424B1 1 a2228471z424b1.htm S-1/A

Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Table of Contents

Filed Pursuant to Rule 424(b)(1)
Registration No. 333-207397

PROSPECTUS

27,250,000 Shares

LOGO

Red Rock Resorts, Inc.

Class A Common Stock



        This is an initial public offering of shares of Class A Common Stock of Red Rock Resorts, Inc.

        Red Rock Resorts, Inc. is offering 27,054,686 of the shares to be sold in this Offering. The selling stockholders are offering an additional 195,314 shares.

        Prior to this Offering, there has been no public market for the Class A Common Stock. The initial public offering price of the Class A Common Stock is $19.50 per share. Our shares of Class A Common Stock have been approved for listing on the Nasdaq Stock Market ("NASDAQ") under the symbol "RRR."

        Following this Offering, we will have two classes of authorized common stock. Shares of Class A Common Stock will have one vote per share. Shares of Class B Common Stock held by certain existing owners will have ten votes per share. All other shares of Class B Common Stock will have one vote per share. Affiliates of Frank J. Fertitta III, our Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, a member of our board of directors, will hold the substantial majority of our issued and outstanding Class B Common Stock having ten votes per share. As a result, the Fertitta family will be able to control any action requiring the general approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. Accordingly, we will be a "controlled company." See "Management."



        See "Risk Factors" beginning on page 25 to read about factors you should consider before buying shares of our Class A Common Stock.

        Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 
  Per Share   Total  

Public offering price

  $ 19.50   $ 531,375,000  

Underwriting discounts and commissions

  $ 1.17   $ 31,882,500  

Proceeds, before expenses, to us(1)

  $ 18.33   $ 495,912,394  

Proceeds, before expenses, to the selling stockholders

  $ 18.33   $ 3,580,106  

(1)
The underwriters will receive compensation in addition to the underwriting discount. See "Underwriting (Conflicts of Interest)."

        To the extent that the underwriters sell more than 27,250,000 shares of our Class A Common Stock, the underwriters have the option to purchase up to an additional 4,087,500 shares of our Class A Common Stock from us at the initial public offering price less the underwriting discount.

        The underwriters expect to deliver the shares against payment in New York, New York on or about May 2, 2016.



Deutsche Bank Securities   J.P. Morgan   BofA Merrill Lynch   Goldman, Sachs & Co.



Wells Fargo Securities   Citigroup   Macquarie Capital



Fifth Third Securities   Credit Suisse



UBS Investment Bank   Stifel   Raine Securities

Oppenheimer & Co.

 

Guggenheim Securities

 

Ramirez & Co., Inc.

   

Prospectus dated April 26, 2016


Table of Contents

LOGO


Table of Contents

LOGO


Table of Contents

LOGO


Table of Contents

LOGO


Table of Contents


TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

THE OFFERING

    15  

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL AND OTHER DATA

    20  

RISK FACTORS

    25  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

    49  

THE REORGANIZATION OF OUR CORPORATE STRUCTURE

    51  

USE OF PROCEEDS

    58  

DIVIDEND POLICY

    59  

CAPITALIZATION

    60  

DILUTION

    62  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

    64  

SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA

    76  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    79  

DESCRIPTION OF OUR BUSINESS

    102  

MANAGEMENT AND DIRECTORS

    128  

EXECUTIVE COMPENSATION

    136  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    152  

PRINCIPAL AND SELLING STOCKHOLDERS

    161  

DESCRIPTION OF CAPITAL STOCK

    165  

SHARES ELIGIBLE FOR FUTURE SALE

    171  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

    173  

UNDERWRITING (CONFLICTS OF INTEREST)

    177  

LEGAL MATTERS

    190  

EXPERTS

    190  

WHERE YOU CAN FIND MORE INFORMATION

    190  

INDEX TO FINANCIAL STATEMENTS

    F-1  



        Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with information different from that contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by us or on our behalf. Neither we, the selling stockholders nor the underwriters take any responsibility for, or can provide any assurance as to the reliability of, any information other than the information in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by us or on our behalf. We, the selling stockholders and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our Class A Common Stock.

        In this prospectus, unless otherwise stated or the context otherwise requires:

    the "Company," "we," "our," and "us" refer (1) subsequent to the consummation of this Offering and the reorganization transactions described under "The Reorganization of Our Corporate Structure" (referred to in this prospectus as the "Offering and Reorganization Transactions"), to Red Rock Resorts, Inc., a Delaware corporation, or "Red Rock," and its consolidated subsidiaries and (2) prior to the consummation of the Offering and Reorganization Transactions, to (a) Station Holdco LLC, a Delaware limited liability company, or "Station Holdco," and its consolidated subsidiaries for periods following June 17, 2011 and (b) Station

i


Table of Contents

      Casinos, Inc. and its consolidated subsidiaries ("STN" or "STN Predecessor") for periods prior to June 17, 2011. See "The Reorganization of Our Corporate Structure."

    On January 5, 2016, Red Rock amended its certificate of incorporation to change its name from "Station Casinos Corp." to "Red Rock Resorts, Inc."

    References to LLC Units in this prospectus are to limited liability company interests in Station Holdco.

    References to our "existing owners" are to the members of Station Holdco following the consummation of the Offering and Reorganization Transactions (including the merger of certain members of Station Holdco with subsidiaries of Red Rock).

    When we describe the exchange of LLC Units and shares of Class B Common Stock on a "one-for-one basis" we mean that (x) one LLC Unit and one share of Class B Common Stock will be exchanged for (y) one share of Class A Common Stock.

    References to our Principal Equityholders in this prospectus are to (i) FI Station Investor LLC ("FI Station Investor") and Fertitta Business Management LLC, entities that are owned by certain trusts and other entities owned or established for the benefit of Frank J. Fertitta III, our Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, a member of our board of directors, and their spouses and lineal descendants and certain of our other current and former executive officers, (ii) Frank J. Fertitta III and Lorenzo J. Fertitta, or any of their spouses or lineal descendants, and (iii) any trust or entity, other than the Company, that is controlled by, or established for the benefit of, or the estate of Frank J. Fertitta or Lorenzo J. Fertitta or their spouses or lineal descendants (collectively with FI Station Investor and Fertitta Business Management LLC, the "Fertitta Family Entities").

    When we present information on a "pro forma" basis, such information gives pro forma effect to the Offering and Reorganization Transactions and such other transactions described in this prospectus under "Unaudited Pro Forma Condensed Combined Financial Information."


Industry and Market Data

        Although we are responsible for all disclosure contained in this prospectus, in some cases we have relied on certain market and industry data obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications and government publications in conjunction with our assumptions about our markets. Unless otherwise noted, the independent third-party sources for the economic indicators cited herein are based on the citations set forth as footnotes to the tables appearing on pages 108 and 112 in the section of this prospectus entitled "Description of Our Business—Our Competitive Strengths." While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors" in this prospectus.


Presentation of Financial Information

        Red Rock is a newly-formed Delaware corporation with no operations. Station Casinos LLC ("Station LLC") is a gaming and entertainment company that owns, operates and manages hotel and casino properties. Station Holdco LLC and Station Voteco LLC ("Station Voteco") hold all of the economic and voting interests, respectively, in Station LLC (collectively, "Station Holdco"). Station LLC operates under management agreements with Fertitta Entertainment LLC ("Fertitta Entertainment").

ii


Table of Contents

        On April 30, 2012, Station Holdco and Fertitta Entertainment and their respective consolidated subsidiaries became under the common control of brothers Frank J. Fertitta III and Lorenzo J. Fertitta, who collectively hold more than 50% of their voting and economic interests.

        In October 2015, Station LLC entered into an agreement to purchase all of the outstanding membership interests of Fertitta Entertainment (the "Fertitta Entertainment Acquisition") which constitutes the acquisition of an entity under common control.

        Unless otherwise indicated, the historical financial information of Station Holdco, our predecessor for accounting purposes in this prospectus, represents the effect of the retrospective combination of the financial statements of Station Holdco and Fertitta Entertainment for all periods subsequent to April 30, 2012.


Non-GAAP Financial Measures

        We have included a presentation of Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") in this prospectus that is not in accordance with generally accepted accounting principles ("GAAP"). 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 operating 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 items. 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. In addition, it should be noted that not all gaming companies that report EBITDA or adjustments to this measure may calculate EBITDA or 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. See "Summary Historical and Unaudited Pro Forma Condensed Combined Financial and Other Data" for definitions of the non-GAAP financial measures used in this prospectus and reconciliations thereof to the most directly comparable GAAP measures.

iii


Table of Contents



PROSPECTUS SUMMARY

        This summary highlights selected information about us and this Offering but does not contain all of the information that you should consider before investing in our Class A Common Stock. Before making an investment decision, you should read this entire prospectus carefully, including the discussion under the heading "Risk Factors" and the combined financial statements and related notes thereto contained elsewhere in this prospectus. This prospectus includes forward looking-statements that involve risks and uncertainties. See "Forward-Looking Statements" for more information.


Our Company

        We are a leading gaming, development and management company operating 21 strategically-located casino and entertainment properties. We have developed over $5 billion of regional gaming and entertainment destinations in multiple jurisdictions. In addition, we are an established leader in Native American gaming, managing facilities in northern California and western Michigan. We began operations in 1976 with a 5,000 square foot casino featuring 100 slot machines and have grown through development and acquisitions to become a premier provider of gaming and entertainment for residents of the Las Vegas regional market and visitors. Our Las Vegas portfolio includes nine major gaming and entertainment facilities and ten smaller casinos (three of which are 50% owned), offering approximately 19,300 slot machines, 300 table games and 4,000 hotel rooms. Our Las Vegas properties are broadly distributed throughout the market and easily accessible, with over 90% of the Las Vegas population located within five miles of one of our gaming facilities. We offer convenience and a wide variety of gaming and non-gaming entertainment options to attract guests to our properties. We also provide friendly service and exceptional value in a comfortable environment. 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 consisting of approximately 398 acres in Las Vegas and Reno, Nevada.

        We believe that the Las Vegas regional market is one of the most attractive gaming markets in the United States due to favorable economic and market fundamentals, a number of which drive demand for our products. The following metrics, for the most recent period available, indicate that an economic recovery is underway in the Las Vegas regional market:

    Population growth was approximately 2.7 times the national average in 2015;

    Las Vegas year-over-year employment growth was 2.4%, based on December 2015 data from the U.S. Bureau of Labor Statistics ("BLS"), which marks the fifth consecutive year of positive growth;

    Home value appreciation of 9.3%, compared to the national average of 5.6% during the year ended December 31, 2015;

    Las Vegas welcomed a record 42.3 million visitors for the year ended December 31, 2015; and

    Approximately $13.9 billion in new investments are either in the planning stages or actively under development in Las Vegas, based on public announcements.

        In addition to these favorable demand drivers, the Las Vegas regional market provides a stable and highly attractive tax structure, as well as legal limitations that restrict the development of additional off-Strip gaming properties. In particular:

    Nevada offers the lowest maximum statutory gaming tax rate in the United States at 6.75%, and has only raised gaming taxes once in the last 28 years;

1


Table of Contents

    Nevada State Senate Bill 208 ("SB 208"), enacted in 1997, significantly limits the construction of casinos in the Las Vegas valley; and

    No new major gaming facilities have opened in the Las Vegas regional market that cater predominantly to Las Vegas residents since 2009 and no new development of such facilities has been announced.

        We are intensely focused on providing the best possible guest experience and creating guest loyalty. Our "Boarding Pass" loyalty program, which allows members to earn and redeem rewards at any of our properties, has achieved high levels of guest use with a significant majority of our gaming revenue generated by Boarding Pass members. In addition, nearly half of the adult population of the Las Vegas metropolitan area are members of our Boarding Pass program and have visited one or more of our properties during the year ended December 31, 2015. The Boarding Pass also has significant brand recognition and guest value, as evidenced by being selected "Best Players Club" for each of the last 15 years by the Las Vegas Review Journal.

        We became a publicly traded company in 1993 and, following a significant period of development and expansion between 1993 and 2007, were taken private in 2007 in a management-led buyout. Impacted by the financial crisis between 2008 and 2011, we completed a restructuring in June 2011. Since that time, we have:

    Further strengthened our capital structure by:

    Reducing total debt by $440 million to $2.0 billion as of December 31, 2015 (excluding a $114.6 million non-recourse land loan) from approximately $2.45 billion; and

    Significantly reducing the ratio of total debt to Adjusted EBITDA.

    Invested $380 million in capital improvements to maintain and enhance our properties, including:

    Adding and renovating numerous non-gaming amenities across our portfolio;

    Continuing to refresh our gaming floors with the latest products and technology;

    Creating innovative technology products such as mobile sports betting applications and interactive marketing kiosks; and

    Investing in information technology to improve our systems and protect our and our guests' proprietary data.

    Improved our profitability:

    For the year ended December 31, 2015 compared to the year ended December 31, 2014, Adjusted EBITDA increased 13.1% and Adjusted EBITDA margin improved by 250 basis points to 33.4% while income from continuing operations increased by 9.4%.

        See "Summary Historical and Unaudited Pro Forma Condensed Combined Financial and Other Data" for the definition of Adjusted EBITDA and a reconciliation of this non-GAAP metric to the most directly comparable GAAP metric.

        We believe that our high-quality assets, market-wide distribution and award-winning Boarding Pass loyalty program will allow us to achieve significant benefits from improving economic conditions in Las Vegas. Further, our refined cost structure will help maximize the flow-through of net revenue to Adjusted EBITDA, as additional economic growth drives incremental revenue at our properties. These factors position us well for future growth, including expanding our existing properties, developing our strategic real estate portfolio, pursuing new management contracts, and opportunistically acquiring existing properties and pursuing new developments in other markets.

2


Table of Contents

Our Competitive Strengths

        We believe the following competitive strengths position us well for future growth and financial performance.

Portfolio of highly attractive assets broadly distributed throughout Las Vegas

        We own and operate 19 strategically-located casino and entertainment properties in the Las Vegas regional market, and over 90% of the Las Vegas population is located within five miles of one of our casinos. All of our properties enjoy convenient access and visibility from an interstate highway or major thoroughfare. As of December 31, 2015, our 19 Las Vegas properties offered the following gaming and non-gaming amenities:

    19,309 slot and video poker machines featuring the latest technology and most popular themes in a variety of denominations;

    302 table games, including blackjack, baccarat, craps, roulette and high-limit gaming salons;

    4,041 hotel rooms ranging from standard rooms to one-of-a-kind luxury suites of more than 7,500 square feet;

    113 food and beverage venues, including 57 restaurants ranging from fine dining to casual dining and 56 quick-serve outlets;

    53 bars and lounges ranging from casual country to ultra-modern chic, featuring signature cocktails, live music and dancing;

    270,000 square feet of flexible convention and meeting space ranging from boardrooms to ballrooms;

    26 live entertainment venues ranging from intimate lounges to the 5,000-seat outdoor Sunset Amphitheater, and hosting a wide variety of acts from rock and country headliners to cover bands and comedians;

    96 movie screens in seven theaters with IMAX 3D, private viewing boxes and the latest sound and seating technology; and

    282 bowling lanes in five state-of-the-art facilities, featuring cosmic bowling, VIP lanes, private party suites and cocktail lounges.

        We take great pride in the appearance of our properties and have historically invested a considerable amount of capital to maintain, refresh and enhance our properties in a manner that is consistent with our high standards and to position our properties as best-in-class.

        The Las Vegas economy has begun to recover from the economic downturn and recent trends indicate that the recovery is ongoing. We believe the Las Vegas regional market is one of the most attractive gaming markets in the United States due to its strong economic and demographic fundamentals, a stable and supportive regulatory environment, the lowest maximum statutory gaming tax rate in the nation and significant current and announced investment.

Large and Loyal Customer Base

        We have a large and established guest database. Our Boarding Pass loyalty rewards program has achieved high levels of guest use, with a significant majority of our gaming revenue being generated by Boarding Pass members. In addition, we estimate that nearly half of the adult population of the Las Vegas metropolitan area are members of our Boarding Pass program and have visited one or more of our properties during the year ended December 31, 2015. The Boarding Pass also has significant brand recognition and guest value, as evidenced by being selected "Best Players Club" for each of the last

3


Table of Contents

15 years by the Las Vegas Review Journal. The Boarding Pass encourages guest loyalty and allows us to provide tailored promotions, messaging and guest experience. The program links all of our properties, allowing players to earn and redeem points at any of our properties, providing unparalleled diversity of experience, which we believe provides us with a competitive advantage. We believe that our targeted marketing strategies creates guest loyalty, as a significant majority of our Boarding Pass members who were in our database as of December 31, 2014 continued to visit our properties in 2015. We believe these marketing strategies will enable us to continue to grow our database and promote repeat visitation by Boarding Pass members.

Well positioned for growth

        We believe that our uniquely positioned platform will continue to benefit from the ongoing recovery of the Las Vegas economy through increased visitation and guest spend, as population, employment and average weekly earnings growth are all critical drivers of both gaming and non-gaming revenues. Based on data from the BLS, employment and average weekly earnings in the Las Vegas area were 2.4% and 3.8% higher, respectively, in December 2015 compared to December 2014. As employment levels and average weekly earnings continue to improve, we expect continued growth in gaming revenues, which at $2.1 billion for the year ended December 31, 2015 remained approximately 17.1% below peak levels experienced in the Las Vegas regional market in 2007. We believe our existing cost structure, which benefits from Nevada having the lowest maximum statutory gaming tax rate in the United States, contributes to lower variable costs and creates a scalable platform to support higher margin growth. We also believe that our capital structure provides us with the flexibility to pursue additional growth opportunities.

        While a number of important regional metrics that drive demand for our products such as population, employment (measured by number of jobs) and taxable sales are above or approaching pre-recession peak levels, other metrics such as home prices and gaming revenue in the Las Vegas regional market, remain well below peak levels experienced prior to the recession.

