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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



|[X] |  | 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



|[    ] |  | 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 333-87202



CIRCUS AND ELDORADO JOINT VENTURE

SILVER LEGACY CAPITAL CORP.

(Exact names of registrants as specified in their charters)



|Nevada Nevada                                                 |  | 88-0310787 71-0868362               
|------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. Employer Identification No.)



407 North Virginia
Street, Reno, Nevada 89501

---

(Address of principal executive offices, including zip
code)



(800) 687-7733

---

(Registrants telephone number, including area code)



Not Applicable

---

(Former name, former address and former fiscal year, if changed since last report)



Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing
requirements for the past 90 days. Yes    x    No ̈



Indicate by check mark whether either of the registrants is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ̈No  x



The number of shares of Silver
Legacy Capital Corp.s Common Stock outstanding at November 14, 2003 was 2,500. All of these shares are owned by Circus and Eldorado Joint Venture.



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CIRCUS AND ELDORADO JOINT VENTURE

SILVER LEGACY CAPITAL CORP.



FORM 10-Q



INDEX



|                              |  |         |  |                                                                                                                       |  | Page No.
|----------------------------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------------- |  | --------
|                              | 
|PART I. FINANCIAL INFORMATION |  |        
|                              |  |         | 
|                              |  | Item 1. |  | Financial Statements:                                                                                                 |  |         
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002                        |  | 3       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2003 and 2002 |  | 4       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Partners Equity as of September 30, 2003 and December 31, 2002        |  | 5       
|                              |  |         | 
|                              |  |         |  | Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2003 and 2002       |  | 6       
|                              |  |         | 
|                              |  |         |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                        |  | 7       
|                              |  |         | 
|                              |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 11      
|                              |  |         | 
|                              |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                            |  | 18      
|                              |  |         | 
|                              |  | Item 4. |  | Controls and Procedures                                                                                               |  | 19      
|                              | 
|PART II. OTHER INFORMATION    |  |        
|                              |  |         | 
|                              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                      |  | 19      
|                              | 
|SIGNATURES                    |  | 20     



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PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)



|                                       |  | September 30,2003 |         | December 31,2002
|-------------------------------------- |  | ----------------- | ------- | ----------------
|ASSETS                                 |  |                   |         |                 
|CURRENT ASSETS:                        |  |                   |         |                 
|Cash and cash equivalents              |  | $                 | 13,255  |                 
|Accounts receivable, net               |  |                   | 3,920   |                 
|Inventories                            |  |                   | 1,685   |                 
|Prepaid expenses and other             |  |                   | 4,416   |                 
|                                       |  |                   |         |                 
|Total current assets                   |  |                   | 23,276  |                 
|PROPERTY AND EQUIPMENT, NET            |  |                   | 267,575 |                 
|OTHER ASSETS, NET                      |  |                   | 8,327   |                 
|                                       |  |                   |         |                 
|Total Assets                           |  | $                 | 299,178 |                 
|                                       |  |                   |         |                 
|LIABILITIES AND PARTNERS EQUITY       |  |                   |         |                 
|CURRENT LIABILITIES:                   |  |                   |         |                 
|Current portion of long-term debt      |  | $                 |        |                 
|Accounts payable                       |  |                   | 4,444   |                 
|Accrued interest                       |  |                   | 1,347   |                 
|Accrued and other liabilities          |  |                   | 9,224   |                 
|                                       |  |                   |         |                 
|Total current liabilities              |  |                   | 15,015  |                 
|LONG-TERM DEBT, LESS CURRENT PORTION   |  |                   | 159,476 |                 
|OTHER LONG-TERM LIABILITIES            |  |                   | 2,467   |                 
|                                       |  |                   |         |                 
|Total liabilities                      |  |                   | 176,958 |                 
|PARTNERS EQUITY                       |  |                   | 122,220 |                 
|                                       |  |                   |         |                 
|Total Liabilities and Partners Equity |  | $                 | 299,178 |                 
|                                       |  |                   |         |                 



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands)



|                                    |  | Three Months Ended September 30, |        |   | Nine Months Ended September 30, |  
|----------------------------------- |  | -------------------------------- | ------ | - | ------------------------------- | -
|                                    |  | 2003                             |        |   | 2002                            |  
|OPERATING REVENUES:                 |  |                                  |        |   |                                 |  
|Casino                              |  | $                                | 25,207 |   |                                 | $
|Rooms                               |  |                                  | 10,592 |   |                                 |  
|Food and beverage                   |  |                                  | 9,653  |   |                                 |  
|Other                               |  |                                  | 2,147  |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|                                    |  |                                  | 47,599 |   |                                 |  
|Less: promotional allowances        |  |                                  | (4,413 | ) |                                 |  
|                                    |  |                                  |        |   |                                 |  
|Net operating revenues              |  |                                  | 43,186 |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|OPERATING EXPENSES:                 |  |                                  |        |   |                                 |  
|Casino                              |  |                                  | 13,001 |   |                                 |  
|Rooms                               |  |                                  | 3,087  |   |                                 |  
|Food and beverage                   |  |                                  | 6,470  |   |                                 |  
|Other                               |  |                                  | 1,659  |   |                                 |  
|Selling, general and administrative |  |                                  | 7,615  |   |                                 |  
|Depreciation                        |  |                                  | 2,715  |   |                                 |  
|Loss on disposition of assets       |  |                                  | 277    |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|Total operating expenses            |  |                                  | 34,824 |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|OPERATING INCOME                    |  |                                  | 8,362  |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|OTHER (INCOME) EXPENSE:             |  |                                  |        |   |                                 |  
|Interest income                     |  |                                  |       |   |                                 |  
|Interest expense                    |  |                                  | 4,258  |   |                                 |  
|Loss on early redemption of debt    |  |                                  |       |   |                                 |  
|Interest rate swap income           |  |                                  |       |   |                                 |  
|Other                               |  |                                  | (12    | ) |                                 |  
|                                    |  |                                  |        |   |                                 |  
|Total other (income) expense        |  |                                  | 4,246  |   |                                 |  
|                                    |  |                                  |        |   |                                 |  
|NET INCOME                          |  | $                                | 4,116  |   |                                 | $
|                                    |  |                                  |        |   |                                 |  



