UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q





(Mark
one)


x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended September 30, 2010





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: 000-52975




American
Casino & Entertainment Properties LLC


(Exact
name of registrant as specified in its charter)





Delaware
                    
                    20-0573058(State
      or other jurisdiction of
                    
                    (I.R.S.
      Employerincorporation
      or organization)
                    
                    Identification
      No.)2000
      Las Vegas Boulevard SouthLas
      Vegas, NV
                    
                    89104(Address
      of principal executive offices)
                    
                    (Zip
      code)





(702)
380-7777


(Registrant's
telephone number, including area code)







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





Indicate
by check mark whether the registrant (1) has 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 registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes x No  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   Yes  ̈ No x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.


Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer x (Do
      not check if a smaller reporting company)
            Smaller
      reporting company  ̈


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  ̈ No x







TABLE
OF CONTENTS





PagePart
      I
              
              Financial
      InformationItem
      1.
              Unaudited
      Condensed Consolidated Financial Statements
              1Condensed
      Consolidated Balance Sheets – September 30, 2010 (unaudited) and
      December 31, 2009
              1Condensed
      Consolidated Statements of Operations (unaudited) – the three months ended
      September 30, 2010 and September 30, 2009
              2Condensed
      Consolidated Statements of Operations (unaudited) – the nine months ended
      September 30, 2010 and September 30, 2009
              3Condensed
      Consolidated Statements of Cash Flows (unaudited) – the nine months ended
      September 30, 2010 and September 30, 2009
              4Condensed
      Consolidated Statement of Members’ Equity (unaudited) – the nine months
      ended September 30, 2010
              5Notes
      to Condensed Consolidated Financial Statements (unaudited)
              6Item
      2.
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
              12Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              21Item
      4T.
              Controls
      and Procedures
              21Part
      II
              
              Other
      InformationItem
      6.
              Exhibits
              22


i


PART
I-FINANCIAL INFORMATION





Item
1. Unaudited Condensed Consolidated Financial Statements.





AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


CONDENSED
CONSOLIDATED BALANCE SHEETS


As of
                  
                  
                  As ofSeptember 30, 2010
                  
                  
                  December 31, 2009(Unaudited)(In
      thousands)AssetsCurrent
      Assets:Cash and cash equivalents
                  
                  $
                  105,957
                  
                  
                  $
                  101,092Investments-restricted
                  
                  
                  1,171
                  
                  
                  
                  1,857Accounts receivable, net
                  
                  
                  3,343
                  
                  
                  
                  3,250Other current assets
                  
                  
                  11,411
                  
                  
                  
                  10,418Total Current Assets
                  
                  
                  121,882
                  
                  
                  
                  116,617Property
      and equipment, net
                  
                  
                  1,140,248
                  
                  
                  
                  1,146,796Debt
      issuance costs, net
                  
                  
                  3,029
                  
                  
                  
                  2,940Intangible
      and other assets
                  
                  
                  20,277
                  
                  
                  
                  22,606Total
      Assets
                  
                  $
                  1,285,436
                  
                  
                  $
                  1,288,959Liabilities
      and Members' EquityCurrent
      Liabilities:Accounts payable
                  
                  $
                  4,716
                  
                  
                  $
                  3,236Accrued expenses
                  
                  
                  29,427
                  
                  
                  
                  18,646Accounts payable and accrued expenses - related party
                  
                  
                  17
                  
                  
                  
                  200Accrued payroll and related expenses
                  
                  
                  11,591
                  
                  
                  
                  10,818Current portion of capital lease obligations
                  
                  
                  273
                  
                  
                  
                  263Total Current Liabilities
                  
                  
                  46,024
                  
                  
                  
                  33,163Long-Term
      Liabilities:Long-term debt, net of unamortized discount
                  
                  
                  354,522
                  
                  
                  
                  351,436Capital lease obligations, less current portion
                  
                  
                  1,989
                  
                  
                  
                  2,195Total Long-Term Liabilities
                  
                  
                  356,511
                  
                  
                  
                  353,631Total
      Liabilities
                  
                  
                  402,535
                  
                  
                  
                  386,794Commitments
      and ContingenciesMembers'
      Equity:Members' Equity
                  
                  
                  882,901
                  
                  
                  
                  902,165Total Members' Equity
                  
                  
                  882,901
                  
                  
                  
                  902,165Total
      Liabilities and Members' Equity
                  
                  $
                  1,285,436
                  
                  
                  $
                  1,288,959





See notes
to condensed consolidated financial statements.




1


AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS




Three months ended
                        September 30, 2010
                      
                      
                      Three months ended
                        September 30, 2009(Unaudited)(In thousands)Revenues:Casino
                      
                      $
                      48,907
                      
                      
                      $
                      50,082Hotel
                      
                      
                      14,283
                      
                      
                      
                      15,324Food and beverage
                      
                      
                      16,702
                      
                      
                      
                      18,685Tower, retail and other
                      
                      
                      9,596
                      
                      
                      
                      9,373Gross revenues
                      
                      
                      89,488
                      
                      
                      
                      93,464Less promotional allowances
                      
                      
                      5,922
                      
                      
                      
                      5,795Net revenues
                      
                      
                      83,566
                      
                      
                      
                      87,669Costs
      And Expenses:Casino
                      
                      
                      16,320
                      
                      
                      
                      17,004Hotel
                      
                      
                      8,879
                      
                      
                      
                      9,210Food and beverage
                      
                      
                      12,678
                      
                      
                      
                      14,509Other operating expenses
                      
                      
                      3,460
                      
                      
                      
                      3,324Selling, general and administrative
                      
                      
                      28,148
                      
                      
                      
                      28,950Depreciation and amortization
                      
                      
                      11,208
                      
                      
                      
                      10,384Gain on sale of assets
                      
                      
                      (10
                      )
                      
                      
                      -Management fee - related party
                      
                      
                      375
                      
                      
                      
                      375Total costs and expenses
                      
                      
                      81,058
                      
                      
                      
                      83,756Income
      From Operations
                      
                      
                      2,508
                      
                      
                      
                      3,913Other
      Income (Expense):Interest income
                      
                      
                      -
                      
                      
                      
                      32Interest expense
                      
                      
                      (11,385
                      )
                      
                      
                      (5,728
                      )Total other expense, net
                      
                      
                      (11,385
                      )
                      
                      
                      (5,696
                      )Net
      Loss
                      
                      $
                      (8,877
                      )
                      
                      $
                      (1,783
                      )




See notes
to condensed consolidated financial statements.





2




AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS




Nine months ended
                        September 30, 2010
                      
                      
                      Nine months ended
                        September 30, 2009(Unaudited)(In thousands)Revenues:Casino
                      
                      $
                      156,129
                      
                      
                      $
                      165,438Hotel
                      
                      
                      43,435
                      
                      
                      
                      46,487Food and beverage
                      
                      
                      51,210
                      
                      
                      
                      56,870Tower, retail and other
                      
                      
                      25,433
                      
                      
                      
                      26,713Gross revenues
                      
                      
                      276,207
                      
                      
                      
                      295,508Less promotional allowances
                      
                      
                      18,339
                      
                      
                      
                      19,998Net revenues
                      
                      
                      257,868
                      
                      
                      
                      275,510Costs
      And Expenses:Casino
                      
                      
                      50,117
                      
                      
                      
                      53,673Hotel
                      
                      
                      25,668
                      
                      
                      
                      26,545Food and beverage
                      
                      
                      38,533
                      
                      
                      
                      42,180Other operating expenses
                      
                      
                      9,876
                      
                      
                      
                      10,320Selling, general and administrative
                      
                      
                      82,640
                      
                      
                      
                      85,932Depreciation and amortization
                      
                      
                      32,742
                      
                      
                      
                      30,823Pre-opening costs
                      
                      
                      283
                      
                      
                      
                      -(Gain) loss on sale of assets
                      
                      
                      (6
                      )
                      
                      
                      578Management fee - related party
                      
                      
                      1,125
                      
                      
                      
                      1,375Impairment of assets
                      
                      
                      2,000
                      
                      
                      
                      -Total costs and expenses
                      
                      
                      242,978
                      
                      
                      
                      251,426Income
      From Operations
                      
                      
                      14,890
                      
                      
                      
                      24,084Other
      Income (Expense):Interest income
                      
                      
                      8
                      
                      
                      
                      91Interest expense
                      
                      
                      (34,162
                      )
                      
                      
                      (7,008
                      )Interest expense - related party
                      
                      
                      -
                      
                      
                      
                      (21,398
                      )Total other expense, net
                      
                      
                      (34,154
                      )
                      
                      
                      (28,315
                      )Net
      Loss
                      
                      $
                      (19,264
                      )
                      
                      $
                      (4,231
                      )




See notes
to condensed consolidated financial statements.


