FOR THE QUARTERLY PERIOD ENDED September 30, 2008

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2008

or

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

For the transition period from              to             

Commission File Number 000-50635

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)
3000 PARADISE ROAD LAS VEGAS, NEVADA	89109
(Address of Principal Executive Offices)	(Zip Code)

702-732-5111

(Registrant’s Telephone Number, Including Area Code)

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  x    No  ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  x  (Do not check if a smaller reporting company)	Smaller reporting company  ¨

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

As of November 1, 2008 there were 1.5 Class A Membership Units outstanding and there were 1,500,000 Class B Membership Units outstanding.

COLONY RESORTS LVH ACQUISITIONS, LLC

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	COLONY RESORTS LVH ACQUISITIONS, LLC
	CONDENSED INTERIM FINANCIAL STATEMENTS:
	CONDENSED BALANCE SHEETS	1
	UNAUDITED CONDENSED STATEMENTS OF OPERATIONS	2
	UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS	4
	NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	22
PART II.	OTHER INFORMATION	23
ITEM 1A.	RISK FACTORS	23
ITEM 6.	EXHIBITS	24
SIGNATURES		26

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED INTERIM FINANCIAL STATEMENTS

COLONY RESORTS LVH ACQUISITIONS, LLC

CONDENSED BALANCE SHEETS

(in thousands)

	September 30, 2008		December 31, 2007*
	(Unaudited)
Assets
CURRENT ASSETS:
Cash and equivalents	$	38,647	$	23,645
Restricted cash		5,715		3,168
Accounts receivable, net of allowance for doubtful accounts of $7,096 at September 30, 2008 and $5,912 at December 31, 2007		14,357		18,168
Inventories		2,978		3,089
Prepaid expenses and other current assets		6,046		5,522
Total current assets		67,743		53,592
PROPERTY AND EQUIPMENT, NET		344,974		352,327
RESTRICTED CASH		3,522		3,772
OTHER ASSETS, NET		841		2,117
Total assets	$	417,080	$	411,808
Liabilities and Members’ Equity
CURRENT LIABILITIES:
Accounts payable	$	5,495	$	11,710
Accrued expenses		34,089		33,072
Due to affiliates		2,148		1,311
Total current liabilities		41,732		46,093
TERM LOAN		250,000		244,248
LONG TERM DEPOSITS		61		31
Total liabilities		291,793		290,372
COMMITMENTS AND CONTINGENCIES
REDEEMABLE MEMBERS’ EQUITY		60,000		60,000
MEMBERS’ EQUITY		65,287		61,436
Total liabilities and members’ equity	$	417,080	$	411,808

* Condensed from audited financial statements.

See notes to the unaudited condensed financial statements.

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COLONY RESORTS LVH ACQUISITIONS, LLC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except unit data)

	For the three months ended September 30, 2008			For the three months ended September 30, 2007
Revenues:
Casino	$	21,832		$	28,296
Rooms		25,620			24,774
Food and beverage		17,977			17,976
Other revenue		5,012			6,005
Total revenue		70,441			77,051
Less: promotional allowances		(6,973	)		(7,637	)
Net revenues		63,468			69,414
Expenses:
Casino		19,271			21,353
Rooms		8,355			8,084
Food and beverage		13,139			13,329
Other expense		3,518			3,944
General and administrative		16,838			17,821
Depreciation and amortization		5,123			4,009
Total expense		66,244			68,540
Operating (loss) income		(2,776	)		874
Interest expense		3,395			5,086
Net loss	$	(6,171	)	$	(4,212	)
Net loss allocation
Allocable to Class A	$	—		$	—
Allocable to Class B	$	(6,171	)	$	(4,212	)
Basic weighted average Class A membership units outstanding		1.50			1.50
Basic weighted average Class B membership units outstanding		1,500,000.00			1,500,000.00
Diluted weighted average membership units outstanding		1,500,001.50			1,500,001.50
Net loss per Class A membership unit-basic	$	(4.11	)	$	(2.81	)
Net loss per Class B membership unit-basic	$	(4.11	)	$	(2.81	)
Per membership unit-diluted	$	(4.11	)	$	(2.81	)

See notes to the unaudited condensed financial statements.

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COLONY RESORTS LVH ACQUISITIONS, LLC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except unit data)

	For the nine months ended September 30, 2008			For the nine months ended September 30, 2007
Revenues:
Casino	$	73,085		$	81,720
Rooms		91,973			85,456
Food and beverage		59,263			56,662
Other revenue		17,256			19,472
Total revenue		241,577			243,310
Less: promotional allowances		(22,035	)		(22,278	)
Net revenues		219,542			221,032
Expenses:
Casino		58,248			61,239
Rooms		25,921			24,550
Food and beverage		42,120			40,896
Other expense		11,102			12,500
General and administrative		51,674			53,128
Depreciation and amortization		15,242			11,726
Total expense		204,307			204,039
Operating income		15,235			16,993
Interest expense		11,384			14,613
Net income	$	3,851		$	2,380
Net income allocation
Allocable to Class A	$	—		$	—
Allocable to Class B	$	3,851		$	2,380
Basic weighted average Class A membership units outstanding		1.50			1.50
Basic weighted average Class B membership units outstanding		1,500,000.00			1,500,000.00
Diluted weighted average membership units outstanding		1,500,001.50			1,500,001.50
Net income per Class A membership unit-basic	$	2.57		$	1.59
Net income per Class B membership unit-basic	$	2.57		$	1.59
Per membership unit-diluted	$	2.57		$	1.59

See notes to the unaudited condensed financial statements.

