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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, 2005
 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: 333-118149
 
 American Casino & Entertainment Properties LLC
  
 Delaware
    
    20-0573058(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2000 Las Vegas Boulevard SouthLas Vegas, NV
    
    89104(Address of registrants principal executive offices)
    
    (Zip Code)
 (702) 380-7777
 
 
 
 o þ
 þ o
 þ o
 o
  o o þ
  o þ




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##### 



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2005
TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    12Item 1B. Unresolved Staff Comments
    
    
    16Item 2. Properties
    
    
    16Item 3. Legal Proceedings
    
    
    16Item 4. Submission of Matters to a Vote of
Security Holders
    
    
    16PART IIItem 5. Market For Registrants Common Equity,
Related Stockholder Matters and Issuer
Purchases of Securities
    
    
    17Item 6. Selected Financial Data
    
    
    17Item 7. Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    19Item 7A. Quantitative and Qualitative Disclosures
About Market Risk
    
    
    26Item 8. Financial Statements and Supplementary
Data
    
    
    27Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
    
    
    42Item 9A. Controls and Procedures
    
    
    42Item 9B. Other Information
    
    
    42PART IIIItem 10. Directors and Executive Officers of the
Registrant
    
    
    43Item 11. Executive Compensation
    
    
    45Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters
    
    
    47Item 13. Certain Relationships and Related
Transactions
    
    
    48Item 14. Principal Accountant Fees and Services
    
    
    49PART IVItem 15. Exhibits and Financial Statement
Schedules
    
    
    50EX-10.14: TAX ALLOCATION AGREEMENTEX-10.15: UNDERTAKINGEX-21.1: SUBSIDIARIESEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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PART I
 
 ITEM 1. BUSINESS
 General
        1




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Our Gaming and Entertainment Properties
 Stratosphere
   Casino
   Hotel, Food and Beverage
 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, which opened in October 2003, 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 on March 10, 2005, is the final major thrill ride attraction to
be built atop the Tower. The new ride holds 10 passengers in escape proof seats as it
spins at 40 m.p.h. The new ride consists of 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.
  
    
    event space and wedding chapels, at levels 103 and 104;
    
    Romance at Top of the World, a 156-seat lounge, at level 107; and
 2




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
    
    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
  Business and Marketing Strategy
   Arizona Charlies Decatur
  Casino
    Hotel, Food and Beverage
  Retail and Entertainment
  3




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Business and Marketing Strategy
    Arizona Charlies Boulder
  Casino
 , ,
   Hotel, Food and Beverage
  Retail and Entertainment
    4




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Business and Marketing strutegy
     Trademarks
  Seasonality
  Casino Credit
  Competition
   The Las Vegas Market
  5




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Tourist Market
     Local Market
  Our Business Strategy and Competitive Strengths
  Value-Oriented Experience
   Customer Service
  Stratosphere as a Destination Property for Visitors to Las Vegas
  6




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##### Table of Contents



Repositioned Properties to Better Target Market
  Emphasis on Slot Play
  Experienced Management Team
  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.
  7




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Owner and Operator Licensing Requirements
   Our Registration Requirements
   Individual Licensing Requirements
   Consequences of Violating Gaming Laws
  Requirements of Beneficial Securities Holders
  8




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
    
    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
  
    
    pay that person any dividend or interest upon any voting securities;
    
    allow that person to exercise, directly or indirectly, any voting right held by that person;
    
    pay remuneration in any form to that person for services rendered or otherwise; or
    
    fail 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.
 Gaming Laws Relating to Securities Ownership
  
    
    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;
 9




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
    
    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;
    
    preserve the beneficial aspects of conducting business in the corporate form; and
    
    promote a neutral environment for the orderly governance of corporate affairs.
  10




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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
  Employees
  11




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Available Information
  
 Item 1A. Risk Factors
 The gaming industry is highly regulated. We are subject to extensive governmental gaming regulation
and taxation policies, which may harm our business.
    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 Nevada 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;
    
    some of our employees are covered by collective bargaining agreements and we may incur
higher costs or work slow-downs or stoppages due to union activities;
 12




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
    
    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.
    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.
  13




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We have substantial leverage and debt service.
    
    
    incur additional debt, including guarantees;
    
    incur liens;
    
    dispose of assets;
    
    make certain acquisitions;
    
    make certain capital expenditures;
    
    pay dividends and make other restricted payments;
    
    enter into sale and leaseback transactions;
    
    engage in any new businesses;
    
    issue preferred stock; and
    
    enter into transactions with our stockholders and our affiliates.
  We are a holding company and will depend on the business of our subsidiaries to satisfy our
obligations under the notes.
   14




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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.
   Because we are currently dependent upon three 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;
    
    a decline in the number of visitors to Las Vegas; and
    
    a decrease in gaming and non-gaming activities.
  Our parent, AREP Gaming, intends to assign the rights to acquire the Flamingo in Laughlin, Nevada
to us, but we cannot guarantee that we will be able to satisfy the conditions of the acquisition or
that we will recover our investment made in connection with the acquisition.
   15




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We are a wholly-owned subsidiary of American Real Estate Partners, L.P. which will be able to make
decisions concerning us.
  
