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 September 30, 2013

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

For the transition period from to

Commission file number 0-52042

OCM HOLDCO, LLC

(Exact name of Registrant as specified in its charter)

DELAWARE

20-3673772

(State or other jurisdiction of incorporation

or organization)

(I.R.S. Employer Identification No.)

333 SOUTH GRAND AVENUE

28th FLOOR

LOS ANGELES, CALIFORNIA, 90071

(Address of principal executive offices)

(213) 830-6300

(Registrant’s telephone number)

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

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

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

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

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

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OCM HOLDCO, LLC

Index

Form 10-Q

		PAGE
	Forward Looking Statements	3

Part I	Financial Information	4

Item 1.	Consolidated Financial Statements	4
	Balance Sheets	4
	Statements of Comprehensive Income (Loss)	5
	Statements of Changes in Members’ Equity	6
	Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20

Part II	Other Information	20
Item 1.	Legal Proceedings	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21
	Signatures	22

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Forward Looking Statements.

In addition to historical information, this Form 10-Q contains forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from those contained in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the notes to the financial statements of OCM HoldCo, LLC set forth in the section entitled “Financial Statements.” When used in this report, the words “expects,” “intends,” “anticipates,” “should,” “believes,” “will,” “plans,” “estimates,” “may,” “seeks,” and similar expressions are generally intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements after the date of this document. You should carefully review the information described in this Form 10-Q. You should also carefully review the risk factors described in the previously filed Form 10-K for the year ended December 31, 2012, and those described from time to time in our future reports filed with the Securities and Exchange Commission (the “Commission”).

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PART I—FINANCIAL STATEMENTS

Item 1. Financial Statements.

OCM HoldCo, LLC and Subsidiaries

Consolidated Balance Sheets

	September 30,		December 31,
	2013		2012
	(Unaudited)
ASSETS
Current assets
Cash	$	10,413,073	$	10,638,837
Deferred tax asset, current	333,091		46,723
	10,746,164		10,685,560

Other assets
Investment in Cannery Casino Resorts, LLC	87,431,970		90,072,780
Gaming and related licenses	805,698		805,698
Deferred tax assets, net of valuation allowance of $3,098,428 and $0	5,670,896		7,387,410
	$	104,654,728	$	108,951,448

LIABILITIES AND MEMBERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses, including $292,538 and $235,020 to related parties	$	310,233	$	268,363
Taxes payable	—		3,931
Related party loans	750,000		750,000
	1,060,233		1,022,294

Members’ equity	103,594,495		107,929,154
	$	104,654,728	$	108,951,448

See notes to consolidated financial statements.

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OCM HoldCo, LLC and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

For the Three and Nine Months Ended September 30, 2013 and 2012

	Three Months Ended						Nine Months Ended
	2013			2012			2013			2012

Income (loss)
Interest income	$	2,594		$	1,923		$	7,760		$	5,989
Equity in loss of unconsolidated investees	(1,398,709		)	(1,328,171		)	(2,804,532		)	(1,939,387		)
	(1,396,115		)	(1,326,248		)	(2,796,772		)	(1,933,398		)

Costs and expenses
Professional fees	50,422			38,873			200,772			177,807
Administrative fees and other expenses	13,410			13,129			40,516			39,647
Interest expense, related parties	11,643			11,018			34,107			32,392
	75,475			63,020			275,395			249,846

Loss before income tax provision	(1,471,590		)	(1,389,268		)	(3,072,167		)	(2,183,244		)

Income tax (provision) benefit	(487,104		)	1,410,017			(1,368,912		)	(2,172,537		)

Net income (loss)	(1,958,694		)	20,749			(4,441,079		)	(4,355,781		)
Equity in other comprehensive income of unconsolidated investee, net of tax, unrealized gain (loss) on interest rate swap	(50,477		)	—			106,420			—
Comprehensive income (loss)	$	(2,009,171	)	$	20,749		$	(4,334,659	)	$	(4,355,781	)

See notes to consolidated financial statements.

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OCM HoldCo, LLC and Subsidiaries

Consolidated Statements of Changes in Members’ Equity (Unaudited)

For the Nine Months Ended September 30, 2013 and 2012

	Total members’ equity			Accumulated other comprehensive income (loss)			Invested capital and accumulated earnings

2013
Balances, beginning of period	$	107,929,154		$	(205,774	)	$	108,134,928
Net loss	(4,441,079		)	—			(4,441,079		)
Equity in other comprehensive income of unconsolidated investee, net of tax, unrealized gain on interest rate swap	106,420			106,420			—

Balances, end of period	$	103,594,495		$	(99,354	)	$	103,693,849

2012
Balances, beginning of period	$	161,236,285		$	(27,064	)	$	161,263,349
Net loss	(4,355,781		)	—			(4,355,781		)

Balances, end of period	$	156,880,504		$	(27,064	)	$	156,907,568

See notes to consolidated financial statements.