3


AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS




Nine monthsended
                          September30, 2010
                        
                        
                        Nine monthsended
                          September30, 2009(Unaudited)(In thousands)Cash
      Flows From Operating Activities:Net
      loss
                        
                        $
                        (19,264
                        )
                        
                        $
                        (4,231
                        )Adjustments
      to reconcile net loss to net cash provided byoperating
      activities:Depreciation
      and amortization
                        
                        
                        32,742
                        
                        
                        
                        30,823Amortization
      of debt discount and issuance costs
                        
                        
                        3,578
                        
                        
                        
                        4,380(Gain)
      loss on sale of assets
                        
                        
                        (6
                        )
                        
                        
                        578Impairment
      of assets
                        
                        
                        2,000
                        
                        
                        
                        -Changes
      in operating assets and liabilities:Restricted cash
                        
                        
                        -
                        
                        
                        
                        2,598Accounts
      receivable, net
                        
                        
                        (93
                        )
                        
                        
                        513Other
      assets
                        
                        
                        (984
                        )
                        
                        
                        808Accounts
      payable and accrued expenses
                        
                        
                        10,278
                        
                        
                        
                        (857
                        )Related
      party activity, net
                        
                        
                        (183
                        )
                        
                        
                        (1,275
                        )Net
      Cash Provided by Operating Activities
                        
                        
                        28,068
                        
                        
                        
                        33,337Cash
      Flows From Investing Activities:Decrease
      in investments - restricted
                        
                        
                        686
                        
                        
                        
                        -Acquisition
      of property and equipment
                        
                        
                        (22,636
                        )
                        
                        
                        (9,602
                        )Increase
      in intangible assets
                        
                        
                        (645
                        )
                        
                        
                        -Decrease
      in restricted cash
                        
                        
                        -
                        
                        
                        
                        38,404Proceeds
      from sale of property and equipment
                        
                        
                        169
                        
                        
                        
                        239Net
      Cash Provided by (Used in) Investing Activities
                        
                        
                        (22,426
                        )
                        
                        
                        29,041Cash
      Flows From Financing Activities:Debt
      issuance costs
                        
                        
                        (581
                        )
                        
                        
                        (3,082
                        )Payments
      on note payable
                        
                        
                        -
                        
                        
                        
                        (327,713
                        )Payments
      on capital lease obligation
                        
                        
                        (196
                        )
                        
                        
                        (239
                        )Proceeds
      from notes payable
                        
                        
                        -
                        
                        
                        
                        311,250Equity
      contribution
                        
                        
                        -
                        
                        
                        
                        35,000Net
      Cash Provided by (Used in) Financing Activities
                        
                        
                        (777
                        )
                        
                        
                        15,216Net
      increase in cash and cash equivalents
                        
                        
                        4,865
                        
                        
                        
                        77,594Cash
      and cash equivalents - beginning of period
                        
                        
                        101,092
                        
                        
                        
                        30,366Cash
      and cash equivalents - end of period
                        
                        $
                        105,957
                        
                        
                        $
                        107,960Supplemental
      Disclosures of Cash Flow Information:Cash
      paid during the period for interest, net of amounts
      capitalized
                        
                        $
                        20,271
                        
                        
                        $
                        91Cash
      paid during the period for interest - related party, net of amounts
      capitalized
                        
                        $
                        -
                        
                        
                        $
                        26,171Supplemental
      Disclosures of Non-Cash Items:Accrued
      intangible assets
                        
                        $
                        400
                        
                        
                        $
                        -Accrued
      capital expenditures
                        
                        $
                        2,356
                        
                        
                        $
                        -Non-cash
      acquisition of property and equipment
                        
                        $
                        -
                        
                        
                        $
                        940Non-cash
      equity contribution related to troubled debt restructure
                        
                        $
                        -
                        
                        
                        $
                        737,917





See notes
to condensed consolidated financial statements.


4


AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


CONDENSED
CONSOLIDATED STATEMENT OF MEMBERS’ EQUITY


(Unaudited)


(In
thousands)




Class A
                      Equity
                    
                    
                    Class B
                      Equity
                    
                    
                    TotalEquityBalances
      at December 31, 2009
                    
                    $
                    -
                    
                    
                    $
                    902,165
                    
                    
                    $
                    902,165Net loss
                    
                    
                    -
                    
                    
                    
                    (19,264
                    )
                    
                    
                    (19,264
                    )Balances
      at September 30, 2010
                    
                    $
                    -
                    
                    
                    $
                    882,901
                    
                    
                    $
                    882,901




See notes
to condensed consolidated financial statements.


5


AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




Note 1.  The
Company




American
Casino & Entertainment Properties LLC, or ACEP, was formed in Delaware on
December 29, 2003. As used in this Quarterly Report on Form 10-Q, the terms
“ACEP”, “company”, “we”, “our”, “ours”, and “us” refer to American Casino &
Entertainment Properties LLC and its subsidiaries, unless the context suggests
otherwise. ACEP is a holding company that was formed for the purpose of
acquiring the entities that own and operate the Stratosphere Casino Hotel &
Tower, or the Stratosphere, Arizona Charlie’s Decatur and Arizona Charlie’s
Boulder in Las Vegas, Nevada.  We purchased the Aquarius Casino Resort, or
the Aquarius, on May 19, 2006.  The Aquarius operates in Laughlin,
Nevada.





On April
22, 2007, American Entertainment Properties Corp., or AEP, our former direct
parent, entered into a Membership Interest Purchase Agreement, or the Agreement,
with W2007/ACEP Holdings, LLC, or Holdings, an affiliate of Whitehall Street
Real Estate Funds, or Whitehall, a series of real estate investment funds
affiliated with Goldman, Sachs & Co., to sell all of our issued and
outstanding membership interests to Holdings, for approximately $1.3
billion.  Pursuant to the Assignment and Assumption Agreement, dated
December 4, 2007, between Holdings and W2007/ACEP Managers Voteco, LLC, or
Voteco, Holdings assigned all of its rights, obligations and interests under the
Agreement to Voteco. Voteco’s acquisition of ACEP, or the Acquisition, closed at
a purchase price of $1.2 billion on February 20, 2008.





On
February 23, 2010, ACEP and ACEP Finance Corp., or ACEP Finance and, together
with ACEP, the Issuers, completed an exchange offer registered with the
Securities and Exchange Commission, or SEC, in which the Issuers issued
approximately $374.9 million aggregate principal amount of their 11% Senior
Secured Notes due 2014, or SEC-Registered Notes, in exchange for $374.9 million
of their outstanding, 11% Senior Secured Notes due 2014, or the Unregistered
Notes, issued in a transaction pursuant to Rule 144A and Regulation S under the
Securities Act of 1933, as amended, or the Securities Act. The SEC-Registered
Notes have substantially identical terms to the Unregistered Notes, except that
the SEC-Registered Notes were issued in a transaction registered under the
Securities Act. The SEC-Registered Notes and the Unregistered Notes are
collectively referred to herein as the 11% Senior Secured Notes.




Note 2.  Basis of
Presentation




The
accompanying condensed consolidated financial statements included herein have
been prepared by ACEP, without audit, in accordance with the accounting
policies described in our 2009 audited consolidated financial statements and
pursuant to the rules and regulations of the SEC. Certain information and
footnote disclosures normally included in financial statements, prepared in
accordance with accounting principles generally accepted in the United States,
have been condensed or omitted pursuant to such rules and regulations. We
believe that the disclosures are adequate to make the information presented not
misleading. In the opinion of management, the accompanying condensed
consolidated financial statements include all adjustments (consisting only of
those of a normal recurring nature), which are necessary for a fair presentation
of the results for the interim periods presented. Interim results are not
necessarily indicative of results to be expected for any future interim period
or for the entire fiscal year.





These
condensed consolidated financial statements should be read in conjunction with
the notes to the 2009 consolidated audited financial statements presented in our
annual report on Form 10-K for the year ended December 31, 2009, filed with the
SEC on March 22, 2010 (SEC File No. 000-52975). Our reports are available
electronically by visiting the SEC website at http://www.sec.gov.
You may also visit the investor relations section of the American Casino &
Entertainment Properties LLC website at http://www.acepllc.com.





Principles
of Consolidation




The
condensed consolidated financial statements include the accounts of ACEP and its
wholly-owned subsidiaries. All material intercompany balances and transactions
have been eliminated in consolidation.





6


Recently
Issued Accounting Pronouncements





In
January 2010, the Financial Accounting Standards Board, or FASB, issued guidance
that clarifies and requires new disclosures about fair value measurements in
Accounting Standards Codification, or ASC, 815, Derivatives andHedging,subtopic 10-50-4B
for derivative instruments and ASC 320, Investments – Debts and Equity
Securities, subtopic 10-50-1B for debt and equity securities. The
clarifications and requirement to disclose the amount and reasons for
significant transfers in and out of Level 1 and Level 2, as well as significant
transfers in and out of Level 3 of the fair value hierarchy were adopted by us
in the first quarter of 2010.  The new guidance also requires that
purchases, sales, issuances and settlements be presented gross in the Level 3
reconciliation and that requirement is effective for the fiscal years beginning
after December 15, 2010 and for interim periods within those years, with early
adoption permitted. We early adopted the disaggregation guidance on January 1,
2010. Since this new guidance only amends the disclosures requirements, it did
not impact our consolidated balance sheet, statement of operations or statement
of cash flows.