 Item 1B. Unresolved Staff Comments
  
 ITEM 2. PROPERTIES
 Stratosphere
  Arizona Charlies Decatur
  Arizona Charlies Boulder
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  16




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  
 ITEM 6. SELECTED FINANCIAL DATA
    17




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Years Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(in thousands, except ratios)Income Statement Data:Revenues:Casino
    
    $
    182,939
    
    
    $
    167,972
    
    
    $
    147,888
    
    
    $
    143,057
    
    
    $
    142,919Hotel
    
    
    61,861
    
    
    
    54,653
    
    
    
    47,259
    
    
    
    44,263
    
    
    
    38,326Food and beverage
    
    
    70,060
    
    
    
    66,953
    
    
    
    59,583
    
    
    
    56,349
    
    
    
    55,453Tower, retail and other income
    
    
    35,413
    
    
    
    33,778
    
    
    
    30,336
    
    
    
    28,247
    
    
    
    29,512Gross revenues
    
    
    350,273
    
    
    
    323,356
    
    
    
    285,066
    
    
    
    271,916
    
    
    
    266,210Less promotional allowances
    
    
    22,291
    
    
    
    23,375
    
    
    
    22,255
    
    
    
    21,893
    
    
    
    23,737Net revenues
    
    
    327,982
    
    
    
    299,981
    
    
    
    262,811
    
    
    
    250,023
    
    
    
    242,473Cost and expenses:Casino
    
    
    63,216
    
    
    
    61,985
    
    
    
    61,284
    
    
    
    59,879
    
    
    
    60,026Hotel
    
    
    26,957
    
    
    
    24,272
    
    
    
    22,074
    
    
    
    20,142
    
    
    
    17,190Food and beverage
    
    
    51,784
    
    
    
    48,495
    
    
    
    44,990
    
    
    
    43,393
    
    
    
    42,806Tower, retail and other operations
    
    
    15,372
    
    
    
    14,035
    
    
    
    14,008
    
    
    
    14,934
    
    
    
    15,640Selling, general and administrative
    
    
    81,321
    
    
    
    78,720
    
    
    
    74,985
    
    
    
    80,019
    
    
    
    78,692Depreciation and amortization
    
    
    23,305
    
    
    
    23,516
    
    
    
    20,222
    
    
    
    20,209
    
    
    
    17,209(Gain) loss on disposal of assets
    
    
    (25
    )
    
    
    96
    
    
    
    1,401
    
    
    
    354
    
    
    
    (23
    )Total costs and expenses
    
    
    261,930
    
    
    
    251,119
    
    
    
    238,964
    
    
    
    238,930
    
    
    
    231,540Income from operations
    
    
    66,052
    
    
    
    48,862
    
    
    
    23,847
    
    
    
    11,093
    
    
    
    10,933Other income (expense):Interest income
    
    
    1,617
    
    
    
    1,049
    
    
    
    426
    
    
    
    667
    
    
    
    1,640Interest expense
    
    
    (18,846
    )
    
    
    (18,939
    )
    
    
    (5,389
    )
    
    
    (5,990
    )
    
    
    (5,971
    )Total other expense
    
    
    (17,229
    )
    
    
    (17,890
    )
    
    
    (4,963
    )
    
    
    (5,323
    )
    
    
    (4,331
    )Income before income taxes
    
    
    48,823
    
    
    
    30,972
    
    
    
    18,884
    
    
    
    5,770
    
    
    
    6,602Provision (benefit) for income taxes
    
    
    16,789
    
    
    
    10,100
    
    
    
    (1,798
    )
    
    
    4,907
    
    
    
    4,908Net income
    
    $
    32,034
    
    
    $
    20,872
    
    
    $
    20,682
    
    
    $
    863
    
    
    $
    1,694OTHER FINANCIAL DATA:Capital expenditures
    
    $
    28,219
    
    
    $
    14,009
    
    
    $
    33,465
    
    
    $
    22,878
    
    
    $
    56,019
 As of December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    108,316
    
    
    $
    75,161
    
    
    $
    77,258
    
    
    $
    59,343
    
    
    $
    48,587Total assets
    
    
    494,257
    
    
    
    464,341
    
    
    
    480,738
    
    
    
    397,835
    
    
    
    386,346Total debt (1)
    
    
    218,298
    
    
    
    218,748
    
    
    
    105,243
    
    
    
    101,655
    
    
    
    96,975Members/Stockholders equity
    
    
    232,098
    
    
    
    200,996
    
    
    
    330,345
    
    
    
    259,953
    
    
    
    255,847
 
 (1)
    
    Total debt, including current portion, consists of the current and long-term portions of
capital lease obligations and notes payable, including for 2003, 2002 and 2001 notes payable to
related parties. 18




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Transaction
  Overview
   Patron Gaming Volume
 The information contained in the following table relates to Clark County, Nevada and was obtained
from the Las Vegas Convention and Visitors Authority and the Nevada Gaming Control Board.
 Years Ending December 31,2005
    
    
    2004
    
    
    2003Total gaming revenue
    
    $
    9,716,860,000
    
    
    $
    8,711,244,000
    
    
    $
    7,830,676,000Number of slot machines
    
    
    130,945
    
    
    
    131,197
    
    
    
    135,127Number of table games
    
    
    4,450
    
    
    
    4,347
    
    
    
    4,358Number of visitors
    
    
    38,566,717
    
    
    
    37,388,781
    
    
    
