##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



FORM 10-Q



---



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



FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005



Commission file number 333-114335



---



POSTER FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)



---



Nevada

(State or other jurisdiction of incorporation or organization)



56-2370836

(I.R.S. Employer Identification No.)



129 E. Fremont Street, Las Vegas, Nevada 89101

(Address of principal executive offices)



(702) 385-7111

(Registrants telephone number, including area code)



N/A

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



---



Registrant is a wholly owned subsidiary
of Landrys Restaurants, Inc. Registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is filing this Form 10-Q with the reduced disclosure format authorized by General Instruction H.



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 is an accelerated filer.    Yes ̈No  x



Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes ̈No  x



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



Common Stock, no par value, 100 outstanding shares as of November 12, 2005.



---



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

TABLE OF CONTENTS



|           |  |                                                                                                                                     |  |           
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------- |  | ----------
|           |  |                                                                                                                                     |  | PageNumber
|Part I.    |  | Financial Information                                                                                                               |  | 2         
|           |  |                                                                                                                                    
|Item 1.    |  | Financial Statements                                                                                                                |  | 2         
|           |  | Poster Financial Group, Inc.                                                                                                        |  |           
|           |  |                                                                                                                                    
|           |  | Consolidated Balance Sheets as of September 30, 2005 (unaudited) and December 31, 2004                                              |  | 3         
|           |  |                                                                                                                                    
|           |  | Unaudited Consolidated Statements of Operations for the periods ended September 26, 2005, September 30, 2005 and September 30, 2004 |  | 4         
|           |  |                                                                                                                                    
|           |  | Unaudited Consolidated Statement of Stockholders Equity                                                                            |  | 5         
|           |  |                                                                                                                                    
|           |  | Unaudited Consolidated Statements of Cash Flows for periods ended September 26, 2005, September 30, 2005 and September 30, 2004     |  | 6         
|           |  |                                                                                                                                    
|           |  | Notes to Unaudited Consolidated Financial Statements                                                                                |  | 7         
|           |  |                                                                                                                                    
|           |  | Golden Nugget Group (1)                                                                                                             |  |           
|           |  |                                                                                                                                    
|           |  | Unaudited Combined Statement of Operations and Changes in Division Equity for the period January 1, 2004 to January 22, 2004        |  | 20        
|           |  |                                                                                                                                    
|           |  | Unaudited Combined Statement of Cash Flows for the period January 1, 2004 to January 22, 2004                                       |  | 21        
|           |  |                                                                                                                                    
|           |  | Notes to Unaudited Combined Financial Statements                                                                                    |  | 22        
|           |  |                                                                                                                                    
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                               |  | 26        
|           |  |                                                                                                                                    
|Item 4.    |  | Disclosure Controls and Procedures                                                                                                  |  | 31        
|           |  |                                                                                                                                    
|PART II.   |  | OTHER INFORMATION                                                                                                                   |  | 32        
|           |  |                                                                                                                                    
|Item 1.    |  | Legal Proceedings                                                                                                                   |  | 32        
|           |  |                                                                                                                                    
|Item 5.    |  | Other Information                                                                                                                   |  | 32        
|           |  |                                                                                                                                    
|Item 6.    |  | Exhibits                                                                                                                            |  | 32        
|           |  |                                                                                                                                    
|Signatures |  |                                                                                                                                     |  | 33        

---

|(1) | Poster Financial Group, Inc. completed the acquisition of the Golden Nugget Group on January 23, 2004. The acquisition of the Golden Nugget Group was significant and
accordingly, the financial statements of the Golden Nugget Group are included in the Quarterly Report on Form 10-Q in order to comply with Rule 3-01 of Regulation S-X.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



1



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

PART 1. FINANCIAL INFORMATION



ITEM 1. Financial Statements



The accompanying unaudited consolidated financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting only of normal recurring entries) necessary for a fair presentation of our results of operations, financial positions
and changes therein for the periods presented have been included.



This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are
forward-looking statements for purposes of federal and state securities laws. Forward-looking statements may include the words may, will, plans, believes, estimates,
expects, intends and other similar expressions. Our forward-looking statements are subject to risks and uncertainty, including, without limitation, our ability to continue our expansion strategy, our ability to make projected
capital expenditures, as well as general market conditions, competition, and pricing. Forward-looking statements include statements regarding:



| |  |  | potential acquisitions of other businesses and lines of businesses in other sectors of the hospitality and entertainment industries;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | future capital expenditures, including the amount and nature thereof;
| | - |  | ---------------------------------------------------------------------



| |  |  | business strategy and measures to implement such strategy;
| | - |  | ----------------------------------------------------------



| |  |  | competitive strengths;
| | - |  | ----------------------



| |  |  | goals;
| | - |  | ------



| |  |  | expansion and growth of our business and operations;
| | - |  | ----------------------------------------------------



| |  |  | future commodity prices;
| | - |  | ------------------------



| |  |  | availability of products, materials and employees;
| | - |  | --------------------------------------------------



| |  |  | consumer perceptions of safety;
| | - |  | -------------------------------



| |  |  | changes in local, regional and national economic conditions;
| | - |  | ------------------------------------------------------------



| |  |  | the effectiveness of our marketing efforts;
| | - |  | -------------------------------------------



| |  |  | changing demographics surrounding our businesses;
| | - |  | -------------------------------------------------



| |  |  | the effect of tax laws and any changes therein;
| | - |  | -----------------------------------------------



| |  |  | same store sales;
| | - |  | -----------------



| |  |  | earnings guidance;
| | - |  | ------------------



| |  |  | the seasonality of our business;
| | - |  | --------------------------------



| |  |  | weather and acts of God;
| | - |  | ------------------------



| |  |  | food, labor, fuel and utilities costs;
| | - |  | --------------------------------------



| |  |  | plans; and
| | - |  | ----------



| |  |  | references to future success.
| | - |  | -----------------------------



Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate, and, therefore, we cannot
assure you that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in our forward-looking statements, the inclusion of such information should not be regarded as a
representation by us or any other person that our objectives and plans will be achieved.



2



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

CONSOLIDATED BALANCE SHEETS

(Dollars
in thousands)



|                                                                                         |  |                   |         |  |  |                    |   |         |  
|---------------------------------------------------------------------------------------- |  | ----------------- | ------- |  |  | ------------------ | - | ------- | -
|                                                                                         |  | SuccessorCompany  |         |  |  | PredecessorCompany |  
|                                                                                         |  | September 30,2005 |         |  |  | December 31,2004   |  
|                                                                                         |  | (unaudited)       |         |  |  |                    |  
|ASSETS                                                                                   |  |                   |         |  |  |                    |   |         |  
|CURRENT ASSETS:                                                                          |  |                   |         |  |  |                    |   |         |  
|Cash and cash equivalents                                                                |  | $                 | 25,428  |  |  |                    | $ | 15,321  |  
|Accounts receivable, net                                                                 |  |                   | 5,934   |  |  |                    |   | 16,370  |  
|Inventories                                                                              |  |                   | 2,973   |  |  |                    |   | 3,228   |  
|Prepaid expenses and other                                                               |  |                   | 6,825   |  |  |                    |   | 4,832   |  
|Assets held for sale                                                                     |  |                   |        |  |  |                    |   | 43,076  |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total current assets                                                                     |  |                   | 41,160  |  |  |                    |   | 82,827  |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|PROPERTY AND EQUIPMENT, net                                                              |  |                   | 319,578 |  |  |                    |   | 152,793 |  
|INVESTMENT IN JOINT VENTURE                                                              |  |                   | 5,215   |  |  |                    |   | 5,351   |  
|DEPOSITS AND OTHER ASSETS, net                                                           |  |                   | 35,446  |  |  |                    |   | 36,203  |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total assets                                                                             |  | $                 | 401,399 |  |  |                    | $ | 277,174 |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                     |  |                   |         |  |  |                    |   |         |  
|CURRENT LIABILITIES:                                                                     |  |                   |         |  |  |                    |   |         |  
|Accounts payable                                                                         |  | $                 | 14,574  |  |  |                    | $ | 8,534   |  
|Accrued liabilities                                                                      |  |                   | 37,222  |  |  |                    |   | 33,224  |  
|Current portion of notes payable                                                         |  |                   | 130     |  |  |                    |   | 119     |  
|Bank credit facility classified as currently payable                                     |  |                   | 490     |  |  |                    |   | 36,036  |  
|Liabilities related to assets held for sale                                              |  |                   |        |  |  |                    |   | 5,783   |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total current liabilities                                                                |  |                   | 52,416  |  |  |                    |   | 83,696  |  
|NOTES PAYABLE, NET OF CURRENT PORTION                                                    |  |                   | 185,905 |  |  |                    |   | 155,272 |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total liabilities                                                                        |  |                   | 238,321 |  |  |                    |   | 238,968 |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|COMMITMENTS AND CONTINGENCIES                                                            |  |                   |         |  |  |                    |   |         |  
|STOCKHOLDERS EQUITY:                                                                    |  |                   |         |  |  |                    |   |         |  
|Common stock (no par value, 10,000 shares authorized, 100 shares issued and outstanding) |  |                   |        |  |  |                    |   |        |  
|Paid-in capital in excess of par value                                                   |  |                   | 163,000 |  |  |                    |   | 50,000  |  
|Retained earnings (deficit)                                                              |  |                   | 78      |  |  |                    |   | (11,794 | )
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total stockholders equity                                                               |  |                   | 163,078 |  |  |                    |   | 38,206  |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  
|Total liabilities and stockholders equity                                               |  | $                 | 401,399 |  |  |                    | $ | 277,174 |  
|                                                                                         |  |                   |         |  |  |                    |   |         |  



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



3



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)



|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|--------------------------------------- |  | ------------------------------- | ----- | - |  |  | ------------------------- | - | ------ | ---------------------------------- |  | - | ---------------------------- | - |  | --------------------------------- | ------- | - |  | - | ------- | -
|                                        |  | SuccessorCompany                |       |   |  |  | Predecessor Company       |  
|                                        |  | September 27 -September 30,2005 |       |   |  |  | July 1 -September 26,2005 |   |        | Three MonthsEndedSeptember 30,2004 |  |   | January 1 -September 26,2005 |   |  | Nine MonthsEndedSeptember 30,2004 |        
|REVENUES                                |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Casino                                  |  | $                               | 1,825 |   |  |  |                           | $ | 36,618 |                                    |  | $ | 41,280                       |   |  | $                                 | 121,505 |   |  | $ | 123,327 |  
|Rooms                                   |  |                                 | 601   |   |  |  |                           |   | 12,307 |                                    |  |   | 11,861                       |   |  |                                   | 41,139  |   |  |   | 34,599  |  
|Food and beverage                       |  |                                 | 597   |   |  |  |                           |   | 12,809 |                                    |  |   | 14,205                       |   |  |                                   | 41,759  |   |  |   | 38,756  |  
|Entertainment, retail and other         |  |                                 | 95    |   |  |  |                           |   | 2,474  |                                    |  |   | 3,430                        |   |  |                                   | 8,190   |   |  |   | 9,487   |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Gross revenues                          |  |                                 | 3,118 |   |  |  |                           |   | 64,208 |                                    |  |   | 70,776                       |   |  |                                   | 212,593 |   |  |   | 206,169 |  
|Promotional allowances                  |  |                                 | (411  | ) |  |  |                           |   | (8,146 | )                                  |  |   | (9,882                       | ) |  |                                   | (25,812 | ) |  |   | (25,732 | )
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Net revenues                            |  |                                 | 2,707 |   |  |  |                           |   | 56,062 |                                    |  |   | 60,894                       |   |  |                                   | 186,781 |   |  |   | 180,437 |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|COST AND EXPENSES                       |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Casino                                  |  |                                 | 1,057 |   |  |  |                           |   | 22,392 |                                    |  |   | 28,314                       |   |  |                                   | 72,589  |   |  |   | 75,036  |  
|Rooms                                   |  |                                 | 235   |   |  |  |                           |   | 5,465  |                                    |  |   | 5,555                        |   |  |                                   | 16,766  |   |  |   | 14,649  |  
|Food and beverage                       |  |                                 | 352   |   |  |  |                           |   | 8,571  |                                    |  |   | 8,266                        |   |  |                                   | 27,030  |   |  |   | 23,634  |  
|Entertainment, retail and other         |  |                                 | 92    |   |  |  |                           |   | 2,141  |                                    |  |   | 2,528                        |   |  |                                   | 6,863   |   |  |   | 7,343   |  
|Provision for doubtful accounts         |  |                                 | 26    |   |  |  |                           |   | 442    |                                    |  |   | 935                          |   |  |                                   | 1,938   |   |  |   | 2,010   |  
|General and administrative              |  |                                 | 445   |   |  |  |                           |   | 13,619 |                                    |  |   | 15,510                       |   |  |                                   | 41,036  |   |  |   | 39,338  |  
|(Gain) loss on disposal of fixed assets |  |                                 |      |   |  |  |                           |   | (11    | )                                  |  |   | (70                          | ) |  |                                   | (504    | ) |  |   | (70     | )
|Depreciation and amortization           |  |                                 | 202   |   |  |  |                           |   | 4,076  |                                    |  |   | 4,204                        |   |  |                                   | 12,972  |   |  |   | 11,285  |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Total cost and expense                  |  |                                 | 2,409 |   |  |  |                           |   | 56,695 |                                    |  |   | 65,242                       |   |  |                                   | 178,690 |   |  |   | 173,225 |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Operating income (loss)                 |  |                                 | 298   |   |  |  |                           |   | (633   | )                                  |  |   | (4,348                       | ) |  |                                   | 8,091   |   |  |   | 7,212   |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|OTHER INCOME (EXPENSE):                 |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Equity in loss of joint venture         |  |                                 | (14   | ) |  |  |                           |   | (312   | )                                  |  |   | (126                         | ) |  |                                   | (826    | ) |  |   | (382    | )
|Interest income                         |  |                                 |      |   |  |  |                           |   | 9      |                                    |  |   | 17                           |   |  |                                   | 28      |   |  |   | 106     |  
|Interest expense                        |  |                                 | (169  | ) |  |  |                           |   | (4,216 | )                                  |  |   | (4,234                       | ) |  |                                   | (13,307 | ) |  |   | (12,391 | )
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Total other income (expense)            |  |                                 | (183  | ) |  |  |                           |   | (4,519 | )                                  |  |   | (4,343                       | ) |  |                                   | (14,105 | ) |  |   | (12,667 | )
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|Income (loss) before income taxes       |  |                                 | 115   |   |  |  |                           |   | (5,152 | )                                  |  |   | (8,691                       | ) |  |                                   | (6,014  | ) |  |   | (5,455  | )
|Provision for income taxes              |  |                                 | 37    |   |  |  |                           |   |       |                                    |  |   |                             |   |  |                                   |        |   |  |   |        |  
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  
|NET INCOME (LOSS)                       |  | $                               | 78    |   |  |  |                           | $ | (5,152 | )                                  |  | $ | (8,691                       | ) |  | $                                 | (6,014  | ) |  | $ | (5,455  | )
|                                        |  |                                 |       |   |  |  |                           |   |        |                                    |  |   |                              |   |  |                                   |         |   |  |   |         |  



