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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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



or



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



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Commission File Number 000-50635



For the
quarterly period ended March 31, 2004



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COLONY RESORTS LVH ACQUISITIONS, LLC

(Exact Name of Registrant as Specified in its Charter)



|                                                           |  |                                        
|---------------------------------------------------------- |  | ---------------------------------------
|NEVADA                                                     |  | 41-2120123                             
|(State or Other Jurisdiction of Incorporation)             |  | (I.R.S. Employer Identification Number)
|                                                           | 
|1999 AVENUE OF THE STARS,SUITE 1200LOS ANGELES, CALIFORNIA |  | 90067                                  
|(Address of Principal Executive Offices)                   |  | (Zip Code)                             



310-282-8820

(Registrants Telephone Number, Including Area Code)



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Indicate by
check mark whether the Registrant (1) has filed all reports required 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 ̈No  x



Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes ̈No  x



As of June 21, 2004, there were 1.5 Class A Membership Units held by Colony Resorts LVH Holdings, LLC.



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##### Table of Contents

Colony Resorts LVH Acquisitions, LLC

Table of Contents



|                                     |  |                                                                                                                                                                   |  |     
|------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                     |  |                                                                                                                                                                   |  | Page
|PART I.                              |  | FINANCIAL INFORMATION                                                                                                                                             |  |     
|                                     |  |                                                                                                                                                                  
|ITEM 1.                              |  | FINANCIAL STATEMENTS                                                                                                                                              |  | 1   
|                                     | 
|LVH CORPORATION                      |  |                                                                                                                                                                  
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS:                                                                                                                 |  |     
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED BALANCE SHEETS AS OF MARCH 31, 2004 AND DECEMBER 31, 2003                                                                                               |  | 1   
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003                                           |  | 2   
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003                                                                   |  | 3   
|                                     |  |                                                                                                                                                                  
|                                     |  | NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003                                                                        |  | 4   
|                                     | 
|COLONY RESORTS LVH ACQUISITIONS, LLC |  |                                                                                                                                                                  
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS:                                                                                                                 |  |     
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED BALANCE SHEETS AS OF MARCH 31, 2004 AND DECEMBER 31, 2003                                                                                               |  | 6   
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND FOR THE PERIOD FROM DECEMBER 18, 2003 (DATE OF INCEPTION) THROUGH MARCH 31, 2004 |  | 7   
|                                     |  |                                                                                                                                                                  
|                                     |  | UNAUDITED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND FOR THE PERIOD FROM DECEMBER 18, 2003 (DATE OF INCEPTION) THROUGH MARCH 31, 2004 |  | 8   
|                                     |  |                                                                                                                                                                  
|                                     |  | NOTES TO FINANCIAL STATEMENTS                                                                                                                                     |  | 9   
|                                     |  |                                                                                                                                                                  
|ITEM 2.                              |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                                             |  | 14  
|                                     |  |                                                                                                                                                                  
|ITEM 3.                              |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                                                                                         |  | 18  
|                                     |  |                                                                                                                                                                  
|ITEM 4.                              |  | CONTROLS AND PROCEDURES                                                                                                                                           |  | 19  
|                                     |  |                                                                                                                                                                  
|PART II.                             |  | OTHER INFORMATION                                                                                                                                                 |  |     
|                                     |  |                                                                                                                                                                  
|ITEM 2.                              |  | CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES                                                                                  |  | 19  
|                                     |  |                                                                                                                                                                  
|ITEM 5.                              |  | OTHER INFORMATION                                                                                                                                                 |  | 20  
|                                     |  |                                                                                                                                                                  
|ITEM 6.                              |  | EXHIBITS                                                                                                                                                          |  | 27  
|                                     | 
|SIGNATURES                           |  | 28                                                                                                                                                               



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LVH CORPORATION



CONDENSED BALANCE SHEETS (In Thousands)

AS OF MARCH 31, 2004 AND DECEMBER 31, 2003 (unaudited)



|                                                                                              |  |            |          |   |              |   |          |  
|--------------------------------------------------------------------------------------------- |  | ---------- | -------- | - | ------------ | - | -------- | -
|                                                                                              |  | March 31 , |          |   | December 31, |  
|                                                                                              |  | 2004       |          |   | 2003         |  
|Assets                                                                                        |  |            |          |   |              |   |          |  
|CURRENT ASSETS:                                                                               |  |            |          |   |              |   |          |  
|Cash and equivalents                                                                          |  | $          | 8,634    |   |              | $ | 12,734   |  
|Accounts receivable, net                                                                      |  |            | 11,637   |   |              |   | 21,764   |  
|Inventories                                                                                   |  |            | 2,283    |   |              |   | 2,472    |  
|Prepaid expenses and other current assets                                                     |  |            | 5,410    |   |              |   | 3,894    |  
|                                                                                              |  |            |          |   |              |   |          |  
|Total current assets                                                                          |  |            | 27,964   |   |              |   | 40,864   |  
|PROPERTY AND EQUIPMENT, net                                                                   |  |            | 162,281  |   |              |   | 166,159  |  
|OTHER ASSETS                                                                                  |  |            | 217      |   |              |   | 188      |  
|                                                                                              |  |            |          |   |              |   |          |  
|Total assets                                                                                  |  | $          | 190,462  |   |              | $ | 207,211  |  
|                                                                                              |  |            |          |   |              |   |          |  
|Liabilities and stockholders equity                                                          |  |            |          |   |              |   |          |  
|CURRENT LIABILITIES:                                                                          |  |            |          |   |              |   |          |  
|Accounts payable and bank overdrafts                                                          |  | $          | 2,288    |   |              | $ | 4,935    |  
|Due to affiliated companies                                                                   |  |            | 31,538   |   |              |   | 39,993   |  
|Accrued expenses                                                                              |  |            | 31,085   |   |              |   | 43,499   |  
|                                                                                              |  |            |          |   |              |   |          |  
|Total current liabilities                                                                     |  |            | 64,911   |   |              |   | 88,427   |  
|OTHER LIABILITIES                                                                             |  |            | 76       |   |              |   | 72       |  
|                                                                                              |  |            |          |   |              |   |          |  
|Total liabilities                                                                             |  |            | 64,987   |   |              |   | 88,499   |  
|                                                                                              |  |            |          |   |              |   |          |  
|COMMITMENTS AND CONTINGENCIES                                                                 |  |            |          |   |              |   |          |  
|STOCKHOLDERS EQUITY :                                                                        |  |            |          |   |              |   |          |  
|Common stock ($1.00 par value, 25,000 shares authorized, 1,000 shares issued and outstanding) |  |            | 1        |   |              |   | 1        |  
|Additional paid-in capital                                                                    |  |            | 332,747  |   |              |   | 332,747  |  
|Accumulated deficit                                                                           |  |            | (207,273 | ) |              |   | (214,036 | )
|                                                                                              |  |            |          |   |              |   |          |  
|Total stockholders equity                                                                    |  |            | 125,475  |   |              |   | 118,712  |  
|                                                                                              |  |            |          |   |              |   |          |  
|Total liabilities and stockholders equity                                                    |  | $          | 190,462  |   |              | $ | 207,211  |  
|                                                                                              |  |            |          |   |              |   |          |  



See notes to the
unaudited condensed financial statements.



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LVH CORPORATION



CONDENSED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (In Thousands)

THREE MONTHS ENDED MARCH 31, 2004
AND 2003 (unaudited)



|                                         |  |                              |          |   |      |   |          |  
|---------------------------------------- |  | ---------------------------- | -------- | - | ---- | - | -------- | -
|                                         |  | Three months ended March 31, |         
|                                         |  | 2004                         |          |   | 2003 |  
|Revenues                                 |  |                              |          |   |      |   |          |  
|Casino                                   |  | $                            | 22,479   |   |      | $ | 17,999   |  
|Rooms                                    |  |                              | 24,809   |   |      |   | 21,414   |  
|Food and beverage                        |  |                              | 14,196   |   |      |   | 12,506   |  
|Other revenue                            |  |                              | 5,437    |   |      |   | 4,824    |  
|                                         |  |                              |          |   |      |   |          |  
|                                         |  |                              | 66,921   |   |      |   | 56,743   |  
|                                         |  |                              |          |   |      |   |          |  
|Expenses                                 |  |                              |          |   |      |   |          |  
|Casino                                   |  |                              | 14,155   |   |      |   | 12,873   |  
|Rooms                                    |  |                              | 6,922    |   |      |   | 6,530    |  
|Food and beverage                        |  |                              | 13,660   |   |      |   | 12,510   |  
|Other expense                            |  |                              | 2,438    |   |      |   | 2,718    |  
|General and administrative               |  |                              | 16,259   |   |      |   | 15,457   |  
|Depreciation and amortization            |  |                              | 4,688    |   |      |   | 4,461    |  
|Management fee to parent                 |  |                              | 2,036    |   |      |   | 1,739    |  
|                                         |  |                              |          |   |      |   |          |  
|                                         |  |                              | 60,158   |   |      |   | 56,288   |  
|                                         |  |                              |          |   |      |   |          |  
|Operating income                         |  |                              | 6,763    |   |      |   | 455      |  
|                                         |  |                              |          |   |      |   |          |  
|Net income                               |  |                              | 6,763    |   |      |   | 455      |  
|Accumulated deficit, beginning of period |  |                              | (214,036 | ) |      |   | (198,511 | )
|                                         |  |                              |          |   |      |   |          |  
|Accumulated deficit, end of period       |  | $                            | (207,273 | ) |      | $ | (198,056 | )
|                                         |  |                              |          |   |      |   |          |  





See notes to the unaudited condensed financial statements.



