<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 March 31, 1996
Commission file number 0-10619
HOLLYWOOD PARK, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-3667491
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1050 South Prairie Avenue, Inglewood, California 90301
(Address of Principal Executive Offices) (Zip Code)
(310) 419-1500
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (a) 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, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
The number of outstanding shares of the registrant's common stock, as of the
date of the close of business on May 13, 1996: 18,504,798.
<PAGE>
Hollywood Park, Inc.
Table of Contents
Part I
<TABLE>
Item 1. Financial Information
<S> <C>
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995............................ 1
Consolidated Statements of Operations for the
three months ended March 31, 1996 and 1995....... 2
Consolidated Statements of Cash Flows for the
three months ended March 31, 1996 and 1995....... 3
Notes to Consolidated Financial Statements........ 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 10
Part II
Item 1. Legal Proceedings...................................... 14
Item 3. Default Upon Senior Securities......................... 14
Item 6.a Exhibits............................................... 15
Other Financial Information............................ 17
Signatures............................................. 20
</TABLE>
<PAGE>
Hollywood Park, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $15,367,000 $22,406,000
Restricted cash 795,000 3,126,000
Short term investments 5,679,000 6,447,000
Other receivables, net of allowance for doubtful accounts
of $1,502,000 in 1996 and $1,841,000 in 1995 5,062,000 8,147,000
Prepaid expenses and other assets 3,065,000 3,342,000
Deferred tax assets 5,148,000 5,139,000
Current portion of notes receivable 35,000 34,000
------------ ------------
Total current assets 35,151,000 48,641,000
Notes receivable 848,000 857,000
Property, plant and equipment, net 173,304,000 174,717,000
Lease with TRAK East, net 0 1,195,000
Goodwill, net 21,317,000 27,375,000
Deferred tax assets 4,487,000 3,152,000
Long term gaming assets 19,100,000 19,063,000
Other assets 11,704,000 11,706,000
------------ ------------
$265,911,000 $286,706,000
============ ============
=================================================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 8,381,000 $ 12,518,000
Accrued lawsuit settlement 2,755,000 5,232,000
Accrued liabilities 18,200,000 13,237,000
Accrued workers' compensation 2,074,000 2,277,000
Accrued slip and fall claims 1,459,000 1,543,000
Gaming liabilities 3,484,000 3,998,000
Amounts due to horsemen for purses, stakes and awards 288,000 709,000
Amounts payable to charities 370,000 370,000
Outstanding pari-mutuel tickets 842,000 2,757,000
Current portion of notes payable 32,317,000 32,310,000
Deferred tax liabilities 529,000 251,000
------------ ------------
Total current liabilities 70,699,000 75,202,000
Notes payable 15,629,000 15,629,000
Gaming liabilities 14,946,000 16,894,000
Deferred tax liabilities 12,765,000 13,235,000
------------ ------------
Total liabilities 114,039,000 120,960,000
Commitments and contingencies - -
Stockholders' Equity:
Capital stock--
Preferred-$1.00 par value, authorized 250,000 shares;
27,499 issued and outstanding 28,000 28,000
Common-$.10 par value, authorized 40,000,000 shares;
18,504,798 issued and outstanding 1,850,000 1,850,000
Capital in excess of par value 168,479,000 168,479,000
Accumulated deficit (18,485,000) (4,611,000)
------------ ------------
Total stockholders' equity 151,872,000 165,746,000
------------ ------------
$265,911,000 $286,706,000
============ ============
</TABLE>
- ---------
See accompanying notes to consolidated financial statements.
1
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Hollywood Park, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1996 1995
----------- ------------
(unaudited)
<S> <C> <C>
REVENUES:
Pari-mutuel commissions $6,718,000 $6,308,000
Lease and management fee-Sunflower 1,071,000 1,507,000
Lease-Casino 0 6,382,000
Gaming-Casino 11,841,000 0
Admissions, programs, and other racing income 3,436,000 3,473,000
Concession sales 3,174,000 4,858,000
Other income 1,613,000 1,928,000
----------- ------------
27,853,000 24,456,000
----------- ------------
EXPENSES:
Salaries, wages and employee benefits 12,601,000 7,864,000
Operations of facilities 2,362,000 2,580,000
Cost of concession sales 4,868,000 5,873,000
Professional services 2,260,000 1,978,000
Rent 282,000 269,000
Utilities 998,000 959,000
Marketing 873,000 563,000
Administrative 3,213,000 1,538,000
------------ ------------
27,457,000 21,624,000
------------ ------------
Operating income 396,000 2,832,000
Write off of investment in Sunflower 11,346,000 0
------------ ------------
Income (loss) before interest, income taxes, depreciation and
amortization (10,950,000) 2,832,000
Depreciation and amortization 2,913,000 2,792,000
Interest expense 844,000 954,000
------------ ------------
Loss before income tax benefit (14,707,000) (914,000)
Income tax benefit 1,329,000 320,000
------------ ------------
Net loss ($13,378,000) ($594,000)
============ ============
==============================================================================================================
Dividends requirements on convertible preferred stock $481,000 $481,000
Net loss allocated to common shareholders ($13,859,000) ($1,075,000)
Per common share:
Net loss-primary ($0.74) ($0.06)
Net loss-fully diluted ($0.74) ($0.06)
Cash dividend per common share $0.00 $0.00
Number of shares-primary 18,610,114 18,369,634
Number of shares-fully diluted 20,901,606 20,661,126
</TABLE>
- ---------
See accompanying notes to consolidated financial statements.
