##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from
 to
 Commission File Number: 000-52975
 American Casino & Entertainment Properties LLC
  Delaware
    
    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
 
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS
 PagePart I Financial InformationItem 1. Unaudited Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets  March 31, 2009 (Successor) (unaudited) and December 31, 2008 (Successor)
    
    
    1Condensed Consolidated Statements of Operations (unaudited)  the three months ended March 31, 2009 (Successor), the period February 21, 2008 through March 31, 2008 (Successor), and the period January 1, 2008 through February 20, 2008 (Predecessor)
    
    
    2Condensed Consolidated Statements of Cash Flows (unaudited)  the three months ended March 31, 2009 (Successor), the period February 21, 2008 through March 31, 2008 (Successor), and the period January 1, 2008 through February 20, 2008 (Predecessor)
    
    
    3Condensed Consolidated Statement of Members Equity (unaudited)  the three months ended March 31, 2009 (Successor)
    
    
    4Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4T. Controls and Procedures
    
    
    15Part II Other InformationItem 1A. Risk Factors
    
    
    17Item 6. Exhibits
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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PART I-FINANCIAL INFORMATION
 
 Item 1. Unaudited Condensed Consolidated Financial Statements.
 AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 SuccessorAs of
    
    
    As ofMarch 31, 2009
    
    
    December 31, 2008(Unaudited)(In thousands)AssetsCurrent Assets:Cash and cash equivalents
    
    $
    43,482
    
    
    $
    30,366Restricted cash
    
    
    20,247
    
    
    
    30,353Investments-restricted
    
    
    1,857
    
    
    
    1,857Accounts receivable, net
    
    
    3,649
    
    
    
    4,494Other current assets
    
    
    13,383
    
    
    
    12,857Total Current Assets
    
    
    82,618
    
    
    
    79,927Property and equipment, net
    
    
    1,166,715
    
    
    
    1,172,690Debt issuance and deferred financing costs, net
    
    
    6,941
    
    
    
    8,900Restricted cash
    
    
    8,259
    
    
    
    10,649Intangible and other assets
    
    
    30,830
    
    
    
    31,144Total Other Assets
    
    
    46,030
    
    
    
    50,693Total Assets
    
    $
    1,295,363
    
    
    $
    1,303,310Liabilities and Members EquityCurrent Liabilities:Accounts payable
    
    $
    2,687
    
    
    $
    8,160Accrued expenses
    
    
    22,520
    
    
    
    23,981Accrued payroll and related expenses
    
    
    10,743
    
    
    
    10,061Current portion of capital lease obligations
    
    
    771
    
    
    
    861Total Current Liabilities
    
    
    36,721
    
    
    
    43,063Long-Term Liabilities:Long-term debt
    
    
    1,108,000
    
    
    
    1,108,000Capital lease obligations, less current portion
    
    
    949
    
    
    
    949Total Long-Term Liabilities
    
    
    1,108,949
    
    
    
    1,108,949Total Liabilities
    
    
    1,145,670
    
    
    
    1,152,012Commitments and ContingenciesMembers Equity:Members Equity
    
    
    149,693
    
    
    
    151,298Total Members Equity
    
    
    149,693
    
    
    
    151,298Total Liabilities and Members Equity
    
    $
    1,295,363
    
    
    $
    1,303,310
  1




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Successor
    
    
    PredecessorPeriod from
    
    
    Period fromFebruary 21, 2008
    
    
    January 1, 2008Three Months Ended
    
    
    through
    
    
    throughMarch 31, 2009
    
    
    March 31, 2008
    
    
    February 20, 2008(Unaudited)(In thousands)Revenues:Casino
    
    $
    59,451
    
    
    $
    32,577
    
    
    $
    36,539Hotel
    
    
    14,981
    
    
    
    11,566
    
    
    
    11,683Food and beverage
    
    
    18,646
    
    
    
    11,146
    
    
    
    12,354Tower, retail and other
    
    
    8,192
    
    
    
    4,216
    
    
    
    4,651Gross Revenues
    
    
    101,270
    
    
    
    59,505
    
    
    