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LVH CORPORATION



CONDENSED STATEMENTS OF CASH FLOWS (In Thousands)

THREE MONTHS ENDED MARCH 31, 2004 AND 2003 (unaudited)



|                                                                                  |  |      |         |   |      |   |        |  
|--------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------ | -
|                                                                                  |  | 2004 |         |   | 2003 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |      |         |   |      |   |        |  
|Net income                                                                        |  | $    | 6,763   |   |      | $ | 455    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |         |   |      |   |        |  
|Depreciation and amortization                                                     |  |      | 4,688   |   |      |   | 4,461  |  
|Provision for bad debts                                                           |  |      | (93     | ) |      |   | (296   | )
|Other                                                                             |  |      | (25     | ) |      |   | 7      |  
|Change in working capital components:                                             |  |      |         |   |      |   |        |  
|Accounts receivable                                                               |  |      | 10,220  |   |      |   | 581    |  
|Inventories, prepaid expenses and other current assets                            |  |      | (1,327  | ) |      |   | (206   | )
|Accounts payable, bank overdrafts and accrued expenses                            |  |      | (15,061 | ) |      |   | (1,914 | )
|                                                                                  |  |      |         |   |      |   |        |  
|Net cash provided by operating activities                                         |  |      | 5,165   |   |      |   | 3,088  |  
|                                                                                  |  |      |         |   |      |   |        |  
|CASH FLOWS USED IN INVESTING ACTIVITIES:                                          |  |      |         |   |      |   |        |  
|Additions to property and equipment                                               |  |      | (810    | ) |      |   | (3,051 | )
|                                                                                  |  |      |         |   |      |   |        |  
|CASH FLOWS USED IN FINANCING                                                      |  |      |         |   |      |   |        |  
|ACTIVITIESChange in due to affiliated companies                                  |  |      | (8,455  | ) |      |   | (3,651 | )
|                                                                                  |  |      |         |   |      |   |        |  
|Decrease in cash and equivalents                                                  |  |      | (4,100  | ) |      |   | (3,614 | )
|Cash and equivalents at beginning of period                                       |  |      | 12,734  |   |      |   | 15,250 |  
|                                                                                  |  |      |         |   |      |   |        |  
|Cash and equivalents at end of period                                             |  | $    | 8,634   |   |      | $ | 11,636 |  
|                                                                                  |  |      |         |   |      |   |        |  





See notes to the unaudited condensed financial statements.



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LVH CORPORATION



NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2004 AND 2003



1. BASIS OF PRESENTATION AND OPERATIONS



The accompanying financial statements present the accounts of LVH
Corporation ( LVH). LVH is a wholly-owned indirect subsidiary of Caesars Entertainment, Inc., formerly Park Place Entertainment Corporation (Caesars or the Parent). The accompanying financial statements have been
prepared from the separate records maintained by LVH and may not necessarily be indicative of the conditions that would have existed or the results of operations if LVH had been operated as an unaffiliated company.



LVH owns and operates the Las Vegas Hilton Hotel and Casino (the
Property), a hotel and casino that is located on approximately 59 acres adjacent to the Las Vegas Convention Center. With this prominent convention location, the Property focuses its marketing toward convention groups. The Property
features 2,968 guest rooms and suites, approximately 74,000 square feet of casino space, 12 restaurants and 225,000 square feet of meeting and convention area. The Property also includes a 1,600-seat showroom featuring top entertainers, a night
club, and a spa and health club.



The condensed financial
statements included herein are unaudited and have been prepared by LVH pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although LVH believes that the disclosures are adequate to make
the information presented not misleading. In the opinion of management of LVH, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the
three month period ended March 31, 2004 are not necessarily indicative of results to be expected for the full fiscal year. These condensed financial statements should be read in conjunction with the financial statements and notes thereto for the
year ended December 31, 2003, as provided in the Post-Effective Amendment No. 1 to Form 10 Registration Statement of Colony Resorts LVH Acquisitions, LLC (the Company), filed June 17, 2004 (File No. 000-50635) (the Form 10).



In January 2003, the FASB issued Interpretation No. 46
(FIN 46), Consolidation of Variable Interest Entities. The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. FIN 46 changes certain consolidation requirements by requiring a
variable interest entity to be consolidated by a company that is subject to a majority of the risk loss from the variable interest entitys activities or receive a majority of the entitys residual returns or both. The adoption of FIN 46
did not have a material impact on the financial statements.



2. INCOME TAXES



LVH accounts for income taxes using the asset and
liability approach required by SFAS No. 109. The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax
bases of LVHs assets and liabilities. Future tax benefits attributable to temporary differences are recognized to the extent that realization of such benefits are more likely than not. A valuation allowance for a deferred tax asset was
established in prior periods due to the uncertainty related to the realization of future tax benefits. LVHs effective tax rate was 0% for the three months ended March 31, 2003 and 2004 as a result of the establishment of the valuation
allowance.



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3. COMMITMENTS AND CONTINGENCIES



Litigation



LVH is involved in various legal proceedings relating to its business. LVH believes that all the actions brought against it are without merit and will
continue to vigorously defend against them. While any proceeding or litigation has an element of uncertainty, LVH believes that the final outcome of these matters is not likely to have a material adverse effect upon its results of operations or
financial position.



4. PROPOSED SALE OF THE LAS VEGAS HILTON



On December 24, 2003, Caesars entered into a definitive
agreement to sell the Property to an affiliate of Colony Capital, LLC (Colony), a Los Angeles based international private investment firm, for approximately $280,000,000. The transaction closed on June 18, 2004.



Under the terms of the agreement, Colony purchased most of the assets of LVH,
and assumed certain related current liabilities. The aggregate consideration was adjusted for changes in net working capital. In addition, certain gaming devices currently leased from a wholly-owned subsidiary of Caesars were included in the assets
sold to Colony.



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COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



UNAUDITED BALANCE SHEETS

(in thousands)



|                                                          |  |               |        |   |                  |   |        |  
|--------------------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                                          |  | March 31,2004 |        |   | December 31,2003 |  
|ASSETS                                                    |  |               |        |   |                  |   |        |  
|PROPERTY & EQUIPMENT, NET                                 |  | $             | 1,010  |   |                  |   |       |  
|OTHER ASSETS                                             |  |               |        |   |                  |   |        |  
|Restricted cash  long term                               |  |               | 19,676 |   |                  | $ | 15,000 |  
|Deferred financing costs                                  |  |               | 1,950  |   |                  |   | 1,950  |  
|                                                          |  |               |        |   |                  |   |        |  
|TOTAL ASSETS                                              |  | $             | 22,636 |   |                  | $ | 16,950 |  
|                                                          |  |               |        |   |                  |   |        |  
|LIABILITIES AND MEMBERS DEFICIT                          |  |               |        |   |                  |   |        |  
|CURRENT LIABILITIES                                       |  |               |        |   |                  |   |        |  
|Due to affiliates                                         |  | $             | 24,950 |   |                  | $ | 17,362 |  
|                                                          |  |               |        |   |                  |   |        |  
|TOTAL LIABILITIES                                         |  |               | 24,950 |   |                  |   | 17,362 |  
|                                                          |  |               |        |   |                  |   |        |  
|COMMITMENTS AND CONTINGENCIES                             |  |               |        |   |                  |   |        |  
|MEMBERS ACCUMULATED DEFICIT DURING THE DEVELOPMENT STAGE |  |               | (2,314 | ) |                  |   | (412   | )
|                                                          |  |               |        |   |                  |   |        |  
|TOTAL LIABILITIES AND MEMBERS DEFICIT                    |  | $             | 22,636 |   |                  | $ | 16,950 |  
|                                                          |  |               |        |   |                  |   |        |  







See accompanying notes to financial statements.



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COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



UNAUDITED STATEMENTS OF OPERATIONS

(in thousands)



|                          |  |               |       |                                                                       |   |      
|------------------------- |  | ------------- | ----- | --------------------------------------------------------------------- | - | -----
|                          |  | March 31,2004 |       | For the Period fromDecember 18, 2003(Inception) throughMarch 31, 2004
|EXPENSES:                 |  |               |       |                                                                       |   |      
|Advertising and marketing |  | $             | 1     |                                                                       | $ | 3    
|Licensing fees            |  |               | 10    |                                                                       |   | 240  
|Professional fees         |  |               | 1,432 |                                                                       |   | 1,458
|Travel and entertainment  |  |               | 459   |                                                                       |   | 613  
|                          |  |               |       |                                                                       |   |      
|NET LOSS                  |  | $             | 1,902 |                                                                       | $ | 2,314
|                          |  |               |       |                                                                       |   |      





See accompanying notes to financial statements.



