UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)



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

For the quarterly period ended ~~March~~June 3130, 2015



¨	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: 000-53938

Nevada Property 1 LLC

(Exact name of registrant as specified in its charter)

Delaware		27-1695189
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(State or other jurisdiction ofincorporation or organization)		(I.R.S. EmployerIdentification No.)
3708 Las Vegas Boulevard South Las Vegas, Nevada		89109
3708 Las Vegas Boulevard SouthLas Vegas, Nevada		89109
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code — (702)-698-7000

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 xý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 xý No ¨

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

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~¨ ~~whether~~Accelerated ~~the registrant is a large accelerated~~ filer, an¨ Non-accelerated filer, ax ~~non-accelerated~~(Do ~~filer,~~not orcheck if a smaller reporting company.) ~~See~~Smaller ~~the definitions of “large accelerated filer,” “accelerated filer” and “smaller~~ reporting company” ~~in Rule 12b-2 of the Exchange Act.~~ ¨

~~Large~~Indicate ~~accelerated~~by ~~filer~~check ¨mark ~~Accelerated~~whether ~~filer~~the ¨registrant ~~Non-accelerated~~is ~~filer~~a xshell company (Doas ~~not~~defined ~~check~~in ifRule a12b-2 ~~smaller~~of ~~reporting~~the ~~company)~~Exchange ~~Smaller reporting company~~ Act). Yes ¨ No ý

~~Indicate~~The byRegistrant’s ~~check~~Class A ~~mark~~and ~~whether~~Class B Membership Interests are not publicly traded. As of August 7, 2015, BRE Spade Voteco LLC owned all of the registered 100 Class A Membership Interests of the registrant isand aBRE ~~shell~~Spade ~~company~~Mezz ~~(as~~1 ~~defined~~LLC inowned ~~Rule~~all ~~12b-2~~of the 100 Class B Membership Interests of the ~~Exchange Act)~~registrant. ~~Yes ¨ No x~~

~~The~~Table ~~Registrant’s Class A and Class B Membership Interests are not publicly traded. As~~ of May 15, 2015, BRE Spade Voteco LLC owned all of the registered 100 Class A Membership Interests of the registrant and BRE Spade Mezz 1 LLC owned all of the 100 Class B Membership Interests of the registrant. Contents

~~Table~~NEVADA ofPROPERTY ~~Contents~~1 LLC

~~NEVADA PROPERTY 1 LLC~~ INDEX

INDEX



Forward Looking Statements		1

PART I — FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014	2
	Condensed Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2015 and 2014	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2015 and 2014	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II — OTHER INFORMATION		34

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5	Other Information	34
Item 6.	Exhibits	36
SIGNATURES		37

Forward Looking Statements		1
PART I — FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31, 2014	2
	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2015 and 2014	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2015 and 2014	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II — OTHER INFORMATION		31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5	Other Information	31
Item 6.	Exhibits	33
SIGNATURES		34

Table of Contents

~~Table~~Cautionary ofStatement ~~Contents~~Regarding Forward-Looking Statements

~~Cautionary~~Any ~~Statement~~statements ~~Regarding~~made ~~Forward~~in this report that are not statements of historical fact or that refer to estimated or anticipated future events are forward-~~Looking~~looking ~~Statements~~ statements. These statements may include, or be preceded or followed by, the words “may,” “will,” “should,” “might,” “could,” “potential,” “possible,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “hope” or similar expressions.

~~Any~~We have based our forward-looking statements on management’s beliefs and assumptions based on information available to our management at the time these statements are made. inAlthough ~~this~~we ~~report~~believe ~~that~~our expectations are ~~not~~based ~~statements~~upon reasonable assumptions within the bounds of ~~historical~~our ~~fact~~knowledge orof ~~that~~our ~~refer~~business toand ~~estimated~~operations, orour ~~anticipated~~actual ~~future events~~results ~~are~~may ~~forward-looking~~materially ~~statements~~differ from expected results. ~~These~~Factors ~~statements~~that ~~may~~could ~~include,~~have ora bematerial ~~preceded~~adverse oreffect ~~followed~~on ~~by,~~our ~~the~~operations ~~words~~and ~~“may,”~~future ~~“will,”~~prospects ~~“should,”~~or ~~“might,”~~that “could,” ~~“potential,”~~cause ~~“possible,” “believe,”~~actual ~~“expect,”~~results ~~“anticipate,”~~to ~~“intend,”~~differ ~~“plan,”~~materially ~~“estimate~~from our expectations include,” ~~“hope”~~but orare ~~similar~~not ~~expressions.~~limited to:

We• ~~have~~General ~~based~~economic ~~our forward-looking statements on management’s beliefs~~ and ~~assumptions~~market ~~based~~conditions, onparticularly ~~information~~in ~~available~~levels toof ~~our~~spending ~~management~~in at the ~~time~~Las ~~these~~Vegas ~~statements are made. Although we believe our expectations are based upon reasonable assumptions within the bounds of our knowledge of our business and operations~~hotel, ~~our~~resort ~~actual results may materially differ from expected results. Factors that could have a material adverse effect on our operations~~ and ~~future~~casino ~~prospects or that could cause actual results to differ materially from our expectations include, but are not limited to:~~ industry;

• ~~General~~increasing ~~economic~~competition ~~and market conditions, particularly~~ in ~~levels~~our ~~of spending in the Las Vegas hotel, resort and casino~~ industry;

• ~~increasing~~the ~~competition~~seasonal innature ~~our~~of the hotel, resort and casino industry;

• the ~~seasonal~~capital intensive nature of the Las Vegas hotel, resort and casino industry;

• ~~the~~costs ~~capital~~associated ~~intensive~~with ~~nature~~compliance ofwith ~~the~~extensive ~~Las~~legal ~~Vegas~~and ~~hotel~~regulatory requirements, ~~resort~~including ~~and~~anti-money ~~casino~~laundering ~~industry~~requirements;

• ~~costs~~diminishing ~~associated~~value ~~with~~of ~~compliance~~our ~~with~~name, ~~extensive~~image ~~legal~~ and ~~regulatory requirements, including anti-money laundering requirements~~brand;

• ~~diminishing~~the ~~value~~unexpected loss of key members of our ~~name,~~senior ~~image~~management ~~and~~or ~~brand~~their inability to obtain licensure from the Nevada Gaming Authorities;

• ~~the~~dependence ~~unexpected~~on ~~loss~~various of key ~~members~~third-party ~~of our senior management~~operators;

• ~~dependence~~the onoutcome ~~various~~of ~~key~~pending ~~third-party~~or ~~operators~~future legal proceedings;

• ~~the~~labor ~~outcome~~unionization ofcampaigns, ~~pending~~negotiations or ~~future legal proceedings~~strikes;


•	cyber security risk including misappropriation of customer information or other breaches of information security;


•	our ability to collect gaming receivables from our credit players;


•	the impact a natural disaster or infectious disease outbreak may have on the travel and leisure industry;


•	the consequences of military conflicts and any security alerts and/or terrorist attacks which may impact levels of travel, leisure and consumer spending; and


•	other risks discussed in the sections entitled Part I —“Item 1A — Risk Factors” in our Annual Report on Form 10-K which was filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2015.

In addition, new risks and uncertainties emerge from time to time, and it is not possible for us to predict or assess the impact of every factor that may cause our actual results to differ from those contained in any forward-looking statements. Undue reliance should not be placed on such statements, which speak only as of the date of this document or the date of any document that may be incorporated by reference into this document. Consequently, readers of this Quarterly Report on Form 10-Q should consider these forward-looking statements only as our current plans, estimates and beliefs. We do not undertake and specifically decline any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. except as may be required by law.

Except as may be required by law, we undertake no obligation to update or revise any forward-looking statements in this Quarterly Report on Form 10-Q or in our Annual Report on Form 10-K to reflect any new events or any change in conditions or circumstances. 1

1Table of Contents

~~Table~~Part ofI ~~Contents~~— Financial Information

~~Part~~Item 1 I — ~~Financial~~Condensed ~~Information~~Consolidated Financial Statements

~~Item 1~~NEVADA —PROPERTY ~~Condensed~~1 ~~Consolidated Financial Statements~~ LLC

~~NEVADA~~CONDENSED ~~PROPERTY~~CONSOLIDATED 1BALANCE ~~LLC~~ SHEETS

~~CONDENSED~~(In ~~CONSOLIDATED BALANCE SHEETS~~ thousands)

(In thousands)



	Successor
	June 30, 2015		December 31, 2014
	(Unaudited)
ASSETS
Current Assets:
Cash on hand	$	20,751	$	21,270
Cash in bank	85,054		34,166
Total cash and cash equivalents	105,805		55,436
Restricted cash	3,641		877
Designated cash	4,875		31,649
Accounts receivable, net	64,054		51,806
Inventories	15,764		15,055
Prepaid expenses and other assets	18,056		21,514
Total current assets	212,195		176,337
Property and equipment, net	1,406,702		1,432,298
Goodwill	31,963		25,549
Intangible assets, net	193,169		214,828
Other assets	15,170		34,378
Total assets	$	1,859,199	$	1,883,390
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities:
Accounts payable	$	7,977	$	7,740
Interest payable	1,161		—
Accrued and other liabilities	98,370		102,210
Total current liabilities	107,508		109,950
Debt obligations	865,675		862,617
Other liabilities	4,335		4,567
Total liabilities	977,518		977,134
Commitments and contingencies (Note 15)
Members' equity	881,681		906,256
Total liabilities and members' equity	$	1,859,199	$	1,883,390

	Successor
	March 31,2015		December 31,2014
	(Unaudited)
ASSETS
Current Assets:
Cash on hand	$	18,274	$	21,270
Cash in bank		57,199		34,166
Total cash and cash equivalents		75,473		55,436
Restricted cash		1,076		877
Designated cash		35,988		31,649
Accounts receivable, net		64,566		51,806
Inventories		13,744		15,055
Prepaid expenses and other assets		18,600		21,514
Total current assets		209,447		176,337
Property and equipment, net		1,419,722		1,432,298
Goodwill		31,963		25,549
Intangible assets, net		203,998		214,828
Other assets		15,486		34,378
Total assets	$	1,880,616	$	1,883,390
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities:
Accounts payable	$	10,457	$	7,740
Interest payable		1,284		—
Accrued and other liabilities		98,399		102,210
Total current liabilities		110,140		109,950
Accounts payable — construction		73		306
Accrued and other liabilities — construction		63		72
Debt obligations		864,146		862,617
Other liabilities		4,038		4,189
Total liabilities		978,460		977,134
Commitments and contingencies (Note 15)
Members’ equity		902,156		906,256
Total liabilities and members’ equity	$	1,880,616	$	1,883,390

See accompanying notes to condensed consolidated financial statements.

~~See accompanying notes to condensed consolidated financial statements.~~ 2

2Table of Contents

~~Table~~NEVADA ofPROPERTY ~~Contents~~1 LLC

~~NEVADA~~CONDENSED ~~PROPERTY~~CONSOLIDATED 1STATEMENTS ~~LLC~~OF OPERATIONS

~~CONDENSED~~(Unaudited ~~CONSOLIDATED~~— ~~STATEMENTS~~In ~~OF OPERATIONS~~ thousands)

(Unaudited — In thousands)



	Successor			Predecessor			Successor			Predecessor
	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014			Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Revenues:
Casino	$	62,142		$	51,381		$	120,590		$	100,500
Hotel	80,268			80,773			160,878			156,540
Food and beverage	85,634			95,280			167,513			180,679
Entertainment, retail and other	7,965			10,298			16,139			18,584
Gross revenues	236,009			237,732			465,120			456,303
Less -- promotional allowances	(36,431		)	(37,622		)	(75,705		)	(73,327		)
Net revenues	199,578			200,110			389,415			382,976
Operating expenses:
Casino	39,035			31,549			77,326			62,499
Hotel	9,096			9,325			17,319			18,549
Food and beverage	50,971			63,872			98,949			119,503
Entertainment, retail and other	6,512			10,709			13,207			18,402
Sales and marketing	11,077			16,833			26,707			37,482
General and administrative	27,623			26,597			55,112			51,658
Corporate	4,321			9,036			20,295			11,776
Gain on disposal of assets	—			(1		)	—			115
Asset impairment	—			1,506			—			1,506
Depreciation and amortization	27,535			42,252			54,995			83,942
Total operating expenses	176,170			211,678			363,910			405,432
Operating income/(loss)	23,408			(11,568		)	25,505			(22,456		)
Other income/(expense):
Net settlements and default income	—			96			—			245
Interest and other income	13			15			18			30
Interest expense, net of amount capitalized	(8,095		)	(9,518		)	(15,535		)	(19,064		)
Total other expense	(8,082		)	(9,407		)	(15,517		)	(18,789		)
Income/(loss) before income taxes	15,326			(20,975		)	9,988			(41,245		)
Income tax (expense)/benefit	(10		)	7,383			(10		)	14,965
Net income/(loss)	$	15,316		$	(13,592	)	$	9,978		$	(26,280	)

	Successor			Predecessor
	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Revenues:
Casino	$	58,447		$	49,119
Hotel		80,610			75,767
Food and beverage		81,879			85,399
Entertainment, retail and other		8,175			8,286
Gross revenues		229,111			218,571
Less — promotional allowances		(39,274	)		(35,705	)
Net revenues		189,837			182,866
Operating expenses:
Casino		38,292			30,950
Hotel		8,223			9,224
Food and beverage		47,978			55,631
Entertainment, retail and other		6,695			7,693
Sales and marketing		15,680			20,649
General and administrative		27,490			25,061
Corporate		15,973			2,740
Loss on disposal of assets		—			116
Depreciation and amortization		27,460			41,690
Total operating expenses		187,791			193,754
Operating income/(loss)		2,046			(10,888	)
Other income/(expense):
Net settlements and default income		—			149
Interest and other income		5			15
Interest expense, net of amount capitalized		(7,440	)		(9,546	)
Total other expense		(7,435	)		(9,382	)
Loss before income taxes		(5,389	)		(20,270	)
Income tax benefit		—			7,582
Net loss	$	(5,389	)	$	(12,688	)

See accompanying notes to condensed consolidated financial statements.

~~See accompanying notes to condensed consolidated financial statements.~~ 3

3Table of Contents

~~Table~~NEVADA ofPROPERTY ~~Contents~~1 LLC

~~NEVADA~~CONDENSED ~~PROPERTY~~CONSOLIDATED 1STATEMENTS ~~LLC~~OF CASH FLOWS

~~CONDENSED~~(Unaudited ~~CONSOLIDATED~~— ~~STATEMENTS~~In ~~OF CASH FLOWS~~ thousands)

(Unaudited — In thousands)



	Successor			Predecessor
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Cash flows from operating activities:
Net income/(loss)	$	9,978		$	(26,280	)
Deferred income taxes	—			(14,978		)
Depreciation and amortization	54,995			83,942
Amortization of debt discount and deferred financing costs	3,058			—
Change in value on Interest rate cap	(189		)	—
Asset impairment	—			1,506
Gain on disposal of assets	—			115
Bad debt provision	8,708			4,738
Changes in operating assets and liabilities:
Restricted cash	(2,764		)	(343		)
Designated cash	26,774			—
Accounts receivable, net	(20,957		)	(14,940		)
Due from affiliate	—			56,413
Inventories	(709		)	1,271
Prepaid expenses and other assets	25,080			3,233
Accounts payable	237			2,749
Accrued and other liabilities	(4,089		)	4,178
Interest payable	1,161			(341		)
Net cash provided by operating activities	101,283			101,263
Cash flows from investing activities:
Net cash paid for acquisition	(6,414		)	—
Ordinary capital expenditures	(5,689		)	(7,114		)
Capital expenditures for major construction projects	(2,190		)	(13,402		)
Net cash used in investing activities	(14,293		)	(20,516		)
Cash flows from financing activities:
Borrowings under loan payable to affiliate	—			6,222
Principal payments under loan payable to affiliate	—			(81,600		)
Contributions from Members	6,414			—
Distributions to Members	(43,035		)	—
Net cash used in financing activities	(36,621		)	(75,378		)
Net increase in cash and cash equivalents	50,369			5,369
Cash and cash equivalents at beginning of period	55,436			58,660
Cash and cash equivalents at end of period	$	105,805		$	64,029
Supplemental disclosure of cash flow information
Cash transactions:
Cash paid for interest due to affiliate, net of interest capitalized	$	—		$	19,606
Cash paid for interest due on term loan	$	11,139		$	—
Non-cash transactions:
Change in accrued additions to construction in progress	$	(377	)	$	(11,102	)

	Successor			Predecessor
	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Cash flows from operating activities:
Net loss	$	(5,389	)	$	(12,688	)
Deferred income taxes		—			(453	)
Depreciation and amortization		27,460			41,690
Amortization of debt discount and deferred financing costs		1,529			—
Change in value on Interest rate cap		(157	)		—
Gain on disposal of assets		—			116
Bad debt provision		3,189			2,200
Changes in operating assets and liabilities:
Restricted cash		(200	)		(135	)
Designated cash		(4,339	)		—
Accounts receivable, net		(15,950	)		(15,902	)
Due from affiliate		—			(7,129	)
Inventories		1,312			1,007
Prepaid expenses and other assets		22,118			147
Accounts payable		2,717			(3,430	)
Accrued and other liabilities		(3,978	)		(7,002	)
Interest payable		1,284			(313	)
Net cash provided by/(used in) operating activities		29,596			(1,892	)
Cash flows from investing activities:
Net cash paid for acquisition		(6,414	)		—
Ordinary capital expenditures		(2,517	)		(2,515	)
Capital expenditures for major construction projects		(1,917	)		(9,508	)
Net cash used in investing activities		(10,848	)		(12,023	)
Cash flows from financing activities:
Borrowings under loan payable to affiliate		—			5,336
Principal payments under loan payable to affiliate		—			(10,000	)
Contributions from Members		6,414			—
Distributions to Members		(5,125	)		—
Net cash provided by/(used in) financing activities		1,289			(4,664	)
Net increase/(decrease) in cash and cash equivalents		20,037			(18,579	)
Cash and cash equivalents at beginning of period		55,436			58,660
Cash and cash equivalents at end of period	$	75,473		$	40,081
Supplemental disclosure of cash flow information
Cash transactions:
Cash paid for interest due to affiliate, net of interest capitalized	$	—		$	9,859
Cash paid for interest due on term loan	$	4,473		$	—
Non-cash transactions:
Change in accrued additions to construction in progress	$	(147	)	$	(9,667	)

See accompanying notes to condensed consolidated financial statements.

~~See accompanying notes to condensed consolidated financial statements.~~ 4

4Table of Contents

~~Table~~NEVADA ofPROPERTY ~~Contents~~1 LLC

~~NEVADA~~NOTES ~~PROPERTY~~TO 1CONDENSED ~~LLC~~CONSOLIDATED FINANCIAL STATEMENTS

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ (Unaudited)

~~(Unaudited)~~1. Organization and Description of the Business

1.Company ~~Organization and Description of the Business~~ Overview

Nevada Property 1 LLC, a limited liability company organized in Delaware (“Nevada Property” and, together with its subsidiaries, the “Company,” ~~Overview~~“we,” “us” or “our”), operates The Cosmopolitan of Las Vegas (the “Property” or “The Cosmopolitan”) which commenced operations on December 15, 2010.

On December 19, 2014, ownership of Nevada Property 1changed ~~LLC,~~upon athe ~~limited~~sale ~~liability~~of ~~company~~100% ~~organized~~of the Class B Membership Interests in ~~Delaware~~Nevada Property (the “~~Nevada~~Class ~~Property~~B Membership Interests”) ~~and,~~to ~~together~~BRE ~~with~~Spade ~~its~~Mezz ~~subsidiaries,~~1 ~~the “Company,”~~LLC (“~~we,~~Spade Mezz”), an affiliate of Blackstone Real Estate Partners VII L.P. (“usBlackstone” or “~~our~~Parent”), ~~operates~~as ~~The~~described ~~Cosmopolitan~~more offully ~~Las~~below ~~Vegas~~under (the heading “~~Property”~~Sale or ~~“The~~Transfer ~~Cosmopolitan”)~~of ~~which~~Members’ ~~commenced~~Equity ~~operations~~Interests onand ~~December 15,~~Corporate ~~2010~~Structure. ”

OnNevada ~~December 19,~~Property’s ~~2014,~~wholly-owned ~~ownership~~subsidiaries ofare Nevada ~~Property~~Restaurant ~~changed~~Venture ~~upon~~1 ~~the~~LLC ~~sale~~(“Nevada ofRestaurant”), ~~100%~~which ofwas ~~the~~formed ~~Class~~on BNovember 24, ~~Membership~~2009 ~~Interests~~as ina ~~Nevada~~limited ~~Property (the~~liability ~~“Class~~company Bin ~~Membership~~Delaware ~~Interests”)~~and toNevada ~~BRE~~Retail ~~Spade~~Venture ~~Mezz~~ 1 LLC, (“~~Spade~~Nevada ~~Mezz~~Retail”), anwhich ~~affiliate~~was ofalso ~~Blackstone~~formed ~~Real~~on ~~Estate~~November 24, ~~Partners~~2009 ~~VII~~as La limited liability company in Delaware.P Nevada Restaurant leases the Property’s restaurants and the nightclub from Nevada Property and has entered into management agreements with third-party restaurant operators and a nightclub operator to manage and operate their respective establishments at the Property. ~~(“Blackstone”~~Nevada orRetail ~~“Parent”),~~leases asthe ~~described~~retail ~~more~~spaces ~~fully~~at ~~below~~the ~~under~~Property from the ~~heading~~ ~~“Sale~~Company orand ~~Transfer~~operates certain of ~~Members’~~the ~~Equity~~retail ~~Interests~~spaces ~~and~~within ~~Corporate~~the ~~Structure~~Property.” In addition, Nevada Retail has also entered into lease agreements with third-party retail operators to manage and operate their respective retail businesses at the Property.

~~Nevada~~The ~~Property~~Company’s ~~wholly-owned subsidiaries are Nevada Restaurant Venture 1 LLC (“Nevada Restaurant”)~~operations, which ~~was~~includes ~~formed~~hotel, ~~on November 24~~casino, ~~2009~~food ~~as a limited liability company in Delaware~~ and ~~Nevada Retail Venture 1 LLC (“Nevada Retail”)~~beverage, ~~which was also formed on November 24~~retail, ~~2009~~spa ~~as a limited liability company in Delaware. Nevada Restaurant leases the Property’s restaurants~~ and ~~the~~entertainment ~~nightclub from Nevada Property~~ and ~~has~~other ~~entered~~related ~~into~~operations, ~~management~~are ~~agreements~~conducted ~~with third-party restaurant operators and a nightclub operator to manage and operate their respective establishments~~ at the Property. ~~Nevada~~Given ~~Retail leases~~ the ~~retail~~integrated ~~spaces~~nature atof ~~the~~these ~~Property~~operations, ~~from~~ the Company ~~and~~is ~~operates~~considered ~~certain of the retail spaces within the Property. In addition, Nevada Retail has also entered into lease agreements with third-party retail operators~~ to ~~manage~~have ~~and~~one ~~operate~~operating ~~their respective retail businesses at the Property~~segment.

The ~~Company’s~~principal ~~operations,~~executive ~~which~~offices ~~includes~~of ~~hotel,~~The ~~casino,~~Cosmopolitan ~~food~~of ~~and~~Las ~~beverage,~~Vegas ~~retail,~~are ~~spa~~located ~~and~~at ~~entertainment~~3708 ~~and~~Las ~~other~~Vegas ~~related~~Boulevard ~~operations~~South, ~~are~~ ~~conducted~~Las ~~entirely~~Vegas, atNevada 89109 and the ~~Property~~telephone number is (702) 698-7000. ~~Given~~The ~~the~~Cosmopolitan’s ~~integrated~~internet ~~nature~~website ofis ~~these~~located ~~operations,~~at ~~the~~www.cosmopolitanlasvegas.com. ~~Company~~The information on our website is ~~considered~~not topart ~~have~~of ~~one~~this ~~operating~~Quarterly ~~segment.~~Report on Form 10-Q.

~~The~~Sale ~~principal~~or ~~executive~~Transfer ~~offices~~ of ~~The~~Members’ ~~Cosmopolitan~~Equity ofInterests ~~Las Vegas are located at 3708 Las Vegas Boulevard South, Las Vegas, Nevada 89109~~ and ~~the~~ ~~telephone~~Corporate ~~number is (702) 698-7000. The Cosmopolitan’s internet website is located at www.cosmopolitanlasvegas.com. The information on our website is not part of this Quarterly Report on Form 10-Q.~~ Structure

On December 18, 2014, BRE Spade Voteco LLC (“Spade Voteco”), received approval from the Nevada Gaming Commission (the “Gaming Commission”) to acquire control of the Company. In connection with such approval, and with the completion of the Class B Sale or(as ~~Transfer~~defined below), on December 19, 2014, Nevada Voteco LLC (“Nevada Voteco”) transferred 100% of ~~Members’~~the ~~Equity~~Class A Membership Interests ~~and~~in ~~Corporate~~Nevada ~~Structure~~Property (the “Class A Membership Interests”) to Spade Voteco for nominal consideration (together with the Class B Sale, the “Sale”).

On December 1819, 2014, ~~BRE~~Nevada ~~Spade~~Mezz ~~Voteco~~1 LLC (“~~Spade~~Nevada ~~Voteco~~Mezz”), ~~received~~an ~~approval~~affiliate ~~from~~of ~~the~~Deutsche ~~Nevada~~Bank, ~~Gaming~~completed ~~Commission~~its previously announced sale (the “~~Gaming~~Class ~~Commission~~B Sale”) ~~to acquire control~~ of ~~the~~100% ~~Company. In connection with such approval, and with the completion~~ of the Class B ~~Sale~~Membership ~~(as~~Interests ~~defined~~to ~~below),~~Spade ~~on December 19~~Mezz, ~~2014,~~an ~~Nevada~~affiliate ~~Voteco~~of ~~LLC~~Blackstone, ~~(“Nevada~~for ~~Voteco”)~~cash ~~transferred 100%~~consideration of ~~the~~$1.73 ~~Class A~~billion ~~Membership~~plus ~~Interests in~~ Nevada Property’s ~~(the~~working ~~“Class~~capital Aof ~~Membership~~$49.4 ~~Interests”)~~million toas ~~Spade~~determined ~~Voteco~~pursuant ~~for~~to ~~nominal consideration (together with~~ the ~~Class~~provisions Bof ~~Sale,~~ the ~~“Sale”).~~purchase agreement.

