Station Casinos LLC - FORM 10-Q - August 12, 2014

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
þ    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
For the quarterly period ended June 30, 2014
OR
¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to     
Commission file number 000-54193
STATION CASINOS LLC
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
27-3312261
(I.R.S. Employer
Identification No.)

1505 South Pavilion Center Drive, Las Vegas, Nevada
(Address of principal executive offices)
89135
(Zip Code)
(702) 495-3000
Registrant's telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes þ    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ
 (Do not check if a
smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No þ
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ    No o 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
As of July 31, 2014, 100 shares of the registrant's voting units were outstanding and 100 shares of the registrant's non-voting units were outstanding.


STATION CASINOS LLC
INDEX

 
 
 
 
 
 
 
 


  

2




Part I. Financial Information
Item 1.    Financial Statements
STATION CASINOS LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except units data)
 
June 30, 2014
 
December 31, 2013
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
153,535

 
$
137,621

Restricted cash
1,067

 
1,067

Receivables, net
29,912

 
45,522

Inventories
9,000

 
9,055

Prepaid gaming tax
22,141

 
18,966

Prepaid expenses and other current assets
10,941

 
9,025

Total current assets
226,596

 
221,256

Property and equipment, net of accumulated depreciation of $325,483 and $276,197 at June 30, 2014 and December 31, 2013, respectively
2,137,154

 
2,162,742

Goodwill
201,238

 
201,238

Intangible assets, net of accumulated amortization of $50,502 and $42,056 at June 30, 2014 and December 31, 2013, respectively
178,946

 
189,852

Land held for development
215,889

 
216,021

Investments in joint ventures
17,624

 
14,032

Native American development costs
8,311

 
6,806

Other assets, net
59,427

 
66,451

Total assets
$
3,045,185

 
$
3,078,398

LIABILITIES AND MEMBERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
21,712

 
$
18,223

Accrued interest payable
16,048

 
16,920

Other accrued liabilities
113,961

 
125,673

Current portion of long-term debt
50,793

 
69,814

Total current liabilities
202,514

 
230,630

Long-term debt, less current portion
2,097,966

 
2,128,335

Deficit investment in joint venture
2,263

 
2,308

Interest rate swaps and other long-term liabilities, net
22,613

 
21,182

Total liabilities
2,325,356

 
2,382,455

Commitments and contingencies (Note 9)

 

Members' equity:
 
 
 
Voting units; 100 units authorized, issued and outstanding
—

 
—

Non-voting units; 100 units authorized, issued and outstanding
—

 
—

Additional paid-in capital
734,524

 
781,372

Accumulated other comprehensive loss
(11,704
)
 
(11,933
)
Accumulated deficit
(40,386
)
 
(111,031
)
Total Station Casinos LLC members' equity
682,434

 
658,408

Noncontrolling interest
37,395

 
37,535

Total members' equity
719,829

 
695,943

Total liabilities and members' equity
$
3,045,185

 
$
3,078,398


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

3




STATION CASINOS LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, unaudited)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Operating revenues:
 
 
 
 
 
 
 
Casino
$
223,922

 
$
224,962

 
$
452,359

 
$
445,819

Food and beverage
59,543

 
59,580

 
120,589

 
120,265

Room
28,884

 
26,857

 
57,264

 
54,129

Other
18,545

 
18,052

 
35,621

 
33,896

Management fees
17,058

 
11,020

 
34,444

 
20,860

Gross revenues
347,952

 
340,471

 
700,277

 
674,969

Promotional allowances
(23,801
)
 
(23,892
)
 
(46,855
)
 
(46,599
)
Net revenues
324,151

 
316,579

 
653,422

 
628,370

Operating costs and expenses:
 
 
 
 
 
 
 
Casino
86,808

 
85,627

 
174,524

 
170,446

Food and beverage
39,403

 
40,265

 
79,502

 
82,033

Room
11,425

 
10,482

 
22,715

 
21,615

Other
7,979

 
7,210

 
14,950

 
13,369

Selling, general and administrative
75,738

 
75,317

 
154,628

 
145,806

Development and preopening
144

 
46

 
173

 
186

Depreciation and amortization
33,626

 
35,417

 
66,675

 
70,748

Management fee expense
12,352

 
11,790

 
25,116

 
23,536

Write-downs and other charges, net
14,497

 
3,037

 
16,022

 
5,550

 
281,972

 
269,191

 
554,305

 
533,289

Operating income
42,179

 
47,388

 
99,117

 
95,081

Earnings from joint ventures
585

 
474

 
1,026

 
993

Operating income and earnings from joint ventures
42,764

 
47,862

 
100,143

 
96,074

Other (expense) income:
 
 
 
 
 
 
 
Interest expense, net
(37,158
)
 
(40,530
)
 
(76,816
)
 
(83,829
)
Loss on extinguishment of debt
—

 
—

 
(4,132
)
 
(146,787
)
Gain on Native American development
49,074

 
—

 
49,074

 
—

Change in fair value of derivative instruments
(71
)
 
34

 
(73
)
 
(238
)
 
11,845

 
(40,496
)
 
(31,947
)
 
(230,854
)
Net income (loss)
54,609

 
7,366

 
68,196

 
(134,780
)
Less: net (loss) income attributable to noncontrolling interests
(752
)
 
70

 
(2,449
)
 
(1,284
)
Net income (loss) attributable to Station Casinos LLC
$
55,361

 
$
7,296

 
$
70,645

 
$
(133,496
)

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

4




STATION CASINOS LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands, unaudited)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Net income (loss)
$
54,609

 
$
7,366

 
$
68,196

 
$
(134,780
)
Other comprehensive (loss) income:
 
 
 
 
 