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COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



UNAUDITED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                |  |                |        |   |                                                                       |   |         |  
|------------------------------------------------------------------------------- |  | -------------- | ------ | - | --------------------------------------------------------------------- | - | ------- | -
|                                                                                |  | March 31, 2004 |        |   | For the Period fromDecember 18, 2003(Inception) throughMarch 31, 2004 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                           |  |                |        |   |                                                                       |   |         |  
|Net loss                                                                        |  |                |        |   |                                                                       |   |         |  
|Adjustments to reconcile net loss to net cash provided by operating activities: |  | $              | (1,902 | ) |                                                                       | $ | (2,314  | )
|Changes in assets and liabilities:                                              |  |                |        |   |                                                                       |   |         |  
|Due to affiliates                                                               |  |                | 7,588  |   |                                                                       |   | 24,950  |  
|                                                                                |  |                |        |   |                                                                       |   |         |  
|Net cash provided by operating activities                                       |  |                | 5,686  |   |                                                                       |   | 22,636  |  
|                                                                                |  |                |        |   |                                                                       |   |         |  
|                                                                                |  |               
|CASH FLOWS FROM INVESTING ACTIVITIES                                            |  |                |        |   |                                                                       |   |         |  
|Purchases of property & equipment                                               |  |                | (1,010 | ) |                                                                       |   | (1,010  | )
|Changes in restricted cash                                                      |  |                | (4,676 | ) |                                                                       |   | (19,676 | )
|                                                                                |  |                |        |   |                                                                       |   |         |  
|Net cash used in investing activities                                           |  |                | (5,686 | ) |                                                                       |   | (20,686 | )
|                                                                                |  |                |        |   |                                                                       |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                           |  |                |        |   |                                                                       |   |         |  
|Debt issuance costs                                                             |  |                |        |   |                                                                       |   |         |  
|Net cash used in financing activities                                           |  |                |       |   |                                                                       |   | (1,950  | )
|                                                                                |  |                |        |   |                                                                       |   |         |  
|                                                                                |  |                |       |   |                                                                       |   | (1,950  | )
|                                                                                |  |                |        |   |                                                                       |   |         |  
|NET INCREASE (DECREASE) IN CASH                                                 |  |                |       |   |                                                                       |   |        |  
|                                                                                |  |               
|CASH AT BEGINNING OF THE PERIOD                                                 |  |                |       |   |                                                                       |   |        |  
|CASH AT END OF THE PERIOD                                                       |  |                |       |   |                                                                       |   |        |  
|                                                                                |  |                |        |   |                                                                       |   |         |  
|                                                                                |  | $              |       |   |                                                                       | $ |        |  
|                                                                                |  |                |        |   |                                                                       |   |         |  



See accompanying notes
to financial statements.



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COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



NOTES TO FINANCIAL STATEMENTS



1. ORGANIZATION
AND BASIS OF PRESENTATION



Nature of operations



Colony Resorts LVH Acquisitions, LLC, a Nevada limited liability company [(a
development stage company)] (the Company), was formed at the direction of Colony Investors VI, L.P., a Delaware limited partnership (Colony VI) and an affiliate of Colony Capital, Inc. (Colony Capital), under the
laws of the State of Nevada on December 18, 2003. Pursuant to the Companys Amended and Restated Operating Agreement, dated June 18, 2004, (the Operating Agreement) the Company will continue in existence perpetually. Members of the
Company, however, may terminate the Operating Agreement and dissolve the Company at any time.



The Company has conducted no business other than in connection with the execution of a Purchase and Sale Agreement (as defined below), relating to the acquisition of substantially all of the assets and certain
liabilities of LVH Corporation, a Nevada corporation (LVH). LVH is a wholly-owned subsidiary of Caesars Entertainment Inc., formerly Park Place Entertainment Corporation (Caesars), and owns and operates the Las Vegas Hilton,
a casino resort located in Las Vegas, Nevada (the Hotel).



The Company, LVH and Caesars, entered into the Purchase and Sale Agreement, dated December 24, 2003 (the Purchase and Sale Agreement). Pursuant to the Purchase and Sale Agreement, the Company acquired substantially all of the
assets and certain liabilities of LVH (the Acquisition) for approximately $280,000,000 subject to certain adjustments defined in the Purchase and Sale Agreement. The Acquisition was completed on June 18, 2004. The Company will continue
certain of the current business operations of LVH but will not have an ongoing relationship with LVH or Caesars.



On June 18, 2004, the Company financed the Acquisition and paid related fees and expenses with capital contributions from the issuance of Class A and
Class B Membership Units (the Equity Financing), and a non-recourse first mortgage term loan in the amount of approximately $200 million from Goldman Sachs & Co. (Goldman) (the Goldman Term Loan and together
with the Equity Financing, the Acquisition Financing).



Basis of
Presentation



The Companys affiliates consist of
Colony Resorts LVH Holdings, LLC, (Holdings), Colony VI a discrete investment fund of Colony Capital and Colony Resorts LVH Co-investment Partners, L.P. (Coinvestment Partners), Colony Resorts LVH Coinvestment Voteco, LLC
(Coinvestment Voteco), and Colony Resorts LVH VoteCo., LLC (Voteco), each of which purchased Class A or Class B Membership Units on June 18, 2004 in connection with the equity financing described in Note 3.



Development Stage Risk Factors



On June 17, 2004, the Company secured a Nevada State gaming license for the
ownership and operation of the Hotel. The Company is now subject to the normal risks inherent in operating a hotel casino, including compliance with regulatory tax and operational requirements.



As a development stage company, the Company had risks that could have
impacted its ability to successfully complete the Acquisition, which included as described above, obtaining financing for the Acquisition. In addition, prior to the completion of the Acquisition, the Company had to secure several state and local
government regulatory agency approvals, including, but not limited to, securing a state gaming license for the ownership and operation of the Hotel.



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##### Table of Contents

COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



NOTES TO FINANCIAL STATEMENTS(Continued)



Interim Financial Statements



The accompanying condensed financial statements included herein have been prepared by the Company, 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 accounting principles generally accepted in the Untied States
have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal
recurring adjustments) necessary for a fair presentation of the results for the interim periods have been made. The results for the three-month period ended March 31, 2004 are not necessarily indicative of results to be expected for the full fiscal
year. These financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2003, included in the Companys Post Effective Amendment No. 1 to Form 10 Registration
Statement filed June 17, 2004 (File No. 000-50635).



2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES



Use of Estimates



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



Restricted Cash



The Company deposited $19,676,000 into an escrow account as of March 31, 2004, which was applied towards the Acquisition purchase price.



Deferred Financing Costs



Deferred financing costs consist of a commitment fee and deposits totaling
$1,950,000 related to the Companys financing. The Company has commenced amortization of these costs since the closing of the Acquisition using the effective interest method.



Property and Equipment



The cost of Property and Equipment is capitalized and depreciated over the estimated useful lives of the assets, which range from 3 to 40 years.



Income Taxes



The Company is a limited liability company and will be taxed as a
partnership for federal income tax purposes. Accordingly, no provision for federal income taxes was recorded because the taxable income or loss is included in the income tax return of the members.



Advertising Costs



Advertising costs are expensed as incurred.



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##### Table of Contents

COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



NOTES TO FINANCIAL STATEMENTS(Continued)



Recent Accounting Pronouncements



In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities.
The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. FIN 46 changes certain consolidation requirements by requiring a variable interest entity to be consolidated by a company that is
subject to a majority of the risk loss from the variable interest entitys activities or receive a majority of the entitys residual returns or both. The adoption of FIN 46 did not have a material impact on the financial statements.



3. MEMBERSHIP INTERESTS



As of March 31, 2004, all of the Companys Class A Membership Units
were held by Holdings and no Class B Membership Units were outstanding.



In connection with and immediately prior to the Acquisition, the Company issued Class A Membership Units (Class A Units) to Coinvestment VoteCo and VoteCo on a pro rata basis in proportion to the equity contributions made by
each entity. In addition, the Company issued Class B Membership Units (Class B Units and together with the Class A Units, the Membership Units) to Coinvestment Partners and to Holdings, a wholly-owned subsidiary of Colony VI
on a pro rata basis in proportion to the equity contributions made by each entity. All of these entities are existing affiliates of the Company.



Prior to the closing of the Acquisition, the Company executed an Amended and Restated Operating Agreement by and among the Company, VoteCo, Coinvestment
VoteCo, Holdings and Co-Investment Partners (the Amended and Restated Operating Agreement). Pursuant to the Amended and Restated Operating Agreement, holders of Class A Units are entitled to one vote per unit in all matters to be voted
on by voting members of the Company. Holders of Class B units have no vote, except as otherwise expressly required by law.



On June 18, 2004, the Company issued Class A Units and Class B Units in connection with the organizational structure that was put in place in order to
consummate the Acquisition so that Holdings and Co-Investment Partners could acquire substantially all of the assets of LVH without having any voting power or other power to control the affairs or operations of the Company, except as otherwise
expressly required by law.



At the time of the closing of the
Acquisition, the Company executed: (1) Transfer Restriction Agreement by and among Thomas J. Barrack, Jr. (Barrack), Nicholas L. Ribis (Ribis), Co-Investment Partners and Coinvestment VoteCo (the Coinvestment Transfer
Restriction Agreement) and (2) Transfer Restriction Agreement by and among Mr. Barrack, VoteCo and Holdings (the VoteCo Transfer Restriction Agreement).