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OCM HoldCo, LLC and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 30, 2013 and 2012

	2013			2012

Operating activities
Net loss	$	(4,441,079	)	$	(4,355,781	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of unconsolidated investees	2,804,532			1,939,387
Deferred income taxes	1,372,843			2,169,909
Increase in accounts payable and accrued expenses	41,871			48,706
Decrease in taxes payable	(3,931		)	2,628
Net cash used in operating activities	(225,764		)	(195,151		)

Investing activities
Net cash provided by investing activities	—			—

Financing activities
Net cash provided by financing activities	—			—

Net decrease in cash	(225,764		)	(195,151		)
Cash, beginning of period	10,638,837			8,270,647

Cash, end of period	$	10,413,073		$	8,075,496

Supplemental cash flow information
Noncash financing and investing activity
Equity in other comprehensive income of unconsolidated investee	$	106,420		$	—

See notes to consolidated financial statements.

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OCM HoldCo, LLC and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1— Basis of Presentation and Organization

The consolidated financial statements of OCM HoldCo, LLC (“OCM”), a Delaware limited liability company, as of September 30, 2013 and December 31, 2012, and for the three and nine month periods ended September 30, 2013 and 2012, include the accounts of OCM and its wholly-owned subsidiaries (collectively, the “Company”). The interim financial statements presented herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “Commission”) applicable to interim financial information. Certain information and disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments necessary for a fair presentation of the results for the interim periods have been made (consisting of normal recurring adjustments). Results of operations for the current interim periods are not necessarily indicative of results to be expected for the full fiscal year. All significant intercompany accounts and transactions have been eliminated in consolidation.

All of OCM’s issued and outstanding Class A Units are held by OCM VoteCo, LLC, a Delaware limited liability company (“VoteCo”), and all of OCM’s issued and outstanding non-voting Class B Units are held by OCM InvestCo, LLC, a Nevada limited liability company (“InvestCo”). The rights of the Class A Units and Class B Units are substantially identical with the exception that the Class B Units are not entitled to any management or voting rights with respect to the Company, except as provided by applicable law. Neither class has dividend or liquidation preferences, atypical participation rights, or preferred, convertible, or redeemable features. In general, any sale, assignment or transfer of such units is subject to the prior approval of the gaming regulators of Nevada and Pennsylvania. VoteCo is responsible for the operations of the Company, including the appointment and removal of managers. VoteCo has a de minimus economic interest in the Company of less than 0.00015%, and its total equity contributions are limited to $100.

The Company, through its subsidiary, OCM AcquisitionCo, LLC (“AcquisitionCo”), owns 92,690 Series A1 Preferred Units (together with the Series A2 Preferred Units, the “Series A Units”) of Cannery Casino Resorts, LLC (“CCR”), which represent a 31.71% interest in the aggregate Series A Units of CCR. The Company owns more than 99.99% of the capital interest in OCM Blocker, LLC, a Delaware limited liability company (“Blocker”), and Blocker owns all of the issued and outstanding units of AcquisitionCo. The Company indirectly owned a 62-1/6% interest in CCR’s Series C Preferred Units until they were redeemed on October 2, 2012 (as described below). The Company’s current business consists primarily of its ownership of these equity interests in CCR. CCR, through wholly-owned subsidiaries, owns and operates The Cannery Hotel and Casino (“The Cannery”), located in North Las Vegas, Nevada and the Eastside Cannery Casino and Hotel (the “Eastside Cannery”), located in southeast Las Vegas, which opened on August 28, 2008, and operated the Rampart Casino, located in the Summerlin area of northwest Las Vegas. CCR ceased its operations at the Rampart Casino when its sublease term expired in March 2012. In addition, CCR, through a wholly owned subsidiary, PA Meadows, LLC, a Delaware limited liability company (“PA Meadows”), owns The Meadows Racetrack and Casino (“The Meadows”), an operating harness racetrack and 350,000 square foot casino located in North Strabane Township, Washington County, Pennsylvania.

