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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2004

Or

For The Transition Period From                      To                     

Commission File Number 000-50635

COLONY RESORTS LVH ACQUISITIONS, LLC

(Exact name of registration as specified in its charter)

Registrant’s telephone number, including Area Code (702) 732-5111

Securities registered pursuant to Section 12(b) of the Act: None

(Title of Class)

Securities registered pursuant to Section 12(g) of the Act: Class A Membership Units

(Title of Class)

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; and (2) has been subject to such filing requirements for the past 90 days.

Yes x   No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

The aggregate market value of voting stock held by nonaffiliates of registrant as of June 30, 2004 was $0. As of March 30, 2004, there were 0.90 Class A Membership Units held by Colony Resorts LVH Coinvestment Voteco, LLC and 0.60 Class A Membership Units held by Colony Resorts LVH Voteco, LLC.

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Colony Resorts LVH Acquisitions, LLC

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Special Note Regarding Forward-Looking Statements

Certain statements in this section, and elsewhere in this Annual Report on Form 10-K (as well as information included in oral statements or other written statements made or to be made by the Company) constitute “forward-looking statements.” Such forward-looking statements include the discussions of the business strategies of the Company and expectations concerning future operations, margins, profitability, liquidity and capital resources. In addition, in certain portions of this Annual Report on Form 10-K, the words: “anticipates”, “believes”, “estimates”, “seeks”, “expects”, “plans”, “intends” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Although the Company believes that such forward-looking statements are reasonable, it can give no assurance that any forward-looking statements will prove to be correct. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among increased competition and other planned construction in Las Vegas, including the expected opening of the Wynn Resort on the site of the former Desert Inn and increases in meeting and convention space, the completion of infrastructure projects in Las Vegas, government regulation of the casino industry, including gaming license approvals and regulation in foreign jurisdictions, the legalization of gaming in certain jurisdictions, such as Native American reservations in the States of California and New York and regulation of gaming on the Internet, leverage and debt service (including sensitivity to fluctuations in interest rates and other capital markets trends), uncertainty of casino spending and vacationing at casino resorts in Las Vegas, disruptions or reductions in travel to Las Vegas due to terrorist acts, the situation in Iraq and any future terrorist incidents, outbreaks of SARS illness in the Company’s market areas, new taxes or changes to existing tax rates, fluctuations in occupancy rates and average daily room rates in Las Vegas, demand for all-suites rooms, the popularity of Las Vegas as a convention and trade show destination, insurance risks, including the risk that the Company has not obtained sufficient coverage against acts of terrorism or will only be able to obtain additional coverage at significantly increased rates, litigation risks, and general economic and business conditions which may impact levels of disposable income, consumer spending and pricing of hotel rooms.

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PART I

ITEM 1.— BUSINESS

General

Colony Resorts LVH Acquisitions, LLC, a Nevada limited liability company (the “Company”), was formed, under the laws of the State of Nevada on December 18, 2003. The Company owns and operates the Las Vegas Hilton, a casino resort located in Las Vegas, Nevada (the “Hotel”). The Company does not currently have any subsidiaries.

The Company, LVH Corporation (“LVH”) and Caesars Entertainment, Inc. (“Caesars”) entered into a Purchase and Sale Agreement, dated as of December 24, 2003 (the “Purchase and Sale Agreement”). Pursuant to the Purchase and Sale Agreement, subject to the satisfaction or waiver of certain conditions to the obligations of the parties under the Purchase and Sale Agreement, the Company acquired substantially all of the assets, including the real property, on which the Hotel is situated and related parcels of land and all buildings, structures and fixtures on such land, all furniture and equipment used in connection with the operation of the Hotel, and all cash held by LVH as of the closing of the transaction, and certain liabilities of LVH (the “Acquisition”), for a purchase price of $280 million, subject to certain adjustments for proration items and working capital. On June 18, 2004, the Acquisition was consummated and the Company continued certain of the current operations of LVH.

Prior to the completion of the Acquisition on June 18, 2004, the Company conducted no business other than in connection with the Purchase and Sale Agreement.

The Company does not have an ongoing relationship with LVH or Caesars except for customary, surviving provisions in the Purchase and Sale Agreement. Certain terms of the Purchase and Sale Agreement survive the closing of the Purchase and Sale Agreement, including the representations and warranties of each party which generally survived for a period of 270 days post-closing. In addition, certain covenants including the obligation to keep information confidential survive the closing. The other covenants survive in accordance with their respective terms which are set forth in the Purchase and Sale Agreement.

The Company was approved by the Nevada Gaming Commission (the “Nevada Commission”), upon the recommendation of the Nevada Gaming Control Board (the “Nevada Board” and collectively with the Nevada Commission, the “Gaming Authorities”), as well as by the Clark County Liquor and Gaming Board (comprised of the Clark County Commissioners) (“Clark County”) prior to acquiring substantially all of the assets of LVH through the Acquisition.

The Company financed the Acquisition and paid related fees and expenses with (1) proceeds from the issuance Membership Units (the “Equity Financing”), which generated proceeds of $150 million in the aggregate and (2) a term loan in the amount of $200 million from Archon Financial, L.P., an affiliate of Goldman Sachs & Co. (the “Term Loan” and together with the Equity Financing, the “Acquisition Financing”). All of the assets acquired by the Company in the Acquisition, including the Hotel, are collateralized by the Term Loan.

Concurrently with the closing of the Acquisition, the Company entered into a License Agreement pursuant to which the Company licenses from Hilton, Inns, Inc. (“Hilton”) the right to use the name “Hilton” and is part of Hilton’s reservation system and Hilton’s “HHonors Programs ^™.”

The Company was incorporated under the laws of Nevada in 2003. Its principal executive offices are located at 3000 Paradise Road, Las Vegas, Nevada 89109 and its telephone number is 702-732-5111. The Company’s website is www.lvhilton.com. The Company is a voluntary filer and files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports and other information with the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The public can obtain copies of these materials by visiting the SEC at 1-800-SEC-0330, or by accessing the SEC’s website at www.sec.gov.

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Property History

The Las Vegas Hilton Hotel and Casino is located one block east of the Las Vegas Strip (the “Strip”) on approximately fifty-nine acres of land between Paradise Road and Joe W. Brown Drive adjacent to the Las Vegas Convention Center. Originally developed in 1969, the Hotel was purchased by Hilton in 1971 and has been operated as a Hilton-branded hotel ever since. The Hotel historically catered primarily to the high-end gaming customer segment.

Since its opening, the Hotel has undergone numerous substantial expansions and renovations to its hotel and casino space. The original Hotel consisted of a central or “core” hotel tower with a North and East tower attached to it. Over the years, the East tower was expanded to its current size and the North tower was expanded twice to its current size. Expansions have also been made to the casino floor, including the 1997 addition of SpaceQuest – a 22,000 square feet themed-casino area that was developed in coordination with the ‘Star Trek: The Experience’ show, which is managed by Paramount Parks (“Paramount”).

The opening of new luxury upscale mega-resorts on the Strip during the 1990s resulted in increased competition for high-end and premium play gaming business. Due to the Hotel’s off-Strip location and intense competition from newer Strip assets, which offered customers a more updated package of rooms and amenities, the Hotel’s management decided to exit the premium gaming segment in 2000 and focus on the core convention and mid-level casino business.

