Station Casinos LLC - FORM 10-Q - May 12, 2015

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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 March 31, 2015
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 April 30, 2015, 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)
 
March 31, 2015
 
December 31, 2014
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
104,699

 
$
121,965

Restricted cash
1,067

 
1,067

Receivables, net
37,244

 
34,852

Inventories
8,615

 
9,960

Prepaid gaming tax
19,395

 
19,426

Prepaid expenses and other current assets
12,820

 
7,538

Current assets of discontinued operations
1,149

 
1,746

Assets held for sale
3,612

 
—

Total current assets
188,601

 
196,554

Property and equipment, net of accumulated depreciation of $395,871 and $374,738 at
 March 31, 2015 and December 31, 2014, respectively
2,124,910

 
2,135,908

Goodwill
195,676

 
195,676

Intangible assets, net of accumulated amortization of $54,896 and $50,313 at
 March 31, 2015 and December 31, 2014, respectively
163,749

 
168,332

Land held for development
195,057

 
202,222

Investments in joint ventures
16,773

 
18,180

Native American development costs
10,511

 
9,619

Other assets, net
46,937

 
47,850

Total assets
$
2,942,214

 
$
2,974,341

LIABILITIES AND MEMBERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
20,808

 
$
25,938

Accrued interest payable
5,509

 
15,049

Other accrued liabilities
123,003

 
123,297

Current portion of long-term debt
39,865

 
80,892

Current liabilities of discontinued operations
262

 
366

Total current liabilities
189,447

 
245,542

Long-term debt, less current portion
2,064,247

 
2,065,707

Deficit investment in joint venture
2,290

 
2,339

Interest rate swaps and other long-term liabilities, net
20,665

 
15,585

Total liabilities
2,276,649

 
2,329,173

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
647,532

 
653,843

Accumulated other comprehensive loss
(7,800
)
 
(7,099
)
Accumulated deficit
—

 
(27,750
)
Total Station Casinos LLC members' equity
639,732

 
618,994

Noncontrolling interest
25,833

 
26,174

Total members' equity
665,565

 
645,168

Total liabilities and members' equity
$
2,942,214

 
$
2,974,341


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

3




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

 
Three Months Ended March 31,
 
2015
 
2014
Operating revenues:
 
 
 
Casino
$
234,065

 
$
225,643

Food and beverage
65,226

 
61,046

Room
31,391

 
28,380

Other
17,180

 
17,076

Management fees
19,950

 
17,386

Gross revenues
367,812

 
349,531

Promotional allowances
(25,043
)
 
(23,054
)
Net revenues
342,769

 
326,477

Operating costs and expenses:
 
 
 
Casino
85,031

 
84,966

Food and beverage
41,380

 
40,099

Room
11,788

 
11,290

Other
6,132

 
6,820

Selling, general and administrative
71,247

 
70,414

Preopening
128

 
29

Depreciation and amortization
35,157

 
31,558

Management fee expense
13,592

 
12,540

Write-downs and other charges, net
3,013

 
1,525

 
267,468

 
259,241

Operating income
75,301

 
67,236

Earnings from joint ventures
410

 
441

Operating income and earnings from joint ventures
75,711

 
67,677

Other expense:
 
 
 
Interest expense, net
(36,295
)
 
(39,628
)
Loss on extinguishment of debt
—

 
(4,132
)
Change in fair value of derivative instruments
(3
)
 
(2
)
 
(36,298
)
 
(43,762
)
Net income from continuing operations
39,413

 
23,915

Discontinued operations
(132
)
 
(10,328
)
Net income
39,281

 
13,587

Less: net income (loss) attributable to noncontrolling interests
1,459

 
(1,697
)
Net income attributable to Station Casinos LLC
$
37,822

 
$
15,284


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

4




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

 
Three Months Ended March 31,
 
2015
 
2014
 
 
 
 
Net income
$
39,281

 
$
13,587

Other comprehensive income (loss):
 
 
 
Unrealized (loss) gain on interest rate swaps:
 
 
 
Unrealized loss arising during period
(3,746
)
 
(2,067
)
Reclassification of unrealized loss on interest rate swaps into operations
3,097

 
3,273

Unrealized (loss) gain on interest rate swaps, net
(649
)
 
1,206

Unrealized (loss) gain on available-for-sale securities
(52
)
 
3

Other comprehensive (loss) income
(701
)
 
1,209

Comprehensive income
38,580

 
14,796

Less: comprehensive income (loss) attributable to noncontrolling interests
1,459

 
(1,697
)
Comprehensive income attributable to Station Casinos LLC
$
37,121

 
$
16,493


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)