The Companys Class A Units issued to Coinvestment VoteCo are subject to the Coinvestment Transfer Restriction
Agreement, which provides, among other things, that:



| |  | Co-Investment Partners has the right to acquire Class A Units from Coinvestment VoteCo on each occasion that Class B Units held by Co-Investment Partners would be transferred to a
proposed purchaser who, in connection with such proposed sale, has obtained all licenses, permits, registrations, authorizations, consents, waivers, orders, findings of suitability or other approvals required to be obtained from, and has made all
findings, notices or declarations required to be made with, all gaming authorities under all applicable gaming laws,
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



NOTES TO FINANCIAL STATEMENTS(Continued)



| |  | A specific purchase price, as determined in accordance with the Coinvestment Transfer Restriction Agreement, will be paid to acquire the Class A Units from Coinvestment VoteCo, and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Coinvestment VoteCo will not transfer ownership of Class A Units owned by it except pursuant to such option of Co-Investment Partners.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



The Companys Class A Units issued to VoteCo are subject to the VoteCo
Transfer Restriction Agreement, which provides, among other things, that:



| |  | Holdings has the right to acquire Class A Units from VoteCo on each occasion that Class B Units held by Holdings would be transferred to a proposed purchaser who, in connection with
such proposed sale, has obtained all licenses, permits, registrations, authorizations, consents, waivers, orders, findings of suitability or other approvals required to be obtained from, and has made all findings, notices or declarations required to
be made with, all gaming authorities under all applicable gaming laws,
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | A specific purchase price, as determined in accordance with the VoteCo Transfer Restriction Agreement, will be paid to acquire the Class A Units from VoteCo, and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | VoteCo will not transfer ownership of Class A Units owned by it except pursuant to such option of Holdings.
| | - | -----------------------------------------------------------------------------------------------------------



It is currently anticipated that any future holders of the Companys
Membership Units will become a party to the Amended and Restated Operating Agreement.



4. RELATED PARTY TRANSACTIONS



Colony VI
funded the escrow deposit and deferred financing costs and paid certain expenses related to the Companys operations during the period from December 18, 2003 (date of inception) through December 31, 2003. These advances are reported as Due from
Affiliates in the accompanying balance sheets.



5. COMMITMENTS AND
CONTINGENCIES



Employment Arrangements



The Company has entered into employment agreements, as amended, with several
executives. The employment agreements have initial terms of two to five years and are subject to one-year extensions.



The employment agreements provide the executives will receive a base salary with either mandatory increases or annual adjustments and annual bonus
payments.



In addition, the employment agreements provide that
the Company grant certain executives options to purchase the Companys Class A Units and Class B Units that are issued and outstanding as of the date on which the Acquisition was completed. The Options were granted under the equity compensation
plan adopted by the Company. Depending on the terms of the employment agreement, executives were granted options to purchase 0.5% to 1.5% of the Membership Units.



Easement



The Hilton Grand Vacations property, located adjacent to the Hotel, has an easement for use of approximately 260 parking spaces (out of approximately
4,800 parking spaces). There is also an easement for the use of the monorail that runs through the Hotel property.



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##### Table of Contents

COLONY RESORTS LVH ACQUISITIONS, LLC

(A Development Stage Company)



NOTES TO FINANCIAL STATEMENTS(Continued)



Environmental



An independent environmental consultant performed a Phase I environmental site assessment in accordance with the American Society for Testing and
Materials (ASTM) standards on the Las Vegas Hilton property in December 2003. This assessment involved visual inspection, interviews with site personnel, review of certain publicly available records, and preparation of a written report.
The assessment did not include any testing of soil or groundwater at the property. According to certain historical data integrated into the Phase I report, in 2000 it was discovered that there is a plume of tetrachloroethene in the groundwater and
the property was listed as a leaking underground storage tank site. The contamination is believed to originate from an off-site source, but the source has not yet been identified.



To date, the Nevada Division of Environmental Protection has not required any additional investigation at the property. The
Phase I report states that levels of tetrachloroethene and total petroleum hydrocarbons in the groundwater beneath the property in 2000 exceeded certain limits allowed under a National Pollutant Discharge Elimination System permit. The Phase I
report indicates that the allowable levels have been exceeded in the past and a treatment system is needed to ensure compliance with applicable requirements. The Company expects to install a treatment system at a nominal cost. The Phase I report
also identified asbestos-containing materials at the Hotel. The Company expects to manage these materials pursuant to an operations and maintenance program.



The Company has not determined what the cost, if any, will be with respect to the groundwater or the asbestos issue, however, the Company believes that
the issues will not have a material effect upon its financial position or results of operations subsequent to the Acquisition. There can be no assurance, however, that the estimated capital and operating costs for the treatment system will not be
exceeded or that there will be no claims or other liabilities associated with the foregoing conditions.



Litigation



The Company
is not a party to any litigation and, no action, suit or proceedings against it has been threatened by any person.



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##### Table of Contents

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



The following discussion and analysis of the
Companys financial condition and results of operations should be read in conjunction with the consolidated financial statements, the related notes to consolidated financial statements and Managements Discussion and Analysis of
Financial Condition and Results of Operations included in the Companys Form 10 Registration Statement and the unaudited interim condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form
10-Q.



Overview



Pursuant to the terms of the Purchase and Sale Agreement, the Company
purchased substantially all of the assets of LVH. The Acquisition closed on June 18, 2004. Since June 18, 2004, the Company has owned and operated the Property.



Prior to the closing of the Acquisition, LVH was in the business of operating a casino/hotel. LVHs primary sources of revenue consisted of casino
operations, room rental, and food and beverage sales.



Casino
revenue is derived primarily from patrons wagering on slot machines, table games and other gaming activities. Table games generally include Blackjack or Twenty One, Craps, Baccarat and Roulette. Other gaming activities include Keno and Race and
Sports. Casino revenue is defined as the win from gaming activities, computed as the difference between gaming wins and losses, not the total amounts wagered. Table game volume, table game drop (terms which are used
interchangeably), and slot handle are casino industry specific terms that are used to identify the amount wagered by patrons for a casino table game or slot machine, respectively. Table game hold and slot hold
represent the percentage of the total amount wagered by patrons that the casino has won. Hold is derived by dividing the amount won by the casino by the amount wagered by patrons. Casino revenue is recognized at the end of each gaming day.



Rooms revenue is derived from rooms and suites rented to
guests. Average daily rate is an industry specific term used to define the average amount of revenue per rented room per day. Occupancy percentage defines the total percentage of rooms occupied, and is computed by dividing
the number of rooms occupied by the total number of rooms available. Room revenue is recognized at the time the room is provided to the guest.



Food and beverage revenues are derived from food and beverage sales in the food outlets of our casino/hotel, including restaurants, room service and
banquets. Food and beverage revenue is recognized at the time the food and/or beverage is provided to the guest.



Other revenue includes retail sales, entertainment sales, telephone and other miscellaneous income at the casino/hotel. Such revenue is recognized at the
time the goods or services are provided to the guest.



Casino
revenues vary from time to time due to general economic conditions, popularity of entertainment offerings, table game hold, slot hold, and occupancy percentages in the hotels. Casino revenues also vary depending upon the amount of gaming activity as
well as variations in the odds for different games of chance. LVH also used technology, such as cashless wagering on slot machines, to increase revenues and/or decrease expenses. Casino revenues, room revenues, food and beverage revenues, and other
revenues vary due to general economic conditions and competition. As noted in LVHs results for the three months ended March 31, 2004, LVH experienced improvements in their casino revenues, room revenues, and other revenues. LVH believes these
improvements are due to an improving general economy as customers demonstrated an increased demand for LVHs products.



Results of Operations



The following discussion presents an analysis of LVHs results of operations for the three months ended March 31, 2004 and 2003.



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##### Table of Contents

Comparison of three months ended March 31, 2004 with March 31, 2003



Overall revenue increased $10.2 million from last year, as described below.



LVH recorded net income of $6,763,000 for the three months
ended March 31, 2004 compared with net income of $455,000 for the three months ended March 31, 2003, as described below.



Casino



Casino revenues increased $4,480,000 to $22,479,000 for the three months ended March 31, 2004, compared to $17,999,000 for the three months ended March
31, 2003. Table games accounted for the majority of the increase in casino revenues primarily due to an increase in hold percentage. Table games hold percentage increased 7.6 percentage points from 8.6 percent for the three months ended March
2003 to 16.2 percent for the three months ended March 2004. Table games volume increased approximately 1 percent for the three months ended March 31, 2004, compared to the same period in the prior year. Because table games hold percentage varies
based on the game type and the level of wagering, the hold percentage often fluctuates from period to period. Management of LVH anticipates that increases in convention activity at the Las Vegas Convention Center combined with the implementation of
new marketing initiatives and promotional programs aimed at attracting table games players will expand table games volume in future years.



LVHs casino operating margin increased to 37.0 percent for the three months ended March 31, 2004 compared to 28.5 percent for the three months ended
March 31, 2003. The increase in casino margin was primarily attributable to an increase in casino revenue described above.



