UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
( XX ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1997
-----------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to
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Commission file number: 001-12419
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SHOWBOAT MARINA CASINO PARTNERSHIP
SHOWBOAT MARINA FINANCE CORPORATION
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-1978576
NEVADA 88-0356197
- -------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE SHOWBOAT PLACE, EAST CHICAGO, INDIANA 46312
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(219) 378-3000
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(Registrant's telephone number, including area code)
NOT APPLICABLE
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
------ ------
Indicate the number of shares outstanding of the issuer's classes of
common stock, as of the latest practicable date.
Showboat Marina Casino Partnership Not applicable
Showboat Marina Finance Corporation 1,000 shares of common stock, $1.00
par value as of November 7, 1997
1
<PAGE>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
AND
SHOWBOAT MARINA PARTNERSHIP (PREDECESSOR)
INDEX
Part I FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 30, 1997 and December 31, 1996 3-4
Condensed Consolidated Statements of Operations -
For the three months ended September 30,
1997 and 1996 5
Condensed Consolidated Statements of Operations -
For the Nine months ended September 30,
1997 and the period March 29, 1996 through
September 30, 1996 6
Condensed Consolidated Statements of Cash Flows -
For the Nine months ended September 30,
1997, the period from March 29, 1996 through
September 30, 1996 and the period from
January 1, 1996 through March 28, 1996 7
Notes to the Condensed Consolidated
Financial Statements 8-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
PART II OTHER INFORMATION
ITEMS 1 - 6 14
SIGNATURES 15
EXHIBIT INDEX 16
2
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PART I. Financial Information
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<CAPTION>
Item 1. Financial Statements
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
ASSETS September 30, 1997 December 31, 1996
- ------------------------ ------------------- ------------------
<S> <C> <C>
(unaudited)
(In thousands)
Current assets:
Cash and cash equivalents $ 7,763 $ 599
Short-term investments held
in escrow - 69,002
Receivables, net 785 1,601
Inventories 399 -
Prepaid expenses 1,196 -
------------------- ------------------
Total current assets 10,143 71,202
------------------- ------------------
Property and equipment 166,955 100,601
Less accumulated depreciation
and amortization (5,107) -
------------------- ------------------
161,848 100,601
------------------- ------------------
Other assets:
Economic development and
licensing costs, net of
accumulated amortization
of $499,000 and $0 at
September 30, 1997
and December 31, 1996
respectively 10,996 7,637
Deposits and other assets 2,374 2,158
Debt issuance costs, net of
accumulated amortization of
$506,000 and $0 at September
30, 1997, and December 31,
1996, respectively 5,935 6,296
------------------- ------------------
19,305 16,091
------------------- ------------------
$ 191,296 $ 187,894
=================== ==================
See accompanying notes to condensed consolidated financial statements.
3 (continued)
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<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(continued)
LIABILITIES AND PARTNERS'CAPITAL September 30, 1997 December 31, 1996
- -------------------------------- ------------------ ------------------
<S> <C> <C>
(Unaudited)
(In thousands)
Current liabilities:
Current maturities of long-term
debt $ 5,407 $ -
Accounts payable 3,084 3,717
Construction payables - 4,037
Accured liabilities 7,808 5,557
------------------ ------------------
Total current liabilities 16,299 13,311
------------------ ------------------
Long-term debt, excluding current
maturities 153,414 140,000
------------------ ------------------
Partners' capital:
Capital contributions 40,000 39,000
------------------ ------------------
Accumulated deficit (18,417) (4,417)
------------------ ------------------
Total Partners' Capital 21,583 34,583
------------------ ------------------
$ 191,296 $ 187,894
================== ==================
See accompanying notes to condensed consolidated financial statements.
4
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<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
September 30, 1997 September 30, 1996
------------------ -------------------
<S> <C> <C>
(In thousands)
Revenues:
Casino $ 40,798 $ -
Food and beverage 2,801 -
Other 230 -
------------------ ------------------
43,829 -
Less complimentaries 1,191 -
------------------ ------------------
Net revenues 42,638 -
Operating costs and expenses:
Casino 19,847 -
Food and beverage 2,575 -
General and administrative 8,336 -
Selling, advertising and promotion 5,626 -
Depreciation and amortization 3,276 -
------------------ ------------------
39,660 -
------------------ ------------------
Income from operations 2,978 -
Other (income) expense:
Interest income (80) (1,730)
Interest expense, net of
amounts capitalized 5,574 2,784
------------------ ------------------
5,494 1,054
------------------ ------------------
Net loss $ (2,516) $ (1,054)
================== ==================
See accompanying notes to condensed consolidated financial statements
5
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<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND
THE PERIOD MARCH 29, 1996 THROUGH SEPTEMBER 30, 1996
(Unaudited)
September 30,1997 September 30, 1996
----------------- ------------------
<S> <C> <C>
(In thousands)
Revenues:
Casino $ 73,700 $ -
Food and beverage 4,934 -
Other 716 -
------------------ -----------------
79,350 -
Less complimentaries 1,872 -
------------------ -----------------
Net revenues 77,478 -
------------------ -----------------
Operating costs and expenses:
Casino 36,550 -
Food and beverage 4,731 -
General and administrative 14,842 -
Selling, advertising and promotion 9,781 -
Depreciation and amortization 5,705 -
Preopening costs 9,577 -
------------------ -----------------
$ 81,186 -
------------------ -----------------
Loss from operations (3,708) -
Other (income) expense:
Interest income (855) (3,784)
Interest expense, net of
amounts capitalized 11,147 6,693
------------------ -----------------
10,292 2,909
------------------ -----------------
Net loss $ (14,000) $ (2,909)
================== =================
See accompanying notes to condensed consolidated financial statements.
