SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549  
  FORM 10-Q  ýQUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
quarterly period ended: March 31, 2003  OR  oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
transition period
from           to  Commission
file number 333-53211  Hard Rock Hotel, Inc. (Exact name of
registrant as specified in its charter)  Nevada
  
  88-0306263(State or other jurisdiction
  of incorporation or organization)
  
  (I.R.S. Employer
  Identification No.)4455
  Paradise Road, Las Vegas NV
  
  89109(Address of principal
  executive offices)
  
  (Zip Code)Registrants telephone
  number, including area code:  (702) 693-5000
  
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YesýNoo  Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YesoNoý  APPLICABLE ONLY TO CORPORATE
ISSUERS:  Indicate
the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date.  Common Stock outstanding
by class as of May 13, 2003  Class of Common Stock
  
  SharesClass A Common Stock
  
  12,000Class B Common Stock
  
  64,023
 
  
   HARD ROCK HOTEL, INC.  INDEX  Part I
  FINANCIAL INFORMATIONItem 1.
  Financial Statements (unaudited)Condensed
  Balance Sheets as of March 31, 2003 and December 31, 2002Condensed Statements
  of Operations for the three-month period ended March 31, 2003 and 2002Condensed Statements
  of Cash Flows for the three-month period ended March 31, 2003 and 2002Notes
  to Condensed Financial StatementsItem
  2.
  Managements
  Discussion and Analysis of Financial Condition and Results of OperationsItem
  3.
  Quantitative
  and Qualitative Disclosures about Market RiskPART
  II
  OTHER
  INFORMATIONItem
  1.
  Legal
  ProceedingsItem 6:
  Exhibits and
  Reports on Form 8-K(a)  Exhibits(b)  Reports on Form 8-K  
  Part IFINANCIAL
INFORMATION Item
1.Financial
Statements  HARD ROCK HOTEL, INC. CONDENSED BALANCE SHEETS(unaudited) (in thousands, except
share amounts) ASSETS  March 31,2003
  
  December
  31,
  2002Current assets:Cash and cash
  equivalents
  
  $
  11,269
  
  $
  9,139Accounts
  receivable, net of allowance for doubtful accounts of $1,902 and $1,951 as of
  March 31, 2003 and December 31, 2002, respectively
  
  6,362
  
  10,035Inventories
  
  1,403
  
  1,736Prepaid expenses
  and other current assets
  
  1,707
  
  1,855Related party
  receivable
  
  375
  
  116Total current
  assets
  
  21,116
  
  22,881Property and
  equipment, net of accumulated depreciation and amortization
  
  162,934
  
  165,073Deferred income
  taxes
  
  967
  
  817Other assets
  
  1,585
  
  1,815TOTAL ASSETS
  
  $
  186,602
  
  $
  190,586Current
  liabilities:Accounts payable
  
  $
  3,217
  
  $
  3,564Construction
  related payables
  
  130
  
  179Related party
  payable
  
  383
  
  92Accrued expenses
  
  10,559
  
  14,733Interest payable
  
  5,672
  
  2,910Current portion
  of long-term debt
  
  988
  
  1,084Total current
  liabilities
  
  20,949
  
  22,562Deferred income
  taxes
  
  696
  
  696Long-term debt
  
  138,307
  
  143,289Total long-term
  liabilities
  
  139,003
  
  143,985Total
  liabilities
  
  159,952
  
  166,547Commitments and
  contingencies:Preferred stock,
  9 1⁄4% Series A Cumulative, no par value, redeemable, 40,000 shares authorized,
  28,000 shares issued and outstanding
  
  38,246
  
  37,411Preferred stock,
  9 1⁄4% Series B Cumulative, no par value, redeemable, one share authorized,
  issued and outstanding
  
  25,845
  
  25,280Total preferred stock
  
  64,091
  
  62,691Shareholders
  deficiency:Common stock,
  Class A voting, no par value, 40,000 shares authorized, 12,000 shares issued
  and outstanding
  
  
  
  Common stock,
  Class B non-voting, no par value, 160,000 shares authorized, 64,023 shares
  issued and outstanding
  
  
  
  Paid-in capital
  
  7,508
  
  7,508Accumulated
  deficit
  
  (44,949
  )
  (46,160
  )Total
  shareholders deficiency
  
  (37,441
  )
  (38,652
  )TOTAL
  LIABILITIES AND SHAREHOLDERS DEFICIENCY
  
  $
  186,602
  
  $
  190,586  The
accompanying notes are an integral part of these financial statements  3 
   HARD ROCK HOTEL, INC. CONDENSED STATEMENTS OF
OPERATIONS (in thousands, except
share and per share amounts) (unaudited)  Three
  Months Ended
  March 31,2003
  
  2002Revenue:Casino
  
  $
  14,249
  
  $
  13,393Lodging
  
  7,359
  
  6,613Food and
  beverage
  
  11,237
  
  9,960Retail
  
  2,025
  
  2,241Other income
  
  1,702
  
  1,652Gross revenues
  
  36,572
  
  33,859Less:  promotional allowances
  
  (2,690
  )
  (2,543
  )Net revenues
  
  33,882
  
  31,316Costs and
  expenses:Casino
  
  8,738
  
  7,812Lodging
  
  1,938
  
  1,734Food and
  beverage
  
  5,830
  
  5,030Retail
  
  915
  
  1,009Other
  
  878
  
  871Marketing
  
  1,081
  
  1,939Related party
  expenses
  
  1,079
  
  890General and
  administrative
  
  4,716
  
  4,133Depreciation and
  amortization
  
  2,889
  
  2,913Pre-opening
  
  12
  
  -Total costs and
  expenses
  
  28,076
  
  26,331Income from operations
  
  5,806
  
  4,985Other income
  (expenses):Interest income
  
  6
  
  12Interest expense
  
  (3,265
  )
  (3,387
  )Other, net
  
  (36
  )
  (88
  )Other expenses,
  net
  
  (3,295
  )
  (3,463
  )Income before
  provision for income taxes
  
  2,511
  
  1,522Income tax
  benefit
  
  100
  
  NET INCOME
  
  2,611
  
  1,522Preferred stock
  dividends
  
  (1,400
  )
  (1,306
  )Income
  applicable to common shareholders
  
  $
  1,211
  
  $
  216BASIC AND
  DILUTED NET LOSS PER SHARE:Applicable to
  common shareholders
  
