Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Entity Registrant Name | RED ROCK RESORTS, INC. | |
Entity Central Index Key | 0001653653 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding (in shares) | 70,273,915 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding (in shares) | 46,884,413 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 109,249 | $ 114,607 |
Restricted cash | 3,750 | 3,651 |
Receivables, net | 56,912 | 51,356 |
Inventories | 15,348 | 14,910 |
Prepaid gaming tax | 23,776 | 23,422 |
Prepaid expenses and other current assets | 50,225 | 34,417 |
Assets held for sale | 19,602 | 19,602 |
Total current assets | 278,862 | 261,965 |
Property and equipment, net of accumulated depreciation of $888,828 and $847,718 at March 31, 2019 and December 31, 2018, respectively | 3,093,844 | 3,012,405 |
Goodwill | 195,676 | 195,676 |
Intangible assets, net of accumulated amortization of $48,296 and $46,117 at March 31, 2019 and December 31, 2018, respectively | 115,041 | 117,220 |
Land held for development | 193,686 | 193,686 |
Investments in joint ventures | 8,953 | 8,903 |
Native American development costs | 18,332 | 17,970 |
Deferred tax asset, net | 109,914 | 111,833 |
Other assets, net | 121,334 | 89,868 |
Total assets | 4,135,642 | 4,009,526 |
Current liabilities: | ||
Accounts payable | 36,063 | 25,896 |
Accrued interest payable | 15,084 | 7,418 |
Other accrued liabilities | 237,492 | 266,474 |
Current portion of long-term debt | 33,906 | 33,894 |
Total current liabilities | 322,545 | 333,682 |
Long-term debt, less current portion | 2,931,901 | 2,821,465 |
Other long-term liabilities | 23,780 | 12,436 |
Payable pursuant to tax receivable agreement | 24,948 | 24,948 |
Total liabilities | 3,303,174 | 3,192,531 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.01 per share, 100,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Additional paid-in capital | 367,039 | 361,970 |
Retained earnings | 160,183 | 155,869 |
Accumulated other comprehensive income | 641 | 1,083 |
Total Red Rock Resorts, Inc. stockholders’ equity | 528,567 | 519,620 |
Noncontrolling interest | 303,901 | 297,375 |
Total stockholders’ equity | 832,468 | 816,995 |
Total liabilities and stockholders’ equity | 4,135,642 | 4,009,526 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 703 | 697 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accumulated depreciation | $ 888,828 | $ 847,718 |
Accumulated amortization | $ 48,296 | $ 46,117 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Class A common stock | ||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 70,273,915 | 69,662,590 |
Common stock, shares outstanding (in shares) | 70,273,915 | 69,662,590 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Class B common stock | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 46,884,413 | 46,884,413 |
Common stock, shares outstanding (in shares) | 46,884,413 | 46,884,413 |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating revenues: | ||
Operating revenues | $ 447,022 | $ 421,039 |
Operating costs and expenses: | ||
Selling, general and administrative | 99,065 | 95,109 |
Depreciation and amortization | 50,853 | 43,164 |
Write-downs and other charges, net | 23,728 | 3,845 |
Tax receivable agreement liability adjustment | 0 | (16,873) |
Total operating costs and expenses | 380,877 | 313,198 |
Operating income | 66,145 | 107,841 |
Earnings from joint ventures | 505 | 608 |
Operating income and earnings from joint ventures | 66,650 | 108,449 |
Other (expense) income: | ||
Interest expense, net | (37,438) | (31,111) |
Loss on modification of debt | (302) | 0 |
Change in fair value of derivative instruments | (6,638) | 15,803 |
Other | (69) | (155) |
Total other expense | (44,447) | (15,463) |
Income before income tax | 22,203 | 92,986 |
Provision for income tax | (1,919) | (10,856) |
Net income | 20,284 | 82,130 |
Less: net income attributable to noncontrolling interests | 8,961 | 30,950 |
Net income attributable to Red Rock Resorts, Inc. | $ 11,323 | $ 51,180 |
Earnings Per Share [Abstract] | ||
Earnings per share of Class A common stock, basic (in dollars per share) | $ 0.16 | $ 0.74 |
Earnings per share of Class A common stock, diluted (in dollars per share) | $ 0.16 | $ 0.65 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 69,397 | 68,798 |
Diluted (in shares) | 116,693 | 116,947 |
Statement of Comprehensive Income [Abstract] | ||
Comprehensive income | $ 19,539 | $ 81,520 |
Less: comprehensive income attributable to noncontrolling interests | 8,660 | 30,665 |
Comprehensive income attributable to Red Rock Resorts, Inc. | 10,879 | 50,855 |
Casino | ||
Operating revenues: | ||
Operating revenues | 244,933 | 236,247 |
Operating costs and expenses: | ||
Operating costs and expenses | 82,940 | 78,958 |
Food and beverage | ||
Operating revenues: | ||
Operating revenues | 104,933 | 90,928 |
Operating costs and expenses: | ||
Operating costs and expenses | 92,236 | 80,109 |
Room | ||
Operating revenues: | ||
Operating revenues | 48,075 | 46,630 |
Operating costs and expenses: | ||
Operating costs and expenses | 20,196 | 20,100 |
Other | ||
Operating revenues: | ||
Operating revenues | 25,922 | 22,556 |
Operating costs and expenses: | ||
Operating costs and expenses | 11,859 | 8,786 |
Management fees | ||
Operating revenues: | ||
Operating revenues | $ 23,159 | $ 24,678 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common stockClass A common stock | Common stockClass B common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income | Noncontrolling interest |
Balance at beginning of period at Dec. 31, 2017 | $ 631,712 | $ 689 | $ 1 | $ 349,430 | $ 26,138 | $ 2,473 | $ 252,981 | ||
Number of shares at beginning of period at Dec. 31, 2017 | 68,898,000 | 47,264,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 82,130 | 51,180 | 30,950 | ||||||
Other comprehensive loss, net of tax | (610) | (325) | (285) | ||||||
Share-based compensation | 2,484 | 2,484 | |||||||
Distributions | (5,496) | (5,496) | |||||||
Dividends | (6,938) | (6,938) | |||||||
Issuance of restricted stock awards, net of forfeitures | $ 2 | (2) | |||||||
Issuance of restricted stock awards, net of forfeitures (shares) | 158,000 | ||||||||
Repurchases of Class A common stock | (72) | $ 0 | (72) | ||||||
Repurchases of Class A common stock (shares) | (3,000) | ||||||||
Stock option exercises | 613 | $ 0 | 613 | ||||||
Stock option exercises (shares) | 31,000 | ||||||||
Exchanges of noncontrolling interests for Class A common stock | $ 3 | $ 0 | 1,869 | 19 | (1,891) | ||||
Exchanges of noncontrolling interests for Class A common stock (shares) | 330,000 | 330,000 | (330,000) | ||||||
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests for Class A common stock | (2,184) | (2,184) | |||||||
Deferred tax assets resulting from exchanges of noncontrolling interests for Class A common stock | 2,333 | 2,333 | |||||||
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | (1,095) | 0 | 1,095 | ||||||
Balance at end of period at Mar. 31, 2018 | 703,972 | $ 694 | $ 1 | 353,376 | 70,380 | 2,167 | 277,354 | ||
Number of shares at end of period at Mar. 31, 2018 | 69,414,000 | 46,934,000 | |||||||
Balance at beginning of period at Dec. 31, 2018 | 816,995 | $ 697 | $ 1 | 361,970 | 155,869 | 1,083 | 297,375 | ||
Number of shares at beginning of period at Dec. 31, 2018 | 69,662,590 | 46,884,413 | 69,663,000 | 46,884,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 20,284 | 11,323 | 8,961 | ||||||
Other comprehensive loss, net of tax | (745) | (444) | (301) | ||||||
Share-based compensation | 3,874 | 3,874 | |||||||
Distributions | (4,688) | (4,688) | |||||||
Dividends | (7,009) | (7,009) | |||||||
Issuance of restricted stock awards, net of forfeitures | $ 4 | (4) | |||||||
Issuance of restricted stock awards, net of forfeitures (shares) | 424,000 | ||||||||
Repurchases of Class A common stock | (213) | $ 0 | (213) | ||||||
Repurchases of Class A common stock (shares) | (8,000) | ||||||||
Stock option exercises | 3,970 | $ 2 | 3,968 | ||||||
Stock option exercises (shares) | 195,000 | ||||||||
Exchanges of noncontrolling interests for Class A common stock (shares) | 0 | ||||||||
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | (2,556) | 2 | 2,554 | ||||||
Balance at end of period at Mar. 31, 2019 | $ 832,468 | $ 703 | $ 1 | $ 367,039 | $ 160,183 | $ 641 | $ 303,901 | ||
Number of shares at end of period at Mar. 31, 2019 | 70,273,915 | 46,884,413 | 70,274,000 | 46,884,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 20,284 | $ 82,130 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 50,853 | 43,164 |
Change in fair value of derivative instruments | 6,638 | (15,803) |
Reclassification of unrealized gain on derivative instruments into income | (745) | (698) |
Write-downs and other charges, net | 382 | 349 |
Tax receivable agreement liability adjustment | 0 | (16,873) |
Amortization of debt discount and debt issuance costs | 4,004 | 3,974 |
Share-based compensation | 3,853 | 2,454 |
Earnings from joint ventures | (505) | (608) |
Distributions from joint ventures | 433 | 551 |
Loss on modification of debt | 302 | 0 |
Deferred income tax | 1,919 | 10,856 |
Changes in assets and liabilities: | ||
Receivables, net | (5,196) | 3,413 |
Inventories and prepaid expenses | (36,114) | (1,709) |
Accounts payable | 11,683 | 3,117 |
Accrued interest payable | 7,666 | 4,925 |
Other accrued liabilities | (9,981) | (4,784) |
Other, net | (871) | (8,411) |
Net cash provided by operating activities | 54,605 | 106,047 |
Cash flows from investing activities: | ||
Capital expenditures, net of related payables | (160,030) | (137,728) |
Proceeds from asset sales | 70 | 83 |
Distributions in excess of earnings from joint ventures | 30 | 428 |
Native American development costs | (204) | (130) |
Net settlement of derivative instruments | 3,819 | 1,310 |
Other, net | (853) | (1,089) |
Net cash used in investing activities | (157,168) | (137,126) |
Cash flows from financing activities: | ||
Borrowings under credit agreements with original maturity dates greater than three months | 220,000 | 0 |
Payments under credit agreements with original maturity dates greater than three months | (111,835) | (3,406) |
Proceeds from exercise of stock options | 3,970 | 613 |
Distributions to noncontrolling interests | (4,688) | (5,496) |
Dividends paid | (6,968) | (6,905) |
Payment of debt issuance costs | (2,505) | 0 |
Payments on other debt | (232) | (577) |
Payments on tax receivable agreement liability | 0 | (5,015) |
Other, net | (438) | (297) |
Net cash provided by (used in) financing activities | 97,304 | (21,083) |
Decrease in cash, cash equivalents and restricted cash | (5,259) | (52,162) |
Balance, beginning of period | 118,258 | 234,744 |
Balance, end of period | 112,999 | 182,582 |
Cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 109,249 | 179,192 |
Restricted cash | 3,750 | 3,390 |
Balance, end of period | 112,999 | 182,582 |
Supplemental cash flow disclosures: | ||
Cash paid for interest, net of $2,599 and $1,064 capitalized, respectively | 26,374 | 23,317 |
Cash paid for income taxes, net of refunds received | (65) | (176) |
Non-cash investing and financing activities: | ||