    65,227Less promotional allowances
    
    
    7,580
    
    
    
    5,054
    
    
    
    5,608Net Revenues
    
    
    93,690
    
    
    
    54,451
    
    
    
    59,619Costs and Expenses:Casino
    
    
    18,835
    
    
    
    9,826
    
    
    
    12,363Hotel
    
    
    8,309
    
    
    
    3,818
    
    
    
    4,682Food and beverage
    
    
    14,317
    
    
    
    7,541
    
    
    
    9,183Other operating expenses
    
    
    3,529
    
    
    
    1,897
    
    
    
    2,341Selling, general and administrative
    
    
    28,557
    
    
    
    14,589
    
    
    
    18,511Depreciation and amortization
    
    
    9,902
    
    
    
    3,265
    
    
    
    5,062Loss on disposal of assets
    
    
    15
    
    
    
    41
    
    
    
    Total Costs and Expenses
    
    
    83,464
    
    
    
    40,977
    
    
    
    52,142Income From Operations
    
    
    10,226
    
    
    
    13,474
    
    
    
    7,477Other Income (Expense):Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (13,580
    )Interest income
    
    
    40
    
    
    
    116
    
    
    
    322Interest expense
    
    
    (11,871
    )
    
    
    (8,431
    )
    
    
    (2,564
    )Total Other Expense, net
    
    
    (11,831
    )
    
    
    (8,315
    )
    
    
    (15,822
    )Income (Loss) Before Income Taxes
    
    
    (1,605
    )
    
    
    5,159
    
    
    
    (8,345
    )Benefit for income taxes
    
    
    
    
    
    
    
    
    
    
    2,920Net Income (Loss)
    
    $
    (1,605
    )
    
    $
    5,159
    
    
    $
    (5,425
    )
  2




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Successor
    
    
    PredecessorPeriod from
    
    
    Period fromThree Months
    
    
    February 21, 2008
    
    
    January 1, 2008ended
    
    
    Through
    
    
    ThroughMarch 31, 2009
    
    
    March 31, 2008
    
    
    February 20, 2008(Unaudited)(In thousands)Cash Flows From Operating Activities:Net income (loss)
    
    $
    (1,605
    )
    
    $
    5,159
    
    
    $
    (5,425
    )Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    9,902
    
    
    
    3,265
    
    
    
    5,062Amortization of debt issuance and deferred financing costs
    
    
    1,959
    
    
    
    893
    
    
    
    150Tax benefit
    
    
    
    
    
    
    
    
    
    
    (2,920
    )Write-off of deferred financing costs
    
    
    
    
    
    
    
    
    
    
    4,405Loss on disposal of assets
    
    
    15
    
    
    
    41
    
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    12,496
    
    
    
    (3,934
    )
    
    
    Accounts receivable, net
    
    
    845
    
    
    
    (1,031
    )
    
    
    95Other assets
    
    
    (584
    )
    
    
    3,135
    
    
    
    (95
    )Accounts payable and accrued expenses
    
    
    (6,252
    )
    
    
    (2,965
    )
    
    
    (9,543
    )Net Cash Provided By (Used In) Operating Activities
    
    
    16,776
    
    
    
    4,563
    
    
    
    (8,271
    )Cash Flows From Investing Activities:Acquisition of property and equipment
    
    
    (3,625
    )
    
    
    (4,469
    )
    
    
    (5,265
    )Acquisition of American Casino & Entertainment Properties LLC
    
    
    
    
    
    
    (1,299,066
    )
    
    
    Proceeds from sale of property and equipment
    
    
    55
    
    
    
    
    
    
    
    Net Cash Used In Investing Activities
    
    
    (3,570
    )
    
    
    (1,303,535
    )
    
    
    (5,265
    )Cash Flows From Financing Activities:Debt issuance and deferred financing costs
    
    
    
    
    
    
    (16,366
    )
    
    
    Payments on line of credit
    
    
    
    
    
    
    
    
    
    
    (40,000
    )Capital distribution
    
    
    
    
    
    
    
    
    
    
    (15,439
    )Payments on capital lease obligation
    
    
    (90
    )
    