6
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<CAPTION>
SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
SHOWBOAT MARINA PARTNERSHIP (PREDECESSOR)
CONDENSED COSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
THE PERIOD FROM MARCH 29, 1996 THROUGH SEPTEMBER 30, 1996 AND
THE PERIOD FROM JANUARY 1, 1996 THROUGH MARCH 28, 1996
(Unaudited)
SMCP Predecessor
---------------------------------- -----------------
Nine Months Period from Period from
Ended March 29, 1996 January 1, 1996
September 30, through through
1997 September 30, 1996 March 28, 1996
---------------------------------- ---------------
<S> <C> <C> <C>
(In thousands)
Net cash provided by
(used in) operating
activities $ (6,950) $ (1,804) $ 99
Cash flows from
investing activities:
Economic development costs (3,858) (3,694) (7)
Purchases of property,
equipment and payments
for construction in
progress (59,408) (49,644) (5,730)
Sale of short term
investments 69,002 - -
Other (314) - -
-------------- ------------------- ------------
Net cash provided (used
in) investing activities 5,422 (53,338) (5,737)
-------------- ------------------- ------------
Cash flows from financing
activities:
Proceeds from issuance of
notes payable - 140,000 -
Proceeds from additional
long-term financing 9,636 - -
Repayments of long-term
debt (1,799) - -
Debt issuance costs (145) (5,555) (550)
Capital contributions 1,000 22,287 5,830
-------------- ------------------- ------------
Net cash provided by
financing activities 8,692 156,732 5,280
-------------- ------------------- ------------
Net increase (decrease)
in cash and equivalents 7,164 101,590 (358)
Cash and cash equivalents
at beginning of period 599 - 358
-------------- ------------------- ------------
Cash and cash quivalents
at end of period $ 7,763 $ 101,590 $ -
============== =================== ============
Supplemental disclosures
of cash flow information
and non-cash investing
and financing activities:
Cash paid during the
period for:
Interest, net of
amounts capitalized 15,323 6,540 -
Equipment acquired
under capital leases 10,984 - -
See accompanying notes to condensed consolidated financial statements.
7
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SHOWBOAT MARINA CASINO PARTNERSHIIP (SMCP)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The accompanying consolidated financial statements present
the financial position, results of operations and cash flows of
Showboat Marina Casino Partnership (SMCP) and its wholly owned
subsidiary, Showboat Marina Finance Corporation (SMFC) as of
September 30, 1997 and December 31, 1996 and for the periods ended
September 30, 1997 and 1996. These financial statements also present the
cash flows of Showboat Marina Partnership (Predecessor) for the period
from January 1, 1996 through March 28, 1996. The Predecessor had no
operations through March 28, 1996, other than development and licensing
activities, the costs of which were capitalized and subsequently
contributed to SMCP. Therefore a statement of operations is not
applicable.
SMCP is a general partnership and was formed as of March
1, 1996, for the purpose of developing a riverboat casino
complex in East Chicago, Indiana to be operated on Lake
Michigan. On April 15, 1997, SMCP received a riverboat license
from the Indiana Gaming Commission. After successful completion of
a test cruise, SMCP commenced operations on April 18, 1997. SMFC was
incorporated on March 7, 1996, to assist SMCP in financing the East
Chicago Showboat. Showboat Marina Partnership (SMP) was formed on
January 31, 1994 and had been developing the project prior to the
formation of SMCP. On March 28, 1996, SMP contributed substantially all
of its assets and liabilities to SMCP.
SMCP is effectively owned 55% by Showboat, Inc. (Showboat)
and 45% by Waterfront Entertainment and Development, Inc. (Waterfront)
through various partnership interests.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been consolidated
or omitted. These condensed consolidated financial statements
should be read in conjunction with the financial statements and
notes thereto included in SMCP's December 31, 1996 annual report on
Form 10-K.
The accompanying unaudited consolidated financial statements
contain all adjustments, which in the opinion of management,
are necessary for a fair statement of the results of the interim
period. The results of operations for the interim periods are not
indicative of results of operations for an entire year. Certain prior
period balances have been reclassified to conform to the current
period's presentation.
