**UNITED STATES****SECURITIES****ANDEXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

##### **Form 10-Q**

 

| **ý********QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                       |
| **FOR THE QUARTERLY PERIOD ENDED September 30, 2003.**                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                       |
| **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 333-11811**                                                                                                                                                                                                                                                                                                       |

 

**ELDORADO RESORTS LLCELDORADO CAPITAL CORP.**

(Exact names of registrants as specified in their charters)

 

| **Nevada  Nevada**                                                                  |   | **88-0115550  88-0367075**           |
|-------------------------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction ofincorporation or organization)                       |   | (I.R.S. Employer Identification No.) |
|                                                                                |   |                                 |
| **345 North Virginia Street, Reno, Nevada 89501**                                   |
| (Address of principal executive offices,  including zip code)                       |
|                                                                                |
| **(775) 786-5700**                                                                  |
| **(Registrants’ telephone number, including area code)**                       |
|                                                                                |
| **Not  Applicable**                                                                 |
| (Former name, former address and former  fiscal year, if changed since last report) |

 

Indicateby check mark whether the registrants (1) have filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrants wererequired to file such reports), and (2) have been subject to such filingrequirements for the past 90days.        Yes  ý  No  o

 

Indicate by check mark whether the registrants are accelerated filers(as defined in Exchange Act Rule 12b-2)        Yes  o  No  ý

 

Numberof shares of common stock of Eldorado Capital Corp. outstanding at November 13,2003: 2,500 shares.

 

 

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ELDORADO RESORTS LLCELDORADO CAPITAL CORP.

 

**FORM 10-Q**

 

TABLE OF CONTENTS

 
| **PART I.**    | **FINANCIAL INFORMATION** |
|----------------|---------------------------|
|           |                      |   |
|           | **Item 1.**               | **FINANCIAL STATEMENTS** |
|           |                      |   |
|           |                      | Unaudited  Condensed Consolidated Balance Sheets. |
|           |                      | Unaudited  Condensed Consolidated Statements of Income |
|           |                      | Unaudited  Condensed Consolidated Statements of Members’ Equity |
|           |                      | Unaudited  Condensed Consolidated Statements of Cash Flows |
|           |                      | Notes to Unaudited Condensed  Consolidated Financial Statements |
|           |                      |   |
|           | **Item  2.**              | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS. |
|           |                      |   |
|           | Item 3.                   | QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|           |                      |   |
|           | Item 4.                   | CONTROLS AND PROCEDURES |
|           |                      |   |
| **PART II.**   | **OTHER  INFORMATION**    |
|           |                      |   |
|           | Item 6.                   | EXHIBITS AND REPORTS ON FORM 8-K |
|           |                      |   |
| **SIGNATURES** |                      |

 

1

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**PART I**

FINANCIAL INFORMATION

**Item 1. Financial Statements.**

 

ELDORADO RESORTS LLC

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(dollars inthousands)

** **
|                                                                               |   | **September  30,  2003** |       | **December  31,  2002** |       |
|------------------------------------------------------------------------------------|--------|--------------------------|------------|-------------------------|------------|
| **A S S E T S**                                                                    |   |                     | ** ** |                    | ** ** |
| Current assets:                                                                    |   |                     | ** ** |                    | ** ** |
| Cash and cash equivalents                                                          |   | $                        | 7,050      |                    | $          | 8,135 |   |
| Restricted cash                                                                    |   | 152                      |       | 152                     |       |
| Accounts receivable, net                                                           |   | 3,186                    |       | 3,148                   |       |
| Inventories                                                                        |   | 2,134                    |       | 2,449                   |       |
| Prepaid expenses and other                                                         |   | 2,400                    |       | 2,190                   |       |
| Total current assets                                                               |   | 14,922                   |       | 16,074                  |       |
|                                                                               |   |                     |       |                    |       |
| Investment in joint ventures                                                       |   | 66,706                   |       | 64,149                  |       |
|                                                                               |   |                     |       |                    |       |
| Property and equipment, net                                                        |   | 127,962                  |       | 130,354                 |       |
|                                                                               |   |                     |       |                    |       |
| Other assets, net                                                                  |   | 5,118                    |       | 7,067                   |       |
| Total assets                                                                       |   | $                        | 214,708    |                    | $          | 217,644 |   |
|                                                                               |   |                     |       |                    |       |
| **L I A B I L I T I E S  A N D  M E M B E R  S’  E Q U I T Y** |   |                     |       |                    |       |
|                                                                               |   |                     |       |                    |       |
| Current liabilities:                                                               |   |                     |       |                    |       |
| Current portion of long-term debt                                                  |   | $                        | 356        |                    | $          | 344 |   |
| Current portion of capital lease obligations                                       |   | 96                       |       | 112                     |       |
| Accounts payable                                                                   |   | 3,849                    |       | 4,190                   |       |
| Interest payable                                                                   |   | 1,090                    |       | 3,372                   |       |
| Accrued and other liabilities                                                      |   | 7,579                    |       | 7,267                   |       |
| Due to members and affiliates                                                      |   | 147                      |       | 238                     |       |
| Total current liabilities                                                          |   | 13,117                   |       | 15,523                  |       |
|                                                                               |   |                     |       |                    |       |
| Long-term debt, less current portion                                               |   | 79,320                   |       | 84,691                  |       |
|                                                                               |   |                     |       |                    |       |
| Capital lease obligations, less current portion                                    |   | —                   |       | 63                      |       |
|                                                                               |   |                     |       |                    |       |
| Other liabilities                                                                  |   | 615                      |       | 634                     |       |
| Total liabilities                                                                  |   | 93,052                   |       | 100,911                 |       |
|                                                                               |   |                     |       |                    |       |
| Minority interest                                                                  |   | 5,736                    |       | 5,638                   |       |
|                                                                               |   |                     |       |                    |       |
| Members’ equity                                                               |   | 115,920                  |       | 111,095                 |       |
| Total liabilities and members’ equity                                         |   | $                        | 214,708    |                    | $          | 217,644 |   |

 

The accompanying notes are an integral part of these unaudited condensedconsolidated financial statements.

 

2

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ELDORADO RESORTS LLC

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME(dollars in thousands)

 
|                                           |   | **Three  Months Ended  September 30,** |   | **Nine  Months Ended  September 30,** |   |
|------------------------------------------------|--------|----------------------------------------|--------|---------------------------------------|--------|
|                                           |   | **2003**                               |   | **2002**                              |   | **2003** |   | **2002** |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Operating Revenues:                            |   |                                   |   |                                  |   |   |   |   |   |
| Casino                                         |   | $                                      | 23,134 |                                  | $      | 27,824 |   | $ | 67,094 |   | $ | 73,059 |   |
| Food, beverage and entertainment               |   | 11,229                                 |   | 12,195                                |   | 31,712 |   | 33,860 |   |
| Hotel                                          |   | 4,737                                  |   | 4,960                                 |   | 12,723 |   | 12,626 |   |
| Other                                          |   | 1,498                                  |   | 1,446                                 |   | 4,159 |   | 4,016 |   |
|                                           |   | 40,598                                 |   | 46,425                                |   | 115,688 |   | 123,561 |   |
| Less: Promotional allowances                   |   | (5,019                                 | )      | (5,100                                | )      | (14,085 | ) | (13,388 | ) |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Net operating revenues                         |   | 35,579                                 |   | 41,325                                |   | 101,603 |   | 110,173 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Operating Expenses:                            |   |                                   |   |                                  |   |   |   |   |   |
| Casino                                         |   | 12,519                                 |   | 13,583                                |   | 36,274 |   | 37,049 |   |
| Food, beverage and entertainment               |   | 7,494                                  |   | 8,175                                 |   | 21,482 |   | 23,616 |   |
| Hotel                                          |   | 1,781                                  |   | 1,816                                 |   | 5,190 |   | 5,274 |   |
| Other                                          |   | 416                                    |   | 413                                   |   | 1,173 |   | 1,235 |   |
| Selling, general and administrative            |   | 6,775                                  |   | 7,399                                 |   | 20,386 |   | 20,595 |   |
| Depreciation                                   |   | 2,797                                  |   | 2,864                                 |   | 8,355 |   | 8,929 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Total operating expenses                       |   | 31,782                                 |   | 34,250                                |   | 92,860 |   | 96,698 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Equity in Income of Unconsolidated  Affiliates |   | 2,282                                  |   | 4,438                                 |   | 5,265 |   | 8,744 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Operating Income                               |   | 6,079                                  |   | 11,513                                |   | 14,008 |   | 22,219 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Other Income (Expense):                        |   |                                   |   |                                  |   |   |   |   |   |
| Equity in loss of unconsolidated affiliate     |   | (106                                   | )      | —                                |   | (259 | ) | — |   |
| Interest rate swap income (loss)               |   | —                                 |   | 1,119                                 |   | (163 | ) | 1,119 |   |
| Gain (Loss) on bond repurchases                |   | (54                                    | )      | 15                                    |   | (320 | ) | 50 |   |
| Gain on sale of land                           |   | —                                 |   | —                                |   | 906 |   | — |   |
| Interest expense, net                          |   | (2,171                                 | )      | (2,444                                | )      | (6,672 | ) | (7,815 | ) |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Total other income (expense)                   |   | (2,331                                 | )      | (1,310                                | )      | (6,508 | ) | (6,646 | ) |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Income Before Minority Interest                |   | 3,748                                  |   | 10,203                                |   | 7,500 |   | 15,573 |   |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Minority Interest                              |   | (79                                    | )      | (163                                  | )      | (175 | ) | (318 | ) |
|                                           |   |                                   |   |                                  |   |   |   |   |   |
| Net Income                                     |   | $                                      | 3,669  |                                  | $      | 10,040 |   | $ | 7,325 |   | $ | 15,255 |   |

 

The accompanying notes are an integral partof these unaudited condensed consolidated financial statements.