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COLONY RESORTS LVH ACQUISITIONS, LLC

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	For the nine months ended September 30, 2008			For the nine months ended September 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,851		$	2,380
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,242			11,726
Valuation change in interest rate cap agreement		6			89
Amortization of deferred financing costs		819			1,212
Provision for doubtful accounts		1,654			1,839
Stock-based employee compensation		—			1,340
Changes in assets and liabilities:
Accounts receivable		2,157			(2,928	)
Inventories		110			181
Prepaid expenses and other current assets		(665	)		(1,173	)
Other assets		1,263			(1,374	)
Accounts payable		(6,215	)		(6,251	)
Accrued expenses		1,018			5,096
Due to affiliates		837			892
Long term deposits		30			—
Net cash provided by operating activities		20,107			13,029
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(7,889	)		(23,978	)
Increase (decrease) in restricted cash		(2,297	)		975
Net cash used in investing activities		(10,186	)		(23,003	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Term Loan		5,752			12,812
Debt issuance costs		(671	)		(1	)
Net cash provided by financing activities		5,081			12,811
Increase in cash and equivalents		15,002			2,837
Cash and equivalents at beginning of year		23,645			22,943
Cash and equivalents at end of period	$	38,647		$	25,780
Supplemental Cash Flow Disclosure:
Cash paid for interest, net of amount capitalized	$	10,181		$	11,872

See notes to the unaudited condensed financial statements.

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Colony Resorts LVH Acquisitions, LLC, a Nevada limited liability company (the “Company”), was formed under the laws of the State of Nevada on December 18, 2003. The Company owns and operates the Las Vegas Hilton, a casino resort located in Las Vegas, Nevada (the “Hotel” or the “Property”). The Company licenses from Hilton Inns, Inc. (“Hilton”) the right to Hilton’s reservation system and Hilton’s HHonors Programs™.

The Company’s members consist of (1) Colony Resorts LVH Holdings, LLC (“Holdings”), which is a wholly owned subsidiary of Colony VI, a discrete investment fund managed by an affiliate of Colony Capital, (2) Colony Resorts LVH Co-Investment Partners, L.P. (“Co-Investment Partners”), (3) Colony Resorts LVH Coinvestment Voteco, LLC (“Coinvestment Voteco”), (4) 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 5, (5) WH/LVH Managers Voteco, LLC (“Whitehall Voteco”) which acquired certain Class A Membership Units from Co-Investment Voteco on July 19, 2006 and (6) Nicholas L. Ribis (“Mr. Ribis”) who acquired certain Class A and Class B Membership Units from Voteco and Holdings, respectively, on November 21, 2006.

Prior to June 18, 2004, the Company had conducted no business other than in connection with the execution of the Purchase and Sale Agreement, relating to the acquisition of substantially all of the assets and certain liabilities of LVH Corporation, a Nevada corporation (“LVH”) (the “Acquisition”). LVH is a wholly owned subsidiary of Caesars Entertainment, Inc., formerly Park Place Entertainment Corporation (“Caesars”) that prior to the Acquisition operated the Property. Commencing June 18, 2004, the operations, assets and liabilities of the Property are included in the Company’s financial statements.

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. Accordingly, 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. 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 the fair presentation of the financial position, results of operations and cash flows for the interim periods have been made. The results for the three-months and nine-months ended September 30, 2008, 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, 2007, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Use of Estimates

The preparation of the unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses; including related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates those estimates, including those related to asset impairments, accruals for slot and table game marketing points, compensation and related benefits, revenue recognition, allowance for doubtful accounts, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Reclassifications

Certain previously reported amounts in the condensed financial statements for 2007 have been reclassified to conform to the current period’s presentation. These reclassifications had no effect on the previously reported net income.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and provides for expanded disclosure about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. This guidance was issued to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. The Company has adopted the provisions of SFAS 157 as of January 1, 2008 for financial instruments. Although the adoption of SFAS No. 157 did not have a material effect on the Company’s financial position, results of operations or cash flow, the Company is now required to provide additional disclosures as part of its financial statements. Further, in February 2008 the FASB issued FASB Staff Position 157-2 “Effective Date of FASB Statement 157”, (“FASP FAS 157-2”) which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The Company is currently evaluating the impact FASP FAS 157-2 will have on its financial statements.

SFAS 157 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

As of September 30, 2008, the Company held a certain asset that is required to be measured at fair value on a recurring basis. This asset is a derivative instrument related to its interest cap agreement.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of the guidance is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company adopted the provisions of SFAS 159 as of January 1, 2008. The adoption of SFAS No. 159 did not have a material effect on the Company’s financial position, results of operations or cash flow.

In March 2008, the FASB released SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” (“SFAS 161”). SFAS 161 requires additional disclosures related to the use of derivative instruments, the accounting for derivatives and the financial statement impact of derivatives. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Company is currently assessing the impact the adoption of SFAS 161 will have on the Company’s financial statements.

On 10 October 2008, FASB issued FASB Staff Position No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active (“FSP 157-3” or the FSP). FSP 157-3 clarifies the application of SFAS 157, Fair Value Measurements (Statement 157), in a market that is not active. FSP 157-3 amends SFAS 157 to include an example that illustrates key considerations when applying the principles in SFAS 157 to financial assets when the market for these instruments is not active. The Company is currently assessing the impact that FAS 157-3 will have on the Company’s financial statements.

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

In May of 2008, the FASB issued SFAS No. 162 The Heirarchy of Generally Accepted Accounting Principles. This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This Statement is effective sixty days following the United States Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not expect the adoption of SFAS 162 to have a significant impact on its consolidated results of operations or financial position.

2. NEW TERM LOAN

On May 11, 2006, the Company entered into a new Loan Agreement with Goldman Sachs Commercial Mortgage Capital, L.P. (the “new Term Loan”). The new Term Loan was for an initial principal amount of $209.2 million and was for an initial term of two (2) years with three, one-year extensions. Effective June 3, 2008, the lender granted the Company a one-year extension to the new Term Loan for which the Company paid a $625,000 extension fee and $46,000 in related expenses. The Company has drawn an additional $40.8 million against the new Term Loan resulting in a total outstanding principal amount of $250 million. The new Term Loan is subject to a maximum funding of $250 million.

Interest on the new Term Loan accrues at a rate of one month LIBOR plus 2.9%. The new Term Loan provides for no amortization during the term. The new Term Loan is collateralized by a first priority deed of trust on the Property.

Pursuant to the terms of the new Term Loan, the Company purchased an interest rate cap for $13,000 with LIBOR strike rate of 6.25% for the one year extension of the new Term Loan. As of September 30, 2008, the interest rate cap was valued at $7,015.

The Company’s interest rate cap agreement qualifies as a level two financial asset in accordance with SFAS 157 as of September 30, 2008; however, the balance as of September 30, 2008 and changes in the period ended September 30, 2008 did not have a material effect on the Company’s financial position or operations.