Preopening Costs
Preopening costs were capitalized until operations of the
riverboat casino complex commenced, at which time the costs
were written off. The preopening costs consisted primarily of
payroll, consulting fees, training and related travel costs.
8 (continued)
<PAGE>
SHOWBOAT MARINA CASINO PARTNERSHIIP (SMCP)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. LONG-TERM DEBT
In March 1997, PDS Financial Corporation provided an
equipment lease of approximately $11.0 million. The lease is
secured by the equipment purchased with the proceeds. The
lease is for a term of 48 months and the rate was fixed at
11.0%.
In June 1997, FINOVA Capital Corporation provided a loan
of approximately $10.0 million. The loan is secured by certain
equipment purchased during the construction of the riverboat
casino complex. The loan is for a term of 36 months and the
rate was fixed at 11.1%
In September of 1997, the Partnership entered into an
unsecured line of credit with Fleet Bank in the amount of $.9
million. The term of the line is for a period of one year,
renewable annually at an interest rate of LIBOR plus 75 basis
points. During October of 1997, upon receipt of approval from
the Indiana Gaming Commission, the amount of the line was
increased to $3.0 million. The line is available for general
corporate purposes. As of September 30, 1997, the Partnership
had not drawn funds against this facility.
3. COMMITTMENTS AND CONTINGENCIES
From the date of opening through September 30, 1997, SMCP
has accumulated approximately $2.0 million in management fees
due under its management contract with SMP. However, the
payment of these fees are limited by the Partnership's
bond indenture and require the Partnership to meet certain
fixed charge coverage ratios before any payment can be made.
Due to these restrictions, the Partnership has not accrued any
management fees and will recognize the expense when paid.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
GENERAL
Showboat Marina Casino Partnership ("SMCP" or the "Partnership"),
owns and operates a riverboat casino, the Showboat Mardi Gras Casino,
located in East Chicago, Indiana (the "East Chicago Showboat"). The
East Chicago Showboat began operations on April 18, 1997. The Complex
consists of a casino gaming vessel and a land based support facility.
The gaming vessel contains 53,000 square feet of gaming space with
approximately 1,640 slot machines and 82 table games. The land based
facility consists of a 100,000 square foot pavilion, an 1,800 space parking
garage and surface parking for 1,000 vehicles. The pavilion contains a
buffet, upscale restaurant, cocktail lounge, gift shop, hydraulic bandstand
platform, promotions area and administrative offices.
In accordance with Indiana Gaming Commission Regulations
the vessel conducts ten 2 hour cruises throughout the gaming day.
Entrance to the vessel is limited to the first 30 minutes of each
two hour cruise, with the vessel away from the dock for a period of
1 hour.
The Partnership is a general partnership which was formed
as of March 1, 1996 for the purpose of developing and operating the
East Chicago Showboat on Lake Michigan. Prior to the formation of
the Partnership, the complex was developed by Showboat Marina
Partnership, (the "Predecessor" or "SMP") which was formed on
January 31, 1994. On March 28, 1996, the Predecessor contributed
substantially all of its assets and liabilities to the Partnership.
Showboat Marina Finance Corporation (SMFC) is a wholly owned
subsidiary of the Partnership and was formed on March 7, 1996 to
assist the Partnership in the financing of the East Chicago
Showboat. The Partnership is owned 99% by the Predecessor and 1% by
Showboat Marina Investment Partnership. The Partnership is
effectively owned 55% by Showboat, Inc. and 45% by Waterfront
Entertainment and Development, Inc. through various partnership
interests.
Information contained in this quarterly report is
supplemental to disclosures in the Partnership's year end financial
reports. This management's discussion and analysis of financial
condition and results of operations should be read in conjunction
with the management's discussion and analysis of financial condition
and results of operations included in the Partnership's December 31,
1996 Annual Report on Form 10-K.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Prior to the commencement of operations on April 18, 1997,
the activities of the Partnership and the Predecessor were limited
to applying for the gaming license, securing the land for, arranging
for the financing of and completing the design and construction of
the East Chicago Showboat. All costs, except for some interest
expense, have been capitalized. As a result, the Partnership has no
operating history for the three and nine months ended September 30,
1996.
Three Months Ended September 30, 1997
Revenues
For the three months ended September 30, 1997, the
Partnership had gross revenues of $43.8 million. This was offset by
$1.2 million of complimentaries, resulting in net revenues of $42.6
million for the three months ended September 30, 1997.
10 (continued)
<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS (continued)
Revenues (continued)
Casino revenues for the three months ended September 30,
1997 were $40.8 million, and consisted of $12.2 million in table
games revenue and $28.6 million in slot revenue. Slot revenue
represents 70.1% of the total casino win and table game revenue
makes up the remaining 29.9% of the total casino win for the East
Chicago Showboat.
