<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 1, 1999
HORSESHOE GAMING HOLDING CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 88-0425131
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification
incorporation) Number)
</TABLE>
4024 South Industrial Road, Las Vegas, NV 89103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 650-0080
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE> 2
This Amendment No. 1 amends Item 7 (a) of the current report on Form
8-K dated December 1, 1999 and originally filed on December 16, 1999, by adding
the financial statements of Empress Entertainment, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Acquired or to be Acquired Businesses.
The following historical financial statements of Empress
Entertainment, Inc. are attached hereto:
(i) Consolidated Balance Sheet as of September 30, 1999
(unaudited) and December 31, 1998
(ii) Consolidated Statements of Income for the three and
nine months ended September 30, 1999 (unaudited)
(iii) Consolidated Statements of Cash Flows for the nine
months ended September 30, 1999 (unaudited)
(iv) Consolidated Statements of Stockholders' Equity
(unaudited)
(v) Notes to Consolidated Financial Statements as of
September 30, 1999 (unaudited)
<PAGE> 3
EMPRESS ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 35,794 $ 33,555
Accounts receivable, less allowance for doubtful
accounts of $2,657 and $2,235, respectively 3,651 2,908
Other current assets 4,818 3,099
US Treasuries held for defeasance including accrued
interest and unamortized premium - 163,933
-------- --------
Total current assets 44,263 203,495
Property and equipment, net 189,859 193,809
Other assets, net 34,217 29,509
-------- --------
Total assets $268,339 $426,813
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,019 $ 4,289
Accrued payroll and related expenses 7,625 6,802
Interest payable 3,085 10,799
Other accrued liabilities 17,304 11,573
Current portion of long-term debt - 150,000
-------- --------
Total current liabilities 33,033 183,463
Long-term debt 165,000 176,000
Commitments and contingencies
Stockholders' equity:
Common stock; $.01 par value; 6,000 shares authorized;
1,909.364 shares issued and outstanding - -
Treasury stock; 17.381 shares, held at cost (4,667) (4,667)
Additional paid-in capital 16,548 16,548
Retained earnings 58,425 55,469
-------- --------
Total stockholders' equity 70,306 67,350
-------- --------
Total liabilities and stockholders' equity $268,339 $426,813
======== ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE> 4
EMPRESS ENTERTAINMENT, INC
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Casino $ 111,013 $ 94,959 $ 315,904 $ 276,550
Food and beverage 9,063 7,269 24,182 19,990
Hotel, parking, retail and other 3,044 1,817 6,809 5,182
--------- --------- --------- ---------
Gross revenues 123,120 104,045 346,895 301,722
Less: promotional allowances (4,084) (2,944) (11,187) (7,896)
--------- --------- --------- ---------
Net revenues 119,036 101,101 335,708 293,826
Operating Expenses:
Casino 58,787 49,218 164,335 142,874
Food and beverage 9,116 6,545 23,140 19,038
Hotel, parking and retail 1,321 1,207 3,886 3,448
Sales, general and administrative 10,361 11,453 31,088 33,417
Other operating 4,920 4,830 15,375 14,335
Corporate 2,709 1,586 5,876 4,153
Pre-opening costs -- -- 1,461 --
Depreciation and amortization 5,576 5,185 16,013 15,457
--------- --------- --------- ---------
92,790 80,024 261,174 232,722
--------- --------- --------- ---------
Income from operations 26,246 21,077 74,534 61,104
Other income (expense):
Interest income 181 2,375 2,676 4,363
Interest expense (3,403) (7,890) (14,358) (18,065)
--------- --------- --------- ---------
Income before state income taxes 23,024 15,562 62,852 47,402
Provision for state income taxes 85 127 435 321
--------- --------- --------- ---------
Net income before extraordinary loss 22,939 15,435 62,417 47,081
Extraordinary loss on early extinguishment
of debt -- -- 10,203 292
--------- --------- --------- ---------
Net Income $ 22,939 $ 15,435 $ 52,214 $ 46,789
========= ========= ========= =========
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE> 5
EMPRESS ENTERTAINMENT, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
--------- ---------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 52,214 $ 46,789
Adjustments to reconcile net income to cash
provided by operating activities
Depreciation and amortization 16,013 15,457
Extraordinary loss 10,203 292
Amortize premium on US Treasuries 296 310
Loss on sale of property and equipment 18 42
Change in operating assets and liabilities:
