UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 333-17795-01
WATERFORD GAMING FINANCE CORP.
------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1485836
----------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
------------
(Title of Class)
The registrant meets the conditions set forth in General Instruction
J(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K
with the reduced disclosure format.
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K: Not Applicable.
WATERFORD GAMING FINANCE CORP.
INDEX TO FORM 10-K
PART I. PAGE
Item 1. Business 1
Item 2. Properties 1
Item 3. Legal Proceedings 1
Item 4. Submission of Matters to a Vote of Security Holders 1
PART II.
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 1
Item 6. Selected Financial Data 1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 2
Item 8. Financial Statements and Supplementary Data 2
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 2
PART III.
Item 10. Directors and Executive Officers of the Registrant 3
Item 11. Executive Compensation 3
Item 12. Security Ownership of Certain Beneficial Owners and
Management 3
Item 13. Certain Relationships and Related Transactions 3
PART IV.
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 3-5
PART I
ITEM 1. BUSINESS
- ----------------
A. GENERAL
- ------------
Waterford Gaming Finance Corp., (the "Company"), a Delaware corporation,
was formed on October 22, 1996 as a wholly-owned subsidiary of Waterford
Gaming, L.L.C. ("Gaming"). The Company functions as a co-issuer with
Gaming to issue 12-3/4% Senior Notes payable November 15, 2003 (the "Senior
Notes").
ITEM 2. PROPERTIES
- ------------------
The Company does not have an ownership interest in real property.
ITEM 3. LEGAL PROCEEDINGS
- -------------------------
On August 6, 1997 Leisure Resort Technology, Inc. ("Leisure"), a former
partner of Trading Cove Assocaites ("TCA"), filed a lawsuit against TCA,
Gaming 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 TCA. On January 6, 1998,
the lawsuit was settled. Gaming paid $5,000,000 to Leisure and, in return,
Leisure gave up its beneficial interest in TCA and any other claims it may
have had.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
Omitted.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
- ----------------------------------------------------------
STOCKHOLDERS MATTERS
- --------------------
Not Applicable.
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
Omitted.
1
ITEM 7. 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 included elsewhere herein.
Discussion of the year ended December 31, 1997
- -----------------------------------------------
Revenue for year ended December 31, 1997 was $74.
Expenses for the year ended December 31, 1997 were $55.
As a result of the foregoing factors, the Company's net income for the
twelve months ended December 31, 1997 was $19.
Discussion of the period from October 22, 1996 (commencement of operations)
- --------------------------------------------------------------------------
to December 31, 1996
- --------------------
Revenue for the period ended December 31, 1996 was $0.
Expenses for the period ended December 31, 1996 were $19.
As a result of the foregoing factors, the Company's net loss for the period
ended December 31, 1996 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 fiscal year ending December
31, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
See Index to Financial Statements on Page 4.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------
None.
2
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
The following table sets forth certain information with respect to persons
who are members of the Board of Directors of the Company or who are executive
officers of the Company.
Name Age Positon
Len Wolman................. 43 President, Chief Executive Officer,
Member of the Board of Directors
Del J. Lauria.............. 49 Secretary, Treasurer, Member of the
Board of Directors
ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------
Omitted.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
The Company is a wholly-owned subsidiary of Gaming.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
Omitted.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 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)
3
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
and Smith Incorporated. (i)
21.1 Subsidiaries of Waterford Gaming Finance Corp. (i)
27 Financial Data Schedule - included in Edgar
filing only.
99.1 Annual Report for the fiscal year ended
September 30, 1997, on Form 10-K of the
Mohegan Tribal Gaming Authority (the
"Authority") dated December 29, 1997,
incorporated by reference to the Authority's
electronic filing of such report on Form 10-K
Commission file reference no. 033-80655.
99.2 Quarterly Report, for the quarter ended
December 31, 1997, on Form 10-Q of the Mohegan
Tribal Gaming Authority (the "Authority")
dated February 13, 1998, incorporated by
reference to the Authority's electronic
filing of such report on Form 10-Q Commission
file reference no. 033-80655.
