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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2015

OR

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

For the transition period from              to              

Commission file number 000-54480

ALST CASINO HOLDCO, LLC

(Exact name of registrant as specified in its charter)

(702) 692-7777

(Registrant’s telephone number, including area code)

N/A

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

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

As of August 7, 2015, there were 432,213 units outstanding of the registrant’s common units.

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ALST CASINO HOLDCO, LLC

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ALST CASINO HOLDCO, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

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

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ALST CASINO HOLDCO, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)

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

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ALST CASINO HOLDCO, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

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

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ALST CASINO HOLDCO, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization

ALST Casino Holdco, LLC (the “Company,” “we,” “us” or “our”), a Delaware limited liability company, was formed on May 11, 2011.  We were formed to acquire substantially all of the equity interests of Aliante Gaming, LLC (“Aliante Gaming”) pursuant to its joint plan of reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”). The reorganization was completed on November 1, 2011 (the “Effective Date”), resulting in Aliante Gaming, the owner and operator of the Aliante Casino + Hotel, previously known as Aliante Station Casino + Hotel located in North Las Vegas, Nevada (the “Casino”), becoming our wholly owned subsidiary. Prior to the effective date, we conducted no operations and had no material assets or liabilities.

Background

Prior to the Effective Date, Aliante Gaming was a wholly owned subsidiary of Aliante Holding, LLC (“Aliante Holding”), which was a 50/50 joint venture partnership between Aliante Station, LLC (“Aliante Station”), a wholly owned subsidiary of Station Casinos, Inc. (“Old Station”) and G.C. Aliante, LLC, an affiliate of the Greenspun Corporation.

Aliante Gaming experienced lower than expected operating results as a result of macroeconomic conditions, including a downturn in the Las Vegas area and low consumer confidence levels. As a result, Aliante Gaming failed to (i) remain in compliance with certain financial maintenance covenants set forth in its $430.0 million credit facility (the “Previous Facility”) and (ii) make scheduled principal or interest payments under the Previous Facility since April 2009.

On April 12, 2011 (the “Petition Date”), Aliante Gaming, together with Aliante Holding and Aliante Station, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Case”), in the United States Bankruptcy Court for the District of Nevada, Northern Division (the “Bankruptcy Court”) to preserve their assets and the value of their estates.

The Chapter 11 Case was jointly administered with certain subsidiaries of Old Station and Green Valley Ranch Gaming, LLC under the lead case In re Station Casinos, Inc., et. al. originally filed on July 28, 2009 (Jointly Administered Case No. 09-52477). Old Station emerged from Chapter 11 on June 17, 2011 as Station Casinos LLC (“New Station,” and collectively with Old Station, “Station”).

On May 20, 2011, Aliante Gaming, along with Aliante Holding, Aliante Station and certain other affiliates of Old Station, filed with the Bankruptcy Court an amended joint plan of reorganization (the “Plan”) resulting from negotiations with its lenders (the “Lenders”) under the Previous Facility and its International Swaps and Derivatives Association master agreement (the “Swap Agreement”). Under the Plan, Aliante Gaming and the Lenders agreed to enter into a series of restructuring transactions pursuant to which the Lenders received new equity of, and issued new debt to, Aliante Gaming, as reorganized, as of the Effective Date.

On the Effective Date, (i) 100% of the equity interests in Aliante Gaming previously held by Aliante Holding was canceled and ceased to be outstanding, (ii) each Lender received, on account, and in full satisfaction, of its claims against Aliante Gaming arising under the Previous Facility and the Swap Agreement, its pro rata share of (a) 100% of the equity interests in Aliante Gaming (the “New Aliante Equity”), which was contributed to the Company in exchange for 432,003 units of our issued and outstanding membership interests (“Common Units”) and (b) 100% of $45.0 million in aggregate principal amount of senior secured term loans of Aliante Gaming (the “Senior Secured Loans”) under a new senior secured credit facility (the “Senior Secured Credit Facility”), (iii) the Previous Facility and the Swap Agreement were canceled (clauses (i), (ii) and (iii) referred to herein as the “Restructuring Transactions”) and (iv) each creditor holding an unsecured claim was paid in full.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented.  Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. general accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q.  The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements of the Company and notes thereto included in the annual report of the Company on Form 10-K for the year-ended December 31, 2014, filed with the Securities and Exchange Commission.