In April
2010, the FASB issued Accounting Standards Update 2010-16, Accruals for Casino Jackpot
Liabilities, which clarifies that an entity should not accrue jackpot
liabilities before they are won if the payout can be avoided. This guidance will
be applied prospectively with a cumulative-effect adjustment in members’ equity
at the beginning of the period of adoption and is effective beginning with our
first quarter of 2011. There will be no impact to our results of operations,
financial position or cash flows related to the adoption of this
guidance.





Reclassifications





Certain
reclassifications have been made to the prior year’s consolidated financial
statements to conform to the current fiscal year presentation. For the three and
nine months ended September 30, 2009 we have reclassified the estimated cost of
providing complimentaries included in casino, hotel, food and beverage, other
operating expenses and selling, general and administrative expenses.  These
reclassifications had no effect on net loss.





Note
3.  Related Party Transactions





On
February 20, 2008, in connection with the closing of the Acquisition,
certain of our wholly owned indirect subsidiaries obtained term loans in an
aggregate amount of approximately $1.1 billion, or the Goldman Term Loans,
from Goldman Sachs Mortgage Company, or GSMC, pursuant to certain mortgage and
mezzanine loan agreements. On June 25, 2009, the Goldman Term Loans were
restructured and, as a result of such restructuring, we became party to a loan
with GSMC in the original principal amount of $350 million, or the 2014 Term
Loans. We paid interest on the 2014 Term Loans of approximately $6.2 million for
the three months ended September 30, 2009.  We paid interest on the Goldman
Term Loans and 2014 Term Loans, collectively, of approximately $26.2 million for
the nine months ended September 30, 2009.





On August
14, 2009, we issued an aggregate principal amount of $375 million of
Unregistered Notes. Goldman, Sachs & Co., or Goldman Sachs, was the
initial purchaser of the Unregistered Notes. We used the gross proceeds
from the offering of the 11% Senior Secured Notes, approximately $311.3 million,
to repay the 2014 Term Loans, which were held by GSMC, an affiliate of Goldman
Sachs and Whitehall 2007, owners of a majority of our indirect
interests. Upon such payment, the remaining balance of 2014 Term Loans was
forgiven by GSMC.  Due to the related party nature of the transaction, the
difference between the carrying amount of the 2014 Term Loans and the aggregate
principal amount of the Unregistered Notes was credited directly to Members
Equity. Goldman Sachs has advised us that they intend to make a market in
the 11% Senior Secured Notes.





7


As of
November 29, 2007, the Stratosphere entered into a master room agreement with
Consolidated Resorts, Inc., or CRI, which was effective from January 1, 2008
through December 31, 2008. Even though it had expired, the parties continued to
operate under the agreement in a month-to-month arrangement. CRI was
approximately 75% owned by Whitehall. Whitehall is affiliated with Holdings, the
100% holder of our Class B membership interests, and Goldman Sachs. On July 10,
2009, CRI filed under Chapter 7 of the U.S. Bankruptcy Code in United States
Bankruptcy Court for the District of Nevada, and it is therefore unlikely that
we will be able to collect amounts owed to us by CRI. We no longer have a
relationship with CRI and it is no longer a related party. Under the agreement,
CRI purchased a minimum number, which varied by month, of room nights from the
Stratosphere. In addition, CRI was required to purchase promotional incentives
such as show, restaurant and gaming packages for each guest. Revenues for
promotional incentives are included in Casino revenues, Food and beverage
revenues and Tower, retail and other revenues. There was also a sales incentive
component whereby CRI was to pay us a fee for the resultant of net timeshare
sales generated by CRI guests divided by total monthly tours solicited at the
property when in excess of $2,499 per solicited tour. There were no sales
incentives earned during either the three or nine months ended September 30,
2009.  We did not receive any revenues for the three months ended September
30, 2009.  We received approximately $397,000 in Hotel revenues, $65,000 in
Casino revenues, $97,000 in Food and beverage revenues, and $239,000 in Tower,
retail, and other revenues for the nine months ended September 30, 2009. 
CRI also leased space from the Stratosphere for three marketing kiosks. The
lease agreement was effective from July 1, 2008 through September 30, 2011. The
base rent was $125,000 per month plus common area maintenance charges. The
Stratosphere received additional rent for tours over 1,250 guests per month that
originate from the Stratosphere. Stratosphere did not receive any Tower, retail
and other revenues for rent under the lease agreement for the three months ended
September 30, 2009. Stratosphere received Tower, retail and other revenues of
$750,000 for rent under the lease agreement for the nine months ended September
30, 2009. CRI owed us $184,000 as of September 30, 2010 and December 31, 2009,
which is fully reserved on the condensed consolidated balance
sheets.





On
February 20, 2008, we entered into a consulting agreement with Highgate Hotels,
L.P., or Highgate, pursuant to which Highgate provides asset management
consulting services to us.Highgate owns a less than 5% membership interest in Holdings. The
agreement was amended to reduce fees payable thereunder on June 25, 2009
and Highgate converted amounts due them from ACEP to contributed capital in
Holdings.The
consulting agreement expires on June 20, 2013.  Highgate is entitled
to receive a $1.5 million per year base consulting fee for the periods through
February 20, 2011 and a $1.0 million per year consulting fee for the
periods after February 20, 2011, additional consulting fees up to $500,000
per year for periods after February 20, 2011 based on EBITDA results at the
properties and development fees at 4% of the aggregate costs of any agreed upon
development projects. We incurred Highgate fees of approximately $375,000 for
both the three months ended September 30, 2010 and September 30, 2009. We
incurred Highgate fees of approximately $1.1 million and $1.4 million for the
nine months ended September 30, 2010 and September 30, 2009, respectively. We
incurred no development fees for either the three months or nine months ended
September 30, 2010 and September 30, 2009. As of September 30, 2010 and December
31, 2009, we owed Highgate approximately $0 and $192,000,
respectively.





On June
16, 2008, we entered into an agreement with Travel Tripper LLC, or TTL, to
utilize their technology for online hotel reservations. TTL is owned by an
affiliate of Goldman Sachs (9%), an affiliate of Highgate (9%) and an employee
of Highgate (40%). TTL is paid 4% of room revenues booked utilizing its system.
As of August 1, 2010, the fee paid to TTL was reduced to 2%. We expensed fees of
approximately $70,000 and $122,000 for the three months ended September 30, 2010
and September 30, 2009, respectively. We expensed fees of approximately $279,000
and $427,000 for the nine months ended September 30, 2010 and September 30,
2009, respectively. As of September 30, 2010 and December 31, 2009, we owed TTL
approximately $15,000 and $6,000, respectively.





Archon
Group, LP, or Archon, an affiliate of Goldman Sachs, provides various services
to us such as construction management, cash management and insurance
brokers.  We expensed fees of approximately $46,000 and $35,000 for the
three months ended September 30, 2010 and September 30, 2009, respectively. We
expensed fees of approximately $70,000 and $73,000 for the nine months ended
September 30, 2010 and September 30, 2009, respectively. As of September 30,
2010 and December 31, 2009, we owed Archon approximately $0 and $1,000,
respectively. Additionally, Archon was the administrative agent under the 2014
Term Loans.





On
October 3, 2008, we entered into a participation agreement with Nor1, Inc., or
Nor1, to utilize their technology to help sell perishable suite and room
inventories. Nor1 gives the guest who books on-line the opportunity to book
a non-guaranteed suite or upgraded rooms at a discounted rate if such is
available at check-in. If the suite or upgraded room is awarded, Nor1 is
paid 25% of the upgrade fee. Goldman Sachs owns less than 5% of Nor1. We
expensed fees of approximately $5,000 and $11,400 for the three months ended
September 30, 2010 and September 30, 2009, respectively. We expensed fees of
approximately $29,000 and $23,000 for the nine months ended September 30, 2010
and September 30, 2009, respectively. As of September 30, 2010 and December 31,
2009, we owed Nor1 approximately $3,000 and $1,000, respectively.





8


We follow
a related party transaction approval policy for reviewing related person
transactions. These procedures are intended to ensure that transactions with
related persons are fair to us and in our best interests. If a proposed
transaction appears to or does involve a related person, the transaction is
presented to our audit committee for review. The audit committee is authorized
to retain and pay such independent advisors as it deems necessary to properly
evaluate the proposed transaction, including, without limitation, outside legal
counsel and financial advisors to determine the fair value of the
transaction.





Note
4.   Intangible Assets





We
account for intangible assets in accordance with FASB ASC 350, Goodwill and Intangible
Assets.





Our
finite-lived acquired intangible assets include our player loyalty plan and a
non-compete agreement. Our infinite-lived acquired intangible assets include
trade names.  Acquired assets are recorded at fair value on the date of
acquisition and finite-lived assets are amortized over the estimated period to
be benefited.