 
Three Months Ended March 31,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
39,281

 
$
13,587

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
35,157

 
33,049

Change in fair value of derivative instruments
3

 
2

Amortization of deferred losses on derivative instruments
3,097

 
3,273

Write-downs and other charges, net
2,574

 
1,061

Amortization of debt discount and debt issuance costs
4,638

 
4,341

Interest—paid in kind
1,041

 
1,015

Share-based compensation
694

 
775

Earnings from joint ventures
(410
)
 
(441
)
Distributions from joint ventures
601

 
245

Loss on extinguishment of debt
—

 
4,132

Changes in assets and liabilities:
 
 
 
Receivables, net
(1,983
)
 
(3,667
)
Inventories and prepaid expenses
(3,902
)
 
(3,108
)
Accounts payable
(4,515
)
 
(2,423
)
Accrued interest payable
(9,593
)
 
(9,863
)
Other accrued liabilities
4,327

 
5,646

Other, net
157

 
295

Net cash provided by operating activities
71,167

 
47,919

Cash flows from investing activities:
 
 
 
Capital expenditures, net of related payables
(23,709
)
 
(20,740
)
Proceeds from sale of land, property and equipment
4,964

 
33

Distributions in excess of earnings from joint ventures
249

 
—

Proceeds from repayment of Native American development costs
—

 
16,974

Native American development costs
(760
)
 
(580
)
Other, net
(570
)
 
1,256

Net cash used in investing activities
(19,826
)
 
(3,057
)

6




STATION CASINOS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(amounts in thousands, unaudited)
 
Three Months Ended March 31,
 
2015
 
2014
Cash flows from financing activities:
 
 
 
Borrowings under credit agreements with original maturity dates of three months or less, net
20,000

 
—

Payments under credit agreements with original maturities greater than three months
(65,880
)
 
(4,063
)
Distributions to members and noncontrolling interests
(18,877
)
 
(38,564
)
Payment of debt issuance costs
—

 
(2,356
)
Payments on derivative instruments with other-than-insignificant financing elements
(2,441
)
 
(2,705
)
Capital contributions from noncontrolling interests
—

 
5,129

Other, net
(997
)
 
(567
)
Net cash used in financing activities
(68,195
)
 
(43,126
)
Cash and cash equivalents (including cash and cash equivalents of discontinued operations):
 
 
 
(Decrease) increase in cash and cash equivalents
(16,854
)
 
1,736

Balance, beginning of period
122,702

 
137,621

Balance, end of period
$
105,848

 
$
139,357

Supplemental cash flow disclosures:
 
 
 
Cash paid for interest
$
39,589

 
$
42,552

Non-cash investing and financing activities:
 
 
 
Capital expenditures incurred but not yet paid
$
12,472

 
$
8,573


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
    
Organization    
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 and a casino in Allegan County in southwestern Michigan, both on behalf of Native American tribes.

Basis of Presentation
The accompanying condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") 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 include only 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 related notes included in the Company's Annual Report on Form 10–K for the year ended December 31, 2014.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with 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. Significant estimates incorporated into the Company's condensed consolidated financial statements include the estimated useful lives for depreciable and amortizable assets, the estimated cash flows and other factors used in assessing the recoverability of goodwill, intangible assets and other long-lived assets, the estimated fair values of certain assets related to write-downs and impairments, the estimated reserve for self-insured insurance claims, the estimated costs associated with the Company's player rewards program and the estimated liabilities related to litigation, claims and assessments. 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 controlled subsidiaries and MPM Enterprises, LLC ("MPM"), which is a 50% owned, consolidated variable interest entity ("VIE") that manages Gun Lake Casino. All significant intercompany accounts and transactions have been eliminated.
The Company consolidates MPM 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 assets of MPM reflected in the Company's Condensed Consolidated Balance Sheets at March 31, 2015 and December 31, 2014 included intangible assets of $29.4 million and $31.9 million, respectively, and receivables of $3.6 million and $3.2 million, respectively. MPM's assets may be used only to settle MPM's obligations, and MPM's beneficial interest holders have no recourse to the general credit of the Company.
The Company has various other investments in 50% owned joint ventures which are accounted for using the equity method, including its three 50% owned smaller casino properties and a joint venture which owns undeveloped land in North Las Vegas. Equity method investments at March 31, 2015 and December 31, 2014 also included $7.6 million and $8.8 million, respectively, of investments in certain restaurants at the Company's properties which are considered to be VIEs, of which Station is not the primary beneficiary.

