
Our principal source of revenue and operating income is gaming, and our non-gaming offerings include restaurants, hotels and other entertainment amenities. Approximately 80% to 85% of our casino revenue is generated from slot play. The majority of our revenue is cash-based and as a result, fluctuations in our revenues have a direct impact on our cash flows from operations. Because our business is capital intensive, we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing and fund capital expenditures.
A significant portion of our business is dependent upon customers who live and/or work in the Las Vegas metropolitan area. In June 2024, the unemployment rate in the Las Vegas metropolitan area was 6.2% as compared to 6.0% in June 2023. Statewide, the unemployment rate for June 2024 was 5.2% as compared to 5.4% in June 2023. In June 2024, the median price of an existing single-family home in Las Vegas according to the Las Vegas Realtors® was $475,000, up 7.7% from $440,990 in June 2023. In light of uncertainty in the economic outlook stemming from inflation, higher interest rates, increased energy costs and increased geo-political and regional conflicts, we cannot predict whether the trend in unemployment or the trend in housing prices in the Las Vegas area will continue.
We have continued to experience favorable customer trends, including strong and consistent visitation from our guests and strong spend per visit across the majority of our properties. These trends, in combination with our operational discipline and our focus on our core local guests, as well as regional and out of town guests, continued to drive strong operating results in 2024. However, we cannot predict whether these trends will continue, nor can we predict the extent to which impacts of inflation, increased energy costs and interest rate fluctuations may affect our business in the future.
Information about our results of operations is included herein and in the notes to our Condensed Consolidated Financial Statements.
22


Key Performance Indicators
We use certain key indicators to measure our performance.
Gaming revenue measures:
Slot handle, table game drop and race and sports write are measures of volume. Slot handle represents the dollar amount wagered in slot machines, and table game drop represents the total amount of cash and net markers issued that are deposited in table game drop boxes.
Win represents the amount of wagers retained by us.
Hold represents win as a percentage of slot handle, table game drop or race and sports write.
As our customers are primarily Las Vegas residents, our hold percentages are generally consistent from period to period. Fluctuations in our casino revenue are primarily due to the volume and spending levels of customers at our properties.
Food and beverage revenue measures:
Average guest check is a measure of food sales volume and product offerings at our restaurants, and represents the average amount spent per customer visit.
Number of guests served is an indicator of volume.
Room revenue measures:
Occupancy is calculated by dividing occupied rooms, including complimentary rooms, by rooms available.
Average daily rate (“ADR”) is calculated by dividing room revenue, which includes the retail value of complimentary rooms, by rooms occupied, including complimentary rooms.
Revenue per available room is calculated by dividing room revenue by rooms available.
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Results of Operations
Information about our results of operations is presented below (amounts in thousands):
 Three Months Ended June 30,Percent
change
Six Months Ended June 30,Percent
change
 2024202320242023
Net revenues$486,403 $416,130 16.9 %$975,300 $849,766 14.8 %
Operating income140,234 126,913 10.5 %295,758 264,188 11.9 %
Casino revenues319,629 269,507 18.6 %636,483 557,747 14.1 %
Casino expenses87,853 69,583 26.3 %172,822 141,294 22.3 %
Margin72.5 %74.2 %72.8 %74.7 %
Food and beverage revenues91,718 77,623 18.2 %184,996 155,770 18.8 %
Food and beverage expenses74,267 60,883 22.0 %147,714 120,995 22.1 %
Margin19.0 %21.6 %20.2 %22.3 %
Room revenues50,142 44,892 11.7 %103,030 88,831 16.0 %
Room expenses16,075 13,473 19.3 %31,946 27,080 18.0 %
Margin67.9 %70.0 %69.0 %69.5 %
Other revenues24,914 24,108 3.3 %50,791 47,418 7.1 %
Other expenses7,760 8,994 (13.7)%15,027 16,706 (10.1)%
Selling, general and administrative expenses111,318 93,480 19.1 %216,123 185,985 16.2 %
Percent of net revenues22.9 %22.5 %22.2 %21.9 %
Depreciation and amortization46,703 32,738 42.7 %91,576 63,833 43.5 %
Write-downs and other, net2,193 10,066 n/m4,334 29,685 n/m
Interest expense, net57,434 44,340 29.5 %114,635 86,796 32.1 %
Loss on extinguishment/modification of debt— — n/m14,402 — n/m
Change in fair value of derivative instruments1,923 — n/m1,923 — n/m
Net income attributable to noncontrolling interests34,134 35,397 (3.6)%69,670 76,248 (8.6)%
Provision for income tax11,788 8,417 40.0 %18,061 18,608 (2.9)%
Net income attributable to
Red Rock
35,676 39,513 (9.7)%78,511 84,189 (6.7)%
_______________________________________________________________
n/m = Not meaningful
We view each of our Las Vegas casino properties as an individual operating segment. We aggregate all of our Las Vegas operating segments into one reportable segment because all of our Las Vegas properties offer similar products, cater to the same customer base, have the same regulatory and tax structure, share the same marketing programs, are directed by a centralized management structure and have similar economic characteristics. We also aggregate our Native American management arrangements into one reportable segment. There was no Native American management activity in the current or prior year periods. The results of operations for our Las Vegas operations are discussed in the remaining sections below.