 
 
Unrealized (loss) gain on interest rate swaps:
 
 
 
 
 
 
 
Unrealized (loss) gain arising during period
(4,190
)
 
9,660

 
(6,257
)
 
5,593

Less reclassification of unrealized loss on interest rate swaps into operations
3,234

 
3,368

 
6,507

 
6,475

Unrealized (loss) gain on interest rate swaps, net
(956
)
 
13,028

 
250

 
12,068

Unrealized loss on available-for-sale securities
(24
)
 
(54
)
 
(21
)
 
(116
)
Other comprehensive (loss) income
(980
)
 
12,974

 
229

 
11,952

Comprehensive income (loss)
53,629

 
20,340

 
68,425

 
(122,828
)
Less comprehensive (loss) income attributable to noncontrolling interests
(752
)
 
70

 
(2,449
)
 
(1,284
)
Comprehensive income (loss) attributable to
Station Casinos LLC
$
54,381

 
$
20,270

 
$
70,874

 
$
(121,544
)

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


5




STATION CASINOS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands, unaudited)

 
Six Months Ended June 30,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net income (loss)
$
68,196

 
$
(134,780
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
66,675

 
70,748

Change in fair value of derivative instruments
73

 
238

Amortization of deferred losses on derivative instruments
6,507

 
6,475

Recovery of doubtful accounts
(551
)
 
(603
)
Write-downs and other charges, net
15,135

 
4,028

Amortization of debt discount and debt issuance costs
8,732

 
15,164

Interest—paid in kind
2,046

 
2,020

Share-based compensation
1,538

 
1,908

Earnings from joint ventures
(1,026
)
 
(993
)
Distributions from joint ventures
799

 
667

Loss on extinguishment of debt
4,132

 
146,787

Gain on Native American development
(49,074
)
 
—

Changes in assets and liabilities:
 
 
 
Restricted cash
—

 
(1,337
)
Receivables, net
(813
)
 
3,370

Inventories and prepaid expenses
(5,066
)
 
(7,318
)
Accounts payable
2,239

 
(6,290
)
Accrued interest payable
(838
)
 
13,629

Other accrued liabilities
(10,064
)
 
4,479

Other, net
1,397

 
(8,221
)
Net cash provided by operating activities
110,037

 
109,971

Cash flows from investing activities:
 
 
 
Capital expenditures, net of related payables
(42,422
)
 
(49,420
)
Proceeds from sale of property and equipment
318

 
344

Investments in joint ventures
(3,418
)
 
(973
)
Distributions in excess of earnings from joint ventures
99

 
29

Proceeds from repayment of Native American development costs
66,048

 
—

Native American development costs
(1,125
)
 
(1,855
)
Other, net
833

 
(502
)
Net cash provided by (used in) investing activities
20,333

 
(52,377
)

6




STATION CASINOS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(amounts in thousands, unaudited)
 
Six Months Ended June 30,
 
2014
 
2013
Cash flows from financing activities:
 
 
 
Proceeds from issuance of 7.50% Senior Notes
—

 
499,935

Repayment of senior notes due 2018
—

 
(625,000
)
Borrowings under credit agreement with original maturity dates greater than
three months
—

 
1,611,622

Payments under credit agreements with original maturities of three months or less, net
—

 
(9,063
)
Payments under credit agreements with original maturities greater than three months
(59,152
)
 
(1,499,420
)
Distributions to members and noncontrolling interests
(53,348
)
 
(5,582
)
Payment of debt issuance costs
(2,454
)
 
(35,701
)
Payments on derivative instruments with other-than-insignificant financing elements
(5,461
)
 
(3,308
)
Capital contributions from noncontrolling interests
7,266

 
3,522

Payments on other debt
(1,307
)
 
(303
)
Net cash used in financing activities
(114,456
)
 
(63,298
)
Cash and cash equivalents:
 
 
 
Net increase (decrease) in cash and cash equivalents
15,914

 
(5,704
)
Balance, beginning of period
137,621

 
128,880

Balance, end of period
$
153,535

 
$
123,176

Supplemental cash flow disclosures:
 
 
 
Cash paid for interest
$
63,567

 
$
48,218

Non-cash investing and financing activities:
 
 
 
Capital expenditures incurred but not yet paid
$
12,145

 
$
14,193

Issuance of note payable with option by Fertitta Interactive in exchange for redemption of noncontrolling interest
$
—

 
$
4,600


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

7




STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.    Organization, Basis of Presentation and Significant Accounting Policies
Station Casinos LLC, a Nevada limited liability company (the "Company" or "Station"), is a gaming and entertainment company that owns and operates nine major hotel/casino properties and ten smaller casino properties (three of which are 50% owned) in the Las Vegas metropolitan area. The Company also manages a casino in Sonoma County, California, which opened on November 5, 2013, and a casino in southwestern Michigan, both on behalf of Native American tribes. Through its majority-owned subsidiary, Fertitta Interactive LLC, the Company operates real money online poker in Nevada, which commenced in April 2013, and real money online gaming in New Jersey, which commenced in November 2013.
The accompanying condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which only include normal recurring adjustments) necessary for a fair presentation of the results for the interim periods have been made. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10–K for the year ended December 31, 2013.
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Principles of Consolidation
The amounts shown in the accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including Fertitta Interactive LLC ("Fertitta Interactive"), which is 57.3% owned and controlled by the Company, and MPM Enterprises, LLC ("MPM"), which is 50% owned and controlled by the Company.
MPM, which manages Gun Lake Casino in southwestern Michigan, is a variable interest entity ("VIE"). The Company consolidates MPM in its consolidated financial statements because it directs the activities of MPM that most significantly impact MPM's economic performance and has the right to receive benefits and the obligation to absorb losses that are significant to MPM. The creditors of MPM have no recourse to the general credit of the Company, and the assets of MPM may be used only to settle MPM's obligations. MPM's assets reflected in the Company's Condensed Consolidated Balance Sheets at June 30, 2014 and December 31, 2013 included intangible assets of $37.0 million and $42.1 million, respectively, and receivables of $2.5 million and $2.1 million, respectively.

