10-Q/A 1 k70607e10vqza.txt AMENDMENT NO. 1 TO FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q/A AMENDMENT NO. 1 TO (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 31, 2002 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 333-81584 Delaware MAJESTIC INVESTOR HOLDINGS, LLC 33-4468392 Delaware MAJESTIC INVESTOR CAPITAL CORP. 36-4471622 (State or other (Exact name of registrant as specified (I.R.S. Employer jurisdiction in its charter) Identification No.) of incorporation or organization) One Buffington Harbor Drive Gary, Indiana 46406-3000 (219) 977-7823 (Registrant's address and telephone number, including area code) 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 filing requirements for the past 90 days. Yes ______ No __X___ Shares outstanding of each of the registrant's classes of common stock as of March 31, 2002: Class Number of shares ----- ---------------- Not applicable Not applicable EXPLANATORY NOTE The Registrant completed the acquisition of the assets of three subsidiaries of Fitzgeralds Gaming Corporation on December 6, 2001. Financial statements for the acquired business were not available when the Registrant filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2002. In order to comply with Rule 3-02 of Regulation S-X, this Amendment No. 1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 is being filed to include such financial statements in Item 1 of this Report and to reference such financial data in Item 2 of this Report. MAJESTIC INVESTOR HOLDINGS, LLC Index

i PART 1 - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements MAJESTIC INVESTOR HOLDINGS, LLC Consolidated Balance Sheets (Unaudited)

The accompanying notes are an integral part of these consolidated financial statements. 1 MAJESTIC INVESTOR HOLDINGS, LLC CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

The accompanying notes are an integral part of these financial statements. 2 MAJESTIC INVESTOR HOLDINGS, LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

The accompanying notes are an integral part of these consolidated financial statements. 3 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. BASIS OF PRESENTATION Majestic Investor Holdings, LLC (the "Company"), is a Delaware limited liability company formed on September 14, 2001. The Company owns and operates three Fitzgeralds brand casinos through its wholly-owned subsidiaries, Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC and Barden Nevada Gaming, LLC, each of which is a "restricted subsidiary" of the Company under the Indenture relating to the Company's 11.653% Senior Secured Notes (the "Notes"). Majestic Investor Capital Corp. ("MICC"), another wholly-owned subsidiary of the Company, was formed specifically to facilitate the offering of the Company's Notes and does not have any material assets or operations. The Company is a wholly-owned subsidiary of Majestic Investor, LLC and an indirect wholly-owned subsidiary of The Majestic Star Casino, LLC ("Majestic Star"), owner and operator of the Majestic Star Casino, a riverboat casino located at Buffington Harbor in Gary, Indiana. The Company is indirectly wholly- owned and controlled by Don H. Barden, the Company's Manager, Chairman, President and Chief Executive Officer. Except where otherwise noted, the words "we," "us," "our" and similar terms, as well as the "Company," refer to Majestic Investor Holdings, LLC and all of its subsidiaries. The accompanying consolidated financial statements are unaudited and include the accounts of the Company's wholly-owned subsidiaries, Majestic Investor Capital Corp., Barden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC and Barden Nevada Gaming, LLC. All significant intercompany transactions and balances have been eliminated. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the results for the interim period has been made. The results for the three months ended March 31, 2002 are not necessarily indicative of results to be expected for the full fiscal year. The 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, 2001. NOTE 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, "Rescission of FASB statements, No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections." This Statement updates, clarifies and simplifies existing accounting pronouncements. Management does not expect the standard to have any material impact on the Company's consolidated financial position, results of operations and cash flows. NOTE 3. COMMITMENTS AND CONTINGENCIES GAMING REGULATIONS The ownership and operation of our casino gaming facilities are subject to various state and local regulations in the jurisdictions where they are located. In Nevada, our gaming operations are subject to the Nevada Gaming Control Act, and to the licensing and regulatory control of the Nevada Gaming Commission, the Nevada State Gaming Control Board and various local ordinances and regulations, including, without limitation, applicable city and county gaming and liquor licensing authorities. In Mississippi, our gaming operations are subject to the Mississippi Gaming Control Act, and to the licensing and/or regulatory control of the Mississippi Gaming Commission, the Mississippi State Tax Commission and various state and local regulatory agencies, including liquor licensing authorities. In Colorado, our gaming operations are subject to the Limited Gaming Act of 1991, which created the Division of Gaming within the Colorado Department of 4 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Revenue and the Colorado Limited Gaming Control Commission to license, implement, regulate and supervise the conduct of limited gaming. Our operations are also subject to the Colorado Liquor Code and the state and local liquor licensing authorities. In addition, as The Majestic Star Casino, LLC does business in the State of Indiana, the Company is subject to certain reviews by the Indiana Gaming Commission. The Company's directors, officers, managers and key employees are required to hold individual licenses, the requirements for which vary from jurisdiction to jurisdiction. Licenses and permits for gaming operations and of individual licensees are subject to revocation or non-renewal for cause. Under certain circumstances, holders of our securities are required to secure independent licenses and permits. NOTE 4. ACQUISITIONS On December 6, 2001, we completed the acquisition of substantially all of the assets and assumed certain liabilities of Fitzgeralds Las Vegas, Inc. ("Fitzgeralds Las Vegas"), Fitzgeralds Mississippi Inc. ("Fitzgeralds Tunica") and 101 Main Street Limited Liability Company ("Fitzgeralds Black Hawk") (the "Fitzgeralds assets") for approximately $152.7 million in cash, which includes the purchase price of $149.0 million and professional fees and other expenses related to the acquisition. The purchase and sale agreement dated November 22, 2000 included a provision whereby the purchase price of $149.0 million was subject to adjustment in certain circumstances including an adjustment related to the working capital of the acquired properties at the date of acquisition. Pursuant to the terms of the purchase and sale agreement, the parties agreed to a $3.8 million purchase price reduction, on May 9, 2002 based upon a negotiated settlement of the value of working capital at December 6, 2001. The Company will record this amount as a reduction of goodwill in the second quarter of 2002. Accordingly, the purchase price is allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We determined the estimated fair value of property and equipment and intangible assets based upon third-party valuations. The purchase price was determined based upon estimates of future cash flows and the net worth of the assets acquired. Majestic Investor Holdings, LLC funded the acquisition through the issuance of its 11.653% Senior Secured Notes. The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed at the acquisition date.