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



4



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

(Dollars in thousands)



|                            |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  
|--------------------------- |  | ------------ | --- | ------------------------- | - | -------------------------- |  | - | ------- |  | - | ------- | - |  | - | ------- | -
|                            |  | Common Stock |     | Additional Paid inCapital |   | Retained Earnings(Deficit) |  |   | Total   | 
|                            |  | Shares       |     | Amount                    |   |                            | 
|Predecessor Company         |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  
|Balance, December 31, 2004  |  |              | 100 |                           | $ |                           |  | $ | 50,000  |  | $ | (11,794 | ) |  | $ | 38,206  |  
|Net income (loss)           |  |              |    |                           |   |                           |  |   |        |  |   | (6,014  | ) |  |   | (6,014  | )
|Capital contributions       |  |              |    |                           |   |                           |  |   | 3,000   |  |   |        |   |  |   | 3,000   |  
|Distributions               |  |              |    |                           |   |                           |  |   |        |  |   | (979    | ) |  |   | (979    | )
|                            |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  
|Balance, September 26, 2005 |  |              | 100 |                           | $ |                           |  | $ | 53,000  |  | $ | (18,787 | ) |  | $ | 34,213  |  
|Successor Company           |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  
|Acquisition capital         |  |              |    |                           |   |                           |  |   | 163,000 |  |   |        |   |  |   | 163,000 |  
|Net income (loss)           |  |              |    |                           |   |                           |  |   |        |  |   | 78      |   |  |   | 78      |  
|                            |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  
|Balance, September 30, 2005 |  | $            | 100 |                           | $ |                           |  | $ | 163,000 |  | $ | 78      |   |  | $ | 163,078 |  
|                            |  |              |     |                           |   |                            |  |   |         |  |   |         |   |  |   |         |  



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



5



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)



|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|------------------------------------------------------------------------------------------ |  | -------------------------------------- | ------- | - |  |  | ----------------------------------- | - | ------ | ----------------------------------- |  | - | -------- | -
|                                                                                           |  | Successor Company                      |         |   |  |  | Predecessor Company                 |  
|                                                                                           |  | September 27, 2005 -September 30, 2005 |         |   |  |  | January 1, 2005 -September 26, 2005 |   |        | Nine Months EndedSeptember 30, 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                      |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Net income (loss)                                                                          |  | $                                      | 78      |   |  |  |                                     | $ | (6,014 | )                                   |  | $ | (5,455   | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities -  |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Depreciation and amortization                                                              |  |                                        | 202     |   |  |  |                                     |   | 12,972 |                                     |  |   | 11,285   |  
|Provision for doubtful accounts                                                            |  |                                        | 26      |   |  |  |                                     |   | 1,938  |                                     |  |   | 2,010    |  
|Gain on sale of assets                                                                     |  |                                        |        |   |  |  |                                     |   | (504   | )                                   |  |   | (70      | )
|Equity in loss of joint venture                                                            |  |                                        | 14      |   |  |  |                                     |   | 826    |                                     |  |   | 382      |  
|Changes in operating assets and liabilities:                                               |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|(Increase) decrease in accounts receivable                                                 |  |                                        | (288    | ) |  |  |                                     |   | 8,323  |                                     |  |   | (10,658  | )
|(Increase) decrease in inventories                                                         |  |                                        | (121    | ) |  |  |                                     |   | 696    |                                     |  |   | 384      |  
|(Increase) decrease in prepaid expenses and other                                          |  |                                        | (788    | ) |  |  |                                     |   | (183   | )                                   |  |   | (2,672   | )
|(Increase) decrease in deposits and other assets                                           |  |                                        | 10      |   |  |  |                                     |   | 1,963  |                                     |  |   | (432     | )
|Increase (decrease) in accounts payable                                                    |  |                                        | 588     |   |  |  |                                     |   | 44     |                                     |  |   | 2,465    |  
|Increase (decrease) in accrued liabilities                                                 |  |                                        | 1,958   |   |  |  |                                     |   | (5,807 | )                                   |  |   | 15,235   |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Net cash provided by operating activities                                                  |  |                                        | 1,679   |   |  |  |                                     |   | 14,254 |                                     |  |   | 12,474   |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                      |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Acquisition of property, equipment and improvements, excluding amounts in accounts payable |  |                                        | (3      | ) |  |  |                                     |   | (6,009 | )                                   |  |   | (11,458  | )
|Acquisition of the Golden Nugget Group, net of cash $11,942                                |  |                                        |        |   |  |  |                                     |   |       |                                     |  |   | (201,781 | )
|Proceeds from sale of equipment                                                            |  |                                        |        |   |  |  |                                     |   | 1,157  |                                     |  |   | 70       |  
|Contributions to joint venture                                                             |  |                                        |        |   |  |  |                                     |   | (704   | )                                   |  |   | (469     | )
|Decrease in restricted cash                                                                |  |                                        |        |   |  |  |                                     |   |       |                                     |  |   | 159,548  |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Net cash used in investing activities                                                      |  |                                        | (3      | ) |  |  |                                     |   | (5,556 | )                                   |  |   | (54,090  | )
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                      |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Payments on term loan                                                                      |  |                                        | (16,500 | ) |  |  |                                     |   | (2,100 | )                                   |  |   |         |  
|Proceeds from issuance of term loan                                                        |  |                                        |        |   |  |  |                                     |   |       |                                     |  |   | 20,000   |  
|Net borrowings (repayments) under revolving credit facility                                |  |                                        | 16,500  |   |  |  |                                     |   | (7,065 | )                                   |  |   | 5,302    |  
|Change in bank overdraft                                                                   |  |                                        | (3,761  | ) |  |  |                                     |   | 1,840  |                                     |  |   | 796      |  
|Distributions to PB Gaming                                                                 |  |                                        |        |   |  |  |                                     |   | (979   | )                                   |  |   | (2,517   | )
|Additional contributions of equity from PB Gaming                                          |  |                                        |        |   |  |  |                                     |   | 3,000  |                                     |  |   | 39,117   |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Net cash provided by (used in) financing activities                                        |  |                                        | (3,761  | ) |  |  |                                     |   | (5,304 | )                                   |  |   | 62,698   |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                       |  |                                        | (2,085  | ) |  |  |                                     |   | 3,394  |                                     |  |   | 21,082   |  
|                                                                                           |  |                                        |         |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                           |  |                                        | 27,513  |   |  |  |                                     |   | 24,119 |                                     |  |   |         |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                 |  |                                        | 25,428  |   |  |  |                                     | $ | 27,513 |                                     |  | $ | 21,082   |  
|                                                                                           |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                         |  |                                        |         |   |  |  |                                     |   |        |                                     |  |   |          |  
|Cash paid during the period for interest                                                   |  | $                                      |        |   |  |  |                                     | $ | 9,013  |                                     |  | $ | 7,501    |  



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



6



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



1. ORGANIZATION



Poster Financial Group, Inc. (PFG or the Company) a Nevada corporation owns and operates the Golden Nugget hotel, casino, and
entertainment resorts in downtown Las Vegas and Laughlin, Nevada. The Company is a wholly owned subsidiary of Landrys Restaurants, Inc. (Landrys or the Parent). Unless otherwise stated, all dollars are in
thousands.



On September 27, 2005, Landrys Gaming
Inc., an unrestricted subsidiary of Landrys, completed the acquisition of the capital stock of PFG for $163.0 million in cash plus the assumption of $155.0 million of senior secured notes and $27.0 million of bank debt, see Note 2 for further
discussion. A new basis of accounting resulting from the acquisition has been pushed down to PFG. The results of operations, financial position and cash flows have been segregated to present post-acquisition activity as the Successor
Company and pre-acquisition activity as the Predecessor Company in the financial statements and accompanying footnotes.



On January 23, 2004, PFG acquired the Golden Nugget Group from MGM Mirage. Results of operations and cash flows for 2004 exclude the period of
January 1, 2004 through January 22, 2004 when the Golden Nugget Group was owned and operated by MGM Mirage. Results of operations and cash flows for this period have been included in this Form 10-Q in order to comply with Rule 3-01 of
Regulation S-X.



Principles of Consolidation



The accompanying financial statements include the consolidated accounts of
PFG and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.



The Company indirectly holds 17.65% of the voting units and 50.0% of the non-voting units of the Fremont Street Experience, and accounts for its
investment utilizing the equity method of accounting. The Fremont Street Experience is owned by a group of unrelated casino operators in downtown Las Vegas, and operates retail malls, parking garages, entertainment venues and a pedestrian mall that
encloses Fremont Street, located adjacent to the Golden Nugget  Las Vegas.



Basis of Presentation



The consolidated
financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The preparation of the consolidated financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring items and estimates necessary for a fair presentation of the results for interim periods, have been made. These consolidated financial
statements should be read in conjunction with the financial statements and notes thereto included in the 2004 Form 10-K, filed with the Securities and Exchange Commission.



At December 31, 2004 the Golden Nugget  Laughlin was treated as discontinued operations and its assets were
classified as held for sale as a result of an agreement entered into between the Company and Barrick Gaming Corporation. The transaction did not close by May 31, 2005 and as such was automatically cancelled during the quarter ended
June 30, 2005. Accordingly, the assets of the Golden Nugget  Laughlin were reclassified from assets held for sale, and the Company no longer reports its results as discontinued operations.



7



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



Revenue
Recognition and Promotional Allowances



Casino revenue is
the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs (casino front money) and for chips in the customers possession (outstanding
chip liability). Casino revenues are recognized net of certain sales incentives in accordance with the Emerging Issues Task Force (EITF) consensus on Issue 01-9, Accounting for Consideration Given by a Vendor to a Customer
(Including a Reseller of the Vendors Products). Under the guidance of the EITF, the Company recognizes sales incentives as a reduction of revenue. In addition, accruals for the cost of cash-back points in point-loyalty programs, such as
points earned in slot players clubs, are recorded as a reduction of revenue.



