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Table of Contents                    


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                    to                                     .

Commission file number 001-37754
______________________________________________________________
RED ROCK RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
47-5081182
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

1505 South Pavilion Center Drive, Las Vegas, Nevada 89135
(Address of principal executive offices, Zip Code)
(702495-3000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of each class
Trading symbol
Name of each exchange on which registered
Class A Common Stock, $.01 par value
RRR
NASDAQ Stock Market
Securities registered pursuant to Section 12(g) of the Act
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes     No 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes     No  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes     No 
As of June 28, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s Class A common stock held by non-affiliates (all persons other than executive officers or directors) was $1.5 billion, based on the closing price on that date as reported by the NASDAQ Stock Market LLC.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Class
 
Outstanding at February 14, 2020
Class A Common Stock, $0.01 par value
 
70,465,422
Class B Common Stock, $0.00001 par value
 
46,827,370

Documents Incorporated by Reference
Portions of the registrant’s definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year end of December 31, 2019.




Table of Contents                    


TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



  

2




Table of Contents                    


PART I
ITEM 1.
BUSINESS
Introduction
Red Rock Resorts, Inc. (“we,” “our,” “us,” “Red Rock” or the “Company”) is a holding company that owns an indirect equity interest in and manages Station Casinos LLC (“Station LLC”), through which we conduct all of our operations. Station LLC is a gaming, development and management company established in 1976 that develops and operates strategically-located casino and entertainment properties. Station LLC currently owns and operates ten major gaming and entertainment facilities and ten smaller casinos (three of which are 50% owned), offering approximately 20,400 slot machines, 375 table games and 5,000 hotel rooms in the Las Vegas regional market. In addition, Station LLC also manages Graton Resort & Casino in northern California on behalf of a Native American tribe.
We hold an indirect equity interest in Station LLC through our ownership of limited liability interests in Station Holdco LLC (“Station Holdco,” and such interests, “LLC Units”), which holds all of the economic interests in Station LLC. At December 31, 2019, we held 60.1% of the equity interests in Station Holdco. We operate and control all of the business and affairs of Station LLC and Station Holdco through our ownership of 100% of the voting interests in Station LLC and our designation as the sole managing member of both Station LLC and Station Holdco. Our only assets are our ownership interests in Station LLC and Station Holdco, other than cash and tax-related assets and liabilities. We have no operations outside of our management of Station LLC.
Our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K (the “Consolidated Financial Statements”) reflect the consolidation of Station LLC and its consolidated subsidiaries and Station Holdco. The financial position and results of operations attributable to LLC Units we do not own are reported separately as noncontrolling interest.
Our casino properties are conveniently located throughout the Las Vegas valley and provide our customers a wide variety of entertainment and dining options. Over 90% of the Las Vegas population is located within five miles of one of our gaming facilities. We provide friendly service and exceptional value in a comfortable environment. We believe we surpass our competitors in offering casino patrons the newest and most popular slot and video games featuring the latest technology. We also believe the high-quality entertainment experience we provide our customers differentiates us from our competitors.
Most of our major properties are master-planned for expansion, enabling us to incrementally expand our facilities as demand dictates. We also control seven highly desirable gaming-entitled development sites in Las Vegas and Reno, Nevada.
Our principal source of revenue and operating income is gaming, and our non-gaming offerings include restaurants, hotels and other entertainment amenities. Approximately 80% to 85% of our casino revenue is generated from slot play. The majority of our revenue is cash-based and as a result, fluctuations in our revenues have a direct impact on our cash flows from operations. Because our business is capital intensive, we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing and fund capital expenditures.
A significant portion of our business is dependent upon customers who live and/or work in the Las Vegas metropolitan area. Based on population and employment growth, the Las Vegas economy was one of the fastest growing economies in the United States from 2015 to 2019. Based on a recent U.S. Census Bureau release, Nevada was second among all states in percentage growth of population from July 2018 to July 2019. In addition, based on preliminary data for December 2019 from the U.S. Bureau of Labor Statistics, Las Vegas experienced a 2.5% year-over-year increase in employment to 1,048,500. This resulted in an unemployment rate of 3.5% which has declined from 14.1% in September 2010. Businesses and consumers in Las Vegas continue to increase their spending as evidenced by 77 consecutive months of year-over-year increases in taxable retail sales from July 2013 to November 2019. Home values have also improved significantly over the past several years with the median price of an existing single family home in Las Vegas up approximately 180% at December 2019 compared to January 2012, as reported by the Las Vegas Realtors®.
The Las Vegas economy continues to show growth in employment, taxable sales and home prices, and we believe these positive trends, along with new capital investment planned or underway in Las Vegas, provide a foundation for future growth in our business. Although our operating results over the past few years have benefited from the favorable local economic conditions, we cannot be sure if, or how long, these favorable market conditions will persist or that they will continue to positively impact our results of operations.
Our principal executive offices are located at 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135. The telephone number for our executive offices is (702) 495-3000. We maintain a website at www.redrockresorts.com, the contents of which are expressly not incorporated by reference into this filing.

3




Table of Contents                    


Business Strategy
Our primary operating strategy emphasizes attracting and retaining customers, primarily Las Vegas residents and, to a lesser extent, out-of-town visitors. Our properties attract customers through:
convenient locations with best-in-class assets;
offering our customers the latest in slot and video poker technology;
a variety of non-gaming amenities such as hotel resorts, restaurants, bars and entertainment options;
focused marketing efforts targeting our extensive customer database;
innovative, frequent and high-profile promotional programs; and
convention business.
The Las Vegas regional market is very competitive, and we compete with both large hotel casinos in Las Vegas and smaller gaming-only establishments throughout the Las Vegas valley.
Provide a high quality, value-oriented gaming and entertainment experience. We are committed to providing a high-value entertainment experience for our guests, as our significant level of repeat visitors demand exceptional service, variety and quality in their overall experience. We offer a broad array of gaming options, including the most popular slot and video poker products, and the latest technological innovations in slots, table games and sports wagering. We believe that providing a wide variety of entertainment options is also a significant factor in attracting guests. In particular, we feature multiple dining options at all of our major properties, which is a primary motivation for casino visits. We are dedicated to ensuring a high level of guest satisfaction and loyalty by providing attentive guest service in a convenient, friendly and casual atmosphere. As part of our commitment to providing a high value entertainment experience and to stimulate visitation, we regularly refresh and enhance our gaming and non-gaming amenities.
Generate revenue growth through targeted marketing and promotional programs. Our significant advertising programs generate consistent brand awareness and promotional visibility. Our ability to advertise under a single brand across our portfolio also allows us to achieve material economies of scale. While we advertise through traditional media such as television, radio and newspaper to reach our core guests, we continue to expand our focus and spend on social, digital and mobile platforms to respond to the evolving methods through which guests receive information.
We employ an innovative marketing strategy that utilizes our frequent high-profile promotional programs to attract and retain guests, while also establishing and maintaining a high level of brand recognition. Through our analytical approach to promotional development, we are also able to optimize reinvestment in those guests who deliver stronger results. Our proprietary customer relationship management systems are highly attuned to how guests interact with our properties and products. This information allows us to focus on targeting guests based on their preferences.
We have installed new technology on all of our slot machines which will permit us to provide “on device” marketing, bonusing and guest communication, including real-time customized promotions and incentives. We believe that this investment in technology has resulted in an increase in guest loyalty and enhanced the value of our loyalty program. As we continue to introduce new features and brand titles for customized promotional incentives, the technology should continue to help drive participation in our my|Rewards Boarding Pass loyalty program.
Maximize business profitability. During our over 40-year history, we have developed a culture that focuses on operational excellence and cost management. We believe that this focus has contributed to adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins that compare favorably to our public peers over the past several years. Our internally developed proprietary systems and analytical tools provide us with the ability to closely monitor revenues and operational expenses and provide real-time information to management. Benchmarking across our properties also allows us to create and take advantage of best practices in all functional areas of our business. We believe our existing cost structure, which has low variable costs, can support significant incremental revenue growth while maximizing the flow through of revenue to Adjusted EBITDA.
Utilize flexible capital structure to drive growth and equity holder returns. We maintain a flexible capital structure that we believe will allow us to pursue a balance of new growth opportunities and a disciplined return of capital to our equity holders. We believe our scalable platform and extensive development and management expertise provide us the ability to build master-planned expansions, pursue acquisitions and/or seek new development opportunities in an effort to maximize equity holder returns.

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Employee Relations. Station LLC began as a family-run business in 1976 and has maintained close-knit relationships among our management, and we endeavor to instill this same sense of loyalty among our employees. Toward this end, we take a hands-on approach through active and direct involvement with employees at all levels. We believe we have very good employee relations. See “Risk Factors—Risks Related to Our Business—Union organization activities could disrupt our business by discouraging patrons from visiting our properties, causing labor disputes or work stoppages, and, if successful, could significantly increase our labor costs.
Native American projects. We currently provide management and development services to two Native American tribes using our expertise in developing and operating regional entertainment destinations.

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Organizational Structure
The following chart summarizes our organizational structure as of December 31, 2019. This chart is provided for illustrative purposes only and does not purport to represent all legal entities owned or controlled by us:
___________________________________________________________
(1)
Shares of Class A common stock and Class B common stock vote as a single class. Each outstanding share of Class A common stock is entitled to one vote; each outstanding share of Class B common stock that is held by a holder that, together with its affiliates, owned at least 30% of the outstanding LLC Units immediately following the consummation of the Company’s public offering in 2016 (the “IPO”) and, at the applicable record date, maintains direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock) is entitled to ten votes; and each other outstanding share of Class B common stock is entitled to one vote. The only holders of Class B common stock that satisfy the foregoing criteria are entities controlled by Frank J. Fertitta III, our Chairman of the Board and Chief Executive Officer, and Lorenzo J. Fertitta, our Vice Chairman of the Board. These entities are referred to herein as the “Fertitta Family Entities” or “Principal Equity Holders.”
(2)
“Continuing Owners” refers to the owners of LLC Units at December 31, 2019 who held such units prior to the Company’s IPO in May 2016.

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Properties
Set forth below is certain information at December 31, 2019 concerning our properties.
 
Hotel
Rooms
 
Slots (1)
 
Gaming
Tables (2)
 
Acreage
Las Vegas Properties
 
 
 
 
 
 
 
Red Rock
796

 
2,725

 
64

 
64

Green Valley Ranch
495

 
2,386

 
48

 
40

Palms (3)
1,363

 
1,456

 
55

 
37

Palace Station
575

 
1,680

 
51

 
30

Boulder Station
299

 
2,477

 
25

 
46

Texas Station
199

 
1,675

 
23

 
47

Sunset Station
457

 
2,084

 
36

 
80

Santa Fe Station
200

 
2,358

 
39

 
39

Fiesta Rancho
100

 
1,039

 
15

 
25

Fiesta Henderson
224

 
1,394

 
18

 
35

Wild Wild West
260

 
171

 

 
20

Wildfire Rancho

 
157

 

 
5

Wildfire Boulder

 
153

 

 
2

Wildfire Sunset

 
124

 

 
1

Wildfire Lake Mead

 
62

 

 
3

Wildfire Valley View

 
35

 

 

Wildfire Anthem

 
15

 

 

50% Owned Properties
 
 
 
 
 
 
 
Barley’s

 
191

 

 

The Greens

 
38

 

 

Wildfire Lanes

 
179

 

 
9

 
4,968

 
20,399

 
374

 
483

Managed Property
 
 
 
 
 
 
 
Graton Resort & Casino
200

 
3,350

 
131

 
254

 
5,168

 
23,749

 
505

 
737

__________________________________________________________________________
(1)
Includes slot and video poker machines.
(2)
Generally includes blackjack (“21”), craps, roulette, pai gow, baccarat, let it ride and three-card poker.
(3)
Hotel rooms include 599 condominium units.
Red Rock
Red Rock opened in 2006 and is strategically located at the intersection of Interstate 215 and Charleston Boulevard in the Summerlin master-planned community in Las Vegas, Nevada. Red Rock is adjacent to Downtown Summerlin, a 1.6 million square foot outdoor shopping, dining and entertainment center; City National Arena, which features two National Hockey League-sized ice sheets for use by both the Vegas Golden Knights team and the public; and Las Vegas Ballpark, which opened in April 2019 as the new home for the Las Vegas Aviators professional Triple-A baseball team. The AAA Four Diamond resort features an elegant desert oasis theme with a contemporary design featuring luxury amenities. This resort offers six styles of suites, including one-of-a-kind custom villas and penthouse suites, in addition to standard guest rooms. Additional non-gaming amenities include nine full-service restaurants, a 16-screen movie theater complex, approximately 94,000 square feet of meeting and convention space, a full-service spa, a 72-lane bowling center, a Kid’s Quest child care facility and a gift shop. Red Rock’s Restaurant Row links, via a pedestrian walkway, five of our premier restaurants including Terra Rossa, which opened in August 2019, Blue Ribbon Sushi Bar & Grill, which opened in January 2019, Yard House, Hearthstone Kitchen & Cellar, and Lucille’s Smokehouse Bar-B-Que. Other full-service restaurants at Red Rock include T-bones Chophouse, 8 Noodle Bar, Grand Café, Feast Buffet (which features live-action themed buffets offering options that include Mexican, Italian, barbecue, American and Chinese cuisines) and the Sandbar pool café. Red Rock features numerous bars and lounges including Rocks Lounge, Onyx Bar, Sandbar and Lucky Bar. Red Rock also offers a variety of quick-serve restaurants.

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Green Valley Ranch
Green Valley Ranch opened in 2001 and is strategically located at the intersection of Interstate 215 and Green Valley Parkway in Henderson, Nevada. Green Valley Ranch is approximately five minutes from McCarran International Airport and seven minutes from the Las Vegas Strip. Green Valley Ranch was designed to complement the Green Valley master-planned community. This Mediterranean style AAA Four Diamond resort features standard guest rooms and suites, eight full-service restaurants, a 4,200-square-foot non-gaming arcade, a European Spa with outdoor pools, a 10-screen movie theater complex, a Kid’s Quest child care facility, gift shop and approximately 65,000 square feet of meeting and convention space which includes the Grand Events Center and El Cielo Ballroom. Green Valley Ranch also offers an eight-acre outdoor complex featuring private poolside cabanas and a contemporary poolside bar and grill. Green Valley Ranch’s full-service restaurants include Hank’s Fine Steaks & Martinis, Borracha Mexican Cantina, Bottiglia Cucina & Enoteca Italian restaurant, Tides Seafood & Sushi Bar, Pizza Rock by Tony Gemignani, Grand Café, Feast Buffet and the Turf Grill. Guests can also enjoy the Drop Bar, a centerpiece of the casino, the Lobby Bar, which is open to the lobby entrance and overlooks the pool area, and the Sip Bar. Green Valley Ranch also offers a variety of quick-serve restaurants.
Palms
We purchased Palms in 2016. Palms is strategically located just west of the center of the Las Vegas Strip off Interstate 15 on Flamingo Road. In September 2019, Palms completed a $690 million redevelopment project, which repositioned and reimagined the property. The redevelopment included a completely renovated casino floor featuring the addition of approximately 300 slot machines and 16 table games; new slot and table games high limit rooms; 33,000 square feet of completely renovated meeting and convention space; a new hotel front desk registration and VIP registration and reception areas; 282 fully redesigned and renovated premium hotel rooms and one-of-a-kind luxury suites, as well as construction of 60 new hotel rooms in the Fantasy Tower; a casino connector integrating the adjacent 599-room Palms Place tower directly into the newly expanded casino floor; an indoor connector to the pre-existing self-park garage with ingress directly into the newly expanded casino floor; and an all-new exterior look, including a new marquee, state-of-the-art digital signage on the hotel tower exterior, a modernized porte cochere, and new exterior facades and lush landscaping.
In addition, the redevelopment added several new full-service restaurants and dining options, including: Scotch 80 Prime, a high-end steakhouse; Vetri Cucina, an Italian restaurant with award-winning chef Marc Vetri; Shark, a seafood restaurant with celebrity chef Bobby Flay; Mabel’s, an American barbeque restaurant with celebrity chef Michael Symon featuring within the restaurant Sara’s, a 45-seat supper club “Meateasy”; Greene St. Kitchen, a New York-inspired eatery in partnership with Clique Hospitality Group; Tim Ho Wan, a Michelin-Star dim sum restaurant from Hong Kong; A.Y.C.E. (“All You Can Eat”) Buffet; Send Noodles, a noodle bar restaurant; Lucky Penny, a 24-hour café; Apex, a rooftop lounge and bar; and Unknown, an iconic center bar featuring signature art pieces from world-renowned artist Damien Hirst. In addition to its many full-service restaurants, Palms also offers a variety of quick-serve restaurants.
Apart from these new venues and upgrades, Palms offers other non-gaming amenities that were upgraded in the redevelopment, including: a fully upgraded 14-screen Brendan Theatres luxury movieplex; a resort pool; a complete renovation of the 2,500 seat Pearl Concert Theater in partnership with Live Nation; a full-service and state-of-the art 8,000 square foot recording studio, and a new wellness spa and salon.
Palace Station
Palace Station opened in 1976 and is strategically located at the intersection of Sahara Avenue and Interstate 15, one of Las Vegas’ most heavily traveled areas. Palace Station is a short distance from McCarran International Airport and very close to major attractions on the Las Vegas Strip and in downtown Las Vegas. In December 2018, Palace Station completed a $192.6 million redevelopment project, which added 178,000 square feet of gaming and entertainment space to the property, along with a refreshed exterior look. Highlights of the property include: a fully renovated and expanded gaming floor; 575 updated hotel rooms and suites; a signature restaurant, San Francisco-based Boathouse Asian Eatery; a 14,000 square foot, state-of-the-art Feast Buffet; a new resort-style pool area; a state-of-the-art bingo room; a fully renovated poker room; a fully renovated race and sports book; a nine-screen Regal Cinnebarre luxury movieplex; and two LED marquee signs.
In addition to those new venues and upgrades, Palace Station offers other non-gaming amenities including four other full-service restaurants (Charcoal Room steakhouse, Brass Fork Café, The Oyster Bar and Little Tony’s Italian restaurant), three additional bars, an approximately 20,000-square-foot meeting and convention center and a gift shop. In addition to its many full-service restaurants, Palace Station also offers a variety of quick-serve restaurants.
Boulder Station
Boulder Station opened in 1994 and is strategically located at the intersection of Boulder Highway and Interstate 515. Boulder Station is located approximately four miles east of the Las Vegas Strip and approximately four miles southeast of downtown Las Vegas. Boulder Station features a turn-of-the-20th-century railroad station theme with non-gaming amenities including five full-service restaurants, a 750-seat entertainment lounge, four additional bars, an 11-screen movie theater

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complex, a Kid’s Quest child care facility, a swimming pool, a non-gaming video arcade and a gift shop. Boulder Station’s restaurants, which offer a variety of enjoyable meals at reasonable prices, include Grand Café, Feast Buffet, The Broiler Steakhouse, Pasta Cucina and Guadalajara Mexican restaurant. Boulder Station also offers a variety of quick-serve restaurants.
Texas Station
Texas Station opened in 1995 and is strategically located at the intersection of Lake Mead Boulevard and Rancho Drive in North Las Vegas. Texas Station features a friendly Texas atmosphere, highlighted by distinctive early Texas architecture with non-gaming amenities including four full-service restaurants, a Kid’s Quest child care facility, a 300-seat entertainment lounge, a 2,000-seat event center, six additional bars, an 18-screen movie theater complex, a swimming pool, two non-gaming video arcades, a gift shop, a 60-lane bowling center and approximately 40,000 square feet of meeting and banquet space. Texas Station’s full-service restaurants offer a variety of enjoyable meals at reasonable prices, and include Grand Café, Beaumont’s Southern Kitchen, Feast Buffet and The Oyster Bar. Guests also enjoy the unique features of several bars and lounges including the Sports Bar, Martini Bar, Whiskey Bar, Garage Bar, Splitz Bar and South Padre Lounge. Texas Station also offers a variety of quick-serve restaurants.
Sunset Station
Sunset Station opened in 1997 and is strategically located at the intersection of Interstate 515 and Sunset Road. Situated in a highly concentrated commercial corridor along Interstate 515, Sunset Station has prominent visibility from the freeway and the Sunset commercial corridor. Sunset Station is located approximately 4.5 miles east of McCarran International Airport and approximately 5.5 miles southeast of Boulder Station. Sunset Station features a Spanish/Mediterranean style theme. Additional non-gaming amenities include five full-service restaurants, approximately 13,000 square feet of meeting space, a 500-seat entertainment lounge, a 5,000-seat outdoor amphitheater, six additional bars, a gift shop, a non-gaming video arcade, a 13-screen luxury seating movie theater complex, a 72-lane bowling center, a Kid’s Quest child care facility and a swimming pool. Sunset Station’s full-service restaurants, which include Grand Café, Sonoma Cellar Steakhouse, Pasta Cucina, Feast Buffet and the Oyster Bar, offer a variety of enjoyable meals at reasonable prices. Guests also enjoy the Gaudi Bar, a centerpiece of the casino featuring over 8,000 square feet of stained glass. Sunset Station also offers a variety of quick-serve restaurants.
Santa Fe Station
We purchased Santa Fe Station in 2000 and subsequently refurbished and expanded the facility. Santa Fe Station is strategically located at the intersection of U.S. Highway 95 and Rancho Drive, approximately five miles northwest of Texas Station. Santa Fe Station features non-gaming amenities including five full-service restaurants, a gift shop, a non-gaming video arcade, a swimming pool, a 500-seat entertainment lounge, four additional bars and grills, a 60-lane bowling center, a 16-screen luxury seating movie theater complex, a Kid’s Quest child care facility and over 14,000 square feet of meeting and banquet facilities. Santa Fe Station’s full-service restaurants include The Charcoal Room, Leticia’s Cocina, Grand Café, Feast Buffet and the Oyster Bar. Guests also enjoy 4949 Lounge, a centerpiece of the casino. Santa Fe Station also offers a variety of quick-serve restaurants.
Fiesta Rancho
We purchased Fiesta Rancho in 2001. Fiesta Rancho is strategically located at the intersection of Lake Mead Boulevard and Rancho Drive in North Las Vegas across from Texas Station. Fiesta Rancho features non-gaming amenities including full-service restaurants, a gift shop, a non-gaming video arcade, a swimming pool, a 700-seat entertainment lounge, a regulation-size ice skating rink and several additional bars, including the Cabo Lounge, Venom Bar and the Sports Bar. Fiesta Rancho’s full-service restaurants include Denny’s and the Festival Buffet. Fiesta Rancho also offers a variety of quick-serve restaurants.
Fiesta Henderson
We purchased Fiesta Henderson in 2001 and subsequently refurbished and expanded the facility. Fiesta Henderson is strategically located at the intersection of Interstate 215 and Interstate 515 in Henderson, Nevada, approximately three miles southeast of Sunset Station. Fiesta Henderson features non-gaming amenities including four full-service restaurants, a 12-screen movie theater complex, a gift shop, a swimming pool, four bars and lounges and meeting space. Fiesta Henderson’s full-service restaurants include Fuego Steakhouse, Café Fiesta, Leticia’s Cocina and the Festival Buffet. Fiesta Henderson also offers a variety of quick-serve restaurants.
Wild Wild West
We opened Wild Wild West in 1998. Wild Wild West is strategically located on Tropicana Avenue immediately adjacent to Interstate 15. Wild Wild West’s non-gaming amenities include a hotel, a full-service restaurant, a bar, a gift shop and a truck plaza.

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Wildfire Rancho
We purchased Wildfire Rancho in 2003. Wildfire Rancho is located on Rancho Drive across from Texas Station. Wildfire Rancho’s non-gaming amenities include a lounge, outdoor patio and quick-serve food offerings.
Wildfire Boulder and Wildfire Sunset
We purchased Wildfire Boulder and Wildfire Sunset in 2004. Both properties are located in Henderson, Nevada, and offer non-gaming amenities which include a full-service restaurant and a bar. Wildfire Boulder is located approximately seven miles southeast of Fiesta Henderson. Wildfire Sunset is located next to Sunset Station.
Wildfire Lake Mead
We purchased Wildfire Lake Mead in 2006. Wildfire Lake Mead is located in Henderson, Nevada, and features a sports lounge, a bar and quick-serve food offerings.
Wildfire Valley View and Wildfire Anthem
We purchased Wildfire Valley View and Wildfire Anthem in 2013. Wildfire Valley View is located in Las Vegas and Wildfire Anthem is located in Henderson, Nevada. Non-gaming amenities offered by Wildfire Valley View and Wildfire Anthem include a bar and quick-serve food offerings.
Barley’s, The Greens and Wildfire Lanes
We own a 50% interest in three smaller properties in Henderson, Nevada including Barley’s, a casino and brew pub, The Greens, a restaurant and lounge, and Wildfire Lanes, which features a full-service restaurant, a bar and an 18-lane bowling center.
Graton Resort & Casino
We manage Graton Resort & Casino (“Graton Resort”) in northern California, which opened in November 2013, on behalf of the Federated Indians of Graton Rancheria, a federally recognized Native American tribe. Graton Resort is located just west of U.S. Highway 101 near Rohnert Park, California, approximately 43 miles north of San Francisco. It is the largest gaming and entertainment facility in the Bay Area. Graton Resort offers various dining options including four full-service restaurants and eight fast-casual restaurants, 200 hotel rooms, meeting and convention space, a spa, a resort-style pool, a lobby bar and additional casino space. The management agreement has a term of seven years from the opening date and expires November 2020. We currently receive a management fee of 27% of Graton Resort’s net income as defined in the management agreement.
Developable Land
We own approximately 323 acres of developable land comprised of seven strategically-located parcels in Las Vegas and Reno, Nevada, each of which is zoned for casino gaming and other commercial uses. We also own two additional development sites that are currently for sale. Following is a description of such parcels of land held for development or sale:
Land Held for Development
Durango/I-215: We own approximately 71 acres located at the intersection of Durango Road and Interstate 215 in the southwestern area of the Las Vegas valley. The site has excellent visibility and access from Interstate 215. As a result of gaming and land use restrictions, there are no major casino sites, other than those owned by us, within approximately five miles of this site.
Wild Wild West: We own approximately 96 acres of land located at the intersection of Tropicana Boulevard and Interstate 15, less than one-half mile from the Las Vegas strip. This parcel has excellent visibility and access from Interstate 15, on which approximately 300,000 cars per day pass by the site. Included in this parcel are the 20 acres on which Wild Wild West is located.
Flamingo/I-215: We own approximately 58 acres located between Flamingo Road and Interstate 215 in the master-planned community of Summerlin in Las Vegas. The site has excellent visibility and access from Interstate 215.
Via Inspirada/Bicentennial Parkway: We own approximately 45 acres located on Via Inspirada near Bicentennial Parkway in the Las Vegas valley, approximately six miles southwest of Green Valley Ranch. This property is the only casino gaming-entitled property in the master-planned community of Inspirada.
Skye Canyon: We own approximately 40 acres in northwestern Las Vegas off of U.S. Highway 95 approximately seven miles northwest of Santa Fe Station.

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Boulder Highway: We own approximately five acres at the intersection of Boulder Highway and Oakey Boulevard approximately 1.5 miles southeast of downtown Las Vegas. This property has grandfathered gaming entitlements that predate room and other amenity requirements, which creates greater flexibility with respect to the potential development of this site.
South Virginia Street/I-580 (Reno): We own approximately eight acres on South Virginia Street near Interstate 580, directly across from the Reno-Sparks Convention Center.
Land Held for Sale
Mt. Rose Property (Reno): We own approximately 88 acres at the intersection of Mt. Rose Highway and South Virginia Street in Reno, Nevada.
Cactus Avenue: We own approximately 57 acres near the intersection of Cactus Avenue and Las Vegas Boulevard, approximately six miles south of the Las Vegas strip.
From time to time we may acquire additional parcels or sell portions of our existing sites that are not necessary to the development of additional gaming facilities.
Native American Development
We have entered into development and management agreements with the North Fork Rancheria of Mono Indians (the “Mono”), a federally recognized Native American tribe located near Fresno, California, under which we will assist the Mono in developing and operating a gaming and entertainment facility (the “North Fork Project”) to be located on a 305-acre site (the “North Fork Site”) located adjacent to U.S. Highway 99 north of the city of Madera in Madera County, California. The North Fork Site was taken into trust for the benefit of the Mono by the United States Department of the Interior in February 2013.
We will receive a development fee of 4% of the costs of construction (as defined in the development agreement) for our development services, which will be paid upon the commencement of gaming operations at the facility. The management agreement provides for a management fee of 30% of the facility’s net income. As currently contemplated, the North Fork Project is expected to include approximately 2,000 slot machines, approximately 40 table games and several restaurants. The management agreement and the development agreement have a term of seven years from the opening of the facility.
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 National Indian Gaming Commission (“NIGC”).
The development of the North Fork Project is subject to several ongoing legal challenges, the receipt of required regulatory approvals and financing. There can be no assurance that the North Fork Project will be successfully completed nor that future events and circumstances will not change our estimates of the timing, scope, and potential for successful completion or that any such changes will not be material. There can be no assurance that we will recover all of our investment in the North Fork Project even if it is successfully completed and opened for business. See Note 6 to the Consolidated Financial Statements for additional information about the North Fork Project.
Intellectual Property
We use a variety of trade names, service marks, trademarks, patents and copyrights in our operations and believe that we have all the licenses necessary to conduct our continuing operations. We have registered several service marks, trademarks, patents and copyrights with the United States Patent and Trademark Office or otherwise acquired the licenses to use those which are material to conduct our business. We file copyright applications to protect our creative artworks, which are often featured in property branding, as well as our distinctive website content.
Seasonality
Our cash flows from operating activities are somewhat seasonal in nature. Our operating results are traditionally strongest in the fourth quarter and weakest during the third quarter.
Competition
Our casino properties face competition from all other casinos and hotels in the Las Vegas area, including to some degree, from each other. We compete with other nonrestricted casino/hotels, as well as restricted gaming locations, by focusing on repeat customers and attracting these customers through innovative marketing programs. Our value-oriented, high-quality approach is designed to generate repeat business. Additionally, our casino properties are strategically located and designed to permit convenient access and ample free parking, which are critical factors in attracting local visitors and repeat patrons.
At December 31, 2019, there were approximately 39 major gaming properties located on or near the Las Vegas Strip, 14 located in the downtown area and several located in other areas of Las Vegas. We also face competition from 144 nonrestricted gaming locations in the Clark County area primarily targeted to the local and repeat visitor markets. In addition,

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our casino properties face competition from restricted gaming locations (sites with 15 or fewer slot machines) in the greater Las Vegas area. At December 31, 2019, there were approximately 1,400 restricted gaming locations in Clark County with approximately 14,100 slot machines. Major additions, expansions or enhancements of existing properties or the construction of new properties by competitors could have a material adverse effect on our business.
The Nevada legislature enacted SB 208 in 1997. This legislation identified certain gaming enterprise districts wherein casino gaming development would be permitted throughout the Las Vegas valley and established more restrictive criteria for the establishment of new gaming enterprise districts. We believe the growth in gaming supply in the Las Vegas regional market has been, and will continue to be, limited by the provisions of SB 208.
To a lesser extent, we compete with gaming operations in other parts of the state of Nevada, such as Reno, Laughlin and Lake Tahoe, and other gaming markets throughout the United States and in other parts of the world, and with state sponsored lotteries, on- and off-track wagering on horse and other races, card rooms, online gaming and other forms of legalized gambling. The gaming industry also includes land-based casinos, dockside casinos, riverboat casinos, racetracks with slots and casinos located on Native American land. There is intense competition among companies in the gaming industry, some of which have significantly greater resources than we do. In May 2018, the United States Supreme Court overturned a law prohibiting states from legalizing sports wagering, which has resulted in a substantial expansion of sports gaming outside the state of Nevada. Several states are also considering legalizing casino gaming in designated areas. Legalized casino and sports gaming in various states and on Native American land could result in additional competition and could adversely affect our operations, particularly to the extent that such gaming is conducted in areas close to our operations. We also face competition from internet poker operators in Nevada. In addition, internet gaming has commenced in Nevada, New Jersey, Delaware and Pennsylvania, and legislation permitting internet gaming has been approved or proposed by a number of other states. Expansion of internet gaming in new or existing jurisdictions and on Native American land could result in additional competition for our Las Vegas operations and for the gaming facilities that we manage for Native American tribes.
Native American gaming in California, as it currently exists, has had little, if any, impact on our Las Vegas operations to date, although there are no assurances as to the future impact it may have. In total, the State of California has signed and ratified Tribal-State Compacts with 74 Native American tribes. At December 31, 2019, there were 63 Native American gaming facilities in operation in the State of California. These Native American tribes are allowed to operate slot machines, lottery games, and banked and percentage games (including “21”) on Native American lands. A banked game is one in which players compete against the licensed gaming establishment rather than against one another. A percentage game is one in which the house does not directly participate in the game, but collects a percentage of the amount of bets made, winnings collected, or the amount of money changing hands. It is not certain whether any additional expansion of Native American gaming in California will affect our Las Vegas operations given that visitors from California make up Nevada’s largest visitor market. Increased competition from Native American gaming in California may result in a decline in our revenues and may have a material adverse effect on our business.
Regulation and Licensing
In addition to gaming regulations, our business is subject to various federal, state and local laws and regulations of the United States and Nevada. These laws and regulations include, but are not limited to, restrictions concerning employment and immigration status, currency transactions, zoning and building codes, protection of human health and safety and the environment, marketing and advertising, privacy and telemarketing. Since we deal with significant amounts of cash in our operations we are subject to various reporting and anti-money laundering regulations. Any violations of anti-money laundering laws or any of the other laws or regulations to which we are subject could result in regulatory actions, fines, or other penalties. Any material changes, new laws or regulations or material differences in interpretations by courts or governmental authorities or material regulatory actions, fines, penalties or other actions could adversely affect our business and operating results.
Nevada Gaming Laws and Regulations
The ownership and operation of casino gaming facilities and the manufacture and distribution of gaming devices in Nevada are subject to the Nevada Gaming Control Act and the rules and regulations promulgated thereunder (collectively, the “Nevada Act”) and various local ordinances and regulations. Our gaming operations in Nevada are subject to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming Control Board (the “Nevada Board”), the Las Vegas City Council, the Clark County Liquor and Gaming Licensing Board (the “CCLGLB”), the North Las Vegas City Council, the Henderson City Council and certain other local regulatory agencies. The Nevada Commission, Nevada Board, Las Vegas City Council, CCLGLB, North Las Vegas City Council, Henderson City Council, and certain other local regulatory agencies are collectively referred to as the “Nevada Gaming Authorities”.
The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy which are concerned with, among other things: (i) the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; (ii) the establishment and maintenance of responsible accounting practices and procedures; (iii) the maintenance of effective controls over the financial practices of gaming licensees,

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including the establishment of minimum procedures for internal controls and the safeguarding of assets and revenues, providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) providing a source of state and local revenues through taxation and licensing fees. Changes in such laws, regulations and procedures could have an adverse effect on our gaming operations.
Our indirect subsidiaries that conduct gaming operations in Nevada are required to be licensed by the Nevada Gaming Authorities. The gaming licenses require the periodic payment of fees and taxes and are not transferable. NP Red Rock LLC, NP Boulder LLC, NP Palace LLC, NP Sunset LLC, NP Tropicana LLC, NP Fiesta LLC, NP Gold Rush LLC, NP Lake Mead, LLC, NP Magic Star LLC, NP Rancho LLC, NP Santa Fe LLC, NP Texas LLC, Station GVR Acquisition, LLC, SC SP 2 LLC, NP LML LLC, FP Holdings, L.P. and NP River Central LLC hold licenses to conduct nonrestricted gaming operations. NP Opco Holdings is registered as an intermediary company and is licensed as the sole member and manager of NP Opco LLC. NP Opco LLC is registered as an intermediary company, is licensed as the sole member and manager of NP Fiesta LLC, NP Lake Mead LLC, NP Santa Fe LLC, NP Gold Rush LLC, NP Magic Star LLC, NP Rancho LLC, NP Texas LLC, NP River Central LLC, and Station GVR Acquisition LLC. NP Opco LLC is found suitable as the sole member and manager of NP Green Valley LLC, SC SP Holdco LLC and NP LML LLC. Our ownership in NP Tropicana LLC is held through NP Landco Holdco LLC, which has a registration as an intermediary company and a license as the sole member of NP Tropicana LLC. Our ownership in SC SP 2 LLC is held through SC SP Holdco LLC which has a registration as an intermediary company and a license as a member and manager of SC SP 2 LLC. Town Center Amusements, Inc., a Limited Liability Company is licensed to conduct nonrestricted gaming operations at Barley’s. Greens Café, LLC is licensed to conduct nonrestricted gaming operations at The Greens, and Sunset GV, LLC is licensed to conduct nonrestricted gaming operations at Wildfire Lanes. A license to conduct “nonrestricted” operations is a license to conduct an operation of (i) at least 16 slot machines, (ii) any number of slot machines together with any other game, gaming device, race book or sports pool at one establishment, (iii) a slot machine route, (iv) an inter-casino linked system, or (v) a mobile gaming system. SC SP 4 LLC holds a restricted gaming license, which is a state gaming license to operate not more than 15 slot machines and no other gaming device, race book or sports pool. We are required to periodically submit detailed financial and operating reports to the Nevada Commission and provide any other information that the Nevada Commission may require. Substantially all material loans, leases, sales of securities and similar financing transactions by us and our licensed or registered subsidiaries must be reported to or approved by the Nevada Commission and/or the Nevada Board.
We have been found suitable to indirectly own the equity interests in our licensed and registered subsidiaries (the “Gaming Subsidiaries”) and we are registered by the Nevada Commission as a publicly traded corporation for purposes of the Nevada Act (a “Registered Corporation”). On September 26, 2019, the Nevada Commission issued its Fifth Revised Order of Registration for the Company that, among other things, reaffirmed our registration as a publicly traded corporation for the purposes of the Nevada Act (“Fifth Revised Order”). As a Registered Corporation, we are required to periodically submit detailed financial and operating reports to the Nevada Board and provide any other information the Nevada Board may require. No person may become a more than 5% stockholder or holder of more than a 5% interest in, or receive any percentage of gaming revenue from the Gaming Subsidiaries without first obtaining licenses, approvals and/or applicable waivers from the Nevada Gaming Authorities.
The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, a Registered Corporation or its licensed subsidiaries, in order to determine whether such individual is suitable or should be licensed as a business associate of a Registered Corporation or a gaming licensee. Officers, directors and certain key employees of our licensed subsidiaries must file applications and may be required to be licensed or found suitable by the Nevada Gaming Authorities. Our officers, directors and key employees who are actively and directly involved in gaming activities of our licensed subsidiaries may be required to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing for any cause that they deem reasonable. A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of suitability must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities and, in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in corporate position.
If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or unsuitable to continue to have a relationship with us or our licensed subsidiaries, the companies involved would have to sever all relationships with such person. In addition, the Nevada Commission may require our licensed subsidiaries to terminate the employment of any person who refuses to file the appropriate applications. Determinations of suitability or questions pertaining to licensing are not subject to judicial review in Nevada.
If it were determined that the Nevada Act was violated by a licensed subsidiary, the gaming licenses it holds could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, the Company, our licensed subsidiaries and the persons involved could be subject to substantial fines for each separate violation

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of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate our properties, and under certain circumstances, earnings generated during the supervisor’s appointment (except for the reasonable rental value of the premises) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of the gaming licenses of the licensed subsidiaries or the appointment of a supervisor could (and revocation of any such gaming license would) have a material adverse effect on our gaming operations.
Any beneficial owner of our equity securities, regardless of the number of shares owned, may be required to file an application, may be investigated, and may be required to obtain a finding of suitability if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. If the beneficial owner of our equity securities who must be found suitable is a corporation, partnership, limited partnership, limited liability company or trust, it must submit detailed business and financial information, including a list of its beneficial owners, to the Nevada Board. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.
The Nevada Act provides that persons who acquire beneficial ownership of more than 5% of the voting or non-voting securities of a Registered Corporation must report the acquisition to the Nevada Commission. The Nevada Act also requires that beneficial owners of more than 10% of the voting securities of a Registered Corporation must apply to the Nevada Commission for a finding of suitability within thirty days after the Chair of the Nevada Board mails the written notice requiring such filing. An “institutional investor,” as defined in the Nevada Commission’s regulations, which acquires beneficial ownership of more than 10%, but not more than 25%, of our voting securities may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only. An institutional investor that has obtained a waiver may, in certain circumstances, hold up to 29% of our voting securities and maintain its waiver for a limited period of time. An institutional investor shall not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of our board of directors, any change in our corporate charter, bylaws, management policies or our operations, or any of our gaming affiliates, or any other action which the Nevada Commission finds to be inconsistent with holding our voting securities for investment purposes only. Activities which are not deemed to be inconsistent with holding voting securities for investment purposes only include: (i) voting on all matters voted on by stockholders; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in our management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent.
Any person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Nevada Commission, or the Chair of the Nevada Board, may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any equity holder who is found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common equity of a Registered Corporation beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. We will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be an equity holder or to have any other relationship with us or our licensed or registered subsidiaries, we (i) pay that person any dividend or interest upon our securities, (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pay remuneration in any form to that person for services rendered or otherwise, or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish his securities including, if necessary, the immediate purchase of said securities for the price specified by the relevant gaming authority or, if no such price is specified, the fair market value as determined by our board of directors. The purchase may be made in cash, notes that bear interest at the applicable federal rate or a combination of notes and cash. Additionally, the CCLGLB has the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming licensee.
The Nevada Commission may, in its discretion, require the holder of any debt security of a Registered Corporation to file applications, be investigated and be found suitable to own the debt security of a Registered Corporation if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the Registered Corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by such unsuitable person in connection with such securities; (iii) pays the unsuitable person remuneration in any form; or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction.
We are required to maintain a current membership interest ledger in Nevada, which may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. Failure to make such disclosure may

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be grounds for finding the record holder unsuitable. We are also required to render maximum assistance in determining the identity of the beneficial owner.
We may not make a public offering of our securities without the prior approval of the Nevada Commission if the securities or proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. On September 26, 2019, the Nevada Commission granted us prior approval, subject to certain conditions, to make public offerings for a period of three years (the “Shelf Approval”). The Shelf Approval also applies to any affiliated company wholly owned by us which is a publicly traded corporation or would thereby become a publicly traded corporation pursuant to a public offering. The Shelf Approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chair of the Nevada Board. If the Shelf Approval is rescinded for any reason, it could adversely impact our capital structure and liquidity and limit our flexibility in planning for, or reacting to, changes in our business and industry. The Shelf Approval does not constitute a finding, recommendation or approval by any of the Nevada Gaming Authorities as to the accuracy or adequacy of any offering memorandum or the investment merits of the securities offered thereby. Any representation to the contrary is unlawful.
Changes in control of the Company through merger, consolidation, stock or asset acquisitions (including stock issuances in connection with restructuring transactions), management or consulting agreements, or any act or conduct by a person whereby such person obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and the Nevada Commission that they meet a variety of stringent standards prior to assuming control of such Registered Corporation. The Nevada Commission may also require controlling equity holders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.
The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Nevada corporate gaming licensees, and Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Nevada’s gaming industry and to further Nevada’s policy to: (i) assure the financial stability of corporate gaming licensees and their affiliates; (ii) preserve the beneficial aspects of conducting business in the corporate form; and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are, in certain circumstances, required from the Nevada Commission before a Registered Corporation can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated. The Nevada Act also requires prior approval of a plan of re-capitalization proposed by the Registered Corporation’s board of directors or similar governing entity in response to a tender offer made directly to the Registered Corporation’s equity holders for the purpose of acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to the counties and cities in which the Nevada licensee’s respective operations are conducted. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated. A live entertainment tax is also paid by casino operations where admission charges are imposed for entry into certain entertainment venues. Nevada licensees that hold a license as an operator of a slot route or manufacturer’s or distributor’s license also pay certain fees and taxes to the State of Nevada.
Any person who is licensed, required to be licensed, registered, required to be registered, or is under common control with such persons, and who proposes to become involved in a gaming venture outside of Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation by the Nevada Board of their participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. The Fifth Revised Order requires us to deposit with the Nevada Board and maintain a revolving fund of $50,000 for all purposes, including foreign gaming and compliance with the Fifth Revised Order. Thereafter, licensees are required to comply with certain reporting requirements imposed by the Nevada Act. Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in activities or enter into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees, or employ, contract with or associate with a person in the foreign operation who has been denied a license or finding of suitability in Nevada on the grounds of unsuitability or whom a court in the state of Nevada has found guilty of cheating. The loss or restriction of our gaming licenses in Nevada would have a material adverse effect on our business and could require us to cease gaming operations in Nevada.

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Nevada Liquor Regulations
There are various local ordinances and regulations as well as state laws applicable to the sale of alcoholic beverages in Nevada. Palace Station, Wildfire Rancho, Wildfire Valley View, and Santa Fe Station are subject to liquor licensing control and regulation by the Las Vegas City Council. Red Rock, Boulder Station, Palms, and Wild Wild West are subject to liquor licensing control and regulation by the CCLGLB. Texas Station and Fiesta Rancho are subject to liquor licensing control and regulation by the North Las Vegas City Council. Sunset Station, Green Valley Ranch, Fiesta Henderson, Barley’s, Wildfire Sunset, Wildfire Boulder, The Greens, Wildfire Anthem, Wildfire Lanes and Wildfire Lake Mead are subject to liquor licensing control and regulation by the Henderson City Council. All liquor licenses are revocable and are, in some jurisdictions, not transferable. The agencies involved have full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material adverse effect on the operations of our licensed subsidiaries.
Native American Gaming Regulations
The terms and conditions of management contracts and the operation of casinos and all gaming on land held in trust for Native American tribes in the United States are subject to the Indian Gaming Regulatory Act of 1988 (the “IGRA”), which is administered by the NIGC and the gaming regulatory agencies of state and tribal governments. The IGRA is subject to interpretation by the NIGC and may be subject to judicial and legislative clarification or amendment.
The IGRA established three separate classes of tribal gaming: Class I, Class II and Class III. Class I gaming includes all traditional or social games solely for prizes of minimal value played by a tribe in connection with celebrations or ceremonies. Class II gaming includes games such as bingo, pull-tabs, punchboards, instant bingo (and electronic or computer-aided versions of such games) and non-banked card games (those that are not played against the house), such as poker. Class III gaming is casino-style gaming and includes banked table games such as blackjack, craps and roulette, and gaming machines such as slots, video poker, lotteries and pari-mutuel wagering, a system of betting under which wagers are placed in a pool, management receives a fee from the pool, and the remainder of the pool is split among the winning wagers.
The IGRA requires NIGC approval of management contracts for Class II and Class III gaming, as well as the review of all agreements collateral to the management contracts. The NIGC will not approve a management contract if a director or a 10% shareholder of the management company: (i) is an elected member of the governing body of the Native American tribe which is the party to the management contract; (ii) has been or subsequently is convicted of a felony or gaming offense; (iii) has knowingly and willfully provided materially important false information to the NIGC or the tribe; (iv) has refused to respond to questions from the NIGC; or (v) is a person whose prior history, reputation and associations pose a threat to the public interest or to effective gaming regulation and control, or create or enhance the chance of unsuitable activities in gaming or the business and financial arrangements incidental thereto. In addition, the NIGC will not approve a management contract if the management company or any of its agents have attempted to unduly influence any decision or process of tribal government relating to gaming, or if the management company has materially breached the terms of the management contract or the tribe’s gaming ordinance or resolution, or a trustee, exercising the skill and due diligence that a trustee is commonly held to, would not approve the management contract. A management contract can be approved only after the NIGC determines that the contract provides for, among other things: (i) adequate accounting procedures and verifiable financial reports, which must be furnished to the tribe; (ii) tribal access to the daily operations of the gaming enterprise, including the right to verify daily gross revenues and income; (iii) minimum guaranteed payments to the tribe, which must have priority over the retirement of development and construction costs; (iv) a ceiling on the repayment of such development and construction costs; and (v) a contract term not exceeding five years and a management fee not exceeding 30% of net revenues (as determined by the NIGC); provided that the NIGC may approve up to a seven-year term and a management fee not to exceed 40% of net revenues if the NIGC is satisfied that the capital investment required, and the income projections for the particular gaming activity require the larger fee and longer term. There is no periodic or ongoing review of approved contracts by the NIGC. Other than an action by the parties, the only post-approval action that could result in possible modification or cancellation of a contract would be as the result of an enforcement action taken by the NIGC based on a violation of the law or an issue affecting suitability.
The IGRA prohibits all forms of Class III gaming unless the tribe has entered into a written agreement with the state that specifically authorizes the types of Class III gaming the tribe may offer (a “tribal-state compact”) or the Secretary of the Interior has issued procedures pursuant to which the tribe may conduct Class III gaming. These tribal-state compacts provide, among other things, the manner and extent to which each state will conduct background investigations and certify the suitability of the manager, its officers, directors, and key employees to conduct gaming on Native American lands.
Title 25, Section 81 of the United States Code states that “no agreement or contract with an Indian tribe that encumbers Indian lands for a period of 7 or more years shall be valid unless that agreement or contact bears the approval of the Secretary of the Interior or a designee of the Secretary”. An agreement or contract for services relative to Native American lands which fails to conform with the requirements of Section 81 is void and unenforceable. All money or other things of value paid to any person by any Native American or tribe for or on his or their behalf, on account of such services, in excess of any

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amount approved by the Secretary or his or her authorized representative will be subject to forfeiture. We intend to comply with Section 81 with respect to any other contract with an Indian tribe in the United States.
Native American tribes are sovereign nations with their own governmental systems, which have primary regulatory authority over gaming on land within the tribes’ jurisdiction. Therefore, persons engaged in gaming activities on tribal lands, including the Company, are subject to the provisions of tribal ordinances and regulations. Tribal gaming ordinances are subject to review by the NIGC under certain standards established by the IGRA. The NIGC may determine that some or all of the ordinances require amendment, and those additional requirements, including additional licensing requirements, may be imposed on us.
Several bills have been introduced in Congress that would amend the IGRA. Any amendment of the IGRA could change the governmental structure and requirements within which tribes could conduct gaming, and may have an adverse effect on our results of operations or impose additional regulatory or operational burdens. In addition, any amendment to or expiration of a tribal-state compact may have an adverse effect on our results of operations or impose additional regulatory or operational burdens.
General Gaming Regulations in Other Jurisdictions
If we become involved in gaming operations in any other jurisdictions, such gaming operations will subject us and certain of our officers, directors, key employees, equity holders and other affiliates (“Regulated Persons”) to strict legal and regulatory requirements, including mandatory licensing and approval requirements, suitability requirements, and ongoing regulatory oversight with respect to such gaming operations. Such legal and regulatory requirements and oversight will be administered and exercised by the relevant regulatory agency or agencies in each jurisdiction (the “Regulatory Authorities”). We and the Regulated Persons will need to satisfy the licensing, approval and suitability requirements of each jurisdiction in which we seek to become involved in gaming operations. These requirements vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations. In general, the procedures for gaming licensing, approvals and findings of suitability require the Company and each Regulated Person to submit detailed personal history information and financial information to demonstrate that the proposed gaming operation has adequate financial resources generated from suitable sources and adequate procedures to comply with the operating controls and requirements imposed by law and regulation in each jurisdiction, followed by a thorough investigation by such Regulatory Authorities. In general, the Company and each Regulated Person must pay the costs of such investigation. An application for any gaming license, approval or finding of suitability may be denied for any cause that the Regulatory Authorities deem reasonable. Once obtained, licenses and approvals may be subject to periodic renewal and generally are not transferable. The Regulatory Authorities may at any time revoke, suspend, condition, limit or restrict a license, approval or finding of suitability for any cause that they deem reasonable. Fines for violations may be levied against the holder of a license or approval and in certain jurisdictions, gaming operation revenues can be forfeited to the state under certain circumstances. There can be no assurance that we will obtain all of the necessary licenses, approvals and findings of suitability or that our officers, directors, key employees, other affiliates and certain other stockholders will satisfy the suitability requirements in one or more jurisdictions, or that such licenses, approvals and findings of suitability, if obtained, will not be revoked, limited, suspended or not renewed in the future. We may be required to submit detailed financial and operating reports to Regulatory Authorities.
Failure by us to obtain, or the loss or suspension of, any necessary licenses, approval or findings of suitability would prevent us from conducting gaming operations in such jurisdiction and possibly in other jurisdictions, which may have an adverse effect on our results of operations.
Anti-Money Laundering Laws
Our services are subject to federal anti-money laundering laws, including the Currency and Foreign Transactions Reporting Act of 1970 (the “Bank Secrecy Act”). On an ongoing basis, these laws require us, among other things, to: (i) maintain an anti-money laundering program; (ii) designate and maintain individuals to assure compliance; (iii) train relevant personnel; (iv) identify and report large cash transactions and suspicious activity; (v) screen individuals and entities against sanctions and watch lists and; (vi) independently test for compliance.
Anti-money laundering regulations and regulator expectations thereof are constantly evolving. We implement policies and procedures to reasonably assure compliance with anti-money laundering regulations and continuously monitor our compliance with these regulations. We cannot predict how these future regulations and expectations thereof might affect us. Complying with future regulation could be expensive or require us to change the way we operate our business.

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Environmental Matters
Although we are currently involved in monitoring activities at a few of our sites due to historical or nearby operations, compliance with federal, state and local laws and regulations relating to the protection of the environment to date has not had a material effect upon our capital expenditures, earnings or competitive position and we do not anticipate any material adverse effects in the future based on the nature of our future operations.
Employees
At January 31, 2020, we had approximately 14,000 employees, including employees of our 50% owned properties, but excluding managed properties that are owned by third-party employers. We believe we have good employee relations. None of our owned casino properties is currently subject to any collective bargaining obligations, agreement or similar arrangement with any union, with the exception of Boulder Station, Palace Station, Green Valley Ranch, Fiesta Rancho and Palms. Our casino properties have been the subject of union organization efforts and we believe additional efforts by union activists to organize employees are ongoing at this time. We are engaged in negotiations of collective bargaining agreements for various bargaining units of employees at a number of our properties and we expect that we will be required to negotiate collective bargaining agreements at other properties or for other categories of employees. The outcome of our negotiations with these unions is not assured and could result in significant increases in labor costs, which could have a material adverse effect on the business of our casino properties and our financial condition and results of operations. In addition, it is possible that other of our owned casino properties or future managed properties will become unionized. Union organization efforts that may occur in the future could cause disruptions to our casino properties and discourage patrons from visiting our properties and may cause us to incur significant costs, any of which could have a material adverse effect on our results of operations and financial condition. Further, union activities may result in labor disputes, including work stoppages, which could have a material adverse effect on our business, financial condition and results of operations.
Available Information
We are required to file annual, quarterly and other current reports and information with the Securities and Exchange Commission (“SEC”). Because we submit filings to the SEC electronically, access to this information is available at the SEC’s website (www.sec.gov). This site contains reports and other information regarding issuers that file electronically with the SEC.
We also make available, free of charge, at our principal internet address (www.redrockresorts.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Other information on our website is expressly not incorporated by reference into this filing.
We have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our directors, officers (including our principal executive officer and our principal financial officer) and employees. The Code of Ethics and any waivers or amendments to the Code of Ethics are available on the Investor Relations section of our website at www.redrockresorts.com. Printed copies are also available to any person without charge, upon request directed to our Corporate Secretary, 1505 South Pavilion Center Drive, Las Vegas, Nevada 89135.
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements. Such statements contain words such as “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “might,” “should,” “could,” “would,” “seek,” “pursue,” and “anticipate” or the negative or other variation of these or similar words, or may include discussions of strategy or risks and uncertainties. Forward-looking statements in this Annual Report on Form 10-K include, among other things, statements concerning:
projections of future results of operations or financial condition;
expectations regarding our business and results of operations of our existing casino properties and prospects for future development;
expenses and our ability to operate efficiently;
expectations regarding trends that will affect our market and the gaming industry generally and the impact of those trends on our business and results of operations;
our ability to comply with the covenants in the agreements governing our outstanding indebtedness;
our ability to meet our projected debt service obligations, operating expenses, and maintenance capital expenditures;
expectations regarding the availability of capital resources, including our ability to refinance our outstanding indebtedness;

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our intention to pursue development opportunities and acquisitions and obtain financing for such development and acquisitions; and
the impact of regulation on our business and our ability to receive and maintain necessary approvals for our existing properties and future projects.
Any forward-looking statement is based upon a number of estimates and assumptions that, while considered reasonable by us, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, and are subject to change. Actual results of operations may vary materially from any forward-looking statement made herein. Forward-looking statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the contingencies and uncertainties to which any forward-looking statement contained herein is subject include, but are not limited to, the following:
our reliance on the Las Vegas regional market;
the impact of business conditions, including competitive practices, changes in customer demand and the cyclical nature of the gaming and hospitality business generally, on our business and results of operations;
the impact of general economic conditions outside our control, including changes in interest rates, consumer confidence and unemployment levels, on our business and results of operations;
the effects of intense competition that exists in the gaming industry;
additional competition arising as a result of the approval of new gaming licenses or gaming activities such as internet gaming, and the expansion of sports betting outside the state of Nevada;
our substantial outstanding indebtedness and the effect of our significant debt service requirements on our operations and ability to compete;
the risk that we will not be able to finance our development and investment projects or refinance our outstanding indebtedness;
the impact of extensive regulation from gaming and other government authorities on our ability to operate our business and the risk that regulatory authorities may revoke, suspend, condition or limit our gaming or other licenses, impose substantial fines or take other actions that adversely affect us;
risks associated with changes to applicable gaming and tax laws that could have a material adverse effect on our financial condition;
adverse outcomes of legal proceedings and the development of, and changes in, claims or litigation reserves;
risks associated with development, construction and management of new projects or the expansion of existing facilities, including cost overruns, construction delays, environmental risks and legal or political challenges; and
risks associated with integrating operations of any acquired companies and developed properties.
For additional contingencies and uncertainties, see Item 1A. Risk Factors.
Given these risks and uncertainties, we can give no assurances that results contemplated by any forward-looking statements will in fact occur and therefore caution investors not to place undue reliance on them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report on Form 10-K might not occur.
Market and Industry Data
Some of the market and industry data contained in this Annual Report on Form 10-K are based on independent industry publications or other publicly available information. Although we believe that these independent sources are reliable, we have not independently verified and cannot assure you as to the accuracy or completeness of this information. As a result, you should be aware that the market and industry data contained herein, and our beliefs and estimates based on such data, may not be reliable.

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ITEM 1A.
RISK FACTORS
The following risk factors should be considered carefully in addition to the other information contained in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Any of these risks and uncertainties could cause our actual results to differ materially from the results contemplated by the forward-looking statements. The following risk factors set forth the risks that we believe are material to our business, financial condition, assets, operations and equity interests. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected.
Risks Related to Our Business
We depend on the residents of the Las Vegas regional market and repeat visitors, which subjects us to greater risks than a gaming company with more diverse operations.
All of our casino properties are dependent upon attracting Las Vegas residents as well as out of town visitors. As a result of our concentration in the Las Vegas regional market, we have a greater degree of exposure to a number of risks than we would have if we had operations outside of the Las Vegas valley. These risks include the following:
local economic and competitive conditions;
changes in local and state governmental laws and regulations, including gaming laws and regulations;
natural and other disasters; and
a decline in the local population.
Our strategy of growth through master-planning of certain of our major casinos for future expansion was developed, in part, based on projected population growth in Las Vegas. There can be no assurance that population growth in Las Vegas will justify future development, additional casinos or expansion of any of our existing casino properties, which limits our ability to expand our business.
Our business is sensitive to changes in consumer sentiment and discretionary spending.
Consumer demand for the offerings of casino hotel properties such as ours is sensitive to factors impacting consumer confidence, including downturns in the economy and other factors that impact discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions and customer confidence in the economy, unemployment, uncertainty and distress in the housing and credit markets, the impact of high energy, fuel, food and healthcare costs, perceived or actual changes in disposable consumer income and wealth, taxes, and effects or fears of war, terrorism, violence, widespread illnesses or epidemics could further reduce customer demand for the amenities that we offer and materially and adversely affect our business and results of operations.
Our casinos draw a substantial number of customers from the Las Vegas metropolitan area, as well as nearby geographic areas, including Southern California, Arizona and Utah. While our business is affected by the general economic conditions in the United States, our business and results of operations would be particularly negatively impacted if our target markets experience an economic downturn or other adverse conditions.
We face substantial competition in the gaming industry and we expect that such competition will intensify.
Our casino properties face competition for customers and employees from all other casinos and hotels in the Las Vegas metropolitan area including, to some degree, each other. In addition, our casino properties face competition from all smaller nonrestricted gaming locations and restricted gaming locations (locations with 15 or fewer slot machines) in the Las Vegas metropolitan area, including those that primarily target the local and repeat visitor markets. Major additions, expansions or enhancements of existing properties or the construction of new properties by competitors could also have a material adverse effect on the business of our casino properties. If our competitors operate more successfully than we do, or if they attract customers away from us as a result of aggressive pricing and promotion or enhanced or expanded properties, we may lose market share and our business could be adversely affected.
To a lesser extent, our casino properties compete with gaming operations in other parts of the state of Nevada and other gaming markets in the United States and in other parts of the world, with state sponsored lotteries, on- and off-track pari-mutuel wagering (a system of betting under which wagers are placed in a pool, management receives a fee from the pool, and the remainder of the pool is split among the winning wagers), card rooms, other forms of legalized gaming and online gaming. The gaming industry also includes dockside casinos, riverboat casinos, racetracks with slot machines and casinos located on Native American land. There is intense competition among companies in the gaming industry, some of which have significantly

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greater resources than we do. Our properties have encountered additional competition as large-scale Native American gaming on Indian lands, particularly in California, has increased and competition may intensify if more Native American gaming facilities are developed. Several states are currently considering the approval of legalized casino gaming in designated areas and the expansion of existing gaming operations or additional gaming sites. In May 2018, the United States Supreme Court overturned a law prohibiting states from legalizing sports wagering, which has resulted in a substantial expansion of sports betting outside the state of Nevada, including online sports betting. In addition, internet gaming has commenced in Nevada, New Jersey, Delaware and Pennsylvania, and legislation permitting internet gaming has been approved or proposed by a number of other states. Internet gaming and the expansion of legalized casino gaming or legalized sports betting in new or existing jurisdictions and on Native American land could result in additional competition that could adversely affect our operations, particularly to the extent that such gaming is conducted in areas close to our operations.
For further details on competition in the gaming industry, see Item 1. Business—Competition.
Our success depends on key executive officers and personnel.
Our success depends on the efforts and abilities of our executive officers and other key employees, many of whom have significant experience in the gaming industry, including, but not limited to, Frank J. Fertitta III, our Chairman of the Board and Chief Executive Officer. Competition for qualified personnel in our industry is intense, and it would be difficult for us to find experienced personnel to replace our current executive officers and employees. We believe that a loss of the services of these officers and/or personnel could have a material adverse effect on our results of operations.
Our results of operations may be adversely impacted by the expiration or termination of our Native American management agreements and we may not be successful in entering into additional management or development agreements for Native American gaming opportunities.
Our management agreement for Gun Lake Casino expired in February 2018 and our management agreement for Graton Resort expires in November 2020. Our management fees from these agreements were $91.1 million, $87.0 million and $118.0 million for the years ended December 31, 2019, 2018 and 2017, respectively, which, based on the margins applicable to our management activities, contributed significantly to our net income for such periods. As a result, our results of operations may be adversely impacted by the expiration or termination of such agreements. Although we intend to seek additional development and management contracts with Native American tribes, we cannot be sure that we will be able to enter into any such agreements. The development of Native American gaming facilities is subject to numerous conditions and is frequently subject to protracted legal challenges. As a result, even if we are able to enter into development and management agreements for Native American gaming projects, we cannot be sure that the projects, including the North Fork project, will be completed or, if completed, that they will generate significant management fees or return on our investment.
Union organization activities could disrupt our business by discouraging patrons from visiting our properties, causing labor disputes or work stoppages, and, if successful, could significantly increase our labor costs.
In September 2016, the National Labor Relations Board (the “NLRB”) certified the Local Joint Executive Board of Las Vegas (“LJEBLV”) as the bargaining representative for a bargaining unit of Boulder Station non-gaming employees. As a result, Boulder Station commenced bargaining with the LJEBLV as the bargaining representative for a bargaining unit of those Boulder Station non-gaming employees. Also in March 2017, Palace Station voluntarily recognized the LJEBLV as the bargaining representative for a bargaining unit of Palace Station non-gaming employees and commenced bargaining. The LJEBLV and Palace Station and the LJEBLV and Boulder Station to date have conducted many bargaining sessions but have not achieved a labor agreement.
In November 2017, the NLRB conducted an election at Green Valley Ranch and determined that a majority of the votes had been cast for LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Green Valley Ranch non-gaming employees. Green Valley Ranch challenged the election results; its challenges were not successful and, accordingly, Green Valley Ranch anticipates that it will commence bargaining with the LJEBLV.
In April 2018, the NLRB conducted an election at Palms and determined that a majority of the votes had been cast for LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Palms non-gaming employees. Palms is challenging the NLRB’s order; if Palms’ challenges are not ultimately successful, Palms will commence bargaining with the LJEBLV.
In June 2019, the NLRB conducted an election at Sunset Station and determined that a majority of the votes had been cast for LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Sunset Station non-gaming employees. Sunset Station is challenging the election results; if Sunset Station’s legal challenges are not ultimately sustained, Sunset Station will commence bargaining with the LJEBLV.