3. RELATED PARTY TRANSACTIONS

The Company entered into a Services Agreement, Joint Services Agreement and Joint Marketing Agreement with Resorts International Hotel, Inc. (“Resorts”) an affiliate of the Company (through common control) on June 18, 2004. On April 25, 2005, the Joint Services Agreement and the Joint Marketing Agreement were amended and restated to add RIH Resorts, LLC, an affiliate of the Company (through common control), as a party to the agreements. These agreements provide for an initial term of three years with automatic one year renewal periods. The agreements provide that the Company and Resorts will cooperatively develop and implement joint services and marketing programs.

The Company provides and/or receives services from affiliated companies. The total net value of services received from the affiliated companies was approximately $2.9 million for the nine months ended September 30, 2008 and $3.5 million for the nine months ended September 30, 2007.

4. REDEEMABLE MEMBERS’ INTERESTS

In connection with the closing of the Acquisition, the Company, Voteco, Co-Investment Voteco, Co-Investment Partners and Holdings entered into a Sale Right Agreement, dated June 18, 2004 (the “Sale Right Agreement”). Pursuant to the terms of Co-Investment Partners’ partnership agreement, at any time after May 23, 2008, Whitehall (a limited partner in Co-Investment Partners and an affiliate of Goldman Sachs Commercial Mortgage Capital, L.P., the lender under the Term Loan) has the right to request that Co-Investment Partners purchase all of Whitehall’s interest in Co-Investment Partners at a purchase price determined by Whitehall. Pursuant to the Sale Right Agreement, upon receiving notice from Whitehall that it has exercised the sale right the Company must, within forty-five days elect to either (i) purchase that portion of the Class B Membership Units which represent Whitehall’s interest in Co-investment Partners or (ii) sell the Company in its entirety. If the Company elects not to redeem the Class B Membership Units, it must appoint Goldman Sachs & Co. as its sole and exclusive agent for a period of one year to seek to sell the Company at a price extrapolated from the price Whitehall established for its interest in Co-Investment Partners. In addition, on June 18, 2010, if the Company has not been sold pursuant to sale right above or otherwise, the Company is required to appoint Goldman Sachs & Co. as its sole agent to seek to sell the

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company at the best price obtainable unless Whitehall and Co-Investment Partners both agree not to sell the Company or to postpone such sale. For purposes of the diluted membership unit calculation, it is assumed that the redemption of Whitehall’s interest or sale of the property will be consummated at fair value. To date, Whitehall has chosen not to exercise its sale right.

5. MEMBERSHIP INTERESTS

In connection with and immediately prior to the Acquisition, the Company issued Class A Membership Units (“Class A Units”) to Co-Investment 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 Co-Investment Partners and to Holdings, 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. Pursuant to the Operating Agreement and following receipt of all required approvals from the Nevada Gaming Commission, Co-Investment Voteco transferred certain Class A Units to Whitehall Voteco, and as a result, Whitehall Voteco joined the Company as a member and became a party to the Operating Agreement effective July 19, 2006. Pursuant to an Option Agreement between Mr. Ribis, Voteco and Holdings, Mr. Ribis exercised options to acquire Class A Units and Class B Units directly from Voteco and Holdings, respectively, and as a result, Mr. Ribis joined the Company as a member and became a party to the Operating Agreement effective November 21, 2006.

As of September 30, 2008, Voteco owns 0.585 Class A Units, Co-Investment Voteco owns 0.30 Class A Units, Whitehall Voteco owns 0.60 Class A Units and Mr. Ribis owns 0.015 Class A Units. In addition, as of September 30, 2008, Holdings owns 585,000 Class B Units, Co-Investment Partners owns 900,000 Class B Units and Mr. Ribis owns 15,000 Class B Units. Pursuant to the 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 are not entitled to vote, except as otherwise expressly required by law.

At the time of the closing of the Acquisition, a Transfer Restriction Agreement was executed by and among Thomas J. Barrack, Jr. (“Mr. Barrack”), Mr. Ribis, Co-Investment Partners and Co-Investment Voteco (the “Coinvestment Transfer Restriction Agreement”) and a Transfer Restriction Agreement was executed by and among Mr. Barrack, Voteco and Holdings (the “Voteco Transfer Restriction Agreement”). At the time of the transfer of certain Class A Units to Whitehall Voteco from Co-Investment Voteco, a Transfer Restriction Agreement was executed by and among Stuart Rothenberg (“Mr. Rothenberg”), Brahm Cramer (“Mr. Cramer”) and Jonathan Langer (“Mr. Langer”) and together with Mr. Rothenberg and Mr. Cramer, the “Whitehall Voteco Members”, Whitehall Voteco and Co-Investment Partners (the “Whitehall Voteco Transfer Restriction Agreement”).

The Company’s Class A Units issued to Co-Investment Voteco are subject to the Co-Investment Transfer Restriction Agreement, which provides, among other things, that:

• Co-Investment Partners has the right to acquire Class A Units from Co-Investment 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;

• A specific purchase price, as determined in accordance with the Co-Investment Transfer Restriction Agreement, will be paid to acquire the Class A Units from Coinvestment Voteco; and

• Co-Investment 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;

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

• 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.

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

• Co-Investment Partners has the right to acquire Class A Units from Whitehall 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;

• A specific purchase price, as determined in accordance with the Whitehall Voteco Transfer Restriction Agreement, will be paid to acquire the Class A Units from Whitehall Voteco; and

• Whitehall Voteco will not transfer ownership of Class A Units owned by it except pursuant to such option of Co-Investment Partners.

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

6. 2004 INCENTIVE PLAN

In connection with the closing of the Acquisition, the Company’s board and members approved the Company’s 2004 Incentive Plan (the “Plan”). As of June 18, 2004, the Company had a total of 0.167 Class A Units and 166,667 Class B units reserved for issuance under the Plan. The Plan was amended by the board on May 16, 2006 in order to (1) comply with Section 409A of the Internal Revenue Code of 1986, as amended from time to time, and (2) eliminate the provision that excludes the value attributable to the Development Parcels (as defined in the Plan).