 

3

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ELDORADO RESORTS LLC

 

UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF MEMBERS’ EQUITY(dollars in thousands)

 
| BALANCE, January 1, 2003    |   | $      | 111,095 |   |
|-----------------------------|--------|--------|---------|--------|
|                        |   |   |    |
| Net Income                  |   | 7,325  |    |
| Distributions               |   | (2,500 | )       |
|                        |   |   |    |
| BALANCE, September 30, 2003 |   | $      | 115,920 |   |

 

The accompanying notes are anintegral part of these unaudited condensed consolidated financial statements.

 

4

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ELDORADO RESORTS LLC

 

UNAUDITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in thousands)

 
|                                                                                |   | **Nine Months  Ended  September 30,** |   |
|-------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                |   | **2003**                              |   | **2002** |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                               |   |                                  |   |   |   |
| Net income                                                                          |   | $                                     | 7,325  |   | $ | 15,255 |   |
| Adjustments to reconcile net income to net cash  provided by operating activities:  |   |                                  |   |   |   |
| Depreciation                                                                        |   | 8,355                                 |   | 8,929 |   |
| Amortization of debt issue costs                                                    |   | 290                                   |   | 334 |   |
| Loss (Gain) on bond repurchases, net of unamortized  bond fees                      |   | 320                                   |   | (50 | ) |
| Equity in income of unconsolidated affiliates                                       |   | (5,006                                | )      | (8,744 | ) |
| Minority interest                                                                   |   | 175                                   |   | 318 |   |
| Gain on sale of property and equipment                                              |   | (2                                    | )      | (11 | ) |
| Gain on sale of land                                                                |   | (906                                  | )      | — |   |
| Interest rate swap loss (income)                                                    |   | 163                                   |   | (1,119 | ) |
| Decrease (Increase) in—                                                        |   |                                  |   |   |   |
| Restricted cash                                                                     |   | —                                |   | 206 |   |
| Accounts receivable, net                                                            |   | (701                                  | )      | (381 | ) |
| Inventories                                                                         |   | 315                                   |   | 565 |   |
| Prepaid expenses                                                                    |   | 290                                   |   | (422 | ) |
| Increase (Decrease) in—                                                        |   |                                  |   |   |   |
| Accounts payable                                                                    |   | (341                                  | )      | 116 |   |
| Interest payable                                                                    |   | (2,282                                | )      | (2,734 | ) |
| Accrued and other liabilities, due to members and  affiliates and other liabilities |   | 202                                   |   | 343 |   |
|                                                                                |   |                                  |   |   |   |
| Net cash provided by operating activities                                           |   | 8,197                                 |   | 12,605 |   |
|                                                                                |   |                                  |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                               |   |                                  |   |   |   |
| Purchases of property and equipment                                                 |   | (6,157                                | )      | (2,956 | ) |
| Proceeds from sale of property and equipment                                        |   | 197                                   |   | 45 |   |
| Proceeds from sale of land                                                          |   | 2,463                                 |   | — |   |
| Distributions from unconsolidated affiliates                                        |   | 2,450                                 |   | 16,673 |   |
| Minority interest in distributions                                                  |   | (77                                   | )      | (629 | ) |
| Increase in joint venture investments                                               |   | —                                |   | (200 | ) |
| Increase in other assets, net                                                       |   | (40                                   | )      | (20 | ) |
|                                                                                |   |                                  |   |   |   |
| Net cash provided by (used in) investing activities                                 |   | (1,164                                | )      | 12,913 |   |
|                                                                                |   |                                  |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                               |   |                                  |   |   |   |
| Proceeds from long-term debt and capital leases                                     |   | 35,009                                |   | 24,549 |   |
| Principal payments on long-term debt and capital  leases                            |   | (30,843                               | )      | (40,556 | ) |
| Payment on bond repurchases                                                         |   | (9,784                                | )      | (6,982 | ) |
| Distributions                                                                       |   | (2,500                                | )      | (4,595 | ) |
|                                                                                |   |                                  |   |   |   |
| Net cash used in financing activities                                               |   | (8,118                                | )      | (27,584 | ) |
|                                                                                |   |                                  |   |   |   |
| DECREASE IN CASH AND CASH EQUIVALENTS                                               |   | (1,085                                | )      | (2,066 | ) |
|                                                                                |   |                                  |   |   |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    |   | 8,135                                 |   | 9,910 |   |
|                                                                                |   |                                  |   |   |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          |   | $                                     | 7,050  |   | $ | 7,844 |   |
|                                                                                |   |                                  |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                   |   |                                  |   |   |   |
|                                                                                |   |                                  |   |   |   |
| Cash paid during period for interest                                                |   | $                                     | 9,016  |   | $ | 11,101 |   |

 

The accompanying notes are an integral part of these unaudited condensedconsolidated financial statements.

 

5

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ELDORADO RESORTS LLC

 

NOTESTO UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

 

**1.****             ****General**

 

Thecondensed consolidated financial statements include the accounts of EldoradoResorts, LLC (“Resorts”), a Nevada limited liability company, Eldorado CapitalCorp. (“Capital”), a Nevada Corporation and wholly-owned subsidiary of Resorts,and a majority owned subsidiary, Eldorado Limited Liability Company (“ELLC”)(together, the “Company”).  TheCompany owns and operates the Eldorado Hotel & Casino (the “Eldorado”), apremier hotel/casino and entertainment facility in Reno, Nevada.  Capital was established solely for the purpose of serving as aco-issuer of the 101/2% SeniorSubordinated Notes due 2006 issued by Resorts and Capital and, as such, Capitaldoes not have any operations, assets or revenues.  All significant intercompany accounts and transactions have beeneliminated in consolidation.

 

TheCompany accounts for its investment in the Silver Legacy Joint Venture and twoother smaller joint ventures, Tamarack and MindPlay, utilizing the equitymethod of accounting.  The Company’sconsolidated net income includes its proportional share of the Silver LegacyJoint Venture’s, Tamarack’s, and MindPlay’s net income (loss) before taxes.

 

Inthe opinion of Management, the accompanying unaudited condensed consolidatedfinancial statements contain all adjustments, all of which are normal andrecurring, necessary to present fairly the financial position of the Company asof September 30, 2003, the results of operations for the three and nine monthperiods ended September 30, 2003 and 2002 and cash flows for the nine monthsended September 30, 2003 and 2002.  Theresults of operations for such periods are not necessarily indicative of theresults to be expected for a full year.

 

Certaininformation and footnote disclosures normally included in financial statementsprepared in accordance with generally accepted accounting principles have beencondensed or omitted.  These condensedconsolidated financial statements should be read in conjunction with theconsolidated financial statements and notes thereto included in the AnnualReport of Eldorado Resorts LLC and Eldorado Capital Corp. on Form 10-K for theyear ended December 31, 2002.

 

***Use of Estimates***

 

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses duringthe reporting period.  Actual resultscould differ from these estimates.

 

***Recently Issued Accounting Pronouncements***

 

InJune 2001, the Financial Accounting Standards Board (“FASB”) issued Statementof Financial Accounting Standards (“SFAS”) No. 143, “Accounting for AssetRetirement Obligations.”  This statementaddresses financial accounting and reporting for obligations associated withthe retirement of tangible long-lived assets and the associated assetretirement costs.  This statementapplies to all entities and to all legal obligations associated with the retirementof long-lived assets that result from the acquisition, construction,development and the normal operation of a long-lived asset, except for certainobligations of lessees.  The Companyadopted SFAS No. 143 effective January 1, 2003.  The adoption of this statement did not have a material impact onits financial condition or results of operations.

 

InAugust 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment orDisposal of Long-Lived Assets.”  Thisstatement requires one accounting model be used for long-lived assets to bedisposed of by sale, whether previously held and used or newly acquired andbroadens the presentation of discontinued operations to include additionaldisposal transactions.  This statementis effective for fiscal years and interim periods beginning after December 15,2001.  The Company therefore adoptedSFAS No. 144 in January 2002.  TheCompany periodically evaluates its long-lived assets for impairment.  Adoption of SFAS No. 144 did not have amaterial impact on the Company’s financial condition or results of operations.