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In June 2019, the NLRB conducted an election at Fiesta Rancho and determined that a majority of the votes had been cast for LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Fiesta Rancho non-gaming employees; Fiesta Rancho has commenced bargaining with the LJEBLV.
In September 2019, the NLRB conducted an election at Fiesta Henderson and determined that a majority of the votes had been cast for LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Fiesta Henderson non-gaming employees; the NLRB subsequently invalidated the election results and ordered a rerun election; the LJEBLV has challenged the NLRB’s decision.
In December 2019, the NLRB conducted an election at Red Rock and determined that a majority of the votes had been cast against LJEBLV, which was seeking to become the bargaining representative for a bargaining unit of Red Rock non-gaming employees. The LJEBLV has objected to the election; a hearing with respect to those objections has not been scheduled to date.
In addition, a bargaining unit of nine Palms slot technicians is represented by the International Union of Operating Engineers, Local 501 (“Local 501”). Palms and Local 501 have been negotiating for more than three years, and have yet to achieve a labor agreement. Local 501 also seeks to represent bargaining units of Palace Station, Green Valley Ranch, Sunset Station, Fiesta Henderson and Red Rock slot technicians. Elections have been conducted by the NLRB at each of Palace Station, Green Valley Ranch, Sunset Station, Fiesta Henderson and Red Rock in connection with which the NLRB determined that a majority of the valid votes were cast for Local 501. Each of Palace Station, Green Valley Ranch, Sunset Station, Fiesta Henderson and Red Rock is challenging Local 501’s satisfaction of statutory requirements to be certified as the representative of the bargaining units; if any such challenge is unsuccessful the relevant property will commence bargaining with Local 501.
In addition, Teamsters Local Union 986 (“Local 986”) was certified as the bargaining representative for a bargaining unit of Palms warehouse receivers in June 2018. Palms has commenced bargaining with the Teamsters. In September 2019, the NLRB conducted an election at the Palms and a majority of the valet parking attendants voted to be represented by the Local 986. Bargaining has not yet commenced. In September 2019, the NLRB conducted an election at the Palms and a majority of the bell desk employees voted to be represented by Local 986. Bargaining has not yet commenced.
Graton Resort is also subject to collective bargaining agreements. None of our other casino properties is currently subject to any bargaining obligation, collective bargaining agreement or similar arrangement with any union. However, union activists have actively sought to organize employees at certain of our casino properties in the past, and we believe that such efforts are ongoing at this time. Accordingly, there can be no assurance that our owned casino properties or existing or future managed properties will not ultimately be unionized. Union organization efforts that may occur in the future could cause disruptions to our casino properties and discourage patrons from visiting our properties and may cause us to incur significant costs, any of which could have a material adverse effect on our results of operations and financial condition. In addition, union activities may result in labor disputes, including work stoppages, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, collective bargaining involving any of our existing or future properties in the event that they become organized introduces an element of uncertainty into planning our future labor costs, which could have a material adverse effect on the business of our casino properties and our financial condition and results of operations.
Work stoppages, labor problems and unexpected shutdowns may limit our operational flexibility and negatively impact our future profits.
Any work stoppage at one or more of our casino properties, including any construction projects which may be undertaken, could require us to expend significant funds to hire replacement workers, and qualified replacement labor may not be available at reasonable costs, if at all. Strikes and work stoppages could also result in adverse media attention or otherwise discourage customers from visiting our casino properties. Strikes and work stoppages involving laborers at any construction project which may be undertaken could result in construction delays and increases in construction costs. As a result, a strike or other work stoppage at one of our casino properties or any construction project could have an adverse effect on the business of our casino properties and our financial condition and results of operations. There can be no assurance that we will not experience a strike or work stoppage at one or more of our casino properties or any construction project in the future.
Any unexpected shutdown of one of our casino properties or any construction project could have an adverse effect on the business of our casino properties and our results of operations. There can be no assurance that we will be adequately prepared for unexpected events, including political or regulatory actions, which may lead to a temporary or permanent shutdown of any of our casino properties.

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The concentration and evolution of the slot machine manufacturing industry or other technological conditions could impose additional costs on us.
We rely on a variety of hardware and software products to maximize revenue and efficiency in our operations. Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment in order to remain competitive in the markets in which we operate. In addition, we may not be able to successfully implement and/or maintain any acquired technology.
We are subject to extensive federal, state and local regulation and governmental authorities have significant control over our operations; this control and the cost of compliance or failure to comply with such regulations that govern our operations in any jurisdiction where we operate could have an adverse effect on our business.
Our ownership and operation of gaming facilities is subject to extensive regulation, including licensing requirements, by the states, counties and cities in which we operate. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations, and we are subject to extensive background investigations and suitability standards in our gaming business. We also will become subject to regulation in any other jurisdiction where we choose to operate in the future. As such, our gaming regulators can require us to disassociate ourselves from suppliers or business partners found unsuitable by the regulators or, alternatively, cease operations in that jurisdiction. In addition, unsuitable activity on our part, on the part of individuals investing in or otherwise involved with us or on the part of our owners, managers or unconsolidated affiliates in any jurisdiction could have a negative effect on our ability to continue operating in other jurisdictions.
Specifically in Nevada, our gaming operations and the ownership of our securities are subject to extensive regulation by the Nevada Gaming Authorities. The Nevada Gaming Authorities have broad authority with respect to licensing and registration of our business entities and individuals investing in or otherwise involved with us. Although we currently are registered with, and currently hold gaming licenses issued by, the Nevada Gaming Authorities, these authorities may, among other things, revoke the gaming license of any corporate entity or the registration of a registered corporation or any entity registered as a holding company of a corporate licensee for violations of gaming regulations.
In addition, the Nevada Gaming Authorities may, under certain conditions, revoke the license or finding of suitability of any officer, director, controlling person, stockholder, noteholder or key employee of a licensed or registered entity. If our gaming licenses were revoked for any reason, the Nevada Gaming Authorities could require the closing of our casinos, which would have a material adverse effect on our business, financial condition, results of operations or cash flows. Compliance costs associated with gaming laws, regulations or licenses are significant. Any change in the laws, regulations or licenses applicable to our business or gaming licenses could require us to make substantial expenditures or could otherwise have a material adverse effect on our business, financial condition, results of operations or cash flows. For a more complete description of the gaming regulatory requirements that have an effect on our business, see Item 1. Business—Regulation and Licensing. The regulatory environment in any particular jurisdiction may change in the future and any such change could have a material adverse effect on our results of operations. There can be no assurance that we will be able to obtain new licenses, including any licenses that may be required if we pursue gaming opportunities in jurisdictions where we are not already licensed, or renew any of our existing licenses, or that if such licenses are obtained, that such licenses will not be conditioned, suspended or revoked, and the loss, denial or non-renewal of any of our licenses could have a material adverse effect on our business, financial condition, results of operations or cash flows.
In addition, we are subject to various gaming taxes, which are subject to possible increase at any time, and federal income tax. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. The United States recently enacted significant tax reform, and certain provisions of the new law may adversely affect us. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. If United States or state tax authorities change applicable tax laws, including laws relating to taxation of gaming operations, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.
Further, we may not make a public offering of our securities without the prior approval of the Nevada Commission if the securities or proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. If we are not approved for such a public offering by the Nevada Commission in the future, or if an exemption from such approval is not available, it could adversely impact our capital structure and liquidity and limit our flexibility in planning for, or reacting to, changes in our business and industry. Any such approval will not constitute a finding, recommendation or approval by any of the Nevada Gaming Authorities as to the accuracy or adequacy of any offering memorandum or the investment merits of the securities offered thereby. Any representation to the contrary is unlawful.

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We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. We are subject to regulation under the Bank Secrecy Act, which, among other things, requires us to report to the Financial Crimes Enforcement Network (“FinCEN”) any currency transactions in excess of $10,000 that occur within a 24-hour gaming day, including identification of the individual transacting the currency. We are also required to report certain suspicious activity, including any transactions aggregating to $5,000 or more, where we know, suspect or have reason to suspect such transactions involve funds from illegal activity or are intended to evade federal regulations or avoid reporting requirements. In addition, under the Bank Secrecy Act we are subject to various other rules and regulations involving reporting and recordkeeping. Our compliance with the Bank Secrecy Act is subject to periodic audits by FinCEN, and we may be required to pay substantial penalties if we fail to comply with applicable regulations. Any violations of anti-money laundering laws or regulations by any of our properties could have an adverse effect on our financial condition, results of operations or cash flows. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted.
We are subject to a variety of federal, state and local laws and regulations relating to the protection of the environment and human health and safety, which could materially affect our business, financial condition, results of operations and cash flows.
We are subject to federal, state and local laws and regulations relating to the protection of the environment and human health and safety, including those relating to air emissions, water discharges and remediation of contamination. Such laws and regulations require us to obtain, maintain and renew environmental operating or construction permits or approvals particularly in connection with our development activities. Certain environmental laws can impose joint and several liability without regard to fault on responsible parties, including past and present owners and operators of sites, related to the investigation or remediation of sites at which hazardous wastes or materials were disposed or released. Private parties may also bring claims arising from the presence of hazardous materials on a site or exposure to such materials. We are currently involved in monitoring activities at a few of our sites due to historical or nearby operations. Increasingly stringent environmental laws, regulations or standards may make compliance with such requirements more difficult or costly or otherwise adversely affect our operations. Failure to comply with environmental laws or regulations, or any liabilities or claims arising under such laws or regulations, could require us to incur potentially significant costs or sanctions, including fines, penalties or cessation of operations, or otherwise adversely affect our business, financial condition and results of operations.
Rising operating and other costs at our casino properties could have a negative impact on our business.
The operating expenses associated with our casino properties could increase due to, among other reasons, the following factors:
changes in the federal, state or local regulations, including state and local gaming regulations or taxes, or the way such regulations are administered could impose additional restrictions or increase our operating costs;
aggressive marketing and promotional campaigns by our competitors for an extended period of time could force us to increase our expenditures for marketing and promotional campaigns in order to maintain our existing customer base and attract new customers;
as our properties age, we may need to increase our expenditures for repairs, maintenance, and to replace equipment necessary to operate our business compared to amounts that we have spent historically;
our reliance on slot play revenues and any additional costs imposed on us from vendors;
availability and cost of the many products and services we provide our customers, including food and beverage, retail items, entertainment, hotel rooms, and spa services;
availability and costs associated with insurance;
increases in costs of labor and employee benefits, including due to potential unionization of our employees;
increases in the prices of electricity, natural gas and other forms of energy; and
water shortages or other increases in the cost of water.
If our operating expenses increase without any offsetting increase in our revenues, our results of operations would suffer.

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We may incur losses that are not adequately covered by insurance, which may harm our results of operations. In addition, our insurance costs may increase and we may not be able to obtain similar insurance coverage in the future.
Although we maintain insurance that is customary and appropriate for our business, each of our insurance policies is subject to certain exclusions. Our property insurance coverage is in an amount that may be significantly less than the expected replacement cost of rebuilding our facilities in the event of a total loss. The lack of adequate insurance for certain types or levels of risk could expose us to significant losses in the event of a catastrophe. In addition to the damage caused to our properties by a casualty loss, we may suffer business disruption or be subject to claims by third parties that may be injured or harmed. While we carry general liability insurance and business interruption insurance, there can be no assurance that insurance will be available or adequate to cover all loss and damage to which our business or our assets might be subjected. Certain casualty events, such as labor strikes, nuclear events, loss of income due to terrorism or epidemics, deterioration or corrosion, insect or animal damage and pollution, may not be covered under our policies. Any losses we incur that are not adequately covered by insurance may decrease our future operating income, require us to fund replacements or repairs for destroyed property and reduce the funds available for payments of our obligations.
We renew our insurance policies on an annual basis. To the extent that the cost of insurance coverage increases, we may be required to reduce our policy limits or agree to exclusions from our coverage.
We are subject to litigation in the ordinary course of our business. An adverse determination with respect to any such disputed matter could result in substantial losses.
We are, from time to time, during the ordinary course of operating our businesses, subject to various litigation claims and legal disputes, including contract, lease, employment and regulatory claims as well as claims made by visitors to our properties. There are also litigation risks inherent in any construction or development of any of our properties. Certain litigation claims may not be covered entirely or at all by our insurance policies or our insurance carriers may seek to deny coverage. In addition, litigation claims can be expensive to defend and may divert our attention from the operations of our businesses. Further, litigation involving visitors to our properties, even if without merit, can attract adverse media attention. As a result, litigation can have a material adverse effect on our businesses and, because we cannot predict the outcome of any action, it is possible that adverse judgments or settlements could significantly reduce our earnings or result in losses.
We may incur delays and budget overruns with respect to current or future construction projects. Any such delays or cost overruns may have a material adverse effect on our operating results.
We evaluate expansion opportunities as they become available, and in the future we may construct new facilities or enhance our existing properties by constructing additional facilities.
Such construction projects entail significant risks, including the following:
shortages of material or skilled labor;
unforeseen engineering, environmental or geological problems;
work stoppages;
weather interference;
floods;
unanticipated cost increases; and
legal or political challenges;
any of which can give rise to delays or cost overruns.
The anticipated costs and construction periods are based upon budgets, conceptual design documents and construction schedule estimates prepared by us in consultation with our architects and contractors. Construction, equipment, staffing requirements, problems or difficulties in obtaining and maintaining any of the requisite licenses, permits, allocations or authorizations from regulatory authorities can increase the cost or delay the construction or opening of each of the proposed facilities or otherwise affect the project’s planned design and features. We cannot be sure that we will not exceed the budgeted costs of these projects, that the projects will commence operations within the contemplated time frame, if at all, or that we will receive the return on investment that we expect from such projects. Budget overruns and delays with respect to expansion and development projects could have a material adverse impact on our results of operations.

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We may pursue new gaming acquisition and development opportunities and may not be able to recover our investment or successfully expand to additional locations.
We will regularly evaluate and may pursue new gaming acquisition and development opportunities in existing and emerging jurisdictions. These opportunities may take the form of joint ventures. To the extent that we decide to pursue any new gaming acquisition or development opportunities, our ability to benefit from such investments will depend upon a number of factors including:
our ability to identify and acquire attractive acquisition opportunities and development sites;
our ability to secure required federal, state and local licenses, permits and approvals, which in some jurisdictions are limited in number;
certain political factors, such as local support or opposition to development of new gaming facilities or legalizing casino gaming in designated areas;
the availability of adequate financing on acceptable terms (including waivers of restrictions in existing credit arrangements); and
our ability to identify and develop satisfactory relationships with joint venture partners.
Most of these factors are beyond our control. Therefore, we cannot be sure that we will be able to recover our investment in any new gaming development opportunities or acquired facilities, or successfully expand to additional locations.
We have invested, and we will likely continue to invest, in real property in connection with the pursuit of expansion opportunities. These investments are subject to the risks generally incident to the ownership of real property, including:
changes in economic conditions;
environmental risks;
governmental rules and fiscal policies; and
other circumstances over which we may have little or no control.
The development of such properties will also be subject to restrictions under our credit agreements. We cannot be sure that we will be able to recover our investment in any such properties or be able to prevent incurring investment losses.
We may experience difficulty integrating operations of any acquired companies and developed properties and managing our overall growth which could have a material adverse effect on our operating results.     
We may not be able to effectively manage our properties, proposed projects with Native American tribes and any future acquired companies or developed properties, or realize any of the anticipated benefits of the acquisitions, including streamlining operations or gaining efficiencies from the elimination of duplicative functions. The management of Native American gaming facilities requires extensive and continued dedication of management resources which may divert management resources and attention from other business. In addition, to the extent we pursue expansion and acquisition opportunities, we would face significant challenges in managing our expansion projects and any other gaming operations we may acquire in the future. Failure to manage our growth effectively could have a material adverse effect on our operating results.
We require significant capital to fund capital expenditures, pursue proposed development, expansion or acquisition opportunities or refinance our indebtedness.
Our businesses are capital intensive. For our casino properties to remain attractive and competitive we must periodically invest significant capital to keep the properties well-maintained, modernized and refurbished. Similarly, future construction and development projects, including but not limited to, the proposed North Fork Project, and acquisitions of other gaming operations could require significant additional capital. We rely on earnings and cash flow from operations to finance our business, capital expenditures, development, expansion and acquisitions and, to the extent that we cannot fund such expenditures from cash generated by operations, funds must be borrowed or otherwise obtained. We will also be required in the future to refinance our outstanding debt. Our ability to effectively operate and grow our business may be constrained if we are unable to borrow additional capital or refinance existing borrowings on reasonable terms.
We may be unable to generate sufficient revenues and cash flows to service our debt obligations as they come due, finance capital expenditures and meet our operational needs.

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If we are unable to access sufficient capital from operations or borrowings, we may be precluded from:
maintaining or enhancing our properties;
taking advantage of future opportunities;
growing our business; or
responding to competitive pressures.
Further, our failure to generate sufficient revenues and cash flows could lead to cash flow and working capital constraints, which may require us to seek additional working capital. We may not be able to obtain such working capital when it is required. Further, even if we were able to obtain additional working capital, it may only be available on unfavorable terms. For example, we may be required to incur additional debt, and servicing the payments on such debt could adversely affect our results of operations and financial condition. Limited liquidity and working capital may also restrict our ability to maintain and update our casino properties, which could put us at a competitive disadvantage to casinos offering more modern and better maintained facilities.
If we do not have access to credit or capital markets at desirable times or at rates that we would consider acceptable, the lack of such funding could have a material adverse effect on our business, results of operations and financial condition and our ability to service our indebtedness.
We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets which could negatively affect our results of operations.    
We test our goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each year or when a triggering event occurs, and we test other long-lived assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If we do not achieve our projected cash flow estimates related to such assets, we may be required to record an impairment charge, which could have a material adverse impact on our financial statements. We have recognized significant impairment charges in the past as a result of a number of factors including negative industry and economic trends, reduced estimates of future cash flows, and slower than expected growth. We could be required to recognize additional impairment charges, which could have a material adverse effect on our results of operations if events that negatively impact our business should occur in the future.
Any failure to protect our trademarks could have a negative impact on the value of our brand names and adversely affect our business.
The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our success. While our business as a whole is not substantially dependent on any one trademark or combination of several of our trademarks or other intellectual property, we seek to establish and maintain our proprietary rights in our business operations through the use of trademarks. Despite our efforts to protect our proprietary rights, parties may infringe our trademarks and our rights may be invalidated or unenforceable. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources. We cannot assure you that all of the steps we have taken to protect our trademarks will be adequate to prevent imitation of our trademarks by others. The unauthorized use or reproduction of our trademarks could diminish the value of our brand and its market acceptance, competitive advantages or goodwill, which could adversely affect our business.
Shortages or increases in prices of energy or water may adversely affect our business and our results of operations.
Our casinos and hotels use significant amounts of electricity, natural gas, other forms of energy and water. The southwest United States is currently experiencing a drought, which may result in governmentally-imposed restrictions on water use or increases in the cost of water. Any such restrictions on use of water or increases in cost could adversely impact our business and our results of operations. While no shortages of energy have been experienced recently and gasoline prices are currently lower than historical periods, energy shortages or substantial increases in the cost of electricity and gasoline in the United States have negatively affected our operating results in the past. Increased gasoline prices may cause reduced visitation to our properties because of travel costs or reductions in disposable income of our guests and increased energy prices directly impact our operating costs. Any such increases in prices could negatively affect our business in the future.

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Win rates for our gaming operations depend on a variety of factors, some beyond our control, and the winnings of our gaming customers could exceed our casino winnings.
The gaming industry is characterized by an element of chance. In addition to the element of chance, win rates are also affected by other factors, including players’ skill and experience, the mix of games played, the financial resources of players, the spread of table limits, the volume of bets played and the amount of time played. Our gaming profits are mainly derived from the difference between our casino winnings and the casino winnings of our gaming customers. Since there is an inherent element of chance in the gaming industry, we do not have full control over our winnings or the winnings of our gaming customers. If the winnings of our gaming customers exceed our winnings, we may record a loss from our gaming operations, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We face the risk of fraud and cheating.
Our gaming customers may attempt or commit fraud or cheat in order to increase winnings. Acts of fraud or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers or other casino or gaming area staff. Failure to discover such acts or schemes in a timely manner could result in losses in our gaming operations. In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and cash flows.
Failure to maintain the integrity of our internal or customer data, including defending our information systems against hacking, security breaches, computer malware, cyber-attacks and similar technology exploitation risks, could have an adverse effect on our results of operations and cash flows, and/or subject us to costs, fines or lawsuits.
Our business requires the collection and retention of large volumes of data about our customers, employees, suppliers and business partners, including customer credit card numbers and other personally identifiable information of our customers and employees, in various information systems that we maintain and in those maintained by third-party service providers. The integrity and protection of that data is important to our business and is subject to privacy laws enacted by various jurisdictions. The regulatory environment and the requirements imposed on us by the payment card industry surrounding information, security and privacy are evolving and may be inconsistent. Our systems may be unable to meet changing regulatory and payment card industry requirements and employee and customer expectations, or may require significant additional investments or time in order to do so. Our information systems and records, including those maintained by service providers, may be subject to cyber-attacks, security breaches, system failures, viruses, operator error or inadvertent releases of data. Cyber-attacks and security breaches may include, but are not limited to, attempts to access information, including customer and company information, computer malware such as viruses, denial of service, ransomware attacks that encrypt, exfiltrate, or otherwise render data unusable or unavailable in an effort to extort money or other consideration as a condition to purportedly returning the data to a usable form, operator errors or misuse, or inadvertent releases of data, and other forms of electronic security breaches. The steps we have taken to mitigate these risks may not be sufficient and a significant theft, loss or fraudulent use of customer, employee or company data maintained by us or by a service provider could have an adverse effect on our reputation and employee relationships and could result in remedial and other expenses, fines or litigation. A breach in the security of our information systems or those of our service providers could lead to an interruption in the operation of our systems or loss, disclosure or misappropriation of our business information or other unintended consequences. If any of these risks materialize, they could have an adverse effect on our business, results of operations and cash flows.
Risks Related to our Indebtedness
We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future and to react to changes in our business.
We have a substantial amount of debt, which requires significant principal and interest payments. As of December 31, 2019, the principal amount of our outstanding indebtedness totaled approximately $3.08 billion and we had $422.5 million of undrawn availability under our Revolving Credit Facility, which is net of $440.0 million in outstanding borrowings and the issuance of approximately $33.5 million of letters of credit and similar obligations. After giving effect to the February 2020 financing transactions, the principal amount of our outstanding indebtedness as of December 31, 2019 would have been approximately $3.1 billion and we would have had $1.0 billion of undrawn availability under our Revolving Credit Facility, as amended. Our ability to make interest payments on our debt will be significantly impacted by general economic, financial, competitive and other factors beyond our control.

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Our substantial indebtedness could:
make it more difficult for us to satisfy our obligations under our senior notes and senior secured credit facilities and other indebtedness;
increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings, including those under our senior secured credit facilities, are and will continue to be at variable rates of interest;
require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;
limit our flexibility in planning for, or reacting to, changes in our business and industry;
place us at a disadvantage compared to competitors that may have proportionately less debt;
limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and
cause us to incur higher interest expense in the event of increases in interest rates on our borrowings that have variable interest rates or if we refinance existing debt at higher interest rates.
Our indebtedness imposes restrictive financial and operating covenants that limit our flexibility in operating our business and may adversely affect our ability to compete or engage in favorable business or financing activities.
Our credit agreements and the indenture governing our senior notes contain a number of covenants that impose significant operating and financial restrictions on us, including certain limitations on our and our subsidiaries’ ability to, among other things:
incur additional debt or issue certain preferred units;
pay dividends on or make certain redemptions, repurchases or distributions in respect of LLC Units issued by Station Holdco or make other restricted payments;
make certain investments;
sell certain assets;
create liens on certain assets;
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and
enter into certain transactions with our affiliates.
In addition, our credit agreements contain certain financial covenants, including maintenance of a minimum interest coverage ratio and adherence to a maximum total leverage ratio.
As a result of these covenants and restrictions, we are limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The restrictions caused by such covenants could also place us at a competitive disadvantage to less leveraged competitors. Our ability to comply with covenants and restrictions contained in the agreements governing our indebtedness also may be affected by general economic conditions, industry conditions and other events beyond our control. As a result, we cannot assure you that we will be able to comply with these covenants and restrictions.
A failure to comply with the covenants contained in the credit agreements, the indentures governing our senior notes, or other indebtedness that we may incur in the future could result in an event of default, which, if not cured or waived, could result in the acceleration of the indebtedness and have a material adverse effect on our business, financial condition and results of operations. In the event of any default under any of our credit agreements, the lenders thereunder:
will not be required to lend any additional amount to us;
could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend future credit; and
could require us to apply all of our available cash to repay these borrowings.

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If we are unable to comply with the covenants in the agreements governing our indebtedness or to pay our debts, the lenders under our credit agreements could proceed against the collateral granted to them to secure that indebtedness, which includes substantially all of our assets, and the holders of our senior notes would be entitled to exercise remedies under our indenture. If our indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full. Moreover, in the event that such indebtedness is accelerated, there can be no assurance that we will be able to refinance it on acceptable terms, or at all.
Despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness, which could increase the risks associated with our substantial indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, in the future. The terms of the documents governing our indebtedness restrict, but do not completely prohibit, us from doing so. As of December 31, 2019, we had $422.5 million of undrawn availability under our Revolving Credit Facility, which is net of $440.0 million in outstanding borrowings and the issuance of approximately $33.5 million of letters of credit and similar obligations. After giving effect to the refinancing transactions completed in February 2020, the principal amount of our outstanding indebtedness as of December 31, 2019 would have been approximately $3.1 billion and we would have had approximately $1.0 billion of undrawn availability under our Revolving Credit Facility, as amended. In addition, the indentures governing our senior notes allow us to issue additional notes under certain circumstances. The indentures also allow us to incur certain other additional secured and unsecured debt. Further, the indentures do not prevent us from incurring other liabilities that do not constitute indebtedness. If new debt or other liabilities are added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. If our operating results and available cash are insufficient to meet our debt service obligations, we could face substantial liquidity problems and might be required to dispose of significant assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them, and these proceeds may not be adequate to meet any debt service obligations then due. Additionally, the documents governing our indebtedness limit the use of the proceeds from any disposition; as a result, we may not be allowed, under these documents, to use proceeds from such dispositions to satisfy all current debt service obligations.
Our substantial indebtedness exposes us to significant interest expense increases.
As of December 31, 2019, after giving effect to our interest rate swaps, approximately $1.1 billion, or 35%, of our borrowings were at variable interest rates and expose us to interest rate risk. After giving effect to the February 2020 financing transactions and our interest rate swaps, approximately $350.0 million, or 11% of our borrowings were at variable interest rates. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. Had our consolidated variable interest rate indebtedness outstanding at December 31, 2019 remained the same, an increase of 1% in the interest rates payable on our variable rate indebtedness would have increased our annual estimated debt-service requirements by approximately $10.8 million, after giving effect to our interest rate swaps. After giving effect to the February 2020 refinancing transactions and our interest rate swaps, an increase of 1% in the interest rates payable on our variable rated indebtedness would increase our annual estimated debt-service requirements by approximately $3.5 million. Accordingly, an increase in interest rates from current levels could cause our annual debt-service obligations to increase significantly.

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Risks Related to Our Structure and Organization
Red Rock’s only material asset is its interest in Station Holdco and Station LLC. Accordingly, it is dependent upon distributions from Station Holdco to make payments under the tax receivable agreement, pay dividends, if any, and pay taxes and other expenses.
Red Rock is a holding company. Its only assets are its ownership of LLC Units and its voting interest in Station LLC, other than cash and tax-related assets and liabilities. Red Rock has no independent means of generating revenue. In connection with the IPO, Red Rock entered into a tax receivable agreement (“TRA”) with certain pre-IPO owners of Station Holdco. Red Rock intends to cause Station Holdco to make distributions to its members, including us, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the TRA and dividends, if any, declared by it. To the extent that Red Rock needs funds, and Station Holdco is restricted from making such distributions pursuant to the terms of the agreements governing its debt or under applicable law or regulation, or is otherwise unable to provide such funds, it could materially and adversely affect Red Rock’s liquidity and financial condition. The earnings from, or other available assets of, Station Holdco may not be sufficient to pay dividends or make distributions or loans to Red Rock to enable it to pay taxes and other expenses and make payments under the TRA or pay dividends on the Class A common stock.
Payments of dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitations on our ability to pay dividends. Our credit facility and the indentures governing our senior notes include, and any financing arrangement that we enter into in the future may include, restrictive covenants that limit our ability to pay dividends and make distributions. In addition, Station Holdco is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Station Holdco (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Station Holdco are generally subject to similar legal limitations on their ability to make distributions to Station Holdco.
Our Principal Equity Holders have control over our management and affairs, and their interests may differ from our interests or those of our other stockholders.
Each outstanding share of Class B common stock that is held by a holder that, together with its affiliates, owned LLC Units representing at least 30% of the outstanding LLC Units immediately following the IPO and, at the applicable record date, maintains direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock) is entitled to ten votes, and each other outstanding share of Class B common stock and each share of Class A common stock is entitled to one vote. As a result, Fertitta Family Entities held 86.7% of the combined voting power of Red Rock as of December 31, 2019. Due to their ownership, the Fertitta Family Entities have the power to control our management and affairs, including the power to:
elect all of our directors;
agree to sell or otherwise transfer a controlling stake in our Company, which may result in the acquisition of effective control of our Company by a third party; and
determine the outcome of substantially all actions requiring stockholder approval, including transactions with related parties, corporate reorganizations, acquisitions and dispositions of assets and dividends.
The interests of the Fertitta Family Entities may differ from our interests or those of our other stockholders and the concentration of control in the Fertitta Family Entities will limit other stockholders’ ability to influence corporate matters. The concentration of ownership and voting power of the Fertitta Family Entities may also prevent or cause a change of control of our Company or a change in the composition of our board of directors and will make many transactions impossible without the support of the Fertitta Family Entities, even if such events are in the best interests of our other stockholders. As a result of the concentration of voting power among the Fertitta Family Entities, we may take actions that our other stockholders do not view as beneficial, which may adversely affect our results of operations and financial condition and cause the value of your investment in our Class A common stock to decline.
In addition, because the Principal Equity Holders hold most of their ownership interest in part of our business directly and/or indirectly through Station Holdco, rather than through Red Rock, the public company, they may have conflicting interests with holders of shares of our Class A common stock. For example, if Station Holdco makes distributions to Red Rock, the Principal Equity Holders will also be entitled to receive distributions pro rata in accordance with the percentages of their respective LLC Units and their preferences as to the timing and amount of any such distributions may differ from those of our public shareholders. The Principal Equity Holders may also have different tax positions from us which could influence their

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decisions regarding whether and when to dispose of assets, especially in light of the existence of the TRA, whether and when to incur new, or refinance existing, indebtedness, and whether and when Red Rock should terminate the TRA and accelerate its obligations thereunder. The structuring of future transactions may take into consideration these Principal Equity Holders’ tax or other considerations even where no similar benefit would accrue to us. For example, a disposition of real estate or other assets in a taxable transaction could accelerate then-existing obligations under the TRA, which may result in differing incentives between the Principal Equity Holders and Red Rock with respect to such a transaction. For more information, see “Tax Receivable Agreement with Related Parties” within Note 2 to the Consolidated Financial Statements.
We are a “controlled company” within the meaning of the rules of NASDAQ and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
The Fertitta Family Entities hold more than 50% of the voting power of our shares eligible to vote. As a result, we are a “controlled company” under the rules of NASDAQ. Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that (i) a majority of the board of directors consist of independent directors and (ii) that the board of directors have compensation and nominating and corporate governance committees composed entirely of independent directors. Although a majority of the members of our board of directors are independent and our compensation and nominating and corporate governance committees are comprised entirely of independent directors, in the future we may elect not to comply with certain corporate governance requirements that are not applicable to controlled companies.
We will be required to pay certain of our pre-IPO Owners for certain tax benefits we may claim arising in connection with the reorganization transactions, and the amounts we may pay could be substantial.
The TRA provides for the payment by Red Rock to certain of our pre-IPO owners of 85% of the amount of benefits, if any, that Red Rock realizes (or is deemed to realize in the case of an early termination payment by us, a change in control or a material breach by us of our obligations under the TRA, as discussed below) as a result of (i) increases in tax basis resulting from our purchases or exchanges of LLC Units and (ii) certain other tax benefits related to our entering into the TRA, including tax benefits attributable to payments that we are required to make under the TRA. See “Tax Receivable Agreement with Related Parties” within Note 2 to the Consolidated Financial Statements.
Any increases in tax basis, as well as the amount and timing of any payments under the TRA, cannot reliably be predicted at this time. The amount of any such increases and payments will vary depending upon a number of factors, including, but not limited to, the timing of exchanges, the price of our Class A common stock at the time of the exchanges, the amount, character and timing of our income and the tax rates then applicable.
The payments that we may make under the TRA could be substantial. At December 31, 2019 and 2018, our liability under the TRA with respect to previously consummated transactions was $25.1 million and $24.9 million, respectively. Assuming no material changes in the relevant tax law and based on our current operating plan and other assumptions, including our estimate of the tax basis of our assets as of December 31, 2019 and that Red Rock earns sufficient taxable income to realize all the tax benefits that are subject to the TRA, we expect to make payments under the TRA over a period of approximately 40 years. The foregoing numbers are merely estimates that are based on current assumptions. The amount of actual payments could differ materially.
Future payments to our pre-IPO owners in respect of any subsequent exchanges of LLC Units for Class A common stock would be in addition to these amounts and are expected to be substantial. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding TRA payments. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise (as described below), the payments under the TRA exceed the actual benefits we realize in respect of the tax attributes subject to the TRA and/or distributions to Red Rock by Station Holdco are not sufficient to permit Red Rock to make payments under the TRA after it has paid taxes.
In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
The TRA provides that in the event that we exercise our right to early termination of the TRA, there is a change in control or a material breach by us of our obligations under the TRA, the TRA will terminate, and we will be required to make a payment equal to the present value of future payments under the TRA, which payment would be based on certain assumptions, including those relating to our future taxable income, and may substantially exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity, and there can be no assurance that we will be able to finance our obligations under the TRA.

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In addition, these obligations could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control, in particular in circumstances where our Principal Equity Holders have interests that differ from those of other shareholders. Because our Principal Equity Holders have a controlling ownership interest in the Company, they are able to control the outcome of votes on all matters requiring approval by our stockholders. Accordingly, actions that affect such obligations under the TRA may be taken even if other stockholders oppose them.
Payments under the TRA will be based on the tax reporting positions that we determine. Although we are not aware of any material issue that would cause the Internal Revenue Service (the “IRS”) to challenge a tax basis increase, we will not be reimbursed for any payments previously made under the TRA (although we would reduce future amounts otherwise payable under such TRA). No assurance can be given that the IRS will agree with the allocation of value among our assets. As a result, in certain circumstances, payments could be made under the TRA in excess of the benefit that we actually realize in respect of the increases in tax basis resulting from our purchases or exchanges of LLC Units and certain other tax benefits related to our entering into the TRA.
We may not be able to realize all or a portion of the tax benefits that are expected to result from the exchanges of LLC Units and payments made under the TRA itself.
Our ability to benefit from any depreciation or amortization deductions or to realize other tax benefits that we currently expect to be available as a result of the increases in tax basis created by the exchanges of LLC Units, including exchanges associated with the sale of the shares of Class A common stock offered hereby, and our ability to realize certain other tax benefits attributable to payments under the TRA itself, depend on a number of assumptions, including that we earn sufficient taxable income each year during the period over which such deductions are available and that there are no adverse changes in applicable law or regulations. If our actual taxable income is insufficient and/or there are adverse changes in applicable law or regulations, we may be unable to realize all or a portion of these expected benefits and our cash flows and stockholders’ equity could be negatively affected. However, absent a change in control or other termination event with respect to the TRA, we will generally not be required to make payments under that agreement with respect to projected tax benefits that we do not actually realize, as reported on our tax return. See “Tax Receivable Agreement with Related Parties” within Note 2 to the Consolidated Financial Statements.
Risks Related to Ownership of Our Class A Common Stock
The share price for our Class A common stock may fluctuate significantly.
The market price of our Class A common stock may be significantly affected by factors such as quarterly variations in our results of operations, changes in government regulations, general market conditions specific to the gaming industry, changes in interest rates, changes in general economic and political conditions, volatility in the financial markets, threatened or actual litigation or government investigations, the addition or departure of key personnel, actions taken by our shareholders, including the sale or other disposition of their shares of our Class A common stock, differences between our actual financial and operating results and those expected by investors and analysts and changes in analysts’ recommendations or projections. These and other factors may lower the market price of our Class A common stock, even though they may or may not affect our actual operating performance.
Furthermore, in recent years the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our Class A common stock could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce the price of our Class A common stock and materially affect the value of your investment.
The market price of our Class A common stock could decline upon the exchange of LLC Units by our Continuing Owners.
Approximately 47 million LLC Units of Station Holdco are owned by our Continuing Owners, or 39.9% of Red Rock Class A common stock on a fully exchanged basis, and may be sold in the future. In addition, under the Exchange Agreement, each holder of shares our Class B common stock is entitled to exchange its LLC Units for shares of our Class A common stock, as described under “Tax Receivable Agreement with Related Parties” within Note 2 to the Consolidated Financial Statements.
The market price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock eligible for future sale, or the perception that such sales could occur. These sales, or the possibility that these sales may occur, may make it more difficult for holders of our Class A common stock to sell such stock in the future at a time and at a price that they deem appropriate. They also may make it more difficult for us to raise additional capital by selling equity securities in the future.

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We may not have sufficient funds to pay dividends on our Class A common stock.
Although we intend to pay dividends on our Class A common stock to the extent that we have sufficient funds available for such purpose, the declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of our board of directors and we may reduce or discontinue entirely the payment of such dividends at any time. Our board of directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant. The existing debt agreements of Station LLC limit the ability of Station LLC to make distributions to Station Holdco, which effectively restricts the ability of Station Holdco to distribute sufficient funds to permit Red Rock to pay dividends to its stockholders. Red Rock will be required to apply funds distributed by Station Holdco to pay taxes and make payments under the TRA. Therefore, we cannot assure you that you will receive any dividends on your Class A common stock. Accordingly, you may need to sell your shares of Class A common stock to realize a return on your investment, and you may not be able to sell your shares above the price you paid for them. See Note 12 to the Consolidated Financial Statements.
Anti-takeover provisions and shareholder requirements in our charter documents, provisions of Delaware law and Nevada gaming laws may delay or prevent our acquisition by a third party, which might diminish the value of our Class A common stock. Provisions in our debt agreements may also require an acquirer to refinance our outstanding indebtedness if a change of control occurs, which could discourage or increase the costs of a takeover.
In addition to the Fertitta Family Entities owning 86.7% of the combined voting power of our common stock, which permits them to control decisions made by our stockholders, including election of directors and change of control transactions, our amended and restated certificate of incorporation and bylaws contain provisions that make it harder for a third party to acquire us. These provisions include certain super-majority approval requirements and limitations on actions by written consent of our stockholders at any time that the Fertitta Family Entities hold less than 10% of the LLC Units. In addition, our board of directors has the right to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquirer. Our amended and restated certificate of incorporation also imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock other than the Fertitta Family Entities.
The Nevada Act provides that persons who acquire beneficial ownership of more than 5% of the voting or non-voting securities of a Registered Corporation under Nevada gaming laws must report the acquisition to the Nevada Commission. The Nevada Act also requires that beneficial owners of more than 10% of the voting securities of a Registered Corporation must apply, subject to certain exceptions, to the Nevada Commission for a finding of suitability within thirty days after the Chair of the Nevada Board mails the written notice requiring such filing.
Further, changes in control of the Company through merger, consolidation, stock or asset acquisitions (including stock issuances in connection with restructuring transactions), management or consulting agreements, or any act or conduct by a person whereby such person obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and the Nevada Commission that they meet a variety of stringent standards prior to assuming control of such Registered Corporation. The Nevada Commission may also require controlling equity holders, officers, directors, and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction. The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Nevada corporate gaming licensees, and Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Act also requires prior approval of a plan of re-capitalization proposed by the Registered Corporation’s board of directors or similar governing entity in response to a tender offer made directly to the Registered Corporation’s equity holders for the purpose of acquiring control of the Registered Corporation.
These anti-takeover provisions, shareholder requirements and other provisions under Delaware law and Nevada gaming laws could discourage, delay or prevent a transaction involving a change in control of our Company, including transactions that our stockholders may deem advantageous, and negatively affect the trading price of our Class A common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
Under our credit facilities, a takeover of our Company would likely constitute a “change of control” and be deemed to be an event of default under such facility, which would therefore require a third-party acquirer to refinance any outstanding indebtedness under the credit facility in connection with such takeover. In addition, the TRA provides that, in the event of a

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change of control, we are required to make a payment equal to the present value of estimated future payments under the TRA, which would result in a significant payment becoming due in the event of a change of control. These change of control provisions, and similar provisions in future agreements, are likely to increase the costs of any takeover and may discourage, delay or prevent an acquisition of our Company by a third party.
Nevada gaming laws and regulations include requirements that may discourage ownership of our Class A common stock or otherwise impact the price of our Class A common stock.
Any beneficial owner of our voting or non-voting securities, regardless of the number of shares owned, may be required to file an application, may be investigated, and may be required to obtain a finding of suitability as a beneficial owner of our securities if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. If the beneficial owner of our voting or non-voting securities who must be found suitable is a corporation, partnership, limited partnership, limited liability company or trust, it must submit detailed business and financial information, including a list of its beneficial owners, to the Nevada Board. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.
Any person who acquires more than 5% of Red Rock’s voting power must report the acquisition to the Nevada Commission. Nevada gaming regulations also require that beneficial owners of more than 10% of Red Rock’s voting power apply to the Nevada Commission for a finding of suitability within 30 days after the Chair of the Nevada Board mails written notice requiring such filing. Further, an “institutional investor”, as defined in the Nevada gaming regulations, that acquires more than 10%, but not more than 25%, of Red Rock’s voting power may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds Red Rock’s voting securities for investment purposes only.
Any person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Nevada Commission, or the Chair of the Nevada Board, may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any equity holder who is found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common equity of a Registered Corporation beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. We will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be an equity holder or to have any other relationship with us or our licensed or registered subsidiaries, we (i) pay that person any dividend or interest upon our securities, (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pay remuneration in any form to that person for services rendered or otherwise, or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish his securities including, if necessary, the immediate purchase of said securities for the price specified by the relevant gaming authority or, if no such price is specified, the fair market value as determined by the board of directors of Red Rock. The purchase may be made in cash, notes that bear interest at the applicable federal rate or a combination of notes and cash. Additionally, the CCLGLB has the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming license. The cumulative effect of these laws and regulations may discourage ownership of our Class A common stock or otherwise impact the price of our Class A common stock.
Moreover, if any of our significant stockholders or members of Station Holdco is required to, but does not, apply for a finding or suitability or licensing or is found unsuitable by the Nevada Commission, they may rapidly liquidate their equity holdings, which could cause the market price of our Class A common stock to decline. Additionally, we could be required to repurchase any shares or LLC Units held by such significant stockholder or member for cash, notes bearing interest at the applicable federal rate or a combination of cash and notes. In the event that we were required to repurchase shares for cash, our cash position would be reduced and our liquidity and financial condition could be materially adversely affected. There can be no assurance that we would have sufficient cash available to meet such obligation as well as our continuing operating requirements or that, if additional financing were required, that such financing could be obtained on terms acceptable to us, if at all.
Future offerings of debt securities or additional or increased loans, which would rank senior to our common stock upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our Class A common stock.
In the future, we may attempt to increase our capital resources through offerings of debt securities, entering into or increasing amounts under our loan agreements or additional offerings of equity securities. Upon bankruptcy or liquidation, holders of our debt securities, including holders of our senior notes, and shares of preferred stock, if any is issued, and lenders with respect to our indebtedness, including our credit facility, will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Our preferred stock, if issued, will likely have a preference on liquidating distributions or a preference on dividend payments or both that could limit our ability to make a dividend distribution to the

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holders of our common stock. Our decision to issue securities in any future offering or enter into or increase loan amounts will depend on our management’s views on our capital structure and financial results, as well as market conditions and other factors beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of any such future transaction, and purchasers of our Class A common stock bear the risk of our future transactions reducing the market price of our Class A common stock and diluting their ownership interest in our Company.
If securities analysts do not publish research or reports about our Company, or if they issue unfavorable commentary about us or our industry and markets or downgrade our Class A common stock, the price of our Class A common stock could decline.
The trading market for our Class A common stock depends in part on the research and reports that third-party securities analysts publish about our Company and our industry and markets. One or more analysts could downgrade our Class A common stock or issue other negative commentary about our Company or our industry or markets. In addition, we may be unable to attract sufficient research coverage. Alternatively, if one or more of these analysts cease coverage of our Company, we could lose visibility in the market. As a result of one or more of these factors, the trading price and volume of our Class A common stock could decline.
If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could materially and adversely affect us.
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement. We cannot be certain that we will be successful in implementing or maintaining adequate internal control over our financial reporting and financial processes. Furthermore, as we grow our business, our internal controls will become more complex, and we will require significantly more resources to ensure our internal controls remain effective. Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weakness or significant deficiency, and management may not be able to remediate any such material weakness or significant deficiency in a timely manner. The existence of any material weakness or significant deficiency in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
Substantially all of the property that we own and lease is subject to liens to secure borrowings under our credit agreements and include the following:
Red Rock, which opened in 2006, is situated on approximately 64 acres that we own on the west side of Las Vegas, Nevada.
Green Valley Ranch, which opened in 2001, is situated on approximately 40 acres that we own in Henderson, Nevada.
Palms, which we purchased in 2016, is situated on approximately 37 acres that we own in Las Vegas, Nevada.
Palace Station, which opened in 1976, is situated on approximately 30 acres that we own in Las Vegas, Nevada.
Boulder Station, which opened in 1994, is situated on approximately 46 acres that we own on the east side of Las Vegas, Nevada.
Texas Station, which opened in 1995, is situated on approximately 47 acres that we own in North Las Vegas, Nevada.
Sunset Station, which opened in 1997, is situated on approximately 80 acres that we own in Henderson, Nevada.
Santa Fe Station, which we purchased in 2000, is situated on approximately 39 acres that we own on the northwest side of Las Vegas, Nevada.

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Fiesta Rancho, which we purchased in 2001, is situated on approximately 25 acres that we own in North Las Vegas, Nevada.
Fiesta Henderson, which we purchased in 2001, is situated on approximately 35 acres that we own in Henderson, Nevada.
Wild Wild West, which we purchased in 1998, is situated on approximately 20 acres of land in Las Vegas, Nevada. The land on which Wild Wild West is situated is part of a 96-acre site that we own, which is being held for future development.
Wildfire Rancho, which we purchased in 2003, is situated on approximately five acres that we own in Las Vegas, Nevada.
Wildfire Boulder, which we purchased in 2004, is situated on approximately two acres that we own in Henderson, Nevada.
Wildfire Sunset, which we purchased in 2004, is situated on approximately one acre that we own in Henderson, Nevada.
Wildfire Lake Mead, which we purchased in 2006, is situated on approximately three acres that we own in Henderson, Nevada.
Wildfire Valley View and Wildfire Anthem, which we purchased in 2013, lease land and buildings used in their operations in Las Vegas, Nevada and Henderson, Nevada, respectively, from third-party lessors.
Barley’s and The Greens, which are 50% owned, lease land and buildings in Henderson, Nevada used in their operations from third-party lessors. Wildfire Lanes, which is 50% owned, owns the land and building in Henderson, Nevada used in its operations. We opened Barley’s in 1996 and purchased The Greens in 2005 and Wildfire Lanes in 2007.
We own 323 acres of developable land comprised of seven strategically-located parcels in Las Vegas and Reno, Nevada, each of which is zoned for casino gaming and other commercial uses. We also own two additional development sites that are currently for sale, comprising a 57-acre site in Las Vegas and an 88-acre site in Reno. From time to time we may acquire additional parcels or sell portions of our existing sites that are not necessary to the development of additional gaming facilities.
Subsequent to the opening or purchase of certain of our properties, we have completed a variety of expansion and renovation projects. From time to time we also renovate portions of our properties, such as hotel rooms and restaurants.
ITEM 3.
LEGAL PROCEEDINGS
We and our subsidiaries are defendants in various lawsuits relating to routine matters incidental to our business. No assurance can be provided as to the outcome of such matters and litigation inherently involves significant costs.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.

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PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our Class A common stock has traded on the NASDAQ under the symbol “RRR” since April 27, 2016. Prior to that date, there was no public market for our Class A common stock. The declaration, amount and payment of dividends on shares of Class A common stock are at the discretion of the board of directors, subject to legally available funds.
Dividends
The declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of our board of directors and we may reduce or discontinue entirely the payment of such dividends at any time. Our board of directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant. See Note 12 to the Consolidated Financial Statements for further details on dividends.
During each of the years ended December 31, 2019 and 2018, the Company declared and paid cash dividends of $0.40 per share to Class A common shareholders. In January 2020, the board of directors declared a dividend of $0.10 per share of Class A common stock to holders of record as of March 13, 2020 to be paid on March 27, 2020.
Holders
At February 14, 2020, there were 13 holders of record of our Class A common stock, although we believe there are a significantly larger number of beneficial owners of our Class A common stock because many shares are held by brokers and other institutions on behalf of stockholders.
Issuer Purchases of Equity Securities—None.
Recent Sales of Unregistered Securities—None.

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Stock Performance Graph
The following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the Standard & Poor’s MidCap 400 Index (“S&P 400”) and a peer group for the period beginning on April 27, 2016 (the date our common stock commenced trading on the NASDAQ) and ending on December 31, 2019.
 
Cumulative Total Return
 
April 27, 2016
 
December 31,

 
2016
 
2017
 
2018
 
2019
RRR
$
100.00

 
$
125.13

 
$
185.18

 
$
113.04

 
$
135.56

S&P 400
100.00

 
116.34

 
135.23

 
120.24

 
151.75

Peer Group (a)
100.00

 
123.47

 
165.13

 
113.75

 
175.03

_______________________________________
(a)
Includes Boyd Gaming Corporation, Caesars Entertainment Corporation, Eldorado Resorts, Inc., MGM Resorts International and Penn National Gaming, Inc.
Past stock price performance is not necessarily indicative of future results. The performance graph should not be deemed filed or incorporated by reference into any other of our filings under the Securities Act of 1933 or the Exchange Act of 1934, unless we specifically incorporate the performance graph by reference therein.

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ITEM 6.
SELECTED FINANCIAL DATA
The following selected consolidated financial data have been derived from our consolidated financial statements. The selected consolidated financial data are qualified in their entirety by, and should be read in conjunction with, Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and the notes thereto.
 
Year Ended December 31,
 
2019
 
2018 (a)
 
2017 (b)
 
2016 (c)
 
2015 (d)
 
(amounts in thousands, except per share data)
Operating Results:
 
 
 
 
 
 
 
 
 
Net revenues
$
1,856,534

 
$
1,681,030

 
$
1,642,139

 
$
1,475,760

 
$
1,352,135

Operating income
186,001

 
372,208

 
331,281

 
309,711

 
287,189

Net (loss) income
(6,737
)
 
219,480

 
63,533

 
155,964

 
143,252

Net (loss) income attributable to noncontrolling interests
(3,386
)
 
61,939

 
28,110

 
64,012

 
5,594

Net (loss) income attributable to Red Rock Resorts, Inc.
(3,351
)
 
157,541

 
35,423

 
91,952

 
137,658

Per Share Data:
 
 
 
 
 
 
 
 
 
Net (loss) earnings per share, basic
$
(0.05
)
 
$
2.28

 
$
0.53

 
$
1.04

 
$
1.53

Net (loss) earnings per share, diluted
$
(0.05
)
 
$
1.77

 
$
0.42

 
$
1.03

 
$
1.53

Cash dividends declared per common share
$
0.40

 
$
0.40

 
$
0.40

 
$
0.20

 
$

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, excluding restricted cash
$
128,835

 
$
114,607

 
$
231,465

 
$
133,776

 
$
116,426

Total assets
4,114,187

 
4,009,526

 
3,620,121

 
3,527,016

 
2,932,111

Total debt
3,033,291

 
2,855,359

 
2,617,822

 
2,422,301

 
2,155,197

Total equity
782,597

 
816,995

 
631,712

 
627,598

 
573,709

 
 
 
 
 
 
 
 
 
 
(a)
During the year ended December 31, 2018, we recognized income of $90.4 million as a result of payments made to two pre-IPO owners of Station Holdco in exchange for the assignment of all of their rights under the TRA.
(b)
During the year ended December 31, 2017, we recognized a $100.3 million charge in related party lease termination costs, which was offset by a $135.1 million adjustment to the tax receivable agreement liability due to tax reform.
(c)
The acquisition of Palms was completed on October 1, 2016.
(d)
Selected financial data as of and for the year ended December 31, 2015 was not retrospectively adjusted upon adoption of the revenue recognition standard in 2018 and therefore is not comparable.

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ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in Item 8. Financial Statements and Supplementary Data included in this Annual Report on Form 10-K.
Overview
Red Rock is a holding company that owns an indirect equity interest in and manages Station LLC, through which we conduct all of our operations. Station LLC is a gaming, development and management company established in 1976 that develops and operates strategically-located casino entertainment properties. Station LLC owns and operates ten major gaming and entertainment facilities and ten smaller casinos (three of which are 50% owned) offering approximately 20,400 slot machines, 375 table games and 5,000 hotel rooms in the Las Vegas regional market. Station LLC also manages Graton Resort in northern California on behalf of a Native American tribe. Our agreement to manage Graton Resort will expire in November 2020.
We hold an indirect equity interest in Station LLC through our ownership of LLC Units in Station Holdco, which holds all of the economic interests in Station LLC. At December 31, 2019, we held 60.1% of the equity interests in Station Holdco. We operate and control all of the business and affairs of Station LLC and Station Holdco through our ownership of 100% of the voting interests in Station LLC and our designation as the sole managing member of both Station LLC and Station Holdco. Our only assets are our ownership interests in Station LLC and Station Holdco, other than cash and tax-related assets and liabilities. We have no operations outside of our management of Station LLC and Station Holdco.
Our Consolidated Financial Statements reflect the consolidation of Station LLC and its consolidated subsidiaries and Station Holdco. The financial position and results of operations attributable to LLC Units we do not own are reported separately as noncontrolling interest.
Our principal source of revenue and operating income is gaming, and our non-gaming offerings include restaurants, hotels and other entertainment amenities. Approximately 80% to 85% of our casino revenue is generated from slot play. The majority of our revenue is cash-based and as a result, fluctuations in our revenues have a direct impact on our cash flows from operations. Because our business is capital intensive, we rely heavily on the ability of our properties to generate operating cash flow to repay debt financing and fund capital expenditures.
A significant portion of our business is dependent upon customers who live and/or work in the Las Vegas metropolitan area. Based on population and employment growth, the Las Vegas economy was one of the fastest growing economies in the United States from 2015 to 2019. Based on a recent U.S. Census Bureau release, Nevada was second among all states in percentage growth of population from July 2018 to July 2019. In addition, based on preliminary data for December 2019 from the U.S. Bureau of Labor Statistics, Las Vegas experienced a 2.5% year-over-year increase in employment to 1,048,500. This resulted in an unemployment rate of 3.5% which has declined from 14.1% in September 2010. Businesses and consumers in Las Vegas continue to increase their spending as evidenced by 77 consecutive months of year-over-year increases in taxable retail sales from July 2013 to November 2019. Home values have also improved significantly over the past several years with the median price of an existing single family home in Las Vegas up approximately 180% at December 2019 compared to January 2012, as reported by the Las Vegas Realtors®.
The Las Vegas economy continues to show growth in employment, taxable sales and home prices, and we believe these positive trends, along with new capital investment planned or underway in Las Vegas, provide a foundation for future growth in our business. Although our operating results over the past few years have benefited from favorable local economic conditions, we cannot be sure if, or how long, these favorable market conditions will persist or that they will continue to positively impact our results of operations.
We completed a $690 million redevelopment project at Palms in September 2019 and completed a $192.6 million redevelopment project at Palace Station in December 2018. Accordingly, our year-over-year comparative operating results reflect the impact of construction disruption and costs associated with these projects for the periods prior to their completion.

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Information about our results of operations is included herein and in the notes to our Consolidated Financial Statements.
Our Key Performance Indicators
We use certain key indicators to measure our performance.
Gaming revenue measures:
Slot handle, table game drop and race and sports write are measures of volume. Slot handle represents the dollar amount wagered in slot machines, and table game drop represents the total amount of cash and net markers issued that are deposited in table game drop boxes. Race and sports write represents the aggregate dollar amount wagered on race and sports events.
Win represents the amount of wagers retained by us.
Hold represents win as a percentage of slot handle or table game drop.
As our customers are primarily Las Vegas residents, our hold percentages are generally consistent from period to period. Fluctuations in our casino revenue are primarily due to the volume and spending levels of customers at our properties.
Food and beverage revenue measures:
Average guest check is a measure of food sales volume and product offerings at our restaurants, and represents the average amount spent per customer visit.
Number of guests served is an indicator of volume.
Room revenue measures:
Occupancy is calculated by dividing occupied rooms, including complimentary rooms, by rooms available.
Average daily rate (“ADR”) is calculated by dividing room revenue, which includes the retail value of complimentary rooms, by rooms occupied, including complimentary rooms.
Revenue per available room is calculated by dividing room revenue by rooms available.

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Results of Operations
The following table presents information about our results of operations (dollars in thousands). Information about our results of operations for the year ended December 31, 2018 as compared to 2017 can be found under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 26, 2019.
 