Innovative management team and owner-operator alignment with shareholders

        We believe that one of our competitive strengths has been the ability of our highly-experienced management team, led by the Fertitta family, to identify, develop and execute innovative and value-creating opportunities. Examples include identifying the Las Vegas regional market niche in 1976, developing the regional entertainment destination concept through multiple major casino openings in the 1990's and 2000's, introducing the highly successful Boarding Pass loyalty reward program in 1999, and capitalizing on the opportunity created by Nevada's passage of SB 208 through a series of strategic acquisitions and new developments. Outside of Las Vegas, we leveraged our business model by entering into development and management agreements with several Native American tribes and developed and operated some of the most successful Native American casinos in the country.

        We have developed over $5 billion of gaming facilities, with each new property being designed for its market and benefiting from the experience gained from our prior projects. We have also developed proprietary data analytics which allow us to monitor revenues and operational expenses on a daily basis, benchmark results across properties, and provide real-time information for management decision-making. The application of our analytics and in-house technologies have resulted in Adjusted EBITDA margins that compare favorably to our public peers over the past several years.

        The Fertitta family has maintained significant ownership in the Company since it was founded in 1976, and is expected to remain our largest shareholder after this Offering. We believe the owner-operator dynamic of the Fertitta family's continued leadership, together with its significant ownership, results in a high degree of alignment with our shareholders.

4


Table of Contents

Our Business Strategy

Continue to 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 primarily advertise through traditional media such as television, radio and newspaper, we continue to increase our focus on reaching and engaging guests through social, digital and mobile solutions.

        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. 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. In addition, we are investing in technology that will be installed on all of our slot machines and will permit us to provide "on device" marketing, bonusing and guest communication, including real-time customized promotions and incentives. We believe that our focused marketing allows us to create greater guest loyalty. We continually refine our database marketing programs to drive visitation and increase profitability. We recently introduced custom kiosk games to enhance the promotional engagement and experience of our Boarding Pass members. We plan to continue developing these custom interactive games to retain and build our guest database. We have also developed progressive mobile solutions to engage our current guests and attract new guests.

Maximize business profitability

        During our nearly 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 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 for management solutions. Detailed benchmarking across our 21 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 strong capital structure to drive growth and shareholder returns

        We maintain a flexible, low-leverage capital structure relative to our public peers that we believe will allow us to pursue a balance of new growth opportunities and a disciplined return of capital to our shareholders. We believe our scalable platform and extensive development and management expertise

5


Table of Contents

provide us the ability to build master-planned expansions, pursue acquisitions and/or seek new development opportunities in an effort to maximize shareholder returns.

Our Growth Strategy

Drive same store growth

        As the Las Vegas economy recovers, we believe population, employment levels, average weekly earnings and consumer confidence will continue to improve. We believe we are uniquely positioned to benefit from this growth through increased guest spend and visitation. We believe our existing Las Vegas portfolio should benefit from improving economic conditions resulting in ongoing same-store growth.

        In addition to our existing capacity, most of our major properties and managed casinos have been master-planned for future growth. As such, we have the ability to meet demand and increase revenue by developing additional facilities at those properties, which may include additional gaming, hotel rooms, meeting and conference space, restaurants or entertainment venues.

        The Native American gaming facilities we manage are also positioned for same-store growth. Since opening in November 2013, Graton Resort & Casino ("Graton Resort"), the largest gaming and entertainment facility in the San Francisco Bay area, has shown steadily improving business levels. Graton Resort also recently broke ground on a $175 million expansion, which includes a 200-room hotel, convention space and other resort amenities and is expected to be complete in the fall of 2016. Gun Lake Casino recently announced plans to expand its gaming, entertainment and dining offerings which are expected to open in the summer of 2017. In addition, Graton Resort and Gun Lake Casino are both positioned to benefit from the continued improvement of the overall economy, which should yield increased management fees without our need to invest additional capital.

Pursue growth opportunities

        We control seven highly desirable gaming-entitled development sites consisting of approximately 398 acres in Las Vegas and Reno, Nevada. As such, we believe we are well positioned to capitalize on future demand for additional gaming and entertainment facilities driven by growth in these markets.

        We also control and continue to pursue the development of the North Fork Rancheria's casino project. The tribe's potential casino site is located adjacent to the Golden State Highway approximately 15 miles north of Fresno, California. With over 1.1 million people in the Fresno-Madera metropolitan area and approximately 22 million vehicles per year driving past the site, we believe the tribe has one of the most favorable gaming locations in the California central valley. We also believe that we may be able to leverage our existing relationships in Native American gaming and our track record of successful development and management of Native American casinos to secure additional development opportunities.

        In addition, our development and operational expertise will allow us to evaluate and potentially pursue domestic and/or international development and acquisition opportunities in both existing and emerging markets.

Industry and Market Opportunity

        Gaming continues to be a significant and growing sector of the global economy. Gaming markets can generally be categorized as either destination markets, such as the Las Vegas Strip, frequented by out-of-town visitors who travel long distances for multi-night stays, or regional markets where guests are predominantly from within 150 miles with much more frequent visitation. Regional gaming markets can be highly impacted by macroeconomic factors including population growth, unemployment, average weekly earnings growth, gas prices, consumer confidence, consumer discretionary spending, tax rates

6


Table of Contents

and home values. Regional gaming markets are also impacted by new supply being introduced when the state or an adjacent state legalizes or expands gaming. In addition, regional gaming markets may be impacted by regulatory changes such as a tax increase or a smoking ban, which can negatively impact gaming revenues at existing facilities.


The Las Vegas Gaming Market

        Las Vegas is the largest and most prominent gaming market in the United States with approximately 100,000 slot machines, 4,500 table games and $9 billion in gaming revenue as of and for the year ended December 31, 2015 based on data from the Nevada Gaming Control Board covering Clark County, but excluding Laughlin and Mesquite. Las Vegas currently offers nearly 150,000 hotel rooms and enjoyed an occupancy rate of 87.7% for the year ended December 31, 2015. Over the past two decades, Las Vegas resorts have focused on attracting more than just gaming patrons as operators have invested heavily in non-gaming attractions and amenities. As a result, Las Vegas has become one of the nation's most popular convention and meeting destinations and draws leisure travelers attracted to its restaurants, shopping, and entertainment, as well as its gaming amenities. Since the end of the economic recession in 2009, Las Vegas has seen a rebound in visitation, welcoming a record 42.3 million visitors for the year ended December 31, 2015, up 16.4% from 2009.


The Las Vegas Regional Market

        Although world-renowned for its destination resorts along the Las Vegas Strip, southern Nevada also hosts one of the largest and most vibrant regional gaming markets in the United States. The Las Vegas regional market, comprised primarily of the residents who live and/or work in the Las Vegas area, generated revenue of $2.1 billion for the year ended December 31, 2015, which was approximately 5.1% higher than the trough that occurred during the year ended December 31, 2010, based on data from the Nevada Gaming Control Board covering Clark County, but excluding the Las Vegas Strip, Laughlin, Mesquite and Downtown.

Strong Population, Employment and Average Weekly Earnings Growth

        The Las Vegas economy, although severely impacted by the recession and housing crisis that spanned from 2008 to 2011, began to stabilize in 2012 and, based on population and employment growth, is once again one of the fastest growing economies in the United States. In 2015, population growth in Las Vegas was approximately 2.7 times the national average. Based on December 2015 data from the BLS, Las Vegas experienced a 2.4% year-over-year increase in employment which marked the fifth consecutive year of positive growth. Another important factor impacting the financial health of Las Vegas residents is average weekly earnings growth, which was 3.8% higher in December 2015 compared to December 2014 based on data from the BLS. In addition, a large portion of our guests are retirees, and Las Vegas continues to experience steady growth in retirees with the percentage of the population aged 65 and over increasing to 13.3% in 2015, from 10.6% in 2005. We believe workers and retirees will continue to be attracted to Las Vegas due to its economic momentum, availability of diverse jobs, lack of state income and estate taxes, relatively affordable housing, mild climate and multitude of entertainment and recreation options.

Increased Spending and Improving Home Values

        Businesses and consumers in Las Vegas continue to increase their spending as evidenced by 30 consecutive months of year-over-year increases in taxable retail sales from July 2013 to December 2015. 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 84% as of December 2015 compared to January 2012.

7


Table of Contents

Significant Capital Investment and Development

        This recent momentum has spurred another wave of investment in a number of sectors within the Las Vegas economy. Based on public announcements, approximately $13.9 billion in new project and infrastructure investments or are either in the planning stages or under active development in the Las Vegas valley. These projects include the Las Vegas Arena (MGM & AEG joint venture), Strip destination resort Resorts World Las Vegas; major infrastructure expansion, including Project Neon, which is a multi-phase highway improvement project that will expand Interstate 15; the Las Vegas Convention and Visitors Authority's convention center district expansion; Union Village, a massive new healthcare complex; a number of major manufacturing facilities including the Faraday Future automotive production plant; and other public and private sector investments. A number of these projects will not only create construction jobs for area residents, but will also provide a significant number of full-time employment opportunities upon opening. In addition to the direct impact of these investments, new projects typically have the indirect effect of creating additional employment as a result of local spending.

Limited New Casino Development

        Even as the Las Vegas economy continues to rebound, new casino gaming development in the Las Vegas regional market remains limited. Since 2009, there have been no new casino openings that cater predominantly to Las Vegas residents and no new development of such facilities has been announced. We also believe that the development of new casino facilities will continue to be limited due to SB 208, which limited casino gaming in the Las Vegas valley to specified gaming districts and established more restrictive criteria for the creation of new gaming districts.

Stable Regulatory Environment and Lowest Maximum Statutory Gaming Tax Rate in the United States

        The Las Vegas regional market also benefits from local and state laws and regulations which are accommodative to business in general and, more specifically, the gaming industry, including a stable and highly favorable tax structure. Of states offering commercial gaming, Nevada has the lowest maximum statutory gaming tax rate at 6.75%. Further, the Nevada gaming tax rate has remained unchanged since 2003, when it was changed for the first time since 1987 and only increased by 50 basis points. By contrast, the highest maximum statutory gaming tax rate in the United States is 67% in Maryland.

Recent Developments

        Although our financial results for the three months ended March 31, 2016 are not yet finalized, the following information reflects our preliminary expectations with respect to our financial results based on information currently available to management:

        We expect net revenues to be in the range of $355.0 million to $362.6 million for the three months ended March 31, 2016, an increase of approximately 4.7% based on the midpoint of the range compared to net revenues of $342.8 million for the three months ended March 31, 2015;

        We expect income from continuing operations to be in the range of $52.3 million to $66.0 million for the three months ended March 31, 2016, an increase of approximately 29.4% based on the midpoint of the range compared to income from continuing operations of $45.7 million for the three months ended March 31, 2015; and

        We expect Adjusted EBITDA to be in the range of $130.2 million to $136.2 million for the three months ended March 31, 2016, an increase of approximately 11.2% based on the midpoint of the range compared to Adjusted EBITDA of $119.8 million for the three months ended March 31, 2015. For the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to income from continuing

8


Table of Contents

operations, see footnote (f) to "Summary Historical and Unaudited Pro Forma Condensed Combined Financial and Other Data."

        At March 31, 2016, the principal amount of our indebtedness was $2.18 billion.

        The estimated increase in net revenues, income from continuing operations and Adjusted EBITDA is primarily due to improvements in our casino and room operations. Such increases reflect the impact of the ongoing economic recovery in Las Vegas, which resulted in period over period improvements in slot handle and table drop and improvements in occupancy rate and average daily rate in our Las Vegas operations. In addition, management fees from our Native American managed properties increased as a result of improved casino operations at both of our managed properties and lower interest costs due to debt refinancing at Graton Resort.

        This preliminary information is the responsibility of management, reflects management's good faith estimates based solely upon information available to us as of the date hereof and is not a comprehensive statement of our financial results for the three months ended March 31, 2016. We have provided a range for the preliminary estimated financial results described above primarily because they remain subject to the completion of our financial closing procedures, which will not occur until after the completion of this offering. Our actual results may differ materially from these estimated ranges. For example, during the course of the preparation of the respective financial statements and related notes and the review of our financial statements for the three months ended March 31, 2016, additional items that would require material adjustments to be made to the preliminary estimated financial information presented above may be identified. The information presented above should not be considered a substitute for full unaudited financial statements prepared in accordance with GAAP.

        Our independent registered public accounting firm, Ernst & Young LLP, has not reviewed, compiled or performed any procedures on this preliminary information. Accordingly, Ernst & Young LLP does not express an opinion or any other form of assurance with respect to the preliminary information. Therefore, you should not place undue reliance upon these preliminary estimates. These preliminary results should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes, all included elsewhere in this prospectus. For additional information, see "Risk Factors."

Our Structure

        Following the consummation of the Offering and Reorganization Transactions, Red Rock will be a holding company that has no assets other than its direct and indirect equity interest in Station Holdco and its voting interest in Station LLC. Red Rock will operate and control all of the business and affairs and consolidate the financial results of Station Holdco and its subsidiaries. Prior to the completion of this Offering, Station Holdco will amend and restate its limited liability company agreement to, among other things, appoint Red Rock as its sole managing member. Red Rock, Station Holdco and the existing owners are expected to enter into an exchange agreement under which (subject to the terms of the exchange agreement) the existing owners will have the right to exchange their LLC Units, together with an equal number of shares of Class B Common Stock, for shares of Red Rock Class A Common Stock. Pursuant to such exchange agreement, the existing owners will exchange (x) one LLC Unit and one share of Class B Common Stock for (y) one share of Class A Common Stock, or, at our election, for cash, which we refer to as an exchange of LLC Units and shares of Class B Common Stock for shares of Class A Common Stock on a one-for-one basis. When LLC Units and a corresponding number of shares of Class B Common Stock are exchanged for Class A Common Stock by a holder of LLC Units pursuant to such exchange agreement, such shares of Class B Common Stock will be cancelled.

        Our business is currently managed by Fertitta Entertainment pursuant to management agreements that each have a term of 25 years and were entered into in June 2011. Frank J. Fertitta III, our

9


Table of Contents

Chairman and Chief Executive Officer, and Lorenzo J. Fertitta, a member of our board of directors, own a majority of the equity interests of each of Fertitta Entertainment and Station Holdco. Our executive officers (other than Daniel J. Roy) and certain other key personnel are employed by Fertitta Entertainment and provide services to us pursuant to the management agreements. As compensation for the management services provided to us, Fertitta Entertainment receives a base management fee equal to two percent of the gross revenues attributable to our properties and an incentive management fee equal to five percent of positive EBITDA of our properties. In connection with this Offering, we expect to consummate the Fertitta Entertainment Acquisition for a purchase price of $460.0 million less the amount paid by the Company in satisfaction of indebtedness of Fertitta Entertainment on the closing date, which is expected to be approximately $51.7 million, and subject to reduction for the amount of Fertitta Entertainment's liabilities that are assumed by Station LLC, which are estimated to be approximately $1.5 million. The purchase price for the Fertitta Entertainment Acquisition will be paid to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment. The terms of the Fertitta Entertainment Acquisition were negotiated by the members of Fertitta Entertainment, on the one hand, and on the other hand by both German American Capital Corporation ("GACC") (as the holder of certain approval rights under the existing equityholders agreement for Station Holdco and its subsidiaries) and by a special committee of the board of managers of Station LLC (comprised of Dr. James E. Nave and Mr. Robert E. Lewis, each of whom was determined to be disinterested in the Fertitta Entertainment Acquisition). The special committee unanimously approved the terms of the Fertitta Entertainment Acquisition, and had the assistance and counsel of independent legal and financial advisors retained by such special committee in the negotiation and approval of such terms. At the closing of the Fertitta Entertainment Acquisition, Fertitta Entertainment is not expected to have material assets other than the management agreements for the Company's business and its workforce. In connection with the Fertitta Entertainment Acquisition, we expect to terminate the management agreements with Fertitta Entertainment by mutual agreement for no additional consideration and assume or enter into new employment agreements or other employment relationships with our executive officers and other individuals who were employed by Fertitta Entertainment and provided services to us through the management agreements prior to the consummation of the Fertitta Entertainment Acquisition. See "Certain Relationships and Related Party Transactions—Acquisition of Fertitta Entertainment."

        We estimate that the net proceeds to us from the sale of our Class A Common Stock in this Offering, after deducting underwriting discounts and commissions but before expenses, will be approximately $495.9 million ($570.8 million if the underwriters exercise their option to purchase additional shares in full), based on the initial public offering price of $19.50 per share. We intend to use such net proceeds as follows:

    $424.4 million to acquire newly-issued LLC Units in Station Holdco. In turn, Station Holdco intends to:

    Contribute $417.5 million of the proceeds it receives from us to Station LLC to pay a portion of the purchase price for the Fertitta Entertainment Acquisition. The balance of the Fertitta Entertainment Acquisition will be funded by debt incurred by Station LLC. The purchase price for the Fertitta Entertainment Acquisition, including the offering proceeds that are contributed to Station LLC to fund a portion of the purchase price for the Fertitta Entertainment Acquisition, will be paid by Station LLC to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by

10


Table of Contents

      certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment.

    Apply the balance of the proceeds it receives from us to pay expenses incurred in connection with the Offering and Reorganization Transactions.

    $67.4 million (or $142.4 million if the underwriters exercise their option to purchase additional shares in full) to purchase LLC Units from certain of our existing owners, at a per-LLC Unit price equal to the price paid by the underwriters for shares of our Class A Common Stock in this Offering. Accordingly, we will not retain any of these proceeds. See "Certain Relationships and Related Party Transactions—Purchase of LLC Units from Existing Owners."

    $4.1 million to pay withholding tax obligations with respect to certain members of the Merging Blockers (as defined below).

