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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, 2008
 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(State or other jurisdiction of 
incorporation or organization)
    
    20-0573058(I.R.S. Employer
Identification No.)
 2000 Las Vegas Boulevard South 
Las Vegas, NV(Address of principal executive offices)
    
    89104(Zip code)
 (702) 380-7777
 
 
 
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company 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, 2008
TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    16Item 2. Properties
    
    
    23Item 3. Legal Proceedings
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23PART IIItem 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    24Item 6. Selected Financial Data
    
    
    25Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 8. Financial Statements and Supplementary Data
    
    
    40Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    62Item 9A(T). Controls and Procedures
    
    
    62Item 9B. Other Information
    
    
    62PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    63Item 11. Executive Compensation
    
    
    66Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    71Item 13. Certain Relationships and Related Transactions and Director Independence
    
    
    71Item 14. Principal Accountant Fees and Services
    
    
    74PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    75EX-10.19: EMPLOYMENT AGREEMENTEX-10.22: ECONOMIC PARTICIPATION 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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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
  Experienced Management Team
  5




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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.
  
    
    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
  6




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Arizona Charlies Decatur
  Casino
   Hotel, Food and Beverage
  ® ®
 Retail and Entertainment
   Arizona Charlies Boulder
  Casino
 , ,
  Hotel, Food and Beverage
  7




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




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Marketing Strategy
         Trademarks
  9




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Seasonality
  Casino Credit
  Competition
    The Las Vegas Market
  Tourist Market
    10




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Local Market
   The Laughlin Market
  Regulation and Licensing
 Introduction
    Registration Requirements
  11




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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.
  Individual Licensing Requirements
   Consequences of Violating Gaming Laws
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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
  
    
    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;
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
    
    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;
    
    preserve the beneficial aspects of conducting business in the corporate form; and
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
    
    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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Employees
  Available Information
  
 Item 1A. RISK FACTORS
 We have a large amount of debt, which could adversely affect our ability to raise additional
capital, if needed, increase our vulnerability to general adverse economic and industry conditions,
and expose us to interest rate risk to the extent of our variable rate debt and prevent us from
meeting our obligations.
   
    
    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.
 The Goldman Term Loans contain covenants with which we have to comply in order to maintain
borrowing availability and avoid penalties. These covenants may restrict our ability to operate our
business, and failure to comply with them could subject us to penalties or cause the entire balance
of the Goldman Term Loans to become due and payable.
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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.
  If our economic performance were to decline, we may not be able to generate sufficient cash to
service all of our indebtedness and may be forced to take other actions to satisfy our obligations
under our indebtedness, which may not be successful.
   We may be unable to raise additional indebtedness because of the recent instability in the
financial markets.
  Our business is subject to extensive governmental gaming regulation, which is costly to comply
with, and failure to do so could cause us to incur penalties or force us to cease operations.
  17




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Changes in tax laws could increase our cost of doing business and negatively affect our
profitability.
     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.
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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.
  Our operations may be adversely impacted by expanded Native American gaming operations if they
attract patrons that otherwise would visit our properties.
   Because we are currently dependent upon four properties for all our revenues, disruption of our
operations at one or more of these properties will have a significantly higher impact on our
profitability than it would for a gaming company with more operating properties.
  Because all four of our gaming properties are concentrated in a relatively small area in Nevada, we
are subject to risks associated with the conditions in that area and in the areas from which we
draw patrons.
  
    
    local economic and competitive conditions;
    
    inaccessibility of the area due to inclement weather, road construction or closure of
primary access routes;
    
    natural and other disasters, including terrorist attacks;
    
    reduced land and air travel due to increasing fuel costs; and
    
    a decline in the number of visitors to Las Vegas and Laughlin, Nevada.
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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.
     A majority of our patrons at the Stratosphere travel from out of state by air or car. Increasing
transportation costs or transportation disruptions may decrease the number of visitors, thereby
lowering our revenues and profitability.
  Three of our properties depend on the local market for patrons, and we may not be able to continue
to attract a sufficient number of guests and gaming customers in Nevada to make our operations
profitable.
  Claims that we infringe upon third parties intellectual property rights could be costly to defend
or settle, and thus could reduce our income or increase our net loss.
  From time to time, we are a defendant in a variety of litigation and other adversary proceedings,
which are costly to defend, divert managements attention from our operations and may cause us to
pay damages if we are unsuccessful in defending against the actions or unable to cover damages with
insurance proceeds.
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We may incur property and other losses that are not adequately covered by insurance, which may harm
our results of operations.
  A significant portion of our labor force is covered by collective bargaining agreements, and a
dispute with covered employees or new labor agreements may lower our revenues and increase our
costs.
  Our hotels and casinos may need to increase capital expenditures to compete effectively but we may
not have sufficient funds to do so.
  Our hotels and casinos may incur substantial costs as a result of our growth and expansion
strategy.
  We may find it difficult to expand our business into additional states due to varying state
regulatory requirements.
  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.
  21




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Increasing prices or shortages of energy and water may increase our cost of operations or force us
to temporarily or permanently cease operations.
   We are dependent upon technology services and electrical power to operate our business, and if we
experience damage or service interruptions, we may have to cease some or all of our operations,
resulting in a decrease in revenues.
  We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets.
 Goodwill and Other Intangible Assets Accounting for the Impairment or Disposal
of Long-Lived Assets
   Item 1B. UNRESOLVED STAFF COMMENTS
  22




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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
  23




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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
       Recent Sales of Unregistered Securities
   Description of Registrants Securities to be Registered
 General
   Class A Interests and Class B Interests
  24




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25




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ITEM 6. SELECTED FINANCIAL DATA
   Successor
    
    
    PredecessorPeriod fromFebruary 21,
    
    
    Period from2008 through
    
    
    January 1, 2008December 31,
    
    
    through February
    
    
    Years Ended December 31,2008
    
    
    20, 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands, except ratios)Income Statement Data:Revenues:Casino
    
    $
    219,956
    
    
    $
    36,539
    
    
    $
    265,138
    
    
    $
    220,814
    
    
    $
    182,939
    
    
    $
    167,972Hotel
    
    
    69,483
    
    
    
    11,683
    
    
    
    88,242
    
    
    
    75,587
    
    
    
    61,861
    
    
    
    54,653Food and beverage
    
    
    77,230
    
    
    
    12,354
    
    
    
    91,160
    
    
    
    83,667
    
    
    
    70,060
    
    
    
    66,953Tower, retail and other
    
    
    34,179
    
    
    
    4,651
    
    
    
    40,074
    
    
    
    35,912
    
    
    