Capital expenditures incurred but not yet paid | $ 71,985 | $ 53,264 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Capitalized Interest | $ 2,599 | $ 1,064 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Significant Accounting Policies | 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 September 2015 to own an equity interest in and manage Station Casinos LLC (“Station LLC”). In May 2016, the Company completed an initial public offering (“IPO”) and used the proceeds to purchase newly issued limited liability company interests in Station Holdco LLC (“Station Holdco” and such units, the “LLC Units”), and outstanding LLC Units from existing members of Station Holdco. The Company owns all of the outstanding voting interests in Station LLC and has an indirect economic interest in Station LLC through its ownership interest in Station Holdco, which owns all of the economic interests in Station LLC. Station LLC, a Nevada limited liability company, is a gaming, development and management company that owns and operates ten major gaming and entertainment facilities and ten smaller casino properties ( three of which are 50% owned) in the Las Vegas regional market. Station LLC also manages Graton Resort in Sonoma County, California on behalf of a Native American tribe. At March 31, 2019 , the Company held approximately 60.0% of the economic interests in Station Holdco as well as 100% of the voting interest in Station LLC and 100% of the voting power in Station Holdco, subject to certain limited exceptions, and is the designated 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. The Company is subject to federal income taxes and California state income taxes. 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, 2018 . Certain amounts in the condensed consolidated financial statements for the prior year have been reclassified to be consistent with the current year presentation. Principles of Consolidation Station Holdco and Station LLC are variable interest entities (“VIEs”), 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 interest in Station Holdco not owned by Red Rock within noncontrolling interest in the condensed consolidated financial statements. All intercompany accounts and transactions have been eliminated. The Company has investments in three 50% owned smaller casino properties which are joint ventures accounted for using the equity method. The carrying amount of the Company’s investment in one of the smaller casino properties has been reduced below zero and is presented within Other long-term liabilities on the Condensed Consolidated Balance Sheets. 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, 2018 . The Company updated its lease accounting policies as described in Note 12 in conjunction with the adoption of the new lease accounting standard. Recently Issued and Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for measurement of credit losses on financial instruments. The amended accounting guidance replaces the incurred loss impairment model with a forward-looking expected loss model, and is applicable to most financial assets, including trade receivables other than those arising from operating leases. The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim and annual periods beginning after December 15, 2018. A modified retrospective transition method with a cumulative-effect adjustment to retained earnings is required to be applied at the date of adoption. The Company will adopt this guidance in the first quarter of 2020 and does not expect the adoption to have a material impact on its financial position or results of operations. In February 2016, the FASB issued a new accounting standard that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new standard, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for leases with terms greater than twelve months. Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with revenue recognition guidance. The Company adopted the new lease accounting standard on January 1, 2019 using the modified retrospective transition method and elected not to retrospectively adjust its results of operations or balance sheets for comparative periods presented. The Company elected to use the package of practical expedients in its transition and accordingly, did not reassess its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected not to apply the use-of-hindsight practical expedient. For leases under which the Company is the lessor, the Company elected not to separate non-lease components from lease components. Upon adoption, the Company recognized operating lease right-of-use assets and operating lease liabilities of $17.3 million . In addition, prepaid rent, deferred rent and off-market lease liability balances related to operating leases at December 31, 2018 were reclassified to right-of-use assets upon adoption. The Company recognized no cumulative-effect adjustment to retained earnings upon adoption of the new standard, and the adoption did not have a material impact on the Company’s statements of income or cash flows. See Note 12 for additional information. |
Noncontrolling Interest in Stat
Noncontrolling Interest in Station Holdco | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest in Station Holdco | 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, and the interests in Station Holdco not owned by Red Rock are presented within noncontrolling interest in the condensed consolidated financial statements. During the three months ended March 31, 2018 , approximately 0.3 million LLC Units, together with an equal number of Class B common shares, held by noncontrolling interest holders were exchanged for Class A common shares, which increased Red Rock’s ownership interest in Station Holdco. No such units and shares were exchanged for Class A common shares during the three months ended March 31, 2019 . The ownership of the LLC Units is summarized as follows: March 31, 2019 December 31, 2018 Units Ownership % Units Ownership % Red Rock 70,273,915 60.0 % 69,662,590 59.8 % Noncontrolling interest holders 46,884,413 40.0 % 46,884,413 40.2 % Total 117,158,328 100.0 % 116,547,003 100.0 % The Company uses monthly weighted-average LLC Unit ownership to calculate the pretax income and other comprehensive 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. |
Native American Development
Native American Development | 3 Months Ended |
Mar. 31, 2019 | |
Development Disclosure [Abstract] | |
Native American Development | Native American Development North Fork Rancheria of Mono Indians Tribe The Company has development and management agreements with the North Fork Rancheria of Mono Indians (the “Mono”), a federally recognized Native American tribe located near Fresno, California, which were originally entered into in 2003. In August 2014, the Mono and the Company entered into the Second Amended and Restated Development Agreement (the “Development Agreement”) and the Second Amended and Restated Management Agreement. Pursuant to those agreements, the Company will assist the Mono in developing and operating a gaming and entertainment facility (the “North Fork Project”) to be located in Madera County, California. 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 slot machines, approximately 40 table games and several restaurants, and the cost of the project is expected to be between $250 million and $300 million . Development of the North Fork Project is subject to certain governmental and regulatory approvals, including, but not limited to, approval of the Management Agreement by the Chairman of the National Indian Gaming Commission (“NIGC”). 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. The Company will contribute significant financial support to the North Fork Project. Through March 31, 2019 , the Company has paid approximately $33.4 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 advances are expected to be repaid from the proceeds of third-party financing or from the Mono’s gaming revenues; however, there can be no assurance that the advances will be repaid. The carrying amount of the advances was reduced to fair value upon the Company’s adoption of fresh-start reporting in 2011. At March 31, 2019 , the carrying amount of the advances was $18.3 million . 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 Company will receive a development fee of 4% of the costs of construction (as defined in the Development Agreement) for its development services, which will be paid upon the commencement of gaming operations at the facility. In March 2018, the Mono submitted a proposed Third Amended and Restated Management Agreement (the “Management Agreement”) to the NIGC. The Management Agreement allows the Company to receive a management fee of 30% of the North Fork Project’s net income. The Management Agreement and the Development Agreement have 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 the Management Agreement 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. Upon termination or expiration of the Management Agreement and Development Agreement, the Mono will continue to be obligated to repay any unpaid principal and interest on the advances from the Company, as well as certain other amounts that may be due, such as management fees. 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, the Development Agreement and Management Agreement contain 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 this type of project is difficult to predict and is dependent upon the receipt of the necessary governmental and regulatory approvals. There can be no assurance as to when, or if, these approvals will be obtained. The Company currently estimates that construction of the North Fork Project may begin in the next 18 to 30 months and estimates that the North Fork Project would be completed and opened for business approximately 18 months after construction begins. There can be no assurance, however, that the North Fork Project will be completed and opened within this time frame or at all. The Company expects to assist the Mono in obtaining third-party financing for the North Fork Project once all necessary regulatory approvals have been received and prior to commencement of construction; however, there can be no assurance that the Company will be able to obtain such financing for the North Fork Project on acceptable terms or at all. 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 65% to 75% at March 31, 2019 . 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 all milestones and the successful resolution of all litigation and contingencies. There can be no assurance that the North Fork Project will be successfully completed or that future events and 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. The following table summarizes the Company’s evaluation at March 31, 2019 of each of the critical milestones necessary to complete the North Fork Project. As of March 31, 2019 Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”) Yes Date of recognition Federal 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 compact A 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 (see North Fork Rancheria of Mono Indians v. State of California) 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 DOI The 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 BIA In 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 tribe The North Fork Site was accepted into trust in February 2013. Approval of management agreement by NIGC In 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. Approval of the Management Agreement by the NIGC is expected to occur following the Mono’s response to the deficiency letter. The Company believes the Management Agreement will be approved because the terms and conditions thereof are consistent with the provisions of the Indian Gaming Regulatory Act (“IGRA”). Gaming licenses: Type The 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 authorities The 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 with the City and County were amended in December 2016 to restructure the timing of certain payments due to delays in the development of the North Fork Project. Following is a discussion of certain unresolved legal matters related to the North Fork Project. Stand Up For California! v. Brown. In March 2013, Stand Up for California! and Barbara Leach, a local resident (collectively, the “Stand Up” plaintiffs), filed a complaint for declaratory relief and petition for writ of mandate in California Superior Court for the County of Madera against California Governor Edmund G. Brown, Jr., alleging that Governor Brown violated the California constitutional separation-of-powers doctrine when he concurred in the North Fork Determination. The complaint sought to vacate and set aside the Governor’s concurrence. Plaintiffs’ complaint was subsequently amended to include a challenge to the constitutionality of AB 277. The Mono intervened as a defendant in the lawsuit. In March 2014, the court dismissed plaintiffs’ amended complaint, which dismissal was appealed by plaintiffs. In December 2016, an appellate court ruled in favor of the Stand Up plaintiffs concluding that Governor Brown exceeded his authority in concurring in the Secretary’s determination that gaming on the North Fork Site would be in the best interest of the tribe and not detrimental to the surrounding community. The appellate court’s decision reversed the trial court’s previous ruling in favor of the Mono. The Mono and the State filed petitions in the Supreme Court of California seeking review of the appellate court’s decision. In March 2017, the Supreme Court of California granted the Mono and State’s petitions for review and deferred additional briefing or other action in this matter pending consideration and disposition of a similar issue in United Auburn Indian Community of Auburn Rancheria v. Brown. The United Auburn case was fully briefed in December 2017. Oral argument has not yet been scheduled. Picayune Rancheria of Chukchansi Indians v. Brown . 