##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 
 Commission
file number: 000-52975
 
 American Casino & Entertainment Properties LLC
  
 Delaware
    
    20-0573058(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2000 Las Vegas Boulevard South 
Las Vegas, NV
    
    89104(Address of principal executive offices)
    
    (Zip Code)
 (702) 380-7777
   
 o þ
 þ o
 þ o
 o
  o o þ o
  o þ




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##### 



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2007
TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    16Item 1B.
    
    Unresolved Staff Comments
    
    
    19Item 2.
    
    Properties
    
    
    19Item 3.
    
    Legal Proceedings
    
    
    19Item 4.
    
    Submission of Matters to a Vote of
Security Holders
    
    
    19PART IIItem 5.
    
    Market For Registrants Common Equity,
Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    20Item 6.
    
    Selected Financial Data
    
    
    21Item 7.
    
    Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    23Item 7A.
    
    Quantitative and Qualitative Disclosures
About Market Risk
    
    
    30Item 8.
    
    Financial Statements and Supplementary
Data
    
    
    30Item 9.
    
    Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
    
    
    49Item 9A.
    
    Controls and Procedures
    
    
    49Item 9B.
    
    Other Information
    
    
    50PART IIIItem 10.
    
    Directors, Executive Officers and
Corporate Governance
    
    
    51Item 11.
    
    Executive Compensation
    
    
    53Item 12.
    
    Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters
    
    
    57Item 13.
    
    Certain Relationships and Related
Transactions and Director Independence
    
    
    57Item 14.
    
    Principal Accountant Fees and Services
    
    
    59PART IVItem 15.
    
    Exhibits and Financial Statement
Schedules
    
    
    60EX-4.5: LOAN AGREEMENTEX-14.1: CODE OF BUSINESS CONDUCT AND ETHICSEX-21.1: SUBSIDIARIESEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
  2




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PART I
 
 ITEM 1. BUSINESS
 General
         3




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
    
    Holdings has the right to acquire Class A Interests from Voteco on each occasion that
Class B Interests held by Holdings would be transferred to a proposed purchaser who, in
connection with such proposed sale, has obtained all licenses, permits, registrations,
authorizations, consents, waivers, orders, findings of suitability or other approvals
required to be obtained from, and has made all findings, notices or declarations required
to be made with, all gaming authorities under all applicable gaming laws,
    
    A specific purchase price, as determined in accordance with the Transfer Restriction
Agreement, will be paid to acquire the Class A Interests from Voteco, and
    
    Voteco will not transfer ownership of Class A Interests owned by it except pursuant to
such option of Holdings.
        4




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##### Table of Contents



Our Business Strategy and Competitive Strengths
  Value-Oriented Experience
   Customer Service
  Stratosphere as a Destination Property for Visitors to Las Vegas
   Repositioned Properties to Better Target Market
  Emphasis on Slot Play
  5




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##### Table of Contents



Experienced Management Team
  Our Gaming and Entertainment Properties
 Stratosphere
   Casino
   Hotel, Food and Beverage
 th
 th
 The Tower
   
    
    Big Shot, which catapults up to 16 riders, in harnessed seats, from the 921-foot level
of the Tower Pod, 160 feet straight up the mast of the Tower and allows for a controlled
free-fall back to the landing platform;
    
    X Scream, is shaped like a giant teeter-totter and launches up to eight riders
approximately 30 feet over the edge of the Tower and then dangles them weightlessly above
the Las Vegas Strip; and
    
    Insanity, which opened in March 2005, holds ten passengers in escape proof seats in an
arm that extends out 64 feet over the edge of the Tower and spins passengers at up to three
Gs. As the ride spins faster and faster, the riders are propelled up to an angle of 70
degrees, overlooking the City of Las Vegas more than 900 feet below.
 6




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##### Table of Contents




    
    event space and wedding chapels, at levels 103 and 104;
    
    Romance at Top of the World, a 156-seat lounge, at level 107; and
    
    indoor/outdoor observation decks, at levels 108 and 109, containing a gift shop,
Starbucks®, snack bar, free-standing vending machines featuring snacks and souvenirs
designed to capitalize on the unique nature of the Tower.
 Retail and Entertainment
  Arizona Charlies Decatur
  Casino
    Hotel, Food and Beverage
   Retail and Entertainment
   Arizona Charlies Boulder
  7




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##### Table of Contents



Casino
 , ,
   Hotel, Food and Beverage
   Retail and Entertainment
    Aquarius Casino Resort
    Casino
  8




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##### Table of Contents



Hotel, Food and Beverage
 ® ®
 Retail and Entertainment
  Marketing Strategy
      9




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##### Table of Contents



Trademarks
  Seasonality
  Casino Credit
  Competition
    The Las Vegas Market
  10




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##### Table of Contents



Tourist Market
     Local Market
  The Laughlin Market
  Regulation and Licensing
 Introduction
  Policy Concerns of Gaming Laws
  
    
    preventing unsavory or unsuitable persons from being directly or indirectly involved
with gaming at any time or in any capacity;
    
    establishing and maintaining responsible accounting practices and procedures;
    
    maintaining effective controls over the financial practices of licensees, including
establishing minimum procedures for internal fiscal affairs, and safeguarding assets and
revenue, providing reliable recordkeeping and requiring the filing of periodic reports with
the Nevada Gaming Authorities;
    
    preventing cheating and fraudulent practices; and
    
    providing a source of state and local revenue through taxation and licensing fees.
  11




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Owner and Operator Licensing Requirements
   Registration Requirements
    Individual Licensing Requirements
   Consequences of Violating Gaming Laws
  12




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##### Table of Contents



Requirements for Equity Security Holders
   
    
    voting on all matters voted on by stockholders or interest holders;
    
    making financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in its management,
policies or operations; and
    
    other activities that the Nevada Gaming Commission may determine to be consistent with
such investment intent.
  Consequences of Being Found Unsuitable
  13




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##### Table of Contents




    
    pays that person any dividend or interest upon any voting securities;
    
    allows that person to exercise, directly or indirectly, any voting right held by that
person;
    
    pays remuneration in any form to that person for services rendered or otherwise; or
    
    fails to pursue all lawful efforts to require the unsuitable person to relinquish such
persons voting securities including, if necessary, the immediate purchase of the voting
securities for cash at fair market value.
 Requirements for Debt Security Holders
  
    
    pays to the unsuitable person any dividend, interest or any distribution whatsoever;
    
    recognizes any voting right by the unsuitable person in connection with the securities;
    
    pays the unsuitable person remuneration in any form; or
    
    makes any payment to the unsuitable person by way of principal, redemption, conversion,
exchange, liquidation or similar transaction.
 Approval of Public Offerings
  Approval of Changes in Control
  
    
    merger;
    
    consolidation;
    
    stock or asset acquisitions;
    
    management or consulting agreements; or
    
    any act or conduct by a person by which the person obtains control of us.
  Approval of Defensive Tactics
  
    
    assure the financial stability of corporate gaming operators and their affiliates;
 14




