Good afternoon, and welcome to Red Rock Resorts first quarter 2023 conference call. All participants will be in a listen-only mode. Please note, this conference is being recorded. I would now like to turn the conference over to Stephen Cootey, Executive Vice President, Chief Financial Officer, and Treasurer of Red Rock Resorts. Please go ahead. Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Red Rock Resorts first quarter 2023 earnings conference call. Joining me on the call today are Frank and Lorenzo Fertitta, Scott Kreeger, and our executive management team. I'd like to remind everyone that our call today will include forward-looking statements under the safe harbor provisions of the United States federal securities laws. Developments and results may differ from those projected. During this call, we will also discuss non-GAAP financial measures. For definitions and a complete reconciliation of these figures to GAAP, please refer to the financial tables in our earnings press release, Form 8-K, and investor deck, which were filed this afternoon prior to the call. Also, please note that this call is being recorded. On a consolidated basis, the first quarter net revenue was $433.9 million, up $32 million or 8% from the prior year's first quarter. Adjusted EBITDA was $194.2 million, up $15.4 million or 8.6% year-over-year. Our adjusted EBITDA margin was 44.8% for the quarter, an increase of 28 basis points year-over-year. This represents the best first quarter adjusted EBITDA and adjusted EBITDA margin results in the company's history. With respect to our Las Vegas operations, the first quarter net revenue was $430 million, up $30.3 million or 7.6% from the prior year's first quarter. Adjusted EBITDA was $214.1 million, up $15.9 million or 8% year-over-year. Our adjusted EBITDA margin was 49.8%, an increase of 19 basis points year-over-year. This represents the second-best quarter for our Las Vegas operations in the company's history in terms of both adjusted EBITDA and adjusted EBITDA margin and marks the 11th consecutive quarter that the company delivered adjusted EBITDA margins in excess of 45%. In the quarter, we converted 78% of our adjusted EBITDA to operating free cash flow, generating $152 million or $1.46 per share. This significant level of free cash flow continues to be reinvested in our long-term growth strategy or returned to our stakeholders via debt pay down, dividends, or share repurchases. Throughout the quarter, we remained operationally disciplined and focused on our core local guests, as well as continued to grow our regional and national segments. When comparing our results to last year's first quarter, we continue to see upside from strong visitation in our regional and national segments. This strength, coupled with stron spend per visit across our entire portfolio, allowed us to enjoy record first quarter revenue and adjusted EBITDA results across our entire gaming segment. Turning to the non-gaming segments, both Hotel and Food and Beverage delivered significant year-over-year and record profitability in the first quarter. Hotel revenue was $43.9 million, up $7.2 million or 19.5% year-over-year, driven by higher occupancy and ADR across our hotel portfolio. Food and Beverage revenue was $78.1 million, up $12.4 million or 18.9% year-over-year, driven by higher average check across our Food and Beverage outlets and the strength of our catering business. Our catering revenue has surpassed 2019 levels and continues to grow as this quarter represents the seventh consecutive quarter of double-digit year-over-year growth in this business segment. With regard to our group sales business, we continue to see positive momentum driven by growth in both room nights and ADR as our pipeline continues to grow into 2023. As we begin the second quarter, our business across both our gaming and non-gaming segments remain stable. On the expense side, we remain operationally disciplined and continue to look for ways to become more efficient while providing best-in-class wages and benefits to our team members and delivering best-in-class customer service to our guests. Despite macroeconomic headwinds, which include inflation and increased interest rates, our focus on our core operations have enabled us to generate record adjusted EBITDA, maintain adjusted EBITDA margins, and return over $1.2 billion in capital, or nearly $12 per share, to our shareholders since we reopened in June of 2020. While we remain vigilant to the macroeconomic picture, we are committed to disciplined investment in our core strategy, which includes expanding our footprint in Las Vegas and offering new amenities to our guests at our existing locations. Building upon the successful openings of our high-limit table and slot rooms, as well as Lotus of Siam at our Red Rock Resorts property last year, we welcomed Naxos Taverna, Kallisto Oyster Bar, and Rouge Room during the first quarter. These new amenities complement the existing offerings at Red Rock and have been well received by our guests. In addition, we successfully opened Wildfire on Fremont, located on the Boulder Highway, on February 10th, a 21,000 sq ft casino featuring over 200 slot machines, a sports book, and two restaurants at a capital investment of $24 million. Let's cover a few balance sheet and capital items. The company's cash and cash equivalents at the end of the first quarter was $107.7 million, and the total principal amount of debt outstanding was $3.08 billion, resulting in a net debt number of $2.98 billion. At the end of the first quarter, the company's net debt to EBITDA