Subsequent to the closing of the Acquisition, the Company granted 0.167 options of Class A Units and 166,667 options of Class B Units to certain executives, in accordance with the Plan. The options have a 10 year life, vest over three years and have an exercise price of $100 per unit in both classes which was equal to, or greater than, the fair market value of the membership units at the date of grant. As a result of the amendment on May 16, 2006 which eliminated the exclusion of the value of the Development Parcels, the options increased in value.

Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123(R)) requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s estimated requisite service period (generally the vesting period of equity award) on a straight-line basis. Estimates are revised if key elements of the options change. The cumulative effect on compensation cost as a result of changes to key elements or forfeiture estimates are recognized in the period of the change. The amendment on May 16, 2006 triggered a revaluation of the options. The increase in value will be recorded on a straight-line basis over the remaining vesting period of the options.

Prior to January 1, 2006, the Company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB No.25), and related interpretations. The Company adopted SFAS No. 123(R) using the modified prospective method and accordingly, financial statement amounts for prior periods presented in the Form 10-K have not been restated to reflect the fair value method of recognizing compensation cost relating to these options.

The fair value of the option awards is estimated on the date of grant using an appraisal of the value of the Company and its membership units. No additional grants have been awarded subsequent to the Acquisition date.

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

There was no compensation costs related to the 166,667 options included for the nine months ended September 30, 2008 in the implementation of SFAS No. 123(R). There was approximately $1.3 million of compensation cost related to the 166,667 options recognized in general and administrative expenses for the nine months ended September 30, 2007. There was no compensation cost in general and administrative expenses for the three months ended September 30, 2007. The 166,667 options are fully vested as of June 30, 2007 and there has been no additional compensation expense related to this option plan since that date.

The estimated fair value of the options at the date of grant was $27.73 per membership unit and was computed using the Black-Scholes-Merton option pricing model with the following weighted average assumptions: risk free interest rate of 3.24%; no expected dividend yields; and expected vesting periods of 36 months. The estimated fair value of the options at the date of amendment was $38.21 per membership unit and was also computed using the Black-Scholes-Merton option pricing model with the following weighted average assumptions: risk free interest rate of 5.07%, no expected dividend yield, and expected vesting periods of 13 months. The following table sets forth the assumptions used to determine compensation cost for these options consistent with the requirements of SFAS No. 123(R).

Weighted-average assumptions:	2006 (Post Amendment)			2006 (Pre Amendment)			2005			2004
Model		Black-Scholes			Black-Scholes			Black-Scholes			Black-Scholes
Number of options		166,667			166,667			166,667			166,667
Membership unit price	$	100		$	100		$	100		$	100
Exercise unit price	$	100		$	100		$	100		$	100
Dividend Yield		N/A			N/A			N/A			N/A
Volatility		37	%		40	%		40	%		40	%
Risk-Free rate		5.07	%		3.24	%		3.24	%		3.24	%
Valuation Date		May 16, 2006			June 18, 2004			June 18, 2004			June 18, 2004
Expiration Date		June 18, 2014			June 18, 2014			June 18, 2014			June 18, 2014
Term		13 months						36 months			36 months
Up movement		N/A						N/A			N/A
Down movement		N/A						N/A			N/A
Risk Neutral Probability		N/A						N/A			N/A

7. COMMITMENTS AND CONTINGENCIES

Letters of Credit

Beginning in 2005 and annually thereafter, the Company was required to deliver irrevocable standby letters of credit in connection with its workers’ compensation insurance policies issued by its insurance carriers. The letters of credit are secured by certificates of deposits in the same notional amounts as the corresponding letters of credit. The initial expiration dates of these letters of credit are for one year and are automatically extended for one year from their expiration date unless the issuing bank notifies the Company sixty days prior to such expiration dates that the letters of credit will not be renewed. As of September 30, 2008 and December 31, 2007, the certificates of deposit which secure the letters of credit total $3,512,000 and $3,762,000, respectively, and are included in restricted cash. As of September 30, 2008 and December 31, 2007, there were no amounts outstanding on the letters of credit.

Hilton License Agreement

The Company currently operates under a license agreement with Hilton Inns, Inc. The license agreement gives the Company the right to use the mark “Hilton” and to participate in Hilton’s reservation system and HHonors Program™ among other things. The license agreement expires on December 31, 2008.

The Company is currently seeking an extension of the license agreement with Hilton Inns, Inc. If the license agreement is not extended, the Company may realize lower occupancy levels and average daily hotel rates and incur significant, additional expenses to re-brand the hotel.

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COLONY RESORTS LVH ACQUISITIONS, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Litigation

In the normal course of business, the Company is subject to various litigation, claims and assessments. The Company is not currently a party to any material litigation and, it is not aware of any material action, suit or proceeding against it that has been threatened by any person.

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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.

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 financial statements, the related notes to financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 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

The following discussion of the Company’s results of operations compares the three months and nine months ended September 30, 2008 to the three months and nine months ended September 30, 2007 respectively.

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 the Race and Sports Book and Poker. Casino revenue is defined as the win from gaming activities, computed as the net 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.

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. The Hotel also uses 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.

Room 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 the 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 Hotel. Such revenue is recognized at the time the goods or services are provided to the guest.

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Comparison of the Three Months Ended September 30, 2008 with the Three Months Ended September 30, 2007

Summary Financial Information

The Hotel offers hotel, gaming, dining, entertainment, retail and spa amenities at one location in Las Vegas and under one operating segment. Approximately 31% of the Hotel’s gross revenue is derived from gaming, while 36% is derived from room revenue. Room revenue is significant because of the Hotel’s location next to the Las Vegas Convention Center and its related emphasis on the group, convention, and trade show business.