In
accordance with Financial Accounting Standards Board, or FASB ASC 350, Goodwill
and Other Intangible Assets, we perform an annual impairment test of
indefinite-lived intangible assets in the fourth quarter of each year and
whenever a triggering event occurs which causes us to perform an impairment
test.  During the three months ended June 30, 2010, due to continued
weakness in consumer spending, increased room supply in the Las Vegas market and
decreased spending by visitors to the Stratosphere we revised our Stratosphere
revenue forecasts.  We considered this revision to Stratosphere’s
forecasted revenues to be a triggering event. As of June 30, 2010, we performed
impairment tests that resulted in the non-cash write-down of the Stratosphere
trade names of $2.0 million. The impairment of these assets was due primarily to
our decrease in revenues, which was an indication that these assets may not be
recoverable. We believe the on-going economic recession in the U.S. and Southern
Nevada economies has reduced overall industry valuations.





As of
September 30, 2010 and December 31, 2009, we had the following intangible
assets.




(in thousands)September 30, 2010
                        
                        
                        December 31, 2009(Unaudited)Gross
                        
                        
                        
                        
                        
                        Net
                        
                        
                        Gross
                        
                        
                        
                        
                        
                        NetAsset
                        
                        Carrying
                        
                        
                        Accumulated
                        
                        
                        Carrying
                        
                        
                        Carrying
                        
                        
                        Accumulated
                        
                        
                        CarryingLife
                        
                        Amount
                        
                        
                        Amortization
                        
                        
                        Amount
                        
                        
                        Amount
                        
                        
                        Amortization
                        
                        
                        AmountAmortizing intangible assets:Player
      Loyalty Plan
                        5
      Years
                        
                        $
                        7,450
                        
                        
                        $
                        (3,848
                        )
                        
                        $
                        3,602
                        
                        
                        $
                        7,450
                        
                        
                        $
                        (2,731
                        )
                        
                        $
                        4,719Non-Compete
      Agreement
                        38
      Months
                        
                        
                        1,045
                        
                        
                        
                        (248
                        )
                        
                        
                        797
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -$
                        8,495
                        
                        
                        $
                        (4,096
                        )
                        
                        $
                        4,399
                        
                        
                        $
                        7,450
                        
                        
                        $
                        (2,731
                        )
                        
                        $
                        4,719Non-amortizing
      intangible assets:Trade
      Name
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        $
                        15,797
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        $
                        17,797Total
      intangible assets
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        $
                        20,196
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        $
                        22,516





9





Note
5.   Debt





Long-term
debt and capital lease obligations consist of the following:




As of
                    
                    
                    As ofSeptember 30,2010
                    
                    
                    December 31,2009(Unaudited)(In
      thousands)11%
      Senior Secured Notes due June 15, 2014
                    
                    $
                    375,000
                    
                    
                    $
                    375,000Unamortized
      discount
                    
                    
                    (20,478
                    )
                    
                    
                    (23,564
                    )Capital
      lease obligations
                    
                    
                    2,262
                    
                    
                    
                    2,458Total
      long-term debt and capital lease obligations
                    
                    
                    356,784
                    
                    
                    
                    353,894Current
      portion of capital lease obligations
                    
                    
                    273
                    
                    
                    
                    263Total
      long-term debt and capital lease obligations, net
                    
                    $
                    356,511
                    
                    
                    $
                    353,631




11%
Senior Secured Notes





On
August 14, 2009, the Issuers issued the Unregistered Notes pursuant to the
Indenture among the Issuers, certain subsidiary guarantors and The Bank of New
York Mellon, as trustee, or the Indenture.The 11% Senior Secured
Notes mature on June 15, 2014 and bear interest at a rate of 11% per annum.
Interest is computed on the basis of a 360-day year composed of twelve 30-day
months and is payable semi-annually on June 15 and December 15 of each
year, beginning on December 15, 2009. The obligations are jointly,
severally and unconditionally guaranteed by all of the subsidiaries of ACEP
other than ACEP Finance and will be so guaranteed by any future domestic
subsidiaries of ACEP, subject to certain exceptions. The 11% Senior Secured
Notes are collateralized by substantially all fee and leasehold real property
comprising the Stratosphere, the Aquarius, Arizona Charlie’s Decatur and Arizona
Charlie’s Boulder.





On
February 23, 2010, the Issuers completed an exchange offer registered with the
SEC in which the Issuers issued approximately $374.9 million aggregate principal
amount of their SEC-Registered Notes in exchange for $374.9 million of their
Unregistered Notes. The SEC-Registered Notes have substantially identical terms
to the Unregistered Notes, except that the SEC-Registered Notes were issued in a
transaction registered under the Securities Act.





In
accordance with positions established by the SEC, separate financial information
with respect to the parent, co-issuer, guarantor subsidiaries and non-guarantor
subsidiaries is not required as the parent and co-issuer have no independent
assets or operations, the guarantees are full and unconditional and joint and
several, and the total assets, stockholders’ equity, revenues, income from
operations before income taxes and cash flows from operating activities of the
non-guarantor subsidiaries is less than 3% of ACEP’s consolidated
amounts.





The gross
proceeds from the issuance of the Unregistered Notes, approximately $311.3
million, were used to repay a portion of the then outstanding balance of the
2014 Term Loans.  Upon such payment, the remaining balance of the 2014 Term
Loans was forgiven by GSMC. We increased Members’ Equity by $215.6 million for
the gain on debt extinguishment.





The fair
value of our debt is estimated based on market prices for the same or similar
issues. We issued the Unregistered Notes on August 14, 2009. The estimated fair
value of the 11% Senior Secured Notes was approximately $366.6 million as of
September 30, 2010.





On or
after June 15, 2012,  the Issuers may redeem all or a part of the 11%
Senior Secured Notes at the redemption prices set forth in the Indenture, plus
accrued and unpaid interest to the applicable redemption date. In addition, at
any time prior to June 15, 2012, the Issuers may, on one or more than one
occasion, redeem some or all of the 11% Senior Secured Notes at a redemption
price equal to 100% of the principal amount of the 11% Senior Secured Notes
redeemed, plus a “make-whole” premium, and accrued and unpaid interest to the
applicable redemption date. At any time prior to June 15, 2012, we may also
redeem up to 35% of the aggregate principal amount of the 11% Senior Secured
Notes, using the proceeds of certain qualified equity offerings, at a redemption
price of 111% of the principal amount thereof, plus accrued and unpaid interest
to the applicable redemption date.  We may, not more than once in any
12-month period ending on June 15, 2010, 2011 and 2012, redeem up to 5% of the
original aggregate principal amount of the 11% Senior Secured Notes at a
redemption price equal to 102% of the principal amount of the 11% Senior Secured
Notes redeemed plus accrued and unpaid interest to the applicable redemption
date.





10


If
certain change of control events occur as specified in the Indenture, we must
offer to repurchase the 11% Senior Secured Notes at a repurchase price equal to
101% of the principal amount of the 11% Senior Secured Notes repurchased, plus
accrued and unpaid interest to the applicable repurchase date.





If ACEP
or its subsidiaries sell assets under certain circumstances or experience
certain events of loss, we must offer to repurchase the 11% Senior Secured Notes
at a repurchase price equal to 100% of the principal amount of the Notes
repurchased, plus accrued and unpaid interest to the date of purchase,
prepayment or redemption, as the case may be.





We are
bound by certain covenants contained and defined in the Indenture that requires
us to file quarterly and annual reports, and among other things, restricts our
ability to:





•
            declare
      or pay dividends and distributions on our equity interests, purchase,
      redeem, or otherwise retire for value any equity interest, make payments
      on debt, or make investments;





•
            incur
      indebtedness or issue preferred
stock;





•
            sell,
      create liens, or otherwise encumber our assets or equity interests;
      and





•
            enter
      into transactions with affiliates.





These
covenants contained in the Indenture are subject to a number of important
limitations and exceptions.





The
Indenture provides for events of default, including, but not limited to, cross
defaults to certain other debt of ACEP and its subsidiaries. In the case of an
event of default arising from specified events of bankruptcy or insolvency, all
outstanding 11% Senior Secured Notes will become due and payable immediately
without further action or notice. Management believes that we are in compliance
with the provisions of the Indenture as of quarter end and the date of this
filing.





Note
6.  Legal Proceedings





We are,
from time to time, a party to various legal proceedings arising out of our
businesses.  We believe, however, there are no proceedings pending or
threatened against us, which, if determined adversely, would have a material
adverse effect upon our financial conditions, results of operations or
liquidity.




11


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





With the
exception of historical facts, the matters discussed in this quarterly report on
Form 10-Q are forward looking statements. Forward-looking statements may relate
to, among other things, future actions, future performance generally, business
development activities, future capital expenditures, strategies, the outcome of
contingencies such as legal proceedings, future financial results, financing
sources and availability and the effects of regulation and competition. When we
use the words “believe”, “intend”, “expect”, “may”, “will”, “should”,
“anticipate”, “could”, “estimate”, “plan”, “predict”, “project”, or their
negatives, or other similar expressions, the statements which include those
words are usually forward-looking statements. When we describe strategy that
involves risks or uncertainties, we are making forward-looking
statements.





