10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarter ended September 30, 2013

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: 000-54532

BREF HR, LLC

(Exact name of registrant as specified in its charter)

Delaware	27-4938906
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)
Three World Financial Center
250 Vesey Street, 11th Floor New York, NY	10281
(Address of principal executive office)	(Zip Code)

(Registrant’s telephone number, including area code): (212) 417-7265

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __ No X

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes __ No X

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition 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	Smaller reporting company__
		(Do not check if a 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 __ No X

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Condensed Consolidated Balance Sheets (unaudited)	2
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)	3
Condensed Consolidated Statements of Cash Flows (unaudited)	4
Notes To Condensed Consolidated Financial Statements (unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	22
PART II—OTHER INFORMATION	23
Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3. Defaults Upon Senior Securities	23
Item 4. Submission of Matters to a Vote of Security Holders	23
Item 5. Other Information	24
Item 6. Exhibits	24

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

BREF HR, LLCCondensed Consolidated Balance Sheets(Unaudited)

($ in thousands)	September 30, 2013			December 31, 2012
Assets
Current assets
Cash and cash equivalents	$	14,095		$	13,658
Accounts receivable, net	9,881			8,309
Inventories	2,831			2,519
Prepaid expenses and other current assets	4,034			3,861
Investment in joint venture	—			1,474
Related party receivable	137			885
Restricted cash	3,934			3,995
Total current assets	34,912			34,701
Property and equipment, net	484,146			499,164
Intangible assets, net	71,622			76,195
Restricted cash	17,743			17,781
Investment in joint venture	1,494			—
Total assets	$	609,917		$	627,841
Liabilities and Members' Equity (Deficit)
Current liabilities
Accounts payable	$	7,650		$	6,053
Construction related payables	307			302
Related party payables	—			406
Interest payable	55,882			—
Accrued expenses	22,484			23,676
Current portion of long term debt	669,520			—
Total current liabilities	755,843			30,437
Long term accrued expenses	261			568
Long term interest payable	9,268			43,963
Long term debt	—			632,864
Long term debt - due to affiliate	16,160			15,021
Total long term liabilities	25,689			692,416
Total liabilities	781,532			722,853
Members' equity (deficit)
Paid-in capital	86,673			86,673
Accumulated deficit	(258,288		)	(181,685		)
Total members' equity (deficit)	(171,615		)	(95,012		)
Total liabilities and members equity (deficit)	$	609,917		$	627,841

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

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BREF HR, LLCCondensedConsolidated Statements of Operations and Comprehensive Loss

(Unaudited)

($ in thousands)	Three months ended September 30, 2013			Three months ended September 30, 2012			Nine months ended September 30, 2013			Nine Months Ended September 30, 2012
Revenue
Casino	$	9,666		$	11,342		$	32,849		$	33,464
Lodging	15,571			15,469			47,896			48,405
Food and beverage	18,804			20,781			60,099			64,310
Retail	745			732			2,123			2,154
Other	7,437			6,025			24,610			22,252
Gross revenues	52,223			54,349			167,577			170,585
Less: Promotional allowances	(4,902		)	(4,625		)	(15,586		)	(15,311		)
Net revenues	47,321			49,724			151,991			155,274
Costs and Expenses
Casino	8,808			9,004			27,220			27,291
Lodging	5,132			5,275			14,905			15,839
Food and beverage	11,998			11,973			34,617			35,270
Retail	427			405			1,176			1,355
Other	5,037			3,581			16,273			13,286
Marketing	2,317			2,041			6,762			6,816
Fee and expense reimbursements - related party	452			450			1,366			1,719
General and administrative	9,720			10,144			30,468			28,068
Depreciation and amortization	7,428			7,595			23,469			23,612
Pre-opening	1			89			11			259
Impairment of intangible assets	—			—			—			3,000
Total costs and expenses	51,320			50,557			156,267			156,515
Loss from operations	(3,999		)	(833		)	(4,276		)	(1,241		)
Interest income	4			4			20			31
Interest expense	(25,088		)	(22,506		)	(72,367		)	(66,483		)
(Loss) income on joint venture investment	(16		)	(324		)	20			(324		)
Loss before income tax expense	(29,099		)	(23,659		)	(76,603		)	(68,017		)
Income tax expense	—			—			—
Net loss	$	(29,099	)	$	(23,659	)	$	(76,603	)	$	(68,017	)
Other Comprehensive loss
Interest rate cap fair market value adjustment, net of tax	—			—			—			203
Comprehensive loss	$	(29,099	)	$	(23,659	)	$	(76,603	)	$	(67,814	)

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

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BREF HR, LLCCondensedConsolidated Statements of Cash Flows(Unaudited)

	Nine months ended September 30, 2013			Nine months ended September 30, 2012
($ in thousands)
Cash flows from operating activities
Net loss	$	(76,603	)	$	(68,017	)
Adjustment to reconcile net loss to net cash
provided by operating activities:
Depreciation	18,896			18,504
Provision for (recovery of) doubtful accounts	258			(301		)
Impairment of intangible assets	—			3,000
Amortization of intangible assets	4,573			5,108
Amortization of debt discount	24,574			21,079
Accrued non-cash interest applied to principal	13,221			4,319
Change in value of interest rate caps net of
premium amortization	64			340
(Income) loss on joint venture investment	(20		)	324
Loss on sale of assets	—			6
(Increase) decrease in assets:
Accounts receivable	(1,830		)	(1,697		)
Inventories	(312		)	260
Prepaid expenses	(173		)	(1,029		)
Related party receivable	696			125
Increase (decrease) in liabilities:
Accounts payable	1,597			1,649
Related party payable	(406		)	69
Other accrued liabilities	(1,032		)	(1,083		)
Accrued interest payable	21,187			20,184
Net cash provided by operating activities	4,690			2,840
Cash flows from investing activities
Purchases of property and equipment	(3,878		)	(10,170		)
Payments on construction related payables	5			—
Restricted cash contributions	(7,008		)	(6,744		)
Restricted cash withdrawals	7,107			17,066
Loan to joint venture	(248		)	—
Repayments on joint venture debt	300			—
Investment in joint venture	—			(2,104		)
Proceeds from sale of operating assets	—			35
Net cash used in investing activities	(3,722		)	(1,917		)
Cash flows from financing activities
Repayments on borrowings	—			(1,000		)
Purchase of interest rate caps	(64		)	(142		)
Capital lease payments	(467		)	(1,446		)
Net cash used in financing activities	(531		)	(2,588		)
Net increase (decrease) in cash and cash equivalents	437			(1,665		)
Cash and cash equivalents, beginning of period	13,658			16,818
Cash and cash equivalents, end of period	$	14,095		$	15,153

Continued on next page

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	Nine months ended September 30, 2013		Nine months ended September 30, 2012
($ in thousands)
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, net
of amounts capitalized	$	13,254	21,331
Supplemental Disclosure Non-cash Investing
and Financing Activities
Construction related payables	$	307	$	303

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

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BREF HR, LLCNotes to Condensed Consolidated Financial Statements (Unaudited)

1.    Company Structure

Organization

BREF HR, LLC is a Delaware limited liability company that was formed on February 11, 2011. The affairs of the Company are governed by a Limited Liability Company Agreement dated as of March 1, 2011 (the “LLC Agreement”). Unless otherwise specified, the terms the “Company,” “we,” “us” or “our” refer to BREF HR, LLC and its consolidated subsidiaries, or any one or more of them, as the context may require. We own and operate the Hard Rock Hotel & Casino Las Vegas. Commencing operations in 1995, the Hard Rock Hotel & Casino Las Vegas is modeled after the highly successful Hard Rock Cafe restaurant chain and is decorated with an extensive collection of rare rock and roll memorabilia. The original Hard Rock Cafe was co-founded in 1971 by Peter Morton, and the “Hard Rock” name has grown to become widely recognized throughout the world.

The Company was formed by certain affiliates of Brookfield Financial, LLC (“Brookfield Financial”) to acquire the limited liability company interests of HRHH JV Junior Mezz, LLC (“HRHH JV Junior Mezz”) and HRHH Gaming Junior Mezz, LLC (“HRHH Gaming Junior Mezz”), which indirectly owned the Hard Rock Hotel & Casino Las Vegas and certain related assets. These assets were acquired pursuant to the assignment from Hard Rock Hotel Holdings, LLC (“HRH Holdings”) in connection with the default by HRH Holdings and its subsidiaries on the real estate financing facility (the “Facility”), and the resulting settlement agreement, as described below. Brookfield Financial is managed by Brookfield Real Estate Financial Partners LLC (together with its affiliates, “Brookfield”).

On March 1, 2011, HRH Holdings, Vegas HR Private Limited (the “Mortgage Lender”), Brookfield Financial, NRFC WA Holdings, LLC, Morgans Hotel Group Co. (“Morgans” and together with an affiliated entity, the “Morgans Parties”) and certain affiliates of DLJ Merchant Banking Partners (“DLJMBP”), as well as other interested parties entered into the Agreement to Transfer in Lieu of Foreclosure and Settlement Agreement (the “Settlement Agreement”) pursuant to which the membership interests of HRHH JV Junior Mezz and HRHH Gaming Junior Mezz were transferred and assigned to the Company. The transactions contemplated by the Settlement Agreement are referred to as the “Assignment.” The Assignment was accounted for as a business combination.

The Company's Going Concern

The Company incurred a loss of $76.6 million for the nine months ended September 30, 2013, and has a net members' deficit of $171.6 million as of September 30, 2013. The Amended Facility allows the Company to accrue 'payable in kind' interest ("PIK interest"), representing the difference between interest accruing under the Amended Facility and the amounts paid. The outstanding PIK interest as of September 30, 2013 and December 31, 2012 was $31.7 million and $18.5 million, respectively. The PIK interest outstanding as of March 1, 2014, in the amount of $44.3 million, became due and payable on March 1, 2014, as the operating performance of the Company did not meet a specified debt yield threshold for the twelve month period ending March 1, 2014. However, the lender entered into a Forbearance Agreement effective as of March 1, 2014, pursuant to which it agreed not to exercise any rights or remedies with respect to the PIK interest until June 2, 2014. Currently, the Company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014. The Company is currently assessing its options to satisfy the PIK interest payment obligation, including, but not limited to, negotiating a waiver of this requirement from the lender, selling off a portion of existing collateral or attempting to obtain borrowings from other sources. The Company's ability to continue as a going concern is dependent upon its ability to restructure its indebtedness, obtain alternative financing on acceptable terms, obtain approval from the lender to use available cash reserves to satisfy a portion of this potential obligation, or a combination thereof. However, there is no certainty on the outcome. We have placed mortgages on our hotel casino property to secure our indebtedness. In the event the PIK interest is not paid on June 2, 2014, among other lesser remedies, the lender may declare all unpaid principal and accrued interest under the Amended Facility due and payable immediately. If the PIK payment is not made on June 2, 2014 we risk losing some or all of our property to foreclosure. If this occurs, our business and results of operations would be materially adversely affected. These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The consolidated financial statements do not

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include any adjustments that might result from the outcome of uncertainties, including the possibility that the Company loses some or substantially all of its assets to foreclosure as a result of these uncertainties.

2.    Basis of Presentation, Principles of Consolidation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”) in accordance with the instruction to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnotes necessary for complete consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). These condensed consolidated financial statements should be read in conjunction with the Company’s 2013 annual consolidated financial statements and notes thereto on Form 10-K for the year ended December 31, 2013.

The results for the periods indicated reflect all adjustments (consisting primarily of normal recurring adjustments) that management considers necessary for a fair presentation of financial position, results of operations, and cash flows. The results for such periods are not necessarily indicative of the results to be expected for the full year.

The preparation of the condensed consolidated financial statements in conformity with GAAP 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, and those differences could be material.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries as of and for the nine months ended September 30, 2013 and September 30, 2012 and December 31, 2012.

Consolidations of Variable Interest Entity

During the period from March 1, 2011 through June 14, 2012, LVHR was the third party operator of all gaming operations at the Hard Rock Hotel & Casino Las Vegas and the Company did not own any interest in LVHR or its affiliated entities, WG-Harmon, LLC (“WG-Harmon”) and Warner Gaming, LLC. However, the Company, through one of its subsidiaries, entered into a Casino Lease Agreement (“Casino Lease”) with LVHR, pursuant to which it leased the casino premises in exchange for a monthly rent payment. The Casino Lease provided that the Company may terminate the lease upon 30 days prior written notice to LVHR, without payment of any termination fee. In addition, as part of the Casino Lease, the Company was obligated to make available to LVHR a revolving line of credit to be used solely for working capital purposes, specifically to fund any cash flow shortfalls in the casino operations. In addition to the Casino Lease, LVHR and the Company, entered into the Existing Gaming Assets Acquisition Agreement dated as of March 1, 2011, pursuant to which LVHR acquired all of the then existing casino assets used in the gaming operations at the Hard Rock Hotel & Casino Las Vegas. In addition, upon the exercise of the option to acquire the equity of LVHR, the agreement provides for the forgiveness of any accrued rent owed.

Prior to June 15, 2012, when LVHR became a wholly-owned consolidated subsidiary of the Company, LVHR was consolidated as a variable interest entity as the Company was deemed the primary beneficiary of LVHR as the Company had both (1) the power to direct the activities significantly impacting LVHR's economic performance and (2) the obligation to absorb LVHR's losses. Prior to June 15, 2012, the Company did not own any interest in LVHR or its affiliated entities, WG-Harmon and Warner Gaming, LLC, and LVHR was the third party operator of all gaming operations at the Hard Rock Hotel & Casino Las Vegas.

Correction of Previously Reported Cash Paid During the Period for Interest, Net of Amounts Capitalized for the nine months ended September 30, 2012

Subsequent to the issuance of the Company's September 30, 2012 condensed consolidated financial statements in its Form 10-Q for that period, the Company discovered a typographical error in the supplemental disclosure of cash flow information on the Condensed Consolidated Statement of Cash Flows related to cash paid during the period for interest, net of amounts capitalized. The previously filed September 30, 2012 10-Q incorrectly noted cash paid during the period for interest, net of amounts capitalized for the nine

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months ended of $2.1 million. Such amount should have disclosed $21.3 million. The accompanying supplemental disclosure of cash flow information on the Condensed Consolidated Statement of Cash Flows has been corrected. The Company has determined that such typographical error is not material to the Condensed Consolidated Statement of Cash Flows as of September 30, 2012.

