Good afternoon and welcome to Red Rock Resorts' Q1 2025 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' Q1 2025 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 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. Let's start off by stating that the Q1 represented another strong quarter for the company by all measures. Our Las Vegas operations achieved its highest Q1 net revenue and adjusted EBITDA in our history while maintaining near-record adjusted EBITDA margin. In addition to delivering strong financial results, we remain pleased with the continued performance of our Durango Casino Resort. Following a successful first year, Durango has continued to grow the Las Vegas locals market as well as drive incremental play from our existing customer base while attracting new guests to the Station Casinos brand. The property continues to show positive momentum with increased visitation and higher net theoretical win from carded customers in the surrounding Durango area while adding over 95,000 new customers to our database. The property remains on a solid ramp trajectory and is on pace to become one of our highest margin properties, generating return net of cannibalization of nearly 16% through the Q1 of 2025. As we've noted on prior earnings calls, some cannibalization has occurred primarily at our Red Rock property as a result of Durango's opening. However, we are encouraged that the revenue backfill is ahead of pace and early trends suggest the worst of the cannibalization impact is behind us. Consistent with our historical experience, we continue to expect full revenue recovery over the next couple of years, supported by the strong long-term demographic growth across the Las Vegas Valley, particularly in Summerlin, where the combined build-out of Downtown Summerlin and Summerlin West is projected to add approximately 34,000 new households. As stated on our last earnings call, construction continues on the next phase of our Durango master plan. This expansion will add over 25,000 sq ft of additional casino space, including a new high-limit slot area and bar. In total, the project will introduce 230 new slot machines, with 120 allocated to the high-limit room. As part of this phase, we are also building a new covered parking garage with nearly 2,000 spaces, which will enhance customer access and provide infrastructure flexibility to support future growth at the property. The total project cost is approximately $120 million and is currently operating under a guaranteed maximum price contract, with completion of the project expected in late December. Where there has been some construction disruption on the south side of the property, we are taking proactive steps to minimize guest impact. Across the rest of the portfolio, we maintain strong operational discipline and continue to execute our core strategy of reinvesting in our existing properties to enhance amenities while remaining focused on delivering best-in-class customer service. Despite a return to more typical seasonal visitation patterns, we effectively managed expenses, delivered record financial performance with near-record margins, reinvested in our properties, and returned capital to our shareholders. Now let's take a look at our Q1. With respect to our Las Vegas operations, our Q1 net revenue was $495 million, up 1.9% from the prior year's Q1. Our adjusted EBITDA was $235.9 million, up 2.7% from the prior year's Q1. Our adjusted EBITDA margin was 47.7%, an increase of 34 basis points from the prior year. On a consolidated basis, our Q1 net revenue was $497.9 million, up 1.8% from the prior year's Q1. Our adjusted EBITDA was $215.1 million, up 2.8% from the prior year's Q1. Our adjusted EBITDA margin was 43.2% for the quarter, an increase of 42 basis points from the prior year. In the quarter, we converted 43% of our adjusted EBITDA into operating free cash flow, generating $93 million or $0.88 per share. This strong level of free cash flow was strategically deployed to support our long-term growth initiatives, including our most recent projects at Durango, Sunset Station, and Green Valley Ranch, while returning to stakeholders through debt reduction and dividends. As we begin 2025, we remain focused on our core local guests while continuing to grow our regional and national customer segments across the portfolio. Compared to the Q1 of last year, we saw continued strength in carded slot play across our majority of our database. Strong customer engagement and robust spend per visit helped drive near-record revenue and profitability in our gaming segments for the quarter. Turning to our non-gaming operations, both hotel and food and beverage divisions delivered a strong quarter, achieving near-record revenue and profitability in the Q1. Our hotel division recorded its second-highest Q1 revenue and profit, driven by our team's success in driving increased occupancy across the portfolio. Not to be outdone, the food and beverage division also achieved near-record performance, supported by higher cover counts across our outlets. Regarding Group Sales and Catering, as noted on our last earnings call, we faced