        The following chart summarizes our organizational structure following the consummation of the Offering and Reorganization Transactions and the Fertitta Entertainment Acquisition. This chart is

11


Table of Contents

provided for illustrative purposes only and does not purport to represent all legal entities owned or controlled by us:

GRAPHIC


(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 will be entitled to one vote, each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owns at least 30% of the outstanding LLC Units immediately following this Offering 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) will be entitled to ten votes and each

12


Table of Contents

    other outstanding share of Class B Common Stock will be entitled to one vote. We expect that the only existing owners that will satisfy the foregoing criteria will be Fertitta Family Entities. Consequently, such entities will be the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock immediately following this Offering. See "Principal and Selling Stockholders." In accordance with the exchange agreement to be entered into in connection with the Offering and Reorganization Transactions, holders of LLC Units will be 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.

(2)
As part of the Offering and Reorganization Transactions, ADVSTRA SC Holdings, LLC, CAPINC SC Holdings, LLC, PAIN SC Holdings, LLC, PRTN SC Holdings, LLC, STRAINC SC Holdings, LLC, Serengeti SC Blockerco LLC, PB Investor I LLC and PB Investor II LLC, Delaware entities that have elected to be taxed as a corporation for U.S. federal income tax purposes (the "Merging Blockers"), will merge with newly-formed subsidiaries of Red Rock in transactions intended to qualify as tax-free for U.S. federal income tax purposes (referred to herein as the "Blocker Mergers"). In the Blocker Mergers, the owner(s) of each Merging Blocker will collectively receive one share of Class A Common Stock for each LLC Unit owned by such Merging Blocker and such number of LLC Units as would be issuable upon a cashless exercise of the Warrants (defined below) held by such Merging Blocker. In the aggregate, approximately 10,137,209 shares of Class A Common Stock of Red Rock are expected to be issued as consideration in the Blocker Mergers. In connection with the Blocker Mergers, the Company will (i) withhold 222,959 shares of Class A Common Stock that would otherwise be issued to certain of the members of the Merging Blockers, (ii) sell such shares in this Offering, and (iii) use the net proceeds from the sale of such shares to pay withholding tax obligations with respect to such members. The number of shares of Class A Common Stock issued in the Blocker Mergers and withholding with respect thereto will depend on the actual initial public offering price per share.

    Warrants to purchase an aggregate of 4,337,475 LLC Units (including warrants held by the Merging Blockers) (collectively, the "Warrants") will become exercisable upon consummation of this Offering. We expect that the Warrants will be amended to provide for cashless exercise for LLC Units and that all of the Warrants will be exercised promptly following consummation of this Offering. Assuming that all of the outstanding Warrants are exercised on a cashless basis, an aggregate of 476,531 LLC Units will be issuable upon exercise of the Warrants.

(3)
Holders of profit units issued by Station Holdco, all of whom are current or former employees of Station LLC, will receive restricted shares of Class A Common Stock issued pursuant to the terms of our new Red Rock Resorts, Inc. 2016 Equity Incentive Plan in substitution for such profit units. As of December 31, 2015, an aggregate of 10,039,007 Station Holdco profit units were outstanding. Pursuant to the terms of the Station Holdco Amended and Restated Profit Unit Plan, an aggregate of 1,832,891 restricted shares of Class A Common Stock will be substituted for the outstanding Station Holdco profit units.

(4)
A portion of these LLC Units will be held by subsidiaries of Red Rock. Assumes no exercise of the underwriters' option to purchase additional shares. If the underwriters exercise their option to purchase additional shares in full, (i) the holders of Class A Common Stock will have 8.3% of the voting power in Red Rock, (ii) holders of Class B Common Stock will have 91.7% of the voting power of Red Rock, (iii) the LLC Units held by the existing owners will constitute 62.8% of the outstanding LLC Units in Station Holdco, and (iv) Red Rock will own 37.2% of the outstanding LLC Units in Station Holdco.

        See "The Reorganization of Our Corporate Structure," "Certain Relationships and Related Party Transactions" and "Description of Capital Stock" for more information on the exchange agreement and the rights associated with our common stock and the LLC Units.

13


Table of Contents

Risks Associated with our Business

        An investment in shares of our Class A Common Stock involves a high degree of risk. Below is a summary of certain key risk factors that you should consider in evaluating an investment in shares of our Class A Common Stock:

    our reliance on the Las Vegas 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;

    the risk that new gaming licenses or gaming activities, such as internet gaming, are approved and result in additional competition;

    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, including anti-money laundering laws and regulations, 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

    the lack of a public market for our common stock.

        This list is not exhaustive. Please read the full discussion of these risks and other risks described under the caption "Risk Factors" beginning on page 25 of this prospectus.

Corporate Information

        The Company's principal executive offices are located at 1505 South Pavilion Center Drive, Las Vegas, Nevada, 89135 and its telephone number is (702) 495-3000. The Company's website address is www.sclv.com. Information contained on or accessible through the Company's website is not a part of this prospectus and the inclusion of the website address in this prospectus is an inactive textual reference only.

14


Table of Contents

 


THE OFFERING

Issuer

  Red Rock Resorts, Inc.

Class A Common Stock Offered by Us

 

27,054,686 shares.

Class A Common Stock offered by Selling Stockholders

 

195,314 shares.

Underwriters' Option to Purchase Additional Shares

 

We have granted the underwriters a 30-day option to purchase up to 4,087,500 additional shares of Class A Common Stock at the initial public offering price less the underwriting discount.

Class A Common Stock to Be Outstanding After this Offering

 

38,971,058 shares (or 43,058,558 shares if the underwriters exercise their option to purchase additional shares in full) (or 115,854,794 shares if each outstanding LLC Unit were exchanged for one share of Class A Common Stock, as described under "The Reorganization of Our Corporate Structure").

Class B Common Stock to Be Outstanding After this Offering

 

76,883,736 shares (or 72,796,236 shares if the underwriters exercise their option to purchase additional shares in full). In connection with the Offering and Reorganization Transactions, existing owners will purchase for nominal consideration one share of Class B Common Stock for each LLC Unit owned by such existing owner.

 

When LLC Units and a corresponding number of shares of Class B Common Stock are exchanged for Class A Common Stock by a holder of LLC Units pursuant to the exchange described below, such shares of Class B Common Stock will be cancelled.

Voting Power Held by Holders of Class A Common Stock After This Offering

 

7.3% (or 8.3% if the underwriters exercise their option to purchase additional shares in full) (or 100% if each outstanding LLC Unit were exchanged for one share of Class A Common Stock, as described under "The Reorganization of Our Corporate Structure"). Each share of Class A Common Stock will be entitled to one vote. Because shares of Class A Common Stock are entitled to one vote, whenever a holder of Class B Common Stock that is entitled to ten votes per share effects an exchange of LLC Units, together with an equivalent number of shares of Class B Common Stock, for shares of Class A Common Stock, such holder's aggregate voting power with respect to Red Rock will be commensurately reduced.

15


Table of Contents

Voting Power Held by Holders of Class B Common Stock After This Offering

 

92.7% (or 91.7% if the underwriters exercise their option to purchase additional shares in full) (or 0% if each outstanding LLC Unit were exchanged for one share of Class A Common Stock, as described under "The Reorganization of Our Corporate Structure"). Each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owns at least 30% of the outstanding LLC Units immediately following this Offering 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) will be entitled to ten votes and each other outstanding share of Class B Common Stock will be entitled to one vote. Because shares of Class A Common Stock are entitled to one vote, whenever a holder of Class B Common Stock that is entitled to ten votes per share effects an exchange of LLC Units, together with an equivalent number of shares of Class B Common Stock, for shares of Class A Common Stock, such holder's aggregate voting power with respect to Red Rock will be commensurately reduced.

Exchange

 

LLC Units, together with an equal number of shares of Class B Common Stock, may be exchanged at any time, in certain minimum increments, for shares of our Class A Common Stock on a one-for-one basis or, at our election, for cash.

Use of Proceeds

 

We estimate that the net proceeds to us from the sale of our Class A Common Stock in this Offering, after deducting underwriting discounts and commissions but before expenses, will be approximately $495.9 million ($570.8 million if the underwriters exercise their option to purchase additional shares in full). We intend to use such net proceeds as follows:

 

$424.4 million to acquire newly-issued LLC Units in Station Holdco. In turn, Station Holdco intends to:

 

Contribute $417.5 million of the proceeds it receives from us to Station LLC to pay a portion of the consideration for the Fertitta Entertainment Acquisition. The balance of the purchase price for the Fertitta Entertainment Acquisition will be funded by debt incurred by Station LLC. The purchase price for the Fertitta Entertainment Acquisition, including the offering proceeds that are contributed to Station LLC to fund a portion of the purchase price for the Fertitta Entertainment Acquisition, will be paid by Station LLC to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment.

16


Table of Contents

 

Apply the balance of the proceeds it receives from us to pay expenses incurred in connection with the Offering and Reorganization Transactions.

 

$67.4 million (or $142.4 million if the underwriters exercise their option to purchase additional shares in full), to purchase LLC Units from certain of our existing owners, at a per-LLC Unit price equal to the price paid by the underwriters for shares of our Class A Common Stock in this Offering. Accordingly, we will not retain any of these proceeds.

 

$4.1 million to pay withholding tax obligations with respect to certain members of the Merging Blockers.

 

We will not receive any proceeds from the sale of shares of Class A Common Stock by the selling stockholders.

Voting Rights

 

Holders of shares of Class A Common Stock and Class B Common Stock will be entitled to vote on all matters to be voted on by stockholders. Each outstanding share of Class A Common Stock will be entitled to one vote, each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owns at least 30% of the outstanding LLC Units immediately following this Offering 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) will be entitled to ten votes and each other outstanding share of Class B Common Stock will be entitled to one vote. We expect that the only existing owners that will satisfy the foregoing criteria will be Fertitta Family Entities. Consequently, such entities will be the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock immediately following this Offering. See "Principal and Selling Stockholders." The shares of Class B Common Stock will have no economic rights. Each share of our Class B Common Stock will be 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 consummation of this Offering 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). See "Description of Capital Stock—Capital Stock—Class B Common Stock—Voting Rights."

17


Table of Contents

 

Holders 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.

Dividend Policy

 

Following this Offering and subject to legally available funds, we intend to pay quarterly cash dividends to the holders of our Class A Common Stock initially equal to $0.10 per share of Class A Common Stock, commencing with the third quarter of 2016.

 

The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors. Our board of directors will take into account general economic and business 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 (including Station Holdco) to us, and such other factors as our board of directors may deem relevant. The payment of cash distributions by Station LLC to Station Holdco is restricted under the terms of the agreements governing its outstanding debt, and may be further restricted by other agreements related to indebtedness we incur in the future.

 

Red Rock is a holding company and has no material assets other than its direct and indirect equity interest in Station Holdco and its voting interest in Station LLC. We intend to cause Station Holdco to make distributions to us in an amount sufficient to cover cash dividends, if any, declared by us. 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.

Ticker Symbol

 

"RRR"

Risk Factors

 

See "Risk Factors" and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in shares of our Class A Common Stock.

Conflict of Interest

 

Because Deutsche Bank Securities Inc., an underwriter for this Offering, is an affiliate of GACC, which is a significant stockholder and one of our existing owners that will receive more than 5% of the net proceeds of this Offering, a conflict of interest under Financial Industry Regulatory Authority, Inc. ("FINRA") Rule 5121 is deemed to exist. Accordingly, this Offering will be conducted in accordance with that rule. See "Underwriting (Conflicts of Interest)."

18


Table of Contents

        Except as otherwise indicated, all information in this prospectus:

    assumes no exercise of the underwriters' option to purchase additional shares;

    assumes 1,604,961 shares of our Class A Common Stock are issuable upon exercise of options to purchase shares of Class A Common Stock pursuant to grants that are expected to be made under the Company's 2016 Equity Incentive Plan to certain of our employees in connection with the Offering. See "Executive Compensation—2016 Equity Incentive Plan";

    assumes 76,883,736 shares of Class A Common Stock are reserved for issuance upon the exchange of LLC Units held by the existing owners immediately following this Offering;

    assumes 10,137,209 shares of Class A Common Stock are issued in the Blocker Mergers;

    assumes 1,832,891 restricted shares of Class A Common Stock are issued to holders of profit units issued by Station Holdco;

    assumes the grant of 169,231 restricted shares of Class A Common Stock to employees and non-employee directors in connection with this Offering; and

    assumes 476,531 LLC Units are issued to holders of the Warrants.

19


Table of Contents



SUMMARY HISTORICAL AND UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL AND OTHER DATA

        The following summary historical and pro forma condensed combined financial and other data should be read in conjunction with, and are qualified by reference to, "Presentation of Financial Information," "The Reorganization of Our Corporate Structure," "Use of Proceeds," "Unaudited Pro Forma Condensed Combined Financial Information," "Selected Historical Combined Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the combined financial statements of Station Holdco and notes thereto included elsewhere in this prospectus.

        Station Holdco will be considered Red Rock's predecessor for accounting purposes, and the combined financial statements of Station Holdco will be our historical financial statements following this Offering. The summary historical combined financial data of Station Holdco presented below for the years ended December 31, 2015, 2014 and 2013, and as of December 31, 2015, 2014 and 2013, have been derived from and should be read together with the combined financial statements of Station Holdco and the accompanying notes, which are contained elsewhere in this prospectus.

        The summary unaudited pro forma condensed combined statement of operations data of Red Rock for the year ended December 31, 2015 presents our combined results of operations giving pro forma effect to the Offering and Reorganization Transactions as described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds" and the Fertitta Entertainment Acquisition, including the transfer of certain assets and repayment of certain liabilities not included in the Fertitta Entertainment Acquisition (and therefore not reflected in the historical combined financial statements of Station Holdco), as if such transactions occurred on January 1, 2015, and assuming no exercise of the underwriters' option to purchase additional shares.

        The summary unaudited pro forma condensed combined balance sheet data of Red Rock as of December 31, 2015 presents our combined financial position giving pro forma effect to the Offering and Reorganization Transactions as described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds" and the Fertitta Entertainment Acquisition, including the transfer of certain assets and repayment of certain liabilities of Fertitta Entertainment not included in the Fertitta

20


Table of Contents

Entertainment Acquisition, as if such transactions had occurred on December 31, 2015 and assuming no exercise of the underwriters' option to purchase additional shares.

 
   
  Historical  
 
  Pro Forma  
 
  Year Ended December 31,  
 
  Year Ended
December 31,
2015
 
 
  2015   2014   2013  
 
  (unaudited)
   
   
   
 
 
  (dollars in thousands, except per share amounts)
 

Statement of Operations Data:

                         

Operating revenues:

                         

Casino

  $ 922,154   $ 922,154   $ 897,361   $ 882,241  

Food and beverage

    251,235     251,235     239,212     235,722  

Room

    122,888     122,888     112,664     105,630  

Other

    69,728     69,728     70,522     67,431  

Management fees

    88,859     88,859     68,782     59,758  

Gross revenues

    1,454,864     1,454,864     1,388,541     1,350,782  

Promotional allowances

    (102,729 )   (102,729 )   (96,925 )   (94,645 )

Net revenues

    1,352,135     1,352,135     1,291,616     1,256,137  

Operating costs and expenses:

                         

Casino

    347,509     347,509     341,490     339,651  

Food and beverage

    162,722     162,722     157,191     161,790  

Room

    46,559     46,559     45,479     43,062  

Other

    25,454     25,454     28,979     26,580  

Selling, general and administrative

    331,520     327,857     320,120     327,820  

Preopening

    1,165     1,165     640     222  

Depreciation and amortization

    137,865     137,865     127,961     128,958  

Impairment of goodwill

                1,183  

Asset impairment(a)

    6,301     6,301     11,739      

Write-downs and other charges, net(b)

    3,695     9,514     20,956     11,895  

    1,062,790     1,064,946     1,054,555     1,041,161  

Operating income

    289,345     287,189     237,061     214,976  

Earnings from joint ventures

    809     809     924     1,603  

Operating income and earnings from joint ventures

    290,154     287,998     237,985     216,579  

Other (expense) income:

                         

Interest expense, net

    (144,325 )   (144,489 )   (151,702 )   (165,220 )

Loss on extinguishment of debt(c)

        (90 )   (4,132 )   (147,131 )

Gain on Native American development(d)

            49,074     16,974  

Change in fair value of derivative instruments

    (1 )   (1 )   (90 )   (291 )

    (144,326 )   (144,580 )   (106,850 )   (295,668 )

Income (loss) from continuing operations before income taxes

    145,828     143,418     131,135     (79,089 )

Income tax (expense) benefit

    (16,502 )            

Income (loss) from continuing operations

    129,326     143,418     131,135     (79,089 )

Discontinued operations(e)

        (166 )   (42,548 )   (24,976 )

Net income (loss)

    129,326     143,252     88,587     (104,065 )

Less: net income (loss) attributable to noncontrolling interests

    98,680     5,594     (11,955 )   (9,067 )

Net income (loss) attributable to Red Rock

  $ 30,646   $ 137,658   $ 100,542   $ (94,998 )

Basic weighted average number of Class A Common shares outstanding

    38,403,220                    

Basic net income per share applicable to Class A Common Stock

  $ 0.80                    

Diluted weighted average number of Class A Common shares outstanding

    115,854,794                    

Diluted net income per share applicable to Class A Common Stock

  $ 0.79                    

Other data

   
 
   
 
   
 
   
 
 

Adjusted EBITDA(f)

  $ 451,414   $ 451,414   $ 399,049   $ 362,117  

Capital expenditures

          129,925     102,748     86,728  

Number of hotel rooms(g)

          4,041     4,015     4,056  

Average hotel occupancy rate

          93.5 %   90.6 %   88.9 %

Number of slot machines(g)

          23,888     24,334     20,640  

Number of table games(g)

          466     469     310  

21


Table of Contents

 

 
  Pro Forma   Historical  
 
  As of
December 31,

  As of December 31,  
 
  2015   2015   2014  
 
  (unaudited)
   
   
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 116,426   $ 116,426   $ 122,579  

Total assets

    2,887,225     2,932,111     2,973,824  

Long term debt, including current portion

    2,123,388     2,155,197     2,145,364  

Total equity

    546,316     573,709     644,117  

(a)
Asset impairment primarily represents the write-down of certain parcels of land to their estimated fair values.