8



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

Third party holdings of equity interests in the Company's consolidated subsidiaries 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 Income and the Condensed Consolidated Statements of Comprehensive Income, 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 have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on the previously reported net income.
Discontinued Operations
During the fourth quarter of 2014, the Company's majority-owned consolidated subsidiary, Fertitta Interactive LLC ("Fertitta Interactive"), ceased operations. The results of operations of Fertitta Interactive are reported in discontinued operations in the Condensed Consolidated Statements of Income for all periods presented, and the assets and liabilities of Fertitta Interactive are reported separately in the Condensed Consolidated Balance Sheets. The Condensed Consolidated Statements of Cash Flows have not been adjusted for discontinued operations. See Note 2 for additional information.
Assets Held for Sale
The Company classifies assets as held for sale when an asset or asset group meets all of the held for sale criteria in the accounting guidance for impairment and disposal of long-lived assets. Assets held for sale are initially measured at the lower of carrying amount or fair value less cost to sell. At March 31, 2015, assets held for sale primarily represented undeveloped land in Las Vegas, Nevada that is under contract and is expected to be sold within one year. The contracted selling price of the land less cost to sell was greater than its carrying amount at March 31, 2015 and accordingly, no loss was recognized upon its reclassification to held for sale.
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 and the Company has no liability associated with uncertain tax positions.

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, 2014.
Recently Issued and Recently Adopted Accounting Standards
In April 2014, the Financial Accounting Standards Board ("FASB") issued amended accounting guidance that changes the criteria for reporting discontinued operations and expands disclosure requirements for disposals that do not meet the discontinued operations criteria. The Company adopted this guidance in the first quarter of 2015, and the adoption did not have a material impact on the Company's 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.

9



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

In April 2015, the FASB issued amended accounting guidance that changes the balance sheet presentation of debt issuance costs. Under the amended guidance, debt issuance costs will be presented on the balance sheet as a direct deduction from the related debt liability rather than as an asset. For public companies, the new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015 (including interim periods within those fiscal years), and is required to be applied on a retrospective basis. Early adoption is permitted. The Company expects to adopt this guidance in the first quarter of 2016. Upon adoption, approximately $20 million in debt issuance costs which are currently included in other assets will be reclassified as a direct deduction from the related debt liabilities. The adoption will have no effect on the Company's results of operations.
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 will have on its condensed consolidated financial statements.
2.        Fertitta Interactive
The Company's majority-owned consolidated subsidiary, Fertitta Interactive, ceased operations during the fourth quarter of 2014. Fertitta Interactive previously operated online gaming in New Jersey and online poker in Nevada under the Ultimate Gaming and Ultimate Poker brands, respectively.
    The results of Fertitta Interactive have been reported as discontinued operations in the accompanying Condensed Consolidated Statements of Income for all periods presented. Following is an analysis of discontinued operations (amounts in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Revenues
$
—

 
$
2,794

Costs and expenses
132

 
13,122

Net loss from discontinued operations
(132
)
 
(10,328
)
Less: net loss from discontinued operations attributable
 to noncontrolling interests
(56
)
 
(4,535
)
Net loss from discontinued operations attributable to Station Casinos LLC
$
(76
)
 
$
(5,793
)

The assets and liabilities of Fertitta Interactive are reported separately in the Condensed Consolidated Balance Sheets. The major classes of assets of discontinued operations are presented below (amounts in thousands):
 
March 31, 2015
 
December 31, 2014
Cash
$
1,149

 
$
737

Accounts receivable and other
—

 
1,009

Total assets
$
1,149

 
$
1,746

    
Fertitta Interactive's current liabilities at March 31, 2015 and December 31, 2014 consisted primarily of accounts payable, accrued expenses and gaming-related liabilities.        

3.    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 with the North Fork Rancheria of Mono Indians (the "Mono"), a federally-recognized Indian tribe located near Fresno, California, which were entered into in 2003. 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 north of the city of Madera, California.


10



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

As currently contemplated, the North Fork Project is expected to include approximately 2,000 slot machines, approximately 40 table games and several restaurants. Development of the North Fork Project is subject to certain governmental and regulatory approvals, including, but not limited to, approval of the management agreement by the Chairman of the National Indian Gaming Commission ("NIGC").
    
The Company and the Mono entered into the Second Amended and Restated Development Agreement (the "Development Agreement") in August 2014, under which the Company will receive a development fee of 4% of the costs of construction and the costs of development (both as defined in the Development Agreement). Under the terms of the Development Agreement, the Company has agreed to arrange the financing for the ongoing development costs and construction of the facility. Prior to obtaining third-party financing, the Company will contribute significant financial support to the North Fork Project. Through March 31, 2015, the Company has paid approximately $25.6 million of reimbursable advances to the Mono, primarily to complete the environmental impact study, secure the North Fork Site and pay the costs of litigation. The advances 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 March 31, 2015, the carrying amount of the advances was $10.5 million.