Investments in all other 50% or less owned affiliated companies are accounted for using the equity method. Equity method investments at June 30, 2014 and December 31, 2013 included $7.8 million and $4.4 million, respectively, of investments in certain restaurants at the Company's properties which are considered to be VIEs, in which Station is not the primary beneficiary.
Third party holdings of equity interests in the Company's condensed consolidated financial statements are referred to herein as noncontrolling interests. The portion of net income (loss) attributable to noncontrolling interests is presented separately in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income (Loss), and the portion of members' equity attributable to noncontrolling interests is presented separately on the Condensed Consolidated Balance Sheets.
Certain amounts in the condensed consolidated financial statements for the prior year periods have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on the previously reported net income.

8



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Income Taxes
The Company is a limited liability company treated as a partnership for income tax purposes and as such, is a pass-through entity and is not liable for income tax in the jurisdictions in which it operates. Accordingly, no provision for income taxes has been made in the condensed consolidated financial statements.

Significant Accounting Policies
A description of the Company's significant accounting policies is included in Item 8 of its Annual Report on Form 10–K for the year ended December 31, 2013.
Recently Issued Accounting Standards
In April 2014, the Financial Accounting Standards Board (the "FASB") issued amended accounting guidance that changes the criteria for reporting discontinued operations and expands the related disclosure requirements. This guidance is effective in the first quarter of 2015 for public companies with calendar year ends, and early adoption is permitted. The Company will adopt this guidance during the first quarter of 2015 and does not expect the adoption to have a material impact on its financial position or results of operations.
In May 2014, the FASB issued a new accounting standard for revenue recognition which requires entities to recognize revenue when it transfers promised goods or services to customers, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard supersedes the existing accounting guidance for revenue recognition, including industry-specific guidance, and amends certain accounting guidance for recognition of gains and losses on the transfer of non-financial assets. For public companies, the new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016, and early adoption is not permitted. Upon adoption, financial statement issuers may elect to apply the new standard either retrospectively to each prior reporting period presented, or using a modified retrospective approach by recognizing the cumulative effect of initial application and providing certain additional disclosures. The Company will adopt this guidance in the first quarter of 2017. The Company is currently evaluating the impact this guidance will have on its financial position and results of operations, and has not yet determined which adoption method it will elect.
A variety of proposed or otherwise potential accounting guidance is currently under study by standard-setting organizations and certain regulatory agencies. Due to the tentative and preliminary nature of such proposed accounting guidance, the Company has not yet determined the effect, if any, that the implementation of such proposed accounting guidance would have on its condensed consolidated financial statements.
2.    Native American Development

Following is information about the Company's Native American development activities.
    
North Fork Rancheria of Mono Indian Tribe

The Company has development and management agreements that were entered into in 2003, and amended in February 2010, with the North Fork Rancheria of Mono Indians (the "Mono"), a federally-recognized Indian tribe located near Fresno, California. Pursuant to those agreements, the Company will assist the Mono in developing and operating a gaming and entertainment facility (the "North Fork Project") to be located in Madera County, California.
    

9



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table outlines the Company's evaluation at June 30, 2014 of each of the critical milestones necessary to complete the North Fork Project.
 
As of June 30, 2014
Federally recognized as a tribe by the Bureau of Indian Affairs ("BIA")
Yes
Date of recognition
Federal recognition was terminated in 1961 and restored in 1983. There is currently no evidence to suggest that recognition might be terminated in the future.
Tribe has possession of or access to usable land upon which the project is to be built
The Department of the Interior ("DOI") accepted approximately 305 acres of land for the project into trust for the benefit of the Mono on February 5, 2013.
Status of obtaining regulatory and governmental approvals:
 
Tribal–state compact
A compact was negotiated and signed by the Governor of California and the Mono on August 31, 2012. The compact was submitted to the California legislature for ratification and AB 277, the legislation ratifying the compact, was passed by the California State Assembly on May 2, 2013 and passed by the California State Senate on June 27, 2013. On July 3, 2013, opponents of the North Fork Project filed a referendum seeking to place AB 277 on the state-wide ballot in California in November 2014. On November 20, 2013, the referendum qualified for the November 2014 ballot. The opponents contend that the qualification of the referendum has suspended AB 277 and unless AB 277 is approved by a majority of voters in the next general election (November 2014), the compact will be void.
Approval of gaming compact by DOI
The Mono compact was submitted to the DOI on July 19, 2013. The compact became effective as a matter of law on October 22, 2013.
Record of decision regarding environmental impact published
by BIA
On November 26, 2012, the record of decision for the Environmental Impact Statement for the project was issued by the BIA. On December 3, 2012, the Notice of Intent to take land into trust was published in the Federal Register.
BIA accepting usable land into trust on behalf of the tribe
The Mono site was accepted into trust on February 5, 2013.
Approval of management agreement by National Indian Gaming Commission ("NIGC")
Approval of the amended and restated management agreement by the NIGC is expected to occur following the effective date of the compact. The Company believes the amended and restated management agreement will be approved because the terms and conditions thereof are consistent with the provisions of the Indian Gaming Regulatory Act and the terms of previously approved management agreements.
Gaming licenses:
 