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS EQUITY

(In thousands)



|                            |  | Galleon, Inc. |        |   | Eldorado Resorts, LLC |   |        | Total | 
|--------------------------- |  | ------------- | ------ | - | --------------------- | - | ------ | ----- | 
|BALANCE, December 31, 2002  |  | $             | 53,533 |   |                       | $ | 63,533 |       | 
|Net income                  |  |               | 4,602  |   |                       |   | 4,602  |       | 
|Partners distributions     |  |               | (2,025 | ) |                       |   | (2,025 | )     | 
|                            |  |               |        |   |                       |   |        |       | 
|BALANCE, September 30, 2003 |  | $             | 56,110 |   |                       | $ | 66,110 |       | 
|                            |  |               |        |   |                       |   |        |       | 







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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



|                                                                                            |  | Nine Months EndedSeptember 30, |        
|------------------------------------------------------------------------------------------- |  | ------------------------------ | -------
|                                                                                            |  | 2003                           |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |  |                                |        
|Net income                                                                                  |  | $                              | 9,204  
|                                                                                            |  |                                |        
|Adjustments to reconcile net income to net cash provided by operating operating activities: |  |                                |        
|Depreciation and amortization                                                               |  |                                | 8,555  
|Loss on disposition of assets                                                               |  |                                | 533    
|Loss on early redemption of debt Write-off of deferred loan costs                           |  |                                |       
|Interest rate swap receivable                                                               |  |                                |       
|Increase in accrued pension cost                                                            |  |                                | 612    
|Changes in current assets and current liabilities:                                          |  |                                |        
|Increase in accounts receivable, net                                                        |  |                                | (347   
|Decrease in inventories                                                                     |  |                                | 138    
|Increase in prepaid expenses and other                                                      |  |                                | (1,170 
|Increase in accounts payable                                                                |  |                                | 1,032  
|Decrease in accrued guarantee fees to related party                                         |  |                                |       
|(Decrease) increase in accrued interest                                                     |  |                                | (4,075 
|Increase in accrued and other liabilities                                                   |  |                                | 873    
|                                                                                            |  |                                |        
|Total adjustments                                                                           |  |                                | 6,151  
|                                                                                            |  |                                |        
|Net cash provided by operating activities                                                   |  |                                | 15,355 
|                                                                                            |  |                                |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |  |                                |        
|Proceeds from sale of assets                                                                |  |                                | 115    
|Increase in other assets                                                                    |  |                                | (851   
|Purchase of property and equipment                                                          |  |                                | (3,226 
|                                                                                            |  |                                |        
|Net cash used in investing activities                                                       |  |                                | (3,962 
|                                                                                            |  |                                |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |  |                                |        
|Proceeds from bank credit facility                                                          |  |                                | 4,500  
|Proceeds from issuance of mortgage notes                                                    |  |                                |       
|Distributions to partners                                                                   |  |                                | (4,050 
|Debt issuance costs                                                                         |  |                                | (1     
|Payments on bank credit facility                                                            |  |                                | (13,500
|                                                                                            |  |                                |        
|Net cash used in financing activities                                                       |  |                                | (13,051
|                                                                                            |  |                                |        
|Net (decrease) increase in cash and cash equivalents                                        |  |                                | (1,658 
|Cash and cash equivalents at beginning of period                                            |  |                                | 14,913 
|                                                                                            |  |                                |        
|Cash and cash equivalents at end of period                                                  |  | $                              | 13,255 
|                                                                                            |  |                                |        
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                         |  |                                |        
|Cash paid during period for interest                                                        |  | $                              | 15,439 
|                                                                                            |  |                                |        



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



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CIRCUS AND ELDORADO JOINT VENTURE

(doing business as Silver Legacy Resort Casino)



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Summary of Significant Accounting Policies and Basis of
Presentation



Principles of Consolidation/Operations



Effective March 1, 1994, Eldorado Limited Liability Company (a Nevada
limited liability company owned and controlled by Eldorado Resorts, LLC) (ELLC) and Galleon, Inc. (a Nevada corporation owned and controlled by Mandalay Resort Group) (Galleon and, collectively with ELLC, the
Partners), entered into a joint venture agreement to establish Circus and Eldorado Joint Venture (the Partnership), a Nevada general partnership. The Partnership owns and operates a casino and hotel located in Reno, Nevada
(Silver Legacy), which began operations on July 28, 1995. ELLC contributed land to the Partnership with a fair value of $25,000,000 and cash of $26,900,000 for a total equity investment of $51,900,000. Galleon contributed cash to the
Partnership of $51,900,000 to comprise their total equity investment. Each partner has a 50% interest in the Partnership.



The condensed consolidated financial statements include the accounts of the Partnership and its wholly owned subsidiary, Silver Legacy Capital Corp.
(Capital). Capital was established solely for the purpose of serving as a co-issuer of $160 million principal amount of 101/8% mortgage notes due 2012 issued by the Partnership and Capital and, as such, Capital does not have any operations, assets, or revenues. All significant intercompany accounts and transactions have been eliminated in
consolidation.



In the opinion of Management, the
accompanying unaudited condensed consolidated financial statements contain all adjustments, all of which are normal and recurring, necessary to present fairly the financial position of the Partnership as of September 30, 2003, and the results of
operations for the three and nine months ended September 30, 2003 and 2002 and cash flows for the nine months ended September 30, 2003 and 2002. The results of operations for such periods are not necessarily indicative of the results to be expected
for a full year.



Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto included in the Partnerships annual report on Form 10-K for the year ended December 31, 2002.



Use of Estimates



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.



Reclassifications



Certain reclassifications
have been made to the prior year amounts to conform to the current year presentation, and have no effect on net income.



Recently Issued Accounting Pronouncements



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, Accounting for Asset Retirement Obligations.
This statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement applies to all entities and to all legal obligations
associated with the retirement of long-lived assets that result from the acquisition, construction, development and the normal operation of a long-lived asset, except for certain obligations of lessees. The Partnership adopted SFAS No. 143 effective
January 1, 2003. The adoption of this statement did not have a material impact on its financial condition or results of operations.



In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement requires one
accounting model be used for long-lived assets to be disposed of by sale, whether



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previously held and used or newly acquired and broadens the presentation of discontinued operations to include additional
disposal transactions. This statement is effective for fiscal years and interim periods beginning after December 15, 2001. The Partnership adopted SFAS No. 144 in January 2002. The Partnership periodically evaluates its long-lived assets for
impairment. The adoption of this statement did not have a material impact on its financial condition or results of operations.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical
Corrections. SFAS No. 145 rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt. Under SFAS No. 4, all gains and losses from extinguishment of debt were required to be aggregated, if material, and classified
as an extraordinary item, net of related income tax effect, on the statement of income. SFAS No. 145 requires all gains and losses from extinguishment of debt to be classified as extraordinary only if they meet the criteria of Accounting Principles
Board (APB) Opinion 30. This statement is effective for the Partnerships 2003 fiscal year and early adoption was permitted. In May 2002, the Partnership adopted this statement and classified its fiscal 2002 loss from early
retirement of debt of $134,000 as a component of other (income) expense.