(b)
Write-downs and other charges, net, primarily represent losses on asset disposals, severance expense and non-routine transactions.

(c)
During the year ended December 31, 2014, we recognized a $4.1 million loss on extinguishment of debt, primarily related to Station LLC's March 2014 repricing of its term loan facility. During the year ended December 31, 2013, we recognized a $147.1 million loss on extinguishment of debt, primarily related to the refinancing of $2.1 billion of our then outstanding debt. See Note 10 to the Annual Combined Financial Statements included elsewhere in this prospectus for additional information.

(d)
For the years ended December 31, 2014 and 2013, we recorded gains of $49.1 million and $17.0 million, respectively, pursuant to repayments on our advances for Graton Resort. The gains were a result of the adjustment of the carrying amount of the project to fair value upon adoption of fresh-start reporting in June 2011, which resulted in the carrying amount of the advances being less than the amount due from the Graton Tribe.

(e)
Discontinued operations represents the results of Fertitta Interactive, which ceased operations in the fourth quarter of 2014. See Note 19 to the Annual Combined Financial Statements included elsewhere in this prospectus for additional information. In accordance with the accounting guidance for pro forma financial statements, discontinued operations are not included in the pro forma financial information for the year ended December 31, 2015.

(f)
Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We define Adjusted EBITDA as income (loss) from continuing operations plus interest expense, net, depreciation and amortization, preopening expense, share-based compensation, a donation to UNLV, asset impairment, write-downs and other charges, net, loss on extinguishment of debt and change in fair value of derivative instruments, minus gain on Native American development and Adjusted EBITDA attributable to the noncontrolling interests of MPM. 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.

22


Table of Contents

    Set forth below is a reconciliation of Adjusted EBITDA to Income (loss) from continuing operations for the year ended December 31, 2015, on a pro forma basis, and the years ended December 31, 2015, 2014 and 2013.

 
   
  Historical  
 
  Pro Forma  
 
  Year Ended December 31,  
 
  Year Ended
December 31,
2015
 
 
  2015   2014   2013  
 
  (unaudited)
   
   
   
 
 
  (dollars in thousands, except per share amounts)
 

Adjusted EBITDA

                         

Las Vegas operations

  $ 410,301   $ 410,301   $ 379,748   $ 357,456  

Native American management

    66,622     66,622     46,937     33,194  

Reportable Segment Adjusted EBITDA

    476,923     476,923     426,685     390,650  

Corporate and other

    (25,509 )   (25,509 )   (27,636 )   (28,533 )

Adjusted EBITDA

    451,414     451,414     399,049     362,117  

Other operating income (expense)

   
 
   
 
   
 
   
 
 

Preopening

    (1,165 )   (1,165 )   (640 )   (222 )

Depreciation and amortization

    (137,865 )   (137,865 )   (127,961 )   (128,958 )

Share-based compensation

    (23,389 )   (19,726 )   (12,757 )   (16,359 )

Donation to UNLV

    (2,500 )   (2,500 )        

Asset impairment

    (6,301 )   (6,301 )   (11,739 )   (1,183 )

Write-downs and other charges, net

    (3,695 )   (9,514 )   (20,956 )   (11,895 )

Adjusted EBITDA attributable to MPM noncontrolling interest

    14,192     14,192     13,424     13,274  

Other

    (537 )   (537 )   (435 )   (195 )

Operating income and earnings from joint ventures

    290,154     287,998     237,985     216,579  

Other (expense) income

                         

Interest expense, net

    (144,325 )   (144,489 )   (151,702 )   (165,220 )

Loss on extinguishment of debt

        (90 )   (4,132 )   (147,131 )

Gain on Native American development

            49,074     16,974  

Change in fair value of derivative instruments

    (1 )   (1 )   (90 )   (291 )

Income before income taxes

    145,828     143,418     131,135     (79,089 )

Income tax expense

    (16,502 )            

Income (loss) from continuing operations

  $ 129,326   $ 143,418   $ 131,135   $ (79,089 )

23


Table of Contents

     With respect to our preliminary estimated financial results for the three months ended March 31, 2016 and historical financial results for the three months ended March 31, 2015 described in "—Recent Developments," the following tables set forth a reconciliation of estimated or historical income from continuing operations for the periods indicated, as determined in accordance with GAAP, to estimated or historical Adjusted EBITDA for such period.

 
  Range of Preliminary
Results for the
Three Months Ended
March 31, 2016
  For the Three
Months Ended
March 31, 2015
 
 
  Low   High    
 
 
  (in thousands, unaudited)
 

Net Revenues

                   

Las Vegas operations

  $ 328,000   $ 334,000   $ 321,499  

Native American management

    26,000     27,000     19,786  

Reportable segment net revenues

    354,000     361,000     341,285  

Corporate and other

    1,000     1,600     1,484  

Net revenues

  $ 355,000   $ 362,600   $ 342,769  

Adjusted EBITDA

                   

Las Vegas operations

  $ 117,000   $ 121,000   $ 111,249  

Native American management

    20,000     20,800     14,403  

Reportable segment Adjusted EBITDA

    137,000     141,800     125,652  

Corporate and other

    (6,800 )   (5,600 )   (5,809 )

Adjusted EBITDA

    130,200     136,200     119,843  

Other operating expense

   
 
   
 
   
 
 

Preopening

    (450 )   (250 )   (128 )

Depreciation and amortization

    (40,900 )   (37,900 )   (35,193 )

Share-based compensation

    (1,100 )   (600 )   (3,007 )

Write-downs and other charges, net

    (3,100 )   (1,700 )   (3,015 )

Adjusted EBITDA attributable to MPM noncontrolling interests

    3,800     4,400     3,664  

Operating income and earnings from joint ventures

    88,450     100,150     82,164  

Other expense

   
 
   
 
   
 
 

Interest expense, net

    (36,100 )   (34,100 )   (36,462 )

Change in fair value of derivative instruments

    (3 )   (3 )   (3 )

Income from continuing operations

  $ 52,347   $ 66,047   $ 45,699  
(g)
As of the last day of the period presented, including Native American properties.

24


Table of Contents


RISK FACTORS

        An investment in our Class A Common Stock involves a high degree of risk. In addition to the other information in this prospectus, prospective investors should carefully consider the following risks before making an investment in our Class A Common Stock. The risks described in this prospectus are not the only ones we may face. Any of these risks and uncertainties could cause our actual results to differ materially from the results contemplated by the forward-looking statements set forth herein, and could otherwise have a significant adverse impact on our business, prospects, financial condition or results of operations. The trading price of our Class A Common Stock could decline due to any of these risks and uncertainties, and you could lose all or part of your investment.

        Please also read "Cautionary Statement Concerning Forward-Looking Statements" in this prospectus, where we describe additional uncertainties associated with our business and the forward-looking statements included in this prospectus.


Risks Related to Our Business

         We depend on the Las Vegas locals and repeat visitor markets as our key markets, which subjects us to greater risks than a gaming company with more diverse operations.

        Our operating strategies emphasize attracting and retaining customers from the Las Vegas local and repeat visitor market. 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 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.

        In addition, our strategy of growth through master-planning of our 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 our existing casino properties, which limits our ability to expand our business.

         Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy.

        Consumer demand for the offerings of casino hotel properties such as ours is sensitive to downturns in the economy and the corresponding impact on 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, the uncertainty and distress in the housing and credit markets, the impact of high energy, fuel, food and healthcare costs, the potential for bank failures, perceived or actual changes in disposable consumer income and wealth, taxes, effects or fears of war and future acts of terrorism 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 the economies of these areas have shown significant recovery, we are unable to determine the sustainability or strength of

25


Table of Contents

the recovery. In addition, the overall economic outlook and residential real estate market in the United States, and in particular Las Vegas, remain uncertain and our target markets, in particular Las Vegas, continue to experience significantly higher rates of unemployment than the national average. The economic downturn and adverse conditions experienced in our target markets and in the United States generally resulted in a significant decline in spending in Las Vegas, which negatively affected our results of operations. Any slowing of the recovery or a return to an economic downturn would further negatively affect our results of operations.

         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 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, expansion of existing gaming operations or additional gaming sites. In addition, internet gaming has commenced in Nevada, New Jersey and Delaware, and legislation approving internet gaming has been proposed by the federal government and other states. Internet gaming and expansion of legalized casino gaming 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 "Description of Our 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.

26


Table of Contents

         Our results of operations may be adversely impacted by the expiration or termination of our management agreements for the Gun Lake Casino and Graton Resort and we may not be successful in entering into additional management or development agreements for Native American gaming opportunities.

        Our management agreements for the Gun Lake Casino and the Graton Resort expire in February 2018 and November 2020, respectively. Our management fees from managing the Gun Lake Casino and Graton Resort were $88.3 million and $68.1 million for the years ended December 31, 2015 and 2014, 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. In addition, 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.

        None of our owned casino properties are currently subject to any collective bargaining agreement or similar arrangement with any union, and we believe we have excellent employee relations. 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. In addition, one of our managed properties, Graton Resort, is subject to collective bargaining agreements. 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, should employees at one or more of our properties organize, collective bargaining would introduce 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.

27


Table of Contents

        In addition, 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.

         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 or on the part of our 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 Commission (the "Nevada Commission"), the Nevada State Gaming Control Board (the "Nevada Board") and the Clark County Liquor and Gaming License Board (the "CCLGLB"), the Las Vegas City Council, the North Las Vegas City Council, the Henderson City Council and certain other local regulatory agencies, collectively referred to as 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. In addition, 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

28


Table of Contents

regulatory requirements that have an effect on our business, see "Description of Our 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. In addition, we are subject to various gaming taxes, which are subject to possible increase at any time. Increases in gaming taxation could also adversely affect 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.

        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. The Nevada Commission has approved this Offering and we have applied to the Nevada Commission for prior approval, subject to certain conditions, to make public offerings of securities for a period of three years (the "Shelf Approval"). The Shelf Approval, if granted, will also apply 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, if granted, may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chairman of the Nevada Board. If we are not able to obtain the Shelf Approval or 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.

        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 Currency and Foreign Transactions Reporting Act of 1970, commonly known as 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

29


Table of Contents

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 gaming properties could have a negative impact on our business.

        The operating expenses associated with our gaming 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 service we provide our customers, including food, beverages, 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.

         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. In addition, certain casualty events, such as labor strikes, nuclear events, loss of income due to terrorism, deterioration or corrosion, insect or animal damage and pollution, may not be covered under our policies. Any losses we incur that are not adequately

30


Table of Contents

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 future construction projects. Any such delays or cost overruns may have a material adverse effect on our operating results.

        We are currently providing funding for the North Fork Project (as defined herein) and have an agreement to develop the facility. In addition, we will evaluate expansion opportunities as they become available, and in the future we may develop projects in addition to the proposed North Fork Project.

        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 or that the projects will commence operations within the contemplated time frame, if at all. Budget overruns and delays with respect to expansion and development projects could have a material adverse impact on our results of operations.

31


Table of Contents

         We may regularly 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 continued dedication of management resources and may temporarily distract attention from our day-to-day 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.

32


Table of Contents

         We require significant capital to fund capital expenditures, pursue proposed development, expansion or acquisition opportunities or refinance our significant 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.

        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.

33


Table of Contents

         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 severe 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. In addition, 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.

         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

34


Table of Contents

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 security breaches, system failures, viruses, operator error or inadvertent releases of data. 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 and could have an adverse effect on our business, results of operations and cash flows.


Risks Related to our Capital Structure

         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, 2015, after giving pro forma effect to the Fertitta Entertainment Acquisition, including the payment of certain liabilities not included in the acquisition, and the Offering and Reorganization Transactions, the principal amount of our outstanding indebtedness, including original issue discount and debt issuance cost and our $114.6 million non-recourse land loan, totaled approximately $2.18 billion, and we have $255.8 million of undrawn availability under our revolving credit facility. Our ability to make interest payments on our debt will be significantly impacted by general economic, financial, competitive and other factors beyond our control.

        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;

35


Table of Contents

    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 our LLC Units 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. In addition, our ability to comply with covenants and restrictions contained in the agreements governing our indebtedness 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 indenture 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.

        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

36


Table of Contents

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. These events could result in the loss of your investment in our Class A Common Stock.

         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, 2015, after giving pro forma effect to the Fertitta Entertainment Acquisition and the Offering and Reorganization Transactions, including the payment of certain liabilities not included in the acquisition, we had $255.8 million of undrawn availability under our credit facility (after giving effect to the issuance of approximately $33.2 million of letters of credit and similar obligations). In addition, the indenture governing our senior notes allows us to issue additional notes under certain circumstances. The indenture also allows us to incur certain other additional secured and unsecured debt. Further, the indenture does 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 will also be required to obtain the consent of the lenders under our credit facility to refinance material portions of our indebtedness. 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 ability to service all of our indebtedness depends on our ability to generate cash flow, which is subject to factors that are beyond our control.

        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 general economic, financial, competitive and other factors that are beyond our control. In addition, a further deterioration in the economic performance of our casino properties may cause us to reduce or delay investments and capital expenditures, or to sell assets. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

37


Table of Contents

         Our substantial indebtedness exposes us to significant interest expense increases if interest rates increase.

        As of December 31, 2015, after giving pro forma effect to the Fertitta Entertainment Acquisition, including the payment of certain liabilities not included in the acquisition, and the Offering and Reorganization Transactions, approximately $1,644.2 million, or 75.3%, of our borrowings were at variable interest rates and expose us to interest rate risk. 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. Assuming our consolidated variable interest rate indebtedness outstanding as of December 31, 2015 remains the same, an increase of 1% in the interest rates payable on our variable rate indebtedness would increase our 2016 annual estimated debt-service requirements by approximately $4.1 million. Accordingly, an increase in interest rates from current levels could cause our annual debt-service obligations to increase significantly.


Risks Related to Our Structure and Organization

         Red Rock's only asset after the completion of this Offering will be its interest in Station Holdco and Station LLC. Accordingly it will be dependent upon distributions from Station Holdco to make payments under the tax receivable agreement, pay dividends, if any, and pay taxes and other expenses.

        Following the completion of the Offering and Reorganization Transactions, Red Rock will be a holding company and will have no assets other than its ownership of LLC Units and its voting interest in Station LLC. Red Rock will have no independent means of generating revenue. 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 tax receivable agreement 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 tax receivable agreement 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 indenture 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 Equityholders have control over our management and affairs, and their interests may differ from our interests or those of our other stockholders.

        Following this Offering, each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owns LLC Units representing at least 30% of the outstanding LLC Units immediately following this Offering 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) will be entitled to ten votes and each other outstanding share of Class B Common

38


Table of Contents

Stock will be entitled to one vote. As a result, following this Offering, Fertitta Family Entities will hold approximately 87.0% of the combined voting power of Red Rock (assuming no exercise of the underwriters' option to purchase additional shares). Due to their ownership, the Fertitta Family Entities will 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 some transactions impossible without the support of the Fertitta Family Entities, even if such events are in the best interests of our other stockholders. In addition, 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 Equityholders hold their ownership interest in part of our business directly and/or indirectly through Station Holdco, rather than through Red Rock, the public company, these existing owners may have conflicting interests with holders of shares of our Class A Common Stock. For example, if Station Holdco makes distributions to Red Rock, our existing owners 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. Our existing owners may also have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, especially in light of the existence of the tax receivable agreement that we will enter into in connection with this Offering, whether and when to incur new, or refinance existing, indebtedness, and whether and when Red Rock should terminate the tax receivable agreement and accelerate its obligations thereunder. In addition, the structuring of future transactions may take into consideration these existing owners' 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 tax receivable agreement, which may result in differing incentives between the Principal Equityholders and Red Rock with respect to such a transaction. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

        Moreover, GACC will hold approximately 18.0% of the LLC Units and 3.9% of the voting power of Red Rock (assuming no exercise of the underwriters' option to purchase additional shares) and is a lender under our revolving credit facility and our land loan. To the extent that GACC continues to hold interests at multiple levels of our capital structure, it may have a conflict of interest and make decisions or take actions that reflect its interests as our secured lender, unsecured lender or equityholder that could have adverse consequences to our other stakeholders. See "Underwriting (Conflicts of Interest)."

39


Table of Contents

         Upon the listing of our shares on NASDAQ, we will be a "controlled company" within the meaning of the rules of NASDAQ and, as a result, will 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.

        Upon completion of this Offering, the Fertitta Family Entities will hold more than 50% of the voting power of our shares eligible to vote. As a result, we will be 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 we expect that a majority of the members of our board of directors will be independent and that our compensation and nominating and corporate governance committees will be 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 our existing owners for certain tax benefits we may claim arising in connection with this Offering and related transactions, and the amounts we may pay could be substantial.

        We will enter into a tax receivable agreement with our existing owners that will provide for the payment by Red Rock to our existing 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 tax receivable agreement, 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 tax receivable agreement, including tax benefits attributable to payments that we are required to make under the tax receivable agreement. See "The Reorganization of Our Corporate Structure" and "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

        Any increases in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, 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 tax receivable agreement could be substantial. 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, 2015 and that Red Rock earns sufficient taxable income to realize all the tax benefits that are subject to the tax receivable agreement, we expect future payments under the tax receivable agreement relating to the purchase by Red Rock of LLC Units as part of this Offering to aggregate $28.1 million (or $59.0 million if the underwriters exercise their option to purchase additional shares in full) and to range over the next 15 years from approximately $1.3 million to $3.3 million per year (or approximately $2.8 million to $6.8 million per year if the underwriters exercise their option to purchase additional shares in full) and decline thereafter. The foregoing numbers are merely estimates that are based on current assumptions. The amount of actual payments could differ materially.

