Investor Presentation • February 2021
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INVESTOR PRESENTATION • F E B R U A R Y 2021 | DISCLAIMER This presentation contains forward-looking statements, that reflect current views of Red Rock, Inc. (the “Company”) with respect to, among other things, our operations and financial performance, all of which are subject to known and unknown risks, uncertainties an d other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ material ly from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of h istorical fact may be forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words “outlook,” “be lieves,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “esti mates,” “anticipates” or the negative thereof and similar words and expressions are intended to identify forward -looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” in th e Company’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) filed with the Securities and Exchange Commission (the “SEC”). We assume no obligation to update or review any such forward -looking information, whether as a result of new information, future developments or otherwise. This presentation also contains estimates and information concerning our industry and peers that are based on industry public ations, reports and peer company public filings. This information involves a number of assumptions and limitations, and you are cauti oned not to rely on or give undue weight to the information. We have not independently verified the accuracy or completeness of the data contained in these industry publications, reports or filings. The industry in which we operate is subject to a high degree of uncertainty and risk due to variety of factors, including those described in the “Risk Factors” section of the Company’s public filings with the SEC. This presentation includes certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin. Non -GAAP financial measures such as Adjusted EBITDA and Adjusted EBITDA Margin should be considered only as supplemental to, and not a s superior to, financial measures prepared in accordance with GAAP. Please refer to the Annex A of this presentation for a reco nciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 2 | KEY INVESTMENT HIGHLIGHTS Attractive and Growing Las Vegas Locals Market Best-in-Class Assets in Best-in-Class Locations Durable Business Model Built to Drive Free Cash Flow Financial Performance – High Margins and Strong Balance Sheet Owned Pipeline of Growth Opportunities INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 3 ATTRACTIVE AND GROWING LAS VEGAS L O C A L S MARKET | ONE OF THE LARGEST GAMING MARKETS IN THE US Top 10 United States Commercial Gaming Markets by Gross Gaming Revenue (LTM December 2020)(1)(2) ($ in millions) 4,000 $3,726 3,500 3,000 2,500 2,000 $1,868 $1,513 1,500 Market Size ($ millions) inSize($ Market $1,086 $1,048 1,000 $911 $777 $729 $717 $672 500 - Las Vegas Strip Las Vegas New Jersey Chicagoland(3) Coastal- Philadelphia Lake Charles Reno Cincinnati- St Louis Locals Mississippi Lawrenceburg (1) State Gaming Control Boards and Commissions. (2) Includes periods of time when casinos and resorts were either not open due to COVID-19 or operated with restrictions related to COVID-19. (3) Chicagoland casinos were closed during from November 19 through the end of December INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 5 | CONTINUED GROWING POPULATION AND DISCRETIONARY INCOME Las Vegas Population(1) Average Weekly Earnings(1) (in thousands) Las Vegas is the 3rd fastest growing 2,400 MSA in the United States $1,000 Average Weekly Earnings growth driving Retirees, a key gaming demographic comprise nearly 20% of the total increased discretionary income population $950 2,200 $900 2,000 $850 $800 1,800 $750 1,600 $700 $650 1,400 $600 Jul-12 Jun-13 Apr-15 Jan-18 Jan-07 Feb-17 Sep-10 Oct-09 Oct-20 1,200 Mar-16 Nov-08 Nov-19 Aug-11 Dec-07 Dec-18 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 May-14 Population ex Retirees Retiree Population (1) United States Census Bureau. (2) Nevada Gaming Control Board. INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 6 | FAVORABLE COST OF LIVING AND LOW TAX RATES DRIVE POPULATION GROWTH Median Home Prices by County(1) TTM Driver License Surrenders(2) Driver License Surrenders are