11



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

The following table outlines the Company's evaluation at March 31, 2015 of each of the critical milestones necessary to complete the North Fork Project.
 
As of March 31, 2015
Federally recognized as a tribe by the Bureau of Indian Affairs ("BIA")
Yes
Date of recognition
No later than 1916. 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 as "Proposition 48." The opponents contend that the qualification of the referendum suspended the effectiveness of AB 277 and that the compact would be void unless Proposition 48 was approved by a majority of voters in the November 4, 2014 general election. On November 4, 2014, Proposition 48 failed. On March 17, 2015, the Mono filed suit against the State of California (see North Fork Rancheria of Mono Indians v. State of California) to obtain a compact with the State or procedures from the Assistant Secretary of the Interior for Indian Affairs under which Class III gaming may be conducted on the North Fork Site. No assurances can be provided as to whether the Mono will be successful in obtaining a tribal-state compact or Secretarial procedures to conduct Class III gaming on the North Fork Site.
Approval of gaming compact by DOI
The Mono compact was submitted to the DOI on July 19, 2013. The Company believes that the compact became effective as a matter of federal 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 North Fork Site was accepted into trust on February 5, 2013.

Approval of management agreement by NIGC
Approval of the Second Amended and Restated Management Agreement by the NIGC is expected to occur following the Mono's written request for such approval. The Company believes the Second 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.
Gaming licenses:
 
Type
Current plans for the North Fork Project include Class II and Class III gaming, which requires that a compact be in effect and that the Company's Second 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.
North Fork Rancheria of Mono Indians v. State of California. On March 17, 2015, the Mono filed a complaint against the State of California alleging that the State has violated 25 U.S.C. Section 2710(d)(7) et. seq. by failing to negotiate with the Mono in good faith to enter into a tribal-state compact governing Class III gaming on the Mono’s Indian lands. The suit seeks a declaration that the State has failed to negotiate in good faith to enter into an enforceable tribal-state compact and an order directing the State to conclude an enforceable tribal-state compact within 60 days or submit to mediation. On May 6, 2015, the State filed its answer to the Mono's complaint.

12



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

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.
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 March 31, 2015. 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.
4.    Long-term Debt
Long-term debt consisted of the following (amounts in thousands):
 
March 31,
2015
 
December 31, 2014
$1.625 billion Term Loan Facility, due March 1, 2020, interest at a margin above LIBOR or base rate (4.25% at March 31, 2015 and December 31, 2014), net of unamortized discount of $40.0 million and $42.1 million, respectively
$
1,440,777

 
$
1,503,831

$350 million Revolving Credit Facility, due March 1, 2018, interest at a margin above LIBOR or base rate (3.68% at March 31, 2015)
20,000

 
—

$500 million 7.50% Senior Notes, due March 1, 2021, net of unamortized discount of $5.2 million and $5.3 million, respectively
494,850

 
494,682

Restructured Land Loan, due June 16, 2016, interest at a margin above LIBOR or base rate (3.68% and 3.67% at March 31, 2015 and December 31, 2014, respectively), net of unamortized discount of $5.6 million and $6.7 million, respectively
108,138

 
106,783

Other long-term debt, weighted-average interest of 3.96% and 3.98% at March 31, 2015 and December 31, 2014, respectively, maturity dates ranging from 2016 to 2027
40,347

 
41,303

Total long-term debt
2,104,112

 
2,146,599

Current portion of long-term debt
(39,865
)
 
(80,892
)
Total long-term debt, net
$
2,064,247

 
$
2,065,707


The current portion of long-term debt at December 31, 2014 included a mandatory excess cash flow payment on the $1.625 billion term loan facility (the "Term Loan Facility") of $61.0 million which was paid during the first quarter of 2015.

Term Loan Amendment

In March 2014, the Company completed a repricing of 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 plus 3.25%, or base rate plus 2.25%, subject to a minimum LIBOR rate of 1.00%. The amendment had no impact on the Company’s $350 million revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan Facility, the "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 during the first quarter of 2014, which included $2.4

13



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

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 6.75 to 1.00 at March 31, 2015 to 5.00 to 1.00 in 2017 and a minimum interest coverage ratio ranging from 2.50 to 1.00 in 2015 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 March 31, 2015, the Company’s total leverage ratio was 4.73 to 1.00 and its interest coverage ratio was 3.64 to 1.00, both as defined in the credit agreement, and the Company believes it was in compliance with all applicable covenants.     