    35,413
    
    
    
    33,778Gross revenues
    
    
    400,848
    
    
    
    65,227
    
    
    
    484,614
    
    
    
    415,980
    
    
    
    350,273
    
    
    
    323,356Less promotional allowances
    
    
    36,097
    
    
    
    5,608
    
    
    
    40,406
    
    
    
    30,281
    
    
    
    22,291
    
    
    
    23,375Net revenues
    
    
    364,751
    
    
    
    59,619
    
    
    
    444,208
    
    
    
    385,699
    
    
    
    327,982
    
    
    
    299,981Costs and expenses:Casino
    
    
    72,498
    
    
    
    12,363
    
    
    
    87,984
    
    
    
    80,060
    
    
    
    63,216
    
    
    
    61,985Hotel
    
    
    29,406
    
    
    
    4,682
    
    
    
    35,396
    
    
    
    33,419
    
    
    
    26,957
    
    
    
    24,272Food and beverage
    
    
    56,770
    
    
    
    9,183
    
    
    
    68,398
    
    
    
    60,052
    
    
    
    51,784
    
    
    
    48,495Other operating expenses
    
    
    15,337
    
    
    
    2,341
    
    
    
    17,943
    
    
    
    16,856
    
    
    
    15,372
    
    
    
    14,035Selling, general and administrative
    
    
    116,364
    
    
    
    18,511
    
    
    
    126,008
    
    
    
    107,073
    
    
    
    81,321
    
    
    
    78,720Depreciation and amortization
    
    
    31,288
    
    
    
    5,062
    
    
    
    36,034
    
    
    
    28,620
    
    
    
    23,305
    
    
    
    23,516Pre-opening costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,904
    
    
    
    
    
    
    
    (Gain) loss on sale of assets
    
    
    875
    
    
    
    
    
    
    
    8
    
    
    
    239
    
    
    
    (25
    )
    
    
    96Impairment of assets
    
    
    11,894
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    334,432
    
    
    
    52,142
    
    
    
    371,771
    
    
    
    328,223
    
    
    
    261,930
    
    
    
    251,119Income from operations
    
    
    30,319
    
    
    
    7,477
    
    
    
    72,437
    
    
    
    57,476
    
    
    
    66,052
    
    
    
    48,862Other income (expense):Loss on early extinguishment of debt
    
    
    
    
    
    
    (13,580
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest income
    
    
    813
    
    
    
    322
    
    
    
    2,367
    
    
    
    2,239
    
    
    
    1,617
    
    
    
    1,049Interest expense
    
    
    (62,547
    )
    
    
    (2,564
    )
    
    
    (20,574
    )
    
    
    (21,314
    )
    
    
    (18,846
    )
    
    
    (18,939
    )Total other expense, net
    
    
    (61,734
    )
    
    
    (15,822
    )
    
    
    (18,207
    )
    
    
    (19,075
    )
    
    
    (17,229
    )
    
    
    (17,890
    )Income (loss) before income taxes
    
    
    (31,415
    )
    
    
    (8,345
    )
    
    
    54,230
    
    
    
    38,401
    
    
    
    48,823
    
    
    
    30,972Provision (benefit) for income taxes
    
    
    
    
    
    
    (2,920
    )
    
    
    15,602
    
    
    
    12,758
    
    
    
    16,789
    
    
    
    10,100Net income (loss)
    
    $
    (31,415
    )
    
    $
    (5,425
    )
    
    $
    38,628
    
    
    $
    25,643
    
    
    $
    32,034
    
    
    $
    20,872OTHER FINANCIAL DATA:Capital expenditures
    
    $
    34,934
    
    
    $
    5,265
    
    
    $
    22,465
    
    
    $
    46,851
    
    
    $
    28,219
    
    
    $
    14,009
 26




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Successor
    
    PredecessorAs of December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    30,366
    
    
    $
    107,265
    
    
    $
    54,912
    
    
    $
    108,316
    
    
    $
    75,161Total assets
    
    
    1,303,310
    
    
    
    605,098
    
    
    
    575,826
    
    
    
    494,257
    
    
    
    464,341Total debt (1)
    
    
    1,109,810
    
    
    
    257,330
    
    
    
    257,825
    
    
    
    218,298
    
    
    
    218,748Members equity
    
    
    151,298
    
    
    
    296,369
    
    
    
    257,741
    
    
    
    232,098
    
    
    
    200,996
 
 (1)
    
    Total debt, including current portion, consists of the current and long-term portions of
capital lease obligations and notes payable. 27




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    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.
   Overview
    28




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Patron Gaming Volume
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Years Ending December 31,2008
    
    2007
    
    2006Total gaming revenue
    
    $
    9,796,723,000
    
    
    $
    10,868,554,000
    
    
    $
    10,643,824,000Number of slot machines
    
    
    126,789
    
    
    
    128,904
    
    
    
    131,430Number of table games
    
    
    4,454
    
    
    
    4,458
    
    
    
    4,511Number of visitors
    
    
    37,481,552
    
    
    
    39,196,761
    
    
    
    38,914,889
  Results of Operations
 The following table sets forth the results of our operations for the periods indicated.
 CombinedSuccessor
    
    
    Predecessor
    
    
    (a)
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1, 20082008 through
    
    
    through
    
    
    Year EndedDecember 31,
    
    
    February 20,
    
    
    December 31,
    
    
    
    
    
    
    
    
    
    
    2008 to 2007
    
    
    2007 to 20062008
    
    
    2008
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    % Change
    
    
    % Change(in millions)Income Statement Data:Revenues:Casino
    
    $
    220.0
    
    
    $
    36.5
    
    
    $
    256.5
    
    
    $
    265.1
    
    
    $
    220.8
    
    
    
    -3.2
    %
    
    
    20.1
    %Hotel
    
    
    69.5
    
    
    
    11.7
    
    
    
    81.2
    
    
    
    88.2
    
    
    
    75.6
    
    
    
    -7.9
    %
    
    
    16.7
    %Food and beverage
    
    
    77.2
    
    
    
    12.4
    
    
    
    89.6
    
    
    
    91.2
    
    
    
    83.7
    
    
    
    -1.8
    %
    
    
    9.0
    %Tower, retail and other
    
    
    34.2
    
    
    
    4.7
    
    
    
    38.9
    
    
    
    40.1
    
    
    
    35.9
    
    
    
    -3.0
    %
    
    
    11.7
    %Gross revenues
    
    
    400.9
    
    
    
    65.3
    
    
    
    466.2
    
    
    
    484.6
    
    
    
    416.0
    
    
    