2
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Hollywood Park, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------
1996 1995
------------ -----------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($13,378,000) ($594,000)
Adjustment to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 3,050,000 2,792,000
Unrealized gain on short term bond investing (16,000) 0
(Gain) loss on sale or disposal of property, plant and equipment (5,000) 67,000
Loss on write off of investment in Sunflower 11,346,000 0
Decrease (increase) in restricted cash 2,331,000 (43,000)
Increase in casino lease and related interest receivable, net 0 (6,945,000)
Decrease (increase) in other receivables, net 3,085,000 (276,000)
Decrease (increase) in prepaid expenses and other assets 279,000 (650,000)
Increase in deferred tax assets (1,344,000) (240,000)
Decrease in accounts payable (4,137,000) (1,040,000)
Decrease in accrued lawsuit settlement (2,477,000) 0
Decrease in gaming liabilities (514,000) 0
Increase in accrued liabilities 279,000 1,415,000
Decrease in accrued workers' compensation (203,000) (124,000)
Decrease in accrued slip and fall claims (84,000) (98,000)
Decrease in amounts due to horsemen for purses, stakes
and awards (421,000) (168,000)
Decrease in amounts payable to charities 0 (9,000)
Decrease in outstanding pari-mutuel tickets (1,915,000) (897,000)
Increase (decrease) in deferred tax liabilities 5,000 (117,000)
----------- -----------
Net cash used in operating activities (4,119,000) (6,927,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (3,551,000) (2,122,000)
Receipts from sale of property, plant and equipment 6,000 96,000
Principal collected on notes receivable 8,000 8,000
Purchase of short term investments (8,757,000) (5,914,000)
Proceeds from short term investments 9,525,000 4,907,000)
Long term gaming assets 323,000 0
----------- -----------
Net cash used in investing activities (2,446,000) (3,025,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from unsecured notes payable 7,000 1,404,000
Payment of unsecured notes payable 0 (3,196,000)
Payment of secured notes payable 0 (667,000)
Payments under capital lease obligations 0 (53,000)
Dividends paid to preferred stockholders (481,000) (481,000)
----------- -----------
Net cash used for financing activities (474,000) (2,993,000)
----------- -----------
Decrease in cash and cash equivalents (7,039,000) (12,945,000)
Cash and cash equivalents at the beginning of the period 22,406,000 37,122,000
----------- -----------
Cash and cash equivalents at the end of the period $15,367,000 $24,177,000
=========== ===========
</TABLE>
- ---------
See accompanying notes to consolidated financial statements.
3
<PAGE>
Hollywood Park, Inc.
Notes to Consolidated Financial Statements
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial information included herein has been prepared in conformity with
generally accepted accounting principles as reflected in the financial
statements included in the consolidated annual report on Form 10-K of Hollywood
Park, Inc. (the "Company" or "Hollywood Park") filed with the Securities and
Exchange Commission for the year ended December 31, 1995. This financial
information does not include certain footnotes and financial presentations
normally presented annually, and therefore, should be read in conjunction with
the Company's 1995 Form 10-K.
The information furnished herein is unaudited; however, in the opinion of
management it reflects all normal recurring adjustments that are necessary to
present a fair statement of the results for the interim periods. It should be
understood that accounting measurements at the interim dates inherently involve
greater reliance on estimates than at year end. The interim racing results of
operations are not indicative of the results for the full year due to the
seasonality of the horse racing business.
The Company owns and operates the Hollywood Park race track, a premier
thoroughbred racing facility located in California, Sunflower Racing, Inc.
