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: 6/30/97
[ ] 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 (I.R.S. Employer Identification No.)
incorporation or organization)
914 Hartford Turnpike
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 June 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
six months ended June 30, 1997 (unaudited). 4
Condensed Statement of Cash Flows of Waterford Gaming Finance
Corp. for the six months ended June 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 June 30, 1997, and the related condensed
statements of operations and retained earnings (deficit) for the three
months and six months ended June 30, 1997, and the related condensed
statement of cash flows for the six months ended June 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
July 25, 1997
1
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial information as of June 30, 1997, and for
the three months and six months ended June 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
June 30, 1997 (Unaudited) and December 31, 1996
________
ASSETS
June 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 six months ended June 30, 1997
(Unaudited)
_________
For the three For the six
months ended months ended
June 30, 1997 June 30, 1997
Revenue:
Bank rebate $ 74 $ 74
Expenses:
Bank charges --- 55
---- ----
Net income 74 19
Deficit, beginning of period (74) (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 six months ended June 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
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 June 30, 1997, and the results
of operations and retained earnings (deficit) for the three months and six
months ended June 30, 1997, and the related statement of cash flows for the
six months ended June 30, 1997. The Company was formed on October 22, 1996
and, accordingly, there are no comparative statements for the corresponding
three months and six months ending June 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
note thereto.
Waterford Gaming Finance Corp. is a wholly-owned subsidiary of Waterford
Gaming, L.L.C.
Results of Operations
Discussion of the period from April 1, 1997 to June 30, 1997
Revenue for the quarter ended June 30, 1997 was $74 of rebated bank charges.
Expenses for the quarter ended June 30, 1997 were $0.
As a result of the foregoing factors, the Company's net income for the three
months ended June 30, 1997 was $74.
Discussion of the period from January 1, 1997 to June 30, 1997.
Revenue for the six months ended June 30, 1997 was $74.
Bank charges for the six months ended June 30, 1997 were $55.
As a result of the foregoing factors, the Company's net income for the six
months ended June 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
June 30, 1996 and for the corresponding six months ending June 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)
21.1 Subsidiaries of Waterford Gaming
Finance Corp. (i)
27 Financial Data Schedule - included in
Edgar filing only.
8
99.1 Quarterly Report on Form 10-Q of the
Mohegan Tribal Gaming Authority (the
"Authority") dated May 15, 1997,
incorporated by reference to the
Authority's electronic filing of such
report on Form 10-Q SEC file
reference no. 033-80655.
99.2 Quarterly Report on Form 10-Q of
Waterford Gaming, L.L.C., dated
August 14, 1997 incorporated by
reference to Waterford Gaming, L.L.C.'s
electronic filing of such report on
Form 10-Q SEC file reference no
333-17795.
(i) Incorporated by reference to the Registrant's Registration
Statement on Form S-4, Commission File No. 333-17795,
declared effective on May 15, 1997.
(b) No Form 8-K Filings.
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: 8/14/97 By:/s/Len Wolman
Len Wolman, Chief Executive Officer
Date: 8/14/97 By:/s/Del Lauria
Del Lauria, Treasurer
10
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Waterford Gaming Finance Corp.
All amounts are unaudited.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 100
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<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 100
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0
0
<COMMON> 10
<OTHER-SE> 90
<TOTAL-LIABILITY-AND-EQUITY> 100
<SALES> 0
<TOTAL-REVENUES> 74
<CGS> 0
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<OTHER-EXPENSES> 55
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 19
<INCOME-TAX> 0
<INCOME-CONTINUING> 19
<DISCONTINUED> 0
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