The following table summarizes the Hotel’s results of operations (in thousands):

	Three Months Ended September 30,
	2008			2007
Net revenues	$	63,468		$	69,414
Operating (loss) income		(2,776	)		874
Net loss		(6,171	)		(4,212	)

Revenue Information

The breakdown of the Property’s net revenue is as follows (dollars in thousands):

	Three Months Ended September 30,
	2008			2007			Percent Change
Casino	$	21,832		$	28,296		(22.8	)%
Rooms		25,620			24,774		3.4	%
Food and beverage		17,977			17,976		—	%
Other revenue		5,012			6,005		(16.5	)%
		70,441			77,051		(8.6	)%
Less - promotional allowance		(6,973	)		(7,637	)	8.7	%
Net revenues	$	63,468		$	69,414		(8.6	)%

Casino

Casino revenue decreased $6.5 million, or (22.8)%, to $21.8 million for the quarter ended September 30, 2008, compared to $28.3 million for the quarter ended September 30, 2007. The decrease in casino revenue was due to a $3.8 million decrease in the table games win, a $2.4 million decrease in slot win, and a slight decrease in race and sports book win. The decrease in slot and table game win is primarily a result of lower slot and table game drop for the quarter ended September 30, 2008 compared to the quarter ended June 30, 2007. The decrease in volume is due to the general economic downturn and fierce competition.

The Casino operating department margin was 11.7% for the quarter ended September 30, 2008. The operating department margin was 24.5% for the quarter ended September 30, 2007. The declining margin was primarily due to lower revenues with lagging cost adjustments.

Rooms

For the quarter ended September 30, 2008, room revenue was $25.6 million, an increase of $0.8 million from the quarter ended September 30, 2007. The increase is primarily attributable to an increase in the average daily room rate for the quarter ended September 30, 2008 compared to the average daily room rate for the quarter ended September 30, 2007.

The Room operating department margin was 67.4% for the three months ended September 30, 2008 and for the three months ended September 30, 2007. Costs increased in proportion to revenue increases.

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Food and Beverage

Food and Beverage revenue for the quarter ended September 30, 2008 and for the quarter ended September 30, 2007 was $18.0 million. The number of guests served and the average check were flat quarter-to-quarter. Operating margins did not vary significantly quarter-to-quarter. The operating margin was 26.9% for the quarter ended September 30, 2008 compared to an operating margin of 25.9% for the quarter ended September 30, 2007.

Other

Other Revenue includes retail sales, entertainment sales and miscellaneous income. Other Revenue was approximately $5.0 million for the quarter ended September 30, 2008 or $1.0 million less than Other Revenue reported for the quarter ended September 30, 2007. Entertainment revenue was higher for the third quarter of 2007 compared to the third quarter of 2008 because of more scheduled performances from headliner entertainment during 2007.

Operating Cost and Expense Information

The breakdown of the Property’s operating costs and expenses is as follows (dollars in thousands):

	Three Months Ended September 30,
	2008		2007		Percent Change
Casino	$	19,271	$	21,353	(9.8	)%
Rooms		8,355		8,084	3.4	%
Food and beverage		13,139		13,329	(1.4	)%
Other		3,518		3,944	(10.8	)%
General and administrative		16,838		17,821	(5.5	)%
Depreciation and amortization		5,123		4,009	27.8	%
Total	$	66,244	$	68,540	(3.3	)%

Operating Expenses

Operating expenses (excluding depreciation and amortization) were lower for the quarter ended September 30, 2008 compared to the quarter ended September 30, 2007. The decrease in other expenses is due to lower casino expenses, in particular payroll and employee benefits and marketing expenses.

Depreciation and amortization increased from $4.0 million for the quarter ended September 30, 2007 to $5.1 million for the quarter ended September 30, 2008. The increase is primarily due to the additional depreciation expense associated with capital expenditures for renovations completed during the first quarter of 2007.

Interest Expense

For the three months ended September 30, 2008, interest expense totaled $3.4 million. For the three months ended September 30, 2007, interest expense totaled $5.1 million. The decrease of $1.7 million is due to a decline in the LIBOR rate between the two periods.

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Comparison of the Nine Months Ended September 30, 2008 with the Nine Months Ended September 30, 2007

Summary Financial Information

The following table summarizes the Hotel’s results of operations (in thousands):

	Nine Months Ended September 30,
	2008		2007
Net revenues	$	219,542	$	221,032
Operating income		15,235		16,993
Net income		3,851		2,380

Revenue Information

The breakdown of the Property’s net revenue is as follows (dollars in thousands):

	Nine Months Ended September 30,
	2008			2007			Percent Change
Casino	$	73,085		$	81,720		(10.6	)%
Rooms		91,973			85,456		7.6	%
Food and beverage		59,263			56,662		4.6	%
Other revenue		17,256			19,472		(11.4	)%
		241,577			243,310		(0.7	)%
Less: - promotional allowance		(22,035	)		(22,278	)	(1.1	)%
Net revenues	$	219,542		$	221,032		(0.7	)%

Casino

Casino revenue decreased $8.6 million, or 10.6%, to $73.1 million for the nine months ended September 30, 2008, compared to $81.7 million for the nine months ended September 30, 2007. The decrease was primarily from reduced slot win and table games win and also from the elimination of the poker room. Table games revenue decreased $5.5 million for the nine months of 2008 compared to the nine months of 2007. Slot revenue decreased $3.2 million for the nine months of 2008 compared to the nine months of 2007. The decrease in slot win and table game win was primarily due to a decrease in drop. The general economic downturn, a shift in casino marketing efforts away from high end players and a highly competitive environment resulted in less volume from 2007 to 2008. The poker room, which was included in casino revenue, was closed in December 2007.

The Casino operating department margin was 20.3% for the nine months ended September 30, 2008. The Casino operating department margin was 25.1% for the nine months ended September 30, 2007. The lower operating margin was the result of reduced casino revenue and relatively fixed casino operating expenses.

Rooms

For the nine months ended September 30, 2008, room revenue was $92.0 million, an increase of $6.5 million from the nine months ended September 30, 2007. The increase is attributable to both an increase in the average daily room rate for the nine months ended September 30, 2008 compared to the average daily room rate for the nine months ended September 30, 2007 and an increase in the number of occupied rooms between the two periods.

The room operating department margin did not vary significantly for the comparable nine month periods. The Room operating margin for the nine months ended September 30, 2008 was 71.8%; the Room operating margin for the nine months ended September 30, 2006 was 71.3%.

Food and Beverage

Food and Beverage revenue for the nine months ended September 30, 2008 was $59.3 million, a $2.6 million increase compared to $56.7 million for the nine months ended June 30, 2007. The operating margin of 28.9% for the first nine months of 2008 was slightly improved from the operating margin of 27.8% for the nine months of 2007. Reduced labor costs in proportion to revenue were primarily responsible for the higher operating margins.

