SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: 9/30/97
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period to .
Commission file number: 333-17795-01
Waterford Gaming Finance Corp.
(Exact name of Registrant as specified in its charter)
Delaware 06-1485836
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
914 Hartford Tpke.
P.O. Box 715
Waterford, CT 06385
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (860) 442-4559
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
WATERFORD GAMING FINANCE CORP.
INDEX TO FORM 10-Q
Page
Number
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Report of Independent Accountants 1
Financial Information 2
Condensed Balance Sheets of Waterford Gaming Finance Corp.
as of September 30, 1997 (unaudited) and December 31, 1996. 3
Condensed Statements of Operations and Retained Earnings (Deficit)
of Waterford Gaming Finance Corp. for the three months and nine
months ended September 30, 1997 (unaudited). 4
Condensed Statement of Cash Flows of Waterford Gaming Finance
Corp. for the nine months ended September 30, 1997 (unaudited). 5
Note to Condensed Financial Statements of Waterford Gaming
Finance Corp. (unaudited). 6
ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations. 7
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 8
ITEM 2 -- Changes in Securities 8
ITEM 3 -- Defaults upon Senior Securities 8
ITEM 4 -- Submission of Matters to a Vote of Security Holders 8
ITEM 5 -- Other Information 8
ITEM 6 -- Exhibits and Reports on Form 8-K 8-9
Signatures - Waterford Gaming Finance Corp. 10
Report of Independent Accountants
To the Stockholder of Waterford Gaming Finance Corp.:
We have reviewed the condensed balance sheet of Waterford Gaming Finance Corp.
(the "Company") as of September 30, 1997, and the related condensed
statements of operations and retained earnings (deficit) for the three
months and nine months ended September 30, 1997, and the related condensed
statement of cash flows for the nine months ended September 30, 1997. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1996, and the related
statements of operations and retained earnings (deficit) and cash flows for
the period from November 6, 1996 (commencement of operations) to December
31, 1996 (not presented herein); and in our report dated April 17, 1997, we
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the condensed balance sheet as of
December 31, 1996, is fairly stated, in all material respects, in relation to
the balance sheet from which it has been derived.
Coopers & Lybrand, L.L.P.
Hartford, Connecticut
October 27, 1997
1
PART I. - FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
The unaudited condensed financial information as of September 30, 1997, and
for the three months and nine months ended September 30, 1997, included in
this report was reviewed by Coopers & Lybrand, L.L.P., independent public
accountants, in accordance with the professional standards and procedures
established for such reviews by the American Institute of Certified Public
Accountants.
2
WATERFORD GAMING FINANCE CORP.
CONDENSED BALANCE SHEETS
September 30, 1997 (Unaudited) and December 31, 1996
________
ASSETS
September 30, December 31,
1997 1996
_____________ ____________
Cash $ 100 $ 81
______ ______
STOCKHOLDER'S EQUITY
Stockholder's equity:
Common stock, $.01 par value;
1,000 shares authorized,
issued and outstanding $ 10 $ 10
Additional paid-in capital 90 90
Retained earnings (deficit) - (19)
______ ______
Total stockholder's equity $ 100 $ 81
______ ______
The accompanying note is an integral part of the financial statements.
3
WATERFORD GAMING FINANCE CORP.
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
for the three months and nine months ended September 30, 1997
(Unaudited)
_________
For the three For the nine
months ended months ended
September 30, 1997 September 30, 1997
__________________ __________________
Revenue:
Bank rebate $ - $ 74
Expenses:
Bank charges - 55
____ ____
Net income - 19
Deficit, beginning of period - (19)
____ ____
Retained earnings, end of period $ - $ -
____ ____
The accompanying note is an integral part of the financial statements.
4
WATERFORD GAMING FINANCE CORP.
CONDENSED STATEMENT OF CASH FLOWS
for the nine months ended September 30, 1997
(Unaudited)
_________
Cash flows from operating activities:
Net income $ 19
____
Net cash provided by operating activities 19
____
Net increase in cash 19
Cash at beginning of period 81
____
Cash at end of period $100
____
The accompanying note is an integral part of the financial statements.
5
WATERFORD GAMING FINANCE CORP.
NOTE TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
_________
1. Basis of Presentation:
The unaudited interim financial statements should be read in conjunction
with the Company's 1996 audited financial statements within the Company's
Registration Statement on Form S-4, as amended, initially filed with the
Securities and Exchange Commission (the "Commission") File No.
333-17795-01 on April 29, 1997.
The unaudited interim financial statements include normal and recurring
adjustments which are, in the opinion of management, necessary to present
a fair statement of financial position as of September 30, 1997, and the
results of operations and retained earnings (deficit) for the three
months and nine months ended September 30, 1997, and the related statement
of cash flows for the nine months ended September 30, 1997. The Company
was formed on October 22, 1996 and, accordingly, there are no comparative
statements for the corresponding three months and nine months ending
September 30, 1996. Results of operations for the period are not
necessarily indicative of the results to be expected for the full year.
The following significant event has occurred subsequent to fiscal year
1996, which requires disclosure in this interim report per Regulation S-X,
Rule 10-01, Paragraph(a)(5).