    -3.8
    %
    
    
    16.5
    %Less promotional allowances
    
    
    36.1
    
    
    
    5.6
    
    
    
    41.7
    
    
    
    40.4
    
    
    
    30.3
    
    
    
    3.2
    %
    
    
    33.3
    %Net revenues
    
    
    364.8
    
    
    
    59.7
    
    
    
    424.5
    
    
    
    444.2
    
    
    
    385.7
    
    
    
    -4.4
    %
    
    
    15.2
    %Costs and expenses:Casino
    
    
    72.5
    
    
    
    12.4
    
    
    
    84.9
    
    
    
    88.0
    
    
    
    80.1
    
    
    
    -3.5
    %
    
    
    9.9
    %Hotel
    
    
    29.4
    
    
    
    4.7
    
    
    
    34.1
    
    
    
    35.4
    
    
    
    33.4
    
    
    
    -3.7
    %
    
    
    6.0
    %Food and beverage
    
    
    56.8
    
    
    
    9.2
    
    
    
    66.0
    
    
    
    68.4
    
    
    
    60.1
    
    
    
    -3.5
    %
    
    
    13.8
    %Other operating expenses
    
    
    15.3
    
    
    
    2.3
    
    
    
    17.6
    
    
    
    18.0
    
    
    
    16.9
    
    
    
    -2.2
    %
    
    
    6.5
    %Selling, general and administrative
    
    
    117.2
    
    
    
    18.5
    
    
    
    135.7
    
    
    
    126.0
    
    
    
    107.2
    
    
    
    7.7
    %
    
    
    17.5
    %Pre-opening costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.9
    
    
    NA
    
    
    
    0.0
    %Depreciation and amortization
    
    
    31.3
    
    
    
    5.1
    
    
    
    36.4
    
    
    
    36.0
    
    
    
    28.6
    
    
    
    1.1
    %
    
    
    25.9
    %Impairment of assets
    
    
    11.9
    
    
    
    
    
    
    
    11.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NATotal costs and expenses
    
    
    334.4
    
    
    
    52.2
    
    
    
    386.6
    
    
    
    371.8
    
    
    
    328.2
    
    
    
    4.0
    %
    
    
    13.3
    %Income from operations
    
    $
    30.4
    
    
    $
    7.5
    
    
    $
    37.9
    
    
    $
    72.4
    
    
    $
    57.5
    
    
    
    -47.7
    %
    
    
    25.9
    %
 
 (a)
    
    The consolidated results for the twelve months ended December 31, 2008, which we refer to as
Combined, were derived by the mathematical addition of the results for the Predecessor Period and
the Successor Period. The presentation of financial information for Combined herein may yield
results that are not fully comparable on a period-by-period basis, particularly related to
depreciation and amortization, primarily due to the impact of the Acquisition on February 20, 2008.
Combined does not comply with Generally Accepted Accounting Principles, GAAP, or with the SECs
rules for pro forma presentation; however, it is presented because we believe that it provides the
most meaningful comparison of our results for 2008 to our results for prior periods. 30




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##### Table of Contents



Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
  Casino
  Hotel
  Food & Beverage
  Tower, Retail and Other
  Promotional Allowances
  31




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##### Table of Contents



Selling, General and Administrative (SG&A)
  Impairment of Assets
 Goodwill and Other
Intangible Assets
   Interest Expense
  Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
  Casino
  32




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##### Table of Contents



Hotel
  Food & Beverage
  Tower, Retail and Other
 Viva Las Vegas
 Promotional Allowances
  Selling, General and Administrative
  Interest Expense
  33




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##### Table of Contents



Financial Condition
 Liquidity and Capital Resources
       34




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##### Table of Contents



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)Debt
    
    $
    1,108,000
    
    
    $
    
    
    
    $
    1,108,000
    
    
    $
    
    
    
    $
    Interest on debt
    
    
    45,800
    
    
    
    38,600
    
    
    
    7,200
    
    
    
    
    
    
    
    Capital leases, including interest
    
    
    8,365
    
    
    
    961
    
    
    
    170
    
    
    
    170
    
    
    
    7,064Operating leases
    
    
    378
    
    
    
    217
    
    
    
    126
    
    
    
    35
    
    
    
    Purchase Obligations
    
    
    2,898
    
    
    
    2,898
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    2,998
    
    
    
    1,075
    
    
    
    1,923
    
    
    
    
    
    
    
    Total
    
    $
    1,168,439
    
    
    $
    43,751
    
    
    $
    1,117,419
    
    
    $
    205
    
    
    $
    7,064
 Critical Accounting Policies
  35




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##### Table of Contents



Revenue Recognition
    Slot Club Liability
  Self-Insurance
  Income Taxes
    36




---



##### Table of Contents



Accounting for Income
Taxes
 Accounting for Uncertainty in Income Taxes: an interpretation
of FASB Statement No. 109
 Intangible Assets and Long-Lived Assets
  Goodwill and Other Intangible Assets Accounting
for Impairment or Disposal of Long-Lived Assets
  Results of Operations
 Commitments and Contingencies
  37




---



##### Table of Contents



Recently Issued Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement 115
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement 133
 
 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    38




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39




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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
    
    
    41Consolidated Balance Sheets as of December 31, 2008 (Successor) and 2007 (Predecessor)
    
    
    42Consolidated Statements of Operations for the period February 21, 2008 through
December 31, 2008 (Successor), the period January 1, 2008 to February 20, 2008 and
the years ended December 31, 2007 and 2006 (Predecessor)
    
    
    43Consolidated Statements of Cash Flows for the period February 21, 2008 through
December 31, 2008 (Successor), the period January 1, 2008 to February 20, 2008 and
the years ended December 31, 2007 and 2006 (Predecessor)
    
    
    44Consolidated Statements of Members Equity for the period February 21, 2008 through
December 31, 2008 (Successor), the period January 1, 2008 to February 20, 2008 and
the years ended December 31, 2007 and 2006 (Predecessor)
    
    
    45Notes to Consolidated Financial Statements
    
    
    46
 40




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 Board of Directors and Members  American Casino & Entertainment Properties LLC
     
 41




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED BALANCE SHEETS
 Successor
    
    
    PredecessorAs of
    
    
    As ofDecember
    
    
    December31, 2008
    
    
    31, 2007(in thousands)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    30,366
    
    
    $
    107,265Restricted cash
    
    
    30,353
    
    
    
    Investments-restricted
    
    
    1,857
    
    
    
    2,858Accounts receivable, net
    
    
    4,494
    
    
    
    5,615Deferred income taxes
    
    
    
    
    
    
    4,309Other current assets
    
    
    12,857
    
    
    
