rrr-20230630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ 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

(Address of principal executive offices)

89135

(Zip Code)

(702) 495-3000

Registrant’s telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $.01 par value	RRR	NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated 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 Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at July 31, 2023
Class A Common Stock, $0.01 par value						58,390,843
Class B Common Stock, $0.00001 par value						45,985,804

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RED ROCK RESORTS, INC.

INDEX


Part I.	Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets — June 3 0 , 2023 (unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Income — Three and six months ended June 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) — Three and six months ended June 30 , 2023 and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows — S ix months ended June 3 0 , 2023 and 2022 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

Part II.	Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signature		31

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Part I. Financial Information

Item 1. Financial Statements

RED ROCK RESORTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)


	June 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	100,949	$	117,289
Receivables, net	41,738		43,630
Inventories	13,998		13,199
Prepaid gaming tax	25,554		22,834
Prepaid expenses and other current assets	27,681		24,043
Total current assets	209,920		220,995
Property and equipment, net of accumulated depreciation of $1,227,615 and $1,168,984 at June 30, 2023 and December 31, 2022, respectively	2,533,755		2,195,017
Goodwill	195,676		195,676
Intangible assets, net of accumulated amortization of $19,005 and $18,215 at June 30, 2023 and December 31, 2022, respectively	83,595		84,385
Land held for development	451,125		449,017
Native American development costs	43,859		41,687
Deferred tax asset, net	76,891		75,741
Other assets, net	92,765		83,232
Total assets	$	3,687,586	$	3,345,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,481	$	11,381
Accrued interest payable	14,305		14,460
Income tax payable	4,587		—
Other accrued liabilities	262,079		234,718
Current portion of payable pursuant to tax receivable agreement	995		6,631
Current portion of long-term debt	26,079		26,059
Total current liabilities	319,526		293,249
Long-term debt, less current portion	3,183,891		2,958,717
Other long-term liabilities	42,498		39,581
Payable pursuant to tax receivable agreement, less current portion	20,964		21,960
Total liabilities	3,566,879		3,313,507
Commitments and contingencies (Note 11)
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; 58,390,843 and 58,012,937 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	584		580
Class B common stock, par value $0.00001 per share, 100,000,000 shares authorized; 45,985,804 shares issued and outstanding at June 30, 2023 and December 31, 2022	1		1
Additional paid-in capital	1,104		—
Retained earnings	98,298		43,203
Total Red Rock Resorts, Inc. stockholders’ equity	99,987		43,784
Noncontrolling interest (deficit)	20,720		(11,541)
Total stockholders’ equity	120,707		32,243
Total liabilities and stockholders’ equity	$	3,687,586	$	3,345,750

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

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RED ROCK RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating revenues:
Casino	$	269,507	$	280,636	$	557,747	$	560,407
Food and beverage	77,623		73,756		155,770		139,455
Room	44,892		44,283		88,831		81,055
Other	24,108		23,566		47,418		42,960
Net revenues	416,130		422,241		849,766		823,877
Operating costs and expenses:
Casino	69,583		69,746		141,294		138,612
Food and beverage	60,883		57,839		120,995		111,062
Room	13,473		13,293		27,080		25,775
Other	8,994		8,792		16,706		15,162
Selling, general and administrative	93,480		90,193		185,985		176,489
Depreciation and amortization	32,738		33,097		63,833		66,522
Write-downs and other, net	10,066		2,045		29,685		12,225
Asset impairment	—		78,992		—		78,992
	289,217		353,997		585,578		624,839
Operating income	126,913		68,244		264,188		199,038
Earnings from joint ventures	754		1,012		1,653		1,856
Operating income and earnings from joint ventures	127,667		69,256		265,841		200,894
Other expense:
Interest expense, net	(44,340)		(28,748)		(86,796)		(55,422)
Income before income tax	83,327		40,508		179,045		145,472
Provision for income tax	(8,417)		(8,070)		(18,608)		(20,789)
Net income	74,910		32,438		160,437		124,683
Less: net income attributable to noncontrolling interests	35,397		16,690		76,248		60,589
Net income attributable to Red Rock Resorts, Inc.	$	39,513	$	15,748	$	84,189	$	64,094

Earnings per common share (Note 10):
Earnings per share of Class A common stock, basic	$	0.68	$	0.26	$	1.46	$	1.06
Earnings per share of Class A common stock, diluted	$	0.65	$	0.26	$	1.40	$	1.04
Weighted-average common shares outstanding:
Basic	57,828		59,514		57,741		60,255
Diluted	103,329		61,568		103,260		62,707

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

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RED ROCK RESORTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(amounts in thousands)

(unaudited)


	Red Rock Resorts, Inc. Stockholders’ Equity
	Common stock						Additional paid-in capital		Retained earnings				Noncontrolling interest	Total stockholders’ equity
	Class A			Class B
	Shares	Amount		Shares	Amount
Balances, March 31, 2023	58,219	$	582	45,986	$	1	$	1,166	$	73,327	$	18,557		$	93,633
Net income	—	—		—	—		—		39,513		35,397			74,910
Share-based compensation	—	—		—	—		4,933		—		—			4,933
Distributions	—	—		—	—		—		—		(32,807)			(32,807)
Dividends	—	—		—	—		—		(14,542)		—			(14,542)
Stock option exercises and issuance of restricted stock, net	172	2		—	—		(2)		—		—			—
Withholding tax on share-based compensation	—	—		—	—		(5,420)		—		—			(5,420)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco	—	—		—	—		427		—		(427)			—
Balances, June 30, 2023	58,391	$	584	45,986	$	1	$	1,104	$	98,298	$	20,720		$	120,707


	Red Rock Resorts, Inc. Stockholders’ Equity
	Common stock						Additional paid-in capital		Retained earnings		Noncontrolling interest (deficit)			Total stockholders’ equity (deficit)
	Class A			Class B
	Shares	Amount		Shares	Amount
Balances, March 31, 2022	61,472	$	615	45,986	$	1	$	50,252	$	36,942		$	8,973		$	96,783
Net income	—	—		—	—		—		15,748			16,690			32,438

Share-based compensation	—	—		—	—		4,701		—			—			4,701
Distributions	—	—		—	—		—		—			(33,133)			(33,133)
Dividends	—	—		—	—		—		(14,671)			—			(14,671)
Stock option exercises and issuance of restricted stock, net	12	(1)		—	—		1,211		—			—			1,210
Withholding tax on share-based compensation	(1)	—		—	—		(1,398)		—			—			(1,398)
Repurchases of Class A common stock	(3,038)	(30)		—	—		(88,774)		(24,875)			—			(113,679)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco	—	—		—	—		34,008		—			(34,008)			—
Balances, June 30, 2022	58,445	$	584	45,986	$	1	$	—