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Principles of Consolidation

The accompanying condensed consolidated financial statements include the Company and its wholly owned subsidiary, Aliante Gaming.  All material intercompany transactions are eliminated in consolidation.

Fair Value of Financial Instruments

The estimated fair value of the Company’s financial instruments has been determined by the Company using available market information and valuation methodologies. However, considerable judgment is required to develop the estimates of fair value; thus, the estimates provided herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

The carrying amounts of cash, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-9, (Topic 606): Revenue from Contracts with Customers (“ASU No. 2014-9”). ASU No. 2014-9 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of certain nonfinancial assets. ASU No. 2014-9 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Early application is not permitted. Management is currently assessing the impact of the adoption of this accounting pronouncement on the Company’s condensed consolidated financial statements in future periods.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern — Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern (Subtopic 205-40).  ASU No. 2014-15 requires management to provide an interim and annual assessment concerning an entity’s ability to continue as a going concern, and also requires disclosures under certain circumstances.  ASU No. 2014-15 is effective for fiscal years beginning after December 15, 2016, and for annual periods and interim periods thereafter.  Early application is permitted.  It is currently management’s intent to adopt this accounting pronouncement upon the effective date. On April 1, 2015, the FASB proposed deferring the effective date of ASU No. 2014-15 by one year to December 15, 2017 for annual reporting periods beginning after that date.  The FASB also proposed permitting early adoption of the standard, but not before the original effective of December 31, 2016. Management is currently assessing the impact of the adoption of this accounting pronouncement on the Company’s consolidated financial statements in future periods.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount.  ASU No. 2015-03 is effective for fiscal years beginning after December 15, 2015, and for annual periods and interim periods thereafter.  Early application is permitted.  It is currently management’s intent to adopt this accounting pronouncement upon the effective date.

No other new accounting pronouncements issued or effective during this period have or are expected to have a material impact on the Company’s financial position or results of operations.

A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies.  Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our consolidated financial statements.

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Note 3. Receivables

Receivables, net consist of the following (in thousands):

Note 4. Long-term Debt

Long-term debt consists of the following (in thousands):

Senior Secured Credit Facility (Related Party)

On November 1, 2011, the Company and Aliante Gaming entered into the Senior Secured Credit Facility, which provided for $45.0 million in principal amount of Senior Secured Loans, which were deemed made on the same date without any funding being provided. The Senior Secured Credit Facility represented an already outstanding obligation of Aliante Gaming as of November 1, 2011 and provided for interest to be paid at a rate to be elected by Aliante Gaming, such rate being either (i) 10% per annum, payable in kind and added to the principal amount of the Senior Secured Loans quarterly in arrears and subsequently treated as principal of the Senior Secured Loans, or (ii) 6% per annum, which interest will be payable in cash quarterly in arrears. The outstanding principal amount of the Senior Secured Loans and all accrued and unpaid interest thereon will be payable on the maturity date, which shall be the earlier of November 1, 2018 or the acceleration of the Senior Secured Loans in accordance with the terms of the Senior Secured Credit Facility. The Senior Secured Loans may be prepaid in certain minimum amounts without the payment of any prepayment premium or fee. Effective June 30, 2014 Aliante Gaming elected the cash payment option with accrued interest being payable in kind through June 30, 2014.  As a result of accruing interest through June 30, 2014 in kind, the principal outstanding balance as of June 30, 2015 and 2014 was $48.5 million and $58.5 million, respectively.

The Senior Secured Credit Facility is guaranteed by the Company and by each domestic wholly owned subsidiary of Aliante Gaming and is secured by a first-priority (a) pledge of 100% of the Company’s equity interest in Aliante Gaming, (b) pledge of 100% of the equity interests in Aliante Gaming’s domestic subsidiaries (if any) and 65% of the equity interests of Aliante Gaming’s “first-tier” foreign subsidiaries (if any) and (c) security interest in substantially all of Aliante Gaming’s tangible and intangible assets, as well as those of each subsidiary guarantor (if any), in each case, other than any assets that may not be pledged pursuant to applicable gaming laws and subject to customary exceptions. The Senior Secured Credit Facility includes various covenants and mandatory prepayments which are customary for similar types of financings and does not contain any financial maintenance covenants.