Net Revenues. Net revenues for the three months ended June 30, 2024 were $486.4 million, up 16.9% as compared to $416.1 million for the prior year period. For the six months ended June 30, 2024, net revenues were $975.3 million, an increase
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of 14.8% compared to $849.8 million for the prior year period. Contributing to the increase for both the three and six months ended June 30, 2024 is our Durango property which opened on December 5, 2023. For the three months ended June 30, 2024, our casino revenue, food and beverage, room and other revenues increased by 18.6%, 18.2%, 11.7% and 3.3%, respectively, as compared to the same quarter in 2023, and for the six months ended June 30, 2024, we achieved year over year growth of 14.1%, 18.8%, 16.0% and 7.1% for casino revenue, food and beverage, room and other revenues, respectively.
Operating Income. For the three and six months ended June 30, 2024, our operating income was $140.2 million and $295.8 million, respectively. For the three and six months ended June 30, 2023, our operating income was $126.9 million and $264.2 million, respectively. Our Durango property contributed to the increase in operating income for both the three and six months ended June 30, 2024 as compared with the prior year periods. Additional information about factors impacting our operating income is included below.
Casino. As described at Net Revenues above, our casino revenues increased by 18.6% and 14.1% for the three and six months ended June 30, 2024 as compared to the same periods in the prior year. For the three months ended June 30, 2024 as compared to the prior year period, our slot handle increased by 9.8%, table games drop increased by 54.7% and race and sports write decreased by 4.9%. For the six months ended June 30, 2024 as compared to the prior year period, our slot handle increased 9.5%, table games drop increased 52.5% and race and sports write decreased by 3.0%. For the three months ended June 30, 2024, slots and tables games hold were consistent while race and sports hold increased 2.1%, all as compared to the prior year period. In addition, for the six months ended June 30, 2024 our slots and race and sports hold were consistent while our table games hold decreased 1.9%, all as compared to the prior year period. Casino expenses for the three and six months ended June 30, 2024 as compared to the prior year periods increased by 26.3% and 22.3%, respectively, primarily due to our Durango property.
Food and Beverage. Food and beverage includes revenue and expenses from our restaurants, bars and catering. For the three and six months ended June 30, 2024, food and beverage revenue increased by 18.2% and 18.8%, respectively, as compared to the same periods in the prior year due to additional food and beverage offerings. For the three and six months ended June 30, 2024, the average guest check increased by 10.4% and 10.9%, respectively, and the number of restaurant guests served increased by 14.5% and 11.6%, respectively, all as compared to the prior year periods. Food and beverage expenses for three and six months ended June 30, 2024 as compared to the prior year periods increased by 22.0% and 22.1%, respectively, primarily due to food and beverage expenses at our Durango property.
Room.  For the three and six months ended June 30, 2024, room revenues increased by 11.7% and 16.0%, respectively, and room expenses increased by 19.3% and 18.0%, respectively, all as compared to the prior year periods. Room expenses were higher for the three and six months ended June 30, 2024 as compared to the prior year periods, primarily due to our Durango property.