  $
  15.93
  
  $
  2.84Weighted average
  number of common shares outstanding
  
  76,023
  
  76,023  The
accompanying notes are an integral part of these financial statements  4 
   HARD ROCK HOTEL, INC. CONDENSED STATEMENTS OF
CASH FLOWS (in thousands, except
supplemental schedule) (unaudited)  Three
  Months Ended
  March 31,2003
  
  2002Cash flows from
  operating activities:Net income
  
  $
  2,611
  
  $
  1,522Adjustments to
  reconcile net income to net cash provided by (used in) operating activities:Depreciation and
  amortization
  
  2,889
  
  2,913Provision for
  losses on accounts receivable
  
  142
  
  (132
  )Amortization of
  loan fees
  
  185
  
  184Loss on sales of
  property and equipment
  
  36
  
  88Changes in
  operating assets and liabilities:Accounts
  receivable
  
  3,531
  
  1,330Inventories
  
  333
  
  270Prepaid expenses
  and other current assets
  
  148
  
  (495
  )Related party
  receivable
  
  (259
  )
  -Increase in
  deferred income taxes
  
  (150
  )
  -Accounts payable
  
  (347
  )
  467Related party
  payable
  
  291
  
  (52
  )Accrued expenses
  
  (4,174
  )
  (1,355
  )Interest payable
  
  2,762
  
  2,763Net cash
  provided by operating activities
  
  7,998
  
  7,503Cash flow used
  in investing activities:Purchases of
  property and equipment
  
  (786
  )
  (914
  )Proceeds
  from sales of property and equipment
  
  -
  
  36Construction
  payables
  
  (49
  )
  (2,024
  )Decrease in
  other assets
  
  45
  
  28Net cash used in
  investing activities
  
  (790
  )
  (2,874
  )Cash flows used
  in financing activities:Principal
  payments on long-term debt
  
  (5,078
  )
  (2,641
  )Net cash used in
  financing activities
  
  (5,078
  )
  (2,641
  )Net increase in
  cash and cash equivalents
  
  2,130
  
  1,988Cash and cash
  equivalents, beginning of period
  
  9,139
  
  8,591Cash and cash
  equivalents, end of period
  
  $
  11,269
  
  $
  10,579Supplemental
  disclosures of cash flow information:Cash paid during
  the period for interest
  