and interest coverage ratios was 3.9 times and 5.6 times, respectively. Our leverage is expected to tick upwards as we complete the construction of our Durango property. Upon the completion of Durango, we expect it to lever toward our long-term net leverage target of 3 times. Capital spend in the first quarter was $175.5 million, which includes approximately $159.2 million in investment capital inclusive of Durango, as well as $16.3 million in maintenance capital. For the full year 2023, we expect to spend between $70 million and $90 million in maintenance capital and a total of $600 million-$650 million in growth capital inclusive of Durango. Let's provide an update on our development pipeline. Starting with our Durango development, as we've mentioned before, we're extremely excited about this project, which is situated on a 50-acre site, ideally located off the 215 expressway in Durango Drive in the southwest Las Vegas Valley. This project is located within the fastest-growing area in the Las Vegas Valley, with a very favorable demographic profile and no unrestricted gaming competitors within a 5-mile radius. This quarter, we've completed the full enclosure of the low-rise structure and are finishing the enclosure of the hotel tower. Our tower service elevators are now fully operational. We expect to have central plant online in the next couple weeks. The project is on schedule with an anticipated opening in the fourth quarter of 2023. We now expect to spend approximately $780 million on the project, which includes all design costs, construction, hard and soft costs, pre-opening expenses, and any financing costs associated with the project. Most of the increase in this investment is attributable to our decision to expand the casino area and add an additional 360 gaming positions to the casino floor. We believe that a larger casino footprint will better align the product offering with the anticipated growth and favorable demographics in the area surrounding Durango. Additionally, there have been some smaller increases to our construction labor and procurement costs as we work to ensure the project opens later this year. Despite the increase in investment, the company expects the return profile for Durango to be consistent with our prior greenfield developments. Turning to North Fork, as we noted last quarter, after favorably resolving all its other litigation, the tribe has a single remaining case in the California courts. We do not believe that this case will interfere with the right or the ability of North Fork to conduct gaming on its federal trust land, and we continue to work with the tribe to progress our efforts with respect to this project, including working toward approval of a management agreement, continuing our work on the development and design, and having preliminary talks with respective lending partners. We will continue to provide updates on our quarterly earnings calls. On April 20th, the Oakland A's announced that they have entered into a purchase and sale agreement to buy 48.6 acres of land on our Viva site. In conjunction with this sale, the A's were granted an option to acquire an additional 8 acres of land on the site. Due to confidentiality, the purchase price of this transaction has not been disclosed, but the anticipated closing of the sale is anticipated to occur in the fourth quarter later this year. As a reminder, the entire Viva site consists of 96 acres. If the A's transaction closes and they exercise their 8-acre option, we still retain 39.3 acres for future monetization as we continue to execute on our strategy of repositioning our land portfolio for future growth. Lastly, on May 4th, the company's board of directors declared a cash dividend of $0.25 per Class A common share, payable on June 30th to Class A shareholders of record as of June 15th. With our current best-in-class assets and locations, coupled with our development pipeline of seven owned development sites located in the most desirable locations in the Las Vegas Valley, we have an unparalleled growth story that will allow us to double the size of our portfolio and capitalize on the very favorable long-term demographic trends and high barriers to entry that characterize the Las Vegas locals market. Despite a challenging macro environment, our disciplined approach to running our business resulted in record high EBITDA and EBITDA margin for the quarter. While we remain vigilant to the overall economic environment, we are confident in the resilience of our business model, as well as our management team's ability to execute our long-term growth strategy and take a balanced approach into returning capital to our shareholders and improving upon our already strong balance sheet. We would also like to recognize and extend our thanks to all of our team members for their hard work. Our success starts with them, and they continue to be primary reasons why our guests return time after time. We are also proud to announce today that our employees have voted us the top casino employer in the Las Vegas Valley for the third year in a row. We are also proud to share that Forbes recently selected our Red Rock Casino Resort & Spa as a top overall casino resort hotel in Las Vegas, which we consider a tremendous recognition of our efforts and those of our team members. Finally, we'd like to thank our guests for their loyal support in each of the last six decades. Operator, this concludes our prepared remarks for today, and we are now ready to take questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Joseph Greff with JPMorgan. Please go ahead. Good