leading indicator for population growth San Mateo County, CA (Silicon Valley, SF Bay Area) $1,176,700 Santa Clara County, CA (San Jose, Silicon Valley) $1,126,098 12 King County, WA (Seattle) $671,043 Los Angeles County, CA $663,000 San Diego County, CA $642,904 10 Wasatch County, UT (Salt Lake City) $438,018 San Bernardino County, CA (Riverside) $385,056 Clark County, NV (Las Vegas) $324,626 8 Maricopa County, AZ (Phoenix) $312,768 6 Thousands 4 Marginal Income Tax Rates(1) State Tax 2 California 13.30% Oregon 9.90% Idaho 6.93% 0 Utah 4.95% Arizona 4.50% Jan-12 Jan-10 Jan-14 Jan-16 Jan-18 Jan-20 Sep-10 Sep-14 Sep-12 Sep-16 Sep-18 Sep-20 May-13 May-15 May-17 May-19 Nevada NO STATE TAX May-11 (1) National Association of Realtors and Tax Foundation. Reflects the highest tier tax rates for the respective state. (2) UNLV Center for Business and Economic Research. INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 7 | LOCALS MARKET RECOVERED QUICKLY POST COVID - 19 SHUTDOWN Year-over-Year Gross Gaming Revenue Percent Change Las Vegas Strip Market(1) Las Vegas Locals Market(1)(2) 10% 7% 6% 1% -2% 0% -2% -8% -11% -17% -20% -28% -30% -32% -39% -39% -39% -46% -51% -61% -100%-100% -100% -100% Las Vegas Locals market resilient in months following shutdown (1) Nevada Gaming Control Board Monthly Revenue Report. (2) Las Vegas Locals includes GCB segments of Boulder Strip, North Las Vegas and Balance of County. INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 8 BEST IN CLASS ASSETS IN BEST IN CLASS LOCATIONS | BEST- IN- CLASS ASSETS SERVING MULTIPLE DEMOGRAPHICS Luxury Classic Value Neighborhood Red Rock Resort Palace Station Fiesta Rancho Wildfire Rancho (currently closed) Green Valley Ranch Boulder Station Wildfire Boulder Fiesta Henderson Palms Sunset Station (currently closed) (currently closed) Wildfire Sunset Santa Fe Station Wildfire Lake Mead Texas Station (currently closed) Wildfire Anthem Wildfire Valley View Wild Wild West Barley’s (50% Owned) Wildfire Lanes (50% Owned) The Greens (50% Owned) INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 10 | UNPARALLELED DISTRIBUTION AND SCALE 95 ■ 20 properties strategically 15 distributed throughout the Las Vegas metropolitan area 2 215 ■ Properties are conveniently 3 95 located on major highways, 4 interstates and arterials 1 5 ■ Over 90% of Las Vegas 7 population lives within 5 miles of 6 515 a Red Rock property 215 ■ 69% of residential development 9 15 is within 3-miles of an existing 10 95 property or development site 8 owned by the Company(1) Major Properties Smaller Properties Development Sites 15 1 Mile (1) Red Rock (5) Palace Station (9) Sunset Station (2) Santa Fe Station (6) Palms Casino Resort (10) Fiesta Henderson (3) Fiesta Rancho (7) Boulder Station (1) Applied Analysis Residential Development Proximity Study 2020. (4) Texas Station (8) Green Valley Ranch INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 11 DURABLE BUSINESS MODEL BUILT TO DRIVE FREE CASH FLOW | THE RED ROCK ADVANTAGE – B A C K T O B A S I C S ■ Best in class assets with amenities for all ages and QUALITY ASSETS income levels ■ No deferred capital maintenance ■ #1 Locals loyalty program LOCAL VALUE ■ Amenities priced for repeat customer visits ■ Over 90% of population within 5-miles of one of our UNMATCHED properties CONVENIENCE ■ Expansive free parking providing immediate access to gaming floor ■ Over 5.8 million members in the Boarding Pass program LOYAL CUSTOMER ■ Over 50% of slot revenue driven by customers visiting our properties 4 or more times per month INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 13 | GAMING CENTRIC BUSINESS MODEL DRIVES MARGIN PERFORMANCE Red Rock Q4-20(1) Las Vegas Strip(1) Wynn Gaming 24% LVS Non-Gaming Non- Gaming 30% 76% Gaming 24% MGM Non- Gaming Gaming 70% 76% Gaming 22% Non- Gaming 78% Red Rock generates more than 2/3rd of its revenue from high margin gaming (1) RRR Q4-20 Company filings and annual 2019 10K filings for respective Las Vegas Strip operators. INVESTORI N V E S T O R PRESENTATION : FEBF E B 20212 0 2 1 14 | LOYAL SLOT CUSTOMER OFFERS RECURRING REVENUE STREAM 8+ Visits per month 35% Uncarded Local Rated Guests, 64% 36% 4-7 Visits per month 16% 1-3 Visits per month 13% Over 50% of slot revenue(2) generated by high frequency local guests (1) Company data for Phase I properties only.