##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31, 2006                                               
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from            to                                            

Commission File Number:
333-118149


American Casino & Entertainment Properties LLC


(Exact name of registrant as specified in its charter)


|                                                                                         |  |                                         
|---------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                 |  | 20-0573058                              
|(State or other jurisdiction of
    incorporation or organization)                       |  | (I.R.S. Employer
    Identification No.)
|                                                                                        
|2000 Las Vegas Boulevard South
    Las Vegas, NV(Address of principal executive offices) |  | 89104(Zip Code)                         

(702) 380-7777


(Registrants telephone number, including area code)


þ o


12b-2


o o þ


12b-2 o þ










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TABLE OF CONTENTS


|                       |  |                                                                                                                                  |  |      |    | 
|---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                       |  |                                                                                                                                  |  | Page |   
|                       |  |                                                                                                                                  |  |      |   
|PART I                 |  | FINANCIAL INFORMATION                                                                                                            |  |      | 2  | 
|                       |  | Item 1.  Unaudited
    Condensed Consolidated Financial Statements                                                               |  |      | 2  | 
|                       |  | Condensed Consolidated Balance Sheets as of
    March 31, 2006 (unaudited) and December 31, 2005                                 |  |      | 2  | 
|                       |  | Condensed Consolidated Statements of Income
    for the three months ended March 31, 2006 and
    March 31, 2005 (unaudited)     |  |      | 3  | 
|                       |  | Condensed Consolidated Statements of Cash
    Flows for the three months ended March 31, 2006 and
    March 31, 2005 (unaudited) |  |      | 4  | 
|                       |  | Notes to Condensed Consolidated Financial
    Statements (unaudited)                                                             |  |      | 5  | 
|                       |  | Item 2.  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations                           |  |      | 7  | 
|                       |  | Item 3.  Quantitative and
    Qualitative Disclosures About Market Risk                                                          |  |      | 11 | 
|                       |  | Item 4.  Controls and
    Procedures                                                                                             |  |      | 11 | 
|PART II                |  | OTHER INFORMATION                                                                                                                |  |      | 12 | 
|                       |  | Item 1A. Risk Factors                                                                                                            |  |      | 12 | 
|                       |  | Item 6.  Exhibits                                                                                                                |  |      | 12 | 
|EX-31.1: CERTIFICATION
|EX-31.2: CERTIFICATION
|EX-32.1: CERTIFICATION
|EX-32.2: CERTIFICATION



1



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##### Table of Contents






PART I.     FINANCIAL
INFORMATION







|        |                                                          
|------- | ---------------------------------------------------------
|ITEM 1. | Unaudited Condensed Consolidated Financial
    Statements

AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC





CONDENSED CONSOLIDATED BALANCE SHEETS


|                                      |                                                 |                |         |         |                   |   |         |         | 
|------------------------------------- | ----------------------------------------------- | -------------- | ------- | ------- | ----------------- | - | ------- | ------- | 
|                                      |                                                 | As of          |         |         | As of             |  
|                                      |                                                 | March 31, 2006 |         |         | December 31, 2005 |  
|                                      |                                                 |                |         |         |                   |  
|                                      |                                                 | (Unaudited)    |         |         |                  
|                                      |                                                 | (In thousands) |        
|ASSETS                               
|Current Assets:                       |                                                 |                |         |         |                   |   |         |        
|                                      | Cash and cash equivalents                       |                | $       | 118,552 |                   |   | $       | 108,316 | 
|                                      | Cash and cash equivalents-restricted            |                |         | 265     |                   |   |         | 504     | 
|                                      | Investments-restricted                          |                |         | 2,852   |                   |   |         | 2,828   | 
|                                      | Accounts receivable, net                        |                |         | 4,146   |                   |   |         | 4,167   | 
|                                      | Related party receivables                       |                |         | 3,882   |                   |   |         | 971     | 
|                                      | Deferred income taxes                           |                |         | 2,305   |                   |   |         | 2,305   | 
|                                      | Other current assets                            |                |         | 11,136  |                   |   |         | 12,092  | 
|                                      |                                                 |                |         |         |                   |  
|Total Current Assets                  |                                                 |                | 143,138 |         |                   |   | 131,183 |        
|                                      |                                                 |                |         |         |                   |  
|Property and equipment, net           |                                                 |                | 315,644 |         |                   |   | 319,505 |        
|                                      |                                                 |                |         |         |                   |  
|Deferred financing costs, net         |                                                 |                | 6,134   |         |                   |   | 6,397   |        
|Deferred income taxes                 |                                                 |                | 37,344  |         |                   |   | 37,172  |        
|                                      |                                                 |                |         |         |                   |  
|Total Other Assets                    |                                                 |                | 43,478  |         |                   |   | 43,569  |        
|                                      |                                                 |                |         |         |                   |  
|Total Assets                          |                                                 | $              | 502,260 |         |                   | $ | 494,257 |        
|                                      |                                                 |                |         |         |                   |  
|                                     
|LIABILITIES AND SHAREHOLDERS EQUITY 
|Current Liabilities:                  |                                                 |                |         |         |                   |   |         |        
|                                      | Accounts payable                                |                | $       | 4,295   |                   |   | $       | 4,352   | 
|                                      | Accrued expenses                                |                |         | 22,541  |                   |   |         | 22,582  | 
|                                      | Accrued payroll and related expenses            |                |         | 9,280   |                   |   |         | 11,042  | 
|                                      | Current portion of capital lease obligation     |                |         | 478     |                   |   |         | 473     | 
|                                      |                                                 |                |         |         |                   |  
|Total Current Liabilities             |                                                 |                | 36,594  |         |                   |   | 38,449  |        
|                                      |                                                 |                |         |         |                   |  
|Long-Term Liabilities:                |                                                 |                |         |         |                   |   |         |        
|                                      | Long-term debt, less current portion            |                |         | 215,000 |                   |   |         | 215,000 | 
|                                      | Capital lease obligations, less current portion |                |         | 2,704   |                   |   |         | 2,825   | 
|                                      | Other                                           |                |         | 6,017   |                   |   |         | 5,885   | 
|                                      |                                                 |                |         |         |                   |  
|Total Long-Term Liabilities           |                                                 |                | 223,721 |         |                   |   | 223,710 |        
|                                      |                                                 |                |         |         |                   |  
|Total Liabilities                     |                                                 |                | 260,315 |         |                   |   | 262,159 |        
|                                      |                                                 |                |         |         |                   |  
|Commitments and Contingencies         |                                                 |                |         |         |                   |   |         |        
|Members Equity:                      |                                                 |                |         |         |                   |   |         |        
|Members equity                       |                                                 |                | 241,945 |         |                   |   | 232,098 |        
|                                      |                                                 |                |         |         |                   |  
|                                      | Total Members Equity                           |                |         | 241,945 |                   |   |         | 232,098 | 
|                                      |                                                 |                |         |         |                   |  
|Total Liabilities and Members Equity |                                                 | $              | 502,260 |         |                   | $ | 494,257 |        
|                                      |                                                 |                |         |         |                   |  



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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC





CONDENSED CONSOLIDATED STATEMENTS OF INCOME


|                           |                                     |                          |        |        |                |   |        |        |        |  
|-------------------------- | ----------------------------------- | ------------------------ | ------ | ------ | -------------- | - | ------ | ------ | ------ | -
|                           |                                     | Three Months             |        |        | Three Months   |  
|                           |                                     | Ended                    |        |        | Ended          |  
|                           |                                     | March 31, 2006           |        |        | March 31, 2005 |  
|                           |                                     |                          |        |        |                |  
|                           |                                     | (Unaudited)              |       
|                           |                                     | (In thousands)           |       
|Revenues:                  |                                     |                          |        |        |                |   |        |       
|                           | Casino                              |                          | $      | 48,022 |                |   | $      | 47,729 |       
|                           | Hotel                               |                          |        | 17,433 |                |   |        | 15,793 |       
|                           | Food and beverage                   |                          |        | 18,070 |                |   |        | 17,076 |       
|                           | Tower, retail and other             |                          |        | 8,219  |                |   |        | 8,206  |       
|                           |                                     |                          |        |        |                |  
|                           |                                     | Gross Revenues           |        |        | 91,744         |   |        |        | 88,804 |  
|                           | Less promotional allowances         |                          |        | 5,799  |                |   |        | 5,966  |       
|                           |                                     |                          |        |        |                |  
|                           |                                     | Net Revenues             |        |        | 85,945         |   |        |        | 82,838 |  
|                           |                                     |                          |        |        |                |  
|Costs and Expenses:        |                                     |                          |        |        |                |   |        |       
|                           | Casino                              |                          |        | 16,488 |                |   |        | 15,900 |       
|                           | Hotel                               |                          |        | 6,843  |                |   |        | 6,023  |       
|                           | Food and beverage                   |                          |        | 13,201 |                |   |        | 12,376 |       
|                           | Other operating expenses            |                          |        | 3,730  |                |   |        | 3,638  |       
|                           | Selling, general and administrative |                          |        | 20,786 |                |   |        | 19,687 |       
|                           | Depreciation and amortization       |                          |        | 6,010  |                |   |        | 5,443  |       
|                           | Gain on sale of assets              |                          |        | (2     | )              |   |        | (19    | )     
|                           |                                     |                          |        |        |                |  
|                           |                                     | Total Costs and Expenses |        |        | 67,056         |   |        |        | 63,048 |  
|                           |                                     |                          |        |        |                |  
|Income From Operations     |                                     |                          | 18,889 |        |                |   | 19,790 |       
|                           |                                     |                          |        |        |                |  
|Other Income (Expense):    |                                     |                          |        |        |                |   |        |       
|                           | Interest income                     |                          |        | 850    |                |   |        | 167    |       
|                           | Interest expense                    |                          |        | (4,682 | )              |   |        | (4,539 | )     
|                           |                                     |                          |        |        |                |  
|                           |                                     | Total Other Expense, net |        |        | (3,832         | ) |        |        | (4,372 | )
|                           |                                     |                          |        |        |                |  
|Income Before Income Taxes |                                     |                          | 15,057 |        |                |   | 15,418 |       
|Provision for income taxes |                                     |                          | 5,210  |        |                |   | 5,327  |       
|                           |                                     |                          |        |        |                |  
|Net Income                 |                                     | $                        | 9,847  |        |                | $ | 10,091 |       
|                           |                                     |                          |        |        |                |  



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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC





CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                  |                                                                                       |                                              |                                       |         |                |        |        |        |       |        |  
|------------------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------- | ------- | -------------- | ------ | ------ | ------ | ----- | ------ | -
|                                                  |                                                                                       | Three Months                                 |                                       |         | Three Months   |       
|                                                  |                                                                                       | Ended                                        |                                       |         | Ended          |       
|                                                  |                                                                                       | March 31, 2006                               |                                       |         | March 31, 2005 |       
|                                                  |                                                                                       |                                              |                                       |         |                |       
|                                                  |                                                                                       | (Unaudited)                                  |                                      
|                                                  |                                                                                       | (In thousands)                               |                                      
|Cash Flows From Operating Activities:             |                                                                                       |                                              |                                       |         |                |        |        |       
|                                                  | Net income                                                                            |                                              | $                                     | 9,847   |                |        | $      | 10,091 |      
|                                                  | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                              |                                       |         |                |        |        |        |      
|                                                  |                                                                                       | Depreciation and amortization                |                                       |         | 6,010          |        |        |        | 5,443 |       
|                                                  |                                                                                       | Gain on sale or disposal of assets           |                                       |         | (2             | )      |        |        | (19   | )     
|                                                  |                                                                                       | Provision for deferred income taxes          |                                       |         | (172           | )      |        |        | 4,504 |       
|                                                  |                                                                                       | Changes in operating assets and liabilities: |                                       |         |                |        |        |        |       |       
|                                                  |                                                                                       |                                              | Restricted cash                       |         |                | 239    |        |        |       | (51    | )
|                                                  |                                                                                       |                                              | Accounts receivable, net              |         |                | 21     |        |        |       | (101   | )
|                                                  |                                                                                       |                                              | Other assets                          |         |                | 1,184  |        |        |       | 202    |  
|                                                  |                                                                                       |                                              | Accounts payable and accrued expenses |         |                | (1,825 | )      |        |       | (4,248 | )
|                                                  |                                                                                       |                                              | Other                                 |         |                | 132    |        |        |       |       |  
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Net Cash Provided By Operating Activities         |                                                                                       |                                              | 15,434                                |         |                |        | 15,821 |       
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Cash Flows From Investing Activities:             |                                                                                       |                                              |                                       |         |                |        |        |       
|                                                  | Increase in investments  restricted                                                  |                                              |                                       | (24     | )              |        |        |       |      
|                                                  | Acquisition of property and equipment                                                 |                                              |                                       | (2,152  | )              |        |        | (4,711 | )    
|                                                  | Related party receivables                                                             |                                              |                                       | (2,911  | )              |        |        | (288   | )    
|                                                  | Proceeds from sale of property and equipment                                          |                                              |                                       | 5       |                |        |        | 25     |      
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Net Cash Used in Investing Activities             |                                                                                       |                                              | (5,082                                | )       |                |        | (4,974 | )     
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Cash Flows From Financing Activities:             |                                                                                       |                                              |                                       |         |                |        |        |       
|                                                  | Deferred financing costs                                                              |                                              |                                       |        |                |        |        | (2     | )    
|                                                  | Payments on capital lease obligation                                                  |                                              |                                       | (116    | )              |        |        | (110   | )    
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Net Cash Used in Financing Activities             |                                                                                       |                                              | (116                                  | )       |                |        | (112   | )     
|                                                  |                                                                                       |                                              |                                       |         |                |       
|                                                  | Net increase in cash and cash equivalents                                             |                                              |                                       | 10,236  |                |        |        | 10,735 |      
|                                                  | Cash and cash equivalents  beginning of period                                       |                                              |                                       | 108,316 |                |        |        | 75,161 |      
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Cash and Cash Equivalents  end of period         |                                                                                       | $                                            | 118,552                               |         |                | $      | 85,896 |       
|                                                  |                                                                                       |                                              |                                       |         |                |       
|Supplemental Disclosure of Cash Flow Information: |                                                                                       |                                              |                                       |         |                |        |        |       
|                                                  | Cash paid during the period for interest                                              |                                              | $                                     | 8,513   |                |        | $      | 8,518  |      
|                                                  |                                                                                       |                                              |                                       |         |                |       
|                                                  | Cash paid during the period for income taxes                                          |                                              | $                                     | 650     |                |        | $      |       |      
|                                                  |                                                                                       |                                              |                                       |         |                |       