Recently Issued Accounting Pronouncements

No new accounting pronouncements issued or effective during 2013 have had or are expected to have a material impact on the Company's financial position or result of operations.

3.    Accounts Receivable, Net

Components of accounts receivable, net consist of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Casino	$	4,670		$	3,677
Hotel	3,556			2,883
Other	2,865			2,708
	11,091			9,268
Less: allowance for doubtful accounts	(1,210		)	(959		)
Total accounts receivable, net	$	9,881		$	8,309

4.    Restricted Cash

Certain of our subsidiaries are obligated to maintain cash reserve funds for a variety of purposes as determined pursuant to the Amended Facility, discussed at Note 10, Debt, including a requirement for the subsidiaries to deposit funds into a replacements and refurbishments reserve fund at amounts equal to three percent of the Hard Rock Hotel & Casino Las Vegas’ gross revenues. Restricted cash consists of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Tax reserves	$	2,003	$	2,072
Insurance reserves	924		1,327
Other reserves	363		363
Workers' compensation reserves	644		233
Total current restricted cash	3,934		3,995
Long-term
Working capital reserves	14,483		16,148
Available restricted cash reserves for future capital expenditures	3,260		1,633
Total long-term restricted cash	17,743		17,781
Total restricted cash	$	21,677	$	21,776

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5.    Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Restaurants and bars	$	1,858	$	1,739
Retail merchandise	886		699
Other inventory and operating supplies	87		81
Total inventories	$	2,831	$	2,519

6.     Property and Equipment, Net

Property and equipment, net consists of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Land	$	115,600		$	115,600
Buildings and land and building improvements	342,131			341,940
Furniture, fixtures and equipment	79,304			77,005
Memorabilia	6,369			6,012
	543,404			540,557
Less: accumulated depreciation	(60,498		)	(41,603		)
Construction in progress	1,240			210
Total property and equipment, net	$	484,146		$	499,164

Depreciation relating to property and equipment for the Company was $6.3 million and $6.1 million for the three months ended September 30, 2013 and 2012, respectively. Depreciation relating to property and equipment for the Company was $18.9 million and $18.5 million for the nine months ended September 30, 2013 and 2012, respectively.

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7.     Intangible Assets, Net

Intangible assets, net consist of the following:

	December 31, 2012										September 30, 2013
($ in thousands)	Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Remaining life (years)
Non-amortizing intangible assets
Hard Rock Licensing	$	55,000	$	(15,000	)	$	—		$	40,000	$	55,000	$	(15,000	)	$	—		$	40,000	Indefinite
Future Trademark Licensing	7,000		—			—			7,000		7,000		—			—			7,000		Indefinite
	62,000		(15,000		)	—			47,000		62,000		(15,000		)	—			47,000
Amortizing intangible assets
In-place contracts	29,000		(6,175		)	(5,316		)	17,509		29,000		(6,175		)	(7,992		)	14,833		8
Monster TM Licensing	2,537		—			(1,213		)	1,324		2,537		—			(1,710		)	827		2
Customer Relationships	3,000		—			(3,000		)	—		3,000		—			(3,000		)	—		0
Sponsorship Agreements	1,300		—			(1,191		)	109		1,300		—			(1,300		)	—		0
Market leases	1,736		—			(594		)	1,142		1,736		—			(837		)	899		1 - 8
Player relationships	10,000		—			(2,685		)	7,315		10,000		—			(3,570		)	6,430		8
Other	2,200		—			(404		)	1,796		2,200		—			(567		)	1,633		8
	49,773		(6,175		)	(14,403		)	29,195		49,773		(6,175		)	(18,976		)	24,622
Total
intangibles, net	$	111,773	$	(21,175	)	$	(14,403	)	$	76,195	$	111,773	$	(21,175	)	$	(18,976	)	$	71,622

The Hard Rock Trademark and future licensing rights are not subject to amortization as they have an indefinite useful life. The in-place contracts, trade names, Customer Relationships, Sponsorship Agreements, Market leases and other amortizing intangible assets are being ratably amortized on a straight-line basis over the estimated useful life which ranges from one to nine years. Player Relationships are amortized on an accelerated basis consistent with the expected timing of the Company’s realization of the economic benefits of such relationships.

For the three months ended September 30, 2013 and 2012, the Company recorded amortization expense of $1.1 million and $1.5 million, respectively. For the nine months ended September 30, 2013 and 2012, the Company recorded amortization expense of $4.6 million and $5.1 million, respectively.

Pueblo of Isleta Impairment. On October 13, 2009, HRH Holdings executed a license agreement with the Pueblo of Isleta (the "Isleta license agreement"). Pursuant to the Isleta license agreement, the Company sublicensed certain intellectual property, including the “Hard Rock Hotel” and “Hard Rock Casino” trademarks, to Isleta in connection with a hotel and a casino that Isleta opened in Albuquerque, New Mexico. Under the terms of the Isleta license agreement, Isleta agreed to pay us a certain percentage of its annual gross revenues based on the performance of its Hard Rock Hotel/Casino as well as certain other license fees. On December 24, 2012, Isleta and the Company mutually agreed to terminate the Isleta license agreement. The termination of the Isleta license agreement occurred on June 30, 2013. As part of such termination, the Company recorded an impairment of the Isleta intangible asset included in other licenses of $6.2 million in December 2012. The $6.2 million impairment charge represented discounted future licensing fees included in the March 1, 2011 fair value related to the agreement which were anticipated at that time had the agreement continued after June 30, 2013.

During the second quarter of 2012, with forecasted net revenues differing from expectations, the Company performed an interim impairment analysis of the Hard Rock trademark. This analysis resulted in an impairment charge of $3.0 million for the second quarter of 2012. The fair value of Hard Rock Licensing at September 30, 2012 was determined using the discounted cash flow of forecasted net revenues.

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Hard Rock Licensing Impairment. During the fourth quarter of 2012, the Company completed its annual impairment analysis of the Hard Rock trademark, which resulted in an additional impairment charge of $12.0 million due to updated forecasts and market conditions. The fair value of Hard Rock Licensing at December 31, 2012 was determined using the discounted cash flow of forecasted net revenues.

The impairment charges to Hard Rock Licensing were the result of reductions in the projected revenue due to the weak market environment and are included within impairment of intangible assets reflected in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

8.     Accrued Expenses

Accrued expenses consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Deferred income	$	2,165	$	4,082
Capital lease obligations	409		599
Advance room, convention and customer deposits	6,368		4,575
Accrued salaries, payroll taxes and other employee benefits	2,164		3,001
Accrued miscellaneous taxes	1,925		1,187
Reserve for legal liability claims	5,279		3,727
Other accrued liabilities	4,174		6,505
Total current accrued expenses	22,484		23,676
Long term
Capital lease obligations	261		568
Total long term accrued expenses	261		568
Total accrued expenses	$	22,745	$	24,244

9.     Agreements with Related Parties

WG-Harmon

During the three months ended September 30, 2013 and 2012, the Company incurred $0.5 million and $0.4 million, respectively in management fees payable to WG-Harmon under the Management Agreement (Gaming Operations), Resort Management Agreement and Liquor Management and Employee Services Agreement, collectively ("WG-Harmon Agreements"), as defined below which is included in general and administrative on the condensed consolidated statement of operations. During the nine months ended September 30, 2013 and 2012, the Company incurred $1.4 million and $1.2 million, respectively, in management fees payable under the WG-Harmon Agreements. As of September 30, 2013 and December 31, 2012, the Company had $0.0 million and $0.4 million, respectively, payable to WG-Harmon which is included in related party payables on the condensed consolidated balance sheets.

Gaming Operations

On March 1, 2011, LVHR entered into the Management Agreement (Gaming Operations) (the “Management Agreement”) with WG-Harmon, pursuant to which WG-Harmon agreed to manage the gaming operations at the Hard Rock Hotel & Casino Las Vegas for LVHR. The term of the Management Agreement began on March 1, 2011 and terminated on June 15, 2012. During the term of the Management Agreement, LVHR paid to WG-Harmon a base fee in the amount of $37,500 per month. LVHR also reimbursed WG-Harmon for reasonable fees and expenses incurred in connection with the performance of WG-Harmon’s duties under such agreement.

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On December 22, 2011, the Company received a license from the Nevada Gaming Commission to serve as the operator of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas and we were approved to acquire and own the equity securities of LVHR, subject to the Registration Statement becoming effective. Under Section 12(g)(1) of the Exchange Act, the Registration Statement became effective on December 22, 2011. LVHR became one of our subsidiaries and we assumed operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas on June 15, 2012. On or about the same date that LVHR became one of our subsidiaries and we assumed operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas, we restructured and converted LVHR from a Nevada corporation to a Nevada limited liability company known as LVHR Casino, LLC. Upon consummation of the restructure and conversion of LVHR: (i) LVHR Casino, LLC became a mortgage borrower under the Amended Facility and the Second Mortgage; (ii) LVHR Casino, LLC continued to own all of the assets that LVHR acquired on March 2, 2011 that are used at the Hard Rock Hotel & Casino Las Vegas gaming operations, and (iii) the revolving line of credit HRHH Gaming was obligated to make available to LVHR terminated. The Management Agreement terminated on June 15, 2012 without payment of any termination fee.

Non-Gaming Operations

On March 1, 2011, the Company and WG-Harmon entered in a Resort Management Agreement (the “Resort Management Agreement”), pursuant to which WG-Harmon managed the Hard Rock Hotel & Casino Las Vegas, other than the gaming operations and the liquor operations. The term of the Resort Management Agreement began on March 1, 2011 and continued until June 15, 2012, the date upon which LVHR became one of our subsidiaries and we assumed the operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas. During the term of the Resort Management Agreement, the Company paid to WG-Harmon a base fee in the amount of $122,500 per month. In addition to such base fee, WG-Harmon has an incentive management fee based on performance of the adjusted EBITDA of the Hard Rock Hotel & Casino Las Vegas as set forth in the Resort Management Agreement.

On June 15, 2012, the Resort Management Agreement was replaced by the Amended and Restated Management Agreement (the “Amended Resort Management Agreement”). On June 15, 2012, the Company and WG-Harmon entered into the Amended Resort Management Agreement, pursuant to which WG-Harmon will manage the Hard Rock Hotel & Casino Las Vegas, including the gaming operations and the liquor operations. WG-Harmon is required to use commercially reasonable efforts to operate the Hard Rock Hotel & Casino Las Vegas, and has complete discretion and control in all matters related to the management and operation of the Hard Rock Hotel & Casino Las Vegas. The term of the Amended Resort Management Agreement began on June 15, 2012 and will continue until March 31, 2016. During the term of the Amended Resort Management Agreement, the Company will pay WG-Harmon a base fee in the amount of $160,000 per month, payable monthly, which base fee may be decreased to $150,000 per month if WG-Harmon is no longer providing certain construction services to the Company. In April 2013, a $10,000 reduction to the base fee was put in place. In addition to such base fee, the Company will pay WG-Harmon an incentive management fee based on the performance of the adjusted EBITDA of the Hard Rock Hotel & Casino Las Vegas, as set forth in the Amended Resort Management Agreement.

Liquor Management

On March 1, 2011 the Company and WG-Harmon entered into a Liquor Management and Employee Services Agreement (the “Liquor Management Agreement”), relating to non-gaming operations at the Hard Rock Hotel & Casino Las Vegas. The term of the Liquor Management Agreement will terminate concurrently with the termination of the Resort Management Agreement. During the term of the Liquor Management Agreement WG-Harmon will pay to the Company monthly rent of $25,000 and deposit all liquor revenue into a lockbox account maintained by the Company pursuant to the Facility.

Effective December 23, 2011, the Clark County Liquor and Gaming Licensing Board (the “Clark County Board”) approved temporary liquor licenses for the Company to operate the liquor operations at the Hard Rock Hotel & Casino Las Vegas. On April 1, 2012, the Clark County Board approved an extension for the Company to operate the liquor operations at the Hard Rock Hotel & Casino Las Vegas. The Liquor Management Agreement terminated on June 15, 2012, and such responsibilities were absorbed by WG-Harmon under the Amended Resort Management Agreement.

Second Mortgage Loan Agreement

On March 1, 2011, as part of the Assignment, the Company entered into a second mortgage loan agreement with Brookfield Financial (the “Second Mortgage”), a related party. See Note 10, Debt, for further discussion. During the three months ended

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September 30, 2013 and 2012, the Company accrued interest of $1.6 million and $1.2 million, respectively, under the Second Mortgage. During the nine months ended September 30, 2013 and 2012, the Company accrued interest of $4.5 million and $3.5 million, respectively, under the Second Mortgage which is included in long term accrued expenses on the condensed consolidated balance sheets.

Investment in Joint Venture

In June 2012, CDO Restaurant Associates LLC (“CDO”), a Delaware limited liability company, was formed between the Company and Fox Restaurant Concepts, LLC (“Fox”) to operate a restaurant, Culinary Dropout, using leased space at the Hard Rock Hotel and Casino Las Vegas. The Company contributed 80% of the initial construction and pre-opening budget, or $2.1 million, and also loaned CDO $100,000 to cover pre-opening costs in excess of initial budgeted amounts. During 2012, the Company loaned CDO an additional $248,000 to cover final construction costs in excess of budgeted amounts. The Company determined that the investment in CDO should be accounted for as an equity method investment. The loan bears interest at the greater of 8% or the reference rate publicly announced by Bank of America N.T. & S.A (3.25% at September 30, 2013) plus 4 percent. Loans are required to be repaid before any other distributions of net cash flow. Net cash flow is then distributed in proportion to the Members’ initial capital contributions, plus an 8% preferred return, and, once paid in full, in accordance with the 50% membership interest. The Company accounts for its investment in CDO under the equity method based on applicable accounting guidance as the Company does not hold a controlling financial interest in CDO.