The Hotel

The 30-story Las Vegas Hilton hotel tower has been a Hilton-branded hotel for over thirty years. The Hotel consists of approximately 2,650 standard rooms and 300 suites with the standard rooms ranging from 300 square feet to 500 square feet and suites beginning at 600 square feet. Other services offered to the guests include a business center, 24-hour room service and in-room high-speed data ports.

The Casino

The Casino features an approximately 74,000 square feet gaming area with approximately 1,340 slot machines and approximately fifty-nine table games. The casino offers customers with the latest slot machine games such as Monopoly^™, Yahtzee^™, Playboy^™ and Wheel of Fortune^™ under applicable agreements with the manufacturers of such slot machines. The Casino’s approximately 55 table games (excluding baccarat tables) include the traditional games of blackjack, craps, roulette and “Pai Gow Poker.”

The Casino is marketed to attract a broad base of patrons, using database-marketing techniques, slot clubs and traditional incentives such as reduced room rates and complimentary meals and suites. The Company offers “high roller” gaming customers premium suites and special hotel and casino services.

Race and Sports Book

The 30,000 square-foot SuperBook^®, has the capability to broadcast more than 30 different sporting events from around the world at any given time. The SuperBook^® features 40 projection screens and monitors and has a seating capacity for more than 400 guests.

Restaurants

The Hotel features twelve dining options with seating for approximately 1,800 customers, including the Mistral (French gourmet restaurant) and Benihana Village. The Hotel has six fine dining options with approximately 800 seats and six casual dining restaurants with approximately 1,000 seats. All the restaurants are owned or franchised by the Hotel, with the exception of Mistral and Vegas Subs, which are leased.

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Entertainment

Show venues at the Hotel include the 1,600-seat Hilton Theater, the 300-seat Shimmer Cabaret and ‘Star Trek: The Experience’. The Hilton Theater has great historical relevance and has hosted performances by Elvis Presley, who performed at the Hotel from 1969 to 1976, and will feature a line-up in 2005 anchored by twenty performance weeks by Barry Manilow. The Shimmer Cabaret features comedian David Brenner six nights per week and also debuted the ‘Aussie Angels’ adult revue in late 2004. The Hotel also hosts ‘Star Trek: The Experience’, an approximately 65,000 square foot attraction featuring motion-based simulation rides, interactive video and virtual reality stations, dining and souvenir shops. This attraction was developed in collaboration with Paramount and is owned and managed by Paramount.

Convention/Meeting Areas

The Hotel is located adjacent to the Las Vegas Convention Center (“LVCC”), which has approximately 3.2 million square feet of total space, and features approximately three million square feet of exhibit space, and 243,950 square feet of net meeting room space, accommodating 144 meeting rooms with seating capacities from 20 to 12,000.

Additionally, the Hotel itself has approximately 200,000 square feet of total meeting space including the Hilton Center, the Hilton Pavilion and the Hilton Ballroom. The Hilton Center is comprised of the Conrad Room and the Barron Room – each a pillar-free area with a total of 70,000 square feet. Using a partition, two smaller rooms can be created seating up to a total of 8,900 people depending on the seating arrangement. The Hilton Ballroom and Hilton Pavilion, located adjacent to the Hilton Center, offer a combined 78,130 square feet of space for meetings and conferences. Additionally, there are fourteen conference rooms available for meetings, each with moveable partitions, two large Board Rooms and five Salon Suites. Based upon demand for meeting space, some hotel rooms can also be converted to hospitality suites.

Las Vegas Monorail Station

The Hotel has one of only seven existing stations linking the new four-mile monorail running from MGM Grand to the Sahara Hotel and Casino. The monorail began operations on July 15, 2004. The Hotel is currently the only property with a monorail station located directly at the front entrance to the property providing more convenient access to the monorail for its customers. Future plans for the monorail include extending it to downtown Las Vegas (Fremont Street), the McCarran Airport as well as to the west side of the Strip.

Other Amenities

Other amenities offered by the Hotel include an outdoor pool and recreation area with individual cabanas, an indoor/outdoor spa, fitness room, six championship tennis courts, three temperature spas, dry and wet sauna, the Cabana Bar and the Cabana Shop. Additionally, the Hotel has a Sports Zone Video Arcade and a retail area.

Business Strategy

The Company’s business strategy includes:

Capital Improvement Program. The Company has made significant capital improvements in the Hotel and casino since the Acquisition and continues to make additional investments as part of the overall capital improvement program (the “Program”). The most important elements of the Program include reconfiguration of the casino floor to open up more gaming areas, improve access and increase foot traffic through the casino. The Company anticipates spending approximately $22 million on renovations of the casino and public areas, $3 million on slot machines, and $3 million on a retail space build-out. Finally, it is currently anticipated that approximately $3 million will be spent renovating hotel rooms. Specific timing of the expenditures under the Program is uncertain, however the Company

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expects to complete the Program by the end of 2005. Expenditures under the Programs will be funded by $26 million of proceeds from the Term Loan and from operating cash flows.

These changes will provide incentive for visitors to stay in the casino longer and increase the number of visitors to the Hotel. In addition to the new casino design, the Company plans to remodel the bars, restaurants and the Hilton Theater.

Focus on Customer Service. The Company continues to emphasize the importance of creating a culture focused on customer service. Each employee is extensively trained in their respective functional area to respond immediately to customer needs. Customer satisfaction is a key basis of employee evaluation. The Company believes this promotes an environment in which all employees feel a sense of commitment to customer service and customers feel welcome and happy in the Hotel.

Increase in Convention Business. The Company will leverage its position as the world’s largest Hilton hotel with an outstanding convention facility, an experienced staff, and a convenient drive-in location adjacent to the Las Vegas Convention Center. The Company will highlight its highly experienced sales/service staff as they compete against all other convention properties. Emphasis will be on size, amenities and superior date availability. Differentiation from competition will occur through providing competitive amenities, quality and superior service at a better price point.

Targeted Customer Base. The Company plans to reengineer its customer databases to identify and target high margin repeat gaming customers, and to use sophisticated player tracking systems to award cash rebates or promotional allowances, such as complimentary rooms, food, beverage and entertainment to guests based on their level of profitability to the Company.

Invest in State-of-the-Art Slot Machines. The Company is committed to offering its customers the latest themed slot machines and gaming technology. The Company has spent $2 million in state-of-the-art slot machines in 2004 as part of its capital improvement project. The Company will continue to focus on the continual acquisition of this type of slot product as it believes it is critical to retaining mid-level slot players who are more knowledgeable and sophisticated than players in other gaming segments.

The Las Vegas Market

Las Vegas is one of the fastest-growing and largest entertainment markets in the country. Las Vegas hotel occupancy rates are among the highest of any major market in the United States. According to the Las Vegas Convention and Visitors Authority (the “LVCVA”), the number of visitors traveling to Las Vegas has increased at a steady and significant rate for the last ten years from 23.5 million visitors in 1993 to 37.3 million visitors in 2004, a compound annual growth rate of 4.2%. The 2004 increase in visitor volume was 5.2%. The LVCVA management believes that the growth in the Las Vegas market has been enhanced by a dedicated program of the LVCVA and major Las Vegas hotels to promote Las Vegas as an exciting vacation and convention site, most recently through its highly successful ‘What happens in Vegas stays in Vegas’ advertising campaign. The increased capacity of McCarran International Airport and the introduction of large, themed destination resorts in Las Vegas continue to support the growth rate.