OnAs ~~December 19,~~a ~~2014,~~result ~~Nevada~~of ~~Mezz~~the ~~1 LLC (“Nevada Mezz”)~~Sale, anSpade ~~affiliate~~Voteco ofhas ~~Deutsche~~100% ~~Bank,~~voting ~~completed~~control ~~its~~over ~~previously~~Nevada ~~announced~~Property ~~sale (the~~through ~~“Class~~its Bownership ~~Sale”)~~ of ~~100%~~all of the Class A B Membership Interests toand Spade Mezz, anholds ~~affiliate~~100% ofeconomic ~~Blackstone,~~control ~~for~~over ~~cash~~Nevada ~~consideration~~Property ofthrough ~~$1.73~~its ~~billion~~ownership ~~plus~~of ~~Nevada~~all ~~Property’s~~of ~~working~~the ~~capital~~Class ofB ~~$49~~Membership Interests.4 ~~million~~Except as ~~determined~~provided ~~pursuant~~by tolaw, the ~~provisions~~ ofClass ~~the~~B ~~purchase~~Membership ~~agreement.~~Interests have no voting rights.

As a result of the Sale, Spade Voteco now has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz now holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law, the Class B Membership Interests have no voting rights. 5

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~~Table~~In ofconnection ~~Contents~~with the Sale, the Company completed the following transactions:

In• ~~connection~~Nevada ~~with~~Property acquired all of the ~~Sale~~membership interests in TCOLV Propco LLC (“Propco”), ~~the~~an ~~Company~~affiliate ~~completed~~entity ~~the~~of ~~following~~Blackstone, ~~transactions:~~through a contribution of such interests from Spade Mezz.

• Nevada Property ~~acquired~~transferred ~~all~~its offee ~~the~~simple ~~membership~~interest ~~interests~~ in ~~TCOLV~~the ~~Propco~~Property ~~LLC~~to (“Propco”), anits ~~affiliate~~direct ~~entity~~subsidiary at the time of ~~Blackstone,~~such ~~through~~transfer aand ~~contribution~~leased ofback such ~~interests~~Property from ~~Spade~~Propco ~~Mezz~~(exclusive of the gaming assets and intellectual property to which Nevada Property had retained title) pursuant to a Lease and Operating Agreement (the “Lease”), dated December 19, 2014.

• Nevada Property ~~transferred~~distributed ~~its~~all ~~fee~~of ~~simple interest in~~ the ~~Property~~membership tointerests ~~Propco,~~in ~~its direct subsidiary at the time of such transfer and leased back such Property from~~ Propco ~~(exclusive of the gaming assets and intellectual property~~ to ~~which~~Spade ~~Nevada Property had retained title) pursuant to a Lease and Operating Agreement, dated as of December 19, 2014, (the “Lease”)~~Mezz.

• Nevada Property, ~~distributed~~Propco, ~~all~~Spade Mezz and certain other affiliates of Blackstone entered into the ~~membership~~financing ~~interests~~arrangements inand ~~Propco~~agreements todescribed ~~Spade~~within ~~Mezz~~the Quarterly Report on Form 10-Q at March 31, 2015 and our 2014 Annual Report on Form 10-K.

•Spade ~~Nevada~~Voteco ~~Property,~~and ~~Propco,~~ Spade Mezz ~~and~~are ~~certain~~collectively ~~other~~referred ~~affiliates~~to ofas ~~Blackstone entered into~~ the ~~financing~~“Members” ~~arrangements and agreements described~~ within this Quarterly Report on Form 10-Q ~~and our Annual Report on Form 10-K, which was filed with the SEC on March 27, 2015~~.

~~Spade~~2. ~~Voteco~~Basis ~~and~~of ~~Spade~~Presentation ~~Mezz~~and ~~are~~Summary ~~collectively~~of ~~referred~~Significant toAccounting ~~as the “Members” within this Quarterly Report on Form 10-Q.~~ Policies

2. Basis of Presentation ~~and Summary of Significant Accounting Policies~~

~~Basis~~The Company’s condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The condensed consolidated financial statements of ~~Presentation~~the Company include the accounts of the Company and its subsidiaries. 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. All intercompany transactions and balances have been eliminated in consolidation. The interim results reflected in these condensed consolidated financial statements are not necessarily indicative of results to be expected for the full fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.

The ~~Company’s~~accompanying condensed consolidated financial statements ~~are~~for ~~prepared~~Nevada inProperty ~~accordance~~1 ~~with~~LLC ~~U.S.~~include ~~generally~~TCOLV ~~accepted~~Propco ~~accounting~~LLC ~~principles~~ (“~~U.S. GAAP~~Propco”)., ~~The~~which ~~condensed~~is ~~consolidated~~a ~~financial~~variable ~~statements~~interest ofentity ~~the~~for ~~Company~~which ~~include~~ the ~~accounts~~Company ofis the ~~Company~~primary ~~and its subsidiaries. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments~~beneficiary, ~~which~~Nevada ~~management~~Property ~~believes~~1 ~~are~~LLC ~~necessary~~and toNevada ~~present~~Property ~~fairly~~1 ~~the~~LLC’s ~~financial~~wholly-owned ~~position~~subsidiaries, ~~results~~Nevada ofRestaurant ~~operations,~~ and ~~cash~~Nevada ~~flows of the Company for the respective periods presented~~Retail. ~~All intercompany transactions and balances have been eliminated in consolidation.~~

The ~~accompanying~~Company ~~condensed~~is ~~consolidated~~an ~~financial~~indirect ~~statements~~wholly-owned ~~for~~subsidiary ~~Nevada~~of Blackstone. ~~Property~~In 1the ~~LLC~~normal ~~include~~course ~~TCOLV~~of ~~Propco LLC (“Propco”)~~business, ~~which is a variable interest entity for which~~ the Company’s isoperations ~~the~~may ~~primary~~include ~~beneficiary,~~significant ~~Nevada~~transactions ~~Property~~conducted 1with ~~LLC,~~Blackstone ~~and~~or ~~Nevada~~affiliated ~~Property~~entities 1of ~~LLC’s, wholly own subsidiaries, Nevada Restaurant and Nevada Retail~~Blackstone.

AsReferences ~~previously~~in ~~noted,~~this ~~the~~Quarterly ~~Company~~Report ison anForm ~~indirect wholly~~10-~~owned~~Q ~~subsidiary~~to ~~of Blackstone.~~“Successor” Inand “Successor Period” refer to the ~~normal~~Company ~~course~~on ofor ~~business~~after December 19, 2014 and reflect assets and liabilities at fair value determined by allocating the Company’s ~~operations~~enterprise ~~may~~value ~~include~~to ~~significant~~its ~~transactions~~assets ~~conducted~~and ~~with~~liabilities ~~Blackstone~~pursuant orto ~~affiliated~~accounting ~~entities~~guidance ofrelated ~~Blackstone~~to business combinations. References to “Predecessor” and “Predecessor Period” refer to the Company on or before December 18, 2014 and reflect the historical accounting basis in the Predecessor’s assets and liabilities.

~~References in~~Variable ~~this~~Interest Quarterly Report on Form 10-Q to “Successor” and “Successor Period” refer to the Company on or after December 19, 2014 and reflect assets and liabilities at fair value determined by allocating the Company’s enterprise value to its assets and liabilities pursuant to accounting guidance related to business combinations. References to “Predecessor” and “Predecessor Period” refer to the Company on or before December 18, 2014 and reflect the historical accounting basis in the Predecessor’s assets and liabilities. Entities

A legal entity is referred to as a variable interest entity if, by design (1) the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors that cannot make significant decisions about the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. Variable ~~Interest~~interest ~~Entities~~entities for which the Company is the primary beneficiary are consolidated.

AIn ~~legal~~accordance ~~entity~~with isthe ~~referred~~guidance tofor asthe aconsolidation of variable interest ~~entity if~~entities, ~~by design (1)~~ the ~~total~~Company ~~equity~~analyzes ~~investment~~our atvariable ~~risk~~interests ~~is not sufficient~~ to ~~permit~~ ~~the~~determine ~~legal~~if ~~entity~~an ~~to finance its activities without additional subordinated financial support from other parties, or (2) the~~ entity ~~has~~in ~~equity~~which ~~investors~~we ~~that cannot make significant decisions about the entity’s operations through voting rights, or do not~~ have ~~the~~a ~~obligation~~variable tointerest ~~absorb~~is ~~the~~a ~~expected~~variable ~~losses,~~interest orentity doand ~~not~~whether ~~have~~we ~~the~~must ~~right~~consolidate tothat ~~receive~~variable ~~the~~interest ~~residual returns of the~~ entity. ~~Variable~~Our ~~interest~~analysis ~~entities~~includes ~~for~~both ~~which~~quantitative ~~the~~and ~~Company~~qualitative ~~is the primary beneficiary are consolidated~~reviews.

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InAs ~~accordance~~discussed ~~with~~in our Annual Report on Form 10-K, Propco leased the ~~guidance~~hotel and other related property, except for casino-related assets for which Nevada Property retains title (the ~~consolidation~~“Leased Property”), to the Company pursuant to a Lease and Operating Agreement (the “Lease”). The Lease has an initial term expiring on December 31, 2021, subject to two automatic renewals for successive periods of ~~variable~~five ~~interest~~years ~~entities~~each, subject to the Company ~~analyzes~~’s ~~our~~election ~~variable~~not ~~interests~~to renew. Under the Lease, the Company is obligated to ~~determine~~pay ifto anPropco ~~entity~~fixed annual rent (“Fixed Rent”) equal to $125 million per year, payable in ~~which~~arrears wein ~~have~~equal amonthly ~~variable~~installments. ~~interest~~Each year, during the term of the Lease, the Company is aobligated ~~variable~~to ~~interest~~pay ~~entity~~Propco, as percentage rent, an amount equal to the difference, if positive, between (x) 90% of Operating Income, as defined in the Lease, for such year and ~~whether~~(y) the weFixed ~~must~~Rent ~~consolidate~~payable ~~that~~with ~~variable~~respect ~~interest~~to ~~entity~~such year. ~~Our~~Under ~~analysis~~the ~~includes~~Lease, ~~both~~all ~~quantitative~~costs and ~~qualitative reviews~~expenses incurred in connection with capital expenditure and expenditures for furniture, fixtures and equipment for the Leased Property shall be paid by the Company from amounts funded by Propco to the Company for such purposes. The rent expense recorded for the three and six months ended June 30, 2015 were $52.6 million and $91.1 million, respectively. These amounts are eliminated upon consolidation.

AsThe ~~discussed~~Company indetermined ~~our~~that ~~Annual Report on Form 10-K,~~ Propco ~~leased~~is ~~the~~a ~~hotel~~variable ~~and~~interest ~~other~~entity ~~related property, except for casino-related assets for which Nevada Property retains title, (the “Leased Property”), to the Company pursuant to a Lease~~ and ~~Operating Agreement (~~the ~~“Lease”). The Lease has an initial term expiring on December 31, 2021, subject to two automatic renewals for successive periods of five years each, subject to the~~ Company’s ~~election not to renew. Under the Lease, the Company~~ is ~~obligated to pay to Propco fixed annual rent (“Fixed Rent”) equal to $125 million per year, payable in arrears in equal monthly installments. Each year, during~~ the ~~term~~primary ofbeneficiary; ~~the Lease~~therefore, the Company ishas ~~obligated~~consolidated ~~to pay~~ Propco, ~~as percentage rent, an amount equal to the difference, if positive, between (x) 90% of Operating Income, as defined~~ in the ~~Lease,~~Successor ~~for such year and (y) the Fixed Rent payable with respect to such year~~Period. Under the Lease, all costs and expenses incurred in connection with capital expenditure and expenditures for furniture, fixtures and equipment for the Leased Property shall be paid by the Company from amounts funded by Propco to the Company for such purposes.

~~The~~Pushdown ~~Company determined that Propco is a variable interest entity and the Company is the primary beneficiary; therefore, the Company has consolidated Propco in the Successor Period.~~ Accounting

As previously noted, the Company is an indirect wholly-owned subsidiary of Blackstone. As a result of the Sale, the Company elected to apply pushdown accounting to reflect Spade Mezz’s basis of accounting for the acquired assets and assumed liabilities of the Company. As discussed in Note 13, the Company is not a borrower under the two mezzanine loan agreements (the “Mezzanine Loans”) entered into by affiliates of Blackstone with JPMorgan for a total aggregate principal amount of $425 million. However, the amounts payable under such loans are, in each case, secured by a first lien on the direct and indirect equity of Propco and are expected to also include a pledge of the Class B Membership Interests and a call right of the Class A Membership Interests. Further, the Company is required to pay interest on the Mezzanine Loans; however, the Company is not a borrower, nor is the Company jointly and severally liable for the Mezzanine Loans; therefore, in accordance with ASU No. 2014-17, Business Combination (Topic 805): Pushdown Accounting, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of June 30, 2015.

AsUse ~~previously noted, the Company is an indirect wholly-owned subsidiary~~ of ~~Blackstone.~~ As a result of the Sale, the Company elected to apply pushdown accounting to reflect Spade Mezz’s basis of accounting for the acquired assets and assumed liabilities of the Company. As discussed in Note 13, the Company is not a borrower under the two mezzanine loan agreements (the “Mezzanine Loans”) entered into by affiliates of Blackstone with JPMorgan for a total aggregate principal amount of $425 million. However, the amounts payable under such loans are, in each case, secured by a first lien on the direct and indirect equity of Propco and are expected to also include a pledge of the Class B Membership Interests and a call right of the Class A Membership Interests. Further, the Company is required to pay interest on the Mezzanine Loans; however, the Company is not a borrower, nor is the Company jointly and severally liable for the Mezzanine Loans; therefore, in accordance with ASU No. 2014-17, Business Combination (Topic 805): Pushdown Accounting, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of March 31, 2015. Estimates

~~Use~~The preparation of ~~Estimates~~condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of the Company’s business and operations, actual results could differ materially from those estimates.

~~The~~Cash ~~preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates~~ and ~~assumptions~~ ~~that~~Cash affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of the Company’s business and operations, actual results could differ materially from those estimates. Equivalents

Cash in banks and ~~Cash~~deposits ~~Equivalents~~with financial institutions that can be liquidated without prior notice or penalty are classified by the Company as cash and cash equivalents. The Company generally considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

~~Cash~~Pursuant into ~~banks~~the terms of the Mortgage Loan agreement, dated December 19, 2014, among Propco, Nevada Property and ~~deposits~~certain ~~with~~subsidiaries ~~financial~~of ~~institutions~~Nevada ~~that~~Property ~~can~~(collectively, bethe ~~liquidated~~“Mortgage ~~without~~Borrowers”) ~~prior~~and ~~notice~~JPMorgan orChase ~~penalty~~Bank, ~~are~~National ~~classified~~Association by(“JPMorgan”), pursuant to which the ~~Company~~Mortgage Borrowers borrowed $875 million (the “Mortgage Loan”) in connection with the Sale and as ~~cash~~ discussed in Note 11, the Company is required to establish and maintain certain specified cash ~~equivalents~~accounts through the term of the Mortgage Loan. The ~~Company~~amounts ~~generally~~funded, ~~considers~~and ~~all~~to ~~highly~~be ~~liquid~~funded, ~~investments~~to ~~with~~these ancash ~~original~~accounts ~~maturity~~are ofsubject ~~three~~to ~~months~~terms orincluded ~~less~~in the Mortgage Loan and is to be released to us subject to certain conditions specified therein being met. To the extent that an event of default were to occur as determined by the terms of such agreements, there are additional requirements and restrictions placed on the cash ~~equivalents~~accounts. These accounts are held with an independent third party agent (and assuming no event of default has occurred), include: (i) a “lockbox account” which houses certain rents and other revenues from the Property and its operations, with the exception of income from casino or gaming operations; (ii) a “concentration account” which houses certain rents and other revenues from the Property and its operations and which houses all of the amounts transferred from the lockbox account and casino account; and (iii) “casino accounts” which hold all of the income derived from

Pursuant to the terms of the Mortgage Loan agreement, dated as of December 19, 2014, among Propco, Nevada Property and certain subsidiaries of Nevada Property (collectively, the “Mortgage Borrowers”) and JPMorgan Chase Bank, National Association (“JPMorgan”), pursuant to which the Mortgage Borrowers borrowed $875 million (the “Mortgage Loan”) in connection with the Sale and as discussed in Note 11, the Company is required to establish and maintain certain specified cash accounts through the term of the Mortgage Loan and Mezzanine Loans. The amounts funded, and to be funded, to these cash accounts are subject to terms included in the Mortgage Loan and is to be released to us subject to certain conditions specified therein being met. To the extent 7

7Table of Contents

~~Table~~casino operations, less casino operating expenses and any amounts required under gaming liquidity requirements to be maintained on-site at the property in compliance with gaming regulations. Transfers from the lockbox account are required to be made not less than once every business day throughout the term of ~~Contents~~the loans. Transfers from the casino account are required to be made not less than two times per week throughout the term of the loans. For the purpose of the operation of the Company, the cash accounts in (i) and (ii) mentioned above have been combined. A separate credit card depository account has also been established as part of the cash account requirements of the Mortgage Loan. Amounts held in the aforementioned accounts may be invested in securities permitted by the loan documents. The Mortgage Loan lender has a first priority security interest in these accounts subject to certain stipulations related to gaming laws for casino related accounts.

~~that~~Cash ~~an event of default were to occur as determined by the terms of such agreements, there are additional requirements~~ and ~~restrictions placed on the~~ cash ~~accounts.~~equivalents ~~These accounts~~ are held ~~with an~~in ~~independent third party agent (and assuming no event of default has occurred)~~checking, ~~include: (i) a “lockbox account” which houses certain rents and other revenues from the Property and its operations~~savings, ~~with the exception of income from casino or gaming operations; (ii) a “concentration account” which houses certain rents~~ and ~~other~~liquid ~~revenues~~investment ~~from~~accounts ~~the~~at ~~Property~~various ~~and~~financial ~~its operations and which houses all of the amounts transferred from the lockbox account and casino account~~institutions. ~~Transfers~~The ~~from~~combined ~~the lockbox~~ account ~~are~~balance ~~required~~at toany begiven ~~made~~institution ~~not~~may ~~less~~exceed ~~than~~Federal ~~once~~Deposit ~~every~~Insurance ~~business~~Corporation ~~day throughout the term of the loans. Transfers from the casino account are required to be made not less than two times per week throughout the term of the loans; and~~ (~~iii)~~ “~~casino accounts~~FDIC”) ~~shall~~insurance becoverage ~~established~~ and, ~~maintained~~as toa ~~hold all of the income derived from casino operations~~result, ~~less~~there ~~casino~~is ~~operating~~a ~~expenses~~concentration ~~and~~of ~~any~~credit ~~amounts~~risk ~~required~~related ~~under gaming liquidity requirements~~ to beamounts ~~maintained~~ on~~-site~~ atdeposit ~~the property~~ in ~~compliance~~excess ~~with gaming regulations. For the purpose~~ of ~~the~~FDIC ~~operation~~insurance ~~of the Company the cash accounts in (i) and (ii) mentioned above have been combined~~coverage. AManagement ~~separate~~believes, ~~credit~~based ~~card~~on ~~depository account has also been established as part of~~ the ~~cash~~quality ~~account requirements~~ of the ~~Mortgage~~financial ~~Loan.~~institutions, ~~Amounts~~that ~~held in~~ the ~~aforementioned~~risk ~~accounts~~is ~~may~~not ~~be invested in securities permitted by the loan documents~~significant. ~~The Mortgage Loan lender has a first priority security interest in these accounts subject to certain stipulations related to gaming laws for casino related accounts.~~

~~Cash~~Restricted and cash equivalents are held in checking, savings, and liquid investment accounts at various financial institutions. The combined account balance at any given institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Management believes, based on the quality of the financial institutions, that the risk is not significant. Cash

Restricted ~~Cash~~cash consists of tokes (tips) earned by our CoStars in the Company’s slot and table games departments, cash account funded by our partners to be used for certain capital expenditures and replacement reserve used for capital expenditures required per the Mortgage Loan agreement.

~~Restricted~~Designated cash totaled $1.1 million as of March 31, 2015. A portion of restricted cash consisted of $0.8 million tokes (tips) earned by our CoStars in the Company’s slot and table games departments and $0.3 million represents the cash account funded by our partners to be used for certain capital expenditures. Cash

~~Designated~~As ~~Cash~~of December 31, 2014, the Company established a designated cash account which consists primarily of the net working capital as a result of the Sale and amounts funded by the Predecessor to fund payments for certain executives under the various executive incentive award plans. The plans included the Management Exit Award Plan (the “Exit Award Plan”), Management Incentive Plan and Retention Bonus Plan all related to the Sale.

AsAccounts ofReceivable ~~December 31, 2014, the Company established a designated cash account which consists primarily of the net working capital as a result of the Sale~~ and ~~amounts~~Credit funded by the Predecessor to fund payments for certain executives under the various executive incentive plans. The designated cash balance of $36.0 million at March 31, 2015, was comprised of $29.9 million of net working capital and $6.1 million for incentive awards under the Management Exit Award Plan (the “Exit Award Plan”), as discussed in Note 8. On April 27, 2015, the $29.9 million of net working capital was paid to Deutsche Bank as final payment related to the Sale of the Company. Risk

Accounts ~~Receivable~~receivable, net including casino and ~~Credit~~hotel ~~Risk~~receivables, are typically non-interest bearing and are initially recorded at cost. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. Accounts are written off when management deems them to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The allowance is estimated based on a percentage of credit drop, a specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions.

Accounts receivable, net including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. The Company issues credit in the form of “markers” to approved casino customers following investigations of creditworthiness. Accounts are written off when management deems them to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The allowance is estimated based on specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. Inventories

8Inventories consist of retail merchandise, food and beverage items which are stated at the lower of cost or market value. Cost is determined by the weighted average identification method.

~~Table~~Derivative ofFinancial ~~Contents~~Instruments

The ~~activity~~Company ~~related~~has tomanaged its market risk, including interest rate risk associated with variable rate borrowings, with the ~~allowance~~use ~~for~~of ~~accounts~~a ~~receivable~~derivative ~~for~~financial instrument. The fair value of the ~~period~~derivative ~~below~~financial instrument is recognized as ~~follows~~an (asset or liability at each balance sheet date, with changes in ~~thousands~~fair value affecting net loss. The Company’s interest rate cap did not qualify for hedge accounting. Accordingly, changes in the fair value of the interest rate cap are presented as an increase (decrease): in interest expense in the accompanying condensed consolidated statements of operations.

	Successor
	Three Months Ended March 31, 2015
	BeginningBalance		Write-offs,Net ofRecoveries			Provision			EndingBalance
Allowance for doubtful accounts(1)	$	—	$	(363	)	$	(3,189	)	$	(3,552	)

~~(1)~~Table ~~As part~~ of ~~the adoption of purchase accounting related to the Sale of the Company (refer to Note 3), the accounts receivables were recorded at their fair value.~~Contents

~~Inventories~~Fair Value of Financial Instruments

~~Inventories~~The ~~consist~~ Company applies the provisions of ~~retail~~FASB ~~merchandise~~Topic 820, ~~food~~“Fair Value Measurements” (Topic 820), to its financial assets and ~~beverage~~liabilities. ~~items~~Fair ~~which~~value ~~are~~is ~~stated~~defined atas a market-based measurement intended to estimate the ~~lower~~price ofthat ~~cost~~would be received to sell an asset or paid to transfer a liability in an orderly transaction between market ~~value~~participants at the measurement date under current market conditions. ~~Cost~~Topic is820 ~~determined~~also byestablished a fair value hierarchy, which requires an entity to maximize the ~~weighted~~use ~~average~~of ~~identification~~observable ~~method~~inputs when measuring fair value. These inputs are categorized as follows:

~~Derivative~~• ~~Financial~~Level ~~Instruments~~1 — quoted prices in an active market for identical assets or liabilities;

~~The~~• ~~Company~~Level ~~has~~2 ~~managed~~— ~~its~~quoted ~~market~~prices ~~risk,~~in ~~including~~an ~~interest~~active ~~rate~~market ~~risk~~for ~~associated~~similar ~~with~~assets ~~variable~~or ~~rate borrowings~~liabilities, ~~with~~inputs ~~the~~other ~~use~~than ofquoted aprices ~~derivative financial~~that ~~instrument.~~are ~~The~~observable ~~fair~~for ~~value~~similar ofassets ~~the derivative financial instrument is recognized as an asset~~ or ~~liability at each balance sheet date~~liabilities, ~~with~~inputs ~~changes~~derived inprincipally ~~fair~~from ~~value~~or ~~affecting~~corroborated ~~net~~by ~~loss.~~observable ~~The~~market ~~Company’s~~data ~~interest~~by ~~rate~~correlation ~~cap~~or ~~did~~other ~~not~~means; qualify for hedge accounting. Accordingly, changes in the fair value of the interest rate cap are presented as an increase (decrease) in interest expense in the accompanying condensed consolidated statements of operations. and

~~Fair~~• ~~Value~~Level of3 ~~Financial~~— ~~Instruments~~valuation methodology with unobservable inputs that are significant to the fair value measurement.