    11,999Total Current Assets
    
    
    79,927
    
    
    
    132,046Property and equipment, net
    
    
    1,172,690
    
    
    
    431,970Debt issuance and deferred financing costs, net
    
    
    8,900
    
    
    
    4,555Deferred income taxes
    
    
    
    
    
    
    34,503Restricted cash
    
    
    10,649
    
    
    
    Intangible and other assets
    
    
    31,144
    
    
    
    2,024Total Other Assets
    
    
    50,693
    
    
    
    41,082TOTAL ASSETS
    
    $
    1,303,310
    
    
    $
    605,098LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    8,160
    
    
    $
    4,730Accrued expenses
    
    
    23,981
    
    
    
    27,347Accrued payroll and related expenses
    
    
    10,061
    
    
    
    16,936Current portion of capital lease obligations
    
    
    861
    
    
    
    520Total Current Liabilities
    
    
    43,063
    
    
    
    49,533Long-Term Liabilities:Long-term debt
    
    
    1,108,000
    
    
    
    255,000Capital lease obligations, less current portion
    
    
    949
    
    
    
    1,810Other
    
    
    
    
    
    
    2,386Total Long-Term Liabilities
    
    
    1,108,949
    
    
    
    259,196Total Liabilities
    
    
    1,152,012
    
    
    
    308,729Commitments and ContingenciesMembers Equity:Members Equity
    
    
    151,298
    
    
    
    296,369Total Members Equity
    
    
    151,298
    
    
    
    296,369TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    1,303,310
    
    
    $
    605,098
  42




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1, 20082008 through
    
    
    through
    
    
    YEARS ENDEDDecember 31,
    
    
    February 20,
    
    
    DECEMBER 31,2008
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)REVENUES:Casino
    
    $
    219,956
    
    
    $
    36,539
    
    
    $
    265,138
    
    
    $
    220,814Hotel
    
    
    69,483
    
    
    
    11,683
    
    
    
    88,242
    
    
    
    75,587Food and beverage
    
    
    77,230
    
    
    
    12,354
    
    
    
    91,160
    
    
    
    83,667Tower, retail and other
    
    
    34,179
    
    
    
    4,651
    
    
    
    40,074
    
    
    
    35,912Gross revenues
    
    
    400,848
    
    
    
    65,227
    
    
    
    484,614
    
    
    
    415,980Less promotional allowances
    
    
    36,097
    
    
    
    5,608
    
    
    
    40,406
    
    
    
    30,281Net revenues
    
    
    364,751
    
    
    
    59,619
    
    
    
    444,208
    
    
    
    385,699COSTS AND EXPENSES:Casino
    
    
    72,498
    
    
    
    12,363
    
    
    
    87,984
    
    
    
    80,060Hotel
    
    
    29,406
    
    
    
    4,682
    
    
    
    35,396
    
    
    
    33,419Food and beverage
    
    
    56,770
    
    
    
    9,183
    
    
    
    68,398
    
    
    
    60,052Other operating expenses
    
    
    15,337
    
    
    
    2,341
    
    
    
    17,943
    
    
    
    16,856Selling, general and administrative
    
    
    116,364
    
    
    
    18,511
    
    
    
    126,008
    
    
    
    107,073Depreciation and amortization
    
    
    31,288
    
    
    
    5,062
    
    
    
    36,034
    
    
    
    28,620Pre-opening costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,904Loss on sale of assets
    
    
    875
    
    
    
    
    
    
    
    8
    
    
    
    239Impairment of assets
    
    
    11,894
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    334,432
    
    
    
    52,142
    
    
    
    371,771
    
    
    
    328,223INCOME FROM OPERATIONS
    
    
    30,319
    
    
    
    7,477
    
    
    
    72,437
    
    
    
    57,476OTHER INCOME (EXPENSE):Loss on early extinguishment of debt
    
    
    
    
    
    
    (13,580
    )
    
    
    
    
    
    
    Interest income
    
    
    813
    
    
    
    322
    
    
    
    2,367
    
    
    
    2,239Interest expense
    
    
    (62,547
    )
    
    
    (2,564
    )
    
    
    (20,574
    )
    
    
    (21,314
    )Total other expense, net
    
    
    (61,734
    )
    
    
    (15,822
    )
    
    
    (18,207
    )
    
    
    (19,075
    )INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (31,415
    )
    
    
    (8,345
    )
    
    
    54,230
    
    
    
    38,401Provision (benefit) for income taxes
    
    
    
    
    
    
    (2,920
    )
    
    
    15,602
    
    
    
    12,758NET INCOME (LOSS)
    
    $
    (31,415
    )
    
    $
    (5,425
    )
    
    $
    38,628
    
    
    $
    25,643
  43




---



##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21, 2008
    
    
    January 1, 2008through
    
    
    through
    
    
    YEARS ENDED DECEMBERDecember 31,
    
    
    February 20,
    
    
    31,2008
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (31,415
    )
    
    $
    (5,425
    )
    
    $
    38,628
    
    
    $
    25,643Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    31,288
    
    
    
    5,062
    
    
    
    36,034
    
    
    
    28,620Provision (benefit) for deferred income taxes
    
    
    
    
    
    
    (2,920
    )
    
    
    348
    
    
    
    317Write-off of deferred financing costs
    
    
    
    
    
    
    4,405
    
    
    
    
    
    
    
    Loss on sale of assets
    
    
    875
    
    
    
    
    
    
    
    8
    
    
    
    239Impairment of assets
    
    
    11,894
    
    
    
    
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    558
    
    
    
    
    
    
    
    269
    
    
    
    235Accounts receivable, net
    
    
    1,026
    
    
    
    95
    
    
    
    1,137
    
    
    
    (686
    )Other current assets
    
    
    14,752
    
    
    
    55
    
    
    
    5,863
    
    
    
    (2,459
    )Accounts payable and accrued expenses
    
    
    (137
    )
    
    
    (9,543
    )
    
    
    (5,254
    )
    
    
    11,452Other
    
    
    
    
    
    
    
    
    
    
    (3,607
    )
    
    
    108Net Cash Provided By (Used In) Operating Activities
    
    
    28,841
    
    
    
    (8,271
    )
    
    
    73,426
    
    
    
    63,469CASH FLOWS FROM INVESTING ACTIVITIES:Decrease (increase) in investments  restricted
    
    
    1,001
    
    
    
    
    
    
    
    599
    
    
    
    (629
    )Acquisition of property and equipment
    
    
    (32,547
    )
    
    
    (5,265
    )
    
    
    (22,465
    )
    