 

InApril 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4,44, and 64, Amendment of FASB Statement No. 13, and TechnicalCorrections.”  SFAS No. 145 rescindsSFAS No. 4, “Reporting Gains and Losses from Extinguishment of Debt.”  Under SFAS No. 4, all gains and losses fromextinguishment of debt were 

 

6

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required to be aggregated, if material, andclassified as an extraordinary item, net of related income tax effect, on thestatement of income.  SFAS No. 145requires all gains and losses from extinguishment of debt to be classified asextraordinary only if they meet the criteria of Accounting Principles Board(“APB”) Opinion 30.  Any gain or loss onextinguishment of debt that was classified as an extraordinary item in priorperiods presented that does not meet the criteria in APB Opinion 30 is requiredto be reclassified.  In May 2002, theCompany adopted this statement.  Thefiscal 2003 loss and 2002 gain on repurchase of bonds, net of unamortized bondfees, was $320,000 and $50,000, respectively.

 

InJune 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated withExit or Disposal Activities.”  Thisstatement addresses financial accounting and reporting for costs associatedwith exit or disposal activities and nullifies EITF No. 94-3, “LiabilityRecognition for Certain Employee Termination Benefits and Other Costs to Exitan Activity (including Certain Costs Incurred in a Restructuring).”  This statement requires that a liability fora cost associated with an exit or disposal activity be recognized when theliability is incurred.  A fundamentalconclusion reached by the FASB in SFAS No. 146 is that an entity’s commitmentto a plan, by itself, does not create a present obligation to others that meetsthe definition of a liability.  Thisstatement also establishes that fair value is the objective for initialmeasurement of the liability.  TheCompany adopted SFAS No. 146 effective January 1, 2003.  The adoption of this statement did not havea material impact on its financial condition or results of operations.

 

In November 2002, the FASB issued FASB Interpretation No. 45,“Guarantor’s Accounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others” (“FIN 45”).  FIN 45 expands the information disclosuresrequired by guarantors for obligations under certain types of guarantees. Italso requires initial recognition at fair value of a liability for suchguarantees.  The initial recognition andinitial measurement provisions of this Interpretation are applicable on aprospective basis to guarantees issued or modified after December 31, 2002,irrespective of the guarantor’s fiscal year-end.  The disclosure requirements in this Interpretation are effectivefor financial statements of interim or annual periods ending after December 15,2002.  Adoption of FIN 45 did not have amaterial impact on the Company’s financial condition or results of operations.

 

In January 2003, the FASB issued FASBInterpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN46”), which addresses consolidation by business enterprises where equityinvestors do not bear the residual economic risks and rewards.  These entities have been commonly referred to as “special-purposeentities”.  Companies are required toapply the provisions of FIN 46 prospectively for all variable interest entitiescreated after January 31, 2003.  Forpublic companies, all interests acquired before February 1, 2003, must followthe new rules in accounting periods ending after December 15, 2003.  Adoption of FIN 46 is not expected to have amaterial impact on the Company’s financial condition or results of operations.

 

In April 2003, the FASB issued SFAS 149, “Amendments of Statement 133on Derivative Instruments and Hedging Activities.”  This statement amends SFAS 133, “Accounting for DerivativeInstruments and Hedging Activities”, and clarifies financial accounting andreporting for derivative instruments, including certain derivative instrumentsembedded in other contracts and hedging activities under SFAS 133.  This statement is effective for contractsentered into or modified after June 30, 2003, except as stated below and forhedging relationships designated after June 30, 2003.  The provisions of this statement that relate to Statement 133Implementation Issues that have been effective for fiscal quarters that beganprior to June 15, 2003, should continue to be applied in accordance with theirrespective effective dates.  Theadoption of this statement is not expected to have a material impact on theCompany’s results of operations or financial position.

 

In May 2003, the FASB issued SFAS 150, “Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity.”  This statement establishesstandards for how an issuer classifies and measures certain financialinstruments with characteristics of both liabilities and equity.  Financial instruments that are within thescope of the statement, which previously were often classified as equity, mustnow be classified as liabilities.  Thisstatement is effective for financial instruments entered into or modified afterMay 31, 2003, and otherwise is generally effective at the beginning of thefirst interim period beginning after June 15, 2003.  The adoption of this statement is not expected to have a materialeffect on the Company’s results of operations or financial position.

 

**2.****             ****Senior Subordinated Notes**

 

OnJuly 31, 1996, Resorts and Capital (the “Issuers”) sold $100,000,000 inaggregate principal amount of 101/2% Senior Subordinated Notes due 2006 (the “Notes”).  The Notes are joint and several obligationsof the Issuers.  The Notes mature onAugust 15, 2006 and bear interest at the rate of 101/2% per annum, payable semi-annually in arrears on February 15 and August15 of each year, commencing on February 15, 1997.  Pursuant to a Registration Rights Agreement dated as of July 31,1996, among the Issuers and the Initial Purchasers party thereto, the Issuersfiled a registration statement under the Securities Act of 1933, as amended(the “1933 Act”) with respect to an offer to 

 

7

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exchange the Notes, which were issued inreliance on an exemption from registration under the 1933 Act, for registereddebt securities of the Issuers with terms identical to the Notes.  The exchange of the originally issued Notesfor the registered Notes was completed on February 26, 1997.  The Company purchased $10.2 million, $2.0million and $5.2 million principal amount of the Notes on the open market inOctober 2001, June 2002, and August 2002, respectively.  The Company purchased an additional $7.9million and $1.75 million principal amount of the Notes on the open market inJanuary 2003 and September 2003, respectively. See Note 6.

 

**3.****             ****Long-Term Debt**

 

Long-termdebt consists of the following (in thousands):

 
|                                                      |   | **September  30,  2003** |       | **December  31,  2002** |       |
|-----------------------------------------------------------|--------|--------------------------|------------|-------------------------|------------|
|                                                      |   |                     | ** ** |                    | ** ** |
| 101/2% Senior Subordinated Notes                          |   | $                        | 73,091     |                    | $          | 82,695 |   |
| Outstanding portion of reducing revolver credit  facility |   | 5,500                    |       | 1,000                   |       |
| Notes payable to individuals                              |   | 1,085                    |       | 1,340                   |       |
|                                                      |   | 79,676                   |       | 85,035                  |       |
| Less—Current portion                                 |   | (356                     | )          | (344                    | )          |
|                                                      |   | $                        | 79,320     |                    | $          | 84,691 |   |

 

The 101/2% Senior Subordinated Notesmature on August 15, 2006 and bear interest at the rate of 101/2% per annum, payablesemi-annually in arrears on February 15 and August 15 of each year.

 

TheCompany has a senior secured revolving credit facility which, as amended onSeptember 10, 2003 (the “New Credit Facility”), provides for credit of up to$30 million. The amount of credit available pursuant to the New Credit Facilityreduces by $1.0 million on December 31, 2004 and at the end of each subsequentquarter until March 31, 2006, when the facility terminates and any balance thenoutstanding becomes due and payable. Borrowings under the New Credit Facility bear interest, at the Company’soption, at either (i) the greater of (a) the rate publicly announced from timeto time by Bank of America as its “Prime Rate” or (b) the Federal Funds Rateplus .50% (“Base Rate”) or (ii) a Eurodollar rate determined in accordance withthe New Credit Facility.  As ofSeptember 30, 2003, the Eurodollar rate was 1.12% and the Base Rate was 4.0%.The Eurodollar rate was 1.37% and the Base Rate was 4.25% as of December 31,2002. The effective rate of interest on borrowings under the New CreditFacility was 3.97% per annum as of September 30, 2003.

 

TheCompany purchased $7.9 million and $1.75 million principal amount of its 101/2% Notes on the open market in January 2003 and September 2003,respectively.  The Company borrowed $8.0million and $2.0 million under its New Credit Facility to facilitate theJanuary 2003 and September 2003 purchases, respectively.  The Notes were purchased at a premiumresulting in a loss of $54,000 and $320,000 for the three and nine months endedSeptember 30, 2003, respectively, after writing off unamortized bond feesrelating to the debt issue.

 

OnSeptember 15, 2003, the Company made an interest free loan to the City of Reno(the “Borrower”) in the amount of $500,000 for the purpose of funding theconstruction of improvements and related expenses for the Whitewater RaftingPark to be located in the Truckee River adjacent to Wingfield Park in downtownReno.  If the Borrower does not pay theloan amount on or before November 30, 2003, the Borrower agrees to repay theloan amount, together with interest thereon at the rate of 5% per annum on theunpaid balance on or before January 30, 2004.

 

Thenotes payable to individuals are due in monthly installments of $34,614 and$3,000, including monthly interest at 9% and prime plus 2% (6.0% at September30, 2003), to August 14, 2006 and May 16, 2004, respectively, when therespective principal balances are due. The notes are secured by real property.

 

TheNew Credit Facility and the indenture relating to the 101/2% Notes contain various restrictive covenants including the maintenanceof certain financial ratios and limitations on additional debt, disposition of property,mergers and similar transactions.  As ofSeptember 30, 2003, the Company was in compliance with all of its covenants.