Rooms



Room revenues increased $3,395,000 to $24,809,000 for the three months ended March 31, 2004 compared to $21,414,000 recorded for the three months ended
March 31, 2003. The increase was primarily attributed to an increase in the average daily rate as occupancy percentage remained relatively unchanged at 89.2% for the three months ended March 31, 2004 compared to 89.4% for the three months ended
March 31, 2003. The average daily rate increased from $101 for the three months ended March 31, 2003 to $114 for the three months ended March 31, 2004. The increase in the average daily rate stemmed from increased convention related business as
the convention average daily rate was $13.77 more in the three months ended March 31, 2004 compared to the same period in 2003.



LVHs room operating margin for the quarter ended March 31, 2004 increased to 72.1 percent compared to 69.5 percent for the three months ended March
31, 2003. The increase in room operating margin was primarily attributable to an increase in room revenue described above.



Food and Beverage



Food and beverage revenues increased $1,690,000 to $14,196,000 for the three months ended March 31, 2004 compared to $12,506,000 for the three months
ended March 31, 2003. The increase in revenue is primarily due to an increase in banquet and casual dining restaurant revenue for the first quarter of 2004, when compared to the same period in 2003, due to increased convention related business as
discussed above.



LVHs food and beverage operating margin
for the three months ended March 31, 2004 increased to 3.8 percent compared to break-even for the three months ended March 31, 2003. This improvement was due to increased food and beverage revenue in the current quarter when compared to the
three months ended March 31, 2003 as noted above.



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Other



Other revenue includes retail sales, entertainment sales, telephone and other miscellaneous income. Other revenue increased
$613,000 to $5,437,000 for the three months ended March 31, 2004 as compared to $4,824,000 for the three months ended March 31, 2003. The increase is principally due to renegotiating the Star Trek agreement, which resulted in an increase of $367,000
and an increase in convention space rental of $153,000.



Other
expense includes costs associated with retail, entertainment, telephone and other miscellaneous costs. Other expense decreased $280,000 for the three months ended March 31, 2004 compared to the three months ended March 31, 2003. The decrease for the
three months ended March 31, 2004 was mainly attributable to a $337,000 decrease in entertainment expense.



General and Administrative



General and administrative expense includes costs associated with selling, general, administrative and property operations. General and administrative
expense increased $802,000 to $16,259,000 for the three months ended March 31, 2004 compared to $15,457,000 for the comparable period of 2003. This increase is principally due to $573,000 of expenses associated with the sale of the LVH and $321,000
of legal fees.



Depreciation and Amortization



Depreciation and amortization expense increased
$227,000 to $4,688,000 for the three months ended March 31, 2004 compared to $4,461,000 for the comparable period of 2003.



Financial Condition



Liquidity



The
following is a description of LVHs historical liquidity and capital resources. As of March 31, 2004, LVH had cash and equivalents of $8,634,000, which is primarily cash in LVHs casino used to fund LVHs daily operations. Net cash
provided by operating activities was $5,165,000 for the three months ended March 31, 2004 compared to $3,088,000 for the three months ended March 31, 2003. The increase is primarily related to the increase in net income for the three months ended
March 31, 2004. LVH had the ability to borrow from Caesars to fund any operating cash needs as well as capital projects. A downturn in the economy, increase in revenue or wagering taxes, acts of terrorism, war or military actions would impact
LVHs casino operations and negatively impact its cash flows from operations. If this were to occur, LVH would be required to adjust its capital spending plans as described below.



Concurrently with the closing of the Acquisition, the Company entered into a License Agreement pursuant to which the Company
licenses from Hilton the right to use the mark Hilton and is part of Hiltons reservation system and Hiltons HHonors Program. The License Agreement commenced on the date of the closing of the Acquisition and expires on December 31, 2008. During the term of the
License Agreement, the Company is required to pay Hilton an annual fee of $2,000,000 plus 1% of the Hotels gross room revenue to fund national and regional group advertising and sales and business promotion efforts by Hilton.



The Company expects to derive its future liquidity from the Acquisition
Financing, including the issuance of the Membership Units and the Goldman Term Loan. The Company raised approximately $150 from the sale of the Class A Units and $150 million from the sale of the Class B Units. The Goldman Term Loan is for a
principal amount of $200 million with a coupon equal to LIBOR plus 650 basis points and $32 million of the Goldman Term Loan is held back for capital expenditures and an interest reserve. The initial term is two years with two one-year extension
options. In addition, the Goldman Term Loan contains important affirmative and negative financial covenants customary for loans of this nature, which may restrict the Companys ability to operate the casino and hotel operations or pursue
development opportunities if desired.



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The Company expects that its cash flows from operations, together with cash on hand and available
borrowings, including the Goldman Term Loan will be adequate to fund its activities, including the capital expenditures that the Company plans to make over the foreseeable future. However, no assurances can be made that such sources of financing
will be sufficient to fund such activities and capital expenditures and the Companys debt, including the Goldman Term Loan, will materially restrict future borrowings. The Goldman Term Loan does permit the Company to incur additional debt to
fund working capital, although the Company may seek to obtain a working capital line.



Critical Accounting Policies



A summary of
LVHs significant accounting policies can be found in Note 2 of the Notes to the Financial Statements of the Companys Form 10. LVHs preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires LVH to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Significant among those estimates are the useful lives and potential impairment of long-term assets, such as buildings and equipment; the adequacy of LVHs allowance for uncollectible
receivables; and the amount of litigation and self-insurance reserves. These estimated amounts are based on LVHs best judgments using both historical information and known trends in LVH and in our industry. Because of the uncertainty inherent
in any estimate, it is likely that the actual results could differ from the initial estimates, and the differences could be material. The policies and estimates discussed below are considered to be the most significant.



Long-Lived Assets



Property and equipment are stated at cost less accumulated depreciation.
Judgments are made in determining if or when assets have been impaired and the estimated useful lives of assets. The accuracy of these estimates affects the depreciation expense recognized in LVHs results of operations. LVH assigns lives to
its assets based on its standard policy, which LVH believes represents the useful life of each category of asset. The carrying values of its long-lived assets are reviewed when events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Management assesses the possibility of an asset impairment by using estimates of future cash flows which are affected by current operating results, trends and prospects, as well as the effect of obsolescence, demand,
competition and other economic factors.



Allowance for Doubtful Accounts



LVH allows for an estimated amount of receivables
that may not be collected. LVH estimates an allowance for doubtful accounts using a specific formula applied to aged receivables as well as a specific review of large balances. Historical experience is considered, as are customer relationships, in
determining specific reserves.



Litigation Reserves



LVH assesses its exposures to loss contingencies including legal matters
and provides for an exposure if it is judged to be probable and estimable. If the actual loss from a contingency differs from managements estimate, operating results could be impacted.



Self-insurance Reserves



LVH is self-insured for various levels of general liability, workers
compensation, and non-union employee medical insurance coverage. Insurance claims and reserves include accruals of estimated settlements for known claims, as well as accrued estimates of incurred but not reported claims. In estimating these costs,
LVH considers its historical claims experience and makes judgments about the expected levels of costs per claim. Changes in health care costs, accident frequency and severity and other factors can increase the estimate for these liabilities.



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Recently Issued Accounting Pronouncements



In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities.
The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. FIN 46 changes certain consolidation requirements by requiring a variable interest entity to be consolidated by a company that is
subject to a majority of the risk loss from the variable interest entitys activities or receive a majority of the entitys residual returns or both. The adoption of FIN 46 did not have a material impact on the financial statements.



Contractual Commitments



The Company did not have any debt or contractual commitments as of March 31,
2004. On June 18, 2004 in connection with the consummation of the Acquisition, the Company entered into the Goldman Term Loan. The Goldman Term Loan is for a principal amount of $200 and is for an initial term of two (2) years with two one-year
extensions. The Goldman Term Loan is subject to a $30 million holdback amount: $26 million will be set aside for renovation and construction and $4 million will be held as a debt-service reserve. Interest on the Goldman Term Loan accrues at a rate
of 6.50% plus the greater of (i) one-Month LIBOR or (ii) 1.5%. The Goldman Term Loan provides for no amortization during the term. The Goldman Term Loan will be secured by a first priority deed of trust on the Property.



Off-Balance Sheet Arrangements



LVH is not subject to any off-balance sheet arrangements which it believes
will have a material adverse impact on its financial condition. The Company is not currently subject to any off-balance sheet arrangements which it believes will have a material adverse impact on its financial condition.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------



The following discusses the Companys exposure to market risk related to changes in interest rates, equity prices and foreign currency exchange
rates. The Company does not believe that its exposure to market risk is material.



Market risk is the risk of loss arising from changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. LVH is exposed to no such market risks. The Company has
market risk associated with funds that were borrowed to finance the Acquisition and pay related fees and expenses.



The Company executed the Goldman Term Loan concurrently with the closing of the Acquisition. The Goldman Term Loan is for a principal amount of $200
million with a coupon equal to LIBOR plus 650 basis points. The initial term of the Goldman Term Loan is two years with two one-year extension options. The Goldman Term Loan is subject to interest rate risk and the interest payments associated with
the Goldman Term Loan will increase if LIBOR increases.