    35,540,126
 19




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Results of Operations
 Years Ended December 31,
    
    
    2005 to 2004
    
    
    2004 to 20032005
    
    
    2004
    
    
    2003
    
    
    % Change
    
    
    % Change(in millions)Income Statement Data:Revenues:Casino
    
    $
    182.9
    
    
    $
    168.0
    
    
    $
    147.9
    
    
    
    8.9
    %
    
    
    13.6
    %Hotel
    
    
    61.9
    
    
    
    54.7
    
    
    
    47.3
    
    
    
    13.2
    %
    
    
    15.6
    %Food and beverage
    
    
    70.1
    
    
    
    67.0
    
    
    
    59.6
    
    
    
    4.6
    %
    
    
    12.4
    %Tower, retail and other
    
    
    35.4
    
    
    
    33.8
    
    
    
    30.3
    
    
    
    4.7
    %
    
    
    11.6
    %Gross revenues
    
    
    350.3
    
    
    
    323.5
    
    
    
    285.1
    
    
    
    8.3
    %
    
    
    13.5
    %Less promotional allowances
    
    
    22.3
    
    
    
    23.4
    
    
    
    22.3
    
    
    
    -4.7
    %
    
    
    4.9
    %Net revenues
    
    
    328.0
    
    
    
    300.1
    
    
    
    262.8
    
    
    
    9.3
    %
    
    
    14.2
    %Costs and expenses:Casino
    
    
    63.2
    
    
    
    62.0
    
    
    
    61.3
    
    
    
    1.9
    %
    
    
    1.1
    %Hotel
    
    
    27.0
    
    
    
    24.3
    
    
    
    22.1
    
    
    
    11.1
    %
    
    
    10.0
    %Food and beverage
    
    
    51.8
    
    
    
    48.5
    
    
    
    45.0
    
    
    
    6.8
    %
    
    
    7.8
    %Other operating expenses
    
    
    15.4
    
    
    
    14.0
    
    
    
    14.0
    
    
    
    10.0
    %
    
    
    0.0
    %Selling, general and administrative
    
    
    81.3
    
    
    
    78.8
    
    
    
    76.4
    
    
    
    3.2
    %
    
    
    3.1
    %Depreciation and amortization
    
    
    23.3
    
    
    
    23.5
    
    
    
    20.2
    
    
    
    -0.9
    %
    
    
    16.3
    %Total costs and expenses
    
    
    262.0
    
    
    
    251.1
    
    
    
    239.0
    
    
    
    4.3
    %
    
    
    5.1
    %Income from operations
    
    $
    66.0
    
    
    $
    49.0
    
    
    $
    23.8
    
    
    
    34.7
    %
    
    
    105.9
    %
 Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
  Casino Revenues
  Non-Casino Revenues
     20




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Promotional Allowances
  Operating Expenses
      Interest Expense
  Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
  Casino Revenues
  Non-Casino Revenues
  21




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Promotional Allowances
  Operating Expenses
     Interest Expense
  Financial Condition
 Liquidity and Capital Resources
   22




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23




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Off Balance Sheet Arrangements
  Contractual Obligations
  Payments due by PeriodLess than
    
    
    1-3
    
    
    4-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(in thousands)Long-term debt
    
    $
    215,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    215,000Interest on long-term debt
    
    
    109,773
    
    
    
    16,877
    
    
    
    33,755
    
    
    
    33,755
    
    
    
    25,386Commitment fee on credit line
    
    
    208
    
    
    
    100
    
    
    
    108
    
    
    
    
    
    
    
    Capital leases, including
interest
    
    
    11,934
    
    
    
    677
    
    
    
    1,354
    
    
    
    1,082
    
    
    
    8,821Other contractual obligations
    
    
    2,585
    
    
    
    2,585
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    937
    
    
    
    763
    
    
    
    174
    
    
    
    
    
    
    
    Total
    
    $
    340,437
    
    
    $
    21,002
    
    
    $
    35,391
    
    
    $
    34,837
    
    
    $
    249,207
 Critical Accounting Policies
  Revenue Recognition
  Slot Club Liability
 Self-Insurance
 Income Taxes
 24




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##### Table of Contents



Commitments and Contingencies
 Recently Issued Accounting Pronouncements
  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
  25




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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    26




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    28Report of Independent Registered Public Accounting Firm
    
    
    29Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    
    30Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003
    
    
    31Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and
2003
    
    
    32Consolidated Statements of Members/Stockholders Equity for the years ended December
31, 2005, 2004 and 2003
    
    
    33Notes to Consolidated Financial Statements
    
    
    34
 27




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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
     
 28




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 29




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
CONSOLIDATED BALANCE SHEETS
 AS OF DECEMBER 31,2005
    
    
    2004(in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    108,316
    
    
    $
    75,161Cash and cash equivalents-restricted
    
    
    504
    
    
    
    448Investments-restricted
    
    
    2,828
    
    
    
    2,546Accounts receivable, net
    
    
    4,167
    
    
    
    3,942Related party receivables
    
    
    971
    
    
    
    388Deferred income taxes
    
    
    2,305
    
    
    
    2,685Other current assets
    
    
    12,092
    
    
    
    10,311Total Current Assets
    
    
    131,183
    
    
    
    95,481Property and equipment, net
    
    
    319,505
    
    
    