a challenging year-to-year comparison in the Q1. However, we are seeing positive momentum in both lines of business and expect stronger performance throughout the remainder of 2025. As we look ahead into the Q2, we are seeing stability in our core slot and tables business, in the locals market, and across our carded database. We remain confident in our business prospects moving forward. Now let's cover a few balance sheet and capital items. The company's cash and cash equivalents at the end of the Q1 was $150.6 million, and the total print amount of debt outstanding was $3.4 billion, resulting in net debt of $3.3 billion. As of the end of the Q1, the company's net debt to EBITDA ratio is 4.1 times. Also, during the Q1, we made distributions of approximately $27.6 million to the LLC unit holders of Station Holdco, which included distribution of approximately $16.1 million to Red Rock Resorts. The company used the distribution to pay its previously declared dividend of $0.25 per Class A common share. Capital spent in the Q1 was $68.2 million, which includes approximately $32.2 million in investment capital as well as $36 million in maintenance capital. For the full year 2025, we now expect to spend between $350 million and $400 million, down $25 million from our previous earnings call, mainly due to the timing of capital payments. The full year capital spend includes $260 million-300 million in investment capital, as well as $90 million-100 million in maintenance capital. As mentioned on our last earnings call, we are making investments in both our Sunset Station and Green Valley Ranch properties. At our Sunset Station property, we are building up the success we are seeing with our recently renovated racing sports book and partial casino remodel by continuing to refresh the podium in order to better position the property to capture the continued growth of Henderson, including the master plan communities of Skye and Cadence, which are expected to total over 12,500 households upon final completion of both communities. As part of the project, we are adding an all-new Country Western Bar and nightclub, a new Mexican restaurant, an all-new center bar, along with a completely renovated casino space. Work continues to move forward on this project, and the total cost of the renovation is expected to be approximately $53 million. At our Green Valley Ranch property, we are expected to start a complete refresh of our room and suite product as well as our convention space, aligning the hotel with our most recent renovations made to our well-received high-limit table and slot rooms at the property. Work is expected to start in June of 2025, with the majority of our rooms being back in service by year-end. The cost of the room and convention renovation is expected to be approximately $200 million. Like our other recently introduced amenities, we expect these to be solid investments. However, we do expect some disruption challenges at these properties while we introduce these new amenities to our customers. Turning now to North Fork, construction is progressing well. We anticipate completing the slab on grade in July and closing the facility by October, keeping us on track for a mid-2026 resort opening. The total all-in project is expected to be approximately $750 million and is currently operating under a guaranteed maximum price contract. When complete, this best-in-class resort will include approximately 100,000 sq ft of casino space with over 2,400 slot machines, including 2,000 Class III games, 42 table games, and two food and beverage outlets and a food court with many exciting options. Subsequent to quarter end, we are pleased to announce the successful closing of construction financing for the project, which is both a major milestone in our 20-plus year relationship with the North Fork Tribe and, we believe, a landmark transaction in the arena of tribal greenfield development. The $750 million financing package will consist of a $25 million revolving credit facility maturing in 2030, bearing interest at $450 over SOFR, a $340 million delayed term loan A credit facility maturing in 2030, also bearing interest at $450 over SOFR, and a $385 million delayed draw term loan B credit facility maturing in 2031, bearing interest at $725 over SOFR. The delayed draw structure of the project financing will significantly reduce the project's cost by lowering capitalized interest expense by nearly $100 million. In addition, the majority of the credit facility is immediately accessible without the need of a declination letter, providing the tribe with a more cost-effective capital structure while simultaneously ending Red Rock Resorts' need to fund the project off its own balance sheet. As part of the financing, Red Rock Resorts received $110.5 million in return capital along with accrued interest it invested in the project over the past 20 years. After this repayment, Red Rock Resorts' outstanding note balance with the tribe stands at approximately $69.6 million. We are excited about this project, very happy with the execution of the financing, and look forward to providing further updates on