These
forward-looking statements are based on the current plans and expectations of
our management and are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results or those
anticipated. These factors include, but are not limited to: the size of our
indebtedness, our indebtedness' effect on our business, the adverse effect of
government regulation and other matters affecting the gaming industry, increased
operating costs of our properties, increased competition in the gaming industry,
adverse effects of economic downturns and terrorism, our failure to make
necessary capital expenditures, increased costs associated with our growth
strategy, the loss of key personnel, risks associated with geographical market
concentration, our failure to satisfy our working capital needs from operations
or our indebtedness, our inability to raise additional money, our dependence on
water, energy and technology services, adverse effects of increasing energy
costs, and the availability of and costs associated with potential sources of
financing.





You
should also read, among other things, the risks and uncertainties described in
the section entitled Risk Factors in Item 1A of our annual report on Form 10-K,
filed with the SEC on March 22, 2010 (SEC File No. 000-52975).





We
warn you that forward-looking statements are only predictions. Actual events or
results may differ as a result of risks that we face. Forward-looking statements
speak only as of the date they were made, and we undertake no obligation to
update them.





The
following discussion contains management’s discussion and analysis of financial
condition and results of operations. Management’s discussion and analysis should
be read in conjunction with “Item 1. Financial Statements” of this quarterly
report on Form 10-Q and Management’s Discussion and Analysis of Financial
Condition and Results of Operations presented in our annual report on Form 10-K
for the year ended December 31, 2009.





Overview





We own
and operate four gaming and entertainment properties in Clark County, Nevada.
The four properties are the Stratosphere Casino Hotel & Tower, or the
Stratosphere, which is located on the Las Vegas Strip and caters to visitors to
Las Vegas, two off-Strip casinos, Arizona Charlie's Decatur and Arizona
Charlie's Boulder, which cater primarily to residents of Las Vegas and the
surrounding communities, and the Aquarius Casino Resort, in Laughlin, Nevada, or
the Aquarius, which caters to visitors to Laughlin. The Stratosphere is one of
the most recognized landmarks in Las Vegas, our two Arizona Charlie’s properties
are well-known casinos in their respective marketplaces and the Aquarius has the
largest hotel by number of rooms in Laughlin. Each of our properties offers
customers a value-oriented experience by providing competitive odds in our
casinos, quality rooms in our hotels, award-winning dining facilities and, at
the Stratosphere and Aquarius, an offering of competitive value-oriented
entertainment attractions. We believe the value we offer our patrons, together
with a strong focus on customer service, will enable us to continue to attract
customers to our properties.





Our
operating results are greatly dependent on the volume of customers at our
properties, which in turn affects the price we can charge for our non-gaming
amenities. A substantial portion of our operating income is generated from our
gaming operations, more specifically slot play. The majority of our revenue is
cash based through customers wagering with cash or paying for non-gaming
amenities with cash or credit card.  Because our business is capital
intensive, we rely heavily on the ability of our properties to generate
operating cash flow to repay debt financing, fund maintenance capital
expenditures and provide excess cash for future development.





12


Las Vegas
is one of the largest entertainment markets in the country. Las Vegas hotel
occupancy rates are among the highest of any major market in the United States.
We believe that the Las Vegas gaming market has two distinct sub-segments: the
tourist market, which tends to be concentrated on the Las Vegas Strip and
Downtown Las Vegas, and the local market, which includes the surrounding Las
Vegas area.





We use
certain key measurements to evaluate operating revenue.  Casino revenue
measurements include “table games drop” and “slot coin-in,” which are measures
of the total amounts wagered by patrons. Win or hold percentage represents the
percentage of table games drop or slot coin-in that is retained by the casino
and recorded as casino revenue.  Hotel revenue measurements include hotel
occupancy rate, which is the average percentage of available hotel rooms
occupied during a period, and average daily room rate, which is the average
price of occupied rooms per day.  Food and beverage revenue measurements
include number of covers, which is the number of guests served, and the average
check amount per guest.





Results
of Operations





Three
Months Ended September 30, 2010 Compared to Three Months Ended September 30,
2009





The
following table sets forth the results of our operations for the periods
indicated.





Three months ended
                        
                        
                        Three months endedSeptember 30, 2010
                        
                        
                        September 30, 2009(in millions)Income
      Statement Data:Revenues:Casino
                        
                        $
                        48.9
                        
                        
                        $
                        50.1Hotel
                        
                        
                        14.3
                        
                        
                        
                        15.3Food and beverage
                        
                        
                        16.7
                        
                        
                        
                        18.7Tower, retail and other
                        
                        
                        9.6
                        
                        
                        
                        9.4Gross revenues
                        
                        
                        89.5
                        
                        
                        
                        93.5Less
      promotional allowances
                        
                        
                        5.9
                        
                        
                        
                        5.8Net revenues
                        
                        
                        83.6
                        
                        
                        
                        87.7Costs
      and expenses:Casino
                        
                        
                        16.3
                        
                        
                        
                        17.0Hotel
                        
                        
                        8.9
                        
                        
                        
                        9.2Food and beverage
                        
                        
                        12.7
                        
                        
                        
                        14.5Other operating expenses
                        
                        
                        3.5
                        
                        
                        
                        3.3Selling, general and administrative
                        
                        
                        28.5
                        
                        
                        
                        29.4Depreciation and amortization
                        
                        
                        11.2
                        
                        
                        
                        10.4Total costs and expenses
                        
                        
                        81.1
                        
                        
                        
                        83.8Income
      from operations
                        
                        $
                        2.5
                        
                        
                        $
                        3.9EBITDA
      Reconciliation:Net
      loss
                        
                        $
                        (8.9
                        )
                        
                        $
                        (1.8
                        )Interest income
                        
                        
                        -
                        
                        
                        
                        -Interest expense
                        
                        
                        11.4
                        
                        
                        
                        5.7Depreciation and amortization
                        
                        
                        11.2
                        
                        
                        
                        10.4EBITDA
                        
                        $
                        13.7
                        
                        
                        $
                        14.3




13


We
believe that our presentation of EBITDA is an important supplemental measure of
our operating performance to investors. EBITDA is a commonly used measure of
performance in our industry which we believe, when considered with measures
calculated in accordance with United States Generally Accepted Accounting
Principles (GAAP), gives investors a more complete understanding of operating
results before the impact of investing and financing transactions and income
taxes and facilitates comparisons between us and our competitors. Although
EBITDA is a non-GAAP measure, we believe this measure will be used by investors
in their assessment of our operating performance and the valuation of our
company.





Generally
weak economic conditions throughout the United States stemming from a severe
recession precipitated an economic slowdown that has negatively impacted tourism
in Southern Nevada. Las Vegas, however, has experienced some positive trends in
overall demand in 2010. Through August 31, 2010, the Las Vegas Convention and
Visitors Authority (“LVCVA”) reported year-over-year increases in visitor
volume, room nights occupied, convention attendance and daily auto traffic-all
major highways. Lower spend by visitors coming to Las Vegas is reflected in
monthly year-over-year declines in gross gaming revenues and taxable sales for
much of 2010. When gross gaming revenues have shown monthly year-over-year
increases, the increases are primarily from baccarat play, which is favored by
high-end international guests. Our properties do not target the baccarat player.
In addition, airline capacity and passenger counts through McCarran
International Airport have decreased and hotel room inventories have increased
by 5.0% year-over-year resulting in lower occupancies throughout Las Vegas.
Unlike Las Vegas, Laughlin, NV continues to experience declining demand and
revenues in 2010 according to the LVCVA. The Clark County and Las Vegas local
economies continue to be characterized by increasing unemployment and declining
real estate values. As occupancies and visitor traffic to casinos decline,
operators in both the tourist and local markets have become more aggressive with
promotions that include gaming incentives, reduced room rates, reduced
entertainment prices, and food incentives to drive traffic to their properties.
All of these factors have impacted our operations.





Our
consolidated gross revenues decreased 4.3% to $89.5 million for the three months
ended September 30, 2010 from $93.5 million for the three months September 30,
2009. Our consolidated income from operations and EBITDA decreased 35.9% and
4.2% to $2.5 million and $13.7 million for the three months ended September 30,
2010 compared to $3.9 million and $14.3 million for the three months ended
September 30, 2009. The decrease in our gross revenues, operating income and
EBITDA are due primarily to the general economic slowdown and market factors
discussed previously.





Casino





Casino
revenues consist of revenues from slot machines, table games, poker, race and
sports book, bingo and keno. Casino revenues decreased 2.4% to $48.9 million for
the three months ended September 30, 2010, compared to $50.1 million for the
three months ended September 30, 2009.  This decrease was primarily due to
a 0.4% decrease in slot coin-in, a decrease in slot hold percentage to 6.8% from
6.9%, and a 10.6% decrease in table drop. As a result, our slots and table
revenues declined 1.2% and 12.1% respectively. For the three months ended
September 30, 2010, slot machine revenues were 84.5% of casino revenues, and
table game revenues were 11.9% of casino revenues, compared to 83.4% and 13.2%
of casino revenues, respectively, for the three months ended September 30,
2009.  Other casino revenues, consisting of race and sports book, poker,
bingo and keno, increased 5.9% for the three months ended September 30, 2010
compared to the three months ended September 30, 2009.  The increase in
other casino revenues were driven primarily by an increase in the race and
sports book hold percentage to 15.1% for the three months ended September 30,
2010 compared to 9.7% for the three months ended September 30, 2009. Casino
operating expenses decreased 4.1% to $16.3 million, for the three months ended
September 30, 2010, from $17.0 million for the three months ended September 30,
2009. This decrease was primarily due to decreased labor costs, revenue taxes
and participation expenses.  Participation expense consists of fees paid to
game owners for use of their games.