    314,609Debt issuance and deferred financing costs, net
    
    
    6,397
    
    
    
    7,447Lessee incentive
    
    
    
    
    
    
    367Deferred income taxes
    
    
    37,172
    
    
    
    46,437Total Other Assets
    
    
    43,569
    
    
    
    54,251TOTAL ASSETS
    
    $
    494,257
    
    
    $
    464,341LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Accounts payable-trade
    
    
    3,547
    
    
    $
    4,429Accounts payable-construction
    
    
    805
    
    
    
    805Accrued expenses
    
    
    22,582
    
    
    
    22,759Accrued payroll and related expenses
    
    
    11,042
    
    
    
    10,779Current portion of capital lease obligation
    
    
    473
    
    
    
    450Total Current Liabilities
    
    
    38,449
    
    
    
    39,222Long-Term Liabilities:Notes payable
    
    
    215,000
    
    
    
    215,000Accrued lessee incentive
    
    
    
    
    
    
    568Capital lease obligations, less current portion
    
    
    2,825
    
    
    
    3,298Other
    
    
    5,885
    
    
    
    5,257Total Long-Term Liabilities
    
    
    223,710
    
    
    
    224,123Total Liabilities
    
    
    262,124
    
    
    
    263,345Commitments and ContingenciesMembers Equity :Members Equity
    
    
    232,098
    
    
    
    200,996Total Members Equity
    
    
    232,098
    
    
    
    200,996TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    494,257
    
    
    $
    464,341
  30




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
CONSOLIDATED STATEMENTS OF INCOME
 YEARS ENDED DECEMBER 31,2005
    
    
    2004
    
    
    2003(in thousands)REVENUES:Casino
    
    $
    182,939
    
    
    $
    167,972
    
    
    $
    147,888Hotel
    
    
    61,861
    
    
    
    54,653
    
    
    
    47,259Food and beverage
    
    
    70,060
    
    
    
    66,953
    
    
    
    59,583Tower, retail and other
    
    
    35,413
    
    
    
    33,778
    
    
    
    30,336Gross revenues
    
    
    350,273
    
    
    
    323,356
    
    
    
    285,066Less promotional allowances
    
    
    22,291
    
    
    
    23,375
    
    
    
    22,255Net revenues
    
    
    327,982
    
    
    
    299,981
    
    
    
    262,811COSTS AND EXPENSES:Casino
    
    
    63,216
    
    
    
    61,985
    
    
    
    61,284Hotel
    
    
    26,957
    
    
    
    24,272
    
    
    
    22,074Food and beverage
    
    
    51,784
    
    
    
    48,495
    
    
    
    44,990Other operating expenses
    
    
    15,372
    
    
    
    14,035
    
    
    
    14,008Selling, general and administrative
    
    
    81,321
    
    
    
    78,720
    
    
    
    74,985Depreciation and amortization
    
    
    23,305
    
    
    
    23,516
    
    
    
    20,222(Gain) loss on sale of assets
    
    
    (25
    )
    
    
    96
    
    
    
    1,401Total costs and expenses
    
    
    261,930
    
    
    
    251,119
    
    
    
    238,964INCOME FROM OPERATIONS
    
    
    66,052
    
    
    
    48,862
    
    
    
    23,847OTHER INCOME (EXPENSE):Interest income
    
    
    1,617
    
    
    
    1,049
    
    
    
    426Interest expense
    
    
    (18,846
    )
    
    
    (18,939
    )
    
    
    (5,389
    )Total other expense, net
    
    
    (17,229
    )
    
    
    (17,890
    )
    
    
    (4,963
    )INCOME BEFORE INCOME TAXES
    
    
    48,823
    
    
    
    30,972
    
    
    
    18,884Provision (benefit) for income taxes
    
    
    16,789
    
    
    
    10,100
    
    
    
    (1,798
    )NET INCOME
    
    $
    32,034
    
    
    $
    20,872
    
    
    $
    20,682
  31




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEARS ENDED DECEMBER 31,2005
    
    
    2004
    
    
    2003(in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    32,034
    
    
    $
    20,872
    
    
    $
    20,682Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    23,305
    
    
    
    23,516
    
    
    
    20,222(Gain) loss on sale or disposal of assets
    
    
    (25
    )
    
    
    96
    
    
    
    1,401Provision (benefit) for deferred income taxes
    
    
    9,645
    
    
    
    7,431
    
    
    
    (5,448
    )Changes in operating assets and liabilities:Restricted cash
    
    
    (56
    )
    
    
    (448
    )
    
    
    1,926Accounts receivable, net
    
    
    (225
    )
    
    
    109
    
    
    
    247Other current assets
    
    
    (715
    )
    
    
    338
    
    
    
    1,653Accounts payable and accrued expenses
    
    
    (2,296
    )
    
    
    2,723
    
    
    
    3,715Other
    
    
    628
    
    
    
    
    
    
    
    3,399Net Cash Provided By Operating Activities
    
    
    62,295
    
    
    
    54,637
    
    
    
    47,797CASH FLOWS FROM INVESTING ACTIVITIES:(Increase) decrease in investments  restricted
    
    
    (282
    )
    
    
    427
    
    
    
    (290
    )Sale of marketable securities
    
    
    
    
    
    
    4,200
    
    
    