Type
Current plans for the North Fork Project include Class II and Class III gaming, which requires that the compact remain in effect and that the Company's amended and restated management agreement be approved by the NIGC.
Number of gaming devices allowed
The compact permits a maximum of 2,000 Class III slot machines at the facility. There is no limit on the number of Class II gaming devices that the Mono can offer.
Agreements with local authorities
The Mono has entered into memoranda of understanding with the City of Madera, the County of Madera and the Madera Irrigation District under which the Mono agreed to pay one-time and recurring mitigation contributions, subject to certain contingencies.
The timing of this type of project is difficult to predict and is dependent upon the receipt of the necessary governmental and regulatory approvals. There can be no assurance as to when, or if, these approvals will be obtained. The Company currently estimates that construction of the facility may begin in the next 36 to 48 months and estimates that the facility would be completed and opened for business approximately 18 months after construction begins. There can be no assurance, however, that the North Fork Project will be completed and opened within this time frame or at all. The Company expects to assist the Mono in obtaining third–party financing for the North Fork Project once all necessary regulatory approvals have been received and prior to commencement of construction; however, there can be no assurance that the Company will be able to obtain such financing for the North Fork Project on acceptable terms or at all.

10



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Under the development agreement, the Company has made reimbursable advances to the Mono totaling approximately $23.4 million, which are expected to be repaid from the proceeds of third-party financing or from the Mono's gaming revenues; however, there can be no assurance that the advances will be repaid The carrying amount of the advances was reduced to fair value upon the Company's adoption of fresh-start reporting in 2011. At June 30, 2014, the carrying amount of the advances was $8.3 million.
The Company has evaluated the likelihood that the North Fork Project will be successfully completed and opened, and has concluded that the likelihood of successful completion is in the range of 65% to 75% at June 30, 2014. The Company's evaluation is based on its consideration of all available positive and negative evidence about the status of the North Fork Project, including, but not limited to, the status of required regulatory approvals, as well as the progress being made toward the achievement of all milestones and the successful resolution of all contingencies. There can be no assurance that the North Fork Project will be successfully completed or that future events and circumstances will not change the Company's estimates of the timing, scope, and potential for successful completion or that any such changes will not be material. In addition, there can be no assurance that the Company will recover all of its investment in the North Fork Project even if it is successfully completed and opened for business.
The Federated Indians of Graton Rancheria

Prior to securing third-party financing for Graton Resort & Casino (“Graton Resort”) in Sonoma County, California, the Company made reimbursable advances to the Federated Indians of Graton Rancheria (the “Graton Tribe”) for the development of Graton Resort. At December 31, 2013, $63.9 million in advances remained outstanding. In January 2014, the Company received a repayment of $17 million of the outstanding advances, and in June 2014, the Graton Tribe repaid the remaining balance of $49.1 million, including principal and accrued interest. The carrying amount of the advances was reduced to fair value upon the Company’s adoption of fresh-start reporting in 2011. Accordingly, repayments in excess of the carrying amount of the advances are reflected as gains on Native American development in the Condensed Consolidated Statements of Operations.
3.    Long-term Debt
Long-term debt consisted of the following (amounts in thousands):
 
June 30, 2014
 
December 31, 2013
$1.625 billion Term Loan Facility, due March 1, 2020, interest at a margin above LIBOR or base rate (4.25% and 5.00% at June 30, 2014 and December 31, 2013, respectively), net of unamortized discount of $46.2 million and $51.4 million, respectively
$
1,507,851

 
$
1,561,415

$350 million Revolving Credit Facility, due March 1, 2018, interest at a margin above LIBOR or base rate
—

 
—

$500 million 7.50% Senior Notes, due March 1, 2021, net of unamortized discount of $5.6 million and $6.0 million, respectively
494,355

 
494,041

Restructured Land Loan, due June 16, 2016, interest at a margin above LIBOR or base rate (3.65% and 3.67% at June 30, 2014 and December 31, 2013, respectively), net of unamortized discount of $8.8 million and $10.7 million, respectively
103,417

 
99,820

Other long-term debt, weighted-average interest of 4.02% and 3.93% at June 30, 2014 and December 31, 2013, respectively, maturity dates ranging from 2014 to 2027
43,136

 
42,873

Total long-term debt
2,148,759

 
2,198,149

Current portion of long-term debt
(50,793
)
 
(69,814
)
Total long-term debt, net
$
2,097,966

 
$
2,128,335


Current portion of long-term debt at June 30, 2014 and December 31, 2013 included estimated mandatory excess cash flow payments on the Term Loan Facility of $31.0 million and $50.7 million, respectively.

Term Loan Amendment

In March 2014, the Company completed a repricing of its $1.625 billion Term Loan Facility (the "Term Loan Facility") which reduced the interest rate on the facility by 75 basis points. Prior to the repricing, the interest rate under the Term Loan Facility was at the Company’s option, either LIBOR plus 4.00%, or base rate plus 3.00%, subject to a minimum LIBOR rate of 1.00%. As amended, the interest rate under the Term Loan Facility is at the Company's option, either LIBOR

11



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

plus 3.25%, or base rate plus 2.25%, subject to a minimum LIBOR rate of 1.00%. The Company must pay a 1% premium if it prepays the amended Term Loan Facility prior to March 18, 2015. The amendment had no impact on the Company’s $350 million Revolving Credit Facility (the "Revolving Credit Facility").

The Company evaluated the repricing transaction on a lender by lender basis and accounted for the portion of the transaction that did not meet the criteria for debt extinguishment as a debt modification. As a result of the repricing transaction, the Company recognized a $4.1 million loss on extinguishment of debt, which included $2.4 million in third-party fees and the write-off of $1.7 million in unamortized debt discount and debt issuance costs related to the repriced debt.