Revolver Availability

At March 31, 2015, the Company's borrowing availability under the $350 million Revolving Credit Facility, subject to continued compliance with the terms of the Credit Facility, was $296.8 million, which is net of outstanding borrowings of $20.0 million and outstanding letters of credit and similar obligations totaling $33.2 million.

5.    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. At March 31, 2015, the Company had two outstanding interest rate swaps with a total notional amount of $1.0 billion. One of the Company's interest rate swaps with a notional amount of approximately $0.7 billion will mature in July 2015, at which time the notional amount of the Company's remaining interest rate swap, which matures in 2017, will increase by the same amount.
    
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
 
 
March 31,
2015
 
December 31, 2014
Derivatives designated as hedging instruments:
 
 
 
 
Interest rate swap
Other accrued liabilities
 
$
2,149

 
$
4,149

Interest rate swap
Interest rate swaps and other
 long–term liabilities, net
 
9,360

 
6,105


The Company recognizes changes in the fair value of derivative instruments each period as described in the Cash Flow Hedges section below.

As of March 31, 2015, 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 certain conditions of default exist on the Credit Facility. As of March 31, 2015, the termination value of the interest rate swaps, including accrued interest, was a net liability of $12.5 million. Had the Company been in breach of the provisions of the swap arrangements, it could have been required to pay the termination value to settle the obligations.

Cash Flow Hedges

As of March 31, 2015, the Company's two outstanding interest rate swaps effectively converted $1.0 billion of its variable interest rate debt to a fixed rate of approximately 5.29%. In accordance with the accounting guidance for derivatives

14



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

and hedging, the Company has designated the full notional amount of both interest rate 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%). As of March 31, 2015, the Company paid a weighted-average fixed interest rate of 2.04% and received a weighted-average variable interest rate of 1.00% on its interest rate swaps, which is the LIBOR floor stipulated in the agreements.

For derivative instruments that are designated and qualify as cash flow hedges of forecasted interest payments, the effective portion of the gain or loss 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. Gains or losses on any ineffective portion of derivative instruments in cash flow hedging relationships 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 Income. 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.

The table below presents the losses on derivative financial instruments included in the Company's condensed consolidated financial statements (amounts in thousands):
Derivatives in Cash Flow Hedging Relationships
 
Amount of Gain (Loss) on Derivatives Recognized in Other Comprehensive Income (Effective Portion)
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
 
Location of Gain (Loss) on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Amount of Gain (Loss) on Derivatives Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
Three Months Ended March 31,
 
 
Three Months Ended March 31,
 
 
Three Months Ended March 31,
 
2015
 
2014
 
 
2015
 
2014
 
 
2015
 
2014
Interest rate swaps
 
$
(3,746
)
 
$
(2,067
)
 
Interest expense, net
 
$
(3,097
)
 
$
(3,273
)
 
Change in fair value of derivative instruments
 
$
(3
)
 
$
(2
)
Losses reclassified from accumulated other comprehensive loss into interest expense, net include reclassifications of deferred losses related to discontinued cash flow hedging relationships. Approximately $6.6 million of deferred losses on interest rate swaps is expected to be reclassified from accumulated other comprehensive loss into earnings during the next twelve months. This amount includes the amortization of previously deferred losses related to discontinued cash flow hedging relationships.
6.    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, 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 March 31, 2015
 
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)
$
135

 
$
135

 
$
—

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
11,509

 
$
—

 
$
11,509

 
$
—


15



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

 
 
 
Fair Value Measurement at Reporting Date Using
 
Balance as of December 31, 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)
$
187

 
$
187

 
$
—

 
$
—

Liabilities
 
 
 
 
 
 
 
Interest rate swaps
$
10,254

 
$
—

 
$
10,254

 
$
—

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

The fair values of the Company's interest rate swaps are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each swap. This analysis reflects the contractual terms of the interest rate swap, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. 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.
    
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):
 
 
March 31,
2015
 
December 31, 2014
Aggregate fair value
 
$
2,175

 
$
2,166

Aggregate carrying amount, net of unamortized discounts
 
2,104

 
2,147


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.
    