Intangible assets primarily include $9.8 million for customer relationships, $3.7 million for tradename and $5.2 million for gaming licenses. Intangible assets for customer relationships and tradenames are being amortized over a period of 8-10 years. In accordance with SFAS 142, goodwill, and other indefinite lived intangible assets, such as the Company's gaming license, are not amortized but instead are subject to impairment tests at least annually. 5 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 5. OTHER INTANGIBLE ASSETS The gross carrying amount and accumulated amortization of the Company's intangible assets, other than goodwill, as of March 31, 2002, are as follows:

The amortization expense recorded on the intangible assets for the three months ended March 31, 2002 was $0.4 million. The estimated amortization expense for each of the five succeeding fiscal years is as follows:

NOTE 6. GOODWILL The changes in the carrying amount of goodwill for the three months ended March 31, 2002 are as follows:

The increase in goodwill primarily relates to professional fees incurred by the Company related to the acquisition of Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk. In accordance with FAS 142, goodwill is not amortized but instead subject to impairment tests at least annually. 6 NOTE 7. SEGMENT INFORMATION The Company owns and operates three properties as follows: a casino and hotel located in downtown Las Vegas, Nevada; a casino and hotel located in Tunica, Mississippi; and a casino located in Black Hawk, Colorado (collectively, the "Properties"). The Company identifies its business in three segments based on geographic location. The Properties market in each of their segments primarily to middle-income guests, emphasizing their Fitzgeralds brand and 7 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) their "Fitzgerald Irish Luck" theme. The major products offered in each segment are as follows: casino, hotel rooms (except in Black Hawk, Colorado) and food and beverage. The accounting policies of each business segment are the same as those described in the summary of significant accounting policies previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. There are minimal inter-segment sales. Corporate costs are allocated to the business segment through management fees from Majestic Star and are reflected in "General and Administrative" expenses. A summary of the Properties' operations by business segment for the three months ended March 31, 2002 and for the quarter ended April 1, 2001 is presented below:

--------------- (1)Unallocated and other include corporate items and eliminations that are not allocated to the operating segments. (2)Fitzgeralds Las Vegas, Inc., Fitzgeralds Mississippi Inc. and 101 Main Street Limited Liability Company discontinued recording depreciation and amortization of their property and equipment and interest on the senior secured notes subsequent to the filing of the bankruptcy cases on December 5, 2000. 8 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 8. RELATED PARTY TRANSACTIONS During the three months ended March 31, 2002, a distribution of $188,000, related to the fourth quarter of 2001, was paid to Bardon Development Inc. ("BDI") in accordance with the Management Agreement between the Company and BDI dated December 5, 2001. Interest of $185,750 on a $2.0 million note made by Majestic Investor, LLC to BDI which was later assigned to Majestic Investor Holdings, LLC remains outstanding at March 31, 2002. BDI repaid the principal of the note in conjunction with the closing of the acquisition on December 6, 2001. In December 2001, the Company issued a $700,000 note to BDI. The note bears interest at a rate of 7% per annum. The principal and accrued but unpaid interest are due and payable in full on December 12, 2002. NOTE 9. SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION The Company's $152.6 million, 11.653% Senior Secured Notes are unconditionally and irrevocably guaranteed, jointly and severally, by all of the restricted subsidiaries of the Company. The guarantees rank senior in right of payment to all existing and future subordinated indebtedness of these restricted subsidiaries and equal in right of payment with all existing and future senior indebtedness of these restricted subsidiaries. The following condensed consolidating information presents financial statements as of March 31, 2002 and December 31, 2001 and for the three months ended March 31, 2002, of Majestic Investor Holdings, LLC, the parent Company, the guarantor subsidiaries (on a combined basis) and the elimination entries necessary to combine such entities on a consolidated basis. MICC, a wholly-owned subsidiary of the Company, is a non-guarantor subsidiary. However, MICC does not have any material assets, obligations or operations. Therefore, no non-guarantor subsidiary has been presented below. 9 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Condensed consolidating balance sheets as of March 31, 2002.

--------------- (a) To eliminate intercompany receivables and payables. (b) To eliminate intercompany accounts and investment in subsidiaries. 10 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Condensed consolidating balance sheets as of December 31, 2001.

--------------- (a) To eliminate intercompany receivables and payables. (b) To eliminate intercompany accounts and investment in subsidiaries. 11 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Condensed consolidating statements of operations for the three months ended March 31, 2002.

12 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Condensed consolidating statements of cash flows for the three months ended March 31, 2002.

NOTE 10. SUPPLEMENTAL CONSOLIDATING INFORMATION The following information presents consolidating balance sheets as of March 31, 2002 and consolidating statements of operations and cash flows for the three months ended March 31, 2002. 13 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Consolidating balance sheets as of March 31, 2002.

14 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Consolidating statements of operations for the three months ended March 31, 2002.

15 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Consolidating statements of cash flows for the three months ended March 31, 2002.

16 MAJESTIC INVESTOR HOLDINGS, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Consolidating statements of cash flows for the three months ended March 31, 2002 (continued).

17 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Statement of Forward-Looking Information This report includes statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Words such as "believes," "anticipates," "estimates" or "expects" used in the Company's press releases and reports filed with the Securities and Exchange Commission are intended to identify forward-looking statements. All forward-looking statements involve risks and uncertainties. Although the Company believes its expectations are based upon reasonable assumptions within the bounds of its current knowledge of its business and operations, there can be no assurances that actual results will not materially differ from expected results. The Company cautions that these and similar statements included in this report and in previously filed reports are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, without limitation: the ability to fund planned development needs and to service debt from existing operations; the ability to successfully integrate the three Fitzgeralds casinos; increased competition in existing markets or the opening of new gaming jurisdictions; a decline in the public acceptance of gaming; the limitation, conditioning or suspension of our gaming licenses; increases in or new taxes imposed on gaming revenues, taxes on gaming devices; a finding of unsuitability by regulatory authorities with respect to the Company or its officers or key employees; loss and/or retirement of key executives; a significant increase in fuel or transportation prices; adverse economic conditions in the Company's markets; severe and unusual weather in our markets; non-renewal of the Company's or any of its operating subsidiaries' gaming licenses from the appropriate governmental authorities in Nevada, Mississippi and Colorado; and continuing effects of recent terrorist attacks and any future occurrences of terrorist attacks or other destabilizing events. We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date thereof. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements and factors that may affect future results contained throughout this report. The Company undertakes no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date hereof. The following discussion should be read in conjunction with, and is qualified in its entirety by, our financial statements, including the notes thereto listed in Item 1. Overview The Company was formed on September 14, 2001 and commenced operations of the Fitzgeralds casinos on December 7, 2001, and accordingly has a limited operating history. The discussion of operations herein focuses on events and the Company's revenues and expenses during the three months ended March 31, 2002 and the combined results of operations of the three Fitzgeralds casino properties for the quarter ended April 1, 2001. The gaming operations of the Company's properties may be seasonal and, depending on the location and other circumstances, the effects of such seasonality could be significant. The properties' results are affected by inclement weather in relevant markets. For example, the Fitzgeralds Black Hawk site, located in the Rocky Mountains of Colorado, is subject to snow and 18 icy road conditions during the winter months. Any such severe weather conditions may discourage potential customers from visiting the Black Hawk facilities. Also, at Fitzgeralds Las Vegas, business levels are generally weaker from Thanksgiving through the middle of January (except during the week between Christmas and New Year's) and throughout the summer, and generally stronger from mid-January through Easter and from mid-September through Thanksgiving. At Fitzgeralds Tunica and Fitzgeralds Black Hawk, business levels are typically weaker from Thanksgiving through the end of the winter and typically stronger from mid-June to mid-November. Accordingly, the Company's results of operations are expected to fluctuate from quarter to quarter and the results for any fiscal quarter may not be indicative of results for future fiscal quarters. Results of Operations The following table sets forth information derived from the Company's consolidated statements of income for the three months ended March 31, 2002, and the combined statement of operations for Fitzgeralds Las Vegas, Inc., Fitzgeralds Mississippi, Inc. and 101 Main Street Limited Liability Company for the quarter ended April 1, 2001 expressed as a percentage of gross revenues. 19 Consolidated Statement of Operations-- Summary Information (dollars in thousands)