Year Ended December 31,
 
2019
 
2018
 
Percent
change
Net revenues
$
1,856,534

 
$
1,681,030

 
10.4%
Operating income
186,001

 
372,208

 
(50.0)%
 
 
 
 
 
 
Casino revenues
984,253

 
940,483

 
4.7%
Casino expenses
351,043

 
326,980

 
7.4%
Margin
64.3
%
 
65.2
%
 
 
 
 
 
 
 
 
Food and beverage revenues
481,558

 
381,197

 
26.3%
Food and beverage expenses
465,505

 
340,212

 
36.8%
Margin
3.3
%
 
10.8
%
 
 
 
 
 
 
 
 
Room revenues
192,305

 
170,824

 
12.6%
Room expenses
81,064

 
78,440

 
3.3%
Margin
57.8
%
 
54.1
%
 
 
 
 
 
 
 
 
Other revenues
106,773

 
100,912

 
5.8%
Other expenses
52,329

 
48,431

 
8.0%
 
 
 
 
 
 
Management fee revenue
91,645

 
87,614

 
4.6%
 
 
 
 
 
 
Selling, general and administrative expenses
416,355

 
390,492

 
6.6%
Percent of net revenues
22.4
%
 
23.2
%
 
 
 
 
 
 
 
 
Depreciation and amortization
222,211

 
180,255

 
23.3%
Write-downs and other charges, net
82,123

 
34,650

 
n/m
Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
n/m
Interest expense, net
156,679

 
143,099

 
9.5%
Loss on extinguishment/modification of debt, net
19,939

 

 
n/m
Change in fair value of derivative instruments
(19,467
)
 
12,415

 
n/m
Benefit (provision) for income tax
1,734

 
(23,875
)
 
n/m
Net (loss) income attributable to noncontrolling interests
(3,386
)
 
61,939

 
n/m
Net (loss) income attributable to Red Rock Resorts, Inc.
(3,351
)
 
157,541

 
n/m
________________________________________________
n/m = not meaningful

We view each of our Las Vegas casino properties as an individual operating segment. We aggregate all of our Las Vegas operating segments into one reportable segment because all of our Las Vegas properties offer similar products, cater to the same customer base, have the same regulatory and tax structure, share the same marketing programs, are directed by a centralized management structure and have similar economic characteristics. We also aggregate our Native American management arrangements into one reportable segment. The results of operations for our Native American management

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segment are discussed in the section entitled “Management Fee Revenue” below and the results of operations of our Las Vegas operations are discussed in the remaining sections below.
Net Revenues. Net revenues for the year ended December 31, 2019 increased by 10.4% to $1.86 billion as compared to $1.68 billion for the year ended December 31, 2018. The increase in net revenues was primarily due to a $170.8 million increase in Las Vegas operations, led by an increase in net revenues at Palms.
Operating Income. Operating income decreased to $186.0 million for 2019 as compared to $372.2 million for 2018. The decrease was primarily due to expenses at Palms, including higher depreciation relating to the Palms redevelopment project, artist performance agreement termination costs at the nightclub and dayclub, and redevelopment and preopening expenses incurred prior to the grand reopening in April 2019. The change from the prior year was also impacted by a gain recognized in 2018 associated with the extinguishment of a tax receivable agreement liability. Factors impacting operating income are discussed below.
Casino.  Casino revenues increased by $43.8 million to $984.3 million for 2019 as compared to $940.5 million for 2018 primarily due to increased volume across all major categories of gaming operations. Slot handle increased by 4.0%, table games drop increased by 16.8% and race and sports write increased by 7.1% for 2019 as compared to 2018. Casino expenses increased by $24.1 million or 7.4% for 2019 as compared to 2018, commensurate with the increased casino volume.
Food and Beverage.  Food and beverage includes revenue and expenses from restaurants, bars and catering at all of our Las Vegas properties, as well as the revenue and expenses associated with the nightclub and dayclub at Palms, which operated from April 2019 to November 2019. Food and beverage revenue for 2019 increased by $100.4 million as compared to 2018, primarily due to new restaurants at Palms, as well as the nightclub and dayclub. For 2019, food and beverage expense increased by 36.8% as compared to 2018, primarily due to the opening of the nightclub and dayclub at Palms, as well as several new restaurants at Palms and Palace Station. Food and beverage expenses for 2019 also included one-time costs associated with the grand reopening events held at Palms in early April 2019. The number of restaurant guests increased by 4.9% and the average guest check increased by 10.1% compared to prior year. Despite the food and beverage revenue growth at Palms, expenses in this area have been challenging, due in large part to the entertainment and fixed cost structure associated with the nightclub and dayclub. As a result, we closed the Palms’ nightclub and dayclub.
Room. Information about our hotel operations is presented below:
 
Year Ended December 31,
 
2019
 
2018
Occupancy
88.1
%
 
87.7
%
Average daily rate
$
128.51

 
$
118.65

Revenue per available room
$
113.15

 
$
104.03

For 2019, room revenues increased by 12.6% to $192.3 million as compared to $170.8 million for 2018, primarily due to the completion of the redevelopment project at Palms. For 2019, our ADR improved by 8.3%, our revenue per available room improved by 8.8%, and our occupancy rate improved by 0.4 percentage points as compared to 2018, commensurate with the increase in room revenues.
Other. Other primarily includes revenues from tenant leases, retail outlets, bowling, spas and entertainment and their corresponding expenses. Other revenues and other expenses increased for 2019, as compared to 2018, primarily due to increased business volume.
Management Fee Revenue. Management fee revenue primarily represents fees earned from our agreement with a Native American tribe to manage Graton Resort. For 2019, as compared to 2018, management fee revenue increased by 4.6% to $91.6 million, which was driven by stronger operating results at Graton Resort. The increase in management fees from Graton Resort was partially offset by the impact of the expiration of the Gun Lake management agreement in February 2018, which produced $4.3 million of revenue in 2018. The Graton Resort management agreement will expire in November 2020.
Selling, General and Administrative (“SG&A”).  SG&A expenses increased by 6.6% to $416.4 million for 2019 as compared to $390.5 million for 2018, primarily due to increased costs at Palms, including costs associated with the grand reopening events held in early April 2019 and the property’s national branding and marketing campaign. As a percentage of net revenue, SG&A expenses decreased by 0.8 percentage points for 2019 as compared to the prior year.

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Depreciation and Amortization.  Depreciation and amortization expense for 2019 increased to $222.2 million as compared to $180.3 million for 2018. The increase primarily represents depreciation on assets placed into service as a result of the completion of the Palms and Palace Station projects.
Write-downs and Other Charges, net. Write-downs and other charges, net include asset disposals, preopening and redevelopment, severance, business innovation and technology enhancements and non-routine expenses. For 2019, write-downs and other charges, net totaled $82.1 million, which included $39.8 million in artist performance agreement termination costs at Palms’ nightclub and dayclub and $25.9 million in Palms redevelopment and preopening expenses, comprising various costs associated with the brand repositioning campaign, as well as preopening related to new restaurants, nightclubs, bars and other amenities. For 2018, write-downs and other charges, net totaled $34.7 million, which included $18.6 million in Palms redevelopment and preopening expenses.
Tax Receivable Agreement Liability Adjustment.  From time to time, our liability under the tax receivable agreement (“TRA”) is adjusted based on a number of factors, including the amount and timing of our taxable income, the tax rate then applicable, our amortizable basis in Station Holdco, and the impact of transactions relating to TRA liabilities. Adjustments to our TRA liability are recognized within the Tax receivable agreement liability adjustment line in the Consolidated Statements of Operations and Comprehensive (Loss) Income. During 2018, we paid a total of $28.9 million to two pre-IPO owners of Station Holdco in exchange for which the owners assigned us all of their rights under the TRA. As a result, our liability under the TRA was reduced by $119.2 million and we recognized nontaxable income of $90.4 million.
Interest Expense, net.  The following table presents summarized information about our interest expense (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
Interest cost, net of interest income
$
143,035

 
$
134,998

Amortization of debt discount and debt issuance costs
16,421

 
16,149

Capitalized interest
(2,777
)
 
(8,048
)
Interest expense, net
$
156,679

 
$
143,099

Interest expense, net, for 2019 was $156.7 million as compared to $143.1 million for 2018. The increase in interest expense, net was primarily due to higher outstanding indebtedness. In addition, capitalized interest was lower during the year due to the completion of the Palms and Palace Station projects. See Note 9 to the Consolidated Financial Statements for additional information about our long-term debt.
Loss on Extinguishment/Modification of Debt, net. During 2019, we recognized a $19.9 million loss on extinguishment/modification of debt, primarily arising from the purchase of our corporate office building in the fourth quarter. We previously leased the building from the third-party seller/lessor under a sale-leaseback arrangement accounted for as a financing transaction. We accounted for the purchase as an extinguishment of the financing liability and recognized a loss on extinguishment of $19.6 million representing the difference between the carrying amount of the liability and the purchase price of the building.
Change in Fair Value of Derivative Instruments. During 2019, we recognized a net loss of $19.5 million in the fair value of our interest rate swaps, as compared to a net gain of $12.4 million for 2018. The decrease in the fair value of our interest rate swaps was primarily due to downward movements in the forward interest rate curve.
Benefit (Provision) for Income Tax. For the year ended December 31, 2019, we recognized an income tax benefit of $1.7 million as compared to income tax expense of $23.9 million for the prior year, primarily due to results of operations. Station Holdco is treated as a partnership for income tax reporting and Station Holdco’s members are liable for federal, state and local income taxes based on their share of Station Holdco’s taxable income. Our effective tax rate of 20.5% for 2019 was approximately equal to the statutory rate with differences primarily related to loss attributable to noncontrolling interest, tax credits and permanent items.
Net (Loss) Income Attributable to Noncontrolling Interests. Net (loss) income attributable to noncontrolling interests for the years ended December 31, 2019 and 2018 represented the portion of net (loss) income attributable to the ownership interest in Station Holdco not held by us.

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Adjusted EBITDA
Adjusted EBITDA for the years ended December 31, 2019 and 2018 for our two reportable segments and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands). The Las Vegas operations segment includes all of our Las Vegas area casino properties and the Native American management segment includes our Native American management arrangements.
 
Year Ended December 31,
 
2019
 
2018
Net revenues
 
 
 
Las Vegas operations
$
1,758,760

 
$
1,588,003

Native American management
91,074

 
87,009

Reportable segment net revenues
1,849,834

 
1,675,012

Corporate and other
6,700

 
6,018

Net revenues
$
1,856,534

 
$
1,681,030

 
 
 
 
Net (loss) income
$
(6,737
)
 
$
219,480

Adjustments
 
 
 
Depreciation and amortization
222,211

 
180,255

Share-based compensation
16,848

 
11,289

Write-downs and other charges, net
82,123

 
34,650

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
Interest expense, net
156,679

 
143,099

Loss on extinguishment/modification of debt, net
19,939

 

Change in fair value of derivative instruments
19,467

 
(12,415
)
(Benefit) provision for income tax
(1,734
)
 
23,875

Other
316

 
(633
)
Adjusted EBITDA
$
509,015

 
$
508,962

 
 
 
 
Adjusted EBITDA
 
 
 
Las Vegas operations
$
454,805

 
$
457,379

Native American management
85,562

 
80,795

Reportable segment Adjusted EBITDA
540,367

 
538,174

Corporate and other
(31,352
)
 
(29,212
)
Adjusted EBITDA
$
509,015

 
$
508,962

 
 
 
 
The year-over-year changes in Adjusted EBITDA are due to the factors described under Results of Operations above.
Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We believe that Adjusted EBITDA is a widely used measure of operating performance in our industry and is a principal basis for valuation of gaming companies. We believe that in addition to net (loss) income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations excluding non-cash expenses, financing costs, and other non-operational or non-recurring items. Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance agreement terminations at Palms’ nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, (benefit) provision for income tax and other.
To evaluate Adjusted EBITDA and the trends it depicts, the components should be considered. Each of these components can significantly affect our results of operations and should be considered in evaluating our operating performance, and the impact of these components cannot be determined from Adjusted EBITDA. Further, Adjusted EBITDA does not represent net income or cash flows from operating, investing or financing activities as defined by GAAP and should not be considered as an alternative to net income as an indicator of our operating performance. Additionally, Adjusted EBITDA does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. It should be noted that not all gaming companies that report EBITDA or adjustments to this measure may calculate EBITDA or

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such adjustments in the same manner as we do, and therefore, our measure of Adjusted EBITDA may not be comparable to similarly titled measures used by other gaming companies.
Holding Company Financial Information
The indenture governing the 5.00% Senior Notes and the indenture governing the 4.50% Senior Notes contain certain covenants that require Station LLC to furnish to the holders of the notes certain annual and quarterly financial information relating to Station LLC and its subsidiaries. The obligation to furnish such information may be satisfied by providing consolidated financial information of the Company along with additional disclosure explaining the differences between such information and the financial information of Station LLC and its subsidiaries on a standalone basis. The following financial information about the Company and its consolidated subsidiaries, exclusive of Station LLC and its subsidiaries (the “Holding Company”), is furnished to explain the differences between the financial information of the Holding Company and the financial information of Station LLC and its subsidiaries for the periods presented in this report. As discussed below, the primary differences between the financial information of the Holding Company and that of Station LLC relate to income taxes and the TRA.
At December 31, 2019, the difference between the balance sheet for Station LLC and its consolidated subsidiaries and the balance sheet for the Holding Company is that the Holding Company had cash of $0.2 million and a net deferred tax asset of $113.2 million that are solely assets of the Holding Company, offset by liabilities that are solely the Holding Company’s, consisting of a $25.1 million liability under the TRA and $0.8 million of other net current liabilities. At December 31, 2018, the Holding Company had cash of $0.2 million, an income tax receivable of $0.1 million and a net deferred tax asset of $111.8 million, offset by liabilities that are solely the Holding Company’s, consisting of a $24.9 million liability under the TRA and $0.6 million of other net current liabilities.
For the year ended December 31, 2019, the difference between the statement of operations for Station LLC and its consolidated subsidiaries and the statement of operations for the Holding Company is that the Holding Company had net income of $1.7 million which represented its income tax benefit. For 2018, the difference between the statement of operations for Station LLC and its consolidated subsidiaries and the statement of operations for the Holding Company is that the Holding Company incurred a net loss of $62.9 million, which included income of $90.6 million from the TRA liability adjustments, offset by SG&A expenses of $3.9 million and income tax benefit of $23.9 million.
Financial Condition, Capital Resources and Liquidity
The following financial condition, capital resources and liquidity discussion contains certain forward-looking statements with respect to our business, financial condition, results of operations, dispositions, acquisitions, expansion projects and issuances of debt and equity, which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to, the risks described in Item 1A. Risk Factors.
At December 31, 2019, we had $128.8 million in cash and cash equivalents, and Station LLC’s borrowing availability under its credit facility, subject to continued compliance with its terms, was $422.5 million, which was net of $440.0 million in outstanding borrowings and $33.5 million in outstanding letters of credit and similar obligations. In February 2020, we amended Station LLC’s credit facility to, among other things, (i) increase the borrowing availability under the revolving credit facility by $135.1 million to $1.03 billion, (ii) extend the maturity date for term loans A and B and the revolving credit facility to February 7, 2025, February 7, 2027 and February 7, 2025, respectively, (iii) reduce the interest rates under the term loan B by 25 basis points and (iv) increase the consolidated total leverage ratios by 0.50x, the achievement of which will result in an interest rate step-down for the term loan A and the revolving credit facility.
Our anticipated uses of cash for 2020 include (i) approximately $90.0 million to $110.0 million for maintenance and investment capital expenditures, (ii) required principal and interest payments on Station LLC’s indebtedness, totaling approximately $20.4 million and $122.8 million, respectively, (iii) dividends to our Class A common stockholders and distributions to noncontrolling interest holders of Station Holdco, including approximately $11.7 million to be paid in March 2020.
We are obligated to make payments under the TRA, which is described in Note 2 to the Consolidated Financial Statements. At December 31, 2019, such obligations with respect to previously consummated transactions totaled $25.1 million. Future payments in respect of any subsequent exchanges of LLC Units for Class A common stock would be in addition to these amounts and are expected to be substantial. Required TRA payments are generally limited to one payment per year, and the timing of these payments may vary. The amount of such payments is also limited to the extent we utilize the related deferred tax assets. The payments that we are required to make will generally reduce the amount of overall cash that might have otherwise been available to us, but we expect the cash tax savings we will realize from the utilization of the related deferred tax assets to

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fund the required payments. See Contractual Obligations for additional information about the estimated amounts and timing of payments under the TRA.
From time to time, we may seek to repurchase our outstanding indebtedness. Any such purchases may be funded by existing cash balances or the incurrence of debt, including borrowings under our credit facility. The amount and timing of any repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.
In February 2019, our board of directors approved an equity repurchase program authorizing the repurchase of up to an aggregate of $150 million of our Class A common stock. We are not obligated to repurchase any shares under this program. Subject to applicable laws and the provisions of any agreements restricting our ability to do so, repurchases may be made at our discretion from time to time through open market purchases, negotiated transactions or tender offers, depending on market conditions and other factors. Through December 31, 2019, no equity repurchases were made under the program.
We believe that cash flows from operations, available borrowings under the credit facility, other debt financings and existing cash balances will be adequate to satisfy our anticipated uses of capital for the next twelve months. We regularly assess our projected capital requirements for capital expenditures, repayment of debt obligations, and payment of other general corporate and operational needs. In the long term, we expect that we will fund our capital requirements with a combination of cash generated from operations, borrowings under the credit facility and the issuance of debt or equity as market conditions may permit. However, our cash flow and ability to obtain debt or equity financing on terms that are satisfactory to us, or at all, may be affected by a variety of factors, including competition, general economic and business conditions and financial markets. As a result, we cannot provide any assurance that we will generate sufficient income and liquidity to meet all of our liquidity requirements or other obligations.
Following is a summary of our cash flow information (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
Cash flows provided by (used in):
 
 
 
Operating activities
$
316,632

 
$
346,007

Investing activities
(405,137
)
 
(606,682
)
Financing activities
103,162

 
144,189

Cash Flows from Operations
Our operating cash flows primarily consist of operating income generated by our properties (excluding depreciation and other non-cash charges), interest paid and changes in working capital accounts such as inventories, prepaid expenses, receivables and payables. The majority of our revenue is generated from our slot machine and table game play, which is conducted primarily on a cash basis. Our food and beverage, room and other revenues are also primarily cash-based. As a result, fluctuations in our revenues have a direct impact on our cash flow from operations.
Net cash provided by operating activities for the year ended December 31, 2019 totaled $316.6 million, compared to $346.0 million for 2018. For 2019, operating cash flows were negatively impacted by write-downs and other charges, net, including Palms redevelopment and preopening, artist performance agreement termination costs at Palms’ nightclub and dayclub, and a $18.7 million increase in cash paid for interest.
Cash Flows from Investing Activities
During 2019 and 2018, we paid $353.3 million and $579.3 million, respectively, for capital expenditures, which were primarily related to various renovation projects, including the redevelopment of Palms that was completed in the third quarter of 2019 and the upgrade and expansion project at Palace Station that was completed in 2018, as well as the purchase of slot machines and related gaming equipment. During 2019 and 2018, we paid $57.4 million and $36.1 million, respectively, for the purchase of land held for development in Las Vegas.
Cash Flows from Financing Activities
During 2019, we incurred net borrowings under the revolving credit facility of $195.0 million, which were primarily used to fund capital expenditures. We also paid $27.9 million in dividends to Class A common shareholders and $18.7 million in cash distributions to the noncontrolling interest holders of Station Holdco. In addition, we purchased our corporate building for $57.0 million, which was previously leased from the third-party seller under a sale-leaseback transaction accounted for as a

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financing transaction, and settled the associated $37.4 million liability. The $19.6 million difference between the purchase price and the liability extinguished was recognized as a loss on early extinguishment of debt.
During 2018, we incurred net borrowings under the revolving credit facility of $245.0 million, which were primarily used to fund capital expenditures. We also paid $28.9 million to two pre-IPO owners of Station Holdco in exchange for which the owners assigned to us all of their rights under the TRA as described in Note 15 to the Consolidated Financial Statements.
Restrictive Covenants
Certain customary covenants are included in both the credit agreement governing the credit facility and the indentures governing Station LLC’s senior notes that, among other things and subject to certain exceptions, restrict Station LLC’s ability and the ability of its restricted subsidiaries to incur or guarantee additional debt; create liens on collateral; engage in mergers, consolidations or asset dispositions; pay distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; engage in lines of business other than its core business and related businesses; or issue certain preferred units.
The credit facility also includes certain financial ratio covenants that Station LLC is required to maintain throughout the term of the credit facility and measure as of the end of each quarter. As most recently amended in February 2020, these financial ratio covenants include 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 December 31, 2021 to 5.25 to 1.00 at December 21, 2023 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 providing 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. At December 31, 2019, Station LLC’s interest coverage ratio was 4.37 to 1.00 and its consolidated total leverage ratio was 4.96 to 1.00, both as defined in the credit facility. We believe Station LLC was in compliance with all applicable covenants at December 31, 2019.
Off-Balance Sheet Arrangements
At December 31, 2019, we had no variable interests in unconsolidated entities that provide off-balance sheet financing, liquidity, market risk or credit risk support, or that engage in leasing, hedging or research and development arrangements with us, nor did we have retained or contingent interests in assets transferred to an unconsolidated entity. Our derivative instruments comprise interest rate swaps as described in Note 10 to the Consolidated Financial Statements. At December 31, 2019, we had outstanding letters of credit and similar obligations totaling $33.5 million.
Contractual Obligations
The following table summarizes our contractual obligations at December 31, 2019 (amounts in thousands):
 
Payments Due by Period
 
Less than 1 year
 
1-3 years
 
3-5 years
 
Thereafter
 
Total
Long-term debt (a)
$
33,989

 
$
788,774

 
$
1,665,665

 
$
587,115

 
$
3,075,543

Interest on long-term debt and interest rate swaps (b)
136,930

 
241,644

 
88,989

 
24,305

 
491,868

Operating leases
4,286

 
3,205

 
935

 
43,141

 
51,567

Obligation under the tax receivable agreement (c)

 
1,147

 
2,211

 
21,706

 
25,064

Other (d)
31,316

 
2,779

 
275

 

 
34,370

Total contractual obligations
$
206,521

 
$
1,037,549

 
$
1,758,075

 
$
676,267

 
$
3,678,412

___________________________________
(a)
Includes scheduled principal payments and estimated excess cash flow payments on long-term debt outstanding at December 31, 2019. Additional information about Station LLC’s long-term debt is included in Note 9 to the Consolidated Financial Statements.
(b)
Includes contractual interest payments on fixed and variable rate long-term debt outstanding at December 31, 2019 based on outstanding amounts and interest rates in effect at that date, and projected cash payments on our interest rate swaps.
(c)
The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of the taxable income we generate each year and the tax rate then applicable.

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(d)
Includes employment contracts, long-term stay-on agreements, open purchase orders, natural gas purchase contracts, equipment purchase obligations and other long-term obligations.
Inflation
We do not believe that inflation has had a significant impact on our revenues, results of operations or cash flows in the last several fiscal years.
Native American Development
We have development and management agreements with the Mono, a federally recognized Native American tribe located near Fresno, California, pursuant to which we will assist the Mono in developing, financing and operating a gaming and entertainment facility to be located on Highway 99 north of the city of Madera, California. See Note 6 to the Consolidated Financial Statements for additional information.
Regulation and Taxes
We are subject to extensive regulation by Nevada gaming authorities, as well as regulation by gaming authorities in the other jurisdictions in which we operate, including the NIGC, the California Gambling Control Commission and the Federated Indians of Graton Rancheria Gaming Commission. We will also be subject to regulation, which may or may not be similar to that in Nevada, by any other jurisdiction in which we may conduct gaming activities in the future.
The gaming industry represents a significant source of tax revenue, particularly to the State of Nevada and its counties and municipalities. From time to time, various state and federal legislators and officials have proposed changes in tax law, or in the administration of such law, affecting the gaming industry. The Nevada legislature meets every two years for 120 days and when special sessions are called by the Governor. The legislature is not currently in session, and there are no specific legislative proposals to increase gaming taxes. There are no assurances that an increase in gaming taxes will not be proposed and passed by the Nevada Legislature in the future.
Description of Certain Indebtedness
Long-term Debt
A description of our indebtedness is included in Note 9 to the Consolidated Financial Statements.
Derivative Instruments
A description of our derivative and hedging activities and the related accounting is included in Note 10 to the Consolidated Financial Statements.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that are subject to an inherent degree of uncertainty. Certain accounting estimates and assumptions may have a material impact on our financial statements due to the significant levels of subjectivity and judgment involved and the susceptibility of such estimates and assumptions to change. We base our estimates on historical experience, information that is currently available to us and various other assumptions that we believe are reasonable under the circumstances, and we evaluate our estimates on an ongoing basis. Actual results may differ from these estimates, and such differences could have a material effect on our consolidated financial statements. Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements. Following is a discussion of our accounting policies that involve critical estimates and assumptions.
Long-Lived Assets
Our business is capital intensive and a significant portion of our capital is invested in property and equipment and other long-lived assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We evaluate the recoverability of our long-lived assets by estimating the future cash flows the asset is expected to generate, and comparing these estimated cash flows, on an undiscounted basis, to the carrying amount of the asset. If the carrying amount is greater, the asset is considered to be impaired, and we recognize an impairment charge equal to the amount by which the carrying amount of the asset exceeds its fair value. We test our long-lived assets for impairment at the reporting unit level, and each of our operating properties is considered a separate reporting unit.
Inherent in the calculation of fair values are various estimates and assumptions, including estimates of future cash flows expected to be generated by an asset or asset group. We base our cash flow estimates on the current regulatory, political and economic climates in the areas where we operate, recent operating information and projections for our properties. These estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, changes in

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consumer preferences, or events affecting various forms of travel and access to our properties. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates. The most significant assumptions used in determining cash flow estimates include forecasts of future operating results, EBITDA margins, tax rates, capital expenditures, working capital requirements, long-term growth rates and terminal year free cash flows. Cash flow estimates and their impact on fair value are highly sensitive to changes in many of these assumptions. If our ongoing estimates of future cash flows are not met, we may be required to record impairment charges in the future. For the year ended December 31, 2019, we identified certain potential indicators of impairment at the Palms reporting unit level. Based on the undiscounted expected future cash flows, no impairment was recorded.
Property and Equipment. At December 31, 2019, the carrying amount of our property and equipment was approximately $3.1 billion, which represents approximately 74.4% of our total assets. We make estimates and assumptions when accounting for property and equipment. We compute depreciation using the straight-line method over the estimated useful lives of the assets, and our depreciation expense is highly dependent on the assumptions we make about the estimated useful lives of our assets. We estimate the useful lives of our property and equipment based on our experience with similar assets and our estimate of the usage of the asset. Whenever events or circumstances occur that change the estimated useful life of an asset, we account for the change prospectively. We must also make judgments about the capitalization of costs. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. If an asset or asset group is disposed or retired before the end of its previously estimated useful life, we may be required to accelerate our depreciation expense or recognize a loss on disposal.
Goodwill. We test our goodwill for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and we consider each of our operating properties to be a separate reporting unit.
When performing the annual goodwill impairment testing, we either conduct a qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elect to bypass this qualitative assessment and perform a quantitative test for impairment. Under the qualitative assessment, we consider both positive and negative factors, including macroeconomic conditions, industry events, financial performance and other changes, and make a determination of whether it is more likely than not that the fair value of goodwill is less than its carrying amount. If, after assessing the qualitative factors, we determine it is more likely than not the asset is impaired, we perform a quantitative test in which the estimated fair value of the reporting unit is compared with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit.
When performing the quantitative test, we estimate the fair value of each reporting unit using the expected present value of future cash flows along with value indications based on our current valuation multiple and multiples of comparable publicly traded companies. The estimation of fair value requires management to make critical estimates, judgments and assumptions, including estimating expected future cash flows and selecting appropriate discount rates, valuation multiples and market comparables. Application of alternative estimates and assumptions could produce significantly different results.
At December 31, 2019, our goodwill totaled $195.7 million. Approximately 86.8% of our goodwill is associated with one of our properties. As of our 2019 annual goodwill testing date, the estimated fair values of each of our properties with goodwill exceeded their respective carrying amounts. If the fair value of any of these properties should decline in the future, we may be required to recognize a goodwill impairment charge, which could be material. A property’s fair value may decline as a result of a decrease in the property’s actual or projected operating results or changes in significant assumptions and judgments used in the estimation process, including the discount rate and market multiple.
Indefinite-Lived Intangible Assets. Our indefinite-lived intangible assets primarily represent the value of our brands. At December 31, 2019, the carrying amount of our indefinite-lived intangible assets totaled approximately $77.5 million. Indefinite-lived intangible assets are not amortized unless management determines that their useful life is no longer indefinite. We test our indefinite-lived intangible assets for impairment during the fourth quarter of each year, and whenever events or changes in circumstances indicate that an asset may be impaired, by comparing the carrying amount of the asset to its estimated fair value. If the carrying amount of the asset exceeds its estimated fair value, we recognize an impairment charge equal to the excess. We estimate the fair value of our brands using a derivation of the income approach to valuation based on estimated royalties avoided through ownership of the assets. The fair values of certain of our properties’ indefinite-lived intangible assets is highly sensitive to changes in projected operating results. Accordingly, any decrease in the projected operating results of a property could require us to recognize an impairment charge, which could be material.
Finite-Lived Intangible Assets. Our finite-lived intangible assets primarily represent the value of our management contracts and customer relationships. We amortize our finite-lived intangible assets over their estimated useful lives using the

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straight-line method, and we periodically evaluate the remaining useful lives of our finite-lived intangible assets to determine whether events or circumstances warrant a revision to the remaining period of amortization.
Our management contract intangible assets represent the value associated with management agreements under which we provide management services to various casino properties, primarily Native American casinos which we have developed or are currently developing. We estimated the fair values of our management contract intangible assets using discounted cash flow techniques based on future cash flows expected to be received in exchange for providing management services. We amortize our management contract intangible assets using the straight-line method over their expected useful lives, which is generally equal to the initial term of the management agreement. We begin recognizing amortization expense when the managed property commences operations and management fees are being earned. The recoverability of our management contract intangible assets is dependent upon the operating results of the managed casinos and the likelihood that the casino project we are currently developing is successfully completed.
Our customer relationship intangible assets represent the value associated with our rated casino guests. We estimated the fair values of our customer relationship intangible assets using a variation of the cost approach. The recoverability of our customer relationship intangible assets could be affected by, among other things, increased competition within the gaming industry, a downturn in the economy, declines in customer spending which would impact the expected future cash flows associated with the rated casino guests, declines in the number of customer visits which could impact the expected attrition rate of the rated casino guests, and erosion of operating margins associated with rated casino guests.
Native American Development Costs. We incur certain costs associated with our development and management agreements with Native American tribes which are reimbursable by the tribes, and we capitalize these costs as long-term assets. The assets are typically transferred to the tribes at such time as the tribes secure third-party financing, or the gaming facility is completed. We earn a return on the costs incurred for the acquisition and development of Native American projects. Due to the uncertainty surrounding the timing and amount of the stated return, we recognize the return on a cash basis. Development costs and the related return are typically repaid by the tribes from a project’s third-party financing or from operating cash flows of the casino after opening. Accordingly, the recoverability of our development costs is highly dependent upon the tribes’ success in obtaining third-party financing and our ability to operate the project successfully upon its completion. Our evaluation of the recoverability of our Native American development costs requires us to apply a significant amount of judgment.
We evaluate our Native American development costs for impairment whenever events or changes in circumstances indicate that the carrying amount of the project might not be recoverable, taking into consideration all available information. Among other things, we consider the status of the project, any contingencies, the achievement of milestones, any existing or potential litigation and regulatory matters when evaluating our Native American projects for impairment. If an indicator of impairment exists, we compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying amount of the asset. If the undiscounted expected future cash flows for a project do not exceed its carrying amount, then the asset is written down to its estimated fair value. We estimate a project’s fair value using a discounted cash flow model and market comparables, when available. Our estimate of the undiscounted future cash flows of a Native American development project is based on consideration of all positive and negative evidence about the future cash flow potential of the project including, but not limited to, the likelihood that the project will be successfully completed, the status of required approvals, and the status and timing of the construction of the project, as well as current and projected economic, political, regulatory and competitive conditions that may adversely impact the project’s operating results. In certain circumstances, we may discontinue funding of a project due to a revision of its expected potential, or otherwise determine that our advances are not recoverable and as a result, we may be required to write off the entire carrying amount of a project.
Litigation, Claims and Assessments
We are defendants in various lawsuits relating to routine matters incidental to our business and we assess the potential for any lawsuits or claims brought against us on an ongoing basis. For ongoing litigation and potential claims, we use judgment in determining the probability of loss and whether a reasonable estimate of loss, if any, can be made. We accrue a liability when we believe a loss is probable and the amount of the loss can be reasonably estimated. As the outcome of litigation is inherently uncertain, it is possible that certain matters may be resolved for materially different amounts than previously accrued or disclosed.
Income Taxes
We are taxed as a corporation and pay corporate federal, state and local taxes on income allocated to us by Station Holdco. Station Holdco continues to operate as a partnership for federal, state and local tax reporting and holds 100% of the economic interests in Station LLC. The members of Station Holdco are liable for any income taxes resulting from income allocated to them by Station Holdco as a pass-through entity.

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We recognize deferred tax assets and liabilities based on the differences between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets represent future tax deductions or credits. Realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Each reporting period, we analyze the likelihood that our deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. On an annual basis, we perform a comprehensive analysis of all forms of positive and negative evidence based on year end results. During each interim period, we update our annual analysis for significant changes in the positive and negative evidence. We have determined that a portion of our deferred tax assets do not meet the “more likely than not” threshold required under the accounting standard and as a result, have provided a valuation allowance on our net deferred tax assets.
We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. We do not believe that we have any tax positions for which it is reasonably possible that we will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
We will recognize interest and penalties related to income taxes, if any, within the provision for income taxes. We have incurred no interest or penalties related to income taxes in any of the periods presented.
Tax Receivable Agreement with Related Parties
In connection with the IPO, we 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 us to make payments to such holders for 85% of the tax benefits we realize by such exchange. 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 December 31, 2019, our liability under the TRA with respect to previously consummated transactions was $25.1 million. Future payments in respect of any subsequent exchanges of LLC Units for Class A common stock would be in addition to these amounts and are expected to be substantial.
The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of the taxable income we generate each year and the tax rate then applicable. The payment obligations under the TRA are our 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 our 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 we exercise our right to terminate the TRA. The TRA will also terminate if we breach our obligations under the TRA or upon certain mergers, asset sales or other forms of business combinations, or other changes of control. If we exercise our right to terminate the TRA, or if the TRA is terminated early in accordance with its terms, our payment obligations would be accelerated based upon certain assumptions, including the assumption that we would have sufficient future taxable income to utilize such tax benefits, and may substantially exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices.
Our primary exposure to market risk is interest rate risk associated with our long-term debt. We evaluate our exposure to market risk by monitoring interest rates in the marketplace. We attempt to limit our exposure to interest rate risk by managing the mix of our long-term and short-term borrowings and by using interest rate swaps to achieve fixed cash flows attributable to interest payments on our variable-rate debt. Borrowings under our credit agreements bear interest at a margin above LIBOR or base rate (each as defined in the credit agreements) as selected by us. The total amount of outstanding borrowings is expected to fluctuate and may be reduced from time to time.
LIBOR is expected to be discontinued after 2021. The interest rate per annum applicable to loans under our credit facility is, at our option, either LIBOR plus a margin or a base rate plus a margin. The credit facility permits the administrative

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agent to approve a comparable successor base rate in the event that LIBOR is discontinued, but there can be no assurances as to what the alternative base rate may be and whether such base rate will be more or less favorable than LIBOR or any other unforeseen impacts of the potential discontinuation of LIBOR. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurance regarding the impact of the discontinuation of LIBOR.
At December 31, 2019, $2.5 billion of the borrowings under our credit agreements were based on variable rates, primarily LIBOR, plus applicable margins of 1.75% to 2.50%. The LIBOR rate underlying our LIBOR-based borrowings outstanding under our credit facility ranged from 0.75% to 2.50%. The weighted-average interest rates for variable-rate debt shown in the long-term debt table below were calculated using the rates in effect at December 31, 2019. We cannot predict the LIBOR or base rate interest rates that will be in effect in the future, and actual rates will vary. Based on our outstanding borrowings at December 31, 2019, an assumed 1% increase in variable interest rates would cause our annual interest cost to increase by approximately $10.8 million, after giving effect to our interest rate swaps. After giving effect to the February 2020 financing transactions, an assumed 1% increase in variable interest rates would cause our annual interest cost to increase by approximately $3.5 million, after giving effect to our interest rate swaps.
We are also exposed to interest rate risk related to our interest rate swap agreements which we use to hedge a portion of our variable-rate debt. At December 31, 2019, our interest rate swaps had a combined notional amount of $1.4 billion and a weighted-average fixed pay rate of 1.73%. This rate will increase to 1.94% over the exposure period ending in July 2021.
Certain of our interest rate swaps were previously designated in cash flow hedging relationships until their dedesignation in June 2017. Although we no longer apply hedge accounting to these interest rate swaps, they continue to meet our risk management objectives by achieving fixed cash flows attributable to interest payments on the debt principal being hedged. See Note 10 to the Consolidated Financial Statements for detailed information about our interest rate swaps. We do not use derivative financial instruments for trading or speculative purposes.
Interest rate movements affect the fair value of our interest rate swaps. The fair values of our interest rate swaps are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the instrument. This analysis reflects the contractual terms of the agreements, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurement. Fair value is subject to significant estimation and a high degree of variability between periods and changes in the fair values of our interest rate swaps are recognized in our Consolidated Statements of Operations in the period of change. In addition, we are exposed to credit risk should the counterparties fail to perform under the terms of the interest rate swap agreements; however, we seek to minimize our exposure to this risk by entering into interest rate swap agreements with highly rated counterparties, and we do not believe we were exposed to significant credit risk at December 31, 2019.
Following is information about future principal maturities of our long-term debt and the related weighted-average contractual interest rates in effect at December 31, 2019 (dollars in millions):
 
Expected maturity date
 
 
 
2020
 
2021
 
2022
 
2023
 
2024
 
Thereafter
 
Total
 
Fair value
Long-term debt:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed rate
$
1.6

 
$
1.1

 
$
1.1

 
$
1.1

 
$
1.2

 
$
587.1

 
$
593.2

 
$
595.3

Weighted-average interest rate
4.53
%
 
3.80
%
 
3.80
%
 
3.80
%
 
3.80
%
 
4.92
%
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate (a)
$
32.4

 
$
169.7

 
$
616.8

 
$
1,663.4

 
$

 
$

 
$
2,482.3

 
$
2,513.8

Weighted-average interest rate
4.00
%
 
4.24
%
 
3.69
%
 
4.23
%
 
%
 
%
 


 
 
____________________________________
(a)
Based on variable interest rates and margins in effect at December 31, 2019.

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Following is information about future principal maturities of our long-term debt and the related weighted-average contractual interest rates at December 31, 2019, after giving effect to our February 2020 financing transactions (dollars in millions):
 
Expected maturity date
 
2020
 
2021
 
2022
 
2023
 
2024
 
Thereafter
 
Total
Long-term debt:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed rate
$
1.6

 
$
1.1

 
$
1.1

 
$
1.1

 
$
1.2

 
$
1,337.2

 
$
1,343.3

Weighted-average interest rate
4.52
%
 
3.80
%
 
3.80
%
 
3.80
%
 
3.80
%
 
4.69
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate (a)
$
18.8

 
$
164.8

 
$
132.6

 
$
21.2

 
$
25.1

 
$
1,389.7

 
$
1,752.2

Weighted-average interest rate
3.86
%
 
4.02
%
 
4.01
%
 
3.83
%
 
3.86
%
 
4.00
%
 
 
____________________________________
(a)
Based on variable interest rates and margins in effect at December 31, 2019.
Following is information about the combined notional amount and weighted-average interest rate by contractual maturity date for our interest rate swap agreements, as well as the fair value of the combined net asset at December 31, 2019 (dollars in millions):
 
Expected maturity date
 
 
 
2020
 
2021
 
2022
 
2023
 
2024
 
Thereafter
 
Total
 
Fair value (c)
Interest rate swaps:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
$
156.2

 
$
1,250.0

 
$

 
$

 
$

 
$

 
$
1,406.2

 
$
5.7

Fixed interest rate payable (a)
1.83
%
 
1.94
%
 
%
 
%
 
%
 
%
 


 
 
Variable interest rate receivable (b)
1.72
%
 
1.72
%
 
%
 
%
 
%
 
%
 


 
 
____________________________________
(a)
Represents the weighted-average fixed interest rate payable on our interest rate swaps.
(b)
Represents the variable receive rate in effect at December 31, 2019.
(c)
Liability excludes accrued interest.
Additional information about our long-term debt and interest rate swaps is included in Notes 9 and 10 to the Consolidated Financial Statements.

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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Red Rock Resorts, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Red Rock Resorts, Inc. (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2020 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Valuation of Property and Equipment
Description of the Matter
 
At December 31, 2019, the Company’s property and equipment, included in long-lived assets, totaled $3 billion. As discussed in Note 2, the Company performs a review of the carrying amounts of its long-lived assets, other than goodwill and indefinite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The impairment recognized is the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. If there are indicators of impairment identified, management prepares future undiscounted cash flow estimates to determine if the Company’s long-lived assets are impaired. No single indicator would necessarily result in management preparing an undiscounted cash flow estimate. Management uses judgment to determine if the severity of any single indicator or the combination of multiple indicators of less severity results in an indication that long-lived assets require an undiscounted cash flow estimate to determine if an impairment has occurred. At December 31, 2019, management identified an indicator of impairment related to the Palms reporting unit which required management to perform an undiscounted cash flow estimate to determine whether an impairment occurred in property and equipment for Palms. No indicators of impairment for any other reporting units were identified.
Auditing the Company’s impairment assessment was challenging, as the assumptions used by management in the determination of whether impairment indicators exist, are highly subjective and judgmental. These specific assumptions are comprised of market conditions, including industry and economic trends, changes in regulations, consumer preferences, travel and changes to the Company’s operations specific to property and equipment. Changes to management’s methodology of evaluating these assumptions could have a material effect on management’s determination of whether the assets need to be tested for recoverability as of a reporting date. Additionally, auditing the Company’s estimation around the undiscounted cash flows involved a high degree of judgment over the Company’s assumptions such as EBITDA growth and exit multiples.
How We Addressed the Matter in Our Audit
 
We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s review of impairment indicators over property and equipment and undiscounted cash flow analysis. For example, we tested controls over management’s assessment, including the identification of indicators of impairment and the data and assumptions used in management’s impairment assessment.
To test the Company’s evaluation of indicators of impairment for property and equipment, our audit procedures included, among others, assessing the methodologies and testing the completeness and accuracy of the Company’s analysis of events or changes in circumstances. As part of our evaluation, we considered market conditions, including industry and economic trends, changes in regulations, consumer preferences, travel and changes to the Company’s operations, in assessing whether an indicator of impairments exists. To test the Company’s undiscounted cash flow analysis for the Palms reporting unit, we compared projected amounts to historical results, including sensitivity analyses.


/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2015.
Las Vegas, Nevada
February 21, 2020







58




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RED ROCK RESORTS, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
128,835

 
$
114,607

Restricted cash
4,080

 
3,651

Receivables, net
56,683

 
51,356

Inventories
17,765

 
14,910

Prepaid gaming tax
24,424

 
23,422

Prepaid expenses and other current assets
17,641

 
34,417

Assets held for sale
32,202

 
19,602

Total current assets
281,630

 
261,965

Property and equipment, net
3,061,762

 
3,012,405

Goodwill
195,676

 
195,676

Intangible assets, net
108,506

 
117,220

Land held for development
238,440

 
193,686

Investments in joint ventures
8,867

 
8,903

Native American development costs
18,749

 
17,970

Deferred tax asset, net
113,185

 
111,833

Other assets, net
87,372

 
89,868

Total assets
$
4,114,187

 
$
4,009,526

LIABILITIES AND STOCKHOLDERS’ EQUITY

 
 
 
Current liabilities:
 
 
 
Accounts payable
$
33,970

 
$
25,896

Accrued interest payable
7,477

 
7,418

Other accrued liabilities
200,560

 
266,474

Current portion of long-term debt
33,989

 
33,894

Total current liabilities
275,996

 
333,682

Long-term debt, less current portion
2,999,302

 
2,821,465

Other long-term liabilities
31,228

 
12,436

Payable pursuant to tax receivable agreement
25,064

 
24,948

Total liabilities
3,331,590

 
3,192,531

Commitments and contingencies (Note 20)

 

Stockholders’ equity:
 
 
 
Preferred stock, par value $0.01 per share, 100,000,000 shares authorized; none issued and outstanding

 

Class A common stock, par value $0.01 per share, 500,000,000 shares authorized; 70,465,422 and 69,662,590 shares issued and outstanding at December 31, 2019 and 2018, respectively
705

 
697

Class B common stock, par value $0.00001 per share, 100,000,000 shares authorized; 46,827,370 and 46,884,413 shares issued and outstanding at December 31, 2019 and 2018, respectively
1

 
1

Additional paid-in capital
376,229

 
361,970

Retained earnings
124,423

 
155,869

Accumulated other comprehensive (loss) income
(641
)
 
1,083

Total Red Rock Resorts, Inc. stockholders’ equity
500,717

 
519,620

Noncontrolling interest
281,880

 
297,375

Total stockholders’ equity
782,597

 
816,995

Total liabilities and stockholders’ equity
$
4,114,187

 
$
4,009,526


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

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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating revenues:
 
 
 
 
 
Casino
$
984,253

 
$
940,483

 
$
886,206

Food and beverage
481,558

 
381,197

 
365,448

Room
192,305

 
170,824

 
179,041

Other
106,773

 
100,912

 
92,967

Management fees
91,645

 
87,614

 
118,477

Net revenues
1,856,534

 
1,681,030

 
1,642,139

Operating costs and expenses:
 
 
 
 
 
Casino
351,043

 
326,980

 
311,086

Food and beverage
465,505

 
340,212

 
326,069

Room
81,064

 
78,440

 
81,768

Other
52,329

 
48,431

 
40,332

Selling, general and administrative
416,355

 
390,492

 
380,930

Depreciation and amortization
222,211

 
180,255

 
178,217

Write-downs and other charges, net
82,123

 
34,650

 
29,584

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
(139,300
)
Related party lease termination

 

 
100,343

Asset impairment

 

 
1,829

 
1,670,533

 
1,308,822

 
1,310,858

Operating income
186,001

 
372,208

 
331,281

Earnings from joint ventures
1,928

 
2,185

 
1,632

Operating income and earnings from joint ventures
187,929

 
374,393

 
332,913

Other (expense) income:
 
 
 
 
 
Interest expense, net
(156,679
)
 
(143,099
)
 
(131,442
)
Loss on extinguishment/modification of debt, net
(19,939
)
 

 
(16,907
)
Change in fair value of derivative instruments
(19,467
)
 
12,415

 
14,112

Other
(315
)
 
(354
)
 
(357
)
 
(196,400
)
 
(131,038
)
 
(134,594
)
(Loss) income before income tax
(8,471
)
 
243,355

 
198,319

Benefit (provision) for income tax
1,734

 
(23,875
)
 
(134,786
)
Net (loss) income
(6,737
)
 
219,480

 
63,533

Less: net (loss) income attributable to noncontrolling interests
(3,386
)
 
61,939

 
28,110

Net (loss) income attributable to Red Rock Resorts, Inc.
$
(3,351
)
 
$
157,541

 
$
35,423

 
 
 
 
 
 
(Loss) earnings per common share (Note 18):
 
 
 
 
 
(Loss) earnings per share of Class A common stock, basic
$
(0.05
)
 
$
2.28

 
$
0.53

(Loss) earnings per share of Class A common stock, diluted
$
(0.05
)
 
$
1.77

 
$
0.42

 
 
 
 
 
 
Weighted-average common shares outstanding:
 
 
 
 
 
Basic
69,565

 
69,115

 
67,397

Diluted
69,565

 
116,859

 
115,930


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

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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(amounts in thousands)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income
$
(6,737
)
 
$
219,480

 
$
63,533

Other comprehensive loss, net of tax:
 
 
 
 
 
Loss on interest rate swaps:
 
 
 
 
 
Unrealized loss arising during period

 

 
(1,025
)
Reclassification into income
(2,600
)
 
(2,442
)
 
658

Loss on interest rate swaps recognized in other comprehensive loss
(2,600
)
 
(2,442
)
 
(367
)
Loss on available-for-sale securities:
 
 
 
 
 
Unrealized gain arising during period

 

 
8

Reclassification into income

 

 
(120
)
Loss on available-for-sale securities recognized in other comprehensive loss

 

 
(112
)
Minimum pension liability adjustment, net
(486
)
 
(310
)
 
(165
)
Other comprehensive loss, net of tax
(3,086
)
 
(2,752
)
 
(644
)
Comprehensive (loss) income
(9,823
)
 
216,728

 
62,889

Less: comprehensive (loss) income attributable to noncontrolling interests
(4,743
)
 
60,610

 
27,649

Comprehensive (loss) income attributable to Red Rock Resorts, Inc.
$
(5,080
)
 
$
156,118

 
$
35,240



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


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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands)
 
Red Rock Resorts, Inc. Stockholders’ Equity
 
 
 
 
Common Stock
 
Additional paid in capital
 
Retained earnings
 
Accumulated other comprehensive income (loss)
Noncontrolling interest
Total stockholders’ equity
Class A
 
Class B
Shares
 
Amount
Shares
 
Amount
Balances, December 31, 2016
65,893

 
$
659

 
49,956

 
$
1

 
$
325,962

 
$
17,772

 
$
2,458

 
$
280,746

 
$
627,598

Net income

 

 

 

 

 
35,423

 

 
28,110

 
63,533

Other comprehensive loss, net of tax

 

 

 

 

 

 
(183
)
 
(461
)
 
(644
)
Share-based compensation

 

 

 

 
8,000

 

 

 

 
8,000

Distributions

 

 

 

 

 

 

 
(38,290
)
 
(38,290
)
Dividends declared

 

 

 

 

 
(27,057
)
 

 

 
(27,057
)
Issuance of restricted stock awards, net of forfeitures
188

 
2

 

 

 
(2
)
 

 

 

 

Repurchases of Class A common stock
(3
)
 

 

 

 
(93
)
 

 

 

 
(93
)
Stock option exercises
128

 
1

 

 

 
2,500

 

 

 

 
2,501

Exchanges of noncontrolling interests for Class A common stock
2,692

 
27

 
(2,692
)
 

 
14,510

 

 
228

 
(14,765
)
 

Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
(22,761
)
 

 

 

 
(22,761
)
Net deferred tax assets resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
24,291

 

 

 

 
24,291

Tax effects resulting from stock option exercises

 

 

 

 
(882
)
 

 

 

 
(882
)
Acquisition of subsidiary noncontrolling interests

 

 

 

 
2,850

 

 

 
(7,334
)
 
(4,484
)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco

 

 

 

 
(4,945
)
 

 
(30
)
 
4,975

 

Balances, December 31, 2017
68,898

 
$
689

 
47,264

 
$
1

 
$
349,430

 
$
26,138

 
$
2,473

 
$
252,981

 
$
631,712

Net income

 

 

 

 

 
157,541

 

 
61,939

 
219,480

Other comprehensive loss, net of tax

 

 

 

 

 

 
(1,423
)
 
(1,329
)
 
(2,752
)
Share-based compensation

 

 

 

 
11,343

 

 

 

 
11,343

Distributions

 

 

 

 

 

 

 
(19,940
)
 
(19,940
)
Dividends declared

 

 

 

 

 
(27,810
)
 

 

 
(27,810
)

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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(amounts in thousands)
 
Red Rock Resorts, Inc. Stockholders’ Equity
 
 
 
 
Common Stock
 
Additional paid in capital
 
Retained earnings
 
Accumulated other comprehensive income (loss)
Noncontrolling interest
Total stockholders’ equity
Class A
 
Class B
Shares
 
Amount
Shares
 
Amount
Issuance of restricted stock awards, net of forfeitures
122

 
1

 

 

 
(1
)
 

 

 

 

Repurchases of Class A common stock
(10
)
 

 

 

 
(307
)
 

 

 

 
(307
)
Stock option exercises
273

 
3

 

 

 
5,378

 

 

 

 
5,381

Exchanges of noncontrolling interests for Class A common stock
380

 
4

 
(380
)
 

 
2,149

 

 
21

 
(2,174
)
 

Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
(2,528
)
 

 

 

 
(2,528
)
Net deferred tax assets resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
2,675

 

 

 

 
2,675

Tax effects resulting from stock option exercises

 

 

 

 
(259
)
 

 

 

 
(259
)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco

 

 

 

 
(5,910
)
 

 
12

 
5,898

 

Balances, December 31, 2018
69,663

 
$
697

 
46,884

 
$
1

 
$
361,970

 
$
155,869

 
$
1,083

 
$
297,375

 
$
816,995

Net loss

 

 

 

 

 
(3,351
)
 

 
(3,386
)
 
(6,737
)
Other comprehensive loss, net of tax

 

 

 

 

 

 
(1,729
)
 
(1,357
)
 
(3,086
)
Share-based compensation

 

 

 

 
16,816

 

 

 

 
16,816

Distributions

 

 

 

 

 

 

 
(18,743
)
 
(18,743
)
Dividends declared

 

 

 

 

 
(28,095
)
 

 

 
(28,095
)
Issuance of restricted stock awards, net of forfeitures
426

 
4

 

 

 
(4
)
 

 

 

 

Repurchases of Class A common stock
(15
)
 

 

 

 
(376
)
 

 

 

 
(376
)
Stock option exercises
334

 
3

 

 

 
6,704

 

 

 

 
6,707

Exchanges of noncontrolling interests for Class A common stock
57

 
1

 
(57
)
 

 
368

 

 
1

 
(370
)
 


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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(amounts in thousands)
 
Red Rock Resorts, Inc. Stockholders’ Equity
 
 
 
 
Common Stock
 
Additional paid in capital
 
Retained earnings
 
Accumulated other comprehensive income (loss)
Noncontrolling interest
Total stockholders’ equity
Class A
 
Class B
Shares
 
Amount
Shares
 
Amount
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
(213
)
 

 

 

 
(213
)
Net deferred tax assets resulting from exchanges of noncontrolling interests for Class A common stock

 

 

 

 
104

 

 

 

 
104

Tax effects resulting from stock option exercises

 

 

 

 
(775
)
 

 

 

 
(775
)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco

 

 

 

 
(8,365
)
 

 
4

 
8,361

 

Balances, December 31, 2019
70,465

 
$
705

 
46,827

 
$
1

 
$
376,229

 
$
124,423

 
$
(641
)
 
$
281,880

 
$
782,597

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Cash flows from operating activities:
 
 
 
 
 
Net (loss) income
$
(6,737
)
 
$
219,480

 
$
63,533

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
222,211

 
180,255

 
178,217

Change in fair value of derivative instruments
19,467

 
(12,415
)
 
(14,112
)
Reclassification of unrealized (gain) loss on derivative instruments into income
(2,843
)
 
(2,929
)
 
1,176

Write-downs and other charges, net
7,291

 
3,519

 
19,783

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
(139,300
)
Asset impairment

 

 
1,829

Amortization of debt discount and debt issuance costs
16,421

 
16,149

 
17,206

Share-based compensation
16,848

 
11,289

 
7,922

Earnings from joint ventures
(1,928
)
 
(2,185
)
 
(1,632
)
Distributions from joint ventures
1,498

 
2,033

 
961

Loss on extinguishment/modification of debt, net
19,939

 

 
16,907

Deferred income tax
(1,735
)
 
23,860

 
136,156

Changes in assets and liabilities:
 
 
 
 
 
Receivables, net
(1,072
)
 
(2,054
)
 
(4,610
)
Inventories and prepaid expenses
(397
)
 
(17,749
)
 
(6,999
)
Accounts payable
9,686

 
2,677

 
(1,184
)
Accrued interest payable
59

 
(3,193
)
 
(5,148
)
Income tax payable/receivable, net

 
191

 
7,790

Other accrued liabilities
16,314

 
13,619

 
6,644

Other, net
1,707

 
4,098

 
4,821

Net cash provided by operating activities
316,632

 
346,007

 
289,960

Cash flows from investing activities:
 
 
 
 
 
Capital expenditures, net of related payables
(353,269
)
 
(579,287
)
 
(248,427
)
Acquisition of land held for development
(57,354
)
 
(36,106
)
 

Acquisition of land from related party

 

 
(23,440
)
Proceeds from asset sales
938

 
4,702

 
1,045

Distributions in excess of earnings from joint ventures
450

 
1,359

 
1,038

Native American development costs
(804
)
 
(702
)
 
(2,469
)
Net settlement of derivative instruments
11,023

 
9,842

 
585

Other, net
(6,121
)
 
(6,490
)
 
(9,985
)
Net cash used in investing activities
(405,137
)
 
(606,682
)
 
(281,653
)
 
 
 
 
 
 

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RED ROCK RESORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(amounts in thousands)
 
Year Ended December 31,
 
2019
 
2018
 
2017
Cash flows from financing activities:
 
 
 
 
 
Borrowings under credit agreements with original maturity dates greater than
    three months
690,000

 
440,000

 
805,592

Payments under credit agreements with original maturity dates greater than
    three months
(527,449
)
 
(222,743
)
 
(635,874
)
Proceeds from issuance of 5.00% Senior Notes

 

 
550,000

Redemption of 7.50% Senior Notes

 

 
(500,000
)
Cash paid for early extinguishment of debt
(19,636
)
 

 
(18,776
)
Proceeds from exercise of stock options
6,707

 
5,381

 
2,501

Distributions to members and noncontrolling interests
(18,743
)
 
(19,940
)
 
(38,290
)
Dividends paid
(27,899
)
 
(27,698
)
 
(26,980
)
Payment of debt issuance costs
(3,619
)
 

 
(31,419
)
Borrowings on other debt
42,643

 

 

Payments on other debt
(38,167
)
 
(823
)
 
(5,180
)
Payments on tax receivable agreement liability

 
(28,865
)
 

Acquisition of subsidiary noncontrolling interests

 

 
(4,484
)
Other, net
(675
)
 
(1,123
)
 
(6,806
)
Net cash provided by financing activities
103,162

 
144,189

 
90,284

Increase (decrease) in cash, cash equivalents and restricted cash
14,657

 
(116,486
)
 
98,591

Balance, beginning of year
118,258

 
234,744

 
136,153

Balance, end of year
$
132,915

 
$
118,258

 
$
234,744

 
 
 
 
 
 
Cash, cash equivalents and restricted cash:
 
 
 
 
 
Cash and cash equivalents
$
128,835

 
$
114,607

 
$
231,465

Restricted cash
4,080

 
3,651

 
3,279

Balance, end of year
$
132,915

 
$
118,258

 
$
234,744

 
 
 
 
 
 
Supplemental cash flow disclosures:
 
 
 
 
 
Cash paid for interest, net of $2,777, $8,048 and $1,110 capitalized, respectively
$
143,134

 
$
124,419

 
$
118,519

Income tax refunds received
$
64

 
$
176

 
$
9,160

Non-cash investing and financing activities:
 
 
 
 
 
Capital expenditures incurred but not yet paid
$
30,626

 
$
112,668

 
$
39,673


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

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RED ROCK RESORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization and Background
Red Rock Resorts, Inc. (“Red Rock,” or the “Company”) was formed as a Delaware corporation in September 2015 to own an indirect equity interest in and manage Station Casinos LLC (“Station LLC”), a Nevada limited liability company. Station LLC is a gaming, development and management company established in 1976 that owns and operates 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 a casino in northern California on behalf of a Native American tribe. Station LLC managed a casino in Michigan on behalf of another Native American tribe through February 2018. The Company owns all of the outstanding voting interests in Station LLC and has an indirect interest in Station LLC through its ownership of limited liability interests in Station Holdco LLC (“Station Holdco,” and such interests, “LLC Units”), which owns all of the economic interests in Station LLC.
At December 31, 2019, the Company held 60.1% of the economic interests and 100% of the voting power in Station Holdco, as well as 100% of the voting interest in Station LLC, subject to certain limited exceptions, and is designated as the sole managing member of both Station Holdco and Station LLC. The Company controls and operates all of the business and affairs of Station Holdco and Station LLC, and conducts all of its operations through these entities.
2.         Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
Station Holdco and Station LLC are variable interest entities (“VIEs”), of which the Company is the primary beneficiary. 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. Accordingly, the Company consolidates the financial position and results of operations of Station LLC and its consolidated subsidiaries and Station Holdco, and presents the interests in Station Holdco not owned by Red Rock within noncontrolling interest in the consolidated financial statements. Substantially all of the Company’s assets and liabilities represent the assets and liabilities of Station Holdco and Station LLC, other than assets and liabilities related to income taxes and the tax receivable agreement (“TRA”). Investments in all 50% or less owned affiliated companies are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated.
Certain amounts in the consolidated financial statements for the previous years have been reclassified to be consistent with the current year presentation.
Noncontrolling Interest in Station Holdco
Noncontrolling interest in Station Holdco represents the LLC Units held by certain owners who held such units prior to the Company’s 2016 initial public offering (the “IPO” and such owners, the “Continuing Owners”). Noncontrolling interest is reduced when Continuing Owners exchange their LLC Units, along with an equal number of shares of Class B common stock, for shares of Class A common stock. See Note 12 for additional information.
The ownership of the LLC Units is summarized as follows:        
 
December 31, 2019
 
December 31, 2018
 
Units
 
Ownership %
 
Units
 
Ownership %
Red Rock
70,465,422

 
60.1
%
 
69,662,590

 
59.8
%
Noncontrolling interest holders
46,827,370

 
39.9
%
 
46,884,413

 
40.2
%
Total
117,292,792

 
100.0
%
 
116,547,003

 
100.0
%

The Company uses monthly weighted-average LLC Unit ownership to calculate the pretax (loss) 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.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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

Fair Value Measurements
For assets and liabilities accounted for or disclosed at fair value, the Company utilizes the fair value hierarchy established by the accounting guidance for fair value measurements and disclosures to categorize the inputs to valuation techniques used to measure fair value into three levels. The three levels of inputs are as follows:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The accounting guidance for fair value measurements and disclosures also provides the option to measure certain financial assets and liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to measure any financial assets or liabilities at fair value that are not required to be measured at fair value.
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, receivables and accounts payable approximate fair value primarily because of the short maturities of these instruments.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and investments with an original maturity of 90 days or less.
Restricted Cash
Restricted cash consists of reserve funds for the Company’s condominium operations at Palms.
Receivables, Net and Credit Risk
The Company’s accounts receivable primarily represent receivables from contracts with customers and consist mainly of casino, hotel, ATM, cash advance, retail, management fees and other receivables, which are typically non-interest bearing.
Receivables are initially recorded at cost and an allowance for doubtful accounts is maintained to reduce receivables to their carrying amount, which approximates fair value. The allowance is estimated based on a specific review of customer accounts, historical collection experience, the age of the receivable and other relevant factors. Accounts are written off when management deems the account to be uncollectible, and recoveries of accounts previously written off are recorded when received. At December 31, 2019 and 2018, the allowance for doubtful accounts was $4.9 million and $2.3 million, respectively. Management believes there are no significant concentrations of credit risk.
Inventories
Inventories primarily represent food and beverage items and retail merchandise which are stated at the lower of cost or net realizable value. Cost is determined on a weighted-average basis.
Assets Held for Sale
The Company classifies assets as held for sale when an asset or asset group meets all of the held for sale criteria in the accounting guidance for impairment and disposal of long-lived assets. Assets held for sale are initially measured at the lower of their carrying amount or fair value less cost to sell. At December 31, 2019 and 2018, assets held for sale represented certain undeveloped land in Las Vegas and Reno.
Property and Equipment
Property and equipment is initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, the shorter of the estimated useful life of the asset or the lease term, as follows:
Buildings and improvements
10 to 45 years
Furniture, fixtures and equipment
3 to 10 years

Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. Construction in progress is related to the construction or development of property and equipment that has not yet been placed in service for its intended use. Depreciation and amortization of property and equipment commences when the asset is placed in service. When an asset is retired or otherwise disposed, the related cost and accumulated depreciation are removed from the accounts and the gain or loss on disposal is recognized within Write-downs and other charges, net.