Hotel, food and beverage, entertainment and other operating revenues are recognized as services are performed. Advance deposits on rooms and advance ticket sales are recorded as accrued liabilities until services are
provided to the customer. The retail value of accommodations, food and beverage, and other services furnished to hotel-casino guests without charge is included in gross revenue and then deducted as promotional allowances.



The estimated retail value of such promotional allowances is included in
operating revenues as follows:



|                |  |                                        |     |  |  |                                  |   |                                      |  |                                    |       |                                     |   |        |  |   |       
|--------------- |  | -------------------------------------- | --- |  |  | -------------------------------- | - | ------------------------------------ |  | ---------------------------------- | ----- | ----------------------------------- | - | ------ |  | - | ------
|                |  | Successor Company                      |     |  |  | Predecessor Company             
|                |  | September 27, 2005 -September 30, 2005 |     |  |  | July 1, 2005 -September 26, 2005 |   | Three Months endedSeptember 30, 2004 |  | January 1, 2005-September 26, 2005 |       | Nine Months endedSeptember 30, 2004
|Rooms           |  | $                                      | 164 |  |  |                                  | $ | 2,857                                |  | $                                  | 3,152 |                                     | $ | 9,007  |  | $ | 8,677 
|Food & Beverage |  |                                        | 236 |  |  |                                  |   | 4,909                                |  |                                    | 6,091 |                                     |   | 15,665 |  |   | 15,479
|Other           |  |                                        | 11  |  |  |                                  |   | 380                                  |  |                                    | 639   |                                     |   | 1,140  |  |   | 1,576 
|                |  |                                        |     |  |  |                                  |   |                                      |  |                                    |       |                                     |   |        |  |   |       
|                |  | $                                      | 411 |  |  |                                  | $ | 8,146                                |  | $                                  | 9,882 |                                     | $ | 25,812 |  | $ | 25,732
|                |  |                                        |     |  |  |                                  |   |                                      |  |                                    |       |                                     |   |        |  |   |       



The
estimated cost of providing such promotional allowances is primarily included in casino expenses as follows:



|                  |  |                                        |     |  |  |                                  |   |                                      |  |                                     |       |                                     |   |        |  |   |       
|----------------- |  | -------------------------------------- | --- |  |  | -------------------------------- | - | ------------------------------------ |  | ----------------------------------- | ----- | ----------------------------------- | - | ------ |  | - | ------
|                  |  | Successor Company                      |     |  |  | Predecessor Company             
|                  |  | September 27, 2005 -September 30, 2005 |     |  |  | July 1, 2005 -September 26, 2005 |   | Three Months endedSeptember 30, 2004 |  | January 1, 2005 -September 26, 2005 |       | Nine Months endedSeptember 30, 2004
|Rooms             |  | $                                      | 106 |  |  |                                  | $ | 1,848                                |  | $                                   | 1,867 |                                     | $ | 5,856  |  | $ | 5,137 
|Food and Beverage |  |                                        | 260 |  |  |                                  |   | 5,404                                |  |                                     | 7,191 |                                     |   | 17,121 |  |   | 18,293
|Other             |  |                                        | 16  |  |  |                                  |   | 628                                  |  |                                     | 767   |                                     |   | 1,808  |  |   | 1,750 
|                  |  |                                        |     |  |  |                                  |   |                                      |  |                                     |       |                                     |   |        |  |   |       
|                  |  | $                                      | 382 |  |  |                                  | $ | 7,880                                |  | $                                   | 9,825 |                                     | $ | 24,785 |  | $ | 25,180
|                  |  |                                        |     |  |  |                                  |   |                                      |  |                                     |       |                                     |   |        |  |   |       



Recently Issued Accounting
Pronouncements



In December 2004, the FASB issued
Statement of Financial Accounting Standards (SFAS) No. 123R (revised 2004), Share-Based Payment, which revised SFAS No. 123, Accounting for Stock-Based Compensation. The revised statement addresses the
accounting for share-based payment transactions with employees and other third parties and requires that compensation costs relating to such transactions be recognized in the consolidated statement of operations. The revised statement is effective
as of the first annual period beginning after June 15, 2005. The adoption of this pronouncement is not expected to have any effect on the Companys consolidated financial position, results of operations and cash flows.



8



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



In
November 2004, the FASB issued SFAS No. 151, Inventory Costs, which amends part of ARB 43, Inventory Pricing, concerning the treatment of certain types of inventory costs. The statement clarifies that abnormal costs are
required to be treated as current-period charges under all circumstances. In addition, fixed production overhead should be allocated based on the normal capacity of the production facilities, with unallocated overhead charged to expense when
incurred. The Company maintains inventories for its restaurants, gift shops, bars and other operations. SFAS 151 is required to be adopted for fiscal years beginning after June 15, 2005, and is not expected to have a material impact on the
Companys financial position, results of operations or cash flows.



In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets (SFAS 153), which eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets and
replaces it with a general exception from fair value measurement for exchanges of nonmonetary assets that do not have commercial substance. SFAS 153 is required to be adopted in fiscal periods beginning after June 15, 2005. Management does not
believe its adoption will have a material impact on the Companys financial position, results of operations or cash flows.



In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Correctionsa replacement of APB No. 20 and FAS
No. 3 (SFAS 154). SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting
a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS 154 also provides guidance for determining whether retrospective application of a change in accounting
principle is impracticable and for reporting a change when retrospective application is impracticable. The correction of an error in previously issued financial statements is not an accounting change. However, the reporting of an error correction
involves adjustments to previously issued financial statements similar to those generally applicable to reporting an accounting change retrospectively. Therefore, the reporting of a correction of an error by restating previously issued financial
statements is also addressed by SFAS 154. SFAS 154 is required to be adopted in fiscal years beginning after December 15, 2005. The adoption of SFAS 154 is not expected to have a material impact on the Companys financial position, results
of operations and cash flows.



2. CHANGE OF CONTROL



On September 27, 2005, Landrys completed the acquisition of the
capital stock of PFG for $163.0 million plus the assumption of $155.0 million of senior secured notes due 2011 and $27.0 million in bank debt. The following summarizes the preliminary allocation of purchase price based on estimated fair values of
the assets acquired and liabilities assumed. These fair values were determined using appraised values and managements estimates from information currently available as well as preliminary plans for future operations.



|                                        |  |   |          |  
|--------------------------------------- |  | - | -------- | -
|Estimated fair value of assets acquired |  | $ | 402,536  |  
|Liabilities assumed or created          |  |   | (53,012  | )
|                                        |  |   |          |  
|Allocated purchase price                |  |   | 349,524  |  
|Less: Cash acquired and debt assumed    |  |   | (214,037 | )
|                                        |  |   |          |  
|Net cash paid                           |  | $ | 135,487  |  
|                                        |  |   |          |  



As a result of the
acquisition, we have recorded direct acquisition costs for the estimated incremental costs to rationalize activities at the two locations and for associated employee contract termination and severance costs. Accounting principles generally accepted
in the United States, provide that these direct acquisition expenses, which are not associated with the generation of future revenues and have no future economic benefit, be reflected as assumed liabilities in the allocation of the purchase price.
The acquisition liabilities included in the purchase price allocation aggregate approximately $3.0 million.



9



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



The
following unaudited pro forma financial information presents the consolidated results of operations as if the acquisition occurred on January 1, 2004, after including certain pro forma adjustments for interest expense, depreciation and
amortization, and income taxes.



|                  |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |                                     |   |         |  |   |        
|----------------- |  | -------------------------------------- | ----- |  |  | -------------------------------- | - | ------ | ------------------------------------ |  | - | ----------------------------------- | - | ----------------------------------- | - | ------- |  | - | -------
|                  |  | Successor Company                      |       |  |  | Predecessor Company             
|                  |  | September 27, 2005 -September 30, 2005 |       |  |  | July 1, 2005 -September 26, 2005 |   |        | Three Months endedSeptember 30, 2004 |  |   | January 1, 2005 -September 26, 2005 |   | Nine Months endedSeptember 30, 2004
|Revenue           |  | $                                      | 2,707 |  |  |                                  | $ | 56,062 |                                      |  | $ | 60,894                              |   |                                     | $ | 186,781 |  | $ | 195,243
|Net income (loss) |  | $                                      | 78    |  |  |                                  | $ | (2,068 | )                                    |  | $ | (4,649                              | ) |                                     | $ | 82      |  | $ | 598    



The pro forma
financial information is not necessarily indicative of the combined results of operations had the transaction occurred on January 1, 2004 or the results of operations that may be obtained in the future.



3. LONG-TERM DEBT



Debt Issuance



In December 2003, the Company issued $155.0 million of 83/4% senior secured notes due 2011 to finance a portion of the purchase price of the acquisition and the Golden Nugget Group from MGM Mirage. All payments are guaranteed, jointly and severally, by all the
Companys current and future restricted subsidiaries on a senior secured basis. The senior notes and the guarantees are secured by a pledge of capital stock of the Companys restricted subsidiaries and a security interest in substantially
all of the Companys and the guarantors current and future assets. Such security interest is junior to the security interest granted to the lenders under the Companys credit facility. Interest on the Notes is payable in June and
December of each year.



The $155.0 million of 83/4% senior secured notes due 2011 remained outstanding following Landrys purchase of PFG. As a result of the
change of control, PFG was required to commence an offer to purchase all outstanding senior notes for 101% of the aggregate principal amount plus any accrued and unpaid interest. The offer commenced in accordance with the indenture and will expire
on November 28, 2005. Any notes tendered under the offer will be funded from the PFG revolving credit facility or Landrys revolving credit facility.



Bank Credit Agreement



In January 2004, the Company entered into a $35.0 million senior secured credit facility consisting of a $20.0 million amortizing term loan and a $15.0
million revolver. The senior secured credit facility was later amended expanding the revolver to $25.0 million. Under the credit facility, the Company is subject to various financial covenants, including among other things, limitations on the
disposal of assets, mergers and acquisitions, liens or indebtedness, and transactions with affiliates. The Companys obligations under the credit facility are guaranteed, jointly and severally, by all the Companys subsidiaries. The
Companys obligations under the credit facility are also secured by a pledge of capital stock of the Companys restricted subsidiaries and the Companys interest in the Fremont Street Experience, as well as a first priority lien on
substantially all of the Companys and the guarantors current and future assets. Interest on the credit facility accrues at an interest rate determined at the option of the Company, at either the LIBOR Index plus a 4% margin, or the Base
Rate, defined as the banks prime rate plus a 3% margin.



At March 31, 2005, the Company failed to satisfy the financial covenants under the loan and security agreement. On March 31, 2005, the Company entered into a commitment letter arrangement with their lender, which on May 2,
2005, was formalized into an amendment to the loan and security agreement relating to its credit facility. The amendment modifies financial ratios and covenants to resolve certain defaults (which had been previously waived by the lenders) and to
permit the sale of the Golden Nugget  Laughlin.



10



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



On August 10,
2005, the Company entered into an amendment to the loan and security agreement relating to the senior secured credit facility. The amendment modified the financial covenants to include the results of operations of the Laughlin properties.



In connection with the acquisition, the Company entered into
an amended loan and security agreement whereby the remaining balance of the term loan plus accrued interest was repaid; the revolver was increased to $43.0 million; certain financial covenants were adjusted; and the financing spread was reduced to
Libor plus 2% or base rate plus 1% at September 30, 2005. The financing spread and commitment fee increases or decreases based on a financial leverage ratio as defined in the credit agreement. As of September 30, 2005, $2.6 million in
letters of credit were outstanding with $13.4 million of available borrowing capacity.