The ~~Company~~carrying ~~applies~~values of the ~~provisions~~Company’s ofcash ~~FASB~~and ~~Topic~~cash ~~820~~equivalents, ~~“Fair~~restricted ~~Value~~cash, ~~Measurements”~~designated ~~(Topic 820)~~cash, toreceivables ~~its~~and ~~financial~~accounts ~~assets~~payable ~~and~~approximate ~~liabilities. Fair~~fair value isbecause ~~defined~~of ~~as a market-based measurement intended to estimate~~ the ~~price~~short ~~that~~term ~~would~~maturities beof ~~received~~these toinstruments. ~~sell~~The ancarrying ~~asset~~value orof ~~paid~~the toCompany’s ~~transfer~~debt ~~a liability in an orderly transaction between market participants~~ at ~~the~~June 30, ~~measurement~~2015, ~~date~~is ~~under~~consistent ~~current market~~with ~~conditions. Topic 820 also established a~~ fair value ~~hierarchy,~~due ~~which requires an entity~~ to ~~maximize~~ the ~~use~~variable ofinterest ~~observable~~rates ~~inputs~~in ~~when measuring fair value~~place. ~~These inputs are categorized as follows:~~

•Debt ~~Level~~Financing ~~1 — quoted prices in an active market for identical assets or liabilities;~~Costs

•Direct ~~Level~~and 2incremental —costs ~~quoted~~incurred ~~prices~~in obtaining loans or in anconnection ~~active~~with ~~market~~the ~~for~~issuance ~~similar~~of ~~assets~~long-term ordebt ~~liabilities,~~are ~~inputs~~amortized ~~other~~using ~~than~~the ~~quoted~~effective ~~prices~~interest ~~that~~method ~~are~~over ~~observable~~the ~~for~~terms ~~similar~~of ~~assets~~the orrelated ~~liabilities,~~debt ~~inputs~~agreements. ~~derived~~For ~~principally~~the ~~from~~three orand ~~corroborated~~six bymonths ~~observable~~ended ~~market~~June 30, ~~data~~2015, by$1.5 ~~correlation~~million orand ~~other~~$3.1 ~~means;~~million, respectively, of debt financing costs and debt discounts were amortized to interest expense. Unamortized debt financing costs of $9.3 million were presented as a direct deduction to the debt obligation at June 30, 2015.

•The ~~Level~~deferred 3financing —costs ~~valuation~~previously ~~methodology~~reported ~~with~~in ~~unobservable~~other ~~inputs~~assets ~~that~~at ~~are~~December 31, ~~significant~~2014 of $2.1 million were reclassified to a direct deduction to the ~~fair~~debt. ~~value~~See ~~measurement~~below for discussion regarding adoption of Accounting Standard Update 2015-3, Simplifying the Presentation of Debt Issuance Costs.

~~The~~Property ~~carrying values of the Company’s cash~~ and ~~cash equivalents~~Equipment, restricted cash, designated cash, receivables and accounts payable approximate fair value because of the short term maturities of these instruments. The carrying value of the Company’s debt at March 31, 2015, is consistent with fair value due to the variable interest rates in place. Net

Property and equipment are stated at the lower of cost or fair value. As part of the purchase accounting in connection with the Sale of the Company, the estimated useful lives of property and equipment were evaluated based on their remaining economic life resulting in modified estimated useful lives. Depreciation is provided over the estimated useful lives of the assets using the straight-line method as follows:

Debt Financing Costs



Building and improvements		29 years
Land improvements		11 years
Furniture, fixtures and equipment		4 to 6 years

~~Direct~~Leasehold ~~and~~improvements ~~incremental~~are ~~costs~~generally ~~incurred~~amortized inon ~~obtaining~~a ~~loans or in connection with the issuance of long~~straight-~~term~~line ~~debt~~basis ~~are amortized using the effective interest method~~ over the ~~terms~~shorter of the ~~related~~estimated ~~debt~~useful ~~agreements.~~life ~~For~~of the ~~period~~assets ~~ended~~or ~~March 31, 2015, $1.5 million of debt financing costs and debt discounts were amortized to interest expense. Unamortized debt financing costs of $10.9 million were presented as a direct deduction to~~ the ~~debt~~lease ~~obligation at March 31, 2015~~term.

9The remaining estimated useful lives of assets are periodically reviewed and adjusted as necessary. Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations.

~~Table of Contents~~9

~~The~~Table ~~deferred financing costs previously reported in other assets at December 31, 2014~~ of ~~$2.1~~ ~~million were reclassified to a direct deduction to the debt. See below for discussion regarding adoption of Accounting Standard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs.~~ Contents

~~Property~~Goodwill and ~~Equipment, Net~~ Intangibles

~~Property~~We ~~and~~have ~~equipment~~$225.1 ~~are~~million ~~stated~~in atgoodwill ~~the~~and ~~lower~~intangible ofassets ~~cost~~in orour ~~fair~~condensed ~~value.~~consolidated Asbalance ~~part~~sheet ofat ~~the~~June 30, ~~purchase~~2015, ~~accounting~~resulting infrom ~~connection with~~ the Sale ofas ~~the Company,~~discussed ~~the~~in ~~estimated~~Note ~~useful~~3. ~~lives~~Intangible ofassets ~~property~~determined ~~and~~to ~~equipment~~have ~~were~~a ~~evaluated~~finite ~~based on their remaining economic~~ life ~~resulting~~are inamortized ~~modified~~on ~~estimated~~a ~~useful~~straight-line ~~lives.~~basis ~~Depreciation is provided~~ over the ~~estimated~~determined useful ~~lives~~life of the ~~assets~~asset ~~using the straight-line method~~ as follows:

Building and improvements			29 years
Land improvements			11 years
Furniture, fixtures and equipment			4 to 6 years


•	Trade name — 30 years

~~Leasehold~~• ~~improvements~~Customer ~~are~~distribution ~~generally~~arrangement ~~amortized~~— on16 ayears, ~~straight-line~~based ~~basis~~on ~~over~~ the ~~shorter~~remaining ofterm ~~the estimated useful life~~ of the ~~assets or the lease term.~~ agreement

~~The~~• ~~remaining~~Backlog ~~estimated~~— ~~useful~~2 lives of assets are periodically reviewed and adjusted as necessary. Costs related to improvements are capitalized, while costs of repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. years

~~Goodwill~~• ~~and~~Customer ~~Intangibles~~relationships — 3 years

We• ~~have~~Property ~~$236.0~~easement ~~million~~— in5 ~~goodwill and intangible assets in our condensed consolidated balance sheet at March 31~~years, ~~2015,~~based ~~resulting from the Sale as discussed in Note 3. Intangible assets determined to have a finite life are amortized~~ on ~~a straight-line basis over~~ the ~~determined~~remaining ~~useful~~ life of the ~~asset~~easement ~~as follows:~~ right

•The ~~Trade~~Company ~~name~~is —required 30to ~~years~~perform an annual goodwill impairment review, and depending upon the results of that measurement, the recorded goodwill may be written down and charged to income from operations when its carrying amount exceeds its estimated fair value. Goodwill is reviewed for impairment annually on the first day of the Company’s fourth fiscal quarter (October 1) or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable, such as a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel.

~~• Customer distribution arrangement — 16 years, based on the remaining terms of the agreement~~Reclassifications

•For ~~Backlog~~the —period 2ended ~~years~~December 31, 2014, we reclassified certain balance sheet accounts on the condensed consolidated balance sheets to conform all periods to the adoption of Accounting Standard Update No. 2015-3. See below for further discussion.

•Recently ~~Customer~~Issued ~~relationships~~Accounting ~~— 3 years~~Pronouncements

•In ~~Property~~May ~~easement~~2014, —the 5FASB 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, ~~based~~2018, onincluding interim periods within that reporting period. Early application is not permitted. Management is currently assessing the ~~remaining~~impact ~~life~~of the adoption of this accounting pronouncement on the ~~easement~~Company’s ~~right~~condensed consolidated financial statements in future periods.

~~The Company~~In isAugust ~~required~~2014, tothe ~~perform~~FASB anissued ~~annual~~ASU ~~goodwill impairment review~~No. 2014-15, ~~and~~Presentation ~~depending~~of ~~upon~~Financial ~~the~~Statements ~~results~~— ofGoing ~~that~~Concern ~~measurement,~~— ~~the~~Disclosure ~~recorded~~of ~~goodwill~~Uncertainties ~~may~~about bean ~~written~~Entity’s ~~down~~Ability ~~and charged~~ to ~~income~~Continue ~~from~~as ~~operations~~a ~~when~~Going ~~its~~Concern ~~carrying~~(Subtopic ~~amount~~205-40) ~~exceeds~~(“ASU ~~its~~No. 2014-15”). ~~estimated fair~~ASU ~~value~~No. 2014-15 ~~Goodwill~~requires ismanagement ~~reviewed~~to ~~for~~provide ~~impairment~~an ~~annually~~interim onand ~~the~~annual ~~first~~assessment ~~day~~concerning ofan ~~the Company~~entity’s ~~fourth~~ability ~~fiscal~~to ~~quarter~~continue ~~(October~~as 1)a orgoing ~~more~~concern ~~frequently~~and ~~whenever~~also ~~events~~requires ordisclosures ~~changes~~under incertain circumstances. ~~indicate~~ASU ~~that~~No. 2014-15 ~~the~~is ~~carrying~~effective ~~value~~for ~~may~~fiscal ~~not~~years bebeginning ~~recoverable~~after December 15, ~~such~~ as2016 aand ~~significant~~for ~~adverse~~annual ~~change~~periods inand ~~legal~~interim ~~factors~~periods orthereafter. inEarly ~~the~~application ~~business~~is ~~climate,~~permitted. anIt ~~adverse~~is ~~action~~management’s orintent ~~assessment~~to byadopt athis ~~regulator,~~accounting ~~unanticipated~~pronouncement ~~competition,~~upon orthe aeffective ~~loss of key personnel~~date.

~~Reclassifications~~In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (“ASU No. 2015-3”), 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. 2015-3 is effective for fiscal years beginning after December 15, 2015 and for annual periods and interim periods thereafter. Early application is permitted. The Company adopted ASU No. 2015-3 during the three months ended March 31, 2015. Debt financing costs of $2.1 million previously reported in other assets were reclassified as an offset to debt obligations as of March 31, 2015. Adoption of ASU No. 2015-3 was applied retrospectively and the December 31, 2014 balances for other assets and debt obligations were adjusted by $2.1 million. At June 30, 2015, the unamortized debt financing cost was $9.3 million.

~~For~~No ~~the~~other ~~period~~new ~~ended~~accounting ~~December 31,~~pronouncements ~~2014,~~issued weor ~~reclassified~~effective ~~certain~~during ~~balance~~this ~~sheet~~period ~~accounts~~had onor ~~the~~are ~~condensed~~expected ~~consolidated~~to ~~balance~~have ~~sheets~~a ~~to conform~~material ~~all~~impact ~~periods~~on to the ~~adoption~~Company’s offinancial ~~Accounting~~position ~~Standard~~or ~~Update~~results ~~No. 2015-03.~~of ~~See below for further discussion~~operations.

10A 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 condensed consolidated financial statements.

~~Table of Contents~~10

~~Recently~~Table ~~Issued~~of ~~Accounting Pronouncements~~ Contents

~~In May 2014, the FASB issued ASU No~~3. ~~2014-09,~~ ~~(Topic~~Purchase ~~606):~~Accounting ~~Revenue~~in ~~from~~Connection ~~Contracts~~ with ~~Customers (“ASU No. 2014-09”). ASU No. 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for~~ the ~~transfer~~Sale of certain nonfinancial assets. ASU No. 2014-09 is effective for fiscal years beginning after December 15, 2016, 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.~~

InAs ~~August~~discussed ~~2014,~~in ~~the~~Note ~~FASB~~1, ~~issued~~Nevada ~~ASU No. 2014-15~~Mezz, ~~Presentation~~an affiliate of ~~Financial Statements~~Deutsche —Bank, ~~Going~~completed ~~Concern~~its —previously ~~Disclosure~~announced sale of ~~Uncertainties~~the ~~about~~Company ~~an Entity’s Ability~~ to ~~Continue~~Spade asMezz, aan ~~Going~~affiliate ~~Concern~~of ~~(Subtopic~~Blackstone ~~205-40)~~for ~~(“ASU~~cash ~~No. 2014-15”).~~consideration ~~ASU~~of No$1. ~~2014-15~~73 ~~requires~~billion ~~management~~plus tothe ~~provide~~Company’s anworking ~~interim~~capital ~~and annual~~of ~~assessment~~$49.4 ~~concerning~~million anas ~~entity’s~~determined ~~ability~~pursuant to ~~continue~~the asprovisions aof ~~going~~the ~~concern,~~purchase ~~and~~agreement. ~~also~~On ~~requires~~April 21, ~~disclosures~~2015, ~~under~~Deutsche ~~certain~~Bank ~~circumstances.~~and ~~ASU~~Blackstone ~~No. 2014-15~~reached isfinal ~~effective~~agreement ~~for~~on ~~fiscal~~the ~~years~~$49.4 ~~beginning~~million ~~after~~working ~~December 15,~~capital ~~2016,~~amount and ~~for annual~~final ~~periods~~payment ~~and~~was ~~interim~~made ~~periods~~to ~~thereafter.~~Deutsche ~~Early~~Bank ~~application~~on isApril 27, ~~permitted~~2015. ItThe isSale ~~management’s~~was ~~intent~~accounted tofor ~~adopt~~in ~~this~~accordance ~~accounting~~with ~~pronouncement~~ASC ~~upon~~805, ~~the~~Business ~~effective date~~Combination. The Company elected to apply pushdown accounting.

~~During~~In ~~the~~March ~~fourth~~2015, ~~quarter~~Nevada ofMezz ~~2014,~~and ~~ASU~~Spade ~~No. 2014-17,~~Mezz ~~Business~~entered ~~Combinations~~into ~~(Topic~~the ~~805):~~Second ~~Pushdown~~Amendment ~~Accounting~~to the Purchase Agreement (the “~~ASU~~Second ~~2014-17~~Amendment”) ~~was issued.~~to ~~ASU~~amend ~~No. 2014-17~~the ~~gives~~agreement ~~all~~to ~~entities~~account for the ~~option~~release of $12.3 million to ~~apply~~the ~~pushdown~~Company ~~accounting~~from ~~when~~the ~~they~~owner ~~are~~controlled ~~acquired~~insurance byprogram ~~another~~as ~~entity~~further discussed in Note 9. InThe ~~conjunction~~Second ~~with~~Amendment specifies that Nevada Mezz would receive a credit in the ~~issuance~~excess net working capital amount equal to $6.4 million, representing 50% of ~~ASU~~the ~~2014-17~~released amount plus broker fees. As a result, the ~~SEC~~net ~~eliminated~~working ~~its~~capital ~~guidance~~previously ~~related~~estimated toat ~~pushdown~~$43.0 ~~accounting~~million increased to $49.4 ~~ASU No~~million, increasing the aggregate purchase price from $1. ~~2014-17~~77 ~~was~~billion ~~effective~~to ~~upon~~$1.78 ~~issuance~~billion. ~~See~~The ~~our~~estimated ~~application~~fair market values of ~~ASU~~the ~~No. 2014-17~~tangible ~~within~~and ~~the~~intangible ~~Pushdown~~assets ~~Accounting~~acquired ~~section~~and ofliabilities ~~this~~assumed ~~Note~~did asnot ~~well~~change asfrom ~~Note~~those 3recorded at December 19, ~~Purchase~~2014. ~~Accounting~~The inadditional ~~Connection~~excess ~~with~~of the ~~Sale~~purchase price of ~~the Company~~$6.4 million was recorded as goodwill at March 31, 2015.

The following table reflects the allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, with the excess recorded as goodwill (in thousands).

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30) (“ASU No. 2015-03”), 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. To simplify the presentation of debt related costs, management adopted the requirements of ASU No. 2015-03 in the current interim period. Debt financing costs of $2.1 million previously reported in other assets were reclassified as an offset to debt obligations as of March 31, 2015. Adoption of ASU No. 2015-03 was applied retrospectively and the December 31, 2014 balances for other assets and debt obligations were adjusted by $2.1 million. At March 31, 2015, the unamortized debt financing cost was $10.9 million.



Current and other assets	$	174,703
Property and equipment, net	1,433,898
Goodwill	31,963
Intangible assets, net	216,344
Other non-current assets	34,223
Total assets	1,891,131
Current liabilities	(107,152		)
Other long-term liabilities	(4,483		)
Total liabilities	(111,635		)
Total equity purchase price	$	1,779,496

The following table presents the unaudited pro forma results as if the Sale had occurred at January 1, 2014 (in thousands).

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



	Three Months Ended June 30, 2014
Net revenues	$	200,110
Operating expenses	196,961
Operating income	3,149
Other expense	(7,984		)
Loss before income taxes	(4,835		)
Income tax expense	(10		)
Net loss	$	(4,845	)

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 condensed consolidated financial statements.



	Six Months Ended June 30, 2014
Net revenues	$	382,976
Operating expenses	376,485
Operating income	6,491
Other expense	(15,260		)
Loss before income taxes	(8,769		)
Income tax expense	(10		)
Net loss	$	(8,779	)

~~3. Purchase Accounting in Connection with the Sale of the Company~~ 11

AsTable ~~discussed in Note 1, Nevada Mezz, an affiliate~~ of Deutsche Bank, completed its previously announced sale of the Company to Spade Mezz, an affiliate of Blackstone for cash consideration of $1.73 billion plus the Company’s working capital of $49.4 million as determined pursuant to the provisions of the purchase agreement. On April 21, 2015, Deutsche Bank and Blackstone reached final agreement on the $49.4 million working capital amount and final payment was made to Deutsche Bank on April 27, 2015. The Sale was accounted for in accordance with ASC 805, Business Combination. The Company elected to apply pushdown accounting. Contents

~~Effective~~4. ~~March~~Accounts ~~2015~~Receivable, Nevada Mezz and Spade Mezz entered into the Second Amendment to the Purchase Agreement (the “Second Amendment”) to amend the agreement to account for the release of $12.3 million to the Company from the owner controlled insurance program as further discussed in Note 9. The Second Amendment Net

Accounts receivable, net consists of the following:



	Successor
(In thousands)	June 30, 2015			December 31, 2014
Casino	$	48,278		$	26,244
Hotel	17,596			16,393
Other	6,913			9,169
	72,787			51,806
Less: allowance for doubtful accounts	(8,733		)	—
	$	64,054		$	51,806

~~Table~~Accounts receivable, including casino and hotel receivables, are typically non-interest bearing. The Company issues credit to approved casino customers following investigations of ~~Contents~~creditworthiness. The allowance is estimated based on a percentage of credit drop, a specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. As part of the adoption of purchase accounting related to the Sale of the Company (refer to Note 3), the accounts receivables at December 31, 2014 were recorded at their fair value.

~~specifies that Nevada Mezz would receive a credit in the excess net working capital amount equal to $6~~5.4 ~~million,~~Prepaid ~~representing~~Expenses 50% of the released amount plus broker fees. As a result, the net working capital previously estimated at $43.0 million increased to $49.4 million, increasing the aggregate purchase price from $1.77 billion to $1.78 billion. The estimated fair market values of the tangible and ~~intangible~~Other ~~assets~~Current ~~acquired and liabilities assumed did not change from those recorded at December 19, 2014. The additional excess of the purchase price of $6.4 million was recorded as goodwill at March 31, 2015.~~ Assets

~~The~~Prepaid ~~following~~expenses ~~table reflects the allocation of the purchase price to the tangible~~ and ~~identifiable~~other ~~intangible~~current assets ~~acquired~~consist ~~and~~of ~~liabilities assumed, with~~ the ~~excess recorded as goodwill (in thousands).~~ following:

Current and other assets		$	174,703
	Successor
Property and equipment, net			1,433,898
(In thousands)	June 30, 2015				December 31, 2014
Goodwill			31,963
Prepaid expenses	$	14,459			$	15,754
Intangible assets, net			216,344
Other assets	3,597				5,760
Other non-current assets			34,223
	$	18,056			$	21,514
Total assets		$	1,891,131
Current liabilities			(107,152	)
Other long-term liabilities			(4,483	)
Total liabilities			(111,635	)
Total equity purchase price		$	1,779,496

~~The~~Prepaid ~~following~~expenses ~~table~~as ~~presents~~of ~~the~~June 30, ~~unaudited~~2015 ~~pro~~and ~~forma~~December 31, ~~results~~2014 asconsisted ifprimarily ~~the~~of ~~Sale~~expenses ~~had~~relating ~~occurred~~to atinsurance, ~~January~~gaming taxes, marketing, operations, property maintenance and other taxes. Other assets as of June 130, 2015 and December 31, 2014 ~~(in~~consisted ~~thousands).~~primarily of imprest funds relating to our partner restaurants and security deposits.

	Three Months EndedMarch 31, 2014
Net revenues	$	182,866
Operating expenses		179,524
Operating income		3,342
Other income (expense)		(7,277	)
Loss before income taxes		(3,935	)
Income tax (expense)/benefit		—
Net loss	$	(3,935	)

6. Property and Equipment, Net

Property and equipment, net are stated at the lower of cost or fair value and consist of the following:

4. Accounts Receivable, Net



	Successor
(In thousands)	June 30, 2015			December 31, 2014
Land and land improvements	$	107,382		$	107,352
Buildings and improvements	1,208,725			1,206,191
Furniture, fixtures and equipment	110,998			108,734
Construction in progress	15,250			12,337
Less: accumulated depreciation	(35,653		)	(2,316		)
	$	1,406,702		$	1,432,298

~~Accounts~~Depreciation ~~receivable~~expense of $16.7 million was incurred during the three months ended June 30, ~~net~~2015 ~~consists~~for the Successor period and $41.8 million for the three months ended June 30, 2014 for the Predecessor period. Depreciation expense of $33.3 million was incurred during the ~~following:~~six months ended June 30, 2015 for the Successor period and $83.1 million for the six months ended June 30, 2014 for the Predecessor period.

	Successor
(In thousands)	March 31,2015			December 31,2014
Casino	$	36,395		$	26,244
Hotel		21,895			16,393
Other		9,828			9,169
		68,118			51,806
Less: allowance for doubtful accounts		(3,552	)		—
	$	64,566		$	51,806

~~Accounts~~Table ~~receivable, including casino and hotel receivables, are typically non-interest bearing. The Company issues credit to approved casino customers following investigations~~ of creditworthiness. The allowance is estimated based on specific review of customer accounts as well as management’s experience with collection trends in the gaming and hospitality industry and current economic and business conditions. Contents

12The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. A minimal amount of interest expense was capitalized for the three and six months ended June 30, 2015. There was no interest expense capitalized for the three and six ended June 30, 2014.

~~Table~~7. ofGoodwill ~~Contents~~and Intangibles

Goodwill consists of the following:

5. Prepaid Expenses and Other Current Assets



	Successor
(In thousands)	June 30, 2015		December 31, 2014
Goodwill	$	31,963	$	25,549
Less: accumulated impairment	—		—
	$	31,963	$	25,549

Intangible assets, net consist of the following:

Prepaid expenses and other current assets consist of the following:



	Successor
(In thousands)	June 30, 2015			December 31, 2014
Trade name	$	100,000		$	100,000
Customer distribution agreement	21,000			21,000
Backlog	48,000			48,000
Customer relationships	39,000			39,000
Property easement	8,344			8,344
Less: accumulated amortization	(23,175		)	(1,516		)
	$	193,169		$	214,828

	Successor
(In thousands)	March 31,2015		December 31,2014
Prepaid expenses	$	15,217	$	15,754
Other assets		3,383		5,760
	$	18,600	$	21,514

Intangibles are amortized over the respective useful lives of the assets ranging from two to thirty years. Amortization expense related to intangibles was $10.8 million for the three months ended June 30, 2015 for the Successor period and $0.4 million for the three months ended June 30, 2014 for the Predecessor period and $21.7 million for the six months ended June 30, 2015 for the Successor period and $0.8 million for the six months ended June 30, 2014 for the Predecessor period.

Prepaid expenses as of March 31, 2015 and December 31, 2014 consist primarily of expenses relating to insurance, gaming taxes, marketing, operations, property maintenance and other taxes. Other assets as of March 31, 2015 and December 31, 2014 consist primarily of imprest funds relating to our partner restaurants and security deposits. 13

6.Table ~~Property~~of ~~and Equipment, Net~~ Contents

~~Property~~8. ~~and~~Restricted ~~equipment, net are stated at the lower of cost or fair value~~ and ~~consist~~Designated ~~of the following:~~ Cash

	Successor
(In thousands)	March 31,2015			December 31,2014
Land and land improvements	$	107,352		$	107,352
Buildings and improvements		1,208,276			1,206,191
Furniture, fixtures and equipment		108,856			108,734
Construction in progress		14,185			12,337
Less: accumulated depreciation		(18,947	)		(2,316	)
	$	1,419,722		$	1,432,298

As of June 30, 2015, the Company’s restricted cash account totaled $3.6 million, consisting of $0.2 million of tokes (tips) earned by our CoStars in the Company’s slot and table games departments, $0.6 million from the cash account funded by our partners to be used for certain capital expenditures and $2.8 million of replacement reserve used for capital expenditures as required by the Mortgage Loan agreement. At December 31, 2014, the restricted cash balance was comprised of $0.9 million, consisting of $0.4 million tokes and $0.5 million from the cash account funded by our partners to be used for certain capital expenditures.

~~Depreciation~~As ~~expense~~of June 30, 2015, the Company’s designated cash account consisted of $164.69 million ~~was~~comprised ~~incurred~~in ~~during~~its entirety for incentive awards under the ~~three~~Exit ~~months~~Award ~~ended~~Plan. ~~March 31~~The $4.9 million was paid on July 1, 2015. On April 27, ~~for~~2015, the ~~Successor~~ ~~period~~Company ~~and~~paid $4129.39 million ~~for~~of excess net working capital to Deutsche Bank out of the ~~three~~designated ~~months~~cash ~~ended~~as ~~March~~ a final payment related to the Sale of the Company. The payment was treated as a capital distribution to the Members. The designated cash balance at December 31, 2014, was comprised of $23.5 million of estimated excess net working capital and $8.2 million for incentive awards under the ~~Predecessor~~Exit ~~period.~~Award Plan, Management Incentive Plan and Retention Bonus Plan.

~~The interest cost associated with major development and construction projects is capitalized and included in the cost of the project~~9. ~~Interest~~Other capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. For the three months ended March 31, 2015 and 2014, no interest expense was capitalized. Assets

During the quarter ended March 31, 2015, the Company, Deutsche Bank and National Union Fire Insurance Company of Pittsburgh, PA (“Union Fire Insurance”) entered into a Closeout Agreement whereby the parties agreed to closeout all the general liability and workers compensation insurance policies established under the owner controlled insurance program (“OCIP”). As part of the Closeout Agreement, the parties agreed to a final single payment amount of $7.0 ~~Goodwill~~million paid to Union Fire Insurance which represents full and ~~Intangibles~~final settlement of all obligations arising from the closeout policies. In return, Union Fire Insurance waived and released the Company with respect to all future obligations and assumed 100% first loss position under and with respect to the closeout policies. The Closeout Agreement provided for the final distribution to the Company of the remaining funds in the cash collateral account of $12.3 million which the Company received in February and March 2015. As a result of the Closeout Agreement, the Company eliminated the reserve for workers' compensation claims and the balance in the OCIP fund and recognized a settlement expense of $3.6 million which is reflected in corporate expense in our condensed consolidated statements of operations for the six months ended June 30, 2015.

