Red Rock Resorts(RRR) - 2024 Q4 - Annual Report

Financial Performance - Net revenues for the year ended December 31, 2024 increased by $214.9 million to$1.94 billion, a 12.5% increase compared to 2023[252] - Operating income for 2024 was $568.7 million, up 1.8$558.7 million in 2023, primarily driven by the new Durango property[253] - Casino revenues increased by 12.8% to $1.28 billion, with slot handle up 9.5$360.4 million, with an average guest check increase of 10.4% and restaurant guests served up by 8.6%[255] - Room revenues increased by 9.5% to $200.5 million, with occupancy at 87.8$204.00[256] - Adjusted EBITDA for 2024 was $795.9 million, up from$745.9 million in 2023, reflecting improved operating performance[267] - Net income attributable to Red Rock decreased by 12.5% to $154.1 million compared to$176.0 million in 2023[251] Expenses and Liabilities - Selling, general and administrative expenses increased by 15.4% to $432.3 million, primarily due to costs associated with the Durango property opening[258] - Depreciation and amortization expenses rose to$187.1 million, a 41.2% increase from $132.5 million in 2023, mainly due to Durango's assets[260] - Interest expense, net for 2024 was$228.8 million, a 26.4% increase from $181.0 million in 2023, attributed to increased borrowings[262] - The company had a net loss of$34.6 million for the year ended December 31, 2024, primarily due to income tax provisions[272] - Obligations under the TRA totaled $20.4 million as of December 31, 2024, with future payments expected to be substantial[283] Cash Flow and Capital Expenditures - For the year ended December 31, 2024, net cash provided by operating activities was$548.3 million, compared to $494.3 million for 2023, reflecting an increase due to the Durango property and changes in working capital[288] - Cash paid for capital expenditures in 2024 totaled$283.9 million, a decrease from $699.5 million in 2023, with expenditures primarily related to renovation projects[289] - The company paid$118.4 million in dividends to Class A common stockholders and $126.7 million in cash distributions to noncontrolling interest holders in 2024[290] Debt and Financing - Station LLC entered into a new senior secured term loan facility of$1.57 billion and a new revolving credit facility of $1.1 billion on March 14, 2024[275] - The company issued$500.0 million in aggregate principal amount of 6.625% Senior Notes due 2032 on March 14, 2024[278] - The company expects cash requirements for 2025 to include approximately $375.0 million to$425.0 million for capital expenditures and $52.9 million for principal payments on indebtedness[280] - At December 31, 2024,$1.7 billion of borrowings under credit agreements were based on variable rates, primarily SOFR, with a potential annual interest cost increase of approximately $17.1 million for a 1$0.25 per share of Class A common stock, to be paid on March 31, 2025[282] - The company repurchased 75,000 shares of Class A common stock at a weighted-average price of $52.29 per share during the year ended December 31, 2024, with$309.0 million remaining authorized for repurchases[284] - The board of directors authorized $600.0 million for repurchases of Class A common stock, with$309.0 million remaining for future repurchases as of December 31, 2024[284] Assets and Intangible Assets - As of December 31, 2024, the Holding Company had cash of $4.2 million, deferred tax assets of$56.4 million, and a note receivable from Station LLC of $53.9 million[271] - The carrying amount of property and equipment was approximately$2.8 billion, representing 68.8% of total assets[303] - Goodwill totaled $195.7 million, with approximately 87$76.5 million as of December 31, 2024[308] - The company had outstanding letters of credit and similar obligations totaling $47.3 million as of December 31, 2024[294] Regulatory and Taxation Matters - The company is subject to extensive regulation by gaming authorities in Nevada and other jurisdictions, impacting operational compliance[296] - The gaming industry is a significant source of tax revenue for the State of Nevada, with no current proposals to increase taxes on gaming revenue[297] - The company is taxed as a corporation and pays federal, state, and local taxes on income allocated by Station Holdco, which operates as a partnership[313] - Deferred tax assets and liabilities are recognized based on differences between book value and tax value, with realization depending on sufficient taxable income[314] - A valuation allowance is recorded if it is more likely than not that some portion of a deferred tax asset will not be realized, with annual comprehensive analysis performed[315] - Uncertain tax positions are recorded based on a two-step process, determining if the positions are likely to be sustained and recognizing the largest amount of tax benefit that is more than 50% likely to be realized[316] - The company does not anticipate needing to record a significant liability for unrecognized tax benefits within the next twelve months[317] Legal Matters - The company is involved in various lawsuits and assesses the potential for losses, accruing liabilities when a loss is probable and can be reasonably estimated[312] - The company incurred costs associated with Native American development agreements, which are recognized as long-term assets and are dependent on the success of the projects[310]