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




|        |            
|------- | -----------
|Note 1. | The Company







|        |                      
|------- | ---------------------
|Note 2. | Basis of Presentation

10-K 333-118149).




Principles of Consolidation






|        |                           
|------- | --------------------------
|Note 3. | Related Party Transactions

out-of






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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




out-of








|        |                           
|------- | --------------------------
|Note 4. | Non-guarantor Subsidiaries





|        |                  
|------- | -----------------
|Note 5. | Legal Proceedings



6



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

10-K


Overview






|                          |  |         |        |  |           |  |       |        |  |  |             |  |  |  |    | 
|------------------------- |  | ------- | ------ |  | --------- |  | ----- | ------ |  |  | ----------- |  |  |  | -- | 
|                          |  | Casino  |        |  | Number of |  |       | Number |  |  | Number      | 
|                          |  | Square  |        |  | Hotel     |  |       | of     |  |  | of          | 
|                          |  | Footage |        |  | Rooms     |  |       | Slots  |  |  | Table Games | 
|                          |  |         |        |  |           |  |       |        |  |  |             | 
|Stratosphere              |  |         | 80,000 |  |           |  | 2,444 |        |  |  | 1,385       |  |  |  | 49 | 
|Arizona Charlies Decatur |  |         | 52,000 |  |           |  | 258   |        |  |  | 1,483       |  |  |  | 15 | 
|Arizona Charlies Boulder |  |         | 41,000 |  |           |  | 303   |        |  |  | 830         |  |  |  | 14 | 







