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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended: March 31, 2004

For the transition period from                      to                     

Commission File Number: 1-9481

ARCHON CORPORATION

(Exact name of registrant as specified in its charter)

3993 Howard Hughes Parkway, Suite 630, Las Vegas, Nevada 89109

(Address of principal executive office and zip code)

(702) 732-9120

(Registrant’s telephone number, including area code)

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

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

Indicate by a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    YES  ¨    NO  ¨

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

6,221,431                         as of                         May 12, 2004

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ARCHON CORPORATION

INDEX

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PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Archon Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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Archon Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (continued)

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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Archon Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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Archon Corporation and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

For the Six Months Ended March 31, 2004

See the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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Archon Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

See the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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ARCHON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and General Information

Archon Corporation (the “Company” or “Archon”), is a publicly held Nevada corporation. The Company’s primary business operations are conducted through a wholly-owned subsidiary corporation, Pioneer Hotel Inc. (“PHI”), which operates the Pioneer Hotel & Gambling Hall (the “Pioneer”) in Laughlin, Nevada. In addition, the Company owns real estate on Las Vegas Boulevard South (the “Strip”) and at the corner of Rainbow and Lone Mountain Road, both in Las Vegas, Nevada, and also owns investment properties in Dorchester, Massachusetts and Gaithersburg, Maryland.

The consolidated condensed financial statements included herein are unaudited and have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. The results for the three and six-month periods are not necessarily indicative of results to be expected for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A for the year ended September 30, 2003 and the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003.

2. Summary of Significant Accounting Policies

Principles of Consolidation. The accompanying unaudited consolidated condensed financial statements include the accounts of Archon and its wholly-owned subsidiaries. Amounts representing the Company’s investment in less than majority-owned companies in which a significant equity ownership interest is held are accounted for on the equity method. All material intercompany accounts and transactions have been eliminated in consolidation.

Earnings Per Share. The Company presents its per share results in accordance with Statement of Accounting Standards (“SFAS”) No. 128, “Earnings Per Share” (“SFAS 128”). SFAS 128 requires the presentation of basic net loss per share and diluted net loss per share. Basic per share amounts are computed by dividing net loss by average shares outstanding during the period, while diluted per share amounts reflect the impact of additional dilution for all potentially dilutive securities, such as stock options. Dilutive stock options of approximately 540,000 were not included in diluted calculations during the quarters or six-month periods ended March 31, 2004 and 2003 since the Company incurred a net loss during these periods and the effect would be antidilutive.

Accounting for Stock-Based Compensation. The Company had a Key Employee Stock Option Plan (the “Stock Option Plan”) which terminated in 2003 for the issuance of new grants. The Company accounts for the Stock Option Plan under the recognition and measurement principles of APB Opinion

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No. 25, Accounting for Stock Issued to Employees and related Interpretations. No stock-based employee compensation cost is reflected in net loss, as all options granted under the Stock Option Plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net loss and loss per share as if the Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation (in thousands except for per share amounts).

Estimates and Assumptions. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used by the Company include those related to customer incentives, bad debts, inventories, investments, estimated useful lives for depreciable and amortizable assets, valuation reserves and estimated cash flows in assessing the recoverability of long-lived assets, estimated liabilities for slot club bonus point programs, income taxes, contingencies and litigation. Actual results may differ from estimates.

Recently Issued Accounting Standards – FIN 46. In January 2003, the Financial Accounting Standards Board (the “FASB”) issued FASB Interpretation No. (“FIN”) 46, Consolidation of Variable Interest Entities (“VIEs”). In December 2003, the FASB reissued Interpretation No. 46 (“FIN 46R”) with certain modifications and clarifications. Application of FIN 46R is effective for interests in certain variable interest entities for periods ending after March 15, 2004 unless FIN 46 was previously applied. FIN 46 and FIN 46R establish standards for determining under what circumstances VIEs should be consolidated with their primary beneficiary, including those in which the usual condition for consolidation does not apply. FIN 46 and FIN 46R also require disclosures about unconsolidated VIEs in which the Company has a significant variable interest. The consolidation requirements of FIN 46 and FIN 46R apply immediately to VIEs created after January 31, 2003 and are effective beginning in the

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Company’s second quarter ended March 31, 2004. The Company has evaluated its relationships and does not believe it has any significant, consolidatable VIEs. As such, the adoption of these interpretations had no impact on the Company’s results of operations and financial position.

3. Comprehensive Loss

Comprehensive loss is the total of net loss and all other non-stockholder changes in stockholders’ equity. Comprehensive loss for the three and six months ended March 31, 2004 and 2003 is as follows (in thousands):

4. Other Assets

Included in “Other Assets” at March 31, 2004 and September 30, 2003 is a note receivable from PDS Gaming, Inc. of approximately $2.0 million and $4.9 million, respectively. This note bears a stated interest at a rate of 10%. The $2.0 million receivable was collected in April 2004.