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On October 2, 2012, CCR and Washington Trotting Association, a subsidiary of CCR (“WTA”) entered into two syndicated credit facilities with Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, swing line lender and letter of credit issuer, Bank of America, N.A., Goldman Sachs Bank USA (“GS”) and Wells Fargo Gaming Capital, LLC, as co-syndication agents, Credit Suisse AG, Cayman Islands Branch and Macquarie Capital (USA) Inc. (“MC”), as co-documentation agents and Deutsche Bank Securities Inc. (“DBSI”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, GS, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and MC, as Joint Lead Arrangers and Book Running Managers. Provisions of the new credit facilities included: a $425 million first lien facility consisting of a six-year $385 million term loan and a five-year $40 million revolving loan (collectively referred to herein as the “First Lien Credit Facility”), and a seven-year $165 million second lien term loan facility (the “Second Lien Credit Facility”). Portions of the proceeds were used to retire $443.5 million of then existing debt, and $86.9 million of the proceeds were distributed to certain owners of the Series C Preferred Units of CCR.

On October 2, 2012, in connection with CCR entering into the First Lien Credit Facility and Second Lien Credit Facility, and in accordance with the terms and conditions of the Waiver and Amendment to Third Amended and Restated Operating Agreement of CCR (the “Waiver and Amendment”), by and among Crown CCR Group Investments One, LLC, a Delaware limited liability company (“Crown One”) and Crown CCR Group Investments Two, LLC, a Delaware limited liability company (“Crown Two” and collectively, the “Crown Parties”), Millennium Gaming, Inc., a Nevada corporation (“Millennium”), and AcquisitionCo, CCR (i) redeemed 39,384, 6,391, and 6,390 Series C Preferred Units held by AcquisitionCo, Crown One, and Crown Two, respectively (collectively, the “Series C Redemption”), and (ii) accepted contributions of 10,000, 7,241, 2,797 and 2,797 Series C Preferred Units from Millennium Gaming, AcquisitionCo, Crown One, and Crown Two, respectively (collectively, the “Series C Capital Contribution”). AcquisitionCo received $65.6 million from CCR in connection with the Series C Redemption and recognized a gain on the redemption of approximately $26.3 million and made a non-cash equity contribution back to CCR of $7.2 million. Following the Series C Redemption and the Series C Capital Contribution, there are no remaining Series C Preferred Units outstanding, and the Company continues to indirectly hold a 31.71% interest in the aggregate Series A Units of CCR.

On November 27, 2012, AcquisitionCo distributed $63.0 million as a return of capital to Blocker. Blocker in turn paid the Company a total of $63.0 million, which consisted of a $10.5 million partial repayment of principal and a $10.0 million payment of accrued interest on intercompany loans to the Company, and $42.5 million as a return of capital. The Company then distributed the $63.0 million to InvestCo as a return of capital.

These consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the Commission on March 29, 2013, from which the balance sheet information as of December 31, 2012 was derived.

NOTE 2—Selected condensed consolidated operating information for unconsolidated investees

Selected unaudited condensed consolidated operating information for Cannery Casino Resorts, LLC, and Subsidiaries follows:

	Three months ended						Nine months ended
	September 30,						September 30,
	2013			2012			2013			2012

Revenues	$	110,119,786		$	119,538,969		$	343,212,791		$	378,275,440

Income from operations	$	6,535,095		$	6,495,256		$	26,028,710		$	25,455,065

Net loss	$	(4,410,941	)	$	(4,188,491	)	$	(8,844,315	)	$	(6,116,009	)

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NOTE 3—Income taxes

OCM is a limited liability company and, accordingly, is treated as a partnership for federal income tax purposes with the tax effect of its activities recognized in the income tax returns of its members.

OCM owns over 99.99% of the equity interest in Blocker, which has elected to be taxed as a corporation and which, in turn, owns 100% of AcquisitionCo and OCM LandCo, LLC. AcquisitionCo owns the investment in CCR, a Nevada limited liability company that is treated as a partnership for federal income tax purposes. Accordingly, equity in the earnings of CCR are generally taxable to Blocker along with other tax attributes (permanent differences) and business tax credits. The principal exception to this generalization is earnings from the corporate, taxpaying subsidiaries of CCR that own and operate The Meadows, a racetrack and casino in Pennsylvania.

Management believes it is likely that the undistributed earnings from these tax-paying subsidiaries of CCR will eventually be realized as a gain through the disposition of the Company’s investment in CCR. Blocker incurs interest expense on intercompany indebtedness that is deducted for income tax purposes but is eliminated (a permanent difference), along with the related debt, in this consolidation. OCM also incurs certain other costs, primarily associated with being a reporting company, including professional and other fees, which, for tax reporting purposes, flow through to its members. Because of these circumstances, the Company’s estimated effective tax rate, for the periods presented, differs significantly from the federal statutory rate of 35%.

The Company’s general business plan is to eventually, following the likely economic recovery (Note 5), sell its appreciated investment in unconsolidated investees before its net operating loss carryforwards begin to expire in 2021 and, thus, realize a majority of the related deferred tax assets. The Company has recorded a valuation allowance to reduce the related deferred tax assets to the amount that is more likely than not to be realized.

