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Financial report summary
?Risks
- We depend on the residents of the Las Vegas regional market and repeat visitors, which subjects us to greater risks than a gaming company with more diverse operations.
- Our business is sensitive to changes in consumer sentiment and discretionary spending.
- We face substantial competition in the gaming industry and we expect that such competition will intensify.
- Our success depends on key executive officers and personnel and our ability to attract and retain employees.
- We may incur delays and budget overruns with respect to current or future construction projects. Any such delays or cost overruns may have a material adverse effect on our operating results.
- We may pursue new gaming acquisition and development opportunities and may not be able to recover our investment or successfully expand to additional locations.
- We require significant capital to fund capital expenditures, pursue proposed development, expansion or acquisition opportunities or refinance our indebtedness.
- We may not be successful in entering into additional management or development agreements for Native American gaming opportunities.
- Union organization activities could disrupt our business by discouraging patrons from visiting our properties, causing labor disputes or work stoppages, and, if successful, could significantly increase our labor costs.
- Work stoppages, labor problems and unexpected shutdowns may limit our operational flexibility and negatively impact our future profits.
- The concentration and evolution of the slot machine manufacturing industry or other technological conditions could impose additional costs on us.
- We are subject to extensive federal, state and local regulation and governmental authorities have significant control over our operations; this control and the cost of compliance or failure to comply with such regulations that govern our operations in any jurisdiction where we operate could have an adverse effect on our business.
- We are subject to a variety of federal, state and local laws and regulations relating to the protection of the environment and human health and safety, which could materially affect our business, financial condition, results of operations and cash flows.
- The effects of climate change and/or increased regulation by international, national, state, regional, and local regulatory bodies of greenhouse gas emissions could materially affect our business, financial condition, results of operation and cash flows.
- Increased scrutiny and changing expectations from investors, consumers, employees, regulators, and others regarding our environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer attraction and retention, access to capital and employee recruitment and retention.
- We may incur losses that are not adequately covered by insurance, which may harm our results of operations. In addition, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future.
- We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets which could negatively affect our results of operations.
- Any failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business.
- Shortages or increases in prices of energy or water may adversely affect our business and our results of operations.
- Win rates for our gaming operations depend on a variety of factors, some beyond our control, and the winnings of our gaming customers could exceed our casino winnings.
- We face the risk of fraud and cheating.
- Failure to maintain the integrity of our internal or customer data, including defending our information systems against hacking, security breaches, computer malware, cyber-attacks and similar technology exploitation risks, could have an adverse effect on our results of operations and cash flows, and/or subject us to costs, fines or lawsuits.
- We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business.
- Our indebtedness imposes restrictive financial and operating covenants that limit our flexibility in operating our business and may adversely affect our ability to compete or engage in favorable business or financing activities.
- Despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness, which could increase the risks associated with our substantial indebtedness.
- We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
- Red Rock’s only material asset is its interest in Station Holdco and Station LLC. Accordingly, it is dependent upon distributions from Station Holdco to make payments under the tax receivable agreement, pay dividends, if any, and pay taxes and other expenses.
- Our Principal Equity Holders have control over our management and affairs, and their interests may differ from our interests or those of our other stockholders.
- We are a “controlled company” within the meaning of the rules of NASDAQ and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
- We will be required to pay certain of our pre-IPO owners for certain tax benefits we may claim arising in connection with the reorganization transactions, and the amounts we may pay could be substantial.
- In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
- We may not be able to realize all or a portion of the tax benefits that are expected to result from the exchanges of LLC Units and payments made under the TRA itself.
- The market price of our Class A common stock could decline upon the exchange of LLC Units by our Continuing Owners.
- We may not have sufficient funds to pay dividends on our Class A common stock.
- Anti-takeover provisions and shareholder requirements in our charter documents, provisions of Delaware law and Nevada gaming laws may delay or prevent our acquisition by a third party, which might diminish the value of our Class A common stock. Provisions in our debt agreements may also require an acquirer to refinance our outstanding indebtedness if a change of control occurs, which could discourage or increase the costs of a takeover.
- Future offerings of debt securities or additional or increased loans, which would rank senior to our common stock upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our Class A common stock.
- The share price for our Class A common stock may fluctuate significantly.
- We are subject to litigation in the ordinary course of our business. An adverse determination with respect to any such disputed matter could result in substantial losses.
Management Discussion
- 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 activities into one reportable segment. The results of operations for our Native American management segment are discussed in the section entitled Management Fee Revenue below and the results of operations of our Las Vegas operations are discussed in the remaining sections below.
- Net Revenues. Net revenues for the year ended December 31, 2023 increased by $60.3 million to $1.72 billion as compared to $1.66 billion for the year ended December 31, 2022. Contributing to our year over year increase is our Durango property which opened on December 5, 2023. We achieved year over year growth of 0.5%, 10.8%, 11.3% and 8.4% in casino revenue, food and beverage, room and other revenues, respectively. There was no revenue from our Native American management activity for the year ended December 31, 2023, resulting in a decrease in management fee revenue.