<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
QUARTERLY REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
-------------
Commission File Number 333-00214
---------
HORSESHOE GAMING, L.L.C.
------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 7999 88-0343515
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer Identification No.)
of incorporation or organization) Classification Code Number)
</TABLE>
568 Colonial Road
Memphis, Tennessee 38117
(901) 820-2460
(Address, including zip code, and telephone number, including
area code, of registrants' principal executive office)
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
--- ---
<PAGE> 2
HORSESHOE GAMING, L.L.C. AND SUBSIDIARIES
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
QUARTER ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
INDEX PAGE
- ----- ----
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements:
Horseshoe Gaming, L. L. C. and Subsidiaries:
Consolidated Condensed Balance Sheets
at June 30, 1996 and December 31, 1995......................................... 3
Consolidated Condensed Statements of Operations
for the six and three months ended June 30, 1996 and 1995...................... 4
Consolidated Condensed Statements of Cash Flows
for the six and three months ended June 30, 1996 and 1995...................... 5
Notes to Consolidated Condensed Financial Statements.............................. 6
New Gaming Capital Partnership and Subsidiary:
Consolidated Condensed Balance Sheets
at June 30, 1996 and December 31, 1995........................................ 8
Consolidated Condensed Statements of Operations
for the six and three months ended June 30, 1996 and 1995..................... 9
Consolidated Condensed Statements of Cash Flows
for the six and three months ended June 30, 1996 and 1995..................... 10
Notes to Consolidated Condensed Financial Statements............................. 11
Robinson Property Group, L.P.:
Condensed Balance Sheets
at June 30, 1996 and December 31, 1995........................................ 12
Condensed Statements of Operations
for the six and three months ended June 30, 1996 and 1995..................... 13
Condensed Statements of Cash Flows
for the six and three months ended June 30, 1996 and 1995..................... 14
Notes to Condensed Financial Statements.......................................... 15
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations ................................................. 16
PART II OTHER INFORMATION
ITEM 6 Exhibits and reports on Form 8-K........................................... 20
SIGNATURES ........................................................................... 21
</TABLE>
2
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
HORSESHOE GAMING, L.L.C. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 64,513 $ 65,541
Accounts receivable, net 5,824 5,207
Receivables - related party 820 757
Inventories 1,657 1,481
Prepaid expenses and other 3,122 1,404
-------- --------
Total current assets 75,936 74,390
-------- --------
Property and Equipment:
Land 8,552 6,920
Buildings, boat, barge and improvements 113,353 100,849
Furniture, fixtures and equipment 37,859 35,568
Less: accumulated depreciation (19,732) (13,642)
-------- --------
140,032 129,695
Construction in progress 8,775 9,187
-------- --------
Net property and equipment 148,807 138,882
-------- --------
Escrow funds 76,436 31,316
Goodwill, net 39,826 40,640
Other assets, net 15,765 15,988
-------- --------
$356,770 $301,216
======== ========
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 11,284 $ 10,747
Accounts payable 1,819 3,910
Accrued expenses and other 30,656 28,513
-------- --------
Total current liabilities 43,759 43,170
Long-term debt, less current maturities 224,270 186,856
-------- --------
Total liabilities 268,029 230,026
-------- --------
Commitments and Contingencies
Redeemable Ownership Interests, net 21,869 18,443
Members' Equity 66,872 52,747
-------- --------
$356,770 $301,216
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
3
<PAGE> 4
HORSESHOE GAMING, L.L.C. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Casino $ 80,221 $ 71,169 $163,893 $120,840
Food and beverage 7,386 6,534 14,771 11,545
Hotel 2,057 2,010 4,028 3,225
Other 1,133 1,024 2,383 1,757
--------- --------- -------- --------
90,797 80,737 185,075 137,367
Promotional allowances (6,309) (4,720) (12,563) (8,284)
--------- --------- -------- --------
Net revenues 84,488 76,017 172,512 129,083
--------- --------- -------- --------
Expenses:
Casino 39,057 32,136 79,794 53,315
Food and beverage 4,866 4,082 9,611 7,416
Hotel 523 673 1,070 1,232
Other 410 634 889 1,040
General and administrative 16,043 12,026 31,199 20,613
Development 3,026 1,744 3,909 2,736
Depreciation and amortization 4,061 3,063 7,784 5,616
Preopening - - - 7,021
--------- --------- -------- --------
Total expenses 67,986 54,358 134,256 98,989
--------- --------- -------- --------
Operating Income 16,502 21,659 38,256 30,094
Other Income (Expense):
Interest expense (7,546) (4,902) (14,254) (8,852)
Interest and other income 1,333 181 2,555 239
Other 328 - 212 -
Minority interest in income
of subsidiaries (522) (3,494) (1,025) (4,821)
--------- -------- -------- --------
Net Income $ 10,095 $ 13,444 $ 25,744 $ 16,660
========= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
4
<PAGE> 5
HORSESHOE GAMING, L.L.C. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1996 1995
-------- --------
<S> <C> <C>
Cash provided by operating activities: $ 34,415 $ 37,940
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (16,575) (24,079)
Proceeds from land held for sale 1,400 -
Incease in escrow funds (45,120) -
Increase in construction payable - (2,558)
Increase in other assets (1,698) (280)
-------- --------
Net cash used in investing
activities (61,993) (26,917)
-------- --------
Cash flows from financing activities:
Advances to/from affiliates - 930
Proceeds from debt and warrants, net 49,073 28,605
Payments on debt (11,373) (6,147)
Capital contributions 27 -
Capital distributions (11,177) (18,777)
-------- --------
Net cash provided by
financing activities 26,550 4,611
-------- --------
Net change in cash and cash equivalents (1,028) 15,634
Cash and cash equivalents, beginning of period 65,541 13,495
-------- --------
Cash and cash equivalents, end of period $ 64,513 $ 29,129
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
5
<PAGE> 6
HORSESHOE GAMING, L.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Introduction:
The accompanying unaudited Consolidated Condensed Financial Statements of
Horseshoe Gaming, L.L.C. and Subsidiaries (the "Company"), a Delaware limited
liability company, have been prepared in accordance with the instructions to
Form 10-Q and therefore do not include all information and disclosures
necessary for complete financial statements in conformity with generally
accepted accounting principles. The consolidated condensed balance sheet at
December 31, 1995 was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting principles.