Also included in “Other Assets” at March 31, 2004 and September 30, 2003 are unamortized loan issue costs (approximately $2.5 million and $2.6 million, respectively) which were incurred when the Company acquired certain rental property, and deferred rents (approximately $2.1 million and $1.8 million, respectively). The unamortized loan issue costs are being amortized on a straight-line basis, which closely approximates the effective interest method, over the loan period.

Also included in “Other Assets” at March 31, 2004 and September 30, 2003 is approximately $700,000 of commercial and residential mortgage loans, representing loans originally funded by J & J Mortgage to unaffiliated third parties as well as loans made directly to J & J Mortgage under a master loan agreement. The loans purchased by the Company were purchased for the principal amount, plus accrued interest, if any. The advances to J & J Mortgage under the master loan arrangement bear interest at the prime rate plus 2%. J & J Mortgage is owned by LICO, which in turn is wholly-owned by Paul W. Lowden, the President, Chief Executive Officer and majority stockholder of the Company. John W. Delaney, a director of the Company, is the president of J & J Mortgage.

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5. Related Parties

The Company has entered into a Patent Rights and Royalty Agreement with David Lowden, brother of Paul W. Lowden, with respect to certain gaming technology for which David Lowden has been issued a patent. The Company has agreed to pay certain royalty payments with respect to the technology incorporated into gaming devices placed in operation, as well as costs related to maintain the patent. David Lowden has granted the Company an exclusive five-year license expiring in January 2007 in the United States with respect to the technology, which will be automatically renewed for additional two-year terms unless Archon terminates the agreement within thirty days prior to the renewal or the agreement is otherwise earlier terminated in accordance with its terms. The Company also has an understanding with David Lowden that it will pay for the costs of commercial development of the technology. Through March 31, 2004, the Company had expensed approximately $250,000 for commercial development of the technology, although none have been expensed in the six months ended March 31, 2004.

The Company had previously loaned approximately $1.4 million to Duke’s – Sparks (“Duke’s”), a Nevada limited liability company. The Company, through its wholly-owned subsidiary Archon Sparks Management Company, operated Duke’s casino. Chris Lowden, son of Paul W. Lowden, is a limited partner in the company that is the managing member of Duke’s. The Company also previously had acquired a $100,000 Class B member interest in Duke’s.

In December 2003, Duke’s closed its casino operations. The Company has written-off its investment in Duke’s and has recorded a reserve for its receivable from Duke’s of approximately $1.4 million during its fiscal year ended September 30, 2003 and has no further asset exposure from Duke’s.

See Note 4 for information regarding transactions between the Company and J & J Mortgage.

6. Federal Income Tax

The Company recorded federal income tax benefits, based on statutory rates, of $221,000 and $667,000, respectively, for the quarters ended March 31, 2004 and 2003 and $1.0 million and $1.4 million, respectively, for the six months ended March 31, 2004 and 2003. The Company has recorded deferred tax assets related to net operating assets as the Company is able to offset its deferred tax assets with its deferred tax liabilities. Realization of the net deferred tax assets is dependent on the Company’s ability to generate profits from operations or from the sale of long-lived assets which would reverse the temporary differences that established the deferred tax liabilities. In the event the Company does not generate profits from sales of long-lived assets in the future, the valuation allowance would need to be recorded and would impact the Company’s future results of operations.

7. Lease Retirement

On December 29, 2003, the Company exercised an early purchase option to acquire leases related to PHI from a third party. The Company paid approximately $35.6 million in exercising its option to retire certain lease obligations of approximately $37.0 million. Proceeds from debt of approximately $18.0 million as well as a use of marketable securities, cash and collections on certain receivables financed this acquisition. Previous agreements, covenants and restrictions on the use of cash related to the lease agreements are no longer applicable. The debt of $18.0 million is secured by land held for development by the Company, as well as a personal guaranty from the Company’s Chief Executive Officer and Chairman of the Board and

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requires monthly principal and interest payments of approximately $120,000 with a balloon payment of approximately $16.3 million in December 2006. The debt bears interest at a variable rate (approximately 5% at March 31, 2004).

As part of the early purchase option exercise, whereby the Company paid approximately $1.4 million less than its recorded book value of capital lease obligations, the Company reduced its carrying value of property and equipment by $1.4 million in accordance with Financial Interpretation No. 26, “Accounting for Purchase of a Leased Asset By the Lessee During the Term of the Lease, An Interpretation of FASB Statement No. 13”.

8. Supplemental Statement of Cash Flows Information

Supplemental statement of cash flows information for the six-month periods ended March 31, 2004 and 2003 is presented below:

9. Segment Information

The Company’s operations are in the hotel/casino industry and investment properties. The Company’s hotel/casino operations are conducted at the Pioneer in Laughlin, Nevada. The Company owns investment properties in Dorchester, Massachusetts and Gaithersburg, Maryland. “Other and Eliminations” below includes financial information for the Company’s corporate operations and Archon Sparks Management Company, adjusted to reflect eliminations upon consolidation.

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Set forth below is the financial information for the segments in which the Company operates for the three-month and six-month periods ended March 31, 2004 and 2003:

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