 

8

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**4.****             ****Investment in Joint Ventures**

 

The Silver Legacy was developed by theCircus and Eldorado Joint Venture (the “Silver Legacy Joint Venture”), whichwas formed pursuant to the Agreement of Joint Venture of Circus and EldoradoJoint Venture dated as of March 1, 1994 (the “Original Joint VentureAgreement”), between ELLC and Galleon, Inc. (“Mandalay Sub”).  Under the terms of the Original JointVenture Agreement, ELLC and Mandalay Sub (each a “Partner” and, together, the“Partners”) each acquired a 50% interest in the Silver Legacy Joint Venture(each Partner’s “Percentage Interest”). Each of the Partners was obligated to contribute cash or property to theSilver Legacy Joint Venture with a value approximating 15% of the totalbudgeted cost for developing and constructing the Silver Legacy. To satisfytheir respective contribution obligations, ELLC contributed the land on whichSilver Legacy was constructed, at an agreed value of $25 million, and $26.9million in cash, and Mandalay Sub contributed $51.9 million in cash. Inaddition, pursuant to the Original Joint Venture Agreement, Mandalay Sub’sparent corporation, Mandalay Resort Group, provided certain loans to the SilverLegacy Joint Venture relating to the development and construction of the SilverLegacy (the remaining balance of which was repaid in 1997) and also providedcredit support for a $230 million credit agreement originally entered into bythe Silver Legacy Joint Venture on May 30, 1995 (the “Original Silver LegacyCredit Agreement”) to fund the balance of the Silver Legacy’s development andconstruction costs.  In return, MandalayResort Group received from the Silver Legacy Joint Venture an annual fee equalto 1.5% of the average outstanding principal balance of such financing untilMarch 5, 2002.

 

On March 5, 2002, the Partners executeda new amendment and restatement of the Original Joint Venture Agreement (asfurther amended in April 2002, the “New Joint Venture Agreement”), certainterms of which are summarized below, and the Silver Legacy Joint Venture andits wholly-owned finance subsidiary, Silver Legacy Capital Corp., issued $160million principal amount of 101/8%mortgage notes due 2012 (the “Silver Legacy Notes”).  Concurrently with the issuance of the Silver Legacy Notes, theSilver Legacy Joint Venture (i) repaid the entire outstanding balance of theOriginal Silver LegacyCredit Agreement, (ii) entered into a new senior secured credit facilitycomprised of a $20.0 million term loan facility that will amortize over aperiod of five years and a $20.0 million revolving facility with a five yearmaturity (the “New Silver Legacy Credit Agreement”), and (iii) madedistributions of $10.0 million to ELLC and $20.0 million to Mandalay Sub,utilizing the balance of the net proceeds of the Silver Legacy Notes and $26.0million of borrowings under the New Silver Legacy Credit Agreement.  The New Silver Legacy Credit Agreement issecured by a first priority security interest in substantially all of theexisting and future assets (other than certain licenses which may not bepledged under applicable law) of the Silver Legacy Joint Venture and a firstpriority pledge of and security interest in all of the Partnership interests inthe Silver Legacy Joint Venture.  TheSilver Legacy Notes are secured by a security interest in the same assets andpledges of and security interest in the same Partnership interests which arejunior to the security interests and pledges securing the New Silver LegacyCredit Agreement. On November 4, 2003, the Silver Legacy Joint Venture executedan amendment to the New Silver Legacy Credit Agreement which reduced therevolving facility to $10.0 million, and revised certain covenant ratios withretroactive effect to September 30, 2003, including the maximum total debt toEBITDA ratio which the Silver Legacy Joint Venture had exceeded as of September30, 2003.  At September 30, 2003, therewas no indebtedness outstanding under the New Silver Legacy CreditAgreement.  As of such date, the SilverLegacy Joint Venture was in compliance with all of the covenants in the NewSilver Legacy Credit Agreement and the Silver Legacy Joint Venture had theability to borrow all of the $10.0 million available under the revolvingportion of the New Silver Legacy Credit Agreement.  The entire principal amount then outstanding under the New SilverLegacy Credit Agreement becomes due and payable on March 31, 2007, unless thematurity date is extended with the consent of the lenders.

 

Subject to any contractual restrictions to which the Silver LegacyJoint Venture is subject, including the indenture relating to the Silver LegacyNotes, and prior to the occurrence of a “Liquidating Event,” the Silver LegacyJoint Venture is required by the New Joint Venture Agreement to makedistributions to its Partners as follows:

 

(a) Tax distributions equal to the estimated taxable income of theSilver Legacy Joint Venture allocable to each Partner multiplied by the greaterof the maximum marginal federal income tax rate applicable to individuals forsuch period or the maximum marginal federal income tax rate applicable tocorporations for such period (as of the date hereof both rates were 35%);provided, however, that if the State of Nevada enacts an income tax (includingany franchise tax based on income), the applicable tax rate for any taxdistributions subsequent to the effective date of such income tax shall beincreased by the higher of the maximum marginal individual tax rate orcorporate income tax rate imposed by such tax (after reduction for the federaltax benefit for the deduction of state taxes, using the maximum marginal federal,individual orcorporate rate, respectively).

 

(b) Annual distributions of remaining“Net Cash From Operations” in proportion to the Percentage Interests of thePartners.

 

(c) Distributions of “Net Cash FromOperations” in amounts or at times that differ from those described in (a) and(b) above, provided in each case that both Partners agree in writing to thedistribution in advance thereof.

 

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Asdefined in the New Joint Venture Agreement, the term “Net Cash From Operations”means the gross cash proceeds received by the Silver Legacy Joint Venture, lessthe following amounts: (i) cash operating expenses and payments of otherexpenses and obligations of the Silver Legacy Joint Venture, including interestand scheduled principal payments on Silver Legacy Joint Venture indebtedness,including indebtedness owed to the Partners, if any, (ii) all capitalexpenditures made by the Silver Legacy Joint Venture, and (iii) such reasonablereserves as the Partners deem necessary in good faith and in the best interestsof the Silver Legacy Joint Venture to meet anticipated future obligations andliabilities of the Silver Legacy Joint Venture (less any release of reservespreviously established, as similarly determined).

 

Summarized balance sheet and results ofoperations for the Silver Legacy Joint Venture are as follows:

 

Summarized balance sheet information(in thousands):

 
|                                         |   | **September 30,  2003** |    | **December 31,  2002** |   |
|----------------------------------------------|--------|-------------------------|---------|------------------------|--------|
|                                         |   |                    |    |                   |   |
| Current  assets                              |   | $                       | 23,276  |                   | $      | 23,627 |   |
| Property and  equipment, net                 |   | 267,575                 |    | 272,940                |   |
| Other  assets, net                           |   | 8,327                   |    | 7,969                  |   |
| Total assets                                 |   | $                       | 299,178 |                   | $      | 304,536 |   |
|                                         |   |                    |    |                   |   |
| Current  liabilities                         |   | $                       | 15,015  |                   | $      | 17,185 |   |
| Long-term  liabilities                       |   | 161,943                 |    | 170,285                |   |
| Partners’  equity                       |   | 122,220                 |    | 117,066                |   |
| Total  liabilities and partners’ equity |   | $                       | 299,178 |                   | $      | 304,536 |   |

 

Summarizedresults of operations (in thousands):

 
|               |   | **Three  Months Ended  September 30,** |   | **Nine  Months Ended  September 30,** |   |
|--------------------|--------|----------------------------------------|--------|---------------------------------------|--------|
|               |   | **2003**                               |   | **2002**                              |   | **2003** |   | **2002** |   |
| Net revenues       |   | $                                      | 43,186 |                                  | $      | 46,116 |   | $ | 117,495 |   | $ | 123,824 |   |
| Operating expenses |   | (34,824                                | )      | (35,718                               | )      | (96,429 | ) | (98,193 | ) |
| Operating income   |   | 8,362                                  |   | 10,398                                |   | 21,066 |   | 25,631 |   |
| Other expense      |   | (4,426                                 | )      | (1,822                                | )      | (11,862 | ) | (8,925 | ) |
| Net income         |   | $                                      | 4,116  |                                  | $      | 8,576 |   | $ | 9,204 |   | $ | 16,706 |   |

 

Effective December 13, 2000, Resortsentered into an agreement to form Tamarack Crossings, LLC and TamarackPartners, LLC, each a Nevada limited liability company (collectively the“Tamarack Entities”), to develop, own and operate Tamarack Junction(“Tamarack”), a small casino then being constructed in south Reno, Nevada.  In May 2001, the Tamarack Entitiesconsummated a plan of merger with Tamarack Crossings, LLC being the survivingentity, in which Resorts owns a 21.25% interest.  Resorts has a nontransferable option to purchase from DonaldCarano, at a purchase price equal to his cost plus any undistributed incomeattributable thereto, an additional 21.25% interest in Tamarack Crossings, LLCwhich is exercisable until June 30, 2010. Four members of Tamarack Crossings,LLC, including Resorts, manage the business and affairs of Tamarack.  Resorts’ capital contribution to TamarackCrossings, LLC represents its proportionate share of the total capitalcontributions of the members. Additional capital contributions of the members, including Resorts, maybe required for certain purposes, including the payment of operating costs andcapital expenditures or the repayment of loans, to the extent such costs arenot funded by prior capital contributions and earnings.  At September 30, 2003, Resorts’ equityinvestment in Tamarack Crossings, LLC was $3.8 million.  The Company’s investment in Tamarack isaccounted for using the equity method of accounting.  Equity in income related to Tamarack for the nine months endedSeptember 30, 2003 and 2002 was $664,000 and $392,000, respectively, and forthe three months ended September 30, 2003 and 2002 was $225,000 and $150,000,respectively.