Although visitation, demand and expectations may be impacted by international and domestic events and other factors and conditions, the Company expects hotel occupancy rates in Las Vegas to remain high as a result of the sustained growth in the number of visitors traveling to Las Vegas, despite several major hotel/casino expansions and an approximately 2,700 room resort being built on the site of the former Desert Inn.

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Las Vegas as a Trade Show, Convention and Meeting Destination

In 2004, according to the LVCVA, Las Vegas was the most popular trade show destination (with a 25% market share of the Trade Show Week 200 Shows in terms of net square footage) and the fourth most popular convention destination in the United States. In 2004, the number of trade show and convention attendees had increased to 5.7 million and the amount spent by trade show and convention attendees was approximately $6.9 billion.

Trade shows are held for the purpose of getting sellers and buyers of products or services together in order to conduct business. Trade shows differ from conventions in that trade shows typically require substantial amounts of space for exhibition purposes and participant circulation. Conventions generally are gatherings of companies or groups that require less space for breakout meetings and general meetings of the overall group. Las Vegas offers trade shows and conventions a unique infrastructure for handling the world’s largest shows, including the concentration of 48,000 hotel rooms located on the Strip, three convention centers (the Expo Center, Mandalay Bay Convention Center, and the LVCC) with a total of approximately 6.9 million square feet of convention and exhibition space, convenient air service from major cities throughout the United States and other countries, and significant entertainment attractions. In addition to the Expo Center, Mandalay Bay Convention Center, and the LVCC, the MGM Grand Hotel and Casino has a conference and meeting facility of approximately 300,000 gross square feet, and the Mirage has a 100,000 gross square feet of meeting space. Mandalay Bay opened its 1.8 million square foot convention center during January 2003. The Company’s Management believes that Las Vegas will continue to evolve as the country’s preferred trade show and convention destination.

Expanding Hotel Market

During 2004, Las Vegas was among the most popular vacation destinations in the United States. Las Vegas has experienced a period of rapid hotel development with the number of hotel and motel rooms in Las Vegas increasing by 52.0% from 1993 through 2004, and is currently at 131,503. The Company expects that the concentration of quality themed casino hotels and resorts will increase visitor interest in Las Vegas as a business event and vacation destination, and, as a result, increase overall demand for hotel rooms, gaming and entertainment.

Growth of Las Vegas Retail Sector and Non-Gaming Revenue Expenditures

In order to draw additional visitors, an increasing number of destination resorts are developing non-gaming entertainment to complement their gaming activities. According to the LVCVA, gaming revenues have increased from $4.7 billion in 1993 to $7.8 billion in 2003 (a compound annual growth rate of 5.2%), and gaming revenues have further increased to $8.7 billion in 2004. Non-gaming tourist revenues increased from $10.3 billion to $32.8 billion over the same period (a compound annual growth rate of 8.1%). The newer, large themed Las Vegas destination resorts have been designed to capitalize on this growth by providing better quality hotel rooms at higher rates and by providing expanded shopping, dining and entertainment opportunities to their patrons in addition to gaming.

Infrastructure Improvement

Clark County and metropolitan Las Vegas have completed several infrastructure improvements to accommodate the increase in travel to Las Vegas by all modes of transportation. According to the LVCVA, in 2004 visitors to Las Vegas arrived by the following methods of transportation: 45% by air; 40% by auto; 8% by recreational vehicle and 7% by bus.

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McCarran International Airport Expansion

During the past five years, the facilities of McCarran International Airport have been expanded to accommodate the increased number of airlines and passengers that it services. The number of passengers traveling through McCarran International Airport has increased from 36.3 million in 2003 to 41.4 million in 2004. Long-term expansion plans for McCarran International Airport provide for additional runway and related areas. An addition to the terminal is currently under construction and expected to be completed during 2006.

Customer Segmentation

The Company focuses its marketing efforts primarily on the convention segment, the mid-level casino segment and the leisure and tour and travel segment.

While convention and leisure customers come from all areas of the United States, historically, geographically, California provides the largest base of customers to the Hotel accounting for approximately 60% to 65% of total room nights, followed by Arizona with 5% of total room nights and Texas with 4% of total room nights. Accordingly, as a region, California has historically been critical to the property’s success both on the hotel and casino side of the business.

The convention business is the number one market segment for the Hotel, contributing 37%. The Hotel’s prominent location next to the Las Vegas Convention Center allows it to effectively target large convention groups, thereby increasing mid-week demand for available room nights.

The casino customers accounted for approximately 20% of total room nights. These customers represent the second most important market from a room night perspective for the Hotel after the convention business. The Hotel uses a reward program to track casino customers play and provides comps based on historical levels of play.

The leisure customers accounted for approximately 29% of the Hotel’s total room nights sold in 2004. Though leisure customers accounted for a higher share of room nights than the casino customers, the Company regards the casino segment as more valuable because of higher casino play from the casino segment. Leisure customers are attracted to the Hotel due to the property’s Strip-like environment and extensive amenities offered at a more affordable and attractive cost relative to other Strip properties. Within the leisure segment, the Hotel caters to the Free & Independent Traveler leisure segment, Tour & Travel segment and package customers. The Hotel targets the leisure segment through added value packages, promotional discounts, and tour and travel operators. The Tour & Travel segment, which represents 14% of total room nights, is primarily used to increase occupancy during off-peak and low seasons.

The Hotel also attracts some locals play due to its race and sports book and the ease of access through the east end of the Hotel. With over 1.6 million people living in Clark County, the locals market represents an attractive customer base for the Hotel. The Hotel recently began targeting this segment through new advertising and marketing programs such as a membership program which provides discounts for shows and restaurants.

Advertising Strategy

In conjunction with the evolution of the overall image campaign, and with a focus on major entertainment engagements (Barry Manilow and others), the property will develop compelling advertising campaigns utilizing print, outdoor and broadcast with an increased emphasis on local cable television and Visitor Vision (in room at most Las Vegas properties.) A new advertising campaign starting mid 2005 will highlight the strengths and positioning of the property, and will be a natural evolution from the current “Always” campaign. The media strategy will include expanded reach and frequency of media buys to include increased outdoor presence, traffic radio and cable TV. The internet is increasingly being used to promote the Hotel through advertising on major internet sites and search engine optimization to ensure customer traffic is directed to the Hotel’s website.

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Competition

The Hotel is located less than one mile east of the Strip and competes with other high-quality Las Vegas resorts and other Las Vegas hotel casinos, including those located on the Strip, on the basis of overall atmosphere, range of amenities, price, location, entertainment offered, theme and size. Currently, there are approximately thirty major gaming properties located on or near the Strip, thirteen additional major gaming properties in the downtown area and additional gaming properties located in other areas of Las Vegas. Many of the competing properties, such as the Rio, Mandalay Bay, Paris, The Venetian, The Mirage, Treasure Island, Caesar’s Palace, Luxor, New York-New York, Bellagio, Aladdin, the Palms and the MGM Grand have themes and attractions which draw a significant number of visitors and directly compete with the Hotel’s operations. Some of these facilities are operated by companies that have more than one operating facility and may have greater name recognition and financial and marketing resources than the Hotel and market to the same target demographic group as the Hotel does. Furthermore, additional hotel casinos, containing a significant number of hotel rooms, are expected to open in Las Vegas within the coming years. There can be no assurance that the Las Vegas market will continue to grow or that hotel casino resorts will continue to be popular. A decline or leveling off of the growth or popularity of such facilities could result in reduced casino and hotel revenues.