  $
  318
  
  $
  428Cash paid
  (received) during the period for income taxes, net
  
  $
  
  
  $
    The
accompanying notes are an integral part of these financial statements   5 
   Supplemental Schedule of Non-Cash Investing and Financing Activities:  The value of the 9 1/4% Series A Cumulative Preferred Stock increased
by approximately $835,000 and $779,000 in unpaid accrued dividends for the
three-month periods ended March 31, 2003 and 2002, respectively.  The value of the 9 1/4% Series B Cumulative Preferred Stock increased
by approximately $565,000 and $527,000 in unpaid accrued dividends for the
three-month periods ended March 31, 2003 and 2002, respectively.  The Company purchased $286,000 of equipment in exchange for
indebtedness for the three-month period ended March 31, 2002.   6 
   1.             BASIS OF
PRESENTATION  Hard Rock Hotel, Inc.
(the Company), a Nevada corporation incorporated on August 30, 1993,
operates a hotel-casino in Las Vegas, Nevada (the Resort).  Lily Pond Investments, Inc. (Lily Pond), a
Nevada corporation controlled and majority owned by Peter Morton, owns all of
the voting shares and 93% of the non-voting shares of the Company.  Mr. Morton has granted a sublicense to the
Company, pursuant to which the Company holds the exclusive right to use the
Hard Rock Hotel trademark for the Companys operations in Las Vegas.  These financial statements also include the
development activities of its subsidiary, Pink Taco Corporation (Pink Taco
Corp.), a Nevada corporation, (collectively the Company).  Pink
Taco Corp. was formed in September 2002 to develop a Pink Taco
restaurant and bar on the Sunset Strip in West Hollywood, California.  These development efforts were abandoned
during December 2002.  The decision to
abandon the development was based on several factors including global
uncertainties, the less than robust economy, the recent changes in the Companys
management and a desire to focus more on its Las Vegas operations.  These financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with instructions to Form 10-Q and Article 10
of Regulation S-X.   Accordingly,
certain notes and other information have been condensed or omitted from the
interim financial statements presented in this Quarterly Report on Form 10-Q
and they do not include all information required by accounting principles
generally accepted in the United States of America for complete financial
statements.  In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included.  The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America 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 amounts
of revenues and expenses during the reporting period.  Actual results could differ from these estimates.  Operating results for the three-month period
ended March 31, 2003 are not necessarily indicative of future financial results
or the results that may be expected for the year ending December 31, 2003.  The unaudited interim financial statements
contained herein should be read in conjunction with the audited financial
statements and footnotes for the year ended December 31, 2002.  The Company has made certain financial
statement reclassifications for the 2002 financial statements in order to
classify amounts in a manner consistent with the 2003 financial statements
which have had no effect upon net income.  2.             LONG-TERM DEBT  In March 1998, the
Company obtained funding of approximately $115.9 million in net proceeds from
the offering of $120 million aggregate principal amount of its 9.25%, Senior
Subordinated Notes due in 2005 (the Notes). 
Of this amount, approximately $105.6 million was used to pay off an
existing credit facility, including accrued interest.  Concurrent with the execution of the Notes, the Company secured a
senior secured reducing revolving line of credit under a new credit facility
(the Credit Facility) through a group of banks.  As of March 31, 2003, the Company had $120.0 million outstanding
in Notes and $18.0 million outstanding on its Credit Facility.  Notes  Interest on the Notes is
payable on each April 1 and October 1.  The Notes are general unsecured obligations of the Company,
subordinated in right of payment to all existing and future senior
indebtedness, including all borrowings under the Credit Facility.  The Notes are subject to redemption at the
option of the Company, in whole or in part, at any time on or after
April 1, 2002, at a premium to the face amount ($120 million) that
decreases on each subsequent anniversary date, plus accrued interest to the
date of redemption.  The Notes contain
covenants restricting or limiting the ability of the Company to, among other
things, pay dividends, incur additional indebtedness, issue certain preferred
stock and enter into transactions with affiliates.  Credit
Facility  In March 1999, the Credit
Facility was amended to increase the line of credit from $67 million to $77
million and, in November 1999, the Company executed an agreement (the Waiver
Agreement) whereby the amount available under the Credit Facility was reduced
to $62 million.  The Waiver Agreement
required the Company to use a portion of the proceeds from the Series A
Preferred Stock Issuance to pay down amounts outstanding under the Credit
Facility.  In addition, certain
financial covenants, which the Company was not in compliance with, were waived
and modified.  In addition, effective
June 2000, the Company entered into an additional amendment with regard to the
Credit Facility whereby, among other things: (i) the commitment amount
available under the Credit Facility was reduced to $42.0 million; (ii) the
commitment will reduce $2.0 million on the last day of each fiscal quarter
commencing March 31, 2001, and will also reduce, beginning September 30, 2001
and on each succeeding September 30, by 50% of excess cash flow, as defined,
for the then most recently completed fiscal year; and, (iii) Mr. Morton has
been released from a make-well agreement, as defined.  Based on calculations, the Company generated approximately $1.6
million excess cash flow as defined for the year ended December 31, 2001 and
the lenders waived this reduction as the Company entered into an amendment in
November 2002.  Based on calculations,
the Company generated approximately $1.8 million excess cash flow as defined
for the year ended December 31, 2002. 
Accordingly, we expect the commitment will reduce by approximately $0.9
million on September 30, 2003.  7 
   Effective March 2001, the
Company entered into another amendment with regard to the Credit Facility
whereby the $2.0 million quarterly commitment reduction was deferred to
commence with the quarter ending September 30, 2001.  Effective December 2001,
the Company entered into another amendment with regard to the Credit Facility
whereby the $2.0 million quarterly commitment reduction for the quarter ending
December 31, 2001 was waived.  The reduction provisions
above shall terminate the date upon which the commitment available under the
Credit Facility is reduced to $25.0 million. 
The Credit Facility expires on March 23, 2004.  Effective November 2002,
the Company entered into an amendment with regard to the Credit Facility
whereby the Company is permitted to make capital expenditures for expansion
projects in an amount not to exceed $13.0 million, provided that the aggregate
amount of capital expenditures made do not exceed $7.5 million in any fiscal
year or portion thereof and allowing not more than $2.0 million in capital
expenditures not made in any fiscal year to be expended in the following fiscal
year.  Effective December 2002,
the Company entered into an amendment with regard to the Credit Facility
whereby the Company is permitted to purchase and redeem during the period
between December 15, 2002 and September 30, 2003, up to $5.0 million of the
Notes.  The Credit Facility
contains certain covenants including, among other things, financial covenants,
limitations on the Company from disposing of capital stock, entering into
mergers and certain acquisitions, incurring liens or indebtedness, issuing
dividends on stock, and entering into transactions with affiliates.  The Credit Facility is secured by
substantially all of the Companys property at the Las Vegas site.  Interest on the Credit Facility accrues on
all individual borrowings at an interest rate determined at the option of the
Company, at either the LIBOR Index plus an applicable margin (not to exceed
3.5% (applicable margin was 3.00% at March 31, 2003) and aggregating 4.6% at
March 31, 2003), or the Base Rate, defined as the higher of the Federal Funds
Rate plus 0.5%, or the reference rate, as defined, plus an applicable margin
(not to exceed 2.25%).  The Company
chose the LIBOR Index for all of its borrowings outstanding at March 31,
2003.  These margins are dependent upon
the Companys debt to EBITDA ratio, as defined.  Interest accrued on the Base Rate borrowings is due monthly, up