Management has made an analysis of its state and federal tax returns that remain subject to examination by major authorities (consisting of tax years 2009 and thereafter) and concluded that the Company has no recordable liability as a result of certain uncertain tax positions taken.

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NOTE 4—Related party loans

On July 15, 2010, the Company borrowed $750,000 from certain affiliates of the Company in order to cover existing and future expenses of the Company. Interest accrued at the prime rate plus 2% on the outstanding principal amount, and unpaid interest compounded monthly. The Company had accrued interest of $137,644 and $103,537 as of September 30, 2013 and December 31, 2012, respectively. On October 30, 2013, the Company fully repaid these borrowings including accrued interest (see Subsequent Events below).

NOTE 5—Contingencies

The United States recently experienced a recession accompanied by, among other things, weakness in the commercial and investment banking systems resulting in reduced credit and capital financing availability, and highly curtailed gaming, other recreational, construction and real estate market activities and general discretionary consumer spending. Although capital market activity and liquidity have improved of late, the recovery from this recession period is fragile and there can be no assurance that our business, which has been severely affected by the downturn, will fully recover to pre-recession levels.

The Company often carries cash on deposit with financial institutions substantially in excess of federally-insured limits, and the risk of losses related to such concentrations has been increasing as a result of recent economic developments and uncertainties discussed in the foregoing paragraph. The extent of any loss that might be incurred as a result of uninsured deposits in the event of a future failure of a bank or other financial institutions, if any, is not subject to estimation at this time.

NOTE 6—Financial Instruments

Except for cash, the fair value of which equals its carrying value, the only significant financial instrument the Company has is its investment in an unconsolidated investee accounted for on the equity method for which fair value disclosure is not required.

NOTE 7—Subsequent Events

On October 30, 2013, AcquisitionCo distributed $1,877,161 as a return of capital to Blocker. Blocker in turn paid the Company $1,877,161 as a payment of accrued interest on intercompany loans due to the Company. The Company fully repaid the related party loans due to certain affiliates (as described in Note 4), which consisted of repaying $750,000 in principal and $141,474 in accrued interest. Additionally, on October 30, 2013, the Company made a $114,083 return of capital distribution to InvestCo.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following management discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Overview

The Company’s activities consist solely of holding substantial, noncontrolling equity interests in gaming enterprises and related assets.

Background

Overview

The Company and its consolidated subsidiaries were formed on July 22, 2005, at the direction of affiliates of Oaktree Capital Management, L.P., a Delaware limited partnership (“Oaktree”), for the purpose of participating in various activities relating to the gaming industry.

All of the Company’s issued and outstanding Class A Units are held by VoteCo, and all of the Company’s issued and outstanding non-voting Class B Units are held by InvestCo. VoteCo and InvestCo are affiliates of Oaktree. VoteCo is responsible for the operations of the Company, including the appointment and removal of managers. VoteCo has a de minimus economic interest in the Company of less than 0.00015%, and its total equity contributions are limited to $100.

In 2006, the Company acquired a 42% equity interest in CCR through AcquisitionCo. Through its subsidiaries AcquisitionCo and Blocker, the Company currently owns a 31.71% interest in the Series A Units of CCR. The Company’s current business consists primarily of its ownership of this equity interest. CCR, through wholly owned subsidiaries, owns and operates The Cannery, located in North Las Vegas, Nevada and the Eastside Cannery, located in Las Vegas, Nevada. Through its wholly owned subsidiary, PA Meadows, CCR also owns and operates a racetrack and a casino at The Meadows, located in North Strabane Township, Washington County, Pennsylvania. CCR operated the Rampart Casino, located in the Summerlin area of northwest Las Vegas under a sublease agreement with Hotspur Casinos Nevada, Inc. (“Hotspur”) until this sublease expired on March 31, 2012.

On May 18, 2007, CCR consummated an $860 million refinancing consisting of a $110 million five-year first lien revolving credit facility, a $350 million six-year first lien term loan, a $285 million six-year delay draw first lien term loan, and a $115 million seven-year second lien term loan (collectively, the “2007 Credit Agreements”). Portions of the proceeds were used to retire then-existing debt, and to partially fund the completion of the Eastside Cannery and the permanent casino facility at The Meadows. The Eastside Cannery (which replaced a former casino) opened on August 28, 2008, and the 350,000 square-foot permanent casino at The Meadows opened on April 15, 2009. The 2007 Credit Agreements were further amended by the First Lien Amendment No. 1 on March 3, 2010 and the First Lien Amendment No. 2 on February 7, 2012, which, among other matters, extended the maturity date for revolving loans under the 2007 Credit Agreements from May 18, 2012 to February 18, 2013.