    
    (46,851
    )Acquisition of Flamingo Laughlin, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (109,439
    )Acquisition of ACEP LLC
    
    
    (1,299,066
    )
    
    
    
    
    
    
    
    
    
    
    Decrease in related party receivables
    
    
    
    
    
    
    
    
    
    
    472
    
    
    
    499Proceeds from sale of property and equipment
    
    
    81
    
    
    
    
    
    
    
    816
    
    
    
    468Net Cash Used In Investing Activities
    
    
    (1,330,531
    )
    
    
    (5,265
    )
    
    
    (20,578
    )
    
    
    (155,952
    )CASH FLOWS FROM FINANCING ACTIVITIES:Debt issuance and deferred financing costs
    
    
    (16,433
    )
    
    
    
    
    
    
    
    
    
    
    (448
    )Proceeds from line of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000Payments on line of credit
    
    
    
    
    
    
    (40,000
    )
    
    
    
    
    
    
    (20,000
    )Capital distribution
    
    
    
    
    
    
    (15,439
    )
    
    
    
    
    
    
    Equity contribution
    
    
    202,719
    
    
    
    
    
    
    
    
    
    
    
    Proceeds on notes payable
    
    
    1,108,000
    
    
    
    
    
    
    
    
    
    
    
    Payments on capital lease obligation
    
    
    (435
    )
    
    
    (85
    )
    
    
    (495
    )
    
    
    (473
    )Net Cash Provided By (Used In) Financing Activities
    
    
    1,293,851
    
    
    
    (55,524
    )
    
    
    (495
    )
    
    
    39,079Net increase (decrease) in cash and cash equivalents
    
    
    (7,839
    )
    
    
    (69,060
    )
    
    
    52,353
    
    
    
    (53,404
    )Cash and cash equivalents  beginning of period
    
    
    38,205
    
    
    
    107,265
    
    
    
    54,912
    
    
    
    108,316Cash And Cash Equivalents  end of period
    
    $
    30,366
    
    
    $
    38,205
    
    
    $
    107,265
    
    
    $
    54,912SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid during the period for interest, net of amounts capitalized
    
    $
    52,481
    
    
    $
    9,455
    
    
    $
    19,922
    
    
    $
    19,248Cash paid for income taxes, net of refunds
    
    $
    
    
    
    $
    
    
    
    $
    17,984
    
    
    $
    14,750SUPPLEMENTAL DISCLOSURES OF NON-CASH ITEMS:Long-term debt paid by parent
    
    $
    
    
    
    $
    215,000
    
    
    
    
    
    
    
    Accrued capital expenditures
    
    $
    2,387
    
    
    $
    
    
    
    $
    
    
    
    $
    
  44




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONSOLIDATED STATEMENTS OF MEMBERS EQUITY
  Class A Equity
    
    
    Class B Equity
    
    
    Total EquityPredecessor:Balances at December 31, 2005
    
    $
    
    
    
    $
    
    
    
    $
    232,098Net Income
    
    
    
    
    
    
    
    
    
    
    25,643Balances at December 31, 2006
    
    $
    
    
    
    $
    
    
    
    $
    257,741Net Income
    
    
    
    
    
    
    
    
    
    
    38,628Balances at December 31, 2007
    
    $
    
    
    
    $
    
    
    
    $
    296,369Equity contribution
    
    
    
    
    
    
    
    
    
    
    215,000Equity distribution
    
    
    
    
    
    
    
    
    
    
    (15,439
    )Write-off tax assets and liabilties
    
    
    
    
    
    
    
    
    
    
    (39,828
    )Net Loss
    
    
    
    
    
    
    
    
    
    
    (5,425
    )Balances at February 20, 2008
    
    $
    
    
    
    $
    
    
    
    $
    450,677Successor:Balances at February 21, 2008
    
    $
    
    
    
    $
    
    
    
    $
    Equity contributions
    
    
    
    
    
    
    202,719
    
    
    
    202,719Acquisition cost paid by parent
    
    
    
    
    
    
    (20,006
    )
    
    
    (20,006
    )Net Loss
    
    
    
    
    
    
    (31,415
    )
    
    
    (31,415
    )Balances at December 31, 2008
    
    $
    
    
    
    $
    151,298
    
    
    $
    151,298
  45




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##### Table of Contents



AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 THE PERIOD FEBRUARY 21, 2008 THROUGH DECEMBER 31, 2008 (SUCCESSOR), THE PERIOD JANUARY 1, 2008
THROUGH FEBRUARY 20, 2008 AND THE YEARS ENDED DECEMBER 31, 2007 AND 2006 (PREDECESSOR)
 Note 1. Description of Business and Summary of Significant Accounting Policies
 The Company
        46




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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.
      47




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##### Table of Contents



Principles of Consolidation
   Revenue Recognition and Promotional Allowances
   
 Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1,2008 through
    
    
    2008 throughDecember 31,
    
    
    February 20,
    
    
    DECEMBER 31,2008
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)Food and Beverage
    
    $
    7,942
    
    
    $
    1,370
    
    
    $
    9,463
    
    
    $
    8,723Rooms
    
    
    38
    
    
    
    8
    
    
    
    76
    
    
    
    157Other
    
    
    32
    
    
    
    6
    
    
    
    28
    
    
    
    36Total
    
    $
    8,012
    
    
    $
    1,384
    
    
    $
    9,567
    
    
    $
    8,916
 Cash and Cash Equivalents
  Restricted Cash
  48




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##### Table of Contents



Investments Restricted
  Concentrations of Credit Risk
  Property and Equipment
   Buildings and improvements
    
    36-39 yearsFurniture, fixtures and equipment
    
    3-15 yearsLand improvements
    
    15 years
  Unamortized Debt Issue Costs
  Slot Club Liability
  Sales, Advertising and Promotion
  49




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##### Table of Contents



Income Taxes
    Accounting for Income
Taxes
 Accounting for Uncertainty in Income Taxes: an interpretation of FASB Statement No. 109
 Intangible Assets and Long-Lived Assets
  Goodwill and Other Intangible Assets Accounting for
Impairment or Disposal of Long-Lived Assets
 50




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##### Table of Contents



Fair Value of Financial Instruments
  Use of Estimates
  Recently Issued Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement 115
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 51




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##### Table of Contents



Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement 133
 Note 2. Accounts Receivable
  Successor
    
    
    PredecessorDecember 31,2008
    
    
    2007(in thousands)Hotel and related
    
    $
    3,241
    
    
    $
    3,503Gaming
    
    
    873
    
    
    
    1,266Other
    
    
    1,337
    
    
    
    1,3535,451
    
    
    