Income From Operations
The Partnership's income from operations for the three
months ended September 30, 1997 was $3.0 million. Operating
expenses for the three months ended September 30, 1997 were $39.7
million. Casino division expenses included $11.7 million of gross
revenue and admission taxes, as well as $1.5 million of community
benefit levies.
SMCP is currently reviewing its operations in an effort to
improve margin performance. SMCP has begun implementing a series of
cost controls and is continuing to evaluate all opportunities to
reduce costs. SMCP continues to develop cost effective marketing
programs to increase awareness in the Chicago gaming market in an
effort to enhance revenue. Over the past twelve months, the Chicago
gaming market has had capacity growth of 58.9%, while revenue has
grown at a 35.5% rate, resulting in a slower than anticipated
absorption of additional gaming capacity. As of November 1, 1997,
there have been no announced future capacity increases in this market.
Net Loss
For the three months ended September 30, 1997, the
Partnership experienced a net loss of $2.5 million. This loss was
primarily attributable to the level of income from operations
obtained and interest expense in the amount of $5.5 million.
Nine Months Ended September 30, 1997
Revenues
For the nine months ended September 30, 1997, the
Partnership had gross revenues of $79.4 million. This was offset by
$1.9 million of complimentaries, resulting in net revenues of $77.5
million for the nine months ended September 30, 1997.
Casino revenues for the nine months ended September 30,
1997 were $73.7 million, and consisted of $20.9 million in table
games revenue and $52.8 million in slot revenue. Slot revenue
represents 71.6% of the total casino win and table game revenue
makes up the remaining 28.4% of the total casino win for the East
Chicago Showboat.
Loss From Operations
SMCP had income from operations of $5.9 million,
exclusive of $9.6 million of preopening costs for the nine months
ended September 30, 1997. Operating expenses for the nine months
ended September 30, 1997 were $81.2 million, including the write-off
upon opening of preopening costs in the amount of $9.6 million.
Casino division expenses included $21.7 million of gross revenue and
admission taxes, as well as $2.8 million of community benefit levies.
11 (continued)
<PAGE>
MATERIAL CHANGES IN RESULTS OF OPERATIONS (continued)
Loss From Operations (continued)
SMCP is currently reviewing its operations in an effort to
improve margin performance. SMCP has begun implementing a series of
cost controls and is continuing to evaluate all opportunities to
reduce costs. SMCP continues to develop cost effective marketing
programs to increase awareness in the Chicago gaming market in an
effort to enhance revenue. Over the past twelve months, the Chicago
gaming market has had capacity growth of 58.9%, while revenue has
grown at a 35.5% rate, resulting in a slower than anticipated
absorption of additional gaming capacity. As of November 1, 1997,
there have been no announced future capacity increases in this market.
Net Loss
For the nine months ended September 30, 1997, the
Partnership experienced a net loss of $14.0 million. This loss was
primarily attributable to the level of income from operations
obtained, the write off of preopening costs in the amount of $9.6
million and interest expense in the amount of $11.1 million.
MATERIAL CHANGES IN FINANCIAL CONDITION
As of September 30, 1997, SMCP held cash and cash
equivalents of $7.8 million compared to $.6 million in cash
and cash equivalents and $69.0 million in short term investments at
December 31, 1996. Since its inception, SMCP has met its capital
requirements through the $40.0 million capital contribution (the
"Capital Contribution"), the $133.9 million net proceeds from the
offering (the "Offering") of its 13 1/2% First Mortgage Notes due
2003 (the "East Chicago Notes") and equipment financing ofapproximently
$20.6 million provided by PDS Financial Corporation and FINOVA Capital
Corporation. The East Chicago Notes were issued under the Indenture dated
as of March 26, 1996 (the "Note Indenture") between SMCP, SMFC and American
Bank National Association as Trustee (in such capacity, the "Trustee" or
"Registrar"). The funds provided by these sources provided sufficient
amounts to develop and commence operations of the East Chicago Showboat.
In March 1997, PDS Financial Corporation provided an
equipment lease of approximately $11.0 million. The lease is
secured by the equipment purchased with the proceeds. The lease is
for a term of 48 months and the rate was fixed at 11.0%.
In June 1997, FINOVA Capital Corporation provided a loan
of approximately $10.0 million. The loan is secured by certain
equipment purchased during the construction of the riverboat casino
complex. The loan is for a term of 36 months and the rate was fixed
at 11.1%.
On September 30, 1997, the Partnership entered into an
unsecured line of credit agreement with Fleet Bank in the amount of
$.9 million. The term of the line is for a period of one year,
renewable annually at the rate of LIBOR plus 75 basis points.
During October of 1997, upon receipt of approval from the Indiana
Gaming Commission, the amount of the line was increased to $3.0
million. The line is available for general corporate purposes. As
of September 30, 1997, the Partnership had not drawn funds against
this facility.