For the three months ended September 30, 2013 and 2012, the Company recorded a loss of $15,000 and $324,000, respectively, related to its equity in CDO. For the nine months ended September 30, 2013 and 2012, the Company recorded income of $20,000 and a loss of $324,000, respectively, related to its equity in CDO. The Company’s share of the joint venture’s income (loss) is included in equity in income (loss) on joint venture investment in the accompanying condensed consolidated statements of operations and comprehensive loss. At September 30, 2013 and December 31, 2012, the Company’s net investment in CDO is an asset of $1.5 million and $1.5 million, respectively. The balance is included in other assets in the accompanying condensed consolidated balance sheets at September 30, 2013. There were no distributions to the members for the nine months ended September 30, 2013. At September 30, 2013 and December 31, 2012, the Company had $0.0 million and $0.4 million, respectively, outstanding as a related party receivable from CDO.

CDO leases space from the Company under a ten-year operating lease expiring in August 2022. The lease has one five-year renewal option. Rent is paid monthly at 6% of sales, as defined in the agreement. CDO also pays a management fee of 6% of gross sales to Fox. Both the lease and the management agreement expire in August of 2022.

10.     Debt

The following table presents debt outstanding as of September 30, 2013 and December 31, 2012:

($ in thousands)	Final	Face value			Book value			Face value		Book value
Project name/lender	maturity	September 30, 2013			September 30, 2013			December 31, 2012		December 31, 2012
Amended facility -Note A/Vegas HR Private Limited	March 1, 2018	$	567,047		$	493,615		$	553,826	$	472,740
Amended facility -Note B/Vegas HR Private Limited	March 1, 2018	327,290			175,905			327,290		160,124
Second Mortgage - Brookfield Financial	March 1, 2018	30,000			16,160			30,000		15,021
Total debt		924,337			685,680			911,116		647,885
Current portion of long-term debt		(894,337		)	(669,520		)	—		—
Total long term debt		$	30,000		$	16,160		$	911,116	$	647,885

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The difference between the face and book value of the debt represents debt discounts that are amortized to interest expense using the effective interest method over the term of the debt.

As discussed in Note 1, Company Structure, the PIK interest will become due and payable on June 2, 2014. Currently, the Company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014, and therefore, the Company could be in default upon notification by the lender. Accordingly, the Amended Facility, supplemental interest, and PIK interest is classified as current as of September 30, 2013.

Amended Facility – Note A and Note B

On March 1, 2011, as part of the Assignment, the Company assumed the obligations under the Facility and entered into an amendment thereof (as amended, the “Amended Facility”) pursuant to which the land, building and improvements, equipment, fixtures and all personal properties were pledged as security and collateral.

The Amended Facility has a maturity date of March 1, 2018 and provides for interest only at The London InterBank Offered Rate (LIBOR) plus 2.5% with a 1.5% LIBOR floor (total of 4.0% at September 30, 2013). In addition, under the Amended Facility supplemental interest is accrued at a rate sufficient to provide for the greater of 6.5% or LIBOR + 4.0% effective interest rate at maturity after consideration of all prior payments of principal and interest. The rates of accrual are dependent on fluctuations in the applicable LIBOR rate. The Amended Facility has a provision whereby if the cash available for debt service is less than the current interest due, the PIK Interest will be automatically added to the outstanding principal balance of the Amended Facility and shall thereafter accrue interest. In addition, excess cash in the cash management account will be applied to the outstanding PIK interest, supplemental interest and principal according to the terms of the Amended Facility.

Second Mortgage

On March 1, 2011, as part of the Assignment, the Company entered into a second mortgage loan agreement with Brookfield Financial (the “Second Mortgage”) in the amount of $30.0 million pursuant to which certain land, building and improvements, equipment, fixtures and personal properties were pledged as security and collateral. The Second Mortgage is subordinate in right of payment to the Amended Facility. The maturity date of the Second Mortgage is March 1, 2018 and provides for an effective interest rate of 15.0% payable at maturity.

The Amended Facility and Second Mortgage include customary affirmative and negative covenants for similar financings, including, among others, restrictive covenants regarding incurrence of liens, sales or assets, distributions to affiliates, changes in business, cancellation of indebtedness, dissolutions, mergers and consolidations, as well as limitations on security issuances, transfers of any of the Company’s real property and removal of any material article of furniture, fixture or equipment from the Company’s real property. As of September 30, 2013, the Company was in compliance with all covenants.

The outstanding PIK interest related to the Amended Facility as of September 30, 2013 and December 31, 2012 was $31.7 million and $18.5 million, respectively. During the three months ended September 30, 2013 and 2012, the Company recorded PIK interest in the amount of $6.6 million and $2.4 million, respectively. During the nine months ended September 30, 2013 and 2012, the Company recorded PIK interest in the amount of $13.2 million and $3.3 million, respectively. See discussion in Note 1 regarding the acceleration of PIK interest on March 1, 2014, the forebearance of such obligation until June 2, 2014, and the Company's ability to meet such obligation.

The fair value of our total debt as of September 30, 2013 and December 31, 2012 was $616.4 million and $603.1 million, respectively, which was determined utilizing a discounted cash flow model. The Company has determined that the fair value of its long-term debt is determined using Level 3 inputs. The discount rate was determined utilizing historical market-based equity returns which are adjusted, as necessary, for entity specific factors.

11.     Commitments and Contingencies

Legal and Regulatory Proceedings

Our subsidiary HRHH IP was one of a number of defendants (“Defendants”) in an action ("Hard Rock IP Action") commenced by Hard Rock Cafe International (USA), Inc. (“HRCI”) on September 21, 2010 in the United States District Court for the Southern

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District of New York, captioned Hard Rock Cafe International (USA), Inc. v. Hard Rock Hotel Holdings, LLC, et al. asserting certain failures to comply with the terms and requirements of the intellectual property licensure agreements to which the Company was a party. HRCI also commenced a separate arbitration proceeding before the American Arbitration Association with respect to certain claims, originally brought in the Hard Rock IP Action, that were deemed arbitrable by the judge in that action (“HRCI Arbitration”). The HRCI Arbitration arose from the same underlying facts as the Hard Rock IP Action. On June 13, 2013, the parties reached a settlement of both the Hard Rock IP Action and the HRCI Arbitration (“HRCI Settlement”), and the court entered the order of dismissal of the Hard Rock IP Action on June 13, 2013. The terms of the HRCI Settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

S&H Projects (“S&H”) filed a lawsuit against Hard Rock Hotel, Inc. (“HRHI”) on December 3, 2010 with regard to the closure of the Wasted Space lounge in October 2010, (“S&H Matter”). On August 12, 2013, the parties reached a settlement of the S&H Matter. The terms of the S&H Matter settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

The Company and affiliates Brookfield Real Estate Financial Partners, LLC, Brookfield Financial, LLC - Series B, and Brookfield Asset Management (US), Inc. are currently amongst a number of defendants (“Defendants”) in an action commenced by Mace Management Group, LLC (“Mace) and Mandown, LLC (“Mandown”) on June 12, 2012 in Nevada’s Eighth Judicial District Court in Clark County, Nevada (the “Mace/Mandown Action”).  The Mace/Mandown Action relates to investments made by Mace/Mandown in Wasted Space Lounge, Rare 120 restaurant, the Johnny Smalls restaurant and Vanity nightclub (collectively, the “Venues”) at the Hard Rock Hotel and Casino Las Vegas. In general, all claims assert that actions taken by Defendants allegedly deprived Mace/Mandown of their initial investment and/or their share of profits from the Venues. The Mace/Mandown Action is in the preliminary stages and management has determined that based on the proceedings to date it does not believe the outcome of this matter will have a material effect on our business, or results of operations or financial condition of the Company.

Dolce Group Vegas, LLC filed a complaint against the Company, and affiliates Brookfield Asset Management (US), Inc., and Brookfield Financial, LLC - Series B, in Nevada’s Eighth Judicial District Court, Clark County, Nevada on July 13, 2011 (“Dolce Matter”). The plaintiff alleges breach of contract with respect to plaintiff’s contract to develop the “Rare 120” steakhouse concept for Hard Rock Hotel. On July 12, 2013, the parties reached a settlement of the Dolce Matter. The terms of the Dolce Matter settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

On July 27, 2012, the Company received notice of a Demand for Arbitration being filed by Monster Beverage Company (“Monster”) against the Company’s subsidiaries HRHH Hotel/Casino, LLC and HRHH IP, LLC (together the “HRHH Entities”) before the Judicial Arbitration and Mediation Service, or JAMS (the “Monster Beverage Action”).  The gravamen of the Monster Beverage Action was a dispute between the HRHH Entities and Monster over rights to the “Rehab” beverage marks and brand.  On August 16, 2013 the arbitrator issued a final arbitration award in favor of Monster, which was judicially confirmed on January 27, 2014. The outcome of the Monster Beverage Action did not have a material effect on our business, or the results of operations or financial condition of the Company.

We are also subject to a variety of other claims and lawsuits that arise in the ordinary course of our business. We do not believe the outcome of these and the other matters disclosed above will have a material effect on our business, results of operations or financial condition. As of September 30, 2013, the Company accrued approximately $4.6 million for all loss contingency matters and our best estimate of reasonably possible losses in excess of the amount accrued is not material to the financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for “forward-looking statements” made by or on behalf of a company. We may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”), which represent our expectations or beliefs concerning future events. Statements containing expressions such as “believes,” “anticipates,” “expects” or other similar words or expressions are intended to identify forward-looking statements. We caution that these and similar statements are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. Although we believe our expectations are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, we cannot guarantee future results, levels of activity, performance or achievements. Important risks and factors that could cause our actual results to differ materially from any forward-looking statements include, but are not limited to, continued adverse economic and market conditions, particularly in levels of spending in the hotel, resort and casino industry in Las Vegas, Nevada; the seasonal nature of the hotel, casino and resort industry; the use of the “Hard Rock” brand name by entities other than us; costs associated with compliance with extensive regulatory requirements; increases in interest rates and operating costs; increases in uninsured and underinsured losses; risks associated with conflicts of interest with entities which control us; the loss of key members of our senior management; the impact of any material litigation; risks related to natural disasters; changes in the competitive environment in our industry; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and subsequently filed Quarterly Reports on Form 10-Q in the section entitled “Risk Factors” and in this report in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. We undertake no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date hereof.

Overview

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013 and our condensed consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in any forward-looking statements as a result of certain factors, including but not limited to, those factors set forth in the section entitled “Forward-Looking Statements” and elsewhere in this report and in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013 and subsequently filed Quarterly Reports on Form 10-Q.

Within this management’s discussion and analysis of financial condition and results of operation for the nine months ended September 30, 2013 and 2012, references to the “Company,” “we,” “us,” or “our” refer to BREF HR, LLC.

As is customary for companies in the gaming industry, we present average occupancy rate and average daily rate for the Hard Rock Hotel & Casino Las Vegas including rooms provided on a complimentary basis. Operators of hotels in the lodging industry generally may not follow this practice, as they may present average occupancy rate and average daily rate net of rooms provided on a complimentary basis. We calculate (a) average daily rate by dividing total daily lodging revenue by total daily rooms rented and (b) average occupancy rate by dividing total rooms occupied by total number of rooms available. We account for lodging revenue on a daily basis. Rooms provided on a complimentary basis include rooms provided free of charge or at a discount to the rate normally charged to customers as an incentive to use the casino. Complimentary rooms reduce average daily rate for a given period to the extent the provision of such rooms reduces the amount of revenue we would otherwise receive.

The following are key gaming industry-specific measurements we use to evaluate casino revenues. “Table game drop” and “slot machine handle” are used to identify the amount wagered by patrons for a casino table game and slot machine, respectively. “Drop” and “Handle” are abbreviations for table game drop and slot machine handle. “Table game hold percentage” and “slot machine hold percentage” represent the percentage of the total amount wagered by patrons that the casino has won. Such hold percentages are derived by dividing the amount won by the casino by the amount wagered by patrons.

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Results of Operations of the Company for the Three Months Ended September 30, 2013 Compared to the Results of Operations of the Company for the Three Months Ended September 30, 2012

							$ Change			% Change
($ in thousands)	Three months ended September 30, 2013			Three months ended September 30, 2012			2013 vs 2012
Statement of Operations Data:
Revenue
Casino	$	9,666		$	11,342		$	(1,676	)	(14.8	)%
Lodging	15,571			15,469			102			0.7
Food and beverage	18,804			20,781			(1,977		)	(9.5	)
Retail	745			732			13			1.8
Other	7,437			6,025			1,412			23.4
Gross revenues	52,223			54,349			(2,126		)	(3.9	)
Less: Promotional allowances	(4,902		)	(4,625		)	(277		)	(6.0	)
Net revenues	47,321			49,724			(2,403		)	(4.8	)
Costs and Expenses
Casino	8,808			9,004			(196		)	(2.2	)
Lodging	5,132			5,275			(143		)	(2.7	)
Food and beverage	11,998			11,973			25			0.2
Retail	427			405			22			5.4
Other	5,037			3,581			1,456			40.7
Marketing	2,317			2,041			276			13.5
Fee and expense reimbursements	452			450			2			0.4
General and administrative	9,720			10,144			(424		)	(4.2	)
Depreciation and amortization	7,428			7,595			(167		)	(2.2	)
Pre-opening	1			89			(88		)	(98.9	)
Total costs and expenses	51,320			50,557			763			1.5
Loss from operations	(3,999		)	(833		)	(3,166		)	(380.1	)
Interest income	4			4			—			—
Interest expense	(25,088		)	(22,506		)	(2,582		)	(11.5	)
Loss on joint venture investment	(16		)	(324		)	308			95.1
Net loss	$	(29,099	)	$	(23,659	)	$	(5,440	)	(23.0	)%

Casino Revenues. The Company did not directly earn any casino revenues until June 15, 2012. However, the Company has included revenues earned by LVHR during such period in its condensed consolidated financial statements in accordance with applicable guidance relating to variable interest entities.

The decrease in casino revenues for the three months ended September 30, 2013 was primarily due to a $2.4 million or 34.3% decrease in table games revenue slightly offset by a $0.8 million or 18.4% increase in slot machine revenues.

Table Games. Table games revenues for the three months ended September 30, 2013 decreased $2.4 million to $4.6 million when compared to the same period in 2012. We experienced an unusually low hold percentage for the third quarter of 2013, which decreased 4.5% to 9.1% from 13.6%. We continue to focus on bringing in quality level play on property.

Slot. Slot machine revenues for the three months ended September 30, 2013 increased $0.8 million to $4.9 million when compared to the same period in 2012. While slot machine handle increased 2.5%, the success was primarily a function of the slot machine hold percentage which increased to 5.9% from 5.1%. We continue to focus on optimizing the slot floor with the introduction of new product and technology and growing our customer database.