In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This statement addresses financial accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). This statement requires that a
liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. A fundamental conclusion reached by the FASB in SFAS No. 146 is that an entitys commitment to a plan, by itself, does not create a
present obligation to others that meets the definition of a liability. This statement also establishes that fair value is the objective for initial measurement of the liability. The Partnership adopted SFAS No. 146 effective January 1, 2003. The
adoption of this statement did not have a material impact on its financial condition or results of operations.



In April 2003, the FASB issued SFAS No. 149, Amendments of Statement No. 133 on Derivative Instruments and Hedging Activities. This statement
amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and
hedging activities under SFAS No. 133. This statement is effective for contracts entered into or modified after June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. The provisions of this statement that
relate to Statement No. 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. The adoption of this statement is
not expected to have a material impact on the Partnerships results of operations or financial position.



In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.
This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. Financial instruments that are within the scope of the statement, which previously were
often classified as equity, must now be classified as liabilities. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is generally effective at the beginning of the first interim period
beginning after June 15, 2003. The adoption of this statement is not expected to have a material effect on the Partnerships results of operations or financial position.



In November 2002, the FASB issued FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No. 45). FIN No. 45 expands the information disclosures required by guarantors for obligations under certain types of guarantees. It also requires initial
recognition at fair value of a liability for such guarantees. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective 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 effective for financial statements of interim or annual periods ending after December 15, 2002. Adoption of FIN No. 45 did not have a
material impact on the Partnerships financial condition or results of operations.



Note 2. Certain Risks and Uncertainties



A
significant portion of the Partnerships revenues and operating income are generated from patrons who are residents of northern California. A change in general economic conditions or the extent and nature of casino gaming in California,
Washington or Oregon could adversely affect the Partnerships operating results. On September 10, 1999, California lawmakers approved a constitutional amendment that would give Native American tribes the right to offer slot machines and a range
of house-banked card games. On March 7, 2000, California voters approved the constitutional amendment which legalized Nevada-style gaming on Native American reservations.



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The United Auburn Indian Community (UAIC) entered into a development and management agreement
with an established gaming operator, Station Casinos, Inc., to develop and manage an approximately $215 million, 200,000 square foot gaming and entertainment facility on a 49-acre site approximately 21 miles northeast of Sacramento. This facility,
Thunder Valley Casino, began operations on June 9, 2003. As of September 30, 2003, we have experienced a moderate decrease in our weekend casino volume resulting in a negative effect on our overall operating results. Based on its size and proximity,
and potential expansion capabilities, we believe Thunder Valley Casino could continue to have an impact on our operations in the future. While we cannot predict the extent of the potential impact, it could be significant.



Note 3. Long-Term Debt



Long-term debt consisted of the following (in thousands):



|                                                                                                        |  | September 30,2003 |         | December 31,2002
|------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ----------------
|Amount due under credit facilities at floating interest rate, weighted average of 4.57%, due March 2007 |  | $                 |        |                 
|101/8% Mortgage Notes due 2012 (net of unamortized discount of $524 and $570, respectively)             |  |                   | 159,476 |                 
|                                                                                                        |  |                   |         |                 
|                                                                                                        |  |                   | 159,476 |                 
|Lesscurrent portion                                                                                    |  |                   |        |                 
|                                                                                                        |  |                   |         |                 
|                                                                                                        |  | $                 | 159,476 |                 
|                                                                                                        |  |                   |         |                 



On March 5, 2002, the
Partnership and Capital (the Issuers) issued $160,000,000 principal amount of senior secured mortgage notes due 2012 (Notes). Concurrent with issuing the Notes, the Partnership entered into a new senior secured credit
facility (the New Credit Facility) for $40,000,000. The proceeds from the Notes, together with $26,000,000 in borrowings under the New Credit Facility, were used to repay $150,200,000 representing all of the indebtedness outstanding
under the prior bank credit facility (the Bank Credit Facility) and to fund $30,000,000 of distributions to the Partners. In addition, the remaining proceeds along with operating cash flow were used to pay $6,300,000 in related fees and
expenses of the transactions. These fees were capitalized and are included in other assets. Deferred loan costs of $134,000 related to the Bank Credit Facility were written-off upon repayment in full of the Bank Credit Facility.



The Notes are senior secured obligations which rank equally with all of the
Partnerships outstanding senior debt and senior to any subordinated debt. The Notes are secured by a security interest in the Issuers existing and future assets, which is junior to a security interest in such assets securing the
Partnerships obligations on the New Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. Each of the Partners executed a pledge of all of its partnership interests in the Partnership to
secure the Notes, which is junior to a pledge of such partnership interests to secure the Partnerships obligations on the New Credit Facility and any refinancings of such facility that are permitted pursuant to the terms of the Notes. The
Notes mature on March 1, 2012 and bear interest at the rate of 101/8% per annum, payable semi-annually in
arrears on March 1 and September 1 of each year, commencing on September 1, 2002.



The New Credit Facility originally provided for a $20,000,000 senior secured revolving credit facility and a $20,000,000 five-year term loan facility, each of which provided for the payment of interest at floating
rates based on LIBOR plus a spread. The commitment under the term loan facility originally provided for reductions as follows: $1,000,000 per quarter beginning March 31, 2003 through December 31, 2004; $1,250,000 per quarter beginning March 31, 2005
through December 31, 2005; $1,500,000 per quarter beginning March 31, 2006 through December 31, 2006, with the remaining balances due March 31, 2007. During the nine months ended September 30, 2003, the Partnership paid the remaining $9,000,000
outstanding on the term loan; consequently, the term loan was paid in full as of September 30, 2003. During the nine months ended September 30, 2003, $4,500,000 was borrowed and subsequently repaid under the revolving portion of the credit facility.



The Notes and New Credit Facility contain various restrictive
covenants including the maintenance of certain financial ratios and limitations on additional debt, disposition of property, mergers and similar transactions. On



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November 4, 2003, the Partnership executed an amendment to the New Credit Facility (as amended, the Amended Credit Facility) which reduced the
revolving facility to $10,000,000, and revised certain covenant ratios with retroactive effect to September 30, 2003, including the maximum total debt to EBITDA ratio which the Partnership had exceeded as of September 30, 2003. At September 30,
2003, there was no indebtedness outstanding under the Amended Credit Facility. As of such date, the Partnership was in compliance with all of the covenants in the Amended Credit Facility and had the ability to borrow all of the $10,000,000 available
under the revolving portion of the Amended Credit Facility. The entire principal amount then outstanding under the Amended Credit Facility becomes due and payable on March 31, 2007 unless the maturity date is extended with the consent of the
lenders. As of September 30, 2003, the Partnership was in compliance with the covenants in the indenture relating to the Notes.