Pursuant to the terms of the Goldman Term Loan, the Company purchased an interest rate cap with a LIBOR strike rate of 5% for the first two years of the term loan and an interest rate cap with a LIBOR strike rate of 6% for any extension
periods; therefore, a hypothetical increase in LIBOR of 1000 basis points from the rates in effect on the date of this Form 10-Q would not cause the interest payments on the Goldman Term Loan to increase significantly. The Company does not currently
anticipate a sudden change in LIBOR during the term of the Goldman Term Loan.



The Company does not have any significant foreign currency exchange rate risk or commodity price risk and it does not currently trade any market sensitive instruments.



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



As of the end of the period covered by this report, the Company was a development stage company and as such, the management, under the supervision and
with the participation of its Chief Executive Officer and Executive Vice President of Finance are developing a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as
amended) and performed an evaluation of the effectiveness of the design and operation of Companys disclosure controls and procedures implemented at such time. Since the closing of the Acquisition, a system has been in place that the
Companys management, including its Chief Executive Officer and Vice President, Finance, believe include disclosure controls and procedures that are effective.



There have been no changes since the closing of the Acquisition in the Companys internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS



This Quarterly Report on Form 10-Q contains forward-looking statements relating to future events and future performance of the Company within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the Companys expectations, beliefs, intentions or future strategies that are signified by
the words expects, anticipates, intends, believes or similar language. Actual results could differ materially from those anticipated in such forward-looking statements.



All forward-looking statements included in this document are based on
information available to the Company on the date hereof, and the Company assumes no obligation to update any forward-looking statements. The Company cautions investors that its business and financial performance are subject to substantial risks and
uncertainties.



PART II. OTHER INFORMATION



|ITEM 2. | CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | --------------------------------------------------------------------------------



On June 18, 2004, in connection with and immediately prior to the closing of the Acquisition, the Company issued:



| |  | 0.90 Class A Units to Coinvestment VoteCo for a total purchase price of $90 in cash;
| | - | ------------------------------------------------------------------------------------



| |  | 0.60 Class A Units to VoteCo for a total purchase price of $60 in cash;
| | - | -----------------------------------------------------------------------



| |  | 900,000 Class B Units to Co-Investment Partners for a total purchase price of $90,000,000 in cash; and
| | - | ------------------------------------------------------------------------------------------------------



| |  | 600,000 Class B Units to Holdings for an aggregate purchase price of $60,000,000 including the surrender of the Class A Units previously purchased by Holdings.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



The Class B Units are not registered and were
sold pursuant to Section 4(2) of the Securities Act of 1934, as amended.



Pursuant to the Operating Agreement, Holdings and Coinvestment Partners (and their respective entities and affiliates) (the Designated Class B Holders) will have the right at any time to convert their
Class B Units into an equal number of Class A Units, without cost. As long as the Designated Class B holders hold at least one Class B Unit, no other holder of Class B Units will have the right to convert its Class B Units into Class A Units without
the prior written consent of the Designated Class B Holders holding a majority of the outstanding



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Class B units then held by the Designated Class B Holders. If at any time no Designated Class B Holder holds Class B Units, then any holder of Class B Units
will have the right to convert their Class B Units into an equal number of Class A Units without cost. The conversion rights are subject to compliance with all applicable gaming laws and other statutes, laws, rules and regulations. For so long as
the Company is an entity qualifier with the Nevada Gaming Commission, Designated Class B Holders will only be permitted to convert Class B Units into Class A Units as part of or following an in-kind distribution of the entire interest held by that
holder of all Membership Units and, to the extent required, only after being found qualified by the Nevada Gaming Commission.



The Companys Registration Statement on Form 10 (File No. 000-50635) went effective on May 14, 2004. All registered Class A Units were sold on June
18, 2004. The Company raised approximately $150 million from the sale of Membership Units which it used (together with the Goldman Term Loan) to fund the Acquisition, to fund capital improvements expected to occur over the next four years and to
provide working capital for the Company.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------



UNAUDITED PRO FORMA FINANCIAL DATA



The following unaudited pro forma balance sheet of the Company as of March 31, 2004 and unaudited pro forma statement of operations for the year ended December 31, 2003 and three months ended March 31, 2004, give effect to the Acquisition
and the Acquisition Financing as if they occurred, for balance sheet purposes, on March 31, 2004 and, for statement of operations purposes, on January 1, 2003 and 2004. The unaudited pro forma financial statements are not necessarily indicative of
the results that would have been reported had such transactions actually occurred on the date specified, nor are they indicative of the Companys or the Hotels future results of operations or financial condition. The unaudited pro forma
financial statements are based on and should be read in conjunction with, and are qualified in their entirety by, the historical financial statements and notes thereto of the Company, and the historical financial statements and notes thereto of LVH
(including Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q, and the Companys previously filed Registration Statement on Form 10 (File No. 000-50635).



20



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##### Table of Contents

Unaudited Pro Forma Balance Sheet

(As of March 31, 2004)

(In 000s)



|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|---------------------------------------------------- |  | ----------------- | ------ | - | ---------- | - | -------- | ------------ |  | - | -------- | - |  | ------------------------------------ | --------- |  | - | ------- | -
|                                                     |  | Historical        |        |   |            |   |          |              |  |   |          |   |  | Colony Resorts LVH Acquisitions, LLC |          
|                                                     |  | Colony Resorts    |        |   |            |   |          | Pro Forma    |  |   |          |   |  | Pro Forma                            |          
|                                                     |  | LVH               |        |   | Historical |   |          | Adjustments  |  |   |          |   |  | as Adjusted                          |          
|                                                     |  | Acquisitions, LLC |        |   | LVH        |   |          | (see Note 2) |  |   |          |   |  | for Merger                           |          
|Assets                                               |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Cash and cash equivalents                            |  | $                 |       |   |            | $ | 8,634    |              |  | $ | 32,106   |   |  | 2                                    | (b)       |  | $ | 40,740  |  
|Accounts receivable, net                             |  |                   |       |   |            |   | 11,637   |              |  |   |         |   |  |                                      |           |  |   | 11,637  |  
|Inventories                                          |  |                   |       |   |            |   | 2,283    |              |  |   | 379      |   |  | 2                                    | (g)       |  |   | 2,662   |  
|Prepaid expenses and other current assets            |  |                   |       |   |            |   | 5,410    |              |  |   | (1,970   | ) |  | 2                                    | (h)(1)    |  |   | 3,440   |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total current assets                                 |  |                   |       |   |            |   | 27,964   |              |  |   | 30,515   |   |  |                                      |           |  |   | 58,479  |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Property and equipment net                           |  |                   | 1,010  |   |            |   | 162,281  |              |  |   | 1,967    |   |  | 2                                    | (i)       |  |   |         |  
|                                                     |  |                   |        |   |            |   |          |              |  |   | (18,581  | ) |  | 2                                    | (h)(2)    |  |   |         |  
|                                                     |  |                   |        |   |            |   |          |              |  |   | 139,446  |   |  | 2                                    | (d)       |  |   | 286,123 |  
|Restricted cash                                      |  |                   | 19,676 |   |            |   |         |              |  |   | 12,324   |   |  | 2                                    | (a)       |  |   | 32,000  |  
|Other assets                                         |  |                   | 1,950  |   |            |   | 217      |              |  |   | 9,595    |   |  | 2                                    | (k)       |  |   | 11,762  |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total assets                                         |  | $                 | 22,636 |   |            | $ | 190,462  |              |  | $ | 175,266  |   |  |                                      |           |  | $ | 388,364 |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Liabilities andStockholders/Members Equity         |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Accounts payable and bank overdrafts                 |  | $                 |       |   |            | $ | 2,288    |              |  | $ |         |   |  |                                      |           |  | $ | 2,288   |  
|Due to affiliated companies                          |  |                   | 24,950 |   |            |   | 31,538   |              |  |   | (31,538  | ) |  | 2                                    | (e)       |  |   |         |  
|                                                     |  |                   |        |   |            |   |          |              |  |   | (15,000  | ) |  | 2                                    | (j)       |  |   | 9,950   |  
|Accrued expenses                                     |  |                   |       |   |            |   | 31,085   |              |  |   | (2,721   | ) |  | 2                                    | (h)(3)(4) |  |   | 28,364  |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total current liabilities                            |  |                   | 24,950 |   |            |   | 64,911   |              |  |   | (49,259  | ) |  |                                      |           |  |   | 40,602  |  
|Long-term debt                                       |  |                   |       |   |            |   |         |              |  |   | 200,000  |   |  | 2                                    | (c)       |  |   | 200,000 |  
|Other liabilities                                    |  |                   |       |   |            |   | 76       |              |  |   |         |   |  |                                      |           |  |   | 76      |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total liabilities                                    |  |                   | 24,950 |   |            |   | 64,987   |              |  |   | 150,741  |   |  |                                      |           |  |   | 240,678 |  
|Commitments and Contingencies                        |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Shareholders/Members Equity                        |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Common stock-membership interest                     |  |                   |       |   |            |   | 1        |              |  |   | (1       | ) |  | 2                                    | (f)       |  |   |        |  
|                                                     |  |                   |       |   |            |   |         |              |  |   | 135,000  |   |  | 2                                    | (f)       |  |   | 135,000 |  
|                                                     |  |                   |       |   |            |   |         |              |  |   | 15,000   |   |  | 2                                    | (j)       |  |   | 15,000  |  
|Additional paid-in capital                           |  |                   |       |   |            |   | 332,747  |              |  |   | (332,747 | ) |  | 2                                    | (f)       |  |   |        |  
|Retained earnings (deficit)                          |  |                   | (2,314 | ) |            |   | (207,273 | )            |  |   | 207,273  |   |  | 2                                    | (f)       |  |   | (2,314  | )
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total stockholders/members equity                  |  |                   | (2,314 | ) |            |   | 125,475  |              |  |   | 24,525   |   |  |                                      |           |  |   | 147,686 |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  
|Total liabilities and stockholders members equity. |  | $                 | 22,636 |   |            | $ | 190,462  |              |  | $ | 175,266  |   |  |                                      |           |  | $ | 388,364 |  
|                                                     |  |                   |        |   |            |   |          |              |  |   |          |   |  |                                      |           |  |   |         |  