14


Hotel





Hotel
revenues decreased 6.5% to $14.3 million for the three months ended September
30, 2010 from $15.3 million for the three months ended September 30,
2009. The decrease in revenues is primarily the result of lower occupancy
and average daily room rate for the Stratosphere. Our Arizona Charlies
properties increased occupancy at a lower average daily room rate resulting in
relatively flat revenues. Aquarius increased both occupancy and average daily
room rate and increased revenues by 10.3%. Overall room occupancy fell to 67.7%
for the three months ended September 30, 2010 compared to 69.5% for the three
months ended September 30, 2009 and the average daily room rate decreased 3.0%
for the three months ended September 30, 2010 compared to the three months ended
September 30, 2009. The decrease in both occupancy and average daily room
rate at our Las Vegas properties is primarily a result of sharp decreases in
rates across our markets, an increase in Las Vegas citywide room inventories. In
addition, Stratosphere began a room renovation in July 2010. After adjusting for
rooms that were out-of-order, overall occupancy increases to 72.1% for the three
months ended September 30, 2010. Due to increased marketing and direct mail
efforts our comp room sales increased for the three months ended September 30,
2010, while our cash room sales declined. Our comp room sales increased 50.0%
and our cash room sales decreased 9.5% for the three months ended September 30,
2010 compared to the three months ended September 30, 2009. Our hotel
expenses were down 3.3% to $8.9 million for the three months ended September 30,
2010, compared to $9.2 million for the three months ended September 30,
2009. Due to the decline in revenues, our hotel operating margin decreased
to 37.8% for the three months ended September 30, 2010 as compared to 39.9% for
the three months ended September 30, 2009.





Food
& Beverage





Food and
beverage revenues decreased 10.7% to $16.7 million for the three months ended
September 30, 2010 compared to $18.7 million for the three months ended
September 30, 2009.  The decline in revenues was driven largely by the
reduction in food and beverage covers at our properties. Food covers and
beverage covers for the three months ended September 30, 2010 decreased 18.6%
and 9.2%, respectively, compared to the three months ended September 30,
2009. During the period, Stratosphere remodeled Roxy’s, its 24 hour food
service outlet. While being remodeled Roxy’s was relocated to a less visible
location and covers declined approximately 30% during July and August compared
to January through June. Average revenue per cover for the three months
ended September 30, 2010 increased 9.8% compared to the three months ended
September 30, 2009. Our food and beverage expenses decreased 12.4% to $12.7
million for the three months ended September 30, 2010 compared to $14.5 million
for the three months ended September 30, 2009 due to an overall decrease in
our food and beverage costs and payroll and related expenses. As a result,
our food and beverage operating margin increased to 24.0% for the three months
ended September 30, 2010 as compared to 22.5% for the three months ended
September 30, 2009.





Tower,
Retail and Other





Tower,
retail and other revenues increased 2.1% to $9.6 million for the three months
ended September 30, 2010 from $9.4 million for the three months ended September
30, 2009. Tower revenues increased 18.7% for the three months ended September
30, 2010, compared to the three months ended September 30, 2009.  The
primary reason for the increase in Tower revenues was the introduction of the
Sky Jump Las Vegas ride. Entertainment revenue declined 32.9% for the three
months ended September 30, 2010, compared to the three months ended September
30, 2009. The decrease in revenue was due to reduced showroom occupancy at the
Stratosphere. Retail revenue decreased 13.2% for the three months ended
September 30, 2010, compared to the three months ended September 30, 2009. 
Retail revenues declined due to rent concessions and increased tenant
vacancies.  Other operating income decreased 5.1% for the three months
ended September 30, 2010, compared to the three months ended September 30,
2009.  The decrease in revenue was primarily due to lower commission
revenues.  Other operating expenses increased 6.1% to $3.5 million for the
three months ended September 30, 2010, compared to $3.3 million for the three
months ended September 30, 2009. This increase was primarily due to an increase
in entertainer fees and labor costs.  Entertainer fees increased due an
increase in events at the Aquarius and an increase in entertainment options at
the Stratosphere.





Promotional
Allowances





Promotional
allowances are comprised of the retail value of goods and services provided to
casino patrons under various marketing programs. As a percentage of casino
revenues, promotional allowances increased to 12.1% for the three months ended
September 30, 2010 from 11.6% for the three months ended September 30, 2009.
This increase was primarily due to increased room promotions at the Stratosphere
and the Aquarius.





15


Selling,
General and Administrative (‘‘SG&A’’)





Selling,
general and administrative expenses are primarily comprised of payroll,
marketing, advertising, utilities and other administrative expenses. These
expenses decreased 3.1% to $28.5 million, or 31.8% of gross revenues, for the
three months ended September 30, 2010, compared to $29.4 million, or 31.4% of
gross revenues for the three months ended September 30, 2009. This decrease was
primarily due to lower utilities, legal fees, insurance, property taxes, repair
and maintenance, and advertising.





Interest
Expense





Interest
expense increased 100.0% to $11.4 million for the three months ended September
30, 2010, compared to $5.7 million for the three months ended September 30,
2009. The increase was due primarily to the restructuring of the Goldman Term
Loans and issuance of our 11% Senior Secured Notes. For the three months ended
September 30, 2009, we did not report any interest expense related to the 2014
Term Loans on our consolidated statements of operations.  Interest payments
totaling $6.2 million during the three months ended September 30, 2009 were
accounted for as a reduction to the outstanding balance of the 2014 Term Loans
in accordance with FASB ASC 470-60.





Nine
Months Ended September 30, 2010 Compared to Nine Months Ended September 30,
2009





The
following table sets forth the results of our operations for the periods
indicated.





Nine months ended
                        
                        
                        Nine months endedSeptember 30, 2010
                        
                        
                        September 30, 2009(in millions)Income
      Statement Data:Revenues:Casino
                        
                        $
                        156.1
                        
                        
                        $
                        165.4Hotel
                        
                        
                        43.5
                        
                        
                        
                        46.5Food and beverage
                        
                        
                        51.2
                        
                        
                        
                        56.9Tower, retail and other
                        
                        
                        25.4
                        
                        
                        
                        26.7Gross revenues
                        
                        
                        276.2
                        
                        
                        
                        295.5Less
      promotional allowances
                        
                        
                        18.3
                        
                        
                        
                        20.0Net revenues
                        
                        
                        257.9
                        
                        
                        
                        275.5Costs
      and expenses:Casino
                        
                        
                        50.1
                        
                        
                        
                        53.7Hotel
                        
                        
                        25.7
                        
                        
                        
                        26.5Food and beverage
                        
                        
                        38.5
                        
                        
                        
                        42.2Other operating expenses
                        
                        
                        9.9
                        
                        
                        
                        10.3Selling, general and administrative
                        
                        
                        83.8
                        
                        
                        
                        87.9Pre-opening costs
                        
                        
                        0.3
                        
                        
                        
                        -Depreciation and amortization
                        
                        
                        32.7
                        
                        
                        
                        30.8Impairment of assets
                        
                        
                        2.0
                        
                        
                        
                        -Total costs and expenses
                        
                        
                        243.0
                        
                        
                        
                        251.4Income
      from operations
                        
                        $
                        14.9
                        
                        
                        $
                        24.1EBITDA
      Reconciliation:Net
      loss
                        
                        $
                        (19.3
                        )
                        
                        $
                        (4.2
                        )Interest income
                        
                        
                        -
                        
                        
                        
                        (0.1
                        )Interest expense
                        
                        
                        34.2
                        
                        
                        
                        28.4Depreciation and amortization
                        
                        
                        32.7
                        
                        
                        
                        30.8EBITDA
                        
                        $
                        47.6
                        
                        
                        $
                        54.9





16





Generally
weak economic conditions throughout the United States stemming from a severe
recession precipitated an economic slowdown that has negatively impacted tourism
in Southern Nevada. Las Vegas, however, has experienced some positive trends in
overall demand in 2010. Through August 31, 2010, the Las Vegas Convention and
Visitors Authority (“LVCVA”) reported year-over-year increases in visitor
volume, room nights occupied, convention attendance and daily auto traffic-all
major highways. Lower spend by visitors coming to Las Vegas is reflected in
monthly year-over-year declines in gross gaming revenues and taxable sales for
much of 2010. When gross gaming revenues have shown monthly year-over-year
increases, the increases are primarily from baccarat play, which is favored by
high-end international guests. Our properties do not target the baccarat player.
In addition, airline capacity and passenger counts through McCarran
International Airport have decreased and hotel room inventories have increased
by 5.0% year-over-year resulting in lower occupancies throughout Las Vegas.
Unlike Las Vegas, Laughlin, NV continues to experience declining demand and
revenues in 2010 according to the LVCVA. The Clark County and Las Vegas local
economies continue to be characterized by increasing unemployment, declining
real estate values and depressed taxable sales. As occupancies and visitor
traffic to casinos decline, operators in both the tourist and local markets have
become more aggressive with promotions that include gaming incentives, reduced
room rates, reduced entertainment prices, and food incentives to drive traffic
to their properties. All of these factors have impacted our
operations.