Prior to the second quarter of 2014, the Company elected to pay interest under the Senior Secured Credit Facility in kind at a rate of 10% per annum.  During the second quarter of 2014, the Company elected the cash interest option at 6% per annum.  As a result of this change in the expected method of payment, the Company recorded an adjustment to its accrual during the second quarter of 2014 to decrease interest expense by $0.2 million using the retrospective approach.

During the second quarter 2015, the Board of Managers authorized two $5 million principal payments on the Senior Secured Credit Facility which were paid on June 11, 2015 and June 30, 2015.  As a result of these payments, the Company recorded an adjustment during the second quarter of 2015 to increase interest expense by $0.7 million using the retrospective approach.  Under the retrospective approach, a new effective interest rate is computed to reflect the modified estimated cash flows as if such modified cash flows were known at inception. The carrying amount is adjusted to reflect the amount that would have been presented had the adjusted effective rate been applied since inception.

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Fair Value of Debt

It was not practicable to determine the fair market value of the Senior Secured Credit Facility due to the lack of comparable credit facilities and the involvement of our majority shareholders in negotiating the terms and conditions directly with the lender. The fair value of our special assessment debt approximates fair value.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Background

The following discussion and analysis of our results of operations and financial condition for the three and six months ended June 30, 2015 and 2014 should be read in conjunction with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

ALST Casino Holdco, LLC (the “Company,” “we,” “us” or “our”), a Delaware limited liability company, was formed on May 11, 2011. We were formed to acquire substantially all of the equity interests of Aliante Gaming, LLC (“Aliante Gaming”) pursuant to its joint plan of reorganization under Chapter 11 of the United States Bankruptcy Code. The reorganization was completed on November 1, 2011 (the “Effective Date”), resulting in Aliante Gaming, the owner and operator of the Aliante Casino + Hotel, previously known as Aliante Station Casino + Hotel located in North Las Vegas, Nevada (the “Casino”), becoming our wholly owned subsidiary. The casino is a full-service casino and hotel offering high quality accommodations, gaming, dining, entertainment, retail and other resort amenities. Prior to November 1, 2011, we conducted no operations and had no material assets or liabilities.

On November 1, 2011, the Company and Aliante Gaming entered into a senior secured credit facility (the “Senior Secured Credit Facility”) with the holders (the “Lenders”) of our membership interests (the “Common Units”), also referred to as “Members.” The Lenders own 100% of our Common Units. The Senior Secured Credit Facility is further described under “Liquidity and Capital Resources.”

Overview

Our operating results are greatly dependent on the level of gaming revenue generated at the Casino. Gaming revenue is generally defined as gaming wins less gaming losses. A substantial portion of our operating income is generated from our gaming operations, primarily from slot play. We use our non-gaming revenue departments to drive customer traffic to the Casino. The majority of our revenue is cash-based, and as a result, fluctuations in our revenues have a direct impact on our cash flows from operations. Additionally, our business is capital intensive, and we rely heavily on the ability of the Casino to generate operating cash flow to repay debt financing and fund maintenance capital expenditures.

Promotional allowances consist primarily of free slot play and complimentary food and beverages furnished to customers. Upon redemption, the retail value of such services is included in the respective revenue classifications and is then deducted as promotional allowances. We calculate income from operations as net revenues less total operating costs and expenses. Income from operations represents only those amounts that relate to operations and excludes interest income, interest expense and other non-operating income and expenses.

We consider various performance measures in assessing financial condition and results of operations including fluctuations in revenues, expenses and margins as compared to prior periods and internal plans. Additionally, we measure changes in selling, general and administrative expenses as a percent of net revenues, which indicate management’s ability to control costs. We also evaluate our profitability based upon Adjusted EBITDA (see “- Results of Operations” for additional information), which represents earnings before interest, taxes, depreciation and amortization, management fees, restructuring and other charges and other non-recurring items, as applicable. The measures listed above are not a comprehensive list of all factors considered by us in assessing our financial condition and operating performance, and we may consider other individual measures as required by trends and discrete events arising in a specific period, but these are the key indicators.