The results for the interim periods indicated are unaudited, but reflect all
adjustments (consisting only of normal recurring adjustments) which management
considers necessary for a fair presentation of operating results. Results of
operations for interim periods are not necessarily indicative of a full year of
operations.
The consolidated condensed financial statements of the Company include the
operations of Robinson Property Group, L.P. ("RPG"), which operates the
Horseshoe Casino Center in Tunica County, Mississippi, New Gaming Capital
Partnership, which owns approximately 92% of Horseshoe Entertainment, L.P.
("HE") which operates the Horseshoe Bossier City in Bossier City, Louisiana, and
various subsidiaries engaged in the development of casino gaming in new
jurisdictions. Operating results for the 1995 period include the operations of
the Horseshoe Casino Center commencing February 13, 1995.
2. Long-Term Debt:
In January, 1996, the Company filed a registration statement on Form S-4 with
the Securities and Exchange Commission ("SEC") to register under the Securities
Act of 1933 the exchange of its Series B Senior Notes to for its Series A
Senior Notes which have equivalent terms. The registration statement was
declared effective by the SEC on May 13, 1996 and the exchange was effected in
June, 1996.
On April 10, 1996, the Company received approximately $48.1 million after fees
and expenses from the exercise of warrants originally issued in connection with
the Company's private placement of $100 million of 12.75% senior notes in
October, 1995. The warrants provided for the purchase of an additional $50
million in principal amount of senior notes at 98.15% of par value. All of
the outstanding warrants were exercised.
3. Commitments and Contingencies:
Employment Agreements
HE and RPG have entered into employment agreements with certain key employees
that provide certain benefits in the event such employees are terminated. The
employees received ownership interests in the Company that vest over the terms
specified in the various employment agreements, which is generally five years.
The employment agreements include a put/call provision which if exercised by the
employee would require the Company to repurchase the vested ownership interests
in the event of termination based upon the then fair market value determined by
on an independent appraisal. Accordingly, these compensation agreements are
accounted for as variable stock purchase plans. Compensation expense is
recorded each period equal to the fair market value of ownership interests
vested pursuant to these agreements. Changes in market value will be reflected
in compensation expense in future periods until the employees' shares are
repurchased.
The total ownership interest in the Company issued to employees pursuant to
such employment agreements was 3.8% as of June 30, 1996, of which 1.85% was
vested. As of June 30, 1996, the Company would also be required to make
severance payments to employees of up to $4 million if all employees entitled
to severance were terminated.
Litigation
The Company and its subsidiaries, during the normal course of operating their
businesses, become engaged in various litigation and other legal disputes. In
the opinion of the Company's management, the ultimate disposition of such
disputes will not have a material impact on the Company's operations.
6
<PAGE> 7
3. Commitments and Contingencies (Continued):
Political Uncertainties in Louisiana
In the 1996 special session of the Louisiana legislature, Louisiana lawmakers
recently rejected the Governor's efforts to call for a single statewide
referendum that would give voters the opportunity to vote statewide on the
continued legalization of riverboat gaming, the land-based casino, and video
poker. Instead, the Louisiana legislature passed a measure providing for local
option elections in November 1996, which will give voters the opportunity to
decide the fate of certain forms of gaming in their parishes. In the November
1996 elections, voters in each parish will vote on video poker, voters in
parishes with riverboats will vote on riverboat gaming as well, and voters in
Orleans Parish will also vote on the land-based casino.
There can be no assurance that the voters of the Parish of Bossier, in which
HE operates, will not vote to prohibit riverboat gaming in the November 1996
election. If a vote to prohibit riverboat gaming occurred, HE would be
required to discontinue gaming activity in the Parish of Bossier upon
expiration of its current gaming license in 1999. Unless HE were able to
move its boat to another location in which riverboat gaming is legal, the
discontinuance of gaming operations in the Parish of Bossier would have a
material adverse effect on the Company, both in terms of the loss of revenues
and cash flow generated by the Horseshoe Bossier City and the impairment of the
significant investment that the Company has in its riverboat casino and related
facilities.
Competitive Uncertainties in Mississippi
A landowner in DeSoto County, the county immediately north of Tunica County,
and the closest county in Mississippi to the greater Memphis area, has
published notice of its intent to have gambling be permitted to be conducted in
DeSoto County. Certain citizens groups located in DeSoto are in the process of
seeking signatures to a petition to cause an election to reject gambling in
DeSoto County on the November, 1996 ballot. If such signature drive is
unsuccessful or the ballot measure is defeated, then gambling would be
permitted in DeSoto County. Competition in DeSoto County would strongly impact
the viability of gaming operations in Tunica County.
Several ballot measures to amend the Arkansas Constitution to permit gambling
in the Hot Springs and West Memphis, Arkansas markets have been validated by
the Arkansas Attorney General's office and will appear on the November, 1996
statewide ballot. If any of the measures are approved by the voters, the effect
on gaming operations in Bossier City, Louisiana and/or Tunica, Mississippi may
be negatively impacted.
Other Items
The Company is required to purchase the minority ownership interests in any new
projects developed by Horseshoe Ventures following 36 months of operations.
The purchase price is to be based on earnings during the 36-month period and is
payable in cash or ownership interests in the Company.
In February 1996, HE was awarded a certificate of preliminary approval to
operate a second casino in Bossier City, Louisiana by the Louisiana Riverboat
Gaming Commission and is in the process of seeking final licensing approval.
The newly created Louisiana Gaming Control Board has notified the public of its
willingness to accept additional applications on or before August 15, 1996,
with the implication that the Board is proposing to reopen the application
procedure. There can be no assurance that the Company will receive final
approval. The Company has entered into an agreement for the purchase of a
riverboat to be used in Bossier City, Louisiana, as its temporary facility.
The purchase price for the riverboat is $11,500,000, of which $1,500,000 was
paid on March 28, 1996, upon entering into the purchase agreement, and the
remaining $10,000,000 was originally payable on May 15, 1996. The purchase
option has been converted into a right of first refusal and extended through
September 21, 1996 and requires the Company to pay extension fees of $500,000.