On April 8, 2003, the Partnership and Bank of America N.A. entered into a fixed-to-floating swap agreement with a $60,000,000 notional amount. Pursuant to
this swap agreement, which had an expiration date of March 1, 2006, the Partnership received interest at a fixed rate of 10.125% per annum and paid interest based on a floating rate index that was computed on a 6-month LIBOR, in arrears, plus 7.36%.
The amounts due under the swap agreement were payable on September 1 and March 1 of each year, beginning September 1, 2003. On June 11, 2003, the Partnership terminated the swap agreement in advance of its scheduled termination date and received
$1,014,000 representing the fair market value of the swap. This interest rate swap did not meet the criteria for hedge accounting established by Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities; therefore, the entire cash receipt was taken into income during the nine months ended September 30, 2003.



Note 4. Related Parties



Each of our Partners operates a casino attached and adjacent to Silver Legacy. Our Partners may be deemed to be in a conflict of interest position with
respect to decisions they make relating to the Partnership, the Eldorado Hotel & Casino and Circus Circus Hotel & Casino-Reno.



As a condition to the Bank Credit Facility, Mandalay Resort Group (MRG) guaranteed completion of the Silver Legacy and, in addition, entered
into a make-well agreement whereby it was obligated to make additional contributions to the Partnership as necessary to maintain a minimum coverage ratio (as defined). As compensation for the make-well agreement, MRG received a guarantee fee of
11⁄2% of the outstanding balance of the Bank Credit Facility. The Partnership made payments totaling $563,000 on its guarantee fee commitment for the nine-month period ended September 30, 2002. On March 5, 2002, MRGs obligations pursuant to
the make-well agreement, and its right to receive the guarantee fee, terminated. All unpaid guarantee fees were paid in full in March 2002.



Note 5. Supplemental Executive Retirement Plan



Effective January 1, 2002, the Partnership adopted a Supplemental Executive Retirement Plan (SERP) for a select group of highly compensated
management employees. The SERP provides for a lifetime benefit at age 65, based on a formula which takes into account a participants highest annual compensation, years of service, and executive level. The SERP also provides an early retirement
benefit at age 55 with at least four years of service, a disability provision, and a lump sum death benefit. While the SERP is an unfunded plan, the Partnership is informally funding the plan through life insurance contracts on the participants. The
Partnership anticipates that its periodic pension cost for the year ending December 31, 2003 will be approximately $789,000, of which $612,000 has been accrued as of September 30, 2003.



Note 6. Partnership Agreement



Concurrent with the issuance of the Notes on March 5, 2002, the Partnerships partnership agreement was amended and restated in its entirety and was
further amended in April 2002 (the Partnership Agreement). The Partnership Agreement provides for, among other things, profits and losses to be allocated to the Partners in proportion to their percentage interests, separate capital
accounts to be maintained for each Partner, provisions for management of the Partnership and payment of distributions and bankruptcy and/or dissolution of the Partnership. The April 2002 amendments were principally (i) to provide equal voting rights
for ELLC and Galleon with respect to approval of the Partnerships annual business plan and the appointment and compensation of the general manager, and (ii) to give each Partner the right to terminate the general manager.



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



Overview



Effective March 1, 1994, Eldorado Limited Liability Company (ELLC), a Nevada limited liability company owned and controlled by Eldorado
Resorts LLC, and Galleon, Inc. (Galleon), a Nevada corporation owned and controlled by Mandalay Resort Group, formerly known as Circus Circus Enterprises, Inc., entered into a joint venture agreement to establish Circus and Eldorado
Joint Venture, a partnership (the Partnership), for the purpose of constructing, owning and operating Silver Legacy Resort Casino (Silver Legacy). Silver Legacy Capital Corp., a wholly owned subsidiary of the Partnership
(Capital), was incorporated for the sole purpose of serving as a co-issuer of the $160 million principal amount of 101/8% mortgage notes due 2012 issued by the Partnership and Capital (the Notes), and does not have any operations, assets or revenues.



On July 28, 1995, Silver Legacy commenced operations as a hotel-casino in downtown Reno, Nevada. Silver Legacy is a leader
within the Reno market, offering the largest number of table games and the second largest number of hotel rooms and slot machines of any property in the Reno market. Silver Legacys net operating revenues and income are derived largely from our
gaming activities. In an effort to enhance our gaming revenues, we attempt to maximize the use of our gaming facilities at Silver Legacy by providing a well-balanced casino environment that contains a mix of games attractive to multiple market
segments. Rooms, food and beverage also contribute a large portion of our net revenues.



Our operating results are highly dependent on the volume of customers visiting and staying at our resort. Key volume indicators include table games drop and slot handle, which refer to amounts wagered by our
customers. The amount of volume we retain is recognized as casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room designated by average daily rate (ADR) are key indicators for our hotel
business.



Recently Issued Accounting Pronouncements



In June 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 143, Accounting for Asset Retirement Obligations. This statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset
retirement costs. This statement applies to all entities and to all legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and the normal operation of a long-lived asset,
except for certain obligations of lessees. The Partnership adopted SFAS No. 143 effective January 1, 2003. The adoption of this statement did not have a material impact on its financial condition or results of operations.



In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. This statement requires one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired and broadens the presentation of discontinued
operations to include additional disposal transactions. This statement is effective for fiscal years and interim periods beginning after December 15, 2001. The Partnership adopted SFAS No. 144 in January 2002. The Partnership periodically evaluates
its long-lived assets for impairment. The adoption of this statement did not have a material impact on its financial condition or results of operations.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical
Corrections. SFAS No. 145 rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt. Under SFAS No. 4, all gains and losses from extinguishment of debt were required to be aggregated, if material, and classified
as an extraordinary item, net of related income tax effect, on the statement of income. SFAS No. 145 requires all gains and losses from extinguishment of debt to be classified as extraordinary only if they meet the criteria of Accounting Principles
Board (APB) Opinion 30. This statement is effective for the Partnerships 2003 fiscal year and early adoption was permitted. In May 2002, the Partnership adopted this statement and classified its fiscal 2002 loss from early
retirement of debt of $134,000 as a component of other (income) expense.



