rrr-20230930

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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 September 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 November 3, 2023
Class A Common Stock, $0.01 par value						58,398,749
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 — September 30, 2023 (unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Income — Three and nine months ended September 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity — Three and nine months ended September 30, 2023 and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows — Nine months ended September 30, 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	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

Part II.	Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31
Signature		32

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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)


	September 30, 2023		December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	122,835	$	117,289
Receivables, net	76,992		43,630
Inventories	13,638		13,199
Prepaid gaming tax	24,661		22,834
Prepaid expenses and other current assets	32,639		24,043
Assets held for sale	19,175		—
Total current assets	289,940		220,995
Property and equipment, net of accumulated depreciation of $1,254,408 and $1,168,984 at September 30, 2023 and December 31, 2022, respectively	2,631,585		2,195,017
Goodwill	195,676		195,676
Intangible assets, net of accumulated amortization of $19,399 and $18,215 at September 30, 2023 and December 31, 2022, respectively	83,201		84,385
Land held for development	451,125		449,017
Native American development costs	45,108		41,687
Deferred tax asset, net	77,015		75,741
Other assets, net	87,789		83,232
Total assets	$	3,861,439	$	3,345,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,441	$	11,381
Accrued interest payable	13,405		14,460
Income tax payable	7,621		—
Other accrued liabilities	300,932		234,718
Current portion of payable pursuant to tax receivable agreement	995		6,631
Current portion of long-term debt	26,091		26,059
Total current liabilities	362,485		293,249
Long-term debt, less current portion	3,279,541		2,958,717
Other long-term liabilities	40,826		39,581
Payable pursuant to tax receivable agreement, less current portion	20,964		21,960
Total liabilities	3,703,816		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; 58,398,749 and 58,012,937 shares issued and outstanding at September 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 September 30, 2023 and December 31, 2022	1		1
Additional paid-in capital	3,464		—
Retained earnings	119,261		43,203
Total Red Rock Resorts, Inc. stockholders’ equity	123,310		43,784
Noncontrolling interest (deficit)	34,313		(11,541)
Total stockholders’ equity	157,623		32,243
Total liabilities and stockholders’ equity	$	3,861,439	$	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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating revenues:
Casino	$	272,747	$	282,386	$	830,494	$	842,793
Food and beverage	72,778		69,799		228,548		209,254
Room	42,036		39,062		130,867		120,117
Other	24,045		23,192		71,463		66,152
Net revenues	411,606		414,439		1,261,372		1,238,316
Operating costs and expenses:
Casino	70,753		69,697		212,047		208,309
Food and beverage	57,741		55,309		178,736		166,371
Room	13,348		13,031		40,428		38,806
Other	7,759		8,455		24,465		23,617
Selling, general and administrative	91,850		91,570		277,835		268,059
Depreciation and amortization	32,535		30,789		96,368		97,311
Write-downs and other, net	15,083		3,862		44,768		16,087
Asset impairment	—		1,026		—		80,018
	289,069		273,739		874,647		898,578
Operating income	122,537		140,700		386,725		339,738
Earnings from joint ventures	640		822		2,293		2,678
Operating income and earnings from joint ventures	123,177		141,522		389,018		342,416
Other expense:
Interest expense, net	(45,502)		(34,287)		(132,298)		(89,709)
Income before income tax	77,675		107,235		256,720		252,707
Provision for income tax	(9,252)		(11,783)		(27,860)		(32,572)
Net income	68,423		95,452		228,860		220,135
Less: net income attributable to noncontrolling interests	32,907		45,844		109,155		106,433
Net income attributable to Red Rock Resorts, Inc.	$	35,516	$	49,608	$	119,705	$	113,702

Earnings per common share (Note 10):
Earnings per share of Class A common stock, basic	$	0.61	$	0.86	$	2.07	$	1.91
Earnings per share of Class A common stock, diluted	$	0.60	$	0.83	$	1.99	$	1.87
Weighted-average common shares outstanding:
Basic	57,961		57,889		57,815		59,458
Diluted	103,206		103,012		103,243		61,723

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

(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, June 30, 2023	58,391	$	584	45,986	$	1	$	1,104	$	98,298	$	20,720		$	120,707
Net income	—	—		—	—		—		35,516		32,907			68,423
Share-based compensation	—	—		—	—		4,497		—		—			4,497
Distributions	—	—		—	—		—		—		(20,886)			(20,886)
Dividends	—	—		—	—		—		(14,553)		—			(14,553)
Stock option exercises and issuance of restricted stock, net	8	—		—	—		—		—		—			—
Withholding tax on share-based compensation	—	—		—	—		(565)		—		—			(565)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco	—	—		—	—		(1,572)		—		1,572			—
Balances, September 30, 2023	58,399	$	584	45,986	$	1	$	3,464	$	119,261	$	34,313		$	157,623


	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, June 30, 2022	58,445	$	584	45,986	$	1	$	—	$	13,144		$	(41,478)		$	(27,749)
Net income	—	—		—	—		—		49,608			45,844			95,452

Share-based compensation	—	—		—	—		4,737		—			—			4,737
Distributions	—	—		—	—		—		—			(30,352)			(30,352)
Dividends	—	—		—	—		—		(14,437)			—			(14,437)
Stock option exercises and issuance of restricted stock, net	27	1		—	—		(1)		—			—			—
Withholding tax on share-based compensation	—	—		—	—		(549)		—			—			(549)
Repurchases of Class A common stock	(496)	(5)		—	—		(2,523)		(16,472)			—			(19,000)
Rebalancing of ownership percentage between the Company and noncontrolling interests in Station Holdco	—	—		—	—		(1,664)		—			1,664			—
Balances, September 30, 2022	57,976	$	580	45,986	$	1	$	—	$	31,843		$	(24,322)		$	8,102

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 (Continued)

(amounts in thousands)

(unaudited)

SEC Form 10-Q filed by Red Rock Resorts Inc.