("Sunflower"), operating as the Woodlands, a greyhound and thoroughbred racing
facility located in Kansas, and Turf Paradise, Inc. ("Turf Paradise") a
thoroughbred racing facility located in Arizona. On the same property as the
Hollywood Park race track, the Company owns and operates the Hollywood Park-
Casino (the "Casino").
SUNFLOWER On May 2, 1996, the Kansas Legislature adjourned without passing
legislation that would have allowed additional gaming at Sunflower. Since June
1994 Sunflower has been experiencing severe competition from riverboat gaming on
the nearby Missouri River. Hollywood Park has written off its approximately
$11,346,000 investment in Sunflower. There was no cash involved with the write
off of this investment. Management is currently evaluating all options available
to Sunflower.
ACQUISITION OF PACIFIC CASINO MANAGEMENT, INC. The Hollywood Park Casino was
opened in July 1994 under a third party leasing arrangement with Pacific Casino
Management, Inc. ("PCM"). In 1994 under the California Gaming Registration Act,
it was the position of the California Attorney General that as a publicly traded
company, Hollywood Park was not eligible to register as an operator of a card
club, but could lease the site to a registered operator unaffiliated with the
Company. On August 3, 1995, Senate Bill ("SB") 100 was enacted into law. SB
100 does the following: (i) allows for a publicly traded racing association, or
a subsidiary thereof, (hereafter the "Racing Association") to operate a gaming
club on the premises of its race track; (ii) requires the officers, directors
and shareholders of 5.0% or more of a Racing Association (excluding
institutional investors) to be licensed by the Attorney General; (iii)
provisionally licenses a Racing Association and its officers, directors, and
5.0% shareholders to operate a gaming club on the premises of its race track
pending licenses pursuant to sub-paragraph (ii) above; (iv) allows a Racing
Association and its officers, directors and 5.0% shareholders to have an
interest in gaming activities located outside California that are not legal in
California. The provisions of SB 100 are repealed effective January 1, 1999,
unless prior thereto the California legislature enacts a comprehensive scheme
for the regulation of gaming under the jurisdiction of a gaming control
commission.
Pursuant to the authority provided by SB 100, on November 17, 1995, Hollywood
Park acquired substantially all the assets, property and business of PCM, and
assumed substantially all of PCM's liabilities. Prior to the acquisition, under
a lease with the Company, PCM operated the gaming floor activities of the
Hollywood Park-Casino. Immediately following the acquisition PCM was dissolved,
and the gaming floor operations were incorporated into Hollywood Park's Gaming
Division.
4
<PAGE>
The purchase price of PCM's net assets was an aggregate $2,640,000, payable in
shares of Hollywood Park common stock, in three installments: (i) shares of
Hollywood Park common stock having a value of $1,600,000, or 135,164 common
shares, issued on November 17, 1995; (ii) shares of Hollywood Park common stock
having a value of $540,000 on the first anniversary of the execution of the
acquisition; and (iii) shares of Hollywood Park common stock having a value of
$500,000 on the second anniversary of the execution of the acquisition; provided
that Hollywood Park may accelerate the payments; provided further, the aggregate
number of shares to be paid under clauses (ii) and (iii) may not exceed the
number of shares issued on November 17, 1995. Shares to be issued in the
remaining two installments will be valued at the average market price of
Hollywood Park's common stock for the ten trading days immediately preceding the
payment date.
Virtually all of the approximately $21,568,000 of excess acquisition cost over
the recorded value of the net assets acquired was allocated to goodwill and will
be amortized over 40 years. The amortization of the goodwill is not deductible
for income tax purposes.
BOOMTOWN, INC. On April 23, 1996, the respective Board of Directors of
Hollywood Park and of Boomtown, Inc. ("Boomtown") approved and signed the
Agreement and Plan of Merger (the "Merger"), among Hollywood Park, Inc., HP
Acquisition, Inc. and Boomtown, Inc., where by way of a merger with HP
Acquisition, Inc. (a wholly owned subsidiary of Hollywood Park) Boomtown will
become a wholly owned subsidiary of the Company. The Merger is expected to be
finalized by December 31, 1996, but in no event may it be finalized later than
June 30, 1997. The Merger will be accounted for under the purchase method of
accounting, with each issued and outstanding share of Boomtown common stock
converted into 0.625 shares of Hollywood Park common stock. Approximately
5,774,000 newly issued shares of the Company's common stock will be issued in
the Merger.