~~Goodwill~~At ~~consists~~December 31, of2014, the ~~following:~~reserve for workers' compensation claims was $1.5 million and the OCIP fund balance was $19.3 million.

	Successor
(In thousands)	March 31,2015		December 31,2014
Goodwill	$	31,963	$	25,549
Less: accumulated impairment		—		—
	$	31,963	$	25,549

10. Accrued and Other Liabilities

Accrued and other liabilities consist of the following:



	Successor
(In thousands)	June 30, 2015		December 31, 2014
Accrued accounts payable	$	10,815	$	10,782
Accrued payroll costs	21,542		28,844
Deposits - patrons	6,885		7,272
Advance deposits	11,939		14,422
Chip liability	3,811		5,234
Taxes payable	8,166		6,473
Accrued legal fees	24,259		16,406
Other liabilities	10,953		12,777
	$	98,370	$	102,210

~~Table of Contents~~14

~~Intangible~~Table ~~assets, net consist~~ of ~~the following:~~ Contents

	Successor
(In thousands)	March 31,2015			December 31,2014
Trade name	$	100,000		$	100,000
Customer distribution agreement		21,000			21,000
Backlog		48,000			48,000
Customer relationships		39,000			39,000
Property easement		8,344			8,344
Less: accumulated amortization		(12,346	)		(1,516	)
	$	203,998		$	214,828

11. Debt Obligations

~~Intangibles~~The ~~are~~components ~~amortized over the respective useful lives~~ of ~~the~~our ~~assets~~long-term ~~ranging~~debt ~~from~~are ~~two~~as ~~to thirty years. Amortization expense related to intangibles was $10.8 million for the period ended March~~follows: ~~31, 2015, for the Successor period and $0.4 million for the three months ended March 31, 2014, for the Predecessor period.~~

8. Restricted and Designated Cash



	Successor
(In thousands)	June 30, 2015			December 31, 2014
Non-current long-term debt
Mortgage Loan (term loan) ⁽¹⁾	$	875,000		$	875,000
Less: unamortized discount and debt financing costs	(9,325		)	(12,383		)
Long-term debt	$	865,675		$	862,617

As(1) ofCertain ~~March 31,~~affiliates ~~2015,~~of ~~the~~Blackstone ~~Company’s~~have ~~restricted~~provided ~~cash~~a ~~account~~guaranty ~~consisted~~ of ~~tokes~~certain ~~(tips)~~customary ~~earned~~non-recourse bycarve-out ~~our~~liabilities ~~CoStars~~ in ~~the Company’s~~connection ~~slot~~with ~~and table games departments of $0.8 million and~~ the ~~cash~~Mortgage ~~account funded by our partners to be used for certain capital expenditures of $0~~Loan.~~3 million.~~

AsThe ~~of March 31, 2015, the~~ Company’s ~~designated~~chose ~~cash~~early ~~account~~adoption ~~consisted~~ of ~~$29.9~~Accounting ~~million~~Standard ofUpdate ~~net~~No. 2015-3 ~~working capital~~ as adiscussed ~~result~~in ofNote ~~the Sale~~2 and ~~$6.1~~retrospectively ~~million~~applied ~~designated~~the requirements by ~~the~~presenting ~~Predecessor~~deferred tofinancing ~~fund~~costs ~~payments~~as ~~for~~a ~~certain~~direct ~~executives~~reduction ~~under~~of the ~~Exit~~underlying ~~Award Plan~~debt.

On ~~April 27, 2015,~~Mortgage ~~the~~Loan ~~$29.9 million of net working capital was paid to Deutsche Bank as final payment related to the Sale of the Company.~~ Agreement

The Company and Propco (collectively, the “Mortgage Borrowers”) entered into a Mortgage Loan agreement, dated December 19, 2014, with JPMorgan, pursuant to which the Mortgage Borrowers borrowed $875 million under a term loan. The proceeds of the Mortgage Loan were used to pay a portion of the purchase price payable in the Sale. The Mortgage Loan has an initial maturity date of January 9, 2017 and the Company has the unilateral right to three successive one-year extensions, subject to customary debt covenant compliance requirements. ~~Other~~The ~~Assets~~Mortgage Loan has an initial interest rate equal to LIBOR plus 2.95% per annum. As of June 30, 2015, LIBOR was 0.186% and the total rate was 2.99%. The Mortgage Loan is secured by a first lien on the Property and all of the other assets of the Company, including the Mortgage Interest Rate Cap as described in Note 12.

~~Other~~Our ~~long-term~~total ~~assets~~capital ~~primarily~~expenditures ~~consist~~for ofthe three months ended June 30, 2015 was less than the ~~Company’s~~required ~~base~~capital ~~stock~~expenditures per the Mortgage Loan. Under the terms of ~~china,~~the ~~glassware,~~Mortgage ~~uniforms~~Loan, ~~etc~~the difference between the required capital expenditure amount and the actual capital expenditures during the quarter should be deposited into a replacement reserve account., asThe ~~well~~Company as made a $2.8 million deposit to the ~~loss~~replacement ~~payout~~reserve account ~~for~~on ~~its~~July ~~owner~~1, ~~controlled~~2015 ~~insurance~~and ~~program~~the ~~(“OCIP”)~~amount is included in the Restricted Cash balance at June 30, 2015. Our capital activity will increase in future quarters and is expected to meet the required capital expenditures per the Mortgage Loan.

On March 30, 2015, the Company executed the First Amendment to the Mortgage Loan agreement (“First Amendment”) with JPMorgan. The First Amendment reduced the weighted average interest rate to LIBOR plus 2.80%. Under the First Amendment, the revised interest rate spread was allocated among each Component listed below. In addition, for the purpose of computing interest payable from time to time, the principal amount of the loan and certain other computations, the principal balance of the loan shall be divided into Components A-1through A-6. The principal amounts of the Components are as follows:

The Company maintained a comprehensive OCIP that provided insurance coverage for the Property during construction. The program provided the following coverage: workers’ compensation, primary general liability, excess liability, contractors’ pollution legal liability, builders’ risk and project professional liability. The general contractor and all of the subcontractors working on the Property were required to enroll in the program. We also maintain a reserve for workers’ compensation claims incurred but not reported (“IBNR”). The IBNR reserve estimate is determined on our actual historical expense experience and reporting patterns.



Component	Principal Amount (In thousands)		Interest Rate Spread
A-1	$	287,000	1.37	%
A-2	78,000		1.92	%
A-3	70,000		2.37	%
A-4	222,200		3.42	%
A-5	146,100		4.07	%
A-6	71,700		5.37	%
	$	875,000

~~In January~~Pursuant ~~2015, the Company, Deutsche Bank and National Union Fire Insurance Company of Pittsburgh, PA (“Union Fire Insurance”) entered into a Closeout Agreement whereby the parties agreed~~ to ~~closeout all~~ the ~~general~~terms ~~liability and workers compensation insurance policies established under the OCIP. As part~~ of the ~~Closeout~~Mortgage ~~Agreement~~Loan, the ~~parties~~Company ~~agreed~~is torequired ~~a final single payment amount of $7.0 million paid~~ to ~~Union~~establish ~~Fire Insurance~~ and ~~represents~~maintain ~~full~~certain ~~and~~specified ~~final~~cash ~~settlement~~accounts ofthrough ~~all obligations~~the ~~arising~~term ~~from~~of the ~~closeout~~Mortgage ~~policies~~Loan. InRefer ~~return, Union Fire Insurance waives and releases the Company with respect~~ to ~~all~~Note ~~future~~2 ~~obligations~~for ~~and~~further ~~assumes 100% first loss position under and with respect to the closeout policies~~detail.

In addition, the Closeout Agreement provided for the final distribution to the Company of the remaining funds in the cash collateral account of $12.3 million which the Company received in February and March and is reflected in our cash and cash equivalents balance at March 31, 2015. As a result of the Closeout Agreement, the Company recognized a settlement expense of $3.6 million which is reflected in corporate expense in our condensed consolidated statements of operations. 15

AtTable ~~December 31,~~of ~~2014, the IBNR reserve was $1.5 million and the OCIP fund balance was $19.3 million.~~ Contents

1412. Interest Rate Cap Agreement

~~Table~~In connection with the Sale, Propco entered into an interest rate cap agreement in order to manage interest rate risk relating to its Mortgage Loan. The interest rate cap agreement is intended to hedge a portion of ~~Contents~~the underlying interest rate risk on borrowings under the Mortgage Loan. Under this interest rate cap agreement, the Company paid $0.4 million for a maximum interest rate of 3.74% on $875 million of borrowings under the Mortgage Loan in exchange for receipts on the same amount at a variable interest rate based on the applicable LIBOR at the time of payment.

10The Company measured the fair value of its interest rate cap on a recurring basis pursuant to accounting standards for fair value measurements. ~~Accrued~~The Company categorizes this interest rate cap as Level 2, refer to Note 2 for the levels of fair value hierarchy. The fair value of the Company’s interest rate cap agreement was a minimal amount and ~~Other~~$0.2 ~~Liabilities~~million at June 30, 2015 and December 31, 2014, respectively and was included in other non-current assets in the accompanying condensed consolidated balance sheets.

~~Accrued~~13. ~~and~~Related ~~other~~Party ~~liabilities consist of the following:~~ Transactions

	Successor
(In thousands)	March 31,2015		December 31,2014
Accrued accounts payable	$	5,908	$	10,782
Accrued payroll costs		24,624		28,844
Deposits — patrons		4,090		7,272
Advance deposits		17,214		14,422
Chip liability		3,181		5,234
Taxes payable		9,114		6,473
Other liabilities		34,268		29,183
	$	98,399	$	102,210

The Company entered into an agreement with Nevada Voteco to pay for all expenses relating to Nevada Voteco and the Voteco members including costs incurred for the services of all advisors and consultants to the extent such costs are reasonable and documented related to and for the benefit of the Company. The Company paid a minimal amount and $0.2 million for the three months ended June 30, 2015 and 2014, respectively, and $0.2 million and $0.4 million during the six months ended June 30, 2015 and 2014, respectively, for such expenses incurred by Nevada Voteco on behalf of the Company.

~~11.~~Mezzanine ~~Debt Obligations~~ Loans

In connection with the Sale, affiliates of Blackstone entered into the Mezzanine Loans with JPMorgan for a total aggregate principal amount of $425 million. The ~~significant~~first ~~components~~mezzanine loan (the “Mezzanine A Loan”) was for a principal amount of ~~our~~$295 ~~long-term~~million, ~~debt~~with an interest rate of LIBOR plus 6.5% per annum. The second mezzanine loan (the “Mezzanine B Loan”) was for a principal amount of $130 million, with an interest rate of LIBOR plus 8.75% per annum. The principal amount was borrowed and used, amongst other things, to pay a portion of the purchase price in the Sale. The Company is not a borrower under the Mezzanine Loans; however, the amounts payable under such loans are, asin ~~follows:~~each case, secured by an equity interest in the Company (for the Mezzanine A Loan) and an equity interest in the entity residing directly above the Company (for the Mezzanine B Loan), among other ancillary rights afforded to equity owners. The Mezzanine Loans are also secured by a lien on the assets held in the segregated cash accounts held with JPMorgan. Further, the Company is required to pay interest on the Mezzanine Loans.

	Successor
(In thousands)	March 31,2015			December 31,2014
Non-current long-term debt
Mortgage Loan (term loan)(1)	$	875,000		$	875,000
Less: unamortized discount and debt financing costs		(10,854	)		(12,383	)
Long-term debt	$	864,146		$	862,617

The Company is not a named borrower under the Mezzanine Loans and as noted in Note 2, the Mezzanine Loans are not included as a liability on the condensed consolidated balance sheet of the Company as of June 30, 2015. The payments we make for interest on these loans are considered equity distributions to our Members. For the three months ended June 30, 2015, the total interest paid was $5.0 million and $3.0 million for the Mezzanine A Loan and Mezzanine B Loan, respectively. For the six months ended June 30, 2015, the total interest paid was $8.3 million and $4.9 million for the Mezzanine A Loan and Mezzanine B Loan, respectively and is presented as a reduction to members' equity in the condensed consolidated balance sheet at June 30, 2015.

~~(1)~~14. ~~Certain~~Income ~~affiliates of Blackstone Real Estate Partners VII LP have provided a guaranty of certain customary non-recourse carve-out liabilities in connection with the Mortgage Loan.~~Taxes

~~The~~As a result of the Sale, the Company ~~chose~~is ~~early~~organized ~~adoption~~as a limited liability company with one member that holds all of ~~Accounting~~the ~~Standard~~Class ~~Update~~B ~~No. 2015-03~~Membership Interests, which have all the economic interests in the Company, Spade Mezz, an affiliate of Blackstone, as ~~discussed~~described in Note 21, “Sale or Transfer of Members’ Equity Interests and ~~retrospectively~~Corporate ~~applied~~Structure.” ~~the requirements~~As bya ~~presenting~~limited ~~deferred~~liability ~~financing~~company, ~~costs~~the asCompany is considered a ~~direct~~flow-through ~~reduction~~entity offor U.S. income tax purposes resulting in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the ~~underlying~~responsibility ~~debt~~of its Members and no provision has been made for U.S. Federal Income Taxes.

~~Mortgage~~There ~~Loan~~was ~~Agreement~~no effective income tax rate for the three and six months ended June 30, 2015. The effective income tax rate for the three and six months ended June 30, 2014 was (35.2%) and (36.3%), respectively.

The Company and Propco (collectively, the “Mortgage Borrowers”) entered into a Mortgage Loan agreement, dated December 19, 2014, with JPMorgan, pursuant to which the Mortgage Borrowers borrowed $875 million under a term loan. The proceeds of the Mortgage Loan were used to pay a portion of the purchase price payable in the Sale. The Mortgage Loan had an initial maturity date of January 9, 2017 and the Company has the unilateral right to three successive one-year extensions, subject to customary debt covenant compliance requirements. The Mortgage Loan has an initial interest rate equal to LIBOR plus 2.95% per annum. As of December 31, 2014, LIBOR was 0.165% and the total rate was 3.12%. The Mortgage Loan is secured by a first lien on the Property and all of the other assets of the Company, including the Mortgage Interest Rate Cap as described in Note 12. 16

~~Our~~Table ~~total capital expenditures for the three months ended March 31, 2015 was less than the required capital expenditures per the Mortgage Loan. Under the terms~~ of the Mortgage Loan, the difference between the required capital expenditure amount and the actual capital expenditures during the quarter should be deposited into a replacement reserve account. The Company is in the process of segregating the funds into a separate account. Our capital activity will increase in future quarters and expect to meet the required capital expenditures per the Mortgage Loan. Contents

15The Company's major tax jurisdiction is the United States and tax years 2011, 2012 and 2013 remain open to examination. Due to the September 2014 opening of a satellite office in Canada, the Company is now subject to income tax filing requirements in Canada for this tax year and forward. For the three months ended June 30, 2015, the Company paid a minimal amount of income tax related to the Canadian satellite office.

~~Table~~During the quarter ended June 30, 2013, the IRS notified the Company that its 2011 federal income tax return was selected for examination. As of ~~Contents~~June 30, 2015, the IRS has not commenced an audit on the aforementioned tax year period nor have we received any additional correspondence regarding the matter. The Company believes that it has no uncertain tax positions; however, there is no assurance that the taxing authorities will not propose adjustments that are different than the Company’s expected outcome and impact the provision for income taxes. As applicable, we recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. For the three months ended June 30, 2015, there were no accrued penalties and/or interest.

~~On March 30, 2015, the Company executed the First Amendment to the Mortgage Loan agreement (“First Amendment”) with JPMorgan~~15. ~~The First Amendment reduced the weighted average interest rate to LIBOR plus 2.80%. Under the First Amendment~~Commitments, ~~the~~Contingencies ~~revised interest rate spread was allocated among each Component listed below. In addition, for the purpose of computing interest payable from time to time, the principal amount of the loan~~ and ~~certain other computations, the principal balance of the loan shall be divided into Components A-1 through A-6. The principal amounts of the Components are as follows:~~ Litigation

Component	Principal Amount(In thousands)		Interest Rate Spread
A-1	$	287,000		1.37	%
A-2	$	78,000		1.92	%
A-3	$	70,000		2.37	%
A-4	$	222,200		3.42	%
A-5	$	146,100		4.07	%
A-6	$	71,700		5.37	%
	$	875,000

Prior to the issuance of any of our quarterly or annual financial results and for the purposes of accrual and/or disclosure, we analyze each of our material legal proceedings and other contingencies to determine whether an estimate of a probable or reasonably possible loss or range of loss can be made based upon the facts and legal assessment of such matters. During such assessment, we consider all factors that may impact this assessment, including, without limitation, (a) the stage of the proceeding; (b) the damages, penalties and costs sought; (c) the factual matters that remain to be resolved; and (d) the legal principles that are the subject of the proceeding. It is often not possible to estimate the loss or a range of possible loss, particularly where (i) the damages sought are unsubstantiated or indeterminate; (ii) the discovery or other material legal proceedings are incomplete; (iii) the proceedings are in the early stages and there is insufficient information available to assess the viability of the stated grounds; (iv) the matters present legal uncertainties; or (v) there are significant facts in dispute. In such cases, there are considerable uncertainties regarding the resolution of the proceeding, which may preclude the determination of the reasonably possible loss or range or loss.

~~Pursuant~~Class toAction ~~the terms of the Mortgage Loan, the Company is required to establish and maintain certain specified cash accounts through the term of the Mortgage Loan. Refer to Note 2 for further detail.~~ Suits

12a. ~~Interest~~Wage ~~Rate~~and ~~Cap Agreement~~ Hour

InDuring ~~connection~~late ~~with~~2012, the ~~Sale,~~Company ~~Propco~~was ~~entered~~put ~~into~~on annotice ~~interest~~and/or ~~rate~~served ~~cap~~with ~~agreement~~two inseparate ~~order~~purported toclass ~~manage~~action ~~interest~~lawsuits ~~rate~~related ~~risk relating~~ to ~~its~~alleged ~~Mortgage~~unpaid ~~Loan.~~compensation ~~The~~for ~~interest~~time ~~rate~~incurred ~~cap~~by ~~agreement~~CoStars iswhile ~~intended~~on toProperty ~~hedge~~for adonning ~~portion~~and doffing of the ~~underlying~~CoStars’ ~~interest~~required ~~rate~~uniform, ~~risk~~alleged onimproper ~~borrowings~~rounding ~~under~~of ~~the~~time ~~Mortgage~~for ~~Loan.~~hours ~~Under~~worked ~~this~~and ~~interest~~various ~~rate~~other ~~cap~~claims ~~agreement,~~related ~~the~~to ~~Company~~alleged ~~paid~~unpaid $0compensation.4 ~~million~~One ~~for~~of ~~a maximum~~the ~~interest~~purported ~~rate~~wage ofand ~~3.74%~~hour onclass ~~$875~~action ~~million~~lawsuits ofis ~~borrowings~~pending ~~under~~in the ~~Mortgage~~Eighth ~~Loan~~Judicial inDistrict ~~exchange~~Court for ~~receipts~~Clark onCounty, ~~the~~Nevada ~~same~~(“Nevada ~~amount~~State atCourt”), aand ~~variable~~one ~~interest~~is ~~rate~~pending ~~based~~in on the ~~applicable~~U.S. ~~LIBOR~~District atCourt for the ~~time~~District of ~~payment~~Nevada.

~~The~~In ~~Company~~early ~~measured~~April 2015, the ~~fair~~Company ~~value~~commenced ofarms-length ~~its~~settlement ~~interest~~negotiations ~~rate~~leading ~~cap~~to onan aagreement ~~recurring~~in ~~basis~~principle ~~pursuant~~ to ~~accounting~~resolve ~~standards~~both ~~for~~the ~~fair~~Nevada ~~value measurements~~State Court and the U.S. District Court lawsuits. The ~~Company~~proposed ~~categorizes~~resolution ~~this~~includes ~~interest~~an ~~rate~~anticipated ~~cap~~total asnet ~~Level~~payment 2,of ~~refer~~approximately to$7.0 ~~Note~~million 2inclusive ~~for~~of the ~~levels~~opposing counsel fees and all costs of ~~fair~~administering ~~value~~the ~~hierarchy~~settlement. ~~The~~After ~~fair~~such ~~value~~expenses ofare paid, the remaining amount will comprise a settlement fund. Of this amount the Company’s ~~interest~~will ~~rate~~pay ~~cap~~out ~~agreement~~only ~~was~~that ~~$46~~portion ~~thousand~~actually ~~and~~claimed $0by putative class members.2 ~~million~~The atproposed ~~March 31, 2015~~settlement ~~and~~is ~~December 31,~~subject ~~2014,~~to ~~respectively~~approval ~~and~~by ~~was~~the ~~included~~courts. inThe ~~other~~Company ~~non-current~~recorded ~~assets~~the $7.0 million anticipated net settlement amount in the ~~accompanying~~consolidated ~~condensed~~financial ~~consolidated~~statements ~~balance~~during ~~sheets.~~the period ended March 31, 2015.

13As of June 30, 2015, a settlement agreement is in place. Agreement ~~Related~~documents ~~Party~~were ~~Transactions~~presented on July 16, 2015 and we are waiting for preliminary approval by the court.

The Company entered into an agreement with Nevada Voteco to pay for all expenses relating to Nevada Voteco and the Voteco members including costs incurred for the services of all advisors and consultants to the extent such costs are reasonable and documented related to and for the benefit of the Companyb. ~~The~~Alleged ~~Company~~unlawful ~~paid $0.1 million and $0.2 million for the three months ended March 31, 2015 and 2014, respectively, for such expenses incurred by Nevada Voteco on behalf of the Company.~~ taping/recording

~~Mezzanine~~In ~~Loans~~ September 2012, a purported class action lawsuit against the Company was filed in the Superior Court of the State of California, claiming violation of the California Penal Code regarding the alleged unlawful taping or recording of telephone calls to and from the Company. On August 31, 2012, the Company removed the case to the United States District Court for the Southern District of California. Subsequently, the Company filed a motion to dismiss, or in the alternative, to strike the class allegations. On July 15, 2013, the U.S. District Court issued an order denying these motions.

InThe ~~connection~~Company ~~with~~continues ~~the~~to ~~Sale,~~deny ~~affiliates~~all ofliability ~~Blackstone~~to ~~entered into~~ the ~~Mezzanine~~putative ~~Loans~~class ~~with~~members ~~JPMorgan~~but, ~~for~~at a ~~total~~mediation ~~aggregate~~held ~~principal amount~~on ofFebruary 20, ~~$425~~2015, ~~million. The first mezzanine loan (~~the ~~“Mezzanine~~Company Aagreed ~~Loan”)~~to ~~was~~settle ~~for~~all ~~a principal amount~~ of ~~$295~~the ~~million,~~claims ~~with~~against anit ~~interest~~in ~~rate~~this ofmatter ~~LIBOR plus 6.5% per annum. The second mezzanine loan (the “Mezzanine B Loan”) was~~ for a ~~principal~~total ~~amount~~payment of $~~130~~14.5 million, ~~with~~recorded anin ~~interest~~the ~~rate~~period ofended ~~LIBOR~~December ~~plus~~31, 82014.~~75% per~~ ~~annum.~~ The ~~principal~~ amount ~~was~~is ~~borrowed~~inclusive ~~and~~of ~~used,~~all ~~amongst~~attorneys’ ~~other~~fees ~~things,~~ to ~~pay~~the aputative ~~portion~~class ofcounsel ~~the~~and ~~purchase~~all ~~price~~costs inof administering the ~~Sale~~settlement. The Company ~~is not a borrower under the Mezzanine Loans; however~~, the ~~amounts~~plaintiff ~~payable under such loans are, in each case, secured by an equity interest in the Company (for the Mezzanine A Loan)~~ and ~~an equity interest in~~ the ~~entity~~putative ~~residing~~class ~~directly~~counsel ~~above~~have ~~the~~reached ~~Company (for the Mezzanine B Loan), among other ancillary rights afforded to equity owners. The Mezzanine Loans are also secured by~~ a ~~lien~~settlement onagreement ~~the assets held in the segregated cash accounts held with JPMorgan. Further, the Company is required to pay interest on the Mezzanine Loans. Since the~~

16 17

Table of Contents

~~Company~~and ispresented ~~not~~their asettlement ~~named~~agreement ~~borrower~~for ~~under~~preliminary ~~the~~approval ~~Mezzanine~~by ~~Loans,~~the ~~payments~~U.S. weDistrict ~~make~~Court ~~for~~on ~~interest~~May 8, on2015. ~~these~~The ~~loans~~matter ~~are~~is ~~considered~~presently ~~equity~~under ~~distributions~~consideration toby ~~our~~the ~~Members~~Court. ~~For~~If the ~~period~~settlement ~~ended~~agreement ~~March 31~~is preliminarily approved, ~~2015,~~ the ~~total~~Court ~~interest~~will ~~paid~~schedule ~~was~~a ~~$3.2~~final ~~million~~fairness ~~and~~hearing ~~$1.9~~to ~~million~~determine ~~for~~whether the ~~Mezzanine~~settlement Ais ~~Loan and Mezzanine B Loan~~fair, ~~respectively,~~reasonable and isadequate ~~presented~~and aswhether ~~distribution~~judgment toshould ~~Members~~be ~~in the condensed consolidated balance sheet at March 31, 2015~~entered.