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 North Fork Determination. The complaint seeks to vacate and set aside the Governor’s concurrence. In July 2016, the court granted the Mono’s application to intervene and the Mono filed a demurrer seeking to dismiss the case. In November 2016, the district court dismissed Picayune’s complaint, but the court subsequently vacated its ruling based on the December 2016 decision by the Fifth District Court of Appeal in Stand Up for California! v. Brown . In May 2017, the court stayed the case for six months by agreement of the parties and scheduled a status conference on November 13, 2017 to address how the case should proceed in light of the California Supreme Court’s granting of the Mono and State’s petitions for review in Stand Up for California! v. Brown . The case remains stayed. Stand Up for California! et. al. v. United States Department of the Interior. In November 2016, Stand Up for California! and other plaintiffs filed a complaint in the United States District Court for the Eastern District of California alleging that the DOI’s issuance of Secretarial Procedures for the Mono was subject to the National Environmental Policies Act and the Clean Air Act, and violate the Johnson Act. The complaint further alleges violations of the Freedom of Information Act and the Administrative Procedures Act. The DOI filed its answer to the complaint in February 2017 denying plaintiffs’ claims and asserting certain affirmative defenses. A motion to intervene filed by the Mono was granted in March 2017. Plaintiffs subsequently filed a motion to stay the proceedings in May 2017. Briefing on the contested stay request concluded in July 2017 and briefing on cross-motions for summary judgment was concluded in September 2017. On July 18, 2018, the court denied plaintiffs’ motion to stay the proceedings and granted the summary judgment motions of the Mono and the federal defendants. On September 11, 2018, plaintiffs filed a notice of appeal of the District Court decision and a briefing schedule has been established with the United States Court of Appeals for the Ninth Circuit. |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Other Accrued Liabilities | Other Accrued Liabilities Other accrued liabilities consisted of the following (amounts in thousands): March 31, December 31, 2018 Contract and customer-related liabilities: Rewards Program liability $ 20,903 $ 20,654 Advance deposits and future wagers 19,025 18,624 Unpaid wagers, outstanding chips and other customer-related liabilities 15,753 19,640 Other accrued liabilities: Accrued payroll and related 43,684 55,448 Accrued gaming and related 24,096 22,221 Construction payables and equipment purchase accruals 86,675 108,855 Operating lease liabilities, current portion 3,976 — Other 23,380 21,032 $ 237,492 $ 266,474 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consisted of the following indebtedness of Station LLC (amounts in thousands): March 31, December 31, 2018 Term Loan B Facility due June 8, 2023, interest at a margin above LIBOR or base rate (5.00% and 5.03% at March 31, 2019 and December 31, 2018, respectively), net of unamortized discount and deferred issuance costs of $41.0 million and $43.3 million at March 31, 2019 and December 31, 2018, respectively $ 1,773,552 $ 1,775,951 Term Loan A Facility due March 8, 2023, interest at a margin above LIBOR or base rate (4.25% at March 31, 2019), net of unamortized discount and deferred issuance costs of $3.2 million at March 31, 2019 193,745 — Term Loan A Facility due June 8, 2022, interest at a margin above LIBOR or base rate (4.50% and 4.53% at March 31, 2019 and December 31, 2018, respectively), net of unamortized discount and deferred issuance costs of $0.8 million and $4.0 million at March 31, 2019 and December 31, 2018, respectively 54,326 251,448 Revolving Credit Facility due March 8, 2023, interest at a margin above LIBOR or base rate (4.25% at March 31, 2019) 361,277 — Revolving Credit Facility due June 8, 2022, interest at a margin above LIBOR or base rate (4.54% weighted average at December 31, 2018) — 245,000 5.00% Senior Notes due October 1, 2025, net of unamortized deferred issuance costs of $5.5 million and $5.7 million at March 31, 2019 and December 31, 2018, respectively 544,464 544,286 Other long-term debt, weighted-average interest of 6.62% and 6.69% at March 31, 2019 and December 31, 2018, respectively, maturity dates ranging from 2027 to 2037 38,443 38,674 Total long-term debt 2,965,807 2,855,359 Current portion of long-term debt (33,906 ) (33,894 ) Total long-term debt, net $ 2,931,901 $ 2,821,465 Credit Facility On February 8, 2019, Station LLC amended its existing credit facility agreement (the “Credit Facility”) to, among other things, (i) increase the borrowing availability under the Revolving Credit Facility by $115.0 million to $896.0 million and (ii) for consenting lenders under the Term Loan A Facility and the Revolving Credit Facility, extend the maturity date for their portion of such facilities by approximately one year and reduce the interest rate thereunder by 25 basis points. As a result of the amendment, both the Revolving Credit Facility and the Term Loan A Facility each have two tranches with different maturity dates and interest rate spreads. Amounts outstanding under the Revolving Credit Facility and the Term Loan A Facility bear interest at either LIBOR or base rate, at Station LLC’s option, plus a spread that is dependent on Station LLC’s consolidated total leverage ratio as shown below: Consolidated Total Leverage Ratio Revolving Credit Facility and Term Loan A Facility due March 8, 2023 Revolving Credit Facility and Term Loan A Facility due June 8, 2022 LIBOR Base Rate LIBOR Base Rate Greater than 3.50 to 1.00 1.75 % 0.75 % 2.00 % 1.00 % Less than or equal to 3.50 to 1.00 1.50 % 0.50 % 1.75 % 0.75 % The Company evaluated the Credit Facility amendment on a lender by lender basis and accounted for the amendment as a debt modification. The Company incurred approximately $3.3 million in costs associated with the transaction comprising primarily lender fees that were deferred. Of that amount, third-party fees of $0.3 million associated with the modified Term Loan A Facility were recognized as Loss on modification of debt in the Condensed Consolidated Statements of Income and Comprehensive Income . The Credit Facility contains a number of customary covenants, including requirements that Station LLC maintain throughout the term of the Credit Facility and measured as of the end of each quarter, an interest coverage ratio of not less than 2.50 to 1.00 and a maximum consolidated total leverage ratio, with step-downs over the term of the Credit Facility, ranging from 6.50 to 1.00 at March 31, 2019 to 5.25 to 1.00 at December 31, 2021 and thereafter. A breach of the financial ratio covenants shall only become an event of default under the Term Loan B Facility if the lenders within tranches of the Term Loan A Facility and the Revolving Credit Facility take certain affirmative actions after the occurrence of a default of such financial ratio covenants. In the opinion of management, the Company was in compliance with all applicable covenants at March 31, 2019 . Revolving Credit Facility Availability At March 31, 2019 , Station LLC’s combined borrowing availability under both tranches of its Revolving Credit Facility, subject to continued compliance with the terms of the Credit Facility, was $497.6 million , which was net of $361.3 million in outstanding borrowings and $37.1 million in outstanding letters of credit and similar obligations. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company’s objective in using derivative instruments is to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as a primary part of its cash flow hedging strategy. The Company does not use derivative financial instruments for trading or speculative purposes. The Company’s hedging strategy includes the use of forward-starting interest rate swaps that are not designated in cash flow hedging relationships. The interest rate swap agreements allow Station LLC to receive variable-rate payments in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Station LLC’s interest rate swaps each have one -year terms that run consecutively through July 2021, with predetermined fixed pay rates that increase with each new term to more closely align with the one -month LIBOR forward curve as of the trade date of the interest rate swap. At March 31, 2019 , the weighted-average fixed pay rate for Station LLC’s interest rate swaps was 1.46% , which will increase to 1.94% over the exposure period. At March 31, 2019 , Station LLC’s interest rate swaps had a combined notional amount of $1.5 billion . The change in fair value of all of Station LLC’s derivative instruments is reflected in Change in fair value of derivative instruments in the Condensed Consolidated Statements of Income and Comprehensive Income in the period in which the change occurs. The Company classifies cash flows for derivative instruments not designated as cash flow hedges as investing activities in the Condensed Consolidated Statements of Cash Flows. Station LLC has not posted any collateral related to its interest rate swap agreements; however, Station LLC’s obligations under the interest rate swap agreements are subject to the security and guarantee arrangements applicable to the Credit Facility. The interest rate swap agreements contain a cross-default provision under which Station LLC could be declared in default on its obligation under such agreements if certain conditions of default exist on the Credit Facility. At March 31, 2019 , the termination value of Station LLC’s interest rate swaps, including accrued interest, was a net asset of $14.3 million . At March 31, 2019 , Station LLC’s interest rate swaps effectively converted $1.5 billion of Station LLC’s variable interest rate debt to a fixed rate of 3.96% . The fair values of Station LLC’s interest rate swaps, exclusive of accrued interest, as well as their classification on the Condensed Consolidated Balance Sheets, are presented below (amounts in thousands): March 31, December 31, 2018 Interest rate swaps not designated in hedge accounting relationships: Prepaid expenses and other current assets $ 4,159 $ 8,334 Other assets, net 9,167 15,611 Information about pretax gains and losses on derivative financial instruments is presented below (amounts in thousands): Derivatives Not Designated in Hedge Accounting Relationships Location of (Loss) Gain on Derivatives Recognized in Income Amount of (Loss) Gain on Derivatives Recognized in Income Three Months Ended March 31, 2019 2018 Interest rate swaps Change in fair value of derivative instruments $ (6,638 ) $ 15,803 Certain of Station LLC’s interest rate swaps were previously designated in cash flow hedging relationships until their dedesignation in June 2017. Accordingly, cumulative deferred net gains previously recognized in accumulated other comprehensive income associated with these interest rate swaps are being amortized as a reduction of interest expense through July 2020 as the hedged interest payments occur. During each of the three -month periods ended March 31, 2019 and 2018 , $0.7 million in deferred net gains were reclassified from accumulated other comprehensive income to Interest expense, net in the Condensed Consolidated Statements of Income and Comprehensive Income . At March 31, 2019 , there was $3.4 million in deferred net gains included in accumulated other comprehensive income , and of this amount, $2.8 million is expected to be reclassified into earnings during the next twelve months. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets Measured at Fair Value on a Recurring Basis Information about the Company’s financial assets 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): Fair Value Measurement at Reporting Date Using Balance at March 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swaps $ 13,326 $ — $ 13,326 $ — Fair Value Measurement at Reporting Date Using Balance at December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swaps $ 23,945 $ — $ 23,945 $ — The fair values of Station LLC’s interest rate swaps were determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the interest rate swaps. This analysis reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. Station LLC incorporated credit valuation adjustments to appropriately reflect both its own nonperformance risk and the counterparty’s nonperformance risk in the fair value measurement. The Company had no financial liabilities measured at fair value on a recurring basis at March 31, 2019 or December 31, 2018 . 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): March 31, December 31, 2018 Aggregate fair value $ 2,984 $ 2,766 Aggregate carrying amount 2,966 2,855 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. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity During each of the three -month periods ended March 31, 2019 and 2018 , the Company declared and paid cash dividends of $0.10 per share of Class A common stock. On April 30, 2019 , the Company announced that it would pay a dividend of $0.10 per share to holders of record as of June 14, 2019 to be paid on June 28, 2019 . Prior to the payment of the dividend, Station Holdco will declare a distribution to all LLC Unit holders, including the Company, of $0.10 per unit, a portion of which will be paid to its noncontrolling interest holders. Changes in Accumulated Other Comprehensive Income The following table presents changes in accumulated other comprehensive income , net of tax and noncontrolling interest, by component for the three months ended March 31, 2019 (amounts in thousands): Accumulated Other Comprehensive Income Unrealized gain on interest rate swaps Unrecognized pension liability Total Balances, December 31, 2018 $ 1,279 $ (196 ) $ 1,083 Amounts reclassified from accumulated other comprehensive income (loss) into income (444 ) — (444 ) Net current-period other comprehensive loss (444 ) — (444 ) Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 2 — 2 Balances, March 31, 2019 $ 837 $ (196 ) $ 641 Net Income Attributable to Red Rock Resorts, Inc. and Transfers from (to) Noncontrolling Interests The table below presents the effect on Red Rock Resorts, Inc. stockholders’ equity from net income and transfers from (to) noncontrolling interests (amounts in thousands): Three Months Ended 2019 2018 Net income attributable to Red Rock Resorts, Inc. $ 11,323 $ 51,180 Transfers from (to) noncontrolling interests: Exchanges of noncontrolling interests for Class A common stock — 1,891 Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco (2,554 ) (1,095 ) Net transfers (to) from noncontrolling interests (2,554 ) 796 Change from net income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests $ 8,769 $ 51,976 |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation The Company maintains an equity incentive plan which is designed to attract, retain and motivate employees and to align the interests of those individuals with the interests of the Company. A total of 11,585,479 shares of Class A common stock is reserved for issuance under the plan, of which approximately 0.5 million shares were available for issuance at March 31, 2019 . The following table presents information about share-based compensation awards under the equity incentive plan: Restricted Class A Common Stock Stock Options Shares Weighted-average grant date fair value Shares Weighted-average exercise price Outstanding at January 1, 2019 373,764 $ 26.09 5,166,565 $ 25.60 Activity during the period: Granted 445,339 27.41 3,205,472 27.26 Vested/exercised (46,027 ) 26.49 (226,254 ) 21.13 Forfeited (21,291 ) 30.92 (361,918 ) 27.23 Outstanding at March 31, 2019 751,785 $ 26.71 7,783,865 $ 26.34 The Company recognized share-based compensation expense of $3.9 million and $2.5 million for the three months ended March 31, 2019 and 2018 , respectively. At March 31, 2019 , unrecognized share-based compensation cost was $60.3 million , which is expected to be recognized over a weighted-average period of 3.3 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from Station Holdco based upon Red Rock’s economic interest held in Station Holdco. Station Holdco is treated as a pass-through 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 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 current taxes are estimated for the period and the balance sheet is adjusted to reflect such taxes currently payable or receivable. The remaining tax provision or benefit is recorded as deferred taxes. The Company files income tax returns in federal and state jurisdictions. The Company is under federal audit for the 2016 tax year. The Company regularly assesses the likelihood of adverse outcomes resulting from any examinations to determine the adequacy of the Company’s provision for income taxes. The Company’s effective tax rate for the three months ended March 31, 2019 was 8.64% , including discrete items, as compared to 11.67% for the three months ended March 31, 2018 . The Company’s effective tax rate is less than the statutory rate of 21% 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 liable for income taxes on the portion of Station Holdco’s earnings attributable to noncontrolling interests. Station Holdco operates in Nevada and California. Nevada does not impose a state income tax and the Company’s activities in California are minimal; as a result, state income taxes do not have a significant impact on the Company’s effective rate. During the three months ended March 31, 2018 , the Company recognized income from a transaction with a pre-IPO owner and reported a net discrete $3.6 million write-down to the deferred tax asset. As a result of the 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. The Company determined that the deferred tax asset related to the LLC Units issued in the IPO and reorganization transactions is not expected to be realized unless the Company disposes of its investment in Station Holdco. As such, the Company established a valuation allowance against this portion of its deferred tax asset. The Company recognizes changes to the valuation allowance through the provision for income tax or other comprehensive income, as applicable, and at March 31, 2019 and December 31, 2018 , the valuation allowance was $38.4 million and $40.0 million , respectively. Tax Receivable Agreement In connection with the IPO, the Company entered into the TRA with certain pre-IPO owners of Station Holdco. In the event that such parties exchange any or all of their LLC Units for Class A common stock, 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 March 31, 2019 and December 31, 2018 , the Company’s liability under the TRA was $24.9 million , of which $9.0 million was payable to entities related to Frank J. Fertitta III, the Company’s Chairman of the Board and Chief Executive Officer, and Lorenzo J. Fertitta, a vice president of the Company and a member of the Company’s board. For the three months ended March 31, 2018 , exchanges of LLC Units resulted in an increase in the amount payable under the TRA liability of $2.2 million and a net increase in deferred tax assets of $2.3 million , both of which were recorded through stockholders’ equity. No LLC Units were exchanged during the three months ended March 31, 2019 . During the three months ended March 31, 2018 , the Company’s liability under the TRA was reduced by $21.9 million , and nontaxable income of $16.9 million was recognized in a transaction with a pre-IPO owner. 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 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 at a rate of LIBOR plus 5.00% . 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, Red Rock’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. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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 March 31, 2019 and 2018 represent 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 2019 2018 Net income $ 20,284 $ 82,130 Less: net income attributable to noncontrolling interests (8,961 ) (30,950 ) Net income attributable to Red Rock, basic 11,323 51,180 Effect of dilutive securities 7,077 24,306 Net income attributable to Red Rock, diluted $ 18,400 $ 75,486 Three Months Ended 2019 2018 Weighted-average shares of Class A common stock outstanding, basic 69,397 68,798 Effect of dilutive securities 47,296 48,149 Weighted-average shares of Class A common stock outstanding, diluted 116,693 116,947 The calculation of diluted earnings per share of Class A common stock excluded the following potentially dilutive shares that were outstanding at the end of the period because their inclusion would have been antidilutive (amounts in thousands): As of March 31, 2019 2018 Shares issuable upon exercise of stock options 5,849 2,145 Shares issuable upon vesting of restricted stock 506 — 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. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | 12 . Leases Lessee The Company leases certain equipment, buildings, land and other assets used in its operations. The Company determines whether an arrangement is or contains a lease at inception, and determines the classification of the lease based on facts and circumstances as of the lease commencement date. For leases with an initial term greater than twelve months, the Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. For leases with an initial term of twelve months or less, the Company has elected not to recognize ROU assets or lease liabilities. The Company measures its ROU assets and lease liabilities at the lease commencement date based on the present value of lease payments over the lease term. To calculate the present value of lease payments for leases that do not contain an implicit interest rate, the Company uses its incremental borrowing rate based on information available at the lease commencement date. For leases under which the Company has options to extend or terminate the lease, such options are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company includes operating lease ROU assets within Other assets, net on its Condensed Consolidated Balance Sheets. Operating lease liabilities are included in Other accrued liabilities and Other long-term liabilities. For arrangements that contain both lease and non-lease components under which the Company is the lessee, the components are not combined for accounting purposes. The Company’s leases do not include any significant residual value guarantees, restrictions or covenants. For operating leases with fixed rental payments or variable rental payments based on an index or rate, the Company recognizes lease expense on a straight-line basis over the lease term. For operating leases with variable payments not based on an index or rate, the Company recognizes the variable lease expense in the period in which the obligation for the payment is incurred. The Company’s variable lease payments not based on an index or rate are primarily related to short-term leases for slot machines under which lease payments are based on a percentage of the revenue earned. The components of lease expense were as follows (amounts in thousands): Three Months Operating lease cost $ 1,282 Short-term lease cost 1,814 Variable lease cost 2,645 Total lease expense $ 5,741 Supplemental balance sheet information related to leases under which the Company is the lessee was as follows (amounts in thousands): March 31, 2019 Operating lease right-of-use assets $ 16,048 Operating lease liabilities: Current portion $ 3,976 Noncurrent portion 12,831 Total operating lease liabilities $ 16,807 Weighted-average remaining lease term - operating leases 28.6 years Weighted-average discount rate - operating leases 5.40 % Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands): Three Months Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,418 Future minimum lease payments required under all operating leases with initial or remaining non-cancelable lease terms in excess of one year as of March 31, 2019 are as follows (amounts in thousands): Year Ending December 31, 2019 (a) $ 3,696 2020 3,793 2021 2,196 2022 879 2023 473 Thereafter 43,603 Total future lease payments 54,640 Less imputed interest (37,833 ) Total operating lease liabilities $ 16,807 ____________________________________ (a) Amount at March 31, 2019 represents lease payments for the remainder of the year |