NOTES: (1) Adjusted EBITDA (defined as earnings before interest, income taxes, depreciation and amortization, and excludes pre-opening costs of $7,300 associated with the acquisition of the Fitzgeralds casinos) is presented solely as a supplemental disclosure to assist in the evaluation of the Company's ability to generate cash flow. In particular, the Company believes that an analysis of Adjusted EBITDA enhances the understanding of the financial performance of companies with substantial depreciation and amortization. Results for any one or more periods are not necessarily indicative of annual results or continuing trends. 20 QUARTER ENDED MARCH 31, 2002 (SUCCESSOR) COMPARED TO QUARTER ENDED APRIL 1, 2001 (PREDECESSOR) For the three months ended March 31, 2002, the Company utilized a calendar financial reporting period resulting in ninety days of operations, as compared to the period ended April 1, 2001, in which a "4-4-5" (weeks) reporting period was used resulting in ninety-one days of operations. The additional day of operations in the prior year period does not have a significant impact on the comparability of financial information used in the following "Management's Discussion and Analysis of Financial Condition and Results of Operations". Consolidated gross revenues for the three months ended March 31, 2002 amounted to approximately $52.4 million an increase of approximately $1.1 million or 2.0% from gross revenues recorded in the period ended April 1, 2001. For the three months ended March 31, 2002, gross revenues for Fitzgeralds Tunica accounted for $28.2 million or 53.9% of consolidated gross revenues, Fitzgeralds Las Vegas accounted for $14.4 million or 27.4% and Fitzgeralds Black Hawk accounted for $9.8 million or 18.7% compared to $26.2 million or 51.0%, $15.7 million or 30.5% and $9.5 million or 18.5%, respectively, for the period ended April 1, 2001. The Company's business can be separated into four operating departments: casino, rooms (except Fitzgeralds Black Hawk), food and beverage, and other. Consolidated casino revenues for the three months ended March 31, 2002 totaled approximately $42.4 million of which slot machines accounted for approximately $37.3 million or 87.9% and table games accounted for approximately $5.1 million or 12.1% as compared to the period ended April 1, 2001. Casino revenues attributed to Fitzgeralds Tunica were $23.4 million for the three months ended March 31, 2002 compared to $21.5 million in the prior year period, an increase of $1.8 million or 8.4%. The increase in casino revenues is primarily attributable to a $1.9 million or 9.8% increase in slot revenues. Casino revenues attributed to Fitzgeralds Las Vegas were $9.8 million for the three-month period compared to $10.5 million in the prior period, a decrease of $0.7 million or 7.0%. The decrease in casino revenues is primarily attributable to lower overall visitor volumes in the Las Vegas marketplace. Casino revenues attributed to Fitzgeralds Black Hawk were $9.2 million for the three month period compared to $8.9 million, an increase of $0.3 million or 3.4%. 21 The consolidated average number of slot machines in operation was 2,915 during the three month period ended March 31, 2002 compared to 2,870 during the period ended April 1, 2001. Fitzgeralds Tunica accounted for 1,382 or 47.4%; Fitzgeralds Las Vegas accounted for 940 or 32.2% and Fitzgeralds Black Hawk accounted for 593 or 20.4%. The consolidated average win per slot per day was approximately $142 for the three months ended March 31, 2002 compared to $140 in the period ended April 1, 2001, with an average of approximately $168, $87, and $169 compared to $159, $94, and $167 at Fitzgeralds Tunica, Fitzgeralds Las Vegas and Fitzgeralds Black Hawk. The consolidated average win per table per day was approximately $848 for the three month period ended March 31, 2002 compared to $824 in the period ended April 1, 2002 with an average of approximately $814, $1,023, and $365 compared to $818, $957, and $345 at Fitzgeralds Tunica, Fitzgeralds Las Vegas, and Fitzgeralds Black Hawk respectively. Consolidated room revenues totaled $4.1 million or 7.8% of gross revenues for the three months ended March 31, 2002 compared to $4.2 million or 8.2% of gross revenues in the period ended April 1, 2001. Of this amount, Fitzgeralds Tunica accounted for $2.1 million or 51.0% and $2.0 million or 47.7%, respectively. Fitzgeralds Las Vegas accounted for $2.0 million or 49.0% and $2.2 million or 52.3%, respectively. At Fitzgeralds Tunica, the average daily rate was $48 for both