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Other

Other Revenue includes retail sales, entertainment sales and miscellaneous income. Other Revenue was approximately $17.3 million for the nine months ended September 30, 2008 or $2.2 million less than Other Revenue reported for the nine months ended September 30, 2007. Entertainment revenue was higher for the nine months ended September 30, 2007 compared to the nine months ended September 30, 2008 because of more scheduled performances from headliner entertainment and higher showroom occupancy in 2007 compared to 2008.

Operating Cost and Expense Information

The breakdown of the Property’s operating costs and expenses is as follows (dollars in thousands):

	Nine Months Ended September 30,
	2008		2007		Percent Change
Casino	$	58,248	$	61,239	(4.9	)%
Rooms		25,921		24,550	5.6	%
Food and beverage		42,120		40,896	3.0	%
Other expense		11,102		12,500	(11.2	)%
General and administrative		51,674		53,128	(2.7	)%
Depreciation and amortization		15,242		11,726	30.0	%
Total	$	204,307	$	204,039	0.1	%

Operating Expenses

Operating expenses were flat for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007. Higher depreciation and amortization expense due to the depreciation of capital expenditures associated with renovations completed in the first quarter of 2007 were offset by lower casino expenses primarily due to decreased casino volume.

Interest Expense

For the nine months ended September 30, 2008, interest expense totaled $11.4 million. For the nine months ended September 30, 2007, interest expense totaled $14.6 million. The decrease of $3.2 million is due to a decline in the LIBOR rate between the two periods.

Liquidity and Capital Resources

Cash flows of the Company for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 consisted of the following:

Cash Flow - Operating Activities

Cash flow provided by operations was $20.1 million for the nine months ended September 30, 2008 compared to $13.0 million provided by operations for the nine months ended September 30, 2007. Net income increased by $1.5 million for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007. Depreciation and amortization increased cash flow from operations by $15.2 million for the first nine months ended September 30, 2008; depreciation and amortization increased cash flow from operations by $11.7 million for the first nine months ended September 30, 2007.

As of September 30, 2008, the Company had cash and equivalents of $38.6 million of which $6.6 million was cash in the casino used to fund daily operations. For the remainder of 2008, the Company expects to fund property operations, capital expenditures, and debt service requirements from existing cash balances and operating cash flow.

Cash Flows - Investing Activities

For the nine months ended September 30, 2008, $10.2 million of cash was used to fund investing activities of which $7.9 million was used for additions for property and equipment. For the nine months ended September 30, 2007, $23.0 million was used to fund investing activities of which $24.0 million was used for additions to property and equipment.

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Cash Flows - Financing Activities

For the nine months ended September 30, 2008, $5.8 million of new borrowings under the Term Loan were primarily used for the purchase of property and equipment. During the nine months ended September 30, 2007, $12.8 million was borrowed and used for renovations and the purchase of property and equipment. As of September 30, 2008 no amounts remain available under the Term Loan for future borrowings.

Other Factors Affecting Liquidity

While the Company believes that the cash provided by its cash flows from operations together with cash on hand will be adequate to fund its activities, including the capital expenditures that the Company plans to make, no assurances can be made that such sources will be sufficient to meet such requirements. Covenants under the new Term Loan restrict the Company’s future borrowing capacity. If circumstances warrant, the Company may seek a working capital line of credit.

A downturn in the economy, increase in revenue or wagering taxes, acts of terrorism, war or military actions would impact the Company’s operations and negatively impact its cash flows from operations. If this were to occur, the Company would be required to adjust its capital spending plans.

Contractual Obligations and Other Commitments

The following table summarizes the Company’s contractual obligations and commitments (amount in thousands):

	Payments Due by Period
	Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Total
			(In Thousands)
Long-Term Debt Obligation
New Term Loan (a)	$	—	$	250,000	$	—	$	—	$	250,000
Variable interest payments (b)		10,763		—		—		—		10,763
Contractual Obligations
Employment agreements (c)		1,771		312		—		—		2,083
Licensing agreement (d)		500		—		—		—		500
Entertainment contracts (e)		6,987		1,935		—		—		8,922
	$	20,021	$	252,247	$	—	$	—	$	272,268

(a) The new Term Loan, with an initial funding of $209,200,000 originated May 11, 2006. The Company has drawn an additional $40.8 million under the new Term Loan and as of September 30, 2008, the outstanding balance on the term loan was $250,000,000. The loan accrues interest at a rate of 2.9% plus one-month LIBOR which was 4.05% at September 30, 2008. Effective June 3, 2008, the lender granted the Company a one-year extension to the new Term Loan for which the Company paid a $625,000 extension fee and $46,000 in related expenses. The new Tem Loan is subject to a funding maximum of $250,000,000. The loan is collateralized by a first priority deed of trust on the property and has no amortization prior to maturity.

(b) Based on September 30, 2008 LIBOR rates of 4.05% plus the applicable interest rate.

(c) The Company is party to employment agreements with 15 of its senior executives, with original terms of three to five years.

(d) 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 ^TM”. The license expires on December 31, 2008 and during the term of the license, the Company is required to pay Hilton an annual fee of $2 million plus 1% of the Hotel’s gross room revenue.

(e) The Company is party to certain contracts to retain specific entertainers for recurring performances. These agreements expire during 2008 and 2009.

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Off-Balance Sheet Arrangements

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.

Debt Instruments

The following table provides information about the Company’s long-term debt at September 30, 2008 amounts in thousands):

	Maturity Date	Face Amount		Carrying Value		Estimated Fair Value
Term Loan	May 2009	$	250,000	$	250,000	$	250,000

On May 11, 2006, the Company entered into a new Term Loan. The new Term Loan was for an initial principal amount of $209.2 million and for an initial term of two (2) years with three, one-year extensions. Effective June 3, 2008, the lender granted the Company a one-year extension to the new Term Loan for which the Company paid $625,000 extension fee. The Company has drawn an additional $40.8 million under the new Term Loan. The new Term Loan is subject to a funding maximum of $250 million.