~~14.~~Commitments ~~Income~~and ~~Taxes~~Other Legal Proceedings

~~For the three months ended March 31, 2015 and 2014, the effective income tax rate was 0% and (37.4%), respectively. As~~ a result of the Sale, the Company is organized as a limited liability company with one member that holds all of the Class B Membership Interests, which have all the economic interests in the Company, Spade Mezz, an affiliate of Blackstone, as described in Note 1, “Sale or Transfer of Members’ Equity Interests and Corporate Structure.” AsProperty aGeneral ~~limited~~Contractor liability company, the Company is considered a flow-through entity for U.S. income tax purposes resulting in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the responsibility of its Member and noother ~~provision~~purchase ~~has been made for U.S. Federal Income Taxes.~~ obligations

~~Due~~During 2015, the Company engaged Team Construction Management, Inc. ("TCM") to act as the ~~September~~general ~~2014~~contractor ~~opening~~for the build-out of aour ~~Canadian~~west ~~satellite~~tower ~~office~~rooms. As of June 30, ~~the~~2015, ~~Company~~amounts isexpected ~~now~~to ~~subject~~be paid to ~~income~~TCM ~~tax~~under ~~filing~~executed ~~requirements~~contracts totaled in$6.0 ~~Canada~~million. ~~As such~~Including this commitment, the Company’s ~~tax~~had ~~jurisdictions~~total ~~are~~construction ~~the~~commitments ~~United~~of ~~States~~$8.9 ~~and~~million ~~Canada~~as of June 30, 2015.

~~During the quarter ended June 30, 2013, the IRS notified the Company that its 2011 federal income tax return was selected for examination~~b. AsCondominium ofHotel March 31, 2015, the IRS has not commenced an audit on the aforementioned tax year period nor have we received any additional correspondence regarding the matter. The Company believes that it has no uncertain tax positions; however, there is no assurance that the taxing authorities will not propose adjustments that are different than the Company’s expected outcome and impact the provision for income taxes. As applicable, we recognize accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes. For the three months ended March 31, 2015, there were no accrued penalties and/or interest. Litigation

15As disclosed in prior periods, the Company was a named defendant in a number of lawsuits and arbitrations concerning the purchase and sale of condominium hotel units located within the East and West Towers of the Property. ~~Commitments~~The thrust of the claims were virtually the same in every matter. The plaintiffs alleged, ~~Contingencies~~among other things, that the project had materially changed and ~~Litigation~~that delays in the completion of the Property constituted a material breach by the Company, thus permitting the plaintiff/purchaser to rescind their contract and receive a full refund of their earnest money deposit, plus interest thereon. The Company was represented in each of these matters by outside legal counsel. At June 30, 2015, there were four condominium hotel units remaining in various stages of litigation. The Company has prevailed on the merits and has obtained arbitration awards and/or judgments in each of the four matters. The Company is now in the process of responding to and defending against post-award or post-judgment appeals or other proceedings in these matters. Management has determined that based on the proceedings to date, it is currently unable to determine the probability of the outcome of these actions. However, in the opinion of management, any settlement amount in these matters is not expected to be material to the consolidated financial statements of the Company.

Prior to the issuance of any of its quarterly or annual financial results and for the purposes of accrual and/or disclosure, we analyze each of our material legal proceedings and other contingencies to determine whether an estimate of a probable or reasonably possible loss or range of loss can be made based upon the facts and legal assessment of such matters. During such assessment, we consider all factors that may impact this assessment, including, without limitation, (a) the stage of the proceeding; (b) the damages, penalties and costs sought; (c~~) the factual matters that remain to be resolved; and (d) the legal principles that are the subject of the proceeding~~. ItVegas is often not possible to estimate the loss or a range of possible loss, particularly where (i) the damages sought are unsubstantiated or indeterminate; (ii) the discovery or other material legal proceedings are incomplete; (iii) the proceedings are in the early stages and there is insufficient information available to assess the viability of the stated grounds; (iv) the matters present legal uncertainties; or (v) there are significant facts in dispute. In such cases, there are considerable uncertainties regarding the resolution of the proceeding, which may preclude the determination of the reasonably possible loss or range or loss. Nocturne

~~Class~~In ~~Action~~July ~~Suits~~2014, the Company announced the closure of the Vegas Nocturne live entertainment performance show at Rose. Rabbit. Lie. and based upon contractual terms, the cessation of its relationship with Spiegelworld CSC, LLC (“Spiegelworld”). On August 6, 2014, Spiegelworld filed a complaint in the District Court of Clark County, Nevada, alleging among other things, causes of action for breach of contract and declaratory relief.

On May 7, 2015, the Company and Spiegelworld entered into a settlement agreement. ~~Wage~~ Neither party admitted any liability to the other and ~~Hour~~both have agreed to dismissal of the lawsuit. The terms of the settlement did not have a material impact to the condensed consolidated financial statements of the Company. As of June 30, 2015, the claim is settled and final.

During late 2012, the Company was put on notice and/or served with two separate purported class action lawsuits related to alleged unpaid compensation for time incurred by CoStars while on Property for donning and doffing of the CoStars’ required uniform, alleged improper rounding of time for hours worked and various other claims related to alleged unpaid compensationd. ~~One~~Morris ofSchneider the purported wage and hour class action lawsuits is pending in the Eighth Judicial District Court for Clark County, Nevada (“Nevada State Court”), and one is pending in the U.S. District Court for the District of Nevada. Wittstadt

17On June 19, 2015, a lawsuit was filed against the Company in the United States District Court for the District of Nevada by Morris Schneider Wittstadt, LLC., a Georgia law firm. Among other facts, the lawsuit alleges that the firm’s managing partner used partnership funds to game at the Company’s casino. The suit asserts various related claims against the Company, including aiding and abetting a breach of fiduciary duty. In the opinion of management, this litigation is not expected to have a material adverse impact on the consolidated financial statements of the Company. The Company believes that it has meritorious defenses with respect to this matter and intends to defend its position vigorously.

~~Table~~e. ofOther ~~Contents~~Matters

InThe ~~early April 2015, the~~ Company ~~commenced~~is ~~arms-length~~also ~~settlement~~subject ~~negotiations leading~~ to ~~an agreement~~various inother ~~principle~~ordinary toand ~~resolve~~routine ~~both~~claims ~~the~~and ~~Nevada~~litigation ~~State~~arising ~~Court~~in ~~and~~ the ~~U.S.~~normal ~~District~~course ~~Court lawsuits. The proposed resolution includes a total payment~~ of ~~approximately $7~~business.0 ~~million~~In ~~inclusive of~~ the ~~opposing~~opinion ~~counsel~~of ~~fees~~management, ~~and~~ all ~~costs~~pending ofother ~~administering the~~legal ~~settlement.~~matters ~~After such expenses~~ are ~~paid,~~either ~~the~~adequately ~~remaining~~covered ~~amount~~by ~~will~~insurance ~~comprise~~or, aif ~~settlement~~not ~~fund.~~insured, ~~Of this amount the Company~~ will ~~pay~~not ~~out~~have ~~only~~a ~~that~~material ~~portion~~adverse ~~actually~~impact ~~claimed~~on ~~by putative class members. The proposed settlement is subject to approval by~~ the ~~courts. The Company recorded the $7.0 million proposed settlement agreement in accrued and other liabilities in the condensed~~ consolidated ~~balance~~financial ~~sheet~~position, ascash ~~of March 31~~flows, ~~2015~~or ~~and in corporate expense in~~ the ~~condensed~~results ~~consolidated statement~~ of operations ~~for~~of the ~~three months ended March 31, 2015~~Company.

~~b. Alleged unlawful taping/recording~~ 18

~~During~~Table ~~the quarterly period that ended September 30, 2012, a purported class action lawsuit against the Company was filed in the Superior Court~~ of the State of California, claiming violation of the California Penal Code regarding the alleged unlawful taping or recording of telephone calls to and from the Company. On August 31, 2012, the Company removed the case to the United States District Court for the Southern District of California. Subsequently, the Company filed a motion to dismiss, or in the alternative, to strike the class allegations. On July 15, 2013, the U.S. District Court issued an order denying these motions. Contents

The Company continues to deny all liability to the putative class members but, at a mediation held on February 20, 2015, the Company agreed to settle all of the claims against it in this matter for a total payment of $1416.5 ~~million,~~Membership inclusive of all attorneys’ fees to the putative class counsel and all costs of administering the settlement. The Company, the plaintiff and the putative class counsel have reached a settlement agreement and presented their settlement agreement for preliminary approval by the U.S. District Court on May 8, 2015. The matter is presently under consideration by the Court. If the settlement agreement is preliminarily approved, the Court will schedule a final fairness hearing, at which it will determine whether the settlement is fair, reasonable and adequate and whether judgment should be entered. Interests

~~Commitments~~On December 18, 2014, Spade Voteco received approval from the Gaming Commission to acquire control of the Company. In connection with such approval and ~~Other~~with ~~Legal~~the ~~Proceedings~~completion of the Class B Sale, on December 19, 2014, Nevada Voteco transferred 100% of the Class A Membership Interests in Nevada Property to Spade Voteco for nominal consideration.

As a result of the Sale, Spade Voteco now has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz now holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. ~~Condominium~~Except ~~Hotel~~as ~~Litigation~~provided by law, the Class B Membership Interests have no voting rights.

As disclosed in prior periods, the Company was a named defendant in a number of lawsuits and arbitrations concerning the purchase and sale of condominium hotel units located within the East and West Towers of the Property17. ~~The~~Subsequent thrust of the claims were virtually the same in every matter. The plaintiffs alleged, among other things, that the project had materially changed and that delays in the completion of the Property constituted a material breach by the Company, thus permitting the plaintiff/purchaser to rescind their contract and receive a full refund of their earnest money deposit, plus interest thereon. The Company was represented in each of these matters by outside legal counsel. At March 31, 2015, there were two condominium hotel units remaining under litigation. The Company and the putative class counsel are presently negotiating a formal settlement agreement with no definite progress to date. Management has determined that based on the proceedings to date, it is currently unable to determine the probability of the outcome of this action. However, any settlement amount is not expected to have a material effect on the Company’s condensed consolidated financial statements. Events

bOn August 6, 2015, our indirect parent and an affiliate of Blackstone, approved an equity-compensation plan (the “Promote Plan”) and granted members of management, including our named executive officers, equity in the form of Class B Units in such parent entity. ~~Vegas~~Refer ~~Nocturne~~to Part II, Item 5 - "Other Information" for further detail.

InAn ~~July~~isolated ~~2014,~~portion ~~the Company announced the closure~~ of the ~~Vegas~~Property ~~Nocturne~~was ~~live~~damaged ~~entertainment~~by ~~performance~~a ~~show~~fire aton ~~Rose.~~July ~~Rabbit.~~25, ~~Lie~~2015., ~~and, based~~The ~~upon~~Company ~~contractual~~is ~~terms,~~in the ~~cessation~~process of ~~its~~assessing ~~relationship~~the ~~with~~extent ~~Spiegelworld~~of ~~CSC,~~the ~~LLC (“Spiegelworld”). On August 6~~damage, ~~2014,~~which ~~Spiegelworld~~is ~~filed~~not aexpected ~~complaint~~to inbe ~~the~~significant. ~~District~~The ~~Court~~Company ofbelieves ~~Clark~~damages ~~County,~~are ~~Nevada,~~covered ~~alleging~~under ~~among~~the ~~other~~Company's ~~things, causes~~insurance ofpolicies ~~action~~and ~~for~~any ~~breach~~potential ofexposure ~~contract~~will ~~and~~not ~~declaratory~~be ~~relief~~material.

On August 28, 2014, the Company filed an answer and counterclaim against Spiegelworld in the District Court of Clark County, Nevada, alleging, among other things, causes of action for breach of contract, fraud, breach of fiduciary duties and injunctive relief. On November 17, 2014, the District Court issued an order dismissing the Company’s fraud claim without prejudice. On March 18, 2015, the Company and 19

18Table of Contents

~~Table~~Item 2 — Management’s Discussion and Analysis of ~~Contents~~Financial Condition and Results of Operations

~~Spiegelworld~~Sale ~~tentatively~~or ~~agreed~~Transfer ~~upon~~of ~~terms~~Members’ toEquity ~~settle~~Interests ~~this matter, but such settlement is subject to final documentation~~ and ~~approval~~Corporate by the parties and the court. On May 7, 2015, the Company and Spiegelworld entered into a settlement agreement. Neither party admits any liability to the other and both have agreed to dismissal of the lawsuit. The terms of the settlement did not have a material impact to the condensed consolidated financial statements for the period ended March 31, 2015. Structure

cOn December 18, 2014, Spade Voteco, received approval from the Gaming Commission to acquire control of the Company. ~~Other~~In ~~Matters~~connection with such approval, and with the completion of the Class B Sale (as defined below), on December 19, 2014, Nevada Voteco transferred 100% of the Class A Membership Interests in Nevada Property to Spade Voteco for nominal consideration.

~~The~~On ~~Company~~December 19, is2014, ~~also~~Nevada ~~subject~~Mezz, toan ~~various~~affiliate ~~other~~of ~~ordinary~~Deutsche ~~and~~Bank, ~~routine~~completed ~~claims~~its ~~and~~previously ~~litigation~~announced ~~arising~~sale in (the ~~normal~~“Class ~~course~~B Sale”) of ~~business.~~100% Inof the ~~opinion~~ ofClass ~~management,~~B ~~all~~Membership ~~pending~~Interests ~~other~~to ~~legal~~Spade ~~matters~~Mezz, ~~are~~an ~~either~~affiliate ~~adequately~~of ~~covered~~Blackstone byfor ~~insurance~~cash ~~or,~~consideration ifof ~~not~~$1.73 ~~insured,~~billion ~~will~~plus ~~not~~Nevada ~~have~~Property’s aworking ~~material~~capital ~~adverse~~of ~~impact~~$49.4 onmillion ~~the~~as ~~consolidated~~determined ~~financial~~pursuant ~~position,~~to ~~cash flows, or~~ the ~~results~~provisions of ~~operations~~the ofpurchase ~~the Company~~agreement.

16As a result of the Sale, Spade Voteco has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law, the Class B Membership Interests have no voting rights.

~~On December 18, 2014,~~ Spade Voteco ~~received~~and ~~approval~~Spade ~~from~~Mezz ~~the~~are ~~Gaming~~collectively ~~Commission~~referred to ~~acquire~~as ~~control of~~ the ~~Company.~~“Members” ~~In connection~~within ~~with~~this ~~such~~Quarterly ~~approval~~Report ~~and with the completion of the Class B Sale,~~ on ~~December 19,~~Form ~~2014, Nevada Voteco transferred 100% of the Class A Membership Interests in Nevada Property to Spade Voteco for nominal consideration~~10-Q.

AsThe aCosmopolitan result of the Sale, Spade Voteco now has 100% voting control over Nevada Property through its ownership of all of the Class A Membership Interests and Spade Mezz now holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law, the Class B Membership Interests have no voting rights.

~~17. Subsequent Events~~ Overview

InWe ~~early~~are ~~April~~a ~~2015,~~luxury ~~the~~resort ~~Company~~casino ~~commenced~~and ~~arms-length~~hotel ~~settlement~~on ~~negotiations leading to an agreement in principle to resolve both~~ the ~~Nevada~~Las ~~State~~Vegas ~~Court~~Strip. ~~and~~We ~~the~~own Uapproximately 8.S.5 ~~District~~acres ~~Court~~directly ~~lawsuits~~between ~~related~~MGM toResorts ~~the~~International’s ~~wage~~Bellagio and ~~hour~~City ~~cases~~Center properties. The ~~proposed~~Cosmopolitan ~~resolution~~is ~~includes~~connected ato ~~total~~City ~~payment~~Center ofto ~~approximately~~the ~~$7.0~~south ~~million~~via asan ~~discussed~~elevated inpedestrian ~~Note~~bridge ~~15.~~and ~~The~~to ~~Company recorded~~ the ~~$7.0 million~~east ~~proposed~~side ~~settlement~~of ~~agreement in accrued and other liabilities in~~ the ~~condensed~~Las ~~consolidated~~Vegas ~~balance~~Strip ~~sheet~~via asa ofsecond ~~March 31,~~pedestrian ~~2015~~bridge and inhas ~~corporate~~ground ~~expense~~floor inpublic ~~the~~access ~~condensed~~from ~~consolidated~~the ~~statement~~Bellagio ofto ~~operations for~~ the ~~three months ended March 31, 2015~~north.

19The Cosmopolitan features the following:

~~Table~~• Approximately 100,000-square-feet of ~~Contents~~casino space, offering 24-hour gaming and a full range of games. The casino level also contains several destination bar/lounge areas, including the three-story “Chandelier Bar” a feature attraction as well as an intimate entertainment lounge used to bring live performances to the gaming floor;

~~Item 2~~• —Two ~~Management’s~~luxury ~~Discussion~~hotel towers with condominium hotel style rooms with expansive terraces, recreation and ~~Analysis~~leisure offacilities ~~Financial Condition~~including a 50,000-square-foot spa and ~~Results~~hammam facility, two fitness centers, tennis courts, swimming pools and private cabanas. and approximately 152,000-square-feet of ~~Operations~~ meeting and convention space;

~~Sale~~• orIn ~~Transfer~~addition, we offer a collection of ~~Members’~~distinctive ~~Equity~~restaurants, ~~Interests~~managed and ~~Corporate~~operated ~~Structure~~by experienced world class third-party restaurateurs;

On• ~~December 18,~~Our ~~2014,~~retail ~~Spade~~offering ~~Voteco,~~showcases ~~received~~nine ~~approval~~eclectic ~~from~~retail ~~the~~boutiques ~~Gaming~~in ~~Commission to acquire control of the Company. In connection with such approval~~36,000-square-feet ~~and with the completion~~ of ~~the~~contiguous ~~Class B Sale (as defined below), on December 19, 2014, Nevada Voteco transferred 100% of the Class A Membership Interests in Nevada Property to Spade Voteco for nominal consideration.~~ space;

On• ~~December 19,~~We ~~2014,~~feature ~~Nevada~~a ~~Mezz~~cutting edge, anworld ~~affiliate~~class ofnightclub ~~Deutsche~~and ~~Bank,~~dayclub. ~~completed~~The ~~its~~31,000-square-foot ~~previously~~Marquee ~~announced~~Nightclub ~~sale~~encompasses ~~(the~~all ~~“Class B Sale”)~~ of ~~100% of~~ the ~~Class~~features ~~B Membership Interests to Spade Mezz, an affiliate~~ of ~~Blackstone~~a ~~for~~major ~~cash~~Las ~~consideration~~Vegas ofintegrated ~~$1.73~~resort ~~billion~~nightclub, ~~plus~~including ~~Nevada~~two ~~Property’s~~distinct ~~working~~ultra-lounge ~~capital~~experiences ofand ~~$49.4~~a ~~million~~Dayclub; ~~as as determined pursuant to the provisions of the purchase agreement.~~ and

As• aOur ~~result~~integrated ofentertainment ~~the~~venue ~~Sale~~The Chelsea, ~~Spade~~is ~~Voteco~~a ~~now~~65,000-square-foot, ~~has~~multi-use ~~100%~~event ~~voting~~center ~~control~~that ~~over~~can ~~Nevada~~accommodate ~~Property~~up ~~through~~to its ownership of all of the Class A Membership Interests and Spade Mezz now holds 100% economic control over Nevada Property through its ownership of all of the Class B Membership Interests. Except as provided by law3,200 ~~the Class B Membership Interests have no voting rights~~guests.

~~Spade~~Construction ~~Voteco~~ and ~~Spade~~Future ~~Mezz are collectively referred to as the “Members” within this Quarterly Report on Form 10-Q.~~ Development

In late 2014, the Company began a redesign project with respect to certain floors of the West Tower which is expected to add 47 additional rooms. The ~~Cosmopolitan~~project is expected to be completed in late 2015.

~~Property Location~~ 20

~~The~~Table ~~Cosmopolitan comprises approximately 8.5 acres~~ of land and is located on the Las Vegas Strip directly between MGM Resorts International’s Bellagio and City Center properties. The Cosmopolitan is connected to City Center to the south via an elevated pedestrian bridge and to the east side of the Las Vegas Strip via a second pedestrian bridge, and has ground floor public access from the Bellagio to the north. Contents

~~The~~Basis ~~Casino~~of Presentation

~~The~~References ~~100,000-square-foot~~in ~~casino~~this ~~features~~Quarterly ~~the~~Report ~~latest~~on inForm ~~gaming~~10-Q ~~technology~~to ~~offered~~“Successor” inand a“Successor ~~modern,~~Period” ~~energetic~~refer ~~atmosphere.~~to Atthe ~~March 31,~~Company ~~2015,~~on ~~the casino~~or ~~floor~~after ~~included 1~~December 19,~~371~~ ~~slot~~2014 ~~machines~~ and ~~129~~reflect ~~table~~assets ~~games,~~and ~~with~~liabilities ~~immediate~~at ~~guest~~fair ~~access~~value ~~from~~by ~~each~~allocating of the ~~East~~Company’s ~~and~~enterprise ~~West~~value ~~Towers~~to ~~and~~its isassets ~~accessible~~and ~~directly~~liabilities ~~from~~pursuant ~~the~~to ~~Las~~accounting ~~Vegas~~guidance ~~Strip.~~related ~~The~~to ~~casino~~business ~~level~~combinations. ~~also~~References ~~contains~~to ~~several~~“Predecessor” ~~destination~~and ~~bar/lounge areas, including the three-story~~ “~~Chandelier~~Predecessor ~~Bar~~Period” arefer ~~feature attraction as well as an intimate entertainment lounge used~~ to ~~bring live performances to~~ the ~~gaming~~Company ~~floor.~~on ~~The~~or ~~casino~~before ~~also~~December 18, ~~has~~2014 ~~two~~and ~~separate~~reflect ~~high~~the ~~limit~~historical ~~areas~~accounting ~~catering~~basis ~~specifically to~~in ~~our~~the ~~higher~~Predecessor’s ~~limit~~assets ~~clientele.~~and liabilities.

We have presented the results of the Predecessor for the three and six months ended June 30, 2014 for comparison purposes. The ~~Hotel~~discussion of our results of operations contains a comparison of our results for the three and six months ended June 30, 2015 and the results for the Predecessor for the three and six months ended June 30, 2014. The application of accounting guidance related to business combinations did not materially affect the Company’s continuing operations; however, the three and six months ended June 30, 2014 may reflect results that are not fully comparable on a period-by-period basis, particularly with respect to depreciation, amortization and interest expense.

AsResults of the Phase I opening on December 15, 2010, the 50-story East and 52-story West Towers comprised 1,998 hotel and condominium hotel style rooms ranging in size from 730-square-feet to over 5,400-square-feet in addition to ten three-story bungalow-style suites adjacent to the west pool deck. The rooms feature contemporary bespoke room décor featuring spacious living areas, luxurious bathrooms, state-of-the-art technology control panels, flat-screen televisions, entertainment systems, wireless internet and a custom in-room bar. The condominium hotel style rooms offer expansive terraces with dazzling views of the Strip. Subsequent to the completion of Phase I, completion of Phase II resulted in an additional 961 hotel and condominium hotel-style units located in the West Tower, bringing the total rooms available to 2,959. Operations

InThe ~~late~~following ~~2014,~~tables ~~the~~present ~~Company~~selected ~~began~~historical afinancial ~~redesign~~data ~~project~~from ~~with~~the ~~respect~~condensed toconsolidated ~~certain~~statements ~~floors~~ of operations for the ~~West~~periods ~~Tower~~indicated. ~~which~~The ishistorical ~~expected~~results toare ~~add~~not 47necessarily ~~additional rooms.~~indicative ~~The~~of ~~project~~the isresults ~~expected~~of operations to be ~~completed~~expected in ~~late~~the ~~2015~~future.

The Company’s operations are conducted entirely at the Property, which includes hotel, casino, food and beverage, retail and other related operations. Given the integrated nature of the Property’s operations, the Company is considered to have one operating segment.



	Successor			Predecessor
(Unaudited — In thousands)	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014
Net revenues	$	199,578		$	200,110
Operating expenses, excluding depreciation and amortization	148,635			169,426
Depreciation and amortization	27,535			42,252
Operating income/(loss)	23,408			(11,568		)
Other expense	(8,082		)	(9,407		)
Income/(loss) before income taxes	15,326			(20,975		)
Income tax (expense)/benefit	(10		)	7,383
Net income/(loss)	15,316			(13,592		)



	Successor			Predecessor
(Unaudited — In thousands)	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Net revenues	$	389,415		$	382,976
Operating expenses, excluding depreciation and amortization	308,915			321,490
Depreciation and amortization	54,995			83,942
Operating income/(loss)	25,505			(22,456		)
Other expense	(15,517		)	(18,789		)
Income/(loss) before income taxes	9,988			(41,245		)
Income tax (expense)/benefit	(10		)	14,965
Net income/(loss)	9,978			(26,280		)

~~The~~Operating ~~top four floors of the East Tower and an undeveloped restaurant space will be completed at a later date as the Company deems appropriate based on various factors, including market conditions.~~ Measures

~~Food and Beverage Including the Restaurant Collection~~ 21

~~The~~Table ~~Cosmopolitan offers a number~~ of casual dining options for our guests, including a premier buffet, a poolside grill, a casual restaurant on the casino level, a pizzeria and in-room dining options available twenty-four hours a day, seven days a week. The Cosmopolitan also incorporates a number of bars, lounges and destination venues which collectively feature a comprehensive cocktail and wine program, offering our guests a wide range of the finest in beverage options. In addition, The Cosmopolitan offers a collection of eight distinctive restaurants, managed and operated by experienced world class third-party restaurateurs. Contents

~~Retail~~Certain gaming and hospitality industry specific statistics are included in the discussion of our operating performance. These statistics are defined below:

~~Our~~• ~~retail~~The ~~offerings~~table ~~showcase~~games ~~nine~~hold ~~eclectic~~percentage ~~retail~~is ~~boutiques on~~ the ~~second~~percentage ~~level~~ of ~~the~~drop ~~podium in 36,000-square-feet of contiguous space. A sizeable~~ (amount of ~~foot~~cash ~~traffic~~and ~~naturally~~markers ~~flows~~issued; ~~through~~net ~~our~~markers ~~second~~paid ~~floor~~at ~~retail space, as this is~~ the ~~primary~~gaming ~~pathway~~table ~~for~~with ~~Las~~cash ~~Vegas~~or ~~visitors~~chips) tothat ~~travel~~is ~~north~~won ~~and~~by ~~south~~the ~~between~~Property ~~City Center~~ and ~~Bellagio.~~recorded ~~Our~~as ~~retail operators were selected to fit with our overall brand image and profile, and offer our guests a range of accessible, distinctive retail options~~revenue.