Leases of Lessor Disclosure | Lessor The Company leases space within its properties to third-party tenants, primarily food and beverage outlets and movie theaters. The Company also leases space to tenants within commercial and industrial buildings located on certain land held for development. All of the Company’s tenant leases are classified as operating leases and do not contain options for the lessee to purchase the underlying real property. At March 31, 2019 , the Company’s tenant leases had remaining lease terms ranging from less than one year to approximately 20 years. Lease payments from tenants at the Company’s properties typically include variable rent based on a percentage of the tenant’s net sales, and may also include a fixed base rent amount, which may increase by a rate or index over time. The Company recognizes variable rental income in the period in which the right to receive such rental income is established according to the lease agreements and base rental income on a straight-line basis over the lease term. Lease payments from the Company’s tenants at commercial and industrial buildings are typically based on a fixed rental amount, which may increase by a rate or index over time. Non-lease components within tenant lease agreements, which primarily comprise utilities, property taxes and common area maintenance charges, are included within operating lease income. For the three months ended March 31, 2019 and 2018 , revenue from tenant leases was $5.7 million and $6.0 million , respectively, which is included in Other revenues in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income . The following table presents undiscounted future minimum rentals to be received under operating leases as of March 31, 2019 (amounts in thousands): Year Ending December 31, 2019 (a) $ 7,496 2020 8,630 2021 7,395 2022 5,307 2023 4,160 Thereafter 13,118 $ 46,106 ____________________________________ (a) Amount at March 31, 2019 represents minimum rentals to be received for the remainder of the year. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company views each of its Las Vegas casino properties and each of its Native American management arrangements as individual operating segments. 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. The Company utilizes 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 2019 2018 Net revenues Las Vegas operations: Casino $ 244,933 $ 236,247 Food and beverage 104,933 90,928 Room 48,075 46,630 Other (a) 24,266 21,192 Management fees 163 173 Las Vegas operations net revenues 422,370 395,170 Native American management: Management fees 22,996 24,505 Reportable segment net revenues 445,366 419,675 Corporate and other 1,656 1,364 Net revenues $ 447,022 $ 421,039 Net income $ 20,284 $ 82,130 Adjustments Depreciation and amortization 50,853 43,164 Share-based compensation 3,853 2,454 Write-downs and other charges, net 23,728 3,845 Tax receivable agreement liability adjustment — (16,873 ) Interest expense, net 37,438 31,111 Loss on modification of debt 302 — Change in fair value of derivative instruments 6,638 (15,803 ) Provision for income tax 1,919 10,856 Other 69 (807 ) Adjusted EBITDA (b) $ 145,084 $ 140,077 Adjusted EBITDA Las Vegas operations $ 130,478 $ 125,877 Native American management 21,476 22,094 Reportable segment Adjusted EBITDA 151,954 147,971 Corporate and other (6,870 ) (7,894 ) Adjusted EBITDA $ 145,084 $ 140,077 ____________________________________ (a) Other revenue included revenue from tenant leases of $5.7 million and $6.0 million for the three months ended March 31, 2019 and 2018 , respectively. Revenue from tenant leases is accounted for under the lease accounting guidance and does not represent revenue recognized from contracts with customers. (b) Adjusted EBITDA includes net income plus depreciation and amortization, share-based compensation, write-downs and other charges, net, including Palms redevelopment and preopening expenses, tax receivable agreement liability adjustment, interest expense, net, loss on modification of debt, change in fair value of derivative instruments, provision for income tax and other. |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2018 . Certain amounts in the condensed consolidated financial statements for the prior year have been reclassified to be consistent with the current year presentation. |
Principles of Consolidation | Principles of Consolidation Station Holdco and Station LLC are variable interest entities (“VIEs”), 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 interest in Station Holdco not owned by Red Rock within noncontrolling interest in the condensed consolidated financial statements. All intercompany accounts and transactions have been eliminated. The Company has investments in three 50% owned smaller casino properties which are joint ventures accounted for using the equity method. The carrying amount of the Company’s investment in one of the smaller casino properties has been reduced below zero and is presented within Other long-term liabilities on the Condensed Consolidated Balance Sheets. |
Use of Estimates | 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 | 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, 2018 . The Company updated its lease accounting policies as described in Note 12 in conjunction with the adoption of the new lease accounting standard. |
New Accounting Pronouncements | Recently Issued and Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for measurement of credit losses on financial instruments. The amended accounting guidance replaces the incurred loss impairment model with a forward-looking expected loss model, and is applicable to most financial assets, including trade receivables other than those arising from operating leases. The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim and annual periods beginning after December 15, 2018. A modified retrospective transition method with a cumulative-effect adjustment to retained earnings is required to be applied at the date of adoption. The Company will adopt this guidance in the first quarter of 2020 and does not expect the adoption to have a material impact on its financial position or results of operations. In February 2016, the FASB issued a new accounting standard that changes the accounting for leases and requires expanded disclosures about leasing activities. Under the new standard, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for leases with terms greater than twelve months. Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with revenue recognition guidance. The Company adopted the new lease accounting standard on January 1, 2019 using the modified retrospective transition method and elected not to retrospectively adjust its results of operations or balance sheets for comparative periods presented. The Company elected to use the package of practical expedients in its transition and accordingly, did not reassess its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected not to apply the use-of-hindsight practical expedient. For leases under which the Company is the lessor, the Company elected not to separate non-lease components from lease components. Upon adoption, the Company recognized operating lease right-of-use assets and operating lease liabilities of $17.3 million . In addition, prepaid rent, deferred rent and off-market lease liability balances related to operating leases at December 31, 2018 were reclassified to right-of-use assets upon adoption. The Company recognized no cumulative-effect adjustment to retained earnings upon adoption of the new standard, and the adoption did not have a material impact on the Company’s statements of income or cash flows. See Note 12 for additional information. |
Income Taxes (Policies)
Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax, Policy | 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 current taxes are estimated for the period and the balance sheet is adjusted to reflect such taxes currently payable or receivable. The remaining tax provision or benefit is recorded as deferred taxes. |
Leases (Policies)
Leases (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessee, Leases | Lessee The Company leases certain equipment, buildings, land and other assets used in its operations. The Company determines whether an arrangement is or contains a lease at inception, and determines the classification of the lease based on facts and circumstances as of the lease commencement date. For leases with an initial term greater than twelve months, the Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. For leases with an initial term of twelve months or less, the Company has elected not to recognize ROU assets or lease liabilities. The Company measures its ROU assets and lease liabilities at the lease commencement date based on the present value of lease payments over the lease term. To calculate the present value of lease payments for leases that do not contain an implicit interest rate, the Company uses its incremental borrowing rate based on information available at the lease commencement date. For leases under which the Company has options to extend or terminate the lease, such options are included in the lease term when it is reasonably certain that the Company will exercise the option. The Company includes operating lease ROU assets within Other assets, net on its Condensed Consolidated Balance Sheets. Operating lease liabilities are included in Other accrued liabilities and Other long-term liabilities. For arrangements that contain both lease and non-lease components under which the Company is the lessee, the components are not combined for accounting purposes. The Company’s leases do not include any significant residual value guarantees, restrictions or covenants. For operating leases with fixed rental payments or variable rental payments based on an index or rate, the Company recognizes lease expense on a straight-line basis over the lease term. For operating leases with variable payments not based on an index or rate, the Company recognizes the variable lease expense in the period in which the obligation for the payment is incurred. The Company’s variable lease payments not based on an index or rate are primarily related to short-term leases for slot machines under which lease payments are based on a percentage of the revenue earned. |
Lessor, Leases | Lessor The Company leases space within its properties to third-party tenants, primarily food and beverage outlets and movie theaters. The Company also leases space to tenants within commercial and industrial buildings located on certain land held for development. All of the Company’s tenant leases are classified as operating leases and do not contain options for the lessee to purchase the underlying real property. At March 31, 2019 , the Company’s tenant leases had remaining lease terms ranging from less than one year to approximately 20 years. Lease payments from tenants at the Company’s properties typically include variable rent based on a percentage of the tenant’s net sales, and may also include a fixed base rent amount, which may increase by a rate or index over time. The Company recognizes variable rental income in the period in which the right to receive such rental income is established according to the lease agreements and base rental income on a straight-line basis over the lease term. Lease payments from the Company’s tenants at commercial and industrial buildings are typically based on a fixed rental amount, which may increase by a rate or index over time. Non-lease components within tenant lease agreements, which primarily comprise utilities, property taxes and common area maintenance charges, are included within operating lease income. For the three months ended March 31, 2019 and 2018 , revenue from tenant leases was $5.7 million and $6.0 million , respectively, which is included in Other revenues in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income . |
Noncontrolling Interest in St_2