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

The Company makes estimates and assumptions when accounting for capital expenditures. The Company’s depreciation expense is highly dependent on the assumptions made for the estimated useful lives of its assets. Useful lives are estimated by the Company based on its experience with similar assets and estimates of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, the Company accounts for the change prospectively.
Native American Development Costs
The Company incurs certain costs associated with development and management agreements with Native American tribes which are reimbursable by such tribes. These costs are capitalized as long-term assets as incurred, and primarily include costs associated with the acquisition and related development of land and the casino facilities. The assets are typically transferred to the tribe when the tribe secures third-party financing or the gaming facility is completed. Upon transfer of the assets to the tribe, any remaining carrying amount that has not yet been recovered from the tribe is reclassified to a long-term receivable.
The Company earns a return on the costs incurred for the acquisition and development of Native American development projects. Repayment of the advances and the return typically is funded from the tribe’s third-party financing, from the cash flows of the gaming facility, or both. Due to the uncertainty surrounding the timing and amount of the stated return, the Company recognizes the return on a cash basis.
The Company evaluates its Native American development costs for impairment whenever events or changes in circumstances indicate that the carrying amount of a project might not be recoverable, taking into consideration all available information. Among other things, the Company considers the status of the project, any contingencies, the achievement of milestones, any existing or potential litigation, and regulatory matters when evaluating its Native American projects for impairment. If an indicator of impairment exists, the Company compares the estimated future cash flows of the project, on an undiscounted basis, to its carrying amount. If the undiscounted expected future cash flows do not exceed the carrying amount, the asset is written down to its estimated fair value, which typically is estimated based on a discounted future cash flow model or market comparables, when available. The Company estimates the undiscounted future cash flows of a Native American development project based on consideration of all positive and negative evidence about the future cash flow potential of the project including, but not limited to, the likelihood that the project will be successfully completed, the status of required approvals, and the status and timing of the construction of the project, as well as current and projected economic, political, regulatory and competitive conditions that may adversely impact the project’s operating results.
Goodwill
The Company tests its goodwill for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s operating properties is considered a separate reporting unit.
When performing the annual goodwill impairment testing, the Company either conducts a qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elects to bypass this qualitative assessment and perform a quantitative test for impairment. Under the qualitative assessment, the Company considers both positive and negative factors, including macroeconomic conditions, industry events, financial performance and other changes, and makes a determination of whether it is more likely than not that the fair value of goodwill is less than its carrying amount. If, after assessing the qualitative factors, the Company determines it is more likely than not the asset is impaired, it then performs a quantitative test in which the estimated fair value of the reporting unit is compared with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit.
When performing the quantitative test, the Company estimates the fair value of each reporting unit using the expected present value of future cash flows along with value indications based on current valuation multiples of the Company and comparable publicly traded companies. The estimation of fair value involves significant judgment by management. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from such estimates. Cash flow estimates are based on the current regulatory, political and economic climates, recent operating information and projections. Such estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, competition, events affecting various forms of travel and access to the Company’s properties, and other factors. If the Company’s estimates of future cash flows are not met, it may have to record impairment charges in the future.
Indefinite-Lived Intangible Assets
The Company’s indefinite-lived intangible assets primarily represent brands. The fair value of the Company’s brands is estimated using a derivation of the income approach to valuation, based on estimated royalties avoided through ownership of

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

the assets, utilizing market indications of fair value. The Company tests its indefinite-lived intangible assets for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that an asset is impaired. Indefinite-lived intangible assets are not amortized unless it is determined that an asset’s useful life is no longer indefinite. The Company periodically reviews its indefinite-lived assets to determine whether events and circumstances continue to support an indefinite useful life. If an indefinite-lived intangible asset no longer has an indefinite life, the asset is tested for impairment and is subsequently accounted for as a finite-lived intangible asset.
Finite-Lived Intangible Assets
The Company’s finite-lived intangible assets primarily represent assets related to its management contracts and customer relationships, which are amortized over their estimated useful lives using the straight-line method. The Company periodically evaluates the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization.
The Company’s management contract intangible assets represent the value associated with agreements under which the Company provides management services to various casino properties, primarily Native American casinos which it has developed. The fair values of management contract intangible assets were determined using discounted cash flow techniques based on future cash flows expected to be received in exchange for providing management services. The Company amortizes its management contract intangible assets over their expected useful lives beginning when the property commences operations and management fees are being earned. Should events or changes in circumstances cause the carrying amount of a management contract intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
The Company’s customer relationship intangible assets primarily represent the value associated with its rated casino guests. The initial fair values of customer relationship intangible assets were estimated based on a variation of the cost approach. The recoverability of the Company’s customer relationship intangible assets could be affected by, among other things, increased competition within the gaming industry, a downturn in the economy, declines in customer spending which would impact the expected future cash flows associated with the rated casino guests, declines in the number of customer visits which could impact the expected attrition rate of the rated casino guests, and erosion of operating margins associated with rated casino guests. Should events or changes in circumstances cause the carrying amount of a customer relationship intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
Impairment of Long-Lived Assets
The Company reviews the carrying amounts of its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability is evaluated by comparing the estimated future cash flows of the asset, on an undiscounted basis, to its carrying amount. If the undiscounted estimated future cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted estimated future cash flows do not exceed the carrying amount, impairment is measured based on the difference between the asset’s estimated fair value and its carrying amount. To estimate fair values, the Company typically uses market comparables, when available, or a discounted cash flow model. Assets to be disposed of are carried at the lower of their carrying amount or fair value less costs of disposal. The fair value of assets to be disposed of is generally estimated based on comparable asset sales, solicited offers or a discounted cash flow model. The Company’s long-lived asset impairment tests are performed at the reporting unit level. For the year ended December 31, 2019, the Company identified certain potential indicators of impairment at the Palms reporting unit level. Based on the undiscounted expected future cash flows, no impairment was recorded.
Debt Discounts and Debt Issuance Costs
Debt discounts and costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense using the effective interest method over the expected term of the related debt agreements. Costs incurred in connection with the issuance of revolving lines of credit are presented in Other assets, net on the Consolidated Balance Sheets. All other capitalized costs incurred in connection with the issuance of long-term debt are presented as a direct reduction of Long-term debt, less current portion on the Consolidated Balance Sheets.
Derivative Instruments
The Company uses interest rate swaps to hedge its exposure to variability in expected future cash flows related to interest payments. At December 31, 2019 and 2018, none of the Company’s interest rate swaps were designated in cash flow hedging relationships. In accordance with the accounting guidance for derivatives and hedging activities, the Company records all derivatives on the balance sheet at fair value. The fair values of the Company’s derivatives are determined using widely

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

accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not offset derivative asset and liability positions when interest rate swap agreements are held with the same counterparty.
As the Company’s derivative instruments are not designated in hedging relationships, the changes in fair value are recognized within the Consolidated Statements of Operations in the period in which the change occurs, and the cash flows for these instruments are classified within investing activities in the Consolidated Statements of Cash Flows. Certain of the Company’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 (loss) income associated with these interest rate swaps are being amortized as a reduction of interest expense through July 2020 as the previously hedged interest payments occur.
Comprehensive (Loss) Income
Comprehensive (loss) income includes net (loss) income and other comprehensive loss, which includes all other non-owner changes in equity. Components of the Company’s comprehensive (loss) income are reported in the Consolidated Statements of Comprehensive (Loss) Income and Consolidated Statements of Stockholders’ Equity, and accumulated other comprehensive (loss) income is included in stockholders’ equity on the Consolidated Balance Sheets.
Revenues
The Company’s revenue contracts with customers consist of gaming wagers, sales of food, beverage, hotel rooms and other amenities, and agreements to provide management services. Revenues are recognized when control of the promised goods or services is transferred to the guest, in an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for those goods or services, referred to as the transaction price. Other revenues also include rental income from tenants, which is recognized over the lease term, and contingent rental income, which is recognized when the right to receive such rental income is established according to the lease agreements. Revenue is recognized net of cash sales incentives and discounts and excludes sales and other taxes collected from guests on behalf of governmental authorities.
The Company accounts for its gaming and non-gaming contracts on a portfolio basis. This practical expedient is applied because individual customer contracts have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying its revenue recognition policy to the portfolio would not differ materially from applying its policy to the individual contracts.
Casino Revenue
Casino revenue includes gaming activities such as slot, table game and sports wagering. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price is reduced for consideration payable to a guest, such as cash sales incentives and the change in progressive jackpot liabilities. Gaming contracts are typically completed daily based on the outcome of the wagering transaction and include a distinct performance obligation to provide gaming activities.
Guests may receive discretionary incentives for complimentary food, beverage, rooms, entertainment and merchandise to encourage additional gaming, or may earn loyalty points based on their gaming activity. The Company allocates the transaction price to each performance obligation in the gaming wagering contract. The amount allocated to loyalty points earned is based on an estimate of the standalone selling price of the loyalty points, which is determined by the redemption value less an estimate for points not expected to be redeemed. The amount allocated to discretionary complimentaries is the standalone selling price of the underlying goods or services, which is determined using the retail price at which those goods or services would be sold separately in similar transactions. The remaining amount of the transaction price is allocated to wagering activity using the residual approach as the standalone selling price for gaming wagers is highly variable and no set established price exists for gaming wagers. Amounts allocated to wagering are recognized as casino revenue when the result of the wager is determined, and amounts allocated to loyalty points and discretionary complimentaries are recognized as revenue when the goods or services are provided.
Non-gaming Revenue
Non-gaming revenues include sales of food, beverage, hotel rooms and other amenities such as retail merchandise, bowling, spa services and entertainment. The transaction price is the net amount collected from the guest and includes a distinct performance obligation to provide such goods or services. Non-gaming revenues are recognized when the goods or services are

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

provided to the guest. Guests may also earn loyalty points from non-gaming purchases or receive discretionary complimentaries that require the transaction price to be allocated to each performance obligation on a relative standalone selling price basis.
Non-gaming revenues also include the portion of the transaction price from gaming or non-gaming contracts allocated to discretionary complimentaries and the value of loyalty points redeemed for food, beverage, room and other amenities. Discretionary complimentaries are classified in the departmental revenue category fulfilling the complimentary with a corresponding reduction in the departmental revenues that provided the complimentary, which is primarily casino revenue. Included in non-gaming revenues are discretionary complimentaries and loyalty point redemptions of $228.7 million, $206.5 million and $185.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Management Fee Revenue
Management fee revenue primarily represents fees earned from the Company’s management agreements with Native American tribes. The transaction price for management contracts is the management fee to which the Company is entitled for its management services. The management fee represents variable consideration as it is based on a percentage of net income of the managed property, as defined in the management agreements. The management services are a single performance obligation to provide a series of distinct services over the term of the management agreement. The Company allocates and recognizes the management fee monthly as the management services are performed because there is a consistent measure throughout the contract period that reflects the value to the Native American tribe each month.
Player Rewards Program
The Company has a player rewards program (the “Rewards Program”) that allows customers to earn points based on their gaming activity and non-gaming purchases. Guests may accumulate loyalty points over time that may be redeemed at their discretion under the terms of the Rewards Program. Loyalty points may be redeemed for cash, slot play, food, beverage, rooms, entertainment and merchandise at all of the Company’s Las Vegas area properties.
When guests earn points under the Rewards Program, the Company recognizes a liability for future performance obligations. The Rewards Program point liability represents deferred gaming and non-gaming revenue, which is measured at the redemption value of loyalty points earned under the Rewards Program that management ultimately believes will be redeemed. The recognition of the Rewards Program point liability primarily reduces casino revenue.
When points are redeemed for cash, the point liability is reduced for the amount of cash paid out. When points are redeemed for slot play, food, beverage, rooms, entertainment and merchandise, revenues are recognized when the goods or services are provided, and such revenues are classified based on the type of goods or services provided with a corresponding reduction to the point liability.
The Company’s performance obligation related to its loyalty point liability is generally completed within one year, as a guest’s loyalty point balance is forfeited after six months of inactivity for a local guest and after thirteen months for an out-of-town guest, as defined in the Rewards Program. Loyalty points are generally earned and redeemed continually over time. As a result, the loyalty point liability balance remains relatively constant. The loyalty point liability is presented within Other accrued liabilities on the Consolidated Balance Sheet.
Slot Machine Jackpots
The Company does not accrue base jackpots if it is not legally obligated to pay the jackpot. A jackpot liability is accrued with a related reduction in casino revenue when the Company is obligated to pay the jackpot, such as the incremental amount in excess of the base jackpot on a progressive game.
Gaming Taxes
The Company is assessed taxes based on gross gaming revenue, subject to applicable jurisdictional adjustments. Gaming taxes are included in Casino costs and expenses in the Consolidated Statements of Operations. Gaming tax expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Gaming tax expense
$
78,427

 
$
74,501

 
$
69,429


Share-based Compensation
The Company measures its share-based compensation cost at the grant date based on the fair value of the award, and recognizes the cost over the requisite service period. The fair value of stock options is estimated at the grant date using the

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

Black-Scholes option pricing model. The fair value of restricted stock is based on the closing share price of the Company’s stock on the grant date. The Company uses the straight-line method to recognize compensation cost for share-based awards with graded service-based vesting, and cumulative compensation cost recognized to date at least equals the grant-date fair value of the vested portion of the awards. Forfeitures are accounted for as they occur.
Advertising
The Company expenses advertising costs the first time the advertising takes place. Advertising expense is primarily included in selling, general and administrative expense in the Consolidated Statements of Operations. Advertising expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Advertising expense
$
31,678

 
$
24,302

 
$
22,094


Income Taxes
Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it by Station Holdco. Station Holdco continues to operate as a partnership for federal, state and local tax reporting and holds 100% of the economic interests in Station LLC. The members of Station Holdco are liable for any income taxes resulting from income allocated to them by Station Holdco as a pass-through entity.
The Company recognizes deferred tax assets and liabilities based on the differences between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company classifies all deferred tax assets and liabilities as noncurrent. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the enactment date occurs. Deferred tax assets represent future tax deductions or credits. Realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Each reporting period, the Company analyzes the likelihood that its deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. On an annual basis, the Company performs a comprehensive analysis of all forms of positive and negative evidence based on year end results. During each interim period, the Company updates its annual analysis for significant changes in the positive and negative evidence.
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
The Company will recognize interest and penalties related to income taxes, if any, within the provision for income taxes. The Company has incurred no interest or penalties related to income taxes in any of the periods presented.
Tax Receivable Agreement with Related Parties
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 parties for 85% of the tax benefits realized by the Company by such exchange. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. When an exchange transaction occurs, the Company initially recognizes the related TRA liability through a charge to equity, and any subsequent adjustments to the liability are recorded through the statements of operations.
As a result of exchanges of LLC Units for Class A common stock and purchases by the Company of LLC Units from holders of such units, the Company is entitled to a proportionate share of the existing tax basis of the assets of Station Holdco at the time of such exchanges or purchases. In addition, such exchanges or purchases of LLC Units are expected to result in increases in the tax basis of the assets of Station Holdco that otherwise would not have been available. These increases in tax basis may reduce the amount of tax that the Company would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

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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 and amortizable basis. If the Company does not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, it would not be required to make the related TRA payments. The Company will only recognize a liability for TRA payments if management determines it is probable that it will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits. If management determines in the future that the Company will not be able to fully utilize all or part of the related tax benefits, it would derecognize the portion of the liability related to the benefits not expected to be utilized. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, the Company considers its historical results and incorporates certain assumptions, including revenue growth, and operating margins, among others.
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, the Company’s payment obligations would be accelerated based upon certain assumptions, including the assumption that it 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.
Additionally, the Company estimates the amount of TRA payments expected to be paid within the next twelve months and classifies this amount within current liabilities on its Consolidated Balance Sheets. This determination is based on management’s estimate of taxable income for the next fiscal year. To the extent the Company’s estimate differs from actual results, it may be required reclassify portions of the liability under the TRA between current and non-current.
Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income attributable to Red Rock by the weighted-average number of Class A shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Red Rock, including the impact of potentially dilutive securities, by the weighted-average number of Class A shares outstanding during the period, including the number of Class A shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B common stock, outstanding stock options and unvested restricted stock. The Company uses the “if-converted” method to determine the potentially dilutive effect of its Class B common stock, and the treasury stock method to determine the potentially dilutive effect of outstanding stock options and unvested restricted stock.
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 the adoption will not 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

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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 below 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 operations or cash flows. See Note 19 for additional information.
3.    Property and Equipment
Property and equipment consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Land
$
271,603

 
$
270,059

Buildings and improvements
2,990,259

 
2,663,004

Furniture, fixtures and equipment
801,868

 
686,863

Construction in progress
28,120

 
240,197

 
4,091,850

 
3,860,123

Accumulated depreciation
(1,030,088
)
 
(847,718
)
Property and equipment, net
$
3,061,762

 
$
3,012,405


Construction in progress at December 31, 2018 included $218.2 million related to the redevelopment of Palms, all of which was placed into service as of December 31, 2019.
Depreciation expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Depreciation expense
$
213,642

 
$
169,656

 
$
158,327


At December 31, 2019 and 2018, substantially all of the Company’s property and equipment was pledged as collateral for its long-term debt.
4.    Goodwill and Other Intangibles
Goodwill, net of accumulated impairment losses of $1.2 million, was $195.7 million at December 31, 2019 and 2018. The Company’s goodwill is primarily related to the Las Vegas operations segment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s intangibles, other than goodwill, consisted of the following (amounts in thousands):
 
December 31, 2019
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(13,152
)
 
10,448

Management contracts
7 - 20
 
47,000

 
(38,780
)
 
8,220

Condominium rental contracts
20
 
9,000

 
(1,463
)
 
7,537

Trademarks
15
 
6,000

 
(1,300
)
 
4,700

Beneficial leases
6
 
237

 
(136
)
 
101

Intangible assets
 
 
163,337

 
(54,831
)
 
108,506

Liabilities
 
 
 
 
 
 
 
Below market lease
15
 
2,195

 
(470
)
 
1,725

Net intangibles
 
 
$
161,142

 
$
(54,361
)
 
$
106,781

 
December 31, 2018
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(11,579
)
 
12,021

Management contracts
7 - 20
 
47,000

 
(32,532
)
 
14,468

Condominium rental contracts
20
 
9,000

 
(1,012
)
 
7,988

Trademarks
15
 
6,000

 
(900
)
 
5,100

Beneficial leases
6
 
237

 
(94
)
 
143

Intangible assets
 
 
163,337

 
(46,117
)
 
117,220

Liabilities
 
 
 
 
 
 
 
Below market leases
15 - 72
 
4,145

 
(371
)
 
3,774

Net intangibles
 
 
$
159,192

 
$
(45,746
)
 
$
113,446


Amortization expense for intangibles was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Amortization expense
$
8,569

 
$
10,599

 
$
19,890



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

Estimated annual amortization expense for intangibles for each of the next five years is as follows (amounts in thousands):
Years Ending December 31,
 
 
2020
 
$
7,545

2021
 
2,426

2022
 
2,401

2023
 
2,384

2024
 
2,384


5.    Land Held for Development
At December 31, 2019, the Company owned approximately 323 acres of land comprised of seven strategically-located parcels in Las Vegas and Reno, Nevada, each of which is zoned for casino gaming and other uses. In July 2019, the Company paid $57.4 million to purchase 20 acres of land in Las Vegas that was previously leased from the third-party seller under a long-term operating lease.
6.    Native American Development
North Fork Rancheria of Mono Indians
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, without limitation, 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 December 31, 2019, the Company has paid approximately $33.8 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 December 31, 2019, the carrying amount of the advances was $18.7 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

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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 December 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.

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The following table summarizes the Company’s evaluation at December 31, 2019 of each of the critical milestones necessary to complete the North Fork Project.
Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”)
Yes
Date of 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.

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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 in November 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 with the United States Court of Appeals for the Ninth Circuit. The briefing of the issues on appeal was completed on June 13, 2019. The Ninth Circuit heard oral argument on February 11, 2020.

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7.    Management Agreements
The Federated Indians of Graton Rancheria
The Company manages Graton Resort & Casino (“Graton Resort”), which opened in November 2013, on behalf of the Federated Indians of Graton Rancheria (the “Graton Tribe”). Graton Resort is located approximately 43 miles north of downtown San Francisco. The management agreement for Graton Resort will expire in November 2020. The Company received a management fee of 24% of Graton Resort’s net income (as defined in the management agreement) in years 1 through 4 of the agreement, and is entitled to receive 27% of Graton Resort’s net income in years 5 through 7. Excluding reimbursable expenses, management fees from Graton Resort totaled $85.6 million, $77.5 million and $65.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. The management agreement may be terminated under certain circumstances, including but not limited to, material breach, changes in regulatory or legal status, and mutual agreement of the parties. There is no provision in the management agreement allowing the Graton Tribe to buy-out the management agreement prior to its expiration. Under the terms of the management agreement, the Company will provide training to the Graton Tribe such that the tribe may assume responsibility for managing Graton Resort upon expiration of the seven-year term of the management agreement. Upon termination or expiration of the management and development agreements, the Graton Tribe will continue to be obligated to pay certain amounts that may be due to the Company, such as any unpaid management fees. Certain amounts due to the Company under the management and development agreements are subordinate to the obligations of the Graton Tribe under its third-party financing. The management and development agreements contain waivers of the Graton Tribe’s sovereign immunity from suit for the purpose of enforcing the agreements or permitting or compelling arbitration and other remedies.
Gun Lake Casino    
The Company held a 50% interest in MPM Enterprises, LLC (“MPM”), a consolidated VIE, which managed Gun Lake Casino (“Gun Lake”) in Michigan, under a seven-year management agreement that expired in February 2018. Excluding reimbursable expenses, MPM’s management fee revenue from Gun Lake included in the Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 totaled $4.3 million and $46.1 million, respectively.
Reimbursable Costs
Management fee revenue includes reimbursable payroll and other costs, primarily related to Graton Resort. Reimbursable costs totaled $5.5 million, $5.2 million and $6.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
8.        Other Accrued Liabilities
Other accrued liabilities consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Contract and customer-related liabilities:
 
 
 
Rewards Program liability
$
21,392

 
$
20,654

Advance deposits and future wagers
22,185

 
18,624

Unpaid wagers, outstanding chips and other customer-related liabilities
19,722

 
19,640

Other accrued liabilities:
 
 
 
Accrued payroll and related
57,438

 
55,448

Accrued gaming and related
27,490

 
22,221

Construction payables and equipment purchase accruals
27,462

 
108,855

Operating lease liabilities, current portion
3,646

 

Other
21,225

 
21,032

 
$
200,560

 
$
266,474


Contract Balances
Customer contract liabilities related to future performance obligations consist of the Rewards Program point liability, advance deposits on goods or services yet to be provided and wagers for future sporting events. Advance deposits and wagers for future sporting events represent cash payments received from guests that are typically recognized in revenues within one year from the date received. The Company also has other customer-related liabilities that primarily include unpaid wagers and outstanding chips. Unpaid wagers include unredeemed gaming tickets that are exchanged for cash, and outstanding chips

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represent amounts owed to guests in exchange for gaming chips in their possession that may be redeemed for cash or recognized as revenue. Fluctuations in contract liabilities and other customer-related liabilities are a result of normal operating activities. The Company had no material contract assets at December 31, 2019 and 2018, respectively.
9.    Long-term Debt
Long-term debt consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Term Loan B Facility, due June 8, 2023, interest at a margin above LIBOR or base rate (4.30% and 5.03% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $33.7 million and $43.3 million at December 31, 2019 and 2018, respectively
$
1,766,757

 
$
1,775,951

Term Loan A Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.55% at December 31, 2019), net of unamortized discount and deferred issuance costs of $2.5 million at December 31, 2019
186,394

 

Term Loan A Facility, due June 8, 2022, interest at a margin above LIBOR or base rate (3.80% and 4.53% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $0.6 million and $4.0 million at December 31, 2019 and 2018, respectively
52,289

 
251,448

Revolving Credit Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.54% weighted average at December 31, 2019)
440,000

 

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 deferred issuance costs of $5.0 million and $5.7 million at December 31, 2019 and 2018, respectively
545,011

 
544,286

Other long-term debt, weighted-average interest of 3.83% and 6.69% at December 31, 2019 and 2018, respectively, net of unamortized discount and deferred issuance costs of $0.4 million at December 31, 2019
42,840

 
38,674

Total long-term debt
3,033,291

 
2,855,359

Current portion of long-term debt
(33,989
)
 
(33,894
)
Long-term debt, net
$
2,999,302

 
$
2,821,465

Credit Facility
Station LLC’s credit facility consists of the Term Loan B Facility, the Term Loan A Facility and the Revolving Credit Facility (collectively, the “Credit Facility”). The Term Loan B Facility bears interest at a rate per annum, at Station LLC’s option, equal to either LIBOR plus 2.50% or base rate plus 1.50%. The Term Loan A Facility and the Revolving Credit Facility each have two tranches with different maturity dates and interest rate spreads. Amounts outstanding under the Term Loan A Facility and the Revolving Credit 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
%
Station LLC is required to make quarterly principal payments of $4.7 million on the Term Loan B Facility and $3.4 million on the Term Loan A Facility on the last day of each quarter. Station LLC also is required to make mandatory payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, asset sales and equity issuances and, depending on its consolidated total leverage ratio, Station LLC is required to apply a portion of its excess cash flow to repay amounts outstanding under the Term Loan B Facility, which would reduce future quarterly principal payments. The Company is not required to make an excess cash flow payment in 2020.

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

Borrowings under the Credit Facility are guaranteed by all of Station LLC’s existing and future material restricted subsidiaries and are secured by pledges of all of the equity interests in Station LLC and its material restricted subsidiaries, a security interest in substantially all of the personal property of Station LLC and the subsidiary guarantors, and mortgages on the real property and improvements owned or leased by certain of Station LLC’s subsidiaries. 
The Credit Facility contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the ability of Station LLC and the subsidiary guarantors to incur debt; create a lien on collateral; engage in mergers, consolidations or asset dispositions; pay distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; or modify their lines of business. 
The Credit Facility also includes certain financial ratio covenants that Station LLC is required to maintain throughout the term of the Credit Facility and measure as of the end of each quarter. At December 31, 2019, these financial ratio covenants included an interest coverage ratio of not less than 2.50 to 1.00 and a maximum consolidated total leverage ratio ranging from 6.50 to 1.00 at December 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 providing 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. At December 31, 2019, the Company believes it was in compliance with all applicable covenants as defined in the Credit Facility.
At December 31, 2019, Station LLC’s borrowing availability under its Revolving Credit Facility, subject to continued compliance with the terms of the Credit Facility, was $422.5 million, which was net of $440.0 million in outstanding borrowings and $33.5 million in outstanding letters of credit and similar obligations.
Credit Facility Amendments
On February 8, 2019, Station LLC amended 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 an additional year and reduce the interest rate thereunder by 25 basis points. 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, primarily representing 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 extinguishment/modification of debt, net in the Consolidated Statements of Operations.
On February 7, 2020, the Company amended the Credit Facility to, among other things, (a) extend the maturity date under each of the Term Loan A Facility and the Revolving Credit Facility to February 7, 2025 and extend the maturity date under the Term Loan B Facility to February 7, 2027; (b) increase the outstanding borrowing availability under the Revolving Credit Facility to approximately $1.03 billion; (c) (i) reduce the applicable margin under the Term Loan B Facility to 2.25%, (ii) reduce the LIBOR “floor” under the Term Loan B Facility to 0.25% and (iii) provide for benchmark replacement mechanics in respect of the discontinuation of LIBOR; (d) increase the consolidated total leverage ratios at which the applicable margin under the Term Loan A Facility and the Revolving Credit Facility step-down to 4.00 to 1.00; (e) set the consolidated total leverage ratios for the Term Loan B Facility excess cash flow prepayment percentage step-down to 5.00 to 1.00 for the reduction to 25% and to 4.50 to 1.00 for the reduction to 0%; (f) adjust the application, availability, calculation and sizing of certain covenants; and (g) modify the requirement that the Company maintain a maximum consolidated total leverage ratio of not more than 6.50 to 1.00 through the fiscal quarter ending December 31, 2021, which incrementally reduces to 5.25 to 1.00 for the fiscal quarter ending December 21, 2023 and each fiscal quarter thereafter.
5.00% Senior Notes
In September 2017, Station LLC issued $550.0 million in aggregate principal amount of 5.00% Senior Notes due October 1, 2025 at par. Interest on the 5.00% Senior Notes is paid every six months in arrears on April 1 and October 1.
The 5.00% Senior Notes and the guarantees of such notes by certain of Station LLC’s subsidiaries are general senior unsecured obligations.

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

On or after October 1, 2020, Station LLC may redeem all or a portion of the 5.00% Senior Notes at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest to the applicable redemption date:    
Years Beginning October 1,
Percentage
2020
102.50
%
2021
101.25
%
2022 and thereafter
100.00
%
The indenture governing the 5.00% Senior Notes requires Station LLC to offer to purchase the 5.00% Senior Notes at a purchase price in cash equal to 101.00% of the aggregate principal amount outstanding plus accrued and unpaid interest thereon if Station LLC experiences certain change of control events (as defined in the indenture). The indenture also requires Station LLC to make an offer to repurchase the 5.00% Senior Notes at a purchase price equal to 100.00% of the principal amount of the purchased notes if it has excess net proceeds (as defined in the indenture) from certain asset sales.
The indenture governing the 5.00% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 5.00% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 5.00% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 5.00% Senior Notes to be declared due and payable.
4.50% Senior Notes
On February 7, 2020, Station LLC issued $750 million in aggregate principal amount of 4.50% Senior Notes due 2028 pursuant to an indenture dated as of February 7, 2020, among Station LLC, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee. The net proceeds of the sale of the 4.50% Senior Notes were used (i) to repay a portion of the amounts outstanding under the Credit Facility, (ii) to pay fees and costs associated with the offering and (iii) for general corporate purposes. Interest on the 4.50% Senior Notes is paid every six months in arrears on February 15 and August 15, commencing on August 15, 2020.
The indenture governing the 4.50% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 4.50% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 4.50% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 4.50% Senior Notes to be declared due and payable.
Corporate Office Building Financing
In October 2019, the Company paid $57.0 million to purchase its corporate office building, which was previously leased from the third-party seller under a sale-leaseback arrangement accounted for as a financing transaction. Accordingly, the related financing obligation, which had a carrying amount of $37.4 million, was extinguished and the Company recognized a $19.6 million loss on debt extinguishment representing the difference between the purchase price and the carrying amount of the financing obligation.
On December 19, 2019, a 100%-owned unrestricted subsidiary of Station LLC entered into a $42.8 million term loan agreement with a bank, the proceeds of which were used to repay a portion of the outstanding balance under the Revolving Credit Facility. The term loan is secured by the Company’s corporate office building and is not guaranteed by Station LLC or its restricted subsidiaries under the Credit Facility. The term loan bears interest at a fixed rate of 3.80% per annum and matures in December 2025. Principal and interest payments of $0.2 million are payable on a monthly basis until the maturity date, at which time the remaining principal amount will become due.

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

Principal Maturities
As of December 31, 2019, scheduled principal maturities of Station LLC’s long-term debt for each of the next five years and thereafter were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
33,989

2021
170,830

2022
617,944

2023
1,664,453

2024
1,212

Thereafter
587,115

 
3,075,543

Debt discounts and issuance costs
(42,252
)
 
$
3,033,291


10.    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 December 31, 2019, the weighted-average fixed pay rate for Station LLC’s interest rate swaps was 1.73%, which will increase to 1.94% over the exposure period. At December 31, 2019, Station LLC’s interest rate swaps had a combined notional amount of $1.4 billion and effectively converted $1.4 billion of Station LLC’s variable interest rate debt to a fixed rate of 4.22%.
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 December 31, 2019, the termination value of Station LLC’s interest rate swaps, including accrued interest, was a net liability of $5.8 million. Had Station LLC been in breach of the provisions of its swap agreements, it could have been required to pay the termination value to settle the obligations.
The fair values of Station LLC’s interest rate swaps, exclusive of accrued interest, as well as their classification on the Consolidated Balance Sheets, are presented below (amounts in thousands):
 
December 31,
2019
 
2018
Interest rate swaps not designated in hedge accounting relationships:
 
 
 
Prepaid expenses and other current assets
$

 
$
8,334

Other assets, net

 
15,611

Other accrued liabilities
440

 

Other long-term liabilities
5,227

 



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

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
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Interest rate swaps
 
Change in fair value of derivative instruments
 
$
(19,467
)
 
$
12,415

 
$
14,110


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 (loss) 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. At December 31, 2019, accumulated other comprehensive (loss) income included $1.4 million in deferred net gains, which is expected to be reclassified into earnings during the next twelve months.
Prior to the dedesignation, the gain or loss on the effective portion of changes in fair values of interest rate swaps was recorded as a component of other comprehensive loss until the interest payments being hedged were recorded as interest expense, at which time the amounts in accumulated other comprehensive (loss) income were reclassified as an adjustment to interest expense. The Company recognized the gain or loss on any ineffective portion of the derivatives’ change in fair value in the period in which the change occurred as a component of Change in fair value of derivative instruments in the Consolidated Statements of Operations.
Information about pretax gains and losses on derivative financial instruments that were designated in cash flow hedging relationships and their location within the consolidated financial statements is presented below (amounts in thousands):
Derivatives Designated in Cash Flow Hedging Relationships
 
Amount of Loss on Derivatives Recognized in Other Comprehensive Loss (Effective Portion)
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Year Ended December 31,
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
 
2019
 
2018
 
2017
Interest rate swaps
 
$

 
$

 
$
(1,875
)
 
Interest expense, net
 
$
2,843

 
$
2,929

 
$
(1,176
)

11.    Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Information about the Company’s financial assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, is presented below (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
5,667

 
$

 
$
5,667

 
$

 
 
 
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

 
$



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

Assets Measured at Fair Value on a Nonrecurring Basis
During the year ended December 31, 2017, the Company recorded an asset impairment charge of $1.8 million to write down an approximately 31-acre parcel of land held for development in Las Vegas to its estimated fair value of $5.2 million as a result of entering into an agreement to sell a portion of the land at a price less than its carrying amount. The sale was completed in the second quarter of 2018.
Fair Value of Long-term Debt
The estimated fair value of the Company’s long-term debt compared with its carrying amount is presented below (amounts in millions):
 
December 31,
 
2019
 
2018
Aggregate fair value
$
3,109

 
$
2,766

Aggregate carrying amount
3,033

 
2,855


The estimated fair value of the Company’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 hierarchy.
12.    Stockholders’ Equity
The Company has two classes of common stock. The Company’s Certificate of Incorporation authorizes 500,000,000 shares of Class A common stock, par value $0.01 per share and 100,000,000 shares of Class B common stock, par value $0.00001 per share. The Certificate of Incorporation also authorizes up to 100,000,000 shares of preferred stock, par value of $0.01 per share, none of which have been issued.
Class A Common Stock
Voting Rights
The holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders and have economic rights. Holders of shares of the Company’s Class A common stock and Class B common stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except as otherwise required by applicable law or the Certificate of Incorporation.
Dividend Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor. The declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of the board of directors and it may reduce or discontinue entirely the payment of such dividends at any time. The board of directors may take into account general economic and business conditions, the Company’s financial condition and operating results, its available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends to stockholders or the payment of distributions by subsidiaries (including Station Holdco) to the Company, and such other factors as the board of directors may deem relevant.
As a holding company, Red Rock’s only assets are its equity interest in Station Holdco and its voting interest in Station LLC, other than cash and tax-related assets and liabilities. Red Rock has no operations outside of its management of Station LLC. The Company intends to cause Station Holdco to make distributions in an amount sufficient to cover cash dividends declared, if any. If Station Holdco makes such distributions to Red Rock, the other holders of LLC Units will be entitled to receive proportionate distributions based on their percentage ownership of Station Holdco.
During each of the years ended December 31, 2019 and 2018, the Company declared and paid cash dividends of $0.40 per share to Class A common shareholders. In January 2020, the board of directors declared a dividend of $0.10 per share of Class A common stock to holders of record as of March 13, 2020 to be paid on March 27, 2020. Prior to the payment of the dividend, Station Holdco will make a cash 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.
The existing debt agreements of Station LLC, including those governing the Credit Facility, contain restrictive covenants that limit its ability to make cash distributions. Because the only asset of Station Holdco is its interest in Station LLC, the limitations on such distributions will effectively limit the ability of Station Holdco to make distributions to Red Rock, and

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

any financing arrangements that the Company or any of its subsidiaries enter into in the future may contain similar restrictions. Station Holdco is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Station Holdco (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Station Holdco, including Station LLC and its subsidiaries, are generally subject to similar legal limitations on their ability to make distributions to their members or equity holders.
Because the Company must pay taxes and make payments under the TRA, amounts ultimately distributed as dividends to holders of Class A common stock may be less than the amounts distributed by Station Holdco to its members on a per LLC Unit basis.
Rights upon Liquidation
In the event of liquidation, dissolution or winding-up of Red Rock, whether voluntarily or involuntarily, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.
Other Rights
The holders of Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of Class A common stock will be subject to those of the holders of any shares of preferred stock the Company may issue in the future.
Equity Repurchase Program
In February 2019, the Company’s board of directors approved an equity repurchase program authorizing the repurchase of up to an aggregate of $150 million of its Class A common stock. The Company is not obligated to repurchase any shares under this program. Subject to applicable laws and the provisions of any agreements restricting the Company’s ability to do so, repurchases may be made at the Company’s discretion from time to time through open market purchases, negotiated transactions or tender offers, depending on market conditions and other factors. The Company made no repurchases of Class A common stock pursuant to the repurchase program during the year ended December 31, 2019.
Class B Common Stock
Voting Rights
All Continuing Owners of Station Holdco, other than Red Rock, hold shares of Class B common stock. Although Class B shares have no economic rights, they allow those owners of Station Holdco to exercise voting power at Red Rock, which is the sole managing member of Station Holdco.
Each outstanding share of Class B common stock that is held by a holder that, together with its affiliates, owned LLC Units representing at least 30% of the outstanding LLC Units and, at the applicable record date, maintains direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock) is entitled to ten votes and each other outstanding share of Class B common stock is entitled to one vote.
Affiliates of Frank J. Fertitta III and Lorenzo J. Fertitta hold all of the Company’s issued and outstanding shares of Class B common stock that have ten votes per share. As a result, Frank J. Fertitta III and Lorenzo J. Fertitta, together with their affiliates, control any action requiring the general approval of the Company’s stockholders, including the election of the board of directors, the adoption of amendments to the Certificate of Incorporation and bylaws and the approval of any merger or sale of substantially all of the Company’s assets.
Each share of Class B common stock is entitled to only one vote automatically upon it being held by a holder that, together with its affiliates, did not own at least 30% of the outstanding LLC Units immediately following the IPO or owns less than 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock). Holders of LLC Units are entitled at any time to exchange LLC Units, together with an equal number of shares of Class B common stock, for shares of Class A common stock on a one-for-one basis or for cash, at the Company’s election. Accordingly, as members of Station Holdco exchange LLC Units, the voting power afforded to them by their shares of Class B common stock will be correspondingly reduced. Holders of Class B common stock exchanged 0.1 million, 0.4 million and 2.7 million shares of such stock, along with an equal number of LLC Units, for an equal number of shares of Class A common stock during the years ended December 31, 2019, 2018 and 2017, respectively.

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

Automatic Transfer
In the event that any outstanding share of Class B common stock shall cease to be held by a holder of an LLC Unit (including a transferee of an LLC Unit), such share shall automatically be transferred to the Company and thereupon shall be retired.
Dividend Rights
Class B stockholders will not participate in any dividends declared by the board of directors.
Rights upon Liquidation
In the event of any liquidation, dissolution, or winding-up of Red Rock, whether voluntary or involuntary, the Class B stockholders will not be entitled to receive any of the Company’s assets.
Other Rights
The holders of Class B common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class B common stock. The rights, preferences and privileges of holders of Class B common stock will be subject to those of the holders of any shares of preferred stock the Company may issue in the future.
Preferred Stock
Subject to limitations prescribed by Delaware law and the Certificate of Incorporation, the board of directors is authorized to issue preferred stock and to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares. The board of directors is authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company. The Company has no current plan to issue any shares of preferred stock.
Accumulated Other Comprehensive (Loss) Income
The following table presents changes in accumulated other comprehensive (loss) income balances, net of tax and noncontrolling interest (amounts in thousands):
 
Unrealized gain (loss) on interest rate swaps
 
Unrecognized pension liability
 
Total
Balances, December 31, 2017
$
2,510

 
$
(37
)
 
$
2,473

Unrealized loss arising during the period

 
(159
)
 
(159
)
Amounts reclassified from accumulated other comprehensive income (loss) into income
(1,264
)
 

 
(1,264
)
Net current-period other comprehensive loss
(1,264
)
 
(159
)
 
(1,423
)
Exchanges of noncontrolling interests for Class A common stock
21

 

 
21

Rebalancing
12

 

 
12

Balances, December 31, 2018
1,279

 
(196
)
 
1,083

Unrealized loss arising during the period

 
(271
)
 
(271
)
Amounts reclassified from accumulated other comprehensive loss into income
(1,458
)
 

 
(1,458
)
Net current-period other comprehensive loss
(1,458
)
 
(271
)
 
(1,729
)
Exchanges of noncontrolling interests for Class A common stock
1

 

 
1

Rebalancing
4

 

 
4

Balances, December 31, 2019
$
(174
)
 
$
(467
)
 
$
(641
)



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

Net (Loss) 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 (loss) income and changes in its ownership of Station Holdco (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income attributable to Red Rock Resorts, Inc.
$
(3,351
)
 
$
157,541

 
$
35,423

Transfers from (to) noncontrolling interests:
 
 
 
 
 
Exchanges of noncontrolling interests for Class A common stock
370

 
2,174

 
14,765

Acquisition of subsidiary noncontrolling interests

 

 
2,850

Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco
(8,361
)
 
(5,898
)
 
(4,975
)
Net transfers (to) from noncontrolling interests
(7,991
)
 
(3,724
)
 
12,640

Change from net (loss) income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests
$
(11,342
)
 
$
153,817

 
$
48,063

 
 
 
 
 
 

13.    Share-based Compensation
The Red Rock Resorts, Inc. 2016 Amended and Restated Equity Incentive Plan (the “Equity Incentive Plan”) is designed to attract, retain and motivate employees and to align the interests of those individuals with the interests of the Company. The Equity Incentive Plan was approved by the Company’s stockholders and is administered by the Compensation Committee or other designated committee of the board of directors (the “Committee”). The plan authorizes the Committee to grant share-based compensation awards, including stock options, restricted stock, performance awards, stock appreciation rights and certain other stock-based awards, to eligible participants. The Committee may designate plan participants, determine the types of awards to be granted and the number of shares covered by awards, and set the terms and conditions of awards, subject to limitations set forth in the plan. A total of 23.2 million shares of Class A common stock are reserved for issuance under the plan, of which approximately 12.3 million shares were available to be issued at December 31, 2019.
Stock Options
Stock option awards issued under the plan generally vest over a requisite service period of four years and have a term of seven years from the grant date. The exercise price of stock options awarded under the plan is equal to the fair market value of the Company’s stock at the grant date. A summary of stock option activity is presented below:
 
Shares
 
Weighted-average exercise price
 
Weighted-average remaining contractual life (years)
 
Aggregate intrinsic value (amounts in thousands)
Outstanding at January 1, 2019
5,166,565

 
$
25.60

 
 
 
 
Granted
3,998,083

 
25.99

 
 
 
 
Exercised
(386,634
)
 
20.87

 
 
 
 
Forfeited or expired
(1,381,507
)
 
27.26

 
 
 
 
Outstanding at December 31, 2019
7,396,507

 
$
25.79

 
5.3
 
$
8,618

Unvested instruments expected to vest
6,296,411

 
$
26.57

 
5.5
 
$
5,559

Exercisable at December 31, 2019
1,100,096

 
$
21.31

 
3.8
 
$
3,059


The following information is provided for stock options awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
7.20

 
$
9.25

 
$
6.26

Total intrinsic value of stock options exercised (amounts in thousands)
$
1,517

 
$
3,550

 
$
538



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

The weighted-average assumptions used by the Company to estimate the grant date fair values of stock option awards were as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected stock price volatility
32.22
%
 
33.25
%
 
35.55
%
Expected term (in years)
4.98

 
4.87

 
4.95

Risk-free interest rate
2.26
%
 
2.63
%
 
2.06
%
Expected dividend yield
1.43
%
 
1.52
%
 
1.79
%

The Company has limited historical data on which to base certain assumptions used in estimating the grant date fair value of stock option awards. Accordingly, the Company incorporates the historical volatility of comparable public companies into its estimate of expected stock price volatility and utilizes the simplified method to estimate the expected term of stock option awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for a period equal to the expected term. The expected dividend yield is based on the current annualized dividend as of the grant date and the average stock price for the year preceding the option grant.
At December 31, 2019, unrecognized share-based compensation cost related to stock options was $30.6 million which is expected to be recognized over a weighted-average period of 2.8 years.
Restricted Stock Awards
Restricted stock awards issued under the plan generally vest over requisite service periods of two to four years for employee awards and one year for awards to independent directors. A summary of restricted stock activity is presented below:
 
Shares
 
Weighted-average grant date fair value
Nonvested at January 1, 2019
373,764

 
$
26.09

Granted
477,667

 
27.01

Vested
(87,468
)
 
24.02

Forfeited
(51,516
)
 
29.06

Nonvested at December 31, 2019
712,447

 
$
26.75


The following information is provided for restricted stock awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
27.01

 
$
31.95

 
$
22.11

Total fair value of shares vested (amounts in thousands)
$
2,101

 
$
1,194

 
$
2,364


At December 31, 2019, unrecognized share-based compensation cost for restricted stock awards was $12.4 million which is expected to be recognized over a weighted-average period of 2.9 years.
Share-based compensation is classified in the same financial statement line items as cash compensation. The following table presents the location of share-based compensation expense in the Consolidated Statements of Operations (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating costs and expenses:
 
 
 
 
 
Casino
$
458

 
$
250

 
$
228

Food and beverage
202

 
36

 
40

Room
11

 

 
11

Selling, general and administrative
16,177

 
11,003

 
7,643

Total share-based compensation expense
$
16,848

 
$
11,289

 
$
7,922

 
 
 
 
 
 


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

14.    Write-downs and Other Charges, Net
Write-downs and other charges, net include asset disposals, preopening and redevelopment (including Palms redevelopment and preopening expenses and loss on artist performance agreement terminations at Palms’ nightclub and dayclub), severance, business innovation and technology enhancements and non-routine transactions.
For the year ended December 31, 2019, write-downs and other charges, net totaled $82.1 million, which included $39.8 million in artist performance agreement termination costs at Palms’ nightclub and dayclub and $25.9 million in Palms redevelopment and preopening expenses, comprising various costs associated with the brand repositioning campaign, as well as preopening related to new restaurants, nightclubs, bars and other amenities. For the years ended December 31, 2018 and 2017, write-downs and other charges, net were $34.7 million and $29.6 million, respectively, which included $18.6 million and $5.3 million, respectively, in Palms redevelopment and preopening expenses.
15.    Income Taxes
Income Taxes
Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it by 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.
Income Tax (Benefit) Expense
The components of income tax (benefit) expense were as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current income taxes:
 
 
 
 
 
Federal
$

 
$

 
$
(1,330
)
State and local
1

 
15

 
66

Total current income taxes
1

 
15

 
(1,264
)
Deferred income taxes:
 
 
 
 
 
Federal
(1,721
)
 
23,817

 
133,246

State and local
(14
)
 
43

 
2,804

Total deferred income taxes
(1,735
)
 
23,860

 
136,050

Total income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786


A reconciliation of statutory federal income tax, which is the amount computed by multiplying income before tax by the statutory federal income tax rate, to the Company’s provision for income tax is as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected U.S. federal income taxes at statutory rate
$
(1,779
)
 
$
51,105

 
$
69,411

Income attributable to noncontrolling interests
711

 
(13,007
)
 
(9,839
)
State and local income taxes, net of federal benefit
(14
)
 
43

 
474

Non-deductible expenses
1,336

 
1,525

 
(1,361
)
Tax credits
(1,555
)
 
(1,985
)
 
(1,062
)
Impact of tax rate change due to tax reform

 

 
85,348

Share-based compensation contribution
(762
)
 
(1,152
)
 

Return to provision
(313
)
 
1,037

 
2,258

Other

 
2,874

 
(1,776
)
Valuation allowance
642

 
(16,565
)
 
(8,667
)
Income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786



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

The Company’s effective tax rate was 20.47%, 9.81% and 67.96% for the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s effective tax rate includes the net tax expense associated with remeasuring its deferred tax assets, deferred tax liabilities and related valuation allowances to reflect the enacted federal rate, and rate benefit or detriment attributable to the fact that Station Holdco operates as a limited liability company which is not subject to federal income tax. Accordingly, the Company does not recognize income tax provision or benefit on the portion of Station Holdco's earnings or loss attributable to noncontrolling interest holders.
The components of deferred tax assets and liabilities are as follows (amounts in thousands):
 
December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Tax credit carryforwards
$
5,293

 
$
3,737

Net operating loss carryforwards and other attributes
66,476

 
52,785

Investment in partnership
76,004

 
90,035

Payable pursuant to tax receivable agreement
5,268

 
5,244

Total gross deferred tax assets
153,041

 
151,801

Valuation allowance
(39,856
)
 
(39,968
)
Total deferred tax assets, net of valuation allowance
$
113,185

 
$
111,833


The Company recorded a reduction to the net deferred tax asset resulting from the outside basis difference of its interest in Station Holdco. The Company also recorded an increase to deferred tax asset for its tax credits, net operating losses and other tax attributes.
At December 31, 2019, the Company had a federal net operating loss carryforward of approximately $291.0 million. $101.6 million of the federal net operating loss (“NOL”) carryforward will begin to expire in 2037; the remaining $189.4 million have unlimited carryforward but may have usage limitations in a given year. The Company also had $25.2 million of additional pre-tax attributes and $5.3 million of tax credits at December 31, 2019.
The Company analyzes the likelihood that its deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not (a likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. As a result of this analysis, the Company determined that the deferred tax asset related to acquiring its interest in Station Holdco through newly issued LLC Units at IPO and subsequently is not expected to be realized unless the Company disposes of its investment in Station Holdco. The Company recognizes changes to the valuation allowance through the provision for income tax or other comprehensive loss, as applicable, and at December 31, 2019 and 2018, the valuation allowance was $39.9 million and $40.0 million, respectively.
Uncertain Tax Positions
The Company recorded $1.0 million of unrecognized tax benefits as of December 31, 2019. The Company does not currently record interest and penalties for unrecognized tax benefits as any recognition would result in a reduction of its NOL or other tax attributes and would not result in an underpayment of tax. Further, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
The Company files annual income tax returns for Red Rock and Station Holdco in the U.S. federal jurisdiction and California. The Company is currently under examination by the Internal Revenue Service for both entities for 2016. As of December 31, 2019, there are no other ongoing income tax audits.

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

The Company had the following activity for unrecognized tax benefits (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Balance at beginning of period
$

 
$

 
$

Tax positions related to current year additions
519

 

 

Additions for tax positions of prior years
485

 

 

Tax positions related to prior years reductions

 

 

Reductions due to lapse of statute of limitations on tax positions

 

 

Settlements

 

 

Balance at end of period
$
1,004

 
$

 
$


Tax Receivable Agreement
Pursuant to the election under Section 754 of the Internal Revenue Code, the Company continues to expect to obtain an increase in its share of the tax basis in the net assets of Station Holdco when LLC Units are exchanged by Station Holdco’s noncontrolling interest holders and other qualifying transactions. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
In connection with the IPO, the Company entered into the TRA with certain Continuing 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 by 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. For the years ended December 31, 2019, 2018 and 2017, exchanges of LLC Units and Class B common shares resulted in increases of $0.2 million, $2.5 million and $22.8 million, respectively, in amounts payable under the TRA liability and net increases of $0.1 million, $2.7 million and $24.3 million, respectively, in deferred tax assets, all of which were recorded through equity. At December 31, 2019 and 2018, the Company’s liability under the TRA with respect to previously consummated transactions was $25.1 million and $24.9 million, respectively. During the year ended December 31, 2018, the Company paid $28.9 million to pre-IPO owners of Station Holdco in exchange for which the owners assigned to the Company all of their rights under the TRA. The Company’s liability under the TRA was reduced by $119.2 million, and nontaxable income of $90.4 million was recognized as a result of the transactions with Continuing Owners. The $116.5 million net reduction of the TRA liability during 2017 was the result of a $135.1 million decrease due to the new tax rate, partially offset by increases related to exchanges.
16.     Retirement Plans
401(k) Plan
The Company has a defined contribution 401(k) plan (the “401(k) Plan”) which covers all employees who meet certain age and length of service requirements and allows an employer contribution of up to 50% of the first 4% of each participating employee’s compensation contributed to the plan. Participants may elect to defer pretax compensation through payroll deductions. These deferrals are regulated under Section 401(k) of the Internal Revenue Code. The Company recorded expense for matching contributions of $4.2 million, $4.1 million and $4.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Palms Pension Plan
In connection with the acquisition of Palms, the Company acquired a single-employer defined benefit pension plan (the “Pension Plan”), which covers eligible employees of Palms. The Pension Plan provides a cash balance form of pension benefits for eligible Palms employees who met certain age and length of service requirements. There has been a plan curtailment since 2009, and as of the curtailment date, new participants were no longer permitted, and existing participants’ accrual of benefits for future service ceased.

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

The following table provides information about the changes in benefit obligation and the fair value of plan assets (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
Change in benefit obligation:
 
 
 
Benefit obligation (accumulated and projected) at beginning of year
$
13,357

 
$
14,130

Interest cost
517

 
475

Actuarial loss (gain)
1,390

 
(506
)
Benefits paid
(1,079
)
 
(742
)
Benefit obligation (accumulated and projected) at end of year
14,185

 
13,357

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
8,725

 
9,217

Actual return (loss) on plan assets
1,045

 
(668
)
Employer contributions
835

 
918

Benefits paid
(1,079
)
 
(742
)
Fair value of plan assets at end of year
9,526

 
8,725

Funded status at end of year
$
(4,659
)
 
$
(4,632
)

The Company’s qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. The Company expects to contribute $1.4 million to the Pension Plan for the year ending December 31, 2020 and the Company does not expect any plan assets to be returned in the year ending December 31, 2020.
The table below presents the components of pension expense (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Components of net periodic benefit cost:
 
 
 
 
 
Interest cost
$
517

 
$
475

 
$
536

Expected return on plan assets
(187
)
 
(209
)
 
(192
)
Effect of settlement

 

 
13

Net periodic benefit cost
330

 
266

 
357

Other changes recognized in other comprehensive income:
 
 
 
 
 
Net loss
532

 
371

 
319

Amount recognized due to settlement

 

 
(13
)
Total recognized in other comprehensive income
532

 
371

 
306

Total recognized in net periodic benefit cost and other comprehensive income
$
862

 
$
637

 
$
663


The Company did not incur any service costs or amortize any net gains or losses within the net periodic benefit costs of the Pension Plan during the periods presented. Expense associated with the Pension Plan is classified within Other expense in the Consolidated Statements of Operations. Amounts recognized on the Consolidated Balance Sheets related to the Pension Plan consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Other long-term liabilities
$
4,659

 
$
4,632

Net actuarial loss recognized in Accumulated Other Comprehensive Income
1,203

 
671


The Company does not expect to amortize any net actuarial loss from accumulated other comprehensive income into net pension expense during 2020.

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

The following tables present the weighted-average actuarial assumptions used to calculate the net periodic benefit cost and obligation:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net periodic benefit cost:
 
 
 
 
 
Discount rate
4.15%
 
3.60%
 
4.15%
Expected long-term rate of return
5.80%
 
5.80%
 
5.80%
Rate of compensation increase
n/a
 
n/a
 
n/a
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
Benefit obligations:
 
 
 
 
 
Discount rate
 
 
3.20%
 
4.15%
Rate of compensation increase
 
 
n/a
 
n/a

The discount rate used reflects the expected future benefit payments based on plan provisions and participant data as of the beginning of the plan year. The expected future cash flows are discounted by a pension discount yield curve on measurement dates and modified as deemed necessary. The expected return on plan assets uses a weighted-average rate based on the target asset allocation of the plan and capital market assumptions developed with a primary focus on forward-looking valuation models and market indicators. The key inputs for these models are future inflation, economic growth, and interest rate environment.
The composition of the Pension Plan assets at December 31, 2019, along with the targeted mix of assets, is presented below:
 
Target
 
Actual
Fixed income
50
%
 
51
%
Domestic equity
18
%
 
18
%
International equity
14
%
 
13
%
Long/short equity
10
%
 
10
%
Other
8
%
 
8
%
 
100
%
 
100
%

The investment strategy for the Pension Plan assets covers a diversified mix of assets, including equity and fixed income securities and real estate. Assets are managed within a risk management framework which addresses the need to generate incremental returns in the context of an appropriate level of risk, based on plan liability profiles and changes in funded status. The return objectives are to satisfy funding obligations when and as prescribed by law and to minimize the risk of large losses primarily through diversification.

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

Entities are required to use a fair value hierarchy to measure the plan assets. See Note 2 for a description of the fair value hierarchy. The fair values of the Pension Plan assets at December 31, 2019 and 2018 by asset category were as follows (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Fixed income
$
4,846

 
$
4,822

 
$
24

 
$

Domestic equity
1,748

 
150

 
1,598

 

International equity
1,273

 
1,273

 

 

Long/short equity
900

 
900

 

 

Other
759

 
310

 
449

 

 
$
9,526

 
$
7,455

 
$
2,071

 
$

 
 
 
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)
Fixed income
$
4,646

 
$
4,623

 
$
23

 
$

Domestic equity
1,468

 
120

 
1,348

 

International equity
1,059

 
1,059

 

 

Long/short equity
880

 
880

 

 

Other
672

 
260

 
412

 

 
$
8,725

 
$
6,942

 
$
1,783

 
$


At December 31, 2019, expected benefit payments for the next ten years were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
1,600

2021
910

2022
890

2023
800

2024
1,010

2025 - 2029
4,230


17.    Related Party Transactions
Under the TRA described in Note 2, the Company is required to make payments to certain pre-IPO owners of Station Holdco for 85% of the tax benefits realized by the Company as a result of certain transactions with the pre-IPO owners. At December 31, 2019 and 2018, $25.1 million and $24.9 million, respectively, was payable to certain Continuing Owners and pre-IPO owners of Station Holdco, including current and former executives of the Company or members of their respective family group, with respect to previously consummated transactions. Of these amounts, $9.0 million was payable to entities related to Frank J. Fertitta III, the Company’s Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, the Company’s Vice Chairman. Future payments to the pre-IPO owners in respect of any subsequent exchanges of LLC Units for Class A common stock would be in addition to these amounts and are expected to be substantial.
Prior to April 27, 2017, the Company leased the land on which each of Boulder Station and Texas Station is located pursuant to long-term ground leases through 2058 and 2060, respectively. The Company leased this land from entities owned by

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

the Frank J. Fertitta and Victoria K. Fertitta Revocable Family Trust (the “Related Party Lessor”). Frank J. Fertitta, Jr. and Victoria K. Fertitta are the parents of Frank J. Fertitta III and Lorenzo J. Fertitta. On April 27, 2017, the Company acquired the land (formerly subject to the ground leases), including the residual interest in the gaming and hotel facilities and other real property improvements thereon (the “Gaming Facilities”), for aggregate consideration of $120.0 million. Concurrently with the land acquisition, the Company assumed a long-term ground lease with an unrelated third-party lessor for an adjacent parcel of land at Boulder Station that previously had been subleased from the Related Party Lessor. The assumed ground lease terminates in 2089 and provides for monthly rental payments of approximately $14,000, subject to annual increases of 3% to 6% based on a cost of living factor. During the year ended December 31, 2017, the Company recognized a charge of $100.3 million in related party lease termination costs, which was an amount equal to the difference between the aggregate consideration paid by the Company and the fair value of the net assets acquired, including the land and residual interests in the Gaming Facilities and the assumed lease obligation. The transaction conveyed ownership of the land and interests (current and residual) in the Gaming Facilities to the Company, decreased rent expense over the maximum term of the leases by approximately $300 million, and generated a tax benefit of approximately $35 million to Red Rock and the other owners of Station Holdco. The Company’s lease payments under the related party leases totaled approximately $2.3 million for the period from January 1, 2017 to April 27, 2017, and they are included in selling, general and administrative expense in the Consolidated Statements of Operations.
18.    (Loss) Earnings Per Share
Basic (loss) earnings per share is calculated by dividing net (loss) 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 (loss) 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 years ended December 31, 2018 and 2017 represent outstanding shares of Class B common stock, nonvested restricted shares of Class A common stock and outstanding stock options. All other potentially dilutive shares 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 (loss) earnings per share is presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income, basic
$
(6,737
)
 
$
219,480

 
$
63,533

Less net loss (income) attributable to noncontrolling interests, basic
3,386

 
(61,939
)
 
(28,110
)
Net (loss) income attributable to Red Rock, basic
$
(3,351
)
 
$
157,541

 
$
35,423

Effect of dilutive securities

 
48,864

 
13,813

Net (loss) income attributable to Red Rock, diluted
$
(3,351
)
 
$
206,405

 
$
49,236


 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average shares of Class A common stock outstanding, basic
69,565

 
69,115

 
67,397

Effect of dilutive securities

 
47,744

 
48,533

Weighted-average shares of Class A common stock outstanding, diluted
69,565

 
116,859

 
115,930


The calculation of diluted (loss) earnings per share of Class A common stock excluded the following shares that could potentially dilute basic earnings per share in the future because their inclusion would have been antidilutive (amounts in thousands):     
 
As of December 31,
 
2019
 
2018
 
2017
Shares issuable in exchange for Class B common stock and LLC Units
46,827

 

 

Shares issuable upon exercise of stock options
7,397

 
1,966

 
3,677

Shares issuable upon vesting of restricted stock
712

 
64

 
11



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

Shares of Class B common stock are not entitled to share in the earnings of the Company and are not participating securities. Accordingly, separate presentation of earnings per share of Class B common stock under the two-class method has not been presented.
19.    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 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):
 
Year Ended December 31, 2019
Operating lease cost
$
5,185

Short-term lease cost
7,073

Variable lease cost
28,749

Total lease expense
$
41,007


For the years ended December 31, 2018 and 2017, which were not retrospectively adjusted by the Company upon adoption of the new lease accounting standard, expenses incurred under operating lease agreements totaled $20.2 million and $19.3 million, respectively.
Supplemental balance sheet information related to leases under which the Company is the lessee was as follows (amounts in thousands):
 
December 31, 2019
Operating lease right-of-use assets
$
13,099

 
 
Operating lease liabilities:
 
Current portion
$
3,646

Noncurrent portion
10,675

Total operating lease liabilities
$
14,321

Weighted-average remaining lease term - operating leases
33.5

Weighted-average discount rate - operating leases
5.40
%


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

Supplemental cash flow information related to leases under which the Company is the lessee was as follows (amounts in thousands):
 
Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows from operating leases
$
5,842

Future minimum lease payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2019 are as follows (amounts in thousands):
Year Ending December 31,
 
2020
$
4,286

2021
2,313

2022
892

2023
473

2024
462

Thereafter
43,141

Total future lease payments
51,567

Less imputed interest
(37,246
)
Total operating lease liabilities
$
14,321


As of December 31, 2018, prior to the adoption of the new lease accounting standard, future minimum payments under operating leases with initial or remaining non-cancelable lease terms in excess of one year were as follows (amounts in thousands):
Year Ending December 31,
 
2019
$
5,387

2020
3,351

2021
2,256

2022
937

2023
854

Thereafter
44,598

 
$
57,383


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 December 31, 2019, the Company’s tenant leases had remaining lease terms ranging from less than one year to approximately 19 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 years ended December 31, 2019, 2018 and 2017, revenue from tenant leases was $24.2 million, $24.3 million and $23.5 million, respectively. Revenue from tenant leases is included in Other revenues in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.