~~Nightclub,~~• ~~Recreation Deck~~Average ~~and~~Daily ~~Event~~Rate ~~Center~~(“ADR”) is calculated by dividing total hotel revenue by total rooms occupied.

~~The~~• ~~Cosmopolitan~~Revenue ~~features~~per anAvailable ~~integrated~~Room ~~entertainment venue of 56,000-square-feet including a cutting edge, world class nightclub operation called “Marquee Nightclub & Dayclub at The Cosmopolitan”~~ (“~~Marquee~~REVPAR”). ~~The 31,000-square-feet Marquee Nightclub~~ is ~~located~~calculated atby ~~the~~dividing ~~top~~total ~~of the podium between the two~~ hotel ~~towers.~~revenue ~~The~~by ~~Marquee encompasses~~total ~~all~~rooms ~~of the features of a major Las Vegas integrated resort nightclub, including two distinct ultra-lounge experiences and a Dayclub~~available. The Dayclub operates from April through October, and was first opened in April 2011. It features 25,000-square-feet of entertainment space including two pools, several bars, a gaming area comprised of nine table games and grand cabanas with individual infinity pools. On December 29, 2013, we opened The Chelsea, our 65,000-square-foot, multi-use event center and entertainment venue that can accommodate up to 3,200 guests. This performance space and group venue allows our group customers to book entertainment offerings, larger conventions, presentations and dinners as well as product launches and other branding events.

~~Spa~~Our financial results are dependent upon the number of patrons we attract to our Property and the amounts those guests spend per visit. Additionally, ~~Salon~~our operating results may be affected by, among other things, overall economic conditions impacting the disposable income of our guests, weather conditions affecting our Property, achieving and ~~Fitness~~maintaining ~~Centers~~cost efficiencies, competitive factors, gaming tax increases and other regulatory changes, the commencement of new gaming operations, charges associated with debt refinancing, construction at our existing facility and general public sentiment regarding travel. We may experience significant fluctuations in our quarterly operating results due to seasonality, variations in gaming hold percentages and other factors. Consequently, our operating results for any quarter or fiscal year are not necessarily comparable and may not be indicative of future periods’ results.

~~Our~~Three ~~integrated~~Months ~~resort~~Ended ~~offers~~June ~~a 50~~30,~~000-square-foot~~ ~~spa~~2015 ~~and~~Compared ~~hammam~~to ~~facility, located at~~ the ~~base~~Three ofMonths ~~the~~Ended ~~West~~June ~~Tower. Our spa and hammam is a key element in the overall offerings to our guests and offers a level of quality~~30, ~~service and experience that we believe competes with the best spa offerings in the Las Vegas market.~~ 2014

Separately, the Property also offers two fitness centers, one in the East Tower and the other in the West Tower (including tennis courts), offering our guests twenty-four hours a day, seven days a week access to high quality fitness and exercise equipment. Revenues

~~Convention~~As compared to the three months ended June 30, 2014, our gross and ~~Banquet~~ ~~Facility~~net revenues for the three months ended June 30, 2015 decreased by 0.7% and 0.3%, respectively, representing incremental gross and net revenue dollar decreases of $1.7 million and $0.5 million, respectively.

Our revenues for the applicable periods were as follows:

Our 152,000-square-foot convention and banquet facility is located on the second, third and fourth levels of the podium. The space is designed for maximum flexibility and can accommodate everything from small group meetings to large conferences. Directly beneath the hotel towers, the location of the ballroom space is unique to the Las Vegas market, allowing convention attendees immediate, direct access from the hotel towers to the meeting space. The space features full high speed Wi-Fi coverage and support capabilities to enable all modern meeting technology requirements.



	Successor			Predecessor
(Unaudited — In thousands)	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014
Revenues:
Casino	$	62,142		$	51,381
Hotel	80,268			80,773
Food and beverage	85,634			95,280
Entertainment, retail and other	7,965			10,298
Gross revenues	236,009			237,732
Less -- promotional allowances	(36,431		)	(37,622		)
Net revenues	$	199,578		$	200,110

21For the comparable 2015 and 2014 periods, our casino revenues consisted of table games and slots, with our casino revenues increasing by 20.9% over 2014. The table games revenue increased 24.9% due to increased volume of play for the three months ended June 30, 2015. Slots revenue grew 11.4%, a slower growth rate than table games for the three months ended June 30, 2015. Our focus continues to be on supplementing the level of table games play at the Property, from both domestic and international customers. We also continue to focus our efforts on increasing the volume of slot play through leveraging our unique Identity Membership and Rewards Program, building our database of slot customers, expanding our alliance program and continuing to introduce a variety of slot promotions. Our marketing efforts combined with main floor optimization has contributed to the increase in growth and higher volumes. In addition, our Baccarat volume increased due to various tournaments offered during the quarter.

~~Table~~For the three months ended June 30, 2015, hotel revenues declined 0.6% compared to the second quarter of ~~Contents~~2014. The decrease was driven by occupancy decreasing 0.6 percentage points. The lower occupancy levels in the three months ended June 30, 2015, reflect lower group base combined with reduced low-end casino Identity comp room nights and ADR remaining flat at $315. We may experience declines in hotel revenue in future periods as the mix of customers may change.

~~Basis~~The oftable ~~Presentation~~below sets forth our room and occupancy measures related to our operations.

References in this Quarterly Report on Form 10-Q to “Successor” and “Successor Period” refer to the Company on or after December 19, 2014 and reflect assets and liabilities at fair value by allocating the Company’s enterprise value to its assets and liabilities pursuant to accounting guidance related to business combinations. References to “Predecessor” and “Predecessor Period” refer to the Company on or before December 18, 2014 and reflect the historical accounting basis in the Predecessor’s assets and liabilities. 22

WeTable ~~have presented the results~~ of the Predecessor for the quarter ended March 31, 2014 for comparison purposes. The discussion of our results of operations contains a comparison of our results for the quarter ended March 31, 2015 and the results for the Predecessor for the quarter ended March 31, 2014. The application of accounting guidance related to business combinations did not materially affect the Company’s continuing operations; however, the quarter ended March 31, 2014 may reflect results that are not fully comparable on a period-by-period basis, particularly with respect to depreciation, amortization and interest expense. Contents

Results of Operations



	Successor		Predecessor
	Three Months Ended June 30, 2015		Three Months Ended June 30, 2014		Percent Change (a)
Occupancy	94.5	%	95.1	%	(0.6	)
ADR	$315		$315		—
RevPAR	$298		$299		(0.3	)

~~The~~(a) ~~following~~Except ~~tables~~occupancy, ~~present~~which ~~selected~~is ~~historical~~presented ~~financial~~as ~~data~~a ~~from~~percentage ~~the~~point ~~condensed consolidated statements of operations for the periods indicated~~change. ~~The historical results are not necessarily indicative of the results of operations to be expected in the future.~~

~~The Company’s~~Food ~~operations~~and ~~are~~beverage ~~conducted~~revenues ~~entirely~~for at the ~~Property~~three months ended June 30, ~~which~~2015, ~~includes~~decreased ~~hotel~~$9.6 million or (10.1%), ~~casino~~when compared to the three months ended June 30, ~~food~~2014. Food and beverage revenues generated from restaurants, ~~retail~~banquets and ~~other~~conventions, ~~related~~in-room ~~operations.~~dining ~~Given~~and ~~the~~bars ~~integrated~~include ~~nature~~revenues offrom ~~the~~all ~~Property’s~~Company-operated ~~operations~~outlets, as well as the third-party operated food and beverage outlets which are wholly-owned by the Company. isThe ~~considered~~factors that contributed to ~~have~~ the decrease in food and beverage revenue were (i) $3.1 million decline in Marquee revenue due to increased competition; (ii) $3.0 million revenue decline in Rose. Rabbit. Lie. due to the change in operational concept; (iii) $2.0 million decline in banquets revenue due to fewer group room nights; (iv) $1.2 million revenue decline due to the closure of Comme Ca, one ~~operating~~of ~~segment~~our third-party operated restaurants; and (v) overall lower occupancy and fewer entertainment events. We may continue to experience a decline in food and beverage revenue in future periods as competition increases and we evaluate the mix of restaurants and retail spaces at our property.

	Successor			Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Net revenues	$	189,837		$	182,866
Operating expenses, excluding depreciation and amortization		160,331			152,064
Depreciation and amortization		27,460			41,690
Operating income/(loss)		2,046			(10,888	)
Other expense		(7,435	)		(9,382	)
Loss before income taxes		(5,389	)		(20,270	)
Income tax benefit		—			7,582
Net loss		(5,389	)		(12,688	)

Entertainment, retail and other revenues are generated from the Property’s spa and salon, retail outlets, concerts, boxing events, and other miscellaneous activities. Entertainment, retail and other revenues for the three months ended June 30, 2015 and the three months ended June 30, 2014, were $8.0 million and $10.3 million, respectively, representing a decrease of $2.3 million or (22.7%). The quarter-over-quarter decrease in entertainment, retail and other revenues primarily reflects lower revenues generated from a decreased number of entertainment events for the three months ended June 30, 2015. Our entertainment events were 13 for the three months ended June 30, 2015, as compared to 24 for three months ended June 30, 2014. Lower occupancy contributed to a decrease in business activity in our Property’s spa and salon, and retail outlets.

~~Operating~~Revenues ~~Measures~~for the 2015 and 2014 quarterly operating periods include the retail value of accommodations, food and beverage, and other services furnished to our guests without charge. In accordance with industry practice, these promotional allowances or complimentaries (“comps”) are deducted from revenues. While quarter-over-quarter gross revenues decreased by 0.7% for the 2015 operating period compared to the 2014 operating period, promotional allowances as a percentage of gross revenues decreased from 15.8% to 15.4% between the respective periods. The decrease in entertainment events contributed to the decrease in promotional entertainment allowances for the period. We believe the level of promotional allowances or comps incurred for the respective 2015 and 2014 periods were necessary to continue to drive customer awareness, build our customer database and create customer loyalty.

~~Certain~~Operating ~~gaming and hospitality industry specific statistics are included in the discussion of our operating performance. These statistics are defined below:~~ Expenses

•For ~~The~~the ~~table~~three ~~games~~months ~~hold~~ended ~~percentage~~June 30, 2015, our operating expenses, excluding depreciation and amortization, decreased 12.3% when compared to the three months ended June 30, 2014. The 12.3% decrease is higher than the ~~percentage~~decrease ofin ~~drop~~gross ~~(amount~~revenues for the current period, down 0.7% for the comparable 2014 period. The decrease in the operating expenses, excluding depreciation and amortization, is partially reflective of ~~cash~~(i) a decrease in overall marketing and ~~markers~~advertising ~~issued~~spending; ~~net~~(ii) a ~~markers~~decrease ~~paid~~in atfood and beverage costs due to the ~~gaming~~decline ~~table~~in ~~with~~volume ~~cash~~at orMarquee, ~~chips~~Rose. Rabbit. Lie. and Comme Ca; as well as, (iii) ~~that~~a isdecrease ~~won~~in bycontract entertainment and production. In addition, the ~~Property~~decrease in operating expenses was offset by an increase in bad debt expense due to higher gaming volume. Our ongoing efforts are focused on containing and ~~recorded~~reducing asdepartment ~~revenue~~operating expenses, resulting in higher operating margins.

~~• Average Daily Rate (“ADR”) is calculated by dividing total hotel revenue by total rooms occupied.~~23

•Table ~~Revenue~~of ~~per Available Room (“REVPAR”) is calculated by dividing total hotel revenue by total rooms available.~~Contents

The following tables present our operating expenses for the periods indicated:

Our financial results are dependent upon the number of patrons that we attract to our Property and the amounts those guests spend per visit. Additionally, our operating results may be affected by, among other things, overall economic conditions impacting the disposable income of our guests, weather conditions affecting our Property, achieving and maintaining cost efficiencies, competitive factors, gaming tax increases and other regulatory changes, the commencement of new gaming operations, charges associated with debt refinancing, construction at our existing facility and general public sentiment regarding travel. We may experience significant fluctuations in our quarterly operating results due to seasonality, variations in gaming hold percentages and other factors. Consequently, our operating results for any quarter or fiscal year are not necessarily comparable and may not be indicative of future periods’ results.



	Successor		Predecessor
(Unaudited — In thousands)	Three Months Ended June 30, 2015		Three Months Ended June 30, 2014
Operating expenses:
Casino	$	39,035	$	31,549
Hotel	9,096		9,325
Food and beverage	50,971		63,872
Entertainment, retail and other	6,512		10,709
Sales and marketing	11,077		16,833
General and administrative	27,623		26,597
Corporate	4,321		9,036
Loss on disposal of assets	—		(1		)
Asset impairment	—		1,506
Depreciation and amortization	27,535		42,252
Total operating expenses	$	176,170	$	211,678

22Casino operating expenses increased for the period ended June 30, 2015, when compared to the three months ended June 30, 2014, primarily as a result of higher comps of $2.8 million offered to our customers. In addition, we experienced an increase in bad debt expense of $3.3 million due to increased credit play. Our Casino payroll cost increased due to an increase in management headcount as well as severance payments to terminated employees. In addition, we experienced increased gaming taxes due to higher gaming revenue.

~~Table~~Hotel operating costs are associated with the occupancy level and related servicing of ~~Contents~~our rooms. In comparing the three months ended June 30, 2015 to the three months ended June 30, 2014, hotel operating expenses decreased by $0.2 million. Our occupancy levels decreased to 94.5% in 2015 as compared to the 2014 occupancy level of 95.1%. This is primarily reflective of lower group base combined with reduced low-end casino Identity comp room nights.

~~Three~~Food ~~Months~~and ~~Ended~~beverage ~~March 31~~expenses decreased for the three months ended June 30, 2015, ~~Compared~~when compared to the ~~Three~~three ~~Months~~months ~~Ended~~ended ~~March 31~~June 30, 2014. The factors that contributed to the decrease include (i) revenue decline in Rose. Rabbit. Lie. of $5.9 million due to the change in operational concept; (ii) Marquee revenue decline of $3.3 million due to an increase in competition; (iii) decline in revenues of $1.2 million in Comme Ca due to closure of the facility; and (iv) banquets revenue decline due to fewer group room nights. The remainder is attributable to lower occupancy and fewer entertainment events which contributed to the decline in the volume of business in our owned and third-party operated restaurants and bars. In addition, the declines caused a reduction in management and incentive fees owed to third-party operated restaurants and the Marquee for performing at lower profitability levels per their respective agreements.

~~Revenues~~Entertainment, retail and other operating expenses decreased for the three months ended June 30, 2015, primarily due to a decrease in the number of entertainment events as compared to the three months ended June 30, 2014. A decrease in the number of entertainment events resulted in a decrease in entertainment costs. The lower occupancy levels contributed to a decrease in business activity in our Property’s spa and salon, and retail outlets.

AsSales ~~compared~~and tomarketing decreased for the three months ended ~~March 31~~June 30, ~~2014~~2015, ~~our~~when ~~gross~~compared ~~and~~to ~~net revenues for~~ the three months ended ~~March 31~~June 30, ~~2015~~2014, ~~increased~~due byto ~~4.8%~~the ~~and~~shift ~~3.8%,~~in ~~respectively,~~strategy ~~representing~~of ~~incremental~~overall ~~gross~~marketing and ~~net~~advertising ~~revenue~~spending ~~dollar~~for ~~increases~~the ofCompany ~~$10.5~~and ~~million~~third-party ~~and $7.0 million,~~operated ~~respectively~~restaurants.

~~Our~~General ~~revenues~~and administrative expenses increased for the ~~applicable~~three ~~periods~~months ~~were~~ended June 30, 2015, as ~~follows:~~compared to the three months ended June 30, 2014, primarily due to an increase in facility repairs and maintenance for our property as well as for our third-party operated restaurants and bars. In addition, there was an increase in property insurance premiums. General and administrative expenses include salaries, property taxes and insurance.

	Successor			Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Revenues:
Casino	$	58,447		$	49,119
Hotel		80,610			75,767
Food and beverage		81,879			85,399
Entertainment, retail and other		8,175			8,286
Gross revenues		229,111			218,571
Less — promotional allowances		(39,274	)		(35,705	)
Net revenues	$	189,837		$	182,866

~~For~~Table ~~the comparable 2015 and 2014 periods, our casino revenues consisted~~ of table games and slots, with our casino revenues increasing by 19.0% over 2014. The table games hold percentage for the three months ended March 31, 2015 was 15.2%, up from 13.6% in 2014, complementing the growth in our slot revenues of 28%. Our focus continues to be on supplementing the level of table games play at the Property, from both domestic and international customers. We also continue to focus our efforts on increasing the volume of slot play through leveraging our unique Identity Membership and Rewards Program, building our database of slot customers, expanding our alliance program and continuing to introduce a variety of slot promotions, such as the Million Dollar Slot Series tournament which began in July 2014. Contents

~~For~~Corporate ~~the~~expenses, ~~three~~which ~~months~~generally ~~ended~~include ~~March 31,~~corporate ~~2015,~~salaries ~~hotel~~and ~~revenues~~legal ~~grew~~expenses, 6.decreased by $4%.7 ~~compared~~million tofor the ~~first~~three ~~quarter~~months ofended ~~2014.~~June ~~The~~30, ~~increase~~2015, ~~was~~as ~~driven~~compared byto ~~a 10.0%~~the ~~increase~~three inmonths ~~ADR~~ended ~~from~~June ~~$302~~30, to2014, ~~$332~~primarily ~~and~~due anto ~~occupancy~~a decrease ofin ~~2.9~~management ~~percentage~~bonuses ~~points.~~for The ~~lower~~Cosmopolitan ~~occupancy~~of ~~levels~~Las inVegas ~~the~~Incentive ~~period~~Award ~~ended March 31~~Plan, ~~2015~~Management ~~reflect~~Exit ~~decreased~~Award ~~room~~Plan ~~nights~~and ~~from~~Retention ~~free~~Bonus ~~independent~~Plan ~~travelers,~~ which ~~was~~were ~~due~~related to ~~difficulties~~ ~~filling~~the ~~1-2 mid-week occupancy gaps created by increased group room nights~~Sale.

~~The~~Asset ~~table below sets forth our room and occupancy measures related to our operations.~~ Impairment

	Three Months Ended March 31,
	2015			2014			Percent Change (a)
Occupancy		90.63	%		93.56	%		(2.9	)
ADR	$	332		$	302			10.0
RevPAR	$	301		$	283			6.5

There were no asset impairments for the three months ended June 30, 2015. The impairment expense of $1.5 million for three months ended June 30, 2014 was in connection with the closure of the Vegas Nocturne show at Rose. Rabbit. Lie.

~~(a)~~Depreciation ~~Except~~and ~~occupancy,~~Amortization ~~which is presented as a percentage point change.~~Expenses

23Depreciation and amortization charges were $27.5 million and $42.3 million for the three months ended June 30, 2015 and 2014, respectively. The decrease in depreciation expense reflected the revaluation of the fixed assets due to the Sale, partially offset by an increase in amortization expense of the intangible assets acquired in the acquisition.

~~Table~~Other ofIncome ~~Contents~~(Expense)

The following tables present our other income (expenses) for the periods indicated:

Food and beverage revenues for the three months ended March 31, 2015, decreased $3.5 million or (4.1%), when compared to the three months ended March 31, 2014. Food and beverage revenues generated from restaurants, banquets and conventions, in-room dining and bars include revenues from all Company-operated outlets, as well as the third-party operated food and beverage outlets which are wholly-owned by the Company. The factors that contributed to the decrease in food and beverage revenue growth were (i) during the quarter, we experienced a $1.5 million decline in revenues at Rose. Rabbit. Lie. attributable to the cancellation of the Spiegelworld management agreement, discussed in Note 15; (ii) higher group mix in the quarter (group guests are typically committed during lunch/dinner meals periods); and (iii) lower occupancy which impacted business in our nightclub, bars and restaurants.



	Successor			Predecessor
(Unaudited — In thousands)	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014
Other income/(expense):
Net settlements and default income	$	—		$	96
Interest and other income	13			15
Interest expense, net of amount capitalized	(8,095		)	(9,518		)
Total other expense	$	(8,082	)	$	(9,407	)

~~Entertainment,~~Net ~~retail~~Settlement and ~~other~~Default revenues are generated from the Property’s spa and salon, retail outlets, concerts, boxing events, and other miscellaneous activities. Entertainment, retail and other revenues for the three months ended March 31, 2015 and the three months ended March 31, 2014, were $8.2 million and $8.3 million, respectively, representing a decrease of $0.1 million or (1.3%). The quarter-over-quarter decrease in entertainment, retail and other revenues primarily reflects lower revenues generated from a decreased number of entertainment events for the three months period ended March 31, 2015. Lower occupancy contributed to a decrease in business activity in our Property’s spa and salon, and retail outlets. Income

~~Revenues~~There ~~for~~was ~~the~~no ~~2015~~settlement and ~~2014~~default ~~operating~~income ~~quarterly~~for ~~periods include~~ the ~~retail~~three ~~value~~months ofended ~~accommodations,~~June ~~food and beverage~~30, ~~and other services furnished to our guests without charge~~2015. InThe ~~accordance~~net ~~with~~settlement ~~industry~~and ~~practice,~~default ~~these~~income ~~promotional~~of ~~allowances or complimentaries (“comps”) are deducted from revenues~~$0.1 ~~While~~million ~~quarter-over-quarter~~recorded ~~gross revenues increased by 4.8%~~ for the ~~2015 operating~~three ~~period~~months ~~compared~~ended toJune ~~the~~30, 2014 ~~operating~~represented ~~period,~~certain ~~promotional~~purchasers ~~allowances~~within asthe aEast ~~percentage~~and/or ofthe ~~gross~~West ~~revenues~~Towers, ~~increased~~who ~~from~~had ~~16.4%~~previously toopted ~~17.1%~~out ~~between~~of the ~~respective~~settlement ~~periods.~~offers, Wesettling ~~believe~~their ~~the~~claims ~~level~~with ofus ~~promotional~~in ~~allowances~~individual ortransactions ~~comps~~on ~~incurred~~terms ~~for~~identical to the ~~respective~~ ~~2015~~applicable ~~and~~class ~~2014~~action ~~periods~~settlement. ~~were~~At ~~necessary~~June 30, to2015, ~~continue~~no tocondominium ~~drive~~hotel ~~customer~~units ~~awareness,~~remained ~~build~~under ~~our~~contract ~~customer~~at ~~database~~The ~~and create customer loyalty~~Cosmopolitan.

~~Operating~~Interest ~~Expenses~~Expense Net of Amount Capitalized

~~For~~The ~~the~~decrease ~~three months~~in ~~ended~~interest ~~March 31,~~expense ~~2015,~~is ~~our~~attributable ~~operating~~to ~~expenses,~~the ~~excluding~~termination ~~depreciation~~of ~~and~~the ~~amortization,~~Company’s ~~increased~~credit ~~5.4%~~facility ~~when~~with ~~compared~~Deutsche toBank ~~the~~AG ~~three~~New ~~months~~York ~~ended March 31, 2014~~Branch. ~~The~~In ~~5.4%~~connection ~~increase~~with ~~is modestly higher than~~ the ~~growth~~Sale inof ~~gross revenues for~~ the ~~current period~~Company, ~~up 4.8% for~~ the ~~comparable~~outstanding ~~2014~~balances ~~period.~~of ~~The increase in~~ the ~~operating~~loans ~~expenses,~~thereunder ~~excluding~~were ~~depreciation~~forgiven ~~and~~at ~~amortization,~~no iscost ~~partially reflective of (i) a settlement of $7.0 million related~~ to the ~~wage~~Company. ~~and~~The ~~hour~~principal ~~cases, discussed~~balance inof ~~Note 15; (ii)~~ the ~~growth~~Company’s indebt ~~gross~~obligations ~~revenues~~were ~~for~~$875 ~~the~~million ~~three~~as ~~months~~of ~~ended March~~June 3130, 2015. ~~over~~The ~~the~~Company ~~comparable~~paid ~~2014~~$6.7 ~~period;~~million ~~(iii) a decrease~~ in ~~food~~interest ~~and~~expense ~~beverage~~associated ~~due~~with to the ~~decrease~~new indebt ~~occupancy~~obligations ~~gaps~~for ~~created by increased group room nights; (iv) a decrease of~~ the ~~overall~~three ~~marketing~~months ~~and~~ended ~~advertising~~June ~~spending~~30, as2015. ~~well~~Interest ~~as,~~expense ~~(v)~~ for the ~~settlement~~three ofmonths ~~the~~ended ~~OCIP~~June ~~agreement~~30, of2015 includes $31.6 5 million. ~~Our~~as ~~ongoing~~amortization ~~efforts~~of ~~are~~debt ~~focused~~discount ~~on containing~~ and indebt ~~reducing~~financing ~~department operating expenses, resulting in higher operating margins~~costs.

24 25

Table of Contents

~~The~~Income ~~following tables present our operating expenses for the periods indicated:~~Taxes

	Successor		Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015		Three Months EndedMarch 31, 2014
Operating expenses:
Casino	$	38,292	$	30,950
Hotel		8,223		9,224
Food and beverage		47,978		55,631
Entertainment, retail and other		6,695		7,693
Sales and marketing		15,680		20,649
General and administrative		27,490		25,061
Corporate		15,973		2,740
Gain on disposal of assets		—		116
Depreciation and amortization		27,460		41,690
Total operating expenses	$	187,791	$	193,754

As a result of the Sale and beginning on December 19, 2014, no provision has been made for U.S. federal income taxes. The Company is organized as a limited liability company with one member that holds all of the Class B Membership Interests, which have all the economic interests in the Company, Spade Mezz, an affiliate of Blackstone, as described in Note 1, “Sale or Transfer of Members’ Equity Interests and Corporate Structure.” As a limited liability company, the Company is considered a flow-through entity for U.S. income tax purposes resulting in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the responsibility of its Member.

~~Casino~~There ~~operating~~was ~~expenses~~no ~~increased~~income ~~for~~tax ~~the~~benefit ~~period~~for ~~ended March 31, 2015, when compared to~~ the three months ended ~~March 31,~~June ~~2014~~30, ~~primarily~~2015. asThe aincome ~~result~~tax ofbenefit ~~higher comps offered to our customers, as well as higher commissions~~ for ~~independent~~the ~~representatives~~three ~~associated~~months ~~with~~ended ~~our~~June ~~expanded domestic and international host program. In addition~~30, ~~the increase~~2014 iswas ~~commensurate with the increase in Casino revenue coupled with an increase in bad debt expense of~~ $17.84 million.