    
    (43
    )
    
    
    (85
    )Due to seller
    
    
    
    
    
    
    7,379
    
    
    
    Proceeds on notes payable
    
    
    
    
    
    
    1,108,000
    
    
    
    Equity contribution
    
    
    
    
    
    
    200,060
    
    
    
    Net Cash Provided By (Used In) Financing Activities
    
    
    (90
    )
    
    
    1,299,030
    
    
    
    (55,524
    )Net increase (decrease) in cash and cash equivalents
    
    
    13,116
    
    
    
    58
    
    
    
    (69,060
    )Cash and cash equivalents  beginning of period
    
    
    30,366
    
    
    
    38,205
    
    
    
    107,265Cash and Cash Equivalents  end of period
    
    $
    43,482
    
    
    $
    38,263
    
    
    $
    38,205Supplemental Disclosure of Cash Flow Information:Cash paid during the period for interest
    
    $
    10,213
    
    
    $
    13
    
    
    $
    9,455Supplemental Disclosure of Non-cash Items:Long-term debt paid by parent
    
    $
    
    
    
    $
    
    
    
    $
    215,000
  3




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 CONDENSED CONSOLIDATED STATEMENT OF MEMBERS EQUITY
   Class A
    
    
    Class B
    
    
    TotalEquity
    
    
    Equity
    
    
    EquitySuccessor:Balance at December 31, 2008
    
    $
    
    
    
    $
    151,298
    
    
    $
    151,298Net loss
    
    
    
    
    
    
    (1,605
    )
    
    
    (1,605
    )Balance at March 31, 2009
    
    $
    
    
    
    $
    149,693
    
    
    $
    149,693
  4




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AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1. The Company
        
    
    Holdings has the right to acquire Class A Interests from Voteco on each occasion that
Class B Interests held by Holdings would be transferred to a proposed purchaser who, in connection
with such proposed sale, has obtained all licenses, permits, registrations, authorizations,
consents, waivers, orders, findings of suitability or other approvals required to be obtained from,
and has made all findings, notices or declarations required to be made with, all gaming authorities
under all applicable gaming laws,
 5




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
    
    A specific purchase price, as determined in accordance with the Transfer Restriction
Agreement, will be paid to acquire the Class A Interests from Voteco, and
    
    Voteco will not transfer ownership of Class A Interests owned by it except pursuant to such
option of Holdings.
     Note 2. Basis of Presentation
   6




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Principles of Consolidation
   Recently Issued Accounting Pronouncements
 Business
Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement 133
 Reclassifications
  Note 3. Related Party Transactions
  7




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Note 4. Goodwill and Other Intangible Assets
 Goodwill
and Intangible Assets
  8




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(in thousands)March 31, 2009 (Successor)
    
    
    December 31, 2008 (Successor)Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAsset
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingLife
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountAmortizing intangible assets:Advance reservations
    
    2 Months
    
    
    618
    
    
    
    (618
    )
    
    
    
    
    
    
    618
    
    
    
    (618
    )
    
    
    Player Loyalty Plan
    
    5 Years
    
    
    7,450
    
    
    
    (1,613
    )
    
    
    5,837
    
    
    
    7,450
    
    
    
    (1,242
    )
    
    
    6,208$
    8,068
    
    
    $
    (2,231
    )
    
    $
    5,837
    
    
    $
    8,068
    
    
    $
    (1,860
    )
    
    $
    6,208Non-amortizing intangible assets:Trade Name
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    24,910
    
    
    
    
    
    
    
    
    
    
    $
    24,910$
    30,747
    
    
    
    
    
    
    
    
    
    
    $
    31,118
 Note 5. Debt
  As of
    
    
    As ofMarch 31, 2009
    
    
    December 31, 2008(Unaudited)(In thousands)Goldman Term Loans and related mezzanine financings,
due March 11, 2010, interest at a 3% margin above
LIBOR (0.5% at March 31, 2009)
    
    $
    1,108,000
    
    
    $
    1,108,000Capital lease obligations
    
    
    1,720
    
    
    