    Acquisition of property and equipment
    
    
    (28,219
    )
    
    
    (14,009
    )
    
    
    (30,423
    )Related party receivables
    
    
    (232
    )
    
    
    (155
    )
    
    
    (201
    )Cash proceeds from sale of property and equipment
    
    
    43
    
    
    
    420
    
    
    
    521Net Cash Used In Investing Activities
    
    
    (28,690
    )
    
    
    (9,117
    )
    
    
    (30,393
    )CASH FLOWS FROM FINANCING ACTIVITIES:Debt issuance and deferred financing costs
    
    
    
    
    
    
    (1,525
    )
    
    
    (90
    )Proceeds from related party note payable
    
    
    
    
    
    
    
    
    
    
    7,780Proceeds from notes payable
    
    
    
    
    
    
    215,000
    
    
    
    Member contribution
    
    
    
    
    
    
    28,219
    
    
    
    Capital distribution
    
    
    
    
    
    
    (61,916
    )
    
    
    Acquisition of Arizona Charlies
    
    
    
    
    
    
    (125,900
    )
    
    
    Payments on related party notes payable
    
    
    
    
    
    
    (101,252
    )
    
    
    (7,179
    )Payments on capital lease obligation
    
    
    (450
    )
    
    
    (243
    )
    
    
    Net Cash Provided By (Used In) Financing Activities
    
    
    (450
    )
    
    
    (47,617
    )
    
    
    511Net increase (decrease) in cash and cash equivalents
    
    
    33,155
    
    
    
    (2,097
    )
    
    
    17,915Cash and cash equivalents  beginning of period
    
    
    75,161
    
    
    
    77,258
    
    
    
    59,343Cash And Cash Equivalents  End Of Period
    
    $
    108,316
    
    
    $
    75,161
    
    
    $
    77,258SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    17,188
    
    
    $
    11,047
    
    
    $
    5,422Cash paid for income taxes, net of refunds
    
    $
    9,200
    
    
    $
    1,811
    
    
    $
    (290
    )NON-CASH INVESTING AND FINANCING ACTIVITIES:Capitalized lease obligation incurred in the acquisition
of property and equipment
    
    $
    
    
    
    $
    
    
    
    $
    3,042Utilization of tax losses by a related party
    
    $
    932
    
    
    $
    
    
    
    $
    Assets contributed by parent
    
    $
    
    
    
    $
    6,886
    
    
    $
    Change in deferred tax asset related to acquisition
    
    $
    
    
    
    $
    2,490
    
    
    $
    Change in deferred tax asset valuation allowance related
to book-tax differences existing at time of bankruptcy
    
    $
    
    
    
    $
    
    
    
    $
    49,710Cancellation of common stock shares
    
    $
    
    
    
    $
    10
    
    
    $
    
  32




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
CONSOLIDATED STATEMENTS OF MEMBERS/STOCKHOLDERS EQUITY
 AdditionalCommon
    
    
    Paid-In-
    
    
    Members
    
    
    RetainedStock
    
    
    Capital
    
    
    Equity
    
    
    Earnings
    
    
    TotalBalances at December 31, 2002
    
    $
    10
    
    
    $
    243,750
    
    
    $
    
    
    
    $
    16,193
    
    
    $
    259,953Change in deferred tax asset
valuation allowance related to
book-tax differences
existing at time of bankruptcy
    
    
    
    
    
    
    49,710
    
    
    
    
    
    
    
    
    
    
    
    49,710Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,682
    
    
    
    20,682Balances at December 31, 2003
    
    
    10
    
    
    
    293,460
    
    
    
    
    
    
    
    36,875
    
    
    
    330,345Cancellation of common shares
    
    
    (10
    )
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    Change in deferred tax asset
related to acquisition
    
    
    
    
    
    
    2,490
    
    
    
    
    
    
    
    
    
    
    
    2,490Contributions
    
    
    
    
    
    
    35,105
    
    
    
    
    
    
    
    
    
    
    
    35,105Distributions
    
    
    
    
    
    
    (44,000
    )
    
    
    
    
    
    
    (17,916
    )
    
    
    (61,916
    )Acquisition of Arizona
Charlies
    
    
    
    
    
    
    (125,900
    )
    
    
    
    
    
    
    
    
    
    
    (125,900
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,872
    
    
    
    20,872Reclassification of equity as
a result of reorganization
    
    
    
    
    
    
    (161,165
    )
    
    
    200,996
    
    
    
    (39,831
    )
    
    
    Balances at December 31, 2004
    
    
    
    
    
    
    
    
    
    
    200,996
    
    
    
    
    
    
    
    200,996Distribution
    
    
    
    
    
    
    
    
    
    
    (932
    )
    
    
    
    
    
    
    (932
    )Net Income
    
    
    
    
    
    
    
    
    
    
    32,034
    
    
    
    
    
    
    
    32,034Balances at December 31, 2005
    
    $
    
    
    
    $
    
    
    
    $
    232,098
    
    
    $
    
    
    
    $
    232,098
  33




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2005, 2004 AND 2003
 Note 1. Description of Business and Summary of Significant Accounting Policies
 The Company
     Principles of Consolidation and Combination
  Casino Revenues and Promotional Allowances
   34




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##### Table of Contents



December 31,2005
    
    
    2004
    
    
    2003(in thousands)Food and Beverage
    
    $
    7,101
    
    
    $
    7,239
    
    
    $
    7,035Rooms
    
    
    41
    
    
    
    41
    
    
    
    84Other
    
    
    33
    
    
    
    34
    
    
    
    31Total
    
    $
    7,175
    
    
    $
    7,314
    
    
    $
    7,150
 Cash and Cash Equivalents
  Investments Restricted
  Concentrations of Credit Risk
  Inventories
  Property and Equipment
   Buildings and improvements.
    