        Future payments to our existing owners in respect of subsequent exchanges would be in addition to these amounts and are expected to be substantial as well. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding tax receivable agreement 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 tax receivable agreement

40


Table of Contents

exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement and/or distributions to Red Rock by Station Holdco are not sufficient to permit Red Rock to make payments under the tax receivable agreement after it has paid taxes.

         In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the tax receivable agreement.

        The tax receivable agreement will provide that in the event that we exercise our right to early termination of the tax receivable agreement, there is a change in control or a material breach by us of our obligations under the tax receivable agreement, the tax receivable agreement will terminate, and we will be required to make a payment equal to the present value of future payments under the tax receivable agreement, which payment would be based on certain assumptions, including those relating to our future taxable income. In these situations, our obligations under the tax receivable agreement 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 tax receivable agreement. 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 Equityholders have interests that differ from those of other shareholders. Because our Principal Equityholders will retain a controlling ownership interest following the Offering, we expect that our Principal Equityholders will control the outcome of votes on all matters requiring approval by our stockholders. Accordingly, actions that affect such obligations under the tax receivable agreement may be taken even if other stockholders oppose them.

        Payments under the tax receivable agreement 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 tax receivable agreement (although we would reduce future amounts otherwise payable under such tax receivable agreements). 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 tax receivable agreement 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 tax receivable agreement.

         We may not be able to realize all or a portion of the tax benefits that are expected to result from the purchase of LLC Units with the net proceeds of this Offering and exchanges of LLC Units and payments made under the tax receivable agreement 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 purchase of LLC Units from certain of our existing owners with the net proceeds of this Offering and exchanges of LLC Units, and our ability to realize certain other tax benefits attributable to payments under the tax receivable agreement 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 tax receivable agreement, 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 "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

41


Table of Contents

         We may have liabilities associated with the consummation of the Blocker Mergers.

        As part of the Offering and Reorganization Transactions, the Merging Blockers, each of which has elected to be taxed as a corporation for U.S. federal income tax purposes, will merge with one or more newly formed subsidiaries of Red Rock in transactions intended to qualify as tax-free for U.S. federal income tax purposes. Except for merger agreements with Merging Blockers that have been managed by Station Holdco, the merger agreements relating to the Blocker Mergers contain customary representations and warranties and indemnities from the owners of such Merging Blockers. As a result of the Blocker Mergers, Red Rock will indirectly become the owner of the LLC Units owned by the Merging Blockers. In the event that any of the Merging Blockers have liabilities, Red Rock may bear some, or all, of the risks relating to any such liabilities, which could be significant.


Risks Related to Ownership of Our Class A Common Stock and This Offering

         The entire net proceeds from this Offering will be used to purchase LLC Units in Station Holdco, which will use a portion of the net proceeds to acquire Fertitta Entertainment. The use of proceeds from this Offering to pay a portion of the consideration in the Fertitta Entertainment Acquisition may not yield a favorable return.

        We intend to use the entire net proceeds from this Offering to purchase newly-issued and currently existing LLC Units in Station Holdco, as described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds." Accordingly, Red Rock will not retain any of these net proceeds.

        Red Rock intends to use a portion of the net proceeds from this Offering to acquire newly-issued LLC Units from Station Holdco. Station Holdco will contribute $417.5 million of such proceeds to Station LLC to pay a portion of the purchase price for the Fertitta Entertainment Acquisition and Station LLC intends to incur additional indebtedness to fund the balance of the purchase price for the Fertitta Entertainment Acquisition. The purchase price for the Fertitta Entertainment Acquisition, including the offering proceeds that are contributed to Station LLC to fund a portion of the purchase price for the Fertitta Entertainment Acquisition, will be paid by Station LLC to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment. At the closing of the Fertitta Entertainment Acquisition, Fertitta Entertainment is not expected to have material assets other than the management agreements for the Company's business and its workforce. In connection with the Fertitta Entertainment Acquisition, we expect to terminate the management agreements with Fertitta Entertainment by mutual agreement for no additional consideration and assume or enter into new employment agreements or other employment relationships with our executive officers and other individuals who were employed by Fertitta Entertainment and provided services to us through the management agreements prior to the consummation of the Fertitta Entertainment Acquisition. As a result, we cannot assure you that the purchase of Fertitta Entertainment will result in a favorable return.

         There is no existing market for our Class A Common Stock. As a result, the share price for our Class A Common Stock may fluctuate significantly.

        Prior to this Offering, there has been no public market for our Class A Common Stock. We cannot provide any assurance that an active trading market will develop upon completion of this Offering or, if it does develop, that it will be sustained, which may make it difficult for you to sell your shares of Class A Common Stock at an attractive price or at all. The initial public offering price of our Class A Common Stock will be determined by negotiation among us and the representatives of the underwriters and may not be representative of the price that will prevail in the open market after the completion of this Offering. Among the factors to be considered in determining the offering price are the information

42


Table of Contents

presented in this prospectus; the history of, the economic conditions in and prospects for, the industry in which we compete; our markets; the ability of our management; the prospects for our future earnings; our results of operations and our current financial condition; the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies; and the general condition of the securities markets at the time of this Offering. The offering price may not accurately reflect the value of our common stock and may not be realized upon any subsequent disposition of the shares. See "Underwriting (Conflicts of Interest)" for a discussion of the factors that were considered in determining the initial public offering price.

        The market price of our Class A Common Stock after this Offering 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. As a result, our Class A Common Stock may trade at prices significantly below the public offering price or net tangible book value.

        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.

         If you purchase shares of our Class A Common Stock in this Offering, you will suffer immediate and substantial dilution of your investment.

        The initial public offering price of our Class A Common Stock is substantially higher than the pro forma net tangible book value per share of our Class A Common Stock. Therefore, if you purchase shares of our Class A Common Stock in this Offering, your interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our Class A Common Stock and the pro forma net tangible book value per share of our Class A Common Stock after this Offering. See "Dilution."

         You will incur additional dilution if we raise additional capital through the issuance of new equity securities at a price lower than the initial public offering price of our Class A Common Stock or issue shares in connection with our equity incentive plan.

        If we raise additional capital through the issuance of new equity securities at a lower price than the initial public offering price, you will be subject to additional dilution. If we are unable to access the public markets in the future, or if our performance or prospects decrease, we may need to consummate a private placement or public offering of our Class A Common Stock at a lower price than the initial public offering price. In addition, any new securities may have rights, preferences or privileges senior to our Class A Common Stock. Additionally, we have reserved 11,585,479 shares of our Class A Common Stock for issuance under our 2016 Equity Incentive Plan, including 1,604,961 shares of our Class A Common Stock issuable upon the exercise of stock options that we intend to grant to our officers and employees and 169,231 shares of restricted Class A Common Stock that we intend to grant to certain

43


Table of Contents

of our directors, officers and employees at the time of this Offering or will be issued in substitution of profit units held by current or former employees of Station LLC. See "Executive Compensation—2016 Equity Incentive Plan."

         The market price of our Class A Common Stock could decline due to the large number of shares of Class A Common Stock eligible for future sale upon the exchange of LLC Units by our existing owners.

        After completion of this Offering, approximately 76,883,736 LLC Units of Station Holdco will be owned by our existing owners, or 66.4% of Red Rock Class A Common Stock on a fully converted basis (or 72,796,236 LLC Units and 62.8%, respectively, if the underwriters exercise their option to purchase additional shares in full). Under the exchange agreement, each holder of shares our Class B Common Stock will be entitled to exchange its LLC Units for shares of our Class A Common Stock, as described under "The Reorganization of Our Corporate Structure" and "Certain Relationships and Related Party Transactions." We will grant registration rights with respect to the shares of Class A Common Stock delivered in exchange for LLC Units subject to the lock-up agreements described under "Underwriting (Conflicts of Interest)." See "The Reorganization of Our Corporate Structure" and "Certain Relationships and Related Party Transactions—Registration Rights."

        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, including upon the exchange of LLC Units, 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. In addition, they may make it more difficult for us to raise additional capital by selling equity securities in the future. See "Shares Eligible for Future Sale."

         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. In addition, Red Rock will be required to apply funds distributed by Station Holdco to pay taxes and make payments under the tax receivable agreement. 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 "Dividend Policy."

         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 approximately 87.0% (or approximately 86.3% if the underwriters exercise their option to purchase additional shares in full) of the combined voting

44


Table of Contents

power of our common stock following the consummation of this Offering, which will permit 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 are expected to contain provisions which could 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 will have 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 will also impose 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. See "Description of Capital Stock."

        The Nevada Gaming Control Act and the rules and regulations promulgated thereunder (collectively, 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 ("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, subject to certain exceptions, to the Nevada Commission for a finding of suitability within thirty days after the Chairman 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, managers 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. Under the indenture governing our senior notes, any "change of control" would require us or a third-party acquirer to make an offer to noteholders to repurchase such notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest. In addition, we expect that the tax receivable agreement will provide that, in the event of a change of control, we will be required to make a payment equal to the present value of estimated future payments under the tax receivable

45


Table of Contents

agreement, 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 Chairman 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 Chairman 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

46


Table of Contents

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 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 in this Offering 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 will depend 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 or slow 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.

         We will incur increased costs as a result of becoming a public company.

        As a public company, we will incur significant legal, accounting and other expenses that we have not previously incurred, including costs associated with public company reporting requirements. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act of 2002 and related rules implemented by the SEC and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain

47


Table of Contents

qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

         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.

48


Table of Contents


CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        This prospectus includes forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "projects," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies, the industry in which we operate and potential acquisitions. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this prospectus.

        By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus. In addition, even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause our results to vary from expectations include, but are not limited to:

    our reliance on the Las Vegas 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;

    the risk that new gaming licenses or gaming activities, such as internet gaming, are approved and result in additional competition;

    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;

49


Table of Contents

    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

    the lack of a public market for our common stock.

        We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. We urge you to read this entire prospectus carefully, including the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Our Business," for a more complete discussion of the factors that could affect our future performance and the industry in which we operate. In light of these risks, uncertainties and assumptions, the forward-looking events described in this prospectus may not occur.

        Investors are urged not to place undue reliance on forward-looking statements. In addition, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to projections over time unless required by federal securities laws. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this prospectus.

50


Table of Contents


THE REORGANIZATION OF OUR CORPORATE STRUCTURE

        The following actions will be taken in connection with the closing of this Offering:

    We will amend and restate the certificate of incorporation of Red Rock to, among other things, provide for Class A Common Stock and Class B Common Stock. See "Description of Capital Stock."

    We will issue shares of our Class B Common Stock to our existing owners for nominal consideration. Our existing owners will be issued one share of Class B Common Stock for each LLC Unit they own.

    We will consummate the Blocker Mergers and issue shares of Class A Common Stock to the members of the Merging Blockers in proportion to the LLC Units owned by the Merging Blockers, including the LLC Units issuable upon a cashless exercise of the warrants owned by the Merging Blockers. See "Certain Relationships and Related Party Transactions—Blocker Mergers."

    The holders of profit units issued by Station Holdco, all of whom are current or former employees of Station LLC, will be issued an aggregate of 1,832,891 restricted shares of Class A Common Stock pursuant to the terms our new Red Rock Resorts, Inc. 2016 Equity Incentive Plan in substitution for such profit units.

    We will amend and restate the limited liability company agreement of Station Holdco to, among other things, appoint Red Rock as the sole managing member of Station Holdco. See "Certain Relationships and Related Party Transactions—Limited Liability Company Agreement of Station Holdco."

    We will enter into an exchange agreement with our existing owners pursuant to which the existing owners will be 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. See "Certain Relationships and Related Party Transactions—Exchange Agreement."

    We will enter into a tax receivable agreement with our existing owners that will provide for the payment by Red Rock 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 tax receivable agreement, as discussed below) as a result of (i) increases in tax basis resulting from purchases or exchanges of LLC Units and (ii) certain other tax benefits related to our entering into the tax receivable agreement, including tax benefits attributable to payments that we are required to make under the tax receivable agreement. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

    The holders of the outstanding Warrants to purchase LLC Units are expected to exercise their Warrants on a cashless basis.

    We will issue 27,054,686 shares of our Class A Common Stock to the purchasers in this Offering (or 31,142,186 shares if the underwriters exercise their option to purchase additional shares in full) in exchange for net proceeds of approximately $495.9 million (or approximately $570.8 million if the underwriters exercise their option to purchase additional shares in full);

    We will use approximately $67.4 million of the net proceeds of this Offering to purchase 3,678,930 LLC Units (or 7,766,430 LLC Units for an aggregate of $142.4 million if the underwriters exercise their option to purchase additional shares in full) from certain of our existing owners, at a per-LLC Unit price equal to the price paid by the underwriters for shares

51


Table of Contents

      of our Class A Common Stock in this Offering. Accordingly, we will not retain any of these proceeds. See "Certain Relationships and Related Party Transactions—Purchase of LLC Units from Existing Owners."

    We will use approximately $424.4 million of the net proceeds of this Offering to acquire 23,152,797 newly-issued LLC Units in Station Holdco.

    The selling stockholders will sell 195,314 shares of Class A Common Stock to the purchasers in this Offering. We will not receive any proceeds from the sale of shares of Class A Common Stock by the selling stockholders.

    Station Holdco will contribute $417.5 million of the proceeds it receives from Red Rock to Station LLC to pay a portion of the purchase price for the Fertitta Entertainment Acquisition and will apply the balance of the proceeds it receives from us to pay expenses incurred in connection with the Offering and Reorganization Transactions. The balance of the Fertitta Entertainment Acquisition will be funded by debt incurred by Station LLC. The purchase price for the Fertitta Entertainment Acquisition, including the offering proceeds that are contributed to Station LLC to fund a portion of the purchase price for the Fertitta Entertainment Acquisition, will be paid by Station LLC to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment. At the closing of the Fertitta Entertainment Acquisition, Fertitta Entertainment is not expected to have material assets other than the management agreements for the Company's business and its workforce. In connection with the Fertitta Entertainment Acquisition, we expect to terminate the management agreements with Fertitta Entertainment by mutual agreement for no additional consideration and assume or enter into new employment agreements or other employment relationships with our executive officers and other individuals who were employed by Fertitta Entertainment and provided services to us through the management agreements prior to the consummation of the Fertitta Entertainment Acquisition.

    We will use approximately $4.1 million of the net proceeds of this Offering to pay withholding tax obligations with respect to certain members of the Merging Blockers.

52


Table of Contents

        The following chart summarizes our organizational structure following the consummation of the Offering and Reorganization Transactions and the Fertitta Entertainment Acquisition. This chart is provided for illustrative purposes only and does not purport to represent all legal entities owned or controlled by us:

GRAPHIC


(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 will be entitled to one vote, 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 this Offering 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) will be entitled to

53


Table of Contents

    ten votes and each other outstanding share of Class B Common Stock will be entitled to one vote. We expect that the only existing owners that will satisfy the foregoing criteria will be Fertitta Family Entities. Consequently, such entities will be the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock immediately following this Offering. See "Principal and Selling Stockholders." In accordance with the exchange agreement to be entered into in connection with the Offering and Reorganization Transactions, holders of LLC Units will be 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.

(2)
As part of the Offering and Reorganization Transactions, the Merging Blockers will merge with newly-formed subsidiaries of Red Rock in the Blocker Mergers, which are intended to qualify as tax-free for U.S. federal income tax purposes. In the Blocker Mergers, the owner(s) of each Merging Blocker will collectively receive one share of Class A Common Stock for each LLC Unit owned by such Merging Blocker and such number of LLC Units as would be issuable upon a cashless exercise of the Warrants held by such Merging Blocker. In the aggregate, approximately 10,137,209 shares of Class A Common Stock of Red Rock are expected to be issued as consideration in the Blocker Mergers. In connection with the Blocker Mergers, the Company will (i) withhold 222,959 shares of Class A Common Stock that would otherwise be issued to certain of the members of the Merging Blockers, (ii) sell such shares in this Offering, and (iii) use the net proceeds from the sale of such shares to pay withholding tax obligations with respect to such members. The number of shares of Class A Common Stock issued in the Blocker Mergers and withholding with respect thereto will depend on the actual initial public offering price per share.

    Assuming that all of the outstanding Warrants are exercised on a cashless basis, an aggregate of 476,531 LLC Units will be issuable upon exercise of the Warrants.

(3)
Holders of profit units issued by Station Holdco, all of whom are current or former employees of Station LLC, will receive restricted shares of Class A Common Stock issued pursuant to the terms our new Red Rock Resorts, Inc. 2016 Equity Incentive Plan in substitution for such profit units. As of December 31, 2015, an aggregate of 10,039,007 Station Holdco profit units were outstanding. Pursuant to the terms of the Station Holdco Amended and Restated Profit Unit Plan, an aggregate of 1,832,891 restricted shares of Class A Common Stock will be substituted for the outstanding Station Holdco profit units.

(4)
A portion of these LLC Units will be held by subsidiaries of Red Rock. Assumes no exercise of the underwriters' option to purchase additional shares. If the underwriters exercise their option to purchase additional shares in full, (i) the holders of Class A Common Stock will have 8.3% of the voting power in Red Rock, (ii) holders of Class B Common Stock will have 91.7% of the voting power of Red Rock, (iii) the LLC Units held by the existing owners will constitute 62.8% of the outstanding LLC Units in Station Holdco, and (iv) Red Rock will own 37.2% of the outstanding LLC Units in Station Holdco.

        Following the consummation of the Offering and Reorganization Transactions, Red Rock will be a holding company and its sole assets will be its direct and indirect equity interest in Station Holdco and its voting interest in Station LLC. Red Rock will operate and control all of the business and affairs of Station Holdco and its subsidiaries. Accordingly, although Red Rock will own a minority economic interest in Station Holdco following the consummation of the Offering, Red Rock will have 100% of the voting power and will control management of Station Holdco, subject to certain exceptions, and will have 100% of the voting power of Station LLC. The combined financial results of Station Holdco and its consolidated subsidiaries (including Fertitta Entertainment) will be consolidated in our financial statements.