Long-term debt is comprised of the following:



|                                                                                                                            |  |                    |         |   |  |  |                    |   |         |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - |  |  | ------------------ | - | ------- | -
|                                                                                                                            |  | Successor Company  |         |   |  |  | PredecessorCompany |  
|                                                                                                                            |  | September 30, 2005 |         |   |  |  | December 31, 2004  |  
|$25.0 million senior secured credit facility, Libor + 4.0%, due December 2008                                               |  | $                  |        |   |  |  |                    | $ | 17,436  |  
|$20.0 million senior secured term loan, Libor + 4.0%, principal paid quarterly through July 2008, balance due December 2008 |  |                    |        |   |  |  |                    |   | 18,600  |  
|$43.0 million senior secured credit facility, Libor + 2.0%, due January 2009                                                |  |                    | 26,990  |   |  |  |                    |   |        |  
|$155.0 million senior secured note, 83/4% interest only, due 2011                                                           |  |                    | 159,263 |   |  |  |                    |   | 155,000 |  
|Other long-term notes payable with various interest rates, principal and interest                                           |  |                    | 272     |   |  |  |                    |   | 391     |  
|                                                                                                                            |  |                    |         |   |  |  |                    |   |         |  
|Total debt                                                                                                                  |  |                    | 186,525 |   |  |  |                    |   | 191,427 |  
|Less current portion                                                                                                        |  |                    | (620    | ) |  |  |                    |   | (36,155 | )
|                                                                                                                            |  |                    |         |   |  |  |                    |   |         |  
|Long-term debt                                                                                                              |  | $                  | 185,905 |   |  |  |                    | $ | 155,272 |  
|                                                                                                                            |  |                    |         |   |  |  |                    |   |         |  



4. FREMONT STREET EXPERIENCE



The Company indirectly owns 17.65% of the voting units
and 50.0% of the non-voting units of the Fremont Street Experience. This investment is accounted for under the equity method of accounting. Under the equity method, the carrying value of the investment is adjusted by the Companys share of
earnings, losses, capital contributions and distributions.



11



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



Activity relating to
the Companys investment in the Fremont Street Experience for the period from January 23, 2004 through September 30, 2005 is as follows:



|                                        |  |   |        |  
|--------------------------------------- |  | - | ------ | -
|Predecessor Company                     |  |   |        |  
|Investment balance - January 23, 2004   |  | $ | 5,105  |  
|Contributions                           |  |   | 1,408  |  
|Equity in loss of joint venture         |  |   | (1,284 | )
|                                        |  |   |        |  
|Investment balance - September 26, 2005 |  |   | 5,229  |  
|Successor Company                       |  |   |        |  
|Equity in loss of joint venture         |  |   | (14    | )
|                                        |  |   |        |  
|Investment balance - September 30, 2005 |  | $ | 5,215  |  
|                                        |  |   |        |  



The investment balance
reflects the Companys members equity in Fremont Street Experience, comprised of cumulative contributions, adjusted for the Companys proportional interest in profits or losses, as well as an additional $1.8 million contribution made
by the Golden Nugget Group in 1995 on a voluntary basis, and used by the Fremont Street Experience to acquire additional fixed assets used in its operations.



The $5.2 million members equity carried by the Company is approximately $0.3 million less than the proportional amount of members capital
reported by the Fremont Street Experience due to values assigned in the allocation of purchase price resulting from the acquisition.



The additional contribution of $1.8 million represents a non-voting interest which has been treated as a redeemable preferred member contribution of the
Fremont Street Experience. The redeemable preferred member contribution does not have any profit distribution and must be repaid before any distributions are made on voting interests.



Summarized financial information of the Fremont Street Experience is as follows:



|                                       |  |                    |       
|-------------------------------------- |  | ------------------ | ------
|                                       |  | September 30, 2005
|Current assets                         |  | $                  | 3,736 
|Non-current assets                     |  |                    | 36,553
|                                       |  |                    |       
|Total assets                           |  | $                  | 40,289
|                                       |  |                    |       
|Current liabilities                    |  | $                  | 331   
|Non-current liabilities                |  |                    | 16,715
|Preferred member contribution          |  |                    | 3,040 
|Members capital                       |  |                    | 20,203
|                                       |  |                    |       
|Total liabilities and members capital |  | $                  | 40,289
|                                       |  |                    |       



|                   |  |                                     |        |   |                                     |   |        |  
|------------------ |  | ----------------------------------- | ------ | - | ----------------------------------- | - | ------ | -
|                   |  | Nine months endedSeptember 30, 2005 |        |   | Nine months endedSeptember 30, 2004 |  
|Total revenues     |  | $                                   | 4,539  |   |                                     | $ | 3,618  |  
|Costs and expenses |  |                                     | (9,300 | ) |                                     |   | (5,784 | )
|                   |  |                                     |        |   |                                     |   |        |  
|Net loss           |  | $                                   | (4,761 | ) |                                     | $ | (2,166 | )
|                   |  |                                     |        |   |                                     |   |        |  



12



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



The
proportionate share of the Companys loss of the Fremont Street Experience for the nine months ended September 30, 2005 and the period January 23, 2004 through September 30, 2004 is approximately $840 and $382, respectively. Of
the $840 proportionate share of loss, $14 was recorded in the four days of operations in which PFG was a wholly owned subsidiary of Landrys.



5. EMPLOYEE BENEFIT PLANS



The Companys employees, who are members of various unions, are covered by union-sponsored, collective bargained, multi-employer health and welfare
and defined benefit pension plans. The Company recorded an expense of $0.1 million for the period from September 27, 2005 through September 30, 2005, $7.8 million for the period from January 1, 2005 through September 26, 2005,
and $6.7 million for the period from January 23, 2004 through September 30, 2004 under such plans. The plans sponsors have not provided sufficient information to permit the Company to determine its share of unfunded vested benefits,
if any. However, based on available information, the Company does not believe that unfunded amounts attributable to its casino operation are material.



The Company sponsors a retirement savings plan under Section 401(k) of the Internal Revenue Code covering its non-union employees. The plan is
available to certain employees with at least three months of service. The plan allows eligible employees to defer, within prescribed limits, up to 20 percent of their income on a pre-tax basis through contributions to the plan. The Company matches,
within prescribed limits, a portion of eligible employees contributions up to a maximum of 2 percent of an employees eligible compensation. The Company recorded charges for matching contributions of approximately $7,000 for the period
from September 27, 2005 through September 30, 2005, $551,000 for the period from January 1, 2005 through September 26, 2005, and $490,000 for the period from January 23, 2004 through September 30, 2004



6. SEGMENT INFORMATION



The Company owns and operates two properties, a casino hotel resort located in downtown Las Vegas, Nevada (GNLV)
and a casino and hotel located in Laughlin, Nevada (GNL). The Company markets each of these properties primarily to middle-income guests. The major products offered include casino entertainment, hotel rooms, and food and beverage. The
accounting policies for each property are the same as those described in the summary of significant accounting policies.



A summary of the operations by business segment is presented below:



|                         |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|------------------------ |  | -------------------------------------- | ----- |  |  | -------------------------------- | - | ------ | ------------------------------------ |  | - | ----------------------------------- | - |  | ----------------------------------- | ------- | - |  | - | ------- | -
|                         |  | Successor Company                      |       |  |  | Predecessor Company              |  
|                         |  | September 27, 2005 -September 30, 2005 |       |  |  | July 1, 2005 -September 26, 2005 |   |        | Three Months endedSeptember 30, 2004 |  |   | January 1, 2005 -September 26, 2005 |   |  | Nine Months endedSeptember 30, 2004 |        
|Net revenues             |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|GNLV                     |  | $                                      | 2,116 |  |  |                                  | $ | 45,008 |                                      |  | $ | 49,598                              |   |  | $                                   | 150,589 |   |  | $ | 147,497 |  
|GNL                      |  |                                        | 591   |  |  |                                  |   | 11,054 |                                      |  |   | 11,296                              |   |  |                                     | 36,192  |   |  |   | 32,940  |  
|                         |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|Total                    |  | $                                      | 2,707 |  |  |                                  | $ | 56,062 |                                      |  | $ | 60,894                              |   |  | $                                   | 186,781 |   |  | $ | 180,437 |  
|                         |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|Operating income (loss): |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|GNLV                     |  | $                                      | 137   |  |  |                                  | $ | (766   | )                                    |  | $ | (4,489                              | ) |  | $                                   | 4,918   |   |  | $ | 5,434   |  
|GNL                      |  |                                        | 161   |  |  |                                  |   | 545    |                                      |  |   | 295                                 |   |  |                                     | 4,098   |   |  |   | 2,415   |  
|PFG                      |  |                                        |      |  |  |                                  |   | (412   | )                                    |  |   | (154                                | ) |  |                                     | (925    | ) |  |   | (637    | )
|                         |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  
|Total                    |  | $                                      | 298   |  |  |                                  | $ | (633   | )                                    |  | $ | (4,348                              | ) |  | $                                   | 8,091   |   |  | $ | 7,212   |  
|                         |  |                                        |       |  |  |                                  |   |        |                                      |  |   |                                     |   |  |                                     |         |   |  |   |         |  



13



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



7. SUMMARIZED
FINANCIAL INFORMATION



All payments with respect to the
Companys 83/4% senior secured Notes due 2011 are guaranteed, jointly and severally, by all the
Companys subsidiaries. The notes are also collateralized by a pledge of capital stock of the Companys subsidiaries and a security interest in substantially all of the Companys and the guarantors current and future assets.
Such security interest is junior to the security interest granted to the lenders under the Senior Credit Facility.



Separate financial statements and other disclosures concerning each of the subsidiary guarantors are not presented below because management believes they
are not material to investors. The following information represents the summarized financial information of the Company and the subsidiary guarantors on a consolidating basis as of September 30, 2005, the period from January 1, 2005
through September 26, 2005 and the period from September 27, 2005 through September 30, 2005.



14



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



CONDENSED CONSOLIDATING BALANCE SHEETS

September 30, 2005



|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|--------------------------------------------- |  | --------------- | ------- | --------------------- | - | -------------------------------- |  | - | -------- | ---- |  | - | -------
|                                              |  | PosterFinancial |         | GuarantorSubsidiaries |   | Consolidating/EliminatingEntries |  |   | Total   
|Assets                                        |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Current Assets                                |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Cash and cash equivalents                     |  | $               |        |                       | $ | 25,428                           |  | $ |         |      |  | $ | 25,428 
|Accounts receivable, net                      |  |                 |        |                       |   | 5,934                            |  |   |         |      |  |   | 5,934  
|Inventories                                   |  |                 |        |                       |   | 2,973                            |  |   |         |      |  |   | 2,973  
|Prepaid expenses and other                    |  |                 |        |                       |   | 6,825                            |  |   |         |      |  |   | 6,825  
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Total current assets                          |  |                 |        |                       |   | 41,160                           |  |   |         |      |  |   | 41,160 
|                                              |  |                 |         |                      
|Property and equipment, net                   |  |                 |        |                       |   | 319,578                          |  |   |         |      |  |   | 319,578
|Investment in subsidiaries                    |  |                 | 358,752 |                       |   |                                 |  |   | (358,752 | )(a) |  |   |       
|Investment in joint venture                   |  |                 |        |                       |   | 5,215                            |  |   |         |      |  |   | 5,215  
|Deposits and other assets, net                |  |                 |        |                       |   | 35,446                           |  |   |         |      |  |   | 35,446 
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Total assets                                  |  | $               | 358,752 |                       | $ | 401,399                          |  | $ | (358,752 | )    |  | $ | 401,399
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Liabilities and Stockholders Equity          |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Current Liabilities                           |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Accounts payable                              |  | $               |        |                       | $ | 14,574                           |  | $ |         |      |  | $ | 14,574 
|Current portion of notes payable              |  |                 | 489     |                       |   | 620                              |  |   | (489     | )(b) |  |   | 620    
|Other accrued liabilities                     |  |                 | 9,422   |                       |   | 27,800                           |  |   |         |      |  |   | 37,222 
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Total current liabilities                     |  |                 | 9,911   |                       |   | 42,994                           |  |   | (489     | )    |  |   | 52,416 
|                                              |  |                 |         |                      
|Notes payable pushed down from parent company |  |                 | 185,763 |                       |   | 185,763                          |  |   | (185,763 | )(b) |  |   | 185,763
|Other notes payable                           |  |                 |        |                       |   | 142                              |  |   |         |      |  |   | 142    
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Total liabilities                             |  |                 | 195,674 |                       |   | 228,899                          |  |   | (186,252 | )    |  |   | 238,321
|                                              |  |                 |         |                      
|Contingencies and Commitments                 |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Stockholders equity                          |  |                 | 163,078 |                       |   | 172,500                          |  |   | (172,500 | )    |  |   | 163,078
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        
|Total liabilities and stockholders equity    |  | $               | 358,752 |                       | $ | 401,399                          |  | $ | (358,752 | )    |  | $ | 401,399
|                                              |  |                 |         |                       |   |                                  |  |   |          |      |  |   |        

---

|(a) | To eliminate investment in subsidiaries in consolidation.
|--- | ---------------------------------------------------------

|(b) | To eliminate notes payable pushed down to the guarantor subsidiaries.
|--- | ---------------------------------------------------------------------