Food and Beverage Revenues. The decrease in food and beverage revenues during the three months ended September 30, 2013 was attributed a decline in daylife/pool and nightlife revenues due to increased competition in the Las Vegas market.

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Other Revenues. The increase in other revenues was primarily the result of an increase in concert revenues due to a successful residency model during the three months ended September 30, 2013, offset, in part, by a decrease in guaranteed licensing fees.

Other Expenses. Other expenses increased during the three months ended September 30, 2013 due to an increase in artist fees associated with the number concerts held at the Joint.

Interest Expense. The increase in interest expense for the three months ended September 30, 2013 was the result of an increase in the amount of debt as a result of interest being paid in kind during 2012 and 2013.

Results of Operations for the Nine Months Ended September 30, 2013 Compared to the Nine Months Ended September 30, 2012

							$ Change			% Change
($ in thousands)	Nine Months Ended September 30, 2013			Nine Months Ended   September 30, 2012			2013 vs 2012
Statement of Operations Data:
Revenue
Casino	$	32,849		$	33,464		$	(615	)	(1.8	)%
Lodging	47,896			48,405			(509		)	(1.1	)
Food and beverage	60,099			64,310			(4,211		)	(6.5	)
Retail	2,123			2,154			(31		)	(1.4	)
Other	24,610			22,252			2,358			10.6
Gross revenues	167,577			170,585			(3,008		)	(1.8	)
Less: Promotional allowances	(15,586		)	(15,311		)	(275		)	(1.8	)
Net revenues	151,991			155,274			(3,283		)	(2.1	)
Costs and Expenses
Casino	27,220			27,291			(71		)	(0.3	)
Lodging	14,905			15,839			(934		)	(5.9	)
Food and beverage	34,617			35,270			(653		)	(1.9	)
Retail	1,176			1,355			(179		)	(13.2	)
Other	16,273			13,286			2,987			22.5
Marketing	6,762			6,816			(54		)	(0.8	)
Fee and expense reimbursements	1,366			1,719			(353		)	(20.5	)
General and administrative	30,468			28,068			2,400			8.6
Depreciation and amortization	23,469			23,612			(143		)	(0.6	)
Pre-opening	11			259			(248		)	(95.8	)
Impairment of intangible assets	—			3,000			(3,000		)	(100.0	)
Total costs and expenses	156,267			156,515			(248		)	(0.2	)
Loss from operations	(4,276		)	(1,241		)	(3,035		)	(244.6	)
Interest income	20			31			(11		)	(35.5	)
Interest expense	(72,367		)	(66,483		)	(5,884		)	(8.9	)
Income (loss) on joint venture investment	20			(324		)	344			106.2
Net loss	$	(76,603	)	$	(68,017	)	$	(8,586	)	(12.6	)%

Casino Revenues. The Company did not directly earn any casino revenues until June 15, 2012. However, the Company has included revenues earned by LVHR during such period in its condensed consolidated financial statements in accordance with applicable guidance relating to variable interest entities.

The decrease in casino revenues for the nine months ended September 30, 2013 was primarily due to a $2.1 million or 10.6% decrease in table games revenue, offset by a $1.6 million or 12.1% increase in slot revenues.

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Table Games. Table games revenues for the nine months ended September 30, 2013 decreased $2.1 million to $18.0 million when compared to the same period in 2012. While table games drop increased 11.6%, primarily driven by baccarat, the table games hold percentage decreased to 10.0% from 12.4%.

Slot. Slot machine revenues for the nine months ended September 30, 2013 increased $1.6 million to $14.6 million when compared to the same period in 2012. The increase in revenues was driven by enhanced slot product on the floor, which drove slot handle and hold. Slot machine handle increased 8.4% over the prior year, with hold increasing slightly to 5.7%.

Lodging Revenues. The decrease in lodging revenues for the nine months ended September 30, 2013 was due to the decrease in the average daily rate from $136 to $127 which was partially offset by an increase in occupancy, from 85.0% to 90.5%. The decrease in the average daily rate and the increase in occupied rooms was the result of an increase in online travel sales needed to fill the year of year decline in group room business.

Food and Beverage Revenues. The decrease in food and beverage revenues during the nine months ended September 30, 2013 was attributed to a decline in daylife/pool and nightlife revenues due to a shift in programming and increased market competition. In addition, banquets revenue decrease due to the decline in group and corporate business and food outlets declined slightly due to the conversion of a wholly-owned restaurant in to a joint venture.

the conversion of a wholly-owned restaurant into a joint venture. In addition, pool and nightlife revenues decreased due to a shift in property programming and increased market competition. Banquets revenues also decreased due to the decline in group and corporate business.

Other Revenues. The increase in other revenues was primarily the result of an increase in concert revenues due to a successful residency model during the nine months ended September 30, 2013, offset, in part, by a decrease in licensing fees and sponsorship revenues.

Lodging Expenses. Lodging expenses decreased during the nine months ended September 30, 2013 due to a change in our lodging marketing strategy with respect to incentives in our wholesale and online travel segments.

Food and Beverage Expenses. The decrease in food and beverage expenses during the nine months ended September 30, 2013 is due to decreased volume in our restaurants, bars and nightlife spaces due to increased competition in the Las Vegas market.

Other Expenses. Other expenses increased during the nine months ended September 30, 2013 due to an increase in artist fees associated with the number of and quality of concerts held at the Joint.

General and Administrative. The increase in general and administrative expenses for the nine months ended September 30, 2013 was primarily the result of higher legal and other non recurring expenses associated with the timing of legal matters, and was partially offset by payroll related savings.

Impairment of intangible assets.  The Company did not incur any impairment of intangible assets for the nine months ended September 30, 2013.  During the nine months ended September 30, 2012, we recognized a non-cash impairment of charge relating to the Hard Rock trademark of $3.0 million.

Interest Expense. The increase in interest expense for the nine months ended September 30, 2013 was the result of an increase in the amount of debt as a result of interest being paid in kind during 2012 and 2013.

CRITICAL ACCOUNTING POLICIES

A description of the Company’s critical accounting policies can be found in Item 7 of its Annual Report on Form 10-K for the year ended December 31, 2013.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Requirements

19

Short-Term Liquidity Requirements. We expect our liquidity requirements to consist primarily of funds necessary to pay operating expenses associated with our subsidiaries’ hotel and casino operations, interest, payment of principal, fees and expenses under certain of our subsidiaries’ loan agreements (including required deposits into reserve accounts) and capital expenditures associated with the Hard Rock Hotel & Casino Las Vegas. Anticipated sources of our liquidity needs include our subsidiaries’ existing working capital, cash provided by our subsidiaries’ operations and our subsidiaries’ non-restricted cash reserves. We expect to be able to meet our short-term liquidity needs through existing working capital and cash provided by our operations. For the nine months ended September 30, 2013, the Company incurred cash interest payments of $13.3 million.

The outstanding PIK interest as of September 30, 2013 and December 31, 2012 was $31.7 million and $18.5 million, respectively. The Amended Facility allows the Company to accrue 'payable in kind' interest ("PIK interest"), representing the difference between interest accruing under the Amended Facility and the amounts paid. The Amended Facility required that the Company repay in full all PIK interest outstanding on March 1, 2014 in the event the Company had not made sufficient payments to the lender to provide a specified debt yield for the twelve month period ending March 1, 2014. However, the lender entered into a Forbearance Agreement effective as of March 1, 2014, pursuant to which it agreed not to exercise any rights or remedies with respect to the PIK interest until June 2, 2014. Currently, the Company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014, and therefore, the Company could be in default upon notification by the lender. Accordingly, the Amended Facility, supplemental interest, and PIK interest is classified as current as of September 30, 2013. The Company is currently assessing its options to satisfy the PIK interest payment obligation, including, but not limited to, negotiating a waiver of this requirement from the lender, selling off a portion of existing collateral or attempting to obtain borrowings from other sources. If we are unable to restructure its indebtedness, obtain alternative financing on acceptable terms, obtain approval from the lender to use available cash reserves to satisfy a portion of this potential obligation, or a combination thereof, we risk losing some or all of our property to foreclosure. If prevailing interest rates or other factors at the time of any restructuring of our indebtedness or at the time we obtain borrowings from other sources results in higher interest rates, our interest expense would increase, which would harm our business and results of operations.

Long-Term Liquidity Requirements. Our long-term liquidity requirements include funds necessary to pay debt under the Amended Facility and Second Mortgage. Our ability to service our contractual obligations and commitments will be dependent on availability of operating cash and 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.

The Amended Facility has a maturity date of March 1, 2018 and provides for interest only at LIBOR plus 2.5% with a 1.5% LIBOR floor (total of 4.0% at September 30, 2013). In addition, under the Amended Facility supplemental interest is accrued at a rate sufficient to provide for the greater of 6.5% or LIBOR + 4.0% effective interest rate at maturity after consideration of all prior payments of principal and interest. The rates of accrual are dependent on fluctuations in the applicable LIBOR rate. The Amended Facility has a provision whereby if the cash available for debt service is less than the current interest due, the interest shortfall will be automatically added to the outstanding principal balance of the Amended Facility and shall thereafter accrue interest, as PIK interest. In addition, excess cash in the cash management account will be applied to the outstanding PIK interest, supplemental interest and principal according to the terms of the Amended Facility.

The maturity date of the Second Mortgage is March 1, 2018 and provides for an effective interest rate of 15% payable at maturity.

Cash Flows for the Nine Months Ended September 30, 2013

Operating Activities. Our operating cash flows primarily consist of our operating income (excluding non-cash charges), interest paid and changes in working capital accounts such as receivables, inventories, prepaid expenses and payables. Net cash provided by operating activities amounted to $4.7 million for the nine months ended September 30, 2013, compared to $2.8 million net cash provided by operating activities for the nine months ended September 30, 2012. The increase in net cash provided by operating activities primarily relates to an increase in accrued interest payable for the nine months ended September 30, 2013.

Investing Activities. Net cash used in investing activities amounted to $3.7 million for the nine months ended September 30, 2013, compared to $1.9 million net cash used in investing activities for the nine months ended September 30, 2012. The increase in cash used in investing activities primarily relates to the net activity in restricted cash during the nine months ended September 30, 2013 partially offset by a decline in purchases of property, plant and equipment during the nine months ended September 30, 2013.

Financing Activities. Net cash used in financing activities amounted to $0.5 million for the nine months ended September 30, 2013, compared to $2.6 million net cash used in financing activities for nine months ended September 30, 2012. The decrease in cash used

20

in financing activities primarily relates to the prior year principal debt payment and a decline in capital lease obligations during the nine months ended September 30, 2013.

Capital Expenditures, Interest Expense and Reserve Funds

The Company is obligated to maintain reserve funds for capital expenditures at the Hard Rock Hotel & Casino Las Vegas as determined pursuant to the Amended Facility. These capital expenditures relate primarily to the periodic replacement or refurbishment of furniture, fixtures and equipment. The Amended Facility requires the subsidiaries to deposit funds into a replacements and refurbishments reserve fund at amounts equal to three percent of the Hard Rock Hotel & Casino Las Vegas’ gross revenues and requires that the funds be set aside in restricted cash. As of September 30, 2013, the Company had restricted cash in a working capital reserve account of $14.5 million, and an additional $3.3 million was available in restricted cash reserves for future capital expenditures in the replacements and refurbishments reserve fund.

Pursuant to gaming requirements certain of our subsidiaries maintain up to $8 million in reserve for their gaming operations, which in accordance with the Amended Facility is not deposited into the cash management account described above.

21

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The outstanding debt under the Amended Facility has a variable interest rate. We use some derivative financial instruments, primarily interest rate caps, to manage our exposure to interest rate risks related to our floating rate debt. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based on their credit rating and other factors. As of September 30, 2013, our total outstanding variable rate debt was $894.3 million.

Effective March 27, 2013, the Company has entered into two cash flow hedges for a total notional amount $883.4 million at a LIBOR cap rate of 2.5%. At September 30, 2013, the LIBOR rate was 0.18206% on the total outstanding debt, thereby making our caps out of the money. Due to a LIBOR floor of 1.5% currently in place under the Amended Facility, the LIBOR rate would have to exceed the LIBOR floor for our interest expense to be affected and any decrease in interest rates would not decrease interest expense. Subject to the caps and the LIBOR floor, as of September 30, 2013, a hypothetical 1% increase in market rates above the LIBOR floor of 1.5% to 2.5% would increase interest expense for the next twelve months by $8.9 million and a hypothetical 2% increase in market rates above the LIBOR floor of 1.5% to 3.5% would increase interest expense for the next twelve months by $9.3 million. Due to the LIBOR floor, a decrease in market interest rates would not decrease our annual interest expense.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, under the supervision and with the participation of our principal executive and financial officers, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2013. Based on that evaluation, management has concluded that, as of such date, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and financial officers and effectuated by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made in accordance with authorization of management and directors of the Company; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management has conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of the Sponsoring Organizations of the Treadway Commission. Based on this evaluation, we concluded that the Company’s internal control over financial reporting was effective as of September 30, 2013.

22

Changes in Internal Control Over Financial Reporting during the Quarter Ended September 30, 2013

As disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2012, management identified material deficiencies that constituted individually, or in the aggregate, material weaknesses in our internal controls over financial reporting at December 31, 2012:

• We identified errors in the presentation of the statement of cash flows resulting in a restatement of the consolidated statement of cash flows For the year ended December 31, 2011. This represented a deficiency in the operating effectiveness of our internal controls over the preparation and review of the consolidated statement of cash flows.

• Deficiencies in the operating effectiveness of the Company’s internal controls related to significant and unusual contracts and transactions such as the accounting and disclosure for business acquisitions.

As of September 30, 2013, the Company enhanced its process and controls surrounding the internal control over financial reporting to remediate the material weaknesses. Specifically, the Company expanded and improved the controls surrounding the review of the consolidated financial statements, including the consolidated statement of cash flows, and surrounding significant and unusual contracts and transactions. The remediation process included hiring a new Chief Financial Officer in the third quarter of 2012 and additional financial accounting resources in 2013.