To a lesser extent, the Hotel competes with hotel casinos in the Mesquite, Laughlin, Reno and Lake Tahoe areas of Nevada, and in Atlantic City, New Jersey. The Hotel also competes with state-sponsored lotteries, on and off-track wagering, card parlors, riverboat and Native American gaming ventures, and other forms of legalized gaming in the United States, as well as with gaming on cruise ships, internet gaming ventures and international gaming operations. In 1998, California enacted the Tribal Government Gaming and Economic Self-Sufficiency Act (the “Tribal Act”). The Tribal Act provides a mechanism for federally recognized Native American tribes to conduct certain types of gaming on their land. The California electorate approved Proposition 1A on March 7, 2000. Proposition 1A gives all California Indian tribes the right to operate a limited number of certain kinds of gaming machines and other forms of casino wagering on California Indian reservations. Continued proliferation of gaming activities permitted by Proposition 1A may materially reduce casino and hotel revenues in Nevada generally and at the Hotel. The Company is unable, however, to assess the magnitude of the impact on its business.

Employees

As of March 30, 2005, the Company had approximately 3,134 active employees.

The Company recognizes that the Hotel’s employees are critical to its success and has fostered a productive work culture. Employees are offered competitive salaries and a benefits package that includes medical and dental coverage.

The Company believes that it will have a good working relationship with both its union and non-union work force. Labor unions represent approximately 69% of the work force at the Hotel with labor agreement terms ranging from one year to five years. In connection with the closing of the Acquisition, the Company assumed obligations under existing collective bargaining agreements with certain labor unions.

Zoning, Real Estate and Environmental Issues

The Hotel is located on approximately fifty-nine acres of land designated with H-1 Limited Resort and Apartment District zoning. This H-1 Limited Resort and Apartment District was established to provide for the development of gaming enterprises, compatible commercial, and mixed commercial and residential uses, and to prohibit the development of incompatible uses that are detrimental to gaming enterprises. Permitted uses under H-1 Limited Resort and Apartment District zoning include, but are not limited to, and subject to obtaining necessary special use permits and other land use approvals, hotels, casinos, condominiums and timeshares. The existing facility sits on approximately thirty-five acres. Some of this acreage could be suitable for future development projects by the Company, third parties or some combination thereof. Although the Company has contemplated preliminary plans for the development of this acreage, there are no definite or binding plans regarding such

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development. Additionally, the Company has not secured any financing in respect of such contemplated preliminary plans for development.

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

An independent environmental consultant performed a Phase I environmental site assessment in accordance with American Society for Testing and Materials (“ASTM”) standards on the Las Vegas Hilton property in December 2003. This assessment involved visual inspection, interviews with site personnel, review of certain publicly available records, and preparation of a written report. The assessment did not include any testing of soil or groundwater at the property. According to certain historical data integrated into the Phase I report, in 2000 it was discovered that there is a plume of tetrachloroethene in the groundwater and the property was listed as a leaking underground storage tank site. The contamination is believed to originate from an off-site source, but the source has not yet been identified. To date, the Nevada Division of Environmental Protection has not required any additional investigation at the property. The Phase I report states that levels of tetrachloroethene and total petroleum hydrocarbons in the groundwater beneath the property in 2000 exceeded certain limits allowed under a National Pollutant Discharge Elimination System permit. The Phase I report indicates that the allowable levels have been exceeded in the past and a treatment system is needed to ensure compliance with applicable requirements. The Phase I report also identified asbestos-containing materials at the Hotel. The Company expects to manage these materials pursuant to an operations and maintenance program.

The Company does not expect that its compliance measures in respect of the groundwater issue or the asbestos issue will have a material effect upon its capital expenditures, earnings or competitive position. The Company believes that the proper filtration system required for the dewatering sump pumps has been installed at a cost of under $24,000. There can be no assurance, however, that the estimated operating costs for the treatment system will not be exceeded or that there will be no claims or other liabilities associated with the foregoing conditions.

Purchase and Sale Agreement

On December 24, 2003, the Company, LVH and Caesars, entered into the Purchase and Sale Agreement. Pursuant to the Purchase and Sale Agreement, the Company purchased substantially all of the assets of LVH, including, without limitation, the Hotel and assumed certain of LVH’s liabilities. The transactions contemplated pursuant to the Purchase and Sale Agreement were consummated on June 18, 2004. At the closing date of the Acquisition, LVH transferred fee simple title to all real property at the Hotel including, without limitation, buildings, structures, fixtures and improvements located thereon and all rights associated with the land. LVH also assigned certain contracts and agreements related to the business and the Hotel to the Company. In addition, subject to certain conditions, LVH granted a non-exclusive license to the Company to use customer data relating to the Hotel and the business of LVH. Certain property, which is primarily owned by Caesars and used in connection with all of its hotels and casinos, was excluded from the assets transferred to the Company in the Purchase and Sale Agreement. Pursuant to the Purchase and Sale Agreement, the Company offered employment to certain employees of LVH, assumed certain of the collective bargaining agreements with existing labor unions and assumed certain obligations with respect to those employees who accepted offers of employment with the Company.

In consideration for the sale of the Hotel, at closing the Company paid the purchase price of $280 million subject to certain adjustments for proration items and a working capital adjustment and assumed approximately $30.7 million in current liabilities as of March 2004 pursuant to the terms of the Purchase and Sale Agreement primarily relating to accrued payroll, taxes and benefits, accrued expenses and unpaid gaming tickets, which was offset by the assumption of approximately $26.4 million of current assets.

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Regulation and Licensing

The ownership and operation of casino gaming facilities in the State of Nevada are subject to the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, the “Nevada Act”) and various local regulations. The Company’s gaming operations are also subject to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada Gaming Control Board (the “NGCB”) and the Clark County Liquor and Gaming Licensing Board (the “CCLGLB” and, together with the Nevada Commission and the NGCB, the “Nevada Gaming Authorities”).

The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy that are concerned with, among other things: (i) the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; (ii) the establishment and maintenance of responsible accounting practices and procedures; (iii) the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record-keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) the establishment of a source of state and local revenues through taxation and licensing fees. Any change in such laws, regulations and procedures could have an adverse effect on the Company’s gaming operations or on the operation of the Hotel.

The Company is required to be licensed by the Nevada Gaming Authorities to operate a casino, and is currently so licensed. The gaming license requires the periodic payment of fees and taxes and is not transferable. The Company was registered by the Nevada Commission as a publicly traded corporation (“Registered Corporation”) and as such, must periodically submit detailed financial and operating reports to the Nevada Gaming Authorities and furnish any other information that the Nevada Gaming Authorities may require. No person may become a stockholder of, or receive any percentage of profits from, the Company without first obtaining licenses and approvals from the Nevada Gaming Authorities. The Company possesses all state and local government registrations, approvals, permits and licenses required in order for the Company to engage in gaming activities at the Hotel.

The Nevada Gaming Authorities may investigate any individual who has a material relationship to or material involvement with, the Company to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee. Officers, directors and certain key employees of the Company must file applications and be licensed by the Nevada Gaming Authorities.

The Nevada Gaming Authorities may deny an application for licensing or a finding of suitability for any cause they deem reasonable. A finding of suitability is comparable to licensing; both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of suitability, or the gaming licensee by whom the applicant is employed or for whom the applicant serves, must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities. In addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.