7.    Members' Equity
Changes in Members' Equity and Noncontrolling Interest

The changes in members' equity and noncontrolling interest for the three months ended March 31, 2015 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, 2014
$
—

 
$
—

 
$
653,843

 
$
(7,099
)
 
$
(27,750
)
 
$
618,994

 
$
26,174

 
$
645,168

Change in unrealized losses on interest rate swaps
—

 
—

 
—

 
(649
)
 
—

 
(649
)
 
—

 
(649
)
Unrealized loss on available-for-sale securities
—

 
—

 
—

 
(52
)
 
—

 
(52
)
 
—

 
(52
)
Share-based compensation
—

 
—

 
694

 
—

 
—

 
694

 
—

 
694

Net income
—

 
—

 
—

 
—

 
37,822

 
37,822

 
1,459

 
39,281

Distributions
—

 
—

 
(7,005
)
 
—

 
(10,072
)
 
(17,077
)
 
(1,800
)
 
(18,877
)
Balances, March 31, 2015
$
—

 
$
—

 
$
647,532

 
$
(7,800
)
 
$
—

 
$
639,732

 
$
25,833

 
$
665,565


16



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

At March 31, 2015, noncontrolling interest included a 50% ownership interest in MPM, a 42.7% ownership interest in Fertitta Interactive and 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.
Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows (amounts in thousands):
 
Unrealized Losses on Interest Rate Swaps
 
Unrealized Loss on Available-for-sale Securities
 
Total
Balances, December 31, 2014
$
(6,976
)
 
$
(123
)
 
$
(7,099
)
Unrealized losses on interest rate swaps
(3,746
)
 
—

 
(3,746
)
Reclassification of unrealized losses on interest rate swaps into income
3,097

 
—

 
3,097

Unrealized loss on available-for-sale securities
—

 
(52
)
 
(52
)
Balances, March 31, 2015
$
(7,625
)
 
$
(175
)
 
$
(7,800
)
Net Income Attributable to Station Casinos LLC
Net income attributable to Station Casinos LLC was as follows (amounts in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Net income from continuing operations
$
37,898

 
$
21,077

Net loss from discontinued operations
(76
)
 
(5,793
)
Net income attributable to Station Casinos LLC
$
37,822

 
$
15,284

    
8.    Write-downs and Other Charges, Net    
Write-downs and other charges, net include various charges to record net losses on asset disposals and non-routine transactions. Write-downs and other charges, net consisted of the following (amounts in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Loss on disposal of assets, net
$
2,036

 
$
1,678

Severance expense
269

 
464

Other
708

 
(617
)
 
$
3,013

 
$
1,525


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.


17




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 its subsidiaries, MPM, and SC Restaurant Holdco LLC. 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 intercompany cash flows and intercompany receivable and payable balances between the Parent and the Guarantor Subsidiaries in the condensed consolidating statements of cash flows and the condensed consolidating balance sheets, respectively, for the prior year to conform to the current year presentation. The reclassification had no impact on the the condensed consolidating statements of income, the condensed consolidating statements of comprehensive income (loss), the combined cash flows of the Parent and the Guarantor Subsidiaries, the combined balance sheets of the Parent and the Guarantor Subsidiaries, or the condensed consolidated financial statements.

18



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


CONDENSED CONSOLIDATING BALANCE SHEETS
MARCH 31, 2015
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
8,505

 
$
92,558

 
$
—

 
$
101,063

 
$
3,636

 
$
—

 
$
104,699

Restricted cash
 
1,067

 
—

 
—

 
1,067

 
—

 
—

 
1,067

Receivables, net
 
1,408

 
31,052

 
—

 
32,460

 
4,784

 
—

 
37,244

Intercompany receivables
 
932

 
—

 
—

 
932

 
—

 
(932
)
 
—

Advances to subsidiaries
 
231,940

 
—

 
(231,940
)
 
—

 
—

 
—

 
—

Loans to parent
 
—

 
551,593

 
(551,593
)
 
—

 
—

 
—

 
—

Inventories
 
7

 
8,494

 
—

 
8,501

 
114

 
—

 
8,615

Prepaid gaming tax
 
—

 
19,258

 
—

 
19,258

 
137

 
—

 
19,395

Prepaid expenses and other current assets
 
6,197

 
6,390

 
—

 
12,587

 
233

 
—

 
12,820

Current assets of discontinued operations
 
—

 
—

 
—

 
—

 
1,149

 
—

 
1,149

Assets held for sale
 
—

 
3,612

 
—

 
3,612

 
—

 
—

 
3,612

Total current assets
 
250,056

 
712,957

 
(783,533
)
 
179,480

 
10,053

 
(932
)
 