12 (continued)
<PAGE>
MATERIAL CHANGES IN FINANCIAL CONDITION (continued)
Showboat entered into a standby equity commitment which
requires that if, during any of the first three Operating Years (as
defined), SMCP's Combined Cash Flow (as defined) is less than $35.0
million, Showboat will be required to make additional capital
contributions to SMCP in the lesser of (a) $15.0 million, or (b) the
difference between the $35.0 million and the Operating Year's
Combined Cash Flow. Showboat's aggregate potential obligation under
the standby equity commitment is $30.0 million. The first quarter
of the first Operating Year of SMCP ended on September 30, 1997 and
the Combined Cash Flow for such quarter was approximately $6.0
million. There can be no assurance that the Combined Cash Flow for
the current Operating Year, or for any, Operating Year thereafter,
will exceed $35.0 million and that Showboat will not be required
to make additional capital contributions to SMCP in accordance
with the standby equity commitment. The Standby Equity Commitment
is subject to certain limitations, qualifications, and exceptions.
SMCP expects to fund its operating, debt service and
capital needs from operating cash flow and as required from its line
of credit. Based upon SMCP's anticipated operations, management
believes that available cash flow from the East Chicago Showboat's
operations, will be adequate to meet SMCP's anticipated future
requirements for working capital, capital expenditures and scheduled
payments of principal, interest and liquidated damages, if any, on
the Notes for the foreseeable future. No assurance can be given,
however, that operating cash flow will be sufficient for that
purpose. SMCP intends to establish initial working capital reserves
to provide for anticipated short-term liquidity needs. Although no
additional financing beyond the line of credit described above is
contemplated, SMCP will seek, if necessary and to the extent
permitted under the Indenture, additional financing through bank
borrowings, debt or equity financing. There can be no assurance
that additional financing,if needed, will be available to SMCP, or
that, if available, the financing will be on terms favorable to
SMCP. There is no assurance that SMCP's estimate of its reasonably
anticipated liquidity needs is accurate or that new business
developments or other unforeseen events will not occur, resulting in
the need to raise additional funds.
All statements contained herein that are not historical
facts, including but not limited to, statements regarding SMCP's
current business strategy, and SMCP's plans for future development
and operations, are based upon current expectations. These
statements are forward-looking in nature and involve a number of
risks and uncertainties. Actual results may differ materially.
Among the factors that could cause actual results to differ
materially are the following: the availability of sufficient
capital to finance SMCP's business plan on terms satisfactory to
SMCP; competitive factors, such as expansion of gaming in Illinois,
Indiana and Michigan, states from which SMCP expects to draw
significant numbers of patrons and an increase in the number of
casinos serving the Chicago metropolitan area; changes in labor,
equipment and capital costs; contemplated joint ventures on terms
satisfactory to the Company and to obtain necessary regulatory
approvals; general business and economic conditions; and other
factors described from time to time in SMCP's reports filed with the
Securities and Exchange Commission. SMCP wishes to caution the
readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private
Litigation Reform Act of 1995 and, as such, speak only as of the
date made.
13
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SHOWBOAT MARINA CASINO PARTNERSHIP (SMCP)
PART II, OTHER INFORMATION
ITEM 1. Legal Proceedings
The Partnership is a defendant in various lawsuits related to routine
matters incidental to the operations of the business. Management
does not believe that the outcome of the pending litigation will
have a material adverse effect on the Partnership.
ITEM 2. Changes in Securities
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
- --------------------- ------------------------------------
10.01 Interest Bearing Grid Note dated
September 1, 1997, by and between
Showboat Marina Casino Partnership
and Fleet Bank, National Association.
27.01 Financial Data Schedule
(b) Reports on Form 8-K
None.
14
<PAGE>
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.
Date: November 13, 1997 SHOWBOAT MARINA CASINO
---------------------------
PARTNERSHIP, an Indiana general partnership
By: SHOWBOAT MARINA INVESTMENT By: SHOWBOAT MARINA PARTNERSHIP
PARTNERSHIP, an Indiana general an Indiana general partnership, a
partnership, a general partner general partner
By: SHOWBOAT INDIANA INVESTMENT By: SHOWBOAT INDIANA INVESTMENT
LIMITED PARTNERSHIP, a Nevada LIMITED PARTNERSHIP, a Nevada
limited partnership, a general limited partnership, a general
partner partner
By: SHOWBOAT INDIANA, INC., a Nevada By: SHOWBOAT INDIANA, INC., a Nevada
corporation, its general partner corporation, its general partner
By: /s/ J. Keith Wallace By: /s/ J. Keith Wallace
------------------------------ --------------------------------
J. Keith Wallace J. Keith Wallce
President and Chief Executive President and Chief Executive
Officer Officer
By: /s/ Joseph G. O'Brien, III By: /s/ Joseph G. O'Brien, III
------------------------------ -------------------------------
Joseph G. O'Brien, III Joseph G. O'Brien, III
Vice President Finance and Vice President Finance and
Chief Financial Officer Chief Financial Officer
By: WATERFRONT ENTERTAINMENT By: WATERFRONT ENTERTAINMENT
AND DEVELOPMENT, INC., an AND DEVELOPMENT, INC., an
Indiana corporation, a general Indiana corporation, a general
partner partner
By: /s/ Michael A. Pannos By: /s/ Michael A. Pannos
------------------------------ -------------------------------
Michael A. Pannos Michael A. Pannos
President President
By: /s/ Thomas S. Cappas By: /s/ Thomas S. Cappas
------------------------------ -------------------------------
Thomas S. Cappas Thomas S. Cappas
Treasurer (principal financial Treasurer (principal financial
officer) officer)
SHOWBOAT MARINA FINANCE
CORPORATION, a Nevada coporation
By: /s/ Michael A. Pannos
--------------------------------
Michael A. Pannos
Secretary
By: /s/ Joseph G. O'Brien, III
--------------------------------
Joseph G. O'Brien, III
Vice President Finance and Chief
Fianical Officer
15
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------------------------ -----------------------------
10.01 Interest Bearing Grid Note dated
September 1, 1997, by and between
Showboat Marina Casino Partnership
and Fleet Bank, National
Association.