If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or to have an inappropriate relationship with the Company, the Company would have to sever all relationships with such person. In addition, the Nevada Commission may require the Company to terminate the employment of any person who refuses to file appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.

The Company is required to submit periodic detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities and similar financing transactions by the Company must be reported to or approved by the Nevada Commission.

If it were determined that the Nevada Act was violated by the Company, the registration and gaming licenses it then holds could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, the Company and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission. Further,

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a supervisor could be appointed by the Nevada Commission to operate the Property and, under certain circumstances, earnings generated during the supervisor’s appointment (except for the reasonable rental value of the Property) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of any gaming registration or license or the appointment of a supervisor could (and revocation of any gaming license would) materially adversely affect the gaming operations of the Company.

Any beneficial holder of the Company’s voting securities, regardless of the number of shares owned, may be required to file an application, be investigated, and have their suitability as a beneficial holder of the Company’s voting securities determined if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.

The Nevada Act requires any person who acquires more than 5% of the Company’s voting securities to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10% of the Company’s voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the Chairman of the Nevada Board mails the written notice requiring such filing.

On June 17, 2004, the Nevada Commission issued an order of registration of the Company (the “Final Order”), the Final Order (1) prohibits the current holders of the Company’s Membership Units or their respective affiliates from selling, assigning, transferring, pledging or otherwise disposing of Membership Units or any other security convertible into or exchangeable for Class A Units or Class B Units, without the prior approval of the Nevada Commission and (2) prohibits the Company from declaring cash dividends or distributions on any class of membership unit of the Company beneficially owned in whole or in part by Holdings, Co-Investment Partners, VoteCo, Coinvestment VoteCo or their respective affiliates, without the prior approval of the Nevada Commission. The Final Order sets forth a description of the Company and its affiliates and intermediary companies and the various gaming licenses and approvals obtained by those entities together with certain conditions and limitations pertaining to the licenses and approvals.

Under certain circumstances, an “institutional investor” as defined in the Nevada Act, which acquires more than 10% but not more than 15% of the Company’s voting securities, may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities only for investment purposes. An institutional investor shall not be deemed to hold voting securities only for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investment and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of the Company, any change in the Company’s corporate charter, bylaws, management, policies or operations of the Company or any of its gaming affiliates, or any other action which the Nevada Commission finds to be inconsistent with holding the Company’s voting securities only for investment purposes. Activities that are not deemed to be inconsistent with holding voting securities only for investment purposes include: (i) voting on all matters voted on by stockholders; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners.

Any person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Nevada Commission or the Chairman of the Nevada Board may be found to be unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any stockholder found to be unsuitable and who holds, directly or indirectly, any beneficial ownership of the common stock of a Registered Corporation beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. The Company is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with the Company, it: (i) pays that person any dividend or interest upon voting securities of the Company; (ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pays remuneration in any form to that person for services rendered or otherwise; or (iv) fails to pursue all lawful efforts to require such unsuitable person to relinquish his voting securities for cash at fair market value. Additionally, the

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CCLGLB has taken the position that it has the authority to approve all persons owning or controlling the stock of any corporation holding a gaming license.

The Nevada Commission may, in its discretion, require the holder of any debt security of a Registered Corporation to file an application, be investigated and be found suitable to own the debt security of such Registered Corporation. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the Registered Corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by such unsuitable person in connection with such securities; (iii) pays the unsuitable person remuneration in any form; or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation, or similar transaction.

The Company is required to maintain a current stock ledger in Nevada that may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. The Company is also required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. The Company is also required to render maximum assistance in determining the identity of the beneficial owner.

The Company may not make a public offering of any securities without the prior approval of the Nevada Commission if the securities or the proceeds therefore are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. The hypothecation of the Company’s assets and restrictions on stock in connection with any public offering also require the prior approval of the Nevada Commission. In addition, the hypothecation of the Company’s assets and restrictions on stock in respect of any public offering require the approval of the Nevada Commission to remain effective.

Changes in control of the Company through a merger, consolidation, stock or asset acquisition, management or consulting agreement, or any act or conduct by any person whereby he or she obtains control, shall not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the NGCB and the Nevada Commission concerning a variety of stringent standards prior to assuming control of such Registered Corporation. The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process of the transaction.

The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Nevada gaming licensees, and Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially-adverse effects of these business practices upon Nevada’s gaming industry and to further Nevada’s policy to: (i) assure the financial stability of corporate gaming operators and their affiliates; (ii) preserve the beneficial aspects of conducting business in the corporate form; and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are, in certain circumstances, required from the Nevada Commission before the Company can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated.

The Nevada Act also requires prior approval of a plan of recapitalization proposed by the Company in response to a tender offer made directly to the Registered Corporation’s members for the purposes of acquiring control of the Registered Corporation.

License fees and taxes, computed in various ways depending upon the type of gaming or activity involved, are payable to the State of Nevada and to Clark County, Nevada. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated.

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In addition, a casino entertainment tax is paid by the Company to the extent that certain entertainment is provided in a cabaret, nightclub, cocktail lounge or casino showroom in connection with the serving or selling of food, refreshments or merchandise.

Any person who is licensed, required to be licensed, registered, required to be registered, or under common control with such persons (collectively, “Licensees”), and who proposes to become involved in a gaming venture outside of Nevada, is required to deposit with the NGCB, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of any investigation by the NGCB into their participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. Thereafter, Licensees are also required to comply with certain reporting requirements imposed by the Nevada Act. Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of any foreign jurisdiction pertaining to such foreign gaming operation, fail to conduct such foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in activities that are harmful to the State of Nevada or its ability to collect gaming taxes and fees, or employ a person in such foreign operation who has been denied a license or a finding of suitability in Nevada on the ground of personal unsuitability.

The sale of alcoholic beverages by the Company on the premises of the Property is subject to licensing, control, and regulation by the applicable local authorities. The Company has obtained Clark County gaming and liquor licenses. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any such licenses, and any such disciplinary action could (and revocation of such licenses would) have a material adverse effect upon the operations of the Company.

ITEM 2.—THE PROPERTY

Prior to the closing of the Acquisition, the Company owned no property. Upon the closing of the Acquisition on June 18, 2004, the Company acquired substantially all of the assets and certain liabilities of LVH, including the Hotel.

The Hotel is located one block east of the Las Vegas Strip (the “Strip”) on approximately fifty-nine acres of land between Paradise Road and Joe W. Brown Drive adjacent to the Las Vegas Convention Center. It has approximately 2,950 hotel rooms, an approximately 74,000 square feet casino with approximately fifty-nine table games and 1,340 slot machines, a race and sports book, twelve restaurants, approximately 4,800 parking spaces, approximately 200,000 square feet of meeting/convention space, a 1,600-seat showroom, a night club, retail outlets, an outdoor pool and a spa and health club.

All of the assets acquired by the Company in the Acquisition, including the Hotel, collateralize the Term Loan.

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ITEM 3.—LEGAL PROCEEDINGS

The Company is not a party to any material litigation and, it is not aware of any action, suit or proceedings against it that has been threatened by any person.

ITEM 4.—SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter ended December 31, 2004.

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PART II

ITEM 5.—MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

No established public trading market exists for the Company’s common equity. There can no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in the Company’s equity.

Holders

As of December 31, 2004, the Company had two holders of record of each of its Class A Membership Units and Class B Membership Units.