Our
consolidated gross revenues decreased 6.5% to $276.2 million for the nine months
ended September 30, 2010 from $295.5 million for the nine months ended September
30, 2009. Our consolidated income from operations and EBITDA decreased 38.2% and
13.3% to $14.9 million and $47.6 million for the nine months ended September 30,
2010 compared to $24.1 million and $54.9 million for the nine months ended
September 30, 2009. The decrease in our gross revenues, operating income and
EBITDA are due primarily to the general economic slowdown and market factors
discussed previously. In addition, we recognized a $2.0 million non-cash charge
for impairment of intangible assets during the nine months ended September 30,
2010 and our depreciation and amortization increased $1.9 million. We also
incurred pre-opening expenses of approximately $283,000 related to Sky Jump Las
Vegas, which is a harnessed controlled “free-fall” from the top of the
Stratosphere Tower. We expensed approximately $252,000 to appeal our property
taxes, approximately $182,000 in regulatory fees and we accrued approximately
$900,000 to our discretionary bonus pool, which we will evaluate throughout the
year. As a result, our consolidated operating margin decreased to 5.8% for the
nine months ended September 30, 2010 from 8.7% for the nine months ended
September 30, 2009.





Casino





Casino
revenues consist of revenues from slot machines, table games, poker, race and
sports book, bingo and keno. Casino revenues decreased 5.3% to $156.1 million
for the nine months ended September 30, 2010, compared to $165.4 million for the
nine months ended September 30, 2009. This decrease was primarily due to a 3.2%
decrease in slot coin-in and a 10.1% decrease in table drop. As a result, slot
and table revenues declined approximately 5.5% and 6.0% respectively. For the
nine months ended September 30, 2010, slot machine revenues were 84.4% of casino
revenues, and table game revenues were 12.1% of casino revenues, compared to
84.2% and 12.2% of casino revenues, respectively, for the nine months ended
September 30, 2009. Other casino revenues, consisting of race and sports book,
poker, bingo and keno, decreased 8.3% for the nine months ended September 30,
2010 compared to the nine months ended September 30, 2009. The primary reason
for the decline was a 30.5% decrease in poker revenues. Casino operating
expenses decreased 6.7% to $50.1 million, for the nine months ended September
30, 2010, from $53.7 million for the nine months ended September 30, 2009. This
decrease was primarily due to decreased labor costs, participation expenses and
revenue tax expenses. Participation expense consists of fees paid to game owners
for use of their games.





17


Hotel





Hotel
revenues decreased 6.5% to $43.5 million for the nine months ended September 30,
2010 from $46.5 million for the nine months ended September 30, 2009. The
decrease in revenues is primarily the result of lower occupancy for the
Stratosphere and Arizona Charlie’s properties and a decreased average daily room
rate at the Stratosphere and Arizona Charlie’s Decatur. Overall room occupancy
fell to 68.2% for the nine months ended September 30, 2010 compared to 70.1% for
the nine months ended September 30, 2009 and the average daily room rate
decreased 3.0% for the nine months ended September 30, 2010 compared to the nine
months ended September 30, 2009. The decrease in both occupancy and average
daily room rate at our Las Vegas properties is primarily a result of sharp
decreases in rates across our markets, an increase in Las Vegas citywide room
inventories, and an increased reliance on wholesale room sales. In
addition, Stratosphere began a room renovation in July 2010. After adjusting for
the rooms that were out of order, overall occupancy increases to 70.9% for the
nine months ended September 30, 2010. Due to increased marketing and direct mail
efforts our complimentary sales increased for the nine months ended September
30, 2010, while our cash room sales declined. Our comp room sales increased
10.5% and our cash room sales decreased 7.3% for the nine months ended September
30, 2010 compared to the nine months ended September 30, 2009. Our hotel
expenses were down 3.0% to $25.7 million for the nine months ended September 30,
2010, compared to $26.5 million for the nine months ended September 30,
2009. This decrease was primarily due to decreased labor costs. Due to the
decline in revenues, our hotel operating margin decreased to 40.9% for the nine
months ended September 30, 2010 as compared to 43.0% for the nine months ended
September 30, 2009.





Food
& Beverage





Food and
beverage revenues decreased 10.0% to $51.2 million for the nine months ended
September 30, 2010 compared to $56.9 million for the nine months ended September
30, 2009. The decline in revenues was driven largely by the reduction in
food and beverage covers at our properties. Food covers and beverage covers
for the nine months ended September 30, 2010 decreased 14.4% and 9.8%,
respectively, compared to the nine months ended September 30, 2009. During
the period, Stratosphere remodeled Roxy’s, its 24 hour food service outlet.
While being remodeled Roxy’s was relocated to a less visible location and covers
declined approximately 30% during July and August compared to January through
June. Average revenue per cover for the nine months ended September 30,
2010 increased 5.2% compared to the nine months ended September 30,
2009. Our food and beverage expenses decreased 8.8% to $38.5 million for
the nine months ended September 30, 2010 compared to $42.2 million for the nine
months ended September 30, 2009 due to an overall decrease in our food and
beverage variable costs and payroll and related expenses. As a result, our
food and beverage operating margin decreased to 24.8% for the nine months ended
September 30, 2010 as compared to 25.8% for the nine months ended September 30,
2009.





Tower,
Retail and Other





Tower,
retail and other revenues decreased 4.9% to $25.4 million for the nine months
ended September 30, 2010 from $26.7 million for the nine months ended September
30, 2009. Tower revenues increased 11.6% for the nine months ended September 30,
2010, compared to the nine months ended September 30, 2009. The primary reason
for the increase in Tower revenues for the nine months ended September 30, 2010
compared to the nine months ended September 30, 2009 was the introduction of the
Sky Jump Las Vegas ride. Entertainment revenue declined 31.2% for the nine
months ended September 30, 2010, compared to the nine months ended September 30,
2009. The decrease in revenue was due to reduced showroom occupancy at the
Stratosphere and Aquarius and a reduction in the number of events at the
Aquarius. Retail revenue decreased 25.1% for the nine months ended September 30,
2010, compared to the nine months ended September 30, 2009. Retail revenues
declined due to rent concessions and increased tenant vacancies. Other operating
expenses decreased 3.9% to $9.9 million for the nine months ended September 30,
2010, compared to $10.3 million for the nine months ended September 30, 2009.
This decrease was primarily due to a decrease in operating costs associated with
entertainment, entertainer fees and bad debt expenses. Entertainer fees declined
due to the decline in entertainment revenues and the reduction in events at the
Aquarius.





Promotional
Allowances





Promotional
allowances are comprised of the retail value of goods and services provided to
casino patrons under various marketing programs. As a percentage of casino
revenues, promotional allowances decreased to 11.7% for the nine months ended
September 30, 2010 from 12.1% for the nine months ended September 30, 2009. This
decrease was primarily due to reduced marketing promotions, especially at the
Stratosphere and Arizona Charlie’s Decatur.





Selling,
General and Administrative (‘‘SG&A’’)





Selling,
general and administrative expenses are primarily comprised of payroll,
marketing, advertising, utilities and other administrative expenses. These
expenses decreased 4.7% to $83.8 million, or 30.3% of gross revenues, for the
nine months ended September 30, 2010, compared to $87.9 million, or 29.7% of
gross revenues for the nine months ended September 30, 2009. This decrease was
primarily due to lower utilities, advertising, legal fees, bank charges,
property taxes, costs associated with insurance and other efficiencies. We also
incurred expenses of $252,000 to appeal our property taxes and we accrued
$900,000 to our discretionary management bonus pool, which we will continue to
evaluate throughout the year.





18


Pre-opening
Expense





We
incurred $283,000 in pre-opening costs for the nine months ended September 30,
2010.  Pre-opening costs were primarily comprised of marketing related
expenses, labor costs and supplies for Sky Jump Las Vegas. Sky Jump Las Vegas
opened to the public on April 21, 2010.





Impairment
of Assets





In
accordance with Financial Accounting Standards Board, or FASB ASC 350, Goodwill
and Other Intangible Assets, we perform an annual impairment test of
indefinite-lived intangible assets in the fourth quarter of each year and
whenever a triggering event occurs which causes us to perform an impairment
test. During the three months ended June 30, 2010, due to continued weakness in
consumer spending, increased room supply in the Las Vegas market and decreased
spending by visitors to the Stratosphere we revised our Stratosphere revenue
forecasts. We considered this revision to Stratosphere’s forecasted revenues to
be a triggering event. As of June 30, 2010 we performed impairment tests that
resulted in the non-cash write-down of the Stratosphere trade names of $2.0
million.  The impairment of these assets was due primarily to our decrease
in revenues, which was an indication that these assets may not be recoverable.
We believe the on-going economic recession in the U.S. and Southern Nevada
economies has reduced overall industry valuations.