Accounts receivable (743) 1,664
Other current assets (1,719) 412
Accounts payable 730 3,359
Accrued payroll and related expenses 823 (737)
Interest payable (7,714) 7,770
Other accrued liabilities 5,731 2,881
--------- ---------
Net cash provided by operating activities 75,852 78,239
--------- ---------
Cash flows from investing activities:
Purchase of investments -- (182,967)
Proceeds from sale of investments 161,099 30,970
Decrease in interest receivable on investments 2,538 --
Purchase of property and equipment (10,709) (22,184)
Increase in other assets (8,213) (10,278)
--------- ---------
Net cash provided by (used in) investing activities 144,715 (184,459)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings 21,500 182,000
Payments on borrowings (182,500) (58,524)
Payment of premium on early retirment of debt (8,070) --
Payment of financing costs -- (6,412)
Purchase of treasury stock -- (4,667)
Stockholder distributions (49,258) (38,665)
--------- ---------
Net cash provided by (used in) financing activities (218,328) 73,732
--------- ---------
Net increase (decrease) in cash and cash equivalents 2,239 (32,488)
Cash and cash equivalents, beginning of period 33,555 73,257
--------- ---------
Cash and cash equivalents, end of period $ 35,794 $ 40,769
========= =========
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 22,072 $ 10,144
Income taxes paid $ 400 $ 798
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE> 6
EMPRESS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands)
<TABLE>
<CAPTION>
Additional Total
Common Treasury Paid-in Retained Stockholders'
Stock Stock Capital Earnings Equity
------ -------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1996 $ -- $ -- $16,548 $ 33,064 $ 49,612
Net income -- -- -- 46,304 46,304
Cash distributions to stockholders -- -- -- (40,057) (40,057)
----- ------- ------- -------- --------
Balance December 31, 1997 -- -- 16,548 39,311 55,859
Net income -- -- -- 61,326 61,326
Purchase of stock for treasury -- (4,667) -- -- (4,667)
Cash distributions to stockholders -- -- -- (45,168) (45,168)
----- ------- ------- -------- --------
Balance December 31, 1998 -- (4,667) 16,548 55,469 67,350
Net income -- -- -- 52,214 52,214
Cash distributions to stockholders -- -- -- (49,258) (49,258)
----- ------- ------- -------- --------
Balance September 30, 1999 $ -- $(4,667) $16,548 $ 58,425 $ 70,306
===== ======= ======= ======== ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE> 7
EMPRESS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 (Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of Empress Entertainment, Inc. ("the
Company") include the accounts of its wholly owned subsidiaries, Empress
Casino Joliet Corporation ("Empress Joliet") incorporated on December 26,
1990, Empress Casino Hammond Corporation ("Empress Hammond") incorporated
on November 25, 1992, Empress River Casino Finance Corporation ("Empress
Finance") incorporated on January 7, 1994, and Empress Opportunities, Inc.
("Empress Opportunities") incorporated on July 14, 1998. Empress Finance
was formed to issue $150 million 10 3/4% Senior Notes (the "Senior Notes")
due 2002, all of which were redeemed on April 1, 1999. All significant
intercompany transactions have been eliminated.
The Company is engaged in the business of providing riverboat gaming and
related entertainment to the public. Empress Joliet was granted a three
year operating license from the Illinois Gaming Board on July 9, 1992,
which was renewed in June, 1999 for a one year period through June, 2000,
to operate the Empress I and Empress II riverboat casinos located on the
Des Plaines River in Joliet, Illinois. Empress Hammond was granted a
five-year operating license, with annual renewals thereafter, from the
Indiana Gaming Commission on June 21, 1996 to operate the Empress III
riverboat casino located on Lake Michigan in Hammond, Indiana. Empress
Hammond commenced operations on June 28, 1996. The majority of the
Company's customers reside in the Chicago metropolitan area.
Empress Opportunities was formed as an unrestricted subsidiary to serve as
a holding company, under which the Company is pursuing business
opportunities other than the Company's gaming operations in Joliet,
Illinois and Hammond, Indiana. Empress Racing, Inc. ("Empress Racing") was
formed as an unrestricted subsidiary of Empress Opportunities to indirectly
hold approximately 48% ownership interest in Kansas Racing, LLC, which
acquired the Woodlands Racetrack in Kansas City, Kansas on December 31,
1998 in an auction pursuant to a proceeding under Chapter 7 of the U.S.