afternoon, everybody. Very strong results here. As you mentioned, Steve, particularly in the non-gaming side of things, how broad-based was this non-gaming revenue growth? And I guess where I'm going with this is, you know, how even or uneven or concentrated is this non-gaming growth, you know, at maybe some of your higher-end properties like Red Rock and Green Valley Ranch, you know, versus maybe some of what I would call sort of your core properties? Hi, this is Scott. Thanks for the question. Really, it's across the board. When you look at the company as a whole, whether you're looking at food and beverage revenue, catering revenue, and the dynamics of average check and covers in food and beverage, it's across the board. We saw about a 20% growth in food and beverage and about a 78% growth in catering revenue. And we saw our profit in food and beverage go up 44%. Really strong numbers in the food and beverage side. On the hotel side, equally strong numbers. Hotel revenue was up about 20%. ADR was up about 18%, and RevPAR overall was up about 34%. Really strong numbers. If you look at bowling, we were up about 25%, and spa and so on, about the same percentage at 24.6%. We're really happy with the blend of results there. As you drop into properties, you know, you are gonna see some upside benefit at Red Rock because of the capital investment that we've done there. With the new inclusions of restaurants and lounges, you know, we are seeing upside revenue increases there. It really is across the board when you look at a property-by-property basis. Great. Thank you very much. You know, for anybody who wants to take this next question. You know, how are you thinking about the timing of the next development beyond Durango phase one, say, in Inspirada and Henderson? You know, how much time or what do you wanna see to give Durango time to ramp or breathe before investing elsewhere? You know, how does a phase two at Durango, you know, fit in the priority list? Finally, does, you know, I guess, what we would consider increased, you know, land asset monetization impact the timing of your next development? Hey, Joe, this is Lorenzo. I'll take that. I think our, well, our thought process is similar to what we said in the past. I mean, our focus right now is getting Durango open. We'll open that in the fourth quarter. We would want to make sure that Durango is stable and, you know, marching toward the. Expectations ... expected return on investment, you know, obviously, that we've talked about and that we've been able to achieve historically. With that said, we have been working pretty diligently on plans and entitlements for the balance of the land that we own in the land bank for future development. Also, we've been working on a potential phase two for Durango, working on what that programming could look like, what it would be, and, you know, trying to work out all the details on that. I will tell you that historically, you know, once you have a property up and open and cash flowing and doing very well, the spend to go to a phase two or an incremental expansion tends to be very high return on investment and very efficient. While we haven't committed to anything yet, I mean, it's exactly what we had said before. I mean, we just wanna get Durango open. We expect it to be successful, you know, as we open it, and we wanna get it stable, and then we'll be in a position because of the work that we've done to be able to have multiple options, whether we pull the trigger on phase two, whether we break ground on one of the other properties, we'll make that decision. We're in a really good spot for that from that standpoint. Great. Thanks, guys. The next question comes from Carlo Santarelli with Deutsche Bank. Please go ahead. Hey, guys. Thank you. I guess, Steve, maybe you could opine on this one, but when you look at, you know, kind of the Las Vegas shifted last year, some expenses. You're cutting out a little bit, Carlo. I'm sorry, Steve. You hear me better now? Yes, I do. I was saying when you look at the Las Vegas segment, flow through was kind of in that 50%-55% range. Obviously, the growth in F&B and the growth in some of your other revenues in hotel is coming in stronger than the casino revenue growth right now. As we move forward, how do you guys think about what normalized flow through can look like in the local segment? Well, I mean, I think this is going back to the days of, again, from a margin perspective, we feel very comfortable where we are with our margins. Again, we delivered 11 consecutive quarters of margin over 45%. When we think of what normalized margins are, we're here. And we think we can sustain these margins through good times and bad. When you're asking about flow through, I mean, we think flow through, I think we've always historically used a target of 50%-70% flow through. There's gonna be some quarters where timing may prevent that from happening, but we're sticking with that target. Understood. Then if I could just to follow up, as you guys kinda talked earlier, and I know Frank and Lorenzo, you guys have often talked about a return in the high teens, on investment commensurate with what you've done historically at the Greenfield developments. Does that estimate encapsulate any impact on the existing portfolio that could come from- When you think about it, are you thinking about that holistically on what this project will add to aggregate EBITDA relative to the spend? Yeah, this is Lorenzo. We do. When we talk about the returns, we're talking about stabilized returns, which, you know, we expect to take, roughly