 

Effective July 1, 2000, Resorts andAvereon Research LTD. (“ARL”) entered into an agreement to form MindPlay, LLC(the “MindPlay Entity”), for the purpose of developing, owning and marketing asophisticated system to permit the tracking and surveillance of pit gamingoperations (“MindPlay”).  The MindPlayEntity, in which Resorts owns a 19% interest, is managed by a Board ofManagers, which consists of three Managers designated by ARL and two Managersdesignated by Resorts. At September 30, 2003, Resorts’ equity investment in theMindPlay Entity was $0.8 million. Equity in loss related to MindPlay for the three and nine months endedSeptember 30, 2003 was $106,000 and $259,000, respectively.  The Company’s investment in MindPlay isaccounted for using the equity method of accounting.

 

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The Company’s equity in earnings of theSilver Legacy Joint Venture and Tamarack is reported as a component ofoperating income since the Company operates in the same line of business as theSilver Legacy and Tamarack, each with casino operations.  The Company’s equity in loss of MindPlay isreported as a component of non-operating income since MindPlay operates in adissimilar line of business than the Company.

 

**5****.****             ****Certain Risks andUncertainties**

 

A significant portion of the Company’srevenues and operating income are generated from patrons who are residents ofnorthern California.  A change ingeneral economic conditions or the extent and nature of casino gaming inCalifornia, Washington or Oregon could adversely affect the Company’s operatingresults.  On September 10, 1999, Californialawmakers approved a constitutional amendment that would give Native Americantribes the right to offer slot machines and a range of house-banked cardgames.  On March 7, 2000, Californiavoters approved the constitutional amendment which legalized “Nevada-style”gaming on Native American reservations.

 

TheUnited Auburn Indian Community (“UAIC”) has entered into a development andmanagement agreement with an established gaming operator, Station Casinos,Inc., to develop and manage an approximately $215 million, 200,000 square footgaming and entertainment facility on a 49-acre site approximately 21 milesnortheast of Sacramento.  This facility,Thunder Valley Casino, began operations on June 9, 2003.  Although its impact on our operating resultswas not significant in the second quarter, we believe Thunder Valley Casino hada significant impact on our operating results for the three months endedSeptember 30, 2003. Based on its size, proximity, and potential expansioncapabilities, we believe Thunder Valley Casino could further impact ouroperations in the future. While we cannot predict the extent of the futureimpact, it could be significant.

 

**6.****          ****Subsequent Event**

 

Pursuantto notice given on October 3, 2003, to the trustee under the indenture relatingto our 101/2% Notes, weredeemed $8.8 million principal amount of the 101/2% Notes on November 7, 2003 at a price of 101.75% of the principalamount.  The Company borrowed $8.5million under its New Credit Facility to facilitate the partial redemption.  The partial redemption will result in a lossof $257,000 in the fourth quarter of 2003 after writing off unamortized bondfees relating to the debt issue.

 

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**Item 2. ****Management’s Discussion and Analysis of Financial Conditionand Results of Operations.**

 

**General**

 

Eldorado Resorts LLC (“Resorts”) wasformed in June 1996 to be the successor to Eldorado Hotel Associates LimitedPartnership (the “Predecessor Partnership”) pursuant to an exchange of all theoutstanding partnership interests in the Predecessor Partnership for membershipinterests in Resorts (the “Reorganization”). The Reorganization was effective on July 1, 1996.  Resorts owns and operates the Eldorado Hotel& Casino (the “Eldorado”), a premier hotel/casino and entertainmentfacility in Reno, Nevada.  In additionto owning the Eldorado, Resorts’ 96% owned subsidiary, Eldorado LimitedLiability Company, a Nevada limited liability company (“ELLC”), owns a 50%interest in a joint venture (the “Silver Legacy Joint Venture”) which owns theSilver Legacy Resort Casino  (the“Silver Legacy”), a major themed hotel/casino located adjacent to the Eldorado.Resorts, ELLC and Eldorado Capital Corp. (“Capital”), a wholly-owned subsidiaryof Resorts, which holds no significant assets and conducts no businessactivity, are collectively referred to as the “Company.”

 

TheCompany accounts for its investment in the Silver Legacy Joint Venture and twoother smaller joint ventures, Tamarack and MindPlay, utilizing the equitymethod of accounting.  The Company’sconsolidated net income includes its proportional share of the Silver LegacyJoint Venture’s, Tamarack’s, and MindPlay’s net income (loss) before taxes.

 

Thefollowing discussion of the Company’s operations relates to the Eldorado exceptas otherwise indicated.

 

**CriticalAccounting Policies**

 

Our discussion and analysis of our results of operations and financialcondition that follows is based upon our condensed consolidated financialstatements, which have been prepared in accordance with accounting principlesgenerally accepted in the United States of America.  The preparation of these financial statements requires that weapply significant judgment in defining the appropriate assumptions forcalculating financial estimates.  Bytheir nature, these judgments are subject to an inherent degree ofuncertainty.  Our judgments are based onour historical experience, terms of existing contracts, our observance oftrends in the industry, information provided by our customers and informationavailable from other outside sources, as appropriate.  Because of the uncertainty inherent in these matters, there is noassurance that actual results will not differ from our estimates used inapplying the following critical accounting policies.

 

*Property andEquipment and Other Long-Lived Assets*

 

Property and equipment is recorded at cost and is depreciated over itsestimated useful life.  Judgments aremade in determining estimated useful lives and salvage values of these assets.  The accuracy of these estimates affects theamount of depreciation expense recognized in our financial results and whetherwe have a gain or loss on the disposal of assets.  We review depreciation estimates and methods as new events occur,more experience is acquired, and additional information is obtained that wouldpossibly change our current estimates. At September 30, 2003, no events or changes in circumstances indicatedthat the carrying values of our long-lived assets may not be recoverable.

 

*Reserve forUncollectible Accounts Receivable*

 

We reserve an estimated amount for receivables that may not becollected.  Methodologies for estimatingbad debt reserves range from specific reserves to various percentages appliedto aged receivables. Historical collection rates are considered, as arecustomer relationships, in determining specific reserves.  As with many estimates, management must makejudgments about potential actions by third parties in establishing and evaluatingour reserves for bad debts.

 

*Self-InsuranceReserves*

 

The Eldorado is self insured for our group health and workmens’compensation programs.  We utilizehistorical claims information provided by our third party administrators tomake estimates for known pending claims as well as claims that have beenincurred, but not reported as of the balance sheet date.  In order to mitigate our potential exposure,we have an individual claim stop loss policy on our group health claims and anaggregate stop loss policy on our workmens’ compensation claims.  If we become aware of significant claims ormaterial changes affecting our estimates, we would increase our reserves in theperiod in which we made such a determination and record the additional expense.

 

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**RecentDevelopments**

 

Asignificant portion of the Company’s revenues and operating income aregenerated from patrons who are residents of northern California, and as such,our operations have been adversely impacted by the growth in Native American gamingin northern California.  The UnitedAuburn Indian Community (“UAIC”) has entered into a development and managementagreement with an established gaming operator, Station Casinos, Inc., todevelop and manage Thunder Valley Casino, an approximately $215 million,200,000 square foot gaming and entertainment facility on a 49-acre siteapproximately 21 miles northeast of Sacramento.  Thunder Valley Casino opened on June 9, 2003 and offersapproximately 1,900 slot machines and 100 table games, dining and entertainmentamenities and parking for 3,000 vehicles. This project has been open approximately five months, and during thequarter ended September 30, 2003, we believe it had a significant impact on ouroperating results.  Based on its size,proximity, and potential expansion capabilities, we believe Thunder ValleyCasino could further impact our operations in the future. While we cannotpredict the extent of the future impact, it could be significant.  In addition to existing gaming facilities,numerous Native American tribes have announced that they are in the process ofdeveloping or are considering establishing large-scale gaming facilities innorthern California. Management believes the greatest impact from ThunderValley Casino to the Eldorado’s customer base is to its day-trippers, thosepatrons whose visit is for one day and does not include an overnight stay.  These customers are typically not trackedplayers, as they tend not to be as loyal a customer as those who visit for morethan one day at a time.  Day-trippersprimarily visit Reno in the second and third quarters when the weather is morefavorable.

 

Approvalshave been obtained for two public works projects in the downtown area ofReno.  The first project will lower thetrain tracks, which run through Reno’s downtown district and separate theEldorado and the two adjoining properties from the rest of the downtown gamingfacilities.  Construction on thisproject, which commenced in early 2003, is expected to be completed in 2006 andwill be organized in such a manner that it will not prevent pedestrian orvehicular traffic from crossing the railroad tracks within the downtownarea.  The second project involves theconstruction of a downtown special events center next to the National BowlingStadium.  Construction of this projectis expected to begin in early 2004 and be completed by mid-2005.  At this time, we cannot determine the effecteither of these projects will have on our operations.

 

OnJuly 22, 2003, the Governor of Nevada signed into law a new tax bill thatprovides for increases in the taxes applicable to our operations.  Based on our initial evaluation of the newNevada tax law, we believe the annual incremental impact on our current levelof operations will be approximately $0.75 million.