to the maturity date, while interest on LIBOR borrowings is due quarterly up to
the maturity date.  3.             LEGAL
AND REGULATORY PROCEEDINGS  The Company is a
defendant in various lawsuits relating to routine matters incidental to its
business.  Management provides an
accrual for estimated losses that may occur and does not believe that the
outcome of any pending claims or litigation, in the aggregate, will have a
material adverse effect on the Companys financial position, results of
operations or liquidity beyond the amounts recorded in the accompanying balance
sheet as of March 31, 2003.  4.             RECENT ACCOUNTING PRONOUNCEMENTS  In
June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations.  This statement addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs.  This statement applies to all
entities and applies to all legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and the normal operation of a long-lived asset, except for certain obligations
of lessees.The Company adopted this statement on January 1, 2003,
and the adoption did not have a material effect on its financial statements.  In
April 2002, the FASB issued SFAS No. 145, Rescission
of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. The most significant provisions of this
statement relate to the rescission of Statement No. 4, Reporting Gains and Losses from Extinguishment of
Debtand it also amends other existing authoritative pronouncements
to make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. 
Under this new statement, any gain or loss on extinguishment of debt
that was classified as an extraordinary item in prior periods presented that
does not meet certain defined criteria must be reclassified.The Company adopted this statement on January 1, 2003,
and the adoption did not have a material effect on its financial statements.  In
June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities.  This
statement address financial accounting and reporting for costs associated with
exit or disposal activities and nullifies EITF No. 94-3 Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).  The statement requires that a liability for
a cost associated with an exit or disposal activity be recognized when the
liability is incurred.  A fundamental
conclusion reached by the FASB in this statement is than an entitys commitment
to a plan, by itself, does not create a present obligation to others that meets
the definition of a liability.  This
statement also establishes that fair value is the objective for initial measurement
of the liability.The Company adopted this statement on
January 1, 2003, and the adoption did not have a material effect on its
financial statements.  8 
    In November 2002, the
FASB issued Interpretation No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others, an interpretation of SFAS Nos. 5, 57 and 107 and a rescission of FASB
Interpretation No. 34.  This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under certain
guarantees that it has issued.  It also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee.  This
Interpretation does not prescribe a specific approach for subsequently
measuring the guarantors recognized liability over the term of the related
guarantee.  This Interpretation also incorporates, without change, the
guidance in FASB Interpretation No. 34, Disclosure of Indirect Guarantees of
Indebtedness of Others, which is being superseded.  The provisions of this
Interpretation are applicable on a prospective basis to guarantees issued or modified
after December 31, 2002, and the disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002.  The Company adopted the disclosure requirements of this
Interpretation during the year ended December 31, 2002.  The Company adopted the other provisions of
this statement on January 1, 2003, and the adoption did not have a material
effect on its financial statements.  5.             SUBSEQUENT EVENTS  Tender Offer  On May 1, 2003, the
Company commenced a cash tender offer and consent solicitation (the Offer)
for its $120 million outstanding principal amount of the Notes.  The Offer is scheduled to
expire at 12:00 midnight, New York City Time, on May 29, 2003, unless extended
or earlier terminated (the Expiration Date). 
Holders of Notes who tender their Notes and deliver consents on or prior
to 12:00 midnight, New York City Time, on May 14, 2003 (the Consent Date),
will receive 102.563% of the principal amount of the Notes validly tendered
(the Total Consideration).  Holders
who tender their Notes after the Consent Date but prior to the Expiration Date
will receive 100% of the principal amount of the Notes validly tendered (the
Tender Offer Consideration).  The
Total Consideration is the sum of the Tender Offer Consideration and 2.563% of
the principal amount of the Notes paid to each holder of Notes that validly
tenders their Notes and delivers consents on or prior to the Consent Date.  In each case, holders that validly tender
their Notes shall receive accrued and unpaid interest up to, but not including,
the payment date.  The Offer is subject to
the satisfaction of certain conditions, including the Companys receipt of
valid tenders for a majority of the outstanding Notes and debt financing
sufficient to consummate the Offer on terms acceptable to the Company.   Signage  The Company entered into a $1.3 million conditional
sale agreement, payable on or before October 1, 2003, for the manufacture and
installation of four full color live video LED sign systems.   9 
   Item 2.ManagementsDiscussion and Analysis of Financial
Condition and Results of Operations  The following discussion should be read in
conjunction with, and is qualified in its entirety by, the Companys financial
statements, including the notes thereto, and the other financial information
appearing elsewhere hereinand by the audited
financial statements and footnotes for the year ended December 31, 2002, which
may be obtained upon request from the Company.  SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS  This document includes
various forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Sections 21E of the Securities Exchange
Act of 1934, as amended, which represent the Companys expectations or beliefs
concerning future events.  Statements
containing expressions such as believes, anticipates or expects used in
our press releases and periodic reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission are intended to identify forward-looking
statements.  All forward-looking
statements involve risks and uncertainties. Although we believe our
expectations are based upon reasonable assumptions within the bounds of our
knowledge of our business and operations, there can be no assurances that
actual results will not materially differ from expected results. We caution
that these and similar statements included in this report and in previously
filed periodic reports, including reports filed on Forms 10-K and 10-Q, are
further qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements.  Such factors include, without limitation,
the following:  increased competition in
existing markets or the opening of new gaming jurisdictions; a decline in the
public acceptance of gaming; the limitation, conditioning or suspension of any
of our gaming licenses; increases in or new taxes imposed on gaming revenues or
gaming devices; a finding of unsuitability by regulatory authorities with
respect to the our officers, directors or key employees; loss or retirement of
key executives; significant increases in fuel or transportation prices; adverse
economic conditions in the our key markets; severe and unusual weather in the
our key markets; and adverse results of significant litigation matters.Readers are
cautioned not to place undue reliance on forward-looking statements, which
speak only as of the date thereof.We expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statement contained in this report, including to reflect any change in our
expectations with regard to that forward-looking statement or any change in
events, conditions or circumstances on which that forward-looking statement is
based.  For more information regarding
risks inherent in an investment in the Company, see the section Business 
Risk Factors in our annual Report on Form 10-K filed with the SEC on March 31,
2003.  OVERVIEW  Our sole business is the
operation of the Resort.  These
financial statements also include the
development activities of our subsidiary, Pink Taco Corporation (Pink Taco
Corp.), a Nevada corporation, (collectively the Company).  Pink Taco Corp. was formed in September 2002
to develop a Pink Taco restaurant and bar on the Sunset Strip in West
Hollywood California.  These development
efforts were abandoned during December 2002.  RESULTS
OF OPERATIONS  Three
Months Ended March 31, 2003 and 2002  NET REVENUES.  Net revenues increased 8% for the