In the event HE does not receive approval, the purchase agreement for the
riverboat will be terminated and the Company will be refunded the $1,500,000
down payment. The extension fees are nonrefundable and do not reduce the
original purchase price. During the option period, the seller is able to
market the boat and accept another offer subject to HE's right of first refusal
with respect to the other offer.
In February 1996, NGCP entered into an option agreement to purchase an
additional 1% limited partnership interest in HE for $4,000,000, of which
approximately $514,000 was paid in February, 1996, approximately $819,000 is to
be paid within 10 days of HE receiving final approval, discussed above, and the
remaining $2,667,000 is payable in three annual installments of $889,000 plus
accrued interest at 8% beginning one year after closing. If HE does not
receive final license approval, the total purchase price will be reduced to
$1,541,000.
On May 20, 1996, the Company had applied to the State of Indiana for the only
license available to operate a riverboat casino in Harrison County, Indiana. The
Indiana Gaming Commission awarded the license to another applicant. As a
result, the second quarter results of operations include approximately
$1,900,000 from the write-off of land, deposits on land options and additional
expenses incurred by the Company pursuing the Indiana license.
7
<PAGE> 8
NEW GAMING CAPITAL PARTNERSHIP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 15,235 $ 27,025
Accounts receivable, net 1,671 1,825
Receivables - related party 820 527
Inventories 1,296 1,063
Prepaid expenses and other 2,490 1,225
-------- --------
Total current assets 21,512 31,665
-------- --------
Property and Equipment:
Land 5,797 4,215
Buildings, boat and improvements 63,153 50,678
Furniture, fixtures and equipment 21,088 19,403
Less: accumulated depreciation (11,337) (8,247)
-------- --------
78,701 66,049
Construction in progress 6,674 8,889
-------- --------
Net property and equipment 85,375 74,938
-------- --------
Other Assets:
Deferred finance charges, net 2,343 2,367
Deferred license fee, net 916 937
Goodwill, net 18,957 19,341
Other, net 3,559 5,611
-------- --------
$132,662 $134,859
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Current maturities of long-term debt $ 8,799 $ 7,320
Accounts payable 956 1,239
Due to affiliates 5,215 5,596
Accrued expenses and other 11,309 15,598
-------- --------
Total current liabilities 26,279 29,753
Long-term debt, less current maturities 74,191 70,692
-------- --------
Total liabilities 100,470 100,445
-------- --------
Commitments and Contingencies
Partners' Capital 32,192 34,414
-------- --------
$132,662 $134,859
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
8
<PAGE> 9
NEW GAMING CAPITAL PARTNERSHIP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Casino $ 42,683 $ 37,489 $ 86,208 $ 70,313
Food and beverage 4,663 3,880 9,203 7,642
Hotel 1,164 1,132 2,239 1,935
Other 493 489 954 911
--------- --------- -------- --------
49,003 42,990 98,604 80,801
Promotional allowances (3,640) (2,276) (7,002) (4,605)
--------- --------- -------- --------
Net revenues 45,363 40,714 91,602 76,196
--------- --------- -------- --------
Expenses:
Casino 22,113 18,417 46,376 33,175
Food and beverage 2,244 2,380 4,601 4,524
Hotel 153 380 378 705
Other 158 306 348 579
General and administrative 9,122 7,643 18,078 13,791
Depreciation and amortization 2,260 1,477 4,210 2,889
--------- --------- -------- --------
Total 36,050 30,603 73,991 55,663
--------- --------- -------- --------
Operating Income 9,313 10,111 17,611 20,533
Other Income (Expense):
Interest expense (2,844) (2,549) (5,465) (5,081)
Interest income 144 130 409 166
Other, net 418 - 418 -
Minority interest in income
of subsidiary (522) (3,494) (1,025) (4,821)
--------- --------- -------- --------
Net Income $ 6,509 $ 4,198 $ 11,948 $ 10,797
========= ========= ======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
9
<PAGE> 10
NEW GAMING CAPITAL PARTNERSHIP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<Cation>
Six Months Ended
June 30,
------------------
1996 1995
-------- --------
<S> <C> <C>
Cash provided by operating activities $ 10,783 $ 20,414
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (14,035) (3,351)
Proceeds from land held for sale 1,400 -
Increase in other assets (365) 256
-------- --------
Net cash used in investing
activities (13,000) (3,095)
-------- --------
Cash flows from financing activities:
Proceeds from debt 9,000 3,484
Payments on debt (4,022) (3,140)
Capital contributions 27 -
Capital distributions (14,197) (10,683)
Decrease in due to affiliates (381) (5,205)
-------- --------
Net cash used in financing
activities (9,573) (15,544)
-------- --------
Net change in cash and cash equivalents (11,790) 1,775
Cash and cash equivalents, beginning of period 27,025 11,616
-------- --------
Cash and cash equivalents, end of period $ 15,235 $ 13,391
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
10
<PAGE> 11
NEW GAMING CAPITAL PARTNERSHIP AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Introduction:
The accompanying unaudited Consolidated Condensed Financial Statements of New
Gaming Capital Partnership and Subsidiary (the "Partnership") have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and disclosures necessary for complete financial
statements in conformity with generally accepted accounting principles. The
consolidated condensed balance sheet at December 31, 1995 was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles. The results for the interim periods
indicated are unaudited, but reflect all adjustments (consisting only of normal
recurring adjustments) which management considers necessary for a fair
presentation of operating results. Results of operations for interim periods
are not necessarily indicative of a full year of operations.
The Consolidated Condensed Financial Statements of the Partnership include the
operations of its 91.92% subsidiary, Horseshoe Entertainment, L.P. ("HE") which
operates the Horseshoe Bossier City in Bossier City, Louisiana.
Certain reclassifications were made to prior period financial statements to
conform with current year presentations.
2. Commitments and Contingencies:
Litigation
The Partnership and its subsidiary, during the normal course of operating their
business, become engaged in various litigation and other legal disputes. In
the opinion of the Partnership's management, the ultimate disposition of such
disputes will not have a material impact on the Partnership's operations.