The credit agreement governing the Term Loan Facility and the Revolving Credit Facility contains a number of customary covenants, including requirements that the Company maintain a maximum total leverage ratio ranging from 7.25 to 1.00 at June 30, 2014 to 5.00 to 1.00 in 2017 and a minimum interest coverage ratio ranging from 2.50 to 1.00 in 2014 to 3.00 to 1.00 in 2017, provided that a default of the financial ratio covenants shall only become an event of default under the Term Loan Facility if the lenders providing the Revolving Credit Facility take certain affirmative actions after the occurrence of a default of such financial ratio covenants. At June 30, 2014, the Company’s total leverage ratio was 5.12 to 1.00 and its interest coverage ratio was 3.15 to 1.00, both as defined in the credit agreement, and the Company was in compliance with all applicable covenants.     

March 2013 Refinancing Transactions
    
In March 2013, the Company refinanced approximately $2.1 billion of its outstanding debt and paid $35.7 million in related fees and costs. The Company recognized a $146.8 million loss on extinguishment of debt, primarily representing the write-off of unamortized debt discount and debt issuance costs related to the refinanced debt.
        
Revolver Availability

At June 30, 2014, the Company's borrowing availability under the $350 million Revolving Credit Facility was $315.2 million, which is net of outstanding letters of credit and similar obligations totaling $34.8 million.

4.    Derivative Instruments
    
The Company's objective in using derivative instruments is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as a primary part of its cash flow hedging strategy. The Company's interest rate swaps utilized as cash flow hedges involve the receipt of variable–rate payments in exchange for fixed–rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivative financial instruments for trading or speculative purposes. The Company carries derivative instruments on the Condensed Consolidated Balance Sheets at fair value, which incorporates adjustments for the nonperformance risk of the Company and the counterparties.
    
The table below presents the fair value of the Company's derivative financial instruments, exclusive of any accrued interest, as well as their classification on the Condensed Consolidated Balance Sheets (amounts in thousands):
 
Balance sheet classification
 
Fair value
 
 
June 30, 2014
 
December 31, 2013
Derivatives designated as hedging instruments:
 
 
 
 
 
Interest rate swaps
Interest rate swaps and other
 long–term liabilities, net
 
$
13,933

 
$
13,030


The Company recognizes changes in the fair value of derivative instruments each period as described below in the Cash Flow Hedges and Non-Designated Hedges sections.

As of June 30, 2014, the Company had not posted any collateral related to its interest rate swap agreements; however, the Company's obligations under the swaps are subject to the security and guarantee arrangements applicable to the related credit agreements. The swap agreements contain cross-default provisions under which the Company could be declared in default on its obligations under such agreements if the Company is in default under the Credit Facility. As of June 30, 2014, the termination value of the interest rate swaps, including accrued interest, was a net liability of $15.2 million. Had the Company

12



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

been in breach of the provisions of the swap agreements, it could have been required to pay the termination value to settle the obligations.

Cash Flow Hedges

As of June 30, 2014, the Company had two outstanding interest rate swaps which effectively convert $1.0 billion of its variable interest rate debt to a fixed rate of approximately 5.3%. In accordance with the accounting guidance for derivatives and hedging, the Company has designated the full notional amount of both of its outstanding swaps as cash flow hedges of interest rate risk. Under the terms of the swap agreements, the Company pays fixed rates ranging from 1.77% to 2.13% and receives variable rates based on one-month LIBOR (subject to a minimum of 1.00%).

The effective portion of the gains or losses on the Company's derivative instruments designated in hedging relationships is reported as a component of other comprehensive income (loss) until the interest payments being hedged are recorded as interest expense, at which time the amounts in other comprehensive income (loss) are reclassified as an adjustment to interest expense. The Company's two outstanding interest rate swaps that are designated in hedging relationships had fair values other than zero at the time they were designated, resulting in ineffectiveness. Gains or losses on the ineffective portion of the Company's derivative instruments are recorded in the period in which they occur as a component of change in fair value of derivative instruments in the Condensed Consolidated Statements of Operations.

The table below presents the gains (losses) on derivative financial instruments included in the Company's condensed consolidated financial statements for the three and six months ended June 30, 2014 and 2013, respectively (amounts in thousands):
Derivatives in Cash Flow Hedging Relationships
 
Amount of (Loss) Gain on Derivatives Recognized in Other Comprehensive Income (Effective Portion)
 
Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Amount of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Location of Loss on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Amount of (Loss) Gain on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Three Months Ended June 30,
 
 
Three Months Ended June 30,
 
 
Three Months Ended June 30,
 
2014
 
2013
 
 
2014
 
2013
 
 
2014
 
2013
Interest rate swaps
 
$
(4,190
)
 
$
9,660

 
Interest expense, net
 
$
(3,234
)
 
$
(3,368
)
 
Change in fair value of derivative instruments
 
$
(71
)
 
$
34

Derivatives in Cash Flow Hedging Relationships
 
Amount of (Loss) Gain on Derivatives Recognized in Other Comprehensive Income (Effective Portion)
 
Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Amount of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Location of Loss on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Amount of Loss on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Six Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
Six Months Ended June 30,
 
2014
 
2013
 
 
2014
 
2013
 
 
2014
 
2013
Interest rate swaps
 
$
(6,257
)
 
$
5,593

 
Interest expense, net
 
$
(6,507
)
 
$
(6,475
)
 
Change in fair value of derivative instruments
 
$
(73
)
 
$
(34
)
Losses reclassified from accumulated other comprehensive income (loss) into interest expense, net include reclassifications of deferred losses related to discontinued cash flow hedging relationships. Approximately $12.4 million of deferred losses on interest rate swaps is expected to be reclassified from accumulated other comprehensive income (loss) into earnings during the next twelve months. This amount includes a portion of the previously deferred losses related to discontinued cash flow hedging relationships.