three-month period ended March 31, 2003 to $33.9 million compared to $31.3
million for the three-month period ended March 31, 2002.  The $2.6 million increase in net revenues is
primarily attributable to a $1.2 million or 12% increase in food and beverage
revenues, a $0.8 million or 6% increase in casino revenues and a $0.8 million
or 12% increase in hotel revenues.  
These increases were partially offset by a $0.2 million or 5% decrease
in retail and other revenues and a $0.1 million or 6% increase in promotional
allowances related to items furnished to customers on a complimentary basis.  CASINO REVENUES.  The $0.8 million increase in casino revenues
was primarily due to a $0.8 million or 25% increase in slot machine revenues
and a $0.3 million or 186% increase in race and sports book revenues.  These increases were partially offset by a
$0.3 million or 3% decrease in table games revenues.  The increase in slot machine revenues was due to an increase in
slot machine handle and hold percentage. 
Slot machine handle increased $8.9 million or 11% to $87.7 million from
$78.8 million.  Slot machine hold percentage
increased 0.5 percentage points to 4.8% from 4.3%.  The average number of slot machines in operation decreased to 559
from 568, a decrease of 9 machines or 2%. 
The net result of these changes in handle, hold percentage and average
number of slot machines in operation was an increase in win per slot machine
per day to $83 from $66, an increase of $17 or 26%.  The increase in race and sports book revenues was due to an
increase in race and sports handle and hold percentage.  Race and sports book handle increased $0.4
million or 8% to $5.5 million from $5.1 million.  Race and sports hold percentage increased 6.5 percentage points
to 10.2% from 3.7%.  The decrease in
table games revenues was due to a decrease in table games hold percentage
offset partially by an increase in table games drop.  Table games drop increased $2.9 million or 4% to $75.0 million
from $72.1 million.  Table games hold
percentage decreased 1.0 percentage point to 12.7% from 13.7%.  The average number of table games in
operations increased to 91 from 89, an increase of 2 games or 2%.  The net result of these changes in drop,
hold percentage and average number of table games in operation was a decrease
in win per table game per day to $1,164 from $1,232, a decrease of $68 or
6%.  We have historically reported table
games hold percentage using the gross method, while casinos on the Strip report
hold percentage using the net method (which reduces the table game drop by
marker repayments made in the gaming pit area).  For the purpose of comparison to properties on the Strip, our net
hold percentage for the three-month period ended March 31, 2003 was 14.1%
compared to 15.3% for the three-month period ended March 31, 2002.   10 
    LODGING REVENUES.  The $0.8 million increase in lodging
revenues to $7.4 million from $6.6 million was primarily due to an increase in
average daily rate (ADR) to $128 from $113. 
This increase was offset partially by a $0.1 million decrease in
telephone sales due to the increasing use of cellular telephones, a trend that
we expect to continue.  The occupancy
percentage remained constant between periods at 93%.  FOOD AND BEVERAGE
REVENUES.  The $1.2 million increase in
food and beverage revenues was due to food revenues increasing approximately
$0.8 million and beverage revenues increasing by approximately $0.4
million.  During July 2002, Mortonis
restaurant and bar was closed permanently and has been replaced by Simon
Kitchen and Bar that opened during October 2002.  Food revenues also increased in every other operating
department.  The increases in beverage
revenues were primarily from the opening of Simon Kitchen and Bar of $0.3
million and an increase in banquet bar revenue of $0.1 million.  RETAIL REVENUES AND OTHER
INCOME.  Retail and other revenues
decreased $0.2 million in aggregate.  We
believe the $0.2 million decrease in retail revenues was due in part to
continued general market decline in the themed restaurant merchandise segment,
the addition of other retail operations in Las Vegas and a reduction in foreign
tourists due to Operation Iraqi Freedom.  PROMOTIONAL
ALLOWANCES.  The $0.1 million increase
in promotional allowances was due to an increase in casino and general
marketing complimentary items offered to customers as a result of increased
casino volume.  CASINO EXPENSES.  Casino expenses increased $0.9 million or 12% to $8.7 million from $7.8
million.  The increase was primarily due
to a $0.3 million increase in discounts to our players, a $0.3 million increase
in gaming taxes and fees, a $0.2 million increase in bad debt expenses related
to potentially uncollectible credit extended to casino customers, a $0.2
million increase in casino and marketing labor and related expenses, a $0.1
million increase in the cost of complimentaries related to items furnished to
customers on a complimentary basis. 
These increases were partially offset by a $0.2 million decrease in
casino marketing and player development costs. 
The Companys provision and allowance for doubtful accounts are based on
estimates by management of the collectability of the receivable balances at
each period end.  Managements estimates
consider, among other factors, the age of the receivables, the type or source
of the receivables and the results of collection efforts to date, especially
with regard to significant accounts. 
The outstanding amount of casino markers and checks deposited and
returned by the bank unpaid remained approximately constant between period ends
at approximately $1.6 million.  Casino
expenses as a percentage of casino revenues increased to 61% from 58%, an
increase of 3 percentage points between comparative periods due to the items
described above.  LODGING EXPENSES. Lodging
expenses in relation to lodging revenues, prior to reclassifying the cost of
complimentaries to casino expense, remained constant at 32%.  FOOD AND BEVERAGE COSTS
AND EXPENSES.  Food and beverage costs
and expenses in relation to food and beverage revenues, prior to reclassifying
the cost of complimentaries to casino expense, remained constant at 60%.  RETAIL COSTS AND
EXPENSES.  Retail costs and expenses in
relation to retail revenues, prior to reclassifying the cost of complimentaries
to casino expense, remained constant at approximately 49%.  OTHER COSTS AND
EXPENSES.  Other costs and expenses in
relation to other income decreased to 52% from 53%, a decrease of 1 percentage
point.  The decrease is primarily due to
the recognition of income from the Chevrolet Rock and Roll mobile tour.  MARKETING, GENERAL AND
ADMINISTRATIVE.  General and
administrative expenses in relation to gross revenues increased to 13% from
12%, an increase of 1 percentage point. 
The increase was primarily dueto payroll and related expenses increasing to 7.0% of gross revenues
from 6.4% of gross revenues, guest claims increasing by $0.1 million and
repairs and maintenance increasing by $0.1 million.Marketing
expenses in relation to gross revenues decreased to 3% from 6%, a decrease of 3
percentage points.  The decrease in
marketing expenses was primarily due to
$0.4 million decreases in marketing promotions, a $0.3 million decrease
innational advertising and a $0.1 decrease
in payroll and related expenses.  DEPRECIATION AND
AMORTIZATION.  Depreciation and
amortization expense remained constant.  INTEREST EXPENSE.  Interest expense decreased to $3.3 million
from $3.4 million, a decrease of $0.1 million or 3%.  The decrease is due to the decrease in outstanding borrowings, a
decrease in the effective interest rate on the Companys Credit Facility and
decreasing amortization of loan fees.  11 
   INCOME TAXES.  The Company has recorded a tax benefit of
$0.1 million in the first quarter of 2003. 
The Company did not have income tax expense during 2002 due to being
able to offset 100% of alternative minimum taxable (AMT) income with AMT net
operating loss carryforwards (NOL) from previous periods.  This is due
to legislation passed in the Job Creation and Worker Assistance Act of 2002
which increases the limit on AMT NOL deductions from 90 percent to 100 percent
for NOLs generated or taken as carryforwards in the tax year ending during
2002.  INCOME APPLICABLE TO
COMMON SHAREHOLDERS.  Income applicable
to common shareholders was $1.2 million compared to $0.2 million during the
prior year three-month period. The increase in income applicable to common
shareholders was due to the factors described above and an income tax benefit
of $0.1 million partially offset by a $0.1 million increase in preferred stock
dividends.  Preferred dividends declared
increased due to compounding returns on dividends that were not distributed.  LIQUIDITY AND CAPITAL
RESOURCES  For the three-month