27.01 Financial Data Schedule
16
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001013788
<NAME> SHOWBOAT MARINA CASINO PARTNERSHIP
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 7763
<SECURITIES> 0
<RECEIVABLES> 844
<ALLOWANCES> 59
<INVENTORY> 399
<CURRENT-ASSETS> 10143
<PP&E> 166955
<DEPRECIATION> (5107)
<TOTAL-ASSETS> 191296
<CURRENT-LIABILITIES> 16299
<BONDS> 140000
0
0
<COMMON> 0
<OTHER-SE> 21583
<TOTAL-LIABILITY-AND-EQUITY> 191286
<SALES> 76762
<TOTAL-REVENUES> 77478
<CGS> 41281
<TOTAL-COSTS> 39905
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 59
<INTEREST-EXPENSE> 11147
<INCOME-PRETAX> (14000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION Page no.
<S> <C> <C>
10.01 Interest Bearing Grid Note dated September
1, 1997, by and between Showboat Marina
Casino Partnership and Fleet Bank, National
Association.
27.01 Financial Data Schedule
<PAGE>
EXHIBIT 10.01
INTEREST BEARING GRID NOTE
1300 Atlantic Ave.
$3,000,000.00 Office Address: Atlantic City, NJ 08401 Sept. 1, 1997
<S> <C>
On AUGUST 31, 1998, for value agreement with the Bank; failure
received, the undersigned jointly on request of any Obligor or any
and severally promise(s) to pay Obligor's accountant, to furnish
to the order of Fleet Bank, any financial information, or to
National Association (hereinafter permit inspection of any books
called the Bank) at its Office in or records; any change in, or
the place first above stated, or discovery with regard to, the
if no place is stated, at 10 condition or affairs which, in
Exchange Place, Jersey City, New the Bank's opinion, increases
Jersey, in immediately available its credit risk; or if the Bank
funds, the sum of THREE MILLION-- for any other reason deems
- ---00/100 ($3,000,000.00) itself insecure; the Liabilities
Dollars, or if less than such shall become absolute, due, and
principal sum, the aggregate payable without demand or notice
unpaid principal amount of all to any Obligor. Upon default in
loans made by the Bank to the the due payment of this note or
undersigned hereunder as any other Event of Default, or
indicated on the schedule on the whenever this note or any
reverse side hereof. The payment of principal or interest
undersigned also promises to pay hereof shall become due in
interest at said office in like accordance with any of the
money the unpaid principal amount provisions hereof, the Bank may,
hereof from time to time but shall not be required to (1)
outstanding prior to maturity at proceed to apply to the payment
an annual rate equal to the hereof the balance to the credit
Bank's Prime Rate (the rate of of any account or accounts
interest established from time to maintained with the Bank or any
time by the Bank as its "prime Affiliate by any Obligor and all
rate") plus 0%,<F1> which interest of whom together with any
rate shall change when and as the endorser or guarantor hereby
Prime Rate changes. Interest expressly agree to remain
shall be payable on the first day jointly and severally liable for
of each month commencing the any deficiency. The Bank may
first such day to occur after the exercise any other right or
date hereof and on the maturity remedy hereby granted or allowed
hereof. Upon and following an to it by law, including but not
Event of Default (as defined limited to, the rights and
below) and/or after maturity, remedies of a Secured Party
whether after stated maturity, under the Uniform Commercial
acceleration or otherwise, this Code of the Governing State
note, and, to the extent not (which term as used in this Note
specifically provided elsewhere shall mean the state in which
to the contrary and to the extent the office indicated above
permitted by applicable law, any opposite "Office Address" is
interest, fee or other amount due located; provided, that, if no
in connection with the such office is so indicated then
Liabilities (as hereinafter Governing State shall mean the
defined) shall bear interest at a state where the Bank's office
per annum rate determined daily that originated the loan
and payable on demand which shall evidenced by this note is
be the higher of 2% in excess of located), and each and every
the rate hereinbefore provided, right and remedy hereby granted
or 4% in excess of the Bank's to the Bank or allowed to it by
Prime Rate, but in no event in law shall be cumulative and not
excess of the maximum rate of exclusive of one of the other
interest permitted under the rights or remedies, and may be
applicable law. The Bank shall exercised by the Bank from time
have no obligation to make any to time and as often as may be
loan hereunder. necessary. The Bank shall have
at any time in its discretion
The undersigned hereby expressly the right to enforce collection
authorizes the Bank to record on and payment or liquidation of
the schedule on the reverse any of the collateral by
hereof the amount and date of appropriate action or