Bankruptcy Code.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Interim results may not necessarily be indicative of
results, which may be expected for any other interim period, or for the
year as a whole. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998. The accompanying unaudited consolidated financial
statements contain adjustments which are, in the opinion of management,
necessary to present fairly the financial position and results of
operations for the periods indicated. Such adjustments include only normal
recurring accruals.
Reclassifications
Certain amounts in prior years' financial statements have been reclassified
to conform to the current year presentation.
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
2. Plan of Merger
On September 2, 1998, as amended on March 25, 1999 and July 23, 1999, the
Company entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Horseshoe Gaming (Midwest), Inc. and certain of its
affiliates ("Horseshoe Midwest"). The Merger Agreement if consummated,
would result in the acquisition by Horseshoe Midwest, of all of the
outstanding stock of Empress Hammond and Empress Joliet via two
simultaneous merger transactions (the "Proposed Mergers"). The Proposed
Mergers require regulatory approval from the Indiana Gaming Commission (the
"IGC") and the Illinois Gaming Board (the "IGB") and closing on or before
December 1, 1999. The Company has received approval for the Proposed
Mergers from the IGC and is awaiting final approval from the IGB.
Consummation of the Merger Agreement constitutes a "Change of Control"
under the Indenture, dated as of June 18, 1998, by and among the Company,
the Guarantors named therein and U.S. Bank Trust National Association, as
Trustee, (the "Indenture") and will trigger Horseshoe Midwest's obligation
to make an irrevocable offer to purchase an aggregate of up to $150 million
principal amount of the Company's 8 1/8% Senior Subordinated Notes due 2006
(the "Notes") (the "Change of Control Offer") at a cash price equal to 101%
of the principal amount plus accrued and unpaid interest. Holders of the
Notes will have the option of tendering all or any portion of their Notes
for redemption, or they may retain the Notes. The Company and/or Horseshoe
Midwest intend to comply with the provisions of the Indenture. The Change
of Control Offer must commence within 10 business days following the
consummation of the transactions contemplated by the Merger Agreement and
must remain open for at least 20 business days. Horseshoe Midwest must
complete the repurchase of any Notes tendered in response to the Change of
Control Offer no more than 30 business days after the consummation of the
transactions as contemplated in the Merger Agreement.
3. Early Retirement of Debt
In June 1998, the Company irrevocably deposited $167.2 million (the
"Covenant Defeasance") for the purpose of effecting the redemption of all
of the Company's Senior Notes. On February 10, 1999, the Trustee sent out a
Notice of Redemption to the holders of the Senior Notes announcing the
redemption of such Senior Notes. On April 1, 1999, the Company redeemed all
its $150 million Senior Notes, thus fulfilling all of its obligations
related to the Senior Notes. The Company recognized an extraordinary loss
of $10.2 million in the second quarter of fiscal 1999 due to this early
retirement of debt, representing the premium paid on early retirement and
the write off of unamortized deferred financing costs.
4. Subsidiary Guarantors
In conjunction with the Covenant Defeasance, the Company issued the Notes.
The Notes are jointly, severally and unconditionally guaranteed on an
unsecured senior subordinated basis by all existing and future Restricted
Subsidiaries.
The following tables present summarized balance sheet information of the
Company as of September 30, 1999 and December 31, 1998 and summarized
statement of income information for the three and nine months ended
September 30, 1999 and 1998. The column labeled "Parent Company" represents
the holding company for each of the Company's direct subsidiaries. The
column labeled "Guarantors" represents each of the Company's restricted
subsidiaries, all of which are wholly owned by the parent company. The
column labeled "Non-Guarantors" represents the unrestricted subsidiaries.
The Company believes that separate financial statements and other
disclosures regarding the Guarantors, except as otherwise required under
Regulation S-X, are not material to investors.