periods, with an occupancy of 95.5% and 93.1%, respectively. At Fitzgeralds Las Vegas, the average daily rate was $41 and $40, respectively, with an occupancy of 84.4% and 93.9%, respectively. Consolidated food and beverage revenues for the three months ended March 31, 2002, totaled approximately $5.1 million or 9.7% of gross revenues, compared to approximately $5.1 million or 10.0% of gross revenues for the period ended April 1, 2001. Of this amount, Fitzgeralds Tunica accounted for $2.5 million or 48.6% and $2.3 million or 45.3%, respectively, and Fitzgeralds Las Vegas accounted for $2.1 million or 41.5% and $2.2 million or 43.6%, respectively, for the three-month period ended March 31, 2002 and the period ended April 1, 2001, respectively. Other consolidated revenues consisted primarily of commission and retail income and for the three months ended March 31, 2002 totaled approximately $0.9 million or 1.7% of gross revenues, compared to approximately $1.0 million or 2.0% of gross revenues, for the period ended April 1, 2001. Consolidated promotional allowances included in the consolidated gross revenues for the three months ended March 31, 2002 were $9.1 million or 17.4% of gross revenues compared to approximately $8.0 million or 15.5% of gross revenues, for the period ended April 1, 2001. The $1.2 million or 14.5% increase is primarily attributable to a $1.1 million or 21.2% increase at Fitzgeralds Tunica as a result of a 9.8% increase in slot revenues. Consolidated casino operating expenses including food and beverage, rooms, and other for the three months ended March 31, 2002 were $26.1 million or 49.7% of gross revenues and 61.5% of casino revenues compared to $24.3 million or 47.2% of gross revenues and 59.2% of casino revenues in the period ended April 1, 2001. The $1.8 million or 7.4% increase in casino operating expenses is attributable to $0.3 million in additional payroll costs, $0.4 million for higher costs related to complementaries, $0.1 million for increased costs for slot machines leases, and $0.2 million for higher gaming taxes. Consolidated selling, general, and administrative expenses for the three months ended March 31, 2002 totaled $8.4 million or 16.0% of gross revenues compared to $10.5 million or 20.3% of gross revenues in the period ended April 1, 2001. The $2.1 million or 19.9% decrease in selling, general, and administrative expenses is primarily attributable to lower costs associated with marketing and advertising programs and administrative salaries and wages. Consolidated depreciation and amortization for the three months ended March 31, 2002 totaled $3.4 million or 6.5% of gross revenues compared to $0 in the period ended April 1, 2001. The increase of $3.4 million was due to recognition of these items following the Fitzgeralds acquisition after the discontinuance of the recognition of depreciation and amortization by Fitzgeralds Gaming Corporation subsequent to the filing of the bankruptcy cases on December 5, 2000. Consolidated operating income for the three months ended March 31, 2002 was $5.5 million, or 10.5% of gross revenues, of which Fitzgeralds Tunica accounted for operating income of $4.6 million, or 84.3%, 22 Fitzgeralds Black Hawk accounted for operating income of $1.3 million, or 22.9% and Fitzgeralds Las Vegas accounted for operating income of $0.2 million, or 4.4%. The unallocated corporate loss principally for amortization was $0.6 million or 1.2% of gross revenues. Consolidated net interest expense for the three months ended March 31, 2002 was approximately $4.5 million or 8.6% of gross revenues, as compared to $4,000 for the period ended April 1, 2001. The increase of $4.5 million is attributable to interest expense associated with the 11.653% Senior Secured Notes. The Fitzgeralds companies discontinued accruing interest on the Notes on December 5, 2000 with the commencement of the Bankruptcy Cases. As a result of the foregoing, the Company realized consolidated net income of $1.0 million for the three months ended March 31, 2002. EBITDA for the three months ended March 31, 2002 was $8.9 million, of which Fitzgeralds Tunica accounted for $6.4 million, Fitzgeralds Black Hawk accounted for $1.6 million and Fitzgeralds Las Vegas accounted for $0.9 million. EBITDA should be viewed only in conjunction with all of the Company's financial data and statements, and should not be construed as an alternative either to income from operations (as an indicator of the Company's operating performance) or to cash flows from operating activities as a measure of liquidity. 