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On October 2, 2012 (the “Closing Date”), CCR and WTA (a subsidiary of CCR and together with CCR, the “Borrowers”) entered into two syndicated credit facilities with Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, swing line lender and letter of credit issuer, Bank of America, N.A., Goldman Sachs Bank USA (“GS”) and Wells Fargo Gaming Capital, LLC, as co-syndication agents, Credit Suisse AG, Cayman Islands Branch and Macquarie Capital (USA) Inc. (“MC”), as co-documentation agents and Deutsche Bank Securities Inc. (“DBSI”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, GS, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and MC, as Joint Lead Arrangers and Book Running Managers. Provisions of the new credit facilities included: a $425 million first lien facility consisting of a six-year $385 million term loan and a five-year $40 million revolving loan (collectively referred to herein as the “First Lien Credit Facility”), and a seven-year $165 million second lien term loan facility (the “Second Lien Credit Facility”). Portions of the proceeds were used to pay off the then existing $443.5 million debt that was outstanding under the 2007 Credit Agreements, and $86.9 million of the proceeds were used to redeem the Series C Preferred Units of CCR (as described below).

The term loans under the First Lien Credit Facility (the “First Lien Term Loans”) and the revolving loans under the First Lien Credit Facility bear interest at a LIBOR index plus 4.75%, and the term loans under the Second Lien Credit Facility (the “Second Lien Term Loans”) bear interest at a LIBOR index plus 8.75%, with a LIBOR floor of 1.25% for each of the First Lien Term Loans and Second Lien Term Loans. The interest rate on the First Lien Credit Facility is subject to one-step down based upon compliance with a consolidated total leverage ratio below a certain threshold. Interest payments are payable quarterly for both the First Lien Term Loans and Second Lien Term Loans. The First Lien Term Loans also require quarterly principal payments in an amount equal to 0.25% of the aggregate principal amount of the First Lien Term Loans commencing on December 31, 2012, with the remaining outstanding principal due on the maturity date. Unlike the First Lien Credit Facility, the Second Lien Credit Facility does not amortize and requires the outstanding principal balance to be repaid on its maturity date.

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Additional details related to the First Lien Credit Facility and Second Lien Credit Facility are as follows:

· The terms of the credit facilities are set forth in two agreements. Under the First Lien Credit Facility agreement, the $385 million term facility was borrowed in a single installment on the Closing Date, and the $40 million revolving facility was not funded on the Closing Date, but is available thereafter until the fifth anniversary of the Closing Date. Interest rates under the First Lien Credit Facility and the Second Lien Credit Facility float with LIBOR rate indexes, as explained above.

· Both the First Lien Credit Facility and the Second Lien Credit Facility require CCR to maintain a consolidated total leverage ratio below certain thresholds. In addition, the First Lien Credit Facility also requires CCR to maintain a consolidated interest coverage ratio above certain thresholds.

· Both credit facilities are subject to various other affirmative and negative covenants and reporting obligations in favor of the lenders, including, among other restrictions, restrictions on other indebtedness, capital expenditures, liens, investments, fundamental changes, asset dispositions, affiliate transactions, and restricted payments.

· The Borrowers’ obligations under each of the credit facilities are guaranteed by certain of their subsidiaries on a senior secured basis and are secured by substantially all of the real and personal property, including certain accounts of CCR and its subsidiaries. The liens securing the Borrowers’ obligations under the Second Lien Credit Facility are subordinated to the liens securing the Borrowers’ obligations under the First Lien Credit Facility.

On October 2, 2012, in connection with CCR entering into the First Lien Credit Facility and Second Lien Credit Facility, and in accordance with the terms and conditions of the Waiver and Amendment, CCR (i) redeemed 39,384, 6,391, and 6,390 Series C Preferred Units held by AcquisitionCo, Crown One, and Crown Two, respectively (collectively, the “Series C Redemption”), and (ii) accepted contributions of 10,000, 7,241, 2,797 and 2,797 Series C Preferred Units from Millennium Gaming, AcquisitionCo, Crown One, and Crown Two, respectively (collectively, the “Series C Capital Contribution”). AcquisitionCo received $65.6 million from CCR in connection with the Series C Redemption. Following the Series C Redemption and the Series C Capital Contribution, the Company continued to indirectly hold a 31.71% interest in the aggregate Series A Units of CCR.