Political Uncertainties in Louisiana
In the 1996 special session of the Louisiana legislature, Louisiana lawmakers
recently rejected the Governor's efforts to call for a single statewide
referendum that would give voters the opportunity to vote statewide on the
continued legalization of riverboat gaming, the land-based casino, and video
poker. Instead, the Louisiana legislature passed a measure providing for local
option elections in November 1996, which will give voters the opportunity to
decide the fate of certain forms of gaming in their parishes. In the November
1996 elections, voters in each parish will vote on video poker, voters in
parishes with riverboats will vote on riverboat gaming and voters in
Orleans Parish will also vote on the land-based casino.
There can be no assurance that the voters of HE's parish, the Parish of
Bossier, will not vote to prohibit riverboat gaming in the November 1996
election. If a vote to prohibit riverboat gaming occurred, HE would be
required to discontinue gaming activity in the Parish of Bossier upon
expiration of its current gaming license in 1999. Unless HE were able to
move its boat to another location in which riverboat gaming is legal, the
discontinuance of gaming operations in the Parish of Bossier would have a
material adverse effect on the Partnership, both in terms of the loss of
revenues and cash flow generated by the Horseshoe Bossier City and the
impairment of the significant investment that the Partnership has in its
riverboat casino and related facilities.
Competitive Uncertainties in Louisiana
Several ballot measures to amend the Arkansas constitution to permit gambling
in the Hot Springs, Arkansas market have been validated by the Arkansas
Attorney General's office and will appear on the November, 1996 statewide
ballot. If any of the measures are approved by the voters, the effect on gaming
operations in Bossier City, Louisiana may be negatively impacted.
Other Items
In February 1996, HE was awarded a certificate of preliminary approval to
operate a second casino in Bossier City, Louisiana by the Louisiana Riverboat
Gaming Commission and is in the process of seeking final licensing approval. The
newly created Louisiana Gaming Control Board has notified the public of its
willingness to accept additional applications on or before August 15, 1996, with
the implication that the Board is proposing to reopen the application procedure.
There can be no assurance that HE will receive final approval. Horseshoe Gaming,
L.L.C. ("Gaming"), the Partnership's parent company, has entered into an
agreement for the purchase of a riverboat to be used in Bossier City, Louisiana,
as its temporary facility. The purchase price for the riverboat is $11,500,000,
of which $1,500,000 was paid on March 28, 1996, upon entering into the purchase
agreement, and the remaining $10,000,000 was originally payable on May 15, 1996.
The purchase option has been converted into a right of first refusal and
extended through September 21, 1996 and requires Gaming to pay extension fees of
$500,000. In the event HE does not receive approval, the purchase agreement for
the riverboat will be terminated and Gaming will be refunded the $1,500,000 down
payment. The extension fees are nonrefundable and do not reduce the original
purchase price. During the option period, the seller is able to market the boat
and accept another offer subject to Gaming's right of first refusal with respect
to the other offer.
In February 1996, NGCP entered into an option agreement to purchase an
additional 1% limited partnership interest in HE for $4,000,000, of which
approximately $514,000 was paid in February, 1996, approximately $819,000 is to
be paid within 10 days of HE receiving final approval, discussed above, and the
remaining $2,667,000 is payable in three annual installments of $889,000 plus
accrued interest at 8% beginning one year after closing. If HE does not
receive final license approval, the total purchase price will be reduced to
$1,541,000.
11
<PAGE> 12
ROBINSON PROPERTY GROUP, L.P.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 18,377 $ 32,706
Accounts receivable, net 4,134 3,144
Interest receivable - related party - 305
Inventories 360 418
Prepaid expenses and other 569 166
-------- --------
Total current assets 23,440 36,739
-------- --------
Property and Equipment:
Land 2,755 2,505
Buildings, barge and improvements 50,200 50,171
Furniture, fixtures and equipment 16,315 16,142
Less: accumulated depreciation (8,359) (5,390)
-------- --------
60,911 63,428
Construction in progress 2,100 298
-------- --------
Net property and equipment 63,011 63,726
-------- --------
Other Assets:
Deferred finance charges, net 1,087 2,237
Goodwill, net 20,869 21,299
Other, net 1,764 1,861
-------- --------
$110,171 $125,862
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $ 807 $ 2,671
Due to affiliates 191 4,710
Accrued expenses and other 10,898 8,404
-------- --------
Total current liabilities 11,896 15,785
Long-term debt, less current maturities 38,000 70,000
-------- --------
Total liabilities 49,896 85,785
-------- --------
Commitments and Contingencies
Partners' Capital 60,275 40,077
-------- --------
$110,171 $125,862
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
12
<PAGE> 13
ROBINSON PROPERTY GROUP, L.P.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Revenues:
Casino $ 37,538 $ 33,680 $ 77,685 $ 50,527
Food and beverage 2,723 2,654 5,568 3,903
Hotel 893 878 1,789 1,290
Other 640 535 1,429 846
--------- --------- -------- --------
41,794 37,747 86,471 56,566
Promotional allowances (2,669) (2,444) (5,561) (3,679)
--------- --------- -------- --------
Net revenues 39,125 35,303 80,910 52,887
--------- --------- -------- --------
Expenses:
Casino 16,944 12,933 33,418 19,354
Food and beverage 2,622 2,450 5,010 3,640
Hotel 370 398 692 632
Other 252 341 541 472
General and administrative 6,977 4,249 13,197 6,680
Depreciation and amortization 1,764 1,586 3,512 2,727
Preopening - - - 7,021
--------- --------- -------- --------
Total 28,929 21,957 56,370 40,526
--------- --------- -------- --------
Operating Income 10,196 13,346 24,540 12,361
Other Income (Expense):
Interest expense (1,835) (2,263) (4,784) (3,674)
Interest and other income 141 51 442 66
--------- --------- -------- --------
Net Income $ 8,502 $ 11,134 $ 20,198 $ 8,753
========= ========= ======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
13
<PAGE> 14
ROBINSON PROPERTY GROUP, L.P.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Cash provided by operating activities $ 24,460 $ 20,380
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (2,270) (20,616)
Increase in construction payable - (2,558)
Increase in other assets - (336)
-------- --------
Net cash used in investing
activities (2,270) (23,510)
-------- --------
Cash flows from financing activities:
Proceeds from debt - 25,121
Payments on debt (32,000) (3,007)
Distributions - (8,094)
Changes in due to/from affiliates (4,519) 2,967
-------- --------
Net cash (used in) provided by
financing activities (36,519) 16,987
-------- --------
Net change in cash and cash equivalents (14,329) 13,857
Cash and cash equivalents, beginning of period 32,706 1,879
-------- --------
Cash and cash equivalents, end of period $ 18,377 $ 15,736
======== ========
</TABLE>
The accompanying notes are an integral
part of these condensed financial statements.