<PAGE> 9
Summarized balance sheet information as of September 30, 1999 and December 31,
1998 is as follows:
<TABLE>
<CAPTION>
September 30, 1999
--------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets $ 1,190 $ 43,073 $ -- $ -- $ 44,263
Non-current assets 170,245 216,663 11,047 (173,879) 224,076
--------- -------- --------- --------- --------
$ 171,435 $259,736 $ 11,047 $(173,879) $268,339
========= ======== ========= ========= ========
Liabilities and Equity:
Current liabilities $ 5,279 $ 27,754 $ -- $ -- $ 33,033
Non-current liabilities 170,228 154,310 11,650 (171,188) 165,000
Stockholders' equity (4,072) 77,672 (603) (2,691) 70,306
--------- -------- --------- --------- --------
$ 171,435 $259,736 $ 11,047 $(173,879) $268,339
========= ======== ========= ========= ========
<CAPTION>
December 31, 1998
---------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets $ 6,722 $196,773 $ -- $ -- $203,495
Non-current assets 163,881 216,521 9,334 (166,418) 223,318
--------- -------- --------- --------- --------
$ 170,603 $413,294 $ 9,334 $(166,418) $426,813
========= ======== ========= ========= ========
Liabilities and Equity:
Current liabilities $ 7,132 $176,331 $ -- $ -- $183,463
Non-current liabilities 177,671 152,518 9,538 (163,727) 176,000
Stockholders' equity (14,200) 84,445 (204) (2,691) 67,350
--------- -------- --------- --------- --------
$ 170,603 $413,294 $ 9,334 $(166,418) $426,813
========= ======== ========= ========= ========
</TABLE>
<PAGE> 10
Summarized statement of income information for the three months ended September
30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended September 30, 1999
---------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,510 $119,026 $ -- $ (1,500) $119,036
Cost and expenses 2,356 91,535 399 (1,500) 92,790
Net interest expense 362 2,860 -- -- 3,222
Net income (loss) (1,208) 24,546 (399) -- 22,939
<CAPTION>
Three Months Ended September 30, 1998
---------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 600 $101,101 $ -- $ (600) $101,101
Cost and expenses 1,586 79,038 -- (600) 80,024
Net interest expense 773 4,742 -- -- 5,515
Net income (loss) (1,759) 17,194 -- -- 15,435
</TABLE>
Summarized statement of income information for the nine months ended September
30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1999
---------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 4,510 $335,698 $ -- $ (4,500) $335,708
Cost and expenses 5,615 259,660 399 (4,500) 261,174
Net interest expense 1,208 10,474 -- -- 11,682
Net income (loss) before
extraordinary loss (2,313) 65,129 (399) -- 62,417
<CAPTION>
Nine Months Ended September 30, 1998
---------------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,800 $293,826 $ -- $ (1,800) $293,826
Cost and expenses 4,153 230,369 -- (1,800) 232,722
Net interest expense 2,191 11,511 -- -- 13,702
Net income (loss) before
extraordinary loss (4,544) 51,625 -- -- 47,081
</TABLE>
<PAGE> 11
5. Commitments and Contingencies
In August 1999, the Company executed two amendments to its Development
Agreement concerning its financial commitments with the City of Hammond,
Indiana.
The first amendment requires the Company to satisfy its $10 million
commercial commitment as follows:
o The payment of $0.5 million for the purchase of property in the City of
Hammond, which was consummated in June 1999;
o A cash grant of $3.0 million to the City of Hammond for the City's
unrestricted use in one or more public projects, which was paid
in August, 1999;
o The purchase of $3.0 million in revenue bond anticipation notes, which
must be repaid to the Company by December 31, 2000. $2.0 million of such
revenue bond anticipation notes were purchased in June, 1999 and $1.0
million were purchased in August, 1999;
o The expenditure of $2.5 million for the development of retail or
commercial facilities to be made by December 31, 2005; and
o The expenditure of $1.0 million for parking facilities and for the
acquisition of the hotel parcel.
The second amendment addresses the Company's commitment to construct a
$10.0 million hotel in the City of Hammond. The second amendment requires
the Company to commence construction of the hotel facilities on or before
August 1, 2000 and to diligently pursue its completion.
<PAGE> 12
SIGNATURE
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.
HORSESHOE GAMING HOLDING CORP.
By: /s/ KIRK C. SAYLOR
-------------------------------
Name: Kirk C. Saylor
Title: Chief Financial Officer
Date: February 11, 2000