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

The following table presents undiscounted future minimum rentals to be received under operating leases as of December 31, 2019 (amounts in thousands):
Year Ending December 31,
 
2020
$
9,462

2021
8,236

2022
5,613

2023
4,329

2024
3,256

Thereafter
10,034

 
$
40,930


20.    Commitments and Contingencies
Legal Matters
The Company and its subsidiaries are defendants in various lawsuits relating to routine matters incidental to their business. No assurance can be provided as to the outcome of any legal matters and litigation inherently involves significant risks. The Company does not believe there are any legal matters outstanding that would have a material impact on its financial condition or results of operations.
21.    Segments
The Company views each of its Las Vegas casino properties and each of its Native American management arrangements as an individual operating segment. The Company aggregates all of its Las Vegas operating segments into one reportable segment because all of its Las Vegas properties offer similar products, cater to the same customer base, have the same regulatory and tax structure, share the same marketing techniques, are directed by a centralized management structure and have similar economic characteristics. The Company also aggregates its Native American management arrangements into one reportable segment.

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

The Company utilizes adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as its primary performance measure. The Company’s segment information and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net revenues
 
 
 
 
 
Las Vegas operations:
 
 
 
 
 
Casino
$
984,253

 
$
940,483

 
$
886,206

Food and beverage
481,558

 
381,197

 
365,448

Room
192,305

 
170,824

 
179,041

Other (a)
100,073

 
94,894

 
87,238

Management fees
571

 
605

 
509

Las Vegas operations net revenues
1,758,760

 
1,588,003

 
1,518,442

Native American management:
 
 
 
 
 
Management fees
91,074

 
87,009

 
117,968

Reportable segment net revenues
1,849,834

 
1,675,012

 
1,636,410

Corporate and other
6,700

 
6,018

 
5,729

Net revenues
$
1,856,534

 
$
1,681,030

 
$
1,642,139

 
 
 
 
 
 
Net (loss) income
$
(6,737
)
 
$
219,480

 
$
63,533

Adjustments
 
 
 
 
 
Depreciation and amortization
222,211

 
180,255

 
178,217

Share-based compensation
16,848

 
11,289

 
7,922

Write-downs and other charges, net
82,123

 
34,650

 
29,584

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
(139,300
)
Related party lease termination

 

 
100,343

Asset impairment

 

 
1,829

Interest expense, net
156,679

 
143,099

 
131,442

Loss on extinguishment/modification of debt, net
19,939

 

 
16,907

Change in fair value of derivative instruments
19,467

 
(12,415
)
 
(14,112
)
(Benefit) provision for income tax
(1,734
)
 
23,875

 
134,786

Adjusted EBITDA attributable to MPM noncontrolling interest and other
316

 
(633
)
 
(13,905
)
Adjusted EBITDA (b)
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
Las Vegas operations
$
454,805

 
$
457,379

 
$
433,640

Native American management
85,562

 
80,795

 
95,897

Reportable segment Adjusted EBITDA
540,367

 
538,174

 
529,537

Corporate and other
(31,352
)
 
(29,212
)
 
(32,291
)
Adjusted EBITDA
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
 
 
Total assets
 
 
 
 
 
Las Vegas operations
$
3,637,893

 
$
3,501,705

 
 
Native American management
31,573

 
37,274

 
 
Corporate and other
444,721

 
470,547

 
 
 
$
4,114,187

 
$
4,009,526

 
 
 
 
 
 
 
 
____________________________________
(a)
Includes tenant lease revenue which is accounted for under the lease accounting guidance. See Note 19.

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

(b)
Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance agreement terminations at Palms’ nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, related party lease termination, asset impairment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, (benefit) provision for income tax and other, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
The Company’s capital expenditures, which were primarily related to Las Vegas operations, were $353.3 million, $579.3 million and $248.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
22.    Quarterly Financial Information (Unaudited)
Quarterly financial information is presented below (amounts in thousands, except per share data):
 
Year Ended December 31, 2019
 
First
Quarter
 
Second
Quarter
 
Third
Quarter (a)
 
Fourth
Quarter (b)
Net revenues
$
447,022

 
$
482,868

 
$
465,858

 
$
460,786

Operating income
66,145

 
45,481

 
14,243

 
60,132

Net income (loss)
20,284

 
(7,067
)

(26,798
)
 
6,844

Net income (loss) attributable to Red Rock Resorts, Inc.
11,323

 
(3,846
)
 
(15,657
)
 
4,829

Earnings (loss) per share, basic
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.07

Earnings (loss) per share, diluted
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.05

 
Year Ended December 31, 2018
 
First
Quarter
 
Second
Quarter (c)
 
Third
Quarter
 
Fourth
Quarter
Net revenues
$
421,039

 
$
416,188

 
$
412,332

 
$
431,471

Operating income
107,841

 
137,791

 
54,618

 
71,958

Net income
82,130

 
99,102

 
25,067

 
13,181

Net income attributable to Red Rock Resorts, Inc.
51,180

 
82,735

 
14,680

 
8,946

Earnings per share, basic
$
0.74

 
$
1.20

 
$
0.21

 
$
0.13

Earnings per share, diluted
$
0.65

 
$
0.82

 
$
0.20

 
$
0.11


____________________________________
(a)
Includes $28.2 million in artist performance agreement termination costs and severance at Palms. See Note 14.
(b)
Includes $19.6 million loss on debt extinguishment related to the repayment of the corporate building lease obligation. See Note 9.
(c)
Includes income of $73.5 million related to the TRA liability. See Note 15.

ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, the Company’s management conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the principal executive officer and principal financial

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officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective, at the reasonable assurance level, and are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.
All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurances with respect to financial statement preparation. Further because of changes in conditions, the effectiveness of internal controls may vary over time.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019. This assessment was performed using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control — Integrated Framework. Based on such assessment, management believes that, as of December 31, 2019, the Company’s internal control over financial reporting was effective based on those criteria.
The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2019, which is included below.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2019, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Red Rock Resorts, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Red Rock Resorts, Inc.’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). In our opinion, Red Rock Resorts, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 of the Company and our report dated February 21, 2020 expressed an unmodified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting, included in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Ernst & Young LLP
Las Vegas, Nevada
February 21, 2020


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ITEM 9B.
OTHER INFORMATION
None.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required under this item will be included in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2019 and is incorporated herein by reference.
ITEM 11.
EXECUTIVE COMPENSATION
The information required under this item will be included in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2019 and is incorporated herein by reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS
The information required under this item will be included in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2019 and is incorporated herein by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required under this item will be included in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2019 and is incorporated herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required under this item will be included in our definitive Proxy Statement for our 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission no later than 120 days after December 31, 2019 and is incorporated herein by reference.

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PART IV
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
1.    Red Rock Resorts, Inc. Consolidated Financial Statements (including related notes to Consolidated Financial Statements) filed in Part II of this report are listed below:
Report of Independent Registered Public Accounting Firm — Ernst & Young LLP
Financial Statements:
Consolidated Balance Sheets as of December 31, 2019 and 2018
Consolidated Statements of Operations — Years ended December 31, 2019, 2018 and 2017
Consolidated Statements of Comprehensive (Loss) Income — Years ended December 31, 2019, 2018 and 2017
Consolidated Statements of Stockholders’ Equity — Years ended December 31, 2019, 2018 and 2017
Consolidated Statements of Cash Flows — Years ended December 31, 2019, 2018 and 2017
Notes to Consolidated Financial Statements
2.    Schedule II — Valuation and Qualifying Accounts
We have omitted all other financial statement schedules because they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes to the consolidated financial statements.
 
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
RED ROCK RESORTS, INC.
For the Years Ended December 31, 2019, 2018 and 2017
(in thousands)

 
Balance at Beginning of Year
 
Additions (deductions) to tax benefit
 
Balance at End of Year
Description

 

 

Deferred income tax asset valuation allowance:
 
 
 
 

2019
$
39,968

 
$
(112
)
 
$
39,856

2018
57,607

 
(17,639
)
 
39,968

2017
104,125

 
(46,518
)
 
57,607




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3.    Exhibits
Exhibit Number
 
Exhibit Description
3.1
3.2
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10

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10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20

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10.21
Credit Agreement, dated as of June 8, 2016 (as amended by the First Amendment to Credit Agreement, dated as of January 30, 2017, the Second Amendment to Credit Agreement, dated as of April 5, 2017, the Third Amendment to Credit Agreement, dated as of May 2, 2017, the Incremental Joinder Agreement No. 4 and Fourth Amendment to Credit Agreement, dated as of September 21, 2017 and the Incremental Joinder Agreement No. 5 and Fifth Amendment to Credit Agreement, dated as of February 8, 2019), among Station Casinos LLC, the borrower subsidiaries party thereto, the lenders party thereto, the L/C Lenders party thereto, Deutsche Bank AG Cayman Islands Branch, as administrative agent and Deutsche Bank AG Cayman Islands Branch, as collateral agent. (Incorporated herein by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed February 26, 2019.)
10.22
10.23
10.24
10.25
10.26
14.1
21.1
23.1
31.1
31.2
32.1
32.2
101.INS
XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
____________________________________

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†    Management contract or compensatory plan or arrangement.
ITEM 16.
FORM 10-K SUMMARY
None.


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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
RED ROCK RESORTS, INC.


Dated:
By:
/s/ FRANK J. FERTITTA III
February 21, 2020
 
 
Frank J. Fertitta III
 
 
 
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
 
Title
Date
 
 
 
 
/s/ FRANK J. FERTITTA III
 
Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
February 21, 2020
Frank J. Fertitta III
 
 
 
 
 
 
 
/s/ LORENZO J. FERTITTA
 
Vice Chairman of the Board
February 21, 2020
Lorenzo J. Fertitta
 
 
 
 
 
 
 
/s/ STEPHEN L. COOTEY
 
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
February 21, 2020
Stephen L. Cootey
 
 
 
 
 
 
 
 
 
Director
 
Robert A. Cashell, Jr.
 
 
 
 
 
 
 
/s/ JAMES E. NAVE, D.V.M.
 
Director
February 21, 2020
James E. Nave, D.V.M.
 
 
 
 
 
 
 
/s/ ROBERT E. LEWIS
 
Director
February 21, 2020
Robert E. Lewis
 
 
 


112



Exhibit


EXHIBIT 4.1
DESCRIPTION OF CAPITAL STOCK

We have one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our Class A Common Stock, par value $0.01 per share. The following is a general description of the terms and provisions of our capital stock and related provisions of our amended and restated certificate of incorporation and amended and restated bylaws, in each case as currently in effect on the date of filing this Annual Report on Form 10-K of which this Exhibit 4.1 is a part. The following description is qualified in its entirety by reference to the provisions of our amended and restated certificate of incorporation and our amended and restated bylaws, copies of which are filed as exhibits to the registration statement of which this is a part and are incorporated by herein by reference. For a complete description of our capital stock, you should refer to our amended and restated certificate of incorporation, amended and restated bylaws and the applicable provisions of Delaware law.
Capital Stock
Our current authorized capital stock consists of:
500,000,000 shares of Class A Common Stock, par value of $0.01 per share,
100,000,000 shares of Class B Common Stock, par value of $0.00001 per share, and
100,000,000 shares of preferred stock with a par value of $0.01 per share.
As of December 31, 2019, we had 70,465,422 shares of our Class A Common Stock outstanding, 46,827,370 shares of our Class B Common Stock outstanding and no shares of preferred stock outstanding.
Class A Common Stock
Dividend rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of our Class A Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available therefor.
Voting rights
The holders of our Class A Common Stock are entitled to one vote per share on all matters to be voted upon by our stockholders. Holders of shares of our Class A Common Stock and Class B Common Stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation.
Rights upon liquidation
In the event of liquidation, dissolution or winding up of our Company, whether voluntarily or involuntarily, the holders of our Class A Common Stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of our preferred stock, if any, then outstanding.
Preemptive rights
Holders of our Class A Common Stock are not entitled to any preemptive rights to subscribe for additional shares of our Class A Common Stock, nor are they liable to further capital calls or to assessments by us. Therefore, if we issue additional shares without the opportunity for existing stockholders to purchase more shares, a stockholder’s ownership interest in our Company may be subject to dilution.
Other Rights or Preferences
Our Class A Common Stock has no sinking fund, redemption provisions, or conversion or exchange rights.
Class B Common Stock
Dividend rights
Our Class B stockholders will not participate in any dividends declared by our board of directors.
Voting rights
Holders of shares of our Class A Common Stock and Class B Common Stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and





restated certificate of incorporation. Each outstanding share of our Class B Common Stock that is held by a holder that, together with its affiliates, owned at least 30% of the outstanding limited liability company interests in Station Holdco LLC (“LLC Units”) immediately following our initial public offering in May 2016 (“IPO”) and, at the applicable record date, maintained direct or indirect beneficial ownership of at least 10% of the outstanding shares of our Class A Common Stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A Common Stock) is entitled to ten votes and each other outstanding share of our Class B Common Stock is entitled to one vote. The only holders of Class B Common Stock that satisfy the foregoing criteria are entities affiliated with Frank J. Fertitta III, our Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, a member of our board of directors (such entities, collectively, the “Fertitta Family Entities”). Consequently, such entities are the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock. In accordance with the Exchange Agreement entered into in connection with the IPO, holders of LLC Units are entitled to exchange LLC Units, together with an equal number of shares of Class B Common Stock, for shares of Class A Common Stock on a one-for-one basis or, at our election, for cash. Accordingly, as members of Station Holdco LLC exchange LLC Units, the voting power afforded to them by their shares of Class B Common Stock will be correspondingly reduced.
Automatic transfer
In the event that any outstanding share of our Class B Common Stock shall cease to be held by a holder of an LLC Unit (including a transferee of an LLC Unit), such share shall automatically and without further action on our part or of the holder of Class B Common Stock, be transferred to us and thereupon shall be retired.
Rights upon liquidation
In the event of any liquidation, dissolution, or winding-up of our Company, whether voluntary or involuntary, our Class B stockholders will not be entitled to receive any of our assets.
Preemptive rights
Holders of our Class B Common Stock are not entitled to any preemptive rights to subscribe for additional shares of our Class B Common Stock, nor are they liable to further capital calls or to assessments by us. Therefore, if we issue additional shares without the opportunity for existing stockholders to purchase more shares, a stockholder’s ownership interest in our Company may be subject to dilution.
Other Rights or Preferences
Holders of our Class B Common Stock have no conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our Class B Common Stock. The rights, preferences and privileges of holders of our Class B Common Stock are subject to those of the holders of any shares of our preferred stock we may issue in the future.
Preferred Stock
We are authorized to issue up to 100,000,000 shares of preferred stock, none of which are outstanding as of October 31, 2019. Our board of directors is authorized without further action by you, subject to limitations prescribed by Delaware law and our certificate of incorporation, to issue preferred stock and to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares. Our board of directors is authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company that some of you might believe to be in your best interests or in which you might receive a premium for your shares of Class A Common Stock over the market price and may adversely affect the voting and other rights of the holders of our Class A Common Stock and Class B Common Stock, which could have an adverse impact on the market price of our Class A Common Stock. We have no current plan to issue any shares of preferred stock.
Anti-Takeover Effects of Certain Provisions of Delaware Law and Charter and Bylaw Provisions
Certain provisions of our amended and restated certificate of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our Class A Common Stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority stockholders.





These provisions include:
Super Voting Stock
Each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owned at least 30% of the outstanding LLC Units immediately following the IPO and, at the applicable record date, maintained direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A Common Stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A Common Stock) is entitled to ten votes and each other outstanding share of Class B Common Stock is entitled to one vote. The only holders of Class B Common Stock that satisfy the foregoing criteria are Fertitta Family Entities. Consequently, such entities are the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock.
Action by Written Consent; Special Meetings of Stockholders.
The Delaware General Corporation Law ("DGCL") permits stockholder action by written consent unless otherwise provided by our amended and restated certificate of incorporation. Our amended and restated certificate of incorporation permits stockholder action by written consent so long as the Fertitta Family Entities own at least 10% of the outstanding shares of Class A Common Stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A Common Stock) (the "Fertitta Ownership Condition") and precludes stockholder action by written consent at any time that the Fertitta Ownership Condition is not satisfied. Our amended and restated certificate of incorporation and our amended and restated bylaws provide that special meetings of stockholders may be called only by the board of directors, the chairman of the board of directors or the chief executive officer and only proposals included in the Company's notice may be considered at such special meetings. Notwithstanding the foregoing, for so long as the Fertitta Ownership Condition is satisfied, stockholders collectively holding at least a majority of the voting power of the outstanding shares of our capital stock entitled to vote in connection with the election of directors may call a special meeting. If the Fertitta Ownership Condition is not satisfied, stockholders will no longer have the ability to call a special meeting.
Super Majority Approval Requirements.
The DGCL generally provides that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or bylaws, unless either a corporation's certificate of incorporation or bylaws require a greater percentage. Our amended and restated certificate of incorporation will provide that, (i) for so long as the Fertitta Ownership Condition is satisfied, the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the bylaws or the provisions of our certificate of incorporation relating to amendments, stockholder action by written consent, corporate governance, composition of the board of directors, business combinations and voting rights, dividends, liquidation and transfers of Class A and Class B Common Stock, and (ii) following such time that the Fertitta Ownership Condition is not satisfied, the affirmative vote of holders of at least 662/3% of the voting power of all the then-outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the bylaws or the provisions of our certificate of incorporation relating to amendments, stockholder action by written consent, corporate governance, composition of the board of directors, business combinations and voting rights, dividends, liquidation and transfers of Class A and Class B Common Stock.
Election and Removal of Directors.
The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation does not expressly provide for cumulative voting. Our directors may be removed, with or without cause, upon the affirmative vote of holders of at least a majority of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class.
Business Combinations with Interested Stockholders.
In general, Section 203 of the DGCL, an anti-takeover law, prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation's voting stock, which person or group is considered an interested stockholder under the DGCL, for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. We elected in our amended and restated certificate of incorporation not to be subject to Section 203.
However, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Fertitta Family Entities will not be deemed to be "interested stockholders," regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.





Other Limitations on Stockholder Actions.
Our bylaws will also impose some procedural requirements on stockholders who wish to:
make nominations in the election of directors;
propose that a director be removed;
propose any repeal or change in our bylaws; or
propose any other business to be brought before an annual or special meeting of stockholders.
Under these procedural requirements, in order to bring a proposal before a meeting of our stockholders, a stockholder must deliver timely notice of a proposal pertaining to a proper subject for presentation at the meeting to our corporate secretary along with the following:
a description of the business or nomination to be brought before the meeting and the reasons for conducting such business at the meeting;
the stockholder's name and address;
any material interest of the stockholder in the proposal;
the number of shares beneficially owned by the stockholder and evidence of such ownership; and the names and addresses of all persons with whom the stockholder is acting in concert and a description of all arrangements and understandings with those persons, and the number of shares such persons beneficially own.
To be timely, a stockholder must generally deliver notice:
in connection with an annual meeting of stockholders, not less than 120 nor more than 180 days prior to the month and day corresponding to the date on which the annual meeting of stockholders was held in the immediately preceding year, but in the event that the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary date of the preceding annual meeting of stockholders, a stockholder notice will be timely if received by us not later than the close of business on the later of (1) the 120th day prior to the annual meeting or (2) the 10th day following the day on which we first publicly announce the date of the annual meeting; or
in connection with the election of a director at a special meeting of stockholders, not less than 40 nor more than 60 days prior to the date of the special meeting, but in the event that less than 55 days' notice or prior public disclosure of the date of the special meeting of stockholders is given or made to the stockholders, a stockholder notice will be timely if received by us not later than the close of business on the 10th day following the day on which a notice of the date of the special meeting was mailed to the stockholders or the public disclosure of that date was made.
In order to submit a nomination for our board of directors, a stockholder must also submit any information with respect to the nominee that we would be required to include in a proxy statement, as well as some other information. If a stockholder fails to follow the required procedures, the stockholder's proposal or nominee will be ineligible and will not be voted on by our stockholders.
Limitation of Liability of Directors and Officers
Our amended and restated certificate of incorporation provides that no director will be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except as required by applicable law, as in effect from time to time. Currently, Delaware law requires that liability be imposed for the following:
any breach of the director's duty of loyalty to our Company or our stockholders;
any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law;
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and
any transaction from which the director derived an improper personal benefit.
As a result, neither we nor our stockholders have the right, through stockholders' derivative suits on our behalf, to recover monetary damages against a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior, except in the situations described above.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, we will indemnify any officer or director of our Company against all damages, claims and liabilities arising out of the fact that the person is or was our director or officer, or served any other enterprise at our request as a director, officer, employee, agent or fiduciary. We will reimburse the expenses, including attorneys' fees, incurred by a person indemnified by this provision when we receive an





undertaking to repay such amounts if it is ultimately determined that the person is not entitled to be indemnified by us. Amending this provision will not reduce our indemnification obligations relating to actions taken before an amendment.
Forum Selection
The Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employee to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, or (4) any action asserting a claim governed by the internal affairs doctrine, or if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the foregoing forum selection provisions.
Transfer agent and registrar
The transfer agent and registrar for our Class A Common Stock is American Stock Transfer & Trust Company, LLC.
Limitation of liability and indemnification matters
We have entered into indemnification agreements with certain of our executive officers and each of our directors pursuant to which we have agreed to indemnify such executive officers and directors against liability incurred by them by reason of their services as an executive officer or director to the fullest extent allowable under applicable law. We also provide liability insurance for each officer and director for certain losses arising from claims or charges made against them while acting in their capacities as our officer or director.
To the extent that indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our executive officers and directors pursuant to the foregoing, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is therefore unenforceable.
National market listing
Our Class A Common Stock is listed on NASDAQ under the symbol "RRR."



Exhibit
Exhibit 14.1

RED ROCK RESORTS, INC. 
CODE OF BUSINESS CONDUCT AND ETHICS
(Amended August 2017)
Red Rock Resorts, Inc. and its subsidiaries, including Station Casinos LLC (collectively, the “Company”), is committed to maintaining the highest ethical and moral standards in all of our operations. To this end, the Board of Directors of the Company (the “Board”) has adopted the attached Code of Business Conduct and Ethics (the “Code of Ethics”) to assist us in maintaining the highest ethical and moral standards; safeguarding the health and safety of the public and the directors, members, officers and employees of the Company (collectively, “Team Members”); ensuring compliance with all applicable laws, rules, and regulations; and preventing fraud, mismanagement, waste and abuse throughout the Company's operations.
The primary purpose of this Code of Ethics is to confirm the Company’s commitment to operating pursuant to the highest moral and ethical standards by encouraging Team Members to report unsafe, illegal, fraudulent or wasteful practices by any of the Company's Team Members, suppliers, agents or representatives in violation or apparent violation of the Code of Ethics ("Improper Conduct") and to reasonably protect those Team Members who make such reports (commonly referred to as "whistleblowers") from reprisals.
All Team Members should report suspected Improper Conduct. Reports of Improper Conduct should be made to (i) the Company’s anonymous Theft and Code of Business Conduct and Ethics Hotline at (702) 495-3939; (ii) to a Team Member’s supervisor or manager; (iii) or directly to John Pasqualotto, the Company’s designated Ethical Ombudsman. The Ethical Ombudsman will report Improper Conduct notifications directly to the Company’s Compliance Committee, on a regular basis, but no less than quarterly. The Compliance Committee will report to the Audit Committee on a quarterly basis, or more frequently if the Audit Committee deems necessary. Any reports of Improper Conduct involving accounting or financial misconduct will be immediately reported to the chairperson of audit committee.
The Company will investigate all reports of Improper Conduct. Any Team Member, supplier, agent or representative of the Company who is found to have engaged in Improper Conduct is subject to disciplinary action by the Company, up to and including suspension or termination of the employment or agency relationship, and civil action or criminal prosecution when warranted.
This Code of Ethics is intended to complement and supplement existing policies and legal requirements. No statement in this Code of Ethics is intended to authorize, or to prohibit, disciplinary and/or legal action against a Team Member who knowingly discloses information recognized or designated as confidential under law. Where provisions exist elsewhere under law or Company policy governing information disclosure rights and obligations, and/or retaliation relative to such disclosures, those shall apply in lieu of those contained in this Code of Ethics.
Questions related to the interpretation of this Code of Ethics should be directed to the Company’s Ethical Ombudsman, John Pasqualotto, at (702) 495-3698. In the event the Ethical Ombudsman is not available, (i) in the case of any accounting, internal control or auditing matter, questions should be directed to Wes Allison, the Company’s Chief Accounting Officer, (ii) all other questions should be directed to Jeffrey Welch, the Company’s Chief Legal Officer.

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I. Statement of Purpose
The purpose of this Code of Ethics is to ensure that all Team Members adhere to proper legal and ethical standards in their business practices.
It is the further purpose of this Code of Ethics to affirm the Company’s strong commitment to the highest standards of legal and ethical conduct in its business practices and to set forth the Company’s policies concerning these issues.
The Code of Ethics applies to all Team Members. The Code of Ethics is not comprehensive, in that it is not intended to, or capable of anticipating every issue that may arise. The Company encourages Team Members who have questions about the Code of Ethics and its application to discuss them with their manager or supervisor or the Company’s Ethical Ombudsman.
II. Policy Guidelines and Standards of Behavior
A. Ethical Standards and Responsible Behavior.
The Company has a longstanding policy to maintain the highest ethical standards in the conduct of Company affairs and in its relationship with customers, suppliers, Team Members, advisors and the communities in which our operations are located.
As an integral member of the Company, you are expected to accept certain responsibilities, adhere to acceptable business principles in matters of professional conduct and exhibit a high degree of personal integrity at all times. This includes a sincere respect for the rights and feelings of others and demands that while performing your duties for the Company, you refrain from any behavior that might be harmful to customers, yourself, fellow Team Members or the Company, or that might be viewed unfavorably by current or potential customers or by the public at large. While you are on duty or performing your duties on behalf of the Company, your conduct reflects on the Company. As a consequence, you are encouraged to observe the highest standards of professionalism at all times. Although this Code of Ethics does not attempt to address your activities while not at work or while not performing your duties for the Company, you should be mindful that, due to the regulated nature of the industry in which the Company does business, the personal activities that you participate in while you are not at work can have consequences on your job and professional success.
It would be virtually impossible to cite examples of every type of activity which might give rise to a question of unethical, illegal or impermissible conduct. Therefore, it is important for each of us to rely on our own good judgment in the performance of our duties and responsibilities. Nonetheless, the following are examples of specific acts that are prohibited:
Engaging in any illegal, unlawful or criminal conduct;
Falsifying employment or other Company records;
Soliciting gratuities from customers, suppliers or vendors;
Excessive or unauthorized use of Company resources and supplies, particularly for personal purposes;
Theft of property from co-workers, customers or the Company;
Possession of firearms or other weapons while on Company property or on Company business, unless in a security position that requires possession of a firearm or weapon;

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Failing to maintain the confidentiality of Company, customer, vendor or Team Member information; and
Refusing to cooperate in any investigation by the Company.
If you are unclear as to the proper course of action, you should seek advice and counsel from John Pasqualotto, the Company’s Ethical Ombudsman. The reputation and good name of the Company depend entirely upon the honesty and integrity of each one of us.
All Team Members, suppliers, representatives and agents of the Company must conform to ethical and legal standards, abide by the law and preserve the Company's integrity and reputation. Failure by Team Members to adhere to this Code of Ethics may result in disciplinary action, up to and including discharge from employment or termination of relationship with the Company.
The Company respects your right to discuss terms and conditions of your employment, including wages and benefits, with co-workers and others, and engage in protected, concerted activities, including support of any labor organization. Nothing in this Code of Ethics is intended to interfere with you rights under federal and state laws, including the National Labor Relations Act.
B. Entertainment, Gifts, Favors and Gratuities.
The purpose of the Company's policy relating to entertainment, gifts, favors and gratuities is to avoid any implication that unfair or preferential treatment will be granted or received by the Company's Team Members, suppliers, representatives and agents in their course of dealing on behalf of the Company. When in doubt as to whether conduct violates this Code of Ethics, a basic consideration should be whether public disclosure would be embarrassing to the Company or the recipient, and any such behavior should be avoided. The following general guidelines are provided:
Gifts of cash, or cash equivalents, are never permissible regardless of amount other than Team Members who receive tips in the ordinary course of their jobs.
An especially strict standard is imposed on gifts, services or considerations of any kind from current and potential suppliers, tenants, service providers and consultants. Only those considerations which are deemed common business courtesies will be permitted.
Gifts, favors and entertainment may be given to others, including customers, at Company expense, if they are legal, consistent with accepted business practices and not considered material to the recipient.
Giving, offering or promising anything of value for the purpose of influencing someone in connection with Company business or a Company transaction is impermissible and may be unlawful. Similarly, it is impermissible and may be unlawful to solicit, demand or accept anything of value with the intent of being influenced or rewarded in connection with any Company business or transaction. Therefore, no Team Member, representative or agent may give or receive any gift if it could reasonably be viewed as being done to gain a business advantage for the Company or for a Team Member, representative or agent of the Company.
Team Members are not prevented from incurring normal business-related expenses for entertainment or from accepting personal mementos of minimal value. It is also acceptable to allow a supplier or customer to pay for a business meal.

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C. Bribes.
The Company will pay only those representatives and agents with whom it has a formal written agreement or from whom it has an invoice detailing the business purpose and amount to be paid. A Team Member, representative or agent may make a payment to a provider of goods or services to the Company for only the amount that constitutes the proper remuneration for the service rendered or goods provided. A Team Member may not make a payment if that Team Member knows, or has reason to believe, the payment will be used as a bribe.
D. “Inside” Information.
The following is a summary of the Company's Policy on Insider Trading. For additional details please obtain a copy of the full Securities Trading Policy from the Ethical Ombudsman.
1. Clarifying the meaning of "inside" information.
U.S. Securities regulations, which regulate transactions in corporate securities (stocks and bonds), impose severe sanctions against the use of "inside" information in the purchase and sale of securities by "insiders" of a company for their own benefit and profit. "Inside" information includes any important material fact that has not been disclosed to the public which might be a factor in a decision to buy or sell a particular security. Examples of “material” facts include, but are not limited to, advance knowledge of operating income or loss or earnings results, a pending proposed merger or acquisition/disposition of a significant asset, establishment of a program to repurchase securities of a company, a change in control or change in senior management of a company, or development of a significant new product, invention, discovery or line of business. With respect to the Company, an "insider" includes not only Team Members, representatives or agents, but family members, friends, brokers or anyone to whom the inside information is communicated by such Team Members, representatives or agents. The securities include not only those of the Company, but also the securities of any company of which you have acquired important, non-public knowledge as a result of your employment. Specifically, you should not trade in the securities of any company which, to your knowledge, is under consideration as an acquisition by the Company or with whom the Company is considering entering into a major contractual relationship.
Regulations which are designed to protect the investing public are strictly enforced, and both civil and criminal action can be taken against both the individual and the company involved. If you have any doubts as to whether a contemplated securities transaction might be deemed a violation of the "insider" trading rule, you should refer to the Policy on Insider Trading and/or consult with or seek the advice of the Company's Ethical Ombudsman.
2. Policy prohibiting certain investments.
Unless prior written approval is obtained from the Company’s Ethical Ombudsman, Team Members are prohibited from investing in any of the Company's customers, suppliers or competitors (which includes all restricted and nonrestricted gaming licensees) unless the securities are publicly traded and the investments are on the same terms available to the general public and not based on any "inside" information. This prohibition applies to all forms of investments and to all Team Members, directors, officers of the Company and their immediate families.
In general, Team Members should not have any financial interest in a customer, supplier or competitor that could cause divided loyalty or the appearance of divided loyalty or appear to be a distraction from the performance of a Team Member’s duties.

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E. Conflicts of Interest.
The term "conflict of interest" describes any circumstance that would cast doubt on the ability of a Team Member to act with total objectivity with regard to the Company's interests. Each Team Member is expected to avoid any action or involvement which would in any way compromise his or her actions on behalf of the Company. Activities that could raise a question of conflict of interest include, but are not limited to, the following:
Conducting business on behalf of the Company with a member of the Team Member’s family or a business organization in which the Team Member, representative or agent (or a member of his or her family) has a significant association.
Serving in an advisory, consultative, technical or managerial capacity for, or having a significant financial or other beneficial interest in, any non-affiliated business organization which does significant business with or is a competitor of the Company.
Accepting money, personal gifts (other than those that are deemed common business courtesies), loans (other than loans from lending institutions at prevailing interest rates) or other special treatment or gratuities (not in the ordinary course of employment) from any supplier, customer or competitor of the Company or receiving, directly or indirectly, improper personal benefits as a result of using Company property or obtaining Company services. See Section II. B. Entertainment, Gifts, Favors and Gratuities for more detail.
Every Team Member is prohibited from engaging in any activity or association that creates or appears to create a conflict between his or her personal interests and the Company's business interests. In addition, a Team Member must not allow any situation or personal interests to interfere with his or her exercise of independent judgment or with his or her ability to act in the best interests of the Company.
F. Protection and Proper Use of Company Assets.
Company assets, such as information, materials, supplies, software, hardware and facilities, among other property, are valuable resources owned, licensed or otherwise belonging to the Company. Company assets also include proprietary information such as intellectual property, including patents, trademarks, trade secrets and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Company assets should be used only for legitimate business purposes. Accordingly, all Team Members should endeavor to protect the Company’s assets and ensure their efficient use.
Unauthorized use of Company assets is prohibited and should be reported. The personal use of Company assets without permission is prohibited, although incidental personal use is permitted. If you have any questions about whether your personal use of a Company asset is incidental, you should ask for guidance from the Ethical Ombudsman before taking action.
Team Members should be aware that Company property includes all data and communications transmitted or received to or by, or contained in, the Company’s electronic or telephone systems. Company property also includes all written communications. Team Members and other users of this property should have no expectation of privacy with respect to these communications and data. To the extent permitted by law, the Company has the ability, and reserves the right, to monitor all electronic and telephonic communications. These communications may also be subject to disclosure to law enforcement or government officials.

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G. Corporate Opportunities.
Team Members owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises. Except to the extent explicitly permitted pursuant to written agreement with the Company, Team Members are therefore prohibited from (i) without the written consent of the Ethical Ombudsman (or, in the case of any executive officer, principal financial officer, or director, the Board), taking for themselves personally opportunities that are discovered through the use of Company property, information or position, (ii) using Company property, information or position for improper personal gain and (iii) competing with the Company.
H. Confidentiality.
1. Confidential Information.
Team Members must not disclose to anyone outside the Company any “confidential information” entrusted to them by the Company or its suppliers, customers or business partners, except when disclosure is authorized, in writing, by the Ethical Ombudsman or otherwise legally required. “Confidential information” includes all non-public information that might be useful to competitors, or harmful to the Company or its suppliers, customers or business partners, if disclosed. Confidential information includes, for example, trade secrets, technology, research, customer and supplier lists, unannounced financial data and projections, marketing and pricing strategies and business plans.
The obligation to preserve confidential information continues even after a Team Member is no longer employed by the Company.
2. Protected Disclosures.
Nothing in this Code of Ethics or any agreement between you and the Company:
(a) Will preclude, prohibit or restrict you from (i) communicating with, any federal, state or local administrative or regulatory agency or authority, including but not limited to the Securities and Exchange Commission (the “SEC”); (ii) participating or cooperating in any investigation conducted by any governmental agency or authority; or (iii) filing a charge of discrimination with the United States Equal Employment Opportunity Commission or any other federal state or local administrative agency or regulatory authority.
(b) Prohibits, or is intended in any manner to prohibit, you from (i) reporting a possible violation of federal or other applicable law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the SEC, the U.S. Congress, and any governmental agency Inspector General, or (ii) making other disclosures that are protected under whistleblower provisions of federal law or regulation. Nothing in this Code of Ethics or any agreement between you and the Company is intended to limit your right to receive an award (including, without limitation, a monetary reward) for information provided to the SEC. You do not need the prior authorization of anyone at the Company to make any such reports or disclosures, and you are not required to notify the Company that you have made such reports or disclosures.
(c) Is intended to interfere with or restrain the immunity provided under 18 U.S.C. §1833(b). You cannot be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) (A) in confidence to federal, state or local government officials, directly or indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected violation of law; (ii) in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal; or (iii) in connection

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with a lawsuit alleging retaliation for reporting a suspected violation of law, if filed under seal and does not disclose the trade secret, except pursuant to a court order.
The foregoing provisions regarding Protected Disclosures are intended to comply with all applicable laws. If any laws are adopted, amended or repealed after the date hereof, this Code of Ethics shall be deemed to be amended to reflect the same.
I. Competition and Fair Dealing.
The Company seeks to outperform our competitors fairly and honestly through superior performance, never through unethical or illegal business practices. Acquiring proprietary information, possessing trade secret information that was obtained without the owner’s consent or inducing disclosures of such information by past or present employees, agents or representatives of other companies is prohibited.
Team Members should endeavor to deal fairly and in good faith with the Company’s customers, suppliers and competitors and their employees. No Team Member should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other intentional unfair-dealing practice.
Team Members are prohibited from engaging in the following activities if such activities would be reasonably likely to violate any applicable anti-trust or competition law:
(i) entering into any understanding, agreement, plan or scheme, express or implied, formal or informal, with any competitor with regard to prices, terms or conditions of sale or service, production, distribution, territories or customers;
(ii) exchanging or discussing with a competitor prices, terms or conditions of sale or service, or any other competitive information; or
(iii) engaging in any other conduct which violates any applicable anti-trust or competition laws.
J. Record Keeping.
The Company requires honest and accurate recording and reporting by Team Members of information in order to make responsible business decisions. For example, only the true and actual number of hours worked should be reported. In addition, many Team Members regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor.
All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation.
Records should always be retained or destroyed according to the Company’s email and record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult the Company’s Chief Legal Officer or the Ethical Ombudsman.

7



K. Accurate and Timely Periodic Reports.
The Company is committed to providing full, fair, accurate, timely and understandable disclosure in periodic reports and documents that the Company files with, or submits to, the Securities and Exchange Commission and in other public communications made by the Company. Specifically, the Company shall:
(i) maintain accurate books and records that fully, fairly and accurately reflect the Company’s financial information and reporting of transactions;
(ii) ensure that the financial statements and other financial information included in periodic reports is prepared in accordance with generally accounting principles and fairly presents in all material respects the financial condition, results of operations and cash flows of the Company;
(iii) maintain such disclosure controls and procedures to ensure that material information relating to the Company is made known to management, particularly during the periods in which the Company’s periodic report are being prepared;
(iv) maintain such internal controls and procedures for financial reporting to provide reasonable assurances that the Company’s financial statements are fairly presented in conformity with generally accepted accounting principles;
(v) prohibit the establishment of any material undisclosed or unrecorded funds or assets;
(vi) disclose material off-balance sheet transactions in compliance with applicable laws and regulations; and
(vii) otherwise present information in a clear and orderly manner and minimize the use of legal and financial jargon in the Company’s periodic reports.
Each Team Member who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must take all necessary steps to ensure that the Company provides full, fair, accurate, timely and understandable disclosure. Team Members must also cooperate with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants.
L. Compliance with Laws, Rules and Regulations
All Team Members must obey all applicable local and state laws, governmental rules and regulations in the states in which the Company operates, as well as all applicable federal laws. Particularly, the Company is committed to:
(i) maintaining a workplace that is free from discrimination or harassment based on race, gender, age, color, religion or any other characteristic that is unrelated to the Company’s interests or otherwise protected by law;
(ii) complying with all applicable environmental, health and safety laws;
(iii) supporting fair competition and laws prohibiting restraints of trade and other unfair trade practices;
(iv) prohibiting any unlawful and improper payments (including bribes or kickbacks), gifts, favors or other gratuities to suppliers, customers, U.S., state, local or foreign government officials or other third parties; and

8



(v) complying with all applicable federal and state securities laws, including laws prohibiting insider trading.
III. Complaint/Inquiry Procedures
A. Reporting a Violation of this Code of Ethics.
The Company encourages Team Members to report all actual or perceived violations of this Code of Ethics (referred to as "Improper Conduct") to the anonymous Theft and Code of Business Conduct and Ethics Hotline at (702) 495-3939 or to the Company’s Ethical Ombudsman, regardless of who the offender may be. Any individual who is asked, ordered, directed or encouraged to engage in Improper Conduct, witnesses Improper Conduct or otherwise acquires knowledge of Improper Conduct, should immediately report the Improper Conduct to the anonymous Hotline; or, to his or her manager or supervisor or the Company’s Ethical Ombudsman.
Any manager or supervisor who observes Improper Conduct or receives a complaint or report of Improper Conduct must advise the Company’s Ethical Ombudsman immediately. In addition, managers and supervisors are responsible for maintaining a system of management controls which detect and deter Improper Conduct. Failure by a manager or supervisor to establish management controls or to report Improper Conduct within the scope of this Code of Ethics may result in disciplinary action against the manager or supervisor, up to and including suspension or termination. The Ethical Ombudsman is available to assist management in establishing management systems and recognizing Improper Conduct.
Reasonable care must be taken in dealing with suspected Improper Conduct to avoid any of the following:
Baseless allegations or allegations made with reckless disregard for their truth or accuracy.
Notifying a Team Member, representative or agent who is suspected of Improper Conduct of such suspicion and/or disclosing suspected Improper Conduct to others not involved with the investigation before sufficient facts are known.
Violations of a person's rights under law.
Accordingly, a manager or supervisor who learns of suspected Improper Conduct should:
Contact the Company’s Ethical Ombudsman or report the suspected Improper Conduct to the Anonymous Theft and Code of Business Conduct and Ethics Hotline, immediately.
Defer to the Company’s Ethical Ombudsman to contact the person suspected of Improper Conduct to further investigate the matter.
Avoid discussing the matter with the person suspected of Improper Conduct or with anyone other than the Company’s Ethical Ombudsman, any person designated the Ethical Ombudsman as acting on his behalf, or a duly authorized law enforcement officer.
Direct all inquiries from any attorney retained by the suspected individual or any other representative of the person suspected to the Company's Chief Legal Officer.
Direct all inquiries from the media to the Company's Chief Legal Officer.
Prompt reporting of violations of this Code of Ethics is important to the investigatory process. It is equally important for Team Members to understand what constitutes a violation of this Code of Ethics. Therefore, any Team

9



Member who would like additional information or advice with respect to any particular act or conduct is encouraged to consult with or seek the advice of the Company’s Ethical Ombudsman.
Reports to the Anonymous Theft and Business Conduct and Ethics Hotline may be made by calling (702) 495-3939.
Reports made to the Ethical Ombudsman may be made in person or as follows:
John Pasqualotto 
Ethical Ombudsman 
Red Rock Resorts, Inc. 
1505 S. Pavilion Center Dr. 
Las Vegas, NV 89135 
Direct: (702) 495-3698 
e-mail: john.pasqualotto@stationcasinos.com
Wes Allison 
Chief Accounting Officer 
Red Rock Resorts, Inc. 
1505 S. Pavilion Center Dr. 
Las Vegas, NV 89135 
Direct: (702) 495-3293 
e-mail: wes.allison@stationcasinos,com
Jeffrey T. Welch
Executive Vice President
Chief Legal Officer
Red Rock Resorts, Inc. 
1505 S. Pavilion Center Dr. 
Las Vegas, NV 89135
Direct: (702) 495-3616
e-mail: jeffrey.welch@stationcasinos.com

Each Team Member will be given a copy of this Code of Ethics and will be required to confirm receipt of the same by signing a Team Member Acknowledgment Form.
B. The Investigatory Process.
All reports of violations of this Code of Ethics will be handled in a sensitive and discrete manner. Confidentiality will be maintained throughout the entire investigatory process to the extent practicable and appropriate under the circumstances to protect the privacy of persons involved. However, the Company cannot guarantee confidentiality, and there is no such thing as an "unofficial" or "off the record" report. The Company must act upon all reports received. Nonetheless, the Company will attempt to keep the identity of anyone reporting Improper Conduct confidential, unless: (1) the reporting person agrees to be identified; (2) identification is necessary to allow the Company or law enforcement officials to investigate or respond effectively to the report; or (3) identification is required by law.

10



C. Protection Against Retaliation.
The Company does not tolerate acts of retaliation against any individuals who make a good faith report of Improper Conduct and any acts of retaliation should be reported to your manager or supervisor or the Company’s Ethical Ombudsman immediately. Retaliation against any individual who makes a good faith report of an actual or possible violation of this Code of Ethics or who assists in providing information as part of an investigation made pursuant to this Code of Ethics is also a violation of this Code of Ethics.
D. Responsive Action.
Conduct that is determined to violate this Code of Ethics will be dealt with appropriately. Responsive action may include special or additional training, referral to counseling and disciplinary action, such as warnings, reprimands, withholding a promotion, reassignment, temporary suspension without pay, compensation adjustments or termination.
IV. Disclosure/Amendments and Waivers
This Code of Ethics will be made available on the Company’s website. The Company shall file a copy of this Code of Ethics as an exhibit to its Annual Report on Form 10-K and shall include a statement in such report indicating that it has adopted this Code of Ethics, that a copy of this Code of Ethics is available on its website and that it shall disclose any amendment of this Code of Ethics or any waiver of any provision of this Code of Ethics for any principal financial officer, the CEO or any director on the Company’s website.
Any waiver of any provision of this Code of Ethics for any executive officer, principal financial officer or director may be made only by the entirety of the Board. The provisions of this Code of Ethics may be waived for any other Team Member by the Company’s Ethical Ombudsman, the Compliance Committee or Audit Committee.
This Code of Ethics, as applied to the Company’s principal financial officers, shall be our “code of conduct” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
THIS CODE OF ETHICS AND THE MATTERS CONTAINED HEREIN ARE NEITHER A CONTRACT OF EMPLOYMENT NOR A GUARANTEE OF CONTINUING COMPANY POLICY. WE RESERVE THE RIGHT TO AMEND, SUPPLEMENT OR DISCONTINUE THIS CODE AND THE MATTERS ADDRESSED HEREIN, WITHOUT PRIOR NOTICE, AT ANY TIME.

11

Exhibit




Exhibit 21.1


SUBSIDIARIES OF RED ROCK RESORTS, INC.

Subsidiaries of Red Rock Resorts, Inc. at December 31, 2019 were as follows:

Station Holdco LLC (Delaware)
Station Casinos LLC
NP Palace LLC
NP Boulder LLC
NP Red Rock LLC
Red and Blues, LLC (50% ownership)
NP Sunset LLC
NP IP Holdings LLC
NP Development LLC
NP Landco Holdco LLC
CV PropCo, LLC
NP Tropicana LLC
NP 3330 1 LLC
NP Opco Holdings LLC
NP Opco LLC
Station GVR Acquisition, LLC
NP Fiesta LLC
NP Gold Rush LLC
NP Lake Mead LLC
NP LML LLC
NP Magic Star LLC
NP Rancho LLC
NP Santa Fe LLC
NP Texas LLC
NP River Central LLC
NP Centerline Holdings LLC
NP Durango LLC
NP Hanger Leaseco LLC
NP Inspirada LLC
NP Mt. Rose LLC
NP Reno Convention Center LLC
NP Town Center LLC
SC Rancho Development, LLC
NP Green Valley LLC
Greens Café, LLC (50% ownership)
Town Center Amusements, Inc., A Limited Liability Company (50% ownership)
Sunset GV, LLC (50% ownership)
NP Fresno Land Acquisitions LLC (California)
SC Madera Development, LLC (California)
SC Madera Management, LLC (California)
SC Sonoma Development, LLC (California)
SC Sonoma Management, LLC (California)
NP Sonoma Land Holdings LLC (California)
Sonoma Land Acquisition Company, LLC (California)
SC Butte Development, LLC (California)
SC Butte Management, LLC (California)
SC Michigan, LLC
MPM Enterprises, LLC (50% ownership) (Michigan)





SC Interactive Investor LLC
SC SP Holdco LLC
SC SP 2 LLC
SC SP 3 LLC
SC SP 4 LLC
RRR Palms LLC
Fiesta ParentCo, LLC (Delaware)
FP Holdco, LLC (Delaware)
FP Holdings, L.P.
Palms Leaseco LLC
Palms Place, LLC
PPII Holdings, LLC
PKM Properties LLC
SMJ Dallas L.P. (9.98% ownership)
SC Development 1 LLC (Delaware)
SC Development 2 LLC (Delaware)
SCHB 1 LLC
Fertitta Entertainment LLC (Delaware)
FE Transportation LLC (New York)


All subsidiaries are formed in the State of Nevada and wholly owned unless otherwise specifically identified.        




Exhibit


Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following:
(1)
Registration Statement on Form S-8 No. 333-210938 pertaining to the 2016 Equity Incentive Plan of Red Rock Resorts, Inc.,

(2)
Registration Statement on Form S-8 No. 333-232108 pertaining to the Amended and Restated 2016 Equity Incentive Plan of Red Rock Resorts, Inc., and

(3)
Registration Statement on Form S-3 No. 333-223421 pertaining to the shelf registration of Class A shares of Red Rock Resorts, Inc.

of our reports dated February 21, 2020, with respect to the consolidated financial statements and schedule of Red Rock Resorts, Inc., and the effectiveness of internal control over financial reporting of Red Rock Resorts, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2019.

/s/ Ernst & Young LLP
Las Vegas, Nevada
February 21, 2020



Exhibit


Exhibit 31.1

CERTIFICATION
I, Frank J. Fertitta III, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Red Rock Resorts, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 21, 2020
/s/ FRANK J. FERTITTA III
Frank J. Fertitta III
Chief Executive Officer



Exhibit


Exhibit 31.2

CERTIFICATION
I, Stephen L. Cootey, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Red Rock Resorts, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 21, 2020
/s/ STEPHEN L. COOTEY
Stephen L. Cootey
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)



Exhibit


Exhibit 32.1

Red Rock Resorts, Inc.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
Pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies as follows:
1.
Frank J. Fertitta III is the Chief Executive Officer of Red Rock Resorts, Inc. (the "Company").
2.
The undersigned certifies to the best of his knowledge:
(A)
The Company's Annual Report on Form 10-K for the year ended December 31, 2019 accompanying this Certification, in the form filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(B)
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: February 21, 2020
/s/ FRANK J. FERTITTA III
Frank J. Fertitta III
Chief Executive Officer



Exhibit


Exhibit 32.2

Red Rock Resorts, Inc.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
Pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certifies as follows:
1.
Stephen L. Cootey is the Principal Financial Officer of Red Rock Resorts, Inc. (the "Company").
2.
The undersigned certifies to the best of his knowledge:
(A)
The Company's Annual Report on Form 10-K for the year ended December 31, 2019 accompanying this Certification, in the form filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(B)
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: February 21, 2020
/s/ STEPHEN L. COOTEY
Stephen L. Cootey
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)




v3.19.3.a.u2
Derivative Instruments
12 Months Ended
Dec. 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 December 31, 2019, the weighted-average fixed pay rate for Station LLC’s interest rate swaps was 1.73%, which will increase to 1.94% over the exposure period. At December 31, 2019, Station LLC’s interest rate swaps had a combined notional amount of $1.4 billion and effectively converted $1.4 billion of Station LLC’s variable interest rate debt to a fixed rate of 4.22%.
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 December 31, 2019, the termination value of Station LLC’s interest rate swaps, including accrued interest, was a net liability of $5.8 million. Had Station LLC been in breach of the provisions of its swap agreements, it could have been required to pay the termination value to settle the obligations.
The fair values of Station LLC’s interest rate swaps, exclusive of accrued interest, as well as their classification on the Consolidated Balance Sheets, are presented below (amounts in thousands):
 
December 31,
2019
 
2018
Interest rate swaps not designated in hedge accounting relationships:
 
 
 
Prepaid expenses and other current assets
$

 
$
8,334

Other assets, net

 
15,611

Other accrued liabilities
440

 

Other long-term liabilities
5,227

 


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
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Interest rate swaps
 
Change in fair value of derivative instruments
 
$
(19,467
)
 
$
12,415

 
$
14,110


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 (loss) 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. At December 31, 2019, accumulated other comprehensive (loss) income included $1.4 million in deferred net gains, which is expected to be reclassified into earnings during the next twelve months.
Prior to the dedesignation, the gain or loss on the effective portion of changes in fair values of interest rate swaps was recorded as a component of other comprehensive loss until the interest payments being hedged were recorded as interest expense, at which time the amounts in accumulated other comprehensive (loss) income were reclassified as an adjustment to interest expense. The Company recognized the gain or loss on any ineffective portion of the derivatives’ change in fair value in the period in which the change occurred as a component of Change in fair value of derivative instruments in the Consolidated Statements of Operations.
Information about pretax gains and losses on derivative financial instruments that were designated in cash flow hedging relationships and their location within the consolidated financial statements is presented below (amounts in thousands):
Derivatives Designated in Cash Flow Hedging Relationships
 
Amount of Loss on Derivatives Recognized in Other Comprehensive Loss (Effective Portion)
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Year Ended December 31,
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
 
2019
 
2018
 
2017
Interest rate swaps
 
$

 
$

 
$
(1,875
)
 
Interest expense, net
 
$
2,843

 
$
2,929

 
$
(1,176
)

v3.19.3.a.u2
Basis of Presentation and Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
Station Holdco and Station LLC are variable interest entities (“VIEs”), of which the Company is the primary beneficiary. 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. Accordingly, the Company consolidates the financial position and results of operations of Station LLC and its consolidated subsidiaries and Station Holdco, and presents the interests in Station Holdco not owned by Red Rock within noncontrolling interest in the consolidated financial statements. Substantially all of the Company’s assets and liabilities represent the assets and liabilities of Station Holdco and Station LLC, other than assets and liabilities related to income taxes and the tax receivable agreement (“TRA”). Investments in all 50% or less owned affiliated companies are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated.
Certain amounts in the consolidated financial statements for the previous years have been reclassified to be consistent with the current year presentation.
Noncontrolling Interest in Station Holdco
Noncontrolling interest in Station Holdco represents the LLC Units held by certain owners who held such units prior to the Company’s 2016 initial public offering (the “IPO” and such owners, the “Continuing Owners”). Noncontrolling interest is reduced when Continuing Owners exchange their LLC Units, along with an equal number of shares of Class B common stock, for shares of Class A common stock. See Note 12 for additional information.
The ownership of the LLC Units is summarized as follows:        
 
December 31, 2019
 
December 31, 2018
 
Units
 
Ownership %
 
Units
 
Ownership %
Red Rock
70,465,422

 
60.1
%
 
69,662,590

 
59.8
%
Noncontrolling interest holders
46,827,370

 
39.9
%
 
46,884,413

 
40.2
%
Total
117,292,792

 
100.0
%
 
116,547,003

 
100.0
%

The Company uses monthly weighted-average LLC Unit ownership to calculate the pretax (loss) 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.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value Measurements
For assets and liabilities accounted for or disclosed at fair value, the Company utilizes the fair value hierarchy established by the accounting guidance for fair value measurements and disclosures to categorize the inputs to valuation techniques used to measure fair value into three levels. The three levels of inputs are as follows:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The accounting guidance for fair value measurements and disclosures also provides the option to measure certain financial assets and liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to measure any financial assets or liabilities at fair value that are not required to be measured at fair value.
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, receivables and accounts payable approximate fair value primarily because of the short maturities of these instruments.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and investments with an original maturity of 90 days or less.
Restricted Cash
Restricted cash consists of reserve funds for the Company’s condominium operations at Palms.
Receivables, Net and Credit Risk
The Company’s accounts receivable primarily represent receivables from contracts with customers and consist mainly of casino, hotel, ATM, cash advance, retail, management fees and other receivables, which are typically non-interest bearing.
Receivables are initially recorded at cost and an allowance for doubtful accounts is maintained to reduce receivables to their carrying amount, which approximates fair value. The allowance is estimated based on a specific review of customer accounts, historical collection experience, the age of the receivable and other relevant factors. Accounts are written off when management deems the account to be uncollectible, and recoveries of accounts previously written off are recorded when received. At December 31, 2019 and 2018, the allowance for doubtful accounts was $4.9 million and $2.3 million, respectively. Management believes there are no significant concentrations of credit risk.
Inventories
Inventories primarily represent food and beverage items and retail merchandise which are stated at the lower of cost or net realizable value. Cost is determined on a weighted-average basis.
Assets Held for Sale
The Company classifies assets as held for sale when an asset or asset group meets all of the held for sale criteria in the accounting guidance for impairment and disposal of long-lived assets. Assets held for sale are initially measured at the lower of their carrying amount or fair value less cost to sell. At December 31, 2019 and 2018, assets held for sale represented certain undeveloped land in Las Vegas and Reno.
Property and Equipment
Property and equipment is initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, the shorter of the estimated useful life of the asset or the lease term, as follows:
Buildings and improvements
10 to 45 years
Furniture, fixtures and equipment
3 to 10 years

Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. Construction in progress is related to the construction or development of property and equipment that has not yet been placed in service for its intended use. Depreciation and amortization of property and equipment commences when the asset is placed in service. When an asset is retired or otherwise disposed, the related cost and accumulated depreciation are removed from the accounts and the gain or loss on disposal is recognized within Write-downs and other charges, net.
The Company makes estimates and assumptions when accounting for capital expenditures. The Company’s depreciation expense is highly dependent on the assumptions made for the estimated useful lives of its assets. Useful lives are estimated by the Company based on its experience with similar assets and estimates of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, the Company accounts for the change prospectively.
Native American Development Costs
The Company incurs certain costs associated with development and management agreements with Native American tribes which are reimbursable by such tribes. These costs are capitalized as long-term assets as incurred, and primarily include costs associated with the acquisition and related development of land and the casino facilities. The assets are typically transferred to the tribe when the tribe secures third-party financing or the gaming facility is completed. Upon transfer of the assets to the tribe, any remaining carrying amount that has not yet been recovered from the tribe is reclassified to a long-term receivable.
The Company earns a return on the costs incurred for the acquisition and development of Native American development projects. Repayment of the advances and the return typically is funded from the tribe’s third-party financing, from the cash flows of the gaming facility, or both. Due to the uncertainty surrounding the timing and amount of the stated return, the Company recognizes the return on a cash basis.
The Company evaluates its Native American development costs for impairment whenever events or changes in circumstances indicate that the carrying amount of a project might not be recoverable, taking into consideration all available information. Among other things, the Company considers the status of the project, any contingencies, the achievement of milestones, any existing or potential litigation, and regulatory matters when evaluating its Native American projects for impairment. If an indicator of impairment exists, the Company compares the estimated future cash flows of the project, on an undiscounted basis, to its carrying amount. If the undiscounted expected future cash flows do not exceed the carrying amount, the asset is written down to its estimated fair value, which typically is estimated based on a discounted future cash flow model or market comparables, when available. The Company estimates the undiscounted future cash flows of a Native American development project based on consideration of all positive and negative evidence about the future cash flow potential of the project including, but not limited to, the likelihood that the project will be successfully completed, the status of required approvals, and the status and timing of the construction of the project, as well as current and projected economic, political, regulatory and competitive conditions that may adversely impact the project’s operating results.
Goodwill
The Company tests its goodwill for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s operating properties is considered a separate reporting unit.
When performing the annual goodwill impairment testing, the Company either conducts a qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elects to bypass this qualitative assessment and perform a quantitative test for impairment. Under the qualitative assessment, the Company considers both positive and negative factors, including macroeconomic conditions, industry events, financial performance and other changes, and makes a determination of whether it is more likely than not that the fair value of goodwill is less than its carrying amount. If, after assessing the qualitative factors, the Company determines it is more likely than not the asset is impaired, it then performs a quantitative test in which the estimated fair value of the reporting unit is compared with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit.
When performing the quantitative test, the Company estimates the fair value of each reporting unit using the expected present value of future cash flows along with value indications based on current valuation multiples of the Company and comparable publicly traded companies. The estimation of fair value involves significant judgment by management. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from such estimates. Cash flow estimates are based on the current regulatory, political and economic climates, recent operating information and projections. Such estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, competition, events affecting various forms of travel and access to the Company’s properties, and other factors. If the Company’s estimates of future cash flows are not met, it may have to record impairment charges in the future.
Indefinite-Lived Intangible Assets
The Company’s indefinite-lived intangible assets primarily represent brands. The fair value of the Company’s brands is estimated using a derivation of the income approach to valuation, based on estimated royalties avoided through ownership of
the assets, utilizing market indications of fair value. The Company tests its indefinite-lived intangible assets for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that an asset is impaired. Indefinite-lived intangible assets are not amortized unless it is determined that an asset’s useful life is no longer indefinite. The Company periodically reviews its indefinite-lived assets to determine whether events and circumstances continue to support an indefinite useful life. If an indefinite-lived intangible asset no longer has an indefinite life, the asset is tested for impairment and is subsequently accounted for as a finite-lived intangible asset.
Finite-Lived Intangible Assets
The Company’s finite-lived intangible assets primarily represent assets related to its management contracts and customer relationships, which are amortized over their estimated useful lives using the straight-line method. The Company periodically evaluates the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization.
The Company’s management contract intangible assets represent the value associated with agreements under which the Company provides management services to various casino properties, primarily Native American casinos which it has developed. The fair values of management contract intangible assets were determined using discounted cash flow techniques based on future cash flows expected to be received in exchange for providing management services. The Company amortizes its management contract intangible assets over their expected useful lives beginning when the property commences operations and management fees are being earned. Should events or changes in circumstances cause the carrying amount of a management contract intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
The Company’s customer relationship intangible assets primarily represent the value associated with its rated casino guests. The initial fair values of customer relationship intangible assets were estimated based on a variation of the cost approach. The recoverability of the Company’s customer relationship intangible assets could be affected by, among other things, increased competition within the gaming industry, a downturn in the economy, declines in customer spending which would impact the expected future cash flows associated with the rated casino guests, declines in the number of customer visits which could impact the expected attrition rate of the rated casino guests, and erosion of operating margins associated with rated casino guests. Should events or changes in circumstances cause the carrying amount of a customer relationship intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
Impairment of Long-Lived Assets
The Company reviews the carrying amounts of its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability is evaluated by comparing the estimated future cash flows of the asset, on an undiscounted basis, to its carrying amount. If the undiscounted estimated future cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted estimated future cash flows do not exceed the carrying amount, impairment is measured based on the difference between the asset’s estimated fair value and its carrying amount. To estimate fair values, the Company typically uses market comparables, when available, or a discounted cash flow model. Assets to be disposed of are carried at the lower of their carrying amount or fair value less costs of disposal. The fair value of assets to be disposed of is generally estimated based on comparable asset sales, solicited offers or a discounted cash flow model. The Company’s long-lived asset impairment tests are performed at the reporting unit level. For the year ended December 31, 2019, the Company identified certain potential indicators of impairment at the Palms reporting unit level. Based on the undiscounted expected future cash flows, no impairment was recorded.
Debt Discounts and Debt Issuance Costs
Debt discounts and costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense using the effective interest method over the expected term of the related debt agreements. Costs incurred in connection with the issuance of revolving lines of credit are presented in Other assets, net on the Consolidated Balance Sheets. All other capitalized costs incurred in connection with the issuance of long-term debt are presented as a direct reduction of Long-term debt, less current portion on the Consolidated Balance Sheets.
Derivative Instruments
The Company uses interest rate swaps to hedge its exposure to variability in expected future cash flows related to interest payments. At December 31, 2019 and 2018, none of the Company’s interest rate swaps were designated in cash flow hedging relationships. In accordance with the accounting guidance for derivatives and hedging activities, the Company records all derivatives on the balance sheet at fair value. The fair values of the Company’s derivatives are determined using widely
accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not offset derivative asset and liability positions when interest rate swap agreements are held with the same counterparty.
As the Company’s derivative instruments are not designated in hedging relationships, the changes in fair value are recognized within the Consolidated Statements of Operations in the period in which the change occurs, and the cash flows for these instruments are classified within investing activities in the Consolidated Statements of Cash Flows. Certain of the Company’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 (loss) income associated with these interest rate swaps are being amortized as a reduction of interest expense through July 2020 as the previously hedged interest payments occur.
Comprehensive (Loss) Income
Comprehensive (loss) income includes net (loss) income and other comprehensive loss, which includes all other non-owner changes in equity. Components of the Company’s comprehensive (loss) income are reported in the Consolidated Statements of Comprehensive (Loss) Income and Consolidated Statements of Stockholders’ Equity, and accumulated other comprehensive (loss) income is included in stockholders’ equity on the Consolidated Balance Sheets.
Revenues
The Company’s revenue contracts with customers consist of gaming wagers, sales of food, beverage, hotel rooms and other amenities, and agreements to provide management services. Revenues are recognized when control of the promised goods or services is transferred to the guest, in an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for those goods or services, referred to as the transaction price. Other revenues also include rental income from tenants, which is recognized over the lease term, and contingent rental income, which is recognized when the right to receive such rental income is established according to the lease agreements. Revenue is recognized net of cash sales incentives and discounts and excludes sales and other taxes collected from guests on behalf of governmental authorities.
The Company accounts for its gaming and non-gaming contracts on a portfolio basis. This practical expedient is applied because individual customer contracts have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying its revenue recognition policy to the portfolio would not differ materially from applying its policy to the individual contracts.
Casino Revenue
Casino revenue includes gaming activities such as slot, table game and sports wagering. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price is reduced for consideration payable to a guest, such as cash sales incentives and the change in progressive jackpot liabilities. Gaming contracts are typically completed daily based on the outcome of the wagering transaction and include a distinct performance obligation to provide gaming activities.
Guests may receive discretionary incentives for complimentary food, beverage, rooms, entertainment and merchandise to encourage additional gaming, or may earn loyalty points based on their gaming activity. The Company allocates the transaction price to each performance obligation in the gaming wagering contract. The amount allocated to loyalty points earned is based on an estimate of the standalone selling price of the loyalty points, which is determined by the redemption value less an estimate for points not expected to be redeemed. The amount allocated to discretionary complimentaries is the standalone selling price of the underlying goods or services, which is determined using the retail price at which those goods or services would be sold separately in similar transactions. The remaining amount of the transaction price is allocated to wagering activity using the residual approach as the standalone selling price for gaming wagers is highly variable and no set established price exists for gaming wagers. Amounts allocated to wagering are recognized as casino revenue when the result of the wager is determined, and amounts allocated to loyalty points and discretionary complimentaries are recognized as revenue when the goods or services are provided.
Non-gaming Revenue
Non-gaming revenues include sales of food, beverage, hotel rooms and other amenities such as retail merchandise, bowling, spa services and entertainment. The transaction price is the net amount collected from the guest and includes a distinct performance obligation to provide such goods or services. Non-gaming revenues are recognized when the goods or services are
provided to the guest. Guests may also earn loyalty points from non-gaming purchases or receive discretionary complimentaries that require the transaction price to be allocated to each performance obligation on a relative standalone selling price basis.
Non-gaming revenues also include the portion of the transaction price from gaming or non-gaming contracts allocated to discretionary complimentaries and the value of loyalty points redeemed for food, beverage, room and other amenities. Discretionary complimentaries are classified in the departmental revenue category fulfilling the complimentary with a corresponding reduction in the departmental revenues that provided the complimentary, which is primarily casino revenue. Included in non-gaming revenues are discretionary complimentaries and loyalty point redemptions of $228.7 million, $206.5 million and $185.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Management Fee Revenue
Management fee revenue primarily represents fees earned from the Company’s management agreements with Native American tribes. The transaction price for management contracts is the management fee to which the Company is entitled for its management services. The management fee represents variable consideration as it is based on a percentage of net income of the managed property, as defined in the management agreements. The management services are a single performance obligation to provide a series of distinct services over the term of the management agreement. The Company allocates and recognizes the management fee monthly as the management services are performed because there is a consistent measure throughout the contract period that reflects the value to the Native American tribe each month.
Player Rewards Program
The Company has a player rewards program (the “Rewards Program”) that allows customers to earn points based on their gaming activity and non-gaming purchases. Guests may accumulate loyalty points over time that may be redeemed at their discretion under the terms of the Rewards Program. Loyalty points may be redeemed for cash, slot play, food, beverage, rooms, entertainment and merchandise at all of the Company’s Las Vegas area properties.
When guests earn points under the Rewards Program, the Company recognizes a liability for future performance obligations. The Rewards Program point liability represents deferred gaming and non-gaming revenue, which is measured at the redemption value of loyalty points earned under the Rewards Program that management ultimately believes will be redeemed. The recognition of the Rewards Program point liability primarily reduces casino revenue.
When points are redeemed for cash, the point liability is reduced for the amount of cash paid out. When points are redeemed for slot play, food, beverage, rooms, entertainment and merchandise, revenues are recognized when the goods or services are provided, and such revenues are classified based on the type of goods or services provided with a corresponding reduction to the point liability.
The Company’s performance obligation related to its loyalty point liability is generally completed within one year, as a guest’s loyalty point balance is forfeited after six months of inactivity for a local guest and after thirteen months for an out-of-town guest, as defined in the Rewards Program. Loyalty points are generally earned and redeemed continually over time. As a result, the loyalty point liability balance remains relatively constant. The loyalty point liability is presented within Other accrued liabilities on the Consolidated Balance Sheet.
Slot Machine Jackpots
The Company does not accrue base jackpots if it is not legally obligated to pay the jackpot. A jackpot liability is accrued with a related reduction in casino revenue when the Company is obligated to pay the jackpot, such as the incremental amount in excess of the base jackpot on a progressive game.
Gaming Taxes
The Company is assessed taxes based on gross gaming revenue, subject to applicable jurisdictional adjustments. Gaming taxes are included in Casino costs and expenses in the Consolidated Statements of Operations. Gaming tax expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Gaming tax expense
$
78,427

 
$
74,501

 
$
69,429


Share-based Compensation
The Company measures its share-based compensation cost at the grant date based on the fair value of the award, and recognizes the cost over the requisite service period. The fair value of stock options is estimated at the grant date using the
Black-Scholes option pricing model. The fair value of restricted stock is based on the closing share price of the Company’s stock on the grant date. The Company uses the straight-line method to recognize compensation cost for share-based awards with graded service-based vesting, and cumulative compensation cost recognized to date at least equals the grant-date fair value of the vested portion of the awards. Forfeitures are accounted for as they occur.
Advertising
The Company expenses advertising costs the first time the advertising takes place. Advertising expense is primarily included in selling, general and administrative expense in the Consolidated Statements of Operations. Advertising expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Advertising expense
$
31,678

 
$
24,302

 
$
22,094


Income Taxes
Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it by Station Holdco. Station Holdco continues to operate as a partnership for federal, state and local tax reporting and holds 100% of the economic interests in Station LLC. The members of Station Holdco are liable for any income taxes resulting from income allocated to them by Station Holdco as a pass-through entity.
The Company recognizes deferred tax assets and liabilities based on the differences between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company classifies all deferred tax assets and liabilities as noncurrent. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the enactment date occurs. Deferred tax assets represent future tax deductions or credits. Realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Each reporting period, the Company analyzes the likelihood that its deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. On an annual basis, the Company performs a comprehensive analysis of all forms of positive and negative evidence based on year end results. During each interim period, the Company updates its annual analysis for significant changes in the positive and negative evidence.
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
The Company will recognize interest and penalties related to income taxes, if any, within the provision for income taxes. The Company has incurred no interest or penalties related to income taxes in any of the periods presented.
Tax Receivable Agreement with Related Parties
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 parties for 85% of the tax benefits realized by the Company by such exchange. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. When an exchange transaction occurs, the Company initially recognizes the related TRA liability through a charge to equity, and any subsequent adjustments to the liability are recorded through the statements of operations.
As a result of exchanges of LLC Units for Class A common stock and purchases by the Company of LLC Units from holders of such units, the Company is entitled to a proportionate share of the existing tax basis of the assets of Station Holdco at the time of such exchanges or purchases. In addition, such exchanges or purchases of LLC Units are expected to result in increases in the tax basis of the assets of Station Holdco that otherwise would not have been available. These increases in tax basis may reduce the amount of tax that the Company would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
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 and amortizable basis. If the Company does not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, it would not be required to make the related TRA payments. The Company will only recognize a liability for TRA payments if management determines it is probable that it will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits. If management determines in the future that the Company will not be able to fully utilize all or part of the related tax benefits, it would derecognize the portion of the liability related to the benefits not expected to be utilized. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, the Company considers its historical results and incorporates certain assumptions, including revenue growth, and operating margins, among others.
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, the Company’s payment obligations would be accelerated based upon certain assumptions, including the assumption that it 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.
Additionally, the Company estimates the amount of TRA payments expected to be paid within the next twelve months and classifies this amount within current liabilities on its Consolidated Balance Sheets. This determination is based on management’s estimate of taxable income for the next fiscal year. To the extent the Company’s estimate differs from actual results, it may be required reclassify portions of the liability under the TRA between current and non-current.
Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income attributable to Red Rock by the weighted-average number of Class A shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Red Rock, including the impact of potentially dilutive securities, by the weighted-average number of Class A shares outstanding during the period, including the number of Class A shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B common stock, outstanding stock options and unvested restricted stock. The Company uses the “if-converted” method to determine the potentially dilutive effect of its Class B common stock, and the treasury stock method to determine the potentially dilutive effect of outstanding stock options and unvested restricted stock.
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 the adoption will not 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 below 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 operations or cash flows. See Note 19 for additional information.
v3.19.3.a.u2
Native American Development
12 Months Ended
Dec. 31, 2019
Development Disclosure [Abstract]  
Native American Development Native American Development
North Fork Rancheria of Mono Indians
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, without limitation, 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 December 31, 2019, the Company has paid approximately $33.8 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 December 31, 2019, the carrying amount of the advances was $18.7 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 December 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 December 31, 2019 of each of the critical milestones necessary to complete the North Fork Project.
Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”)
Yes
Date of 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 in November 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 with the United States Court of Appeals for the Ninth Circuit. The briefing of the issues on appeal was completed on June 13, 2019. The Ninth Circuit heard oral argument on February 11, 2020.
v3.19.3.a.u2
Property and Equipment (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
Property and equipment consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Land
$
271,603

 
$
270,059

Buildings and improvements
2,990,259

 
2,663,004

Furniture, fixtures and equipment
801,868

 
686,863

Construction in progress
28,120

 
240,197

 
4,091,850

 
3,860,123

Accumulated depreciation
(1,030,088
)
 
(847,718
)
Property and equipment, net
$
3,061,762

 
$
3,012,405


Schedule of Depreciation Expense
Depreciation expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Depreciation expense
$
213,642

 
$
169,656

 
$
158,327


v3.19.3.a.u2
Leases Lessee (Policies)
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Lessee, Operating Leases [Text Block]
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 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.
v3.19.3.a.u2
Segments (Tables)
12 Months Ended
Dec. 31, 2019
Segment Reporting Information [Line Items]  
Schedule of Segment Reporting Information, by Segment [Table Text Block] The Company’s segment information and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net revenues
 
 
 
 
 
Las Vegas operations:
 
 
 
 
 
Casino
$
984,253

 
$
940,483

 
$
886,206

Food and beverage
481,558

 
381,197

 
365,448

Room
192,305

 
170,824

 
179,041

Other (a)
100,073

 
94,894

 
87,238

Management fees
571

 
605

 
509

Las Vegas operations net revenues
1,758,760

 
1,588,003

 
1,518,442

Native American management:
 
 
 
 
 
Management fees
91,074

 
87,009

 
117,968

Reportable segment net revenues
1,849,834

 
1,675,012

 
1,636,410

Corporate and other
6,700

 
6,018

 
5,729

Net revenues
$
1,856,534

 
$
1,681,030

 
$
1,642,139

 
 
 
 
 
 
Net (loss) income
$
(6,737
)
 
$
219,480

 
$
63,533

Adjustments
 
 
 
 
 
Depreciation and amortization
222,211

 
180,255

 
178,217

Share-based compensation
16,848

 
11,289

 
7,922

Write-downs and other charges, net
82,123

 
34,650

 
29,584

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
(139,300
)
Related party lease termination

 

 
100,343

Asset impairment

 

 
1,829

Interest expense, net
156,679

 
143,099

 
131,442

Loss on extinguishment/modification of debt, net
19,939

 

 
16,907

Change in fair value of derivative instruments
19,467

 
(12,415
)
 
(14,112
)
(Benefit) provision for income tax
(1,734
)
 
23,875

 
134,786

Adjusted EBITDA attributable to MPM noncontrolling interest and other
316

 
(633
)
 
(13,905
)
Adjusted EBITDA (b)
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
Las Vegas operations
$
454,805

 
$
457,379

 
$
433,640

Native American management
85,562

 
80,795

 
95,897

Reportable segment Adjusted EBITDA
540,367

 
538,174

 
529,537

Corporate and other
(31,352
)
 
(29,212
)
 
(32,291
)
Adjusted EBITDA
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
 
 
Total assets
 
 
 
 
 
Las Vegas operations
$
3,637,893

 
$
3,501,705

 
 
Native American management
31,573

 
37,274

 
 
Corporate and other
444,721

 
470,547

 
 
 
$
4,114,187

 
$
4,009,526

 
 
 
 
 
 
 
 
____________________________________
(a)
Includes tenant lease revenue which is accounted for under the lease accounting guidance. See Note 19.
(b)
Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance agreement terminations at Palms’ nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, related party lease termination, asset impairment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, (benefit) provision for income tax and other, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
v3.19.3.a.u2
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Jan. 01, 2019
Ownership percentage in joint venture 50.00%               50.00%      
Accounts Receivable, Allowance for Credit Loss $ 4,900,000       $ 2,300,000       $ 4,900,000 $ 2,300,000    
Net revenues 460,786,000 $ 465,858,000 $ 482,868,000 $ 447,022,000 431,471,000 $ 412,332,000 $ 416,188,000 $ 421,039,000 1,856,534,000 1,681,030,000 $ 1,642,139,000  
Advertising Expense                 31,678,000 24,302,000 22,094,000  
Gaming Tax Expense                 $ 78,427,000 74,501,000 69,429,000  
Tax Receivable Agreement, Realized Tax Benefits Payable to Subsidiary, Percent                 85.00%      
Operating Lease, Right-of-Use Asset 13,099,000               $ 13,099,000     $ 17,300,000
Operating Lease, Liability 14,321,000               14,321,000     $ 17,300,000
Common Stock, Value, Outstanding $ 117,292,792       $ 116,547,003       117,292,792 116,547,003    
Complimentary Goods and Services [Member]                        
Net revenues                 $ 228,700,000 $ 206,500,000 $ 185,600,000  
Minimum [Member] | Building and Building Improvements [Member]                        
Property, Plant and Equipment, Useful Life                 10 years      
Minimum [Member] | Furniture, Fixtures and Equipment [Member]                        
Property, Plant and Equipment, Useful Life                 3 years      
Maximum [Member] | Building and Building Improvements [Member]                        
Property, Plant and Equipment, Useful Life                 45 years      
Maximum [Member] | Furniture, Fixtures and Equipment [Member]                        
Property, Plant and Equipment, Useful Life                 10 years      
MPM Enterprises, LLC [Member]                        
Ownership percentage, parent 50.00%               50.00%      
Station Holdco [Member]                        
Business Acquisition, Percentage of Voting Interests Acquired 100.00%               100.00%      
Parent Company [Member] | London Interbank Offered Rate (LIBOR) [Member]                        
Tax Receivable Agreement Basis Spread on Variable Rate Late Payments                 5.00%      
Common Class B [Member]                        
Common Stock, Shares, Outstanding 46,827,370       46,884,413       46,827,370 46,884,413    
Noncontrolling Interest, Total Ownership Percentage 39.90%       40.20%       39.90% 40.20%    
Common Class A [Member]                        
Common Stock, Shares, Outstanding 70,465,422       69,662,590       70,465,422 69,662,590    
Common Class A [Member] | Red Rock Resorts [Member]                        
Ownership percentage in joint venture 60.10%       59.80%       60.10% 59.80%    
v3.19.3.a.u2
Related Party Transactions (Details) - USD ($)
3 Months Ended 4 Months Ended 8 Months Ended 12 Months Ended
Jun. 30, 2018
Apr. 30, 2017
Apr. 27, 2017
Dec. 31, 2017
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Related Party Transaction [Line Items]              
Tax Receivable Agreement, Estimated Tax Liability         $ 25,100,000 $ 24,900,000  
Payments to Acquire Additional Interest in Subsidiaries         0 0 $ 4,484,000
Payments to related party under operating leases     $ 2,300,000        
Related party lease termination $ 100,300,000       0 0 100,343,000
Ground Lease, Lifetime Rental Payments   $ 300,000,000          
Income tax (benefit) expense         (1,734,000) $ 23,875,000 $ 134,786,000
Frank J. Fertitta and Victoria K. Fertitta Revocable Family Trust [Member]              
Related Party Transaction [Line Items]              
Related Party Transaction, Purchases from Related Party 120,000,000.0            
Frank J. Fertitta III and Lorenzo J Fertitta [Member]              
Related Party Transaction [Line Items]              
Tax Receivable Agreement, Estimated Tax Liability         $ 9,000,000.0    
LLC Unit Holder [Member] | Frank J. Fertitta and Victoria K. Fertitta Revocable Family Trust [Member]              
Related Party Transaction [Line Items]              
Income tax (benefit) expense $ (35,000,000)            
Boulder Station Lease [Member]              
Related Party Transaction [Line Items]              
Ground Lease, Monthly Rental Payments       $ 14,000      
Minimum [Member] | Boulder Station Lease [Member]              
Related Party Transaction [Line Items]              
Ground Lease, Annual Rent Increase       3.00%      
Maximum [Member] | Boulder Station Lease [Member]              
Related Party Transaction [Line Items]              
Ground Lease, Annual Rent Increase       6.00%      
Parent Company [Member] | Red Rock Resorts [Member]              
Related Party Transaction [Line Items]              
Tax Receivable Agreement Realized Tax Benefits Payable To Related Parties, Percent         85.00%    
v3.19.3.a.u2
Stockholders' Equity (Details)
$ / shares in Units, $ in Millions
12 Months Ended
Mar. 27, 2020
$ / shares
Mar. 13, 2020
$ / shares
Apr. 26, 2016
vote
shares
Dec. 31, 2019
Class
$ / shares
shares
Dec. 31, 2018
$ / shares
shares
Dec. 31, 2017
shares
Feb. 08, 2019
USD ($)
Schedule of Capitalization, Equity [Line Items]              
Number of Classes of Stock Authorized | Class       2      
Preferred Stock, Shares Authorized | shares     100,000,000 100,000,000 100,000,000    
Preferred Stock, Par or Stated Value Per Share       $ 0.01 $ 0.01    
Preferred Stock, Shares Issued | shares       0 0    
Common Stock, Dividends, Per Share, Declared       $ 0.40 $ 0.40    
Stock Repurchase Program, Authorized Amount | $             $ 150
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares       100,000 400,000 2,700,000  
Common Class A [Member]              
Schedule of Capitalization, Equity [Line Items]              
Common Stock, Shares Authorized | shares     500,000,000 500,000,000 500,000,000    
Common Stock, Par or Stated Value Per Share       $ 0.01 $ 0.01    
Common Stock, Voting Rights, Number of Votes | vote     1        
Common Class B [Member]              
Schedule of Capitalization, Equity [Line Items]              
Common Stock, Shares Authorized | shares     100,000,000 100,000,000 100,000,000    
Common Stock, Par or Stated Value Per Share       $ 0.00001 $ 0.00001    
Common Stock, Voting Rights, Number of Votes | vote     1        
Station Holdco [Member] | Common Class B [Member]              
Schedule of Capitalization, Equity [Line Items]              
Common Stock, Voting Rights, Number of Votes | vote     10        
Station Holdco [Member] | Voting Units [Member]              
Schedule of Capitalization, Equity [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired       100.00%      
Station Holdco [Member]              
Schedule of Capitalization, Equity [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired       100.00%      
Minimum [Member] | Station Holdco [Member] | Common Class A [Member]              
Schedule of Capitalization, Equity [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired       10.00%      
Minimum [Member] | Station Holdco [Member] | Common Class B [Member]              
Schedule of Capitalization, Equity [Line Items]              
Business Acquisition, Percentage of Voting Interests Acquired       30.00%      
Subsequent Event [Member]              
Schedule of Capitalization, Equity [Line Items]              
Common Stock, Dividends, Per Share, Declared $ 0.10            
Dividends Payable, Date of Record   Mar. 13, 2020          
Dividends Payable, Date to be Paid Mar. 27, 2020            
Subsequent Event [Member] | Station Holdco [Member]              
Schedule of Capitalization, Equity [Line Items]              
Common Stock, Dividends, Per Share, Declared   $ 0.10          
v3.19.3.a.u2
Long-term Debt 4.5% Senior Notes (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Sep. 21, 2017
Debt Instrument [Line Items]    
Long-term Debt, Gross $ 3,075,543  
Senior Notes [Member] | 4.5% Senior Notes due 2028 [Member]    
Debt Instrument [Line Items]    
Long-term Debt, Gross   $ 750,000
Debt Instrument, Interest Rate, Stated Percentage 4.50%  
v3.19.3.a.u2
Share-based Compensation Awards Activity (Details) - Common Class A [Member] - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Share-based Payment Arrangement, Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 7,396,507 5,166,565
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value $ 8,618  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (386,634)  
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price $ 20.87  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross 3,998,083  
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price $ 25.99  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares (1,381,507)  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price $ 27.26  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price $ 25.79 $ 25.60
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term 5 years 3 months 18 days  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number 6,296,411  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price $ 26.57  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term 5 years 6 months  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value $ 5,559  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number 1,100,096  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price $ 21.31  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term 3 years 9 months 18 days  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value $ 3,059  
Restricted Stock [Member]    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]    
Nonvested units, beginning balance 373,764  
Granted 477,667  
Vested (87,468)  
Forfeited (51,516)  
Nonvested units, ending balance 712,447 373,764
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]    
Nonvested units, Weighted-average grant date fair value, beginning balance $ 26.09  
Units granted, Weighted-average grant date fair value 27.01  
Vested, Weighted-average grant date fair value 24.02  
Forfeited, Weighted-average grant date fair value 29.06  
Nonvested units, Weighted-average grant date fair value, ending balance $ 26.75 $ 26.09
v3.19.3.a.u2
Share-based Compensation Weighted Average Assumptions (Details) - Share-based Payment Arrangement, Option [Member] - Common Class A [Member]
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 2.26% 2.63% 2.06%
Expected volatility 32.22% 33.25% 35.55%
Expected life (in years) 4 years 11 months 23 days 4 years 10 months 13 days 4 years 11 months 12 days
Dividend yield 1.43% 1.52% 1.79%
v3.19.3.a.u2
Commitments and Contingencies (Details)
8 Months Ended
Dec. 31, 2017
USD ($)
Dec. 31, 2019
a
Other Commitments [Line Items]    
Area of land | a   323
Boulder Station Lease [Member]    
Other Commitments [Line Items]    
Ground Lease, Monthly Rental Payments | $ $ 14,000  
v3.19.3.a.u2
Retirement Plans (Tables)
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan [Table Text Block]
The following table provides information about the changes in benefit obligation and the fair value of plan assets (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
Change in benefit obligation:
 
 
 
Benefit obligation (accumulated and projected) at beginning of year
$
13,357

 
$
14,130

Interest cost
517

 
475

Actuarial loss (gain)
1,390

 
(506
)
Benefits paid
(1,079
)
 
(742
)
Benefit obligation (accumulated and projected) at end of year
14,185

 
13,357

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
8,725

 
9,217

Actual return (loss) on plan assets
1,045

 
(668
)
Employer contributions
835

 
918

Benefits paid
(1,079
)
 
(742
)
Fair value of plan assets at end of year
9,526

 
8,725

Funded status at end of year
$
(4,659
)
 
$
(4,632
)

Schedule of Net Benefit Costs and Amounts Recognized in Other Comprehensive Income [Table Text Block]
The table below presents the components of pension expense (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Components of net periodic benefit cost:
 
 
 
 
 
Interest cost
$
517

 
$
475

 
$
536

Expected return on plan assets
(187
)
 
(209
)
 
(192
)
Effect of settlement

 

 
13

Net periodic benefit cost
330

 
266

 
357

Other changes recognized in other comprehensive income:
 
 
 
 
 
Net loss
532

 
371

 
319

Amount recognized due to settlement

 

 
(13
)
Total recognized in other comprehensive income
532

 
371

 
306

Total recognized in net periodic benefit cost and other comprehensive income
$
862

 
$
637

 
$
663


Schedule of Defined Pension Plan Statements of Financial Performance and Financial Position, Location [Table Text Block] Amounts recognized on the Consolidated Balance Sheets related to the Pension Plan consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Other long-term liabilities
$
4,659

 
$
4,632

Net actuarial loss recognized in Accumulated Other Comprehensive Income
1,203

 
671


Defined Benefit Plan, Assumptions [Table Text Block]
The following tables present the weighted-average actuarial assumptions used to calculate the net periodic benefit cost and obligation:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net periodic benefit cost:
 
 
 
 
 
Discount rate
4.15%
 
3.60%
 
4.15%
Expected long-term rate of return
5.80%
 
5.80%
 
5.80%
Rate of compensation increase
n/a
 
n/a
 
n/a
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
Benefit obligations:
 
 
 
 
 
Discount rate
 
 
3.20%
 
4.15%
Rate of compensation increase
 
 
n/a
 
n/a

Schedule of Allocation of Plan Assets [Table Text Block]
The composition of the Pension Plan assets at December 31, 2019, along with the targeted mix of assets, is presented below:
 
Target
 
Actual
Fixed income
50
%
 
51
%
Domestic equity
18
%
 
18
%
International equity
14
%
 
13
%
Long/short equity
10
%
 
10
%
Other
8
%
 
8
%
 
100
%
 
100
%

Fair Value, Assets Measured on Recurring Basis [Table Text Block] The fair values of the Pension Plan assets at December 31, 2019 and 2018 by asset category were as follows (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Fixed income
$
4,846

 
$
4,822

 
$
24

 
$

Domestic equity
1,748

 
150

 
1,598

 

International equity
1,273

 
1,273

 

 

Long/short equity
900

 
900

 

 

Other
759

 
310

 
449

 

 
$
9,526

 
$
7,455

 
$
2,071

 
$

 
 
 
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)
Fixed income
$
4,646

 
$
4,623

 
$
23

 
$

Domestic equity
1,468

 
120

 
1,348

 

International equity
1,059

 
1,059

 

 

Long/short equity
880

 
880

 

 

Other
672

 
260

 
412

 

 
$
8,725

 
$
6,942

 
$
1,783

 
$


Schedule of Expected Benefit Payments [Table Text Block]
At December 31, 2019, expected benefit payments for the next ten years were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
1,600

2021
910

2022
890

2023
800

2024
1,010

2025 - 2029
4,230


v3.19.3.a.u2
Fair Value Measurements (Tables)
12 Months Ended
Dec. 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 and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, is presented below (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
5,667

 
$

 
$
5,667

 
$

 
 
 
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 the Company’s long-term debt compared with its carrying amount is presented below (amounts in millions):
 
December 31,
 
2019
 
2018
Aggregate fair value
$
3,109

 
$
2,766

Aggregate carrying amount
3,033

 
2,855


v3.19.3.a.u2
Long-term Debt - 5.00% Senior Notes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Sep. 21, 2017
Debt Instrument [Line Items]      
Long-term Debt, Gross $ 3,075,543    
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member]      
Debt Instrument [Line Items]      
Long-term Debt, Gross     $ 550,000
Debt Instrument, Interest Rate, Stated Percentage 5.00% 5.00%  
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member] | Debt Instrument, Redemption Due to Change in Control [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Redemption Price, Percentage 101.00%    
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member] | Debt Instrument, Redemption Due to Certain Asset Sales [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Redemption Price, Percentage 100.00%    
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member] | Debt Instrument, Redemption, Period One [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Redemption Price, Percentage 102.50%    
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member] | Debt Instrument, Redemption, Period Two [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Redemption Price, Percentage 101.25%    
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member] | Debt Instrument, Redemption, Period Three [Member]      
Debt Instrument [Line Items]      
Debt Instrument, Redemption Price, Percentage 100.00%    
v3.19.3.a.u2
Segments (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
USD ($)
Sep. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2019
USD ($)
Segment
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Segment Reporting Information [Line Items]                      
Net revenues $ 460,786 $ 465,858 $ 482,868 $ 447,022 $ 431,471 $ 412,332 $ 416,188 $ 421,039 $ 1,856,534 $ 1,681,030 $ 1,642,139
Net (loss) income 6,844 $ (26,798) (7,067) 20,284 13,181 $ 25,067 99,102 $ 82,130 (6,737) 219,480 63,533
Depreciation and amortization                 222,211 180,255 178,217
Share-based compensation                 16,848 11,289 7,922
Write-downs and other charges, net                 82,123 34,650 29,584
Tax receivable agreement liability adjustment     $ 73,500           (97) (90,638) (139,300)
Related party lease termination             $ 100,300   0 0 100,343
Asset impairment                 0 0 1,829
Interest expense, net                 156,679 143,099 131,442
Loss on extinguishment/modification of debt, net (19,600)     $ (300)         19,939 0 16,907
Change in fair value of derivative instruments                 19,467 (12,415) (14,112)
Income tax (benefit) expense                 (1,734) 23,875 134,786
Adjusted EBITDA Attributable to MPM noncontrolling interest and other                 316 (633) 13,905
Adjusted EBITDA [1]                 509,015 508,962 497,246
Assets 4,114,187       4,009,526       4,114,187 4,009,526  
Operating Leases, Income Statement, Lease Revenue                 24,200 24,300 23,500
Payments to Acquire Productive Assets                 353,269 579,287 248,427
Casino                      
Segment Reporting Information [Line Items]                      
Net revenues                 984,253 940,483 886,206
Food and beverage                      
Segment Reporting Information [Line Items]                      
Net revenues                 481,558 381,197 365,448
Room                      
Segment Reporting Information [Line Items]                      
Net revenues                 192,305 170,824 179,041
Other                      
Segment Reporting Information [Line Items]                      
Net revenues                 106,773 100,912 92,967
Management fees                      
Segment Reporting Information [Line Items]                      
Net revenues                 $ 91,645 87,614 118,477
Las Vegas Operations [Member]                      
Segment Reporting Information [Line Items]                      
Number of Reportable Segments | Segment                 1    
Net revenues                 $ 1,758,760 1,588,003 1,518,442
Adjusted EBITDA                 454,805 457,379 433,640
Assets 3,637,893       3,501,705       3,637,893 3,501,705  
Payments to Acquire Productive Assets                 353,300 579,300 248,400
Las Vegas Operations [Member] | Casino                      
Segment Reporting Information [Line Items]                      
Net revenues                 984,253 940,483 886,206
Las Vegas Operations [Member] | Food and beverage                      
Segment Reporting Information [Line Items]                      
Net revenues                 481,558 381,197 365,448
Las Vegas Operations [Member] | Room                      
Segment Reporting Information [Line Items]                      
Net revenues                 192,305 170,824 179,041
Las Vegas Operations [Member] | Other                      
Segment Reporting Information [Line Items]                      
Net revenues [2]                 100,073 94,894 87,238
Las Vegas Operations [Member] | Management fees                      
Segment Reporting Information [Line Items]                      
Net revenues                 $ 571 605 509
Native American Management [Member]                      
Segment Reporting Information [Line Items]                      
Number of Reportable Segments | Segment                 1    
Adjusted EBITDA                 $ 85,562 80,795 95,897
Assets 31,573       37,274       31,573 37,274  
Native American Management [Member] | Management fees                      
Segment Reporting Information [Line Items]                      
Net revenues                 91,074 87,009 117,968
Operating Segments [Member]                      
Segment Reporting Information [Line Items]                      
Net revenues                 1,849,834 1,675,012 1,636,410
Adjusted EBITDA                 540,367 538,174 529,537
Corporate, Non-Segment [Member]                      
Segment Reporting Information [Line Items]                      
Adjusted EBITDA                 (31,352) (29,212) (32,291)
Assets $ 444,721       $ 470,547       444,721 470,547  
Corporate, Non-Segment [Member] | Other                      
Segment Reporting Information [Line Items]                      
Net revenues                 $ 6,700 $ 6,018 $ 5,729
[1]
(b)
Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance agreement terminations at Palms’ nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, related party lease termination, asset impairment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, (benefit) provision for income tax and other, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
[2]
(a)
v3.19.3.a.u2
Goodwill and Other Intangibles - Amortization Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Amortization Expense for Finite-Lived Intangible Assets [Line Items]      
Amortization of Intangible Assets $ 8,569 $ 10,599 $ 19,890
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months 7,545    
Finite-Lived Intangible Assets, Amortization Expense, Year Two 2,426    
Finite-Lived Intangible Assets, Amortization Expense, Year Three 2,401    
Finite-Lived Intangible Assets, Amortization Expense, Year Four 2,384    
Finite-Lived Intangible Assets, Amortization Expense, Year Five $ 2,384    
v3.19.3.a.u2
Management Agreements (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
USD ($)
mi
Casino_Property
Sep. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2019
USD ($)
mi
Casino_Property
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Net revenues $ 460,786 $ 465,858 $ 482,868 $ 447,022 $ 431,471 $ 412,332 $ 416,188 $ 421,039 $ 1,856,534 $ 1,681,030 $ 1,642,139
Smaller Casino Properties [Member]                      
Casino properties | Casino_Property 10               10    
Partially Owned Properties [Member] | Smaller Casino Properties [Member]                      
Casino properties | Casino_Property 3               3    
Ownership percentage, parent 50.00%               50.00%    
MPM Enterprises, LLC [Member]                      
Ownership percentage, parent 50.00%               50.00%    
Gun Lake Tribe [Member]                      
Management agreement, term                 7 years    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year One [Member]                      
Project management fee, percent                 24.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Two [Member]                      
Project management fee, percent                 24.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Three [Member]                      
Project management fee, percent                 24.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Four [Member]                      
Project management fee, percent                 24.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Five [Member]                      
Project management fee, percent                 27.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Six [Member]                      
Project management fee, percent                 27.00%    
Federated Indians of Graton Rancheria [Member] | Management Agreement, Year Seven [Member]                      
Project management fee, percent                 27.00%    
San Francisco, California [Member] | Federated Indians of Graton Rancheria [Member]                      
Distance from major city | mi 43               43    
Management fees                      
Net revenues                 $ 91,645 87,614 118,477
Management fees | Gun Lake Tribe [Member] | MPM Enterprises, LLC [Member]                      
Net revenues                   4,300 46,100
Management fees | Federated Indians of Graton Rancheria [Member] | SC Sonoma Management LLC [Member]                      
Net revenues                 85,600 77,500 65,300
Management fees | Reimbursement Revenue [Member]                      
Net revenues                 $ 5,500 $ 5,200 $ 6,600
v3.19.3.a.u2
Write-downs and Other Charges, Net
12 Months Ended
Dec. 31, 2019
Other Income and Expenses [Abstract]  
Write-downs and Other Charges, Net [Text Block] Write-downs and Other Charges, Net
Write-downs and other charges, net include asset disposals, preopening and redevelopment (including Palms redevelopment and preopening expenses and loss on artist performance agreement terminations at Palms’ nightclub and dayclub), severance, business innovation and technology enhancements and non-routine transactions.
For the year ended December 31, 2019, write-downs and other charges, net totaled $82.1 million, which included $39.8 million in artist performance agreement termination costs at Palms’ nightclub and dayclub and $25.9 million in Palms redevelopment and preopening expenses, comprising various costs associated with the brand repositioning campaign, as well as preopening related to new restaurants, nightclubs, bars and other amenities. For the years ended December 31, 2018 and 2017, write-downs and other charges, net were $34.7 million and $29.6 million, respectively, which included $18.6 million and $5.3 million, respectively, in Palms redevelopment and preopening expenses.
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Interest Costs Capitalized $ 2,777 $ 8,048 $ 1,110
v3.19.3.a.u2
Earnings Per Share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block] Earnings Per Share
Basic (loss) earnings per share is calculated by dividing net (loss) 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 (loss) 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 years ended December 31, 2018 and 2017 represent outstanding shares of Class B common stock, nonvested restricted shares of Class A common stock and outstanding stock options. All other potentially dilutive shares 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 (loss) earnings per share is presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income, basic
$
(6,737
)
 
$
219,480

 
$
63,533

Less net loss (income) attributable to noncontrolling interests, basic
3,386

 
(61,939
)
 
(28,110
)
Net (loss) income attributable to Red Rock, basic
$
(3,351
)
 
$
157,541

 
$
35,423

Effect of dilutive securities

 
48,864

 
13,813

Net (loss) income attributable to Red Rock, diluted
$
(3,351
)
 
$
206,405

 
$
49,236


 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average shares of Class A common stock outstanding, basic
69,565

 
69,115

 
67,397

Effect of dilutive securities

 
47,744

 
48,533

Weighted-average shares of Class A common stock outstanding, diluted
69,565

 
116,859

 
115,930


The calculation of diluted (loss) earnings per share of Class A common stock excluded the following shares that could potentially dilute basic earnings per share in the future because their inclusion would have been antidilutive (amounts in thousands):     
 
As of December 31,
 
2019
 
2018
 
2017
Shares issuable in exchange for Class B common stock and LLC Units
46,827

 

 

Shares issuable upon exercise of stock options
7,397

 
1,966

 
3,677

Shares issuable upon vesting of restricted stock
712

 
64

 
11


Shares of Class B common stock are not entitled to share in the earnings of the Company and are not participating securities. Accordingly, separate presentation of earnings per share of Class B common stock under the two-class method has not been presented.
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating revenues:      
Net revenues $ 1,856,534 $ 1,681,030 $ 1,642,139
Operating costs and expenses:      
Selling, general and administrative 416,355 390,492 380,930
Depreciation and amortization 222,211 180,255 178,217
Write-downs and other charges, net 82,123 34,650 29,584
Tax receivable agreement liability adjustment (97) (90,638) (139,300)
Related party lease termination 0 0 100,343
Asset impairment 0 0 1,829
Total operating costs and expenses 1,670,533 1,308,822 1,310,858
Operating income 186,001 372,208 331,281
Earnings from joint ventures 1,928 2,185 1,632
Operating income and earnings from joint ventures 187,929 374,393 332,913
Other (expense) income:      
Interest expense, net (156,679) (143,099) (131,442)
Loss on extinguishment/modification of debt, net (19,939) 0 (16,907)
Change in fair value of derivative instruments (19,467) 12,415 14,112
Other (315) (354) (357)
Total other expense (196,400) (131,038) (134,594)
(Loss) income before income tax (8,471) 243,355 198,319
Benefit (provision) for income tax 1,734 (23,875) (134,786)
Net (loss) income (6,737) 219,480 63,533
Less: net (loss) income attributable to noncontrolling interests (3,386) 61,939 28,110
Net (loss) income attributable to Red Rock Resorts, Inc. $ (3,351) $ 157,541 $ 35,423
(Loss) earnings per common share (Note 18):      
(Loss) earnings per share of Class A common stock, basic $ (0.05) $ 2.28 $ 0.53
(Loss) earnings per share of Class A common stock, diluted $ (0.05) $ 1.77 $ 0.42
Weighted-average common shares outstanding:      
Basic 69,565 69,115 67,397
Diluted 69,565 116,859 115,930
Casino      
Operating revenues:      
Net revenues $ 984,253 $ 940,483 $ 886,206
Operating costs and expenses:      
Operating costs and expenses 351,043 326,980 311,086
Food and beverage      
Operating revenues:      
Net revenues 481,558 381,197 365,448
Operating costs and expenses:      
Operating costs and expenses 465,505 340,212 326,069
Room      
Operating revenues:      
Net revenues 192,305 170,824 179,041
Operating costs and expenses:      
Operating costs and expenses 81,064 78,440 81,768
Other      
Operating revenues:      
Net revenues 106,773 100,912 92,967
Operating costs and expenses:      
Operating costs and expenses 52,329 48,431 40,332
Management fees      
Operating revenues:      
Net revenues $ 91,645 $ 87,614 $ 118,477
v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Contingency [Line Items]  
Summary of Income Tax Contingencies [Table Text Block]
The Company had the following activity for unrecognized tax benefits (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Balance at beginning of period
$

 
$

 
$

Tax positions related to current year additions
519

 

 

Additions for tax positions of prior years
485

 

 

Tax positions related to prior years reductions

 

 

Reductions due to lapse of statute of limitations on tax positions

 

 

Settlements

 

 

Balance at end of period
$
1,004

 
$

 
$


Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
The components of income tax (benefit) expense were as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current income taxes:
 
 
 
 
 
Federal
$

 
$

 
$
(1,330
)
State and local
1

 
15

 
66

Total current income taxes
1

 
15

 
(1,264
)
Deferred income taxes:
 
 
 
 
 
Federal
(1,721
)
 
23,817

 
133,246

State and local
(14
)
 
43

 
2,804

Total deferred income taxes
(1,735
)
 
23,860

 
136,050

Total income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786


Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
A reconciliation of statutory federal income tax, which is the amount computed by multiplying income before tax by the statutory federal income tax rate, to the Company’s provision for income tax is as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected U.S. federal income taxes at statutory rate
$
(1,779
)
 
$
51,105

 
$
69,411

Income attributable to noncontrolling interests
711

 
(13,007
)
 
(9,839
)
State and local income taxes, net of federal benefit
(14
)
 
43

 
474

Non-deductible expenses
1,336

 
1,525

 
(1,361
)
Tax credits
(1,555
)
 
(1,985
)
 
(1,062
)
Impact of tax rate change due to tax reform

 

 
85,348

Share-based compensation contribution
(762
)
 
(1,152
)
 

Return to provision
(313
)
 
1,037

 
2,258

Other

 
2,874

 
(1,776
)
Valuation allowance
642

 
(16,565
)
 
(8,667
)
Income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786


Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
The components of deferred tax assets and liabilities are as follows (amounts in thousands):
 
December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Tax credit carryforwards
$
5,293

 
$
3,737

Net operating loss carryforwards and other attributes
66,476

 
52,785

Investment in partnership
76,004

 
90,035

Payable pursuant to tax receivable agreement
5,268

 
5,244

Total gross deferred tax assets
153,041

 
151,801

Valuation allowance
(39,856
)
 
(39,968
)
Total deferred tax assets, net of valuation allowance
$
113,185

 
$
111,833


v3.19.3.a.u2
Derivative Instruments (Tables)
12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
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
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Interest rate swaps
 
Change in fair value of derivative instruments
 
$
(19,467
)
 
$
12,415

 
$
14,110


Schedule of Derivatives Instruments Statements of Operations and Balance Sheets, Location
The fair values of Station LLC’s interest rate swaps, exclusive of accrued interest, as well as their classification on the Consolidated Balance Sheets, are presented below (amounts in thousands):
 
December 31,
2019
 
2018
Interest rate swaps not designated in hedge accounting relationships:
 
 
 
Prepaid expenses and other current assets
$

 
$
8,334

Other assets, net

 
15,611

Other accrued liabilities
440

 

Other long-term liabilities
5,227

 


Information about pretax gains and losses on derivative financial instruments that were designated in cash flow hedging relationships and their location within the consolidated financial statements is presented below (amounts in thousands):
Derivatives Designated in Cash Flow Hedging Relationships
 
Amount of Loss on Derivatives Recognized in Other Comprehensive Loss (Effective Portion)
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Year Ended December 31,
 
 
Year Ended December 31,
 
2019
 
2018
 
2017
 
 
2019
 
2018
 
2017
Interest rate swaps
 
$

 
$

 
$
(1,875
)
 
Interest expense, net
 
$
2,843

 
$
2,929

 
$
(1,176
)

v3.19.3.a.u2
Quarterly Financial Information (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]                      
Loss on Contract Termination   $ 28,200             $ 39,800    
Net revenues $ 460,786 465,858 $ 482,868 $ 447,022 $ 431,471 $ 412,332 $ 416,188 $ 421,039 1,856,534 $ 1,681,030 $ 1,642,139
Operating income 60,132 14,243 45,481 66,145 71,958 54,618 137,791 107,841 186,001 372,208 331,281
Net income (loss) 6,844 (26,798) (7,067) 20,284 13,181 25,067 99,102 82,130 (6,737) 219,480 63,533
Net income (loss) attributable to Red Rock Resorts, Inc. $ 4,829 $ (15,657) $ (3,846) $ 11,323 $ 8,946 $ 14,680 $ 82,735 $ 51,180 $ (3,351) $ 157,541 $ 35,423
(Loss) earnings per share of Class A common stock, basic $ 0.07 $ (0.22) $ (0.06) $ 0.16 $ 0.13 $ 0.21 $ 1.20 $ 0.74 $ (0.05) $ 2.28 $ 0.53
(Loss) earnings per share of Class A common stock, diluted $ 0.05 $ (0.22) $ (0.06) $ 0.16 $ 0.11 $ 0.20 $ 0.82 $ 0.65 $ (0.05) $ 1.77 $ 0.42
Tax receivable agreement liability adjustment     $ (73,500)           $ 97 $ 90,638 $ 139,300
Related party lease termination             $ 100,300   $ 0 $ 0 $ 100,343
v3.19.3.a.u2
Land Held for Development (Details)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
a
Dec. 31, 2017
a
Land Held for Development [Line Items]    
Number of Project Sites 7  
Payments to Acquire Land Held for Development | $ $ 57.4  
Area of land 323  
Las Vegas Valley [Member]    
Land Held for Development [Line Items]    
Area of land 20 31
v3.19.3.a.u2
Other Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Payables and Accruals [Abstract]    
Rewards Program liability $ 21,392 $ 20,654
Advance deposits and future wagers 22,185 18,624
Unpaid wagers, outstanding chips and other customer-related liabilities 19,722 19,640
Accrued gaming and related 27,490 22,221
Accrued payroll and related 57,438 55,448
Construction payables and equipment purchase accruals 27,462 108,855
Operating Lease, Liability, Current 3,646 0
Other 21,225 21,032
Total other accrued liabilities 200,560 266,474
Contract assets $ 0 $ 0
v3.19.3.a.u2
Long-term Debt - Corporate Office Lease (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Debt Instrument [Line Items]          
Long-term Debt, Gross $ 3,075,543   $ 3,075,543    
Interest expense, net     156,679 $ 143,099 $ 131,442
Loss on extinguishment/modification of debt, net 19,600 $ 300 $ (19,939) $ 0 $ (16,907)
Corporate Office Lease [Member]          
Debt Instrument [Line Items]          
Repayments of Debt $ 57,000        
v3.19.3.a.u2
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2019
Feb. 14, 2020
Jun. 28, 2019
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity File Number 001-37754    
Entity Registrant Name RED ROCK RESORTS, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 47-5081182    
Entity Address, Address Line One 1505 South Pavilion Center Drive    
Entity Address, City or Town Las Vegas    
Entity Address, State or Province NV    
Entity Address, Postal Zip Code 89135    
City Area Code 702    
Local Phone Number 495-3000    
Title of 12(b) Security Class A Common Stock, $.01 par value    
Trading Symbol RRR    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 1,500,000,000
Entity Central Index Key 0001653653    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Documents Incorporated by Reference [Text Block]
Portions of the registrant’s definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year end of December 31, 2019.
   
Common Class A [Member]      
Entity Common Stock, Shares Outstanding   70,465,422  
Common Class B [Member]      
Entity Common Stock, Shares Outstanding   46,827,370  
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement of Comprehensive Income [Abstract]      
Net (loss) income $ (6,737) $ 219,480 $ 63,533
Loss on interest rate swaps:      
Unrealized loss arising during period 0 0 (1,025)
Reclassification into income (2,600) (2,442) 658
Loss on interest rate swaps recognized in other comprehensive loss (2,600) (2,442) (367)
Loss on available-for-sale securities:      
Unrealized gain arising during period 0 0 8
Reclassification into income 0 0 (120)
Loss on available-for-sale securities recognized in other comprehensive loss 0 0 (112)
Minimum pension liability adjustment, net (486) (310) (165)
Other comprehensive loss, net of tax (3,086) (2,752) (644)
Comprehensive (loss) income (9,823) 216,728 62,889
Less: comprehensive (loss) income attributable to noncontrolling interests (4,743) 60,610 27,649
Comprehensive (loss) income attributable to Red Rock Resorts, Inc. $ (5,080) $ 156,118 $ 35,240
v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block] Income Taxes
Income Taxes
Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it by 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.
Income Tax (Benefit) Expense
The components of income tax (benefit) expense were as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Current income taxes:
 
 
 
 
 
Federal
$

 
$

 
$
(1,330
)
State and local
1

 
15

 
66

Total current income taxes
1

 
15

 
(1,264
)
Deferred income taxes:
 
 
 
 
 
Federal
(1,721
)
 
23,817

 
133,246

State and local
(14
)
 
43

 
2,804

Total deferred income taxes
(1,735
)
 
23,860

 
136,050

Total income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786


A reconciliation of statutory federal income tax, which is the amount computed by multiplying income before tax by the statutory federal income tax rate, to the Company’s provision for income tax is as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected U.S. federal income taxes at statutory rate
$
(1,779
)
 
$
51,105

 
$
69,411

Income attributable to noncontrolling interests
711

 
(13,007
)
 
(9,839
)
State and local income taxes, net of federal benefit
(14
)
 
43

 
474

Non-deductible expenses
1,336

 
1,525

 
(1,361
)
Tax credits
(1,555
)
 
(1,985
)
 
(1,062
)
Impact of tax rate change due to tax reform

 

 
85,348

Share-based compensation contribution
(762
)
 
(1,152
)
 

Return to provision
(313
)
 
1,037

 
2,258

Other

 
2,874

 
(1,776
)
Valuation allowance
642

 
(16,565
)
 
(8,667
)
Income tax (benefit) expense
$
(1,734
)
 
$
23,875

 
$
134,786


The Company’s effective tax rate was 20.47%, 9.81% and 67.96% for the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s effective tax rate includes the net tax expense associated with remeasuring its deferred tax assets, deferred tax liabilities and related valuation allowances to reflect the enacted federal rate, and rate benefit or detriment attributable to the fact that Station Holdco operates as a limited liability company which is not subject to federal income tax. Accordingly, the Company does not recognize income tax provision or benefit on the portion of Station Holdco's earnings or loss attributable to noncontrolling interest holders.
The components of deferred tax assets and liabilities are as follows (amounts in thousands):
 
December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Tax credit carryforwards
$
5,293

 
$
3,737

Net operating loss carryforwards and other attributes
66,476

 
52,785

Investment in partnership
76,004

 
90,035

Payable pursuant to tax receivable agreement
5,268

 
5,244

Total gross deferred tax assets
153,041

 
151,801

Valuation allowance
(39,856
)
 
(39,968
)
Total deferred tax assets, net of valuation allowance
$
113,185

 
$
111,833


The Company recorded a reduction to the net deferred tax asset resulting from the outside basis difference of its interest in Station Holdco. The Company also recorded an increase to deferred tax asset for its tax credits, net operating losses and other tax attributes.
At December 31, 2019, the Company had a federal net operating loss carryforward of approximately $291.0 million. $101.6 million of the federal net operating loss (“NOL”) carryforward will begin to expire in 2037; the remaining $189.4 million have unlimited carryforward but may have usage limitations in a given year. The Company also had $25.2 million of additional pre-tax attributes and $5.3 million of tax credits at December 31, 2019.
The Company analyzes the likelihood that its deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not (a likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. As a result of this analysis, the Company determined that the deferred tax asset related to acquiring its interest in Station Holdco through newly issued LLC Units at IPO and subsequently is not expected to be realized unless the Company disposes of its investment in Station Holdco. The Company recognizes changes to the valuation allowance through the provision for income tax or other comprehensive loss, as applicable, and at December 31, 2019 and 2018, the valuation allowance was $39.9 million and $40.0 million, respectively.
Uncertain Tax Positions
The Company recorded $1.0 million of unrecognized tax benefits as of December 31, 2019. The Company does not currently record interest and penalties for unrecognized tax benefits as any recognition would result in a reduction of its NOL or other tax attributes and would not result in an underpayment of tax. Further, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
The Company files annual income tax returns for Red Rock and Station Holdco in the U.S. federal jurisdiction and California. The Company is currently under examination by the Internal Revenue Service for both entities for 2016. As of December 31, 2019, there are no other ongoing income tax audits.
The Company had the following activity for unrecognized tax benefits (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Balance at beginning of period
$

 
$

 
$

Tax positions related to current year additions
519

 

 

Additions for tax positions of prior years
485

 

 

Tax positions related to prior years reductions

 

 

Reductions due to lapse of statute of limitations on tax positions

 

 

Settlements

 

 

Balance at end of period
$
1,004

 
$

 
$


Tax Receivable Agreement
Pursuant to the election under Section 754 of the Internal Revenue Code, the Company continues to expect to obtain an increase in its share of the tax basis in the net assets of Station Holdco when LLC Units are exchanged by Station Holdco’s noncontrolling interest holders and other qualifying transactions. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
In connection with the IPO, the Company entered into the TRA with certain Continuing 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 by 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. For the years ended December 31, 2019, 2018 and 2017, exchanges of LLC Units and Class B common shares resulted in increases of $0.2 million, $2.5 million and $22.8 million, respectively, in amounts payable under the TRA liability and net increases of $0.1 million, $2.7 million and $24.3 million, respectively, in deferred tax assets, all of which were recorded through equity. At December 31, 2019 and 2018, the Company’s liability under the TRA with respect to previously consummated transactions was $25.1 million and $24.9 million, respectively. During the year ended December 31, 2018, the Company paid $28.9 million to pre-IPO owners of Station Holdco in exchange for which the owners assigned to the Company all of their rights under the TRA. The Company’s liability under the TRA was reduced by $119.2 million, and nontaxable income of $90.4 million was recognized as a result of the transactions with Continuing Owners. The $116.5 million net reduction of the TRA liability during 2017 was the result of a $135.1 million decrease due to the new tax rate, partially offset by increases related to exchanges.
v3.19.3.a.u2
Organization and Background
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Organization and Background
Red Rock Resorts, Inc. (“Red Rock,” or the “Company”) was formed as a Delaware corporation in September 2015 to own an indirect equity interest in and manage Station Casinos LLC (“Station LLC”), a Nevada limited liability company. Station LLC is a gaming, development and management company established in 1976 that owns and operates 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 a casino in northern California on behalf of a Native American tribe. Station LLC managed a casino in Michigan on behalf of another Native American tribe through February 2018. The Company owns all of the outstanding voting interests in Station LLC and has an indirect interest in Station LLC through its ownership of limited liability interests in Station Holdco LLC (“Station Holdco,” and such interests, “LLC Units”), which owns all of the economic interests in Station LLC.
At December 31, 2019, the Company held 60.1% of the economic interests and 100% of the voting power in Station Holdco, as well as 100% of the voting interest in Station LLC, subject to certain limited exceptions, and is designated as the sole managing member of both Station Holdco and Station LLC. The Company controls and operates all of the business and affairs of Station Holdco and Station LLC, and conducts all of its operations through these entities.
v3.19.3.a.u2
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Legal Matters
The Company and its subsidiaries are defendants in various lawsuits relating to routine matters incidental to their business. No assurance can be provided as to the outcome of any legal matters and litigation inherently involves significant risks. The Company does not believe there are any legal matters outstanding that would have a material impact on its financial condition or results of operations.
v3.19.3.a.u2
Property and Equipment
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Land
$
271,603

 
$
270,059

Buildings and improvements
2,990,259

 
2,663,004

Furniture, fixtures and equipment
801,868

 
686,863

Construction in progress
28,120

 
240,197

 
4,091,850

 
3,860,123

Accumulated depreciation
(1,030,088
)
 
(847,718
)
Property and equipment, net
$
3,061,762

 
$
3,012,405


Construction in progress at December 31, 2018 included $218.2 million related to the redevelopment of Palms, all of which was placed into service as of December 31, 2019.
Depreciation expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Depreciation expense
$
213,642

 
$
169,656

 
$
158,327


At December 31, 2019 and 2018, substantially all of the Company’s property and equipment was pledged as collateral for its long-term debt.
v3.19.3.a.u2
Management Agreements
12 Months Ended
Dec. 31, 2019
Managements Agreements [Abstract]  
Management Fee Revenue [Text Block] Management Agreements
The Federated Indians of Graton Rancheria
The Company manages Graton Resort & Casino (“Graton Resort”), which opened in November 2013, on behalf of the Federated Indians of Graton Rancheria (the “Graton Tribe”). Graton Resort is located approximately 43 miles north of downtown San Francisco. The management agreement for Graton Resort will expire in November 2020. The Company received a management fee of 24% of Graton Resort’s net income (as defined in the management agreement) in years 1 through 4 of the agreement, and is entitled to receive 27% of Graton Resort’s net income in years 5 through 7. Excluding reimbursable expenses, management fees from Graton Resort totaled $85.6 million, $77.5 million and $65.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. The management agreement may be terminated under certain circumstances, including but not limited to, material breach, changes in regulatory or legal status, and mutual agreement of the parties. There is no provision in the management agreement allowing the Graton Tribe to buy-out the management agreement prior to its expiration. Under the terms of the management agreement, the Company will provide training to the Graton Tribe such that the tribe may assume responsibility for managing Graton Resort upon expiration of the seven-year term of the management agreement. Upon termination or expiration of the management and development agreements, the Graton Tribe will continue to be obligated to pay certain amounts that may be due to the Company, such as any unpaid management fees. Certain amounts due to the Company under the management and development agreements are subordinate to the obligations of the Graton Tribe under its third-party financing. The management and development agreements contain waivers of the Graton Tribe’s sovereign immunity from suit for the purpose of enforcing the agreements or permitting or compelling arbitration and other remedies.
Gun Lake Casino    
The Company held a 50% interest in MPM Enterprises, LLC (“MPM”), a consolidated VIE, which managed Gun Lake Casino (“Gun Lake”) in Michigan, under a seven-year management agreement that expired in February 2018. Excluding reimbursable expenses, MPM’s management fee revenue from Gun Lake included in the Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 totaled $4.3 million and $46.1 million, respectively.
Reimbursable Costs
Management fee revenue includes reimbursable payroll and other costs, primarily related to Graton Resort. Reimbursable costs totaled $5.5 million, $5.2 million and $6.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
Fair Value Measurements
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Information about the Company’s financial assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, is presented below (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
5,667