Noncontrolling Interest in Station Holdco (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest Ownership | The ownership of the LLC Units is summarized as follows: March 31, 2019 December 31, 2018 Units Ownership % Units Ownership % Red Rock 70,273,915 60.0 % 69,662,590 59.8 % Noncontrolling interest holders 46,884,413 40.0 % 46,884,413 40.2 % Total 117,158,328 100.0 % 116,547,003 100.0 % |
Native American Development (Ta
Native American Development (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Development Disclosure [Abstract] | |
Schedule of Development and Management Agreements | The following table summarizes the Company’s evaluation at March 31, 2019 of each of the critical milestones necessary to complete the North Fork Project. As of March 31, 2019 Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”) Yes Date of recognition Federal 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 compact A 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 (see North Fork Rancheria of Mono Indians v. State of California) 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 DOI The 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 BIA In 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 tribe The North Fork Site was accepted into trust in February 2013. Approval of management agreement by NIGC In 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. Approval of the Management Agreement by the NIGC is expected to occur following the Mono’s response to the deficiency letter. The Company believes the Management Agreement will be approved because the terms and conditions thereof are consistent with the provisions of the Indian Gaming Regulatory Act (“IGRA”). Gaming licenses: Type The 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 authorities The 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 with the City and County were amended in December 2016 to restructure the timing of certain payments due to delays in the development of the North Fork Project. |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Other accrued liabilities consisted of the following (amounts in thousands): March 31, December 31, 2018 Contract and customer-related liabilities: Rewards Program liability $ 20,903 $ 20,654 Advance deposits and future wagers 19,025 18,624 Unpaid wagers, outstanding chips and other customer-related liabilities 15,753 19,640 Other accrued liabilities: Accrued payroll and related 43,684 55,448 Accrued gaming and related 24,096 22,221 Construction payables and equipment purchase accruals 86,675 108,855 Operating lease liabilities, current portion 3,976 — Other 23,380 21,032 $ 237,492 $ 266,474 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following indebtedness of Station LLC (amounts in thousands): March 31, December 31, 2018 Term Loan B Facility due June 8, 2023, interest at a margin above LIBOR or base rate (5.00% and 5.03% at March 31, 2019 and December 31, 2018, respectively), net of unamortized discount and deferred issuance costs of $41.0 million and $43.3 million at March 31, 2019 and December 31, 2018, respectively $ 1,773,552 $ 1,775,951 Term Loan A Facility due March 8, 2023, interest at a margin above LIBOR or base rate (4.25% at March 31, 2019), net of unamortized discount and deferred issuance costs of $3.2 million at March 31, 2019 193,745 — Term Loan A Facility due June 8, 2022, interest at a margin above LIBOR or base rate (4.50% and 4.53% at March 31, 2019 and December 31, 2018, respectively), net of unamortized discount and deferred issuance costs of $0.8 million and $4.0 million at March 31, 2019 and December 31, 2018, respectively 54,326 251,448 Revolving Credit Facility due March 8, 2023, interest at a margin above LIBOR or base rate (4.25% at March 31, 2019) 361,277 — Revolving Credit Facility due June 8, 2022, interest at a margin above LIBOR or base rate (4.54% weighted average at December 31, 2018) — 245,000 5.00% Senior Notes due October 1, 2025, net of unamortized deferred issuance costs of $5.5 million and $5.7 million at March 31, 2019 and December 31, 2018, respectively 544,464 544,286 Other long-term debt, weighted-average interest of 6.62% and 6.69% at March 31, 2019 and December 31, 2018, respectively, maturity dates ranging from 2027 to 2037 38,443 38,674 Total long-term debt 2,965,807 2,855,359 Current portion of long-term debt (33,906 ) (33,894 ) Total long-term debt, net $ 2,931,901 $ 2,821,465 |
Schedule of Credit Facility Interest Rates | Amounts outstanding under the Revolving Credit Facility and the Term Loan A Facility bear interest at either LIBOR or base rate, at Station LLC’s option, plus a spread that is dependent on Station LLC’s consolidated total leverage ratio as shown below: Consolidated Total Leverage Ratio Revolving Credit Facility and Term Loan A Facility due March 8, 2023 Revolving Credit Facility and Term Loan A Facility due June 8, 2022 LIBOR Base Rate LIBOR Base Rate Greater than 3.50 to 1.00 1.75 % 0.75 % 2.00 % 1.00 % Less than or equal to 3.50 to 1.00 1.50 % 0.50 % 1.75 % 0.75 % |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The fair values of Station LLC’s interest rate swaps, exclusive of accrued interest, as well as their classification on the Condensed Consolidated Balance Sheets, are presented below (amounts in thousands): March 31, December 31, 2018 Interest rate swaps not designated in hedge accounting relationships: Prepaid expenses and other current assets $ 4,159 $ 8,334 Other assets, net 9,167 15,611 |
Derivative Instruments, Gain (Loss) | Information about pretax gains and losses on derivative financial instruments is presented below (amounts in thousands): Derivatives Not Designated in Hedge Accounting Relationships Location of (Loss) Gain on Derivatives Recognized in Income Amount of (Loss) Gain on Derivatives Recognized in Income Three Months Ended March 31, 2019 2018 Interest rate swaps Change in fair value of derivative instruments $ (6,638 ) $ 15,803 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets at Fair Value Recurring Basis and Fair Value Hierarchy | Information about the Company’s financial assets 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): Fair Value Measurement at Reporting Date Using Balance at March 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swaps $ 13,326 $ — $ 13,326 $ — Fair Value Measurement at Reporting Date Using Balance at December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swaps $ 23,945 $ — $ 23,945 $ — |
Schedule of Long-Term Debt, Carrying Values and Estimated Fair Values | The estimated fair value of Station LLC’s long-term debt compared with its carrying amount is presented below (amounts in millions): March 31, December 31, 2018 Aggregate fair value $ 2,984 $ 2,766 Aggregate carrying amount 2,966 2,855 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated Other Comprehensive Income The following table presents changes in accumulated other comprehensive income , net of tax and noncontrolling interest, by component for the three months ended March 31, 2019 (amounts in thousands): Accumulated Other Comprehensive Income Unrealized gain on interest rate swaps Unrecognized pension liability Total Balances, December 31, 2018 $ 1,279 $ (196 ) $ 1,083 Amounts reclassified from accumulated other comprehensive income (loss) into income (444 ) — (444 ) Net current-period other comprehensive loss (444 ) — (444 ) Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 2 — 2 Balances, March 31, 2019 $ 837 $ (196 ) $ 641 |
Reconciliation of Net Income and Changes to Noncontrolling Interest | Net Income Attributable to Red Rock Resorts, Inc. and Transfers from (to) Noncontrolling Interests The table below presents the effect on Red Rock Resorts, Inc. stockholders’ equity from net income and transfers from (to) noncontrolling interests (amounts in thousands): Three Months Ended 2019 2018 Net income attributable to Red Rock Resorts, Inc. $ 11,323 $ 51,180 Transfers from (to) noncontrolling interests: Exchanges of noncontrolling interests for Class A common stock — 1,891 Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco (2,554 ) (1,095 ) Net transfers (to) from noncontrolling interests (2,554 ) 796 Change from net income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests $ 8,769 $ 51,976 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table presents information about share-based compensation awards under the equity incentive plan: Restricted Class A Common Stock Stock Options Shares Weighted-average grant date fair value Shares Weighted-average exercise price Outstanding at January 1, 2019 373,764 $ 26.09 5,166,565 $ 25.60 Activity during the period: Granted 445,339 27.41 3,205,472 27.26 Vested/exercised (46,027 ) 26.49 (226,254 ) 21.13 Forfeited (21,291 ) 30.92 (361,918 ) 27.23 Outstanding at March 31, 2019 751,785 $ 26.71 7,783,865 $ 26.34 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | 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 2019 2018 Net income $ 20,284 $ 82,130 Less: net income attributable to noncontrolling interests (8,961 ) (30,950 ) Net income attributable to Red Rock, basic 11,323 51,180 Effect of dilutive securities 7,077 24,306 Net income attributable to Red Rock, diluted $ 18,400 $ 75,486 Three Months Ended 2019 2018 Weighted-average shares of Class A common stock outstanding, basic 69,397 68,798 Effect of dilutive securities 47,296 48,149 Weighted-average shares of Class A common stock outstanding, diluted 116,693 116,947 |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share | The calculation of diluted earnings per share of Class A common stock excluded the following potentially dilutive shares that were outstanding at the end of the period because their inclusion would have been antidilutive (amounts in thousands): As of March 31, 2019 2018 Shares issuable upon exercise of stock options 5,849 2,145 Shares issuable upon vesting of restricted stock 506 — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Expense | The components of lease expense were as follows (amounts in thousands): Three Months Operating lease cost $ 1,282 Short-term lease cost 1,814 Variable lease cost 2,645 Total lease expense $ 5,741 |
Lessee Disclosures | Supplemental balance sheet information related to leases under which the Company is the lessee was as follows (amounts in thousands): March 31, 2019 Operating lease right-of-use assets $ 16,048 Operating lease liabilities: Current portion $ 3,976 Noncurrent portion 12,831 Total operating lease liabilities $ 16,807 Weighted-average remaining lease term - operating leases 28.6 years Weighted-average discount rate - operating leases 5.40 % Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands): Three Months Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,418 |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments required under all operating leases with initial or remaining non-cancelable lease terms in excess of one year as of March 31, 2019 are as follows (amounts in thousands): Year Ending December 31, 2019 (a) $ 3,696 2020 3,793 2021 2,196 2022 879 2023 473 Thereafter 43,603 Total future lease payments 54,640 Less imputed interest (37,833 ) Total operating lease liabilities $ 16,807 ____________________________________ (a) Amount at March 31, 2019 represents lease payments for the remainder of the year. |