        Red Rock was incorporated as a Delaware corporation on September 9, 2015 as "Station Casinos Corp." and changed its name to "Red Rock Resorts, Inc." on January 5, 2016. Red Rock has not

54


Table of Contents

engaged in any business or other activities except in connection with its formation. Immediately prior to the completion of this Offering, Red Rock intends to amend and restate its certificate of incorporation to, among other things, authorize two classes of common stock, Class A Common Stock and Class B Common Stock. Each outstanding share of Class A Common Stock will be entitled to one vote, each outstanding share of Class B Common Stock that is held by a holder that, together with its affiliates, owns LLC Units representing at least 30% of the outstanding LLC Units immediately following this Offering 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) will be entitled to ten votes and each other outstanding share of Class B Common Stock will be entitled to one vote and will have the terms described under "Description of Capital Stock." We expect that the only existing owners that will satisfy the foregoing criteria will be Fertitta Family Entities. Consequently, such entities will be the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock immediately following this Offering. See "Principal and Selling Stockholders." Red Rock's Class A Common Stock will be issued to investors in this Offering.

        Station Holdco currently owns non-voting interests in Station LLC that represent all of the economic interests of Station LLC. The voting interests of Station LLC are held by Station Voteco. Station Voteco is owned by Robert A. Cashell Jr., who is designated as a member of Station Voteco by GACC, and an entity owned by Frank J. Fertitta III and Lorenzo J. Fertitta. Immediately prior to the consummation of this Offering, Station Voteco will transfer the voting interest of Station LLC to Red Rock. No consideration will be payable to the members of Station Voteco in connection with such transfer. Upon consummation of such transfer, Station Voteco will be dissolved.

        As a result of the transactions described above:

    the investors in this Offering will collectively own 27,250,000 shares of our Class A Common Stock (or 31,337,500 shares of our Class A Common Stock if the underwriters exercise their option to purchase additional shares in full) and Red Rock will hold 38,971,058 LLC Units (or 43,058,558 LLC Units if the underwriters exercise their option to purchase additional shares in full);

    our existing owners will hold 76,883,736 LLC Units (or 72,796,236 LLC Units if the underwriters exercise their option to purchase additional shares in full), assuming a cashless exercise of the Warrants and that all of the Warrants are exercised for LLC Units;

    members of the Merging Blockers will hold 10,137,209 shares of Class A Common Stock issuable in the Blocker Mergers;

    Holders of profit units issued by Station Holdco will be issued 1,832,891 shares of Class A Common Stock in substitution of such profit units;

    the investors in this Offering will collectively have 5.1% of the voting power in Red Rock (or 6.0% if the underwriters exercise their option to purchase additional shares in full); and

    Station Holdco's existing owners, through their holdings of our Class B Common Stock, will have 92.7% of the voting power in Red Rock (or 91.7% if the underwriters exercise their option to purchase additional shares in full).

        In connection with this Offering, we will enter into an exchange agreement with the existing owners of Station Holdco. Under the exchange agreement, it is expected that the existing owners of Station Holdco (and certain permitted transferees thereof) may elect or, under certain circumstances, will be obligated, subject to certain requirements, to exchange their 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. As a holder exchanges its LLC Units, Red Rock's interest in Station

55


Table of Contents

Holdco will be automatically and correspondingly increased. See "Certain Relationships and Related Party Transactions—Exchange Agreement."

        The purchase of LLC Units with the net proceeds of this Offering and subsequent exchanges of LLC Units are expected to result in increases in the tax basis of the assets of Station Holdco that otherwise would not be available. These increases in tax basis may reduce the amount of tax that Red Rock 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 assets. In connection with the Offering and Reorganization Transactions, we will enter into a tax receivable agreement with the existing owners of Station Holdco that is expected to provide for the payment by Red Rock to those owners of 85% of the amount of the benefits, if any, that Red Rock realizes or is deemed to realize as a result of (i) these increases in tax basis and (ii) certain other tax benefits related to our entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. These payment obligations are obligations of Red Rock and not of Station Holdco. We expect that all of the intangible assets, including goodwill, of Station Holdco at the time of this Offering allocable to LLC Units acquired or deemed acquired in taxable transactions by Red Rock from existing owners of Station Holdco will be amortizable for tax purposes. Red Rock and its stockholders will retain the remaining 15% of the tax benefits that Red Rock is deemed to realize. See "Certain Relationships and Related Party Transactions—Tax Receivable Agreement."

        All existing owners of Station Holdco other than Red Rock also will hold shares of Class B Common Stock. Although these shares will have no economic rights, they will allow those owners of Station Holdco to exercise voting power at Red Rock, the managing member of Station Holdco. Under our amended and restated certificate of incorporation, 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 this Offering 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) will be entitled to ten votes and each other outstanding share of Class B Common Stock will be entitled to one vote. We expect that the only existing owners that will satisfy the foregoing criteria will be Fertitta Family Entities. Consequently, such entities will be the only holders of Class B Common Stock entitled to ten votes per share of Class B Common Stock immediately following this Offering. See "Principal and Selling Stockholders." Holders of LLC Units will be 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 existing owners of Station Holdco exchange LLC Units and shares of Class B Common Stock for shares of Class A Common Stock or, at our election, for cash pursuant to the exchange agreement, the voting power afforded to them by their shares of Class B Common Stock will be correspondingly reduced. After completion of this Offering, the existing owners will beneficially own shares of Class B Common Stock that represent 92.7% of the voting power represented by our outstanding common stock and will have effective control over the outcome of votes on all matters requiring approval by our stockholders.

        We will grant registration rights to existing members of Station Holdco with respect to shares of Class A Common Stock delivered in exchange for LLC Units and shares of Class A Common Stock issued pursuant to the Blocker Mergers subject to the lock-up agreements discussed under "Underwriting (Conflicts of Interest)". In addition, such members will be entitled to request to participate in, or "piggyback" on, certain registrations of any of our securities offered for sale by us at any time after the completion of this Offering and the Principal Equityholders and GACC will be entitled to cause the Company to register the shares of Class A Common Stock they could acquire upon exchange of their LLC Units, subject to certain contractual restrictions, including the terms of the

56


Table of Contents

lock-up agreements discussed under "Underwriting (Conflicts of Interest)". See "Certain Relationships and Related Party Transactions—Registration Rights."

        Pursuant to the amended and restated limited liability company agreement of Station Holdco that will be entered into in connection with this Offering, it is expected that Red Rock, as sole managing member, will have the right to determine when distributions will be made to the members of Station Holdco and the amount of any such distributions, other than with respect to tax distributions as described below. If Station Holdco authorizes a distribution, such distribution will be made to the members of Station Holdco, including Red Rock, pro rata in accordance with the percentages of their respective LLC Units.

        Red Rock will incur U.S. federal, state and local income taxes on its allocable share of any taxable income of Station Holdco. Subject to certain limitations, the amended and restated limited liability company agreement will provide, subject to Station Holdco having available cash and compliance with applicable agreements governing our indebtedness, for quarterly (and in some cases more frequent) cash distributions to the holders of LLC Units, including Red Rock. Red Rock will receive a pro rata portion of any distribution from Station Holdco. Generally, tax distributions will be computed by first determining the tax amount of each holder of LLC Units, which amount will generally equal the taxable income allocated to each holder of LLC Units (with certain adjustments) and then multiplying that income by an assumed tax rate. Station Holdco will then determine an aggregate tax distribution amount by reference to the highest individual LLC Unit holder's tax amount and, subject to certain limitations, will distribute that aggregate amount to all holders of LLC Units as of the tax distribution date based on their percentage ownership interests at the time of the distribution. See "Certain Relationships and Related Party Transactions—Limited Liability Company Agreement of Station Holdco."

57


Table of Contents


USE OF PROCEEDS

        We estimate that the net proceeds to us from the sale of our Class A Common Stock in this Offering, after deducting underwriting discounts and commissions but before expenses, will be approximately $495.9 million ($570.8 million if the underwriters exercise in full their option to purchase additional shares). We intend to use such net proceeds as follows:

    $424.4 million to acquire newly-issued LLC Units in Station Holdco. In turn, Station Holdco intends to:

    Contribute $417.5 million of the proceeds it receives from us to pay a portion of the purchase price for the Fertitta Entertainment Acquisition. The balance of the purchase price for the Fertitta Entertainment Acquisition will be funded by debt incurred by Station LLC. The purchase price for the Fertitta Entertainment Acquisition, including the offering proceeds that are contributed to Station LLC to fund a portion of the purchase price for the Fertitta Entertainment Acquisition, will be paid by Station LLC to entities that are affiliated with Frank J. Fertitta III and Lorenzo J. Fertitta, which are the owners of a majority of the outstanding membership interests of Fertitta Entertainment, and an entity that is owned by certain current and former employees of Fertitta Entertainment, which holds the remaining membership interests in Fertitta Entertainment. See "Capitalization" for additional details regarding the terms of the debt financing for the balance of the purchase price for the Fertitta Entertainment Acquisition.

    Apply the balance of the proceeds it receives from us to pay expenses incurred in connection with this Offering.

    $67.4 million (or $142.4 million if the underwriters exercise their option to purchase additional shares in full), to purchase LLC Units from certain of our existing owners, at a per-LLC Unit price equal to the price paid by the underwriters for shares of our Class A Common Stock in this Offering. Accordingly, we will not retain any of these proceeds.

    $4.1 million to pay withholding tax obligations with respect to certain members of the Merging Blockers.

        We will not receive any proceeds from the sale of shares of Class A Common Stock by the selling stockholders.

        The purchase price for the Fertitta Entertainment Acquisition will be paid to Fertitta Business Management LLC, a Nevada limited liability company, LNA Investments, LLC, a Nevada limited liability company, KVF Investments, LLC, a Nevada limited liability company, and FE Employeeco LLC, a Delaware limited liability company, which are all owned or were formed for the benefit of Frank J. Fertitta III and Lorenzo J. Fertitta or their children or are owned by the executive officers of the Company and other current and former employees of Fertitta Entertainment. See "Certain Relationships and Related Party Transactions—Acquisition of Fertitta Entertainment." The terms of the Fertitta Entertainment Acquisition were negotiated by the members of Fertitta Entertainment, on the one hand, and on the other hand by both GACC (as the holder of certain approval rights under the existing equityholders agreement for Station Holdco and its subsidiaries) and by a special committee of the board of managers of Station LLC (comprised of Dr. James E. Nave and Mr. Robert E. Lewis, each of whom was determined to be disinterested in the Fertitta Entertainment Acquisition). The special committee unanimously approved the terms of the Fertitta Entertainment Acquisition, and had the assistance and counsel of independent legal and financial advisors retained by such special committee in the negotiation and approval of such terms.

58


Table of Contents


DIVIDEND POLICY

        Following this Offering and subject to legally available funds, we intend to pay quarterly cash dividends to the holders of our Class A Common Stock initially equal to $0.10 per share of Class A Common Stock, commencing with the third quarter of 2016. 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.

        Red Rock is a holding company and has no material assets other than its direct and indirect equity interest in LLC Units in Station Holdco and its voting interest of Station LLC. We intend to cause Station Holdco to make distributions to us in an amount sufficient to cover cash dividends, if any, declared by us. If Station Holdco makes such distributions to Red Rock, the other holders of LLC Units will also be entitled to receive distributions pro rata in accordance with the percentages of their respective limited liability company interests.

        The existing debt agreements of Station LLC, including those governing its credit facility and senior notes, contain restrictive covenants that limit its ability to make distributions. Because the only asset of Station Holdco is Station LLC, the limitations on such distributions will effectively limit the ability of Station Holdco to make distributions to Red Rock. In addition, any financing arrangements that we or any of our subsidiaries enter into in the future may contain similar restrictions. 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, including Station LLC and its subsidiaries, are generally subject to similar legal limitations on their ability to make distributions to their members or equityholders.

        Because Red Rock must pay taxes and make payments under the tax receivable agreement, amounts ultimately distributed as dividends to holders of our Class A Common Stock are expected to be less than the amounts distributed by Station Holdco to its members on a per LLC Unit basis.

        Station Holdco made distributions to its existing owners in the amount of $211.2 million and $153.3 million during the years ended December 31, 2015 and 2014, respectively, and made distributions in the amount of $43.7 million to its existing owners in April 2016.

59


Table of Contents


CAPITALIZATION

        The following table sets forth the cash and cash equivalents and capitalization as of December 31, 2015 for:

    Station Holdco; and

    Red Rock on a pro forma basis to give effect to the Offering and Reorganization Transactions described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds" and the effect of the transfer of certain assets and repayment of certain liabilities of Fertitta Entertainment not included in the Fertitta Entertainment Acquisition as if such transactions had occurred on December 31, 2015.

        The information in this table should be read in conjunction with "The Reorganization of Our Corporate Structure," "Use of Proceeds," "Unaudited Pro Forma Condensed Combined Financial Information," "Selected Historical Combined Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the combined financial statements and related notes included elsewhere in this prospectus.

 
  As of December 31, 2015  
 
  Station Holdco
Actual
  Red Rock
Pro Forma
 
 
  (amounts in thousands)
(unaudited)

 

Cash and cash equivalents

  $ 116,426   $ 116,426  

Current portion of long term debt(2)

  $ 88,937   $ 124,717  

Debt:

             

7.50% Senior Notes due 2021(1)

  $ 500,000   $ 500,000  

Term Loan(1)(2)

    1,408,638     1,408,638  

Restructured Land Loan(1)

    114,590     114,590  

Fertitta Entertainment Credit Facility and other debt(1)

    68,037      

Other debt of Station LLC(1)

    34,368     34,368  

Total long term debt, less current portion

  $ 2,125,633   $ 2,057,596  

Equity:

             

Class A Common Stock, $0.01 par value per share, 500,000,000 shares authorized and 38,971,058 shares issued and outstanding on a pro forma basis

        390  

Class B Common Stock, $0.00001 par value per share, 100,000,000 shares authorized and 76,883,736 shares issued and outstanding on a pro forma basis

        1  

Additional paid-in capital and accumulated other comprehensive loss

        161,213  

Total members' equity/total stockholders' equity attributable to us

    552,924     161,604  

Noncontrolling interest

    20,785     384,712  

Total members'/stockholders' equity(3)

    573,709     546,316  

Total capitalization

  $ 2,788,279   $ 2,728,629  

(1)
Long term debt amounts reflect the principal amount of indebtedness and do not include unamortized debt discounts and debt issuance costs recorded in accordance with GAAP.

60


Table of Contents

    Accordingly, the amounts reflected in the table above will not agree to the amounts reported on our combined balance sheet.

(2)
As of December 31, 2015, we had $296.8 million of borrowing availability under our $350 million revolving credit facility, which is net of $20.0 million in outstanding borrowings and $33.2 million in outstanding letters of credit and similar obligations. We expect to incur approximately $41.0 million of indebtedness under our revolving credit facility to finance a portion of the purchase price for the Fertitta Entertainment Acquisition, which is included in current portion of long term debt.

(3)
Pro forma stockholders' equity reflects a net decrease of $27.4 million comprising an increase of $462.9 million as a result of the issuance of our Class A Common Stock, offset by a reduction of $422.9 million related to the Fertitta Entertainment Acquisition and $67.4 million related to our purchase of LLC units from our existing owners. The cash payments for the Fertitta Entertainment Acquisition and the purchase of LLC units from our existing owners are accounted for as equity distributions to our existing owners because Station Holdco and Fertitta Entertainment are entities under common control.

61


Table of Contents


DILUTION

        If you invest in our Class A Common Stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A Common Stock and the pro forma net tangible book value per share of our Class A Common Stock after this Offering. Dilution results from the fact that the per share offering price of the Class A Common Stock is substantially in excess of the pro forma net tangible book value per share of our Class A Common Stock after this Offering.

        The pro forma net tangible book value of Red Rock as of December 31, 2015 would have been $207.3 million or $2.24 per share of Class A Common Stock. Pro forma net tangible book value represents the amount of total tangible assets less total liabilities, and pro forma net tangible book value per share of Class A Common Stock represents pro forma net tangible book value divided by the number of shares of Class A Common Stock outstanding, in each case, after giving effect to the Offering and Reorganization Transactions described under "The Reorganization of Our Corporate Structure" but prior to giving effect to this Offering and the use of proceeds therefrom, assuming that all of the holders of LLC Units (other than Red Rock) exchanged their LLC Units, together with all outstanding shares of Class B Common Stock, for shares of Class A Common Stock on a one-for-one basis.

        After giving effect to the sale of the 27,054,686 shares of Class A Common Stock in this Offering at the initial public offering price of $19.50 per share, the receipt and application of the net proceeds as described under "Use of Proceeds" and after giving effect to the Offering and Reorganization Transactions and the effect of the transfer of certain assets and repayment of certain liabilities of Fertitta Entertainment not included in the Fertitta Entertainment Acquisition, Red Rock's as adjusted pro forma net tangible book value as of December 31, 2015 would have been $179.8 million or $1.55 per share of Class A Common Stock assuming that all of the holders of LLC Units (other than Red Rock) exchanged their LLC Units, together with all outstanding shares of Class B Common Stock, for shares of Class A Common Stock on a one-for-one basis. The following table illustrates this per share dilution assuming the underwriters do not exercise their option to purchase additional shares:

Initial public offering price per share of Class A Common Stock

        $ 19.50  

Pro forma net tangible book value per share of Class A Common Stock as of December 31, 2015(1)

    2.24        

Increase in pro forma net tangible book value per share of Class A Common Stock attributable to new investors(2)

    2.97        

Decrease in pro forma net tangible book value per share of Class A Common Stock resulting from Fertitta Entertainment Acquisition(2)

    (3.66 )      

As adjusted pro forma net tangible book value per share of Class A Common Stock after Offering and Fertitta Entertainment Acquisition(3)

          1.55  

Dilution per share of Class A Common Stock to new investors

        $ 17.95  

(1)
Reflects 92,532,766 outstanding shares of Class A Common Stock, consisting of (i) 10,137,209 outstanding shares of Class A Class A Common Stock issued in connection with the Blocker Mergers, (ii) 1,832,891 outstanding shares of Class A Common Stock issued in substitution for profit units issued by Station Holdco to current or former employees of the Company and (iii) 80,562,666 outstanding shares of Class A Common Stock issuable upon the exchange of LLC Units and corresponding shares of Class B Common Stock to be held by existing owners immediately prior to this Offering.