Interest on the new Term Loan accrues at a rate of one month LIBOR plus 2.9%. The new Term Loan provides for no amortization during the term. The new Term Loan is secured by a first priority deed of trust on the Property.

Pursuant to the terms of the new Term Loan, the Company purchased an interest rate cap with a LIBOR strike rate of 6.25% for the one-year extension of the new Term Loan.

Litigation Contingencies and Available Resources

In the normal course of business, the Company is subject to various litigation, claims and assessments. The Company is not currently a party to any material litigation and it is not aware of any material action, suit or proceedings against it that has been threatened by any person.

Critical Accounting Policies

Significant Accounting Policies and Estimates

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States. Certain of its accounting policies, including the determination of slot club promotion liability, the estimated useful lives assigned to its assets, asset impairment, insurance reserves, and allowance for doubtful accounts require that it apply significant judgment in defining the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. The Company’s judgments are based on its historical experience, terms of existing contracts, observance of trends in the gaming industry and information available from other outside sources. There can be no assurance that actual results will not differ from the Company’s estimates. To provide an understanding of the methodology the Company applies, its significant accounting policies and basis of presentation are discussed below, as well as where appropriate in this discussion and analysis and in the notes to the Company’s financial statements.

Slot Club Promotions

The Company’s Slot Club allows customers to redeem points earned from their gaming activity for cash and complimentary food, beverage, rooms, entertainment and merchandise. At the time redeemed, the retail value of complimentaries is recorded as revenue with a corresponding offsetting amount included in promotional allowances. The cost associated with complimentary food, beverage, rooms, entertainment and merchandise redeemed is recorded in casino costs and expenses. The Company also records a liability for the estimated cost of the outstanding points that it believes will ultimately be redeemed.

Self-Insurance Reserve

The Company is self insured up to certain stop loss amounts for workers’ compensation and guest liability claims. In estimating this accrual, the Company considers historical loss experience and makes judgments about the expected levels of costs per claim. The Company believes its estimates of future liability are reasonable based upon its methodology; however, changes in accident frequency and severity and other factors could materially affect the estimate for this liability.

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Derivative Investments and Hedging Activities

The Company’s new Term Loan requires it to enter into interest rate caps in order to manage interest rate risks associated with this borrowing. The Company has adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (as amended by SFAS No. 138 and 149) to account for its interest rate cap arrangement.

Allowance for Doubtful Accounting Reserves

The Company’s receivables balances relate primarily to its hotel and casino operations. The Company reserves an estimated amount for receivables that may not be collected. The Company estimates the allowance for doubtful accounts by applying standard reserve percentages to aged account balances under a specific dollar amount and specifically analyzing the collectability of each account with a balance over the specified dollar amount, based on the age of the account, the customer’s financial condition, collection history and any other known information.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, while costs of normal repairs and maintenance are charged to expense as incurred.

Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurement (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and provides for expanded disclosure about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. This guidance was issued to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. The Company has adopted the provisions of SFAS 157 as of January 1, 2008 for financial instruments. Although the adoption of SFAS 157 did not have a material effect on the Company’s financial position, results of operations or cash flow, the Company is now required to provide additional disclosures as part of its financial statements. Further, in February 2008 the FASB issued FASB Staff Position 157-2 “Effective Date of FASB Statement No. 157”, (“FASP FAS 157-2”) which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The Company is currently evaluating the impact FASP FAS 157-2 will have on its financial statements.

SFAS 157 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

As of September 30, 2008, the Company held a certain asset that is required to be measured at fair value on a recurring basis. This asset is a derivative instrument related to its interest cap agreement.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of the guidance is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 is effective as of the beginning of the first fiscal year after November 15, 2007. The adoption of SFAS No. 159 will not have a material effect on the Company’s financial position, results of operations or cash flow.

In March 2008, the FASB released SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS No. 161 requires additional disclosures related to the use of derivative instruments, the accounting for derivatives and the financial statement impact of derivatives. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company is currently assessing the impact the adoption of SFAS No. 161 will have on the Company’s consolidated financial statements.

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On 10 October 2008, FASB issued FASB Staff Position No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active (“FSP 157-3” or the FSP). FSP 157-3 clarifies the application of SFAS 157, Fair Value Measurements (Statement 157), in a market that is not active. FSP 157-3 amends SFAS 157 to include an example that illustrates key considerations when applying the principles in SFAS 157 to financial assets when the market for these instruments is not active. The Company is currently assessing the impact that FAS 157-3 will have on the Company’s financial statements.

In May of 2008, the FASB issued SFAS No. 162 The Heirarchy of Generally Accepted Accounting Principles. This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This Statement is effective sixty days following the United States Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not expect the adoption of SFAS 162 to have a significant impact on its consolidated results of operations or financial position.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. The Company’s primary exposure to market risk is interest rate risk associated with its variable rate long-term debt. If LIBOR were to increase 100 basis points and there were no additional borrowings, interest expense would increase approximately $2.5 million annually. The Company attempts to manage its interest rate risk by entering into interest rate cap agreements. The Company does not hold or issue financial instruments for trading purposes and does not enter into derivative transactions that would be considered speculative positions. The derivative financial instruments consist exclusively of interest rate cap agreements. Differentials resulting from these agreements are recorded on an accrual basis as an adjustment to interest expenses.

To manage counterparty credit risk in interest rate cap agreements, the Company only enters into agreements with highly rated institutions that can be expected to perform under terms of such agreements.

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ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Executive Vice President of Finance and our Chief Executive Officer and General Manager, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13(a) – 15(e) and 15(d) – 15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on this evaluation, our principal executive and principal financial officers concluded our disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in our SEC reports. There has been no change in our internal control over financial reporting (as defined in Rules 13(a) – 15(e) and 15(d) – 15(e) under the Securities Exchange Act of 1934, as amended) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM A. RISK FACTORS

Continued disruption in the world financial markets may adversely impact the spending patterns of our customers and the availability and cost of borrowing.

Continued disruptions in the world financial and credit markets and the resulting affect on the economies of the United States and certain foreign countries may result in fewer customers visiting, or customers spending less at our Property which will adversely impact our revenues while some of our costs remain fixed resulting in decreased earnings. The current situation in the world credit markets and the disruptions in the normal flow of credit among financial institutions may adversely impact the availability and cost of credit in the future. There can be no assurances that government responses to the disruptions of the financial and credit markets will restore consumer confidence, stabilize the markets or increase liquidity and the availability of credit.