period ended March 31, 2003 our principal sources of funds were cash on-hand at
December 31, 2002, and cash provided by operating activities of $8.0
million.  The amount of cash provided by
operating activities primarily includes net income of $2.6 million,
depreciation and amortization of $2.9 million, provision for losses on accounts
receivable of $0.1 million and amortization of loan fees of $0.2 million net of
$2.3 million of changes in operating assets and liabilities.  The primary uses of funds were capital
expenditures of $0.8 million and a $5.1 million net reduction in the
outstanding borrowings related to our Credit Facility and equipment
financing.  As a result, as of March 31,
2003, we had cash and cash equivalents of $11.3 million.  On April 9, 2003, the Company entered into a $1.3
million conditional sale agreement, payable on or before October 1, 2003, for
the purchase of four full color live video LED sign systems.  On May 1, 2003, the
Company commenced a cash tender offer and consent solicitation (the Offer)
for its $120 million outstanding principal amount of the Notes.  The Offer is scheduled to
expire at 12:00 midnight, New York City Time, on May 29, 2003, unless extended
or earlier terminated (the Expiration Date). 
Holders of Notes who tender their Notes and deliver consents on or prior
to 12:00 midnight, New York City Time, on May 14, 2003 (the Consent Date),
will receive 102.563% of the principal amount of the Notes validly tendered
(the Total Consideration).  Holders
who tender their Notes after the Consent Date but prior to the Expiration Date
will receive 100% of the principal amount of the Notes validly tendered (the
Tender Offer Consideration).  The
Total Consideration is the sum of the Tender Offer Consideration and 2.563% of
the principal amount of the Notes paid to each holder of Notes that validly
tenders their Notes and delivers consents on or prior to the Consent Date.  In each case, holders that validly tender
their Notes shall receive accrued and unpaid interest up to, but not including,
the payment date.  The Offer is subject to
the satisfaction of certain conditions, including the Companys receipt of valid
tenders for a majority of the outstanding Notes and debt financing sufficient
to consummate the Offer on terms acceptable to the Company.  We believe that our
current cash balances and cash flow from operations and other sources of cash
including the available borrowings under our $30.0 million Credit Facility
($12.0 million as of March 31, 2003) will be sufficient to provide operating
and investing liquidity during the next 12 months.  We may, however, need to raise additional funds prior to April 1,
2004.  Our ability to raise additional
funds is limited by restrictions on our financing activities under our Credit
Facility and the Notes.  We cannot be
certain that additional financing will be available to us on favorable terms
when required, if at all.  The $30.0 million amount
available under the commitment began reducing by $2.0 million on September 30,
2001 and will continue to reduce by $2.0 million on the last day of each
subsequent fiscal quarter until it reaches $25.0 million.  Effective December 2001, the Company entered
into an amendment with regard to the Credit Facility whereby the $2.0 million
quarterly commitment reduction for the quarter ending December 31, 2001 was
waived.  Beginning September 30, 2001
and on each succeeding September 30, the credit line reduces by 50% of
Excess Cash Flow, as defined, for the then most recently completed fiscal
year.  Based on our calculations, we
generated approximately $1.6 million excess cash flow as defined for the year
ended December 31, 2001 and the lenders waived this reduction as the Company
entered into an amendment in November 2002. 
Based on calculations, the Company generated approximately $1.8 million
excess cash flow as defined for the year ended December 31, 2002.  Accordingly, we expect the commitment will
reduce by approximately $0.9 million on September 30, 2003.  The amendment entered into in November 2002 regarding
our Credit Facility also permitted the Company to make capital expenditures for
expansion projects in an amount not to exceed $13.0 million, provided that the
aggregate amount of capital expenditures made do not exceed $7.5 million in any
fiscal year or potion thereof and allowing not more than $2.0 million in
capital expenditures not made in any fiscal year to be expended in the
following fiscal year.  In addition, effective
December 2002, we entered into an amendment with regard to our Credit Facility
whereby we are permitted to purchase and redeem during the period between
December 15, 2002 and September 30, 2003, up to $5.0 million of the Notes.  12 
   The Credit Facility
contains certain covenants including, among other things, financial covenants,
limitations on our ability to dispose of capital stock, enter into mergers and
certain acquisitions, incur liens or indebtedness, issue dividends on stock,
and enter into transactions with affiliates. 
The Credit Facility is secured by substantially all of our property at
the Resort.  As of March 31, 2003,
$16.1 million aggregate in dividends have accrued on our 9 1/4% Series A
Cumulative Preferred Stock and 9 1/4% Series B Cumulative Preferred Stock.   13 
   Item 3.Quantitative
and Qualitative Disclosures About Market Risk  Market risks relating to our operations result
primarily from changes in short-term LIBOR interest rates.  We do not have any foreign exchange or other
significant market risk.  We did not
have any derivative financial instruments at March 31, 2003.  Our exposure to market
risk for changes in interest rates relates primarily to our current Credit
Facility.  In accordance with the Credit
Facility, we enter into variable rate debt obligations to support general
corporate purposes, including capital expenditures and working capital
needs.  We continuously evaluate our
level of variable rate debt with respect to total debt and other factors,
including assessment of the current and future economic environment.  We
had $18.0 million and $22.9 million in variable rate debt outstanding at March
31, 2003 and December 31, 2002, respectively. 
Based upon these variable rate debt levels, a hypothetical 10% adverse
change in the effective interest rate (approximately a 46 basis point increase)
would increase interest expense by approximately $0.1 million on an annual
basis, and likewise decrease our earnings and cash flows.  We cannot predict market fluctuations in
interest rates and their impact on our variable rate debt, nor can there be any
assurance that fixed rate long-term debt will be available to us at favorable
rates, if at all.  Consequently, future
results may differ materially from the estimated adverse changes discussed
above.  As of
March 31, 2003, there have been no material changes to the information
previously reported under Item 7 in the Companys annual report on form 10K for
the year ended December 31, 2002, except that on April 9, 2003, the Company
entered into a $1.3 million conditional sale agreement, payable on or before
October 1, 2003, for the purchase of four full color live video LED sign
systems and that on May 1, 2003, the Company commenced a cash tender offer and
consent solicitation for its $120 million outstanding principal amount of the
Notes.  Our ability to service
our contractual obligations and commitments will be dependent on our future
performance, which will be affected by, among other things, prevailing economic
conditions and financial, business and other factors, certain of which are
beyond our control.   Item4.  Controls
and Procedures  (a)  Evaluation
of Disclosure Controls and Procedures. 
The Companys Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the Companys disclosure controls and procedures
(as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934, as amended (the Exchange Act)) as of a date within 90
days prior to the filing date of this annual report (the Evaluation
Date).  Based on such evaluation, such
officers have concluded that, as of the Evaluation Date, the Companys
disclosure controls and procedures are effective in alerting them on a timely
basis to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Companys reports filed
or submitted under the Exchange Act.  (b)  Changes
in Internal Controls.  Since the
Evaluation Date, there have not been any significant changes in the Companys
internal controls or in other factors that could significantly affect such
controls.    14 
   PART
IIOTHER INFORMATION  Item
1.Legal Proceedings  We
are a defendant in various lawsuits relating to routine matters incidental to
our business.  Management does not
believe that the outcome of any litigation, in the aggregate, will have a
material adverse effect on our business or results of operations.  Item 6.Exhibits
and Reports on Form 8-K  (a)           Exhibits  EXHIBIT
  NUMBER
  