(2)
Pro forma stockholders' equity reflects a net decrease of $27.4 million comprising an increase of $462.9 million as a result of the issuance of our Class A Common Stock,

62


Table of Contents

    offset by a reduction of $67.4 million related to our purchase of LLC units from our existing owners and a reduction of $422.9 million related to the Fertitta Entertainment Acquisition. The cash payments for the purchase of LLC units from our existing owners and the Fertitta Entertainment Acquisition are accounted for as equity distributions to our existing owners because Station Holdco and Fertitta Entertainment are entities under common control.

(3)
Reflects 115,685,563 outstanding shares of Class A Common Stock, consisting of (i) 27,054,686 shares of Class A Common Stock to be issued in this Offering and (ii) the 92,532,766 shares described in note (1) above less the 3,678,930 shares of Class A Common Stock issuable upon the exchange of LLC Units and corresponding shares of Class B Common Stock to be purchased from certain of our existing owners using a portion of the net proceeds from this Offering and 222,959 shares of Class A Common Stock withheld and sold in this Offering to pay withholding tax obligations with respect to certain members of the Merging Blockers. Does not reflect the grant of 169,231 restricted shares of Class A Common Stock to employees and non-employee directors in connection with this Offering.

        Dilution is determined by subtracting pro forma net tangible book value per share of Class A Common Stock after the Offering from the initial public offering price per share of Class A Common Stock. Because our existing owners do not own any Class A Common Stock or other economic interests in Red Rock (other than shares of Class A Common Stock to be issued in the Blocker Mergers or in substitution of outstanding profit units of Station Holdco), we have presented dilution in pro forma net tangible book value per share of Class A Common Stock to investors in this Offering assuming that all of the holders of LLC Units in Station Holdco (other than Red Rock) exchanged their LLC Units, together with all outstanding shares of Class B Common Stock, for shares of Class A Common Stock on a one-for-one basis in order to more meaningfully present the dilutive impact on the investors in this Offering.

        To the extent the underwriters' option to purchase additional shares is exercised, there will be further dilution to new investors.

        The following table sets forth, on the same pro forma basis, as of December 31, 2015, the number of shares of Class A Common Stock purchased from Red Rock, the total consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing owners and by the new investors, assuming that all of the existing holders of LLC Units (other than Red Rock) exchanged their LLC Units, together with all outstanding shares of Class B Common Stock, for shares of our Class A Common Stock on a one-for-one basis:

 
  Shares of Class A
Common
Stock Purchased
  Total
Consideration
   
 
 
  Average Price Per
Share of Class A
Common Stock
 
 
  Number   Percent   Amount   Percent  

Existing owners

    88,435,563     76.4 % $     % $  

New investors

    27,250,000     23.6   $ 531,375,000     100   $ 19.50  

Total

    115,685,563         $ 531,375,000         $ 4.59  

        To the extent the underwriters' option to purchase additional shares is exercised, there will be further dilution to new investors.

        We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent additional capital is raised through the sale of equity or convertible securities, the issuance of these securities could result in further dilution to our stockholders.

63


Table of Contents


UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        We derived the unaudited pro forma condensed combined financial information set forth below through the application of pro forma adjustments to the historical combined financial statements of Station Holdco included elsewhere in this prospectus. The combined financial statements of Station Holdco comprise the financial statements of Station Holdco, Station Voteco, Station LLC and Fertitta Entertainment and each of their respective consolidated subsidiaries. These entities are under the common control of brothers Frank J. Fertitta III and Lorenzo J. Fertitta, who collectively hold more than 50% of the voting and economic interest of Station Holdco, Station Voteco, Station LLC, and Fertitta Entertainment.

        We have historically operated our business through Station LLC under management agreements with Fertitta Entertainment. In October 2015, Station LLC entered into an agreement to purchase all of the outstanding membership interests of Fertitta Entertainment for aggregate consideration of $460 million (the "Fertitta Entertainment Acquisition"). Because Station Holdco and Fertitta Entertainment are under common control, the purchase constitutes an acquisition of an entity under common control for accounting purposes. The acquisition will result in a change in reporting entity requiring retrospective combination of the entities' consolidated financial statements as if the combination had been in effect since the inception of common control, which was established on April 30, 2012. Our predecessor entity for accounting purposes is Station Holdco (the "Predecessor"). See "Presentation of Financial Information."

        The following unaudited pro forma condensed combined financial information gives pro forma effect to the Offering and Reorganization Transactions as described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds" and the Fertitta Entertainment Acquisition, including the effect of the transfer of certain assets and liabilities and repayment of certain liabilities of Fertitta Entertainment not included in the Fertitta Entertainment Acquisition, as if such transactions occurred on January 1, 2015 in the case of the condensed combined statement of operations for the year ended December 31, 2015, and on December 31, 2015, in the case of the condensed combined balance sheet, and are based on available information and certain assumptions we believe are reasonable, but are subject to change. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed combined statement of operations and unaudited pro forma condensed combined balance sheet.

        The unaudited pro forma condensed combined financial information should be read in conjunction with the sections of this prospectus captioned "The Reorganization of Our Corporate Structure," "Use of Proceeds," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical combined financial statements and related notes included elsewhere in this prospectus.

        The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined financial information is included for informational purposes only and does not purport to reflect the results of operations or financial position that would have occurred had we operated as a public company during the periods presented. The unaudited pro forma condensed combined financial information does not purport to be indicative of our results of operations or financial position had the Offering and Reorganization Transactions occurred on the dates assumed. The unaudited pro forma condensed combined financial information also does not project our results of operations or financial position for any future period or date.

        The pro forma adjustments principally give effect to:

    the issuance of 80,562,666 shares of Class B Common Stock to our existing owners;

    the issuance of 27,054,686 shares of Class A Common Stock of Red Rock in connection with this Offering;

64


Table of Contents

    the issuance of 10,137,209 shares of Class A Common Stock of Red Rock in connection with the Blocker Mergers;

    the issuance of 476,531 LLC Units upon an assumed cashless exercise of Warrants;

    the issuance of an aggregate of 1,832,891 restricted shares of Class A Common Stock pursuant to the terms of the Red Rock Resorts, Inc. 2016 Equity Incentive Plan in substitution for an aggregate of 10,039,007 profit units of Station LLC as of December 31, 2015 held by individuals who are our employees or former employees;

    the settlement of all existing outstanding profit units of Fertitta Entertainment as of December 31, 2015;

    the incurrence of $41.0 million of borrowings and the application of a portion of the proceeds of this Offering to pay the purchase price in the Fertitta Entertainment Acquisition;

    the transfer of certain net assets by Fertitta Entertainment prior to, and the repayment of certain liabilities of Fertitta Entertainment in connection with, the Fertitta Entertainment Acquisition;

    the purchase by Red Rock of LLC Units from certain of our existing owners;

    the execution of a tax receivable agreement by and between Red Rock and Station Holdco and the recognition of a related payable under such agreement arising as a result of the purchase by Red Rock of LLC Units from certain of our existing owners;

    the recognition of deferred tax assets related to stock issued to certain employees in exchange for profit units, an increase in the tax basis of the LLC Units in Station Holdco purchased from certain of our existing owners as compared to their GAAP carrying value and deferred tax liabilities related to the book basis of the LLC Units held by the Blocker Merger entities, exceeding the tax basis of the LLC Units, based on an effective income tax rate of 35%;

    the consolidation of Station Holdco and its consolidated subsidiaries into Red Rock's financial statements in accordance with Accounting Standards Codification ("ASC") 810, pursuant to which Red Rock will record a noncontrolling interest in Station Holdco;

    with regard to the unaudited pro forma condensed combined statement of operations, a provision for corporate income taxes, including U.S. Federal income taxes, on the income attributable to Red Rock at an effective rate of 35%. The operations of the Company are primarily conducted in the state of Nevada, which does not have a corporate level income tax. The Company has operations in Michigan and California which are insignificant;

    compensation expense associated with the grant of stock options and 169,231 restricted shares of Class A Common Stock to employees and non-employee directors in connection with the Red Rock Resorts, Inc. 2016 Equity Incentive Plan; and

    transaction expenses incurred in connection with this Offering.

        We have not made an adjustment for additional accounting, legal and information technology costs that we expect to incur as a result of being a public company. As a public company, we expect our general and administrative expenses to increase in an amount that we cannot determine at this time due to greater expenses related to corporate governance, SEC reporting and other compliance matters.

        The unaudited pro forma condensed combined financial information presented assumes no exercise by the underwriters of the option to purchase up to an additional 4,087,500 shares of Class A Common Stock from us.

65


Table of Contents


RED ROCK RESORTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2015

(in thousands, except for shares and per share data)

 
  Station
Holdco
  Pro Forma
Adjustments
Attributable to the
Offering and
Reorganization
Transactions
(excluding the
Fertitta
Entertainment
Acquisition)
   
  As Adjusted
Before the
Fertitta
Entertainment
Acquisition
  Pro Forma
Adjustments
Attributable
to the Fertitta
Entertainment
Acquisition
   
  Red Rock
Pro Forma
 

ASSETS

                                       

CURRENT ASSETS:

                                       

Cash and cash equivalents

  $ 116,426   $ 417,521   2(a)   $ 533,947   $ (417,521 ) 2(g)   $ 116,426  

Receivables, net

    35,505             35,505     (494 ) 2(h)     35,011  

Inventories

    10,329             10,329             10,329  

Prepaid gaming tax

    19,504             19,504             19,504  

Prepaid expenses and other current assets

    8,865             8,865             8,865  

Current assets of discontinued operations

    197             197             197  

Assets held for sale

    21,020             21,020             21,020  

TOTAL CURRENT ASSETS

    211,846     417,521         629,367     (418,015 )       211,352  

Property and equipment, net

    2,140,660             2,140,660     (29,799 ) 2(h)     2,110,861  

Goodwill

    195,676             195,676             195,676  

Intangible assets, net

    149,997             149,997             149,997  

Land held for development

    163,700             163,700             163,700  

Investments in joint ventures

    13,991             13,991             13,991  

Native American development costs

    11,908             11,908             11,908  

Deferred tax asset

        5,215   2(b)     5,215             5,215  

Related party note receivable

    17,568             17,568     (17,568 ) 2(h)      

Other assets, net

    26,765     (1,766 ) 2(c)     24,999     (474 ) 2(h)     24,525  

TOTAL ASSETS

  $ 2,932,111   $ 420,970       $ 3,353,081   $ (465,856 )     $ 2,887,225  

LIABILITIES AND MEMBERS'/STOCKHOLDERS' EQUITY

                                       

CURRENT LIABILITIES:

                                       

Accounts payable

  $ 24,258   $       $ 24,258   $       $ 24,258  

Accrued interest payable

    13,413             13,413     (132 ) 2(h)     13,281  

Other accrued liabilities

    132,199     (2,635 ) 2(c)     129,564     4,815   2(i)     134,379  

Current portion of long-term debt

    88,937             88,937     35,780   2(h)     124,717  

Current liabilities of discontinued operations

    113             113             113  

TOTAL CURRENT LIABILITIES

    258,920     (2,635 )       256,285     40,463         296,748  

Long-term debt, less current portion

    2,066,260             2,066,260     (67,589 ) 2(h)     1,998,671  

Deficit investment in joint venture

    2,255             2,255             2,255  

Interest rate swap and other long-term liabilities, net

    30,967             30,967     (15,811 ) 2(j)     15,156  

Payable to related parties pursuant to tax receivable agreement

        28,079   2(b)     28,079             28,079  

TOTAL LIABILITIES

    2,358,402     25,444         2,383,846     (42,937 )       2,340,909  

Commitments and contingencies

                                       

MEMBERS'/STOCKHOLDERS' EQUITY:

   
 
   
 
 

 

   
 
   
 
 

 

   
 
 

Members'/stockholders' equity, issued and outstanding

                                       

Class A Common Stock, par value $0.01 per share, 500,000,000 shares authorized; 38,971,058 shares issued and outstanding on a pro forma basis

          390   2(d)     390             390  

Class B Common Stock, par value $0.00001 per share, 100,000,000 shares authorized; 76,883,736 shares issued and outstanding on a pro forma basis              

          1   2(d)     1             1  

Combined members' equity

    558,227     (558,227 ) 2(d)                  

Additional paid-in capital

        589,435   2(e)     589,435     (422,919 ) 2(k)     166,516  

Accumulated other comprehensive loss

    (5,303 )           (5,303 )           (5,303 )

Total members'/stockholders' equity attributable to Red Rock              

    552,924     31,599         584,523     (422,919 )       161,604  

Noncontrolling interest

    20,785     363,927   2(f)     384,712             384,712  

TOTAL MEMBERS'/STOCKHOLDERS' EQUITY

    573,709     395,526         969,235     (422,919 )       546,316  

TOTAL LIABILITIES AND MEMBERS'/STOCKHOLDERS' EQUITY

  $ 2,932,111   $ 420,970       $ 3,353,081   $ (465,856 )     $ 2,887,225  

66


Table of Contents


RED ROCK RESORTS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(in thousands, except for shares and per share data)

 
  Station
Holdco
  Pro Forma
Adjustments
Attributable to the
Offering and
Reorganization
Transactions
(excluding the
Fertitta
Entertainment
Acquisition)
   
  As Adjusted
Before the
Fertitta
Entertainment
Acquisition
  Pro Forma
Adjustments
Attributable
to the Fertitta
Entertainment
Acquisition
   
  Red Rock
Pro Forma
 

Operating revenues:

                                       

Casino

  $ 922,154   $       $ 922,154   $       $ 922,154  

Food and beverage

    251,235             251,235             251,235  

Room

    122,888             122,888             122,888  

Other

    69,728             69,728             69,728  

Management fees

    88,859             88,859             88,859  

Gross revenues

    1,454,864             1,454,864             1,454,864  

Promotional allowances

    (102,729 )           (102,729 )           (102,729 )

Net revenues

    1,352,135             1,352,135             1,352,135  

Operating costs and expenses:

                                       

Casino

    347,509             347,509             347,509  

Food and beverage

    162,722             162,722             162,722  

Room

    46,559             46,559             46,559  

Other

    25,454             25,454             25,454  

Selling, general and administrative

    327,857     3,663   3(a)     331,520             331,520  

Preopening

    1,165             1,165             1,165  

Depreciation and amortization

    137,865             137,865             137,865  

Asset impairment

    6,301             6,301             6,301  

Write-downs and other charges, net

    9,514     (5,819 ) 3(b)     3,695             3,695  

    1,064,946     (2,156 )       1,062,790             1,062,790  

Operating income

    287,189     2,156         289,345             289,345  

Earnings from joint ventures

    809             809             809  

Operating income and earnings from joint ventures

    287,998     2,156         290,154             290,154  

Other expense:

                                       

Interest expense, net

    (144,489 )           (144,489 )   164   3(c)     (144,325 )

Loss on extinguishment of debt

    (90 )           (90 )   90   3(d)      

Change in fair value of derivative instruments

    (1 )           (1 )           (1 )

Income before income tax expense

    143,418     2,156         145,574     254         145,828  

Income tax expense

        (16,502 ) 3(e)     (16,502 )           (16,502 )

Net income from continuing operations

    143,418     (14,346 )       129,072     254         129,326  

Net income from continuing operations attributable to noncontrolling interest

    5,665     93,015   3(f)     98,680             98,680  

Net income from continuing operations attributable to Red Rock

  $ 137,753   $ (107,361 )     $ 30,392   $ 254       $ 30,646  

Supplemental pro forma net income per share data 3(g):

                                       

Basic weighted average number of Class A Common shares outstanding

                                    38,403,220  

Basic net income from continuing operations per share applicable to Class A Common Stock

                                  $ 0.80  

Diluted weighted average number of Class A Common shares outstanding

                                    115,854,794  

Diluted net income per share applicable to Class A Common Stock from continuing operations

                                  $ 0.79  

67


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation and the Offering

        We derived the unaudited pro forma condensed combined financial information set forth below through the application of pro forma adjustments to the historical combined financial statements of Station Holdco included elsewhere in this prospectus. We have historically operated our business through Station LLC under management agreements with Fertitta Entertainment. Our predecessor entity for accounting purposes is Station Holdco. The combined financial statements of Station Holdco comprise the financial statements of Station Holdco, Station Voteco, Station LLC, and Fertitta Entertainment and their respective consolidated subsidiaries. The accompanying unaudited pro forma condensed combined financial information gives pro forma effect to the Offering and Reorganization Transactions, as described under "The Reorganization of Our Corporate Structure" and "Use of Proceeds" and the Fertitta Entertainment Acquisition, including the transfer of certain assets and liabilities and the repayment of certain liabilities of Fertitta Entertainment not included in the Fertitta Entertainment Acquisition, as if such transactions occurred on January 1, 2015 in the case of the condensed combined statement of operations for the year ended December 31, 2015, and on December 31, 2015 in the case of the condensed combined balance sheet, and are based on available information and certain assumptions we believe are reasonable, but are subject to change. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed combined financial statements.