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##### Table of Contents




    
    preserve the beneficial aspects of conducting business in the corporate form; and
    
    promote a neutral environment for the orderly governance of corporate affairs.
  Fees and Taxes
  
    
    a percentage of gross revenues received;
    
    the number of gaming devices operated; or
    
    the number of table games operated.
  Foreign Gaming Investigations
  
    
    knowingly violates any laws of the foreign jurisdiction pertaining to the foreign gaming
operation;
    
    fails to conduct the foreign gaming operation in accordance with the standards of
honesty and integrity required of Nevada gaming operations;
    
    engages in any activity or enters into any association that is unsuitable because it
poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to
reflect, discredit or disrepute upon the State of Nevada or gaming in Nevada, or is
contrary to the gaming policies of Nevada;
    
    engages in activities or enters into associations that are harmful to the State of
Nevada or its ability to collect gaming taxes and fees; or
    
    employs, contracts with or associates with a person in the foreign operation who has
been denied a license or finding of suitability in Nevada on the ground of unsuitability.
 License for Conduct of Gaming and Sale of Alcoholic Beverages
  Environmental Matters
  15




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##### Table of Contents



Employees
  Available Information
  
 Item 1A. RISK FACTORS
 We have a large amount of debt, which could restrict our operations and impair our financial
condition.
   
    
    making it more difficult for us to satisfy our obligations;
    
    increasing our vulnerability to adverse economic, regulatory and industry conditions;
    
    limiting our ability to obtain additional financing for future working capital, capital
expenditures, mergers and other purposes;
    
    requiring us to dedicate a substantial portion of our cash flow from operations to
payments on our debt, thereby reducing funds available for operations and other purposes;
    
    limiting our flexibility in planning for, or reacting to, changes in our business and
the industry in which we operate;
    
    making us more vulnerable to increases in interest rates;
    
    placing us at a competitive disadvantage compared to our competitors that have less
debt; and
    
    having a material adverse effect on us if we fail to comply with the covenants in the
instruments governing our debt and preferred stock.
 The Goldman Term Loans contain important affirmative and negative financial covenants customary for
loans of this nature, which may restrict our ability to conduct our gaming operations or pursue
development opportunities if desired.
  The gaming industry is highly regulated. We are subject to extensive governmental gaming regulation
and taxation policies, which may harm our business.
   16




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Rising operating costs for our gaming properties could have a negative impact on our profitability.
  
    
    potential changes in the tax or regulatory environment which impose additional
restrictions or increase operating costs;
    
    our properties use significant amounts of electricity, natural gas and other forms of
energy, and energy price increases may reduce our profitability;
    
    our properties use significant amounts of water and a water shortage may adversely
affect our operations;
    
    an increase in the cost of health care benefits for our employees could have a negative
impact on our profitability;
    
    approximately 39% of our employees are members of various unions and covered by
union-sponsored collective bargaining agreements and we may incur higher costs or work
slow-downs or stoppages due to union activities;
    
    our reliance on slot machine revenues and the concentration of manufacturing of slot
machines in certain companies could impose additional costs on us; and
    
    our insurance coverage may not be adequate to cover all possible losses and our
insurance costs may increase.
 We face substantial competition in the hotel and casino industry.
  
    
    we compete with many world class destination resorts with greater name recognition,
different attractions, amenities and entertainment options;
    
    we compete with the continued growth of gaming on Native American tribal lands;
    
    the existence of legalized gambling in other jurisdictions may reduce the number of
visitors to our properties;
    
    certain states have legalized, and others may legalize, casino gaming in specific
venues, including race tracks and/or in specific areas, including metropolitan areas from
which we traditionally attract customers; and
    
    our properties also compete and will in the future compete with all forms of legalized
gambling.
  Economic downturns, terrorism and the uncertainty of war, as well as other factors affecting
discretionary consumer spending, could reduce the number of our visitors or the amount of money
visitors spend at our casinos.
  17




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##### Table of Contents



Our hotels and casinos may need to increase capital expenditures to compete effectively.
  Our hotels and casinos may incur substantial costs as a result of our growth and expansion
strategy.
  The loss of management and other key personnel could significantly harm our business, and the
quality of individuals hired for positions in the hotel and gaming operations will be critical to
the success of our business.
   18




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Because we are currently dependent upon four properties for all our cash flow, we will be subject
to greater risks than a gaming company with more operating properties or that operates in more
markets.
  
    
    local economic and competitive conditions;
    
    inaccessibility due to inclement weather, road construction or closure of primary access
routes;
    
    decline in air passenger traffic due to higher ticket costs or fears concerning air
travel;
    
    natural and other disasters;
    
    reduced land travel due to the increase in gas prices;
    
    a decline in the number of visitors to Las Vegas and Laughlin, Nevada; and
    
    a decrease in gaming and non-gaming activities.
  
 We have significant working capital needs and if we are unable to satisfy those needs from cash generated from our operations or indebtedness, we may not be able to meet payroll
or statutory tax payment requirements.
    We are dependent upon technology services and electrical power to operate our business, and
if we experience damage or service interruptions, our business may be adversely affected.
   Item 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  Stratosphere
  Arizona Charlies Decatur
  Arizona Charlies Boulder
  Aquarius Casino Resort
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  19




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market
Price of and Dividends on the Registrants Common Equity and
Related Member Matters
       20




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ITEM 6. SELECTED FINANCIAL DATA
   21




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Years Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(in thousands, except ratios)Income Statement Data:Revenues:Casino
    
    $
    265,138
    
    
    $
    220,814
    
    
    $
    182,939
    
    
    $
    167,972
    
    
    $
    147,888Hotel
    
    
    88,242
    
    
    
    75,587
    
    
    
    61,861
    
    
    
    54,653
    
    
    
    47,259Food and beverage
    
    
    91,160
    
    
    
    83,667
    
    
    
    70,060
    
    
    
    66,953
    
    
    
    59,583Tower, retail and other
    
    
    40,074
    
    
    
    35,912
    
    
    
    35,413
    
    
    
    33,778
    
    
    
    30,336Gross revenues
    
    
    484,614
    
    
    
    415,980
    
    
    
    350,273
    
    
    
    323,356
    
    
    
    285,066Less promotional allowances
    
    
    40,406
    
    
    
    30,281
    
    
    
    22,291
    
    
    
    23,375
    
    
    
    22,255Net revenues
    
    
    444,208
    
    
    
    385,699
    
    
    
    327,982
    
    
    
    299,981
    
    
    
    262,811Cost and expenses:Casino
    
    
    87,984
    
    
    
    80,060
    
    
    
    63,216
    
    
    
    61,985
    
    
    
    61,284Hotel
    
    
    35,396
    
    
    
    33,419
    
    
    
    26,957
    
    
    
    24,272
    
    
    
    22,074Food and beverage
    
    
    68,398
    
    
    
    60,052
    
    
    
    51,784
    
    
    
    48,495
    
    
    
    44,990Other operating expenses
    
    
    17,943
    
    
    
    16,856
    
    
    
    15,372
    
    
    
    14,035
    
    
    
    14,008Selling, general and administrative
    
    
    126,008
    
    
    
    107,073
    
    
    
    81,321
    
    
    
    78,720
    
    
    
    74,985Depreciation and amortization
    
    
    36,034
    
    
    
    28,620
    
    
    
    23,305
    
    
    
    23,516
    
    
    
    20,222Pre-opening costs
    
    
    
    
    
    
    1,904
    
    
    
    
    
    
    
    
    
    
    