188,601

Property and equipment, net
 
74,109

 
2,039,010

 
—

 
2,113,119

 
11,791

 
—

 
2,124,910

Goodwill
 
1,234

 
194,442

 
—

 
195,676

 
—

 
—

 
195,676

Intangible assets, net
 
1,045

 
133,350

 
—

 
134,395

 
29,354

 
—

 
163,749

Land held for development
 
—

 
96,037

 
—

 
96,037

 
99,020

 
—

 
195,057

Investments in joint ventures
 
—

 
13,003

 
—

 
13,003

 
3,770

 
—

 
16,773

Native American development costs
 
—

 
10,511

 
—

 
10,511

 
—

 
—

 
10,511

Investments in subsidiaries
 
2,855,532

 
16,553

 
(2,854,782
)
 
17,303

 
—

 
(17,303
)
 
—

Other assets, net
 
29,043

 
17,186

 
—

 
46,229

 
708

 
—

 
46,937

Total assets
 
$
3,211,019

 
$
3,233,049

 
$
(3,638,315
)
 
$
2,805,753

 
$
154,696

 
$
(18,235
)
 
$
2,942,214

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

19



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

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)
MARCH 31, 2015
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
LIABILITIES AND MEMBERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
4,160

 
$
16,195

 
$
—

 
$
20,355

 
$
453

 
$
—

 
$
20,808

Accrued interest payable
 
5,334

 
164

 
—

 
5,498

 
11

 
—

 
5,509

Other accrued liabilities
 
17,266

 
103,974

 
—

 
121,240

 
1,763

 
—

 
123,003

Intercompany payables
 
—

 
—

 
—

 
—

 
912

 
(912
)
 
—

Loans from subsidiaries
 
551,593

 
—

 
(551,593
)
 
—

 
—

 
—

 
—

Advances from parent
 
—

 
231,940

 
(231,940
)
 
—

 
—

 
—

 
—

Current portion of long-term debt
 
38,302

 
1,563

 
—

 
39,865

 
—

 
—

 
39,865

Current liabilities of discontinued operations

 
—

 
—

 
—

 
—

 
282

 
(20
)
 
262

Total current liabilities
 
616,655

 
353,836

 
(783,533
)
 
186,958

 
3,421

 
(932
)
 
189,447

Long-term debt, less current portion
 
1,952,806

 
3,302

 
—

 
1,956,108

 
108,139

 
—

 
2,064,247

Deficit investment in joint venture
 
—

 
2,290

 
—

 
2,290

 
—

 
—

 
2,290

Interest rate swaps and other long-term liabilities, net
 
1,826

 
18,839

 
—

 
20,665

 
—

 
—

 
20,665

Total liabilities
 
2,571,287

 
378,267

 
(783,533
)
 
2,166,021

 
111,560

 
(932
)
 
2,276,649

Members' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Station Casinos LLC members' equity
 
639,732

 
2,854,782

 
(2,854,782
)
 
639,732

 
17,303

 
(17,303
)
 
639,732

  Noncontrolling interest
 
—

 
—

 
—

 
—

 
25,833

 
—

 
25,833

Total members' equity
 
639,732

 
2,854,782

 
(2,854,782
)
 
639,732

 
43,136

 
(17,303
)
 
665,565

Total liabilities and members' equity
 
$
3,211,019

 
$
3,233,049

 
$
(3,638,315
)
 
$
2,805,753

 
$
154,696

 
$
(18,235
)
 
$
2,942,214

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

20



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

CONDENSED CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 2014
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
13,554

 
$
104,575

 
$
—

 
$
118,129

 
$
3,836

 
$
—

 
$
121,965

Restricted cash
 
1,067

 
—

 
—

 
1,067

 
—

 
—

 
1,067

Receivables, net
 
2,830

 
27,633

 
—

 
30,463

 
4,389

 
—

 
34,852

Intercompany receivables
 
3,116

 
—

 
—

 
3,116

 
—

 
(3,116
)
 
—

Advances to subsidiaries
 
273,344

 
—

 
(273,344
)
 
—

 
—

 
—

 
—

Loans to parent
 
—

 
503,684

 
(503,684
)
 
—

 
—

 
—

 
—

Inventories
 
7

 
9,823

 
—

 
9,830

 
130

 
—

 
9,960

Prepaid gaming tax
 
—

 
19,281

 
—

 
19,281

 
145

 
—

 
19,426

Prepaid expenses and other current assets
 
5,003

 
2,331

 
—

 
7,334

 
204

 
—

 
7,538

Current assets of discontinued operations
 
—

 
—

 
—

 
—

 
1,746

 
—

 
1,746

Total current assets
 
298,921

 
667,327

 
(777,028
)
 