14
<PAGE> 15
ROBINSON PROPERTY GROUP, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Introduction:
The accompanying unaudited Condensed Financial Statements of Robinson Property
Group, L.P., (the "Partnership") have been prepared in accordance with the
instructions to Form 10-Q, and therefore do not include all information and
disclosures for complete financial statements in conformity with generally
accepted accounting principles. The consolidated condensed balance sheet at
December 31, 1995 was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting principles.
The results for the interim periods indicated are unaudited, but reflect all
adjustments (consisting only of normal recurring adjustments) which management
considers necessary for a fair presentation of operating results. Results of
operations for interim periods are not necessarily indicative of a full year of
operations.
Operating results for the 1995 period include the operations of Robinson
Property Group, L.P. (dba the Horseshoe Casino Center), commencing February 13,
1995.
2. Contingencies:
Litigation
The Partnership, during the normal course of operating its business, becomes
engaged in various litigation and other legal disputes. In the opinion of the
Partnership's management, the ultimate disposition of such disputes will not
have a material impact on the Partnership's operations.
Competitive Uncertainties in Mississippi
A landowner in DeSoto County, the county immediately north of Tunica County,
and the closest county in Mississippi to the greater Memphis area, has
published notice of its intent to have gambling be permitted to be conducted in
DeSoto County. Certain citizens groups located in DeSoto due in the process of
seeking signatures to a petition to cause an election to reject gambling in
DeSoto County on the November, 1996 ballot. If such signature drive is
unsuccessful or the ballot measure is defeated, then gambling would be
permitted in DeSoto County. Competition in DeSoto County would strongly impact
the viability of gaming operations in Tunica County.
Several ballot measures to amend the Arkansas Constitution to permit gambling
in the Hot Springs and West Memphis, Arkansas markets have been validated by
the Arkansas Attorney General's office and will appear on the November, 1996
statewide ballot. If any of the measures are approved by the voters, the effect
on gaming operations in Bossier City, Louisiana and/or Tunica, Mississippi may
be negatively impacted.
15
<PAGE> 16
PART I FINANCIAL INFOMATION
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis provides information which Management
believes is relevant to an assessment and understanding of the Company's
consolidated financial condition and results of operations of Horseshoe Gaming
L.L.C. (the "Company"). The discussion should be read in conjunction with the
Consolidated Condensed Financial Statements and notes thereto.
The consolidated condensed financial statements of the Company include the
operations of Robinson Property Group, L.P. ("RPG"), which operates the
Horseshoe Casino Center in Tunica County, Mississippi, New Gaming Capital
Partnership ("NGCP"), which owns approximately 92% of Horseshoe Entertainment,
L.P. ("HE") which operates the Horseshoe Bossier City in Bossier City,
Louisiana, and various subsidiaries engaged in the development of casino gaming
in new jurisdictions. Operating results for the 1995 period include the
operations of the Horseshoe Casino Center commencing February 13, 1995.
The Horseshoe Bossier City is one of three riverboat casinos currently
operating in the Bossier City/Shreveport, Louisiana market. As discussed
below, in February 1996 the Company was awarded a certificate of preliminary
approval to operate a second riverboat casino at its Bossier City site.
Further, the Louisiana Riverboat Gaming Commission awarded an additional
certificate of preliminary approval, the recipient of which is also expected to
operate a riverboat casino in the Bossier City/Shreveport market. As a result
of these awards and subject to formal licensing , a total of five riverboat
casinos are expected to be operating in the Bossier City/Shreveport market, two
of which may be operated by the Company. Management believes that the Bossier
City/Shreveport market is sufficiently large to allow five riverboat casinos to
operate profitably. Although management expects that the addition of its
second riverboat casino in Bossier City will result in an increase in revenues
and cash flows, the impact on operating margins from the overall increase in
supply to this market is uncertain.
The Horseshoe Casino Center operates in the competitive Tunica County,
Mississippi, market, which currently consists of ten casinos. Several of the
existing Tunica casinos, including the Horseshoe, have announced expansion
plans, including hotel rooms. The Horseshoe Casino Center is currently one of
only five casinos in the Tunica market with a hotel. While management expects
that this new competition will affect the Horseshoe Casino Center's revenues
and operating income, management also believes the projects will increase the
size and scope of the overall Tunica gaming market, mitigating the potential
adverse impact on future operating levels at the Horseshoe Casino Center.
RESULTS OF OPERATIONS
Three months ended June 30, 1996 and 1995
The Horseshoe Bossier City contributed net revenues and operating income,
respectively, of $45.4 million and $9.3 million for the quarter ended June 30,
1996, and $40.7 million and $10.1 million for the quarter ended June 30, 1995.
Operating income decreased by 7.9%, or $.8 million in the 1996 period as
compared to the 1995 period. The decrease in operating income is due to the
Company increasing its promotional programs and direct marketing efforts in
market areas outside the general locale of the casino. The Horseshoe Bossier
City's net revenues include casino revenues and non-casino revenues,
respectively, of $42.7 million and $2.7 million for the quarter ended June 30,
1996 and $37.5 million and $3.2 million for the quarter ended June 30, 1995.
Casino revenue per day increased approximately 13.8% in 1996 to $469,000 from
$412,000 in 1995.