about 3 years to kind of hit those targets. That would include, even if there was some degradation early on from opening a new property, that there would be backfill at existing properties that. When we talk about the returns, it is holistic, you know, with the new supply in the market affecting everything. That's what we've seen historically as we've opened new casinos. You know, the overall market tends to backfill and grow overall as we add new products. That would be our expectation. Great. Thank you, guys. The next question comes from Shaun Kelley with Bank of America. Please go ahead. Hi, good afternoon, everyone. Thank Thank you for taking my questions. Actually just wanted to build on that last point. I think Lorenzo, you mentioned about three years to hit stabilized returns, if I caught it correctly. Could you just talk a little bit more about the opening cadence you would anticipate? It's been a number of years since I think we've seen a major opening in the locals market. Just kinda curious about, you know, what programming is needed, you know, kinda upfront. You know, is there an investment period around marketing that you would expect? I mean, generally speaking, I would think awareness is very high in this market already. Yeah, just kind of walk us through a little bit of the playbook and, you know, any sense of maybe how you'd expect debuts and then, you know, like percentages-wise, what the debut may look like relative to that stabilized time period. Historically, for the locals market here, as we've opened properties, they tend to be profitable out of the box. It really becomes an exercise of expense management at that point. I mean, obviously, when we open Durango or any other property, we're gonna be probably overstaffed, and we're gonna be overrun with business. The number one priority is not going to be margin, you know, for the first couple of quarters. It's gonna be making sure that we're taking care of every guest. We've got great customer service on the slot floor, on the table games, as well as in the restaurants and hotels. I think it's just a matter of kind of shaking out the service end of it and then figuring out, you know, how we get the most efficient operation and then really start to drive margin and continue to build revenue. I mean, these are dynamic. Growing markets. Yeah, enterprises and growing markets. You have new people moving to town all the time. I mean, based upon our marketing plans, when we open this thing, we're gonna have a very high level of recognition and of Durango and what it is, where it is, and that it's opening. We're expecting to be busy from the time we open up. It may take us a little bit to kind of shake things out and get the operations as efficient as we need them to be. Whether that takes 18 months or 3 years, we don't know. Obviously, we're gonna shoot for the earliest date possible. I think historically, as we've looked at how these properties grow and settle in, it's usually like a two-to-three-year period, for these things to kinda, you know, stabilize, the way we look at it. Very helpful. As my follow-up, and you kind of alluded to like a little bit of the staffing side of things, you know, just kinda wanted to get the thoughts on the upcoming union renegotiations that are going on, you know, I think across Vegas. You know, what impact, if any, does that have on Red Rock? More importantly, I think, you know, kind of when you think about just matching and prevailing wages across the valley, you know, how do you see, you know, kind of the wage or expense growth trending, you know, as you kinda move throughout this year and maybe the next couple of years once that contract is in place? Yeah, this is Scott. Certainly, as that contract gets negotiated, that will set a new bar and have some effect in the valley, across the valley. How we look at labor today and into the future is we've set a couple of quarters now that, one, we've been able to be a best-in-class selection for employees based on our comps and benefits. And we've priced in to our margins very current wage and hour rates. We think we're set up well for Durango. We're out in the market now testing those numbers, and we think that those numbers are solid on an hourly wage basis. We think that that labor pressure is starting to subside a bit, but we do wanna be cautious that in the last part of the year, there are several major projects opening in Las Vegas that may cause a bit of inflation over, say, a six-month period as we open up Durango. You have the MSG Sphere opening up and the Fontainebleau opening up. There will be some competition for labor around those openings. Perfect. Thank you very much. The next question comes from Jordan Bender with JMP Securities. Please go ahead. Great. Thanks for taking my question. If I caught it correctly, I believe you guys said you'll keep some of the acreage tied to the parcel you're selling to the A's. You know, does it make sense, or could you or would you potentially build a casino on that parcel kinda next to the stadium? I think what we've really talked about the last few quarters is, you know, getting a better lay for our future growth pipeline. You've seen that we've acquired a few sites out where all the growth is off the Beltway. In the Las Vegas Valley, we think we're well positioned, I think we're looking really to monetize the Viva parcel. We think that the A's was a really good thing to actually increase the value of the remaining property. We're pretty bullish that we're gonna be able to monetize the Viva site, basically, and we wind up with