189,220

 
10,450

 
(3,116
)
 
196,554

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
 
72,230

 
2,051,495

 
—

 
2,123,725

 
12,183

 
—

 
2,135,908

Goodwill
 
1,234

 
194,442

 
—

 
195,676

 
—

 
—

 
195,676

Intangible assets, net
 
1,045

 
135,384

 
—

 
136,429

 
31,903

 
—

 
168,332

Land held for development
 
—

 
103,202

 
—

 
103,202

 
99,020

 
—

 
202,222

Investments in joint ventures
 
—

 
13,252

 
—

 
13,252

 
4,928

 
—

 
18,180

Native American development costs
 
—

 
9,619

 
—

 
9,619

 
—

 
—

 
9,619

Investments in subsidiaries
 
2,789,090

 
16,914

 
(2,785,357
)
 
20,647

 
—

 
(20,647
)
 
—

Other assets, net
 
30,438

 
16,703

 
—

 
47,141

 
709

 
—

 
47,850

Total assets
 
$
3,192,958

 
$
3,208,338

 
$
(3,562,385
)
 
$
2,838,911

 
$
159,193

 
$
(23,763
)
 
$
2,974,341

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21



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

CONDENSED CONSOLIDATING BALANCE SHEETS (Continued)
DECEMBER 31, 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
 
$
1,391

 
$
24,053

 
$
—

 
$
25,444

 
$
494

 
$
—

 
$
25,938

Accrued interest payable
 
14,877

 
161

 
—

 
15,038

 
11

 
—

 
15,049

Other accrued liabilities
 
19,518

 
102,177

 
—

 
121,695

 
1,602

 
—

 
123,297

Intercompany payables
 
—

 
—

 
—

 
—

 
2,735

 
(2,735
)
 
—

Loans from subsidiaries
 
503,684

 
—

 
(503,684
)
 
—

 
—

 
—

 
—

Advances from parent
 
—

 
273,344

 
(273,344
)
 
—

 
—

 
—

 
—

Current portion of long-term debt
 
79,305

 
1,587

 
—

 
80,892

 
—

 
—

 
80,892

Current liabilities of discontinued operations

 
—

 
—

 
—

 
—

 
747

 
(381
)
 
366

Total current liabilities
 
618,775

 
401,322

 
(777,028
)
 
243,069

 
5,589

 
(3,116
)
 
245,542

Long-term debt, less current portion
 
1,955,189

 
3,735

 
—

 
1,958,924

 
106,783

 
—

 
2,065,707

Deficit investment in joint venture
 
—

 
2,339

 
—

 
2,339

 
—

 
—

 
2,339

Interest rate swaps and other long-term liabilities, net
 
—

 
15,585

 
—

 
15,585

 
—

 
—

 
15,585

Total liabilities
 
2,573,964

 
422,981

 
(777,028
)
 
2,219,917

 
112,372

 
(3,116
)
 
2,329,173

Members' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Station Casinos LLC members' equity
 
618,994

 
2,785,357

 
(2,785,357
)
 
618,994

 
20,647

 
(20,647
)
 
618,994

  Noncontrolling interest
 
—

 
—

 
—

 
—

 
26,174

 
—

 
26,174

Total members' equity
 
618,994

 
2,785,357

 
(2,785,357
)
 
618,994

 
46,821

 
(20,647
)
 
645,168

Total liabilities and members' equity
 
$
3,192,958

 
$
3,208,338

 
$
(3,562,385
)
 
$
2,838,911

 
$
159,193

 
$
(23,763
)
 
$
2,974,341

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

22



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

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2015
(amounts in thousands)
 
 
Parent
 
Guarantor Subsidiaries
 
Eliminations
 
Parent and Guarantor Subsidiaries
 
Non–Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Casino
 
$
—

 
$
232,299

 
$
—

 
$
232,299

 
$
1,766

 
$
—

 
$
234,065

Food and beverage
 
—

 
65,066

 
—

 
65,066

 
160

 
—

 
65,226

Room
 
—

 
30,591

 
—

 
30,591

 
800

 
—

 
31,391

Other
 
—

 
17,187

 
—

 
17,187

 
2,497

 
(2,504
)
 
17,180

Management fees
 
1,342

 
9,273

 
—

 
10,615

 
9,335

 
—

 
19,950

Gross revenues
 
1,342

 
354,416

 
—

 
355,758

 
14,558

 
(2,504
)
 
367,812

Promotional allowances
 
—

 
(24,910
)
 
—

 
(24,910
)
 
(133
)
 
—

 
(25,043
)
Net revenues
 
1,342