In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This statement addresses financial accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an



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Activity (including Certain Costs Incurred in a Restructuring). This statement requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. A fundamental conclusion reached by the FASB in SFAS No. 146 is that an entitys commitment to a plan, by itself, does not create a present obligation to others that meets the definition of
a liability. This statement also establishes that fair value is the objective for initial measurement of the liability. The Partnership adopted SFAS No. 146 effective January 1, 2003. The adoption of this statement did not have a material impact on
its financial condition or results of operations.



In April
2003, the FASB issued SFAS No. 149, Amendments of Statement No. 133 on Derivative Instruments and Hedging Activities. This statement amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and
clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and hedging activities under SFAS No. 133. This statement is effective for contracts entered into or
modified after June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. The provisions of this statement that relate to Statement No. 133 Implementation Issues that have been effective for fiscal quarters
that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. The adoption of this statement is not expected to have a material impact on the Partnerships results of operations or
financial position.



In May 2003, the FASB issued SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both
liabilities and equity. Financial instruments that are within the scope of the statement, which previously were often classified as equity, must now be classified as liabilities. This statement is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is generally effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this statement is not expected to have a material effect on the Partnerships results
of operations or financial position.



In November 2002, the
FASB issued FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No. 45). FIN No. 45 expands the information
disclosures required by guarantors for obligations under certain types of guarantees. It also requires initial recognition at fair value of a liability for such guarantees. The initial recognition and initial measurement provisions of this
interpretation are applicable on a prospective 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 effective for financial
statements of interim or annual periods ending after December 15, 2002. Adoption of FIN No. 45 did not have a material impact on the Partnerships financial condition or results of operations.



Critical Accounting Policies



Our discussion and analysis of our results of operations and financial
condition that follows is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial
statements requires that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Our judgments are based on our
historical experience, terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. Because of the uncertainty inherent in these
matters, there is no assurance that actual results will not differ from our estimates used in applying the following critical accounting policies.



Gross Revenues and Promotional Allowances



In accordance with industry practice, we recognize as casino revenues the net win from gaming activities, which is the difference between gaming wins and
losses. The retail value of food, beverage, rooms and other services furnished to customers on a complimentary basis is included in gross revenues and then is deducted as promotional allowances.



Property and Equipment and Other Long-Lived Assets



Property and equipment is recorded at cost and is depreciated over its
estimated useful life. Judgments are made in determining estimated useful lives and salvage values of these assets. The accuracy of these estimates affects the amount of depreciation expense recognized in our financial results and whether we 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 would possibly change our current estimates. As of September 30, 2003,
no events or changes in circumstances indicated that the carrying values of our long-lived assets may not be recoverable.



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Reserve for Uncollectible Accounts Receivable



We make ongoing estimates relating to the collectibility of our accounts receivable and maintain a reserve for estimated
losses resulting from the inability of our customers to make required payments. In determining the amount we reserve, we review our aged accounts receivables, consider our historical level of credit losses and make judgments about the
creditworthiness of customers based on ongoing credit evaluations and relationships. Since we cannot predict future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from our estimates.



Self Insurance Reserves



Silver Legacy is self insured up to certain limits for our general
liability, group health insurance and workmens compensation programs. We analyze historical and current pending claims information to estimate amounts to be accrued. In order to mitigate our potential exposure, we have obtained certain stop
loss policies.



Recent Developments



A significant portion of the Silver Legacys revenues and operating
income are generated from patrons who are residents of northern California, and as such, our results of operations have been adversely impacted by the growth in Native American gaming in northern California. Station Casinos, Inc., an established
gaming operator, entered into agreements with the United Auburn Indian Community to develop and manage Thunder Valley Casino, a gaming and entertainment facility constructed on a 49-acre site approximately 21 miles northeast of Sacramento. Thunder
Valley Casino opened on June 9, 2003 and offers approximately 1,900 slot machines and 100 table games, dining and entertainment amenities, and parking for 3,000 vehicles. Through September 30, 2003, we experienced a moderate decrease in our weekend
casino volume resulting in a negative effect on our overall operating results. Based on its size and proximity, and potential expansion capabilities, we believe Thunder Valley Casino could continue to impact our operations in the future. While we
cannot predict the extent of any future impact, it could be significant. In addition to existing gaming facilities, numerous Native American tribes have announced that they are in the process of developing or are considering establishing large-scale
gaming facilities in northern California.



Approvals have been
obtained for two public works projects in the downtown area of Reno. The first project will lower the train tracks that traverse Renos downtown district and separate the Silver Legacy and the two adjoining properties from the rest of the
downtown gaming facilities. Construction on this project, which began in early 2003, is expected to be completed in 2006 and will be organized in such a manner that it will not prevent pedestrian or vehicular traffic from crossing the railroad
tracks within the downtown area. The second project involves the construction of a downtown special events center next to the National Bowling Stadium. Construction of this project is expected to begin in early 2004 and be completed by mid-2005. At
this time we cannot determine the effect of either of these projects on our future operations.



On July 22, 2003, the Governor of Nevada signed into law a new tax bill that provides for increases in the taxes applicable to our operations. Based on our initial evaluation of the new Nevada tax law, we estimate the
full-year incremental impact on our operations will be less than $1.0 million.



Three Months Ended September 30, 2003 Compared to Three Months Ended September 30, 2002



Net Revenues



For the
three months ended September 30, 2003, net revenues were $43.2 million compared to $46.1 million for the three months ended September 30, 2002. This decrease of $2.9 million, or 6.4%, was primarily due to declines in casino, food and beverage, and
other operating revenues. The steady expansion of Native American gaming in northern California, including the previously discussed opening of Thunder Valley Casino, continued to have a negative impact on our visitor volume throughout the three
months ended September 30, 2003. In addition, a lower hold percentage in both table games and slots affected our operating results for the third quarter in 2003.



Casino revenues for the three months ended September 30, 2003 declined $1.9 million, or 6.9%, from the three months ended
September 30, 2002, due to decreases in table games and slot revenues compared to the same prior year period. During the three months ended September 30, 2003, table games drop benefited from growth in credit play and a new marketing promotion
implemented in August 2003 and increased $0.5 million, or 1.1%. However, due to a



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lower hold percentage, table games net revenues decreased $0.5 million, or 6.5%, in the current period compared to the prior year. Meanwhile, slot handle
declined 3.5% in the third quarter leading to a 6.8% decline in slot net revenues. The greater decline in slot net revenues was primarily due to a lower hold percentage combined with expenses associated with a new marketing program offered in July
and August 2003.