15



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the period from January 1, 2005 through September 26, 2005



|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|--------------------------------------------------------- |  | --------------- | ------- | - | --------------------- | - | ------- | -------------------------------- |  | - | ------ | ---- |  | - | ------- | -
|                                                          |  | PosterFinancial |         |   | GuarantorSubsidiaries |   |         | Consolidating/EliminatingEntries |  |   | Total  |     
|Net revenues                                              |  | $               |        |   |                       | $ | 186,781 |                                  |  | $ |       |      |  | $ | 186,781 |  
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Cost and expenses                                         |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Casino-hotel operations                                   |  |                 |        |   |                       |   | 123,248 |                                  |  |   |       |      |  |   | 123,248 |  
|General and administrative                                |  |                 | 925     |   |                       |   | 41,545  |                                  |  |   |       |      |  |   | 42,470  |  
|Depreciation and amortization                             |  |                 |        |   |                       |   | 12,972  |                                  |  |   |       |      |  |   | 12,972  |  
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Total cost and expenses                                   |  |                 | 925     |   |                       |   | 177,765 |                                  |  |   |       |      |  |   | 178,690 |  
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Operating income                                          |  |                 | (925    | ) |                       |   | 9,016   |                                  |  |   |       |      |  |   | 8,091   |  
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Other income (expense)                                    |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Equity in loss of joint venture                           |  |                 |        |   |                       |   | (826    | )                                |  |   |       |      |  |   | (826    | )
|Equity in income (loss) of subsidiaries                   |  |                 | 8,190   |   |                       |   |        |                                  |  |   | (8,190 | )(a) |  |   |        |  
|Interest income                                           |  |                 |        |   |                       |   | 28      |                                  |  |   |       |      |  |   | 28      |  
|Interest expense                                          |  |                 | (13,279 | ) |                       |   | (28     | )                                |  |   |       |      |  |   | (13,307 | )
|Interest expense associated with pushed down indebtedness |  |                 |        |   |                       |   | (13,279 | )                                |  |   | 13,279 | (b)  |  |   |        |  
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Total other income (expense)                              |  |                 | (5,089  | ) |                       |   | (14,105 | )                                |  |   | 5,089  |      |  |   | (14,105 | )
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  
|Net income (loss)                                         |  | $               | (6,014  | ) |                       | $ | (5,089  | )                                |  | $ | 5,089  |      |  | $ | (6,014  | )
|                                                          |  |                 |         |   |                       |   |         |                                  |  |   |        |      |  |   |         |  

---

|(a) | To eliminate equity in the income of subsidiaries in consolidation.
|--- | -------------------------------------------------------------------

|(b) | To eliminate interest expense on the notes and term loan pushed down to the guarantor subsidiaries.
|--- | ---------------------------------------------------------------------------------------------------



16



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the period from September 27, 2005 through September 30,
2005



|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|--------------------------------------------------------- |  | --------------- | ---- | - | --------------------- | - | ----- | -------------------------------- |  | - | ----- | ---- |  | - | ----- | -
|                                                          |  | PosterFinancial |      |   | GuarantorSubsidiaries |   |       | Consolidating/EliminatingEntries |  |   | Total |     
|Net revenues                                              |  | $               |     |   |                       | $ | 2,707 |                                  |  | $ |      |      |  | $ | 2,707 |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Cost and expenses                                         |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Casino-hotel operations                                   |  |                 |     |   |                       |   | 1,736 |                                  |  |   |      |      |  |   | 1,736 |  
|General and administrative                                |  |                 |     |   |                       |   | 471   |                                  |  |   |      |      |  |   | 471   |  
|Depreciation and amortization                             |  |                 |     |   |                       |   | 202   |                                  |  |   |      |      |  |   | 202   |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Total cost and expenses                                   |  |                 |     |   |                       |   | 2,409 |                                  |  |   |      |      |  |   | 2,409 |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Operating income                                          |  |                 |     |   |                       |   | 298   |                                  |  |   |      |      |  |   | 298   |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Other income (expense)                                    |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Equity in loss of joint venture                           |  |                 |     |   |                       |   | (14   | )                                |  |   |      |      |  |   | (14   | )
|Equity in income (loss) of subsidiaries                   |  |                 | 194  |   |                       |   |      |                                  |  |   | (194  | )(a) |  |   |      |  
|Interest income                                           |  |                 |     |   |                       |   | 19    |                                  |  |   |      |      |  |   | 19    |  
|Interest expense                                          |  |                 | (169 | ) |                       |   | (19   | )                                |  |   |      |      |  |   | (188  | )
|Interest expense associated with pushed down indebtedness |  |                 |     |   |                       |   | (169  | )                                |  |   | 169   | (b)  |  |   |      |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Total other income (expense)                              |  |                 | 25   |   |                       |   | (183  | )                                |  |   | (25   | )    |  |   | (183  | )
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Income (loss) before income taxes                         |  |                 | 25   |   |                       |   | 115   |                                  |  |   | (25   | )    |  |   | 115   |  
|Provision for income taxes                                |  |                 | 53   |   |                       |   | (90   | )                                |  |   |      |      |  |   | (37   | )
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  
|Net income (loss)                                         |  | $               | 78   |   |                       | $ | 25    |                                  |  | $ | (25   | )    |  | $ | 78    |  
|                                                          |  |                 |      |   |                       |   |       |                                  |  |   |       |      |  |   |       |  

---

|(a) | To eliminate equity in the income of subsidiaries in consolidation.
|--- | -------------------------------------------------------------------

|(b) | To eliminate interest expense on the notes and term loan pushed down to the guarantor subsidiaries.
|--- | ---------------------------------------------------------------------------------------------------



17



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the period from January 1, 2005 through September 26, 2005



|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|---------------------------------------------------------------------------- |  | --------------- | ------ | - | --------------------- | - | ------ | -------------------------------- |  | ----- | - |  | - | ------ | -
|                                                                             |  | PosterFinancial |        |   | GuarantorSubsidiaries |   |        | Consolidating/EliminatingEntries |  | Total |  
|Cash flows from operating activities                                         |  | $               | 7,144  |   |                       | $ | 7,110  |                                  |  | $     |  |  | $ | 14,254 |  
|                                                                             |  |                 |        |  
|Cash flows from investing activities                                         |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Acquisition of property and equipment, excluding amounts in accounts payable |  |                 |       |   |                       |   | (6,009 | )                                |  |       |  |  |   | (6,009 | )
|Proceeds from the sale of equipment                                          |  |                 |       |   |                       |   | 1,157  |                                  |  |       |  |  |   | 1,157  |  
|Contributions to joint venture                                               |  |                 |       |   |                       |   | (704   | )                                |  |       |  |  |   | (704   | )
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Net cash used in investing activities                                        |  |                 |       |   |                       |   | (5,556 | )                                |  |       |  |  |   | (5,556 | )
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Cash flows from financing activities                                         |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Payments on senior notes payable                                             |  |                 | (2,100 | ) |                       |   |       |                                  |  |       |  |  |   | (2,100 | )
|Net borrowings under revolving credit facility                               |  |                 | (7,065 | ) |                       |   |       |                                  |  |       |  |  |   | (7,065 | )
|Change in bank overdraft                                                     |  |                 |        |   |                       |   | 1,840  |                                  |  |       |  |  |   | 1,840  |  
|Additional contributions of equity from PB Gaming                            |  |                 | 3,000  |   |                       |   |        |                                  |  |       |  |  |   | 3,000  |  
|Distributions to PB Gaming                                                   |  |                 | (979   | ) |                       |   |       |                                  |  |       |  |  |   | (979   | )
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Net cash provided by financing activities                                    |  |                 | (7,144 | ) |                       |   | 1,840  |                                  |  |       |  |  |   | (5,304 | )
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Net increase in cash and cash equivalents                                    |  |                 |       |   |                       |   | 3,394  |                                  |  |       |  |  |   | 3,394  |  
|                                                                             |  |                 |        |  
|Cash and cash equivalents, beginning of period                               |  |                 |       |   |                       |   | 24,119 |                                  |  |       |  |  |   | 24,119 |  
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  
|Cash and cash equivalents, end of period                                     |  | $               |       |   |                       | $ | 27,513 |                                  |  | $     |  |  | $ | 27,513 |  
|                                                                             |  |                 |        |   |                       |   |        |                                  |  |       |   |  |   |        |  



18



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)

NOTES TO
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the period from September 27, 2005 through September 30,
2005



|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|----------------------------------------------------------- |  | --------------- | ------- | - | --------------------- | - | ------ | -------------------------------- |  | ----- | - |  | - | ------- | -
|                                                            |  | PosterFinancial |         |   | GuarantorSubsidiaries |   |        | Consolidating/EliminatingEntries |  | Total |  
|Cash flows from operating activities                        |  | $               |        |   |                       | $ | 1,679  |                                  |  | $     |  |  | $ | 1,679   |  
|                                                            |  |                 |         |  
|Cash flows from investing activities                        |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Acquisition of property and equipment                       |  |                 |        |   |                       |   | (3     | )                                |  |       |  |  |   | (3      | )
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Net cash used in investing activities                       |  |                 |        |   |                       |   | (3     | )                                |  |       |  |  |   | (3      | )
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Cash flows from financing activities                        |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Payments on term loan                                       |  |                 | (16,500 | ) |                       |   |        |                                  |  |       |   |  |   | (16,500 | )
|Net borrowings (repayments) under revolving credit facility |  |                 | 16,500  |   |                       |   |        |                                  |  |       |   |  |   | 16,500  |  
|Change in bank overdraft                                    |  |                 |         |   |                       |   | (3,761 | )                                |  |       |  |  |   | (3,761  | )
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Net cash provided by financing activities                   |  |                 |        |   |                       |   | (3,761 | )                                |  |       |  |  |   | (3,761  | )
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Net increase in cash and cash equivalents                   |  |                 |        |   |                       |   | (2,085 | )                                |  |       |  |  |   | (2,085  | )
|                                                            |  |                 |         |  
|Cash and cash equivalents, beginning of period              |  |                 |        |   |                       |   | 27,513 |                                  |  |       |  |  |   | 27,513  |  
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  
|Cash and cash equivalents, end of period                    |  | $               |        |   |                       | $ | 25,428 |                                  |  | $     |  |  | $ | 25,428  |  
|                                                            |  |                 |         |   |                       |   |        |                                  |  |       |   |  |   |         |  



19



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Unaudited Combined Statement of Operations and Changes in Division Equity

(Dollars in thousands)



|                                     |  |                                                |        |  
|------------------------------------ |  | ---------------------------------------------- | ------ | -
|                                     |  | Period from January 1, 2004to January 22, 2004 |       
|Revenues                             |  |                                                |        |  
|Casino                               |  | $                                              | 10,121 |  
|Rooms                                |  |                                                | 2,795  |  
|Food and beverage                    |  |                                                | 3,034  |  
|Entertainment, retail and other      |  |                                                | 817    |  
|                                     |  |                                                |        |  
|Gross revenue                        |  |                                                | 16,767 |  
|Promotional allowances               |  |                                                | (1,962 | )
|                                     |  |                                                |        |  
|Net revenues                         |  |                                                | 14,805 |  
|                                     |  |                                                |        |  
|Costs and expenses                   |  |                                                |        |  
|Casino                               |  |                                                | 5,441  |  
|Rooms                                |  |                                                | 1,304  |  
|Food and beverage                    |  |                                                | 2,003  |  
|Entertainment, retail and other      |  |                                                | 568    |  
|Provision for doubtful accounts      |  |                                                | 107    |  
|General and administrative           |  |                                                | 2,524  |  
|Depreciation                         |  |                                                | 806    |  
|Management fee                       |  |                                                | 844    |  
|                                     |  |                                                |        |  
|Total costs and expenses             |  |                                                | 13,597 |  
|                                     |  |                                                |        |  
|Operating income                     |  |                                                | 1,208  |  
|                                     |  |                                                |        |  
|Other income (expense)               |  |                                                |        |  
|Equity in loss of joint venture      |  |                                                | (26    | )
|Interest income                      |  |                                                | 2      |  
|Interest expense                     |  |                                                | (3     | )
|Intercompany interest expense        |  |                                                | (206   | )
|                                     |  |                                                |        |  
|Total other expense                  |  |                                                | (233   | )
|                                     |  |                                                |        |  
|Income before income taxes           |  |                                                | 975    |  
|Income tax provision                 |  |                                                | (307   | )
|                                     |  |                                                |        |  
|Net income                           |  |                                                | 668    |  
|Division equity, beginning of period |  |                                                | 7,855  |  
|                                     |  |                                                |        |  
|Division equity, end of period       |  | $                                              | 8,523  |  
|                                     |  |                                                |        |  