Information about our hotel operations is presented below:
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Occupancy89.7 %88.6 %88.8 %87.8 %
Average daily rate$201.03 $193.35 $208.78 $195.83 
Revenue per available room$180.32 $171.38 $185.45 $171.91 
For the three and six months ended June 30, 2024, our ADR increased by 4.0% and 6.6%, respectively, our revenue per available room improved by 5.2% and 7.9%, respectively, and our occupancy rate improved by 1.1 and 1.0 percentage points, respectively, all as compared to the prior year periods, primarily due to our Durango property.
Other.  Other primarily represents revenues from tenant leases, retail outlets, bowling, spas, and entertainment, and their corresponding expenses. For the three and six months ended June 30, 2024, other revenues increased by 3.3% and 7.1%, respectively, as compared to the prior year period, primarily driven by additional leased outlets. For the same periods, other expenses decreased by 13.7% and 10.1%, respectively.
Selling, General and Administrative (“SG&A”). For the three and six months ended June 30, 2024, SG&A expenses increased by 19.1% to $111.3 million and 16.2% or $216.1 million, respectively, as compared to the prior year periods. The increases in SG&A expenses were primarily due to expenses associated with our Durango property. As a percentage of net revenue, SG&A expenses for the three and six months ended June 30, 2024 increased slightly as compared to the prior year periods. Management continues to focus on operational discipline and opportunities for improved efficiency.
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Depreciation and Amortization.  For the three and six months ended June 30, 2024, depreciation and amortization expense increased by 42.7% and 43.5%, respectively, as compared to the prior year periods, primarily due to higher depreciation expense associated with Durango’s assets placed in service in December 2023.
Write-downs and Other, net. For the three and six months ended June 30, 2024, write-downs and other, net totaled $2.2 million and $4.3 million, respectively, primarily comprising development and preopening expenses and business innovation development expenses. For the three and six months ended June 30, 2023, write-downs and other, net totaled $10.1 million and $29.7 million, respectively, primarily comprising development and preopening expenses, business innovation development expenses and demolition costs associated with our closed properties.
Interest Expense, net.  Interest expense, net increased to $57.4 million and $114.6 million for the three and six months ended June 30, 2024, respectively, as compared to $44.3 million and $86.8 million, respectively, for the same periods in 2023. The increase in interest expense was due to increased borrowings and higher variable interest rates applicable to our credit facility for the current year periods. We expect that the interest rates on our credit facility may continue to vary in response to macroeconomic conditions. On March 14, 2024, we completed a series of refinancing transactions pursuant to which we entered into an amended and restated credit agreement (the “Credit Agreement”) and issued $500 million of 6.625% senior notes due 2032 (the “6.625% Senior Notes”). The proceeds of the 6.625% Senior Notes, together with borrowings under the Credit Agreement, were used to repay all amounts outstanding under our existing credit facility, pay fees and costs associated with the transactions, and for general corporate purposes. See Note 5 to the Condensed Consolidated Financial Statements for additional information about the refinancing transactions as well as our other long-term debt.
Provision for Income Tax. For the three and six months ended June 30, 2024, we recognized a provision for income tax of $11.8 million and $18.1 million, respectively. Station Holdco is treated as a partnership for income tax reporting purposes and Station Holdco’s members are liable for federal, state and local income taxes based on their share of Station Holdco’s taxable income. We are not liable for income tax on the noncontrolling interests’ share of Station Holdco’s taxable income or benefit from a taxable loss, and therefore our effective tax rates of 14.4% and 10.9% for the three and six months ended June 30, 2024, respectively, were less than the statutory rate. We recognized income tax expense of $8.4 million and $18.6 million for the three and six months ended June 30, 2023, respectively.
Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests for the three and six months ended June 30, 2024 and 2023 represented the portion of net income attributable to the ownership interest in Station Holdco not held by us.
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Adjusted EBITDA
Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 for our two reportable segments and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands). The Las Vegas operations