As of September 30, 2013, management believes it has put in place controls that are sufficient to address the material weaknesses mentioned above, and believes that such material weaknesses have been remediated.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

For discussions of legal proceedings, refer to Note 11, Commitments and Contingencies, to our condensed consolidated financial statements, included elsewhere in this Quarter Report on Form 10-Q.

Item 1A. Risk Factors

You should carefully consider the risks discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results and future prospects. We do not believe that there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

23

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit 31(a), (b) Rule 13a-14(a)/15d-14(a) Certifications

Exhibit 32(a), (b) 18 U.S.C. Section 1350 Certifications

Exhibit 101 Interactive data files pursuant to Rule 405 of Regulation S-T

24

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.

	BREF HR, LLC, by its manager, BREF HR Management, LLC
Date: May 9, 2014	By:	/s/ Andrea Balkan
		Andrea Balkan
		Authorized Representative

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ William Warner	Principal Executive Officer	May 9, 2014
William Warner
/s/ Marlo Vandemore	Principal Financial Officer	May 9, 2014
Marlo Vandemore

25

EX-31.1

Exhibit 31.1

CERTIFICATION

I, William W. Warner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BREF HR, LLC.;

2. Based on my knowledge, this 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, mot misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materials respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014	/S/ William W. Warner
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Marlo Vandemore, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BREF HR, LLC.;

2. Based on my knowledge, this 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, mot misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materials respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014	/S/ Marlo Vandemore
	Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report on Form 10-Q of BREF HR, LLC (the “Company”) for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William W. Warner, the principal executive officer of the Company, hereby certify, pursuant to Rule 13a-14(b) or Rule 15d-14(b), as applicable, under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: May 9, 2014	/S/ William W. Warner
	Principal Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report on Form 10-Q of BREF HR, LLC (the “Company”) for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marlo Vandemore, the principal financial officer of the Company, hereby certify, pursuant to Rule 13a-14(b) or Rule 15d-14(b), as applicable, under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: May 9, 2014	/S/ Marlo Vandemore
	Principal Financial Officer

XML

Intangible Assets, Net - Narrative (Details) (USD $)	3 Months Ended		9 Months Ended		1 Months Ended	3 Months Ended	1 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012 Trademarks	Jun. 30, 2012 Trademarks	Dec. 31, 2012 Licensing agreements	Sep. 30, 2013 Minimum	Sep. 30, 2013 Maximum
Schedule Of Finite And Indefinite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, estimated useful life								1 year	9 years
Amortization of intangibles	$ 1,100,000	$ 1,500,000	$ 4,573,000	$ 5,108,000
Non-cash impairment charge on finite-lived intangibles							6,200,000
Non-cash impairment charge on indefinite-lived intangibles					$ (12,000,000)	$ 3,000,000

XML

Basis of Presentation, Principles of Consolidation and Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash paid during the period for interest, net of amounts capitalized	$ 13,254	$ 21,331
Lease termination notice period	30 days
Previously Reported
Cash paid during the period for interest, net of amounts capitalized		$ 2,100

XML

Debt - Narrative (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term debt, face value	$ 924,337,000		$ 924,337,000		$ 911,116,000
Long term interest payable	9,268,000		9,268,000		43,963,000
Long-term debt, fair value	616,400,000		616,400,000		603,100,000
Payment in Kind (PIK) Note
Debt Instrument [Line Items]
Long term interest payable	31,700,000		31,700,000		18,500,000
Paid-in-Kind Interest	6,600,000	2,400,000	13,200,000	3,300,000
Brookfield Financial | Mortgages
Debt Instrument [Line Items]
Effective interest rate payable at maturity on second mortgage	15.00%		15.00%
Amended Facility [Member] | Loans Payable [Member]
Debt Instrument [Line Items]
Interest rate at period end	4.00%		4.00%
Amended Facility [Member] | Supplemental Interest Accrual Rate, Scenario One | Loans Payable [Member]
Debt Instrument [Line Items]
Supplemental interest rate, minimum			6.50%
Amended Facility [Member] | London Interbank Offered Rate (LIBOR) | Loans Payable [Member]
Debt Instrument [Line Items]
Basis spread			2.50%
Variable rate basis floor			1.50%
Amended Facility [Member] | London Interbank Offered Rate (LIBOR) | Supplemental Interest Accrual Rate, Scenario Two | Loans Payable [Member]
Debt Instrument [Line Items]
Supplemental interest rate, minimum			4.00%
Second Mortgage | Brookfield Financial | Mortgages
Debt Instrument [Line Items]
Long-term debt, face value	$ 30,000,000		$ 30,000,000		$ 30,000,000

XML

Inventories

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Restaurants and bars	$	1,858	$	1,739
Retail merchandise	886		699
Other inventory and operating supplies	87		81
Total inventories	$	2,831	$	2,519

XML

Property and Equipment, Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Land, buildings and equipment	$ 543,404		$ 543,404		$ 540,557
Less: accumulated depreciation	(60,498)		(60,498)		(41,603)
Construction in progress	1,240		1,240		210
Total property and equipment, net	484,146		484,146		499,164
Depreciation	6,300	6,100	18,896	18,504
Land
Property, Plant and Equipment [Line Items]
Land, buildings and equipment	115,600		115,600		115,600
Building and land and building improvements
Property, Plant and Equipment [Line Items]
Land, buildings and equipment	342,131		342,131		341,940
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Land, buildings and equipment	79,304		79,304		77,005
Memorabilia
Property, Plant and Equipment [Line Items]
Land, buildings and equipment	$ 6,369		$ 6,369		$ 6,012

XML

Inventories - (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Inventory [Line Items]
Inventories	$ 2,831	$ 2,519
Restaurants and bars
Inventory [Line Items]
Inventories	1,858	1,739
Retail merchandise
Inventory [Line Items]
Inventories	886	699
Other inventory and operating supplies
Inventory [Line Items]
Inventories	$ 87	$ 81

XML

Intangible Assets, Net - Non-amortizing Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 62,000	$ 62,000
Accumulated Impairment Losses	(15,000)	(15,000)
Net Carrying Amount	47,000	47,000
Trademarks
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	55,000	55,000
Accumulated Impairment Losses	(15,000)	(15,000)
Net Carrying Amount	40,000	40,000
Future Trademark licensing
Indefinite-lived Intangible Assets [Line Items]
Gross Carrying Amount	7,000	7,000
Accumulated Impairment Losses	0	0
Net Carrying Amount	$ 7,000	$ 7,000

XML

Intangible Assets, Net - Amortizing Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 49,773	$ 49,773
Accumulated Impairment Losses	(6,175)	(6,175)
Accumulated Amortization	(18,976)	(14,403)
Net Carrying Amount	24,622	29,195
Licensing agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	29,000	29,000
Accumulated Impairment Losses	(6,175)	(6,175)
Accumulated Amortization	(7,992)	(5,316)
Net Carrying Amount	14,833	17,509
Remaining life (years)	8 years
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,537	2,537
Accumulated Impairment Losses	0	0
Accumulated Amortization	(1,710)	(1,213)
Net Carrying Amount	827	1,324
Remaining life (years)	2 years
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,000	3,000
Accumulated Impairment Losses	0	0
Accumulated Amortization	(3,000)	(3,000)
Net Carrying Amount	0	0
Remaining life (years)	0 years
Sponsorship Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,300	1,300
Accumulated Impairment Losses	0	0
Accumulated Amortization	(1,300)	(1,191)
Net Carrying Amount	0	109
Remaining life (years)	0 years
Market leases
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,736	1,736
Accumulated Impairment Losses	0	0
Accumulated Amortization	(837)	(594)
Net Carrying Amount	899	1,142
Player relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,000	10,000
Accumulated Impairment Losses	0	0
Accumulated Amortization	(3,570)	(2,685)
Net Carrying Amount	6,430	7,315
Remaining life (years)	8 years
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,200	2,200
Accumulated Impairment Losses	0	0
Accumulated Amortization	(567)	(404)
Net Carrying Amount	$ 1,633	$ 1,796
Remaining life (years)	8 years
Minimum | Market leases
Finite-Lived Intangible Assets [Line Items]
Remaining life (years)	1 year
Maximum | Market leases
Finite-Lived Intangible Assets [Line Items]
Remaining life (years)	8 years

XML

Restricted Cash

9 Months Ended

Sep. 30, 2013

Cash and Cash Equivalents [Abstract]

Restricted Cash

Restricted Cash

Certain of our subsidiaries are obligated to maintain cash reserve funds for a variety of purposes as determined pursuant to the Amended Facility, discussed at Note 10, Debt, including a requirement for the subsidiaries to deposit funds into a replacements and refurbishments reserve fund at amounts equal to three percent of the Hard Rock Hotel & Casino Las Vegas’ gross revenues. Restricted cash consists of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Tax reserves	$	2,003	$	2,072
Insurance reserves	924		1,327
Other reserves	363		363
Workers' compensation reserves	644		233
Total current restricted cash	3,934		3,995
Long-term
Working capital reserves	14,483		16,148
Available restricted cash reserves for future capital expenditures	3,260		1,633
Total long-term restricted cash	17,743		17,781
Total restricted cash	$	21,677	$	21,776

XML

Intangible Assets, Net - Schedule of Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Gross Carrying Amount	$ 111,773	$ 111,773
Accumulated Impairment Losses	(21,175)	(21,175)
Accumulated Amortization	(18,976)	(14,403)
Net Carrying Amount	$ 71,622	$ 76,195

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 14,095	$ 13,658
Accounts receivable, net	9,881	8,309
Inventories	2,831	2,519
Prepaid expenses and other current assets	4,034	3,861
Investment in joint venture	0	1,474
Investment in joint venture	1,494	0
Related party receivable	137	885
Restricted cash	3,934	3,995
Total current assets	34,912	34,701
Property and equipment, net of accumulated depreciation and amortization	484,146	499,164
Intangible assets, net	71,622	76,195
Restricted cash	17,743	17,781
Total assets	609,917	627,841
Current liabilities:
Accounts payable	7,650	6,053
Construction related payables	307	302
Related party payables	0	406
Interest payable	55,882	0
Accrued expenses	22,484	23,676
Current portion of long term debt	669,520	0
Total current liabilities	755,843	30,437
Long term accrued expenses	261	568
Long term interest payable	9,268	43,963
Long term debt	0	632,864
Long term debt - due to affiliate	16,160	15,021
Total long term liabilities	25,689	692,416
Total liabilities	781,532	722,853
Members' equity (deficit):
Paid-in capital	86,673	86,673
Accumulated deficit	(258,288)	(181,685)
Total members' equity (deficit)	(171,615)	(95,012)
Total liabilities and members equity (deficit)	$ 609,917	$ 627,841

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Basis of Presentation, Principles of Consolidation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation, Principles of Consolidation and Signficant Accounting Policies

Basis of Presentation, Principles of Consolidation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”) in accordance with the instruction to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and footnotes necessary for complete consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). These condensed consolidated financial statements should be read in conjunction with the Company’s 2013 annual consolidated financial statements and notes thereto on Form 10-K for the year ended December 31, 2013.

The results for the periods indicated reflect all adjustments (consisting primarily of normal recurring adjustments) that management considers necessary for a fair presentation of financial position, results of operations, and cash flows. The results for such periods are not necessarily indicative of the results to be expected for the full year.

The preparation of the condensed consolidated financial statements in conformity with GAAP 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, and those differences could be material.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries as of and for the nine months ended September 30, 2013 and September 30, 2012 and December 31, 2012.

Consolidations of Variable Interest Entity

During the period from March 1, 2011 through June 14, 2012, LVHR was the third party operator of all gaming operations at the Hard Rock Hotel & Casino Las Vegas and the Company did not own any interest in LVHR or its affiliated entities, WG-Harmon, LLC (“WG-Harmon”) and Warner Gaming, LLC. However, the Company, through one of its subsidiaries, entered into a Casino Lease Agreement (“Casino Lease”) with LVHR, pursuant to which it leased the casino premises in exchange for a monthly rent payment. The Casino Lease provided that the Company may terminate the lease upon 30 days prior written notice to LVHR, without payment of any termination fee. In addition, as part of the Casino Lease, the Company was obligated to make available to LVHR a revolving line of credit to be used solely for working capital purposes, specifically to fund any cash flow shortfalls in the casino operations. In addition to the Casino Lease, LVHR and the Company, entered into the Existing Gaming Assets Acquisition Agreement dated as of March 1, 2011, pursuant to which LVHR acquired all of the then existing casino assets used in the gaming operations at the Hard Rock Hotel & Casino Las Vegas. In addition, upon the exercise of the option to acquire the equity of LVHR, the agreement provides for the forgiveness of any accrued rent owed.

Prior to June 15, 2012, when LVHR became a wholly-owned consolidated subsidiary of the Company, LVHR was consolidated as a variable interest entity as the Company was deemed the primary beneficiary of LVHR as the Company had both (1) the power to direct the activities significantly impacting LVHR's economic performance and (2) the obligation to absorb LVHR's losses. Prior to June 15, 2012, the Company did not own any interest in LVHR or its affiliated entities, WG-Harmon and Warner Gaming, LLC, and LVHR was the third party operator of all gaming operations at the Hard Rock Hotel & Casino Las Vegas.

Correction of Previously Reported Cash Paid During the Period for Interest, Net of Amounts Capitalized for the nine months ended September 30, 2012

Subsequent to the issuance of the Company's September 30, 2012 condensed consolidated financial statements in its Form 10-Q for that period, the Company discovered a typographical error in the supplemental disclosure of cash flow information on the Condensed Consolidated Statement of Cash Flows related to cash paid during the period for interest, net of amounts capitalized. The previously filed September 30, 2012 10-Q incorrectly noted cash paid during the period for interest, net of amounts capitalized for the nine months ended of $2.1 million. Such amount should have disclosed $21.3 million. The accompanying supplemental disclosure of cash flow information on the Condensed Consolidated Statement of Cash Flows has been corrected. The Company has determined that such typographical error is not material to the Condensed Consolidated Statement of Cash Flows as of September 30, 2012.

Recently Issued Accounting Pronouncements

No new accounting pronouncements issued or effective during 2013 have had or are expected to have a material impact on the Company's financial position or result of operations.

