Good afternoon, and welcome to Red Rock Resorts' First Quarter 2016 Conference Call. [Operator Instructions] Please note this conference is being recorded. I would like to turn the conference over to Daniel Foley, Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Karen. Good afternoon, and welcome to Red Rock Resorts' First Quarter Earnings Conference Call. Joining me today on the call from Red Rock Resorts are Rich Haskins, President; and Marc Falcone, Executive Vice President, Chief Financial Officer and Treasurer. Our call today will include forward-looking statements under the safe harbor provisions of the federal securities laws. Developments and results may differ from those projected. The risks and uncertainties related to these statements are detailed in our filings with the SEC. 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 and Form 8-K, which were filed this afternoon prior to the call. Also, please note that this call is being recorded. I would now like to turn the call over to Marc Falcone.

Thank you, Dan, and good afternoon. I'm pleased to welcome everyone to our first quarter 2016 earnings call. As many of you are now aware, we successfully completed the initial public offering of Red Rock Resorts on May 2, 2016. We offered 27 million shares and raised approximately $531 million, making it the largest non-REIT IPO of the year. The shares trade on the NASDAQ Exchange under the ticker symbol, RRR. We're excited about our return to the public markets and are extremely focused on providing shareholder value and driving long-term growth for the company. On Tuesday of this week, we took the first step in this regard as we announced the acquisition of the Palms Casino Resort for $312.5 million. With this acquisition, we gained a leading gaming asset in Las Vegas with key strategic benefits in the Las Vegas locals market and close proximity to the Las Vegas Strip, all at a very attractive price. As a hybrid gaming property that appeals to both Las Vegas residents and tourists alike, the Palms is uniquely positioned to benefit from the strong economic trends in Southern Nevada as well as record visitation and visitor spending in Las Vegas. It is a compelling strategic addition to our portfolio of properties. As discussed in our release, after factoring in anticipated synergies, we estimate that the Palms will generate over $35 million in EBITDA during the company's first full year of ownership, resulting in an implied multiple of 8.8x EBITDA for the transaction. We also estimate the we acquired the property at approximately 50% of replacement costs. We expect the acquisition to be accretive to earnings per share and free cash flow positive in our first full year of operation. We believe this acquisition will provide significant shareholder value going forward and it…

[Operator Instructions] Our first question comes from the line of Joseph Greff from JPMorgan. He may have stepped away from his phone. We can move on. Our next question comes from the line of Steven Kent from Goldman Sachs.

A couple of questions. Just Marc, a little bit more on the Palms acquisition. It's interesting you mentioned that it's close to the Strip, but it also is not in the area where you have previously had a property. I just wanted to understand what the rationale is. Because my recollection of the Palms was really targeted more towards the visitors rather than locals. So is that what you're talking about when you said you mentioned investments like -- I don't even know, but does it have a movie theater? Does it have some of these locals things that you add in? So I wanted to ask that question. Then the other is, with Boyd's recent foray into North Las Vegas, the Aliante, Cannery, does that add competition to the board -- against your Boarding Pass? How are you viewing that versus where you stand?

So let me start with the first question, Steve. Station Casinos was one of the original investors in the Palms casino, going back to 2001. And we're actively involved with that property for nearly 10 years. So we're extremely familiar with the asset. It was largely positioned as a locals asset. It does have a 12-theater movie screen. It does have a lot of the other components to what makes the locals property successful. Where we're positioned in this particular asset is we don't have a significant presence of a large portion of our Boarding Pass members. So we feel it's uniquely positioned to capture back a lot of the lost business that, that property has experienced over the last several years, but also continue to benefit from increasing ADRs and RevPARs on the Strip's strong convention business. And overall, I think it's a really good solid mix of both Las Vegas locals business and tourism, not too dissimilar from some of the trends we experienced out of properties like Red Rock and Green Valley Ranch. With respect to the impact or any potential impact for Boyd in the North Las Vegas marketplace, I think, listen, we actually think it's probably a really good situation, overall, because you're consolidating separate ownership in the market under one umbrella, and we think that will create a more rational marketing and promotional environment, which we think could benefit, not only Boyd, but to us as well.

And just one quick one, I'm not sure if you mentioned it, but CapEx in the quarter, how much of it was the IT new system versus other spend? How should we start to think about the cadence of CapEx?

Yes, no problem. So the $31 million did not include anything for the new system. You'll see the new system CapEx spend starting in the second quarter, and which will continue through the second quarter of next year. So it's about a 12-month spend to complete the upgrade of the system and complete the installation and the programming that goes along with it.

[Operator Instructions] And I do have a question from the line of John DeCree from Union Gaming.

Just wanted to ask regarding the type of play that you're seeing at your property. We've heard from other regional operators, more broadly, that they're seeing a pickup in the unrated play on the gaming floor. Wondering if you guys had seen similar trends or if you could talk more broadly about where you're seeing some of the best performance on the casino floor as it relates to your customers.

John, well, I think there is some consistency with what we're experiencing in terms of unrated play at our properties, not dissimilar from what other regional operators have commented on their earnings call. So it's an encouraging sign to see that type of play kind of recover. I think it's a testament to the strength of the local economy where you're starting to see that lower-end play or the unrated play come back. Clearly a sign of the economic environment here stronger. People have more disposable income and are coming back, spending that money in gaming, on the casino floor in our properties.

And that concludes our question-and-answer session for today. I would like to turn the conference back over to Red Rock Resorts' management for any closing comments.

Thank you, everybody. We look forward to reporting second quarter earnings as our first quarter as a public company. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a good day.