Interest
Expense





Interest
expense increased 20.4% to $34.2 million for the nine months ended September 30,
2010, compared to $28.4 million for the nine months ended September 30, 2009.
The increase was due primarily to the restructuring of the Goldman Term Loans
and issuance of our 11% Senior Secured Notes. For the nine months ended
September 30, 2009 we did not report any interest expense related to the 2014
Term Loans on our consolidated statements of operations. Interest payments
totaling $6.2 million during the nine months ended September 30, 2009 were
accounted for as a reduction to the outstanding balance of the 2014 Term Loans
in accordance with FASB ASC 470-60.





Financial
Condition





Liquidity and
Capital Resources





The
following liquidity and capital resources discussion contains certain
forward-looking statements with respect to our business, financial condition,
results of operations, dispositions, acquisitions, renovation projects and our
subsidiaries, which involve risks and uncertainties that cannot be predicted or
quantified, and consequently, actual results may differ materially from those
expressed or implied herein. Such risks and uncertainties include, but are not
limited to, financial market risks, the ability to maintain existing management,
competition within the gaming industry, the cyclical nature of the hotel
business and gaming business, economic conditions, regulatory matters and
litigation and other risks described in our filings with the SEC. In addition,
renovation projects entail significant risks, including shortages of materials
or skilled labor, unforeseen regulatory problems, work stoppages, weather
interference, floods, unanticipated cost increases, and disruption to business.
The anticipated costs and construction periods are based on budgets, conceptual
design documents and construction schedule estimates. There can be no assurance
that the budgeted costs or construction period will be met. All forward-looking
statements are based on our current expectations and projections about future
events.





Net cash
provided by operating activities was $28.1 million for the nine months ended
September 30, 2010 compared to $33.3 million for the nine months ended September
30, 2009. The primary reason for the decrease was the approximate $17.6 million
decrease in net revenues.





19


During
the nine months ended September 30, 2010, our total capital expenditures were
$25.0 million (including approximately $2.4 million in non-cash items), of
which approximately $3.4 million was spent on slot machine replacements and
conversions, $10.6 million on hotel room renovations and upgrades, $1.8 million
was spent on the Sky Jump Las Vegas ride, $3.2 million for renovations of our
food and beverage venues and public areas and $6.0 million on our facilities,
operations and information technology. For the nine months ended September 30,
2009, our total capital expenditures were $10.5 million (including
approximately $940,000 in non-cash items), of which we spent approximately $1.7
million on slot machine replacements and conversions, $520,000 to upgrade our
information technology, $2.5 million to improve our facilities, and
approximately $4.3 million on our hotels, including approximately $3.2 million
on the pools at Aquarius and Stratosphere, $286,000 to renovate suites at
Stratosphere, and $607,000 to replace our phone switches and consolidate our PBX
function.





Our
primary cash requirements for the next twelve months are expected to include
(i) expenses associated with ongoing day-to-day operations, (ii) interest
payments on indebtedness, (iii) payments for design and development costs
of future projects, and (iv) regular maintenance and other capital
expenditures. We currently anticipate that we will spend approximately $13.2
million on regular maintenance and renovation capital projects between September
30, 2010 and December 31, 2010. Approximately $2.7 million of that amount is
associated with regular maintenance of our properties and operations. We are
currently evaluating our budgets for 2011. At this time, we anticipate that our
capital expenditures for 2011 will be approximately $21.0 million and include
approximately $1.7 million for projects that began in 2010, $15.0 million for
regular maintenance of our properties, $2.8 million for upgrades to our IT
systems, and $1.5 million for other renovations, primarily at our Arizona
Charlies properties.





On
February 23, 2010, the Issuers completed an exchange offer registered with the
SEC in which the Issuers issued approximately $374.9 million aggregate principal
amount of their SEC-Registered Notes in exchange for $374.9 million of their
Unregistered Notes. The SEC-Registered Notes have substantially identical terms
to the Unregistered Notes, except that the SEC-Registered Notes were issued in a
transaction registered under the Securities Act. We may from time to time seek
to retire or repurchase our outstanding 11% Senior Secured Notes through cash
purchases in the open market, privately negotiated transactions or otherwise.
Such repurchases, if any, will depend on prevailing market conditions, our
liquidity requirements, contractual restrictions and other factors.  The
amounts involved may be material.





We
believe our cash flow from operations and our cash balances will be sufficient
to fund our operations, interest payments and capital expenditures for the next
12 months. However, our ability to fund our operations, make payments on our
debt and fund planned capital expenditures will depend on our ability to
generate cash in the future. This is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our
control as well as the factors described in the section entitled Risk Factors in
Item 1A of our annual report on Form 10-K, filed with the SEC on March 22, 2010
(SEC File No. 000-52975).





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of
Regulation S-K.





Recently
Issued Accounting Pronouncements





In
January 2010, the Financial Accounting Standards Board, or FASB, issued guidance
that clarifies and requires new disclosures about fair value measurements in
Accounting Standards Codification, or ASC 815, Derivatives and Hedging,subtopic 10-50-4B for derivative instruments and ASC 320, Investments – Debts and Equity
Securities, subtopic 10-50-1B for debt and equity securities. The
clarifications and requirement to disclose the amount and reasons for
significant transfers in and out of Level 1 and Level 2, as well as significant
transfers in and out of Level 3 of the fair value hierarchy were adopted by us
in the first quarter of 2010. The new guidance also requires that purchases,
sales, issuances and settlements be presented gross in the Level 3
reconciliation and that requirement is effective for the fiscal years beginning
after December 15, 2010 and for interim periods within those years, with early
adoption permitted. We early adopted the disaggregation guidance on January 1,
2010. Since this new guidance only amends the disclosures requirements, it did
not impact our consolidated balance sheet, statement of operations or statement
of cash flows.





In April
2010, the FASB issued Accounting Standards Update 2010-16, Accruals for Casino Jackpot
Liabilities, which clarifies that an entity should not accrue jackpot
liabilities before they are won if the payout can be avoided. This guidance will
be applied prospectively with a cumulative-effect adjustment in members’ equity
at the beginning of the period of adoption and is effective beginning with our
first quarter of 2011. There will be no impact to our results of operations,
financial position or cash flows related to the adoption of this
guidance.





20


Item
3. Quantitative and Qualitative Disclosures About Market Risk





Market
risk is the risk of loss arising from adverse changes in market rates and
prices, such as interest rates, foreign currency exchange rates and commodity
prices. Our primary risk exposure relates to interest rate risk. All of our
long-term debt is subject to fixed rates of interest at 11% and does not mature
until June 15, 2014.





The fair
value of our debt is estimated based on the quoted market prices for the same or
similar issues. ACEP issued the Unregistered Notes on August 14, 2009. The
estimated fair value of the 11% Senior Secured Notes was approximately $366.6
million as of September 30, 2010.





For the
nine months ended September 30, 2010, we incurred approximately $34.2 million in
interest expense.





We do not
invest in derivative financial instruments, interest rate swaps or other
investments that alter interest rate exposure.





Item
4T. Controls and Procedures





Our
principal executive officer and principal financial officer, based on their
evaluation of our disclosure controls and procedures (as such terms are defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended the
Exchange Act) as of the end of the period covered by this quarterly report on
Form 10-Q, have concluded that our disclosure controls and procedures are
effective for ensuring that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms.





There
were no changes in our internal control over financial reporting that occurred
during the first nine months of 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.





It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable and not absolute assurance that the objectives of the
system are met.  In addition, the design of any control system is based in
part upon certain assumptions about the likelihood of certain events. Because of
these and other inherent limitations of control systems, there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.




21


PART
II-OTHER INFORMATION





You
should also read, among other things, the risks and uncertainties described in
the section entitled Risk Factors in Item 1A of our annual report on Form
10-K, filed with the SEC on March 22, 2010 (SEC File No. 000-52975). There
were no material changes to those risk factors during the three months ended
September 30, 2010.





Item
6.   Exhibits





The list
of exhibits required by Item 601 of Regulation S-K and filed as part of this
report is set forth in the exhibits index.




22


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.




AMERICAN
CASINO & ENTERTAINMENT PROPERTIES LLC





By:
                /s/
      EDWARD W. MARTIN, IIIEdward
      W. Martin, IIIAuthorized
      Officer, Chief Financial Officer and Treasurer
                  (Principal
      Financial and Accounting Officer)Date:
                November
      12, 2010




23


EXHIBITS
INDEX





EXHIBIT
      NO.
            
            DESCRIPTION31.1
            
            Certification
      of Principal Executive Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.31.2
            
            Certification
      of Principal Financial Officer pursuant to Section 302(a) of the
      Sarbanes-Oxley Act of 2002.32.1
            
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.32.2
            
            Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.


24