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Agreements with Related Parties (Details) (USD $)	3 Months Ended		9 Months Ended		16 Months Ended		3 Months Ended		9 Months Ended			16 Months Ended	1 Months Ended	15 Months Ended	16 Months Ended	3 Months Ended		9 Months Ended		1 Months Ended	9 Months Ended		1 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Jun. 15, 2012	Dec. 31, 2012	Sep. 30, 2013 Affiliated Entity	Sep. 30, 2012 Affiliated Entity	Sep. 30, 2013 Affiliated Entity	Sep. 30, 2012 Affiliated Entity	Dec. 31, 2012 Affiliated Entity	Jun. 15, 2012 Affiliated Entity Gaming Operations	Apr. 30, 2013 Affiliated Entity Non-Gaming Operations	Sep. 30, 2013 Affiliated Entity Non-Gaming Operations	Jun. 15, 2012 Affiliated Entity Non-Gaming Operations	Sep. 30, 2013 Brookfield Financial Mortgages	Sep. 30, 2012 Brookfield Financial Mortgages	Sep. 30, 2013 Brookfield Financial Mortgages	Sep. 30, 2012 Brookfield Financial Mortgages	Jun. 30, 2012 CDO Restaurant Associates, LLC	Sep. 30, 2013 CDO Restaurant Associates, LLC	Dec. 31, 2012 CDO Restaurant Associates, LLC	Jun. 30, 2012 CDO Restaurant Associates, LLC Pre-opening Costs in Excess of Budgeted Amounts	Sep. 30, 2013 CDO Restaurant Associates, LLC Final Construction Costs in Excess of Budgeted Amounts	Sep. 30, 2013 Fox Restaurant Concepts, LLC	Sep. 30, 2013 Bank of America, N.T. & S.A. CDO Restaurant Associates, LLC	Sep. 30, 2013 Equity in income of joint venture CDO Restaurant Associates, LLC	Sep. 30, 2012 Equity in income of joint venture CDO Restaurant Associates, LLC	Sep. 30, 2013 Equity in income of joint venture CDO Restaurant Associates, LLC	Sep. 30, 2012 Equity in income of joint venture CDO Restaurant Associates, LLC	Sep. 30, 2013 Other assets CDO Restaurant Associates, LLC	Dec. 31, 2012 Other assets CDO Restaurant Associates, LLC
Related Party Transaction [Line Items]
Management fee expense							$ 500,000	$ 400,000	$ 1,400,000	$ 1,200,000
Related party payables							0		0		400,000
Monthly base fee for management expense												37,500		160,000	122,500
Monthly base fee for management expense if construction services are no longer provided														150,000
Reduction in monthly base fee for management expense													10,000
Monthly rental income					25,000
Accrued interest on debt																1,600,000	1,200,000	4,500,000	3,500,000
Initial construction and preopening budget, contribution, percentage																				80.00%
Initial construction and preopening budget, contribution																				2,100,000
Loan to related party																							100,000	248,000
Rate on related party loan receivable																					8.00%
Reference rate on loan receivable																										3.25%
Basis spread on variable rate																										4.00%
Preferred return over capital contributions, percentage																					8.00%
Equity method investment, ownership percentage																					50.00%
Income (loss) on joint venture investment	(16,000)	(324,000)	20,000	(324,000)																							(15,000)	(324,000)	20,000	(324,000)
Equity method investment value																															1,500,000	1,500,000
Amount distributed to members during period																					0
Related party receivable	$ 137,000		$ 137,000			$ 885,000															$ 0	$ 400,000
Operating lease, term of contract																					10 years
Operating lease, renewal term																					5 years
Rent expense calculation, percentage of sales																					6.00%
Related party, management fee rate																									6.00%

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

Accrued expenses consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Deferred income	$	2,165	$	4,082
Capital lease obligations	409		599
Advance room, convention and customer deposits	6,368		4,575
Accrued salaries, payroll taxes and other employee benefits	2,164		3,001
Accrued miscellaneous taxes	1,925		1,187
Reserve for legal liability claims	5,279		3,727
Other accrued liabilities	4,174		6,505
Total current accrued expenses	22,484		23,676
Long term
Capital lease obligations	261		568
Total long term accrued expenses	261		568
Total accrued expenses	$	22,745	$	24,244

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Debt - Debt Outstanding (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Face value	$ 924,337	$ 911,116
Current portion of long-term debt, Face value	(894,337)	0
Total long-term debt, Face value	30,000	911,116
Book value	685,680	647,885
Current portion of long term debt	(669,520)	0
Long-term Debt, Excluding Current Maturities	16,160	647,885
Payment in Kind (PIK) Note | Amended Facility Note A
Debt Instrument [Line Items]
Face value	567,047	553,826
Book value	493,615	472,740
Notes Payable, Other Payables | Amended Facility Note B
Debt Instrument [Line Items]
Face value	327,290	327,290
Book value	175,905	160,124
Brookfield Financial | Mortgages | Second Mortgage
Debt Instrument [Line Items]
Face value	30,000	30,000
Book value	$ 16,160	$ 15,021

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Company Structure (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Payment in Kind (PIK) Note	Dec. 31, 2012 Payment in Kind (PIK) Note	Feb. 28, 2014 Subsequent Event Payment in Kind (PIK) Note
Debt Instrument [Line Items]
Net loss	$ (29,099)	$ (23,659)	$ (76,603)	$ (68,017)
Members' equity	(171,615)		(171,615)		(95,012)
Long term interest payable	$ 9,268		$ 9,268		$ 43,963	$ 31,700	$ 18,500	$ 44,300

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Components of accounts receivable, net consist of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Casino	$	4,670		$	3,677
Hotel	3,556			2,883
Other	2,865			2,708
	11,091			9,268
Less: allowance for doubtful accounts	(1,210		)	(959		)
Total accounts receivable, net	$	9,881		$	8,309

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Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenue
Casino	$ 9,666	$ 11,342	$ 32,849	$ 33,464
Lodging	15,571	15,469	47,896	48,405
Food and beverage	18,804	20,781	60,099	64,310
Retail	745	732	2,123	2,154
Other	7,437	6,025	24,610	22,252
Gross revenues	52,223	54,349	167,577	170,585
Less: Promotional allowances	(4,902)	(4,625)	(15,586)	(15,311)
Net revenues	47,321	49,724	151,991	155,274
Costs and Expenses
Casino	8,808	9,004	27,220	27,291
Lodging	5,132	5,275	14,905	15,839
Food and beverage	11,998	11,973	34,617	35,270
Retail	427	405	1,176	1,355
Other	5,037	3,581	16,273	13,286
Marketing	2,317	2,041	6,762	6,816
Fee and expense reimbursements - related party	452	450	1,366	1,719
General and administrative	9,720	10,144	30,468	28,068
Depreciation and amortization	7,428	7,595	23,469	23,612
Pre-opening	1	89	11	259
Impairment of intangible assets	0	0	0	3,000
Total costs and expenses	51,320	50,557	156,267	156,515
Loss from operations	(3,999)	(833)	(4,276)	(1,241)
Interest income	4	4	20	31
Interest expense	(25,088)	(22,506)	(72,367)	(66,483)
(Loss) income on joint venture investment	(16)	(324)	20	(324)
Loss before income tax expense	(29,099)	(23,659)	(76,603)	(68,017)
Income tax expense	0	0	0
Net loss	(29,099)	(23,659)	(76,603)	(68,017)
Other Comprehensive loss
Interest rate cap fair market value adjustment, net of tax	0	0	0	203
Comprehensive loss	$ (29,099)	$ (23,659)	$ (76,603)	$ (67,814)

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Components of Accounts Receivable

Components of accounts receivable, net consist of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Casino	$	4,670		$	3,677
Hotel	3,556			2,883
Other	2,865			2,708
	11,091			9,268
Less: allowance for doubtful accounts	(1,210		)	(959		)
Total accounts receivable, net	$	9,881		$	8,309

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DEI Document	9 Months Ended
	Sep. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	BREF HR, LLC
Entity Central Index Key	0001531537
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	0

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Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2013

Cash and Cash Equivalents [Abstract]

Restricted Cash

Restricted cash consists of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Tax reserves	$	2,003	$	2,072
Insurance reserves	924		1,327
Other reserves	363		363
Workers' compensation reserves	644		233
Total current restricted cash	3,934		3,995
Long-term
Working capital reserves	14,483		16,148
Available restricted cash reserves for future capital expenditures	3,260		1,633
Total long-term restricted cash	17,743		17,781
Total restricted cash	$	21,677	$	21,776

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities
Net loss	$ (76,603)	$ (68,017)
Adjustment to reconcile net loss to net cash provided by operating activities
Depreciation	18,896	18,504
Provision for (recovery of) doubtful accounts	258	(301)
Impairment of intangible assets	0	3,000
Amortization of intangible assets	4,573	5,108
Amortization of debt discount	24,574	21,079
Accrued non-cash interest applied to principal	13,221	4,319
Change in value of interest rate caps net of premium amortization	64	340
(Income) loss on joint venture investment	(20)	324
Loss on sale of assets	0	6
(Increase) decrease in assets:
Accounts receivable	(1,830)	(1,697)
Inventories	(312)	260
Prepaid expenses	(173)	(1,029)
Related party receivable	696	125
Increase (decrease) in liabilities:
Accounts payable	1,597	1,649
Related party payable	(406)	69
Other accrued liabilities	(1,032)	(1,083)
Accrued interest payable	21,187	20,184
Net cash provided by operating activities	4,690	2,840
Cash flows from investing activities
Purchases of property and equipment	(3,878)	(10,170)
Payments on construction related payables	5	0
Restricted cash contributions	(7,008)	(6,744)
Restricted cash withdrawals	7,107	17,066
Loan to joint venture	(248)	0
Repayments on joint venture debt	300	0
Investment in joint venture	0	(2,104)
Proceeds from sale of operating assets	0	35
Net cash used in investing activities	(3,722)	(1,917)
Cash flows from financing activities
Repayments on borrowings	0	(1,000)
Purchase of interest rate caps	(64)	(142)
Capital lease payments	(467)	(1,446)
Net cash used in financing activities	(531)	(2,588)
Net increase (decrease) in cash and cash equivalents	437	(1,665)
Cash and cash equivalents, beginning of period	13,658	16,818
Cash and cash equivalents, end of period	14,095	15,153
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, net of amounts capitalized	13,254	21,331
Supplemental Disclosure Non-cash Investing and Financing Activities
Construction related payables	$ 307	$ 303

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Accrued Expenses

9 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

Accrued expenses consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Current
Deferred income	$	2,165	$	4,082
Capital lease obligations	409		599
Advance room, convention and customer deposits	6,368		4,575
Accrued salaries, payroll taxes and other employee benefits	2,164		3,001
Accrued miscellaneous taxes	1,925		1,187
Reserve for legal liability claims	5,279		3,727
Other accrued liabilities	4,174		6,505
Total current accrued expenses	22,484		23,676
Long term
Capital lease obligations	261		568
Total long term accrued expenses	261		568
Total accrued expenses	$	22,745	$	24,244

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Intangible Assets, Net

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible Assets, Net

Intangible assets, net consist of the following:

	December 31, 2012										September 30, 2013
($ in thousands)	Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Remaining life (years)
Non-amortizing intangible assets
Hard Rock Licensing	$	55,000	$	(15,000	)	$	—		$	40,000	$	55,000	$	(15,000	)	$	—		$	40,000	Indefinite
Future Trademark Licensing	7,000		—			—			7,000		7,000		—			—			7,000		Indefinite
	62,000		(15,000		)	—			47,000		62,000		(15,000		)	—			47,000
Amortizing intangible assets
In-place contracts	29,000		(6,175		)	(5,316		)	17,509		29,000		(6,175		)	(7,992		)	14,833		8
Monster TM Licensing	2,537		—			(1,213		)	1,324		2,537		—			(1,710		)	827		2
Customer Relationships	3,000		—			(3,000		)	—		3,000		—			(3,000		)	—		0
Sponsorship Agreements	1,300		—			(1,191		)	109		1,300		—			(1,300		)	—		0
Market leases	1,736		—			(594		)	1,142		1,736		—			(837		)	899		1 - 8
Player relationships	10,000		—			(2,685		)	7,315		10,000		—			(3,570		)	6,430		8
Other	2,200		—			(404		)	1,796		2,200		—			(567		)	1,633		8
	49,773		(6,175		)	(14,403		)	29,195		49,773		(6,175		)	(18,976		)	24,622
Total
intangibles, net	$	111,773	$	(21,175	)	$	(14,403	)	$	76,195	$	111,773	$	(21,175	)	$	(18,976	)	$	71,622

The Hard Rock Trademark and future licensing rights are not subject to amortization as they have an indefinite useful life. The in-place contracts, trade names, Customer Relationships, Sponsorship Agreements, Market leases and other amortizing intangible assets are being ratably amortized on a straight-line basis over the estimated useful life which ranges from one to nine years. Player Relationships are amortized on an accelerated basis consistent with the expected timing of the Company’s realization of the economic benefits of such relationships.

For the three months ended September 30, 2013 and 2012, the Company recorded amortization expense of $1.1 million and $1.5 million, respectively. For the nine months ended September 30, 2013 and 2012, the Company recorded amortization expense of $4.6 million and $5.1 million, respectively.

Pueblo of Isleta Impairment. On October 13, 2009, HRH Holdings executed a license agreement with the Pueblo of Isleta (the "Isleta license agreement"). Pursuant to the Isleta license agreement, the Company sublicensed certain intellectual property, including the “Hard Rock Hotel” and “Hard Rock Casino” trademarks, to Isleta in connection with a hotel and a casino that Isleta opened in Albuquerque, New Mexico. Under the terms of the Isleta license agreement, Isleta agreed to pay us a certain percentage of its annual gross revenues based on the performance of its Hard Rock Hotel/Casino as well as certain other license fees. On December 24, 2012, Isleta and the Company mutually agreed to terminate the Isleta license agreement. The termination of the Isleta license agreement occurred on June 30, 2013. As part of such termination, the Company recorded an impairment of the Isleta intangible asset included in other licenses of $6.2 million in December 2012. The $6.2 million impairment charge represented discounted future licensing fees included in the March 1, 2011 fair value related to the agreement which were anticipated at that time had the agreement continued after June 30, 2013.

During the second quarter of 2012, with forecasted net revenues differing from expectations, the Company performed an interim impairment analysis of the Hard Rock trademark. This analysis resulted in an impairment charge of $3.0 million for the second quarter of 2012. The fair value of Hard Rock Licensing at September 30, 2012 was determined using the discounted cash flow of forecasted net revenues.