    36-39 yearsFurniture, fixtures and equipment
    
    3-15 yearsLand improvements
    
    15 years
  Long-Lived Assets
   35




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##### Table of Contents



Unamortized Debt Issue Costs
  Slot Club Liability
  Long-Term Debt
  Sales, Advertising and Promotion
  Income Taxes
   Use of Estimates
  36




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##### Table of Contents



Reclassifications
  Recently Issued Accounting Pronouncements
  Note 2. Accounts Receivable
  December 31,2005
    
    
    2004(in thousands)Hotel and related
    
    $
    2,584
    
    
    $
    2,638Gaming
    
    
    562
    
    
    
    534Other
    
    
    1,156
    
    
    
    1,0104,302
    
    
    
    4,182Less allowance for doubtful accounts
    
    
    (135
    )
    
    
    (240
    )$
    4,167
    
    
    $
    3,942
  December 31,2005
    
    
    2004
    
    
    2003(in thousands)Balance at beginning of period
    
    $
    240
    
    
    $
    473
    
    
    $
    830Bad debt expense
    
    
    85
    
    
    
    418
    
    
    
    395Deductions and write-offs
    
    
    (190
    )
    
    
    (651
    )
    
    
    (752
    )Balance at end of period
    
    $
    135
    
    
    $
    240
    
    
    $
    473
 Note 3. Other Current Assets
  December 31,2005
    
    
    2004(in thousands)Inventories
    
    $
    2,394
    
    
    $
    2,510Prepaid expenses
    
    
    7,660
    
    
    
    5,780Other
    
    
    2,038
    
    
    
    2,021$
    12,092
    
    
    $
    10,311
 37




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##### Table of Contents



Note 4. Property and Equipment, Net
  December 31,2005
    
    
    2004(in thousands)Land and improvements
    
    $
    61,493
    
    
    $
    50,310
 December 31,2005
    
    
    2004(in thousands)Building and improvements
    
    
    236,946
    
    
    
    235,848Furniture, fixtures and equipment
    
    
    136,643
    
    
    
    115,727Construction in progress
    
    
    1,935
    
    
    
    7,831437,017
    
    
    
    409,716Less accumulated depreciation and amortization
    
    
    117,512
    
    
    
    95,107$
    319,505
    
    
    $
    314,609
   Note 5. Accrued Expenses
  December 31,2005
    
    
    2004(in thousands)Accrued interest
    
    $
    7,033
    
    
    $
    7,055Accrued liabilities
    
    
    4,267
    
    
    
    3,432Accrued taxes
    
    
    2,038
    
    
    
    2,610Vacation packages
    
    
    1,698
    
    
    
    2,426Accrued slot club liability
    
    
    1,843
    
    
    
    1,976Other
    
    
    5,703
    
    
    
    5,260$
    22,582
    
    
    $
    22,759
 Note 6. Leases
  (in thousands)Years ending December 31,2006
    
    $
    5,6332007
    
    
    4,3352008
    
    
    2,8042009
    
    
    1,7922010
    
    
    942Thereafter
    
    
    2,430Total payments
    
    $
    17,936
   38




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##### Table of Contents



(in thousands)Years ending December 31,2006
    
    $
    6602007
    
    
    6602008
    
    
    6602009
    
    
    9632010
    
    
    85Thereafter
    
    
    7,318Total minimum lease payments
    
    
    10,346Less: amount representing interest ranging from 5% to 10%
    
    
    7,048Present value of net minimum lease payments
    
    
    3,298Less: current portion
    
    
    473Long-term capital lease obligation
    
    $
    2,825
  Note 7. Income Taxes
  December 31,2005
    
    
    2004
    
    
    2003(in thousands)Current
    
    $
    7,144
    
    
    $
    2,669
    
    
    $
    3,650Deferred
    
    
    9,645
    
    
    
    7,431
    
    
    
    (5,448
    )$
    16,789
    
    
    $
    10,100
    
    
    $
    (1,798
    )
 Deferred Tax Assets and Liabilities
  December 31,2005
    
    
    2004(in thousands)Deferred Tax AssetsProperty, plant and equipment
    
    $
    36,358
    
    
    $
    38,128Net operating loss carryforward
    
    
    
    
    
    
    5,595AMT and business credit carryforwards
    
    
    
    
    
    
    1,632Accrued vacation and employee related
    
    
    1,643
    
    
    
    1,784Gaming related
    
    
    1,049
    
    
    
    829Other
    
    
    427
    
    
    
    1,154Total net deferred tax assets
    
    
    39,477
    
    
    
    49,122Less: Current portion
    
    
    (2,305
    )
    