The Horseshoe Casino Center contributed net revenues and operating income of
$39.1 million and $10.2 million, respectively for the three months ended June
30, 1996 and $35.3 million and $13.3 million, respectively for the three months
ended June 30, 1995. Operating income decreased by 23.6%, or $3.1 million in
the 1996 period as compared to the 1995 period. The decrease in operating
income is mainly due to two factors. The Company began increasing its
promotional programs and direct marketing efforts in 1996 in order to
mitigate the impact of additional casino openings in the Tunica market. The
operating results for the second quarter ended also include bad debt reserves
of approximately $1.2 million compared to the 1995 period of approximately $.2
million. The Horseshoe Casino Center's 1996 net revenues include casino
revenues and non-casino revenues, respectively, of $37.5 million and $1.6
million for the quarter ended June 30, 1996 and $33.7 million and $1.6 million
for the quarter ended June 30, 1995. Casino revenue per day increased
approximately 11.6% in 1996 to $413,000 from $370,000 in 1995.
16
<PAGE> 17
OTHER FACTORS AFFECTING EARNINGS
Depreciation and amortization expense increased in the 1996 period compared to
the 1995 period mainly due to amortization of goodwill which did not exist in
the 1995 period and increases in depreciation expense associated with property
improvements completed during the first quarter of 1996.
Development expenses in the second quarter of 1996 reflect a significant
increase over the comparable 1995 period due to the Company's failure to obtain
a license to conduct gaming in the state of Indiana. As a result, the 1996
second quarter results of operations includes approximately $1.9 million from
the write-off of land, land option deposits and additional expenses incurred by
the Company pursuing the Indiana license.
The increase in net interest expense for the three months ended June 30, 1996,
compared with the prior year period ended June 30, 1995, is due to an increase
in the amount of debt outstanding. This was partially offset by a reduction in
the overall interest rate on the Company's long-term debt, which resulted from
the refinancing of the Company's existing indebtedness as discussed in the
Liquidity and Capital Resources section below.
Six months ended June 30, 1996 and 1995
The significant improvement in the Company's net revenues for the six months
ended June 30, 1996, compared with the prior year period ended June 30, is
directly related to the timing of the opening of the Horseshoe Casino Center in
Tunica County, Mississippi, on February 13, 1995. Accordingly, 1995 operating
results include operations for the Horseshoe Casino Center, commencing February
13, 1995.
The Horseshoe Bossier City contributed net revenues and operating income,
respectively, of $91.6 million and $17.6 million for the six months ended June
30, 1996, and $76.2 million and $20.5 million for the six months ended June 30,
1995. Operating income decreased by 14.2%, or $2.9 million in the 1996 period
as compared to the 1995 period. The decrease in operating income is due to the
Company commencing promotional programs and direct marketing programs in market
areas outside the general locale of the casino.
The Horseshoe Bossier City's net revenues include casino revenues and
non-casino revenues, respectively, of $86.2 million and $5.4 million for the
six months ended June 30, 1996 and $70.3 million and $5.9 million for the six
months ended June 30, 1995. Casino revenue per day increased approximately
22.2% in 1996 to $474,000 from $388,000 in 1995.
The Horseshoe Casino Center opened on February 13, 1995 and contributed net
revenues and operating income of $80.9 million and $24.5 million, respectively
for the six months ended June 30, 1996. The 1995 period consisted of four and
one-half months of operations and contributed net revenues of $52.9 million.
Operating income for the 1995 period was $12.4 million which included a $7.0
million charge for preopening expenses. The Horseshoe Casino Center's 1996 net
revenues include $77.7 million of casino revenues and $3.2 million of
non-casino revenues. Casino revenue per day increased approximately 14.4% in
1996 to $445,000 from $389,000 in 1995.
17
<PAGE> 18
OTHER FACTORS AFFECTING EARNINGS
The increase in interest expense for the six months ended June 30, 1996,
compared with the prior year period ended June 30, 1995, is due to an increase
in the amount of debt outstanding. This was partially offset by a reduction in
the overall interest rate on the Company's long-term debt, which resulted from
the refinancing of the Company's existing indebtedness as discussed in the
Liquidity and Capital Resources section below.
LIQUIDITY AND CAPITAL RESOURCES
In October 1995, the Company refinanced substantially all of its existing
indebtedness with the net proceeds from an initial draw of $93.2 million on a
$100 million credit facility (the "Credit Facility") and from the sale of $100
million of 12.75% senior notes due September 30, 2000 (the "Senior Notes").
The Senior Notes were sold with warrants to purchase an additional $50 million
of Senior Notes on April 10, 1996, at a price of 98.15% of par value. The
warrants were exercised and raised approximately $48 million after fees and
expenses. The Credit Facility bears interest at the greater of 10% or
three-month LIBOR plus 2.5% and requires semi-annual principal payments of 5%
of the then outstanding balance with final maturity on September 30, 1999.
The net proceeds from these borrowings were also used to (i) purchase equity
interests in projects under development in new jurisdictions by directly or
indirectly reimbursing Mr. Binion for approximately $6.9 million in costs
expended pursuing such projects, and (ii) provide $5 million of working capital
to the Company. Approximately $31.1 million from the sale of the senior notes
and approximately $49.1 million from the exercise of the warrants was placed in
an escrow account (the "Excess Proceeds Escrow Account") to be used to fund the
development of new projects and the repayment of debt.
In January, 1996, the Company filed a registration statement on Form S-4 with
the Securities and Exchange Commission ("SEC") to register under the Securities
Act of 1933 the exchange of its Series B Senior Notes to for its Series A
Senior Notes which have equivalent terms. The registration statement was
declared effective by the SEC on May 13, 1996 and the exchange was effected in
June, 1996.