Operations Analysis

Results of Operations

Material variables and factors affecting the Company’s income before income taxes for the three months ended September 30, 2013 compared to the three months ended September 30, 2012, are as follows:

· CCR’s net loss increased approximately $0.2 million for the three months ended September 30, 2013, compared to the same period for the prior year, due to the operational highlights for CCR discussed below. This increase resulted in a $0.1 million increase in equity in loss of unconsolidated investees.

Material variables and factors affecting the Company’s income before income taxes for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012, are as follows:

· CCR’s net loss increased approximately $2.7 million for the nine months ended September 30, 2013, compared to the same period for the prior year, due to the operational highlights for CCR discussed below. This increase resulted in a $0.9 million increase in equity in loss of unconsolidated investees.

Material tax attributes of the Company’s unconsolidated investees, primarily CCR, flow to the Company through Blocker, an entity in which the Company owns 99.99% of the equity interest, and are either nonrecurring or vary significantly. Further, significant income of CCR is taxable to corporate subsidiaries of CCR. Management believes that the undistributed earnings from CCR’s tax-paying subsidiaries will be realized as a gain through an eventual sale of the Company’s investment in CCR. (See Note 3 to the consolidated financial statements for additional details.)

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During 2013 and 2012, the Company’s operations are related to its investments in CCR. The United States recently experienced a recession accompanied by, among other things, weakness in the commercial and investment banking systems resulting in reduced credit and capital financing availability, and highly curtailed gaming, other recreational, construction and real estate market activities and general discretionary consumer spending. Although capital market activity and liquidity have improved of late, the recovery from this recession period is fragile and there can be no assurance that our business, which has been severely affected by the downturn, will fully recover to pre-recession levels.

Operational highlights for CCR for the three and nine months ended September 30, 2013 and 2012 are as follows:

Three months ended September 30, 2013 and 2012

Consolidated revenues (net) decreased $9.4 million for the three months ended September 30, 2013, as compared to the corresponding period in the prior year. The decline in consolidated revenues (net) was primarily due to the following:

· Casino revenue

Casino revenues decreased $10.1 million as compared to the same period in the prior year. Casino revenue at The Meadows decreased $8.5 million primarily due to lower slot revenues. Slot revenues fell as a result of increased competition in Ohio and the July 2013 opening of the Lady Luck Casino Nemacolin, which led to a decline in visits to The Meadows by middle and lower tiered customers. Casino revenues at the Eastside Cannery decreased $1.4 million primarily due to decreased patron visits and spend. Casino revenues at The Cannery remained flat for the three months ended September 30, 2013 as compared to the same period in the prior year.

· Other revenue

The decrease in casino revenues, as previously discussed, was partially offset by an increase in other revenues of $1.4 million. The increase in other revenues was primarily due to a property tax settlement at The Meadows with certain governmental agencies on September 3, 2013. The settlement resulted in a cash payment of approximately $0.9 million and $2.2 million in property tax credits to be applied over the next 5 fiscal years. The cash payment and property tax credit was recorded as income for the period ended September 30, 2013.

The increase in other revenues (above) was partially offset by the discontinuation of the quarterly incentive fee of $1.1 million previously paid under CCR’s consulting agreement with the Jackson Rancheria of Mewuk Indians of California (the “Tribe”) in the same period in the prior year. On May 31, 2013, CCR reached a settlement with the Tribe, resulting in the termination of the consulting agreement between both parties.

Income from operations remained flat for the three months ended September 30, 2013 as compared to the corresponding period in the prior year. The decrease in revenues (net), as previously discussed, was offset by the following:

· Casino expense

Casino expense declined $4.3 million primarily due to lower casino tax expense related to the decline in revenues.

· Selling, general and administrative (“SG&A”)

SG&A declined $1.9 million primarily due to lower corporate expenses of $1.1 million and to a lesser extent cost saving measures across our Pennsylvania and Las Vegas operations. The decrease in corporate expense was primarily driven by reductions in incentive compensation expense, development costs, and legal costs for the three months ended September 30, 2013 as compared to the same period in the prior year.

· Depreciation and Amortization

Depreciation and amortization expense declined $1.1 million, primarily at The Cannery and the Eastside Cannery as compared to the same period in the prior year.

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Net loss increased $0.2 million for the three months ended September 30, 2013 as compared to the corresponding period in the prior year. The increase in net loss was primarily due to increased interest expense of $4.4 million related to the debt refinancing on October 2, 2012, offset by lower income tax expense of $4.1 million as compared to the same period in the prior year.