    (Gain) loss on sale of assets
    
    
    8
    
    
    
    239
    
    
    
    (25
    )
    
    
    96
    
    
    
    1,401Total costs and expenses
    
    
    371,771
    
    
    
    328,223
    
    
    
    261,930
    
    
    
    251,119
    
    
    
    238,964Income from operations
    
    
    72,437
    
    
    
    57,476
    
    
    
    66,052
    
    
    
    48,862
    
    
    
    23,847Other income (expense):Interest income
    
    
    2,367
    
    
    
    2,239
    
    
    
    1,617
    
    
    
    1,049
    
    
    
    426Interest expense
    
    
    (20,574
    )
    
    
    (21,314
    )
    
    
    (18,846
    )
    
    
    (18,939
    )
    
    
    (5,389
    )Total other expense, net
    
    
    (18,207
    )
    
    
    (19,075
    )
    
    
    (17,229
    )
    
    
    (17,890
    )
    
    
    (4,963
    )Income before income taxes
    
    
    54,230
    
    
    
    38,401
    
    
    
    48,823
    
    
    
    30,972
    
    
    
    18,884Provision (benefit) for income taxes
    
    
    15,602
    
    
    
    12,758
    
    
    
    16,789
    
    
    
    10,100
    
    
    
    (1,798
    )Net income
    
    $
    38,628
    
    
    $
    25,643
    
    
    $
    32,034
    
    
    $
    20,872
    
    
    $
    20,682OTHER FINANCIAL DATA:Capital expenditures
    
    $
    22,465
    
    
    $
    46,851
    
    
    $
    28,219
    
    
    $
    14,009
    
    
    $
    33,465As of December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    107,265
    
    
    $
    54,912
    
    
    $
    108,316
    
    
    $
    75,161
    
    
    $
    77,258Total assets
    
    
    605,098
    
    
    
    575,826
    
    
    
    494,257
    
    
    
    464,341
    
    
    
    480,738Total debt (1)
    
    
    257,330
    
    
    
    257,825
    
    
    
    218,298
    
    
    
    218,748
    
    
    
    105,243Members equity
    
    
    296,369
    
    
    
    257,741
    
    
    
    232,098
    
    
    
    200,996
    
    
    
    330,345
 
 (1)
    
    Total debt, including current portion, consists of the current and long-term portions of
capital lease obligations and notes payable, including for 2003 notes payable to related parties. 22




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Aquarius Transaction
  Overview
  Patron Gaming Volume
  Years Ending December 31,2007
    
    2006
    
    2005Total gaming revenue
    
    $
    10,868,554,000
    
    
    $
    10,643,824,000
    
    
    $
    9,716,860,000Number of slot machines
    
    
    128,904
    
    
    
    131,430
    
    
    
    130,945Number of table games
    
    
    4,458
    
    
    
    4,511
    
    
    
    4,450Number of visitors
    
    
    39,196,761
    
    
    
    38,914,889
    
    
    
    38,566,717
  23




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##### Table of Contents



Results of Operations
 Years Ended December 31,Excluding AquariusIncluding Aquarius
    


    
    
    
    
    
    
    
    
    
    
    
    
    
    

    2007 to 2006
    

    2006 to 20052007
    
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    % Change

    
    % Change(in millions)Income Statement Data:Revenues:Casino
    
    $
    265.1
    
    
    
    $
    184.2
    
    
    $
    179.6
    
    
    $
    182.9
    
    
    
    2.6
    %
    
    
    -1.8
    %Hotel
    
    
    88.2
    
    
    
    
    70.3
    
    
    
    65.4
    
    
    
    61.9
    
    
    
    7.5
    %
    
    
    5.7
    %Food and beverage
    
    
    91.2
    
    
    
    
    72.9
    
    
    
    72.3
    
    
    
    70.1
    
    
    
    0.8
    %
    
    
    3.1
    %Tower, retail and other
    
    
    40.1
    
    
    
    
    35.2
    
    
    
    33.7
    
    
    
    35.4
    
    
    
    4.5
    %
    
    
    -4.8
    %Gross revenues
    
    
    484.6
    
    
    
    
    362.6
    
    
    
    351.0
    
    
    
    350.3
    
    
    
    3.3
    %
    
    
    0.2
    %Less promotional allowances
    
    
    40.4
    
    
    
    
    25.7
    
    
    
    22.9
    
    
    
    22.3
    
    
    
    12.2
    %
    
    
    2.7
    %Net revenues
    
    
    444.2
    
    
    
    
    336.9
    
    
    
    328.1
    
    
    
    328.0
    
    
    
    2.7
    %
    
    
    0.0
    %Costs and expenses:Casino
    
    
    88.0
    
    
    
    
    63.2
    
    
    
    65.1
    
    
    
    63.2
    
    
    
    -2.9
    %
    
    
    3.0
    %Hotel
    
    
    35.4
    
    
    
    
    27.7
    
    
    
    27.8
    
    
    
    27.0
    
    
    
    -0.4
    %
    
    
    3.0
    %Food and beverage
    
    
    68.4
    
    
    
    
    57.5
    
    
    
    52.3
    
    
    
    51.8
    
    
    
    9.9
    %
    
    
    1.0
    %Other operating expenses
    
    
    18.0
    
    
    
    
    14.7
    
    
    
    15.4
    
    
    
    15.4
    
    
    
    -4.5
    %
    
    
    0.0
    %Selling, general and administrative
    
    
    126.0
    
    
    
    
    87.8
    
    
    
    85.1
    
    
    
    81.3
    
    
    
    3.2
    %
    
    
    4.7
    %Depreciation and amortization
    
    
    36.0
    
    
    
    
    27.2
    
    
    
    24.6
    
    
    
    23.3
    
    
    
    10.6
    %
    
    
    5.6
    %Total costs and expenses
    
    
    371.8
    
    
    
    
    278.1
    
    
    
    270.3
    
    
    
    262.0
    
    
    
    2.9
    %
    
    
    3.2
    %Income from operations
    
    $
    72.4
    
    
    
    $
    58.8
    
    
    $
    57.8
    
    
    $
    66.0
    
    
    
    1.7
    %
    
    
    -12.4
    %
   Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
  Casino Revenues
  Non-Casino Revenues
   24




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##### Table of Contents



Promotional Allowances
  Operating Expenses
    Viva
Las Vegas
  Interest Expense
  Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
  Casino Revenues
  25




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Non-Casino Revenues
    Promotional Allowances
  Operating Expenses
      Interest Expense
  Financial Condition
 Liquidity and Capital Resources
   26




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##### Table of Contents



Off Balance Sheet Arrangements
  Contractual Obligations
  Less than
    
    
    1-3
    
    
    4-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(in thousands)Debt (1)
    
    $
    255,000
    
    
    $
    
    
    
    $
    40,000
    
    
    $
    215,000
    
    
    $
    Interest on debt (1)
    
    
    82,157
    
    
    
    19,418
    
    
    
    37,353
    
    
    
    25,386
    
    
    
    Capital leases, including interest
    
    
    9,024
    
    
    
    660
    
    
    
    1,046
    
    
    
    170
    
    
    
    7,148Other contractual obligations
    
    
    7,179
    
    
    
    7,073
    
    
    
    106
    
    
    
    
    