Development
Bossier City, Louisiana
On February 3, 1996, HE was awarded a certificate of preliminary approval
to operate a second casino in Bossier City by the Louisiana Riverboat
Gaming Commission (the "Commission"), and is in the process of seeking
formal licensing approval. There can be no assurance HE will receive final
approval. The newly created Louisiana Gaming Control Board has notified
the public of its willingness to accept additional applications on or
before August 15, 1996, with the implication that the Board is proposing to
reopen the application procedure. If HE receives final approval, HE will
have been awarded two out of five total licenses for the Bossier
City/Shreveport market. The Company has committed to the State of
Louisiana to open the second casino in a temporary riverboat within 90 days
of receiving final approvals for its license. To satisfy that commitment,
the Company recently entered into a purchase agreement to buy a second
vessel with 30,000 square feet of gaming area, to be used as a temporary
vessel, at a total cost of $11.5 million of which $1.5 million was paid in
March, 1996. In order to extend the option period until September 21, 1996
the Company was required to pay extension fees at $500,000. If the Company
does not receive final approval, then the Company's purchase commitment
will be canceled and the $1.5 million deposit will be returned to the
Company. The extension fees are nonrefundable and do not reduce the
purchase price. During the option period, the seller is able to market the
boat and accept another offer subject to the Company's right of first
refusal with respect to the other offer. The Company intends to replace
this vessel within six months with a larger vessel which is currently under
construction.
HE has also prepared plans for expansion of the entire facility at a net
cost of approximately $160-$170 million, including the addition of the
second riverboat. The expansion plans include a 606-suite 25-story hotel
tower, a 800-1,000-seat entertainment complex, a health club, three
additional restaurants, meeting room facilities, other amenities and the
1,100-car parking garage completed in the first quarter of 1996, all
connected to an expanded dockside facility. Management estimates the
project will be completed during the second quarter of 1997. If HE is not
awarded the license to operate a second casino in Bossier City, it will
scale back its expansion plans. The nature of the reduction in scope has
not yet been determined.
In addition, on March 28, 1996, HE completed the purchase of the Le
Bossier Hotel, including furnishings and fixtures, for approximately $5.2
million. HE had previously leased this facility under a long-term
operating lease.
Tunica, Mississippi
Management of RPG has plans to further develop its casino site in Tunica,
Mississippi, for a total cost of approximately $60-$70 million.
Development plans include an additional 15,000 square feet of gaming space
for 450 slot machines and 18 to 20 table games, 309 additional hotel
suites, a multi-level 1,100-space parking garage and an entertainment
facility which will accommodate approximately 1,200 to 1,500 customers and
include a health club, two additional restaurants, convention facilities
and other amenities. Construction of the expansion has commenced and is
expected to be completed during the second quarter of 1997. If gambling
is legalized in DeSoto County, then the Company will scale back its
development plans. The nature of any reduction in scope has not yet been
determined.
18
<PAGE> 19
Other New Projects
The Company and JBB Gaming Investments, L.L.C., a Delaware limited
liability company owned by Mr. Binion and his family ("JBB"), formed
Horseshoe Ventures L.L.C. to pursue the development of casinos in new
jurisdictions.
The Company is required to purchase, following 36 months of operations,
the direct or indirect interest in any new project developed by Horseshoe
Ventures then held by JBB by using either cash or membership interests in
the Company with the value of such membership interests determined by an
independent appraisal. The value of the purchased interests will be equal
to four times the average annual EBITDA of such new project during the
preceding 36-month period.
OTHER FACTORS AFFECTING LIQUIDITY
In February, 1996 NGCP entered into an option agreement to purchase an
additional 1% minority interest in HE for approximately $4.0 million, subject
to HE receiving final licensing approval. If HE does not receive license
approval, then the purchase price will be adjusted to approximately $1.5
million.
As of June 30, 1996, the Company had cash and cash equivalents of approximately
$140.9 million, including approximately $76.4 million restricted for the
pursuit and development of new projects and the repayment of debt. Within the
next twelve months, the Company expects to spend approximately $130 to $140
million for the expansion of the Bossier City, Louisiana facility, if final
approval is received, and approximately $60 to $70 million for expansion of the
Tunica, Mississippi facility.
Management believes that the Company's cash and cash equivalents on hand and
cash from operations will be adequate to meet the Company's existing
obligations as they become due. Additional financing may be required to fund
the Company's development plans discussed above. There can be no assurance
that the Company will be successful in obtaining additional financing with
terms acceptable to the Company; however, management has discussed potential
financing with certain lending agencies on terms acceptable to the Company.
The Company does not expect the impact of inflation to have a material adverse
effect on its operations. Absent changes in competitive and economic
conditions or in specific prices affecting the industry, the Company believes
that the hotel-casino industry may be able to maintain its operating profit
margins in periods of general inflation by increasing minimum wagering limits
for its games and increasing the prices of its hotel rooms, food and beverage
and other items, and by taking actions designed to increase the number of
patrons.
The Company has not experienced any significant seasonal trends; however, the
Company has a limited operating history and the Company may determine in the
future that its revenues and income may be seasonal in nature.
In the 1996 special session of the Louisiana legislature, Louisiana lawmakers
recently rejected the Governor's efforts to call for a single statewide
referendum that would give voters the opportunity to vote statewide on the
continued legalization of riverboat gaming, the land-based casino, and video
poker. Instead, the Louisiana legislature passed a measure providing for local
option elections in November 1996 which will give voters the opportunity to
decide the fate of certain forms of gaming in their parishes. In the November
1996 elections, voters in each parish will vote on video poker, voters in
parishes with riverboats will vote on riverboat gaming, and voters in
Orleans Parish will also vote on the land-based casino.
There can be no assurance that the voters of HE's parish, the Parish of
Bossier, will approve riverboat gaming in the November 1996 election. If a
vote to prohibit riverboat gaming occurs, HE would be required to discontinue
gaming activity in the Parish of Bossier upon expiration of its current gaming
license in 1999. Under these circumstances, unless HE is able to move its boat
to another location in which river boat gaming is legal, the discontinuance of
gaming operations in the Parish of Bossier coupled with an inability of HE to
move its riverboat casino to another gaming location would have a material
adverse effect on the Company, both in terms of the loss of revenues and cash
flow generated by the Horseshoe Bossier City and the impairment of the
significant investment that the Company has in its riverboat casino and related
facilities.
A landowner in DeSoto County, the county immediately north of Tunica County,
and the closest county in Mississippi to the greater Memphis area, has
published notice of its intent to have gambling be permitted to be conducted in
DeSoto County. Certain citizens groups located in DeSoto due in the process of
seeking signatures to a petition to cause an election to reject gambling in
DeSoto County on the November, 1996 ballot. If such signature drive is
unsuccessful or the ballot measure is defeated, then gambling would be
permitted in DeSoto County. Competition in DeSoto County would strongly impact
the viability of gaming operations in Tunica County.