Nine months ended September 30, 2013 and 2012

Consolidated revenues (net) decreased $35.1 million for the nine months ended September 30, 2013, as compared to the corresponding period in the prior year. The decline in consolidated revenues (net) was primarily due to the following:

· Casino revenue

Casino revenues decreased $35.6 million as compared to the same period in the prior year. Casino revenue at The Meadows decreased $16.2 million primarily due: (i) competition in Ohio; (ii) adverse weather conditions during the first part of 2013; (iii) and to a lesser extent the opening of the Lady Luck Casino Nemacolin in July 2013. The competition from Ohio and opening of the Lady Luck Casino Nemacolin resulted in decreased visits related to middle and lower tiered customers. Casino revenues at the Rampart Casino declined $13.6 million in connection with the expiration of the 10-year casino sublease agreement with Hotspur. CCR’s operations at the Rampart Casino came to an end on March 31, 2012 and were assumed by Hotspur on April 1, 2012. Collectively, casino revenues at The Cannery and the Eastside Cannery, decreased $5.8 million, collectively, primarily due to decreased casino volume and lower discretionary spend by our customers as compared to the same corresponding period in the prior year.

· Pari-mutuel revenue

Pari-mutuel revenues decreased $2.2 million primarily due to closure of two off track betting parlors and lower handle as compared to the same period in the prior year.

· Food and beverage revenue

Food and beverage revenues declined $1.7 million primarily due to: (i) the expiration of the 10-year casino sublease agreement at the Rampart Casino (as previously discussed), (ii) decreased patron visits and spend at The Meadows and the Eastside Cannery.

· Other revenues

The decrease in casino revenues, as previously discussed, was partially offset by an increase in other revenues of $4.3 million. The increase in other revenues was primarily due to a property tax settlement at The Meadows with certain governmental agencies on September 3, 2013. The settlement resulted in a cash payment of approximately $0.9 million and $2.2 million in property tax credits to be applied the over next 5 fiscal years. The cash payment and property tax credit was recorded as income for the period ended September 30, 2013.

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Income from operations increased $0.6 million for the nine months ended September 30, 2013 as compared to the corresponding period in the prior year. The increase in income from operations was primarily due to the following:

· Casino expense

Casino expense declined $17.4 million primarily due to: (i) reduced casino operating expense from the closure of the Rampart Casino in connection with the termination of the 10 year sublease agreement (as previously discussed); (ii) lower casino tax expense related to the declines in revenues and temporary suspension of the (1.5%) administrative tax for slots and tables at The Meadows; and (iii) to a lesser extent lower food and beverage comp cost at The Cannery and the Eastside Cannery as compared to the same period last year.

· Pari-mutuel expense

Pari-mutuel expense decreased $1.5 million primarily due to closure of two off track betting parlor as compared to the same period in the prior year.

· Food and beverage expense

Food and beverage expense declined $2.3 million primarily due to the closure of the Rampart Casino in connection with the termination of the 10 year sublease agreement (as previously discussed) and cost saving measures at the the Eastside Cannery.

· Loss on lease termination

In connection with the closure of the Rampart Casino on March 31, 2012, CCR incurred a one-time charge of $1.9 million related to certain assets and liabilities that were assumed by the Rampart Casino’s landlord.

· Selling, general and administrative (“SG&A”)

SG&A declined $8.8 million primarily due to: (i) closure of the Rampart Casino in connection with the termination of the 10 year sublease agreement (as previously discussed), (ii) lower casino entertainment cost, sales and property tax expense, and advertising expense at the Eastside Cannery as compared to the same period in the prior year, and (iii) to a lesser extent, cost saving measures across the Pennsylvania and Las Vegas operations.

· Depreciation and amortization

Depreciation and amortization expense declined $4.6 million, primarily due to closure of the Rampart Casino in connection with the termination of the 10 year sublease agreement (as previously discussed) and lower depreciation and amortization expense across the Pennsylvania and Las Vegas properties.

Net loss increased $2.7 million for the nine months ended September 30, 2013 as compared to the corresponding period in the prior year. The increase in net loss was primarily due to increased interest expense of $13.2 million related to our debt refinancing on October 2, 2012. The increase in net loss was partially offset by lower income tax expense of $9.8 million as compared to the same period in the prior year and to a lesser extent an increase in income from operations (as previously discussed).

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Liquidity and Capital Resources

The United States recently experienced a recession accompanied by, among other things, weakness in the commercial and investment banking systems resulting in reduced credit and capital financing availability, and highly curtailed gaming, other recreational, construction and real estate market activities and general discretionary consumer spending. Although capital market activity and liquidity have improved of late, the recovery from this recession period is fragile and, consequently, the Company’s liquidity and capital resources, cannot be estimated at this time but may likely be significant.