We are organized as a limited liability company and are not subject to federal income taxes. Accordingly, a provision for income taxes is not included in our condensed consolidated financial statements.

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Results of Operations

The following table highlights the results of operations and reconciles Adjusted EBITDA to net income for the three and six months ended June 30, 2015 as compared to the prior year period (in thousands, except percentages):

(a)                  EBITDA, earnings before interest, taxes, depreciation and amortization, is a widely used measure of operating performance in the gaming industry. We have traditionally used adjusted EBITDA when evaluating the Casino’s operating performance because we believe that the inclusion or exclusion of certain non-cash recurring, non-recurring items is necessary to present the most accurate measure of the Casino’s operating results and as a means to assess results period over period. We refer to the financial measure that adjusts for these items as Adjusted EBITDA. We believe, when considered with measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), Adjusted EBITDA is a useful financial performance measurement for assessing the Casino’s operating performance and is used by management in making financial and operational decisions. In this regard, Adjusted EBITDA is a key metric used by us in our budgeting process, when calculating returns on investment of existing and proposed projects and in the evaluation of incentive compensation related to property management. Adjusted EBITDA consists of net income (loss) less interest, taxes, depreciation and amortization and other non-recurring items, as applicable. We believe that while items excluded from Adjusted EBITDA may be recurring in nature and should not be disregarded in evaluation of the Casino’s operating performance, it is useful to exclude such items when analyzing current results and trends compared to other periods because these items can vary significantly depending on specific underlying transactions, the ability of management to control such items or events and may not be comparable between the periods being presented. Also, we believe excluded items may not relate specifically to the Casino’s operating trends or be indicative of future results. For example, lease terminations will be significantly different in periods when we terminate a lease agreement and it is not expected to be comparable period over period, nor is the amount expected to follow any particular trend from period-to-period. Therefore, we use Adjusted EBITDA as the primary measure of the Casino’s operating performance. We believe that our Members use Adjusted EBITDA as an appropriate financial measure in determining the value of their investment. To evaluate Adjusted EBITDA and the trends it depicts, the components should be considered. The impact of interest, taxes, depreciation and amortization, and other non-recurring items, as applicable, each of which can significantly affect our results of operations and liquidity, should be considered in evaluating our operating performance, and cannot be determined from Adjusted EBITDA. Adjusted EBITDA is used in addition to, and in conjunction with, GAAP measures and should not be considered as an alternative to net income (loss), or any other GAAP operating performance measure. To compensate for the inherent limitations of the disclosure of Adjusted EBITDA, we provide relevant disclosure of our depreciation and amortization, interest and other items in our reconciliations to GAAP financial measures and condensed financial statements, all of which should be considered when evaluating our performance. In addition, it should be noted that not all gaming companies that report Adjusted EBITDA or adjustments to such measures, may calculate Adjusted EBITDA, or such adjustments, in the same manner as us, and therefore, our measure of Adjusted EBITDA may not be comparable to similarly titled measures used by other gaming companies.

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The following table highlights the various sources of revenues and expenses for the three and six months ended June 30, 2015 as compared to the prior year period (in thousands, except percentages):

Casino. Casino revenues increased 16.3% to $15.7 million for the three months ended June 30, 2015 as compared to $13.5 million for the three months ended June 30, 2014. The $2.2 million increase in casino revenues is due primarily to an increase in slot revenue. Casino expenses increased 8.4% to $6.5 million for the three months ended June 30, 2015 as compared to $6.0 million for the three months ended June 30, 2014, primarily due to the increase in casino promotional spending that drove the increase in slot revenue. The net impact of these factors resulted in a 3.0 percentage point improvement in the casino operating margin for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014.

Casino revenues increased 15.4% to $31.5 million for the six months ended June 30, 2015 as compared to $27.3 million for the six months ended June 30, 2014 primarily due to a 19.5% increase in table games revenue and a 12.7% increase in slot revenue. Both increases are primarily a result of an increase in gaming patron visitation. Casino expenses increased 5.4% to $13.0 million for the six months ended June 30, 2015 as compared to $12.4 million for the six months ended June 30, 2014, primarily due to an increase in casino promotional spending. The casino operating margin increased to 58.6% for the six months ended June 30, 2015 as compared to 54.8% for the six months ended June 30, 2014 primarily due to the increase in casino revenues.