    6,122Less allowance for doubtful accounts
    
    
    (957
    )
    
    
    (507
    )$
    4,494
    
    
    $
    5,615
  Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1,2008 through
    
    
    2008 throughDecember 31,
    
    
    February 20,
    
    
    December 31,2008
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)Balance at beginning of period
    
    $
    636
    
    
    $
    507
    
    
    $
    319
    
    
    $
    135Bad debt expense
    
    
    881
    
    
    
    127
    
    
    
    507
    
    
    
    359Deductions and write-offs
    
    
    (560
    )
    
    
    2
    
    
    
    (319
    )
    
    
    (175
    )Balance at end of period
    
    $
    957
    
    
    $
    636
    
    
    $
    507
    
    
    $
    319
 52




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##### Table of Contents



Note 3. Other Current Assets
  Successor
    
    
    PredecessorDecember 31,2008
    
    
    2007(in thousands)Inventories
    
    $
    2,632
    
    
    $
    2,644Prepaid expenses
    
    
    9,463
    
    
    
    8,977Other
    
    
    762
    
    
    
    378$
    12,857
    
    
    $
    11,999
 Note 4. Property and Equipment, Net
  Successor
    
    
    PredecessorDecember 31,2008
    
    
    2007(in thousands)Land and improvements
    
    $
    723,797
    
    
    $
    75,100Buildings and improvements
    
    
    374,406
    
    
    
    339,607Furniture, fixtures and equipment
    
    
    100,884
    
    
    
    186,112Construction in progress
    
    
    3,001
    
    
    
    2,6551,202,088
    
    
    
    603,474Less accumulated depreciation and amortization
    
    
    29,398
    
    
    
    171,504$
    1,172,690
    
    
    $
    431,970
  Note 5. Accrued Expenses
  Successor
    
    
    PredecessorDecember 31,2008
    
    
    2007(in thousands)Accrued interest
    
    $
    2,198
    
    
    $
    7,040Accrued liabilities
    
    
    7,572
    
    
    
    5,291Accrued taxes
    
    
    2,469
    
    
    
    2,764Accrued gaming liabilities
    
    
    6,098
    
    
    
    6,834Other
    
    
    5,644
    
    
    
    5,418$
    23,981
    
    
    $
    27,347
 53




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##### Table of Contents



Note 6. Leases
  Years ending December 31,
    
    (in thousands)2009
    
    $
    4,7332010
    
    
    4,4452011
    
    
    2,9112012
    
    
    1,5502013
    
    
    461Thereafter
    
    
    754Total
    
    $
    14,854
    Years ending December 31,
    
    (in thousands)2009
    
    $
    2172010
    
    
    872011
    
    
    392012
    
    
    352013
    
    
    Thereafter
    
    
    Total
    
    $
    378
   Years ending December 31,
    
    (in thousands)2009
    
    $
    9612010
    
    
    852011
    
    
    852012
    
    
    852013
    
    
    85Thereafter
    
    
    7,064Total minimum lease payments
    
    
    8,365Less: amount representing interest ranging from 5% to 10%
    
    
    6,555Present value of net minimum lease payments
    
    
    1,810Less: current portion
    
    
    861Long-term capital lease obligation
    
    $
    949
 54




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##### Table of Contents



Note 7. Income Taxes
   Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1,2008 through
    
    
    2008 throughDecember 31,
    
    
    February 20,
    
    
    December 31,2008
    
    
    2008
    
    
    2007
    
    
    2006(in thousands)Current
    
    $
    
    
    
    $
    (2,920
    )
    
    $
    15,254
    
    
    $
    12,441Deferred
    
    
    
    
    
    
    
    
    
    
    348
    
    
    
    317$
    
    
    
    $
    (2,920
    )
    
    $
    15,602
    
    
    $
    12,758
 Deferred Tax Assets and Liabilities
  Successor
    
    
    PredecessorDecember 31,
    
    
    December 31,2008
    
    
    2007Deferred Tax AssetsProperty, plant and equipment
    
    $
    
    
    
    $
    33,927Accrued vacation and employee related
    
    
    
    
    
    
    2,110Gaming related
    
    
    
    
    
    
    2,299Other
    
    
    
    
    
    
    476Total net deferred tax assets
    
    
    
    
    
    
    38,812Less: Current portion
    
    
    
    
    
    
    (4,309
    )Net long term deferred tax assets
    
    $
    
    
    
    $
    34,503
  Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21,
    
    
    January 1, 20082008 through
    
    
    throughDecember 31,
    
    
    February 20,
    
    
    Year Ended December 31,2008
    
    
    2008
    
    
    2007
    
    
    2006Federal statutory rate
    
    
    
    
    
    
    -35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Unrecognized tax benefit
    
    
    
    
    
    
    
    
    
    
    -5.7
    %
    
    
    -0.9
    %Permanent differences
    
    
    
    
    
    
    
    
    
    
    0.4
    %
    
    
    0.3
    %Federal income tax credits
    
    
    
    
    
    
    
    
    
    
    -0.9
    %
    
    
    -1.2
    %
    
    
    
    -35.0
    %
    
    
    28.8
    %
    
    
    33.2
    %
  55




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##### Table of Contents



Successor
    
    
    PredecessorAs of
    
    
    As ofDecember 31, 2008
    
    
    December 31, 2007Balance at beginning of year
    
    $
    1,844
    
    
    $
    4,900Reductions 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
    
    
    
    
    
    
    Reductions due to Acquisition
    
    
    (1,844
    )Balance at end of year
    
    $
    
    
    
    $
    1,844
     56




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##### Table of Contents



Note 8. Debt
  Successor
    
    
    PredecessorAs of
    
    
    As ofDecember 31, 2008
    
    
    December 31, 2007(In thousands)Goldman Term Loans and related mezzanine financings,
due March 11, 2010, interest at a 3% margin above
LIBOR (0.4% at December 31, 2008)
    
    $
    1,108,000
    
    
    $
    7.85% senior secured notes, interest payable semi-annually due February 1, 2012
    
    
    
    
    
    
    215,000Senior secured revolving credit facility, interest payable monthly, due May 12, 2010
    
    
    
    
    
    
    40,000Capital lease obligations
    
    
    1,810
    
    
    
    2,330Total long-term debt and capital lease obligations
    
    
    1,109,810
    
    
    
    257,330Current portion of capital lease obligations
    
    
    861
    
    
    
    520Total long-term debt and capital lease obligations, net
    
    $
    1,108,949
    
    
    $
    256,810
 Goldman Term Loans
    Senior Secured Notes
   57




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Note 9. Related Party Transactions
       58




