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Organization and Background
12 Months Ended
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Background
Organization and Background
Station Casinos LLC, a Nevada limited liability company (the “Company” or “Station”), is a gaming, development and management company that owns and operates ten major gaming and entertainment facilities and ten smaller casino properties (three of which are 50% owned) in the Las Vegas regional market. The Company also manages a casino in Sonoma County, California and a casino in Allegan County, Michigan, both on behalf of Native American tribes.
Station was formed in 2010 to acquire substantially all of the assets of Station Casinos, Inc. (“STN”) and Green Valley Ranch Gaming LLC pursuant to Chapter 11 plans of reorganization, which became effective on June 17, 2011. Also on June 17, 2011, the Company entered into various new or amended credit agreements, and entered into 25-year management agreements with subsidiaries of Fertitta Entertainment LLC (“Fertitta Entertainment”) for management of the Company. The management agreements were terminated in connection with the Company’s acquisition of Fertitta Entertainment, which is described below.
In accordance with the accounting guidance for reorganizations, on June 17, 2011, the Company adopted fresh-start reporting and reset the historical net book values of its assets and liabilities to their estimated fair values by assigning the Company’s reorganization value to its assets and liabilities at the adoption date, with the excess recognized as goodwill.
Acquisition of Fertitta Entertainment
In May 2016, the Company acquired all of the outstanding membership interests of Fertitta Entertainment LLC (“Fertitta Entertainment” and such transaction, the “Fertitta Entertainment Acquisition”) for $460 million, which included $51.0 million paid in satisfaction of Fertitta Entertainment’s term loan and revolving credit facility on the closing date, $18.7 million paid to settle Fertitta Entertainment's liability-classified equity awards, and $1.3 million in assumed liabilities. The terms of the Fertitta Entertainment Acquisition were negotiated on behalf of the Company and approved by a special committee of the Company’s board, with the assistance and counsel of independent legal and financial advisors retained by such special committee. The Fertitta Entertainment Acquisition was funded with proceeds the Company received in connection with the initial public offering (“IPO”) of Red Rock Resorts, Inc. (“Red Rock”) and borrowings under its revolving credit facility. Red Rock is a newly formed entity that holds all of the Company’s voting interests and indirectly holds approximately 57% of the Company’s economic interests through its ownership interest in Station Holdco LLC (“Station Holdco”), the holder of 100% of the Company’s economic interests. Red Rock is designated as the Company’s sole managing member and controls and operates all of the Company’s business and affairs. Station Holdco issued new LLC units (“LLC Units”) to Red Rock in exchange for $424.4 million in net proceeds from the IPO, and contributed $419.5 million of the proceeds to the Company, with the remaining $4.9 million used to reimburse the Company for deferred offering costs incurred in connection with the IPO.
Prior to the Fertitta Entertainment Acquisition, the Company had long-term management agreements with affiliates of Fertitta Entertainment to manage its properties. In connection with the Fertitta Entertainment Acquisition, the management agreements were terminated and the Company entered into new employment agreements with its executive officers and other individuals who were employed by Fertitta Entertainment prior to the completion of the Fertitta Entertainment Acquisition.
Prior to the Fertitta Entertainment Acquisition, Station Holdco, Station and Fertitta Entertainment were controlled by brothers Frank J. Fertitta III, the Company’s Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, the Company’s Vice Chairman, who collectively held a majority of the voting and economic interests in these entities. The Fertitta Entertainment Acquisition constituted an acquisition of an entity under common control and was accounted for at historical cost in a manner similar to a pooling of interests. The Company recognized a deemed distribution of approximately $389.1 million to equity holders of Fertitta Entertainment, which represented the excess of the purchase price over the historical cost of the net assets acquired. The accompanying consolidated financial statements include the consolidation of Fertitta Entertainment for all periods presented.