Food and Beverage. Food and beverage revenues increased 21.7% to $4.5 million for the three months ended June 30, 2015 as compared to $3.7 million for the same period in the prior year.  Further, food and beverage revenues increased 16.3% to $8.4 million for the six months ended June 30, 2015 as compared to $7.2 million for the same prior year period.  The increases in both the three and six month periods are primarily a result of increased visitor volume in our casual dining restaurants.  Food and beverage expenses increased 13.0% to $3.4 million for the three months ended June 30, 2015 as compared to the same period in the prior year, and expenses increased $0.7 million or 12.0% for the six months ended June 30, 2015 as compared to the same period prior year, primarily as a result of increased costs associated with increased revenues. The food and beverage operating margin increased to 25.0% and 22.9%, respectively, for the three and six months ended June 30, 2015 as compared to 19.2% and 20.0%, respectively, for the three and six months ended June 30, 2014 as a result of an increase in the number of patrons served, which was offset in part by an increase in food costs as a percentage of food revenue.

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Room. The following table shows key information for hotel operations:

Room revenue includes income from hotel room and meeting space sales and spa revenue. Room revenues increased by 14.5% to $1.8 million for the three months ended June 30, 2015 as compared to $1.6 million for the prior year period. The increase in room revenues is attributable to more room nights sold and an increase in average daily rate.  Room revenues increased by 11.8% to $3.5 million for the six month ended June 30, 2015 as compared to the prior year period. The increase is primarily due to higher occupancy during non-peak periods and an increase in average daily rate. Room expenses increased by 11.2% and 9.6%, respectively, for the three and six months ended June 30, 2015 as compared to the prior year periods mainly due to increased payroll and laundry costs.

Other Revenues and Expenses. Other revenues primarily include income from leased outlets, the gift shop, the call center and entertainment. Other revenues decreased by $0.1 million, or 9.1%, during the three months ended June 30, 2015 as compared to the same period in the prior year and decreased by 4.4% to $1.6 million during the six month ended June 30, 2015 as compared to the same period in the prior year, primarily due to reduced percentage of rent received from leased outlets and decreased sales in the gift shop. Other expenses increased by 3.3% and 2.5% for the three and six months ended June 30, 2015, respectively, as compared to the same period in the prior year due to an increase in salaries and wages in the call center.

Selling, General and Administrative (“SG&A”). SG&A expenses increased by approximately 4.1% and 4.8% for the three and six months ended June 30, 2015, respectively, as compared to prior year periods due to an increase in SG&A salaries and wages.

Depreciation and Amortization. Depreciation and amortization increased by $0.1 million for the three months ended June 30, 2015 and by $0.2 million for the six months ended June 30, 2015, as compared to the prior year period, primarily due to incremental depreciation associated with 2015 and 2014 fixed asset additions.

Operating Income. As a result of the factors discussed above, operating income increased by approximately 97.9% and 90.5%, respectively, for the three and six months ended June 30, 2015 as compared to prior year periods.

Interest Expense. Our outstanding principal indebtedness at June 30, 2015, excluding unamortized debt discount of $6.4 million was approximately $49.3 million compared to approximately $60.8 million, excluding unamortized debt discount of $8.8 million as of June 30, 2014. Interest expense related to our Senior Secured Credit Facility approximated $0.9 million for the three months ended June 30, 2015.  The Senior Secured Loans bear interest at a rate to be elected by Aliante Gaming, such rate being either (i) 10% per annum, which interest will be added to the principal amount of the Senior Secured Loans quarterly in arrears and subsequently treated as principal of the Senior Secured Loans, or (ii) 6% per annum, which interest is payable in cash quarterly in arrears. The Company elected to begin paying cash interest effective June 30, 2014.  Interest expense increased by approximately $1.0 million for both the three and six months ended June 30, 2015 as compared to prior year periods mainly due to a reduction in the rate of interest offset by an increase in the amortization of the original issue discount as calculated under the effective interest rate method.

Net Income. As a result of the factors discussed above, net income for the three and six months ended June 30, 2015 was $1.0 million and $3.1 million compared to $0.4 million and $1.0 million for the three months ended June 30, 2014, respectively.