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##### Table of Contents



Note 10. Goodwill and Other Intangible Assets
 Goodwill and Intangible Assets
   (in thousands)December 31, 2008 (Successor)
    
    
    December 31, 2007 (Predecessor)Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAsset
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingLife
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountAmortizing intangible assets:Advance reservations
    
    2 Months
    
    
    618
    
    
    
    (618
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Player Loyalty Plan
    
    5 Years
    
    
    7,450
    
    
    
    (1,242
    )
    
    
    6,208
    
    
    
    2,939
    
    
    
    (1,000
    )
    
    
    1,939$
    8,068
    
    
    $
    (1,860
    )
    
    $
    6,208
    
    
    $
    2,939
    
    
    $
    (1,000
    )
    
    $
    1,939Non-amortizing intangible assets:Trade Name
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    24,910
    
    
    
    
    
    
    
    
    
    
    $
    $
    31,118
    
    
    
    
    
    
    
    
    
    
    $
    1,939
  59




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Note 11. Employee Benefit Plans
      Note 12. Commitments & Contingencies
    Legal Proceedings
  Note 13. Acquisitions
  60




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##### Table of Contents



Land
    
    $
    718,443Site improvements
    
    
    4,870Building and improvements
    
    
    365,590Machinery and equipment
    
    
    79,237Intangibles
    
    
    37,934Goodwill
    
    
    6,939Capital lease
    
    
    (1,720
    )Debt issuance costs
    
    
    16,366Acquistion costs
    
    
    20,006Reserves and pre-payments
    
    
    49,482Total Purchase Price
    
    $
    1,297,147Cash and cash equivalents
    
    $
    38,205Investment -restricted
    
    
    2,858Accounts receivable, net
    
    
    5,520Other current assets
    
    
    12,179Accounts payable  trade
    
    
    (5,545
    )Accrued expenses
    
    
    (21,048
    )Accrued payroll and related expenses
    
    
    (13,359
    )Current portion of capital lease obligation
    
    
    (525
    )Estimated Working Capital
    
    $
    18,285Total Amount Paid
    
    $
    1,315,432
   Year EndedDecember 31,2006(in thousands)Net revenues
    
    $
    429,580Net income
    
    $
    29,128
  61




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A(T). CONTROLS AND PROCEDURES
      
 ITEM 9B. OTHER INFORMATION
  62




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Identification of Directors and Officers
  NAME
    
    AGE
    
    POSITIONBrahm Cramer
    
    
    40
    
    
    Board MemberJonathan Langer
    
    
    39
    
    
    Board MemberSteven Angel
    
    
    39
    
    
    Board MemberFrank V. Riolo
    
    
    57
    
    
    Chief Executive Officer, Board MemberEdward W. Martin III
    
    
    44
    
    
    Chief Financial Officer, Treasurer, and Board Member
  NAME
    
    AGE
    
    POSITIONPhyllis A. Gilland
    
    
    50
    
    
    Vice President, General Counsel and SecretaryRonald P. Lurie
    
    
    67
    
    
    Executive Vice President, General Manager 
Arizona Charlies DecaturPaul Hobson
    
    
    42
    
    
    Senior Vice President, General Manager 
Aquarius Casino ResortMark Majetich
    
    
    58
    
    
    Senior Vice President, General Manager 
Arizona Charlies BoulderArthur Keith, Jr.
    
    
    46
    
    
    President, General Manager  Stratosphere
Casino Hotel & Tower
 Brahm Cramer
 Jonathan Langer
 Steven Angel
 Frank V. Riolo
 63




---



##### Table of Contents



Edward W. Martin III Bass Pro Outdoor World
 Phyllis A. Gilland
 Ronald P. Lurie
 Paul Hobson
 Mark Majetich
 64




---



##### Table of Contents



Arthur Keith, Jr.
   Audit Committee
    Audit Committee Report
   
 65




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##### Table of Contents



Code of Ethics
  Corporate Governance Guidelines
  Section 16(a) Beneficial Ownership Reporting Compliance
   
 ITEM 11. EXECUTIVE COMPENSATION
 Compensation Committee Report
  
 Compensation Committee Interlocks and Insider Participation
  Compensation Discussion and Analysis
 Overview
  66




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##### Table of Contents



Compensation Philosophy and Objectives
    Individual Performance Measurement
  Base Salary
  Bonus
   Management Incentive Plan and Key Employee Plan
     67




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##### Table of Contents



Severance Arrangements
    Perquisites Benefits
    Executive Compensation
  68




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##### Table of Contents



ANNUAL COMPENSATION (1)Non-EquityIncentive Plan
    
    All OtherName and Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($) (2)
    
    Compensation ($) (3)
    
    Compensation ($) (4)
    
    TotalFrank V. Riolo (PEO)
    
    
    2008
    
    
    
    378,461
    
    
    
    75,000
    
    
    
    
    
    
    
    7,703
    
    
    
    461,164Chief Executive OfficerRichard P. Brown (Former PEO)
    
    
    2008
    
    
    
    216,346
    
    
    
    
    
    
    
    
    
    
    
    1,006,758
    
    
    
    1,223,104President & Chief Executive Officer
    
    
    2007
    
    
    
    625,000
    
    
    
    
    
    
    
    168,750
    
    
    
    12,886
    
    
    
    806,6362006
    
    
    
    588,942
    
    
    
    
    
    
    
    
    
    
    
    13,048
    
    
    
    601,990Edward W. Martin III (PFO)
    
    
    2008
    
    
    
    66,923
    
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    81,923Chief Financial Officer & TreasurerDenise Barton (Former PFO)
    
    
    2008
    
    
    
    282,308
    
    
    
    
    
    
    
    66,919
    
    
    
    712,929
    
    
    
    1,062,156Senior Vice
President, Chief Financial Officer, Treasurer & Secretary
    
    
    2007
    
    
    
    374,375
    
    
    
    
    
    
    
    197,620
    
    
    
    7,093
    
    
    
    579,0882006
    
    
    
    357,471
    
    
    
    
    
    
    
    14,624
    
    
    
    7,225
    
    
    
    379,320Richard B Fitzhugh
    
    
    2008
    
    
    
    239,302
    
    
    
    
    
    
    
    22,560
    
    
    
    245,810
    
    
    
    507,672Vice President, Slot Strategy
    
    
    2007
    
    
    
    224,904
    
    
    
    
    
    
    
    112,800
    
    
    
    4,842
    
    
    
    342,5462006
    
    
    
    134,615
    
    
    
    
    
    
    
    
    
    
    
    2,202
    
    
    
    136,817Mark Majetich
    
    
    2008
    
    
    