The following table provides information as of December 31, 2004, regarding the number of Membership Units that may be issued under the Company’s 2004 Incentive Plan.

Distributions

The Company has never paid nor does it anticipate paying in the foreseeable future any distributions on their Membership Units. The Credit Agreement governing the Term Loan contains restrictions on the payment of dividends or other distributions by the Company.

Purchases of Equity Securities by the Company

During the quarter ended December 31, 2004, the Company did not repurchase any units of its common equity, either as part of a publicly announced plan or program or otherwise. No publicly announced plans or programs are currently in place under which the Company may purchase shares of its common equity.

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ITEM 6.—SELECTED FINANCIAL DATA

The historical selected financial data of the Company (“Successor”) and of LVH (“Predecessor”) set forth below should be read in conjunction with “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and their respective financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The statement of operations data for the years ended December 31, 2004 and 2003, and the balance sheet data at December 31, 2004 and 2003 of the Company are derived from, and are qualified by reference to, the audited financial statements included elsewhere in this Annual Report on Form 10-K.

SUCCESSOR

The following historical information of LVH is derived from its audited financial statements for 2001 through 2004. LVH’s audited financial statements and related notes thereto as of June 17, 2004 and December 31, 2003 and 2002 appear elsewhere in this Annual Report on Form 10-K.

PREDECESSOR

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ITEM 7.—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE PROPERTY

The following discussion should be read in conjunction with, and is qualified in its entirety by, the financial statements and related notes thereto and other financial information included in this Annual Report on Form 10-K. Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking.

Overview

Prior to June 18, 2004 the Company conducted no business other than in connection with the execution of a Purchase and Sale Agreement relating to the acquisition of substantially all of the assets and certain liabilities of LVH. LVH is a wholly-owned subsidiary of Caesars that prior to the Acquisition, operated the Hotel.

Pursuant to the terms of the Purchase and Sale Agreement, the Company purchased substantially all of the assets and assumed certain liabilities of LVH. The Acquisition closed on June 18, 2004. Since June 18, 2004, the Company has owned and operated the Hotel, and accordingly, has a limited operating history. Therefore, the discussion of operations herein focuses on events and the revenues and expenses during the year ended December 31, 2004 as if

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there was no change in ownership of the Hotel on June 18, 2004, compared to the historical operations of the Hotel for the year ended December 31, 2003. The discussion of operations comparing the year ended December 31, 2003 and 2002 covers periods when the Hotel was operated by Caesars.

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

Casino revenues vary from time to time due to general economic conditions, popularity of entertainment offerings, table game hold, slot hold, and occupancy percentages in the hotels. Casino revenues also vary depending upon the amount of gaming activity as well as variations in the odds for different games of chance. The Hotel also uses technology, such as cashless wagering on slot machines, to increase revenues and/or decrease expenses. Casino revenues, room revenues, food and beverage revenues and other revenues vary due to general economic conditions and competition.

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

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

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

Summary Financial Results

The Hotel offers hotel, gaming, dining, entertainment, retail and spa amenities at one location in Las Vegas and under one operating segment. Approximately 32.8% of the Hotel’s gross revenue is derived from gaming, while 35.6% is derived from hotel rooms. Hotel revenue is larger contributor to gross revenue than Gaming revenue because of the Hotel’s emphasis on the group convention and trade show business and the resulting higher occupancy and premium room rates achieved during mid-week periods.

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

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Year Ended December 31, 2004 compared to the Year Ended December 31, 2003

Operating Revenues

The breakdown of the Property’s net revenues is as follows:

Net revenues for the year ended December 31, 2004 were $234.4 million, representing a net increase of $20.4 million or 9.5% when compared with $214.0 million of net revenues during 2003. The increase in net revenues was due to: (1) an increase of casino revenue of $9.0 million, primarily as a result of increased table game and slot machine revenue; (2) an increase in room revenue of $9.9 million as a result of an increase in average daily hotel room rates and hotel room occupancy percentage; and (3) an increase in food and beverage revenue of $5.4 million which resulted from increased banquet and food outlet revenues.

The increase in casino revenues of $9.0 million, or 11.9%, to $84.9 million for the year ended December 31, 2004, compared to $75.9 million for the year ended December 31, 2003. An increase in gaming volume in table games and slot machines contributed to the increase in casino revenues. The table game hold and slot machine win percentages did not change significantly. Table games volume increased approximately 22.1% and slot machine volume increased 6.6% for the year ended December 31, 2004 compared to the year ended December 31, 2003. Table games hold percentage decreased 1.8% from 2003. The slot machine win percentage was relatively flat, increasing 1.1% from 2003 to 2004. The increase in casino volume is primarily due to increased visitation at the Hotel from conventions throughout 2004 and the Company’s focus on marketing efforts (after the Acquisition) to attract new players to the Hotel.

The Hotel’s casino operating margin increased to 31.0% for the year ended December 31, 2004 compared to 28.0% for the year ended December 31, 2003. The increase in casino margin was primarily attributable to the increase in casino revenue discussed above offset by increased promotional costs of $3.4 million incurred to increase customer traffic at the Hotel. The Company anticipates that continued increases in convention activity at the Las Vegas Convention Center, as shown by historical data provided by the Las Vegas Convention and Visitors Authority, combined with the implementation of new promotional programs, will continue to improve casino volume and revenue in future years.

The Hotel maintained an average daily room rate of $97.76 in 2004 as compared to $87.39 in 2003. The Hotel generated revenue per available room of $86.16 during 2004 as compared to $77.40 during 2003. Room revenues during 2004 were $92.2 million, representing an increase of $9.9 million or 12.1% when compared to

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$82.3 million during 2003. The increase in room revenues was the result of an increase in the average daily room rate and a slight increase in room occupancy. Convention traffic continues to be the mainstay of the Hotel’s occupied room nights. The Hotel department’s room operating margin for the year ended December 31, 2004 increased to 71.5% compared to 68.5% the year ended December 31, 2003, which resulted from the aforementioned increase in room rates.

Food and beverage revenues were $62.8 million during 2004, representing an increase of $5.4 million or 9.4% compared to $57.4 million for 2003. The increase was attributable to an increase in banquet and casual dining restaurant revenue which resulted from increase convention business traffic at the Hotel during 2004. The Hotel’s food and beverage operating margin for the year ended December 31, 2004 was 17.3% compared to 14.4% for the year ended December 31, 2003. This increase in margin was due to an increase in food and beverage revenue.

Other revenues include retail sales, entertainment sales, telephone and miscellaneous income at the Hotel. Other revenue decreased $.5 million or 2.4% to $18.8 million in 2004 from $19.3 million in 2003. The decrease was primarily attributable to the reduction of retail revenue as a result of the outsourcing agreement the Company entered into with Caesars, whereby the Company receives only a percentage of retail sales.

Operating Expenses

Fluctuations in the Hotel’s operating expenses are generally based upon the change in volume of guests staying in the Hotel and utilizing the Hotel’s amenities, including the casino, food and beverage, spa and retail outlets.

The breakdown of operating expenses is as follows:

Operating expenses increased $8.4 million, or 3.6%, to $237.9 million for the year ended December 31, 2004 compared to $229.5 million for the year ended December 31, 2003. The increase in operating expenses was primarily attributable to the pre-opening expenses incurred by the Company prior to the Acquisition of the Hotel. Pre-opening expenses include payroll, professional services and other general and administrative expenses related to the Acquisition.