Lessor, Operating Lease, Payments to be Received, Maturity | The following table presents undiscounted future minimum rentals to be received under operating leases as of March 31, 2019 (amounts in thousands): Year Ending December 31, 2019 (a) $ 7,496 2020 8,630 2021 7,395 2022 5,307 2023 4,160 Thereafter 13,118 $ 46,106 ____________________________________ (a) Amount at March 31, 2019 represents minimum rentals to be received for the remainder of the year. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company utilizes 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 2019 2018 Net revenues Las Vegas operations: Casino $ 244,933 $ 236,247 Food and beverage 104,933 90,928 Room 48,075 46,630 Other (a) 24,266 21,192 Management fees 163 173 Las Vegas operations net revenues 422,370 395,170 Native American management: Management fees 22,996 24,505 Reportable segment net revenues 445,366 419,675 Corporate and other 1,656 1,364 Net revenues $ 447,022 $ 421,039 Net income $ 20,284 $ 82,130 Adjustments Depreciation and amortization 50,853 43,164 Share-based compensation 3,853 2,454 Write-downs and other charges, net 23,728 3,845 Tax receivable agreement liability adjustment — (16,873 ) Interest expense, net 37,438 31,111 Loss on modification of debt 302 — Change in fair value of derivative instruments 6,638 (15,803 ) Provision for income tax 1,919 10,856 Other 69 (807 ) Adjusted EBITDA (b) $ 145,084 $ 140,077 Adjusted EBITDA Las Vegas operations $ 130,478 $ 125,877 Native American management 21,476 22,094 Reportable segment Adjusted EBITDA 151,954 147,971 Corporate and other (6,870 ) (7,894 ) Adjusted EBITDA $ 145,084 $ 140,077 ____________________________________ (a) Other revenue included revenue from tenant leases of $5.7 million and $6.0 million for the three months ended March 31, 2019 and 2018 , respectively. Revenue from tenant leases is accounted for under the lease accounting guidance and does not represent revenue recognized from contracts with customers. (b) Adjusted EBITDA includes net income plus depreciation and amortization, share-based compensation, write-downs and other charges, net, including Palms redevelopment and preopening expenses, tax receivable agreement liability adjustment, interest expense, net, loss on modification of debt, change in fair value of derivative instruments, provision for income tax and other. |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Significant Accounting Policies (Details) $ in Thousands | Mar. 31, 2019USD ($)Casino_Property | Jan. 01, 2019USD ($) |
Operating lease right-of-use assets | $ | $ 16,048 | $ 17,300 |
Operating lease liabilities | $ | $ 16,807 | $ 17,300 |
Major Hotel Casino Properties | Wholly Owned Properties | ||
Number of casino properties | 10 | |
Smaller Casino Properties | ||
Number of casino properties | 10 | |
Smaller Casino Properties | Partially Owned Properties | ||
Number of casino properties | 3 | |
Parent ownership percentage (unconsolidated) | 50.00% | |
Smaller Casino Properties | Partially Owned Properties | Equity Method Investment Reduced Below Zero | ||
Number of casino properties | 1 | |
Station Holdco | Voting Units | ||
Parent ownership percentage (consolidated) | 100.00% | |
Station Holdco | Non-Voting Units | ||
Parent ownership percentage (consolidated) | 60.00% | |
Station Casinos LLC | Voting Units | ||
Parent ownership percentage (consolidated) | 100.00% |
Noncontrolling Interest in St_3
Noncontrolling Interest in Station Holdco (Details) - shares | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, units outstanding (in units) | 117,158,328 | 116,547,003 | |
Total ownership percentage (consolidated) | 100.00% | 100.00% | |
Class A common stock | |||
Noncontrolling Interest [Line Items] | |||
Exchanges of noncontrolling interests for Class A common stock (shares) | 0 | 330,000 | |
Noncontrolling interest, units outstanding (in units) | 70,273,915 | 69,662,590 | |
Parent ownership percentage (consolidated) | 60.00% | 59.80% | |
Class B common stock | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, units outstanding (in units) | 46,884,413 | 46,884,413 | |
Noncontrolling ownership percentage (consolidated) | 40.00% | 40.20% |
Native American Development - N
Native American Development - North Fork (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)aTable_GamesSlot_Machines | Dec. 31, 2018USD ($) | |
Development and Management Agreements, Native American [Line Items] | ||
Native American development costs | $ 18,332 | $ 17,970 |
North Fork Rancheria of Mono Indians | ||
Development and Management Agreements, Native American [Line Items] | ||
Number of table games | Table_Games | 40 | |
Reimbursable advances for Native American development | $ 33,400 | |
Native American development costs | $ 18,300 | |
Development fee, percent fee | 4.00% | |
Property management fee, percent fee | 30.00% | |
Estimated period after construction begins, facility is completed and open for business | 18 months | |
Development agreement, term | 7 years | |
Management agreement, term | 7 years | |
North Fork Rancheria of Mono Indians | Minimum | ||
Development and Management Agreements, Native American [Line Items] | ||
Number of slot machines | Slot_Machines | 2,000 | |
Estimated costs for Native American development projects | $ 250,000 | |
Estimated period to begin construction | 18 months | |
Successful project completion | 65.00% | |
North Fork Rancheria of Mono Indians | Maximum | ||
Development and Management Agreements, Native American [Line Items] | ||
Number of slot machines | Slot_Machines | 2,500 | |
Estimated costs for Native American development projects | $ 300,000 | |
Estimated period to begin construction | 30 months | |
Successful project completion | 75.00% | |
North Fork Rancheria of Mono Indians | Land Held for Development | ||
Development and Management Agreements, Native American [Line Items] | ||
Area of land | a | 305 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Rewards Program liability | $ 20,903 | $ 20,654 |
Advance deposits and future wagers | 19,025 | 18,624 |
Unpaid wagers, outstanding chips and other customer-related liabilities | 15,753 | 19,640 |
Accrued payroll and related | 43,684 | 55,448 |
Accrued gaming and related | 24,096 | 22,221 |
Construction payables and equipment purchase accruals | 86,675 | 108,855 |
Operating lease liabilities, current portion | 3,976 | 0 |
Other | 23,380 | 21,032 |
Total | $ 237,492 | $ 266,474 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ (33,906) | $ (33,894) |
Total long-term debt, net | 2,931,901 | 2,821,465 |
Station Casinos LLC | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,965,807 | 2,855,359 |
Current portion of long-term debt | (33,906) | (33,894) |
Total long-term debt, net | 2,931,901 | 2,821,465 |
Station Casinos LLC | Line of Credit | Term Loan B Facility, Due June 8, 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,773,552 | 1,775,951 |
Unamortized discount and deferred issuance costs | $ 41,000 | $ 43,300 |
Effective interest rate (as a percent) | 5.00% | 5.03% |
Station Casinos LLC | Line of Credit | Term Loan A Facility, Due March 8, 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 193,745 | $ 0 |
Unamortized discount and deferred issuance costs | $ 3,200 | |
Effective interest rate (as a percent) | 4.25% | |
Station Casinos LLC | Line of Credit | Term Loan A Facility, Due June 8, 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 54,326 | 251,448 |
Unamortized discount and deferred issuance costs | $ 800 | $ 4,000 |
Effective interest rate (as a percent) | 4.50% | 4.53% |
Station Casinos LLC | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 361,300 | |
Station Casinos LLC | Revolving Credit Facility | Revolving Credit Facility, Due March 8, 2023 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 361,277 | $ 0 |
Effective interest rate (as a percent) | 4.25% | |
Station Casinos LLC | Revolving Credit Facility | Revolving Credit Facility, Due June 8, 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 245,000 |
Effective interest rate (as a percent) | 0.00% | 4.54% |
Station Casinos LLC | Senior Notes | 5.00% Senior Notes, Due October 1, 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 544,464 | $ 544,286 |
Unamortized discount and deferred issuance costs | $ 5,500 | $ 5,700 |
Stated interest rate (as a percent) | 5.00% | 5.00% |
Station Casinos LLC | Other Long-term Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 38,443 | $ 38,674 |
Weighted average interest rate (as a percent) | 6.62% | 6.69% |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)Rate | Mar. 31, 2018USD ($) | Feb. 08, 2019USD ($)basis | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||||
Debt issuance costs incurred | $ 3,300 | |||
Loss on modification of debt | 302 | $ 0 | ||
Station Casinos LLC | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 2,965,807 | $ 2,855,359 | ||
Station Casinos LLC | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Increase in maximum borrowing capacity | $ 115,000 | |||
Maximum borrowing capacity | $ 896,000 | |||
Reduction of interest rate | basis | 25 | |||
Borrowing availability, amount | 497,600 | |||
Long-term debt | 361,300 | |||
Outstanding letters of credit and similar obligations, amount | 37,100 | |||
Station Casinos LLC | Revolving Credit Facility | Revolving Credit Facility, Due March 8, 2023 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 361,277 | $ 0 | ||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest coverage ratio | 2.50 | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Maximum | First Period | ||||
Debt Instrument [Line Items] | ||||
Consolidated total leverage ratio | 6.50 | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Maximum | Last Period | ||||
Debt Instrument [Line Items] | ||||
Consolidated total leverage ratio | 5.25 | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 1.50% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 1.75% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 0.50% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 0.75% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 1.75% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 2.00% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 0.75% | |||
Station Casinos LLC | Line of Credit and Revolving Credit Facility | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | Rate | 1.00% |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Change in fair value of derivative instruments | $ (6,638) | $ 15,803 | |
Interest Rate Swap | Interest expense, net | |||
Derivative [Line Items] | |||
Reclassification adjustment from AOCI on derivatives | 700 | 700 | |
Interest Rate Swap | Not Designated as Hedging Instrument | Change in fair value of derivative instruments | |||
Derivative [Line Items] | |||
Change in fair value of derivative instruments | (6,638) | $ 15,803 | |
Interest Rate Swap | Not Designated as Hedging Instrument | Prepaid expenses and other current assets | |||
Derivative [Line Items] | |||
Fair value of derivative instruments | 4,159 | $ 8,334 | |
Interest Rate Swap | Not Designated as Hedging Instrument | Other assets, net | |||
Derivative [Line Items] | |||
Fair value of derivative instruments | $ 9,167 | $ 15,611 | |
Station Casinos LLC | Interest Rate Swap | Not Designated as Hedging Instrument | London Interbank Offered Rate (LIBOR) | |||
Derivative [Line Items] | |||
Term of contract | 1 year | ||
Term of variable interest rate received | 1 month | ||
Notional amount | $ 1,500,000 | ||
Termination value | 14,300 | ||
Amount of debt hedged | $ 1,500,000 | ||
Effective fixed interest rate of debt hedged | 3.96% | ||
Cumulative deferred gain (prior to dedesignation) | $ 3,400 | ||
Estimated deferred gain expected to be reclassified into earnings | $ 2,800 | ||
Station Casinos LLC | Interest Rate Swap | Not Designated as Hedging Instrument | London Interbank Offered Rate (LIBOR) | July 2019 | |||
Derivative [Line Items] | |||
Average fixed interest rate paid | 1.46% | ||
Station Casinos LLC | Interest Rate Swap | Not Designated as Hedging Instrument | London Interbank Offered Rate (LIBOR) | July 2021 | |||
Derivative [Line Items] | |||
Average fixed interest rate paid | 1.94% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Interest Rate Swap | Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 13,326,000 | $ 23,945,000 |
Financial liabilities | 0 | 0 |
Interest Rate Swap | Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 0 | 0 |
Interest Rate Swap | Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 13,326,000 | 23,945,000 |
Interest Rate Swap | Recurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 0 | 0 |
Station Casinos LLC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate carrying amount of long-term debt | 2,965,807,000 | 2,855,359,000 |
Station Casinos LLC | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate fair value of long-term debt | $ 2,984,000,000 | $ 2,766,000,000 |
Stockholders' Equity Narrative
Stockholders' Equity Narrative (Details) - $ / shares | Jun. 28, 2019 | Jun. 14, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Class of Stock [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | |||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Dividends declared per common share (in dollars per share) | $ 0.10 | ||||
Dividends payable, date declared | Apr. 30, 2019 | ||||
Dividends payable, date of record | Jun. 14, 2019 | ||||