    
    
    Total
    
    $
    353,361
    
    
    $
    27,151
    
    
    $
    78,506
    
    
    $
    25,556
    
    
    $
    222,148
 
 (1)
    
    On February 15, 2008, ACEP repaid all of the 7.85% senior secured notes due 2012 and the
senior secured revolving credit facility. In connection with the closing of the Acquisition, we
have obtained term loans in an aggregate amount of approximately $1.1 billion that have an initial
term of two years with two one-year extension options and a blended annual interest rate of LIBOR
plus 3.00% during the initial term and LIBOR plus 3.25% during any extension term. Critical Accounting Policies
  Revenue Recognition
  Slot
Club Liability
 Self-Insurance
 28




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##### Table of Contents



Income Taxes
  Commitments and Contingencies
 Recently Issued Accounting Pronouncements
     29




---



##### Table of Contents



Forward Looking Statements
  We warn you that forward-looking statements are only predictions. Actual events or results may
differ as a result of risks that we face. Forward-looking statements speak only as of the date they
were made and we undertake no obligation to update them.
 Trends and Other Uncertainties
  
 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
       30




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    32Consolidated Balance Sheets as of December 31, 2007 and 2006
    
    
    33Consolidated Statements of Income for the years ended December 31, 2007, 2006 and 2005
    
    
    34Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and
2005
    
    
    35Consolidated Statements of Members Equity for the years ended December 31, 2007,
2006 and 2005
    
    
    36Notes to Consolidated Financial Statements
    
    
    37
 31




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 The Board of Directors and the Member  American Casino & Entertainment Properties LLC
     
 32




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED BALANCE SHEETS
 AS OF DECEMBER 31,2007
    
    
    2006(in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    107,265
    
    
    $
    54,912Cash and cash equivalents-restricted
    
    
    
    
    
    
    269Investments-restricted
    
    
    2,858
    
    
    
    3,457Accounts receivable, net
    
    
    5,615
    
    
    
    6,752Related party receivables
    
    
    
    
    
    
    472Deferred income taxes
    
    
    4,309
    
    
    
    2,948Other current assets
    
    
    11,999
    
    
    
    16,773Total Current Assets
    
    
    132,046
    
    
    
    85,583Property and equipment, net
    
    
    431,970
    
    
    
    445,788Debt issuance and deferred financing costs, net
    
    
    4,555
    
    
    
    5,729Deferred income taxes
    
    
    34,503
    
    
    
    36,212Other assets
    
    
    2,024
    
    
    
    2,514Total Other Assets
    
    
    41,082
    
    
    
    44,455TOTAL ASSETS
    
    $
    605,098
    
    
    $
    575,826LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    4,730
    
    
    $
    6,708Accrued expenses
    
    
    27,347
    
    
    
    33,168Accrued payroll and related expenses
    
    
    16,936
    
    
    
    14,391Current portion of capital lease obligation
    
    
    520
    
    
    
    496Total Current Liabilities
    
    
    49,533
    
    
    
    54,763Long-Term Liabilities:Long-term debt
    
    
    255,000
    
    
    
    255,000Capital lease obligations, less current portion
    
    
    1,810
    
    
    
    2,329Other
    
    
    2,386
    
    
    
    5,993Total Long-Term Liabilities
    
    
    259,196
    
    
    
    263,322Total Liabilities
    
    
    308,729
    
    
    
    318,085Commitments and ContingenciesMembers Equity:Members Equity
    
    
    296,369
    
    
    
    257,741Total Members Equity
    
    
    296,369
    
    
    
    257,741TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    605,098
    
    
    $
    575,826
  33




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF INCOME
 YEARS ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005(in thousands)REVENUES:Casino
    
    $
    265,138
    
    
    $
    220,814
    
    
    $
    182,939Hotel
    
    
    88,242
    
    
    
    75,587
    
    
    
    61,861Food and beverage
    
    
    91,160
    
    
    
    83,667
    
    
    
    70,060Tower, retail and other
    
    
    40,074
    
    
    
    35,912
    
    
    
    35,413Gross revenues
    
    
    484,614
    
    
    
    415,980
    
    
    
    350,273Less promotional allowances
    
    
    40,406
    
    
    
    30,281
    
    
    
    22,291Net revenues
    
    
    444,208
    
    
    
    385,699
    
    
    
    327,982COSTS AND EXPENSES:Casino
    
    
    87,984
    
    
    
    80,060
    
    
    
    63,216Hotel
    
    
    35,396
    
    
    
    33,419
    
    
    
    26,957Food and beverage
    
    
    68,398
    
    
    
    60,052
    
    
    
    51,784Other operating expenses
    
    
    17,943
    
    
    
    16,856
    
    
    
    15,372Selling, general and administrative
    
    
    126,008
    
    
    
    107,073
    
    
    
    81,321Depreciation and amortization
    
    
    36,034
    
    
    
    28,620
    
    
    
    23,305Pre-opening costs
    
    
    
    
    
    
    1,904
    
    
    
    (Gain) loss on sale of assets
    
    
    8
    
    
    
    239
    
    
    
    (25
    )Total costs and expenses
    
    
    371,771
    
    
    
    328,223
    
    
    
    261,930INCOME FROM OPERATIONS
    
    
    72,437
    
    
    
    57,476
    
    
    
    66,052OTHER INCOME (EXPENSE):Interest income
    
    
    2,367
    
    
    
    2,239
    
    
    
    1,617Interest expense
    
    
    (20,574
    )
    
    
    (21,314
    )
    
    
    (18,846
    )Total other expense, net
    
    
    (18,207
    )
    
    
    (19,075
    )
    
    
    (17,229
    )INCOME BEFORE INCOME TAXES
    
    
    54,230
    
    
    
    38,401
    
    
    
    48,823Provision for income taxes
    
    
    15,602
    
    
    
    12,758
    
    
    
    16,789NET INCOME
    
    $
    38,628
    
    
    $
    25,643
    
    
    $
    32,034
  34




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEARS ENDED DECEMBER 31,2007
    
    
    2006
    
    
    2005(in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    38,628
    
    
    $
    25,643
    
    
    $
    32,034Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    36,034
    
    
    
    28,620
    
    
    
    23,305(Gain) loss on sale of assets
    
    
    8
    
    
    
    239
    
    
    
    (25
    )Provision (benefit) for deferred income taxes
    
    
    348
    
    
    
    317
    
    
    
    9,645Changes in operating assets and liabilities:Restricted cash
    
    
    269
    
    
    
    235
    
    
    
    (56
    )Accounts receivable, net
    
    
    1,137
    
    
    
    (686
    )
    
    
    (225
    )Other current assets
    
    
    5,863
    
    
    
    (2,459
    )
    
    
    (715
    )Accounts payable and accrued expenses
    
    
    (5,254
    )
    
    
    11,452
    
    
    
    (2,296
    )Other
    
    
    (3,607
    )
    
    
    108
    
    
    
    628Net Cash Provided By Operating Activities
    
    
    73,426
    
    
    
    63,469
    
    
    
    62,295CASH FLOWS FROM INVESTING ACTIVITIES:Decrease (increase) in investments  restricted
    
    
    599
    
    
    
    (629
    )
    
    
    (282
    )Acquisition of property and equipment
    
    
    (22,465
    )
    