See accompanying notes to this unaudited pro forma balance sheet



21



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##### Table of Contents

Unaudited Pro Forma Statement of Operations

(For the year ended December 31, 2003)

(In $000, except membership units and
per unit data)



|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|----------------------------------------------------------- |  | ----------------------------------------------- | ---- | - | -------------- | - | ------- | ---------------------------------- |  | - | ------- | - |  | ---------------------------------------------------------- | --- |  | - | ------------ | -
|                                                            |  | Historical Colony Resorts LVH Acquisitions, LLC |      |   | Historical LVH |   |         | Pro Forma Adjustments (see note 3) |  |   |         |   |  | Colony Resorts LVH Acquisitions, LLC Pro Forma As Adjusted |    
|Revenues                                                    |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Casino                                                      |  | $                                               |     |   |                | $ | 75,864  |                                    |  | $ |        |   |  |                                                            |     |  | $ | 75,864       |  
|Rooms                                                       |  |                                                 |     |   |                |   | 72,686  |                                    |  |   |        |   |  |                                                            |     |  |   | 72,686       |  
|Food and beverage                                           |  |                                                 |     |   |                |   | 47,396  |                                    |  |   |        |   |  |                                                            |     |  |   | 47,396       |  
|Other                                                       |  |                                                 |     |   |                |   | 18,065  |                                    |  |   |        |   |  |                                                            |     |  |   | 18,065       |  
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Net revenues                                                |  |                                                 |     |   |                |   | 214,011 |                                    |  |   |        |   |  |                                                            |     |  |   | 214,011      |  
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Expenses                                                    |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Casino                                                      |  |                                                 |     |   |                |   | 54,639  |                                    |  |   | (823    | ) |  | 3                                                          | (e) |  |   | 53,816       |  
|Rooms                                                       |  |                                                 |     |   |                |   | 25,929  |                                    |  |   |        |   |  |                                                            |     |  |   | 25,929       |  
|Food and beverage                                           |  |                                                 |     |   |                |   | 49,105  |                                    |  |   |        |   |  |                                                            |     |  |   | 49,105       |  
|Other expenses                                              |  |                                                 |     |   |                |   | 11,501  |                                    |  |   |        |   |  |                                                            |     |  |   | 11,501       |  
|General and administrative                                  |  |                                                 | 412  |   |                |   | 63,609  |                                    |  |   | 3,523   |   |  | 3                                                          | (a) |  |   | 67,544       |  
|Depreciation and amortization                               |  |                                                 |     |   |                |   | 18,190  |                                    |  |   | (2,161  | ) |  | 3                                                          | (b) |  |   |             |  
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   | 857     |   |  | 3                                                          | (c) |  |   | 16,886       |  
|Management fee to Caesars                                   |  |                                                 |     |   |                |   | 6,563   |                                    |  |   | (6,563  | ) |  | 3                                                          | (d) |  |   |             |  
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|                                                            |  |                                                 | 412  |   |                |   | 229,536 |                                    |  |   | (5,167  | ) |  |                                                            |     |  |   | 224,781      |  
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Operating income (loss)                                     |  |                                                 | (412 | ) |                |   | (15,525 | )                                  |  |   | 5,167   |   |  |                                                            |     |  |   | (10,770      | )
|Interest (expense)                                          |  |                                                 |     |   |                |   |        |                                    |  |   | (16,732 | ) |  | 3                                                          | (f) |  |   | (16,732      | )
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Net loss                                                    |  | $                                               | (412 | ) |                | $ | (15,525 | )                                  |  | $ | (11,565 | ) |  | 3                                                          | (g) |  | $ | (27,502      | )
|                                                            |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Net loss allocation 3(i):                                   |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   |              |  
|Allocable to Class A                                        |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  | $ |             |  
|Allocable to Class B                                        |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  | $ | (27,502      | )
|                                                            |  |                                                 |      |   |               
|Basic weighted average Class A membership units outstanding |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   | 1.50         |  
|Basic weighted average Class B membership units outstanding |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   | 1,500,000.00 |  
|                                                            |  |                                                 |      |   |               
|Diluted weighted average membership units outstanding       |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  |   | 1,500,001.50 |  
|                                                            |  |                                                 |      |   |               
|Per Class A membership unit  basic                         |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  | $ | (18.33       | )
|Per Class B membership unit  basic                         |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  | $ | (18.33       | )
|                                                            |  |                                                 |      |   |               
|Per membership unit  diluted                               |  |                                                 |      |   |                |   |         |                                    |  |   |         |   |  |                                                            |     |  | $ | (18.33       | )





See accompanying notes to this unaudited pro forma statement of operations.



22



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##### Table of Contents

Unaudited Pro Forma Statement of Operations

(For the three months ended March 31, 2004)

(In $000, except membership units
and per unit data)



|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|----------------------------------------------------------- |  | ----------------- | ------ | - | ---------- | - | ------------ |  | - | ------ | - |  | ------------------ | --- |  | - | ------------ | -
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |    
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  | Colony Resorts LVH |    
|                                                            |  | Historical Colony |        |   |            |   |              |  |   |        |   |  | Acquisitions, LLC  |    
|                                                            |  | Resorts           |        |   |            |   | Pro Forma    |  |   |        |   |  | Pro Forma          |    
|                                                            |  | LVH               |        |   | Historical |   | Adjustments  |  |   |        |   |  | as Adjusted        |    
|                                                            |  | Acquisitions, LLC |        |   | LVH        |   | (see Note 3) |  |   |        |   |  | for Merger         |    
|Revenues                                                    |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Casino                                                      |  | $                 |       |   |            | $ | 22,479       |  | $ |       |   |  |                    |     |  | $ | 22,479       |  
|Rooms                                                       |  |                   |       |   |            |   | 24,809       |  |   |       |   |  |                    |     |  |   | 24,809       |  
|Food and beverage                                           |  |                   |       |   |            |   | 14,196       |  |   |       |   |  |                    |     |  |   | 14,196       |  
|Other                                                       |  |                   |       |   |            |   | 5,437        |  |   |       |   |  |                    |     |  |   | 5,437        |  
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Net revenues                                                |  |                   |       |   |            |   | 66,921       |  |   |       |   |  |                    |     |  |   | 66,921       |  
|                                                            |  |                   |        |   |           
|Expenses                                                    |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Casino                                                      |  |                   |       |   |            |   | 14,155       |  |   | (206   | ) |  | 3                  | (e) |  |   | 13,949       |  
|Rooms                                                       |  |                   |       |   |            |   | 6,922        |  |   |       |   |  |                    |     |  |   | 6,922        |  
|Food and beverage                                           |  |                   |       |   |            |   | 13,660       |  |   |       |   |  |                    |     |  |   | 13,660       |  
|Other expenses                                              |  |                   |       |   |            |   | 2,438        |  |   |       |   |  |                    |     |  |   | 2,438        |  
|General and administrative                                  |  |                   | 1,902  |   |            |   | 16,259       |  |   | 881    |   |  | 3                  | (a) |  |   | 19,042       |  
|Depreciation and amortization                               |  |                   |       |   |            |   | 4,688        |  |   | (540   | ) |  | 3                  | (b) |  |   |              |  
|                                                            |  |                   |        |   |            |   |              |  |   | 215    |   |  | 3                  | (c) |  |   |              |  
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   | 4,363        |  
|Management fee to Caesars                                   |  |                   |       |   |            |   | 2,036        |  |   | (2,036 | ) |  | 3                  | (d) |  |   |             |  
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|                                                            |  |                   | 1,902  |   |            |   | 60,158       |  |   | (1,686 | ) |  |                    |     |  |   | 60,374       |  
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Operating income (loss)                                     |  |                   | (1,902 | ) |            |   | 6,763        |  |   | 1,686  |   |  |                    |     |  |   | 6,547        |  
|Interest (expense)                                          |  |                   |       |   |            |   |             |  |   | (3,796 | ) |  | 3                  | (f) |  |   | (3,796       | )
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Net income (loss)                                           |  | $                 | (1,902 | ) |            | $ | 6,763        |  | $ | (2,110 | ) |  | 3                  | (g) |  | $ | 2,751        |  
|                                                            |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Net income allocation 3(i):                                 |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   |              |  
|Allocable to Class A                                        |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  | $ |             |  
|Allocable to Class B                                        |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  | $ | 2,751        |  
|                                                            |  |                   |        |   |           
|Basic weighted average Class A membership units outstanding |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   | 1.50         |  
|Basic weighted average Class B membership units outstanding |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   | 1,500,000.00 |  
|                                                            |  |                   |        |   |           
|Diluted weighted average membership units outstanding       |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  |   | 1,500,001.50 |  
|                                                            |  |                   |        |   |           
|Per Class A membership unit  basic                         |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  | $ | 1.83         |  
|Per Class B membership unit  basic                         |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  | $ | 1.83         |  
|                                                            |  |                   |        |   |           
|Per membership unit  diluted                               |  |                   |        |   |            |   |              |  |   |        |   |  |                    |     |  | $ | 1.83         |  