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Excluding the pre-opening expenses, operating expenses were $231.2 million representing an increase of $1.7 million in comparison to 2003. The increase was primarily attributable to an increase in Casino, Food and Beverage expenses as a direct result of increased business volumes at the Hotel and wage increases compared to the prior year.

General and Administrative

The increase in general and administrative expenses results from the cost of services incurred on a stand alone basis by the Company (subsequent to the Acquisition) that were previously provided to the Hotel by Caesars corporate infrastructure including legal counsel, information technology, and internal audit services that were covered by the Management Fee charged to LVH.

No Management Fee is charged to the Company by any of its existing affiliates.

Depreciation and Amortization

The reduction in depreciation expense in 2004 versus 2003 resulted from the Acquisition of the Hotel in June 2004. Based on a third party appraisal, a significant amount of the purchase price was allocated to land from building and improvements.

Interest Income (Expense)

The following table summarizes information related to the Company’s interest expense on long-term debt and interest income during the year ended December 31, 2004 (in thousands, except percentages):

Interest expense includes $1.2 million of amortization related to deferred financing costs and $690,000 of reflecting the change in the value of the interest rate cap. No interest was capitalized during the year.

Net Loss

The Hotel recorded a net loss of $14.2 million for the year ended December 31, 2004 compared with a net loss of $15.5 million for the year ended December 31, 2003. The decrease was primarily attributed to increased gaming traffic and convention business offset by pre-opening expenses associated with the Acquisition and increased interest expense.

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Year Ended December 31, 2003 compared to the Year Ended December 31, 2002

Operating Revenues

The breakdown of the LVH’s net revenues is as follows:

Casino

Casino revenues decreased $5.5 million to $75.9 million for the year ended December 31, 2003, compared to $81.4 million for the year ended December 31, 2002. Table games accounted for the entire decrease in casino revenues due to decreases in both volume and hold percentage. Table games volume decreased 17.7 percent for the year ended December 31, 2003, compared to the prior year. In addition, hold percentage decreased 0.7 percentage points year over year, but was within the normal range in both years. Management of the Company anticipates that increases in convention activity at the Las Vegas Convention Center combined with the implementation of new marketing initiatives and promotional programs aimed at attracting table games players will expand table games volume in future years. The combination of decreased table games volume and hold percentage resulted in decreased table games win of $7.1 million. This was partially offset by increased slot win of $2.8 million to $46.7 million for the year ended December 31, 2003, compared to $43.8 million for the year ended December 31, 2002.

Although table games hold percentage decreased by 0.7 percentage points in 2003 compared to 2002, the hold percentage was within the normal range in both years. Because table games hold percentage varies based on the game type and the level of wagering, the hold percentage often fluctuates from period to period.

The Property’s casino operating margin decreased to 28.0 percent for the year ended December 31, 2003 compared to 35.6 percent for the year ended December 31, 2002. The decrease in casino margin was primarily attributable to a decrease in casino revenue discussed above as well as increased promotional costs of $1.1 million incurred to attempt to generate revenues and customer traffic at the Hotel. The Company anticipates that continued increases in convention activity at the Las Vegas Convention Center, as shown by historical data provided by the Las Vegas Convention and Visitors Authority, combined with the implementation of new promotional allowances will stabilize or improve table games volume in future years.

Rooms

Room revenues increased $5.4 million to $82.3 million for the year ended December 31, 2003 compared to $76.9 million recorded for the year ended December 31, 2002. Occupancy percentage at the Hotel increased to 87% for the year ended December 31, 2003 compared to 85% for the year ended December 31, 2002. This was slightly offset by the decrease in the average daily rate at the Hotel from $88 for the year ended December 31, 2002 to $87 for the year ended December 31, 2003. The increase in volume was primarily attributable to increased convention related business at the Hotel due to increased activity at the Las Vegas Convention Center. Convention occupied rooms were up 15 percent when compared to the year ended December 31, 2002, while tour and travel occupied rooms increased 11 percent.

This positive trend is expected to continue. The Las Vegas Convention and Visitors Authority expanded the Las Vegas Convention Center facility in 2002 to accommodate the forecasted demand for convention space. Based

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on estimates provided by the Las Vegas Convention and Visitors Authority, the Company believes that future convention customer traffic will at a minimum be sustained and estimates an increase in both the number and attendees at conventions held at the Las Vegas Convention Center. (Source: Las Vegas Convention and Visitors Authority)

The Hotel’s room operating margin for the year ended December 31, 2003 was relatively flat at 64.3 percent compared to 64.9 percent for the year ended December 31, 2002.

Food and Beverage

Food and beverage revenues increased $4.9 million to $57.4 million for the year ended December 31, 2003 compared to $52.5 million for the year ended December 31, 2002. The increase in revenue is primarily due to an increase of $2.3 million in banquet revenue and an increase of $2.0 million at the food and beverage outlets revenue when compared to last year due to increased convention related business as discussed above.

The Hotel’s food and beverage operating margin for the year ended December 31, 2003 was a loss of 3.6 percent compared to a loss of 5.9 percent for the year ended December 31, 2002. This improvement was due to an increase in the average revenue per customer as noted above as well as a slight decrease in food and beverage cost compared to the prior year.

Other

Other revenue includes retail sales, entertainment sales, telephone and other miscellaneous income at the Hotel. Other revenue decreased $4.9 million to $19.3 million for the year ended December 31, 2003 as compared to $24.2 million for the year ended December 31, 2002. The decrease is principally due to decreased entertainment revenues of $4.2 million and telephone revenues of $1.3 million. The number of shows held at the Hotel was decreased by nineteen from 303 in 2002 due to cancellations by one of the performers scheduled to appear at the Hotel. The decrease in telephone revenues was primarily due to increased cellular phone usage by hotel guests.

Operating Expenses

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General and Administrative

General and administrative expense includes costs associated with selling, general, administrative and property operations at the Property. General and administrative expense increased $2.3 million to $63.6 million for the year ended December 31, 2004 compared to $61.4 million for the comparable period of 2003. This increase was primarily due to increased legal costs of $0.7 million, insurance costs of $0.9 million and costs incurred in connection with the pending sale of the Hotel of $1.1 million.

Depreciation and Amortization

Depreciation and amortization expense increased $1.5 million to $18.2 million for the year ended December 31, 2003 compared to $16.7 million for the comparable period of 2002. This increase was primarily due to the depreciation associated with the shorter-lived property and equipment purchases made during the years ended December 31, 2003 and 2002. Such shorter-lived property and equipment purchases consisted of maintenance capital expenditure purchases. Room department upgrades included a $20.0 million hotel room and corridor renovation project completed during 2002.

Other expense includes costs associated with retail, entertainment, telephone and other miscellaneous costs at the Hotel. Other expense decreased $4.0 million for the year ended December 31, 2003 compared to the year ended December 31, 2002. The decrease for the year ended December 31, 2003 was mainly attributable to a decrease in the number of shows held at the Hotel.

Net Loss

The Hotel’s recorded a net loss of $15.5 million for the year ended December 31, 2003 compared with a net loss of $6.4 million for the year ended December 31, 2002. The net loss widened by $9.1 million due to factors discussed above.