future earnings calls. Consistent with our balanced approach to investing in long-term growth while returning capital to our shareholders and following the return of a significant portion of our capital invested into the North Fork project, we are pleased to announce that the company's board of directors has declared a special cash dividend of $1 per Class A common share payable on May 21 to Class A shareholders of record as of May 14. This action reflects the continued confidence of our board and the management team in the strength of our business model and the resilience of the Las Vegas locals market. Lastly, the company's board of directors has also declared its regular cash dividend of $0.25 per Class A common share payable on June 30 to Class A shareholders of record as of June 16. After the payment of our special dividend and our regular dividend, we have returned approximately $159 million to our shareholders in 2025. The year is off to a strong start, and we remain confident in the strength and resilience of our business model. Durango continues to validate our long-term growth strategy and highlight the value of our own development pipeline and real estate bank, which includes more than 450 acres of developable land positioned in highly desirable locations throughout the Las Vegas Valley. Combined with our existing portfolio of best-in-class assets in premier locations, this pipeline positions us for significant growth and enables us to fully capitalize on the favorable long-term demographic trends and high barriers to entry that define the Las Vegas locals market. We want to take a moment to recognize and sincerely thank all of our team members for their continued hard work and dedication. Our success begins with them. They are the driving force behind the exceptional experiences that keep our guests coming back. Thanks to their efforts, we are proud to have been voted top casino employer in the Las Vegas Valley for the fourth consecutive year, certified as a great place to work for three years running, recognized by Forbes as one of America's best in-state employers, and named top place to work by USA Today. Finally, we extend our heartfelt gratitude to our loyal guests for their unwavering support over the past 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 phone, 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 Carlo Santarelli with Deutsche Bank. Please go ahead. Hey, guys. Thanks. Good evening. Steve, in Las Vegas, obviously, OpEx growth seemed very subdued in the Q1. Flow-through was north of 60%. I would imagine, just given March Madness and your sportsbook, that acknowledging you guys had some sportsbook headwinds in the Q1 of last year, could you maybe talk about the ability to kind of garner the flow-through you got on relatively modest revenue growth, and then any other maybe headwinds that were included in the Q1, such as the sports? Yeah. Carlo, this is Scott. I'll take the beginning of it, and then I'll let Steve pipe in as well. We performed better from a sports win perspective, both in Super Bowl and in March Madness. That was some upside. From a payroll perspective, which is one of the larger impacts to margin, we saw that leveling off. Our payroll rose about 2%, mostly attributable to last summer's minimum wage increase. We continue to see IT costs shift from CapEx to OPEX, so there's a little bit of that in there. On a solid front, COGS remained flat year over year, and utility costs were down over 35%, which in the past, you might have remembered that we were struggling with high utility costs. Those things attributed mainly to the margin improvement, especially if you look sequentially quarter- over- quarter. Yeah. I think the only thing I would add to Scott on the cost side is that we are seeing insurance costs creep up, and we expect that to remain some headwinds as we go through 2025. Carlo, to point to some revenue growth, we are coming off the trial period of Durango. The fact that we've actually had revenue growth on top of Durango really kind of points to the growth in our Core Six business. Yeah. Much of which was, some of it was driven by slots as well, which is high margin. That's right. Our gaming, we love quite a bit. Great. Steve, you talked a little bit about, in year two here, the backfill efforts at Red Rock. I do not know that you are going to answer this, but to the extent that you guys have seen a trough there, could you quantify what that trough was relative to kind of 2023 or prior to open of Durango and kind of how you see that progressing back towards 2023 levels in the timeframe? Yeah. Again, as we kind of walk through, the one thing we have working in the locals market for over six decades is plenty of data. We modeled the potential impact of backfill using our Sunset and Green Valley as a template. That is where we came up with backfilling usually occurs around the three-year period. We have been giving you guidance that we expect the cannibalization to be about 10% of Red Rock, and we think we nailed it. Right now, I think we are running probably about six months ahead of schedule in terms of that backfill. We