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



20



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Unaudited Combined Statement of Cash Flows

(Thousands of dollars)



|                                                                                 |  |                                                |        |  
|-------------------------------------------------------------------------------- |  | ---------------------------------------------- | ------ | -
|                                                                                 |  | Period from January 1, 2004to January 22, 2004 |       
|Cash flows from operating activities                                             |  |                                                |        |  
|Net income                                                                       |  | $                                              | 668    |  
|Adjustments to reconcile net income to net cash provided by operating activities |  |                                                |        |  
|Depreciation                                                                     |  |                                                | 806    |  
|Provision for doubtful accounts                                                  |  |                                                | 107    |  
|Equity in loss of joint venture                                                  |  |                                                | 26     |  
|Changes in operating assets and liabilities                                      |  |                                                |        |  
|Decrease (increase) in accounts receivable                                       |  |                                                | 923    |  
|Decrease (increase) in due from Poster Financial                                 |  |                                                | 376    |  
|Decrease (increase) in inventories                                               |  |                                                | 95     |  
|Decrease (increase) in prepaid expenses and other                                |  |                                                | 633    |  
|Decrease (increase) in deposits and other assets                                 |  |                                                | 22     |  
|Increase (decrease) in accounts payable, net of change in bank overdraft         |  |                                                | (380   | )
|Increase (decrease) in other accrued liabilities                                 |  |                                                | 1,736  |  
|                                                                                 |  |                                                |        |  
|Net cash provided by operating activities                                        |  |                                                | 5,012  |  
|                                                                                 |  |                                                |        |  
|Cash flows from investing activities                                             |  |                                                |        |  
|Acquisition of property, equipment and improvements                              |  |                                                | (4,436 | )
|Contributions to joint venture                                                   |  |                                                | (235   | )
|                                                                                 |  |                                                |        |  
|Net cash used in investing activities                                            |  |                                                | (4,671 | )
|                                                                                 |  |                                                |        |  
|Cash flows from financing activities                                             |  |                                                |        |  
|Change in bank overdraft                                                         |  |                                                | (4,996 | )
|Change in amounts payable to MGM MIRAGE and affiliates, net                      |  |                                                | (3,456 | )
|                                                                                 |  |                                                |        |  
|Net cash used in financing activities                                            |  |                                                | (8,452 | )
|                                                                                 |  |                                                |        |  
|Net decrease in cash and cash equivalents                                        |  |                                                | (8,111 | )
|Cash and cash equivalents, beginning of period                                   |  |                                                | 23,904 |  
|                                                                                 |  |                                                |        |  
|Cash and cash equivalents, end of period                                         |  | $                                              | 15,793 |  
|                                                                                 |  |                                                |        |  



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



21



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Notes to Unaudited Combined Financial Statements

For the period from
January 1, 2004 to January 22, 2004



1. Organization



The Golden Nugget Group (the Group) is an
operating division of MGM MIRAGE (MGM MIRAGE or Parent), a publicly held Delaware corporation. The Group is comprised of the following entities:



| |  |  | Golden NuggetLas Vegas, a hotel-casino and entertainment resort located in downtown Las Vegas, Nevada and operated by GNLV, CORP., a Nevada corporation wholly owned by MGM
MIRAGE (GNLV).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Golden NuggetLaughlin, a hotel-casino resort located in Laughlin, Nevada and operated by GNL, CORP., a Nevada corporation wholly owned by MGM MIRAGE (GNL).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | GNLV also has a wholly owned subsidiary, Golden Nugget Experience, LLC (GNE), a Nevada limited liability company. As more fully explained in Note 4, GNE is a
holding company that has an investment in The Fremont Street Experience Limited Liability Company, a Nevada limited liability company (the Fremont Street Experience) organized to enhance tourism in downtown Las Vegas, Nevada. The Fremont
Street Experience is owned by a group of unrelated casino operators in downtown Las Vegas, and operates retail malls, parking garages, entertainment venues and a pedestrian mall that encloses a city street (Fremont Street), located adjacent to the
Golden NuggetLas Vegas. GNE holds 17.65% of the voting units and 50.0% of the non-voting units of the Fremont Street Experience, and accounts for its investment utilizing the equity method of accounting.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The management of MGM MIRAGE has made all significant operational and
financial decisions of the Group during the periods presented.



On January 23, 2004, Poster Financial Group, Inc. (Poster Financial), a party unrelated to MGM MIRAGE, completed the acquisition of the Group from MGM MIRAGE (the Acquisition). The purchase price for the
Acquisition was approximately $213.7 million, reflecting a base purchase price of $215.0 million less an adjustment for working capital at the date of the closing of approximately $4.8 million plus acquisition related expenses of approximately
$3.5 million.



2. Significant Accounting Policies and Basis of Presentation



The combined financial statements included of the Group
for the period January 1, 2004 through January 22, 2004 have been prepared by the Group, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The preparation of the combined financial statements requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring items and estimates necessary for a fair presentation of the results for interim periods, have been
made.



The Acquisition described in Note 3 was accounted
for as a purchase, and the accounting basis in the assets and liabilities of the Group were adjusted on January 23, 2004 to reflect the allocation of purchase price resulting from the Acquisition. The accompanying financial statements present
results of operations and cash flows of the Group for the period from January 1, 2004 through January 22, 2004 (date immediately prior to the Acquisition) utilizing the historical pre-acquisition basis.



22



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Notes to Unaudited Combined Financial Statements

For the period from January 1, 2004 to January 22, 2004



Principles of Presentation



All inter-company accounts and transactions between GNLV and GNE are eliminated in consolidation. All inter-company accounts and transactions between
GNLV and GNL are eliminated in combination to arrive at the financial statements of the Group. The Group is not a separate reporting entity and has not previously presented financial statements on a stand-alone basis. Certain estimates, including
allocations from the Parent, have been made to provide financial information for stand-alone reporting purposes. Management of the Group believes that the presentations and disclosures herein are adequate to make the information not misleading. In
the opinion of management, all adjustments necessary to fairly state the financial statements have been reflected.



Concentration of Credit Risk



Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of casino accounts receivable. The Group
extends credit to approved casino customers following background checks and investigations of creditworthiness.



Trade receivables, including casino and hotel receivables, are typically not interest bearing and are initially recorded at cost. Accounts are written off
when management deems the account to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Groups receivables to their carrying
amount, which approximates fair value. The allowance is estimated based on specific review of customer accounts as well as historical collection experience and current economic and business conditions. Management believes that as of January 22,
2004, no significant concentrations of credit risk existed for which an allowance had not already been recorded.



23



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Notes to Unaudited Combined Financial Statements

For the period from January 1, 2004 to January 22, 2004



There was no cost of employee stock-based compensation included in reported net income for the period presented. For
purposes of computing the pro forma compensation, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rates of 3% for
the 2004 period; no expected dividend yields for the period presented; expected lives of 5 years for the period presented; and expected volatility of 42% for the 2004 period. There were no options granted in the 2004 period.



3. Golden Nugget Acquisition



On January 23, 2004, Poster Financial Group, Inc. (Poster
Financial), an unrelated third party, completed the acquisition of the Group from MGM MIRAGE (the Golden Nugget Acquisition). The purchase price for the acquisition was approximately $213.7 million, reflecting a base purchase
price of $215.0 million less an adjustment for estimated working capital at the date of closing of approximately $4.8 million plus acquisition related expenses of approximately $3.5 million.



4. Fremont Street Experience



The Group owns 17.65% of the voting units and 50.0% of the non-voting units
of the Fremont Street Experience. This investment is accounted for under the equity method of accounting. Under the equity method, the carrying value of the investment is adjusted by the Groups share of earnings, losses, capital contributions
and distributions. Activity relating to the Groups investment in the Fremont Street Experience is as follows (in thousands of dollars):



|                                       |  |                                               |       |  
|-------------------------------------- |  | --------------------------------------------- | ----- | -
|                                       |  | Period fromJanuary 1, 2004to January 22, 2004 |      
|Investment Balancebeginning of period |  | $                                             | 5,187 |  
|Contributions                          |  |                                               |      |  
|Equity in loss of joint venture        |  |                                               | (26   | )
|                                       |  |                                               |       |  
|Investment Balanceend of period       |  | $                                             | 5,161 |  
|                                       |  |                                               |       |  



The investment balance
reflects the Groups members equity in Fremont Street Experience, comprised of cumulative contributions, adjusted for the Groups proportional interest in profits or losses, as well as an additional $1.8 million contribution
made by the Group in 1995 on a voluntary basis, and used by the Fremont Street Experience to acquire additional fixed assets used in its operations.



The additional contribution of $1.8 million represents a non-voting interest which has been treated as a redeemable preferred member contribution of
the Fremont Street Experience. The redeemable preferred member contribution does not have any profit distribution and must be repaid before any distributions are made on voting interests.



Summarized financial information of the Fremont Street Experience is as follows (in thousands of dollars):



|                   |  |                                                |      |  
|------------------ |  | ---------------------------------------------- | ---- | -
|                   |  | Period from January 1, 2004to January 22, 2004 |     
|Total revenues     |  | $                                              | 274  |  
|Costs and expenses |  |                                                | (423 | )
|                   |  |                                                |      |  
|Net loss           |  | $                                              | (149 | )
|                   |  |                                                |      |  



24



---

##### Table of Contents

Golden Nugget Group

(A division of MGM MIRAGE)

Notes to Unaudited Combined Financial Statements

For the period from January 1, 2004 to January 22, 2004



5. Segment Information



The Group owns and operates two properties as follows: a casino-hotel resort located in downtown Las Vegas, Nevada; and a casino and hotel located in
Laughlin, Nevada. The properties market in each of their segments primarily to middle-income guests. The major products offered in each segment are as follows: casino entertainment, hotel rooms, and food and beverage.



The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies. There are minimal inter- segment sales. Corporate costs have historically been allocated to each business segment through management fees charged by MGM MIRAGE.



A summary of the operations by business segment is presented below (in
thousands of dollars):



|                                                |  |                                                |       
|----------------------------------------------- |  | ---------------------------------------------- | ------
|                                                |  | Period from January 1, 2004to January 22, 2004
|Net revenues                                    |  |                                                |       
|GNLV, CORP.                                     |  | $                                              | 12,167
|GNL, CORP.                                      |  |                                                | 2,638 
|                                                |  |                                                |       
|Total                                           |  | $                                              | 14,805
|                                                |  |                                                |       
|Income (loss) from operations:                  |  |                                                |       
|GNLV, CORP.                                     |  | $                                              | 1,052 
|GNL, CORP.                                      |  |                                                | 156   
|                                                |  |                                                |       
|Total                                           |  | $                                              | 1,208 
|                                                |  |                                                |       
|Segment depreciation:                           |  |                                                |       
|GNLV, CORP.                                     |  | $                                              | 782   
|GNL, CORP.                                      |  |                                                | 24    
|                                                |  |                                                |       
|Total                                           |  | $                                              | 806   
|                                                |  |                                                |       
|Expenditures for additions to long-lived assets |  |                                                |       
|GNLV, CORP.                                     |  | $                                              | 3,772 
|GNL, CORP.                                      |  |                                                | 664   
|                                                |  |                                                |       
|Total                                           |  | $                                              | 4,436 
|                                                |  |                                                |       





25



---

##### Table of Contents

POSTER FINANCIAL GROUP, INC.

(A WHOLLY OWNED SUBSIDIARY OF LANDRYS RESTAURANTS, INC.)