The Merger is subject to, among other things, the approval of the common
shareholders of both Hollywood Park and Boomtown, and upon Hollywood Park, its
management and Board of Directors (as of the effective date of the Merger a
total of eleven persons will serve on the Board of Directors of the combined
companies, four of whom will be former directors of Boomtown) and Boomtown's
management acquiring all required regulatory approvals and gaming permits.
Dates have not been set for the Hollywood Park and Boomtown shareholder
meetings, though the application process for the required regulatory approvals
and gaming permits has begun.
Boomtown owns and operates land-based, dockside and riverboat gaming operations
in Verdi, Nevada ("Boomtown Reno"), Las Vegas, Nevada ("Boomtown Las Vegas"),
Biloxi, Mississippi ("Boomtown Biloxi"), and Harvey, Louisiana ("Boomtown New
Orleans"). Boomtown's properties offer hotel accommodations, gaming and other
entertainment amenities to primarily middle income, value oriented customers.
The Boomtown properties incorporate an "old west" theme through the use of
western memorabilia in their interior decor, country/western music and western
dress of their employees.
Boomtown Reno has been operating for over a quarter century and is located seven
miles west of Reno on Interstate 80, the major highway connecting northern
California and Reno. Boomtown Reno is situated on 569 acres with approximately
61 used for current operations. Boomtown Reno's customer base is primarily
drawn from Interstate 80 traffic. Boomtown Reno offers its guests a 40,000
square foot casino, including 1,433 slot machines and 43 table games, a 122-room
hotel, a 16-acre truck stop, a full-service recreational vehicle park, a service
station, a mini-mart and other related amenities. In addition, Boomtown Reno
offers a 35,000 square foot family entertainment center featuring a dynamic
motion theater, an indoor 18-hole western-themed miniature golf course, a
restaurant and a replica of an 1800's Ferris Wheel.
Boomtown Las Vegas commenced operations in May 1994 on a 56-acre site at the
interchange of Blue Diamond Road and Interstate 15, the principal thoroughfare
connecting southern California to Las Vegas. Boomtown Las Vegas is four miles
from the exit for Circus Circus, Excalibur, Luxor, and MGM. Boomtown Las Vegas
includes a 30,000 square foot casino with 1,100 slot machines and 28 gaming
tables, 300 hotel
5
<PAGE>
rooms, a full-service recreational vehicle park, a 600-seat Opera House Dinner
Theater and a replica of an old mine where customers can pan for real gold.
Boomtown Biloxi, a limited partnership majority owned and controlled by
Boomtown, occupies nine acres on Biloxi, Mississippi's back bay. Boomtown
Biloxi is located one-half mile from Interstate 110, the main highway connecting
Interstate 10 (the main thoroughfare connecting New Orleans and Mobile, Alabama)
and the Gulf of Mexico. The facility, which began operations in July 1994,
consists of a land-based facility that houses non-gaming operating space and a
33,000 square foot casino constructed on a 400 x 100 foot barge permanently
moored to the land-based building. The casino offers 985 slot machines, 42
table games and other gaming amenities including restaurants, a western dance
hall/cabaret and a 20,000 square foot family entertainment center.
Boomtown New Orleans, a limited partnership majority owned and controlled by
Boomtown, commenced operations in August 1994 on a 50-acre site in Harvey,
Louisiana, approximately ten miles from the French Quarter of New Orleans.
Gaming operations are conducted from a 250 foot replica of a paddle wheel
riverboat, offering 865 slot machines and 51 table games in a 30,000 square foot
casino. The land-based facility next to the riverboat dock is composed of a
western-themed 88,000 square foot entertainment center and a western
saloon/dance hall.
Boomtown is actively seeking to expand its operations into jurisdictions that
have legalized casino gaming at sites that are near interstate highways or major
thoroughfares near major population or tourist centers. Boomtown is currently
exploring a project in Switzerland, Indiana through a joint venture with Hilton
Gaming Corporation. The gaming license application for this project is pending.
CRYSTAL PARK HOTEL AND CASINO Construction has begun on the Crystal Park Hotel
and Casino ("Crystal Park"), California's first hotel and casino. Crystal Park
is expected to open in fourth quarter 1996, with 100 gaming tables, with no
limits on the number of gaming tables that can be added, and approximately 150
hotel rooms with additional rooms available if needed. Crystal Park will also
include a gift shop, a full service health club and a pool, a state-of-the-art
air filtration system, and a family-style restaurant.