 

Thefollowing discussion of the Company’s operations relates to the Eldorado exceptas otherwise indicated.

 

**Three Months Ended September 30,2003 Compared toThree Months Ended September 30, 2002**

 

**NetRevenues**

 

Net revenues decreased by approximately $5.7 million, or 13.9%, to$35.6 million for the three months ended September 30, 2003 compared to $41.3million for the same period in 2002. The decrease in net revenues resulted primarily from decreases in casino,hotel and food revenues.  Increased competitionfrom Native American gaming, particularly due to the opening of Thunder ValleyCasino on June 9, 2003, and a weak California economy continued to pose achallenge for the three months ended September 30, 2003.

 

Casinorevenues decreased by approximately $4.7 million, or 16.9%, to $23.1 millionfor the three months ended September 30, 2003 compared to $27.8million for the same period in 2002.  The decrease in casino revenues was due todecreases in table games and slot volume, primarily in untracked play, and alower table games hold percentage as compared to the previous period.  The table games hold percentage was lowerthan the same period in 2002 when the table games hold percentage was slightlyhigher than average.  This decrease inhold percentage, as compared to the third quarter of 2002, accounted for 47.2%of the decrease in casino revenues.

 

Food,beverage and entertainment revenues decreased by approximately $1.0 million, or7.9%, to $11.2 million for the three months ended September 30, 2003 comparedto $12.2 million during the same period in 2002. The decrease was primarily dueto a reduction in food revenue as a result of lower customer counts in thethird quarter of 2003 as compared to the same period in 2002.

 

Hotelrevenues decreased by approximately $0.2 million, or 4.5%, to $4.7 million forthe three months ended September 30, 2003 compared to $5.0 million during thesame period in 2002.  The Company’saverage daily rate 

 

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(“ADR”) decreased to approximately $61 in thethird quarter of 2003 as compared to $65 in the third quarter of 2002 whilehotel occupancy increased to approximately 95% in the third quarter of 2003compared to approximately 94% in the third quarter of 2002.

 

Promotionalallowances, expressed as a percentage of casino revenues, were 21.7% for thethird quarter of 2003 compared to 18.3% for the same period in 2002.  This increase is primarily related toincreased redemption of complimentaries as a result of our customers utilizingthe enhanced “Club Eldorado” program compounded with decreased casinorevenue.  The Company enhanced its “ClubEldorado” program on July 1, 2002, allowing customers to view and redeem earnedcomplimentaries throughout the property and offering discounts at the showroomand food outlets.  While the program wasimplemented in the third quarter of 2002, the full effect of the increasedcomplimentaries was not felt until the fourth quarter of 2002.  Management feels the enhanced program hasprovided additional customer loyalty and has added to its customer base.

 

**Operating Expenses**

 

TheCompany’s operating expenses decreased by approximately $2.5 million, or 7.2%,to $31.8 million for the three months ended September 30, 2003 from $34.3million during the same period in 2002. The decrease is primarily attributableto decreases in casino, food, entertainment and selling, general andadministrative expenses.

 

Casinoexpenses decreased by $1.1 million, or 7.8%, to $12.5 million for the threemonths ended September 30, 2003 from $13.6 million during the same period in2002 due to decreases in the amount of gaming taxes paid, bad debt expense,charter buses and payroll expenses, primarily in our games and slotdepartments, where we are benefiting from utilizing new labor efficientticket-in ticket-out slot machines. The decreases were partially offset byincreased casino promotions.  Thedecrease in gaming taxes, not withstanding the implementation of higher rateseffective August 1, 2003, is due to decreased gaming revenue.  The ticket-in ticket-out machines were firstintroduced in early 2003 and as of September 30, 2003, we have approximately520 of these machines.

 

Food,beverage and entertainment expenses decreased by $0.7 million, or 8.3%, toapproximately $7.5 million for the three months ended September 30, 2003 fromapproximately $8.2 million during the same period in 2002. The decrease isprimarily due to lower payroll expenses and decreased food costs, primarily dueto lower restaurant customer counts, and lower showroom professional services.

 

Hotelexpenses decreased by approximately $35 thousand, or 1.9%, to $1.8 million forthe three months ended September 30, 2003.

 

**Selling,General and Administrative Expenses**

 

Selling,general and administrative expenses decreased by $0.6 million, or 8.4%, toapproximately $6.8 million for the three months ended September 30, 2003 ascompared to the same period in 2002 primarily as a result of decreases inutilities and advertising expenses compounded with not having an initialplayers club liability that was incurred in 2002 for the new “Club Eldorado”program.

 

**Depreciation**

 

Depreciationfor the three months ended September 30, 2003 was $2.8 million compared to $2.9million for the same period in 2002, a decrease of 2.3%, due to some assetsbecoming fully depreciated.

 

**Equityin Income of Unconsolidated Affiliates**

 

Earningsfrom the Company’s unconsolidated affiliates, the Silver Legacy Joint Ventureand Tamarack, for the three months ended September 30, 2003 were $2.3 millionas compared to $4.4 million for the same period in 2002, a decrease ofapproximately $2.2 million, or 48.6%. Equity in income of the Silver Legacy Joint Venture decreasedapproximately $2.2 million, or 52.0%, for the three months ended September 30,2003 compared to the same period in 2002. Equity in income of Tamarack increased approximately $75,000, or 50.0%,for the three months ended September 30, 2003 compared to the same period in2002.

 

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**OtherIncome (Expense)**

 

Other income (expense) is comprised of interest expense, equity in lossof unconsolidated affiliate, interest rate swap income and gain (loss) onrepurchase of bonds.  Interest expenseis net of capitalized interest and interest income.  For the three months ended September 30, 2003, interest expensedecreased by approximately $0.3 million, or 11.2%, to $2.2 million, compared to$2.4 million for the same period in 2002 primarily due to a decrease in theaverage outstanding borrowings and a lower average interest rate.  The decrease in average outstandingborrowings is partly due to the Company’s purchase of $5.2 million, $7.9million and $1.75 million principal amount of its 101/2% Notes on the open market inAugust 2002, January 2003 and September 2003, respectively.  In September 2003 and August 2002, theCompany recognized a $54,000 loss and a $15,000 gain, respectively, on thepurchase of its 101/2% Notes, net of unamortized bondfees relating to the debt issue.  The Companyrecognized interest rate swap income of $1.1 million for the three months endedSeptember 30, 2002.  The Company alsorecognized equity in loss of its unconsolidated affiliate of $106,000 for thethree months ended September 30, 2003.

 

**NetIncome**

 

Asa result of the factors described above, net income for the three months endedSeptember 30, 2003 decreased approximately $6.4 million, or 63.5%, to $3.7million compared to $10.0 million during the same period in 2002.

 

**Nine Months EndedSeptember 30, 2003 Compared toNine Months Ended September 30, 2002**

 

**NetRevenues**

 

Net revenues decreased by approximately $8.6 million, or 7.8%, to$101.6 million for the nine months ended September 30, 2003 compared to $110.2million for the same period in 2002. The decrease in net revenues during the2003 period included decreases in casino, food and entertainment revenues.  Increased competition from Native American gaming, particularly theopening of Thunder Valley Casino on June 9, 2003, and a weak California economycontinued to pose a challenge for the nine months ended September 30, 2003.

 

Casino revenues decreased by approximately $6.0 million, or 8.2%, to$67.1 million for the nine months ended September 30, 2003 compared to $73.1million for the same period in 2002. The decrease in casino revenues was primarily due to lower table gamesand slot revenue as a result of decreased table games and slot volume and alower table games hold percentage for the first nine months of 2003 as comparedto the same period in 2002.  The tablegames hold percentage was lower than the same period in 2002 when the tablegames hold percentage was slightly higher than average.  This decrease in hold percentage, ascompared to the nine months ended September 30, 2002, accounted for 55.2% ofthe decrease in casino revenues.

 

Food, beverage and entertainment revenues decreased by approximately$2.1 million, or 6.3%, to $31.7 million for the nine months ended September 30,2003 compared to $33.9 million during the same period in 2002.  The decrease was primarily due to lowercustomer counts in the Eldorado’s restaurants and decreased showroom occupancyin the first nine months of 2003 as compared to the same period in 2002.

 

Hotel revenues increased by approximately $0.1 million, or 0.8%, to$12.7 million for the nine months ended September 30, 2003 compared to $12.6million for the same period in 2002. The Eldorado’s average daily rate andhotel occupancy remained at approximately $57 and 91% for the nine months endedSeptember 30, 2003 and 2002.  In each ofthe nine-month periods, hotel occupancy was impacted by a reduction inavailable room nights (3,400 in 2003 and 3,300 in 2002) due to our hotelremodeling in the first half of 2003 and an energy retrofit in the first halfof 2002.

 

Promotionalallowances, expressed as a percentage of casino revenues, were 21.0% for thenine months ended September 30, 2003 compared to 18.3% for the same period in2002.  This increase is primarilyrelated to increased redemption of complimentaries as a result of our customersutilizing the enhanced “Club Eldorado” program.  The Company enhanced its “Club Eldorado” program on July 1, 2002,allowing customers to view and redeem earned complimentaries throughout the propertyand offering discounts at the showroom and food outlets.  Management feels the enhanced program hasprovided additional customer loyalty and has added to its customer base.