    1,810Total long-term debt and capital lease obligations
    
    
    1,109,720
    
    
    
    1,109,810Current portion of capital lease obligations
    
    
    771
    
    
    
    861Total long-term debt and capital lease obligations, net
    
    $
    1,108,949
    
    
    $
    1,108,949
 Goldman Term Loans
    9




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Note 6. Legal Proceedings
  10




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    We warn you that forward-looking statements are only predictions. Actual events or results may
differ as a result of risks that we face. Forward-looking statements speak only as of the date they
were made, and we undertake no obligation to update them.
  Overview, Background and History
   Casino
    
    Number of
    
    Number
    
    NumberSquare
    
    Hotel
    
    of
    
    ofFootage
    
    Rooms
    
    Slots
    
    Table GamesStratosphere
    
    
    80,000
    
    
    
    2,444
    
    
    
    1,177
    
    
    
    47Arizona Charlies Decatur
    
    
    54,500
    
    
    
    258
    
    
    
    1,289
    
    
    
    14Arizona Charlies Boulder
    
    
    47,000
    
    
    
    303
    
    
    
    1,074
    
    
    
    12Aquarius
    
    
    57,000
    
    
    
    1,907
    
    
    
    1,325
    
    
    
    34
 11




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Results of Operations
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
  Successor
    
    
    PredecessorPeriod from
    
    
    Period fromThree Months
    
    
    February 21, 2008
    
    
    January 1, 2008Ended
    
    
    Through
    
    
    Through
    
    
    CombinedMarch 31, 2009
    
    
    March 31, 2008
    
    
    February 20, 2008
    
    
    2008Income Statement Data:Revenues:Casino
    
    $
    59.5
    
    
    $
    32.6
    
    
    $
    36.5
    
    
    $
    69.1Hotel
    
    
    15.0
    
    
    
    11.6
    
    
    
    11.6
    
    
    
    23.2Food and beverage
    
    
    18.6
    
    
    
    11.1
    
    
    
    12.4
    
    
    
    23.5Tower, retail and other
    
    
    8.2
    
    
    
    4.2
    
    
    
    4.7
    
    
    
    8.9Gross revenues
    
    
    101.3
    
    
    
    59.5
    
    
    
    65.2
    
    
    
    124.7Less promotional allowances
    
    
    7.6
    
    
    
    5.1
    
    
    
    5.6
    
    
    
    10.7Net revenues
    
    
    93.7
    
    
    
    54.4
    
    
    
    59.6
    
    
    
    114.0Costs and expenses:Casino
    
    
    18.8
    
    
    
    9.8
    
    
    
    12.4
    
    
    
    22.2Hotel
    
    
    8.3
    
    
    
    3.8
    
    
    
    4.7
    
    
    
    8.5Food and beverage
    
    
    14.3
    
    
    
    7.5
    
    
    
    9.2
    
    
    
    16.7Other operating expenses
    
    
    3.5
    
    
    
    1.9
    
    
    
    2.3
    
    
    
    4.2Selling, general and
administrative
    
    
    28.6
    
    
    
    14.6
    
    
    
    18.5
    
    
    
    33.1Depreciation and amortization
    
    
    9.9
    
    
    
    3.3
    
    
    
    5.0
    
    
    
    8.3Total costs and expenses
    
    
    83.4
    
    
    
    40.9
    
    
    
    52.1
    
    
    
    93.0Income from operations
    
    $
    10.3
    
    
    $
    13.5
    
    
    $
    7.5
    
    
    $
    21.0
    12




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Casino
  Hotel
  Food and Beverage
  Tower, Retail and Other
  Promotional Allowances
  Selling, General and Administrative
  13




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Interest Expense
  Financial Condition
 Liquidity and Capital Resources
      14




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Recently Issued Accounting Pronouncements
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement 133
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
     
 Item 4T. Controls and Procedures
  15




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16




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PART II-OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
  17




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SIGNATURES
  AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLCBy:
    /s/ EDWARD W. MARTIN, IIIEdward W. Martin, IIIAuthorized Officer, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)




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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.