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



We own and operate the Golden NuggetLas Vegas and the Golden NuggetLaughlin hotel casinos. The following table sets forth information about
each of the Golden Nugget properties as of September 30, 2005:



|                          |  |              |  |             |  |                |  |      
|------------------------- |  | ------------ |  | ----------- |  | -------------- |  | -----
|                          |  | Casino       |  | Hotel Rooms
|Property                  |  | SlotMachines |  | TableGames  |  | Space(sq. ft.) | 
|Golden Nugget - Las Vegas |  | 1,309        |  | 59          |  | 42,000         |  | 1,907
|Golden Nugget - Laughlin  |  | 1,210        |  | 20          |  | 32,000         |  | 300  
|                          |  |              |  |             |  |                |  |      
|                          |  | 2,519        |  | 79          |  | 74,000         |  | 2,207
|                          |  |              |  |             |  |                |  |      



We believe that the
Golden Nugget brand name is one of the most recognized in the gaming industry and we expect to continue to capitalize on the strong name recognition and high level of quality and value associated with it. Our business strategy is to create the best
possible gaming and entertainment experience for our customers by providing a combination of comfortable and attractive surroundings with attentive service from friendly experienced employees. We target out-of-town customers at both of our
properties while also catering to the local customer base. We believe that the Golden NuggetLas Vegas is the leading downtown destination for out-of-town customers. The property offers the same complement of services as our Las Vegas Strip
competitors, but we believe that our customers prefer the boutique experience we offer and the downtown environment. We emphasize the propertys wide selection of high-quality amenities to complement guests gaming experience and provide a
luxury room product and personalized services at an attractive value. At the Golden NuggetLaughlin, we focus on providing a high level of customer service, a quality dining experience at an appealing value, a slot product with highly
competitive pay tables and a superior player rewards program.



We also have an investment in The Fremont Street Experience Limited Liability Company (The Fremont Street Experience), the entity which owns and operates The Fremont Street Experience. The Fremont Street Experience is a unique
entertainment attraction located in the center of downtown Las Vegas on Fremont Street, where the Golden NuggetLas Vegas is located.



Key gaming volume indicators are table game drop and slot machine handle. Table game drop and slot machine handle are casino
industry specific terms that are used to identify the amount wagered by patrons at a casino table game or slot machine, respectively. The revenues of the Golden Nugget properties can also be affected by the percentage of gaming volume retained by
them, indicated by win or hold percentages, which we cannot fully control. Hold is calculated by dividing the amount won by the casino by the amount wagered by patrons. Hold percentages vary based on the mix of games on the
floor. In addition, while hold percentage is reasonably predictable over periods greater than twelve months, it can fluctuate significantly over shorter periods of time, such as a fiscal quarter, which can affect comparability between periods.



Revenues of the Golden Nugget Group can also be affected by
economic and other factors. Domestic leisure travel is dependent on the national economy and the level of consumers disposable income.



Recent Developments



Sale of Poster Financial Group



On September 27, 2005, Landrys completed the acquisition of the capital stock of Poster Financial Group, Inc. (PFG), including $27.5 million in cash, for $163.0 million plus the assumption of $155.0 million of senior
secured notes due 2011 and $27.0 million in bank debt. Based on this event, we have reported operating results and financial position for all periods presented from January 1, 2004 through September 26, 2005 as those of the Predecessor
Company and for all periods from and after September 27, 2005 as those of the Successor Company. Each period has a different basis of



26



---

##### Table of Contents

accounting and as a result they are not comparable. For purposes of presenting a comparison of our 2005 results to prior
periods, we have presented our 2005 results as the mathematical addition of the Predecessor Company and Successor Company periods. We believe that this presentation provides the most meaningful information about our results of operations. This
approach is not consistent with GAAP, may yield results that are not strictly comparable on a period-to-period basis, and may not reflect the actual results we would have achieved.



Results of Operations



At December 31, 2004, the Golden Nugget  Laughlin was treated as discontinued operations and its assets were classified as held for sale as a
result of an agreement entered into between the Company and Barrick Gaming Corporation. The transaction did not close by May 31, 2005 and as such was automatically cancelled during the quarter ended June 30, 2005. Accordingly, the assets
of the Golden Nugget  Laughlin were reclassified from assets held for sale, and the Company no longer reports its results as discontinued operations.



Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004



Net revenues for the three months ended September 30, 2005 were $58.8 million, a decrease of $2.1 million, or 3.5%,
over the three months ended September 30, 2004. The decrease in net revenues was primarily attributable to a decrease in table games drop, offset by a decrease in promotional allowances.



The following table presents detail of our net revenues:



|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|------------------------------- |  | ------------------------------- | ------ | - | ------------------------------- | - | ------ | ------------------------------- |  | ------ | ---- |  | - | ------ | - |  | -------- | ------ | - | ---- | ----- | -- | ---- | - | ------ | -------- |  | - | ------ | - |  | ----- | --
|                                |  | Golden Nugget - Las Vegas       |        |   | Golden Nugget - Laughlin        |   |        | Total                           | 
|                                |  | Three Months EndedSeptember 30, |        |   | Three Months EndedSeptember 30, |   |        | Three Months EndedSeptember 30, | 
|                                |  | 2005                            |        |   | 2004                            |   |        | % Change                        |  |        | 2005 |  |   | 2004   |   |  | % Change |        |   | 2005 |       |    | 2004 |   |        | % Change | 
|Casino revenue, net:            |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Table Games                     |  | $                               | 8,270  |   |                                 | $ | 10,373 |                                 |  | (20.3  | )%   |  | $ | 896    |   |  | $        | 998    |   |      | (10.2 | )% |      | $ | 9,166  |          |  | $ | 11,371 |   |  | (19.4 | )%
|Slots                           |  |                                 | 19,158 |   |                                 |   | 21,608 |                                 |  | (11.3  | )%   |  |   | 8,635  |   |  |          | 7,961  |   |      | 8.5   | %  |      |   | 27,793 |          |  |   | 29,569 |   |  | (6.0  | )%
|Other                           |  |                                 | 1,259  |   |                                 |   | 110    |                                 |  | 1044.5 | %    |  |   | 225    |   |  |          | 230    |   |      | (2.2  | )% |      |   | 1,484  |          |  |   | 340    |   |  | 336.5 | % 
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Casino revenue, net             |  |                                 | 28,687 |   |                                 |   | 32,091 |                                 |  | (10.6  | )%   |  |   | 9,756  |   |  |          | 9,189  |   |      | 6.2   | %  |      |   | 38,443 |          |  |   | 41,280 |   |  | (6.9  | )%
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Non-casino revenue:             |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Rooms                           |  |                                 | 11,959 |   |                                 |   | 10,871 |                                 |  | 10.0   | %    |  |   | 949    |   |  |          | 990    |   |      | (4.2  | )% |      |   | 12,908 |          |  |   | 11,861 |   |  | 8.8   | % 
|Food and beverage               |  |                                 | 10,630 |   |                                 |   | 11,501 |                                 |  | (7.6   | )%   |  |   | 2,776  |   |  |          | 2,704  |   |      | 2.7   | %  |      |   | 13,406 |          |  |   | 14,205 |   |  | (5.6  | )%
|Entertainment, retail and other |  |                                 | 2,551  |   |                                 |   | 3,199  |                                 |  | (20.3  | )%   |  |   | 18     |   |  |          | 231    |   |      | (92.2 | )% |      |   | 2,569  |          |  |   | 3,430  |   |  | (25.1 | )%
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Non-casino revenue              |  |                                 | 25,140 |   |                                 |   | 25,571 |                                 |  | (1.7   | )%   |  |   | 3,743  |   |  |          | 3,925  |   |      | (4.6  | )% |      |   | 28,883 |          |  |   | 29,496 |   |  | (2.1  | )%
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Total revenue                   |  |                                 | 53,827 |   |                                 |   | 57,662 |                                 |  | (6.7   | )%   |  |   | 13,499 |   |  |          | 13,114 |   |      | 2.9   | %  |      |   | 67,326 |          |  |   | 70,776 |   |  | (4.9  | )%
|Less: promotional allowances    |  |                                 | (6,703 | ) |                                 |   | (8,064 | )                               |  | (16.9  | )%   |  |   | (1,854 | ) |  |          | (1,818 | ) |      | 2.0   | %  |      |   | (8,557 | )        |  |   | (9,882 | ) |  | (13.4 | )%
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   
|Net revenues                    |  | $                               | 47,124 |   |                                 | $ | 49,598 |                                 |  | (5.0   | )%   |  | $ | 11,645 |   |  | $        | 11,296 |   |      | 3.1   | %  |      | $ | 58,769 |          |  | $ | 60,894 |   |  | (3.5  | )%
|                                |  |                                 |        |   |                                 |   |        |                                 |  |        |      |  |   |        |   |  |          |        |   |      |       |    |      |   |        |          |  |   |        |   |  |       |   



Revenues



Casino revenues during the three months ended September 30, 2005
totaled $38.4 million, a decrease of $2.8 million, or 6.9%, over the three months ended September 30, 2004. Slot machine revenues accounted for $27.8 million, or 72.3% of casino revenues, and table games revenues accounted for $9.2 million, or
23.8% of the casino revenues for the three months ended September 30, 2005. The decline in table games revenue at the Las Vegas property is the result of changes in table games limits and credit policy which reduced drop for the period ended
September 30, 2005. The increase in other casino revenue represents increased sports book win.



Room revenues totaled $12.9 million, or 22.0% of net revenues, for the three months ended September 30, 2005 compared to $11.9 million, or 19.5% of
net revenues, for the three months ended September 30, 2004. The increase is due to higher average daily rates at the Las Vegas property during the period compared to the same period in the prior year.



27



---

##### Table of Contents

Food and beverage revenues decreased to $13.4 million or 22.8% of net revenues for the three months ended
September 30, 2005 from $14.2 million or 23.3% of net revenues for the three months ended September 30, 2004. The decrease is associated with the decline in casino revenue.



Promotional Allowances



Promotional allowances provided to gaming patrons for the three months ended September 30, 2005 and 2004, totaled $8.6 million and $9.9 million,
respectively. These allowances are classified as a reduction of gross revenues in the consolidated financial statements. The decrease is consistent with the decrease in gaming volumes and qualifying customer base quarter over quarter.



Operating Expenses



Casino operating expenses for the three months ended September 30, 2005 totaled $23.4 million, or 61.0% of casino
revenues, compared to $28.3 million, or 68.6% of casino revenues, for the three months ended September 30, 2004. The decrease is due primarily to decreases in gaming taxes, payroll expense, and outside customer entertainment expense.



General and administrative expenses for the three months ended
September 30, 2005 were $14.1 million, or 23.9% of net revenues, compared to $15.5 million, or 25.5% of net revenues, for the three months ended September 30, 2004. The decrease in general and administrative expenses is attributed to
reductions in payroll.



Other Income and Expense



Other income and expense consists principally of interest expense on the
Senior Notes and the Credit Facility and the equity in the loss of our joint venture investment in The Fremont Street Experience. The Golden NuggetLas Vegas accounts for its investment in The Fremont Street Experience as a joint venture, using
the equity method of accounting. The joint venture is primarily designed to increase visitation to downtown Las Vegas and it is expected to continue to incur losses. GNLV has a 17.65% interest in the loss of The Fremont Street Experience, which
ownership and participation rate was consistent throughout 2004 and 2005.



Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004



Net revenues for the nine months ended September 30, 2005 amounted to $189.5 million, a decrease of $5.8 million, or 2.9%, over the nine months ended
September 30, 2004. The decrease in net revenues was attributable to a decrease in table games drop coupled with a lower hold percentage, offset by increases in hotel and food and beverage revenues.