    
    (46,851
    )
    
    
    (28,219
    )Acquisition of Flamingo Laughlin, net of cash acquired
    
    
    
    
    
    
    (109,439
    )
    
    
    Decrease (increase) in related party receivables
    
    
    472
    
    
    
    499
    
    
    
    (232
    )Proceeds from sale of property and equipment
    
    
    816
    
    
    
    468
    
    
    
    43Net Cash Used In Investing Activities
    
    
    (20,578
    )
    
    
    (155,952
    )
    
    
    (28,690
    )CASH FLOWS FROM FINANCING ACTIVITIES:Debt issuance and deferred financing costs
    
    
    
    
    
    
    (448
    )
    
    
    Proceeds from line of credit
    
    
    
    
    
    
    60,000
    
    
    
    Payments on line of credit
    
    
    
    
    
    
    (20,000
    )
    
    
    Payments on capital lease obligation
    
    
    (495
    )
    
    
    (473
    )
    
    
    (450
    )Net Cash Provided By (Used In) Financing Activities
    
    
    (495
    )
    
    
    39,079
    
    
    
    (450
    )Net increase (decrease) in cash and cash equivalents
    
    
    52,353
    
    
    
    (53,404
    )
    
    
    33,155Cash and cash equivalents  beginning of period
    
    
    54,912
    
    
    
    108,316
    
    
    
    75,161Cash And Cash Equivalents  end of period
    
    $
    107,265
    
    
    $
    54,912
    
    
    $
    108,316SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    19,922
    
    
    $
    19,248
    
    
    $
    17,188Cash paid for income taxes, net of refunds
    
    $
    17,984
    
    
    $
    14,750
    
    
    $
    9,200NON-CASH INVESTING AND FINANCING ACTIVITIES:Utilization of tax losses by a related party
    
    $
    
    
    
    $
    
    
    
    $
    932
  35




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF MEMBERS EQUITY
  MembersEquityBalances at December 31, 2004
    
    $
    200,996Distribution
    
    
    (932
    )Net Income
    
    
    32,034Balances at December 31, 2005
    
    
    232,098Net Income
    
    
    25,643Balances at December 31, 2006
    
    
    257,741Net Income
    
    
    38,628Balances at December 31, 2007
    
    $
    296,369
  36




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2007, 2006 AND 2005
 Note 1. Description of Business and Summary of Significant Accounting Policies
 The Company
       37




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##### Table of Contents




    
    Holdings has the right to acquire Class A Interests from Voteco on each occasion that
Class B Interests held by Holdings would be transferred to a proposed purchaser who, in
connection with such proposed sale, has obtained all licenses, permits, registrations,
authorizations, consents, waivers, orders, findings of suitability or other approvals
required to be obtained from, and has made all findings, notices or declarations required
to be made with, all gaming authorities under all applicable gaming laws,
    
    A specific purchase price, as determined in accordance with the Transfer Restriction
Agreement, will be paid to acquire the Class A Interests from Voteco, and
    
    Voteco will not transfer ownership of Class A Interests owned by it except pursuant to
such option of Holdings.
    38




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##### Table of Contents



Principles of Consolidation and Combination
  Casino Revenues and Promotional Allowances
    December 31,2007
    
    
    2006
    
    
    2005(in thousands)Food and Beverage
    
    $
    9,463
    
    
    $
    8,723
    
    
    $
    7,101Rooms
    
    
    76
    
    
    
    157
    
    
    
    41Other
    
    
    28
    
    
    
    36
    
    
    
    33Total
    
    $
    9,567
    
    
    $
    8,916
    
    
    $
    7,175
 Cash and Cash Equivalents
  Investments Restricted
  Concentrations of Credit Risk
  Property and Equipment
  39




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##### Table of Contents



Buildings and improvements
    
    36-39 yearsFurniture, fixtures and equipment
    
    3-15 yearsLand improvements
    
    15 years
  Long-Lived Assets
   Unamortized Debt Issue Costs
  Slot Club Liability
  Debt
  Sales, Advertising and Promotion
  Income Taxes
  40




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##### Table of Contents



Use of Estimates
  Reclassifications
  Recently Issued Accounting Pronouncements
     41




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##### Table of Contents



Note 2. Accounts Receivable
  December 31,2007
    
    
    2006(in thousands)Hotel and related
    
    $
    3,503
    
    
    $
    3,282Gaming
    
    
    1,266
    
    
    
    1,181Other
    
    
    1,353
    
    
    
    2,6086,122
    
    
    
    7,071Less allowance for doubtful accounts
    
    
    (507
    )
    
    
    (319
    )$
    5,615
    
    
    $
    6,752
  December 31,2007
    
    
    2006
    
    
    2005(in thousands)Balance at beginning of period
    
    $
    319
    
    
    $
    135
    
    
    $
    240Bad debt expense
    
    
    507
    
    
    
    359
    
    
    
    85Deductions and write-offs
    
    
    (319
    )
    
    
    (175
    )
    
    
    (190
    )Balance at end of period
    
    $
    507
    
    
    $
    319
    
    
    $
    135
 Note 3. Other Current Assets
  December 31,2007
    
    
    2006(in thousands)Inventories
    
    $
    2,644
    
    
    $
    2,944Prepaid expenses
    
    
    8,977
    
    
    
    11,487Other
    
    
    378
    
    
    
    2,342$
    11,999
    
    
    $
    16,773
 Note 4. Property and Equipment, Net
  December 31,2007
    
    
    2006(in thousands)Land and improvements
    
    $
    75,100
    
    
    $
    75,100Building and improvements
    
    
    339,607
    
    
    
    336,449Furniture, fixtures and equipment
    
    
    186,112
    
    
    
    174,463Construction in progress
    
    
    2,655
    
    
    
    2,082603,474
    
    
    
    588,094Less accumulated depreciation and amortization
    
    
    171,504
    
    
    
    142,306$
    431,970
    
    
    $
    445,788
  42




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##### Table of Contents



Note 5. Accrued Expenses
  December 31,2007
    
    
    2006(in thousands)Accrued interest
    
    $
    7,040
    
    
    $
    7,089Accrued liabilities
    
    
    5,291
    
    
    
    10,657Accrued taxes
    
    
    2,764
    
    
    
    3,123Vacation packages
    
    
    24
    
    
    
    969Accrued gaming liability
    
    
    6,834
    
    
    
    5,666Other
    
    
    5,394
    
    
    
    5,664$
    27,347
    
    
    $
    33,168
 Note 6. Leases
  Years ending December 31,
    
    (in thousands)2008
    
    $
    4,7262009
    
    
    4,1512010
    
    
    3,9632011
    
    
    3,3292012
    
    
    2,265Thereafter
    
    
    2,796Total
    
    $
    21,230
    Years ending December 31,
    
    (in thousands)2008
    
    $
    6602009
    
    
    9612010
    
    
    852011
    
    
    852012
    
    
    85Thereafter
    
    
    7,148Total minimum lease payments
    
    
    9,024Less: amount representing interest ranging from 5% to 10%
    
    
    6,694Present value of net minimum lease payments
    
    
    2,330Less: current portion
    
    
    520Long-term capital lease obligation
    
    $
    1,810
  43




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##### Table of Contents



Note 7. Income Taxes
  December 31,2007
    
    
    2006
    
    
    2005(in thousands)Current
    
    $
    15,254
    
    
    $
    12,441
    
    
    $
    7,144Deferred
    
    
    348
    
    
    