Hard Rock Licensing Impairment. During the fourth quarter of 2012, the Company completed its annual impairment analysis of the Hard Rock trademark, which resulted in an additional impairment charge of $12.0 million due to updated forecasts and market conditions. The fair value of Hard Rock Licensing at December 31, 2012 was determined using the discounted cash flow of forecasted net revenues.

The impairment charges to Hard Rock Licensing were the result of reductions in the projected revenue due to the weak market environment and are included within impairment of intangible assets reflected in the Condensed Consolidated Statement of Operations and Comprehensive Loss.

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Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table presents debt outstanding as of September 30, 2013 and December 31, 2012:

($ in thousands)	Final	Face value			Book value			Face value		Book value
Project name/lender	maturity	September 30, 2013			September 30, 2013			December 31, 2012		December 31, 2012
Amended facility -Note A/Vegas HR Private Limited	March 1, 2018	$	567,047		$	493,615		$	553,826	$	472,740
Amended facility -Note B/Vegas HR Private Limited	March 1, 2018	327,290			175,905			327,290		160,124
Second Mortgage - Brookfield Financial	March 1, 2018	30,000			16,160			30,000		15,021
Total debt		924,337			685,680			911,116		647,885
Current portion of long-term debt		(894,337		)	(669,520		)	—		—
Total long term debt		$	30,000		$	16,160		$	911,116	$	647,885

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Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of the following:

($ in thousands)	September 30, 2013		December 31, 2012
Restaurants and bars	$	1,858	$	1,739
Retail merchandise	886		699
Other inventory and operating supplies	87		81
Total inventories	$	2,831	$	2,519

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal and Regulatory Proceedings

Our subsidiary HRHH IP was one of a number of defendants (“Defendants”) in an action ("Hard Rock IP Action") commenced by Hard Rock Cafe International (USA), Inc. (“HRCI”) on September 21, 2010 in the United States District Court for the Southern District of New York, captioned Hard Rock Cafe International (USA), Inc. v. Hard Rock Hotel Holdings, LLC, et al. asserting certain failures to comply with the terms and requirements of the intellectual property licensure agreements to which the Company was a party. HRCI also commenced a separate arbitration proceeding before the American Arbitration Association with respect to certain claims, originally brought in the Hard Rock IP Action, that were deemed arbitrable by the judge in that action (“HRCI Arbitration”). The HRCI Arbitration arose from the same underlying facts as the Hard Rock IP Action. On June 13, 2013, the parties reached a settlement of both the Hard Rock IP Action and the HRCI Arbitration (“HRCI Settlement”), and the court entered the order of dismissal of the Hard Rock IP Action on June 13, 2013. The terms of the HRCI Settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

S&H Projects (“S&H”) filed a lawsuit against Hard Rock Hotel, Inc. (“HRHI”) on December 3, 2010 with regard to the closure of the Wasted Space lounge in October 2010, (“S&H Matter”). On August 12, 2013, the parties reached a settlement of the S&H Matter. The terms of the S&H Matter settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

The Company and affiliates Brookfield Real Estate Financial Partners, LLC, Brookfield Financial, LLC - Series B, and Brookfield Asset Management (US), Inc. are currently amongst a number of defendants (“Defendants”) in an action commenced by Mace Management Group, LLC (“Mace) and Mandown, LLC (“Mandown”) on June 12, 2012 in Nevada’s Eighth Judicial District Court in Clark County, Nevada (the “Mace/Mandown Action”).  The Mace/Mandown Action relates to investments made by Mace/Mandown in Wasted Space Lounge, Rare 120 restaurant, the Johnny Smalls restaurant and Vanity nightclub (collectively, the “Venues”) at the Hard Rock Hotel and Casino Las Vegas. In general, all claims assert that actions taken by Defendants allegedly deprived Mace/Mandown of their initial investment and/or their share of profits from the Venues. The Mace/Mandown Action is in the preliminary stages and management has determined that based on the proceedings to date it does not believe the outcome of this matter will have a material effect on our business, or results of operations or financial condition of the Company.

Dolce Group Vegas, LLC filed a complaint against the Company, and affiliates Brookfield Asset Management (US), Inc., and Brookfield Financial, LLC - Series B, in Nevada’s Eighth Judicial District Court, Clark County, Nevada on July 13, 2011 (“Dolce Matter”). The plaintiff alleges breach of contract with respect to plaintiff’s contract to develop the “Rare 120” steakhouse concept for Hard Rock Hotel. On July 12, 2013, the parties reached a settlement of the Dolce Matter. The terms of the Dolce Matter settlement did not have a material effect on our business, or the results of operations or financial condition of the Company.

On July 27, 2012, the Company received notice of a Demand for Arbitration being filed by Monster Beverage Company (“Monster”) against the Company’s subsidiaries HRHH Hotel/Casino, LLC and HRHH IP, LLC (together the “HRHH Entities”) before the Judicial Arbitration and Mediation Service, or JAMS (the “Monster Beverage Action”).  The gravamen of the Monster Beverage Action was a dispute between the HRHH Entities and Monster over rights to the “Rehab” beverage marks and brand.  On August 16, 2013 the arbitrator issued a final arbitration award in favor of Monster, which was judicially confirmed on January 27, 2014. The outcome of the Monster Beverage Action did not have a material effect on our business, or the results of operations or financial condition of the Company.

We are also subject to a variety of other claims and lawsuits that arise in the ordinary course of our business. We do not believe the outcome of these and the other matters disclosed above will have a material effect on our business, results of operations or financial condition. As of September 30, 2013, the Company accrued approximately $4.6 million for all loss contingency matters and our best estimate of reasonably possible losses in excess of the amount accrued is not material to the financial statements.

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Agreements with Related Parties

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Agreements with Related Parties

Agreements with Related Parties

WG-Harmon

During the three months ended September 30, 2013 and 2012, the Company incurred $0.5 million and $0.4 million, respectively in management fees payable to WG-Harmon under the Management Agreement (Gaming Operations), Resort Management Agreement and Liquor Management and Employee Services Agreement, collectively ("WG-Harmon Agreements"), as defined below which is included in general and administrative on the condensed consolidated statement of operations. During the nine months ended September 30, 2013 and 2012, the Company incurred $1.4 million and $1.2 million, respectively, in management fees payable under the WG-Harmon Agreements. As of September 30, 2013 and December 31, 2012, the Company had $0.0 million and $0.4 million, respectively, payable to WG-Harmon which is included in related party payables on the condensed consolidated balance sheets.

Gaming Operations

On March 1, 2011, LVHR entered into the Management Agreement (Gaming Operations) (the “Management Agreement”) with WG-Harmon, pursuant to which WG-Harmon agreed to manage the gaming operations at the Hard Rock Hotel & Casino Las Vegas for LVHR. The term of the Management Agreement began on March 1, 2011 and terminated on June 15, 2012. During the term of the Management Agreement, LVHR paid to WG-Harmon a base fee in the amount of $37,500 per month. LVHR also reimbursed WG-Harmon for reasonable fees and expenses incurred in connection with the performance of WG-Harmon’s duties under such agreement.

On December 22, 2011, the Company received a license from the Nevada Gaming Commission to serve as the operator of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas and we were approved to acquire and own the equity securities of LVHR, subject to the Registration Statement becoming effective. Under Section 12(g)(1) of the Exchange Act, the Registration Statement became effective on December 22, 2011. LVHR became one of our subsidiaries and we assumed operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas on June 15, 2012. On or about the same date that LVHR became one of our subsidiaries and we assumed operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas, we restructured and converted LVHR from a Nevada corporation to a Nevada limited liability company known as LVHR Casino, LLC. Upon consummation of the restructure and conversion of LVHR: (i) LVHR Casino, LLC became a mortgage borrower under the Amended Facility and the Second Mortgage; (ii) LVHR Casino, LLC continued to own all of the assets that LVHR acquired on March 2, 2011 that are used at the Hard Rock Hotel & Casino Las Vegas gaming operations, and (iii) the revolving line of credit HRHH Gaming was obligated to make available to LVHR terminated. The Management Agreement terminated on June 15, 2012 without payment of any termination fee.

Non-Gaming Operations

On March 1, 2011, the Company and WG-Harmon entered in a Resort Management Agreement (the “Resort Management Agreement”), pursuant to which WG-Harmon managed the Hard Rock Hotel & Casino Las Vegas, other than the gaming operations and the liquor operations. The term of the Resort Management Agreement began on March 1, 2011 and continued until June 15, 2012, the date upon which LVHR became one of our subsidiaries and we assumed the operation of the gaming facilities at the Hard Rock Hotel & Casino Las Vegas. During the term of the Resort Management Agreement, the Company paid to WG-Harmon a base fee in the amount of $122,500 per month. In addition to such base fee, WG-Harmon has an incentive management fee based on performance of the adjusted EBITDA of the Hard Rock Hotel & Casino Las Vegas as set forth in the Resort Management Agreement.

On June 15, 2012, the Resort Management Agreement was replaced by the Amended and Restated Management Agreement (the “Amended Resort Management Agreement”). On June 15, 2012, the Company and WG-Harmon entered into the Amended Resort Management Agreement, pursuant to which WG-Harmon will manage the Hard Rock Hotel & Casino Las Vegas, including the gaming operations and the liquor operations. WG-Harmon is required to use commercially reasonable efforts to operate the Hard Rock Hotel & Casino Las Vegas, and has complete discretion and control in all matters related to the management and operation of the Hard Rock Hotel & Casino Las Vegas. The term of the Amended Resort Management Agreement began on June 15, 2012 and will continue until March 31, 2016. During the term of the Amended Resort Management Agreement, the Company will pay WG-Harmon a base fee in the amount of $160,000 per month, payable monthly, which base fee may be decreased to $150,000 per month if WG-Harmon is no longer providing certain construction services to the Company. In April 2013, a $10,000 reduction to the base fee was put in place. In addition to such base fee, the Company will pay WG-Harmon an incentive management fee based on the performance of the adjusted EBITDA of the Hard Rock Hotel & Casino Las Vegas, as set forth in the Amended Resort Management Agreement.

Liquor Management

On March 1, 2011 the Company and WG-Harmon entered into a Liquor Management and Employee Services Agreement (the “Liquor Management Agreement”), relating to non-gaming operations at the Hard Rock Hotel & Casino Las Vegas. The term of the Liquor Management Agreement will terminate concurrently with the termination of the Resort Management Agreement. During the term of the Liquor Management Agreement WG-Harmon will pay to the Company monthly rent of $25,000 and deposit all liquor revenue into a lockbox account maintained by the Company pursuant to the Facility.

Effective December 23, 2011, the Clark County Liquor and Gaming Licensing Board (the “Clark County Board”) approved temporary liquor licenses for the Company to operate the liquor operations at the Hard Rock Hotel & Casino Las Vegas. On April 1, 2012, the Clark County Board approved an extension for the Company to operate the liquor operations at the Hard Rock Hotel & Casino Las Vegas. The Liquor Management Agreement terminated on June 15, 2012, and such responsibilities were absorbed by WG-Harmon under the Amended Resort Management Agreement.

Second Mortgage Loan Agreement

On March 1, 2011, as part of the Assignment, the Company entered into a second mortgage loan agreement with Brookfield Financial (the “Second Mortgage”), a related party. See Note 10, Debt, for further discussion. During the three months ended September 30, 2013 and 2012, the Company accrued interest of $1.6 million and $1.2 million, respectively, under the Second Mortgage. During the nine months ended September 30, 2013 and 2012, the Company accrued interest of $4.5 million and $3.5 million, respectively, under the Second Mortgage which is included in long term accrued expenses on the condensed consolidated balance sheets.

Investment in Joint Venture

In June 2012, CDO Restaurant Associates LLC (“CDO”), a Delaware limited liability company, was formed between the Company and Fox Restaurant Concepts, LLC (“Fox”) to operate a restaurant, Culinary Dropout, using leased space at the Hard Rock Hotel and Casino Las Vegas. The Company contributed 80% of the initial construction and pre-opening budget, or $2.1 million, and also loaned CDO $100,000 to cover pre-opening costs in excess of initial budgeted amounts. During 2012, the Company loaned CDO an additional $248,000 to cover final construction costs in excess of budgeted amounts. The Company determined that the investment in CDO should be accounted for as an equity method investment. The loan bears interest at the greater of 8% or the reference rate publicly announced by Bank of America N.T. & S.A (3.25% at September 30, 2013) plus 4 percent. Loans are required to be repaid before any other distributions of net cash flow. Net cash flow is then distributed in proportion to the Members’ initial capital contributions, plus an 8% preferred return, and, once paid in full, in accordance with the 50% membership interest. The Company accounts for its investment in CDO under the equity method based on applicable accounting guidance as the Company does not hold a controlling financial interest in CDO.

For the three months ended September 30, 2013 and 2012, the Company recorded a loss of $15,000 and $324,000, respectively, related to its equity in CDO. For the nine months ended September 30, 2013 and 2012, the Company recorded income of $20,000 and a loss of $324,000, respectively, related to its equity in CDO. The Company’s share of the joint venture’s income (loss) is included in equity in income (loss) on joint venture investment in the accompanying condensed consolidated statements of operations and comprehensive loss. At September 30, 2013 and December 31, 2012, the Company’s net investment in CDO is an asset of $1.5 million and $1.5 million, respectively. The balance is included in other assets in the accompanying condensed consolidated balance sheets at September 30, 2013. There were no distributions to the members for the nine months ended September 30, 2013. At September 30, 2013 and December 31, 2012, the Company had $0.0 million and $0.4 million, respectively, outstanding as a related party receivable from CDO.

CDO leases space from the Company under a ten-year operating lease expiring in August 2022. The lease has one five-year renewal option. Rent is paid monthly at 6% of sales, as defined in the agreement. CDO also pays a management fee of 6% of gross sales to Fox. Both the lease and the management agreement expire in August of 2022.