    
    (2,685
    )Net long term deferred tax assets
    
    $
    37,172
    
    
    $
    46,437
  39




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##### Table of Contents



December 31,2005
    
    
    2004
    
    
    2003Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Other
    
    
    0.0
    %
    
    
    5.0
    %
    
    
    1.8
    %Permanent differences
    
    
    0.3
    %
    
    
    0.4
    %
    
    
    0.5
    %Federal income tax credits
    
    
    (0.9
    )%
    
    
    (0.7
    %)
    
    
    (1.4
    %)Valuation allowance
    
    
    0.0
    %
    
    
    (6.0
    %)
    
    
    (74.3
    %)Amount not subject to tax expense/benefit
    
    
    0.0
    %
    
    
    (1.1
    %)
    
    
    28.9
    %34.4
    %
    
    
    32.6
    %
    
    
    (9.5
    %)
 Section 382 Limitation
  Note 8. Notes Payable
    Note 9. Related Party Transactions
  40




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##### Table of Contents



Note 10. Employee Benefit Plans
    Note 11. Commitments & Contingencies
   Legal Proceedings
  41




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
    
 ITEM 9B. OTHER INFORMATION
  42




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Directors and Officers
  NAME
    
    AGE
    
    POSITIONJack G. Wasserman
    
    
    69
    
    
    DirectorWilliam A. Leidesdorf
    
    
    60
    
    
    DirectorJames L. Nelson
    
    
    56
    
    
    DirectorKeith A. Meister
    
    
    32
    
    
    DirectorRichard P. Brown
    
    
    58
    
    
    President, Chief Executive Officer and DirectorDenise Barton
    
    
    48
    
    
    Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
  NAME
    
    AGE
    
    POSITIONRonald P. Lurie
    
    64
    
    General Manager -- Arizona Charlie's DecaturBobby Ray Harris
    
    48
    
    General Manager -- Stratosphere OperationsMark Majetich
    
    55
    
    General Manager -- Arizona Charlie's Boulder
    43




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##### Table of Contents



44




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##### Table of Contents



Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
  
 ITEM 11. EXECUTIVE COMPENSATION
 Executive Compensation
  45




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##### Table of Contents



Summary of Compensation Table
 ANNUAL COMPENSATION (1)All otherName and Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($) (2)
    
    Compensation ($) (3)Richard P. Brown
    
    2005
    
    
    500,000
    
    
    
    150,000
    
    
    
    13,580President and Chief Executive Officer
    
    2004
    
    
    461,155
    
    
    
    250,000
    
    
    
    8,3352003
    
    
    316,154
    
    
    
    20,000
    
    
    
    8,315Denise Barton (4)
    
    2005
    
    
    317,269
    
    
    
    112,000
    
    
    
    9,987Senior Vice President, Chief Financial Officer
    
    2004
    
    
    214,635
    
    
    
    70,500
    
    
    
    9,418Treasurer and Secretary
    
    2003
    
    
    182,269
    
    
    
    37,000
    
    
    
    4,413Ronald Lurie (4)
    
    2005
    
    
    222,488
    
    
    
    96,729
    
    
    
    10,562General Manager-Arizona Charlies Decatur
    
    2004
    
    
    214,531
    
    
    
    54,075
    
    
    
    10,3462003
    
    
    217,269
    
    
    
    57,500
    
    
    
    3,608Bobby Ray Harris (4)
    
    2005
    
    
    313,692
    
    
    
    127,650
    
    
    
    10,428General Manager-Stratosphere Operations
    
    2004
    
    
    211,942
    
    
    
    58,750
    
    
    
    2,8632003
    
    
    180,139
    
    
    
    37,000
    
    
    
    9,543Mark Majetich (4)
    
    2005
    
    
    182,690
    
    
    
    122,595
    
    
    
    7,221General Manager-Arizona Charlies Boulder
    
    2004
    
    
    167,983
    
    
    
    43,750
    
    
    
    3,6262003
    
    
    148,640
    
    
    
    37,500
    
    
    
    3,496
      Option Grants in Last Fiscal Year
  Employment Agreements
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Employee Retirement Savings Plan
  Incentive Bonus Plan
  Compensation of Directors
  
 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  Tax Allocation Agreement
  Other Transactions
      48




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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Grant Thornton
    
    
    Grant Thornton2005
    
    
    2004Audit fees (1)
    
    $
    421,000
    
    
    $
    359,453Audit-related fees (2)
    
    
    
    
    
    
    23,500Tax fees
    
    
    
    
    
    
    Total fees
    
    $
    421,000
    
    
    $
    382,953
  (1)
    
    Audit fees also include fees for work associated with Sarbanes-Oxley.(2)
    
    Audit-related fees include fees for work related to the registration statement on Form S-4,
related to our offer to exchange 7.85% senior secured notes due 2012 registered under the
Securities Act of 1933 for 7.85% senior secured notes due 2012 issued in a private placement.
  49




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PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 1. and 2. Financial Statements and Schedules
 PageReport of Independent Registered Public Accounting Firm
    
    
    28Report of Independent Registered Public Accounting Firm
    
    
    29Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    
    30Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003
    
    
    31Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and
2003
    
    
    32Consolidated Statements of Members/Stockholders Equity for the years ended December
31, 2005, 2004 and 2003
    
    
    33Notes to Consolidated Financial Statements
    
    
    34
 List of exhibits
 EXHIBITS INDEX
 EXHIBITNO.
    
    DESCRIPTION3.1
    
    Second Amended and Restated Certificate of Formation of
American Casino & Entertainment Properties LLC (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
    