    317
    
    
    
    9,645$
    15,602
    
    
    $
    12,758
    
    
    $
    16,789
 Deferred Tax Assets and Liabilities
  December 31,2007
    
    
    2006(in thousands)Deferred Tax AssetsProperty, plant and equipment
    
    $
    33,927
    
    
    $
    35,492Accrued vacation and employee related
    
    
    2,110
    
    
    
    2,111Gaming related
    
    
    2,299
    
    
    
    1,866Other
    
    
    476
    
    
    
    (309
    )Total net deferred tax assets
    
    
    38,812
    
    
    
    39,160Less: Current portion
    
    
    (4,309
    )
    
    
    (2,948
    )Net long term deferred tax assets
    
    $
    34,503
    
    
    $
    36,212
  December 31,2007
    
    2006
    
    2005Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Unrecognized tax benefit
    
    
    -5.7
    %
    
    
    -0.9
    %
    
    
    0.0
    %Permanent differences
    
    
    0.4
    %
    
    
    0.3
    %
    
    
    0.3
    %Federal income tax credits
    
    
    -0.9
    %
    
    
    -1.2
    %
    
    
    -0.9
    %28.8
    %
    
    
    33.2
    %
    
    
    34.4
    %
  44




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##### Table of Contents



Balance at January 1, 2007
    
    $
    4,900Additions based on tax positions related to the current year
    
    
    Additions for tax positions of prior years
    
    
    Reduction as a result of lapse of the applicable statue of limitations
    
    
    (3,056
    )Settlements
    
    
    Balance at December 31, 2007
    
    $
    1,844
   Note 8. Debt
      45




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##### Table of Contents



Note 9. Related Party Transactions
     Note 10. Employee Benefit Plans
    46




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##### Table of Contents



Note 11. Commitments & Contingencies
    47




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##### Table of Contents



Legal Proceedings
  Note 12. Acquisitions
  Land
    
    $
    13,000Building
    
    
    92,615Equipment
    
    
    2,685Customer list
    
    
    2,939Deposits
    
    
    18Accrued vacation expense
    
    
    (1,809
    )Total Purchase Price
    
    
    109,448Cash
    
    
    6,028Accounts receivable
    
    
    5Other current assets
    
    
    1,121Equipment
    
    
    36Accrued liabilities
    
    
    (2,598
    )Total Working Capital
    
    
    4,592Total Amount Paid
    
    $
    114,040
   Year EndedDecember 31,(in thousands)2006
    
    2005Net revenues
    
    $
    429,580
    
    
    $
    438,384Net income
    
    $
    29,128
    
    
    $
    38,463
  Note 13. Subsequent Events
  48




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##### Table of Contents



Land
    
    $
    708,570Site improvements
    
    
    4,870Building and improvements
    
    
    365,590Machinery and equipment
    
    
    79,237Intangibles
    
    
    37,934Goodwill
    
    
    2,267Capital lease
    
    
    (1,767
    )Debt issuance costs
    
    
    17,866Acquistion costs
    
    
    23,177Reserves and pre-payments
    
    
    59,357Total Purchase Price
    
    $
    1,297,101Cash and cash equivalents
    
    $
    35,000Investment -restricted
    
    
    2,857Accounts receivable, net
    
    
    5,709Other current assets
    
    
    12,258Accounts payable  trade
    
    
    (4,441
    )Accrued expenses
    
    
    (21,734
    )Accrued payroll and related expenses
    
    
    (18,170
    )Current portion of capital lease obligation
    
    
    (520
    )Estimated Working Capital
    
    $
    10,959Total Amount Paid
    
    $
    1,308,060
 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Internal Control-Integrated Framework
    49




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ITEM 9B. OTHER INFORMATION
  50




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Identification of Directors and Officers
  NAME
    
    AGE
    
    POSITIONStuart Rothenberg
    
    
    44
    
    
    Board MemberBrahm Cramer
    
    
    39
    
    
    Board MemberJonathan Langer
    
    
    38
    
    
    Board MemberRichard P. Brown
    
    
    60
    
    
    President and Chief Executive OfficerDenise Barton
    
    
    50
    
    
    Senior Vice President, Chief Financial Officer, Treasurer and Secretary
  NAME
    
    AGE
    
    POSITIONRonald P. Lurie
    
    
    66
    
    
    Executive Vice President, General Manager  Arizona Charlies DecaturRichard N. Charles
    
    
    60
    
    
    Senior Vice President, General Manager  Aquarius Casino ResortMark Majetich
    
    
    57
    
    
    Senior Vice President, General Manager  Arizona Charlies BoulderHoward G. Toy
    
    
    56
    
    
    Senior Vice President, General Manager  Stratosphere Casino Hotel & Tower
 Stuart Rothenberg
 Brahm Cramer
 Jonathan Langer
 Richard P. Brown
 51




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##### Table of Contents



Denise Barton
 Ronald P. Lurie
 Mark Majetich
 Howard G. Toy
 Richard N. Charles
   Audit Committee
   52




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##### Table of Contents



Audit Committee Report
   
 Code of Ethics
  Corporate Governance Guidelines
  Section 16(a) Beneficial Ownership Reporting Compliance
  
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Committee Report
  
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Compensation Committee Interlocks and Insider Participation
  Compensation Discussion and Analysis
 Overview
  Compensation Philosophy and Objectives
    Base Salary
  Management Incentive Plan
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Benefits
   Perquisites
  55




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Executive Compensation
  Summary of Compensation
 ANNUAL COMPENSATION (1)Non-EquityIncentive Plan
    
    All OtherCompensation
    
    CompensationName and Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    ($) (2)
    
    ($) (3)
    
    TotalRichard P.
Brown (PEO)
    
    
    2007
    
    
    
    625,000
    
    
    
    
    
    
    
    168,750
    
    
    
    12,886
    
    
    
    806,636President
&
Chief Executive Officer
    
    
    2006
    
    
    
    588,942
    
    
    
    
    
    
    
    
    
    
    
    13,048
    
    
    
    601,990Denise
Barton (PFO)
    
    
    2007
    
    
    
    374,375
    
    
    
    
    
    
    
    197,620
    
    
    
    7,093
    
    
    
    579,088Senior Vice
President, Chief Financial Officer, Treasurer and Secretary
    
    
    2006
    
    
    
    357,471
    
    
    
    
    
    
    
    14,624
    
    
    
    7,225
    
    
    
    379,320Richard B Fitzhugh
    
    
    2007
    
    
    
    224,904
    
    
    
    
    
    
    
    112,800
    
    
    
    4,842
    
    
    
    342,546Vice
President, Slot Strategy
    
    
    2006
    
    
    
    134,615
    
    
    
    
    
    
    
    
    
    
    
    2,202
    
    
    
    136,817Donald B McPherson
    
    
    2007
    
    
    
    201,287
    
    
    
    
    
    
    
    102,572
    
    
    
    7,976
    
    
    
    311,835Vice
President, Human Resources
    
    
    2006
    
    
    
    182,166
    
    
    
    
    