For the three months ended September 30,
2003, room revenues decreased $0.1 million, or 1.4%, in comparison to the three months ended September 30, 2002. While room occupancy increased to 91.1% for the three months ended September 30, 2003, as compared to 89.8% for the three months ended
September 30, 2002, our ADR declined to $67.55 in comparison to $69.77.



For the three months ended September 30, 2003 compared to the three months ended September 30, 2002, food and beverage revenues declined $0.5 million, or 4.6%, mainly due to declines in banquet revenues resulting from the absence of several
large groups that generated significant volume in July 2002. Another contributor to the overall decrease was a decline in complimentary food revenues in our buffet, which was primarily attributed to the discontinuance in November 2002 of a coupon
promotion in effect throughout the three months ended September 30, 2002.



Other operating revenues are comprised of revenues generated by our retail outlets, arcade, entertainment and other miscellaneous items. For the three months ended September 30, 2003, other revenues decreased $0.3
million, or 13.9%, in comparison to the three months ended September 30, 2002 partially due to a slight decrease in the number of scheduled concert nights in the current quarter, and the fact that more of these concerts were jointly produced with
other downtown Reno properties.



Promotional allowances,
expressed as a percentage of gross revenues, were 9.3% for the three months ended September 30, 2003 in comparison to 8.6% for the three months ended September 30, 2002. This increase was principally associated with a complimentary room promotion
offered in July and August 2003.



Operating Expenses



Operating expenses decreased $0.9 million, or 2.5%, for the three months
ended September 30, 2003 compared to the three months ended September 30, 2002, primarily due to declines in food and beverage expenses and other operating expenses.



Casino expenses rose $0.2 million, or 1.4%, during the three months ended September 30, 2003 in comparison to the same prior
year period. This increase was in large part due to an increase in casino marketing expenses, which was partially offset by reductions in other casino operating expenses as a result of efforts to control our costs.



Despite the increase in room occupancy during the third quarter, room
expenses remained flat for the three months ended September 30, 2003 compared to the three months ended September 30, 2002, as a result of increased efforts to control departmental expenses.



Food and beverage expenses declined $0.3 million, or 4.6%, for the three
months ended September 30, 2003 in comparison to the three months ended September 30, 2002, tracking the decline in food and beverage revenues.



Other operating expenses are comprised of expenses associated with the operation of our retail outlets, arcade and events pavilion along with the
entertainment departments production costs and professional fees. For the three months ended September 30, 2003 compared to the three months ended September 30, 2002, other expenses decreased $0.4 million, or 19.3%, primarily due to declines
in entertainment expenses during the current year period, resulting from the sharing with other Reno properties of production and entertainers fees for several concerts held in the City Center Pavilion combined with a reduction in the number
of concert nights in the current quarter.



For the three months
ended September 30, 2003, selling, general and administrative expenses decreased $0.3 million, or 3.8%, in comparison to the three months ended September 30, 2002. The principal contributors to this decrease were declines in payroll and benefits
expenses, stemming from our efforts to control costs in the current competitive environment.



Other (Income) Expense



Other (income) expense is comprised of interest income, interest expense, interest rate swap income and other. Interest expense increased $0.2 million for the three months ended September 30, 2003 compared to the same prior year



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period, when an interest rate swap agreement reduced interest expense and contributed $2.3 million in income based on its increase in market value during
that period.



Nine Months Ended September 30, 2003 Compared to Nine Months
Ended September 30, 2002



Net Revenues



Net revenues were $117.5 million for the nine months ended September 30,
2003 compared to $123.8 million for the nine months ended September 30, 2002, resulting in a $6.3 million, or 5.1%, decrease. This decline was principally due to a decrease in casino revenues, and to a lesser extent, decreases in food and beverage
and other operating revenues. We believe these decreases were partially associated with the previously discussed opening of Thunder Valley Casino in June 2003 which affected our third quarter casino revenues. In addition, despite the business
generated by the Womens International Bowling Congress (WIBC) tournament that was held in the Reno area throughout mid-March to early July, the continued effect of a weak economy, specifically in northern California, and the War
with Iraq were negative factors impacting our operating results throughout the 2003 period. Moreover, our casino volume was adversely affected by the disruption caused by our casino carpet replacement and remodeling in the casino area during the
first quarter of 2003.



Casino revenues decreased $4.4 million,
or 6.0%, for the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002. This decrease was mainly due to declines in table games and slot volume during the current year. A lower table games hold percentage during
the nine months ended September 30, 2003 in comparison to the same prior year period also contributed to the decrease in casino revenues.



For the nine months ended September 30, 2003, room revenues rose $0.1 million, or 0.3%, compared to the nine months ended September 30, 2002. Our ADR and
occupancy percentage were $64.73 and 84.2%, respectively, for the nine months ended September 30, 2003 compared to $64.28 and 84.2%, respectively, for the nine months ended September 30, 2002. The slight increase in ADR was primarily due to
increased convention business during the first quarter combined with room nights the WIBC tournament generated during mid-March through early July 2003.



Food and beverage revenues decreased $1.0 million, or 3.6%, for the nine months ended September 30, 2003 compared to the nine months ended September 30,
2002 as a result of decreased casino traffic throughout the current year. In addition, the previously discussed decrease in complimentary food revenue as a result of the discontinuance of a coupon promotion in November 2002 was a contributing factor
in both the second and third quarters of 2003.



Other operating
revenues are comprised of revenues generated by our retail outlets, arcade, entertainment and other miscellaneous items. For the nine months ended September 30, 2003, other revenues decreased $0.9 million, or 13.2%, compared to the nine months ended
September 30, 2002. This decrease was due to the fact that more of our concerts during the 2003 period were jointly produced with other downtown Reno properties.



Promotional allowances, expressed as a percentage of gross revenues, rose to 8.9% for the nine months ended September 30,
2003 from 8.4% for the nine months ended September 30, 2002 mainly due to an increase in the number of special events and marketing offers for which promotional allowances were given throughout the 2003 period.



Operating Expenses



For the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002, operating expenses
decreased $1.8 million, or 1.8%, resulting primarily from declines in food and beverage and other operating expenses.



Casino expenses for the nine months ended September 30, 2003 increased $0.1 million, or 0.4% in comparison to the same prior year period. Declines in
casino payroll expenditures and the amount of state gaming taxes paid were offset by an increase in casino marketing expenses, resulting in an overall increase.



Room expenses declined $0.1 million, or 1.2%, during the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002.
Reductions in payroll and laundry expenses were achieved while occupancy remained flat during the current year period; however, this decline was partially offset by an increase in travel agent commissions associated with the WIBC tournament.