each loan made hereunder and the proceedings, and the net amounts
date and amount of each payment received therefrom, after
of principal thereon. All such deducting all costs and expenses
notations shall be presumptive as incurred in connection
to the correctness thereof and therewith, shall be applied on
the aggregate unpaid amount of account of this note and any
loans set forth on such schedule other indebtedness or
shall be presumed to be the liabilities of the Obligor
unpaid principal amount hereof. aforesaid, all without notice to
any Obligor. Any demand or
Any loan may be prepaid in whole notice, if made or given, shall
or in part at any time and from be sufficiently made upon or
time to time without premium or given to any Obligor if left at
penalty together with interest or mailed to the last address of
accrued on the amount prepaid to such Obligor known to the Bank
the date of any such prepayment. or if made or given in any other
manner reasonably calculated to
If any of the following events come to the attention of such
shall occur with respect to any Obligor or the personal
Obligator (each an "Event of representatives, successors or
Default"); default in payment of assigns of such Obligor, whether
any liability to the holder or not in fact received by them
hereof (however acquired); respectively. Unless the
default in the due payment of any Collateral is perishable of
other indebtedness for borrowed threatens to decline speedily in
money or default in the value or is of a type customarily
observance or performance of any sold on a recognized market, the
covenant or condition in any Bank will give the undersigned
agreement or instrument reasonable notice of the time
evidencing, securing or relating and place of any public sale
to any such indebtedness which thereof or of the time after
causes or permits the which any private sale or other
acceleration of the maturity intended disposition is to be
thereof; suspension or made. Five (5) days prior notice
liquidation of usual business; shall be deemed reasonable notice.
calling of a meeting of The Bank may assign and transfer
creditors; assignment for the this note to any person, firm or
benefit of creditors; or corporation and may deliver
dissolution, bulk sale or notice and repledge the Collateral or
thereof; insolvency of any kind, any part thereof to the assignee
attachment, distraint, or transferee of this note, who
garnishment, levy, execution, shall thereupon become vested
judgment, death, application for with all the powers and rights
or appointment of a receiver, above given to the Bank in
filing of a voluntary or respect thereof, and the Bank
involuntary petition or entry of shall thereafter be forever
any order for relief under any released and discharged of and
provision of the Federal from all responsibility or
Bankruptcy Code as now or liability to the Obligor for or
hereafter in effect; failure to on account of the Collateral so
pay its debts as they become due; delivered. If any attorney is
failure to comply with the terms used to enforce or collect this
of any note, the Obligor agrees to pay
attorney's fees in the amount of
20% of the unpaid principal and
interest due, which the Obligor
agrees to be reasonable. The
Obligor jointly and severally
promises to pay all expenses of
of any nature as soon as incurred
whether in or out of court and
whether incurred before or after
this note shall become
</TABLE>
[FN]
___________________________________
<F1> or Libor plus 75 basis points.
</FN>
2
<PAGE>
<TABLE>
<S> <C>
due at its maturity date or or with respect to any other
otherwise and costs which the provisions of this note and agrees
Bank may deem necessary or proper that no such action or failure to
in connection with the act on the part of the Bank shall
satisfaction of the indebtedness in any way affect or impair the
or the administration, obligations of any Obligor or be
supervision, preservation, construed as a waiver by the Bank
protection (including but not of, or otherwise affect, its right
limited to maintenance of to avail itself of any remedy
adequate insurance) or of the hereunder with the same force and
realization upon the Collateral. effect as if each Obligor had
EACH OBLIGOR ABSOLUTELY, expressly consented to such action
UNCONDITIONALLY AND IRREVOCABLY or inaction upon the part of the
WAIVES (A) THE RIGHT TO A TRIAL Bank. Each Obligor hereby
BY JURY IN ANY LITIGATION WITH authorizes the Bank to request his
THE BANK (WHETHER OR NOT ARISING accountant or accountants to
OUT OF OR RELATING TO THIS NOTE) furnish such financial information
AND (B) ALL RIGHT TO ASSERT AND relating to such Obligor as the
DEFENSE, SET-OFF, COUNTERCLAIM OR Bank shall from time to time
CROSS-CLAIM OF ANY NATURE desire; each such accountant is
WHATSOEVER WITH RESPECT TO THIS hereby authorized to deliver such
NOTE OR OTHERWISE WITH RESPECT TO financial information to the Bank.