are pretty happy with that. Great. Just one clerical thing. Steve, the $110 that you got back post the closing of the financing, is that in your Q1, or is that coming back subsequent to Q1 and took you upon the closing of the transaction? It will be in the Q2. Great. Thank you, guys. The next question comes from John DeCree with CBRE. Please go ahead. Hey, guys. Quick question maybe on maybe two to follow up there on Carlo. The decision to pay a special dividend, does that coincide with receipt or return of capital from North Fork? In terms of capital allocation, I think you still have a couple hundred million left on the buyback. Thinking about balancing share repurchases and the special dividend in this situation. Yeah, no problem. I think the special dividend, to answer your first question, really does reflect our balanced approach to investing in long-term growth. Through Sunset Station, Green Valley Ranch, Durango, our returning capital are shareholders. As you pointed out, with the successful closing of the North Fork financing and the return of $110 million of capital that were previously invested into the project, along with the strength of our balance sheet and the continued confidence in our business model, the board determined that this was the right time to reward the shareholders for their long-term support over 20 years of support of North Fork. With regard to kind of the allocation of capital, as we've always said, we're going to take a balanced approach. We continue to evaluate all options. Again, the board determined the special dividend for all the reasons we talked about. It should be noted that since 2021, we purchased over 14.3 million shares for $646 million, reducing our share count by over 12%. We are not adverse to buying shares back. We have about $309 million left of capacity under that current program, which gives us flexibility to execute on that program when conditions are favorable. Thanks, Steve. Maybe one bigger picture since we're getting questions about the consumer in a number of different ways, given policy changes in D.C. and the potential for recession. I guess what I'll ask you guys, obviously, you're seeing really strong trends in your business, but the big picture, you put out a great slide deck with everything that's going on in Las Vegas. I don't know if you could give us some color about how you see Las Vegas locals market your business being positioned to manage a recession now, perhaps versus the last one we've seen, the great financial crisis, given all the things that have changed. Assuming you'd expect your business to be more durable if there's any recession, kind of some of the things you'd look at that differentiate the market today than, say, maybe 15 years ago. Yeah. I think, John, I think we got to look farther back than 2008. I think when you think of the 2008 crisis along with COVID, we're talking about two very unique situations, right? The former was driven by a complete collapse of the housing and credit markets, with the epicenter being Las Vegas primarily and the latter being a government-management shutdown. Overall, when you think about the resilience of the Las Vegas locals market and in particular Red Rock Resorts, when we look back at what's called a typical recession, Red Rock, in fact, grew in the recessions in the early 1980s, the early 1990s, and the early 2000s. It's pretty much what you said. The customer values convenience, proximity, and affordability. That supports consistent visitation, even in softer economic environments, which is slightly different than the way the Strip reacts during a recession. Combine that with our efficient business model and a strong balance sheet, we're well positioned, we believe, to manage through any recession. Great. Thanks, Steve. Thanks, all. The next question comes from Shaun Kelley with Macquarie. Please go ahead. Hi. Great. Good afternoon, everybody. Thanks for taking my question. Steve, or team, just wondering if you could give us your thoughts on sort of the broader construction environment. Obviously, development is a little bit of a key part to your story, which differs from others in the industry. What is the backdrop today as it relates to sort of the uncertainty around some of the construction cost elements? Does this impact either staging or ordering of how you're thinking about your development pipeline going forward? Thank you. This is Lorenzo. We've obviously spent a hot topic of discussion with what has been going on with tariffs in the marketplace. We have spent the last month working closely with our different procurement companies because we're in the ground right now with the project in North Fork, and we're currently in the ground with the project at Durango and getting ready to start the project we already announced with the room remodel at Green Valley. Certain materials, obviously, that are coming out of China and materials that you just can't source in other places, like lighting packages, stone finishes, electrical gear, those will be affected. We have been successful as far as procuring things like steel and concrete on a domestic basis