  DESCRIPTION3.
  
  CERTIFICATE OF
  INCORPORATION AND BY-LAWS(1) 3.1
  
  Second Amended
  and Restated Certificate of Incorporation of the Company.(2) 3.2
  
  Certificate of
  Amendment of Second Amended and Restated Articles of Incorporation.(2) 3.3
  
  Certificate of
  Designation of 9 1/4% Series A Cumulative Preferred Stock, no par value per
  share.(3) 3.4
  
  Certificate of
  Designation of 9 1/4% Series B Cumulative Preferred Stock, no par value per
  share.(1) 3.5
  
  Second Amended
  and Restated By-Laws of the Company99.
  
  ADDITIONAL EXHIBITS99.1
  
  Certification of Chief Executive Officer and Chief
  Financial Officer Pursuant to 18 U.S.C. section 1350, as adopted pursuant to
  section 906 of the Sarbanes-Oxley Act of 2002.   
 (1)Incorporated by reference to designated
exhibit to our Registration Statement on Form S-4, filed with the Securities
and Exchange Commission on May 21, 1998 (File No. 333- 53211).  (2)Incorporated by reference to designated
exhibit to our Report on Form 10-Q, filed with the Securities and Exchange
Commission for the quarter ended August 31, 1999 (File No. 333-53211).  (3)Incorporated by reference to designated
exhibit to our Report on Form 10-Q, filed with the Securities and Exchange
Commission for the quarter ended June 30, 2000 (File No. 333-53211).  (b)Reports on Form 8-K  Press
release of Hard Rock Hotel, Inc., issued April 22, 2003, reporting results of
operations for the quarter ended March 31, 2003.  15 
   SIGNATURES  Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.  HARD
  ROCK HOTEL, INC.Date:  May 13, 2003
  /s/
  JAMES D. BOWENJames
  D. BowenDULY
  AUTHORIZED OFFICER/s/
  JAMES D. BOWENJames
  D. BowenCHIEF
  FINANCIAL OFFICER(PRINCIPAL
  FINANCIAL OFFICER)   16 
    Exhibit Index   EXHIBIT
  NUMBER
  
  DESCRIPTION3.
  