 
$

 
$
5,667

 
$

 
 
 
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

 
$


Assets Measured at Fair Value on a Nonrecurring Basis
During the year ended December 31, 2017, the Company recorded an asset impairment charge of $1.8 million to write down an approximately 31-acre parcel of land held for development in Las Vegas to its estimated fair value of $5.2 million as a result of entering into an agreement to sell a portion of the land at a price less than its carrying amount. The sale was completed in the second quarter of 2018.
Fair Value of Long-term Debt
The estimated fair value of the Company’s long-term debt compared with its carrying amount is presented below (amounts in millions):
 
December 31,
 
2019
 
2018
Aggregate fair value
$
3,109

 
$
2,766

Aggregate carrying amount
3,033

 
2,855


The estimated fair value of the Company’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 hierarchy.
v3.19.3.a.u2
Noncontrolling Interest in Station Holdco (Tables)
12 Months Ended
Dec. 31, 2019
Noncontrolling Interest [Abstract]  
Noncontrolling Interest [Table Text Block]
The ownership of the LLC Units is summarized as follows:        
 
December 31, 2019
 
December 31, 2018
 
Units
 
Ownership %
 
Units
 
Ownership %
Red Rock
70,465,422

 
60.1
%
 
69,662,590

 
59.8
%
Noncontrolling interest holders
46,827,370

 
39.9
%
 
46,884,413

 
40.2
%
Total
117,292,792

 
100.0
%
 
116,547,003

 
100.0
%

v3.19.3.a.u2
Write-downs and Other Charges, Net Write-downs and Other Charges, Net (Policies)
12 Months Ended
Dec. 31, 2019
Other Income and Expenses [Abstract]  
Write-downs and Other Charges, net [Policy Text Block] Write-downs and Other Charges, Net
Write-downs and other charges, net include asset disposals, preopening and redevelopment (including Palms redevelopment and preopening expenses and loss on artist performance agreement terminations at Palms’ nightclub and dayclub), severance, business innovation and technology enhancements and non-routine transactions.
v3.19.3.a.u2
Quarterly Financial Information (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Information
Quarterly financial information is presented below (amounts in thousands, except per share data):
 
Year Ended December 31, 2019
 
First
Quarter
 
Second
Quarter
 
Third
Quarter (a)
 
Fourth
Quarter (b)
Net revenues
$
447,022

 
$
482,868

 
$
465,858

 
$
460,786

Operating income
66,145

 
45,481

 
14,243

 
60,132

Net income (loss)
20,284

 
(7,067
)

(26,798
)
 
6,844

Net income (loss) attributable to Red Rock Resorts, Inc.
11,323

 
(3,846
)
 
(15,657
)
 
4,829

Earnings (loss) per share, basic
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.07

Earnings (loss) per share, diluted
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.05

 
Year Ended December 31, 2018
 
First
Quarter
 
Second
Quarter (c)
 
Third
Quarter
 
Fourth
Quarter
Net revenues
$
421,039

 
$
416,188

 
$
412,332

 
$
431,471

Operating income
107,841

 
137,791

 
54,618

 
71,958

Net income
82,130

 
99,102

 
25,067

 
13,181

Net income attributable to Red Rock Resorts, Inc.
51,180

 
82,735

 
14,680

 
8,946

Earnings per share, basic
$
0.74

 
$
1.20

 
$
0.21

 
$
0.13

Earnings per share, diluted
$
0.65

 
$
0.82

 
$
0.20

 
$
0.11


____________________________________
(a)
Includes $28.2 million in artist performance agreement termination costs and severance at Palms. See Note 14.
(b)
Includes $19.6 million loss on debt extinguishment related to the repayment of the corporate building lease obligation. See Note 9.
(c)
Includes income of $73.5 million related to the TRA liability. See Note 15.
v3.19.3.a.u2
Noncontrolling Interest in Station Holdco (Details) - shares
shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Equity Method Investment, Ownership Percentage 50.00%    
Exchanges of noncontrolling interests for Class A common stock (shares) 0.1 0.4 2.7
Red Rock Resorts [Member] | Common Class A [Member]      
Equity Method Investment, Ownership Percentage 60.10% 59.80%  
v3.19.3.a.u2
Share-based Compensation Text (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value $ 2,101 $ 1,194 $ 2,364
Share-based compensation 16,848 11,289 7,922
Share-based compensation expense 16,848 11,289 7,922
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value $ 1,517 $ 3,550 $ 538
Common Class A [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of profit units that may be issued 23,200,000    
Nonvested profit units, total compensation cost not yet recognized $ 30,600    
Nonvested profit units, total compensation cost not yet recognized, period for recognition 2 years 9 months 18 days    
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 12,300,000    
Restricted Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Nonvested profit units, total compensation cost not yet recognized $ 12,400    
Nonvested profit units, total compensation cost not yet recognized, period for recognition 2 years 10 months 24 days    
Share-based Payment Arrangement, Option [Member] | Common Class A [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross 3,998,083    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 7,396,507 5,166,565  
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period 7 years    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value $ 7.20 $ 9.25 $ 6.26
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate 2.26% 2.63% 2.06%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate 32.22% 33.25% 35.55%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term 4 years 11 months 23 days 4 years 10 months 13 days 4 years 11 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate 1.43% 1.52% 1.79%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period 4 years    
Share-based Payment Arrangement, Option [Member] | Restricted Stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value $ 27.01 $ 31.95 $ 22.11
Restricted Stock [Member] | Common Class A [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 477,667    
Restricted Stock [Member] | Common Class A [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period 2 years    
Restricted Stock [Member] | Common Class A [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period 4 years    
Restricted Stock [Member] | Director [Member] | Common Class A [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period 1 year    
v3.19.3.a.u2
Leases Lessor Disclosures (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Lessor Disclosure [Abstract]      
Lessor, Operating Lease, Payments to be Received, Next Twelve Months $ 9,462    
Lessor, Operating Lease, Payments to be Received, Two Years 8,236    
Operating Leases, Income Statement, Lease Revenue 24,200 $ 24,300 $ 23,500
Lessor, Operating Lease, Payments to be Received, Three Years 5,613    
Lessor, Operating Lease, Payments to be Received, Four Years 4,329    
Lessor, Operating Lease, Payments to be Received, Five Years 3,256    
Lessee, Operating Lease, Liability, Payments, Due after Year Five 10,034    
Lessor, Operating Lease, Payments to be Received $ 40,930    
v3.19.3.a.u2
Retirement Plans (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year   $ 1,400    
Defined Benefit Plan, Benefit Obligation $ 14,130 14,185 $ 13,357 $ 14,130
Defined Benefit Plan, Interest Cost 536 517 475  
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss)   1,390 (506)  
Defined Benefit Plan, Benefits Paid (Deprecated 2017-01-31)   (1,079) (742)  
Defined Benefit Plan, Plan Assets, Amount $ 9,217 9,526 8,725 9,217
Defined Benefit Plan, Plan Assets, Increase (Decrease) for Actual Return (Loss)   1,045 (668)  
Defined Benefit Plan, Plan Assets, Contributions by Employer   835 918  
Defined Benefit Plan, Plan Assets, Benefits Paid   (1,079) (742)  
Defined Benefit Plan, Funded (Unfunded) Status of Plan   (4,659) (4,632)  
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax   1,203 $ 671  
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months   1,600    
Defined Benefit Plan, Expected Future Benefit Payment, Year Two   910    
Defined Benefit Plan, Expected Future Benefit Payment, Year Three   890    
Defined Benefit Plan, Expected Future Benefit Payment, Year Four   800    
Defined Benefit Plan, Expected Future Benefit Payment, Year Five   1,010    
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter   $ 4,230    
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate 4.15% 4.15% 3.60%  
Defined Benefit Plan, Expected Return (Loss) on Plan Assets $ (192) $ (187) $ (209)  
Defined contribution 401(k) plan, employer matching contribution, percent of match   50.00%    
Defined contribution 401(k) plan, employee contributions subject to employer match (percent)   4.00%    
401(k) plan, expense for matching contributions   $ 4,200 4,100 $ 4,100
Defined Benefit Plan, Net Periodic Pension Benefit Cost        
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment 13 0 0  
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) 357 330 266  
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, before Tax 319 532 371  
Other Comprehensive Income (Loss), Defined Benefit Plan, Settlement and Curtailment Gain (Loss), after Tax (13) 0 0  
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax $ 306 $ 532 $ 371  
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Rate of Return on Plan Assets 5.80% 5.80% 5.80%  
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate   3.20% 4.15%  
Liability, Defined Benefit Plan, Noncurrent   $ 4,659 $ 4,632  
Defined Benefit Plan, Amount Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive (Income) Loss, before Tax $ 663 862 637  
Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   9,526 8,725  
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   7,455 6,942  
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   2,071 1,783  
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 0  
Fixed Income Securities [Member]        
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage   50.00%    
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage   51.00%    
Fixed Income Securities [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 4,846 4,646  
Fixed Income Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   4,822 4,623  
Fixed Income Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   24 23  
Fixed Income Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 0  
Defined Benefit Plan, Equity Securities, US [Member]        
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage   18.00%    
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage   18.00%    
Defined Benefit Plan, Equity Securities, US [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 1,748 1,468  
Defined Benefit Plan, Equity Securities, US [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   150 120  
Defined Benefit Plan, Equity Securities, US [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   1,598 1,348  
Defined Benefit Plan, Equity Securities, US [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 0  
Defined Benefit Plan, Equity Securities, Non-US [Member]        
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage   14.00%    
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage   13.00%    
Defined Benefit Plan, Equity Securities, Non-US [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 1,273 1,059  
Defined Benefit Plan, Equity Securities, Non-US [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   1,273 1,059  
Defined Benefit Plan, Equity Securities, Non-US [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   0 0  
Defined Benefit Plan, Equity Securities, Non-US [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 0  
Hedge Funds, Equity [Member]        
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage   10.00%    
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage   10.00%    
Hedge Funds, Equity [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 900 880  
Hedge Funds, Equity [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   900 880  
Hedge Funds, Equity [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   0 0  
Hedge Funds, Equity [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 0  
Other Security Investments [Member]        
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage   8.00%    
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage   8.00%    
Other Security Investments [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 759 672  
Other Security Investments [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   310 260  
Other Security Investments [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   449 412  
Other Security Investments [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]        
Defined Benefit Plan, Plan Assets, Amount   $ 0 $ 0  
v3.19.3.a.u2
Fair Value Measurements (Details)
12 Months Ended
Dec. 31, 2018
USD ($)
Dec. 31, 2019
USD ($)
a
Dec. 31, 2017
a
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Aggregate fair value of long-term debt $ 2,766,000,000 $ 3,109,000,000  
Aggregate carrying amount of long-term debt 2,855,359,000 $ 3,033,291,000  
Area of land | a   323  
Land held for development 193,686,000 $ 238,440,000  
Las Vegas Valley [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Area of land | a   20 31
Fair Value, Nonrecurring [Member] | Land Held for Development [Member] | Las Vegas Valley [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Impairment of land held for development 1,800,000    
Land held for development 5,200,000    
Fair Value, Recurring [Member] | Interest Rate Swap [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Derivative Asset 23,945,000    
Derivative Liability 0 $ 5,667,000  
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Derivative Asset 0    
Derivative Liability 0    
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Derivative Asset 23,945,000    
Derivative Liability 5,667,000    
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Derivative Asset 0    
Derivative Liability $ 0    
v3.19.3.a.u2
Long-term Debt - Principal Maturities (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months $ 33,989  
Long-term Debt, Maturities, Repayments of Principal in Year Two 170,830  
Long-term Debt, Maturities, Repayments of Principal in Year Three 617,944  
Long-term Debt, Maturities, Repayments of Principal in Year Four 1,664,453  
Long-term Debt, Maturities, Repayments of Principal in Year Five 1,212  
Long-term Debt, Maturities, Repayments of Principal after Year Five 587,115  
Long-term Debt, Gross 3,075,543  
Debt Instrument, Unamortized Discount and Debt Issue Costs (42,252)  
Long-term Debt $ 3,033,291 $ 2,855,359
v3.19.3.a.u2
Share-based Compensation Allocation of Recognized Costs (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total share-based compensation $ 16,848 $ 11,289 $ 7,922
Casino      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total share-based compensation 458 250 228
Food and beverage      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total share-based compensation 202 36 40
Room [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total share-based compensation 11 0 11
Selling, general and administrative [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total share-based compensation $ 16,177 $ 11,003 $ 7,643
v3.19.3.a.u2
Native American Development (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
a
Table_Games
gaming_device
Dec. 31, 2018
USD ($)
Development and Management Agreements, Native American [Line Items]    
Area of land | a 323  
Native American development costs $ 18,749 $ 17,970
North Fork Rancheria of Mono Indians (Mono) [Member]    
Development and Management Agreements, Native American [Line Items]    
Reimbursable advances for Native American development projects 33,800  
Native American development costs $ 18,700  
Property development fee, percent 4.00%  
Project management fee, percent 30.00%  
Development agreement, term 7 years  
Management agreement, term 7 years  
Estimated period, after construction begins, facility is completed and open for business 18 months  
North Fork Rancheria of Mono Indians (Mono) [Member] | Land Held for Development [Member]    
Development and Management Agreements, Native American [Line Items]    
Area of land | a 305  
North Fork Rancheria of Mono Indians (Mono) [Member] | Maximum [Member]    
Development and Management Agreements, Native American [Line Items]    
Number of slot machines | gaming_device 2,500  
Number of table games | Table_Games 40  
Estimated costs for Native American development projects $ 300,000  
Estimated beginning of construction in months 30 months  
Successful project completion, percent 75.00%  
North Fork Rancheria of Mono Indians (Mono) [Member] | Minimum [Member]    
Development and Management Agreements, Native American [Line Items]    
Number of slot machines | gaming_device 2,000  
Estimated costs for Native American development projects $ 250,000  
Estimated beginning of construction in months 18 months  
Successful project completion, percent 65.00%  
v3.19.3.a.u2
Long-term Debt - Credit Facility (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Feb. 07, 2020
USD ($)
Dec. 31, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2019
USD ($)
Rate
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 21, 2023
Feb. 08, 2019
USD ($)
Rate
Debt Instrument [Line Items]                
Long-term Debt   $ 3,033,291   $ 3,033,291 $ 2,855,359      
Debt Issuance Costs Incurred During Noncash or Partial Noncash Transaction     $ 3,300          
Loss on extinguishment/modification of debt, net   19,600 $ 300 (19,939) 0 $ (16,907)    
Line of Credit [Member] | Term Loan A Facility [Member]                
Debt Instrument [Line Items]                
Line of Credit Facility, Periodic Payment, Principal       3,400        
Line of Credit [Member] | Term Loan B Facility, Due June 8, 2023 [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Periodic Payment, Principal       4,700        
Long-term Debt   1,766,757   $ 1,766,757 $ 1,775,951      
Line of Credit [Member] | Term Loan B Facility, Due June 8, 2023 [Member] | London Interbank Offered Rate (LIBOR) [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate       2.50%        
Line of Credit [Member] | Term Loan B Facility, Due June 8, 2023 [Member] | Base Rate [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate       1.50%        
Revolving Credit Facility [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Unused Borrowing Capacity, Amount   422,500   $ 422,500        
Long-term Debt   0   0        
Letters of Credit Outstanding, Amount   $ 33,500   $ 33,500        
Line of Credit Facility, Increase in Maximum Borrowing Capacity               $ 115,000
Line of Credit Facility, Maximum Borrowing Capacity               $ 896,000
Line of Credit Facility, Reduction of Interest Rate | Rate               25.00%
Line of Credit and Revolving Credit Facility [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Ratio Of Indebtedness To EBITDA, Period One   6.50   6.50        
Line of Credit and Revolving Credit Facility [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Interest Coverage Ratio   2.50   2.50        
Ratio Of Indebtedness To EBITDA, Period Five   5.25   5.25        
Station Casinos LLC [Member] | Revolving Credit Facility [Member]                
Debt Instrument [Line Items]                
Long-term Debt   $ 440,000   $ 440,000        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       2.00%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       1.75%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due June 8, 2022 [Member] | Base Rate [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       1.00%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       1.75%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       1.50%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 [Member] | Base Rate [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       0.75%        
Station Casinos LLC [Member] | Line of Credit and Revolving Credit Facility [Member] | Revolving Credit Facility and Term Loan A Facility, Due March 8, 2023 [Member] | Base Rate [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate | Rate       0.50%        
Subsequent Event [Member] | Revolving Credit Facility [Member]                
Debt Instrument [Line Items]                
Line of Credit Facility, Maximum Borrowing Capacity $ 1,030,000              
Subsequent Event [Member] | Line of Credit and Revolving Credit Facility [Member]                
Debt Instrument [Line Items]                
Ratio Of Indebtedness To EBITDA 400.00%              
Subsequent Event [Member] | Line of Credit and Revolving Credit Facility [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Ratio Of Indebtedness To EBITDA 650.00%           525.00%  
Subsequent Event [Member] | Credit Facility [Domain] | Term Loan B facility [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Basis Spread on Variable Rate 2.25%              
Subsequent Event [Member] | Term Loan B facility [Member] | Maximum [Member]                
Debt Instrument [Line Items]                
Ratio Of Indebtedness To EBITDA 500.00%              
Prepayment step-down factor 25.00%              
Subsequent Event [Member] | Term Loan B facility [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Ratio Of Indebtedness To EBITDA 450.00%              
Prepayment step-down factor 0.00%              
London Interbank Offered Rate (LIBOR) [Member] | Subsequent Event [Member] | Line of Credit [Member] | Term Loan B facility [Member] | Minimum [Member]                
Debt Instrument [Line Items]                
Debt Instrument, Interest Rate, Stated Percentage 0.25%              
v3.19.3.a.u2
Stockholders' Equity (Tables)
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income
The following table presents changes in accumulated other comprehensive (loss) income balances, net of tax and noncontrolling interest (amounts in thousands):
 
Unrealized gain (loss) on interest rate swaps
 
Unrecognized pension liability
 
Total
Balances, December 31, 2017
$
2,510

 
$
(37
)
 
$
2,473

Unrealized loss arising during the period

 
(159
)
 
(159
)
Amounts reclassified from accumulated other comprehensive income (loss) into income
(1,264
)
 

 
(1,264
)
Net current-period other comprehensive loss
(1,264
)
 
(159
)
 
(1,423
)
Exchanges of noncontrolling interests for Class A common stock
21

 

 
21

Rebalancing
12

 

 
12

Balances, December 31, 2018
1,279

 
(196
)
 
1,083

Unrealized loss arising during the period

 
(271
)
 
(271
)
Amounts reclassified from accumulated other comprehensive loss into income
(1,458
)
 

 
(1,458
)
Net current-period other comprehensive loss
(1,458
)
 
(271
)
 
(1,729
)
Exchanges of noncontrolling interests for Class A common stock
1

 

 
1

Rebalancing
4

 

 
4

Balances, December 31, 2019
$
(174
)
 
$
(467
)
 
$
(641
)


Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net
The table below presents the effect on Red Rock Resorts, Inc. stockholders’ equity from net (loss) income and changes in its ownership of Station Holdco (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income attributable to Red Rock Resorts, Inc.
$
(3,351
)
 
$
157,541

 
$
35,423

Transfers from (to) noncontrolling interests:
 
 
 
 
 
Exchanges of noncontrolling interests for Class A common stock
370

 
2,174

 
14,765

Acquisition of subsidiary noncontrolling interests

 

 
2,850

Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco
(8,361
)
 
(5,898
)
 
(4,975
)
Net transfers (to) from noncontrolling interests
(7,991
)
 
(3,724
)
 
12,640

Change from net (loss) income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests
$
(11,342
)
 
$
153,817

 
$
48,063

 
 
 
 
 
 

v3.19.3.a.u2
Other Accrued Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Schedule of Other Accrued Liabilities
Other accrued liabilities consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Contract and customer-related liabilities:
 
 
 
Rewards Program liability
$
21,392

 
$
20,654

Advance deposits and future wagers
22,185

 
18,624

Unpaid wagers, outstanding chips and other customer-related liabilities
19,722

 
19,640

Other accrued liabilities:
 
 
 
Accrued payroll and related
57,438

 
55,448

Accrued gaming and related
27,490

 
22,221

Construction payables and equipment purchase accruals
27,462

 
108,855

Operating lease liabilities, current portion
3,646

 

Other
21,225

 
21,032

 
$
200,560

 
$
266,474


v3.19.3.a.u2
Earnings Per Share (Tables)
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
A reconciliation of the numerator and denominator used in the calculation of basic and diluted (loss) earnings per share is presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income, basic
$
(6,737
)
 
$
219,480

 
$
63,533

Less net loss (income) attributable to noncontrolling interests, basic
3,386

 
(61,939
)
 
(28,110
)
Net (loss) income attributable to Red Rock, basic
$
(3,351
)
 
$
157,541

 
$
35,423

Effect of dilutive securities

 
48,864

 
13,813

Net (loss) income attributable to Red Rock, diluted
$
(3,351
)
 
$
206,405

 
$
49,236


 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average shares of Class A common stock outstanding, basic
69,565

 
69,115

 
67,397

Effect of dilutive securities

 
47,744

 
48,533

Weighted-average shares of Class A common stock outstanding, diluted
69,565

 
116,859

 
115,930


Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
The calculation of diluted (loss) earnings per share of Class A common stock excluded the following shares that could potentially dilute basic earnings per share in the future because their inclusion would have been antidilutive (amounts in thousands):     
 
As of December 31,
 
2019
 
2018
 
2017
Shares issuable in exchange for Class B common stock and LLC Units
46,827

 

 

Shares issuable upon exercise of stock options
7,397

 
1,966

 
3,677

Shares issuable upon vesting of restricted stock
712

 
64

 
11


v3.19.3.a.u2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Stockholders’ equity:    
Preferred Stock, Shares Authorized 100,000,000 100,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Preferred Stock, Par or Stated Value Per Share $ 0.01 $ 0.01
Common Class A [Member]    
Stockholders’ equity:    
Common Stock, Shares Authorized 500,000,000 500,000,000
Common Stock, Shares, Issued 70,465,422 69,662,590
Common Stock, Shares, Outstanding 70,465,422 69,662,590
Common Stock, Par or Stated Value Per Share $ 0.01 $ 0.01
Common Class B [Member]    
Stockholders’ equity:    
Common Stock, Shares Authorized 100,000,000 100,000,000
Common Stock, Shares, Issued 46,827,370 46,884,413
Common Stock, Shares, Outstanding 46,827,370 46,884,413
Common Stock, Par or Stated Value Per Share $ 0.00001 $ 0.00001
v3.19.3.a.u2
Quarterly Financial Information
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Financial Information Quarterly Financial Information (Unaudited)
Quarterly financial information is presented below (amounts in thousands, except per share data):
 
Year Ended December 31, 2019
 
First
Quarter
 
Second
Quarter
 
Third
Quarter (a)
 
Fourth
Quarter (b)
Net revenues
$
447,022

 
$
482,868

 
$
465,858

 
$
460,786

Operating income
66,145

 
45,481

 
14,243

 
60,132

Net income (loss)
20,284

 
(7,067
)

(26,798
)
 
6,844

Net income (loss) attributable to Red Rock Resorts, Inc.
11,323

 
(3,846
)
 
(15,657
)
 
4,829

Earnings (loss) per share, basic
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.07

Earnings (loss) per share, diluted
$
0.16

 
$
(0.06
)
 
$
(0.22
)
 
$
0.05

 
Year Ended December 31, 2018
 
First
Quarter
 
Second
Quarter (c)
 
Third
Quarter
 
Fourth
Quarter
Net revenues
$
421,039

 
$
416,188

 
$
412,332

 
$
431,471

Operating income
107,841

 
137,791

 
54,618

 
71,958

Net income
82,130

 
99,102

 
25,067

 
13,181

Net income attributable to Red Rock Resorts, Inc.
51,180

 
82,735

 
14,680

 
8,946

Earnings per share, basic
$
0.74

 
$
1.20

 
$
0.21

 
$
0.13

Earnings per share, diluted
$
0.65

 
$
0.82

 
$
0.20

 
$
0.11


____________________________________
(a)
Includes $28.2 million in artist performance agreement termination costs and severance at Palms. See Note 14.
(b)
Includes $19.6 million loss on debt extinguishment related to the repayment of the corporate building lease obligation. See Note 9.
(c)
Includes income of $73.5 million related to the TRA liability. See Note 15.
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net (loss) income $ (6,737) $ 219,480 $ 63,533
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization 222,211 180,255 178,217
Change in fair value of derivative instruments 19,467 (12,415) (14,112)
Reclassification of unrealized (gain) loss on derivative instruments into income (2,843) (2,929) 1,176
Write-downs and other charges, net 7,291 3,519 19,783
Tax receivable agreement liability adjustment (97) (90,638) (139,300)
Asset impairment 0 0 1,829
Amortization of debt discount and debt issuance costs 16,421 16,149 17,206
Share-based compensation 16,848 11,289 7,922
Earnings from joint ventures (1,928) (2,185) (1,632)
Distributions from joint ventures 1,498 2,033 961
Loss on extinguishment/modification of debt, net 19,939 0 16,907
Deferred income tax (1,735) 23,860 136,156
Changes in assets and liabilities:      
Receivables, net (1,072) (2,054) (4,610)
Inventories and prepaid expenses (397) (17,749) (6,999)
Accounts payable 9,686 2,677 (1,184)
Accrued interest payable 59 (3,193) (5,148)
Income tax payable/receivable, net 0 191 7,790
Other accrued liabilities 16,314 13,619 6,644
Other, net 1,707 4,098 4,821
Net cash provided by operating activities 316,632 346,007 289,960
Cash flows from investing activities:      
Capital expenditures, net of related payables (353,269) (579,287) (248,427)
Acquisition of land held for development (57,354) (36,106) 0
Acquisition of land from related party 0 0 (23,440)
Proceeds from asset sales 938 4,702 1,045
Distributions in excess of earnings from joint ventures 450 1,359 1,038
Native American development costs (804) (702) (2,469)
Net settlement of derivative instruments 11,023 9,842 585
Other, net (6,121) (6,490) (9,985)
Net cash used in investing activities (405,137) (606,682) (281,653)
Cash flows from financing activities:      
Borrowings under credit agreements with original maturity dates greater than three months 690,000 440,000 805,592
Payments under credit agreements with original maturity dates greater than three months (527,449) (222,743) (635,874)
Proceeds from issuance of 5.00% Senior Notes 0 0 550,000
Redemption of 7.50% Senior Notes 0 0 (500,000)
Cash paid for early extinguishment of debt (19,636) 0 (18,776)
Proceeds from exercise of stock options 6,707 5,381 2,501
Distributions to members and noncontrolling interests (18,743) (19,940) (38,290)
Dividends paid (27,899) (27,698) (26,980)
Payment of debt issuance costs (3,619) 0 (31,419)
Proceeds from Other Debt 42,643 0 0
Payments on other debt (38,167) (823) (5,180)
Payments on tax receivable agreement liability 0 (28,865) 0
Acquisition of subsidiary noncontrolling interests 0 0 (4,484)
Other, net (675) (1,123) (6,806)
Net cash provided by financing activities 103,162 144,189 90,284
Increase (decrease) in cash, cash equivalents and restricted cash 14,657 (116,486) 98,591
Balance, beginning of year 118,258 234,744 136,153
Balance, end of year 132,915 118,258 234,744
Cash, cash equivalents and restricted cash:      
Balance, end of year 118,258 118,258 234,744
Supplemental cash flow disclosures:      
Cash paid for interest, net of $2,777, $8,048 and $1,110 capitalized, respectively 143,134 124,419 118,519
Income tax refunds received 64 176 9,160
Non-cash investing and financing activities:      
Capital expenditures incurred but not yet paid $ 30,626 $ 112,668 $ 39,673
v3.19.3.a.u2
Share-based Compensation
12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation Share-based Compensation
The Red Rock Resorts, Inc. 2016 Amended and Restated Equity Incentive Plan (the “Equity Incentive Plan”) is designed to attract, retain and motivate employees and to align the interests of those individuals with the interests of the Company. The Equity Incentive Plan was approved by the Company’s stockholders and is administered by the Compensation Committee or other designated committee of the board of directors (the “Committee”). The plan authorizes the Committee to grant share-based compensation awards, including stock options, restricted stock, performance awards, stock appreciation rights and certain other stock-based awards, to eligible participants. The Committee may designate plan participants, determine the types of awards to be granted and the number of shares covered by awards, and set the terms and conditions of awards, subject to limitations set forth in the plan. A total of 23.2 million shares of Class A common stock are reserved for issuance under the plan, of which approximately 12.3 million shares were available to be issued at December 31, 2019.
Stock Options
Stock option awards issued under the plan generally vest over a requisite service period of four years and have a term of seven years from the grant date. The exercise price of stock options awarded under the plan is equal to the fair market value of the Company’s stock at the grant date. A summary of stock option activity is presented below:
 
Shares
 
Weighted-average exercise price
 
Weighted-average remaining contractual life (years)
 
Aggregate intrinsic value (amounts in thousands)
Outstanding at January 1, 2019
5,166,565

 
$
25.60

 
 
 
 
Granted
3,998,083

 
25.99

 
 
 
 
Exercised
(386,634
)
 
20.87

 
 
 
 
Forfeited or expired
(1,381,507
)
 
27.26

 
 
 
 
Outstanding at December 31, 2019
7,396,507

 
$
25.79

 
5.3
 
$
8,618

Unvested instruments expected to vest
6,296,411

 
$
26.57

 
5.5
 
$
5,559

Exercisable at December 31, 2019
1,100,096

 
$
21.31

 
3.8
 
$
3,059


The following information is provided for stock options awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
7.20

 
$
9.25

 
$
6.26

Total intrinsic value of stock options exercised (amounts in thousands)
$
1,517

 
$
3,550

 
$
538


The weighted-average assumptions used by the Company to estimate the grant date fair values of stock option awards were as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected stock price volatility
32.22
%
 
33.25
%
 
35.55
%
Expected term (in years)
4.98

 
4.87

 
4.95

Risk-free interest rate
2.26
%
 
2.63
%
 
2.06
%
Expected dividend yield
1.43
%
 
1.52
%
 
1.79
%

The Company has limited historical data on which to base certain assumptions used in estimating the grant date fair value of stock option awards. Accordingly, the Company incorporates the historical volatility of comparable public companies into its estimate of expected stock price volatility and utilizes the simplified method to estimate the expected term of stock option awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for a period equal to the expected term. The expected dividend yield is based on the current annualized dividend as of the grant date and the average stock price for the year preceding the option grant.
At December 31, 2019, unrecognized share-based compensation cost related to stock options was $30.6 million which is expected to be recognized over a weighted-average period of 2.8 years.
Restricted Stock Awards
Restricted stock awards issued under the plan generally vest over requisite service periods of two to four years for employee awards and one year for awards to independent directors. A summary of restricted stock activity is presented below:
 
Shares
 
Weighted-average grant date fair value
Nonvested at January 1, 2019
373,764

 
$
26.09

Granted
477,667

 
27.01

Vested
(87,468
)
 
24.02

Forfeited
(51,516
)
 
29.06

Nonvested at December 31, 2019
712,447

 
$
26.75


The following information is provided for restricted stock awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
27.01

 
$
31.95

 
$
22.11

Total fair value of shares vested (amounts in thousands)
$
2,101

 
$
1,194

 
$
2,364


At December 31, 2019, unrecognized share-based compensation cost for restricted stock awards was $12.4 million which is expected to be recognized over a weighted-average period of 2.9 years.
Share-based compensation is classified in the same financial statement line items as cash compensation. The following table presents the location of share-based compensation expense in the Consolidated Statements of Operations (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating costs and expenses:
 
 
 
 
 
Casino
$
458

 
$
250

 
$
228

Food and beverage
202

 
36

 
40

Room
11

 

 
11

Selling, general and administrative
16,177

 
11,003

 
7,643

Total share-based compensation expense
$
16,848

 
$
11,289

 
$
7,922

 
 
 
 
 
 

v3.19.3.a.u2
Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Under the TRA described in Note 2, the Company is required to make payments to certain pre-IPO owners of Station Holdco for 85% of the tax benefits realized by the Company as a result of certain transactions with the pre-IPO owners. At December 31, 2019 and 2018, $25.1 million and $24.9 million, respectively, was payable to certain Continuing Owners and pre-IPO owners of Station Holdco, including current and former executives of the Company or members of their respective family group, with respect to previously consummated transactions. Of these amounts, $9.0 million was payable to entities related to Frank J. Fertitta III, the Company’s Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, the Company’s Vice Chairman. Future payments to the pre-IPO owners in respect of any subsequent exchanges of LLC Units for Class A common stock would be in addition to these amounts and are expected to be substantial.
Prior to April 27, 2017, the Company leased the land on which each of Boulder Station and Texas Station is located pursuant to long-term ground leases through 2058 and 2060, respectively. The Company leased this land from entities owned by
the Frank J. Fertitta and Victoria K. Fertitta Revocable Family Trust (the “Related Party Lessor”). Frank J. Fertitta, Jr. and Victoria K. Fertitta are the parents of Frank J. Fertitta III and Lorenzo J. Fertitta. On April 27, 2017, the Company acquired the land (formerly subject to the ground leases), including the residual interest in the gaming and hotel facilities and other real property improvements thereon (the “Gaming Facilities”), for aggregate consideration of $120.0 million. Concurrently with the land acquisition, the Company assumed a long-term ground lease with an unrelated third-party lessor for an adjacent parcel of land at Boulder Station that previously had been subleased from the Related Party Lessor. The assumed ground lease terminates in 2089 and provides for monthly rental payments of approximately $14,000, subject to annual increases of 3% to 6% based on a cost of living factor. During the year ended December 31, 2017, the Company recognized a charge of $100.3 million in related party lease termination costs, which was an amount equal to the difference between the aggregate consideration paid by the Company and the fair value of the net assets acquired, including the land and residual interests in the Gaming Facilities and the assumed lease obligation. The transaction conveyed ownership of the land and interests (current and residual) in the Gaming Facilities to the Company, decreased rent expense over the maximum term of the leases by approximately $300 million, and generated a tax benefit of approximately $35 million to Red Rock and the other owners of Station Holdco. The Company’s lease payments under the related party leases totaled approximately $2.3 million for the period from January 1, 2017 to April 27, 2017, and they are included in selling, general and administrative expense in the Consolidated Statements of Operations.
v3.19.3.a.u2
Leases Lessor (Policies)
12 Months Ended
Dec. 31, 2019
Lessor Disclosure [Abstract]  
Lessor, Leases [Policy Text Block]
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 December 31, 2019, the Company’s tenant leases had remaining lease terms ranging from less than one year to approximately 19 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.
v3.19.3.a.u2
Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Dec. 31, 2019
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]  
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
RED ROCK RESORTS, INC.
For the Years Ended December 31, 2019, 2018 and 2017
(in thousands)

 
Balance at Beginning of Year
 
Additions (deductions) to tax benefit
 
Balance at End of Year
Description

 

 

Deferred income tax asset valuation allowance:
 
 
 
 

2019
$
39,968

 
$
(112
)
 
$
39,856

2018
57,607

 
(17,639
)
 
39,968

2017
104,125

 
(46,518
)
 
57,607



v3.19.3.a.u2
Goodwill and Other Intangibles (Tables)
12 Months Ended
Dec. 31, 2019
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Abstract]  
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Table Text Block]
The Company’s intangibles, other than goodwill, consisted of the following (amounts in thousands):
 
December 31, 2019
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(13,152
)
 
10,448

Management contracts
7 - 20
 
47,000

 
(38,780
)
 
8,220

Condominium rental contracts
20
 
9,000

 
(1,463
)
 
7,537

Trademarks
15
 
6,000

 
(1,300
)
 
4,700

Beneficial leases
6
 
237

 
(136
)
 
101

Intangible assets
 
 
163,337

 
(54,831
)
 
108,506

Liabilities
 
 
 
 
 
 
 
Below market lease
15
 
2,195

 
(470
)
 
1,725

Net intangibles
 
 
$
161,142

 
$
(54,361
)
 
$
106,781

 
December 31, 2018
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(11,579
)
 
12,021

Management contracts
7 - 20
 
47,000

 
(32,532
)
 
14,468

Condominium rental contracts
20
 
9,000

 
(1,012
)
 
7,988

Trademarks
15
 
6,000

 
(900
)
 
5,100

Beneficial leases
6
 
237

 
(94
)
 
143

Intangible assets
 
 
163,337

 
(46,117
)
 
117,220

Liabilities
 
 
 
 
 
 
 
Below market leases
15 - 72
 
4,145

 
(371
)
 
3,774

Net intangibles
 
 
$
159,192

 
$
(45,746
)
 
$
113,446


Schedule of Finite-Lived Intangible Assets, Amortization Expense [Table Text Block]
Amortization expense for intangibles was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Amortization expense
$
8,569

 
$
10,599

 
$
19,890


Estimated annual amortization expense for intangible assets [Table Text Block]
Estimated annual amortization expense for intangibles for each of the next five years is as follows (amounts in thousands):
Years Ending December 31,
 
 
2020
 
$
7,545

2021
 
2,426

2022
 
2,401

2023
 
2,384

2024
 
2,384


v3.19.3.a.u2
Land Held for Development
12 Months Ended
Dec. 31, 2019
Real Estate [Abstract]  
Land Held for Development Land Held for DevelopmentAt December 31, 2019, the Company owned approximately 323 acres of land comprised of seven strategically-located parcels in Las Vegas and Reno, Nevada, each of which is zoned for casino gaming and other uses. In July 2019, the Company paid $57.4 million to purchase 20 acres of land in Las Vegas that was previously leased from the third-party seller under a long-term operating lease.
v3.19.3.a.u2
Long-term Debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Long-term Debt Long-term Debt
Long-term debt consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Term Loan B Facility, due June 8, 2023, interest at a margin above LIBOR or base rate (4.30% and 5.03% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $33.7 million and $43.3 million at December 31, 2019 and 2018, respectively
$
1,766,757

 
$
1,775,951

Term Loan A Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.55% at December 31, 2019), net of unamortized discount and deferred issuance costs of $2.5 million at December 31, 2019
186,394

 

Term Loan A Facility, due June 8, 2022, interest at a margin above LIBOR or base rate (3.80% and 4.53% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $0.6 million and $4.0 million at December 31, 2019 and 2018, respectively
52,289

 
251,448

Revolving Credit Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.54% weighted average at December 31, 2019)
440,000

 

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 deferred issuance costs of $5.0 million and $5.7 million at December 31, 2019 and 2018, respectively
545,011

 
544,286

Other long-term debt, weighted-average interest of 3.83% and 6.69% at December 31, 2019 and 2018, respectively, net of unamortized discount and deferred issuance costs of $0.4 million at December 31, 2019
42,840

 
38,674

Total long-term debt
3,033,291

 
2,855,359

Current portion of long-term debt
(33,989
)
 
(33,894
)
Long-term debt, net
$
2,999,302

 
$
2,821,465

Credit Facility
Station LLC’s credit facility consists of the Term Loan B Facility, the Term Loan A Facility and the Revolving Credit Facility (collectively, the “Credit Facility”). The Term Loan B Facility bears interest at a rate per annum, at Station LLC’s option, equal to either LIBOR plus 2.50% or base rate plus 1.50%. The Term Loan A Facility and the Revolving Credit Facility each have two tranches with different maturity dates and interest rate spreads. Amounts outstanding under the Term Loan A Facility and the Revolving Credit 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
%
Station LLC is required to make quarterly principal payments of $4.7 million on the Term Loan B Facility and $3.4 million on the Term Loan A Facility on the last day of each quarter. Station LLC also is required to make mandatory payments of amounts outstanding under the Credit Facility with the proceeds of certain casualty events, debt issuances, asset sales and equity issuances and, depending on its consolidated total leverage ratio, Station LLC is required to apply a portion of its excess cash flow to repay amounts outstanding under the Term Loan B Facility, which would reduce future quarterly principal payments. The Company is not required to make an excess cash flow payment in 2020.
Borrowings under the Credit Facility are guaranteed by all of Station LLC’s existing and future material restricted subsidiaries and are secured by pledges of all of the equity interests in Station LLC and its material restricted subsidiaries, a security interest in substantially all of the personal property of Station LLC and the subsidiary guarantors, and mortgages on the real property and improvements owned or leased by certain of Station LLC’s subsidiaries. 
The Credit Facility contains a number of customary covenants that, among other things, restrict, subject to certain exceptions, the ability of Station LLC and the subsidiary guarantors to incur debt; create a lien on collateral; engage in mergers, consolidations or asset dispositions; pay distributions; make investments, loans or advances; engage in certain transactions with affiliates or subsidiaries; or modify their lines of business. 
The Credit Facility also includes certain financial ratio covenants that Station LLC is required to maintain throughout the term of the Credit Facility and measure as of the end of each quarter. At December 31, 2019, these financial ratio covenants included an interest coverage ratio of not less than 2.50 to 1.00 and a maximum consolidated total leverage ratio ranging from 6.50 to 1.00 at December 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 providing 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. At December 31, 2019, the Company believes it was in compliance with all applicable covenants as defined in the Credit Facility.
At December 31, 2019, Station LLC’s borrowing availability under its Revolving Credit Facility, subject to continued compliance with the terms of the Credit Facility, was $422.5 million, which was net of $440.0 million in outstanding borrowings and $33.5 million in outstanding letters of credit and similar obligations.
Credit Facility Amendments
On February 8, 2019, Station LLC amended 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 an additional year and reduce the interest rate thereunder by 25 basis points. 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, primarily representing 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 extinguishment/modification of debt, net in the Consolidated Statements of Operations.
On February 7, 2020, the Company amended the Credit Facility to, among other things, (a) extend the maturity date under each of the Term Loan A Facility and the Revolving Credit Facility to February 7, 2025 and extend the maturity date under the Term Loan B Facility to February 7, 2027; (b) increase the outstanding borrowing availability under the Revolving Credit Facility to approximately $1.03 billion; (c) (i) reduce the applicable margin under the Term Loan B Facility to 2.25%, (ii) reduce the LIBOR “floor” under the Term Loan B Facility to 0.25% and (iii) provide for benchmark replacement mechanics in respect of the discontinuation of LIBOR; (d) increase the consolidated total leverage ratios at which the applicable margin under the Term Loan A Facility and the Revolving Credit Facility step-down to 4.00 to 1.00; (e) set the consolidated total leverage ratios for the Term Loan B Facility excess cash flow prepayment percentage step-down to 5.00 to 1.00 for the reduction to 25% and to 4.50 to 1.00 for the reduction to 0%; (f) adjust the application, availability, calculation and sizing of certain covenants; and (g) modify the requirement that the Company maintain a maximum consolidated total leverage ratio of not more than 6.50 to 1.00 through the fiscal quarter ending December 31, 2021, which incrementally reduces to 5.25 to 1.00 for the fiscal quarter ending December 21, 2023 and each fiscal quarter thereafter.
5.00% Senior Notes
In September 2017, Station LLC issued $550.0 million in aggregate principal amount of 5.00% Senior Notes due October 1, 2025 at par. Interest on the 5.00% Senior Notes is paid every six months in arrears on April 1 and October 1.
The 5.00% Senior Notes and the guarantees of such notes by certain of Station LLC’s subsidiaries are general senior unsecured obligations.
On or after October 1, 2020, Station LLC may redeem all or a portion of the 5.00% Senior Notes at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest to the applicable redemption date:    
Years Beginning October 1,
Percentage
2020
102.50
%
2021
101.25
%
2022 and thereafter
100.00
%
The indenture governing the 5.00% Senior Notes requires Station LLC to offer to purchase the 5.00% Senior Notes at a purchase price in cash equal to 101.00% of the aggregate principal amount outstanding plus accrued and unpaid interest thereon if Station LLC experiences certain change of control events (as defined in the indenture). The indenture also requires Station LLC to make an offer to repurchase the 5.00% Senior Notes at a purchase price equal to 100.00% of the principal amount of the purchased notes if it has excess net proceeds (as defined in the indenture) from certain asset sales.
The indenture governing the 5.00% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 5.00% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 5.00% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 5.00% Senior Notes to be declared due and payable.
4.50% Senior Notes
On February 7, 2020, Station LLC issued $750 million in aggregate principal amount of 4.50% Senior Notes due 2028 pursuant to an indenture dated as of February 7, 2020, among Station LLC, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee. The net proceeds of the sale of the 4.50% Senior Notes were used (i) to repay a portion of the amounts outstanding under the Credit Facility, (ii) to pay fees and costs associated with the offering and (iii) for general corporate purposes. Interest on the 4.50% Senior Notes is paid every six months in arrears on February 15 and August 15, commencing on August 15, 2020.
The indenture governing the 4.50% Senior Notes contains a number of customary covenants that, among other things and subject to certain exceptions, restrict the ability of Station LLC and its restricted subsidiaries to incur or guarantee additional indebtedness; issue disqualified stock or create subordinated indebtedness that is not subordinated to the 4.50% Senior Notes; create liens; engage in mergers, consolidations or asset dispositions; enter into certain transactions with affiliates; engage in lines of business other than its core business and related businesses; or make investments or pay distributions (other than customary tax distributions). These covenants are subject to a number of exceptions and qualifications as set forth in the indenture. The indenture governing the 4.50% Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on such 4.50% Senior Notes to be declared due and payable.
Corporate Office Building Financing
In October 2019, the Company paid $57.0 million to purchase its corporate office building, which was previously leased from the third-party seller under a sale-leaseback arrangement accounted for as a financing transaction. Accordingly, the related financing obligation, which had a carrying amount of $37.4 million, was extinguished and the Company recognized a $19.6 million loss on debt extinguishment representing the difference between the purchase price and the carrying amount of the financing obligation.
On December 19, 2019, a 100%-owned unrestricted subsidiary of Station LLC entered into a $42.8 million term loan agreement with a bank, the proceeds of which were used to repay a portion of the outstanding balance under the Revolving Credit Facility. The term loan is secured by the Company’s corporate office building and is not guaranteed by Station LLC or its restricted subsidiaries under the Credit Facility. The term loan bears interest at a fixed rate of 3.80% per annum and matures in December 2025. Principal and interest payments of $0.2 million are payable on a monthly basis until the maturity date, at which time the remaining principal amount will become due.
Principal Maturities
As of December 31, 2019, scheduled principal maturities of Station LLC’s long-term debt for each of the next five years and thereafter were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
33,989

2021
170,830

2022
617,944

2023
1,664,453

2024
1,212

Thereafter
587,115

 
3,075,543

Debt discounts and issuance costs
(42,252
)
 
$
3,033,291


v3.19.3.a.u2
Earnings Per Share (Details) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                      
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount                 46,827 0 0
Net Income (Loss) Available to Common Stockholders, Basic [Abstract]                      
Net (loss) income $ 6,844 $ (26,798) $ (7,067) $ 20,284 $ 13,181 $ 25,067 $ 99,102 $ 82,130 $ (6,737) $ 219,480 $ 63,533
Income attributable to noncontrolling interests, basic, hypothetical allocation                 3,386 (61,939) (28,110)
Income attributable to Parent, basic, hypothetical allocation                 (3,351) 157,541 35,423
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract]                      
Income attributable to Parent, basic, hypothetical allocation                 (3,351) 157,541 35,423
Effect of dilutive securities                 0 (48,864) (13,813)
Net income attributable to Parent, diluted                 $ (3,351) $ 206,405 $ 49,236
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]                      
Basic                 69,565 69,115 67,397
Effect of dilutive securities                 0 47,744 48,533
Diluted                 69,565 116,859 115,930
Share-based Payment Arrangement, Option [Member]                      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                      
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount                 7,397 1,966 3,677
Restricted Stock [Member]                      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                      
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount                 712 64 11
v3.19.3.a.u2
Stockholders' Equity (AOCI) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance $ 1,083    
Exchanges of noncontrolling interests for Class A common stock 0 $ 0 $ 0
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 0 0 0
Ending balance (641) 1,083  
AOCI Attributable to Parent [Member]      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance 1,083 2,473  
Other Comprehensive Income (Loss), before Reclassifications, before Tax (271) (159)  
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax (1,458) (1,264)  
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (1,729) (1,423)  
Exchanges of noncontrolling interests for Class A common stock 1 21 228
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 4 12 (30)
Ending balance (641) 1,083 2,473
AOCI Attributable to Parent [Member] | Unrealized Gain (Loss) on Derivative Instruments [Member]      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance 1,279 2,510  
Other Comprehensive Income (Loss), before Reclassifications, before Tax 0 0  
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax (1,458) (1,264)  
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (1,458) (1,264)  
Exchanges of noncontrolling interests for Class A common stock 1 21  
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 4 12  
Ending balance (174) 1,279 2,510
AOCI Attributable to Parent [Member] | Unrecognized Pension Liability [Member]      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance (196) (37)  
Other Comprehensive Income (Loss), before Reclassifications, before Tax (271) (159)  
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax 0 0  
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (271) (159)  
Exchanges of noncontrolling interests for Class A common stock 0 0  
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 0 0  
Ending balance $ (467) $ (196) $ (37)
v3.19.3.a.u2
Long-term Debt Corp Bldg Term Loan (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 19, 2019
Oct. 31, 2019
Debt Instrument [Line Items]              
Loss on extinguishment/modification of debt, net $ 19,600 $ 300 $ (19,939) $ 0 $ (16,907)    
Long-term Debt, Gross 3,075,543   $ 3,075,543        
Debt Instrument, Periodic Payment $ 200            
Other Long-term Debt [Member] | Corporate Office Lease [Member]              
Debt Instrument [Line Items]              
Sale Leaseback Transaction, Net Book Value             $ 37,400
Other Long-term Debt [Member] | Corp Bldg Term Loan [Member]              
Debt Instrument [Line Items]              
Long-term Debt, Gross           $ 42,800  
Debt Instrument, Interest Rate, Stated Percentage 3.80%   3.80%        
v3.19.3.a.u2
Write-downs and Other Charges, Net Write-downs and Other Charges, Net (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other Income and Expenses [Abstract]        
Write-downs and other charges, net   $ 82,123 $ 34,650 $ 29,584
Loss on Contract Termination $ 28,200 39,800    
Pre-Opening Costs   $ 25,900 $ 18,600 $ 5,300
v3.19.3.a.u2
Goodwill and Other Intangibles - Indefinite-Lived and Finite-Lived Intangible Assets (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Goodwill $ 195,676 $ 195,676
Goodwill, Impaired, Accumulated Impairment Loss 1,200 1,200
Finite-Lived Intangible Assets, Accumulated Amortization (54,831) (46,117)
Intangible Assets, Gross (Excluding Goodwill) 163,337 163,337
Intangible assets, net 108,506 117,220
Below Market Lease, Gross 2,195 4,145
Below Market Lease, Accumulated Amortization (470) (371)
Below Market Lease, Net 1,725 3,774
Intangible Assets and Below Market Leases, Gross 161,142 159,192
Intangible Assets and Below Market Leases, Accumulated Amortization (54,361) (45,746)
Intangible Assets and Below Market Leases, Net 106,781 113,446
Customer Relationships [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 23,600 23,600
Finite-Lived Intangible Assets, Accumulated Amortization (13,152) (11,579)
Finite-Lived Intangible Assets, Net $ 10,448 $ 12,021
Customer Relationships [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 15 years 15 years
Customer Relationships [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 15 years 15 years
Management Contracts [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 47,000 $ 47,000
Finite-Lived Intangible Assets, Accumulated Amortization (38,780) (32,532)
Finite-Lived Intangible Assets, Net $ 8,220 $ 14,468
Management Contracts [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 7 years 7 years
Management Contracts [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 20 years 20 years
Contract-Based Intangible Assets [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 9,000 $ 9,000
Finite-Lived Intangible Assets, Accumulated Amortization (1,463) (1,012)
Finite-Lived Intangible Assets, Net $ 7,537 $ 7,988
Contract-Based Intangible Assets [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 20 years 20 years
Contract-Based Intangible Assets [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 20 years 20 years
Trademarks [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 6,000 $ 6,000
Finite-Lived Intangible Assets, Accumulated Amortization (1,300) (900)
Finite-Lived Intangible Assets, Net $ 4,700 $ 5,100
Trademarks [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 15 years 15 years
Trademarks [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 15 years 15 years
Beneficial Leases [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross $ 237 $ 237
Finite-Lived Intangible Assets, Accumulated Amortization (136) (94)
Finite-Lived Intangible Assets, Net $ 101 $ 143
Beneficial Leases [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 6 years  
Beneficial Leases [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 6 years 6 years
Below market lease [Member] | Minimum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life   15 years
Below market lease [Member] | Maximum [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Finite-Lived Intangible Asset, Useful Life 15 years 72 years
Brands [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Indefinite-lived Intangible Assets (Excluding Goodwill) $ 77,200 $ 77,200
License Rights [Member]    
Indefinite-lived and Finite-lived Intangible Assets [Line Items]    
Indefinite-lived Intangible Assets (Excluding Goodwill) $ 300 $ 300
v3.19.3.a.u2
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]    
Schedule of Future Minimum Lease Payments for Operating Leases
Future minimum lease payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2019 are as follows (amounts in thousands):
Year Ending December 31,
 
2020
$
4,286

2021
2,313

2022
892

2023
473

2024
462

Thereafter
43,141

Total future lease payments
51,567

Less imputed interest
(37,246
)
Total operating lease liabilities
$
14,321


As of December 31, 2018, prior to the adoption of the new lease accounting standard, future minimum payments under operating leases with initial or remaining non-cancelable lease terms in excess of one year were as follows (amounts in thousands):
Year Ending December 31,
 
2019
$
5,387

2020
3,351

2021
2,256

2022
937

2023
854

Thereafter
44,598

 
$
57,383


v3.19.3.a.u2
Organization and Background (Details)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Casino_Property
$ / shares
shares
Dec. 31, 2018
USD ($)
$ / shares
Dec. 31, 2017
USD ($)
Payments to Acquire Additional Interest in Subsidiaries | $ $ 0 $ 0 $ 4,484
Tax Receivable Agreement, Realized Tax Benefits Payable to Subsidiary, Percent 85.00%    
Equity Method Investment, Ownership Percentage 50.00%    
Station Holdco [Member]      
Business Acquisition, Percentage of Voting Interests Acquired 100.00%    
Voting units | Station Casinos LLC [Member]      
Business Acquisition, Percentage of Voting Interests Acquired 100.00%    
Voting units | Station Holdco [Member]      
Business Acquisition, Percentage of Voting Interests Acquired 100.00%    
Common Class A [Member]      
Common Stock, Par or Stated Value Per Share | $ / shares $ 0.01 $ 0.01  
Common Class A [Member] | Share-based Payment Arrangement, Option [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares 3,998,083    
Common Class A [Member] | Red Rock Resorts [Member]      
Equity Method Investment, Ownership Percentage 60.10% 59.80%  
Common Class B [Member]      
Common Stock, Par or Stated Value Per Share | $ / shares $ 0.00001 $ 0.00001  
Smaller Casino Properties [Member]      
Casino properties 10    
Wholly Owned Properties [Member] | Major Hotel Casino Properties [Member]      
Casino properties 10    
Partially Owned Properties [Member] | Smaller Casino Properties [Member]      
Casino properties 3    
Ownership percentage, parent 50.00%    
v3.19.3.a.u2
Native American Development (Tables)
12 Months Ended
Dec. 31, 2019
North Fork Rancheria of Mono Indians (Mono) [Member]  
Schedule of Development and Management Agreements
The following table summarizes the Company’s evaluation at December 31, 2019 of each of the critical milestones necessary to complete the North Fork Project.
Federally recognized as an Indian tribe by the Bureau of Indian Affairs (“BIA”)
Yes
Date of 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.
v3.19.3.a.u2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Noncontrolling Interest [Line Items]  
Noncontrolling Interest [Table Text Block]
The ownership of the LLC Units is summarized as follows:        
 
December 31, 2019
 
December 31, 2018
 
Units
 
Ownership %
 
Units
 
Ownership %
Red Rock
70,465,422

 
60.1
%
 
69,662,590

 
59.8
%
Noncontrolling interest holders
46,827,370

 
39.9
%
 
46,884,413

 
40.2
%
Total
117,292,792

 
100.0
%
 
116,547,003

 
100.0
%

Schedule of Gaming Tax Expense [Table Text Block] Gaming tax expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Gaming tax expense
$
78,427

 
$
74,501

 
$
69,429


Schedule of Advertising Expense [Table Text Block] Advertising expense was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Advertising expense
$
31,678

 
$
24,302

 
$
22,094


v3.19.3.a.u2
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Principles of Consolidation
Principles of Consolidation
Station Holdco and Station LLC are variable interest entities (“VIEs”), of which the Company is the primary beneficiary. 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. Accordingly, the Company consolidates the financial position and results of operations of Station LLC and its consolidated subsidiaries and Station Holdco, and presents the interests in Station Holdco not owned by Red Rock within noncontrolling interest in the consolidated financial statements. Substantially all of the Company’s assets and liabilities represent the assets and liabilities of Station Holdco and Station LLC, other than assets and liabilities related to income taxes and the tax receivable agreement (“TRA”). Investments in all 50% or less owned affiliated companies are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated.
Reclassification
Certain amounts in the consolidated financial statements for the previous years have been reclassified to be consistent with the current year presentation.
Income (loss) attribution to noncontrolling interest [Policy Text Block]
The Company uses monthly weighted-average LLC Unit ownership to calculate the pretax (loss) 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.
Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value Measurements
Fair Value Measurements
For assets and liabilities accounted for or disclosed at fair value, the Company utilizes the fair value hierarchy established by the accounting guidance for fair value measurements and disclosures to categorize the inputs to valuation techniques used to measure fair value into three levels. The three levels of inputs are as follows:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The accounting guidance for fair value measurements and disclosures also provides the option to measure certain financial assets and liabilities at fair value with changes in fair value recognized in earnings each period. The Company has not elected to measure any financial assets or liabilities at fair value that are not required to be measured at fair value.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, restricted cash, receivables and accounts payable approximate fair value primarily because of the short maturities of these instruments.
Cash and Cash Equivalents
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and investments with an original maturity of 90 days or less.
Restricted Cash
Restricted Cash
Restricted cash consists of reserve funds for the Company’s condominium operations at Palms.
Receivables, Net and Credit Risk
Receivables, Net and Credit Risk
The Company’s accounts receivable primarily represent receivables from contracts with customers and consist mainly of casino, hotel, ATM, cash advance, retail, management fees and other receivables, which are typically non-interest bearing.
Receivables are initially recorded at cost and an allowance for doubtful accounts is maintained to reduce receivables to their carrying amount, which approximates fair value. The allowance is estimated based on a specific review of customer accounts, historical collection experience, the age of the receivable and other relevant factors. Accounts are written off when management deems the account to be uncollectible, and recoveries of accounts previously written off are recorded when received. At December 31, 2019 and 2018, the allowance for doubtful accounts was $4.9 million and $2.3 million, respectively. Management believes there are no significant concentrations of credit risk.
Inventories
Inventories
Inventories primarily represent food and beverage items and retail merchandise which are stated at the lower of cost or net realizable value. Cost is determined on a weighted-average basis.
Assets Held for Sale
Assets Held for Sale
The Company classifies assets as held for sale when an asset or asset group meets all of the held for sale criteria in the accounting guidance for impairment and disposal of long-lived assets. Assets held for sale are initially measured at the lower of their carrying amount or fair value less cost to sell. At December 31, 2019 and 2018, assets held for sale represented certain undeveloped land in Las Vegas and Reno.
Property and Equipment
Property and Equipment
Property and equipment is initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, the shorter of the estimated useful life of the asset or the lease term, as follows:
Buildings and improvements
10 to 45 years
Furniture, fixtures and equipment
3 to 10 years

Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. Construction in progress is related to the construction or development of property and equipment that has not yet been placed in service for its intended use. Depreciation and amortization of property and equipment commences when the asset is placed in service. When an asset is retired or otherwise disposed, the related cost and accumulated depreciation are removed from the accounts and the gain or loss on disposal is recognized within Write-downs and other charges, net.
The Company makes estimates and assumptions when accounting for capital expenditures. The Company’s depreciation expense is highly dependent on the assumptions made for the estimated useful lives of its assets. Useful lives are estimated by the Company based on its experience with similar assets and estimates of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, the Company accounts for the change prospectively.
Native American Development Costs
Native American Development Costs
The Company incurs certain costs associated with development and management agreements with Native American tribes which are reimbursable by such tribes. These costs are capitalized as long-term assets as incurred, and primarily include costs associated with the acquisition and related development of land and the casino facilities. The assets are typically transferred to the tribe when the tribe secures third-party financing or the gaming facility is completed. Upon transfer of the assets to the tribe, any remaining carrying amount that has not yet been recovered from the tribe is reclassified to a long-term receivable.
The Company earns a return on the costs incurred for the acquisition and development of Native American development projects. Repayment of the advances and the return typically is funded from the tribe’s third-party financing, from the cash flows of the gaming facility, or both. Due to the uncertainty surrounding the timing and amount of the stated return, the Company recognizes the return on a cash basis.
The Company evaluates its Native American development costs for impairment whenever events or changes in circumstances indicate that the carrying amount of a project might not be recoverable, taking into consideration all available information. Among other things, the Company considers the status of the project, any contingencies, the achievement of milestones, any existing or potential litigation, and regulatory matters when evaluating its Native American projects for impairment. If an indicator of impairment exists, the Company compares the estimated future cash flows of the project, on an undiscounted basis, to its carrying amount. If the undiscounted expected future cash flows do not exceed the carrying amount, the asset is written down to its estimated fair value, which typically is estimated based on a discounted future cash flow model or market comparables, when available. The Company estimates the undiscounted future cash flows of a Native American development project based on consideration of all positive and negative evidence about the future cash flow potential of the project including, but not limited to, the likelihood that the project will be successfully completed, the status of required approvals, and the status and timing of the construction of the project, as well as current and projected economic, political, regulatory and competitive conditions that may adversely impact the project’s operating results.
Goodwill
Goodwill
The Company tests its goodwill for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s operating properties is considered a separate reporting unit.
When performing the annual goodwill impairment testing, the Company either conducts a qualitative assessment to determine whether it is more likely than not that the asset is impaired, or elects to bypass this qualitative assessment and perform a quantitative test for impairment. Under the qualitative assessment, the Company considers both positive and negative factors, including macroeconomic conditions, industry events, financial performance and other changes, and makes a determination of whether it is more likely than not that the fair value of goodwill is less than its carrying amount. If, after assessing the qualitative factors, the Company determines it is more likely than not the asset is impaired, it then performs a quantitative test in which the estimated fair value of the reporting unit is compared with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to the excess, limited to the amount of goodwill allocated to the reporting unit.
When performing the quantitative test, the Company estimates the fair value of each reporting unit using the expected present value of future cash flows along with value indications based on current valuation multiples of the Company and comparable publicly traded companies. The estimation of fair value involves significant judgment by management. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from such estimates. Cash flow estimates are based on the current regulatory, political and economic climates, recent operating information and projections. Such estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, competition, events affecting various forms of travel and access to the Company’s properties, and other factors. If the Company’s estimates of future cash flows are not met, it may have to record impairment charges in the future.
Indefinite-Lived Intangible Assets
Indefinite-Lived Intangible Assets
The Company’s indefinite-lived intangible assets primarily represent brands. The fair value of the Company’s brands is estimated using a derivation of the income approach to valuation, based on estimated royalties avoided through ownership of
the assets, utilizing market indications of fair value. The Company tests its indefinite-lived intangible assets for impairment annually during the fourth quarter of each year, and whenever events or circumstances indicate that it is more likely than not that an asset is impaired. Indefinite-lived intangible assets are not amortized unless it is determined that an asset’s useful life is no longer indefinite. The Company periodically reviews its indefinite-lived assets to determine whether events and circumstances continue to support an indefinite useful life. If an indefinite-lived intangible asset no longer has an indefinite life, the asset is tested for impairment and is subsequently accounted for as a finite-lived intangible asset.
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets
The Company’s finite-lived intangible assets primarily represent assets related to its management contracts and customer relationships, which are amortized over their estimated useful lives using the straight-line method. The Company periodically evaluates the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances warrant a revision to the remaining period of amortization.
The Company’s management contract intangible assets represent the value associated with agreements under which the Company provides management services to various casino properties, primarily Native American casinos which it has developed. The fair values of management contract intangible assets were determined using discounted cash flow techniques based on future cash flows expected to be received in exchange for providing management services. The Company amortizes its management contract intangible assets over their expected useful lives beginning when the property commences operations and management fees are being earned. Should events or changes in circumstances cause the carrying amount of a management contract intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
The Company’s customer relationship intangible assets primarily represent the value associated with its rated casino guests. The initial fair values of customer relationship intangible assets were estimated based on a variation of the cost approach. The recoverability of the Company’s customer relationship intangible assets could be affected by, among other things, increased competition within the gaming industry, a downturn in the economy, declines in customer spending which would impact the expected future cash flows associated with the rated casino guests, declines in the number of customer visits which could impact the expected attrition rate of the rated casino guests, and erosion of operating margins associated with rated casino guests. Should events or changes in circumstances cause the carrying amount of a customer relationship intangible asset to exceed its estimated fair value, an impairment charge in the amount of the excess would be recognized.
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets
The Company reviews the carrying amounts of its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability is evaluated by comparing the estimated future cash flows of the asset, on an undiscounted basis, to its carrying amount. If the undiscounted estimated future cash flows exceed the carrying amount, no impairment is indicated. If the undiscounted estimated future cash flows do not exceed the carrying amount, impairment is measured based on the difference between the asset’s estimated fair value and its carrying amount. To estimate fair values, the Company typically uses market comparables, when available, or a discounted cash flow model. Assets to be disposed of are carried at the lower of their carrying amount or fair value less costs of disposal. The fair value of assets to be disposed of is generally estimated based on comparable asset sales, solicited offers or a discounted cash flow model. The Company’s long-lived asset impairment tests are performed at the reporting unit level. For the year ended December 31, 2019, the Company identified certain potential indicators of impairment at the Palms reporting unit level. Based on the undiscounted expected future cash flows, no impairment was recorded.
Debt Discounts and Debt Issuance Costs
Debt Discounts and Debt Issuance Costs
Debt discounts and costs incurred in connection with the issuance of long-term debt are capitalized and amortized to interest expense using the effective interest method over the expected term of the related debt agreements. Costs incurred in connection with the issuance of revolving lines of credit are presented in Other assets, net on the Consolidated Balance Sheets. All other capitalized costs incurred in connection with the issuance of long-term debt are presented as a direct reduction of Long-term debt, less current portion on the Consolidated Balance Sheets.
Derivative Instruments
Derivative Instruments
The Company uses interest rate swaps to hedge its exposure to variability in expected future cash flows related to interest payments. At December 31, 2019 and 2018, none of the Company’s interest rate swaps were designated in cash flow hedging relationships. In accordance with the accounting guidance for derivatives and hedging activities, the Company records all derivatives on the balance sheet at fair value. The fair values of the Company’s derivatives are determined using widely
accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not offset derivative asset and liability positions when interest rate swap agreements are held with the same counterparty.
As the Company’s derivative instruments are not designated in hedging relationships, the changes in fair value are recognized within the Consolidated Statements of Operations in the period in which the change occurs, and the cash flows for these instruments are classified within investing activities in the Consolidated Statements of Cash Flows. Certain of the Company’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 (loss) income associated with these interest rate swaps are being amortized as a reduction of interest expense through July 2020 as the previously hedged interest payments occur.
Comprehensive Income
Comprehensive (Loss) Income
Comprehensive (loss) income includes net (loss) income and other comprehensive loss, which includes all other non-owner changes in equity. Components of the Company’s comprehensive (loss) income are reported in the Consolidated Statements of Comprehensive (Loss) Income and Consolidated Statements of Stockholders’ Equity, and accumulated other comprehensive (loss) income is included in stockholders’ equity on the Consolidated Balance Sheets.
Revenues
Revenues
The Company’s revenue contracts with customers consist of gaming wagers, sales of food, beverage, hotel rooms and other amenities, and agreements to provide management services. Revenues are recognized when control of the promised goods or services is transferred to the guest, in an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for those goods or services, referred to as the transaction price. Other revenues also include rental income from tenants, which is recognized over the lease term, and contingent rental income, which is recognized when the right to receive such rental income is established according to the lease agreements. Revenue is recognized net of cash sales incentives and discounts and excludes sales and other taxes collected from guests on behalf of governmental authorities.
The Company accounts for its gaming and non-gaming contracts on a portfolio basis. This practical expedient is applied because individual customer contracts have similar characteristics, and the Company reasonably expects the effects on the financial statements of applying its revenue recognition policy to the portfolio would not differ materially from applying its policy to the individual contracts.
Casino Revenue
Casino revenue includes gaming activities such as slot, table game and sports wagering. The transaction price for a gaming wagering contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price is reduced for consideration payable to a guest, such as cash sales incentives and the change in progressive jackpot liabilities. Gaming contracts are typically completed daily based on the outcome of the wagering transaction and include a distinct performance obligation to provide gaming activities.
Guests may receive discretionary incentives for complimentary food, beverage, rooms, entertainment and merchandise to encourage additional gaming, or may earn loyalty points based on their gaming activity. The Company allocates the transaction price to each performance obligation in the gaming wagering contract. The amount allocated to loyalty points earned is based on an estimate of the standalone selling price of the loyalty points, which is determined by the redemption value less an estimate for points not expected to be redeemed. The amount allocated to discretionary complimentaries is the standalone selling price of the underlying goods or services, which is determined using the retail price at which those goods or services would be sold separately in similar transactions. The remaining amount of the transaction price is allocated to wagering activity using the residual approach as the standalone selling price for gaming wagers is highly variable and no set established price exists for gaming wagers. Amounts allocated to wagering are recognized as casino revenue when the result of the wager is determined, and amounts allocated to loyalty points and discretionary complimentaries are recognized as revenue when the goods or services are provided.
Non-gaming Revenue
Non-gaming revenues include sales of food, beverage, hotel rooms and other amenities such as retail merchandise, bowling, spa services and entertainment. The transaction price is the net amount collected from the guest and includes a distinct performance obligation to provide such goods or services. Non-gaming revenues are recognized when the goods or services are
provided to the guest. Guests may also earn loyalty points from non-gaming purchases or receive discretionary complimentaries that require the transaction price to be allocated to each performance obligation on a relative standalone selling price basis.
Non-gaming revenues also include the portion of the transaction price from gaming or non-gaming contracts allocated to discretionary complimentaries and the value of loyalty points redeemed for food, beverage, room and other amenities. Discretionary complimentaries are classified in the departmental revenue category fulfilling the complimentary with a corresponding reduction in the departmental revenues that provided the complimentary, which is primarily casino revenue. Included in non-gaming revenues are discretionary complimentaries and loyalty point redemptions of $228.7 million, $206.5 million and $185.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Management Fee Revenue
Management fee revenue primarily represents fees earned from the Company’s management agreements with Native American tribes. The transaction price for management contracts is the management fee to which the Company is entitled for its management services. The management fee represents variable consideration as it is based on a percentage of net income of the managed property, as defined in the management agreements. The management services are a single performance obligation to provide a series of distinct services over the term of the management agreement. The Company allocates and recognizes the management fee monthly as the management services are performed because there is a consistent measure throughout the contract period that reflects the value to the Native American tribe each month.
Player Rewards Program
Player Rewards Program
The Company has a player rewards program (the “Rewards Program”) that allows customers to earn points based on their gaming activity and non-gaming purchases. Guests may accumulate loyalty points over time that may be redeemed at their discretion under the terms of the Rewards Program. Loyalty points may be redeemed for cash, slot play, food, beverage, rooms, entertainment and merchandise at all of the Company’s Las Vegas area properties.
When guests earn points under the Rewards Program, the Company recognizes a liability for future performance obligations. The Rewards Program point liability represents deferred gaming and non-gaming revenue, which is measured at the redemption value of loyalty points earned under the Rewards Program that management ultimately believes will be redeemed. The recognition of the Rewards Program point liability primarily reduces casino revenue.
When points are redeemed for cash, the point liability is reduced for the amount of cash paid out. When points are redeemed for slot play, food, beverage, rooms, entertainment and merchandise, revenues are recognized when the goods or services are provided, and such revenues are classified based on the type of goods or services provided with a corresponding reduction to the point liability.
The Company’s performance obligation related to its loyalty point liability is generally completed within one year, as a guest’s loyalty point balance is forfeited after six months of inactivity for a local guest and after thirteen months for an out-of-town guest, as defined in the Rewards Program. Loyalty points are generally earned and redeemed continually over time. As a result, the loyalty point liability balance remains relatively constant. The loyalty point liability is presented within Other accrued liabilities on the Consolidated Balance Sheet.
Slot Machine Jackpots
Slot Machine Jackpots
The Company does not accrue base jackpots if it is not legally obligated to pay the jackpot. A jackpot liability is accrued with a related reduction in casino revenue when the Company is obligated to pay the jackpot, such as the incremental amount in excess of the base jackpot on a progressive game.
Gaming Taxes
Gaming Taxes
The Company is assessed taxes based on gross gaming revenue, subject to applicable jurisdictional adjustments. Gaming taxes are included in Casino costs and expenses in the Consolidated Statements of Operations.
Share-based Compensation
Share-based Compensation
The Company measures its share-based compensation cost at the grant date based on the fair value of the award, and recognizes the cost over the requisite service period. The fair value of stock options is estimated at the grant date using the
Black-Scholes option pricing model. The fair value of restricted stock is based on the closing share price of the Company’s stock on the grant date. The Company uses the straight-line method to recognize compensation cost for share-based awards with graded service-based vesting, and cumulative compensation cost recognized to date at least equals the grant-date fair value of the vested portion of the awards. Forfeitures are accounted for as they occur.
Advertising
Advertising
The Company expenses advertising costs the first time the advertising takes place. Advertising expense is primarily included in selling, general and administrative expense in the Consolidated Statements of Operations.
Write-downs and Other Charges, net Write-downs and Other Charges, Net
Write-downs and other charges, net include asset disposals, preopening and redevelopment (including Palms redevelopment and preopening expenses and loss on artist performance agreement terminations at Palms’ nightclub and dayclub), severance, business innovation and technology enhancements and non-routine transactions.
Income Taxes
Income Taxes
Red Rock is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it by Station Holdco. Station Holdco continues to operate as a partnership for federal, state and local tax reporting and holds 100% of the economic interests in Station LLC. The members of Station Holdco are liable for any income taxes resulting from income allocated to them by Station Holdco as a pass-through entity.
The Company recognizes deferred tax assets and liabilities based on the differences between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company classifies all deferred tax assets and liabilities as noncurrent. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the enactment date occurs. Deferred tax assets represent future tax deductions or credits. Realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period.
Each reporting period, the Company analyzes the likelihood that its deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. On an annual basis, the Company performs a comprehensive analysis of all forms of positive and negative evidence based on year end results. During each interim period, the Company updates its annual analysis for significant changes in the positive and negative evidence.
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record a significant liability for unrecognized tax benefits within the next twelve months.
The Company will recognize interest and penalties related to income taxes, if any, within the provision for income taxes. The Company has incurred no interest or penalties related to income taxes in any of the periods presented.
Tax Receivable Agreement with Related Parties
Tax Receivable Agreement with Related Parties
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 parties for 85% of the tax benefits realized by the Company by such exchange. The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. When an exchange transaction occurs, the Company initially recognizes the related TRA liability through a charge to equity, and any subsequent adjustments to the liability are recorded through the statements of operations.
As a result of exchanges of LLC Units for Class A common stock and purchases by the Company of LLC Units from holders of such units, the Company is entitled to a proportionate share of the existing tax basis of the assets of Station Holdco at the time of such exchanges or purchases. In addition, such exchanges or purchases of LLC Units are expected to result in increases in the tax basis of the assets of Station Holdco that otherwise would not have been available. These increases in tax basis may reduce the amount of tax that the Company would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
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 and amortizable basis. If the Company does not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, it would not be required to make the related TRA payments. The Company will only recognize a liability for TRA payments if management determines it is probable that it will generate sufficient future taxable income over the term of the TRA to utilize the related tax benefits. If management determines in the future that the Company will not be able to fully utilize all or part of the related tax benefits, it would derecognize the portion of the liability related to the benefits not expected to be utilized. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, the Company considers its historical results and incorporates certain assumptions, including revenue growth, and operating margins, among others.
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, the Company’s payment obligations would be accelerated based upon certain assumptions, including the assumption that it 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.
Additionally, the Company estimates the amount of TRA payments expected to be paid within the next twelve months and classifies this amount within current liabilities on its Consolidated Balance Sheets. This determination is based on management’s estimate of taxable income for the next fiscal year. To the extent the Company’s estimate differs from actual results, it may be required reclassify portions of the liability under the TRA between current and non-current.
Earnings Per Share
Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income attributable to Red Rock by the weighted-average number of Class A shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Red Rock, including the impact of potentially dilutive securities, by the weighted-average number of Class A shares outstanding during the period, including the number of Class A shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include the outstanding Class B common stock, outstanding stock options and unvested restricted stock. The Company uses the “if-converted” method to determine the potentially dilutive effect of its Class B common stock, and the treasury stock method to determine the potentially dilutive effect of outstanding stock options and unvested restricted stock.
Recently Issued and Adopted Accounting Standards
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 the adoption will not have a material impact on its financial position or results of operations.
v3.19.3.a.u2
Goodwill and Other Intangibles
12 Months Ended
Dec. 31, 2019
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block] Goodwill and Other Intangibles
Goodwill, net of accumulated impairment losses of $1.2 million, was $195.7 million at December 31, 2019 and 2018. The Company’s goodwill is primarily related to the Las Vegas operations segment.
The Company’s intangibles, other than goodwill, consisted of the following (amounts in thousands):
 
December 31, 2019
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(13,152
)
 
10,448

Management contracts
7 - 20
 
47,000

 
(38,780
)
 
8,220

Condominium rental contracts
20
 
9,000

 
(1,463
)
 
7,537

Trademarks
15
 
6,000

 
(1,300
)
 
4,700

Beneficial leases
6
 
237

 
(136
)
 
101

Intangible assets
 
 
163,337

 
(54,831
)
 
108,506

Liabilities
 
 
 
 
 
 
 
Below market lease
15
 
2,195

 
(470
)
 
1,725

Net intangibles
 
 
$
161,142

 
$
(54,361
)
 
$
106,781

 
December 31, 2018
 
Estimated useful
life
(years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Assets
 
 
 
 
 
 
 
Brands
Indefinite
 
$
77,200

 
$

 
$
77,200

License rights
Indefinite
 
300

 

 
300

Customer relationships
15
 
23,600

 
(11,579
)
 
12,021

Management contracts
7 - 20
 
47,000

 
(32,532
)
 
14,468

Condominium rental contracts
20
 
9,000

 
(1,012
)
 
7,988

Trademarks
15
 
6,000

 
(900
)
 
5,100

Beneficial leases
6
 
237

 
(94
)
 
143

Intangible assets
 
 
163,337

 
(46,117
)
 
117,220

Liabilities
 
 
 
 
 
 
 
Below market leases
15 - 72
 
4,145

 
(371
)
 
3,774

Net intangibles
 
 
$
159,192

 
$
(45,746
)
 
$
113,446


Amortization expense for intangibles was as follows (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Amortization expense
$
8,569

 
$
10,599

 
$
19,890


Estimated annual amortization expense for intangibles for each of the next five years is as follows (amounts in thousands):
Years Ending December 31,
 
 
2020
 
$
7,545

2021
 
2,426

2022
 
2,401

2023
 
2,384

2024
 
2,384


v3.19.3.a.u2
Other Accrued Liabilities
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Other Accrued Liabilities Other Accrued Liabilities
Other accrued liabilities consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Contract and customer-related liabilities:
 
 
 
Rewards Program liability
$
21,392

 
$
20,654

Advance deposits and future wagers
22,185

 
18,624

Unpaid wagers, outstanding chips and other customer-related liabilities
19,722

 
19,640

Other accrued liabilities:
 
 
 
Accrued payroll and related
57,438

 
55,448

Accrued gaming and related
27,490

 
22,221

Construction payables and equipment purchase accruals
27,462

 
108,855

Operating lease liabilities, current portion
3,646

 

Other
21,225

 
21,032

 
$
200,560

 
$
266,474


Contract Balances
Customer contract liabilities related to future performance obligations consist of the Rewards Program point liability, advance deposits on goods or services yet to be provided and wagers for future sporting events. Advance deposits and wagers for future sporting events represent cash payments received from guests that are typically recognized in revenues within one year from the date received. The Company also has other customer-related liabilities that primarily include unpaid wagers and outstanding chips. Unpaid wagers include unredeemed gaming tickets that are exchanged for cash, and outstanding chips
represent amounts owed to guests in exchange for gaming chips in their possession that may be redeemed for cash or recognized as revenue. Fluctuations in contract liabilities and other customer-related liabilities are a result of normal operating activities. The Company had no material contract assets at December 31, 2019 and 2018, respectively.
v3.19.3.a.u2
Leases Leases (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Jan. 01, 2019
Leases [Abstract]        
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months $ 4,286 $ 5,387    
Lessee, Operating Lease, Liability, Payments, Due Year Two 2,313 3,351    
Operating Lease, Payments $ 5,842      
Operating Lease, Weighted Average Remaining Lease Term 33 years 6 months      
Operating Lease, Right-of-Use Asset $ 13,099     $ 17,300
Operating Lease, Cost 5,185      
Short-term Lease, Cost 7,073      
Variable Lease, Cost 28,749      
Lease, Cost 41,007 20,200 $ 19,300  
Operating Lease, Liability, Current 3,646 0    
Operating Lease, Liability, Noncurrent 10,675      
Operating Lease, Liability $ 14,321     $ 17,300
Lessee, Operating Lease, Discount Rate 5.40%      
Lessee, Operating Lease, Liability, Payments, Due Year Three $ 892 2,256    
Lessee, Operating Lease, Liability, Payments, Due Year Four 473 937    
Lessee, Operating Lease, Liability, Payments, Due Year Five 462 854    
Operating Leases, Future Minimum Payments, Due Thereafter 43,141 44,598    
Lessee, Operating Lease, Liability, Payments, Due 51,567 $ 57,383    
Lessee, Operating Lease, Liability, Undiscounted Excess Amount $ (37,246)      
v3.19.3.a.u2
Stockholders' Equity Net Income Attributable to Red Rock Resorts, Inc. and Transfers (to) from Noncontrolling Interests (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net (loss) income attributable to Red Rock Resorts, Inc. $ 4,829 $ (15,657) $ (3,846) $ 11,323 $ 8,946 $ 14,680 $ 82,735 $ 51,180 $ (3,351) $ 157,541 $ 35,423
Exchanges of noncontrolling interests for Class A common stock                 0 0 0
Acquisition of subsidiary noncontrolling interests                 0 0 (4,484)
Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco                 0 0 0
Net transfers (to) from noncontrolling interests                 (7,991) (3,724) 12,640
Change from net (loss) income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests                 (11,342) 153,817 48,063
Noncontrolling Interest [Member]                      
Exchanges of noncontrolling interests for Class A common stock                 370 2,174 14,765
Acquisition of subsidiary noncontrolling interests                     (7,334)
Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco                 (8,361) (5,898) (4,975)
Additional Paid-in Capital [Member]                      
Exchanges of noncontrolling interests for Class A common stock                 (368) (2,149) (14,510)
Acquisition of subsidiary noncontrolling interests                 0 0 2,850
Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco                 $ 8,365 $ 5,910 $ 4,945
v3.19.3.a.u2
Derivative Instruments (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Derivative [Line Items]      
Change in fair value of derivative instruments $ (19,467) $ 12,415 $ 14,112
Interest Rate Swap [Member]      
Derivative [Line Items]      
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax 0 0 (1,875)
Interest Rate Swap [Member] | Interest Expense, Net [Member]      
Derivative [Line Items]      
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net 2,843 (2,929) 1,176
Interest Rate Swap [Member] | Change in Fair Value of Derivative Instruments [Member]      
Derivative [Line Items]      
Change in fair value of derivative instruments (19,467) 12,415 $ 14,110
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member]      
Derivative [Line Items]      
Derivative Asset 0 8,334  
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Other Assets [Member]      
Derivative [Line Items]      
Derivative Asset 0 15,611  
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Other Accrued Liabilities [Member]      
Derivative [Line Items]      
Derivative Liability 440 0  
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]      
Derivative [Line Items]      
Derivative Liability 5,227 $ 0  
Station Casinos LLC [Member] | Interest Rate Swap [Member]      
Derivative [Line Items]      
Deferred (Gain) Loss on Discontinuation of Fair Value Hedge $ 1,400    
Station Casinos LLC [Member] | Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | London Interbank Offered Rate (LIBOR) [Member]      
Derivative [Line Items]      
Derivative, Term of Contract 1 year    
Derivative Instrument, Variable Interest Rate, Term 1 month    
Derivative, Amount of Hedged Item $ 1,400,000    
Effective fixed interest rate on hedged variable interest rate debt 4.22%    
Assets Needed for Immediate Settlement, Aggregate Fair Value $ 5,800    
Station Casinos LLC [Member] | Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | London Interbank Offered Rate (LIBOR) [Member] | Year 3 [Member]      
Derivative [Line Items]      
Derivative, Average Fixed Interest Rate 1.73%    
Station Casinos LLC [Member] | Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | London Interbank Offered Rate (LIBOR) [Member] | Year 4 [Member]      
Derivative [Line Items]      
Derivative, Average Fixed Interest Rate 1.94%    
v3.19.3.a.u2
Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Unrecognized Tax Benefits   $ 1,000    
Effective Income Tax Rate Reconciliation, Percent   20.47% 9.81% 67.96%
Tax Receivable Agreement, Realized Tax Benefits Payable to Subsidiary, Percent   85.00%    
Operating Loss Carryforwards   $ 291,000    
Tax Credit Carryforward, Amount   5,300    
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests   213 $ 2,528 $ 22,761
Net deferred tax assets resulting from exchanges of noncontrolling interests   104 2,675 24,291
Tax Receivable Agreement, Estimated Tax Liability   25,100 24,900  
Payments on tax receivable agreement liability   0 (28,865) 0
Tax receivable agreement liability adjustment $ (73,500) 97 90,638 139,300
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions   519    
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions   485    
Unrecognized Tax Benefits   1,004 0  
Increase (Decrease) in Tax Receivable Agreement, Estimated Tax Liability       (116,500)
Increase (Decrease) in Tax Receivable Agreement Liability, due to tax rate       135,100
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]        
Federal   0 0 (1,330)
State and local   1 15 66
Total current income taxes   1 15 (1,264)
Federal   (1,721) 23,817 133,246
State and local   (14) 43 2,804
Total deferred income taxes   (1,735) 23,860 136,050
Total income tax (benefit) expense   (1,734) 23,875 134,786
Effective Income Tax Rate Reconciliation, Amount [Abstract]        
Expected U.S. federal income taxes at statutory rate   (1,779) 51,105 69,411
Income attributable to noncontrolling interests   711 (13,007) (9,839)
State and local income taxes, net of federal benefit   (14) 43 474
Non-deductible expenses   1,336 1,525 (1,361)
Tax credits   (1,555) (1,985) (1,062)
Impact of tax rate change due to tax reform   0 0 85,348
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount   (762) (1,152) 0
Effective Income Tax Rate Reconciliation, Return to Provision   (313) 1,037 2,258
Other   0 2,874 (1,776)
Valuation allowance   642 (16,565) (8,667)
Total income tax (benefit) expense   (1,734) 23,875 134,786
Components of Deferred Tax Assets and Liabilities [Abstract]        
Tax credit carryforwards   5,293 3,737  
Net operating loss carryforwards and other attributes   66,476 52,785  
Investment in partnership   76,004 90,035  
Payable pursuant to tax receivable agreement   5,268 5,244  
Total gross deferred tax assets   153,041 151,801  
Valuation allowance   (39,856) (39,968)  
Total deferred tax assets, net of valuation allowance   $ 113,185 111,833  
Parent Company [Member] | London Interbank Offered Rate (LIBOR) [Member]        
Tax Receivable Agreement Basis Spread on Variable Rate Late Payments   5.00%    
Tax Receivable Agreement Liability Assigned [Member]        
Tax Receivable Agreement, Estimated Tax Liability   $ (119,200)    
Payments on tax receivable agreement liability   (28,900)    
Tax receivable agreement liability adjustment   90,400    
Additional Paid-in Capital [Member]        
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests   213 2,528 22,761
Net deferred tax assets resulting from exchanges of noncontrolling interests   104 $ 2,675 $ 24,291
Pre-tax Attributes [Member]        
Tax Credit Carryforward, Amount   25,200    
Subject to Expiration [Member]        
Operating Loss Carryforwards   101,600    
Not Subject to Expiration [Member]        
Operating Loss Carryforwards   $ 189,400    
v3.19.3.a.u2
Leases Lessor, Lease Description (Tables)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Lessor Disclosure [Abstract]    
Lessor, Operating Leases [Text Block]
The following table presents undiscounted future minimum rentals to be received under operating leases as of December 31, 2019 (amounts in thousands):
Year Ending December 31,
 
2020
$
9,462

2021
8,236

2022
5,613

2023
4,329

2024
3,256

Thereafter
10,034

 
$
40,930


 
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
Future minimum lease payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2019 are as follows (amounts in thousands):
Year Ending December 31,
 
2020
$
4,286

2021
2,313

2022
892

2023
473

2024
462

Thereafter
43,141

Total future lease payments
51,567

Less imputed interest
(37,246
)
Total operating lease liabilities
$
14,321


As of December 31, 2018, prior to the adoption of the new lease accounting standard, future minimum payments under operating leases with initial or remaining non-cancelable lease terms in excess of one year were as follows (amounts in thousands):
Year Ending December 31,
 
2019
$
5,387

2020
3,351

2021
2,256

2022
937

2023
854

Thereafter
44,598

 
$
57,383


v3.19.3.a.u2
Schedule II - Valuation and Qualifying Accounts (Tables)
12 Months Ended
Dec. 31, 2019
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]  
Summary of Valuation Allowance [Table Text Block]

 
Balance at Beginning of Year
 
Additions (deductions) to tax benefit
 
Balance at End of Year
Description

 

 

Deferred income tax asset valuation allowance:
 
 
 
 

2019
$
39,968

 
$
(112
)
 
$
39,856

2018
57,607

 
(17,639
)
 
39,968

2017
104,125

 
(46,518
)
 
57,607



v3.19.3.a.u2
Property and Equipment (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 4,091,850 $ 3,860,123  
Accumulated depreciation (1,030,088) (847,718)  
Property and equipment, net 3,061,762 3,012,405  
Depreciation 213,642 169,656 $ 158,327
Palms [Member]      
Property, Plant and Equipment [Line Items]      
Construction in Progress, Gross   218,200  
Land [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 271,603 270,059  
Building and Building Improvements [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 2,990,259 2,663,004  
Furniture, Fixtures and Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 801,868 686,863  
Construction in Progress [Member]      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 28,120 $ 240,197  
v3.19.3.a.u2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]      
Balance at Beginning of Year $ 39,968 $ 57,607 $ 104,125
Additions (deductions) to tax benefit (112) (17,639) (46,518)
Balance at End of Year $ 39,856 $ 39,968 $ 57,607
v3.19.3.a.u2
Investments in Variable Interest Entities and Joint Ventures (Details)
Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]  
Ownership percentage in joint venture 50.00%
v3.19.3.a.u2
Long-term Debt - Schedule of Long-term Instruments (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Feb. 08, 2019
Dec. 31, 2018
Debt Instrument [Line Items]      
Long-term debt $ 3,033,291   $ 2,855,359
Current portion of long-term debt (33,989)   (33,894)
Long-term debt, net 2,999,302   2,821,465
Debt Instrument, Unamortized Discount and Debt Issue Costs 42,252    
Line of Credit [Member] | Term Loan A Facility, Due June 8, 2022 [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 52,289   $ 251,448
Debt Instrument, Interest Rate, Effective Percentage 3.80%   4.53%
Debt Instrument, Unamortized Discount and Debt Issue Costs $ 600   $ 4,000
Line of Credit [Member] | Term Loan A Facility, Due March 8, 2023 [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 186,394   $ 0
Debt Instrument, Interest Rate, Effective Percentage 3.55%   0.00%
Debt Instrument, Unamortized Discount and Debt Issue Costs $ 2,500   $ 0
Line of Credit [Member] | Term Loan B Facility, Due June 8, 2023 [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 1,766,757   $ 1,775,951
Debt Instrument, Interest Rate, Effective Percentage 4.30%   5.03%
Debt Instrument, Unamortized Discount and Debt Issue Costs $ 33,700   $ 43,300
Revolving Credit Facility [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 0    
Line of Credit Facility, Maximum Borrowing Capacity   $ 896,000  
Revolving Credit Facility [Member] | Revolving Credit Facility Due June 8, 2022 [Member]      
Debt Instrument [Line Items]      
Long-term debt     $ 245,000
Debt Instrument, Interest Rate, Effective Percentage 0.00%   4.54%
Revolving Credit Facility [Member] | Revolving Credit Facility Due March 8, 2023 [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 440,000   $ 0
Debt Instrument, Interest Rate, Effective Percentage 3.54%   0.00%
Senior Notes [Member] | 5.00% Senior Notes, Due October 1, 2025 [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 545,011   $ 544,286
Debt Instrument, Interest Rate, Stated Percentage 5.00%   5.00%
Debt Instrument, Unamortized Discount and Debt Issue Costs $ 5,000   $ 5,700
Other Debt Obligations [Member]      
Debt Instrument [Line Items]      
Long-term Debt, Weighted Average Interest Rate 3.83%   6.69%
Debt Instrument, Unamortized Discount and Debt Issue Costs $ 400    
Other Long-term Debt [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 42,840   $ 38,674
v3.19.3.a.u2
Leases Leases (Tables)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Leases [Abstract]    
Lessee, Operating Lease, Disclosure [Table Text Block]
Supplemental balance sheet information related to leases under which the Company is the lessee was as follows (amounts in thousands):
 
December 31, 2019
Operating lease right-of-use assets
$
13,099

 
 
Operating lease liabilities:
 
Current portion
$
3,646

Noncurrent portion
10,675

Total operating lease liabilities
$
14,321

Weighted-average remaining lease term - operating leases
33.5

Weighted-average discount rate - operating leases
5.40
%

 
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
Future minimum lease payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2019 are as follows (amounts in thousands):
Year Ending December 31,
 
2020
$
4,286

2021
2,313

2022
892

2023
473

2024
462

Thereafter
43,141

Total future lease payments
51,567

Less imputed interest
(37,246
)
Total operating lease liabilities
$
14,321


As of December 31, 2018, prior to the adoption of the new lease accounting standard, future minimum payments under operating leases with initial or remaining non-cancelable lease terms in excess of one year were as follows (amounts in thousands):
Year Ending December 31,
 
2019
$
5,387

2020
3,351

2021
2,256

2022
937

2023
854

Thereafter
44,598

 
$
57,383


Lease, Cost [Table Text Block]
The components of lease expense were as follows (amounts in thousands):
 
Year Ended December 31, 2019
Operating lease cost
$
5,185

Short-term lease cost
7,073

Variable lease cost
28,749

Total lease expense
$
41,007


 
v3.19.3.a.u2
Share-based Compensation (Tables)
12 Months Ended
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] A summary of stock option activity is presented below:
 
Shares
 
Weighted-average exercise price
 
Weighted-average remaining contractual life (years)
 
Aggregate intrinsic value (amounts in thousands)
Outstanding at January 1, 2019
5,166,565

 
$
25.60

 
 
 
 
Granted
3,998,083

 
25.99

 
 
 
 
Exercised
(386,634
)
 
20.87

 
 
 
 
Forfeited or expired
(1,381,507
)
 
27.26

 
 
 
 
Outstanding at December 31, 2019
7,396,507

 
$
25.79

 
5.3
 
$
8,618

Unvested instruments expected to vest
6,296,411

 
$
26.57

 
5.5
 
$
5,559

Exercisable at December 31, 2019
1,100,096

 
$
21.31

 
3.8
 
$
3,059


Share-based Payment Arrangement, Option, Activity [Table Text Block]
The following information is provided for stock options awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
7.20

 
$
9.25

 
$
6.26

Total intrinsic value of stock options exercised (amounts in thousands)
$
1,517

 
$
3,550

 
$
538


Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
The weighted-average assumptions used by the Company to estimate the grant date fair values of stock option awards were as follows:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Expected stock price volatility
32.22
%
 
33.25
%
 
35.55
%
Expected term (in years)
4.98

 
4.87

 
4.95

Risk-free interest rate
2.26
%
 
2.63
%
 
2.06
%
Expected dividend yield
1.43
%
 
1.52
%
 
1.79
%

Schedule of Nonvested Share Activity [Table Text Block] A summary of restricted stock activity is presented below:
 
Shares
 
Weighted-average grant date fair value
Nonvested at January 1, 2019
373,764

 
$
26.09

Granted
477,667

 
27.01

Vested
(87,468
)
 
24.02

Forfeited
(51,516
)
 
29.06

Nonvested at December 31, 2019
712,447

 
$
26.75


Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
The following information is provided for restricted stock awarded under the plan:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Weighted-average grant date fair value
$
27.01

 
$
31.95

 
$
22.11

Total fair value of shares vested (amounts in thousands)
$
2,101

 
$
1,194

 
$
2,364


Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] The following table presents the location of share-based compensation expense in the Consolidated Statements of Operations (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Operating costs and expenses:
 
 
 
 
 
Casino
$
458

 
$
250

 
$
228

Food and beverage
202

 
36

 
40

Room
11

 

 
11

Selling, general and administrative
16,177

 
11,003

 
7,643

Total share-based compensation expense
$
16,848

 
$
11,289

 
$
7,922

 
 
 
 
 
 

v3.19.3.a.u2
Long-term Debt (Tables)
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
Long-term debt consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Term Loan B Facility, due June 8, 2023, interest at a margin above LIBOR or base rate (4.30% and 5.03% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $33.7 million and $43.3 million at December 31, 2019 and 2018, respectively
$
1,766,757

 
$
1,775,951

Term Loan A Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.55% at December 31, 2019), net of unamortized discount and deferred issuance costs of $2.5 million at December 31, 2019
186,394

 

Term Loan A Facility, due June 8, 2022, interest at a margin above LIBOR or base rate (3.80% and 4.53% at December 31, 2019 and 2018, respectively), net of unamortized discount and deferred issuance costs of $0.6 million and $4.0 million at December 31, 2019 and 2018, respectively
52,289

 
251,448

Revolving Credit Facility, due March 8, 2023, interest at a margin above LIBOR or base rate (3.54% weighted average at December 31, 2019)
440,000

 

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 deferred issuance costs of $5.0 million and $5.7 million at December 31, 2019 and 2018, respectively
545,011

 
544,286

Other long-term debt, weighted-average interest of 3.83% and 6.69% at December 31, 2019 and 2018, respectively, net of unamortized discount and deferred issuance costs of $0.4 million at December 31, 2019
42,840

 
38,674

Total long-term debt
3,033,291

 
2,855,359

Current portion of long-term debt
(33,989
)
 
(33,894
)
Long-term debt, net
$
2,999,302

 
$
2,821,465

Schedule of Interest Rates Amounts outstanding under the Term Loan A Facility and the Revolving Credit 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
%
Debt Instrument Redemption
On or after October 1, 2020, Station LLC may redeem all or a portion of the 5.00% Senior Notes at the redemption prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and additional interest to the applicable redemption date:    
Years Beginning October 1,
Percentage
2020
102.50
%
2021
101.25
%
2022 and thereafter
100.00
%
Schedule of Maturities of Long-term Debt
Principal Maturities
As of December 31, 2019, scheduled principal maturities of Station LLC’s long-term debt for each of the next five years and thereafter were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
33,989

2021
170,830

2022
617,944

2023
1,664,453

2024
1,212

Thereafter
587,115

 
3,075,543

Debt discounts and issuance costs
(42,252
)
 
$
3,033,291


v3.19.3.a.u2
Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Members' Equity Stockholders’ Equity
The Company has two classes of common stock. The Company’s Certificate of Incorporation authorizes 500,000,000 shares of Class A common stock, par value $0.01 per share and 100,000,000 shares of Class B common stock, par value $0.00001 per share. The Certificate of Incorporation also authorizes up to 100,000,000 shares of preferred stock, par value of $0.01 per share, none of which have been issued.
Class A Common Stock
Voting Rights
The holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders and have economic rights. Holders of shares of the Company’s Class A common stock and Class B common stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except as otherwise required by applicable law or the Certificate of Incorporation.
Dividend Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor. The declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of the board of directors and it may reduce or discontinue entirely the payment of such dividends at any time. The board of directors may take into account general economic and business conditions, the Company’s financial condition and operating results, its available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends to stockholders or the payment of distributions by subsidiaries (including Station Holdco) to the Company, and such other factors as the board of directors may deem relevant.
As a holding company, Red Rock’s only assets are its equity interest in Station Holdco and its voting interest in Station LLC, other than cash and tax-related assets and liabilities. Red Rock has no operations outside of its management of Station LLC. The Company intends to cause Station Holdco to make distributions in an amount sufficient to cover cash dividends declared, if any. If Station Holdco makes such distributions to Red Rock, the other holders of LLC Units will be entitled to receive proportionate distributions based on their percentage ownership of Station Holdco.
During each of the years ended December 31, 2019 and 2018, the Company declared and paid cash dividends of $0.40 per share to Class A common shareholders. In January 2020, the board of directors declared a dividend of $0.10 per share of Class A common stock to holders of record as of March 13, 2020 to be paid on March 27, 2020. Prior to the payment of the dividend, Station Holdco will make a cash 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.
The existing debt agreements of Station LLC, including those governing the Credit Facility, contain restrictive covenants that limit its ability to make cash distributions. Because the only asset of Station Holdco is its interest in Station LLC, the limitations on such distributions will effectively limit the ability of Station Holdco to make distributions to Red Rock, and
any financing arrangements that the Company or any of its subsidiaries enter into in the future may contain similar restrictions. Station Holdco is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Station Holdco (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Station Holdco, including Station LLC and its subsidiaries, are generally subject to similar legal limitations on their ability to make distributions to their members or equity holders.
Because the Company must pay taxes and make payments under the TRA, amounts ultimately distributed as dividends to holders of Class A common stock may be less than the amounts distributed by Station Holdco to its members on a per LLC Unit basis.
Rights upon Liquidation
In the event of liquidation, dissolution or winding-up of Red Rock, whether voluntarily or involuntarily, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.
Other Rights
The holders of Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of Class A common stock will be subject to those of the holders of any shares of preferred stock the Company may issue in the future.
Equity Repurchase Program
In February 2019, the Company’s board of directors approved an equity repurchase program authorizing the repurchase of up to an aggregate of $150 million of its Class A common stock. The Company is not obligated to repurchase any shares under this program. Subject to applicable laws and the provisions of any agreements restricting the Company’s ability to do so, repurchases may be made at the Company’s discretion from time to time through open market purchases, negotiated transactions or tender offers, depending on market conditions and other factors. The Company made no repurchases of Class A common stock pursuant to the repurchase program during the year ended December 31, 2019.
Class B Common Stock
Voting Rights
All Continuing Owners of Station Holdco, other than Red Rock, hold shares of Class B common stock. Although Class B shares have no economic rights, they allow those owners of Station Holdco to exercise voting power at Red Rock, which is the sole managing member of Station Holdco.
Each outstanding share of Class B common stock that is held by a holder that, together with its affiliates, owned LLC Units representing at least 30% of the outstanding LLC Units and, at the applicable record date, maintains direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock) is entitled to ten votes and each other outstanding share of Class B common stock is entitled to one vote.
Affiliates of Frank J. Fertitta III and Lorenzo J. Fertitta hold all of the Company’s issued and outstanding shares of Class B common stock that have ten votes per share. As a result, Frank J. Fertitta III and Lorenzo J. Fertitta, together with their affiliates, control any action requiring the general approval of the Company’s stockholders, including the election of the board of directors, the adoption of amendments to the Certificate of Incorporation and bylaws and the approval of any merger or sale of substantially all of the Company’s assets.
Each share of Class B common stock is entitled to only one vote automatically upon it being held by a holder that, together with its affiliates, did not own at least 30% of the outstanding LLC Units immediately following the IPO or owns less than 10% of the outstanding shares of Class A common stock (determined on an as-exchanged basis assuming that all of the LLC Units were exchanged for Class A common stock). Holders of LLC Units are entitled at any time to exchange LLC Units, together with an equal number of shares of Class B common stock, for shares of Class A common stock on a one-for-one basis or for cash, at the Company’s election. Accordingly, as members of Station Holdco exchange LLC Units, the voting power afforded to them by their shares of Class B common stock will be correspondingly reduced. Holders of Class B common stock exchanged 0.1 million, 0.4 million and 2.7 million shares of such stock, along with an equal number of LLC Units, for an equal number of shares of Class A common stock during the years ended December 31, 2019, 2018 and 2017, respectively.
Automatic Transfer
In the event that any outstanding share of Class B common stock shall cease to be held by a holder of an LLC Unit (including a transferee of an LLC Unit), such share shall automatically be transferred to the Company and thereupon shall be retired.
Dividend Rights
Class B stockholders will not participate in any dividends declared by the board of directors.
Rights upon Liquidation
In the event of any liquidation, dissolution, or winding-up of Red Rock, whether voluntary or involuntary, the Class B stockholders will not be entitled to receive any of the Company’s assets.
Other Rights
The holders of Class B common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class B common stock. The rights, preferences and privileges of holders of Class B common stock will be subject to those of the holders of any shares of preferred stock the Company may issue in the future.
Preferred Stock
Subject to limitations prescribed by Delaware law and the Certificate of Incorporation, the board of directors is authorized to issue preferred stock and to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares. The board of directors is authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company. The Company has no current plan to issue any shares of preferred stock.
Accumulated Other Comprehensive (Loss) Income
The following table presents changes in accumulated other comprehensive (loss) income balances, net of tax and noncontrolling interest (amounts in thousands):
 
Unrealized gain (loss) on interest rate swaps
 
Unrecognized pension liability
 
Total
Balances, December 31, 2017
$
2,510

 
$
(37
)
 
$
2,473

Unrealized loss arising during the period

 
(159
)
 
(159
)
Amounts reclassified from accumulated other comprehensive income (loss) into income
(1,264
)
 

 
(1,264
)
Net current-period other comprehensive loss
(1,264
)
 
(159
)
 
(1,423
)
Exchanges of noncontrolling interests for Class A common stock
21

 

 
21

Rebalancing
12

 

 
12

Balances, December 31, 2018
1,279

 
(196
)
 
1,083

Unrealized loss arising during the period

 
(271
)
 
(271
)
Amounts reclassified from accumulated other comprehensive loss into income
(1,458
)
 

 
(1,458
)
Net current-period other comprehensive loss
(1,458
)
 
(271
)
 
(1,729
)
Exchanges of noncontrolling interests for Class A common stock
1

 

 
1

Rebalancing
4

 

 
4

Balances, December 31, 2019
$
(174
)
 
$
(467
)
 
$
(641
)


Net (Loss) 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 (loss) income and changes in its ownership of Station Holdco (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net (loss) income attributable to Red Rock Resorts, Inc.
$
(3,351
)
 
$
157,541

 
$
35,423

Transfers from (to) noncontrolling interests:
 
 
 
 
 
Exchanges of noncontrolling interests for Class A common stock
370

 
2,174

 
14,765

Acquisition of subsidiary noncontrolling interests

 

 
2,850

Rebalancing of ownership percentage between the Company and noncontrolling interests of Station Holdco
(8,361
)
 
(5,898
)
 
(4,975
)
Net transfers (to) from noncontrolling interests
(7,991
)
 
(3,724
)
 
12,640

Change from net (loss) income attributable to Red Rock Resorts, Inc. and net transfers (to) from noncontrolling interests
$
(11,342
)
 
$
153,817

 
$
48,063

 
 
 
 
 
 

v3.19.3.a.u2
Retirement Plans
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
401(k) Plan
The Company has a defined contribution 401(k) plan (the “401(k) Plan”) which covers all employees who meet certain age and length of service requirements and allows an employer contribution of up to 50% of the first 4% of each participating employee’s compensation contributed to the plan. Participants may elect to defer pretax compensation through payroll deductions. These deferrals are regulated under Section 401(k) of the Internal Revenue Code. The Company recorded expense for matching contributions of $4.2 million, $4.1 million and $4.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Palms Pension Plan
In connection with the acquisition of Palms, the Company acquired a single-employer defined benefit pension plan (the “Pension Plan”), which covers eligible employees of Palms. The Pension Plan provides a cash balance form of pension benefits for eligible Palms employees who met certain age and length of service requirements. There has been a plan curtailment since 2009, and as of the curtailment date, new participants were no longer permitted, and existing participants’ accrual of benefits for future service ceased.
The following table provides information about the changes in benefit obligation and the fair value of plan assets (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
Change in benefit obligation:
 
 
 
Benefit obligation (accumulated and projected) at beginning of year
$
13,357

 
$
14,130

Interest cost
517

 
475

Actuarial loss (gain)
1,390

 
(506
)
Benefits paid
(1,079
)
 
(742
)
Benefit obligation (accumulated and projected) at end of year
14,185

 
13,357

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
8,725

 
9,217

Actual return (loss) on plan assets
1,045

 
(668
)
Employer contributions
835

 
918

Benefits paid
(1,079
)
 
(742
)
Fair value of plan assets at end of year
9,526

 
8,725

Funded status at end of year
$
(4,659
)
 
$
(4,632
)

The Company’s qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. The Company expects to contribute $1.4 million to the Pension Plan for the year ending December 31, 2020 and the Company does not expect any plan assets to be returned in the year ending December 31, 2020.
The table below presents the components of pension expense (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Components of net periodic benefit cost:
 
 
 
 
 
Interest cost
$
517

 
$
475

 
$
536

Expected return on plan assets
(187
)
 
(209
)
 
(192
)
Effect of settlement

 

 
13

Net periodic benefit cost
330

 
266

 
357

Other changes recognized in other comprehensive income:
 
 
 
 
 
Net loss
532

 
371

 
319

Amount recognized due to settlement

 

 
(13
)
Total recognized in other comprehensive income
532

 
371

 
306

Total recognized in net periodic benefit cost and other comprehensive income
$
862

 
$
637

 
$
663


The Company did not incur any service costs or amortize any net gains or losses within the net periodic benefit costs of the Pension Plan during the periods presented. Expense associated with the Pension Plan is classified within Other expense in the Consolidated Statements of Operations. Amounts recognized on the Consolidated Balance Sheets related to the Pension Plan consisted of the following (amounts in thousands):
 
December 31,
 
2019
 
2018
Other long-term liabilities
$
4,659

 
$
4,632

Net actuarial loss recognized in Accumulated Other Comprehensive Income
1,203

 
671


The Company does not expect to amortize any net actuarial loss from accumulated other comprehensive income into net pension expense during 2020.
The following tables present the weighted-average actuarial assumptions used to calculate the net periodic benefit cost and obligation:
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net periodic benefit cost:
 
 
 
 
 
Discount rate
4.15%
 
3.60%
 
4.15%
Expected long-term rate of return
5.80%
 
5.80%
 
5.80%
Rate of compensation increase
n/a
 
n/a
 
n/a
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
Benefit obligations:
 
 
 
 
 
Discount rate
 
 
3.20%
 
4.15%
Rate of compensation increase
 
 
n/a
 
n/a

The discount rate used reflects the expected future benefit payments based on plan provisions and participant data as of the beginning of the plan year. The expected future cash flows are discounted by a pension discount yield curve on measurement dates and modified as deemed necessary. The expected return on plan assets uses a weighted-average rate based on the target asset allocation of the plan and capital market assumptions developed with a primary focus on forward-looking valuation models and market indicators. The key inputs for these models are future inflation, economic growth, and interest rate environment.
The composition of the Pension Plan assets at December 31, 2019, along with the targeted mix of assets, is presented below:
 
Target
 
Actual
Fixed income
50
%
 
51
%
Domestic equity
18
%
 
18
%
International equity
14
%
 
13
%
Long/short equity
10
%
 
10
%
Other
8
%
 
8
%
 
100
%
 
100
%

The investment strategy for the Pension Plan assets covers a diversified mix of assets, including equity and fixed income securities and real estate. Assets are managed within a risk management framework which addresses the need to generate incremental returns in the context of an appropriate level of risk, based on plan liability profiles and changes in funded status. The return objectives are to satisfy funding obligations when and as prescribed by law and to minimize the risk of large losses primarily through diversification.
Entities are required to use a fair value hierarchy to measure the plan assets. See Note 2 for a description of the fair value hierarchy. The fair values of the Pension Plan assets at December 31, 2019 and 2018 by asset category were as follows (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance at December 31, 2019
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Fixed income
$
4,846

 
$
4,822

 
$
24

 
$

Domestic equity
1,748

 
150

 
1,598

 

International equity
1,273

 
1,273

 

 

Long/short equity
900

 
900

 

 

Other
759

 
310

 
449

 

 
$
9,526

 
$
7,455

 
$
2,071

 
$

 
 
 
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)
Fixed income
$
4,646

 
$
4,623

 
$
23

 
$

Domestic equity
1,468

 
120

 
1,348

 

International equity
1,059

 
1,059

 

 

Long/short equity
880

 
880

 

 

Other
672

 
260

 
412

 

 
$
8,725

 
$
6,942

 
$
1,783

 
$


At December 31, 2019, expected benefit payments for the next ten years were as follows (amounts in thousands):
Years Ending December 31,
 
2020
$
1,600

2021
910

2022
890

2023
800

2024
1,010

2025 - 2029
4,230


v3.19.3.a.u2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 128,835 $ 114,607
Restricted cash 4,080 3,651
Receivables, net 56,683 51,356
Inventories 17,765 14,910
Prepaid gaming tax 24,424 23,422
Prepaid expenses and other current assets 17,641 34,417
Assets held for sale 32,202 19,602
Total current assets 281,630 261,965
Property and equipment, net 3,061,762 3,012,405
Goodwill 195,676 195,676
Intangible assets, net 108,506 117,220
Land held for development 238,440 193,686
Investments in joint ventures 8,867 8,903
Native American development costs 18,749 17,970
Deferred tax asset, net 113,185 111,833
Other assets, net 87,372 89,868
Total assets 4,114,187 4,009,526
Current liabilities:    
Accounts payable 33,970 25,896
Accrued interest payable 7,477 7,418
Other accrued liabilities 200,560 266,474
Current portion of long-term debt 33,989 33,894
Total current liabilities 275,996 333,682
Long-term debt, less current portion 2,999,302 2,821,465
Other long-term liabilities 31,228 12,436
Payable pursuant to tax receivable agreement 25,064 24,948
Total liabilities 3,331,590 3,192,531
Commitments and contingencies (Note 20)
Stockholders’ equity:    
Preferred Stock, Par Value, Issued 0 0
Additional paid-in capital 376,229 361,970
Retained earnings 124,423 155,869
Accumulated other comprehensive (loss) income (641) 1,083
Total Red Rock Resorts, Inc. stockholders’ equity 500,717 519,620
Noncontrolling interest 281,880 297,375
Total stockholders’ equity 782,597 816,995
Total liabilities and stockholders’ equity 4,114,187 4,009,526
Common Class A [Member]    
Stockholders’ equity:    
Common Stock, Par Value, Issued 705 697
Common Class B [Member]    
Stockholders’ equity:    
Common Stock, Par Value, Issued $ 1 $ 1
v3.19.3.a.u2
Segments
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block] Segments
The Company views each of its Las Vegas casino properties and each of its Native American management arrangements as an individual operating segment. The Company aggregates all of its Las Vegas operating segments into one reportable segment because all of its Las Vegas properties offer similar products, cater to the same customer base, have the same regulatory and tax structure, share the same marketing techniques, are directed by a centralized management structure and have similar economic characteristics. The Company also aggregates its Native American management arrangements into one reportable segment.
The Company utilizes adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) as its primary performance measure. The Company’s segment information and a reconciliation of net income to Adjusted EBITDA are presented below (amounts in thousands):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Net revenues
 
 
 
 
 
Las Vegas operations:
 
 
 
 
 
Casino
$
984,253

 
$
940,483

 
$
886,206

Food and beverage
481,558

 
381,197

 
365,448

Room
192,305

 
170,824

 
179,041

Other (a)
100,073

 
94,894

 
87,238

Management fees
571

 
605

 
509

Las Vegas operations net revenues
1,758,760

 
1,588,003

 
1,518,442

Native American management:
 
 
 
 
 
Management fees
91,074

 
87,009

 
117,968

Reportable segment net revenues
1,849,834

 
1,675,012

 
1,636,410

Corporate and other
6,700

 
6,018

 
5,729

Net revenues
$
1,856,534

 
$
1,681,030

 
$
1,642,139

 
 
 
 
 
 
Net (loss) income
$
(6,737
)
 
$
219,480

 
$
63,533

Adjustments
 
 
 
 
 
Depreciation and amortization
222,211

 
180,255

 
178,217

Share-based compensation
16,848

 
11,289

 
7,922

Write-downs and other charges, net
82,123

 
34,650

 
29,584

Tax receivable agreement liability adjustment
(97
)
 
(90,638
)
 
(139,300
)
Related party lease termination

 

 
100,343

Asset impairment

 

 
1,829

Interest expense, net
156,679

 
143,099

 
131,442

Loss on extinguishment/modification of debt, net
19,939

 

 
16,907

Change in fair value of derivative instruments
19,467

 
(12,415
)
 
(14,112
)
(Benefit) provision for income tax
(1,734
)
 
23,875

 
134,786

Adjusted EBITDA attributable to MPM noncontrolling interest and other
316

 
(633
)
 
(13,905
)
Adjusted EBITDA (b)
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
Las Vegas operations
$
454,805

 
$
457,379

 
$
433,640

Native American management
85,562

 
80,795

 
95,897

Reportable segment Adjusted EBITDA
540,367

 
538,174

 
529,537

Corporate and other
(31,352
)
 
(29,212
)
 
(32,291
)
Adjusted EBITDA
$
509,015

 
$
508,962

 
$
497,246

 
 
 
 
 
 
 
December 31,
 
 
 
2019
 
2018
 
 
Total assets
 
 
 
 
 
Las Vegas operations
$
3,637,893

 
$
3,501,705

 
 
Native American management
31,573

 
37,274

 
 
Corporate and other
444,721

 
470,547

 
 
 
$
4,114,187

 
$
4,009,526

 
 
 
 
 
 
 
 
____________________________________
(a)
Includes tenant lease revenue which is accounted for under the lease accounting guidance. See Note 19.
(b)
Adjusted EBITDA includes net (loss) income plus depreciation and amortization, share-based compensation, write-downs and other charges, net (including Palms redevelopment and preopening expenses, loss on artist performance agreement terminations at Palms’ nightclub and dayclub, severance, business innovation and technology enhancements), tax receivable agreement liability adjustment, related party lease termination, asset impairment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, (benefit) provision for income tax and other, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
The Company’s capital expenditures, which were primarily related to Las Vegas operations, were $353.3 million, $579.3 million and $248.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class B [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Noncontrolling Interest [Member]
Balances at Dec. 31, 2016 $ 627,598 $ 659 $ 1 $ 325,962 $ 17,772 $ 2,458 $ 280,746
Shares, Outstanding at Dec. 31, 2016   65,893 49,956        
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income 63,533       35,423   28,110
Other comprehensive income (loss), net of tax (644)         (183) (461)
Share-based compensation 8,000     8,000     0
Net Income (Loss) Attributable to Parent 35,423            
Distributions (38,290)           (38,290)
Dividends (27,057)       (27,057)    
Issuance of restricted stock awards, net of forfeitures (shares)   188          
Issuance of restricted stock awards, net of forfeitures 0 $ 2   (2)      
Repurchases of Class A common stock (shares)   (3)          
Repurchases of Class A common stock (93)     (93)      
Stock option exercises (shares)   128          
Stock option exercises $ 2,501 $ 1   2,500      
Exchanges of noncontrolling interests for Class A common stock (shares) 2,700 2,692 (2,692)        
Exchanges of noncontrolling interests for Class A common stock $ 0 $ 27   14,510   228 (14,765)
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests (22,761)     (22,761)      
Net deferred tax assets resulting from exchanges of noncontrolling interests 24,291     24,291      
Tax effects resulting from stock option exercises (882)     (882)      
Acquisition of subsidiary noncontrolling interests (4,484)     2,850     (7,334)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 0     (4,945)   (30) 4,975
Balances at Dec. 31, 2017 631,712 $ 689 $ 1 349,430 26,138 2,473 252,981
Shares, Outstanding at Dec. 31, 2017   68,898 47,264        
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income 219,480       157,541   61,939
Other comprehensive income (loss), net of tax (2,752)         (1,423) (1,329)
Share-based compensation 11,343     11,343     0
Net Income (Loss) Attributable to Parent 157,541            
Distributions (19,940)           (19,940)
Dividends (27,810)       (27,810)    
Issuance of restricted stock awards, net of forfeitures (shares)   122          
Issuance of restricted stock awards, net of forfeitures 0 $ 1   (1)      
Repurchases of Class A common stock (shares)   (10)          
Repurchases of Class A common stock (307)     (307)      
Stock option exercises (shares)   273          
Stock option exercises $ 5,381 $ 3   5,378      
Exchanges of noncontrolling interests for Class A common stock (shares) 400 380 (380)        
Exchanges of noncontrolling interests for Class A common stock $ 0 $ 4   2,149   21 (2,174)
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests (2,528)     (2,528)      
Net deferred tax assets resulting from exchanges of noncontrolling interests 2,675     2,675      
Tax effects resulting from stock option exercises (259)     (259)      
Acquisition of subsidiary noncontrolling interests 0     0      
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 0     (5,910)   12 5,898
Balances at Dec. 31, 2018 816,995 $ 697 $ 1 361,970 155,869 1,083 297,375
Shares, Outstanding at Dec. 31, 2018   69,663 46,884        
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net (loss) income (6,737)       (3,351)   (3,386)
Other comprehensive income (loss), net of tax (3,086)         (1,729) (1,357)
Share-based compensation 16,816     16,816     0
Net Income (Loss) Attributable to Parent (3,351)            
Distributions (18,743)           (18,743)
Dividends (28,095)       (28,095)    
Issuance of restricted stock awards, net of forfeitures (shares)   426          
Issuance of restricted stock awards, net of forfeitures 0 $ 4   (4)      
Repurchases of Class A common stock (shares)   (15)          
Repurchases of Class A common stock (376)     (376)      
Stock option exercises (shares)   334          
Stock option exercises $ 6,707 $ 3   6,704      
Exchanges of noncontrolling interests for Class A common stock (shares) 100 57 (57)        
Exchanges of noncontrolling interests for Class A common stock $ 0 $ 1   368   1 (370)
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interests (213)     (213)      
Net deferred tax assets resulting from exchanges of noncontrolling interests 104     104      
Tax effects resulting from stock option exercises (775)     (775)      
Acquisition of subsidiary noncontrolling interests 0     0      
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco 0     (8,365)   4 8,361
Balances at Dec. 31, 2019 $ 782,597 $ 705 $ 1 $ 376,229 $ 124,423 $ (641) $ 281,880
Shares, Outstanding at Dec. 31, 2019   70,465 46,827