and working through FF&E items that we're able to procure through other sources that maybe in the past typically came through China, but we're able to source in other areas. While there is certainly some challenges, I feel like that we are all over the details relative to trying to manage through this the best we can. With all that said, we really don't think that there will be any material impacts to the projects that have been announced and that we're working on. We think that the impact may be somewhere in the neighborhood of 4-6% of the project cost. Managing through the contingencies that we already have and looking at other ways to manage the cost in the project, we're comfortable that, like I said before, there shouldn't be any material impact to the projects. Did that answer your question? Sorry. That's perfect. Maybe just the follow-up, but what's the mechanic in a, I mean, you guys operate under GMPs, and those I know offer a level of protection. I think I have heard a little bit about there being tariff clauses put into these or some of the more recent contracts for, I think, the contractors themselves to protect themselves about some of this stuff. How's that work? I mean, not obviously specific to your individual contracts, but just generically at a high level, does that protect you, or is that still an area that could be passed through to you? Yeah. I think it depends. Sorry, guys. Go ahead. No, I mean, look, at the end of the day, you're right. The contracts going forward, I think, are going to address this in a more detailed manner where maybe they were a bit more vague in the past, even in a GMP contract, which means, look, it's going to have to work through it. It's going to be a negotiation, and we're going to figure it out. We wouldn't expect that we certainly wouldn't bear the full brunt of the tariffs, whether it be in the past on a contract or on a go-forward basis. Like I said before, I mean, we're literally going line by line through each piece of procurement and where these items are coming from and what alternative sources are. It's a little bit more of a puzzle we got to put together, but I think we're effectively, the team, our construction, design, development, and financial team are successfully kind of working through this stuff. On a go-forward basis, like I said, I think it's definitely going to be an issue addressed in contracts going forward. Yeah. As Sean kind of put a point on it, right, as Lorenzo said, this should have, this will have a minimum effect on project budgets through these announced projects. Thanks for all the detail. Appreciate it. The next question comes from Barry Jonas with Truist Securities. Please go ahead. Hey, guys. Just following up on that theme, in terms of what you're seeing with tariffs or you expect to see in the near term, how do you think about managing OPEX margins? Are there ways to offset it either by passing it through to the customer or by other means? Thank you. Yeah. This is Scott. Maybe I'll take the operating side of that. Steve, you can take the design and construction side. As of right now, we are not seeing major impacts in our operational procurement and costs. That does not mean that those things will not start to trickle in. It is our hope that we can manage that through alternative sourcing and negotiating with our vendors. I think it would be a last-ditch effort on our part to start to pass on cost to the customer. Yeah. I think on the DNC side, to piggyback on what Scott said, I mean, we haven't really seen the impact there yet. These tariff situations are incredibly fluid. As Lorenzo mentioned and sort of Scott, alternative sourcing, like-for-like material substitutions, and just disciplined cost control is how we plan to get through it. Got it. Just for a follow-up question, I noticed you recently added TI for your sports betting product. Curious how to think about this from a strategy or a philosophy since this kind of moves you beyond your core locals market to a more Strip-focused segment. Thanks. Yeah. This is Scott. Yeah. Those announcements were just in the paper. Take a step back and look at our STN Sports mobile product and over-the-counter business. It's a very robust business. We continue to see people embracing the mobile app. Our enrolled active customers, our deposits on account are all up for the quarter, quarter-over-quarter. The idea of adding new locations outside of our brand is simply to have better market penetration in areas where we don't have access. Right now, Nevada requires an in-person registration. Having convenient locations for people to sign up and use our sports tools is creative to the overall revenue of the division. This is Lorenzo. I'll also add, look, this is kind of one of our core competencies. We've been in the sportsbook business. We may actually—yeah, Frank—when was it? was it? Since the early 1980s? Late '70s. Late 1970s. I do not know if this is actual, but we may actually be the longest-running sportsbook operator in the city. With that said, there are obviously a lot of properties on the Strip, particularly if you own one property and you