~~Hotel operating~~There ~~costs~~was ~~are~~no ~~associated~~effective ~~with~~income ~~the~~tax ~~occupancy~~rate ~~level~~for ~~and related servicing of our rooms. In comparing~~ the three months ended ~~March 31,~~June ~~2015 to the three months ended March 31~~30, ~~2014, hotel operating expenses decreased by $1.0 million. Our occupancy levels decreased to 90.6% in~~ 2015 ~~as compared to the 2014 occupancy level of 93~~.~~6%.~~ ~~This~~The iseffective ~~primarily~~income ~~reflective~~tax ofrate ~~lower~~for ~~volume of room occupancy due to~~ the ~~decrease~~three inmonths ~~room~~ended ~~nights~~June ~~from free independent travelers~~30, ~~which~~2014 was ~~due to difficulties filling 1-~~(35.2 ~~mid-week occupancy gaps created by increased group room nights~~%).

~~Food~~Six ~~and~~Months ~~beverage~~Ended ~~expenses~~June ~~decreased for the three months ended March 31~~30, 2015, ~~when~~Compared ~~compared~~ to the ~~three~~Six ~~month~~Months ~~ended~~Ended ~~March 31~~June 30, 2014, as a result of the decrease in revenue in food and beverage. The higher group mixes in the quarter, lower occupancy and the decline in revenues at Rose. Rabbit. Lie., affected the volume of business in our Company, our third-party operated restaurants and bars. In addition, this caused a reduction in management and incentive fees owed to third-party operated restaurants and the Marquee for performing at lower profitability levels per their respective agreements.

~~Entertainment,~~Revenues retail and other operating expenses decreased for the three months ended March 31, 2015, primarily due to a decrease in the number of entertainment events as compared to the 2014 period. A decrease in the number of shows resulted in a decrease in the underlying cost for each show. The lower occupancy levels contributed to a decrease in business activity in our Property’s spa and salon, and retail outlets.

~~Sales~~Gross ~~and marketing~~revenues ~~decreased~~ for the ~~three~~six months ended ~~March 31~~June 30, 2015 increased $8.8 million or 1.9%, when compared to the ~~three~~same ~~months~~period ~~ended~~in ~~March 31,~~ 2014,. ~~due~~Net torevenues ~~the~~increased ~~shift~~1.7%. inOur ~~strategy~~revenues offor ~~overall~~the ~~marketing~~six ~~and~~months ~~advertising~~ended ~~spending~~June ~~for~~30, ~~the~~2015 ~~Company~~ and ~~third-party~~2014 ~~operated restaurants.~~were as follows:

General and administrative expenses increased for the three months ended March 31, 2015, as compared to the three months ended March 31, 2014, primarily due to an increase in facility repairs and maintenance for our property as well for our third-party operated restaurants and bars. In addition, there was an increase in bonus expense related to the Company’s Annual Incentive Plan compared to the prior year. General and administrative expenses include salaries, property taxes and insurance.



	Successor			Predecessor
(Unaudited — In thousands)	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Revenues:
Casino	$	120,590		$	100,500
Hotel	160,878			156,540
Food and beverage	167,513			180,679
Entertainment, retail and other	16,139			18,584
Gross revenues	465,120			456,303
Less -- promotional allowances	(75,705		)	(73,327		)
Net revenues	$	389,415		$	382,976

25Our casino revenues increased 20.0% compared to the six months ended June 30, 2014. The table games revenue increased 20.2% due to increased level of play for the six months ended June 30, 2015. Slot revenue grew 19.3% , a slower growth rate than table games for the six months ended June 30, 2015. Our marketing efforts combined with main floor optimization has contributed to the increase in growth and higher volumes. In addition, our Baccarat volume increased due to various tournaments offered during the period.

~~Table~~For the six months ended June 30, 2015, hotel revenues grew 2.8% compared to the six months ended June 30, 2014. The increase was driven by a 4.9% increase in ADR from $309 to $324 partially offset by an occupancy decrease of ~~Contents~~1.7 percentage points. The lower occupancy levels in the period ended June 30, 2015 is reflective of lower group base combined with reduced low-end casino Identity comp room nights. We may experience declines in hotel revenue in future periods as the mix of customers may change.

Corporate expenses, which generally include corporate salaries and legal expenses, increased by $13.2 million for the three months ended March 31, 2015, as compared to the three months ended March 31, 2014, primarily due to the settlement of the OCIP agreement of $3.6 million, a settlement agreement of $7.0 million related to the wage and hour cases, $1.1 million in severance related expenses, $0.5 million in corporate expenses from the Company’s Annual Incentive Plan and $1.0 million of professional fees, mainly attributable to the fair value valuation services and other purchase accounting matters. 26

~~Depreciation~~Table ~~and~~of ~~Amortization Expenses~~ Contents

The table below sets forth our room and occupancy measures related to our operations.

Depreciation and amortization charges were $27.5 million and $41.7 million for the three months ended March 31, 2015 and 2014, respectively. The decrease in depreciation expense reflected the effect of the acquisition method of accounting adopted in connection with the Sale of the Company revaluation of the fixed assets, partially offset by an increase in amortization expense of the new intangible assets.



	Successor		Predecessor
	Six Months Ended June 30, 2015		Six Months Ended June 30, 2014		Percent Change (a)
Occupancy	92.6	%	94.3	%	(1.7	)
ADR	$324		$309		4.9
RevPAR	$300		$292		2.7

~~Other Income~~ (~~Expense~~a) Except occupancy, which is presented as a percentage point change.

~~Other~~Food ~~income~~ and ~~expense~~beverage revenues for the ~~three~~six months ended ~~March 31~~June 30, 2015 ~~and~~decreased $13.2 million or 7.3%, when compared to the ~~three~~same period in 2014. Revenue decline for the six months ended ~~March 31~~June 30, ~~2014~~2015 ~~were~~is primarily attributable to (i) revenue decline of $6.9 million in Rose. Rabbit. Lie. due to the change in operational concept; (ii) Marquee revenue decline of $3.5 million due to an increase in competition; and (iii) the closure of Comme Ca which resulted in a decline of $1.8 million. The remainder is attributable to lower occupancy and fewer entertainment events generating the decline in the volume of business in our owned and third-party operated restaurants and bars. We may continue to experience a decline in food and beverage revenue in future periods as ~~follows:~~competition increases and we evaluate the mix of restaurants and retail spaces at our property.

	Successor			Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Other income/(expense):
Net settlements and default income	$	—		$	149
Interest and other income		5			15
Interest expense, net of amount capitalized		(7,440	)		(9,546	)
Total other expense	$	(7,435	)	$	(9,382	)

Entertainment, retail and other revenues for the six months ended June 30, 2015 and 2014 were $16.1 million and $18.6 million, respectively, representing a decrease of $2.4 million or 13.2%. The period-over-period decrease in entertainment and other revenues primarily reflects a decrease in the number of events, 19 during the six months ended June 30, 2015 compared to 29 during the six months ended 2014. Additionally, the lower occupancy levels contributed to a decrease in business activity in our Property's spa and salon, and retail outlets.

~~Net~~Revenues ~~Settlement~~for the six months ended June 30, 2015 and ~~Default~~2014 ~~Income~~include the retail value of accommodations, food and beverage, and other services furnished to our guests without charge. In accordance with industry practice, these promotional allowances or comps are deducted from revenues. While gross revenues increased by 1.9% for the comparable six month periods, promotional allowances as a percentage of gross revenues increased from 16.1% to 16.3% for the comparable six month period 2014. We believe the level of promotional allowances or comps incurred for the respective 2015 and 2014 periods were necessary to continue to drive customer awareness, build our customer database and create customer loyalty. We expect this level of promotional allowance or comps expense to vary period-over-period, but decline over the long-term.

~~There~~Operating ~~was~~Expenses no settlement and default income for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014. The net settlement and default income of $0.1 million recorded for the three months ended March 31, 2014 represents certain purchasers within the East and/or the West Towers, who had previously opted out of the settlement offers, settling their claims with us in individual transactions on terms identical to the applicable class action settlement. At March 31, 2015, no condominium hotel units remain under contract at The Cosmopolitan.

~~Interest~~For ~~Expense~~the ~~Net~~six months ended June 30, 2015, our operating expenses, excluding depreciation and amortization, decreased 3.9% when compared to the six months ended June 30, 2014. The decrease in the operating expenses, excluding depreciation and amortization, is partially reflective of ~~Amounts~~(i) a ~~Capitalized~~decrease in food and beverage due to the decrease in revenue from Rose. Rabbit. Lie. due to the change in operational concept, a decline in Marquee revenue due to increased competition, and a decline in revenue from Comme Ca due to its closure; (ii) a decrease in overall marketing and advertising spending; as well as, (iii) a decrease in contract entertainment and production. In addition, the decrease in operating expenses was offset by an increase in bad debt expense due to higher gaming volume. Our ongoing efforts are focused on containing and reducing department operating expenses, resulting in higher operating margins.

The decrease in interest expense is attributable to the termination of the Company’s credit facility with Deutsche Bank AG New York Branch. The outstanding balances of the loans thereunder were forgiven at no cost to the Company. The principal balance of the Company’s debt obligations were $875 million as of March 31, 2015. The Company paid $4.5 million in interest expense associated with the new debt obligations for the three months ended March 31, 2015. Interest expense for the three months ended March 31, 2015 includes $1.5 million as amortization of debt discount and debt financing costs. 27

26Table of Contents

The following tables present our operating expenses for the periods indicated:



	Successor		Predecessor
(Unaudited — In thousands)	Six Months Ended June 30, 2015		Six Months Ended June 30, 2014
Operating expenses:
Casino	$	77,326	$	62,499
Hotel	17,319		18,549
Food and beverage	98,949		119,503
Entertainment, retail and other	13,207		18,402
Sales and marketing	26,707		37,482
General and administrative	55,112		51,658
Corporate	20,295		11,776
Gain on disposal of assets	—		115
Asset impairment	—		1,506
Depreciation and amortization	54,995		83,942
Total operating expenses	$	363,910	$	405,432

~~Income~~Casino ~~Taxes~~operating expenses increased for the six months ended June 30, 2015, when compared to the six months ended June 30, 2014, primarily as a result of $5.8 million of higher costs associated with complimentary goods and services offered to our customers. In addition, we experienced an increase in bad debt expense of $5.1 million due to increased credit play. Our Casino payroll cost increased due to an increase in management headcount as well as severance payments to terminated employees. In addition, we experienced increased gaming taxes due to higher gaming revenue.

AsHotel aoperating ~~result~~costs ofare ~~the~~associated ~~Sale~~with ~~and~~the ~~beginning~~occupancy onlevel ~~December 19,~~and ~~2014,~~related noservicing ~~provision~~of ~~has~~our ~~been made for U~~rooms.S. ~~federal~~In ~~income~~comparing ~~taxes. The Company is organized as a limited liability company with one member that holds all of~~ the ~~Class~~six Bmonths ~~Membership~~ended ~~Interests~~June 30, ~~which~~2015 ~~have~~to ~~all~~ the ~~economic~~six ~~interests~~months inended ~~the~~June ~~Company~~30, ~~Spade Mezz~~2014, anhotel ~~affiliate~~operating ofexpenses ~~Blackstone,~~decreased asby ~~described in Note~~ $1,.2 ~~“Sale~~million. orOur ~~Transfer of~~occupancy ~~Members’~~levels ~~Equity~~decreased ~~Interests~~to ~~and Corporate Structure~~92.”6% Asin a2015 ~~limited~~as ~~liability~~compared ~~company,~~to the ~~Company~~2014 isoccupancy ~~considered~~level aof ~~flow-through entity for U~~94.S3%. ~~income~~This ~~tax~~is ~~purposes~~primarily ~~resulting~~reflective ~~in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the responsibility~~ of ~~its~~lower ~~Member.~~group ~~For~~base ~~the~~combined ~~quarters~~with ~~ended~~reduced ~~March 31,~~low-end ~~2015~~casino ~~and~~Identity ~~2014,~~comp ~~our~~room ~~income tax benefit was $0 million and $7~~nights.~~6 million and our effective income tax rates were 0% and (37.4%), respectively.~~

~~Non-U~~Food and beverage expenses decreased for the six months ended June 30, 2015, when compared to the six months ended June 30, 2014, as a result of the decrease in food and beverage revenue.S The factors that contributed to the decrease are primarily (i) revenue decline of $11.2 ~~GAAP~~million ~~Measures~~in —Rose. ~~EBITDA~~Rabbit. Lie. due to the change in operational concept; (ii) Marquee revenue decline of $3.6 million due to an increase in competition; and ~~Adjusted~~(iii) ~~EBITDA~~decline in revenues of $1.2 million in Comme Ca due to closure of the facility. The remainder is attributable to lower occupancy and fewer entertainment events which contributed to the decline in the volume of business in our owned and third-party operated restaurants and bars. In addition, the declines caused a reduction in management and incentive fees owed to third-party operated restaurants and the Marquee for performing at lower profitability levels per their respective agreements.

~~EBITDA~~Entertainment, retail and ~~adjusted~~other ~~EBITDA~~operating ~~are~~expenses ~~used~~decreased byfor ~~management~~the assix ~~the~~months ~~primary~~ended ~~measures~~June of30, ~~operating~~2015, ~~performance~~primarily ofdue to a decrease in the ~~Company.~~number ~~Adjusted~~of ~~EBITDA~~entertainment ~~is calculated~~events as compared to the ~~net~~six ~~income~~months ~~(loss)~~ended ~~attributable~~June to30, 2014. For the ~~Company~~six ~~before~~months ~~interest~~ended June 30, ~~income taxes~~2015, ~~depreciation~~we ~~and~~had ~~amortization,~~19 ~~pre-opening~~entertainment ~~expenses~~events compared to 29 during the six months ended June 30, ~~rent~~2014. ~~expenses~~The ~~and~~decrease ~~corporate~~in ~~expenses~~the number of events resulted in an overall decrease in the entertainment costs. The lower occupancy levels contributed to a decrease in business activity in our Property’s spa and salon, and retail outlets.

~~The~~Sales ~~Company’s~~and ~~condensed~~marketing ~~consolidated~~expenses ~~financial~~decreased ~~statements~~for ~~are~~the ~~prepared~~six inmonths ~~accordance~~ended ~~with~~June ~~U.S.~~30, ~~generally~~2015, ~~accepted~~when ~~accounting~~compared ~~principles (“U.S. GAAP”). Management has presented EBITDA and adjusted EBITDA information as supplemental disclosures~~ to the ~~reported~~six ~~U.S. GAAP~~months ~~measures~~ended ~~because~~June it30, ~~believes~~2014, ~~these~~due ~~measures are widely used~~ to ~~assess~~ the ~~operating~~shift ~~performance~~ in ~~the~~ ~~gaming~~strategy ~~and~~of ~~hospitality~~overall ~~industry.~~marketing ~~Certain items excluded from EBITDA~~ and ~~adjusted~~advertising ~~EBITDA~~spending ~~may~~for ~~be recurring in nature and should not be disregarded in~~ the ~~evaluation~~Company ~~of our earnings performance. However, management believes that the exclusion of such items provides a meaningful analysis of current results~~ and ~~trends~~third-party asoperated ~~these items can vary significantly depending on specific underlying transactions or events that are not comparable between the periods being presented~~restaurants.

~~EBITDA~~General and ~~adjusted~~administrative ~~EBITDA~~expenses ~~should~~increased ~~not~~for bethe ~~construed~~six months ended June 30, 2015, as ~~alternatives~~compared to ~~operating~~the ~~income~~six ormonths ~~net~~ended ~~income~~June 30, as2014, ~~indicators~~primarily ofdue ~~our~~to ~~performance,~~an ~~as alternatives~~increase toof ~~cash~~$1.2 ~~flows~~million ~~from~~in ~~operating~~facility ~~activities,~~repairs asand ~~measures~~maintenance offor ~~liquidity,~~our orproperty as ~~any~~well ~~other~~for ~~measures~~our ~~determined~~third-party inoperated ~~accordance~~restaurants ~~with~~and Ubars.S. ~~GAAP.~~We ~~Also,~~incurred ~~other~~an ~~companies~~increase in ~~the~~payroll ~~gaming~~related costs and ~~hospitality~~property ~~industries~~insurance ~~that~~premiums. ~~report~~General ~~EBITDA~~ and ~~adjusted~~administrative ~~EBITDA information~~expenses ~~may~~include ~~calculate~~salaries, ~~EBITDA~~property taxes and ~~adjusted EBITDA in a different manner~~insurance.

~~The following table presents a reconciliation of EBITDA and adjusted EBITDA to net loss for the periods indicated:~~ 28

	Successor			Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Net loss	$	(5,389	)	$	(12,688	)
Interest, net		7,436			9,531
Income tax benefit		—			(7,582	)
Depreciation and amortization		27,460			41,690
EBITDA		29,507			30,951
Corporate expenses		15,973			2,740
Rent expenses		495			471
Adjusted EBITDA	$	45,975		$	34,162

Table of Contents

27Corporate expenses, which generally include corporate salaries and legal expenses, increased by $8.5 million for the six months ended June 30, 2015, as compared to the six months ended June 30, 2014, primarily due to the settlement of various legal cases of $11.7 million. We incurred an increase in salaries of $1.4 million coupled with a decrease in management bonuses of $4.6 million for The Cosmopolitan of Las Vegas Incentive Award Plan, Management Exit Award Plan and Retention Bonus Plan which were related to the Sale.

~~Table~~Asset ofImpairment ~~Contents~~

~~Liquidity~~There ~~and~~were ~~Capital~~no ~~Resources~~asset impairments for the six months ended June 30, 2015. The impairment expense of $1.5 million for six months ended June 30, 2014 was in connection with the closure of the Vegas Nocturne show at Rose. Rabbit. Lie.

~~Our~~Depreciation ~~ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, funding of capital projects~~ and ~~our~~Amortization ~~compliance~~Expenses ~~with covenants contained in the Lease and in the Mortgage Loan.~~

Depreciation and amortization charges were $55.0 million for the six months ended June 30, 2015 and $83.9 million for the six months ended June 30, 2014. The ~~following~~decrease ~~table~~in ~~summarizes~~depreciation ~~our~~expense ~~historical cash~~reflected ~~flows:~~the revaluation of the fixed assets due to the Sale, partially offset by an increase in amortization expense of the intangible assets acquired in the acquisition.

	Successor			Predecessor
(Unaudited — In thousands)	Three Months EndedMarch 31, 2015			Three Months EndedMarch 31, 2014
Net cash provided by/(used in) operating activities	$	29,596		$	(1,892	)
Net cash used in investing activities		(10,848	)		(12,023	)
Net cash provided by/(used in) financing activities		1,289			(4,664	)

Other Income (Expense)

AsThe offollowing ~~March 31,~~tables ~~2015,~~present weour ~~had~~other ~~$75.5~~income ~~million~~(expenses) infor ~~available~~the ~~cash~~periods ~~and cash equivalents.~~ indicated:

Cash Flows — Operating Activities



	Successor			Predecessor
(Unaudited — In thousands)	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Other income (expense):
Net settlements and default income	$	—		$	245
Interest and other income	18			30
Interest expense, net of amount capitalized	(15,535		)	(19,064		)
Total other income (expense)	$	(15,517	)	$	(18,789	)

Net ~~cash~~Settlement ~~provided by operating activities during the three month ended March 31, 2015, is primarily attributable to the change in prepaid expenses~~ and ~~other~~Default ~~assets~~Income due to the receipt of the excess funds of $12.3 million from the OCIP fund and $7.0 million as closeout of the fund as discussed in Note 9. We continue to improve accounts receivable collections, but for the first quarter of 2015, these cash inflows from receivables were offset by increasing receivables attributable to the operating period’s casino and banquet and group revenue growth.

~~Net~~There ~~cash~~was ~~used~~no bysettlement ~~operating~~and ~~activities~~default ~~during~~income for the ~~three~~six ~~month~~months ended ~~March 31~~June 30, 2015. Through the six months ended June 30, 2014, iscertain ~~primarily~~purchasers ~~attributable~~of tocondominium hotel units located within the ~~change~~East inand West Towers of the ~~amount due~~Property ~~from~~agreed ~~affiliates~~to settle and release their claims against the ~~timing~~Company. ofNo ~~payments~~condominium hotel units remained under contract for ~~certain~~sale ~~accrued~~at ~~liabilities.~~June 30, 2015.

~~Cash~~Interest ~~Flows~~Expense —Net ~~Investing~~of ~~Activities~~Amount Capitalized

AsThe ~~discussed~~decrease in ~~Note~~interest ~~3, per~~expense is attributable to the ~~Second~~termination ~~Amendment~~of ~~signed~~the inCompany’s ~~April~~credit ~~2015~~facility with Deutsche Bank AG New York Branch. In connection with the Sale of the Company, the ~~net~~outstanding ~~cash~~balances ~~paid~~of ~~for~~the loans thereunder were forgiven at no cost to the ~~acquisition~~Company. ~~increased~~The by principal balance of the Company’s debt obligations were $~~6.4~~ 875 million as of June 30, 2015. The ~~increase~~Company paid $11.0 million in interest expense associated with the ~~cash~~new ~~paid~~debt ~~increased~~obligations for the ~~goodwill~~six months ended June 30, 2015. Interest expense for the ~~same~~six ~~amount~~months ended June 30, 2015 includes $3.1 million as amortization of debt discount and debt financing costs.

The ordinary and major capital expenditures incurred during the three months ended March 31, 2015 were $4.4 million. There were no significant major capital expenditures during the period ended March 31, 2015. 29

~~For~~Table ~~the three months ended March 31, 2014, major capital expenditures incurred~~ of ~~$12.0 million were primarily related to construction of certain components of our integrated resort, including The Chelsea and Rose. Rabbit. Lie. (our new venues which opened in late-December 2013).~~ Contents

InIncome ~~addition~~Taxes to direct costs of construction included in construction in progress and ordinary capital expenditures (as applicable) are soft or indirect costs. These soft costs are generally incurred prior to commencement of the project construction and can include permits, architectural fees, engineering fees, real estate commissions and fees, marketing, taxes, insurance, interest payments, leasing and general administrative costs, etc. For the three months ended March 31, 2015 and 2014, no soft costs were capitalized.

~~Cash~~As ~~Flows~~a —result ~~Financing~~of ~~Activities~~the Sale and beginning on December 19, 2014, no provision has been made for U.S. federal income taxes. The Company is organized as a limited liability company with one member that holds all of the Class B Membership Interests, which have all the economic interests in the Company, Spade Mezz, an affiliate of Blackstone, as described in Note 1, “Sale or Transfer of Members’ Equity Interests and Corporate Structure.” As a limited liability company, the Company is considered a flow-through entity for U.S. income tax purposes resulting in its owner being obligated for any U.S. federal income taxes resulting from its operations. Accordingly, such taxes are the responsibility of its Member.

~~For~~There ~~the~~was ~~three~~no ~~months~~income ~~ended~~tax ~~March 31,~~benefit ~~2015,~~for the ~~net~~six ~~cash~~months ~~provided~~ended byJune ~~financing~~30, ~~activities of $1~~2015.3 ~~million~~The ~~includes~~income ~~(i) a~~tax ~~credit~~benefit ~~of $6.4 million~~ for the ~~excess~~six ~~net~~months ~~working capital amount representing 50% of the released amount plus broker fees, refer to Note 9; and (ii) for the period~~ ended ~~March 31,~~June ~~2015~~30, ~~the~~2014 ~~total~~was ~~distributions to members related to the Mezzanine A Loan and Mezzanine B Loan of~~ $315.~~2 million~~0 ~~and $1.9~~ million~~, respectively, refer to Note 13~~.

28There was no effective income tax rate for the six months ended June 30, 2015. The effective income tax rate for the six months ended June 30, 2014 was (35.2%).

~~Table~~Non-U.S. ofGAAP ~~Contents~~Measures — EBITDA and Adjusted EBITDA

~~For~~EBITDA ~~the~~and ~~three~~adjusted ~~months~~EBITDA ~~ended~~are ~~March 31,~~used ~~2014,~~by ~~the~~management ~~net~~as ~~cash~~the ~~used~~primary inmeasures ~~financing~~of ~~activities~~operating performance of ~~$4.7 million~~the ~~includes $5~~Company.3 ~~million~~Adjusted inEBITDA ~~borrowings~~is ~~against~~calculated ~~the~~as ~~credit facility maintained by~~ the ~~Predecessor~~net ~~which~~income ~~was~~(loss) ~~offset~~attributable byto ~~related principal repayments totaling $10.0 million. The draws against~~ the ~~credit~~Company ~~facility~~before ~~were~~interest, ~~primarily~~income ~~utilized~~taxes, ~~for construction~~depreciation ~~costs relating to The Chelsea~~ and ~~Rose. Rabbit. Lie.~~amortization, ~~and~~pre-opening ~~to a lesser degree~~expenses, torent ~~finance~~expenses ~~the~~and ~~operations~~corporate ~~at the Property~~expenses.

~~Liquidity~~The Company’s condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Management has presented EBITDA and adjusted EBITDA information as supplemental disclosures to the reported U.S. GAAP measures because it believes these measures are widely used to assess the operating performance in the gaming and hospitality industry. Certain items excluded from EBITDA and adjusted EBITDA may be recurring in nature and should not be disregarded in the evaluation of our earnings performance. However, management believes that the exclusion of such items provides a meaningful analysis of current results and trends as these items can vary significantly depending on specific underlying transactions or events that are not comparable between the periods being presented.