The following table presents detail of our net revenues:



|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|------------------------------- |  | ------------------------------- | ------- | - | ------------------------------- | - | ------- | ------------------------------- |  | ----- | ---- |  | - | ------ | - |  | -------- | ------ | - | ---- | ----- | -- | ---- | - | ------- | -------- |  | - | ------- | - |  | ----- | --
|                                |  | Golden Nugget - Las Vegas       |         |   | Golden Nugget - Laughlin        |   |         | Total                           | 
|                                |  | Nine Months Ended September 30, |         |   | Nine Months Ended September 30, |   |         | Nine Months Ended September 30, | 
|                                |  | 2005                            |         |   | 2004                            |   |         | % Change                        |  |       | 2005 |  |   | 2004   |   |  | % Change |        |   | 2005 |       |    | 2004 |   |         | % Change | 
|Casino revenue, net:            |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Table Games                     |  | $                               | 26,679  |   |                                 | $ | 38,408  |                                 |  | (30.5 | )%   |  | $ | 2,428  |   |  | $        | 2,425  |   |      | 0.1   | %  |      | $ | 29,107  |          |  | $ | 40,833  |   |  | (28.7 | )%
|Slots                           |  |                                 | 61,792  |   |                                 |   | 63,981  |                                 |  | (3.4  | )%   |  |   | 27,458 |   |  |          | 25,937 |   |      | 5.9   | %  |      |   | 89,250  |          |  |   | 89,918  |   |  | (0.7  | )%
|Other                           |  |                                 | 4,099   |   |                                 |   | 1,926   |                                 |  | 112.8 | %    |  |   | 874    |   |  |          | 771    |   |      | 13.4  | %  |      |   | 4,973   |          |  |   | 2,697   |   |  | 84.4  | % 
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Casino revenue, net             |  |                                 | 92,570  |   |                                 |   | 104,315 |                                 |  | (11.3 | )%   |  |   | 30,760 |   |  |          | 29,133 |   |      | 5.6   | %  |      |   | 123,330 |          |  |   | 133,448 |   |  | (7.6  | )%
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Non-casino revenue:             |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Rooms                           |  |                                 | 38,821  |   |                                 |   | 34,404  |                                 |  | 12.8  | %    |  |   | 2,919  |   |  |          | 2,990  |   |      | (2.4  | )% |      |   | 41,740  |          |  |   | 37,394  |   |  | 11.6  | % 
|Food and beverage               |  |                                 | 34,018  |   |                                 |   | 33,677  |                                 |  | 1.0   | %    |  |   | 8,338  |   |  |          | 8,113  |   |      | 2.8   | %  |      |   | 42,356  |          |  |   | 41,790  |   |  | 1.4   | % 
|Entertainment, retail and other |  |                                 | 7,891   |   |                                 |   | 9,272   |                                 |  | (14.9 | )%   |  |   | 394    |   |  |          | 1,032  |   |      | (61.8 | )% |      |   | 8,285   |          |  |   | 10,304  |   |  | (19.6 | )%
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Non-casino revenue              |  |                                 | 80,730  |   |                                 |   | 77,353  |                                 |  | 4.4   | %    |  |   | 11,651 |   |  |          | 12,135 |   |      | (4.0  | )% |      |   | 92,381  |          |  |   | 89,488  |   |  | 3.2   | % 
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Total revenue                   |  |                                 | 173,300 |   |                                 |   | 181,668 |                                 |  | (4.6  | )%   |  |   | 42,411 |   |  |          | 41,268 |   |      | 2.8   | %  |      |   | 215,711 |          |  |   | 222,936 |   |  | (3.2  | )%
|Less: promotional allowances    |  |                                 | (20,595 | ) |                                 |   | (22,004 | )                               |  | (6.4  | )%   |  |   | (5,628 | ) |  |          | (5,690 | ) |      | (1.1  | )% |      |   | (26,223 | )        |  |   | (27,694 | ) |  | (5.3  | )%
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   
|Net revenues                    |  | $                               | 152,705 |   |                                 | $ | 159,664 |                                 |  | (4.4  | )%   |  | $ | 36,783 |   |  | $        | 35,578 |   |      | 3.4   | %  |      | $ | 189,488 |          |  | $ | 195,242 |   |  | (2.9  | )%
|                                |  |                                 |         |   |                                 |   |         |                                 |  |       |      |  |   |        |   |  |          |        |   |      |       |    |      |   |         |          |  |   |         |   |  |       |   



28



---

##### Table of Contents

Revenues



Casino revenues during the nine months ended September 30, 2005 totaled $123.3 million, a decrease of $10.1 million over the nine months ended
September 30, 2004. Slot machine revenues accounted for $89.3 million, or 72.4% of casino revenues, and table games revenues accounted for $29.1 million, or 23.6% of the casino revenues for the nine months ended September 30, 2005. The
decline in table games revenue at the Las Vegas property is a result of changes in table games limits and credit policy which reduced drop, along with a lower hold percentage for the period ended September 30, 2005. The increase in other casino
revenue represents increased sports book win.



Room revenues
totaled $41.7 million, or 22.0% of net revenues, for the nine months ended September 30, 2005 compared to $37.4 million, or 19.2% of net revenues, for the nine months ended September 30, 2004. The increase is due to higher average daily
rates at the Las Vegas property during the period compared to the same period in the prior year.



Food and beverage revenues for the nine months ended September 30, 2005 totaled $42.4 million, or 22.3% of net revenues, compared to $41.8 million,
or 21.4% of net revenues, for the nine months ended September 30, 2004. The increase is attributed to an increase in the average price per meal.



Promotional Allowances



Promotional allowances provided to gaming patrons for the nine months ended September 30, 2005 and 2004, totaled $26.2 million and $27.7 million,
respectively. These allowances are classified as a reduction of gross revenues in the consolidated financial statements. The decrease is consistent with the decrease in gaming volumes and qualifying customer base year over year.



Operating Expenses



Casino operating expenses for the nine months ended September 30, 2005 totaled $73.6 million, or 59.7% of casino
revenues, compared to $80.5 million, or 60.3% of casino revenues, for the nine months ended September 30, 2004. The decrease is due primarily to decreases in gaming taxes, payroll expense, and outside customer entertainment expense.



General and administrative expenses for the nine months ended
September 30, 2005 were $41.5 million, or 21.9% of net revenues, compared to $41.9 million, or 21.4% of net revenues, for the nine months ended September 30, 2004. The decrease in general and administrative expenses is attributed to
reductions in payroll and outside labor costs.



Other Income and Expense



Other income and expense consists principally of interest
expense on the Senior Notes and the Credit Facility and the equity in the loss of our joint venture investment in The Fremont Street Experience. The Golden NuggetLas Vegas accounts for its investment in The Fremont Street Experience as a joint
venture, using the equity method of accounting. The joint venture is primarily designed to increase visitation to downtown Las Vegas and it is expected to continue to incur losses. GNLV has a 17.65% interest in the loss of The Fremont Street
Experience, which ownership and participation rate was consistent throughout 2004 and 2005.



Liquidity and Capital Resources



On September 27, 2005, upon completion of the sale of PFG, the $155.0 million of 83/4% senior
secured notes due 2011 remained outstanding. As a result of the change of control, PFG was required to commence an offer to purchase all outstanding senior notes for 101% of the aggregate principal amount plus any accrued and unpaid interest. The
offer commenced in accordance with the indenture and will expire on November 28, 2005. Any notes tendered under the offer will be funded from the PFG revolving credit facility or Landrys revolving credit facility.



In connection with the acquisition, the Company entered into an amended loan
and security agreement whereby the remaining balance of the term loan plus accrued interest was repaid; the revolver was increased to $43.0 million; certain financial covenants were adjusted; and the financing spread was reduced to Libor plus 2% or
base rate plus 1% at September 30, 2005. The financing spread and commitment fee increases or decreases based on a financial leverage ratio as defined in the credit agreement



29



---

##### Table of Contents

At September 30, 2005, the Company had cash and cash equivalents of $25.4 million, approximately
$27.0 million outstanding under its revolving credit facility, and $2.6 million drawn under letters of credit with remaining availability under the credit facility of approximately $13.4 million.



For the nine months ended September 30, 2005, net cash provided by
operating activities totaled approximately $15.9 million as compared to $17.5 million in the prior year. Cash used for investing activities during the nine months ended September 30, 2005 totaled $5.6 million, as compared to $58.8 million in
2004 primarily associated with the acquisition from MGM Mirage. Cash flows used in financing activities were approximately $9.1 million in the nine months ended September 30, 2005, primarily for payments on debt and other obligations. Cash
flows from financing activities in the comparable 2004 period were $54.2 million, reflecting borrowings and contributions to fund the acquisition from MGM Mirage.



Critical Accounting Policies



Revenue Recognition. Casino revenues represent the net win from gaming activities, which is the difference between gaming wins and losses. Hotel and other
revenues are recognized at the time the related service is performed.



Property and Equipment. At September 30, 2005, the Company had approximately $319.6 million of net property and equipment recorded on its balance sheet. The Company depreciates its assets on a straight-line basis over their estimated useful
lives. The estimate of the useful lives is based on the nature of the asset as well as our current operating strategy. Future events, such as property expansions, new competition and new regulations, could result in a change in the manner in which
we use certain assets, which could require a change in the estimated useful lives of such assets. In assessing the recoverability of the carrying value of property and equipment, we must make assumptions regarding estimated future cash flows and
other factors. If these estimates or the related assumptions change in the future, we may be required to record impairment charges for these assets.



Slot Club Liability. The Golden Nugget casinos offer a program whereby participants can accumulate points for casino wagering that can currently be
redeemed for cash, lodging, food and beverages and merchandise. A liability is recorded for the estimate of unredeemed points based upon redemption history at the Golden Nugget casinos. Changes in the program, increases in membership and changes in
the redemption patterns of the participants can impact this liability.



Self-Insurance. The Company maintains accruals for its self-insured health program, which are classified in other accrued liabilities in the combined balance sheet. Management determines the estimates of these accruals by periodically
evaluating the historical expenses and projected trends related to these accruals. Actual results may differ from those estimates.



Litigation, Claims and Assessments. The Company also utilizes estimates for litigation, claims and assessments. These estimates are based upon
managements knowledge and experience about past and current events and also upon reasonable future events. Actual results may differ from those estimates.



Recently Issued Accounting Pronouncements



In December 2004, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 123R (revised 2004), Share-Based
Payment, which revised SFAS No. 123, Accounting for Stock-Based Compensation. The revised statement addresses the accounting for share-based payment transactions with employees and other third parties and requires that
compensation costs relating to such transactions be recognized in the consolidated statement of operations. The revised statement is effective as of the first annual period beginning after June 15, 2005. The adoption of this pronouncement is
not expected to have any effect on the Companys consolidated financial position, results of operations and cash flows.



In November 2004, the FASB issued SFAS No. 151, Inventory Costs, which amends part of ARB 43, Inventory Pricing, concerning
the treatment of certain types of inventory costs. The statement clarifies that abnormal



30



---

##### Table of Contents

costs are required to be treated as current-period charges under all circumstances. In addition, fixed production
overhead should be allocated based on the normal capacity of the production facilities, with unallocated overhead charged to expense when incurred. The Company maintains inventories for its restaurants, gift shops, bars and other operations. SFAS
151 is required to be adopted for fiscal years beginning after June 15, 2005, and is not expected to have a material impact on the Companys financial position, results of operations or cash flows.



In December 2004, the FASB issued SFAS No. 153, Exchanges of
Nonmonetary Assets (SFAS 153), which eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets and replaces it with a general exception from fair value measurement for exchanges of
nonmonetary assets that do not have commercial substance. SFAS 153 is required to be adopted in fiscal periods beginning after June 15, 2005. Management does not believe its adoption will have a material impact on the Companys financial
position, results of operations or cash flows.



In June 2005,
the FASB issued SFAS No. 154, Accounting Changes and Error Correctionsa replacement of APB No. 20 and FAS No. 3 (SFAS 154). SFAS 154 provides guidance on the accounting for and reporting of accounting
changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted
accounting principle. SFAS 154 also provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The correction
of an error in previously issued financial statements is not an accounting change. However, the reporting of an error correction involves adjustments to previously issued financial statements similar to those generally applicable to reporting an
accounting change retrospectively. Therefore, the reporting of a correction of an error by restating previously issued financial statements is also addressed by SFAS 154. SFAS 154 is required to be adopted in fiscal years beginning after
December 15, 2005. The adoption of SFAS 154 is not expected to have a material impact on the Companys financial position, results of operations and cash flows.



|ITEM 4. | DISCLOSURE CONTROLS AND PROCEDURES
|------- | ----------------------------------



Evaluation of Disclosure Controls and Procedures



Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.



Changes in Internal Controls over Financial Reporting



There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





31



---

##### Table of Contents

PART II - OTHER INFORMATION



Item 1. Legal Proceedings - None.



Item 5. Other Information - None.



Item 6. Exhibits



|         |  |                                                                                                                                                                                 
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No. 10.1 |  | - Amendment Number Six to Loan and Security Agreement dated as of September 27, 2005 by and among Poster Financial Group, GNLV, Corp., GNL,
Corp. and Wells Fargo Foothill, Inc.
|         | 
|No. 10.2 |  | - Amendment Number Seven to Loan and Security Agreement dated as of November 8, 2005 by and among Poster Financial Group, GNLV, Corp., GNL,
Corp. and Wells Fargo Foothill, Inc.
|         | 
|No. 31.1 |  | - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                      
|         | 
|No. 31.2 |  | - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                      
|         | 
|No. 32   |  | - Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                      





32



---

##### Table of Contents

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.



Poster Financial Group, Inc., Registrant/S/ TILMAN J. FERTITTATilman J. FertittaChairman of the Board of Directors, President and Chief
Executive Officer (Principal Executive Officer)/S/ RICK H. LIEMRick H. LiemSenior Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)




Dated: November 14, 2005



33