do not have scale. It does not really make sense to book a lot of these games, and you are not really able to take a lot of risk and offer limits to your customers maybe that you want to. You look to bring in a third party. I think it is something that is advantageous to guys on the Strip, like the Fontainebleau and Treasure Island, because they do not look at us as competition. We do not really share a lot of casino customers per se. It seems to be a good fit for us and an avenue for us to grow here in the city. Maybe just a bit of more clarification. Not only are we in Mesquite at Casablanca and Virgin River, but we're also adding Treasure Island. We operate the bookmaking for Fontainebleau. El Cortez. El Cortez. El Cortez. Got it. All right. Very helpful. Thank you so much. The next question comes from Jordan Bender with Citizens. Please go ahead. Good afternoon, everyone. Thanks for taking my question. This is your first involvement with the REIT, and VICI answered a lot of questions this morning around the structure. Curious to get your thoughts around how this all came together, and should we view this as a unique opportunity just given the tribal aspect, or does it change your views on using a REIT for Red Rock-owned and operated properties in the future? Thank you. No, I think we—I mean, listen, we really appreciate the relationship with VICI. It goes back as long as they've been in existence. They have been, I guess, always very close contact with us. In terms of the tribal deal, this is a true loan, and VICI really stepped forward and offered best-in-class capital and fantastic terms. We do appreciate, as well as the tribe appreciates the partnership because they were really—they were really important to get this financing across the finish line. Okay. Scott, I want to circle back to something you said. Utilities cost down 35% in the quarter. In past years, it was a continued callout of a headwind. Is there something special that happened in the quarter, or could we see this be a tailwind for margins moving forward? Look, I can't predict the market and what these energy costs will be in the future, but they usually don't move quarter to quarter. It's usually on a longer trend. We are hoping that we'll enjoy these reductions for the near term. Yeah. It was mainly electric, and that's generally driven by gas prices. Got it. Understood. Thank you. The next question comes from David Katz. Please go ahead. Hi. Good evening. Thanks for taking my question. I do want to follow up on the first portion of it and ask, is there a—is there a path at some point in the future, and what would be the hypothetical circumstances around whether you would operate leased properties? How could that make sense for you? I think, David, to start off, I don't think we would ever rule anything out, right? We would always take a look at every opportunity. I think since we've been public, I think we've been blessed with owning our properties, which has kind of suited us very well in the past, both from an upside standpoint. It allows us to really kind of take a long-term view of how we take care of our assets and amenities for our customers. On the downside, as we saw during COVID, not having the variable cost of rent allowed us to keep all of our employees through the downturn. We do like owning our properties, but as I started with this, we'll never say never and we'll always take a look at anything. Understood. Just double-clicking on something you've talked about for probably a couple of years is kind of the lowest end of your database has been a little on the soft side. Is there any change in that? Any improvement or any deterioration we should note? Hey, David. This is Scott. Short answer is no. It is very consistent and stable. We do see upside growth in our VIP core, regional, and national segments for the quarter. When you look at our new member signups, taking out Durango because of the first couple of months, the high volume of signups, if you exclude Durango and look at our new member signups for the quarter, we were up substantially across the core six. We like the way that the database is heading. One other thing to point out, Mr. Lorenzo, is that the way we look at our database is obviously segmented through age groups as well, and every age group was up year over year as well. Thank you all very much. The next question comes to Yves Wieczynski with Citizens. Please go ahead. Yeah. Hey, guys. Good afternoon. Steve or Scott, if I heard you guys correctly, it sounds like trends in April have not really changed much relative to what you guys were witnessing back in the Q1. You just kind of went through the database tiers and what you are kind of seeing there. I guess the question I want to ask is, are you seeing any changes in terms of non-gaming spend, meaning folks still coming to the properties, but as they get there, they are still gambling, but they are maybe not doing as much of the other stuff, whether that is food and beverage, retail, you kind of name it? Yeah. This is Scott. Let me take that. A couple of things I want to mention. First, to answer your question directly, and