13



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Non-Designated Hedges

From time to time, the Company holds interest rate swaps that are not designated in hedging relationships. Any non-designated interest rate swaps are not speculative and are used to manage the Company's exposure to interest rate movements, but do not meet the hedge accounting requirements. Prior to the March 2013 refinancing transactions, a portion of one of the Company's interest rate swaps was not designated in a hedging relationship. The Company records changes in the fair value of any interest rate swaps not designated in hedging relationships in the period in which they occur as a component of change in fair value of derivative instruments in the Condensed Consolidated Statements of Operations.

The table below presents the effect of the Company's derivative financial instruments not designated in hedging relationships on the Condensed Consolidated Statements of Operations (amounts in thousands):
 
 
 
 
Amount of Loss on Derivative Instruments
 Recognized in Income
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Derivatives Not Designated
as Hedging Instruments
 
Location of Loss on Derivative Instruments Recognized in Income
 
2014
 
2013
 
2014
 
2013
Interest rate swaps
 
Change in fair value of
derivative instruments
 
$
—

 
$
—

 
$
—

 
$
(204
)

5.    Fair Value Measurements
Assets Measured at Fair Value on a Recurring Basis
The following tables present information about the Company's financial assets and liabilities measured at fair value on a recurring basis at June 30, 2014 and December 31, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall (amounts in thousands):
 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance as of June 30, 2014
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Available-for-sale securities (a)
$
229

 
$
229

 
$
—

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
13,933

 
$
—

 
$
13,933

 
$
—

 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance as of December 31, 2013
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Available-for-sale securities (a)
$
250

 
$
250

 
$
—

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
13,030

 
$
—

 
$
13,030

 
$
—

____________________________________
(a) Available-for-sale securities are included in Other assets, net on the Condensed Consolidated Balance Sheets.

The fair value of available-for-sale securities is based on quoted prices in active markets.

The fair values of interest rate swaps are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. To comply

14



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

with the provisions of the accounting guidance for fair value measurements and disclosures, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In accordance with the accounting guidance for fair value measurement, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Fair Value of Long-term Debt

The following table presents information about the estimated fair value of the Company's long-term debt compared with its carrying amount (amounts in millions):
 
 
June 30, 2014
 
December 31, 2013
Aggregate fair value
 
$
2,241

 
$
2,299

Aggregate carrying amount
 
2,149

 
2,198


The estimated fair value of the Company's long-term debt is based on quoted market prices from various banks for similar instruments, which is considered a Level 2 input under the fair value measurement hierarchy.

6.    Members' Equity

Changes in Members' Equity and Noncontrolling Interest

The changes in members' equity and noncontrolling interest for the six months ended June 30, 2014 were as follows (amounts in thousands):
 
Voting units
 
Non-voting units
 
Additional
paid-in
capital
 
Accumulated
other
comprehensive
loss
 
Accumulated
deficit
 
Total Station Casinos LLC members'
equity
 
Noncontrolling
interest
 
Total members'
equity
Balances, December 31, 2013
$
—

 
$
—

 
$
781,372

 
$
(11,933
)
 
$
(111,031
)
 
$
658,408

 
$
37,535

 
$
695,943

Change in unrealized losses on interest rate swaps
—

 
—

 
—

 
250

 
—

 
250

 
—

 
250

Unrealized loss on available-for-sale securities
—

 
—

 
—

 
(21
)
 
—

 
(21
)
 
—

 
(21
)
Share-based compensation
—

 
—

 
1,530

 
—

 
—

 
1,530

 
13

 
1,543

Capital contributions from noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

 
7,266

 
7,266

Distributions
—

 
—

 
(48,378
)
 
—

 
—

 
(48,378
)
 
(4,970
)
 
(53,348
)
Net income (loss)
—

 
—

 
—

 
—

 
70,645

 
70,645

 
(2,449
)
 
68,196

Balances, June 30, 2014
$
—

 
$
—

 
$
734,524

 
$
(11,704
)
 
$
(40,386
)
 
$
682,434

 
$
37,395

 
$
719,829

At June 30, 2014, noncontrolling interest includes (a) a 50% ownership interest in MPM, (b) a 42.7% ownership interest in Fertitta Interactive, and (c) ownership interests of the former mezzanine lenders and former unsecured creditors of Station Casinos, Inc. who hold warrants to purchase stock in CV Propco LLC and NP Tropicana LLC.
On July 10, 2014, the Company paid distributions totaling $49.1 million to Station Holdco LLC, which amount was distributed by Station Holdco LLC to its equityholders.

15



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows (amounts in thousands):
 
Unrealized losses on interest rate swaps
 
Unrealized loss on available-for-sale securities
 
Total
Balances, December 31, 2013
$
(11,873
)
 
$
(60
)
 
$
(11,933
)
Deferred losses on interest rate swaps
(6,257
)
 
—

 
(6,257
)
Reclassification of deferred losses on interest rate swaps into income
6,507

 
—

 
6,507

Unrealized loss on available-for-sale securities
—

 
(21
)
 
(21
)
Balances, June 30, 2014
$
(11,623
)
 
$
(81
)
 
$
(11,704
)
        
7.    Management Fee Revenue

The Company manages Graton Resort in Sonoma County, California, and Gun Lake Casino in southwestern Michigan under management agreements with Native American tribes. For the three and six months ended June 30, 2014, management fees earned by the Company include $6.7 million and $14.1 million, respectively, in fees from Graton Resort, which opened on November 5, 2013. Management fee revenue also includes costs incurred by the Company which are reimbursable under the terms of the management agreements.