On July 14, 1995, the Company and Compton Entertainment, Inc. ("CEI") executed
an Amended and Restated Agreement Respecting Pyramid Casino (the "Crystal Park
Agreement") (subsequently changed to Crystal Park Hotel and Casino), finalizing
the terms concerning the development, ownership and operation of a card club in
the city of Compton (the "City"). CEI and each of its officers, directors and
shareholders have been licensed by the City to own and operate a card club. CEI
entered into an Amended and Restated Disposition and Development Agreement (the
"DDA") with the City to lease or purchase land located within the City as the
card club site. Under the terms of the Crystal Park Agreement, on August 3,
1995, the Company paid CEI $2,000,000 for the real property rights or assignment
of the DDA to Hollywood Park. On August 3, 1995, the Company paid CEI an
additional $500,000 to exercise the five year right to purchase CEI's City
gaming license. If at the end of the five year term of the option to purchase
the City gaming license, Hollywood Park is not able to own and operate a card
club at the Compton site, CEI can elect to either negotiate a new lease, or
acquire Hollywood Park's rights to the card club site for a purchase price as
determined by the Agreement. Upon opening the card club, Hollywood Park will
pay CEI up to an additional $2,500,000, under certain conditions detailed in the
Agreement. As required by the DDA, on August 2, 1995, Hollywood Park paid
approximately $2,006,000 to the City to purchase the convention center to house
the card club operations and entered into a 50 year lease with the City for the
hotel and parking parcels at the same site. Initial improvements made by
Hollywood Park to construct, install and equip Crystal Park will be credited
against the annual base rent. No cash rent payments are expected to be made
until after the nineteenth year of the lease, or 2014.
If Crystal Park opens under current California law, which does not allow
publicly traded companies, such as Hollywood Park, to operate a card club (other
than on the same property as the race track), the Company will enter into a 60
month lease with CEI. Under the terms of the lease, as the landlord, Hollywood
Park would build and furnish a card club suitable for CEI to operate. Hollywood
Park would not be responsible for any
6
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segment of the daily operations. CEI would pay the Company monthly rent of 2.65%
of Hollywood Park's total investment in the card club. If there is a change in
California law, allowing the Company to operate card clubs at sites other than
its race track property, Hollywood Park would operate the card club in
partnership with CEI, with Hollywood Park owning 67% of the business, which will
be subject to the partnership described below.
CEI has received all of the required City gaming licenses necessary for
operation of Crystal Park, and on April 1, 1996, received a Provisional
Registration from the California Attorney General.
Hollywood Park, DeBartolo Entertainment and Leo Chu have formed a 40%/40%/20%
partnership, respectively, to build and operate (per the terms and conditions
outlined above) Crystal Park.
PALM SPRINGS CARD CLUB The Company is a 50% partner with DeBartolo
Entertainment, in a 30 table Casino and Night Club to be located in Palm
Springs, California. Hollywood Park and DeBartolo Entertainment will be
landlords in a third party leasing arrangement. The Palm Springs site is
expected to open late fourth quarter 1996. The partnership is expected to incur
construction costs of approximately $1,000,000, with the bulk of the
construction costs to be the responsibility of a yet unnamed third party
operator.
Without legislation to expand the types of gaming which could be offered at the
Palm Springs casino, the Palm Springs site is not expected to generate material
income, due to the nearby Indian Reservations offering full casino gaming.
PRO FORMA RESULTS OF OPERATIONS The following pro forma results of operations
were prepared under the assumption that the acquisition of PCM had occurred at
the beginning of each of the periods shown. The following pro forma adjustments
were made: the elimination of lease rent revenue due to Hollywood Park from PCM
and concession sales made to PCM; lease rent expense recorded by PCM; other
operating expenses including consulting fees, legal and audit services and other
miscellaneous duplicate expenses; and increases for amortization of the excess
purchase price allocated to goodwill, interest expense on the unpaid rent and
income taxes.
Pro forma earnings per share reflect the 135,164 shares of Hollywood Park common
stock issued to the former PCM shareholders and an estimated 105,316 shares of
common stock due to the former PCM shareholders, based on the closing market
price of Hollywood Park's common stock on March 29, 1996.
Hollywood Park, Inc.
Unaudited Pro Forma Combined Consolidated Results of Operations
<TABLE>
<CAPTION>
------------------------------------
For the three months ended March 31,
------------------------------------
1996 (a) 1995
------------------------------------
<S> <C> <C>
Revenues $27,853,000 $27,933,000
Income (loss) before interest, income
taxes, depreciation and amortization 396,000 (849,000)
Loss before write off of investment in ($2,032,000) ($3,328,000)
Sunflower
Net loss ($13,378,000) ($3,328,000)
============ ===========
Dividend requirements on convertible $481,000 $481,000
preferred stock
Net loss allocated to common ($13,859,000) ($3,809,000)
shareholders
Per common share before write off of
investment in Sunflower:
Loss - primary ($0.14) ($0.20)
Loss - fully diluted ($0.14) ($0.20)
Per common share:
Net loss - primary ($0.74) ($0.20)
Net loss - fully diluted ($0.74) ($0.20)
</TABLE>
- ---------
(a) The results for this period are actual.