Liquidity and Capital Resources

Our cash flows are affected by a variety of factors, many of which are outside of our control, including recovery of the local gaming market, recovery of the housing market and community surrounding the Casino, competition and other general business conditions. We believe that our available cash and cash flows from our operations will provide sufficient liquidity to fund our cash requirements and capital expenditures for 2015.  We expect to fund future capital expenditures for maintenance of the Casino through cash generated from our operating activities and we expect that we will generate sufficient income and liquidity to meet all of our liquidity requirements and other obligations. Our results for future periods are subject to numerous uncertainties which may result in liquidity problems, which could in turn affect our ability to meet our obligations while attempting to meet competitive pressures or adverse economic conditions.

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Senior Secured Credit Facility

On November 1, 2011, the Company and Aliante Gaming entered into the Senior Secured Credit Facility, which provided for $45.0 million in principal amount of Senior Secured Loans, which were deemed made on the same date without any funding being provided. The Senior Secured Credit Facility represented an already outstanding obligation of Aliante Gaming as of November 1, 2011 and provided for interest to be paid at a rate to be elected by Aliante Gaming, such rate being either (i) 10% per annum, payable in kind and added to the principal amount of the Senior Secured Loans quarterly in arrears and subsequently treated as principal of the Senior Secured Loans, or (ii) 6% per annum, which interest will be payable in cash quarterly in arrears.  Effective June 30, 2014 Aliante Gaming elected the cash interest payment option with accrued interest being payable in kind through June 30, 2014.  As a result of accruing interest through June 30, 2014, the principal outstanding balance as of June 30, 2015 and 2014 was $48.5 million and $58.5 million, respectively.  The Company paid cash interest during for the three months ended June 30, 2015 of $0.9 million. There is currently no availability for borrowings under the Senior Secured Credit Facility. The outstanding principal amount of the Senior Secured Loans and all accrued and unpaid interest thereon will be payable on the maturity date, which will be the earlier of November 1, 2018 or the acceleration of the Senior Secured Loans in accordance with the terms of the Senior Secured Credit Facility. The Senior Secured Loans may be prepaid in certain minimum amounts without the payment of any prepayment premium or fee.

The Senior Secured Credit Facility is guaranteed by the Company and by each domestic wholly owned subsidiary of Aliante Gaming and is secured by a first-priority (a) pledge of 100% of the Company’s equity interest in Aliante Gaming, (b) pledge of 100% of the equity interests in Aliante Gaming’s domestic subsidiaries (if any) and 65% of the equity interests of Aliante Gaming’s “first-tier” foreign subsidiaries (if any) and (c) security interest in substantially all of Aliante Gaming’s tangible and intangible assets, as well as those of each subsidiary guarantor (if any), in each case, other than any assets that may not be pledged pursuant to applicable gaming laws and subject to customary exceptions. The Senior Secured Credit Facility includes various covenants and mandatory prepayments which are customary for similar types of financings and does not contain any financial maintenance covenants.

Prior to the second quarter of 2014, the Company elected to pay interest under the Senior Secured Credit Facility in kind at a rate of 10% per annum.  During the second quarter of 2014, the Company elected the cash interest option at 6% per annum.  As a result of this change in the expected method of payment, the Company recorded an adjustment to its accrual during the second quarter of 2014 to decrease interest expense by $0.2 million using the retrospective approach.

During the second quarter 2015, the Board of Managers authorized two $5 million principal payments on the Senior Secured Credit Facility which were paid on June 11, 2015 and June 30, 2015.  As a result of these payments, the Company recorded an adjustment during the second quarter of 2015 to increase interest expense by $0.7 million using the retrospective approach.  Under the retrospective approach, a new effective interest rate is computed to reflect the modified estimated cash flows as if such modified cash flows were known at inception. The carrying amount is adjusted to reflect the amount that would have been presented had the adjusted effective rate been applied since inception.

Year Ending December 31, 2015

Our primary cash requirements for the remainder of 2015 are expected to include approximately $2.0 million for maintenance capital expenditures and $1.5 million for interest payments on indebtedness.  We do not expect to pay dividends to the Common Unit Holders in 2015.  We have no availability for borrowings under the Senior Secured Credit Facility and we had $9.8 million in cash and cash equivalents as of June 30, 2015. Approximately two thirds of our cash is used on the casino floor with the other one third reserved for other general purposes.