THE LIABILITIES IN ANY ACTION OR The invalidity or unenforceability
PROCEEDING BROUGHT BY THE HOLDER of any portion of this note shall
HEREOF TO ENFORCE ITS RIGHTS AND in no way affect the validity or
REMEDIES WITH RESPECT TO THIS enforceability of any other portion
NOTE, THE LIABILITIES OR ANY of this note. The Obligors hereby
PORTION THEREOF. The note shall authorize the Bank to date this
be deemed to have been made and note as of the day when the first
delivered in the Governing State, loan evidenced hereby is made and
the Obligor consents to the to complete and fill in any blank
jurisdiction of the state and spaces in this note in order to
federal courts of the Governing conform to the terms upon which any
State in any action brought to loan is granted. Each Obligor
enforce any rights of the Bank further authorizes the Bank to
under this note and the Bank and execute and file one or more
the Obligor shall be determined financing statements covering the
in accordance with the laws of Collateral or any part thereof and
the Governing State. Interest the Obligors agree to bear the cost
shall be calculated on the basis of such filing(s). The term "Bank"
of a 360-day year and actual days as used herein shall be deemed to
elapsed, provided that any include the Bank and its
interest so calculated hereunder successors, endorsees and assigns.
shall in no event be in excess of
the maximum permitted under Special provisions 1/2% FEE PAYABLE
applicable law. This note and UP FRONT. FEE IS DUE ONLY ON
any other agreements, documents $2,100,000.00 PORTION.
and instruments executed and
delivered pursuant to or in Schedule of Specific Possessory
connection with the Liabilities Collateral
contain the entire agreement
between the parties relating to -----------------------------------
the subject matter hereof and -----------------------------------
thereof. The undersigned -----------------------------------
expressly acknowledges that the
Bank has not made and the CORPORATION, PARTNERSHIP, OR
undersigned is not relying on any LIMITED LIABILITY COMPANY SIGNORS:
oral representations, agreements
or commitments of the Bank or of Showboat Marina Casino Partnership
any officer, employee, agent or -----------------------------------
representative thereof. No Name of Corporation, Partnership or
change, modification, Limited Liability Company
termination, waiver, or
discharge, in whole or in part, -------------------------------
of this instrument shall be By: \s\ Joseph G. O'Brien III
effective unless in writing and Name: Joseph G. O'Brien III
signed by the party against whom Title: Vice President
such change, modification, Finance & Administration
termination, waiver, or discharge -----------------------------------
is sought to be enforced. (Address) One Showboat Place
East Chicago, IN 46312
NO CLAIM MAY BE MADE BY THE
UNDERSIGNED, ANY OBLIGOR OR ANY INDIVIDUAL SIGNORS:
OTHER PERSON, AGAINST THE BANK OR
THE AFFILIATES, DIRECTORS, -----------------------------------
OFFICERS, EMPLOYEES, ATTORNEYS OR Name: , Individually
AGENTS OF THE BANK FOR ANY
SPECIAL, INDIRECT OR -----------------------------------
CONSEQUENTIAL DAMAGES OR, TO THE (Address)
FULLEST EXTENT PERMITTED BY LAW,
FOR ANY PUNITIVE DAMAGES IN -----------------------------------
RESPECT OF ANY CLAIM OR CAUSE OF Name: , Individually
ACTION (WHETHER BASED ON
CONTRACT, TORT, STATUTORY -----------------------------------
LIABILITY, OR ANY OTHER GROUND) (Address)
BASED ON, ARISING OUT OF OR
RELATED TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY
OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION
THEREWITH, AND THE UNDERSIGNED
(FOR ITSELF AND ON BEHALF OF EACH
OBLIGOR) HEREBY WAIVE, RELEASE
AND AGREE NEVER TO SUE UPON ANY
CLAIM FOR ANY SUCH DAMAGES,
WHETHER SUCH CLAIM NOW EXISTS OR
HEREAFTER ARISES AND WHETHER OR
NOT IT IS NOW KNOWN OR SUSPECTED
TO EXIST IN ITS FAVOR. The
Obligors, and each of them,
hereby waive presentment, demand
for payment, protest, notice of
protest, notice of dishonor, and
any and all other notices or
demands in connection with the
delivery, acceptance,
performance, default, or
enforcement of this note,
consents to any and all delays,
extensions of time, renewals,
releases of any Obligor and of
any available security, waivers
or modifications that may be
granted or consented to by the
Bank with regard to the time of
payment
</TABLE>
3
<PAGE>
<TABLE>
SCHEDULE OF LOANS AND PAYMENTS
DATE AMOUNT OF LOAN AMOUNT OF PRINCIPAL PAID BALANCE REMAINING NOTIFICATION MADE BY
UNPAID
<S> <C> <C> <C> <C>
</TABLE>
4