 

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**OperatingExpenses**

 

The Company’s operating expenses decreased by approximately $3.8million, or 4.0%, to $92.9 million for the nine months ended September 30, 2003from $96.7 million during the same period in 2002.  This decrease is primarily attributable to a decrease in casino,food, entertainment, depreciation and selling, general and administrativeexpenses.

 

Casino expenses decreased by $0.8 million, or 2.1%, to $36.3 millionfor the nine months ended September 30, 2003 from $37.0 million during the sameperiod in 2002, primarily due to decreases in bad debt, charter buses, gamingtaxes and payroll expenses in the games and slot departments, as a result ofour new ticket-in ticket-out slot machines, partially offset by an increase incasino promotions.

 

Food, beverage and entertainment expenses decreased by approximately$2.1 million, or 9.0%, to $21.5 million for the nine months ended September 30,2003 from approximately $23.6 million during the same period in 2002.  The decrease is primarily due to lowerpayroll expenditures and decreased food costs, primarily due to lowerrestaurant customer counts, lower showroom professional services andadvertising expenses.

 

Hotel expenses decreased by approximately $0.1 million, or 1.6%, to$5.2 million for the nine months ended September 30, 2003 compared to $5.3million for the same period in 2002 primarily due to a decrease in payrollexpenditures and hotel cost of sales.

 

**Selling, General andAdministrative Expenses**

 

Selling, general and administrative expenses decreased by $0.2 million,or 1.0%, to $20.4 million for the nine months ended September 30, 2003 comparedto $20.6 million during the same period in 2002.  The decrease was primarily due to a decrease in advertisingexpense along with not having an initial players club liability in the 2003period, partially offset by an increase in general liability insurance for thenine months ended September 30, 2003 as compared to the 2002 period.

 

**Depreciation**

 

Depreciation for the nine months ended September 30, 2003 was $8.4million compared to $8.9 million for the same period in 2002, a decrease of6.4%, due to certain assets becoming fully depreciated.

 

**Equity in Income ofUnconsolidated Affiliates**

 

Earningsfrom the Company’s unconsolidated affiliates, the Silver Legacy Joint Ventureand Tamarack, for the nine months ended September 30, 2003 were $5.3 million ascompared to $8.7 million for the same period in 2002, a decrease ofapproximately $3.5 million, or 39.8%. Equity in income of the Silver Legacy Joint Venture decreased approximately$3.8 million, or 44.9%, for the nine months ended September 30, 2003 comparedto the same period in 2002.  Equity inincome of Tamarack increased approximately $272,000, or 69.4%, for the ninemonths ended September 30, 2003 compared to the same period in 2002.

 

**OtherIncome (Expense)**

 

Otherincome (expense) is comprised of interest expense, equity in loss ofunconsolidated affiliate, gain (loss) on repurchase of bonds, interest rateswap income (loss) and gain on sale of land. Interest expense is net of capitalized interest and interestincome.  For the nine months endedSeptember 30, 2003, interest expense decreased by approximately $1.1 million,or 14.6%, to $6.7 million compared to $7.8 million for the same period in 2002primarily due to a decrease in the average outstanding borrowings and a loweraverage interest rate.  The decrease inaverage outstanding borrowings is partly due to the Company’s purchase of $2.0million, $5.2 million, $7.9 million and $1.75 million principal amount of its101/2% Notes on the openmarket in June 2002, August 2002, January 2003 and September 2003,respectively.  The Company recognized acumulative $320,000 loss and a cumulative $50,000 gain on the January andSeptember 2003 purchases and June and August 2002 purchases, respectively, of101/2% Notes, net of unamortized bond fees relatingto the debt issue.  The Companyrecognized a $0.2 million loss and a $1.1 million gain from an interest rateswap agreement in the 2003 and 2002 periods, respectively. The Company alsorecognized equity 

 

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in loss of its unconsolidated affiliate of$259,000 in the 2003 period.  In June2003, the Company sold its approximately 90 acres of land in Verdi, Nevada,resulting in a gain of $906,000.

 

**Net Income**

 

As a result of the factors described above, net income for the ninemonths ended September 30, 2003 decreased by approximately $7.9 million, or52.0%, to $7.3 million compared to $15.3 million during the same period in2002.

 

**Liquidity and Capital Resources**

 

The Company’s primary sources ofliquidity and capital resources have been through cash flow from operations,borrowings under various credit agreements and the issuance in July 1996 of$100 million in aggregate principal amount of the 101/2% Notes.  Since 1996, the Company has completedseveral expansion and remodeling projects, accounting for a significant use ofcash flow from operations and borrowed funds. Net cash provided by operating activities was $8.2 million for the nine monthsended September 30, 2003 compared to net cash provided by operating activitiesof $12.6 million during the same period of the prior year.

 

At September 30, 2003, the Company had$7.1million of cash and cash equivalents and, after giving effect to thenoutstanding borrowings, it had approximately $24.5 million available pursuant to its New Credit Facility (asdefined below) all of which could then be utilized under the most restrictiveof our loan covenants.  The Company’sborrowing capacity under those covenants can fluctuate substantially fromquarter to quarter depending upon our operating cash flow.  OnJuly 17, 2001, the Company’s credit facility was amended and restated (the “NewCredit Facility”).  The New CreditFacility, which was further amended September 10, 2003, provides for a seniorsecured revolving credit facility of $30 million.  The amount of credit available pursuant to the New CreditFacility reduces by $1.0 million on December 31, 2004 and at the end of eachsubsequent quarter until March 31, 2006, when the facility terminates and anybalance then outstanding becomes due and payable.  Borrowings under the New Credit Facility bear interest, at theCompany’s option, at either (i) the greater of (a) the rate publicly announcedfrom time to time by Bank of America as its “Prime Rate” or (b) the FederalFunds Rate plus .50% (“Base Rate”) or (ii) a Eurodollar rate determined inaccordance with the New Credit Facility. The effective rate of interest on borrowings under the New Credit Facilityat September 30, 2003 was 3.97% per annum.

 

TheNew Credit Facility is secured by substantially all of the Company’s realproperty.  The New Credit Facilityincludes various restrictions and other covenants including: (i) restrictionson the disposition of property, (ii) restrictions on investments andacquisitions, (iii) restrictions on distributions to members of Resorts, (iv)restrictions on the incurrence of liens and negative pledges, (v) restrictionson the incurrence of indebtedness and the issuance of guarantees, (vi)restrictions on transactions with affiliates and, (vii) restrictions on annualcapital expenditures including capital leases. The New Credit Facility also contains financial covenants including amaximum total debt to EBITDA ratio, a maximum senior debt to EBITDA ratio, aminimum fixed charge coverage ratio and a minimum equity requirement.  As of September 30, 2003, the Company was incompliance with all provisions of the New Credit Facility.

 

Asof September 30, 2003, the Company had outstanding (i) $73.1 million in aggregateprincipal amount of the 101/2% Notes, (ii) $5.5 million of borrowings under the New Credit Facilityand (iii) $0.7 million of other long-term debt (net of current portion).

 

Cashused in investing activities for the nine months ended September 30, 2003 was$1.2 million compared to cash provided by investing activities of $12.9 millionfor the nine months ended September 30, 2002. In 2003, cash used in investing activities related primarily to capitalexpenditures for slot purchases, our hotel remodeling and various equipmentpurchases.  In June 2003, the Companysold its 90 acres of land in Verdi, Nevada for approximately $2.5 million.  Distributions from unconsolidated affiliatesdecreased $14.2 million to $2.5 million for the nine months ended September 30,2003 compared to $16.7 million for the same period in 2002 when ELLC receivedfrom the Silver Legacy Joint Venture a special distribution of $10.0 million atthe time of issuance of the Silver Legacy Notes and a $2.6 million prior yeartax distribution which was made on February 28, 2002.  Capital spending for the nine months ended September 30, 2003increased $3.2 million to $6.2 million compared to $3.0 million for the ninemonths ended September 30, 2002.  Thisincrease is primarily related to the purchase of new ticket-in ticket-out slotmachines of which, as of September 30, 2003, the Company has approximately 520on its casino floor.

 

Cashused in financing activities was $8.1 million for the nine months endedSeptember 30, 2003, compared to $27.6 million for the nine months endedSeptember 30, 2002.  During the ninemonths ended September 30, 2003, the 

 

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Company purchased $7.9 million and $1.75million principal amount of its 101/2% Notes facilitated by borrowing $10.0 million under its creditfacility.  During the nine months endedSeptember 30, 2002, the Company reduced the outstanding portion of the NewCredit Facility by $15.75 million primarily utilizing the aforementioneddistributions to ELLC from the Silver Legacy Joint Venture in the aggregateamount of $12.6 million.

 

TheOperating Agreement of Resorts dated June 28, 1996 obligates Resorts todistribute each year for as long as it is not taxed as a corporation to each ofits members an amount equal to such members’ allocable share of the taxableincome of Resorts multiplied by the highest marginal combined Federal, stateand local income tax rate applicable to individuals for that year.  For the nine months ended September 30, 2003,Resorts made distributions of $2.5 million to its members as compared to $4.6million during the same period in 2002.