7
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RESTRICTED CASH Restricted cash as of March 31, 1996, was for amounts due to
horsemen for purses, stakes and awards. The balance as of December 31, 1995,
included approximately $2,482,000 related to the Class Action lawsuits (see Item
1. Legal Proceedings) and approximately $644,000 related to amounts due to
horsemen for purses, stakes and awards. In March 1996, amounts due for the
Class Action lawsuits were placed in an escrow account in accordance with the
settlement agreement, and therefore are no longer reflected in the Company's
accounts.
ESTIMATES Financial statements prepared in accordance with generally accepted
accounting principles require the use of management estimates, including
estimates used to evaluate the recoverability of property, plant and equipment,
to determine the fair value of financial instruments, to account for the
valuation allowance for deferred tax assets, and to determine litigation related
obligations.
EARNINGS PER SHARE Primary earnings per share were computed by dividing net
loss allocated to common shareholders (net loss less preferred dividend
requirements) by the weighted average number of common shares outstanding during
the period, inclusive of the estimated future shares of the Company's common
stock to be issued to the former PCM shareholders. Fully diluted per share
amounts were similarly computed, but include the effect, when dilutive, of the
conversion of the convertible preferred shares and exercise of stock options.
CASH FLOWS Cash and cash equivalents consisted of certificates of deposit and
short term investments with remaining maturities of 90 days or less.
RECLASSIFICATIONS Certain reclassifications have been made to the 1995 balances
to be consistent with the 1996 financial statement presentation.
NOTE 2 -- SHORT TERM INVESTMENTS
Short term investments as of March 31, 1996, consisted of the following:
Corporate Bonds $4,220,000
Flexible Deposit Program 750,000
U.S. Agency Securities 664,000
Accrued Interest 45,000
----------
Total $5,679,000
==========
The corporate bond investments have a weighted average maturity of two years.
The portfolio consisted of bonds rated from Ba2 to B3 by Moody's and from BB+ to
B- by Standard and Poors, with some bonds not rated by either agency.
Investments in corporate bonds typically carry a greater amount of principal
risk than investments previously made by the Company and yield a correspondingly
higher return.
The flexible deposit program is a discretionary investment vehicle with Bankers
Trust that provides capital preservation plus income at a targeted rate. The
program is represented by three individual investment tranches of $250,000,
$300,000 and $200,000, that mature July 15, 1996, August 15, 1996, and September
15, 1996, respectively. Each tranch is principal-protected by Bankers Trust if
held to maturity. The individual tranches are not rated by any agency.
The U.S. agency securities include U.S. Treasury Bills that mature in August
1996. Each is rated AAA by Moody's and Standard and Poors. The Company holds
short term investments as available for sale as needed. On the basis of the
short term nature of the assets and their relative liquidity, market value
approximates cost.
8
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NOTE 3 -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment held at March 31, 1996, and December 31, 1995,
consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Land and land improvements $ 41,221,000 $ 42,490,000
Buildings and building improvements 177,234,000 175,960,000
Equipment 36,390,000 36,003,000
Construction in progress 9,151,000 8,394,000
------------ ------------
263,996,000 262,847,000
Less accumulated depreciation 90,692,000 88,130,000
------------ ------------
$173,304,000 $174,717,000
============ ============
</TABLE>
NOTE 4 -- SECURED AND UNSECURED NOTES PAYABLE
Notes payable as of March 31, 1996, and December 31, 1995, consisted of the
following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Secured notes payable (a) $ 28,667,000 $ 28,667,000
Unsecured notes payable (a) 15,574,000 15,574,000
Secured note payable - Texaco 3,358,000 3,358,000
Unsecured note payable - Gold Cup 347,000 340,000
------------ ------------
47,946,000 47,939,000
Less current maturities 32,317,000 32,310,000
$ 15,629,000 $ 15,629,000
============ ============
</TABLE>
- ---------
(a) These notes relate to Sunflower and are non-recourse to Hollywood Park.
This table does not include the Crystal Park capital lease obligations discussed
in Note 5.