As disclosed above, the Company, from time to time, has made equity contributions to CCR in connection with CCR maintaining compliance with its debt covenants, including approximately $10.8 million in 2009 and approximately $46.6 million in 2010. The Company has no current investment or other financing plans, and the Company’s recurring prospective need for liquidity and capital resources is principally associated with being a reporting company. On July 15, 2010, the Company borrowed $750,000 from certain affiliates of the Company in order to cover existing and future expenses of the Company anticipated to arise during the next two years. Interest accrued at the prime rate plus 2% on the outstanding principal amount, and unpaid interest is compounded monthly. On October 30, 2013, the Company fully repaid these borrowings, including accrued interest. To the extent the Company needs additional liquidity and capital resources to satisfy those needs, the Company’s members are the expected source of funding.

Inflation

The Company does not believe that inflation has had a material effect on its results of operations in recent years. However, there is no assurance that inflation will not adversely affect its business in the future.

Off Balance Sheet Arrangements

Credit Agreements

On May 18, 2007, CCR entered into the 2007 Credit Agreements totaling $860 million: a $745 million first lien facility and a $115 million second lien term loan facility (see Overview above). Portions of the proceeds were used to retire the then existing debt and to partially fund the completion of the Eastside Cannery and the permanent casino facility at The Meadows.

On March 3, 2010, CCR entered into the First Lien Amendment No. 1 which changed certain covenants and provisions of the 2007 Credit Agreements. The 2007 Credit Agreements were further amended by the First Lien Amendment No. 2 on February 7, 2012. Among other matters, the First Lien Amendment No. 2 extended the maturity date for revolving loans under the 2007 Credit Agreements from May 18, 2012 to February 18, 2013.

On October 2, 2012, CCR entered into two new syndicated credit facilities totaling $590 million: a $425 million First Lien Credit Facility consisting of; (i) $385 million term loan borrowed at Closing Date; (ii) $40 million revolving loan unfunded at Closing Date, but available until the fifth anniversary of the Closing Date and; (iii) $165 million Second Lien Credit Facility (see Overview above). Portions of the proceeds were used to retire $443.5 million of debt that was outstanding under the 2007 Credit Agreements, and $86.9 of the proceeds was distributed to certain owners of the Series C Preferred Units. The remaining value of the Series C Preferred Units was contributed to CCR, and there are no remaining Series C Preferred Units outstanding.

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Critical Accounting Estimates and Policies.

Although the Company’s consolidated financial statements necessarily make use of certain accounting estimates by management, at this time, we believe no matters are the subject of such estimates that are so highly uncertain or susceptible to change as to present a significant risk of a material impact on its financial condition or results of operations as more fully explained in the following paragraph. Moreover, except as discussed below, the Company does not employ any critical accounting policies that are selected from among available alternatives or require the exercise of significant management judgment to apply except for carrying its investments in unconsolidated investees on the equity method of accounting rather than the fair value option. Similarly, except for the selection of depreciable lives and depreciation methods and assumptions used to estimate the fair value of hedge agreements and investments, consisting of preferred auction rate securities, the accounting policies of the Company’s unconsolidated investees also do not require the exercise of significant management judgment to apply.

The realization of substantially all of the Company’s assets is dependent upon an eventual sale of its investment in the unconsolidated investees following a likely economic recovery at a price sufficient to realize the carrying value of the Company’s assets. Further, based in part on prior transactions with the Crown Parties, management believes, despite the current economic conditions, that the estimated fair value of the Company’s investment in unconsolidated investees exceeds the carrying value of its investment and all other assets by a substantial amount such that any risk of not realizing the carrying values and having a material impact on the Company’s financial condition or results of operation is remote. Additionally, it is management’s opinion that the eventual sale of the Company’s appreciated investment in unconsolidated investees makes realization of a majority of its deferred tax assets more likely than not.

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Recently Issued Accounting Pronouncements.

No recently issued accounting pronouncements not yet adopted are expected to have a material impact on our financial position, results of operations, or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange of 1934, as amended (the “Exchange Act”). Based upon that evaluation, the principal executive officer and principal financial officer concluded that, as of September 30, 2013, the Company’s disclosure controls and procedures are effective.

Changes in internal control over financial reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

		The following exhibits are filed or furnished with this report:

31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer and Principal Financial Officer furnished as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

** Pursuant to Rule 406T of Regulation S-T, the Interactive Date Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections

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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, hereunto duly authorized.

	OCM HOLDCO, LLC
	Registrant

Date: November 13, 2013	By:	/s/ Stephen A. Kaplan
		Stephen A. Kaplan
		Manager (principal executive officer)


Date: November 13, 2013	By:	/s/ Ronald N. Beck
		Ronald N. Beck
		Manager (principal financial and chief accounting officer)

OCM HoldCo, LLC 10-Q