then I'll talk a little bit about disruption as well. You are going up against the opening of the Durango property where we had a lot of food and beverage trial. When you parse that out and you look at our food and beverage for the quarter, covers were actually up. Revenue was just slightly down, less than 2%. If you look at food and beverage, it's probably one of the more discretionary spends. It looks healthy to us. When you look at hotel, as we had said for a couple of earnings calls, January or the Q1 was going to be a tough comp in group and catering sales. It did end up being a tough comp. The bright side of that was the operating teams were able to backfill that substantially with wholesale and casino segment rooms. Net-net, we like what we see going forward in hotel. Our group bookings for the remainder of 2025 and what we can see in 2026 are substantially up to previous year. That would include catering as well. With all of that confidence, I would just point out, and maybe Steve can articulate a little more in detail, we are going to start to see heavier disruption as you go into the summer months with Durango, with the rooms going down at Green Valley Ranch for the room remodel and for some of the more meatier remodel areas at Sunset. Yes. I can just give it, put a little bit more color. As you recall, at Sunset, we gave a disruption number of $5.4 million during the year. We really have not seen much disruption during the quarter. During this quarter, as Scott mentioned, we are starting to dig into the table games area as well as the Gaudi Bar, really the center of the construction period. We do expect some disruption there. At Green Valley, we have always stated that the majority, the good portion of disruption is going to start post-June when we take our rooms down. At Durango, we really have not seen too much disruption. If you recall, we gave a number of roughly $5 million, almost $6 million there, but we are starting the concrete pouring and the expansion into the casino. While we will do our best to mitigate any disruption and mitigate any impact on the customer experience, we're getting to the throes of potential disruption this quarter. Okay. Gotcha. Thanks for that, guys. My second question was actually around forward group booking, Scott, but you already hit on that. I'll stop there. Thanks, guys. Appreciate it. Thanks, Steve. The next question comes from Joe Stauff with Susquehanna. Please go ahead. Thanks. Good evening, Lorenzo, Scott, Steve. I wanted to ask, just follow up on your response to the backfill question, six months ahead. Is that just—why is it six months ahead? Is that a function of just more effective marketing programs, population growth? That's the first question. The second, I wanted to ask about your California-based customer, what you saw from them in the Q1 and how you think about the demand from them thus far in the Q2 and going forward. I will take the first part. This is Scott. I think that from a California perspective, you probably had heard some visitation numbers where we saw visitation going down. From our perspective with the drive-in market, we did not see anything materially impactful as it relates to California visitation. No, I think you just point to, we're in an inflationary market. Just point to gas prices, right? You look at California gas prices repeat in June of 2022 at $6.40 a gallon and now sit at $4.78. Driving in from California is still a cheap date. Las Vegas is still a cheap date. Yeah. If you look back every quarter since COVID, we've been up in that segment from California drive-in standpoint. That's right. The regional segment. We continue to be up Q1 2020 of this year. Gotcha. On the backfill. First of all, I think Steve mentioned this is kind of using historical statistical trends from our other openings. The other guys might have some view here. One, I think Red Rock is an incredibly dynamic property. It's our flagship property. It has grown every year we've been in operation. It sits in a very high net worth area. It's essentially. It's one of the fastest-growing parts of the world. That's right. You have the Summerlin West expansion of the Howard Hughes Summerlin Project, which eventually will represent about 34,000 new rooftops. It is growing very quickly. Yeah. It kind of puts the numbers on that to Frank and Scott's point. The valley is growing 1% to 1.5%. You have Downtown Summerlin growing within a one-mile radius over 6%. You have Summerlin West growing at 3.6%. This is an area that sits in one of the fastest-growing—it's one of the fastest-growing areas in Las Vegas Valley. Thank you. The next question comes from Ben Chaiken with Mizuho. Please go ahead. Hey. Good afternoon. Good evening. Thanks for taking my questions. You have several projects this year. Are there any that you see as maybe higher or more compelling from an ROI perspective versus ones that are more maintenance or strategic-oriented? One quick follow-up. Thanks. I think we do expect returns in all of them. I think, right, if I focus on one and Frank and Lorenzo may have a different view, but what we're doing at Sunset has