Effective as of May 15, 1997, the Company functioned as a co-issuer with
its parent, Waterford Gaming, L.L.C., to issue 12-3/4% senior notes payable
(the "Notes") which were registered with the Commission through a
Registration Statement on Form S-4 under the Securities Exchange Act of
1933. As a result, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934.
6
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
The following discussion should be read in conjunction with, and is qualified
in its entirety by, the Company's financial statements and the notes thereto.
Waterford Gaming Finance Corp. is a wholly-owned subsidiary of Waterford
Gaming, L.L.C.
Results of Operations
- ---------------------
Discussion of the period from July 1, 1997 to September 30, 1997
- ----------------------------------------------------------------
Revenue for the quarter ended September 30, 1997 was $0.
Expenses for the quarter ended September 30, 1997 were $0.
As a result of the foregoing factors, the Company's net income for the three
months ended September 30, 1997 was $0.
Discussion of the period from January 1, 1997 to September 30, 1997
- -------------------------------------------------------------------
Revenue for the nine months ended September 30, 1997 was $74.
Bank charges for the nine months ended September 30, 1997 were $55.
As a result of the foregoing factors, the Company's net income for the nine
months ended September 30, 1997 was $19.
The Company is not expected to have significant operating activity. Funding
for future operations will come from the financial support of its parent
company.
The Company was formed on October 22, 1996 and accordingly there are no
comparative results of operations for the corresponding quarter ending
September 30, 1996 and for the corresponding nine months ending September 30,
1996.
7
Part II - Other Information:
-----------------
Item 1 -- Legal Proceedings:
-----------------
On August 6, 1997, a former partner of Trading Cove Associates
(the "Manager") filed a lawsuit against the Manager, Waterford
Gaming, L.L.C. and its owners, Sun Cove Ltd. and RJH Development
Corp. claiming breach of contract, breach of fiduciary duties and
other matters in connection with the development of the Mohegan Sun
Casino by the Manager. Waterford Gaming, L.L.C. believes that
it has meritorious defenses and intends to vigorously defend the
lawsuit and that the outcome of the lawsuit will not have a material
adverse effect on the business of the Company.
Item 2 -- Changes in Securities:
---------------------
NONE
Item 3 -- Defaults upon Senior Securities:
-------------------------------
NONE
Item 4 -- Submission of Matters to a Vote of Security Holders:
---------------------------------------------------
NONE
Item 5 -- Other Information:
-----------------
NONE
Item 6 -- Exhibits and Reports on Form 8-K:
--------------------------------
(a) Exhibits
Exhibit No. Description
3.1 Certificate of Incorporation of
Waterford Gaming Finance Corp. (i)
3.2 Bylaws of Waterford Gaming Finance Corp. (i)
4.1 Indenture, dated as of November 8, 1996,
between Waterford Gaming, L.L.C. and
Waterford Gaming Finance Corp.,
the issuers, and Fleet National Bank, as
trustee, relating to $65,000,000
12 3/4% Senior Notes due 2003. (i)
4.2 Registration Rights Agreement, dated
as of November 8, 1996, among, Waterford
Gaming, L.L.C., Waterford Gaming Finance
Corp., Bear, Stearns & Co., Inc., and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. (i)
4.3 Specimen Form of 12 3/4% Senior Notes
due 2003 (the "Private Notes")
(included in Exhibit 4.1). (i)
4.4 Specimen Form of 12 3/4% Senior Notes
due 2003 (the "Exchange Notes")
(included in Exhibit 4.1). (i)
10.1 Purchase Agreement, dated as of
November 5, 1996, among Waterford Gaming,
L.L.C., Waterford Gaming Finance Corp.,
Bear, Stearns & Co., Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated. (i)
8
21.1 Subsidiaries of Waterford Gaming Finance
Corp. (i)
27 Financial Data Schedule - included in Edgar
filing only.
99.1 Quarterly Report, for the period ended
June 30, 1997, on Form 10-Q of the Mohegan
Tribal Gaming Authority (the "Authority")
dated August 13, 1997, incorporated by
reference to the Authority's electronic
filing of such report on Form 10-Q Commission
file reference no. 033-80655.
99.2 Quarterly Report on Form 10-Q of Waterford
Gaming, L.L.C., dated November 13, 1997,
incorporated by reference to Waterford Gaming
L.L.C.'s electronic filing of such report
on Form 10-Q Commission file reference
no. 333-17795.
(i) Incorporated by reference to the Registrant's Registration
Statement on Form S-4, Commission File No. 333-17795-01,
declared effective on May 15, 1997.
(b) Form 8-K filed on August 15, 1997.
Item 5.
The Mohegan Tribal Gaming Authority (the "Authority") has
filed its quarterly report on Form 10-Q for the period ended
June 30, 1997, a copy of which has been filed as an exhibit
to this report and is incorporated by reference to the
Authority's electronic filing of such report on Form 10-Q
Commission file reference no. 033-80655.
Date of Report: August 13, 1997
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: November 13, 1997 By:/s/Len Wolman
Len Wolman, Chief Executive Officer
Date: November 13, 1997 By:/s/Del Lauria
Del Lauria, Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Waterford Gaming Finance Corp.
All amounts are unaudited.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 100
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 100
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 90
<TOTAL-LIABILITY-AND-EQUITY> 100
<SALES> 0
<TOTAL-REVENUES> 74
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 55
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19
<INCOME-TAX> 0
<INCOME-CONTINUING> 19
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