See accompanying notes to this unaudited pro forma statement of operations



23



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##### Table of Contents

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS



1. The following tables set forth the determination of the preliminary
allocation of the purchase price of the Hotel (in thousands):



|                                        |  |   |        
|--------------------------------------- |  | - | -------
|Cash consideration(i)                   |  | $ | 280,000
|Estimated transaction fees and expenses |  |   | 12,100 
|                                        |  |   |        
|Total                                   |  | $ | 292,100
|                                        |  |   |        



The
preliminary allocation of pro forma purchase price is as follows (in thousands):



|                                             |  |   |        
|-------------------------------------------- |  | - | -------
|Land                                         |  | $ | 153,982
|Buildings, furniture, fixtures and equipment |  |   | 126,389
|Other                                        |  |   | 11,729 
|                                             |  |   |        
|Total                                        |  | $ | 292,100
|                                             |  |   |        



The final purchase
price and its allocation will be based on appraisals and estimates by management and is expected to be completed within one year from the closing.



(i) This amount represents the base purchase price of $280 million. A subsequent adjustment to the final cash consideration will be
determined based on the working capital acquired from LVH at the date of the closing of the Acquisition.



2. The following is a brief description of the pro forma adjustments to the balance sheet to reflect the Acquisition.



a) Represents $32 million of loan proceeds anticipated as of
March 31, 2004 to be held in reserve to pay for property renovations during the first 24-month term of the Acquisition Financing and to cover interest reserves.



b) Represents an adjustment to the purchase price related to working capital requirements imposed on LVH by
the Purchase and Sale Agreement and excess proceeds from the equity and debt financing.



c) Represents the Acquisition Financing, which will consist of a term loan in the amount of approximately $200 million from Goldman Sachs
& Co., secured by a non-recourse first mortgage on the Hotel, interest only, interest at one-month LIBOR, plus 6.5% (Company must purchase and maintain at all times an interest rate cap with a LIBOR strike rate of 5% for the first two years of
the term loan and an interest rate cap with a LIBOR strike rate of 6% for any extension periods); 4-year maturity, comprised of a two-year initial term with 2 one-year extension options.



d) Reflects an increase of $139.5 million, representing a step-up in the basis of the property, plant and
equipment to be acquired.



e) Represents the
elimination of the Due to Affiliated Companies amount to be retained by Caesars.



f) Represents the elimination of the common stock, additional paid-in-capital and retained earnings of LVH and the expected equity
contributions from the issuance by the Company of Class A Units and Class B Units.



g) Represents inventory maintained at a Caesars warehouse not included in the LVH historical balance sheet but included as part of the
Acquisition.



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NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS(Continued)



h) Represents assets and liabilities to remain with Caesars
as provided in the Purchase and Sale Agreement as follows:



(1) Prepaid gaming taxes, insurance and licenses;



(2) Corporate aircraft;



(3) Accrued workers compensation; and



(4) Accrued gaming-related liabilities.



i) Represents the fair value of gaming equipment leased under operating lease arrangements by LVH which will be acquired by the Company.



j) Represents the portion of advances from
affiliates that will be converted to equity upon consummation of the Acquisition.



k) Represents contractual and other intangibles acquired with useful lives ranging from three years to an indefinite life.



3. The following is a brief description of the pro forma adjustments to the
statement of operations to reflect the Acquisition.



a) Represents an adjustment to reflect managements estimate of corporate overhead costs, including executive compensation pursuant to employment agreements and other administrative costs that will be incurred as a result of operating
the Hotel on a stand-alone basis.



b)
Represents a reduction in depreciation expense related to corporate aircraft, which are not included in the purchased assets.



c) Represents an increase in depreciation expense for gaming equipment leased under operating lease arrangements by LVH, which will be
acquired by the Company. The service lives of acquired assets are generally thirty to forty years for buildings and three to ten years for furniture and equipment.



d) Represents the elimination of the corporate fee (representing allocated corporate overhead) that was
charged to LVH by Caesars. The adjustment for corporate overhead costs following the Acquisition is reflected in 3(a).



e) Represents the lease expense related to gaming equipment leased under operating lease arrangements by LVH which will be acquired by the
Company. See Notes 2(i) and 3(c).



f)
Represents the interest expense related to the proposed Acquisition Financing and the amortization of the estimated transaction fees and expenses. The $200 million non-recourse first mortgage term loan in 2(c) bears interest at one-month LIBOR plus
6.5%. An increase of 1/8 of a percentage point in the average LIBOR rate would increase the Companys annual interest cost by approximately $200,000 and quarterly interest cost by $62,500.



g) Since the Company is a limited liability company, there
is no provision for federal income taxes. Distributions will be made to members to cover individual federal and state income tax liabilities.



h) The Company currently intends to enter into a License Agreement pursuant to which the Company would license from Hilton the right to
use the mark Hilton and would be part of Hiltons reservation system and Hiltons HHonors Program. It is currently anticipated that the License Agreement will commence on the date of the closing of the Acquisition and expire on December 31,
2008. During the term of the License Agreement, the Company will be required to pay Hilton an annual fee of $2,000,000 plus 1%



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##### Table of Contents

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS(Continued)



of the Hotels gross room revenue to fund national and regional group
advertising and sales and business promotion efforts by Hilton. The terms of the License Agreement are still being negotiated and have not yet been finalized. Accordingly, no adjustment has been made to the unaudited pro forma statement of
operations to reflect the license fee.



i) The
Company has two classes of Membership Units: Class A and Class B. Earnings per Membership Unit was calculated based upon the two-class method. Under the two-class method, earnings/losses are allocated to each class of Membership Unit based on
participation rights in undistributed earnings/losses.



The
diluted earnings/losses per Membership Unit includes the effect of the assumed conversion of Class B Membership Units into Class A Membership Units.



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##### Table of Contents

|ITEM 6. | EXHIBITS
|------- | --------

|     |  |                                                                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|(a)  |  | Exhibits                                                                                                                                                                                                    
|     | 
|3.1  |  | Amended and Restated Operating Agreement, dated June 18, 2004, for Colony Resorts LVH Acquisitions, LLC                                                                                                     
|     | 
|10.1 |  | Loan Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Archon Financial, L.P.                                                                                           
|     | 
|10.2 |  | License Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Hilton Inns, Inc.                                                                                             
|     | 
|10.3 |  | Transfer Restriction Agreement, dated June 18, 2004, by and among Thomas J. Barrack, Jr., Colony Resorts LVH VoteCo, LLC and Colony Resorts LVH Holdings, LLC                                               
|     | 
|10.4 |  | Transfer Restriction Agreement, dated June 18, 2004, by and among Thomas J. Barrack, Jr., Nicholas L. Ribis, Colony Resorts LVH Coinvestment Voteco, LLC and Colony Resorts LVH Co-Investment
Partners, L.P.
|     | 
|10.5 |  | Stock Purchase Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Colony Resorts LVH Holdings, LLC                                                                       
|     | 
|10.6 |  | Stock Purchase Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Colony Resorts LVH VoteCo, LLC                                                                         
|     | 
|10.7 |  | Stock Purchase Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Colony Resorts LVH Coinvestment Voteco, LLC                                                            
|     | 
|10.8 |  | Stock Purchase Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC and Colony Resorts LVH Co-Investment Partners, L.P.                                                        
|     | 
|31.1 |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                    
|     | 
|31.2 |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                    
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                      
|     | 
|32.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                      



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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.



|              |  |  |  |                                      |  |                    |  |                                                           
|------------- |  |  |  | ------------------------------------ |  | ------------------ |  | ----------------------------------------------------------
|              |  |  |  | COLONY RESORTS LVH ACQUISITIONS, LLC
|              |  |  | 
|June 28, 2004 |  |  |  | By:                                  |  | /s/ Rodolfo Prieto
|              |  |  |  |                                      |  |                    |  | Rodolfo Prieto Chief Executive Officer and General Manager



|              |  |  |  |     |  |                         |  |                                                        
|------------- |  |  |  | --- |  | ----------------------- |  | -------------------------------------------------------
|              |  |  | 
|June 28, 2004 |  |  |  | By: |  | /s/ Robert Schaffhauser
|              |  |  |  |     |  |                         |  | Robert Schaffhauser Executive Vice President of Finance



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