been pretty neat and revolutionary from a property perspective. It hasn't been touched since open. When you look at the race and sports book as well as the partial casino remodel, we've got great customer feedback and almost immediate return on just that section. As we roll across the podium there, we are seeing great customer feedback, and it's being well received, including the Yard House restaurant, for example. That one, I think the team is incredibly proud of. Durango, a little bit different. I think it serves a couple of purposes. One, it sets the kind of—it lays down the infrastructure necessary for Frank and Lorenzo to make a call on the future master planning of Durango. We can't forget that we're putting in most likely will be the best high-limit slot room in Las Vegas. You have known from our past history that we are very good at the high-limit slot and tables business and have outstanding returns when we put in those amenities in both Red Rock and Green Valley. Yeah. I think that the GVR room convention remodel has quite an immediate impact as well. When you come online with the quality of the room that we're creating at Green Valley Ranch and you have a refreshed convention space, pricing is going to be immediate. Immediate when it comes to in terms of ADR and from a group booking standpoint in terms of just confirming and actually booking more business at hopefully a higher price. I think at Sunset, we're seeing a broader demographic coming to the property as a result of some of the new amenities that we put in. We would expect that to continue as we open the Country Western Dance Hall and some other restaurants and amenities. That's all very helpful. One quick follow-up. I know with the construction financing, you mentioned it before. To Carl's question, you get the $110. My understanding is there should be accrued interest in there as well. I think it should be in the ballpark of $50 million-60 million. Is that correct? What's the accrued interest? The note right now, with the $110 million, you've pretty much paid off all the accrued interest. So what you have now is $69.6 million roughly of principal. That said, the note immediately started accruing at SOFR plus 12%. So we're still getting a good return on that investment. Okay. Understood. Thanks. The next question comes from Chad Beynon with Macquarie. Please go ahead. Afternoon. Thanks for taking my question. Notwithstanding the comp differences with catering and Super Bowl and some of those items in the Q1, can you just talk about the core seven properties versus, I guess, the other group within the portfolio, the Wildfires? Are you continuing to see a separation in terms of trends, meaning the core seven outgrowing from a percentage basis, or are you seeing the portfolios kind of grow along the same rate? Thank you. Just to be clear, I'm assuming you're talking about the Wildfires and the taverns? No. Correct. Oh, okay. Okay. You're talking about other types of products that we offer in the market. If that's the case. Yeah. I guess comparing the full resort properties versus the ones where you do not have hotel rooms in the rest of the portfolio. Thank you. From a top-line perspective, we're seeing very similar trends amongst all of the product classes. Okay. Okay. Just kind of thinking back to the management opportunity that you're getting into, is it a priority to explore other management contracts in California or other tribal areas? Not sure if there's contracts that are expiring with others. I know usually these come about with new builds or expansionary builds. Is this something that you plan to focus on more in the next several years? This is Lorenzo. We've been focused on this. I think when did we open our first tribal casino? That was in. Thunder Valley. Thunder Valley. Early 2000s, somewhere around early 2000s. Probably 30 years. Yeah. Even prior to that, in the 1990s, we were looking at a number of development opportunities with tribes all across the country. It is something that we continue to look at. The reality is, though, that there just does not seem to be that many opportunities out there. They do pop up. Because of our history and performance of what we have done in the past with Thunder Valley and Gun Lake in Michigan and what we are doing with North Fork, we get all the looks. If there is a substantial opportunity in tribal gaming from a development ground-up standpoint, we are getting the calls because people obviously can see what we have done in the past. I think we have got a good reputation in that end of the business. With that said, sometimes, as we know, like with North Fork, these take a while. We have shown that we have the fortitude and the patience and the resilience to stand. Once we make our commitment to a tribe, we're going to stick with them and we see it through. Yes, we are looking, but I can't say that I wouldn't expect this to be to where there are multiple opportunities down the road. Great. Thank you very much. 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 hearing from you next quarter. Take care. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.