23 Liquidity and Capital Resources At March 31, 2002, the Company had cash and cash equivalents of approximately $17.3 million. Cash and cash equivalents included $1.3 million at the Company, $8.0 million at Fitzgeralds Mississippi, $3.1 million at Fitzgeralds Black Hawk and $4.9 million at Fitzgeralds Las Vegas. The Company has met its capital requirements to date through net cash from operations, capital contributions, equipment loans and borrowings under its credit facility. For the three months ended March 31, 2002, net cash provided by operating activities totaled approximately $7.0 million. For the three months ended March 31, 2002, cash used by investing activities totaled approximately $2.0 million. Approximately $797,000 was expended during the three months ended March 31, 2002 for professional fees related to the Fitzgeralds acquisition. For the three months ended March 31, 2002, cash used by financing activities totaled approximately $5.4 million primarily resulting from the cash paid on the outstanding line of credit. Approximately $505,000 was expended during the three months ended March 31, 2002 for professional fees related to the issuance of the Company's 11.653% Senior Secured Notes. Approximately $4.8 million was repaid on the credit facility during the three months ended March 31, 2002. As of May 15, 2002, the outstanding borrowings under the credit facility was approximately $1.7 million. The Nevada Regulatory Authorities in April, 2002 approved pledging the assets of the Barden Nevada pursuant to the terms of the Company's credit facility. Therefore, the credit facility has been increased by the lender to $15.0 million from $12.0 million. Also, a cash distribution related to the fourth quarter of 2001 totaling approximately $188,000 was made to Barden Development, Inc. during the three months ended March 31, 2002 under the Management Agreement. We are required to pay weekly liquidated damages under the 11.653% Senior Secured Notes until such Notes are registered at an amount per week per principal amount of such Notes equal to $0.05 for the first 90-day period following April 5, 2002, increasing by an additional $0.05 per week with respect to each subsequent 90-day period, up to a maximum amount of $0.20 per week. Management believes that the Company's cash flow from operations and its current lines of credit will be adequate to meet the Company's anticipated future requirements for working 24 capital, its capital expenditures and scheduled payments of interest and principal on the Company's 11.653% Senior Secured Notes and other permitted indebtedness for the year 2002. No assurance can be given, however, that such proceeds and operating cash flow, in light of increased competition will be sufficient for such purposes. If necessary and to the extent permitted under the Investor Holdings Indenture, the Company will seek additional financing through borrowings and debt or equity financing. There can be no assurance that additional financing, if needed, will be available to the Company, or that, if available, the financing will be on terms favorable to the Company. In addition, there is no assurance that the Company's estimate of its reasonably anticipated liquidity needs is accurate or that unforeseen events will not occur, resulting in the need to raise additional funds. Recently Issued Accounting Pronouncements In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, "Rescission of FASB statements, No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections." This Statement updates, clarifies and simplifies existing accounting pronouncements. Management does not expect the standard to have any material impact on the Company's consolidated financial position, results of operations and cash flows. Item 3. Quantitative And Qualitative Disclosures About Market Risk There have been no material changes from the information reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001. Part II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) None (b) There were no reports on Form 8-K filed during the three months ended March 31, 2002. 25 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. MAJESTIC INVESTOR HOLDINGS, LLC By: Barden Development Inc., Manager By: /s/ Don H. Barden ---------------------------------------------------- July 26, 2002 Don H. Barden, President and Chief Executive Officer MAJESTIC INVESTOR CAPITAL CORP. By: /s/ Don H. Barden ---------------------------------------------------- July 26, 2002 Don H. Barden, President and Chief Executive Officer 26

MAJESTIC INVESTOR HOLDINGS LLC 10-Q/A