~~Our~~EBITDA ~~integrated resort~~and ~~will~~adjusted ~~have~~EBITDA anshould ~~ongoing~~not ~~need~~be ~~for~~construed ~~renovations~~as ~~and~~alternatives ~~other~~to ~~capital~~operating ~~improvements~~income toor ~~remain~~net ~~competitive~~income, ~~including~~as ~~replacement~~indicators of our performance, ~~from~~as ~~time~~alternatives to ~~time~~cash flows from operating activities, as measures of ~~furniture~~liquidity, ~~fixtures~~or ~~and~~as ~~equipment.~~any ~~Certain~~other ~~capital~~measures ~~expenditure~~determined ~~requirements~~in ~~may~~accordance bewith ~~necessary~~U.S. ~~to comply~~GAAP. ~~with~~Also, ~~any~~other ~~changes~~companies in ~~applicable~~the ~~laws~~gaming and ~~regulations.~~hospitality Weindustries ~~estimate~~that ~~capital~~report ~~expenditures~~EBITDA ~~will~~and ~~range~~adjusted ~~between~~EBITDA ~~$40.0 million~~information tomay ~~$50.0~~calculate ~~million~~EBITDA ~~during~~and ~~the~~adjusted ~~year~~EBITDA ~~ended~~in ~~December 31,~~a ~~2015.~~different manner.

The following table presents a reconciliation of EBITDA and adjusted EBITDA to net income/(loss) for the periods indicated:

We intend to pay for the capital expenditures through the use of working capital. We may require additional financing to support future growth. Because we are an indirectly owned subsidiary of Blackstone, funding for major capital expenditures may be provided by Blackstone or one of its affiliates.



	Successor		Predecessor			Successor		Predecessor
(Unaudited — In thousands)	Three Months Ended June 30, 2015		Three Months Ended June 30, 2014			Six Months Ended June 30, 2015		Six Months Ended June 30, 2014
Net income/(loss)	$	15,316	$	(13,592	)	$	9,978	$	(26,280	)
Interest, net	8,082		9,503			15,517		19,034
Income tax (expense)/benefit	10		(7,383		)	10		(14,965		)
Depreciation and amortization	27,535		42,252			54,995		83,942
EBITDA	50,943		30,780			80,500		61,731
Corporate expenses	4,321		9,036			20,295		11,776
Asset impairment	—		1,506			—		1,506
Rent expenses	478		448			973		919
Adjusted EBITDA	$	55,742	$	41,770		$	101,768	$	75,932

~~Short-Term Liquidity Requirements~~ 30

WeTable ~~generally consider our short-term liquidity requirements to consist~~ of those items that are expected to be incurred or come due within the next twelve months. We believe those requirements consist primarily of funds necessary to pay construction payables and retention, normal on-going capital expenditures, interest payments, and on-going working capital requirements. We believe that operating cash flows generated by the Property will be sufficient to meet our short-term liquidity requirements. We estimate short-term liquidity requirements will range between $140.0 million to $150.0 million during the year ended December 31, 2015. Contents

~~Long-Term~~ Liquidity ~~Requirements~~and Capital Resources

WeOur ~~generally~~ongoing ~~consider~~liquidity ~~our~~will ~~long-term~~depend ~~liquidity~~on ~~requirements~~a tonumber ~~consist~~ of ~~those~~factors, ~~items~~including ~~that~~available ~~are~~cash ~~expected~~resources, tocash beflow ~~incurred~~from ~~beyond~~operations, ~~the~~funding ~~next twelve months and believe these requirements consist primarily~~ of ~~funds~~capital ~~necessary to finance future renovation~~ projects and ~~to finance ongoing operational costs. We intend to satisfy~~ our ~~long-term~~compliance ~~liquidity~~with ~~requirements~~covenants ~~through~~contained ~~operating~~in ~~cash~~the ~~flows generated~~Lease byand in the ~~Property.~~Mortgage Loan.

The following table summarizes our historical cash flows:

The debt structure described above will require the Company to generate sufficient cash flow to pay the current interest due on the outstanding borrowings on a monthly basis. Since interest rates will reset monthly based on the value of LIBOR at the reset date, the Company will have a variable interest obligation that may cause volatility in our cash flows. In order to control the volatility in our cash flows, we, along with our Members, purchased an interest rate cap from the Commonwealth Bank of Australia.



	Successor			Predecessor
(Unaudited -- In thousands)	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
Net cash provided by operating activities	$	101,283		$	101,263
Net cash used in investing activities	(14,293		)	(20,516		)
Net cash used in financing activities	(36,621		)	(75,378		)

~~Off-Balance~~As ~~Sheet~~of ~~Arrangements~~June 30, 2015, we had $105.8 million in available cash and cash equivalents.

~~In connection~~Cash ~~with~~Flows ~~the Sale, affiliates of Blackstone entered into two Mezzanine Loan agreements with JPMorgan for a total aggregate principal amount of $425 million. Refer to Note 13~~ — ~~for~~Operating ~~discussion~~Activities ~~on the Mezzanine Loans.~~

~~Critical~~Net ~~Accounting~~cash ~~Policies~~provided by operating activities during the six months ended June 30, 2015 is primarily attributable to positive operating results during the period, overall reduction in prepaid operating expenses and ~~Estimates~~the receipt of $12.3 million from the OCIP fund and a $7.0 million payment both in connection with OCIP Closeout Agreement discussed in Note 9. We continue to improve accounts receivable collections. However, for the six months ended June 30, 2015, the cash inflows from receivables were offset by increasing receivables attributable to the casino and group revenue growth during the operating period.

~~The~~Net ~~preparation~~cash ofprovided ~~our~~by ~~condensed~~operating ~~consolidated~~activities ~~financial~~during ~~statements~~the insix ~~conformity~~months ~~with~~ended ~~U.S.~~June ~~GAAP~~30, ~~requires~~2014, usis toprimarily ~~make~~attributable ~~estimates~~to ~~and~~$56.4 ~~judgments about~~million ~~the effects~~ of ~~matters~~reimbursements ~~that~~by ~~are~~the ~~inherently~~Corporate ~~uncertain.~~Consolidated ~~Management~~Tax ~~evaluates~~Group ~~its~~owned ~~estimates~~by ~~and~~Deutsche ~~assumptions~~Bank onfor anthe ~~ongoing~~utilization ~~basis~~of ~~using~~the ~~historical~~Company’s ~~experience~~prior ~~and~~period ~~other~~net ~~factors,~~operating ~~including~~losses. ~~the~~In ~~current economic environment~~addition, ~~which~~the ~~management~~net ~~believes to~~cash beprovided ~~reasonable~~by ~~under~~operating ~~the~~activities ~~circumstances.~~was Wealso ~~adjust~~primarily ~~such~~impacted ~~estimates~~by ~~and~~(i) ~~assumptions~~increasing ~~when~~receivables ~~facts~~attributable ~~and~~to ~~circumstances~~the ~~dictate.~~operating ~~The~~period’s ~~critical~~casino, ~~accounting~~banquet ~~policies~~and ~~are~~group ~~summarized~~revenue ingrowth; ~~Note~~and 2(ii) tothe ~~our~~timing ~~condensed~~of ~~consolidated~~payments ~~financial~~for ~~statements~~certain ~~included~~significant ~~in Item 8~~prepaid —expenses ~~Financial Statements~~ and ~~Supplementary~~accrued ~~Data~~liabilities, inincluding ~~our~~property ~~2014~~taxes ~~Annual~~and ~~Report~~IT onmanagement ~~Form 10-K filed on March 27, 2015~~contracts.

29Cash Flows — Investing Activities

~~Table~~As ofdiscussed ~~Contents~~in Note 3, per the Second Amendment signed in April 2015, the net cash paid for the acquisition increased by $6.4 million. The increase in the cash paid increased the goodwill for the same amount.

~~Newly~~The ~~Issued~~ordinary ~~Accounting~~and ~~Pronouncements~~major capital expenditures incurred during the six months ended June 30, 2015 of $7.9 million were primarily related to the build-out of additional hotel rooms and certain information technology initiatives.

~~Refer~~For tothe ~~related~~six ~~disclosure~~months ~~within~~ended ~~Note~~June 230, —2014, ~~Basis~~the ofordinary ~~Presentation~~ and ~~Summary~~major ofcapital ~~Significant~~expenditures ~~Accounting~~incurred ~~Policies~~of to$20.5 ~~our~~million ~~condensed consolidated~~were ~~financial~~primarily ~~statements~~related ~~included~~to inconstruction ~~Item 1~~of —certain ~~Notes~~components toof ~~Condensed~~our ~~Consolidated~~integrated ~~Financial~~resort, ~~Statements~~including ~~(unaudited)~~The inChelsea, ~~this~~Rose. ~~Quarterly~~Rabbit. ~~Report~~Lie. onand ~~Form~~ordinary ~~10-Q.~~capital expenditures.

~~Item3~~In addition to direct costs of construction, soft and/or indirect costs are included in construction in progress and ordinary capital expenditures (as applicable). ~~Quantitative~~These soft costs are generally incurred prior to commencement of the project construction and ~~Qualitative~~can ~~Disclosures~~include ~~about~~permits, ~~Market~~architectural ~~Risk~~ fees, engineering fees, real estate commissions and fees, marketing, taxes, insurance, interest payments, leasing and general administrative costs, etc. For the six months ended June 30, 2015 and 2014, we capitalized related soft costs in the amount of $0.4 million and $0.7 million, respectively.

~~Market~~Cash ~~risk~~Flows is— ~~the~~Financing risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. The outstanding debt under our Mortgage Loan has a variable interest rate. In connection with the Mortgage Loan, Propco purchased an interest rate cap from the Commonwealth Bank of Australia in the notional amount of the Mortgage Loan with a strike rate for LIBOR of 3.74% and a term ending on January 15, 2017. Activities

~~Item~~For the six months ended June 30, 2015, the net cash used in financing activities of $36.6 million primarily includes (i) a contribution of $6.4 million for the excess net working capital amount representing 50% of the released amount from the OCIP fund plus broker fees, refer to Note 9; (ii) total distributions to members related to the Mezzanine A Loan and Mezzanine B Loan of $8.3 ~~Controls~~million and ~~Procedures~~$4.9 million, respectively, refer to Note 13; and (iii) a distribution to members of $29.9 million for the final payment of the excess net working capital amount, refer to Note 8.

~~Disclosure Controls and Procedures~~ 31

WeTable ~~maintain disclosure controls and procedures (as such term is defined under Rule 13a-15(e) and Rule 15d-15(e)~~ of the Exchange Act) designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Contents

AsFor ~~required~~the bysix ~~Rule~~months ~~13a-15(b)~~ended ~~and~~June ~~Rule 15d-15(b) of the Exchange Act~~30, ~~the Company’s management~~2014, ~~including~~ the ~~Chief~~net ~~Executive~~cash ~~Officer~~used ~~and Chief~~in ~~Financial~~financing ~~Officer,~~activities ~~is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e)~~ of ~~the Exchange Act~~$75.4 Asmillion ofincludes ~~March 31,~~$6.2 ~~2015,~~million anin ~~evaluation~~borrowings ~~was~~against ~~performed under~~ the ~~supervision~~credit ~~and~~facility ~~with~~maintained ~~the~~by ~~participation of management, including~~ the ~~Chief~~Predecessor ~~Executive~~which ~~Officer~~was ~~and~~offset ~~Chief~~by ~~Financial~~related ~~Officer,~~principal ofrepayments ~~the~~totaling ~~effectiveness~~$81.6 ofmillion. ~~the~~The ~~design~~draws ~~and~~against ~~operation of~~ the ~~Company’s~~credit ~~disclosure~~facility ~~controls~~were ~~and~~primarily ~~procedures.~~utilized ~~Based~~for onconstruction ~~that evaluation,~~costs ~~the~~relating ~~Chief~~to ~~Executive~~The ~~Officer~~Chelsea and ~~Chief~~Rose. ~~Financial~~Rabbit. ~~Officer~~Lie. ~~concluded~~and ~~that~~to ~~our~~a ~~disclosure~~lesser ~~controls~~degree, ~~and~~to ~~procedures~~finance asthe ofoperations ~~March 31,~~at ~~2015,~~the ~~were effective~~Property.

~~Changes in Internal Control over Financial Reporting~~ Liquidity

~~There~~Our integrated resort will have ~~not~~an ~~been~~ongoing ~~any~~need ~~changes~~for inrenovations ~~the~~and ~~Company’s~~other ~~internal~~capital ~~control~~improvements ~~over~~to ~~financial~~remain ~~reporting~~competitive, ~~(as~~including ~~defined~~replacement, infrom ~~Rules~~time ~~13a-15(f)~~to ~~and~~time, ~~15d-15(f) under~~of ~~the~~furniture, ~~Exchange~~fixtures ~~Act)~~and ~~that~~equipment. ~~occurred~~Certain ~~during~~capital ~~the~~expenditure ~~quarter~~requirements ~~ended~~may ~~March 31,~~be ~~2015,~~necessary ~~that~~to ~~have~~comply ~~materially~~with ~~affected,~~any orchanges ~~are~~in ~~reasonably~~applicable ~~likely~~laws toand ~~materially~~regulations. ~~affect,~~We ~~the~~estimate ~~Company’s~~capital ~~internal~~expenditures ~~control~~will ~~over~~range ~~financial~~between ~~reporting~~$53.0 million to $71.0 million during the year ended December 31, 2015.

30We intend to pay for the capital expenditures through the use of working capital. We may require additional financing to support future growth. Because we are an indirectly owned subsidiary of Blackstone, funding for major capital expenditures may be provided by Blackstone or one of its affiliates.

~~Table~~Short-Term ofLiquidity ~~Contents~~Requirements

~~PART~~We IIgenerally —consider ~~OTHER~~our ~~INFORMATION~~short-term liquidity requirements to consist of those items that are expected to be incurred or come due within the next twelve months. We believe those requirements consist primarily of funds necessary to pay construction payables and retention, normal on-going capital expenditures, interest payments, and on-going working capital requirements. We believe that operating cash flows generated by the Property will be sufficient to meet our short-term liquidity requirements. We estimate short-term liquidity requirements will range between $140.0 million to $150.0 million during the year ended December 31, 2015.

~~Item~~Long-Term 1.Liquidity ~~Legal Proceedings~~Requirements

~~See~~We ~~Note~~generally 15consider —our ~~Commitments,~~long-term ~~Contingencies~~liquidity ~~and~~requirements ~~Litigation~~to consist of those items that are expected to ~~our~~be ~~condensed~~incurred ~~consolidated~~beyond ~~financial~~the ~~statements~~next ~~included~~twelve inmonths ~~Item 1~~and ~~— Notes~~believe tothese ~~Condensed~~requirements ~~Consolidated~~consist ~~Financial~~primarily ~~Statements~~of ~~(unaudited)~~funds innecessary ~~this~~to ~~Quarterly~~finance ~~Report~~future onrenovation ~~Form 10-Q~~projects ~~for~~and ato ~~description~~finance ofongoing operational costs. We intend to satisfy our ~~significant~~long-term ~~current~~liquidity ~~legal~~requirements ~~proceedings,~~through ~~which~~operating iscash ~~incorporated~~flows ~~herein~~generated by ~~reference.~~the Property.

~~Item~~The 1Adebt structure described above will require the Company to generate sufficient cash flow to pay the current interest due on the outstanding borrowings on a monthly basis. ~~Risk~~Since ~~Factors~~interest rates will reset monthly based on the value of LIBOR at the reset date, the Company will have a variable interest obligation that may cause volatility in our cash flows. In order to control the volatility in our cash flows, we, along with our Members, purchased an interest rate cap from the Commonwealth Bank of Australia.

~~In addition to the other information contained in this Quarterly Report on Form 10~~Off-Q,Balance ~~you~~Sheet should carefully consider other risk factors discussed in Item 1A — Risk Factors in our Annual Report on Form 10-K which was filed with the SEC on March 27, 2015, in evaluating our business, financial position, future results, and prospects. Although there have been no material changes to the risk factors described in the Annual Report on Form 10-K, the risks described therein are not the only risks facing our Company. Additional risks that we do not presently know or that we currently believe are not material could also materially adversely affect our business, financial position, future results and prospects. Arrangements

~~Item~~In 2.connection ~~Unregistered~~with ~~Sales~~the Sale, affiliates of ~~Equity~~Blackstone ~~Securities~~entered ~~and~~into ~~Use~~two Mezzanine Loan agreements with JPMorgan for a total aggregate principal amount of ~~Proceeds~~$425 million. Refer to Note 13 — for discussion on the Mezzanine Loans.

~~None.~~Critical Accounting Policies and Estimates

~~Item~~The 3preparation of our condensed consolidated financial statements in conformity with U.S. ~~Defaults~~GAAP ~~Upon~~requires ~~Senior~~us ~~Securities~~to make estimates and judgments about the effects of matters that are inherently uncertain. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. The critical accounting policies are summarized in Note 2 to our condensed consolidated financial statements included in Item 8 — Financial Statements and Supplementary Data in our 2014 Annual Report on Form 10-K filed on March 27, 2015.

~~None.~~ 32

~~Item 4.~~Table ~~Mine~~of ~~Safety Disclosures~~ Contents

~~Not~~Newly ~~applicable.~~Issued Accounting Pronouncements

Refer to related disclosure within Note 2 — Basis of Presentation and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Item 1 5.— ~~Other~~Notes ~~Information~~to Condensed Consolidated Financial Statements (unaudited) in this Quarterly Report on Form 10-Q.

On April 3, 2015, the Company entered into a second amendment to the three-year employment agreement with Lisa Marchese, the Company’s Chief Marketing Officer, pursuant to which such employment agreement was extended for a period of sixty daysItem3. ~~Ms. Marchese’s~~Quantitative ~~employment~~and ~~agreement,~~Qualitative ~~which~~Disclosures ~~was~~about ~~scheduled~~Market ~~to terminate on April 3, 2015, will now terminate on June 3, 2015. No other terms of this employment agreement was amended.~~ Risk

AsMarket risk is the risk of ~~April 10,~~loss ~~2015~~arising from adverse changes in market rates and prices, ~~Ronald~~such G.as ~~Eidell~~interest rates, ~~the Company’s~~foreign ~~Chief~~currency ~~Financial~~exchange ~~Officer~~rates isand ~~transitioning~~commodity ~~from~~prices. ~~the~~The ~~position~~outstanding ofdebt ~~Chief~~under ~~Financial~~our ~~Officer~~Mortgage toLoan has a ~~senior~~variable ~~advisory~~interest ~~role~~rate. atIn connection with the ~~Company~~Mortgage ~~and~~Loan, ~~will~~Propco bepurchased ~~available~~an tointerest rate cap from the ~~Company~~Commonwealth Bank of Australia in ~~this~~the ~~capacity~~notional ~~for~~amount of the ~~remainder~~Mortgage Loan with a strike rate for LIBOR of ~~2015~~3.74% and a term ending on January 15, 2017.

~~As of April~~Item ~~10, 2015, the Company’s Board of Directors (the “Board”) appointed Michelle F~~4.Controls ~~Adams, age 42, who was the Company’s Vice President of Finance~~ and Corporate Controller, as the Company’s Chief Financial Officer. Ms. Adam’s appointment was effective immediately, subject to receipt of the required regulatory approvals by the Nevada Gaming Commission. Procedures

OnDisclosure ~~April 16,~~Controls ~~2015,~~and the Board of Directors (the “Board”) of Nevada Property 1 LLC (the “Company”) elected Andrea L. Drasites as a member of the Board, effective immediately, subject to the required regulatory approvals by the Nevada Gaming Commission. Ms. Drasites will become a member of the Company’s Audit Committee. Procedures

31We maintain disclosure controls and procedures (as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

~~Table~~As required by Rule 13a-15(b) and Rule 15d-15(b) of ~~Contents~~the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of June 30, 2015, were effective at the reasonable assurance level.

~~Iran~~Changes ~~Threat~~in ~~Reduction~~Internal ~~and~~Control ~~Syria~~over ~~Human~~Financial ~~Rights Act of 2012~~ Reporting

~~Pursuant~~There tohave ~~Section 219~~not ofbeen any changes in the ~~Iran~~Company’s ~~Threat~~internal ~~Reduction~~control ~~and~~over ~~Syria~~financial ~~Human~~reporting ~~Rights~~(as ~~Act~~defined ofin ~~2012,~~Rules ~~which~~13a-15(f) ~~added~~and ~~Section 13~~15d-15(rf) ofunder the Exchange Act,) wethat ~~hereby~~occurred ~~incorporate~~during bythe ~~reference~~quarter ~~herein~~ended ~~Exhibit~~June 30, ~~99.1~~2015, ofthat ~~this~~have ~~report.~~materially ~~Exhibit~~affected, ~~99.1~~or ~~includes~~are ~~disclosures~~reasonably ~~regarding~~likely ~~Travelport~~to ~~Worldwide~~materially ~~Limited~~affect, ~~which~~the ~~may~~Company’s beinternal ~~considered~~control anover ~~affiliate~~financial ~~of The Blackstone Group L~~reporting.~~P. and therefore, our affiliate.~~

32 33

Table of Contents

~~Item~~PART 6.II ~~Exhibits~~— OTHER INFORMATION

Exhibit
10.1*†		Second Letter Amendment to Employment Agreement, dated April 3, 2015, between Nevada Property 1 LLC and Lisa Marchese
10.2*		First Amendment to Loan Agreement, dated as of March 30, 2015, among JPMorgan Chase Bank, National Association, TCOLV Propco LLC, Nevada Property 1 LLC and the subsidiaries of Nevada Property 1 LLC named therein.
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1*		Exchange Act Section 13(r) Disclosure.
101*		The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 13, 2015 formatted in Extensible Business Reporting Language (XBRL):
		i. the Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014;
		ii. the Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014;
		iii. the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014; and
		iv. the Notes to Condensed Consolidated Financial Statements.

Item 1. Legal Proceedings

*See ~~Filed~~Note ~~herewith~~15 — Commitments, Contingencies and Litigation to our condensed consolidated financial statements included in Item 1 — Notes to Condensed Consolidated Financial Statements (unaudited) in this Quarterly Report on Form 10-Q for a description of our significant current legal proceedings, which is incorporated herein by reference.

†Item 1A. ~~Indicates~~Risk ~~management contract or compensatory plan.~~Factors

~~The~~In ~~agreements~~addition ~~and~~to the other ~~documents~~information ~~filed as~~contained ~~exhibits~~in to this ~~report~~Quarterly ~~are~~Report ~~not~~on ~~intended~~Form to10-Q, ~~provide~~you ~~factual~~should ~~information~~carefully orconsider other ~~disclosure~~risk ~~other~~factors ~~than~~discussed ~~with~~in ~~respect~~Item 1A to— ~~the~~Risk ~~terms~~Factors ofin ~~the~~our ~~agreements~~Annual orReport ~~other~~on ~~documents~~Form ~~themselves,~~10-K ~~and~~which ~~you~~was ~~should~~filed ~~not~~with ~~rely~~the SEC on ~~them~~March 27, ~~for~~2015, ~~that~~in ~~purpose.~~evaluating Inour ~~particular~~business, ~~any representations~~financial position, future results, and ~~warranties~~prospects. ~~made~~Although bythere ushave inbeen ~~these~~no ~~agreements~~material orchanges ~~other~~to ~~documents~~the ~~were~~risk ~~made~~factors ~~solely~~described ~~within~~in the ~~specific~~Annual ~~context~~Report ofon ~~the~~Form ~~relevant~~10-K, ~~agreement~~the orrisks ~~document~~described ~~and~~therein ~~may~~are not ~~describe~~ the ~~actual~~only ~~state~~risks offacing ~~affairs~~our asCompany. ofAdditional ~~the~~risks ~~date~~that ~~they~~we ~~were~~do ~~made~~not presently know or ~~at any~~that ~~other~~we ~~time~~currently believe are not material could also materially adversely affect our business, financial position, future results and prospects.

33Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

~~Table of Contents~~None.

~~SIGNATURES~~Item 3. Defaults Upon Senior Securities

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorizedNone.

~~NEVADA PROPERTY 1 LLC Registrant /S/ WILLIAM P~~Item 4. ~~McBEATH~~Mine ~~President,~~Safety ~~Chief Executive Officer and (Principal Executive Officer) Date: May 13, 2015~~Disclosures

~~/S/~~Not ~~MICHELLE F~~applicable. ~~ADAMS Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: May 13, 2015~~

34Item 5. Other Information

Iran Threat Reduction and Syria Human Rights Act of 2012

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report. Exhibit 99.1 includes disclosures publicly filed by Travelport Worldwide Limited, which may be considered an affiliate of The Blackstone Group L.P. and therefore, our affiliate.

Table of Contents

Management Promote Program

On August 6, 2015, our indirect parent and an affiliate of Blackstone, approved an equity-compensation plan (the “Promote Plan”) and granted members of management, including our named executive officers, equity in the form of Class B Units in such parent entity.

The Class B Units are long-term incentive awards that are designed to promote our interests by providing management employees with equity interests as an incentive to remain in our service and align the executives’ interests with those of our equity holders and ultimate parent investors. The Class B Units are profits interests having economic characteristics similar to stock appreciation rights and represent the right to share in any increase in the equity value of this parent entity that exceeds a specified threshold. Therefore the Class B units only have value to the extent there is an appreciation in the value of our business and the appreciation exceeds a specified threshold.

The Class B Units are scheduled to vest in equal annual installments over the first five anniversaries of December 19, 2014 and will fully vest upon a change of control, in each case, subject to the named executive officer’s continued employment with the Company through the applicable vesting date. If the named executive officer’s employment is terminated for any reason, including death or disability, all unvested Class B Units will be forfeited.

Table of Contents

Item 6. Exhibits



Exhibit
10.1*†	Second Letter Amendment to Employment Agreement, dated April 3, 2015, between Nevada Property 1 LLC and Lisa Marchese, incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on May 13, 2015.
10.2*†	Third Letter Amendment to Employment Agreement, dated June 2, 2015, between Nevada Property 1 LLC and Lisa Marchese.
10.3*†	Consulting Agreement, effective dated as of May 22, 2015, among Nevada Property 1 LLC and Ronald G. Eidell.
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1*	Exchange Act Section 13(r) Disclosure.
101*	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 10, 2015 formatted in Extensible Business Reporting Language (XBRL):
	i. the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014;
	ii. the Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014;
	iii. the Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2015 and 2014; and
	iv. the Notes to Condensed Consolidated Financial Statements.


*	Filed herewith.


†	Indicates management contract or compensatory plan.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

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

NEVADA PROPERTY 1 LLC

Registrant

/S/ WILLIAM P. McBEATH

President, and Chief Executive Officer

(Principal Executive Officer)

Date: August 7, 2015

/S/ MICHELLE F. ADAMS

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

Date: August 7, 2015

Filing Compare · Nevada Property 1 LLC