all these new sites out in the suburbs that we've acquired over the last 12 months. Great. And then just for my follow-up, it looks like corporate expense kinda ticked up in the quarter. Was there anything kinda one-time in nature? Is that kinda the right way to think about that moving forward? You're within that range. There's probably going to be a half a million dollars that's more maybe one time. It was basically bonus related to 2022 and the great year we had so. Great. Thanks. Nice quarter. The next question comes from Steven Wieczynski with Stifel. Please go ahead. Hey, guys. Good afternoon. Staying on the or going back to the non-gaming side of the business and specifically on the hotel side, it seems like you've been able to push rate there, you know, pretty aggressively, and I think Scott said ADRs were up 18% in the first quarter. Can you help us think about how forward room bookings, you know, essentially have been trending as you've continued to take that price? I mean, basically what I'm trying to understand here is, you know, if you start to see any pushback as you push those rates. Yeah, Steve, this is Scott. I think I can help you here. Let's take a look at forward bookings same time last year compared to now, and we'll also kind of look at 2019 because we do get asked frequently, are we back to 2019 levels. When you look at the pace for sales room nights right now, same time last year, we're up about 41%, so very encouraging numbers there. When you look at total room nights and the revenue associated with that, we're up 53%. Correspondingly, catering on the books same time last year is up almost 70%. As we look into the future, we're very encouraged about the booking pace. You mentioned ADR. When you look at overall ADR in comparison to 2019, we're about 21% above 2019 ADR numbers, and we have surpassed 2019 numbers as it relates to catering and group, going into the rest of this year. To maybe piggyback on what Scott said, I think not only are we seeing a robust pipeline, but the mix is shifting. We're seeing predominantly a corporate group enter the mix and in our pipeline, and that's a great thing because you get multiple revenue streams from them, not only rooms, but also food and beverage. Yeah, to add one other thing relative to mix, we're actually seeing quite an increase between now and 2019 in our casino mix. We went from 24% to 31%. Really what that says is a lot of the growth we're seeing is in ADR. Thanks for that, guys. To add onto that, you know, as you start to see more on the corporate side, I would assume that, you know, if corporate continues to roll in, there'll be more opportunity to push price, especially, you know, midweek. Is that kinda the right way to think about it? That's the right way to think about it. That's what we're seeing in the trends. Okay, great. Thanks, guys. Appreciate it. The next question comes from Barry Jonas with Truist. Please go ahead. Great. Last year, you guys talked about seeing some impact at the low end of the database. I know you also said it's less of a focus, can you maybe just talk about how that's playing out right now? This is Scott. I think what we've said in the past is, you know, we focus on our core customer, that being national, regional, VIP core customers. When we look at the performance for the quarter, we see strong growth across all of those areas. When we look at overall carded win, we were up about 2.6%, we're pretty happy with that. When we talk specifically about the lowest end of our database, I think we've mentioned before a lot of our core strategy is focused on the mid to high and out-of-town customer, and that we've shifted away from that low profit, low contribution customer. You're not seeing anything more than we've reported in the past in relation to that database performance. Great. That's helpful. Then just for a follow-up, you know, I know there are limits to what you can say, but are there any notable conditions for the A's land sale to close? With that, are gaming entitlements included with the A's parcel as well as would it remain with the second parcel that you wanna monetize? Hey, Barry, you know, unfortunately, you know, we are under confidentiality, so we can't really answer any of those questions at this time. Understood. Thanks so much, guys. Thank you. The next question comes from Daniel Politzer with Wells Fargo. Please go ahead. Hey, good afternoon, everyone. I wanted to talk about the food and beverage side of the business, just as it relates to more your kinda high-level strategy there. It seems like you've been moving more towards third-party, you know, higher-end product. Can you help us, you know, maybe better understand the rationale for doing this? Is it the mid-to-high-end customer you just kinda referenced and more out of town? How should we think about, you know, the impact to free cash flow and EBITDA and margins? Yeah, this is Scott. I think I'll start it, and maybe Lorenzo can add some color. I think to say that we're solely focused on that might be a misrepresentation a bit or a misunderstanding. I think in certain properties we are looking at more third party and more higher-end outlets, but we're really look across our food and beverage platform based on the specific demographic of the customer at that property. While you do see us doing a lot of stuff with notable food and beverage operators at Red Rock, you know, what's less talked about are the properties like Boulder and Palace Station and Sunset Station, where we're doing equally as dynamic things, but at a different level of average check or