    204,084
    
    
    
    5,000
    
    
    
    33,319
    
    
    
    213,433
    
    
    
    455,836Senior Vice President &
    
    
    2007
    
    
    
    198,867
    
    
    
    
    
    
    
    16,660
    
    
    
    7,976
    
    
    
    223,503General Manager, Arizona Charlies Boulder
    
    
    2006
    
    
    
    182,166
    
    
    
    
    
    
    
    3,447
    
    
    
    8,077
    
    
    
    193,690Ronald Lurie
    
    
    2008
    
    
    
    244,784
    
    
    
    5,000
    
    
    
    26,288
    
    
    
    249,007
    
    
    
    525,079Executive Vice President &
    
    
    2007
    
    
    
    238,527
    
    
    
    
    
    
    
    13,144
    
    
    
    12,660
    
    
    
    264,331General Manager, Arizona Charlies Decatur
    
    
    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.(2)
    
    Represents amounts approved by the Board, upon recommendation of the compensation committee,
on March 19, 2009, related to 2008. The amounts were paid in 2009.(3)
    
    Represents MIP payments related to the termination of the MIP in conjunction with the
Acquisition for 2008 and payment for performance in the applicable year made in February of
the following year under the MIP for 2007 and 2006.(4)
    
    Includes contributions by ACEP to 401(k) plans, dollar value of insurance premiums and other
compensation related to health insurance payments. It also includes for 2008 relocation
expenses of $5,000 and an auto allowance of $1,174 for Mr. Riolo; a retention payment of
$1,000,000 and an auto allowance for Mr. Brown; a retention payment of $505,000 and a
severance payment of $200,000 for Ms. Barton; and retention payments of $235,000, $200,415 and
$240,383 for Mr. Fitzhugh, Mr. Majetich and Mr. Lurie, respectively. Potential Payments Upon Termination Or Change In Control
  69




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Plan-Based and Equity Awards
  Option Grants in Last Fiscal Year
  Employment Agreements
       70




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Compensation of Directors
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
   
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Related Party Transactions
  71




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72




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##### Table of Contents



Tax Allocation Agreement
  73




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##### Table of Contents



Director Independence
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Grant Thornton, LLPSuccessor
    
    
    Predecessor2008
    
    
    2007Audit fees (1)
    
    $
    626,600
    
    
    $
    601,000Other (2)
    
    
    
    
    
    
    3,000Tax return preparation (3)
    
    
    36,900
    
    
    
    Total fees
    
    $
    663,500
    
    
    $
    604,000
 Grant Thornton, LLP, did not provide any services related to financial information systems design
and implementation during 2008 or 2007.
 
 (1)
    
    Audit fees also include fees for services rendered related to compliance with the
Sarbanes-Oxley Act of 2002 for the year ended December 31, 2007.
  (3)
    
    Fees related to the preparation of the consolidated tax return for the year ended December
31, 2008.
 It is the policy of the Audit Committee to pre-approve all engagements and fees of the independent
public accountant and during 2008 and 2007 all such engagements and fees were pre-approved.
 74




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)         1. and 2. Financial Statements and Schedules
 PageReport of Independent Registered Public Accounting Firm
    
    41Consolidated Balance Sheets as of December 31, 2008 (Successor) and 2007 (Predecessor)
    
    42Consolidated Statements of Operations for the period February 21, 2008 through
December 31, 2008 (Successor), the period January 1, 2008 to February 20, 2008 and
the years ended December 31, 2007 and 2006 (Predecessor)
    
    43Consolidated Statements of Cash Flows for the period February 21, 2008 through
December 31, 2008 (Successor), the period January 1, 2008 to February 20, 2008 and
the years ended December 31, 2007 and 2006 (Predecessor)
    
    44Consolidated Statements of Members/Stockholders Equity for the period February 21,
2008 through December 31, 2008 (Successor), the period January 1, 2008 to February
20, 2008 and the years ended December 31, 2007 and 2006 (Predecessor)
    
    45Notes to Consolidated Financial Statements
    
    46
 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).
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EXHIBIT NO.
    
    DESCRIPTION4.5
    
    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.  (incorporated by reference to Exhibit 4.5 to ACEPs Form 10-K (SEC File No. 333-118149), filed on March 27, 2008).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 Agent, 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).
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EXHIBIT NO.
    
    DESCRIPTION10.10
    
    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).10.11
    
    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).10.18
    
    Employment Agreement, effective October 23, 2008, by and
between ACEP and Edward W. Martin III (incorporated by reference to Exhibit 10.2 to ACEPs Form 8-K (SEC File No. 333-118149), filed on October 30, 2008).10.19
    
    Employment Agreement, effective October 23, 2008, by and
between ACEP and Phyllis A. Gilland10.20
    
    Employment Agreement, effective October 23, 2008, by and
between ACEP and Arthur Keith (incorporated by reference to Exhibit 10.1 to ACEPs Form 8-K (SEC File No. 333-118149), filed on October 30, 2008).10.21
    
    Economic Participation Agreement, dated as of October 23, 2008, between W2007 Finance Sub LLC, Whitehall Parallel Global Real
Estate Limited Partnership 2007 and Edward W. Martin, III (incorporated by reference to Exhibit 10.4 to ACEPs Form 8-K
(SEC File No. 333-118149), filed on October 30, 2008).10.22
    
    Economic Participation Agreement, dated as of October 23, 2008, between W2007 Finance Sub LLC,
Whitehall Parallel Global Real Estate Limited Partnership 2007 and Phyllis A. Gilland.10.23
    
    Economic Participation Agreement, dated as of October 23, 2008, between W2007 Finance Sub LLC, Whitehall Parallel Global Real Estate Limited Partnership 2007 and Arthur Keith (incorporated by
reference to Exhibit 10.3 to ACEPs Form 8-K (SEC File No. 333-118149), filed on October 30, 2008).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/ Frank V. Riolo

Frank V. RioloChief Executive OfficerDate:
    
    March 27, 2009
  /s/ Frank V. RioloFrank V. Riolo
    
    Chief Executive Officer
    
    March 27, 2009(Principal Executive Officer)/s/ Edward W. Martin IIIEdward W. Martin III
    
    Chief Financial Officer, Treasurer
    
    March 27, 2009(Principal Financial and Accounting Officer)/s/ Brahm CramerBrahm Cramer
    
    Board Member
    
    March 27, 2009/s/ Jonathan LangerJonathan Langer
    
    Board Member
    
    March 27, 2009/s/ Steven AngelSteven Angel
    
    Board Member
    
    March 27, 2009
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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
  79