Liquidity and Capital Resources

Cash flows of the Company for the year ended December 31, 2004 consisted of the following:

Cash Flows - Operating Activities

Cash flow used in operations was $14.1 million in 2004 compared to the $17.4 million provided by operations in 2003. The $14.1 million used in operations by the Company in 2004 primarily resulted from pre-opening expenses incurred as part of the Acquisition and interest expense. The Company received $17.4 million in advances from an affiliate to fund the Acquisition. The advances were converted to an equity contribution at the completion of the Acquisition.

As of December 31, 2004, the Company had cash and equivalents of $12.9 million of which $10.8 million was cash in the casino used to fund daily operations. For the next twelve months, the Company expects to fund Property operations, capital expenditures, and debt service requirements from existing cash balances and operating cash flow.

Cash Flows – Investing Activities

The Company purchased certain assets and assumed certain liabilities from LVH on June 18, 2004 and invested an additional $9.2 million in property and equipment.

The Company anticipates capital expenditures of $31 million in 2005 of which most will be funded through the $26.2 million of restricted cash, as permitted under the terms of the Term Loan.

Cash Flows – Financing Activities

The Company had raised $150 from the sale of the Class A Membership Units and $150 million from the sale of the Class B Membership Units and $200 million from the Term Loan in connection with the completion of the Acquisition. $17.4 million of the $150 million raised from the sale of the Class B Membership Units represents the conversion to equity of the advance the Company had received from an affiliate, as discussed above.

Other Factors Affecting Liquidity

While the Company believes that its cash flows from operations together with cash on hand will be adequate to fund its activities, including the capital expenditures that the Company plans to make, no assurances can be made that such sources will be sufficient to meet such requirements. Covenants under the Term Loan restricts our

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future borrowing capacity however subject to certain conditions, the Term Loan does permit the Company to incur additional debt to fund working capital. If circumstances warrant, the Company may seek to obtain a working capital line of credit.

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

Contractual Obligations and Other Commitments

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

Off-Balance Sheet Arrangements

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

Debt Instruments

The following table provides information about the Company’s long-term debt at December 31, 2004 (amounts in thousands):

The Term Loan is for a principal amount of $200 million and interest accrues at a rate of 6.50% plus the greater of (i) one-month LIBOR or (ii) 1.5%. The initial term is two years with two one-year extension options. The Term Loan contains certain restrictions that, among other things, limit the ability of the Company create certain liens, enter into certain transactions with affiliates, enter into certain mergers or consolidations or sell assets of the Company without prior approval of the lenders or noteholders. Financial covenants included in the Term Loan include total debt to (Earning before Interest, Taxes, Depreciation and Amortization) EBITDA ratio. The financial covenants in the Term Loan involving EBITDA are applied on a trailing 12 month basis. For purposes of debt compliance, EBITDA is defined as net income plus interest expense, income taxes and depreciation and amortization expenses. The Company was in compliance with all required covenants and ratios under its debt instruments. See “Item 8 – Financial Statements and Supplementary Data – Notes to Financial Statements – Note 6 – Long-Term Debt.”

Litigation Contingencies and Available Resources

The Company is not a party to any material litigation and, it is not aware of any action, suit or proceedings against it that has been threatened by any person.

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Critical Accounting Policies and Estimates

Management has identified the following critical accounting policies that affect the Company’s more significant judgments and estimates used in the preparation of the Company’s financial statements. The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, management evaluates those estimates, including those related to asset impairment, accruals for slot marketing points, compensation and related benefits, revenue recognition, allowance for doubtful accounts, contingencies and litigation. The Company states these accounting policies in the notes to the financial statements and in relevant sections in the discussion and analysis. These estimates are based on the information that is currently available to the Company and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could vary from those estimates.

The Company believes that the following critical accounting policies affect significant judgments and estimates used in the preparation of its financial statements:

Recent Accounting Pronouncements

In September 2004, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) reached a consensus on issue No. 04-08, “The Effect of Contingently Convertible Instruments on Diluted Earnings per Share” (EITF 04-08), which is effective for reporting periods ending after December 15, 2004. EITF 04-08 requires companies to include shares issuable under convertible instruments in diluted earnings per share computations (if dilutive) regardless of whether the market price trigger (or other contingent feature) has been met. As of December 31, 2004 the Company does not have any contingently convertible instruments, therefore the adoption of EITF 04-08, will not impact the future diluted earnings per membership unit of the Company.

In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment,” which requires all companies to measure compensation costs for all share-based payments (including employee stock options) at fair value. This

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statement will be effective for public companies for interim or annual periods beginning after June 15, 2005. The Company is currently in the process of determining the impact this statement will have on its financial condition or results of operations.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets.” This statement is based on the principle that exchanges of nonmonetary assets should be measured based on fair value of the assets exchanged. This statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company believes that the adoption of this statement will not have a material effect on the Company’s financial condition or results of operations.

ITEM 7A.—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. The Company’s primary exposure to market risk is interest rate risk associated with its long-term debt. The Company attempts to manage its interest rate risk by the use of an interest rate cap on its Term Loan. The ability to enter into interest rate cap allows the Company to manage its interest rate risk associated with its variable rate debt.

The Company does not hold or issue financial instruments for trading purposes and does not enter into derivative transactions that would be considered speculative positions. The Company’s derivative financial instruments consist exclusively of the interest rate cap which does not qualify for hedge accounting. Interest differentials resulting from these agreements are recorded on an accrual basis as an adjustment to interest expense.

To manage exposure to counterparty credit risk in interest rate cap, the Company has entered into an agreement with a highly rated institution that can be expected to perform fully under the terms of such agreement. The Company believes that it’s exposure to market risk is not material.

As of December 31, 2004, the Term Loan has a floating interest rate based on 6.50% plus the greater of (i) one month LIBOR or (ii) 1.50%. Assuming a 100 basis point change in LIBOR, the interest payment on the Term Loan would increase $2.0 million. The Company does not currently anticipate a sudden change in LIBOR during the term of the Term Loan.

Foreign currency translation gains and losses were not material to the Company’s results of operations in 2004.

See also “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” and “Item 8 – Financial Statements and Supplementary Data – Notes to Financial Statements – Note 8 – Long-Term Debt.”

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ITEM 8. —FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

The following financial statements of Colony Resorts LVH Acquisitions, LLC and the Financial Statements of LVH Corporation are presented herein on the page indicated:

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Report of Independent Registered Public Accounting Firm

To the Members of Colony Resorts LVH Acquisitions, LLC:

We have audited the accompanying balance sheets of Colony Resorts LVH Acquisitions, LLC (the “Company”) as of December 31, 2004 and 2003, and the related statements of operations, members’ equity, and cash flows for the year ended December 31, 2004, and the period from December 18, 2003 (inception) to December 31, 2003. Our audit also included the financial statement schedule in the index of Item 15(a)(2). These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and 2003, and the results of its operations and its cash flows for the year ended December 31, 2004 and the period from December 18, 2003 (inception) to December 31, 2003, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Ernst & Young LLP

Las Vegas, Nevada

March 28, 2005

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COLONY RESORTS LVH ACQUISITIONS, LLC

BALANCE SHEETS

(In thousands, except membership unit data)

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

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COLONY RESORTS LVH ACQUISITIONS, LLC

STATEMENTS OF OPERATIONS

(In thousands, except membership unit data)

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

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COLONY RESORTS LVH ACQUISITIONS, LLC

STATEMENTS OF MEMBERS’ EQUITY (DEFICIT)

(In thousands)

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

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COLONY RESORTS LVH ACQUISITIONS, LLC

STATEMENTS OF CASH FLOWS

(In thousands)