99.3 Annual Report on Form 10-K of Waterford
Gaming, L.L.C., dated March 30, 1998,
incorporated by reference to Waterford Gaming,
L.L.C.'s electronic filing of such report on
Form 10-K 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) Financial Statement Schedules
----------------------------------
INDEX
Page
Report of Independent Accountants F1
Financial Statements:
Balance Sheets as of December 31, 1997 and 1996 F2
Statements of Operations and Retained
Earnings (Deficit) for the year ended
December 31, 1997 and for the period from
November 6, 1996 (commencement of operations)
to December 31, 1996 F3
Statements of Cash Flows for the year ended
December 31, 1997 and for the period from
November 6, 1996 (commencement of operations)
to December 31, 1996 F4
Notes to Financial Statements F5
4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholder of
Waterford Gaming Finance Corp.:
We have audited the accompanying balance sheets of Waterford Gaming
Finance Corp. (the "Company") as of December 31, 1997 and 1996, and
the related statements of operations and retained earnings (deficit)
and cash flows for the year ended December 31, 1997 and for the period
from November 6, 1996 (commencement of operations) to December 31,
1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheet is free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance
sheet. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Waterford
Gaming Finance Corp. as of December 31, 1997 and 1996, and the results
of its operations and its cash flows for the year ended December 31,
1997 and for the period from November 6, 1996 (commencement of
operations) to December 31, 1996 in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
March 6, 1998
F1
WATERFORD GAMING FINANCE CORP.
BALANCE SHEETS
December 31, 1997 and 1996
____________
1997 1996
---- ----
ASSETS
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 notes are an integral part of the financial statements.
F2
WATERFORD GAMING FINANCE CORP.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS(DEFICIT)
for the year ended December 31, 1997 and for the period from
November 6, 1996 (commencement of operations) to December 31, 1996
____________
For the period from
For the year ended November 6, 1996 to
December 31, 1997 December 31, 1996
------------------ -------------------
Revenue:
Bank rebate $ 74 $ -
Expenses:
Bank charges 55 19
----- -----
Net income (loss) 19 (19)
Retained earnings (deficit),
beginning of year (period) (19) -
----- -----
Retained earnings (deficit), end of year $ - $(19)
===== =====
The accompanying notes are an integral part of the financial statements.
F3
WATERFORD GAMING FINANCE CORP.
STATEMENTS OF CASH FLOWS
for the year ended December 31, 1997 and for the period from
November 6, 1996 (commencement of operations) to December 31, 1996
____________
For the period from
For the year ended November 6, 1996 to
December 31, 1997 December 31, 1996
------------------ -------------------
Cash flows from operating activities:
Net income (loss) $ 19 $ (19)
----- ------
Net cash provided by (used in)
operating activities 19 (19)
----- ------
Net increase (decrease) in cash 19 (19)
Cash at beginning of year (period) 81 100
----- ------
Cash at end of year (period) $ 100 $ 81
===== ======
The accompanying notes are an integral part of the financial statemetns.
F4
WATERFORD GAMING FINANCE CORP.
NOTES TO FINANCIAL STATEMENTS
____________
1. Organization:
Waterford Gaming Finance Corp. (the "Company"), a Delaware
corporation, was formed on October 22, 1996 as a wholly-owned
subsidiary of Waterford Gaming, L.L.C. 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 Securities and
Exchange Commission (the "Commission") File No. 333-17795-01
through a registration statement on Form S-4, initially filed on
April 29, 1997, 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.
2. Summary of Significant Accounting Policies:
Accounting Method
-----------------
The financial statements have been prepared utilizing the accrual
method of accounting.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
F5
(c) Reports on Form 8-K
------------------------
i) Form 8-K filed on January 8, 1998
Item 5.
The Mohegan Tribal Gaming Authority (the "Authority") has
filed its annual report on Form 10-K for the fiscal year
ended September 30, 1997, a copy of which has been filed as
as an exhibit to this report and is incorporated by
reference to the Authority's electronic filing of such
report on Form 10-K SEC file reference no. 033-80655.
ii) Form 8-K filed on February 18, 1998
Item 5.
The Mohegan Tribal Gaming Authority (the "Authority") has
filed its quarterly report on Form 10-Q for the quarter
ended December 31, 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 SEC file reference no. 033-80655.
5
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Waterford Gaming Finance Corp.
Date: March 30, 1998 By:/s/Len Wolman
Len Wolman, Chief Executive Officer
Date: March 30, 1998 By:/s/Del J. Lauria
Del J. Lauria, Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed by the following persons on behalf of the
Registrant and in the capacities indicated on March 30, 1998.
Signature Title
/s/Len Wolman President, Chief Executive Officer,
Len Wolman Member of the Board of Directors
/s/Del J. Lauria Secretary, Treasurer, Member of the
Del J. Lauria Board of Directors
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Waterford Gaming Finance Corp.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<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>