    Limited Liability Company Agreement of American Casino &
Entertainment Properties LLC (incorporated by reference to
Exhibit 3.2 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 American Casino
& Entertainment Properties LLC, 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
American Casino & Entertainment Properties LLC, American
Casino & Entertainment Properties Finance Corp., certain
subsidiaries of American Casino & Entertainment Properties LLC
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
    
    Registration Rights Agreement, dated as of January 29, 2004,
among American Casino & Entertainment Properties LLC, American
Casino & Entertainment Properties Finance Corp., certain
subsidiaries of American Casino & Entertainment Properties LLC
and Bear, Stearns & Co. Inc. (incorporated by reference to
Exhibit 4.4 to ACEPs Form S-4 (SEC File No. 333-118149),
filed on August 12, 2004).10.1
    
    Credit Agreement, dated as of January 29, 2004, among American
Casino & Entertainment Properties LLC, certain subsidiaries of
American Casino & Entertainment Properties LLC, the several
lenders from time to time parties thereto and Bear Stearns
Corporate Lending Inc., as syndication agent and
administrative agent (incorporated by reference to Exhibit
10.1 to ACEPs Form S-4 (SEC File No. 333-118149), filed on
August 12, 2004).10.2
    
    Pledge and Security Agreement, dated as of May 26, 2004, among
American Casino & Entertainment Properties LLC, American
Casino & Entertainment Properties Finance Corp., certain
subsidiaries of American Casino & Entertainment Properties LLC
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).
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10.3
    
    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).10.4
    
    Employment Agreement, effective as of April 1, 2004, by and
between American Casino & Entertainment Properties LLC and
Richard P. Brown (incorporated by reference to Exhibit 10.4 to
ACEPs Form S-4 (SEC File No. 333-118149), filed on August 12,
2004).10.5
    
    Membership Interest Purchase Agreement, dated as of January 5,
2004, by and among American Casino & Entertainment Properties
LLC, Starfire Holding Corporation and Carl C. Icahn
(incorporated by reference to American Real Estate Partners,
L.P.s Exhibit 99.2 to Form 8-K (SEC File No. 1-9516), filed
on January 5, 2004).10.6
    
    First Amendment to Credit Agreement, dated as of January 29,
2004 among American Casino & Entertainment Properties LLC, as
the Borrower, certain subsidiaries of the Borrower, as
Guarantors, The Several Lenders, Bear Stearns Corporate
Lending Inc. as Syndication Agent, and Bear Stearns Corporate
Lending Inc., as Administrative Agent, dated as of May 26,
2004, Bear, Stearns & Co. Inc., as Sole Lead Arranger and Sole
Bookrunner (incorporated by reference to Exhibit 10.6 to
ACEPs Amendment No. 1 to Form S-4 (SEC File No. 333-118149),
filed on October 12, 2004).10.7
    
    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).10.8
    
    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
    
    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).10.10
    
    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, 2005).10.11
    
    Employment Agreement, effective as of January 16, 2006, by and
between American Casino & Entertainment Properties LLC and
Denise Barton (incorporated by reference to Exhibit 10.12 to
ACEPs Form 8-K (SEC File No. 333-118149), filed on January
20, 2006).10.12
    
    American Casino & Entertainment Properties LLC & Atlantic
Coast Entertainment Holdings, Inc. Management Incentive Plan
Effective January 1, 2005 Revised January 10,
2006(incorporated by reference to Exhibit 10.12 to ACEPs Form
8-K (SEC File No. 333-118149), filed on January 20, 2006).10.13
    
    Employment Agreement, effective as of February 21, 2006, by
and between American Casino & Entertainment Properties LLC and
Bobby Ray Harris (incorporated by reference to Exhibit 10.13
to ACEPs Form 8-K (SEC File No. 333-118149), filed on
February 23, 2006).10.14
    
    Tax Allocation Agreement between American Casino &
Entertainment Properties LLC and American Entertainment
Properties Corp.10.15
    
    Undertaking, dated November 20, 1998, by Starfire Holding
Corporation, for the benefit of American Real Estate Partners,
L.P. and its subsidiaries.14.1
    
    Code of Business Conduct and Ethics (incorporated by reference
to Exhibit 99.2 to AREPs Form 10-Q (SEC File No. 1-9516),
filed on November 9, 2004).
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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 Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURES
  AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 By:
    
    /s/ Richard P. Brown

Richard P. Brown
President and Chief Executive Officer
  /s/ Richard P. Brown

Richard P. Brown
    
    President,
Chief Executive Officer and Director

(Principal Executive Officer)
    
    March 16, 2006/s/ Denise BartonDenise Barton
    
    Senior Vice President, Chief Financial
Officer, Treasurer and Secretary 
(Principal
Financial and Accounting Officer)
    
    March 16, 2006/s/ Jack G. WassermanJack G. Wasserman
    
    Director
    
    March 16, 2006/s/ William A. LeidesdorfWilliam A. Leidesdorf
    
    Director
    
    March 16, 2006/s/ James L. NelsonJames L. Nelson
    
    Director
    
    March 16, 2006/s/ Keith A. MeisterKeith A. Meister
    
    Director
    
    March 16, 2006
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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
  54