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Results of Operations




| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Three Months Ended March 31, 2006 Compared to Three
    Months Ended March 31, 2005

|                            |                                     |                          |      |      |      |   |      |          |      |  |      |      |     |  
|--------------------------- | ----------------------------------- | ------------------------ | ---- | ---- | ---- | - | ---- | -------- | ---- |  | ---- | ---- | --- | -
|                            |                                     | Three Months             |      |      |     
|                            |                                     | Ended                    |      |      |     
|                            |                                     | March 31,                |      |      |     
|                            |                                     |                          |      |      |     
|                            |                                     | 2006                     |      |      | 2005 |   |      | % Change |     
|                            |                                     |                          |      |      |      |   |      |          |     
|                            |                                     | (In millions)            |      |      |     
|INCOME STATEMENT DATA:      |                                     |                          |      |      |      |   |      |          |      |  |      |     
|Revenues:                   |                                     |                          |      |      |      |   |      |          |      |  |      |     
|                            | Casino                              |                          | $    | 48.0 |      |   | $    | 47.7     |      |  |      | 0.6  | %  
|                            | Hotel                               |                          |      | 17.4 |      |   |      | 15.8     |      |  |      | 10.1 | %  
|                            | Food and beverage                   |                          |      | 18.1 |      |   |      | 17.1     |      |  |      | 5.8  | %  
|                            | Tower, retail and other             |                          |      | 8.2  |      |   |      | 8.2      |      |  |      | 0.0  | %  
|                            |                                     |                          |      |      |      |   |      |          |     
|                            |                                     | Gross revenues           |      |      | 91.7 |   |      |          | 88.8 |  |      |      | 3.3 | %
|Less promotional allowances |                                     |                          | 5.8  |      |      |   | 6.0  |          |      |  | (3.3 | )%  
|                            |                                     |                          |      |      |      |   |      |          |     
|                            |                                     | Net revenues             |      |      | 85.9 |   |      |          | 82.8 |  |      |      | 3.7 | %
|                            |                                     |                          |      |      |      |   |      |          |     
|Costs and expenses:         |                                     |                          |      |      |      |   |      |          |      |  |      |     
|                            | Casino                              |                          |      | 16.5 |      |   |      | 15.9     |      |  |      | 3.8  | %  
|                            | Hotel                               |                          |      | 6.8  |      |   |      | 6.0      |      |  |      | 13.3 | %  
|                            | Food and beverage                   |                          |      | 13.2 |      |   |      | 12.4     |      |  |      | 6.5  | %  
|                            | Other operating expenses            |                          |      | 3.7  |      |   |      | 3.6      |      |  |      | 2.8  | %  
|                            | Selling, general and administrative |                          |      | 20.8 |      |   |      | 19.7     |      |  |      | 5.6  | %  
|                            | Depreciation and amortization       |                          |      | 6.0  |      |   |      | 5.4      |      |  |      | 11.1 | %  
|                            |                                     |                          |      |      |      |   |      |          |     
|                            |                                     | Total costs and expenses |      |      | 67.0 |   |      |          | 63.0 |  |      |      | 6.3 | %
|                            |                                     |                          |      |      |      |   |      |          |     
|Income from operations      |                                     | $                        | 18.9 |      |      | $ | 19.8 |          |      |  | (4.5 | )%  
|                            |                                     |                          |      |      |      |   |      |          |     



| |               
| | --------------
| | Gross Revenues





| |                
| | ---------------
| | Casino Revenues





| |                    
| | -------------------
| | Non-Casino Revenues



8



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| |                       
| | ----------------------
| | Promotional Allowances





| |                   
| | ------------------
| | Operating Expenses













| |                 
| | ----------------
| | Interest Expense



Financial Condition




| |                                
| | -------------------------------
| | Liquidity and Capital Resources



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Forward-Looking Statements


10-K


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.







|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk












|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

13a-15(e) 15d-15(e).






11



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PART II.     OTHER
INFORMATION




|         |             
|-------- | ------------
|Item 1A. | Risk Factors

10-K







|        |         
|------- | --------
|Item 6. | Exhibits

|            |    |             |  |                                                                                                               
|----------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 31 | .1          |  | Certification of Principal Executive Officer pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 2002.
|           
|            | 31 | .2          |  | Certification of Principal Financial Officer pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 2002.
|           
|            | 32 | .1          |  | Certification of Principal Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.   
|           
|            | 32 | .2          |  | Certification of Principal Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.   

12



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SIGNATURES






| |                                                   
| | --------------------------------------------------
| | American Casino &
    Entertainment Properties LLC



| |     |                  
| | --- | -----------------
| | By: | /s/ Denise Barton

| |                                                
| | -----------------------------------------------
| |                                                
| | Denise Barton                                  
| | Senior Vice President, Chief Financial Officer,
| | Treasurer and Secretary                        
| | (Principal Financial and Accounting Officer)   



13