        As of and for the year ended December 31, 2015, Station Holdco represented all of our operations and held all of our assets and liabilities. Red Rock was incorporated September 9, 2015 and has not conducted any operations since its inception. Red Rock does not have any assets or liabilities. Accordingly, the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 and the unaudited pro forma condensed combined balance sheet as of December 31, 2015 present the historical financial condition of the Predecessor as a starting point for the pro forma presentation. As described in "The Reorganization of Our Corporate Structure," Red Rock will become the sole managing member of Station LLC. The unaudited pro forma condensed combined balance sheet and condensed combined statement of operations are based on the historical combined balance sheet and statement of operations of Station Holdco and related adjustments.

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

        The Unaudited Pro Forma Condensed Combined Balance Sheet reflects the effect of the following pro forma adjustments:

    (a)
    Reflects the net effect on cash and cash equivalents of the receipt of gross proceeds of $527.6 million from the Offering, based on an assumed sale of 27,054,686 shares of Class A Common Stock at the initial public offering price of $19.50 per share, a portion of which will be used to purchase newly-issued LLC Units in Station Holdco. Red Rock intends to use the remaining net proceeds to purchase LLC Units from certain of Station Holdco's existing owners. See "Use of Proceeds."

68


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

      Cash adjustments are as follows (in thousands):

Gross proceeds from this Offering of $527.6 million, net of underwriting discounts and commissions of $31.7 million

  $ 495,912  

less:

       

Purchase of LLC Units from existing owners at $18.33 per unit

    (67,435 )

Portion of Class A Common Stock issued in connection with the Blocker Mergers withheld to satisfy income tax withholding for certain members of the Merging Blockers

    (4,087 )

Professional fees and expenses related to this Offering

    (6,869 )

  $ 417,521  
    (b)
    Pro forma adjustments reflect the effects of the tax receivable agreement on our combined balance sheet as a result of Red Rock's purchase of LLC Units from certain existing owners. Pursuant to the tax receivable agreement, Red Rock will be required to make cash payments to these existing owners equal to 85% of the savings, if any, in U.S. federal, state and local taxes that Red Rock actually realizes, or in some circumstances is deemed to realize, as a result of certain future tax benefits to which Red Rock may become entitled. These tax benefit payments are not necessarily conditioned upon one or more of the existing owners maintaining a continued ownership interest in either Station Holdco or Red Rock. Red Rock expects to benefit from the remaining 15% of the tax benefits, if any, that it may actually realize.

      As a result, as of the date of Red Rock's purchase of LLC Units from existing owners in this Offering, on a cumulative basis, the net effect of accounting for income taxes and the tax receivable agreement on our financial statements will be a net decrease in stockholders' equity. The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the tax receivable agreement have been estimated and are based on the assumption that there are no material changes in the relevant tax law and that we earn sufficient taxable income in each year to realize the full tax benefit of the amortization of our assets. A summary of the adjustments is as follows:

      we will record a net increase of $5.2 million in deferred tax assets for estimated income tax effects of the increase in the tax basis of the purchased LLC Units, partially offset by a decrease resulting from the lower tax basis of the LLC Units held by the Blocker Merger entities and the stock issued to certain employees in exchange for their profit interests, based on an effective income tax rate of 35%. The operations of the Company are primarily conducted in the state of Nevada, which does not have a corporate level income tax. The Company has minimal operations in Michigan and California which result in nominal state and local income taxes;

      we will record a $28.1 million liability due to existing owners under the tax receivable agreement, which represents 85% of the estimated realizable tax benefit resulting from (i) the increase in tax basis in the tangible and intangible assets of Station Holdco on the date of this Offering related to the purchased LLC Units as noted above and (ii) certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement; and

69


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

      we will record a net decrease to additional paid-in capital of $22.9 million, relating to (w) stock issued to certain employees in exchange for profit interests, (x) the Blocker Mergers, (y) increase in the tax basis of certain LLC Units, and (z) the difference between the increase in deferred tax assets and the increase in liability due to existing owners under the tax receivable agreement (see note (e)).

      Pursuant to the terms of the exchange agreement that we will enter into in connection with the Offering and Reorganization Transactions, holders of LLC Units will have the right to exchange their LLC Units (together with shares of Class B Common Stock) for shares of Class A Common Stock or cash, at our election. Any exchanges of LLC Units (together with shares of Class B Common Stock) for shares of Class A Common Stock pursuant to the exchange agreement may result in increases in the tax basis of the tangible and intangible assets of Station Holdco (85% of the realized tax benefits from which will be due to the exchanging LLC Unit holders and recorded as an additional payable pursuant to the tax receivable agreement) that otherwise would not have been available. These exchanges and the resulting effects of the tax receivable agreement on our combined financial statements have not been reflected in the unaudited pro forma condensed combined financial statements.

    (c)
    Expenses related to this Offering and the Fertitta Entertainment Acquisition are estimated to be approximately $11.8 million and include the following (in thousands):

Transactions costs expensed during the year ended December 31, 2015

  $ 5,819  

Estimated offering expenses

    6,000  

Total offerings costs

  $ 11,819  

      Of the $11.8 million, approximately $6.9 million is expected to be paid from the proceeds received by Red Rock in this Offering (see note (a) above). Of the $5.8 million in transaction costs, $2.1 million is recorded in accrued liabilities and will be paid after December 31, 2015. Also included in accrued liabilities is $0.5 million related to deferred offering expenses of $1.8 million that are included in other assets. The $6.0 million in estimated offering expenses will be offset against equity (refer to note (e)).

    (d)
    Reflects the Offering and Reorganization Transactions, as described under "The Reorganization of Our Corporate Structure," including (i) the elimination of existing members' equity of $558.2 million in consolidation of Station Holdco into the financial statements of Red Rock, (ii) the issuance of shares of Class B Common Stock to Station Holdco's existing owners, (iii) the issuance of shares of Class A Common Stock in the Blocker Mergers (iv) the issuance of shares of Class A Common Stock in this Offering for $527.6 million, and (v) the issuance of restricted shares of Class A Common Stock to certain employees or former employees in substitution of profit units held by those individuals in Station Holdco.

70


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

    (e)
    In connection with the Offering and Reorganization Transactions, the following pro forma adjustments were recorded to additional paid-in capital (in thousands):

Net proceeds received by Red Rock from this offering

  $ 495,912  

Offering expenses

    (6,000 )

Par value of Class A Common Stock issued

    (390 )

Par value of Class B Common Stock issued

    (1 )

Purchase of LLC Units from existing owners

    (67,435 )

Portion of Class A Common Stock issued in connection with the Blocker Mergers withheld to satisfy income tax withholding for certain members of the Merging Blockers (see note (a))

    (4,087 )

Acquisition of noncontrolling interest of Station Holdco (see note (f))

    194,300  

Decrease to additional paid-in capital as described in note (b)

    (22,864 )

  $ 589,435  
    (f)
    After the Offering and Reorganization Transactions, as described in "The Reorganization of Our Corporate Structure," our only material asset will be the direct and indirect ownership of 33.6% of the LLC Units and voting interest in Station LLC and our only business will be to act as the sole managing member of Station Holdco. Therefore, pursuant to ASC 810 Consolidation, we will consolidate the financial results of Station Holdco into our financial statements. The ownership interests of the other members of Station Holdco will be accounted for as a noncontrolling interest in our financial statements after this Offering. Immediately following this Offering, the noncontrolling interest of Station Holdco will represent 66.4% of the outstanding LLC Units calculated as follows (in thousands):

Total pro forma Red Rock stockholders' equity

  $ 546,316  

Net liabilities attributable to Red Rock controlling interest

    22,864  

less:

       

Historical noncontrolling interest of Station Holdco

    (20,785 )

Pro forma equity of Station Holdco

  $ 548,395  

Pro forma equity attributable to 66.4% noncontrolling interest of Red Rock

  $ 363,927  

      The adjustment to additional paid-in capital for the acquisition of noncontrolling interest of Station Holdco (see note 2(e)) is as follows (in thousands):

Station Holdco combined members' equity held by the noncontrolling interest holders prior to the Offering and Reorganization Transactions

  $ 558,227  

Less: Pro forma equity attributable to 66.4% noncontrolling interest of Red Rock

    (363,927 )

Adjustment to additional paid-in capital

  $ 194,300  
    (g)
    In connection with the Fertitta Entertainment Acquisition, the following pro forma adjustments were recorded to cash and cash equivalents to reflect borrowings under

71


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

      Station LLC's revolving credit facility, the use of the remaining proceeds of the Offering (see "Use of Proceeds") and use of the proceeds from the borrowings as follows (in thousands):

Borrowings under Station LLC's revolving credit facility

  $ 41,020  

Repayment of principal balance outstanding under the Fertitta Entertainment credit facility

    (51,650 )

Payment of Fertitta Entertainment purchase price, as adjusted for repayment of the Fertitta Entertainment credit facility and liabilities assumed

    (406,891 )

  $ (417,521 )
    (h)
    The Fertitta Entertainment Acquisition will constitute an acquisition of an entity under common control. On April 30, 2012, Station Holdco and Fertitta Entertainment and their respective consolidated subsidiaries came under the common control of brothers Frank J. Fertitta III and Lorenzo J. Fertitta, who collectively hold more than 50% of their voting and economic interests. Accordingly, the column representing the historical financial information of Station Holdco, our predecessor for accounting purposes, represents the effect of the retrospective combination of the financial statements of Station Holdco and Fertitta Entertainment for all periods subsequent to April 30, 2012.

    The following pro forma adjustments reflect excluded assets and liabilities that we will not acquire in the Fertitta Entertainment Acquisition (in thousands):

Accounts receivable

  $ 494  

Property and equipment, net

    29,799  

Related party note receivable

    17,568  

Other assets, net

    474  

Accrued interest payable

    (132 )

Current portion of long-term debt

    (2,240 )

Long-term debt, less current portion

    (18,939 )

Profit units of Fertitta Entertainment that will be settled in connection with the Fertitta Entertainment Acquisition (see note (j))

    (15,811 )

  $ 11,213  

      The following pro forma adjustments were recorded to current portion of long-term debt and long-term debt, less current portion (in thousands):

 
  Current
portion of
long-term
debt
  Long-term
debt, less
current
portion
 

Borrowings under Station LLC's revolving credit facility

  $ 41,020   $  

Repayment of principal balance outstanding under the Fertitta Entertainment credit facility

    (3,000 )   (48,650 )

Excluded long-term debt of Fertitta Entertainment

    (2,240 )   (18,939 )

  $ 35,780   $ (67,589 )
    (i)
    Reflects a pro forma adjustment to record a liability of $4.8 million representing Station LLC's management fee payable to Fertitta Entertainment, which is expected to be

72


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments (Continued)

      assigned to an entity controlled by the Principal Equityholders in connection with the Fertitta Entertainment Acquisition.

    (j)
    Reflects a pro forma adjustment for the profit units of Fertitta Entertainment that will be settled in connection with the Fertitta Entertainment Acquisition and were accounted for as a liability.

    (k)
    In connection with the Fertitta Entertainment Acquisition, the following pro forma adjustments were recorded to additional paid-in capital (in thousands):

Purchase price for the Fertitta Entertainment Acquisition

  $ (460,000 )

Amount repaid to the lenders under the Fertitta Entertainment credit facility

    51,650  

Reimbursement to Station LLC for Fertitta Entertainment liabilities assumed

    1,459  

Assets, net of liabilities, excluded from the Fertitta Entertainment Acquisition (see note (h))

    (11,213 )

Station LLC management fee liability (see note (i))

    (4,815 )

  $ (422,919 )

3. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments

        The Unaudited Pro Forma Condensed Combined Statement of Operations reflect the effect of the following pro forma adjustments:

    (a)
    Reflects compensation expense associated with the grant of stock options and restricted shares of Class A Common Stock to employees and non-employee directors under the Red Rock Resorts, Inc. 2016 Equity Incentive Plan in connection with this Offering.

      In connection with the Offering, restricted shares of Class A Common Stock will be issued to certain employees or former employees in substitution of Station Holdco profit units held by those individuals. The fair value of the replacement awards is equal to the fair value of the awards cancelled and no incremental stock-based compensation adjustment was recorded in the unaudited pro forma condensed combined statement of operations.

    (b)
    Reflects a pro forma adjustment to eliminate transaction costs that were expensed for the year ended December 31, 2015.

    (c)
    In connection with the repayment of indebtedness outstanding under the Fertitta Entertainment credit facility, the transfer of the related party note receivable of Fertitta Entertainment prior to the consummation of the Fertitta Entertainment Acquisition, and the incurrence of additional debt to pay a portion of the purchase price for the Fertitta

73


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

3. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments (Continued)

      Entertainment Acquisition, the following pro forma adjustments were recorded to interest expense, net (in thousands):

Addition of interest expense associated with borrowings under Station LLC's revolving credit facility. 

  $ (1,404 )

Elimination of historical interest expense related to the Fertitta Entertainment credit agreement. 

    2,332  

Elimination of historical interest income related to Fertitta Entertainment related party note receivable

    (764 )

  $ 164  

      A hypothetical 0.125% increase or decrease in the expected weighted average interest rate would increase or decrease interest expense associated with borrowings under Station LLC's revolving credit facility by approximately $51,000 for the year ended December 31, 2015.

    (d)
    Reflects a pro forma adjustment for the loss on extinguishment of debt recorded related to the March 26, 2015 amendment to the Fertitta Entertainment credit agreement.

    (e)
    Following the Offering and Reorganization Transactions, we will be subject to U.S. federal income taxes and state and local taxes with respect to our allocable share of any net taxable income of Station Holdco. As a result, the pro forma statement of operations reflects an adjustment to provide for corporate income taxes at our estimated effective rate of 35%. The operations of the Company are primarily conducted in the state of Nevada, which does not have a corporate level income tax. The Company has minimal operations in Michigan and California which will result in nominal state and local income taxes.

      The provision for income taxes from operations differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate to income before provision for income taxes as follows:

Federal statutory rate

    35 %

State and local rate

    %

Rate benefit from flow-through entity

    (23) %

Pro forma effective tax rate

    12 %

      Our effective tax rate includes a rate benefit attributable to the fact that, after this transaction, approximately 66.4% of Red Rock's earnings will not be subject to corporate level taxes as the applicable income tax expense will be incurred by, and be the obligation of, the members of Station Holdco holding the noncontrolling interests.

    (f)
    After the Offering and Reorganization Transactions, as described in "The Reorganization of Our Corporate Structure," Red Rock will become the sole managing member of Station Holdco and will have a minority economic interest in Station Holdco but will have 100% of the voting power and control the management of Station Holdco. Immediately following the Offering, the noncontrolling interest, representing the ownership interests of the members of Station Holdco other than Red Rock, will be 66.4%. Net income attributable to the noncontrolling interest holders of Red Rock represents 66.4% of income before provision for

74


Table of Contents


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

3. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments (Continued)

      income taxes, as well as net income attributable to noncontrolling interest holders of Station LLC.

    (g)
    Basic and diluted pro forma income per share from continuing operations does not consider Class B Common Stock as these shares do not participate in earnings of Red Rock. As a result, the shares of Class B Common Stock are not considered participating securities and are not included in the weighted average shares outstanding for purposes of computing pro forma net income per share from continuing operations. Diluted pro forma income per share from continuing operations is calculated using the treasury stock method with respect to restricted stock and stock options, and the if-converted method for the exchange of LLC Units and Class B Common Stock for an equal number of Class A Common Stock.

75


Table of Contents


SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA

        The selected historical financial data presented have been derived from Station Holdco and its predecessor entities' combined financial statements which, except for periods ended on or before December 31, 2011, are contained elsewhere in this prospectus.

        You should read the financial information presented below in conjunction with Station Holdco's combined financial statements and accompanying notes included elsewhere in this prospectus, as well as "The Reorganization of Our Corporate Structure," "Use of Proceeds," "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operation," included elsewhere in this prospectus. The information presented below reflects financial data for:

    Station Holdco for the years ended December 31, 2015, 2014, 2013 and 2012, and for the period from June 17, 2011 through December 31, 2011;

    STN Predecessor for the period from January 1, 2011 through June 16, 2011; and

    Green Valley Ranch Gaming, LLC (the "GVR Predecessor," and collectively with STN Predecessor, the "Predecessors") for the period from January 1, 2011 through June 16, 2011.

        As a result of our adoption of fresh-start reporting on June 17, 2011, the selected combined financial data for periods ended on or after December 31, 2011 is not comparable in many respects with the historical consolidated financial data of the Predecessors.

76


Table of Contents

 
  Successor    
  Predecessors  
 
 


 
 
   
   
   
   
   
  STN
Predecessor
  Green Valley
Ranch
Gaming, LLC
 
 
  Station Holdco  
 
   
 
 
   
   
   
   
  Period From
June 17, 2011
Through
December 31,
2011
 





   
   
 
 
  Year Ended December 31,    
   
 
 
  Period From January 1,
2011 Through June 16,
2011
 
 
  2015   2014   2013   2012  
 
  (dollars in thousands)
   
  (dollars in thousands)
 
 
   
   
   
   
   
   
   
   
 
 
   
   
   
   
   
   
   
   
 

Statement of Operations Data:

                                               

Operating revenues:

                                               

Casino

  $ 922,154   $ 897,361   $ 882,241   $ 885,629   $ 452,951       $ 339,703   $ 59,100  

Food and beverage

    251,235     239,212     235,722     237,770     119,735         85,436     19,484  

Room

    122,888     112,664     105,630     106,348     54,924         36,326     9,753  

Other

    69,728     70,522     67,431     69,704     39,658         28,072     4,205  

Management fees

    88,859     68,782     59,758     30,793     13,482         10,765      

Gross revenues

    1,454,864     1,388,541     1,350,782     1,330,244     680,750         500,302     92,542  

Promotional allowances

    (102,729 )   (96,925 )   (94,645 )   (100,023 )   (51,351 )       (35,605 )   (8,490 )

Net revenues

    1,352,135     1,291,616     1,256,137     1,230,221     629,399         464,697     84,052