 

TheCompany’s future sources of liquidity are anticipated to be from its operatingcash flow, funds available from the New Credit Facility and capital leasefinancing for certain of its fixed asset purchases.  The Company’s anticipated uses of cash in the near term will befor capital expenditures and debt service. We believe our capital resources are adequate to meet our obligations includingthe funding of our debt service and recurring capital expenditures.

 

**Forward-LookingStatements**

 

Certaininformation included in this report and other materials filed or to be filed bythe Company with the Securities and Exchange Commission (as well as informationincluded in oral statements or written statements made or to be made by theCompany) contains statements that are forward-looking within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of theSecurities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relatestrictly to historical or current facts. The Company has based these forward-looking statements on its currentexpectations about future events.  Theseforward-looking statements include statements with respect to the Company’sbeliefs, plans, objectives, goals, expectations, anticipations, intentions,financial condition, results of operations, future performance and business,including, current and future operations and statements that include the words“may”, “could”, “should”, “would”, “believe”, “expect”, “anticipate”,“estimate”, “intend”, “plan” or similar expressions.  Such statements include information relating to capital spending,financing sources and the effects of regulation (including gaming and taxregulation) and competition.  Suchforward-looking information involves important risks and uncertainties thatcould significantly affect anticipated results in the future and, accordingly,such results may differ from those expressed in any forward-looking statementsmade by or on behalf of the Company. These risks and uncertainties include, but are not limited to dependenceon existing management, leverage and debt service (including sensitivity tofluctuations in interest rates), domestic or global economic conditions,changes in Federal or state tax laws or the administration of such laws,changes in gaming laws or regulations (including the legalization of gaming incertain jurisdictions), expansion of gaming on Native American lands (includingsuch lands in California), risks and uncertainties relating to any developmentand construction activities and applications for licenses and approvals underapplicable laws and regulations (including gaming laws and regulations) and anyfurther terrorist attacks similar to those that occurred September 11,2001.  Additional information concerningpotential factors that we think could cause our actual results to differmaterially from expected and historical results is included under the caption“Factors that May Affect the Company’s Future Results” in Item 1 of our annualreport on Form 10-K for the year ended December 31, 2002.  This statement is provided as permitted bythe Private Securities Litigation Reform Act of 1995.

 

**Item 3.****  Quantitativeand Qualitative Disclosures About Market Risk**

 

TheCompany is exposed to market risk in the form of fluctuations in interest ratesand their potential impact upon its variable rate debt.  The Company evaluates its exposure to thismarket risk by monitoring interest rates in the marketplace.  We do not utilize derivative financialinstruments for trading purposes.  Otherthan changes in the amount of variable rate debt from time to time outstanding,there were no material quantitative changes in the Company’s market riskexposure, or how risks were managed during the nine months ended September 30,2003.

 

Theindebtedness outstanding under the New Credit Facility as of September 30,2003, representing all of the Company’s then outstanding variable rate debt,totaled $5.5 million.  As of September30, 2003, the interest rate on our indebtedness under the New Credit Facilitywas LIBOR plus 2.0% for $3.0 million of such indebtedness and Prime Rate plus1.0% for the balance of such indebtedness. Under the terms of our New Credit Facility, we may have outstandingthereunder, from time to time, indebtedness of up to $30.0 million, subject toour compliance with applicable covenants. To the extent we increase the amount of our indebtedness under the NewCredit Facility, we will 

 

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increase our exposure to market risk in theform of fluctuations in interest rates. For information concerning our New Credit Facility, see the discussionin Item 2 of this Part I under the caption “Liquidity and Capital Resources.”

 

**Item 4.****  Controls andProcedures**

 

An evaluation was performed by management, with the participation ofour Chief Executive Officer and Chief Financial Officer, of the effectivenessof the design and operation of our disclosure controls and procedures.  Based on this evaluation, the ChiefExecutive Officer and Chief Financial Officer have concluded that, as ofSeptember 30, 2003, our disclosure controls and procedures are effective toensure that information required to be disclosed in the reports that we file orsubmit under the Securities Exchange Act of 1934 is recorded, processed,summarized and reported, within the time periods specified in applicable rulesand forms of the Securities and Exchange Commission.

 

There havebeen no changes in our internal controls over financial reporting that occurredduring the period covered by this report that have materially affected, or arereasonably likely to materially affect, these internal controls over financialreporting.

 

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**PART II****.****                                                OTHERINFORMATION**

 

**Item 6****.****          ****EXHIBITS AND REPORTS ON FORM 8-K**

 

**(a)****         ****Exhibits**

 

The following exhibits are filed as part of thisreport.

 
| **Exhibit Number** |   | **Description**                                                                                                                                                                                                                                                                                |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1                |   | Amendment No. 2 to Second  Amended and Restated Loan Agreement, dated as of September 10, 2003, by and  among Eldorado Resorts LLC, the banks referred to therein, and Bank of  America, N.A., as administrative agent, and related consents of Eldorado  Capital Corporation and the lenders. |
| 4.2                |   | Promissory Note dated as of  August 21, 2003, by and between Eldorado Resorts LLC, and the City of Reno.                                                                                                                                                                                       |
| 31.1               |   | Certification of Donald L.  Carano, Chief Executive Officer of Resorts and****Capital                                                                                                                                                                                                          |
| 31.2               |   | **Certification of Robert M. Jones, Chief Financial  Officer of**Resorts                                                                                                                                                                                                                       |
| 31.3               |   | **Certification of Gene R. Carano, Chief Financial  Officer of**Capital                                                                                                                                                                                                                        |
| 32.1               |   | **Certification of Donald L. Carano pursuant to 18  U.S.C. Section 1350**                                                                                                                                                                                                                      |
| 32.2               |   | Certification of Robert M.  Jones****pursuant  to 18 U.S.C. Section 1350                                                                                                                                                                                                                       |
| 32.3               |   | Certification of Gene R. Carano****pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                          |

 

**(b)****         ****Reports on Form 8-K**

 

No report on Form 8-K was filed during the periodcovered by this report.

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrantshave duly caused this report to be signed on their behalf by the undersignedthereunto duly authorized.

 

 
|                                      |   | ELDORADO  RESORTS LLC                                                                                            |   |
|-------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|--------|
|                                      |   |                                                                                                             |   |
|                                      |   |                                                                                                             |   |
| Date:   November  13, 2003 | By:    |  /s/  Donald L. Carano                                                                                      |   |
|                                      |   | Donald  L. Carano  Chief Executive Officer, President and  Presiding Manager                                     |
|                                      |   |                                                                                                             |
|                                      |   |                                                                                                             |
| Date:   November  13, 2003 | By:    |  /s/  Robert M. Jones                                                                                       |   |
|                                      |   | Robert  M. Jones  Chief Financial Officer of  Eldorado Resorts LLC (Principal  Financial and Accounting Officer) |
|                                      |   |                                                                                                             |
|                                      |   |                                                                                                             |
|                                      |   |                                                                                                             |
|                                      |   | ELDORADO  CAPITAL CORP.                                                                                          |
|                                      |   |
|                                      |   |
| Date:   November  13, 2003 | By:    |  /s/  Donald L. Carano                                                                                      |   |
|                                      |   | Donald  L. Carano  President                                                                                     |
|                                      |   |
|                                      |   |
| Date:   November  13, 2003 | By:    |  /s/  Gene R. Carano                                                                                        |   |
|                                      |   | Gene  R. Carano  Treasurer (Principal Financial and  Accounting Officer)                                         |

 

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**EXHIBIT INDEX**

 
| **Exhibit Number** |   | **Description**                                                                                                                                                                                                                                                                                |
|--------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |   |                                                                                                                                                                                                                                                                                           |
| 4.1                |   | Amendment  No. 2 to Second Amended and Restated Loan Agreement, dated as of September  10, 2003, by and among Eldorado Resorts LLC, the banks referred to therein,  and Bank of America, N.A., as administrative agent, and related consents of  Eldorado Capital Corporation and the lenders. |
|               |   |                                                                                                                                                                                                                                                                                           |
| 4.2                |   | Promissory  Note dated as of August 21, 2003, by and between Eldorado Resorts LLC, and  the City of Reno.                                                                                                                                                                                      |
|               |   |                                                                                                                                                                                                                                                                                           |
| 31.1               |   | Certification  of Donald L. Carano, Chief Executive Officer of Resorts and Capital                                                                                                                                                                                                             |
|               |   |                                                                                                                                                                                                                                                                                           |
| 31.2               |   | Certification  of Robert M. Jones, Chief Financial Officer of Resorts                                                                                                                                                                                                                          |
|               |   |                                                                                                                                                                                                                                                                                           |
| 31.3               |   | Certification  of Gene R. Carano, Chief Financial Officer of Capital                                                                                                                                                                                                                           |
|               |   |                                                                                                                                                                                                                                                                                           |
| 32.1               |   | Certification  of Donald L. Carano pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                          |
|               |   |                                                                                                                                                                                                                                                                                           |
| 32.2               |   | Certification of Robert M. Jones pursuant to 18 U.S.C.  Section 1350                                                                                                                                                                                                                           |
|               |   |                                                                                                                                                                                                                                                                                           |
| 32.3               |   | Certification of Gene R. Carano pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                             |

 

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