In addition, in March 2015, the Board of Managers authorized a unit repurchase program under which the Company may repurchase units up to an aggregate cost not to exceed $5 million in privately negotiated transactions to the extent management believes the units are reasonably priced and such repurchases appear to be an attractive use of available capital and in the best interest of unit holders.  No such unit repurchases took place during the six-months ended June 30, 2015.  The price and timing of any purchases of units will depend on factors such as levels of cash generated from operations, cash requirements for capital projects and economic and market conditions.

Six months ended June 30, 2015 and 2014

The following table summarizes our historical cash flows (in thousands):

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For the six months ended June 30, 2015, net cash provided by operating activities was $9.1 million as compared to $4.0 million of cash used in operating activities for the six months ended June 30, 2014. The increase in cash flows from operating activities is primarily the result of changes in net working capital and net income. For the six months ended June 30, 2015 and June 30, 2014, cash used in investing activities consisted of capital expenditures. Cash used in financing activities represents principal payments on debt for the six months ended June 30, 2015 and June 30, 2014. There were no distributions to the Members during the six months ended June 30, 2015 and June 30, 2014.

Off Balance Sheet Arrangements

As of June 30, 2015, we did not have any off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

As of June 30, 2015, there were no material changes to the contractual obligations previously reported under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2015.

Critical Accounting Policies

A description of our critical accounting policies can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. Such statements contain words such as “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “might,” “should,” “could,” “would,” “seek,” “pursue,” and “anticipate” or the negative or other variation of these or similar words, or may include discussions of strategy or risks and uncertainties. Forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements concerning:

·                  projections of future results of operations or financial condition;

·                  expectations regarding our business and results of operations;

·                  expenses and our ability to operate efficiently;

·                  expectations regarding trends that will affect our market and the gaming industry generally and the impact of those trends on our business and results of operations;

·                  our ability to comply with the covenants in the agreements governing our outstanding indebtedness;

·                  our ability to meet our projected debt service obligations, operating expenses and maintenance capital expenditures;

·                  expectations regarding the availability of capital resources; and

·                  the impact of regulation on our business and our ability to maintain necessary approvals for our property.

Any forward-looking statement is based upon a number of estimates and assumptions that, while considered reasonable by us, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control, and are subject to change. Actual results of operations may vary materially from any forward-looking statement made herein. Forward-looking statements should not be regarded as a representation by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of the contingencies and uncertainties to which any forward-looking statement contained herein is subject include, but are not limited to, the following:

·                  the economic downturn, and in particular the economic downturn in Las Vegas, Nevada, and its effect on consumer spending and our business;

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·                  the effects of intense competition that exists in the gaming industry;

·                  the risk that new gaming licenses or gaming activities, such as internet gaming, are approved and result in additional competition;

·                  the risk that we are dependent on one property for all of our cash flow;

·                  the impact of extensive regulation from gaming and other government authorities on our ability to operate our business and the risk that regulatory authorities may revoke, suspend, condition or limit our gaming or other licenses, impose substantial fines or take other actions that adversely affect us;

·                  risks associated with changes to applicable gaming and tax laws could have a material adverse effect on our financial condition; and

·                  the impact of general business conditions, including competitive practices, changes in customer demand and the cyclical nature of the gaming and hospitality business generally, and general economic conditions on our business and results of operations.

You should consider the areas of risk and uncertainty described elsewhere in this Quarterly Report on Form 10-Q, as well as those discussed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015. Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of June 30, 2015, there were no material changes to the information previously reported under “Item 7A. Quantitative and Qualitative Disclosures About market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). The design of any system of control is based in part upon certain assumptions about the likelihood of future events, and we cannot assure that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective and designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

During the quarter ended June 30, 2015, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is currently a party to litigation arising in the ordinary course of business. As with all litigation, no assurance can be provided as to the outcome, and litigation inherently involves significant costs.

ITEM 1A. RISK FACTORS.

A description of our risk factors can be found in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 27, 2015. There have been no material changes in the risk factors described in such Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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