For the nine months ended September 30, 2003, food and
beverage expenses decreased $0.7 million, or 3.6%, in



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comparison to the same prior year period in conjunction with the previously discussed food and beverage revenue decreases.



Other operating expenses are comprised of expenses associated with the
operation of our retail outlets, arcade and events pavilion along with the entertainment departments production costs and professional fees. Other expenses decreased $0.7 million, or 13.5%, for the nine months ended September 30, 2003 compared
to the nine months ended September 30, 2002. This decrease was primarily due to a decline in entertainment expenses during the current year period, resulting from the sharing with other Reno properties of production and entertainers fees for
several concerts held in the City Center Pavilion.



Selling,
general and administrative expenses increased $0.1 million, or 0.5%, for the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002. This increase was primarily due to increases in general liability insurance costs
and property taxes during the nine months ended September 30, 2003 combined with increased gas and electric utilities expenses during the first quarter of 2003.



Other (Income) Expense



Other (income) expense is comprised of interest income, interest expense, interest rate swap income and other. Interest expense increased $1.8 million for
the nine months ended September 30, 2003 compared to the same prior year period. This increase resulted from higher average outstanding borrowings during our first quarter in 2003 combined with higher average interest rates resulting from our
issuance in March 2002 of our $160 million principal amount of 101/8% mortgage notes (Notes) and
related transactions described under Liquidity and Capital Resources.



Liquidity and Capital Resources



During the nine months ended September 30, 2003, net cash provided by operating activities was $15.4 million compared to $25.4 million for the nine months ended September 30, 2002. This decrease in cash flow was primarily due to a decrease
in net income of $7.5 million combined with a decrease in accrued interest expense during the nine months ended September 30, 2003. As of September 30, 2003, cash and cash equivalents were $13.3 million, sufficient for normal operating requirements.



Cash used in investing activities for the nine months ended
September 30, 2003 was $4.0 million compared to $3.2 million for the nine months ended September 30, 2002. Cash used in investing activities in 2003 and 2002 related primarily to capital expenditures for various renovation projects and equipment
purchases. We currently expect our capital expenditures for 2003 to be approximately $4.0 to $5.0 million, of which we incurred $3.2 million during the nine months ended September 30, 2003. In future years, we expect to make capital expenditures
consistent with historical expenditures and, to the extent necessary to continue to maintain an attractive property and a competitive position in our marketplace, additional amounts as approved by our executive committee. We anticipate that within
the next 12 months we will undertake a room renovation project; however, at this time no decision has been made as to timing or cost of the project.



Cash used in financing activities was $13.1 million for the nine months ended September 30, 2003 compared to $19.0 million for the nine months ended
September 30, 2002. During the nine months ended September 30, 2003, tax distributions of $4.1 million were made to our partners. In addition, prepayments in the aggregate principal amount of $9.0 million were made on the term portion of the credit
facility, permanently reducing the amount of the term loan and terminating our ability to borrow under this portion of our credit facility. During the nine months ended September 30, 2003, $4.5 million was borrowed and subsequently paid on the
revolving portion of the credit facility.



In July 2003, we
renewed our general and liability insurance policies which included an increase in our previous earthquake coverage. Under the new policy, the Partnership and the owner of the adjacent property, Eldorado Resorts LLC (which is an affiliate of ELLC),
have combined earthquake coverage of $500 million. In the event that an earthquake causes damage only to the Partnerships property, the Partnership is eligible to receive up to $500 million in coverage depending on the replacement cost.
However, in the event that both properties are damaged, the Partnership is entitled to receive, to the extent of any replacement cost incurred, up to $276.5 million of the coverage amount and up to the portion of the other $223.5 million, if any,
remaining after satisfaction of a claim of Eldorado Resorts LLC. Our new insurance policy includes terrorism coverage up to $150 million.



The Partnerships partnership agreement, as currently in effect, provides that, subject to any contractual restrictions to which the Partnership is
subject, including the indenture relating to the Notes, and prior to the occurrence of a Liquidating Event, the Partnership will be required to make distributions to its partners as follows:



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(i) The estimated taxable income of the Partnership allocable to each partner multiplied
by the greater of the maximum marginal federal income tax rate applicable to individuals for such period or the maximum marginal federal income tax rate applicable to corporations for such period (as of the date hereof both rates were 35%);
provided, however, that if the State of Nevada enacts an income tax (including any franchise tax based on income), the applicable tax rate for any tax distributions subsequent to the effective date of such income tax shall be increased by the higher
of the maximum marginal individual tax rate or corporate income tax rate imposed by such tax (after reduction for the federal tax benefit for the deduction of state taxes, using the maximum marginal federal individual or corporate rate,
respectively).



(ii) Annual distributions of
remaining Net Cash From Operations in proportion to the percentage interests of the partners.



(iii) Distributions of Net Cash From Operations in amounts or at times that differ from those described in (i) and (ii) above,
provided in each case that both partners agree in writing to the distribution in advance thereof.



As defined in the partnership agreement, the term Net Cash From Operations means the gross cash proceeds received by the Partnership, less the
following amounts: (i) cash operating expenses and payments of other expenses and obligations of the Partnership, including interest and scheduled principal payments on Partnership indebtedness, including indebtedness owed to the partners, if any,
(ii) all capital expenditures made by the Partnership, and (iii) such reasonable reserves as the partners deem necessary in good faith and in the best interests of the Partnership to meet its anticipated future obligations and liabilities (less any
release of reserves previously established, as similarly determined).



The Partnerships partnership agreement provides that the partners shall not be permitted or required to contribute additional capital to the Partnership without the consent of the partners, which consent may be given or withheld in
each partners sole and absolute discretion.



We believe
we have sufficient capital resources to meet all of our obligations. These obligations include existing cash obligations, funding of capital commitments and servicing our debt. Our future sources of liquidity are anticipated to be from our operating
cash flow and borrowings available under our amended senior secured credit facility.



Senior Secured Credit Facility



On March 5,
2002, concurrently with the issuance of the Notes, we entered into a new senior secured credit facility (the Credit Facility) comprised of a $20.0 million term loan facility and a $20.0 million revolving facility. The proceeds from the
Notes, together with $26.0 million of borrowings under our new credit facility and operating cash of $0.6 million, were used to repay $150.2 million, representing all of the indebtedness outstanding under our prior credit facility, to fund $30.0
million of distributions to the Partnerships partners, ELLC and Galleon, and to pay $6.3 million ($5.8 million of which was paid at the time of the transaction) in fees and expenses related to the transactions. During the three months ended
March 31, 2002, prior to the issuance of the Notes, the Partnership also made distributions to its partners of (i) $2.4 million (representing tax distributions attributable to the fourth quarter of 2001), (ii) $5.2 million (representing tax
distributions attributable to the year 2000), and (iii) $2.1 million representing the remaining balance of a priority allocation payable to Galleon. Prepayments on the term loan portion of the Credit Facility permanently reduced the amount of the
term loan. As of September 30, 2003, we had prepaid the entire $20.0 million term facility, including $9.0 million paid during the current year.