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Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt

Debt

The following table presents debt outstanding as of September 30, 2013 and December 31, 2012:

($ in thousands)	Final	Face value			Book value			Face value		Book value
Project name/lender	maturity	September 30, 2013			September 30, 2013			December 31, 2012		December 31, 2012
Amended facility -Note A/Vegas HR Private Limited	March 1, 2018	$	567,047		$	493,615		$	553,826	$	472,740
Amended facility -Note B/Vegas HR Private Limited	March 1, 2018	327,290			175,905			327,290		160,124
Second Mortgage - Brookfield Financial	March 1, 2018	30,000			16,160			30,000		15,021
Total debt		924,337			685,680			911,116		647,885
Current portion of long-term debt		(894,337		)	(669,520		)	—		—
Total long term debt		$	30,000		$	16,160		$	911,116	$	647,885

The difference between the face and book value of the debt represents debt discounts that are amortized to interest expense using the effective interest method over the term of the debt.

As discussed in Note 1, Company Structure, the PIK interest will become due and payable on June 2, 2014. Currently, the Company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014, and therefore, the Company could be in default upon notification by the lender. Accordingly, the Amended Facility, supplemental interest, and PIK interest is classified as current as of September 30, 2013.

Amended Facility – Note A and Note B

On March 1, 2011, as part of the Assignment, the Company assumed the obligations under the Facility and entered into an amendment thereof (as amended, the “Amended Facility”) pursuant to which the land, building and improvements, equipment, fixtures and all personal properties were pledged as security and collateral.

The Amended Facility has a maturity date of March 1, 2018 and provides for interest only at The London InterBank Offered Rate (LIBOR) plus 2.5% with a 1.5% LIBOR floor (total of 4.0% at September 30, 2013). In addition, under the Amended Facility supplemental interest is accrued at a rate sufficient to provide for the greater of 6.5% or LIBOR + 4.0% effective interest rate at maturity after consideration of all prior payments of principal and interest. The rates of accrual are dependent on fluctuations in the applicable LIBOR rate. The Amended Facility has a provision whereby if the cash available for debt service is less than the current interest due, the PIK Interest will be automatically added to the outstanding principal balance of the Amended Facility and shall thereafter accrue interest. In addition, excess cash in the cash management account will be applied to the outstanding PIK interest, supplemental interest and principal according to the terms of the Amended Facility.

Second Mortgage

On March 1, 2011, as part of the Assignment, the Company entered into a second mortgage loan agreement with Brookfield Financial (the “Second Mortgage”) in the amount of $30.0 million pursuant to which certain land, building and improvements, equipment, fixtures and personal properties were pledged as security and collateral. The Second Mortgage is subordinate in right of payment to the Amended Facility. The maturity date of the Second Mortgage is March 1, 2018 and provides for an effective interest rate of 15.0% payable at maturity.

The Amended Facility and Second Mortgage include customary affirmative and negative covenants for similar financings, including, among others, restrictive covenants regarding incurrence of liens, sales or assets, distributions to affiliates, changes in business, cancellation of indebtedness, dissolutions, mergers and consolidations, as well as limitations on security issuances, transfers of any of the Company’s real property and removal of any material article of furniture, fixture or equipment from the Company’s real property. As of September 30, 2013, the Company was in compliance with all covenants.

The outstanding PIK interest related to the Amended Facility as of September 30, 2013 and December 31, 2012 was $31.7 million and $18.5 million, respectively. During the three months ended September 30, 2013 and 2012, the Company recorded PIK interest in the amount of $6.6 million and $2.4 million, respectively. During the nine months ended September 30, 2013 and 2012, the Company recorded PIK interest in the amount of $13.2 million and $3.3 million, respectively. See discussion in Note 1 regarding the acceleration of PIK interest on March 1, 2014, the forebearance of such obligation until June 2, 2014, and the Company's ability to meet such obligation.

The fair value of our total debt as of September 30, 2013 and December 31, 2012 was $616.4 million and $603.1 million, respectively, which was determined utilizing a discounted cash flow model. The Company has determined that the fair value of its long-term debt is determined using Level 3 inputs. The discount rate was determined utilizing historical market-based equity returns which are adjusted, as necessary, for entity specific factors.

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Basis of Presentation, Principles of Consolidation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries as of and for the nine months ended September 30, 2013 and September 30, 2012 and December 31, 2012.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements

No new accounting pronouncements issued or effective during 2013 have had or are expected to have a material impact on the Company's financial position or result of operations.

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Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current
Deferred income	$ 2,165	$ 4,082
Capital lease obligations	409	599
Advance room, convention and customer deposits	6,368	4,575
Accrued salaries, payroll taxes and other employee benefits	2,164	3,001
Accrued miscellaneous taxes	1,925	1,187
Reserve for legal liability claims	5,279	3,727
Other accrued liabilities	4,174	6,505
Total current accrued expenses	22,484	23,676
Long term
Capital lease obligations	261	568
Total long term accrued expenses	261	568
Total accrued expenses	$ 22,745	$ 24,244

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Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Indefinite-Lived Intangible Assets

Intangible assets, net consist of the following:

	December 31, 2012										September 30, 2013
($ in thousands)	Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Remaining life (years)
Non-amortizing intangible assets
Hard Rock Licensing	$	55,000	$	(15,000	)	$	—		$	40,000	$	55,000	$	(15,000	)	$	—		$	40,000	Indefinite
Future Trademark Licensing	7,000		—			—			7,000		7,000		—			—			7,000		Indefinite
	62,000		(15,000		)	—			47,000		62,000		(15,000		)	—			47,000
Amortizing intangible assets
In-place contracts	29,000		(6,175		)	(5,316		)	17,509		29,000		(6,175		)	(7,992		)	14,833		8
Monster TM Licensing	2,537		—			(1,213		)	1,324		2,537		—			(1,710		)	827		2
Customer Relationships	3,000		—			(3,000		)	—		3,000		—			(3,000		)	—		0
Sponsorship Agreements	1,300		—			(1,191		)	109		1,300		—			(1,300		)	—		0
Market leases	1,736		—			(594		)	1,142		1,736		—			(837		)	899		1 - 8
Player relationships	10,000		—			(2,685		)	7,315		10,000		—			(3,570		)	6,430		8
Other	2,200		—			(404		)	1,796		2,200		—			(567		)	1,633		8
	49,773		(6,175		)	(14,403		)	29,195		49,773		(6,175		)	(18,976		)	24,622
Total
intangibles, net	$	111,773	$	(21,175	)	$	(14,403	)	$	76,195	$	111,773	$	(21,175	)	$	(18,976	)	$	71,622

Schedule of Finite-Lived Intangible Assets

Intangible assets, net consist of the following:

	December 31, 2012										September 30, 2013
($ in thousands)	Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment Losses			Accumulated Amortization			Net Carrying Amount		Remaining life (years)
Non-amortizing intangible assets
Hard Rock Licensing	$	55,000	$	(15,000	)	$	—		$	40,000	$	55,000	$	(15,000	)	$	—		$	40,000	Indefinite
Future Trademark Licensing	7,000		—			—			7,000		7,000		—			—			7,000		Indefinite
	62,000		(15,000		)	—			47,000		62,000		(15,000		)	—			47,000
Amortizing intangible assets
In-place contracts	29,000		(6,175		)	(5,316		)	17,509		29,000		(6,175		)	(7,992		)	14,833		8
Monster TM Licensing	2,537		—			(1,213		)	1,324		2,537		—			(1,710		)	827		2
Customer Relationships	3,000		—			(3,000		)	—		3,000		—			(3,000		)	—		0
Sponsorship Agreements	1,300		—			(1,191		)	109		1,300		—			(1,300		)	—		0
Market leases	1,736		—			(594		)	1,142		1,736		—			(837		)	899		1 - 8
Player relationships	10,000		—			(2,685		)	7,315		10,000		—			(3,570		)	6,430		8
Other	2,200		—			(404		)	1,796		2,200		—			(567		)	1,633		8
	49,773		(6,175		)	(14,403		)	29,195		49,773		(6,175		)	(18,976		)	24,622
Total
intangibles, net	$	111,773	$	(21,175	)	$	(14,403	)	$	76,195	$	111,773	$	(21,175	)	$	(18,976	)	$	71,622

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Accounts Receivable, Net - Components of Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	$ 11,091	$ 9,268
Less: allowance for doubtful accounts	(1,210)	(959)
Total accounts receivable, net	9,881	8,309
Casino
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	4,670	3,677
Hotel
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	3,556	2,883
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	$ 2,865	$ 2,708

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Company Structure

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Company Structure

Company Structure

Organization

BREF HR, LLC is a Delaware limited liability company that was formed on February 11, 2011. The affairs of the Company are governed by a Limited Liability Company Agreement dated as of March 1, 2011 (the “LLC Agreement”). Unless otherwise specified, the terms the “Company,” “we,” “us” or “our” refer to BREF HR, LLC and its consolidated subsidiaries, or any one or more of them, as the context may require. We own and operate the Hard Rock Hotel & Casino Las Vegas. Commencing operations in 1995, the Hard Rock Hotel & Casino Las Vegas is modeled after the highly successful Hard Rock Cafe restaurant chain and is decorated with an extensive collection of rare rock and roll memorabilia. The original Hard Rock Cafe was co-founded in 1971 by Peter Morton, and the “Hard Rock” name has grown to become widely recognized throughout the world.

The Company was formed by certain affiliates of Brookfield Financial, LLC (“Brookfield Financial”) to acquire the limited liability company interests of HRHH JV Junior Mezz, LLC (“HRHH JV Junior Mezz”) and HRHH Gaming Junior Mezz, LLC (“HRHH Gaming Junior Mezz”), which indirectly owned the Hard Rock Hotel & Casino Las Vegas and certain related assets. These assets were acquired pursuant to the assignment from Hard Rock Hotel Holdings, LLC (“HRH Holdings”) in connection with the default by HRH Holdings and its subsidiaries on the real estate financing facility (the “Facility”), and the resulting settlement agreement, as described below. Brookfield Financial is managed by Brookfield Real Estate Financial Partners LLC (together with its affiliates, “Brookfield”).

On March 1, 2011, HRH Holdings, Vegas HR Private Limited (the “Mortgage Lender”), Brookfield Financial, NRFC WA Holdings, LLC, Morgans Hotel Group Co. (“Morgans” and together with an affiliated entity, the “Morgans Parties”) and certain affiliates of DLJ Merchant Banking Partners (“DLJMBP”), as well as other interested parties entered into the Agreement to Transfer in Lieu of Foreclosure and Settlement Agreement (the “Settlement Agreement”) pursuant to which the membership interests of HRHH JV Junior Mezz and HRHH Gaming Junior Mezz were transferred and assigned to the Company. The transactions contemplated by the Settlement Agreement are referred to as the “Assignment.” The Assignment was accounted for as a business combination.

The Company's Going Concern

The Company incurred a loss of $76.6 million for the nine months ended September 30, 2013, and has a net members' deficit of $171.6 million as of September 30, 2013. The Amended Facility allows the Company to accrue 'payable in kind' interest ("PIK interest"), representing the difference between interest accruing under the Amended Facility and the amounts paid. The outstanding PIK interest as of September 30, 2013 and December 31, 2012 was $31.7 million and $18.5 million, respectively. The PIK interest outstanding as of March 1, 2014, in the amount of $44.3 million, became due and payable on March 1, 2014, as the operating performance of the Company did not meet a specified debt yield threshold for the twelve month period ending March 1, 2014. However, the lender entered into a Forbearance Agreement effective as of March 1, 2014, pursuant to which it agreed not to exercise any rights or remedies with respect to the PIK interest until June 2, 2014. Currently, the Company does not have sufficient funds to satisfy a demand for the PIK interest payment on June 2, 2014. The Company is currently assessing its options to satisfy the PIK interest payment obligation, including, but not limited to, negotiating a waiver of this requirement from the lender, selling off a portion of existing collateral or attempting to obtain borrowings from other sources. The Company's ability to continue as a going concern is dependent upon its ability to restructure its indebtedness, obtain alternative financing on acceptable terms, obtain approval from the lender to use available cash reserves to satisfy a portion of this potential obligation, or a combination thereof. However, there is no certainty on the outcome. We have placed mortgages on our hotel casino property to secure our indebtedness. In the event the PIK interest is not paid on June 2, 2014, among other lesser remedies, the lender may declare all unpaid principal and accrued interest under the Amended Facility due and payable immediately. If the PIK payment is not made on June 2, 2014 we risk losing some or all of our property to foreclosure. If this occurs, our business and results of operations would be materially adversely affected. These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties, including the possibility that the Company loses some or substantially all of its assets to foreclosure as a result of these uncertainties.

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Property and Equipment, Net

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net consists of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Land	$	115,600		$	115,600
Buildings and land and building improvements	342,131			341,940
Furniture, fixtures and equipment	79,304			77,005
Memorabilia	6,369			6,012
	543,404			540,557
Less: accumulated depreciation	(60,498		)	(41,603		)
Construction in progress	1,240			210
Total property and equipment, net	$	484,146		$	499,164

Depreciation relating to property and equipment for the Company was $6.3 million and $6.1 million for the three months ended September 30, 2013 and 2012, respectively. Depreciation relating to property and equipment for the Company was $18.9 million and $18.5 million for the nine months ended September 30, 2013 and 2012, respectively.

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Restricted Cash (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Restricted Cash and Cash Equivalents Items [Line Items]
Funds required to be reserved by subsidiaries as a percentage of gross revenues	3.00%
Current restricted cash	$ 3,934	$ 3,995
Long-term restricted cash	17,743	17,781
Total restricted cash	21,677	21,776
Tax reserves
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	2,003	2,072
Insurance reserves
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	924	1,327
Other reserves
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	363	363
Worker's compensation reserves
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	644	233
Working capital reserves
Restricted Cash and Cash Equivalents Items [Line Items]
Long-term restricted cash	14,483	16,148
Cash reserves for future capital additions
Restricted Cash and Cash Equivalents Items [Line Items]
Long-term restricted cash	$ 3,260	$ 1,633

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Commitments and Contingencies - Narrative (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Loss contingency accrual	$ 4.6

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Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consists of the following:

($ in thousands)	September 30, 2013			December 31, 2012
Land	$	115,600		$	115,600
Buildings and land and building improvements	342,131			341,940
Furniture, fixtures and equipment	79,304			77,005
Memorabilia	6,369			6,012
	543,404			540,557
Less: accumulated depreciation	(60,498		)	(41,603		)
Construction in progress	1,240			210
Total property and equipment, net	$	484,146		$	499,164