    
    
    3,447
    
    
    
    8,077
    
    
    
    193,690Ronald Lurie (GM)
    
    
    2007
    
    
    
    238,527
    
    
    
    
    
    
    
    13,144
    
    
    
    12,660
    
    
    
    264,331Executive
Vice President and General Manager
    
    
    2006
    
    
    
    231,354
    
    
    
    
    
    
    
    12,630
    
    
    
    16,234
    
    
    
    260,218
 
 (1)
    
    Pursuant to applicable regulations, certain columns of the Summary Compensation Table and
each of the remaining tables required by applicable SEC regulations
have been omitted, if
there was no compensation awarded to, or earned by or paid to any of the named executive
officers by us.
Other annual compensation was less than $50,000 or 10% of the total annual salary and bonus
reported for each of the named executive officers above.(2)
    
    Represents the portion of the bonus awarded in 2005 under the MIP, which was vested in 2006
and 2007, plus interest on the amounts of the awards paid which accrues at the rate of
approximately 4% per annum, and bonuses awarded for the 2007 MIP. Under the 2005 MIP, awards
vest over a four year period, due to the Acquisition, the 2007 MIP fully vested in 2007, and
paid in 2008. In 2008, an additional 20% of the 2007 MIP was paid to MIP recipients, which are
not included in the tables above.In 2005, Ms. Barton, Mr. McPherson and Mr. Lurie were awarded $56,000, $13,200 and $48,364,
respectively, under the MIP.(3)
    
    Includes contributions by ACEP to 401(k) plans, dollar value of insurance premiums and other
compensation related to health insurance payments. It also includes auto allowances for Mr.
Brown during 2006 and 2007. Potential Payments Upon Termination Or Change In Control
  Plan-Based
and Equity Awards
  Option Grants in Last Fiscal Year
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Employment Agreements
        Compensation of Directors
  Fees Earned orName
    
    Paid in Cash ($)William A. Leidesdorf
    
    
    15,000James L. Nelson
    
    
    15,000Jack G. Wasserman
    
    
    18,000Keith A. Meister
    
    
    Richard P. Brown
    
    
    
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
   
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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Related Party Transaction Policy
     Tax Allocation Agreement
  Other Transactions
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Director Independence
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Grant Thornton, LLP2007
    
    
    2006Audit fees (1)
    
    $
    601,000
    
    
    $
    564,000Other (2)
    
    
    3,000
    
    
    
    16,000Total fees
    
    $
    604,000
    
    
    $
    580,000
 Grant Thornton, LLP, did not provide any services related to financial information systems design
and implementation during 2007 or 2006.
 
 (1)
    
    Audit fees also include fees for work associated with Sarbanes-Oxley.(2)
    
    Other fees include fees for work related to compliance with Nevada Gaming Regulations.
 It is the policy of the Audit Committee to pre-approve all engagements and fees of the independent
public accountant and during 2007 and 2006 all such engagements and fees were pre-approved.
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PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) 1. and 2. Financial Statements and Schedules
 PageReport of Independent Registered Public Accounting Firm
    
    
    32Consolidated Balance Sheets as of December 31, 2007 and 2006
    
    
    33Consolidated Statements of Income for the years ended December
31, 2007, 2006 and 2005
    
    
    34Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006 and 2005
    
    
    35Consolidated Statements of Members/Stockholders Equity for the
years ended December 31, 2007, 2006 and 2005
    
    
    36Notes to Consolidated Financial Statements
    
    
    37
 3. List of Exhibits
 
 EXHIBITS INDEX
 EXHIBIT NO.
    
    DESCRIPTION3.1
    
    Second Amended and Restated Certificate of Formation of
American Casino & Entertainment Properties LLC (ACEP)
(incorporated by reference to Exhibit 3.1 to ACEPs Form S-4
(SEC File No. 333-118149), filed on August 12, 2004).3.2
    
    Amended and Restated Limited Liability Company Agreement of
ACEP (incorporated by reference to Exhibit 3.1 to ACEPs Form
8-K (SEC File No. 000-52975), filed on February 26, 2008).3.3
    
    Amended and Restated Certificate of Incorporation of American
Casino & Entertainment Properties Finance Corp. (incorporated
by reference to Exhibit 3.3 to ACEPs Form S-4 (SEC File No.
333-118149), filed on August 12, 2004).3.4
    
    By-Laws of American Casino & Entertainment Properties Finance
Corp. (incorporated by reference to Exhibit 3.4 to ACEPs Form
S-4 (SEC File No. 333-118149), filed on August 12, 2004).4.1
    
    Indenture, dated as of January 29, 2004, among ACEP, American
Casino & Entertainment Properties Finance Corp., the
guarantors from time to time party thereto and Wilmington
Trust Company, as Trustee (incorporated by reference to
Exhibit 4.1 to ACEPs Form S-4 (SEC File No. 333-118149),
filed on August 12, 2004).4.2
    
    Supplemental Indenture, dated as of May 26, 2004, among ACEP,
American Casino & Entertainment Properties Finance Corp.,
certain subsidiaries of ACEP and Wilmington Trust Company, as
Trustee (incorporated by reference to Exhibit 4.2 to ACEPs
Form S-4 (SEC File No. 333-118149), filed on August 12, 2004).4.3
    
    Form of 7.85% Senior Secured Note due 2012 (incorporated by
reference to Exhibit 4.1 to ACEPs Form S-4 (SEC File No.
333-118149), filed on August 12, 2004).4.4
    
    Transfer Restriction Agreement, dated February 20, 2008, among
Stuart Rothenberg, Brahm Cramer, Jonathan Langer, 2007/ACEP
Holdings, LLC and W2007/ACEP Managers Voteco, LLC
(incorporated by reference to Exhibit 4.01 to ACEPs Form 8-K
(SEC File No. 000-52975), filed on February 26, 2008).4.5
    
    Loan Agreement, dated as of
February 20, 2008, among W2007 Aquarius Propco, LP, W2007
Stratosphere Propco, LP, W2007 Stratosphere Land Propco, LP, W2007
Arizona Charlies Propco, LP and W2007 Fresca Propco, LP each,
as a Co-Borrower and collectively as the Borrower, and Goldman Sachs
Commercial Mortgage Capital, LP as Lender.10.1
    
    Amended and Restated Credit Agreement, dated as of May 9,
2006, among ACEP, as the Borrower, Certain Subsidiaries of the
Borrower from time to time party thereto, as Guarantors, the
Several Lenders from time to time parties thereto, Wells Fargo
Bank N.A., as Syndication
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EXHIBIT NO.
    