8.    Write-downs and Other Charges, Net    
Write-downs and other charges, net consisted of the following (amounts in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Loss on disposal of assets, net
$
14,106

 
$
2,674

 
$
15,784

 
$
3,552

Severance expense
414

 
186

 
878

 
1,097

Other
(23
)
 
177

 
(640
)
 
901

Write-downs and other charges, net
$
14,497

 
$
3,037

 
$
16,022

 
$
5,550

Loss on disposal of assets for the three and six months ended June 30, 2014 primarily represents the abandonment of certain assets, including an amphitheater and an outdoor water feature, as well as asset disposals related to various remodeling projects.

9.    Commitments and Contingencies

The Company and its subsidiaries are defendants in various lawsuits relating to routine matters incidental to their business. As with all litigation, no assurance can be provided as to the outcome of any legal matters and litigation inherently involves significant costs.


16




10 .    Condensed Consolidating Financial Information

In March 2013, the Company issued the 7.50% Senior Notes, pursuant to an indenture among the Company (the "Parent"), the guarantors party thereto (the "Guarantor Subsidiaries") and Wells Fargo Bank, National Association, as trustee. The 7.50% Senior Notes are guaranteed by all subsidiaries of the Company other than NP Landco Holdco LLC and Fertitta Interactive and their respective subsidiaries, and MPM. The following condensed consolidating financial statements present information about the Company, the Guarantor Subsidiaries and the non-guarantor subsidiaries. These condensed consolidating financial statements are presented in the provided form because (i) the Guarantor Subsidiaries are 100% owned subsidiaries of the Company (the issuer of the 7.50% Senior Notes), (ii) the guarantees are joint and several, and (iii) the guarantees are "full and unconditional," as those terms are used in Regulation S-X Rule 3-10.  The guarantee of a Guarantor Subsidiary will be automatically released in certain customary circumstances, such as when such Guarantor Subsidiary is sold or all of the assets of such Guarantor Subsidiary are sold, the capital stock is sold, when such Guarantor Subsidiary is designated as an "unrestricted subsidiary" for purposes of the indenture, or upon legal defeasance or satisfaction and discharge of the indenture. The Company has reclassified an intercompany advance from the Parent to the Guarantor Subsidiaries in the condensed consolidating statements of cash flows for the prior year period to conform to the presentation in the Company's Form 10-K. The reclassification had no impact on the condensed consolidating balance sheets, the condensed consolidating statements of operations, the condensed consolidating statements of comprehensive income (loss), the condensed consolidated statement of cash flows, or the combined cash flows of the Parent and the Guarantor Subsidiaries.

17



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


CONDENSED CONSOLIDATING BALANCE SHEETS
JUNE 30, 2014
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
54,184

 
$
90,787

 
$
—

 
$
144,971

 
$
8,564

 
$
—

 
$
153,535

Restricted cash
 
1,067

 
—

 
—

 
1,067

 
—

 
—

 
1,067

Receivables, net
 
1,724

 
23,828

 
—

 
25,552

 
4,360

 
—

 
29,912

Intercompany receivables
 
—

 
104,120

 
(101,447
)
 
2,673

 
—

 
(2,673
)
 
—

Inventories
 
8

 
8,679

 
—

 
8,687

 
313

 
—

 
9,000

Prepaid gaming tax
 
—

 
21,973

 
—

 
21,973

 
168

 
—

 
22,141

Prepaid expenses and other current assets
 
8,019

 
2,343

 
—

 
10,362

 
579

 
—

 
10,941

Total current assets
 
65,002

 
251,730

 
(101,447
)
 
215,285

 
13,984

 
(2,673
)
 
226,596

Property and equipment, net
 
65,414

 
2,051,943

 
—

 
2,117,357

 
19,797

 
—

 
2,137,154

Goodwill
 
1,234

 
194,442

 
—

 
195,676

 
5,562

 
—

 
201,238

Intangible assets, net
 
1,045

 
139,452

 
—

 
140,497

 
38,449

 
—

 
178,946

Land held for development
 
—

 
116,869

 
—

 
116,869

 
99,020

 
—

 
215,889

Investments in joint ventures
 
—

 
14,031

 
—

 
14,031

 
3,593

 
—

 
17,624

Native American development costs
 
—

 
8,311

 
—

 
8,311

 
—

 
—

 
8,311

Investments in subsidiaries
 
2,700,055

 
31,786

 
(2,693,966
)
 
37,875

 
—

 
(37,875
)
 
—

Other assets, net
 
33,345

 
18,413

 
—

 
51,758

 
7,669

 
—

 
59,427

Total assets
 
$
2,866,095

 
$
2,826,977

 
$
(2,795,413
)
 
$
2,897,659

 
$
188,074

 
$
(40,548
)
 
$
3,045,185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

18



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)
JUNE 30, 2014
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
LIABILITIES AND MEMBERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
1,446

 
$
19,443

 
$
—

 
$
20,889

 
$
823

 
$
—

 
$
21,712

Accrued interest payable
 
15,861

 
176

 
—

 
16,037

 
11

 
—

 
16,048

Other accrued liabilities
 
17,325

 
90,756

 
—

 
108,081

 
5,880

 
—

 
113,961

Intercompany payables
 
101,447

 
—

 
(101,447
)
 
—

 
2,673

 
(2,673
)
 
—

Current portion of long-term debt
 
49,218

 
1,575

 
—

 
50,793

 
—

 
—

 
50,793

Total current liabilities
 
185,297

 
111,950

 
(101,447
)
 
195,800

 
9,387

 
(2,673
)
 