On November 4, 2003, we executed an amendment to the Credit Facility (as amended, the Amended Credit Facility) which reduced the revolving
facility to $10.0 million, none of which was outstanding at September 30, 2003, and revised certain covenant ratios with retroactive effect to September 30, 2003, including the maximum total debt to EBITDA ratio which we had exceeded as of September
30, 2003. Under the Amended Credit Facility, we must maintain a maximum ratio of total debt to EBITDA of 5.00 to 1.00 for the quarters ending September 30, 2003 through March 31, 2006 and 4.75 to 1.00 for the quarter ending 2006 and thereafter.
Under the Amended Credit Facility, we are also required to maintain a minimum ratio of EBITDA to fixed charges of 1.20 to 1.00 at all times. The Amended Credit Facility is secured by a first priority security interest in substantially all of our
existing and future assets, other than certain licenses which may not be pledged under applicable law, and a first priority pledge of and security interest in all of the partnership interests in the Partnership held by its partners. The Amended
Credit Facility ranks equal in right of payment to our existing and future senior indebtedness, including the Notes, but the security interests securing our obligations under the Amended Credit Facility are senior to the security interests securing
our obligations on the Notes. The Amended Credit Facility contains customary events of default and covenants, including covenants that limit or



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restrict our ability to incur additional debt, create liens or other encumbrances, pay dividends or make other restricted payments, prepay subordinated
indebtedness, make investments, loans or other guarantees, sell or otherwise dispose of a portion of our assets, or make acquisitions or merge or consolidate with another entity.



At September 30, 2003, there was no indebtedness outstanding under the Amended Credit Facility. As of such date, we were in
compliance with all of the covenants in the Amended Credit Facility and we had the ability to borrow all of the $10.0 million available under the revolving portion of the Amended Credit Facility. The entire principal amount then outstanding under
the Amended Credit Facility becomes due and payable on March 31, 2007 unless the maturity date is extended with the consent of the lenders.



Forward-Looking Statements



Certain information included in this report and other materials filed or to be filed by the Issuers with the Securities and Exchange Commission (as well
as information included in oral statements or written statements made or to be made by the Issuers) contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts. We have based these forward-looking statements on our current expectations about future
events. These forward-looking statements include statements with respect to our beliefs, 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 tax regulation) and competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us or on our behalf. These risks
and uncertainties include, but are not limited to dependence on existing management, leverage and debt service (including sensitivity to fluctuations 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 in certain jurisdictions), expansion of gaming on Native American lands (including such lands in California), risks and uncertainties
relating to any development and construction activities and applications for licenses and approvals under applicable laws and regulations (including gaming laws and regulations) and any further terrorist attacks similar to those that occurred
September 11, 2001. Additional information concerning potential factors that we think could cause our actual results to differ materially from expected and historical results is included under the caption Factors that May Affect Our Future
Results in Item 1 of our annual report on Form 10-K for the fiscal year ended December 31, 2002. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then our actual results, performance or achievements
could differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. This statement is provided as permitted
by the Private Securities Litigation Reform Act of 1995.



Item 3. Quantitative and Qualitative Disclosures About Market Risks



We are exposed to market risk in the form of fluctuations in interest rates and their potential impact upon our variable rate debt outstanding. As of
September 30, 2003, we had no variable rate debt outstanding. At September 30, 2003, the term loan had been paid in full and we had no indebtedness outstanding under the $10.0 million revolving portion of the Amended Credit Facility pursuant to
which we may have outstanding from time to time up to $10.0 million of variable rate debt.



We evaluate our exposure to market risk by monitoring interest rates in the marketplace and we have, on occasion, utilized derivative financial instruments to help manage this risk. To manage our exposure to
counterparty credit risk in interest rate swaps, we enter into agreements with highly rated institutions. The institution that was a counterparty to the interest rate swap agreement described in the next paragraph was a member of the bank group
providing our Credit Facility.



On April 8, 2003 we and Bank of
America N.A. entered into a fixed-to-floating swap agreement with a $60.0 million notional amount. Pursuant to this swap agreement, which had an expiration date of March 1, 2006, we received interest at a fixed rate of 10.125% per annum and we paid
interest based on a floating rate index that was computed on a 6-month LIBOR, in arrears, plus 7.36%. The amounts due under the swap agreement were payable on September 1 and March 1 of each year, beginning September 1, 2003. As of April 8, 2003,
the swap agreements effective date, the amount of the indebtedness exposed to market risk in the form of fluctuations in interest rates on variable rate debt increased by the $60.0 million notional amount of this swap agreement. On June 11,
2003, we terminated the swap



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agreement in advance of its scheduled termination date and received a cash payment of $1.0 million.



Item 4. Controls and Procedures



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



There have been no changes in our internal controls over financial reporting
that occurred during the period covered by this report that have materially affected, or are responsibly likely to materially affect, these internal controls over financial reporting.



Part II. OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K



(a)Exhibits.



|     | 
|---- | 
|10.1 | 
|     | 
|10.2 | 
|     | 
|31.1 | 
|     | 
|31.2 | 
|     | 
|32.1 | 
|     | 
|32.2 | 



(b)Reports
on Form 8-K



During the period covered by
this report, the Partnership did not file any report on Form 8-K.



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SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.



|                        |  |  |  | CIRCUS AND ELDORADO JOINT VENTURE
|----------------------- |  |  |  | ---------------------------------
|                        |  |  | 
|Date: November 14, 2003 |  |  |  | By:                              
|                        |  |  |  |                                  



|                        |  |  | 
|----------------------- |  |  | 
|Date: November 14, 2003 |  |  | 
|                        |  |  | 





|                        |  |  |  | SILVER LEGACY CAPITAL CORP.
|----------------------- |  |  |  | ---------------------------
|                        |  |  | 
|Date: November 14, 2003 |  |  |  | By:                        
|                        |  |  |  |                            



|                        |  |  | 
|----------------------- |  |  | 
|Date: November 14, 2003 |  |  | 
|                        |  |  | 



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