    DESCRIPTIONAgent, CIT Lending Services
Corporation, U.S. Bank, NA and Comerica West Incorporated, as
Co-Documentation Agents, Bear Stearns Corporate Lending Inc.,
as Administrative Agent, and Bear Stearns & Co. Inc., as Sole
Lead Arranger and Sole Bookrunner (incorporated by reference
to Exhibit 10.1 to ACEPs Form 8-K (SEC File No. 333-118149),
filed on May 17, 2006).10.2
    
    Pledge and Security Agreement, dated as of May 26, 2004, among
ACEP, American Casino & Entertainment Properties Finance
Corp., certain subsidiaries of ACEP and Bear Stearns Corporate
Lending Inc. (incorporated by reference to Exhibit 10.2 to
ACEPs Form S-4 (SEC File No. 333-118149), filed on August 12,
2004).10.3
    
    Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of May 26, 2004, made
by Stratosphere Corporation, as Trustor, to Lawyers Title of
Nevada, as Trustee, for the benefit of Wilmington Trust
Company, in its capacity as Indenture Trustee, for the benefit
of the Secured Parties, as Beneficiary (incorporated by
reference to Exhibit 10.7 to ACEPs Amendment No. 1 to Form
S-4 (SEC File No. 333-118149), filed on October 12, 2004).10.4
    
    First Modification to Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing made by
Stratosphere Corporation, as Trustor, to Lawyers Title of
Nevada, as Trustee, for the benefit of Wilmington Trust
Company, in its capacity as Indenture Trustee, for the benefit
of the Secured Parties, as Beneficiary, dated as of May 9,
2006 (incorporated by reference to Exhibit 10.3 to ACEPs Form
8-K (SEC File No. 333-118149), filed on May 17, 2006).10.5
    
    First Modification to Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing made by
Stratosphere Corporation, as Trustor, to Lawyers Title of
Nevada, as Trustee, for the benefit of Bear Stearns Corporate
Lending Inc., in its capacity as Administrative Agent, for the
benefit of the Secured Parties, as Beneficiary, dated as of
May 9, 2006 (incorporated by reference to Exhibit 10.4 to
ACEPs Form 8-K (SEC File No. 333-118149), filed on May 17,
2006).10.6
    
    Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of May 26, 2004, made
by Stratosphere Land Corporation, as Trustor, to Lawyers Title
of Nevada, as Trustee, for the benefit of Wilmington Trust
Company, in its capacity as Indenture Trustee, for the benefit
of the Secured Parties, as Beneficiary (incorporated by
reference to Exhibit 10.3 to ACEPs Form S-4 (SEC File No.
333-118149), filed on August 12, 2004).10.7
    
    First Modification to Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing made by
Stratosphere Land Corporation, as Trustor, to Lawyers Title of
Nevada, as Trustee, for the benefit of Bear Stearns Corporate
Lending Inc., in its capacity as Administrative Agent, for the
benefit of the Secured Parties, as Beneficiary, dated as of
May 9, 2006 (incorporated by reference to Exhibit 10.5 to
ACEPs Form 8-K (SEC File No. 333-118149), filed on May 17,
2006).10.8
    
    Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of May 26, 2004, made
by Arizona Charlies, LLC, as Trustor, to Lawyers Title of
Nevada, as Trustee, for the benefit of Wilmington Trust
Company, in its capacity as Indenture Trustee, for the benefit
of the Secured Parties, as Beneficiary (incorporated by
reference to Exhibit 10.8 to ACEPs Amendment No. 1 to Form
S-4 (SEC File No. 333-118149), filed on October 12, 2004).10.9
    
    First Modification to Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing made by Arizona
Charlies, LLC, as Trustor, to Lawyers Title of Nevada, as
Trustee, for the benefit of Bear Stearns Corporate Lending
Inc., in its capacity as Administrative Agent, for the benefit
of the Secured Parties, as Beneficiary, dated as of May 9,
2006 (incorporated by reference to Exhibit 10.7 to ACEPs Form
8-K (SEC File No. 333-118149), filed on May 17, 2006).10.10
    
    Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of May 26, 2004, made
by Fresca, LLC, as Trustor, to Lawyers Title of Nevada, as
Trustee, for the benefit of Wilmington Trust Company, in its
capacity as Indenture Trustee, for the benefit of the Secured
Parties, as Beneficiary (incorporated by reference to Exhibit
10.9 to ACEPs Amendment No. 1 to Form S-4 (SEC File No.
333-118149), filed on October 12, 2004).
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EXHIBIT NO.
    
    DESCRIPTION10.11
    
    First Modification to Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing made by Fresca,
LLC, as Trustor, to Lawyers Title of Nevada, as Trustee, for
the benefit of Bear Stearns Corporate Lending Inc., in its
capacity as Administrative Agent, for the benefit of the
Secured Parties, as Beneficiary, dated as of May 9, 2006
(incorporated by reference to Exhibit 10.6 to ACEPs Form 8-K
(SEC File No. 333-118149), filed on May 17, 2006).10.12
    
    Reaffirmation Agreement, dated as of May 9, 2006, among the
Grantors thereto with Bear Sterns Corporate Lending Inc., as
Administrative Agent (incorporated by reference to Exhibit
10.2 to ACEPs Form 8-K (SEC File No. 333-118149), filed on
May 17, 2006).10.13
    
    Service Mark License Agreement, by and between Becker Gaming,
Inc. and Arizona Charlies, Inc., dated as of August 1, 2000
(incorporated by reference to Exhibit 10.10 to ACEPs Form
10-K (SEC File No. 333-118149), filed on March 16, 2006).10.14
    
    Asset Purchase Agreement, dated as of November 28, 2005, by
and among Harrahs Operating Company, Inc., Flamingo-Laughlin,
Inc., Boardwalk Regency Corporation, Martial Development
Corporation, IELP Boardwalk LLC and IELP Laughlin Corporation
(incorporated by reference to Exhibit 10.1 to ACEPs Form 8-K
(SEC File No. 333-118149), filed on May 25, 2006).10.15
    
    Amended Employment Agreement, dated as of December 19, 2007,
by and between ACEP and Denise Barton (incorporated by
reference to Exhibit 10.2 to ACEPs Form 8-K (SEC File No.
333-118149), filed on December 27, 2007).10.16
    
    Amended Employment Agreement, effective as of December 19,
2007, by and between ACEP and Richard P. Brown (incorporated
by reference to Exhibit 10.1 to ACEPs Form 8-K (SEC File No.
333-118149), filed on December 27, 2007).10.17
    
    Amended Management Incentive Plan, effective January 1, 2005,
revised June 25, 2007, of ACEP and Atlantic Coast
Entertainment Holdings, Inc. (incorporated by reference to
Exhibit 10.1 to ACEPs Form 8-K (SEC File No. 333-118149),
filed on June 29, 2007).14.1
    
    Code of Business Conduct and Ethics.21.1
    
    Subsidiaries31.1
    
    Certification of Principal Executive Officer pursuant to
Section 302(a) of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to
Section 302(a) of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    Certification of Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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SIGNATURES
  AMERICAN CASINO &
ENTERTAINMENT PROPERTIES LLCBy:
    /s/ Richard P. BrownRichard P. BrownPresident and Chief Executive OfficerDate:
    March 26, 2008  /s/ Richard P. BrownRichard P. Brown
    
    President,
Chief Executive Officer
    
    March 26, 2008(Principal Executive Officer)/s/ Denise BartonDenise Barton
    
    Senior
Vice President, Chief
Financial Officer, Treasurer and
Secretary (Principal Financial
and Accounting Officer)
    
    March 26, 2008/s/ Stuart RothenbergStuart Rothenberg
    
    Board
Member
    
    March 26, 2008/s/ Brahm CramerBrahm Cramer
    
    Board
Member
    
    March 26, 2008/s/ Jonathan Langer

Jonathan Langer
    
    Board
Member
    
    March 26, 2008
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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
  64