food type. We've seen a, you know, so far, a very positive effect, particularly at Red Rock with the re-rack that we've done there by, you know, replacing the buffet with a high-limit table game area, a Greek restaurant and Lotus of Siam. You literally almost see a transformation of what that end of the building looks like now with the pace of customers that we have. We've seen a positive impact on our table games. We've seen our occupancy at peak periods on our table games go up considerably, and obviously, it's helped our high-end slots as well. Overall, that return on investment for us has exceeded what our expectations are. We're in the process now of kind of doing a executing a similar strategy at Green Valley Ranch, where the buffet, what was the buffet, is now under construction, where we'll be adding some food and beverage concepts and a high-limit table games and a future new high-limit slot area. That playbook seems to be working really well for us, and it definitely is a positive impact on margin for us as well, so. Got it. Thanks. As you think about capital returns, Steve, I know you mentioned you should return back to that 3 times leverage, you know, following Durango's opening. I mean, as you think about getting back to returning capital to shareholders, via repurchases or any change in the dividend policy, is this something you need to get to, or could we see it kind of along the way as Durango ramps? No, I think right now we've paused the share repurchases because we're right in the kind of the, you know, right in, we're in the runway of getting Durango up and running. I think once Durango gets up and running, you know, we're gonna see rapid deleveraging. As Lorenzo mentioned, we expect local casinos typically come out of the box very cash flow positive. We'll start immediately taking, going back to be taking a very balanced approach to returning capital to shareholders. As our balance sheet becomes more, you know, as our balance sheet becomes stronger, as we roll out Durango, the board will start evaluating both dividends and share repurchases. Understood. Thanks for the color. The next question comes from Chad Beynon with Macquarie. Please go ahead. Afternoon. Thanks for taking my question. I wanted to ask about your retention levels, free play and promos, if that has been stable or with, you know, the influx of maybe some new people moving into the area, if you've had to step up with any of that, just trying to figure out kind of where that's headed? Thanks. It's been extremely stable. I mean, ever since we reopened, post-COVID in 3Q of 2020, as Steve said, we've had 11 quarters with margins above 45%. I think this quarter was probably the, you know, second or third best margin that we've had in the company's history. Mm-hmm. We see absolutely no changes there. I mean, we're focused on the fact that we have the best locations where all the population is growing. We're focused on customer service, customer recognition, and the things that really matter to people. We're not seeing any changes in the promotional environment. Great. Thank you. Then a follow-up. You talked about, you know, a stable customer, particularly at the high end. Are you still seeing nice growth in, I guess, your neighborhood properties? I guess that would probably be more of a tell on that low end or, was the growth, you know, fairly balanced with the different levels of properties that you offer in the valley? Thank you. Yeah, this is Scott. Yeah, we would characterize it as fairly balanced and stable across the platform. Okay. Thank you very much. Nice result. As a reminder, if you would like to ask a question, please press star, then one to be joined into the queue. The next question comes from David Katz with Jefferies. Please go ahead. Hi. Afternoon, everyone. Thanks for taking my question. I'll date myself a bit and maybe a few of us. When you look at the economic makeup of the valley and how that relates to your portfolio these days, if you could talk a bit about what kinds of economic data and other kinds of information you're looking at and how that makeup of the valley today differs from where it was, you know, 10 or 12 years ago, and you know, how you're differing your strategies in conjunction with that. Sure. I mean, I'll take a shot at that. I'm sure Scott- Well, it starts with the migration of population from primarily California- That's right. ... is the number one market that are people moving to Las Vegas. I think you also see the number one migration coming from California for business relocation as well. It's really, I think, much different than it was, say back in the. '80s, '90s, and 2000s, where most people moving to Las Vegas were either looking for a construction job or a dealer's job or cocktail waitress, bartender. Now it's not that you still don't have people looking for those kinds of jobs here, but you have a totally different mix of people that are moving here to run their business from here, to retire here. You have people that, you know, are not hourly employees. They're bringing their wealth with them to Las Vegas. I think it's a completely different dynamic than what we've seen in the past. Yeah. I think, to add to what Frank's saying, you know, when you look at the wealth of these customers and where they're moving into the valley, this is part of our core strategy of development and growth, that we have locations in all of these high net worth, high growth, areas of the valley. We don't see that slowing down anytime soon. I mean, you can talk, Steve, a little bit about these, recent land purchases