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ITEM 6. EXHIBITS

EXHIBIT NUMBER
2.1	Purchase and Sale Agreement, dated as of December 24, 2003, by and among Colony Resorts LVH Acquisitions, LLC, LVH Corporation and Caesars Entertainment Corporation*
3.1	Articles of Organization, dated as of December 18, 2003, for Colony Resorts LVH Acquisitions, LLC*
3.2	Operating Agreement, dated as of December 22, 2003, for Colony Resorts LVH Acquisitions, LLC*
3.3	Amended and Restated Operating Agreement, dated June 18, 2004, for Colony Resorts LVH Acquisitions, LLC+
3.4	Amendment No. 1 to the Amended and Restated Operating Agreement, dated July 23, 2004, for Colony Resorts LVH Acquisitions, LLC****
3.5	Amendment to Articles of Organization, dated June 25, 2004, for Colony Resorts LVH Acquisitions, LLC******
10.1	Deposit Escrow Agreement, dated as of December 24, 2003, by and among LVH Corporation, Colony Resorts LVH Acquisitions, LLC and Nevada Title Company*
10.2	Coinvestment Transfer Restriction Agreement, dated June 18, 2004, by and among Mr. Barrack, Mr. Ribis, Co-Investment Partners and Coinvestment Voteco+
10.3	Transfer Restriction Agreement, dated June 18, 2004, by and among Mr. Barrack, Holdings and Voteco+
10.4	Employment Agreement, dated as of March 9, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Rodolfo Prieto*
10.5	Employment Agreement, dated as of March 9, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Robert Schaffhauser*
10.6	Employment Agreement, dated as of March 9, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Kenneth Ciancimino*
10.7	Letter Agreement, dated as of March 10, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Rodolfo Prieto*
10.8	Letter Agreement, dated as of March 10, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Robert Schaffhauser*
10.9	Letter Agreement, dated as of March 10, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Kenneth Ciancimino*
10.10	Employment Agreement, dated as of May 17, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Gonzalo De Varona.***
10.11	Employment Agreement, dated as of April 12, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Robert Stewart.***
10.12	Vice Chairman Agreement, dated June 18, 2004, between Colony Resorts LVH Acquisitions, LLC and Nicholas L. Ribis.****
10.13	Colony Resorts LVH Acquisitions, LLC 2004 Incentive Plan****
10.14	Loan Agreement, dated June 18, 2004, by and between Colony Resorts LVH Acquisition, LLC and Archon Financial, L.P.+
10.15	Sale Right Agreement, dated June 18, 2004, by and among Colony Resorts LVH Acquisitions, LLC, Colony Resorts LVH Holdings, LLC, Colony Resorts LVH Coinvestment Voteco, LLC, Colony Resorts LVH Voteco, LLC and Colony Resorts LVH Co-Investment Partners, L.P.****
10.16	Services Agreement, dated June 18, 2004, between Colony Resorts LVH Acquisitions, LLC and Resorts International Hotel and Casino, Inc.****
10.17	Joint Marketing Agreement, by and between Colony Resorts LVH Acquisitions, LLC and Resorts International Hotel, Inc.****
10.18	Joint Services Agreement, by and between Colony Resorts LVH Acquisitions, LLC and Resorts International Hotel, Inc.****
10.19	Employment Agreement, dated as of May 11, 2003, between LVH Corporation and Thomas Page.****
10.20	Addendum to Employment Agreement, dated as of June 22, 2004, by and between Colony Resorts LVH Acquisitions, LLC and Thomas Page.****
10.21	Addendum to Employment Agreement, dated as of April 28, 2006, by and between Colony Resorts LVH Acquisitions, LLC and Robert Schaffhauser ++
10.22	Addendum to Employment Agreement, dated as of April 28, 2006, by and between Colony Resorts LVH Acquisitions, LLC and Ken Ciancimino ++
10.23	Loan Agreement dated as of May 11, 2006, between Colony Resorts LVH Acquisitions, LLC and Goldman Sachs Commercial Mortgage Capital, L.P. +++

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EXHIBIT NUMBER
10.24	First Amendment to the Colony Resorts LVH Acquisitions, LLC 2004 Incentive Plan ++++
10.25	Amended and Restated Joint Services Agreement, dated as of April 26, 2005 by and between Colony Resorts LVH Acquisitions, LLC and Resorts International Hotel, Inc. +++++
10.26	Amended and Restated Joint Marketing Agreement, dated as of April 26, 2006 by and between Colony Resorts LVH Acquisitions, LLC and Resorts International Hotel, Inc. +++++
14.1	Code of Ethics*******
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.

METHOD OF FILING

*	Incorporated by reference to the Registrant’s Form 10, filed March 15, 2004 (File Number 0-50635).
**	Incorporated by reference to the Registrant’s Amendment No. 1 to Form 10, filed April 26, 2004 (File Number 0-50635).
***	Incorporated by reference to the Registrant’s Post-Effective Amendment No. 1 to Form 10, filed June 17, 2004 (File Number 0-50635).
+	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed June 28, 2004 (File Number 0-50635).
****	Incorporated by reference to Registrant’s Post-Effective Amendment No. 2 to Form 10 filed August 13, 2004 (File Number 0-50635).
*****	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed August 23, 2004 (File Number 0-50635).
******	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q/A filed September 9, 2004 (File Number 0-50635).
******	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed November 15, 2004 (File Number 0-50635).
*******	Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 31, 2004 (File Number 000-50635)
++	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed August 14, 2006.
+++	Incorporated by reference to Registrant’s Current Report on Form 8-K, filed May 19, 2006.
++++	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed November 14, 2006
+++++	Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 30, 2007 (File Number 000-50635)

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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
Date: November 7, 2008	By:	/s/ Rodolfo Prieto
		Rodolfo Prieto
		Chief Executive Officer and General Manager
Date: November 7, 2008	By:	/s/ Robert Schaffhauser
		Robert Schaffhauser
		Executive Vice President of Finance

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