NOTE 5 -- LONG TERM GAMING ASSETS
The Company purchased the convention center parcel at the Crystal Park site,
which is currently under renovation to house the card club, and entered into a
capital lease with the city of Compton covering the adjoining hotel, surrounding
parking lot and expansion parcel. The capital lease was valued at approximately
$13,741,000. The lease was entered into on August 3, 1995, and has a term of up
to 50 years. The annual rent payments start at $600,000 and increase every
fifth year until year 46 when they stabilize at $2,850,000. Hollywood Park will
receive a rent payment credit equal to the costs incurred to renovate the card
club and hotel. No cash rent payments are expected to be made until the
nineteenth year of the lease, or 2014.
The balance of the long term gaming assets was related to the lease costs
incurred for the operating lease between Hollywood Park and CEI, and will be
amortized over the five year term of the lease.
NOTE 6 -- LONG TERM GAMING LIABILITIES
Long term gaming liabilities consisted of the Company's capital lease obligation
associated with the lease of the hotel, surrounding parking lot and the
expansion parcel from the city of Compton for Crystal Park. This liability will
be reduced as the construction disbursements are made, and upon submission of
any purchase option payment.
9
<PAGE>
NOTE 7 -- DEVELOPMENT EXPENSES
Included in Administrative expenses for the three months ended March 31, 1996,
was $356,000 of development expenses. These expenses consisted primarily of
costs related to the proposed stadium, the master Inglewood site plan and card
clubs in Stockton and Hawaiian Gardens.
Included in Administrative expenses for the three months ended March 31, 1995,
was $149,000 of development expenses. These expenses consisted primarily of
costs related to Kansas gaming surveys, the proposed stadium and the South San
Francisco card club.
NOTE 8 -- ACCOUNTING FOR STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, ("SFAS" 123) Accounting for
Stock-Based Compensation, requires that the Company disclose additional
information about employee stock-based compensation plans. The objective of
SFAS 123 is to estimate the fair value, based on the stock price at the grant
date, of the Company's stock options to which employees become entitled when
they have rendered the requisite service and satisfied any other conditions
necessary to earn the right to benefit from the stock option. The fair market
value of a stock option is to be estimated using an option-pricing model that
takes into account, as of the grant date, the exercise price and expected life
of the option, the current price of the underlying stock and its expected
volatility, expected dividends on the stock and the risk-free interest rate for
the expected term of the options.
The following sets forth the pro forma financial results under the
implementation of SFAS 123:
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1996 1995
----------------------------
<S> <C> <C>
Net loss before stock-based ($13,378,000) ($594,000)
compensation expense
Stock-based compensation expense 67,000 4,000
------------ -----------
Pro forma net loss ($13,445,000) ($598,000)
============ ===========
Dividend requirements on convertible
preferred stock $ 481,000 $481,000
------------ -----------
Pro forma net loss allocated to common
shareholders ($13,926,000) ($1,079,000)
============ ===========
Per common share:
Pro forma net loss - primary ($0.75) ($0.06)
Pro forma net loss - fully diluted ($0.75) ($0.06)
Number of shares - primary 18,610,114 18,369,634
Number of shares - fully diluted 20,901,606 20,661,126
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS
-------------
RESULTS OF OPERATIONS
Three months ended March 31, 1996 compared to the three months ended
--------------------------------------------------------------------
March 31, 1995
--------------
The 1996 operating results reflect Hollywood Park operating all aspects of the
Casino, including the gaming floors. During the three months ended March 31,
1995, the Company leased the gaming floor activities to PCM for a fixed monthly
rent, and directly operated all other aspects of the business.
Total revenues increased by $3,397,000, or 13.9%, during the three months ended
March 31, 1996, as compared to the three months ended March 31, 1995. Pari-
mutuel commissions increased by $410,000, or 6.5%, due primarily to increases at
Turf Paradise, despite two fewer live race days in 1996. Lease and management
fee - Sunflower continued to be severely negatively impacted by riverboat gaming
in Missouri.
10
<PAGE>
For the three months ended March 31, 1996, as compared to the three months ended
March 31, 1995, Sunflower's total live pari-mutuel handle decreased by
$6,605,000, or 46.8%. Gaming - Casino revenues of $11,841,000 were generated
from the gaming floor activities, which Hollywood Park acquired from PCM on
November 17, 1995. During the three months ended March 31, 1995, the Company
recorded Lease - Casino revenue of $6,382,000, representing the $2,000,000 of
fixed lease rent per month under the lease with PCM, plus accrued interest.