Several ballot measures to amend the Arkansas Constitution to permit gambling
in the Hot Springs and West Memphis, Arkansas markets have been validated by
the Arkansas Attorney General's office and will appear on the November, 1996
statewide ballot. If any of the measures are approved by the voters, the effect
on gaming operations in Bossier City, Louisiana and/or Tunica, Mississippi may
be negatively impacted.
19
<PAGE> 20
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
4.37 Amendment No. 1 to Indenture, dated as of July 19, 1996,
by and among Horseshoe Gaming, L.L.C., Robinson Property
Group Limited Partnership and U.S. Trust Company of California,
N.A., as Trustee under the Indenture.
27 Financial Data Schedule-Horseshoe Gaming L.L.C. and Subsidiaries
(for SEC use only)
20
<PAGE> 21
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.
HORSESHOE GAMING, L.L.C.
a Delaware limited liability company
By: Horseshoe Gaming, Inc.,
a Nevada corporation
Its: Manager
Date: August 13, 1996 By: /s/ Walter J. Haybert
-------------------------------------
Treasurer and Chief Financial Officer
of Horseshoe Gaming, Inc.
21
<PAGE> 22
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.
Robinson Property Group Limited Partnership
a Mississippi limited partnership
By: Horseshoe GP, Inc.,
a Nevada corporation
Its: Manager
Date: August 13, 1996 By: /s/ Walter J. Haybert
-------------------------------------
Treasurer and Chief Financial Officer
of Horseshoe GP, Inc.
22
<PAGE> 23
EXHIBIT INDEX
Exhibit
Number Description
4.37 Amendment No. 1 to Indenture, dated as of July 19, 1996, by and among
Horseshoe Gaming, L.L.C., Robinson Property Group Limited Partnership
and U.S. Trust Company of California, N.A., as Trustee, under the
Indenture.
27 Financial Data Schedule-Horseshoe Gaming L.L.C. and Subsidiaries
<PAGE> 1
AMENDMENT NO. 1
TO
INDENTURE
This Amendment No. 1 to Indenture is dated as of July 19, 1996 (the
"Amendment") and amends that certain Indenture dated as of October 10, 1995
(the "Indenture") by and among Horseshoe Gaming, L.L.C., a Delaware limited
liability company (the "Company"), the Guarantor named therein (the
"Guarantor") and U.S. Trust Company of California, N.A., as trustee (the
"Trustee").
R E C I T A L S:
WHEREAS, the Company, the Gurantor and the Trustee entered into the
Indenture as of October 10, 1995; and
WHEREAS, the Company and the Guarantor wish to amend Section 12.1(d) of
the Indenture without the consent of the Holders of the Senior Notes pursuant
to Section 9.1 of the Indenture.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the Indenture is hereby amended as
follows:
A G R E E M E N T
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Indenture.
2. Amendment of Section 12.1(d). Section 12.1(d) of the Indenture is
hereby amended by the deletion in full of the third sentence of said Section
12.1(d). (The deleted sentence provides that "Notwithstanding the foregoing,
however, in no event shall the obligations of any Subsidiary Guarantor under
the Guarantee exceed 95% of the Consolidated Net Worth of such Subsidiary
Guarantor.")
3. No Action Required by Holders of Senior Notes. This Amendment
shall be self-executing and the Indenture is hereby deemed amended in
accordance with the terms hereof. The Holders of the Senior Notes need not
take any action with respect to this Amendment.
4. Full Force and Effect. Except as provided in this Amendment, all
of the terms and provisions of the Indenture shall remain unmodified and in
full force and effect and are hereby ratified and confirmed.
5. Governing Law. The internal laws of the State of New York shall
govern and be used to construe this Amendment without giving regard to
principles of conflict of laws thereof.
<PAGE> 2
6. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same instrument.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to Indenture to be duly executed as of the date first written above.
HORSESHOE GAMING, L.L.C.
By: Horseshoe Gaming, Inc., its Manager
By: /s/ Jack B. Binion
-----------------------------------
Name: Jack B. Binion
Title: Chief Executive Officer
ROBINSON PROPERTY GROUP LIMITED
PARTNERSHIP
By: Horseshoe GP, Inc., its General Partner
By: /s/ Jack B. Binion
-----------------------------------
Name: Jack B. Binion
Title: Chief Executive Officer
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: /s/ Sandra H. Leess
-----------------------------------
Name: Sandra H. Leess
Title: Senior Vice President
- 2 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR ROBINSON PROPERTY GROUP, L.P. FOR THE PERIOD ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS.<F3>
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,327
<SECURITIES> 9,050
<RECEIVABLES> 4,134<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 360
<CURRENT-ASSETS> 23,440
<PP&E> 71,370
<DEPRECIATION> 8,359
<TOTAL-ASSETS> 110,171
<CURRENT-LIABILITIES> 11,896
<BONDS> 38,000
0
0
<COMMON> 0
<OTHER-SE> 60,275
<TOTAL-LIABILITY-AND-EQUITY> 110,171
<SALES> 2,322<F2>
<TOTAL-REVENUES> 80,910
<CGS> 5,551
<TOTAL-COSTS> 39,661
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,784
<INCOME-PRETAX> 20,198
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,198
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,198
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>NOTES AND ACCOUNTS RECEIVABLE-TRADE ARE REPORTED NET OF ALLOWANCES FOR DOUBTFUL
ACCOUNTS IN THE STATEMENT OF FINANCIAL POSITION.
<F2>NET SALES ARE REPORTED NET OF PROMOTIONAL ALLOWANCES APPLICABLE TO TANGIBLE
ITEMS.
<F3>AMOUNTS INAPPLICABLE OR NOT DISCLOSED AS A SEPARATE LINE ITEM ON THE
STATEMENT OF FINANCIAL POSITION OR RESULTS OF OPERATIONS ARE REPORTED AS 0
HEREIN.
</FN>
</TABLE>