  CERTIFICATE OF
  INCORPORATION AND BY-LAWS(1) 3.1
  
  Second Amended
  and Restated Certificate of Incorporation of the Company.(2) 3.2
  
  Certificate of
  Amendment of Second Amended and Restated Articles of Incorporation.(2) 3.3
  
  Certificate of
  Designation of 9 1/4% Series A Cumulative Preferred Stock, no par value per
  share.(3) 3.4
  
  Certificate of
  Designation of 9 1/4% Series B Cumulative Preferred Stock, no par value per
  share.(1) 3.5
  
  Second Amended
  and Restated By-Laws of the Company99.
  
  ADDITIONAL EXHIBITS99.1
  
  Certification of Chief Executive Officer and Chief
  Financial Officer Pursuant to 18 U.S.C. section 1350, as adopted pursuant to
  section 906 of the Sarbanes-Oxley Act of 2002.  
 (1)Incorporated by reference to designated
exhibit to our Registration Statement on Form S-4, filed with the Securities
and Exchange Commission on May 21, 1998 (File No. 333- 53211).  (2)Incorporated by reference to designated
exhibit to our Report on Form 10-Q, filed with the Securities and Exchange
Commission for the quarter ended August 31, 1999 (File No. 333-53211).  (3)Incorporated by reference to designated
exhibit to our Report on Form 10-Q, filed with the Securities and Exchange
Commission for the quarter ended June 30, 2000 (File No. 333-53211).   17 
    I, Peter A. Morton, certify that:1.
  I have reviewed this quarterly
  report on Form 10-Q of Hard Rock Hotel, Inc.;2.
  Based on my knowledge, this
  annual report does not contain any untrue statement of a material fact or
  omit to state a material fact necessary to make the statements made, in light
  of the circumstances under which such statements were made, not misleading
  with respect to the period covered by this annual report;3.
  Based on my knowledge, the
  financial statements, and other financial information included in this annual
  report, fairly present in all material respects the financial condition,
  results of operations and cash flows of the registrant as of, and for, the
  periods presented in this annual report;4.
  The registrants other certifying
  officers and I are responsible for establishing and maintaining disclosure
  controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
  for the registrant and have:a)
  designed such disclosure controls
  and procedures to ensure that material information relating to the
  registrant, including its consolidated subsidiaries, is made known to us by
  others within those entities, particularly during the period in which this
  annual report is being prepared;b)
  evaluated the effectiveness of
  the registrants disclosure controls and procedures as of a date within 90
  days prior to the filing date of this annual report (the Evaluation Date);
  andc)
  presented in this annual report
  our conclusions about the effectiveness of the disclosure controls and
  procedures based on our evaluation as of the Evaluation Date;5.
  The registrants other certifying
  officers and I have disclosed, based on our most recent evaluation, to the
  registrants auditors and the audit committee of registrants board of
  directors (or persons performing the equivalent functions):a)
  all significant deficiencies in
  the design or operation of internal controls which could adversely affect the
  registrants ability to record, process, summarize and report financial data
  and have identified for the registrants auditors any material weaknesses in
  internal controls; andb)
  any fraud, whether or not
  material, that involves management or other employees who have a significant
  role in the registrants internal controls; and6.
  The registrants other certifying
  officers and I have indicated in this annual report whether there were
  significant changes in internal controls or in other factors that could
  significantly affect internal controls subsequent to the date of our most
  recent evaluation, including any corrective actions with regard to
  significant deficiencies and material weaknesses.  Date:
  May 13, 2003
  
  /s/  PETER A.
  MORTONChief Executive
  Officer  
   I, James D. Bowen, certify that:1.
  I have reviewed this quarterly
  report on Form 10-Q of Hard Rock Hotel, Inc.;2.
  Based on my knowledge, this
  annual report does not contain any untrue statement of a material fact or
  omit to state a material fact necessary to make the statements made, in light
  of the circumstances under which such statements were made, not misleading
  with respect to the period covered by this annual report;3.
  Based on my knowledge, the
  financial statements, and other financial information included in this annual
  report, fairly present in all material respects the financial condition,
  results of operations and cash flows of the registrant as of, and for, the
  periods presented in this annual report;4.
  The registrants other certifying
  officers and I are responsible for establishing and maintaining disclosure
  controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
  for the registrant and have:a)
  designed such disclosure controls
  and procedures to ensure that material information relating to the
  registrant, including its consolidated subsidiaries, is made known to us by
  others within those entities, particularly during the period in which this
  annual report is being prepared;b)
  evaluated the effectiveness of
  the registrants disclosure controls and procedures as of a date within 90
  days prior to the filing date of this annual report (the Evaluation Date);
  andc)
  presented in this annual report
  our conclusions about the effectiveness of the disclosure controls and
  procedures based on our evaluation as of the Evaluation Date;5.
  The registrants other certifying
  officers and I have disclosed, based on our most recent evaluation, to the
  registrants auditors and the audit committee of registrants board of
  directors (or persons performing the equivalent functions):a)
  all significant deficiencies in
  the design or operation of internal controls which could adversely affect the
  registrants ability to record, process, summarize and report financial data
  and have identified for the registrants auditors any material weaknesses in
  internal controls; andb)
  any fraud, whether or not
  material, that involves management or other employees who have a significant
  role in the registrants internal controls; and6.
  The registrants other certifying
  officers and I have indicated in this annual report whether there were
  significant changes in internal controls or in other factors that could significantly
  affect internal controls subsequent to the date of our most recent
  evaluation, including any corrective actions with regard to significant
  deficiencies and material weaknesses.  Date:
  May 13, 2003
  
  /s/  JAMES D.
  BOWENChief
  Financial Officer