202,514

Long-term debt, less current portion
 
1,989,933

 
4,616

 
—

 
1,994,549

 
103,417

 
—

 
2,097,966

Deficit investment in joint venture
 
—

 
2,263

 
—

 
2,263

 
—

 
—

 
2,263

Interest rate swaps and other long-term liabilities, net
 
8,431

 
14,182

 
—

 
22,613

 
—

 
—

 
22,613

Total liabilities
 
2,183,661

 
133,011

 
(101,447
)
 
2,215,225

 
112,804

 
(2,673
)
 
2,325,356

Members' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Station Casinos LLC members' equity
 
682,434

 
2,693,966

 
(2,693,966
)
 
682,434

 
37,875

 
(37,875
)
 
682,434

  Noncontrolling interest
 
—

 
—

 
—

 
—

 
37,395

 
—

 
37,395

Total members' equity
 
682,434

 
2,693,966

 
(2,693,966
)
 
682,434

 
75,270

 
(37,875
)
 
719,829

Total liabilities and members' equity
 
$
2,866,095

 
$
2,826,977

 
$
(2,795,413
)
 
$
2,897,659

 
$
188,074

 
$
(40,548
)
 
$
3,045,185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

19



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 2013
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
27,182

 
$
103,584

 
$
—

 
$
130,766

 
$
6,855

 
$
—

 
$
137,621

Restricted cash
 
1,067

 
—

 
—

 
1,067

 
—

 
—

 
1,067

Receivables, net
 
2,893

 
38,914

 
—

 
41,807

 
3,715

 
—

 
45,522

Intercompany receivables
 
120,925

 
—

 
(118,853
)
 
2,072

 
—

 
(2,072
)
 
—

Inventories
 
7

 
8,740

 
—

 
8,747

 
308

 
—

 
9,055

Prepaid gaming tax
 
—

 
18,826

 
—

 
18,826

 
140

 
—

 
18,966

Prepaid expenses and other current assets
 
5,710

 
2,723

 
—

 
8,433

 
592

 
—

 
9,025

Total current assets
 
157,784

 
172,787

 
(118,853
)
 
211,718

 
11,610

 
(2,072
)
 
221,256

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
 
47,970

 
2,094,310

 
—

 
2,142,280

 
20,462

 
—

 
2,162,742

Goodwill
 
1,234

 
194,442

 
—

 
195,676

 
5,562

 
—

 
201,238

Intangible assets, net
 
1,045

 
143,519

 
—

 
144,564

 
45,288

 
—

 
189,852

Land held for development
 
—

 
117,001

 
—

 
117,001

 
99,020

 
—

 
216,021

Investments in joint ventures
 
—

 
14,032

 
—

 
14,032

 
—

 
—

 
14,032

Native American development costs
 
—

 
6,806

 
—

 
6,806

 
—

 
—

 
6,806

Investments in subsidiaries
 
2,550,678

 
34,738

 
(2,545,154
)
 
40,262

 
—

 
(40,262
)
 
—

Other assets, net
 
36,338

 
22,059

 
—

 
58,397

 
8,054

 
—

 
66,451

Total assets
 
$
2,795,049

 
$
2,799,694

 
$
(2,664,007
)
 
$
2,930,736

 
$
189,996

 
$
(42,334
)
 
$
3,078,398

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

20



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)
DECEMBER 31, 2013
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
LIABILITIES AND MEMBERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
1,374

 
$
15,664

 
$
—

 
$
17,038

 
$
1,185

 
$
—

 
$
18,223

Accrued interest payable
 
16,726

 
182

 
—

 
16,908

 
12

 
—

 
16,920

Other accrued liabilities
 
12,772

 
103,792

 
—

 
116,564

 
9,109

 
—

 
125,673

Intercompany payables
 
—

 
118,853

 
(118,853
)
 
—

 
2,072

 
(2,072
)
 
—

Current portion of long-term debt
 
68,831

 
982

 
—

 
69,813

 
1

 
—

 
69,814

Total current liabilities
 
99,703

 
239,473

 
(118,853
)
 
220,323

 
12,379

 
(2,072
)
 
230,630

Long-term debt, less current portion
 
2,024,517

 
3,998

 
—

 
2,028,515

 
99,820

 
—

 
2,128,335

Deficit investment in joint venture
 
—

 
2,308

 
—

 
2,308

 
—

 
—

 
2,308

Interest rate swaps and other long-term liabilities, net
 
12,421

 
8,761

 
—

 
21,182

 
—

 
—

 
21,182

Total liabilities
 
2,136,641

 
254,540

 
(118,853
)
 
2,272,328

 
112,199

 
(2,072
)
 
2,382,455

Members' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Station Casinos LLC members' equity
 
658,408

 
2,545,154

 
(2,545,154
)
 
658,408

 
40,262

 
(40,262
)
 
658,408

  Noncontrolling interest
 
—

 
—

 
—

 
—

 
37,535

 
—

 
37,535

Total members' equity
 
658,408

 
2,545,154

 
(2,545,154
)
 
658,408

 
77,797

 
(40,262
)
 
695,943

Total liabilities and members' equity
 
$
2,795,049

 
$
2,799,694

 
$
(2,664,007
)
 
$
2,930,736

 
$
189,996

 
$
(42,334
)
 
$
3,078,398

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21



STATION CASINOS LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2014
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Casino
 
$
—

 
$
219,785

 
$
—

 
$
219,785

 
$
4,137

 
$
—

 
$
223,922

Food and beverage
 
—

 
59,365

 
—

 
59,365

 
178

 
—

 
59,543

Room
 
—

 
27,995

 
—

 
27,995

 
889

 
—

 
28,884

Other
 
1

 
16,038

 
—

 
16,039

 
3,462

 
(956