that we have and the balance of the portfolio are all within the fastest growing communities in Las Vegas. Yeah, David, I mean, if you look past you know, even last quarter, you know, from a housing perspective, when you take a look at the fastest growing, you know, master plan communities in the Las Vegas valley, they're all where we have properties. Summerlin, Cadence, Skye Hills, Skye Canyon, Inspirada. Those names should be familiar because we all have land named after most of them. Yes, I think that bodes well for Frank and the rental strategy. Understood. If I can follow that up, please. This is also the odd circumstance where it feels as though we've been waiting around for quite some time for a recession to show up. How do you go about keeping your fingers on the pulse, you know, of that? I know many of the companies we're talking to this earnings season aren't seeing anything yet, but, you know, are cognizant of its potential. Hi, this is Scott. I think as far as reading the tea leaves, that's a difficult thing to do. Understanding the macroeconomic pressures, I think our management teams at the properties are the best in the business at keeping a pulse on the daily efficiency of the property. Whether you're talking about labor control, cost of goods sold control, any kind of operating expense pressures, I think it's seen in our margins that our operating teams know how to control these macro pressures and come out with great results. We've shown consistently that we know how to manage those things. Steve, you may wanna talk about some of the energy costs and other things that are less under our control. I mean, I think from a, like I think the two things that we're, you know, it's tough to manage. One is one's out of our control and one defines really who we are. You see that in some of the increases in SG&A. As Scott mentioned, utility costs, you're up, you know, they're up almost $1.5 million, almost 30%. That's something, you know, we're trying to work through various energy initiatives, but that's one of those where the team has done an excellent job fading through. Then the other really boost to SG&A is repairs and maintenance. This goes back to the core philosophy and how we differentiate ourselves from, you know, our competitors. Not only is it about location, location, but the quality of asset, and that helps keep, you know, keeps our guests coming back. You'll see that consistently throughout our financials. While we can't, you know, read the tea leaves on the macroeconomy, we can tell you that we really like our position based on what we see happening in the Las Vegas Valley coming over the next 1-5 years. You know, with professional sports teams relocating here, with the Sphere opening up, with Formula One coming here, with the Super Bowl coming here, Las Vegas has a lot of things that are, you know, here that can buffer what else might be little things that happen in the macroeconomy, as well as the population growth and the limits on supply in our market. Understood. appreciate the answers, and thanks for including me. The next question comes from John DeCree with CBRE. Please go ahead. Good afternoon, everyone. Thanks for taking my questions. Maybe kind of revisit two topics in a different way. One is on wage inflation. I think we discussed a little earlier in the call about cost pressures. You know, given wage inflation, I think, you know, a couple of quarters ago or a year ago, we had a conversation about the importance of wage growth for your customers. When we think about, you know, upcoming wage inflation, whether it's union contracts or what have you, how do you evaluate the puts and takes? Is it a net benefit as the population earns more, or does that more than outweigh the cost? Just curious if you guys have a view. Hi, John, this is Steve. I mean, I think we, you know, there are always more of them than there are of us. I think as wages go, grow through the valley for a variety of means, whether it's the union contracts or the Sphere or Durango launching or Fontainebleau launching, the more money in the system benefits our properties as they're uniquely located throughout the valley, and the Strip's employees are generally our customers. Fair enough. Thanks. Thanks, Steve. Maybe just a specific question. You've already mentioned teams relocating, with A's potentially coming. You know, if you look at maybe the Knights, have you seen direct benefit on game nights? I mean, obviously it draws population and feeds into the broader economic story. You know, is there a closer, more tangible benefit around those sporting events that you would expect, or would compare if the A's do come? Yeah, this is Scott. We see across the valley that people come out for the Knights games. You know, you can see that in our casinos, you can see it in the small pubs and taverns. We also have a strategic relationship with the Golden Knights that we benefit from within our marketing division. We are big fans of organized sports in Las Vegas. We're big fans of the football team, the hockey team, and eventually the baseball team as well. Yeah. It's great for tourism and, you know, creating demand for the hotel rooms in the city here. Perfect. Thanks so much for all the color, guys. Congratulations on another great quarter. Thanks, John. This concludes our question-and-answer session. I would like to turn the conference back over to Stephen Cootey for any closing remarks. Thank you, everyone, for joining the call. We look forward to talking again in 90 days. Take care. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.