Dividends payable, date to be paid | Jun. 28, 2019 | ||||
Distributions declared per LLC Unit (in dollars per unit) | $ 0.10 |
Stockholders' Equity - AOCI (De
Stockholders' Equity - AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances, December 31, 2018 | $ 1,083 | |
Balances, March 31, 2019 | 641 | |
Unrealized gain on interest rate swaps | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances, December 31, 2018 | 1,279 | |
Amounts reclassified from accumulated other comprehensive income (loss) into income | (444) | |
Net current-period other comprehensive loss | (444) | |
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | 2 | |
Balances, March 31, 2019 | 837 | |
Unrecognized pension liability | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances, December 31, 2018 | (196) | |
Amounts reclassified from accumulated other comprehensive income (loss) into income | 0 | |
Net current-period other comprehensive loss | 0 | |
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | 0 | |
Balances, March 31, 2019 | (196) | |
Accumulated other comprehensive income | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances, December 31, 2018 | 1,083 | |
Amounts reclassified from accumulated other comprehensive income (loss) into income | (444) | |
Net current-period other comprehensive loss | (444) | |
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | 2 | $ 0 |
Balances, March 31, 2019 | $ 641 |
Stockholders' Equity - Changes
Stockholders' Equity - Changes in ownership of Station Holdco LLC (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Changes in ownership of Station Holdco LLC [Line Items] | ||
Net income attributable to Red Rock Resorts, Inc. | $ 11,323 | $ 51,180 |
Red Rock Resorts, Inc. stockholders' equity | ||
Changes in ownership of Station Holdco LLC [Line Items] | ||
Net income attributable to Red Rock Resorts, Inc. | 11,323 | 51,180 |
Exchanges of noncontrolling interests for Class A common stock | 0 | 1,891 |
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco | (2,554) | (1,095) |
Net transfers (to) from noncontrolling interests | (2,554) | 796 |
Change from net income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests | $ 8,769 | $ 51,976 |
Share-based Compensation Awards
Share-based Compensation Awards Under Equity Incentive Plan (Details) - Class A common stock | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Restricted stock | |
Restricted Class A Common Stock | |
Restricted stock options, balance at beginning of the period (in shares) | shares | 373,764 |
Restricted stock options, granted in period (in shares) | shares | 445,339 |
Restricted stock options, vested in period (in shares) | shares | (46,027) |
Restricted stock options, forfeited in period (in shares) | shares | (21,291) |
Restricted stock options, balance at end of the period (in shares) | shares | 751,785 |
Weighted-average grant date fair value | |
Weighted average grant date fair value, restricted stock options balance at the beginning of the period (in usd per share) | $ / shares | $ 26.09 |
Weighted average grant date fair value, restricted stock options granted (in usd per share) | $ / shares | 27.41 |
Weighted average grant date fair value, restricted stock options vested (in usd per share) | $ / shares | 26.49 |
Weighted average grant date fair value, restricted stock options forfeited or expired (in usd per share | $ / shares | 30.92 |
Weighted average grant date fair value, restricted stock options balance at the end of the period (in usd per share) | $ / shares | $ 26.71 |
Employee stock option | |
Stock Options | |
Options, balance at beginning of the period (in shares) | shares | 5,166,565 |
Options, granted in period (in shares) | shares | 3,205,472 |
Options, vested in period (in shares) | shares | (226,254) |
Options, forfeited or expired in period (in shares) | shares | (361,918) |
Options, balance at end of the period (in shares) | shares | 7,783,865 |
Weighted-average exercise price | |
Weighted average exercise price, options balance at beginning of the period (in usd per share) | $ / shares | $ 25.60 |
Weighted average exercise price, options granted in period (in usd per share) | $ / shares | 27.26 |
Weighted average exercise price, exercised in period (in usd per share) | $ / shares | 21.13 |
Weighted average exercise price, options forfeited or expired in period (in usd per share) | $ / shares | 27.23 |
Weighted average exercise price, options balance at end of the period (in usd per share) | $ / shares | $ 26.34 |
Share-based Compensation Narrat
Share-based Compensation Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 3,853 | $ 2,454 |
Compensation cost not yet recognized | $ 60,300 | |
Compensation cost not yet recognized, period for recognition | 3 years 3 months 15 days | |
Class A common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 11,585,479 | |
Number of shares available for grant (in shares) | 500,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Effective Income Tax Rate Reconciliation | |||
Effective income tax rate | 8.64% | 11.67% | |
Federal statutory income tax rate | 21.00% | ||
Income tax expense related to reduction of deferred tax assets | $ 3,600 | ||
Components of Deferred Tax Assets and Liabilities | |||
Deferred tax assets, valuation allowance | $ 38,400 | $ 40,000 | |
Tax Receivable Agreement Liability | |||
Realized tax benefits payable to related parties (as a percent of total realized tax benefits) | 85.00% | ||
Tax receivable agreement liability | $ 24,900 | 24,900 | |
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests for Class A common stock | 2,184 | ||
Deferred tax assets resulting from exchanges of noncontrolling interests for Class A common stock | 2,333 | ||
Tax receivable agreement liability adjustment | $ 0 | 16,873 | |
London Interbank Offered Rate (LIBOR) | |||
Tax Receivable Agreement Liability | |||
Late payments, basis spread on variable rate at which interest is accrued | 5.00% | ||
Amounts resulting from assignment of TRA rights and obligations to the Company | |||
Tax Receivable Agreement Liability | |||
Tax receivable agreement liability | (21,900) | ||
Tax receivable agreement liability adjustment | $ 16,900 | ||
Entities related to Frank J. Fertitta III and Lorenzo J Fertitta | |||
Tax Receivable Agreement Liability | |||
Tax receivable agreement liability | $ 9,000 | $ 9,000 |
Earnings Per Share Reconciliati
Earnings Per Share Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Income (Loss) Available to Common Stockholders, Diluted | ||
Net income | $ 20,284 | $ 82,130 |
Less: net income attributable to noncontrolling interests | (8,961) | (30,950) |
Net income attributable to Red Rock, basic | 11,323 | 51,180 |
Effect of dilutive securities | 7,077 | 24,306 |
Net income attributable to Red Rock, diluted | $ 18,400 | $ 75,486 |
Weighted Average Number of Shares Outstanding Reconciliation | ||
Weighted-average shares of Class A common stock outstanding, basic | 69,397 | 68,798 |
Effect of dilutive securities | 47,296 | 48,149 |
Weighted-average shares of Class A common stock outstanding, diluted | 116,693 | 116,947 |
Earnings Per Share Antidilutive
Earnings Per Share Antidilutive Shares Excluded from Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,849 | 2,145 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 506 | 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | ||
Lessee Disclosure [Abstract] | |||||
Operating lease right-of-use assets | $ 16,048 | $ 17,300 | |||
Operating lease liabilities, current portion | 3,976 | $ 0 | |||
Operating lease liabilities, noncurrent portion | 12,831 | ||||
Total operating lease liabilities | $ 16,807 | 17,300 | |||
Weighted-average remaining lease term - operating leases | 28 years 7 months 7 days | ||||
Weighted-average discount rate - operating leases | 5.40% | ||||
Operating cash flows from operating leases | $ 2,418 | ||||
Lease, Cost [Abstract] | |||||
Operating lease cost | 1,282 | ||||
Short-term lease cost | 1,814 | ||||
Variable lease cost | 2,645 | ||||
Total lease expense | 5,741 | ||||
Operating Lease Liabilities, Payments Due [Abstract] | |||||
Year one | [1] | 3,696 | |||
Year two | 3,793 | ||||
Year three | 2,196 | ||||
Year four | 879 | ||||
Year five | 473 | ||||
Thereafter | 43,603 | ||||
Total future lease payments | 54,640 | ||||
Less imputed interest | (37,833) | ||||
Total operating lease liabilities at March 31, 2019 | 16,807 | $ 17,300 | |||
Lessor Disclosure [Line Items] | |||||
Revenue from tenant leases | 5,700 | $ 6,000 | |||
Lessor, Operating Lease, Payments to be Received, Fiscal Year Maturity [Abstract] | |||||
Year one | [2] | 7,496 | |||
Year two | 8,630 | ||||
Year three | 7,395 | ||||
Year four | 5,307 | ||||
Year five | 4,160 | ||||
Thereafter | 13,118 | ||||
Total future lease payments to be received | $ 46,106 | ||||
Minimum | |||||
Lessor Disclosure [Line Items] | |||||
Lessor operating leases - term of contract | 1 year | ||||
Maximum | |||||
Lessor Disclosure [Line Items] | |||||
Lessor operating leases - term of contract | 20 years | ||||
[1] | Amount at March 31, 2019 represents lease payments for the remainder of the year. | ||||
[2] | Amount at March 31, 2019 represents minimum rentals to be received for the remainder of the year. |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | ||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 447,022 | $ 421,039 | |
Net income | 20,284 | 82,130 | |
Depreciation and amortization | 50,853 | 43,164 | |
Share-based compensation | 3,853 | 2,454 | |
Write-downs and other charges, net | 23,728 | 3,845 | |
Tax receivable agreement liability adjustment | 0 | (16,873) | |
Interest expense, net | 37,438 | 31,111 | |
Loss on modification of debt | 302 | 0 | |
Change in fair value of derivative instruments | 6,638 | (15,803) | |
Provision for income tax | 1,919 | 10,856 | |
Other adjustments to net income | 69 | (807) | |
Adjusted EBITDA | [1] | 145,084 | 140,077 |
Revenue from tenant leases | 5,700 | 6,000 | |
Casino | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 244,933 | 236,247 | |
Food and beverage | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 104,933 | 90,928 | |
Room | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 48,075 | 46,630 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 25,922 | 22,556 | |
Management fees | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 23,159 | 24,678 | |
Las Vegas Operations | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Net revenues | $ 422,370 | 395,170 | |
Adjusted EBITDA | [1] | 130,478 | 125,877 |
Las Vegas Operations | Casino | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 244,933 | 236,247 | |
Las Vegas Operations | Food and beverage | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 104,933 | 90,928 | |
Las Vegas Operations | Room | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 48,075 | 46,630 | |
Las Vegas Operations | Other | |||
Segment Reporting Information [Line Items] | |||
Net revenues | [2] | 24,266 | 21,192 |
Las Vegas Operations | Management fees | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 163 | 173 | |
Native American Management | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Adjusted EBITDA | [1] | $ 21,476 | 22,094 |
Native American Management | Management fees | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 22,996 | 24,505 | |
Reportable Segment | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 445,366 | 419,675 | |
Adjusted EBITDA | [1] | 151,954 | 147,971 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA | [1] | (6,870) | (7,894) |
Corporate and Other | Other | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 1,656 | $ 1,364 | |
[1] | Adjusted EBITDA includes net income plus depreciation and amortization, share-based compensation, write-downs and other charges, net, including Palms redevelopment and preopening expenses, tax receivable agreement liability adjustment, interest expense, net, loss on modification of debt, change in fair value of derivative instruments, provision for income tax and other. | ||
[2] | Other revenue included revenue from tenant leases of $5.7 million and $6.0 million for the three months ended March 31, 2019 and 2018, respectively. Revenue from tenant leases is accounted for under the lease accounting guidance and does not represent revenue recognized from contracts with customers. |