Concession sales decreased by $1,684,000, or 34.7%. The primary reason for the
decline in Concession sales was that the 1995 Concession sales included sales to
PCM, the former gaming floor lessee, and there are no such revenues in the 1996
results. Other income decreased by $315,000, or 16.3%, due primarily to the
cancellation of the initial Forum Parking Agreement, and a decrease in interest
income earned on excess cash reserves. A new Forum Parking Agreement was
executed on October 24, 1995, covering the one year from October 1, 1995,
through September 30, 1996, with a minimum annual rent of $1,200,000, compared
to $1,800,000 per the initial Forum Parking Agreement. The new Forum Parking
Agreement is for a shorter period than the initial Forum Parking Agreement,
which covered twelve years, to provide flexibility regarding the proposed
stadium development and to gain other cross marketing benefits.
Total operating expenses, inclusive of $12,297,000 of Casino operating expenses
(including three months of gaming floor operating expenses in 1996, with no
corresponding gaming floor operating expenses in the 1995 results) increased by
$5,833,000, or 27.0%, during the three months ended March 31, 1996, as compared
to the three months ended March 31, 1995. Salaries, wages and employee benefits
increased by $4,737,000, or 60.2%, primarily because of wages and benefits
associated with the gaming floor staff (hired November 17, 1995). Operations of
facilities decreased by $218,000, or 8.4%, primarily a result of savings
realized at Sunflower due to the decline in business. Cost of concession sales
decreased by $1,005,000, or 17.1%, principally due to staff reductions at the
Casino, and Sunflower. Professional services increased by $282,000, or 14.3%,
due primarily to legal fees. Marketing costs increased by $310,000, or 55.1%,
due essentially to the Casino marketing costs. Under the former California
gaming laws, Hollywood Park could not operate or market the gaming activities of
the Casino. Administrative costs increased by $1,675,000, or 108.9%, primarily
due to costs associated with the operation of the gaming floors, including the
city of Inglewood monthly gaming license fee and bad debt expense.
The Kansas Legislature closed the current legislative session, on May 2, 1996,
without passing any legislative gaming relief for Sunflower, which would have
allowed Sunflower to compete with Missouri riverboat gaming. Hollywood Park has
written off its approximately $11,346,000 investment in Sunflower. There was no
cash involved in the accounting for this write off.
Depreciation and amortization increased by $121,000, or 4.3%, mainly because of
the amortization of the goodwill associated with the November 17, 1995,
acquisition of PCM. Interest expense decreased by $110,000, or 11.5%, due to
lower outstanding bank debt at Sunflower during the three months ended March 31,
1996, as compared to the three months ended March 31, 1995.
Income tax benefit increased by $1,009,000, due to increased operating costs
primarily associated with the operation of the Casino gaming floors.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $7,039,000 during the three months ended
March 31, 1996. The decrease was primarily related to construction of Crystal
Park, and other capital expenditures, payment of year end 1995 normal operating
accounts payable, including outstanding pari-mutuel tickets, and dividends paid
on the Company's convertible preferred stock. Cash and cash equivalents
decreased by $12,945,000 during the three months ended March 31, 1995, primarily
due to debt service payments for notes payable, capital expenditures, dividends
paid on the Company's convertible preferred stock, and Casino operating
expenses.
HOLLYWOOD PARK Capital expenditures of $3,551,000 for the three months ended
March 31, 1996, were primarily related to upgrading the audio visual equipment
at the Hollywood Park race track, and construction
11
<PAGE>
of Crystal Park. Other capital expenditures represent normal and necessary
improvements at Hollywood Park's properties.
During the three months ended March 31, 1996, Hollywood Park paid down normal
operating accounts payable associated with the conclusion of the live Autumn
Meeting, including outstanding pari-mutuel tickets.
During the three months ended March 31, 1996, Hollywood Park did not draw any
funds from its credit facilities with Bank of America National Trust and Savings
Association ("Bank of America"). On April 14, 1995, the Company executed an
unsecured loan of up to $75,000,000 with Bank of America. The loan facility
consists of a $60,000,000 line of credit (the "Line of Credit") and a
$15,000,000 revolver (the "Revolver").
The Line of Credit is an interest only, one year revolving facility, under which
the Company may borrow, pay and reborrow principal amounts without penalty. On
or before July 1, 1996, per Amendment One (as defined below) the Company has the
option to convert the Line of Credit to a term repayment line of credit, at a
maximum amount of $60,000,000, with a seven year term period from the date of
conversion, which would require repayment in eighty-four successive equal
monthly installments. The Line of Credit bears interest at the option of the
Company at Bank of America's prime rate plus 0.25% or the offshore rate plus
2.0%, and the Company may further elect an agreed upon fixed rate.
The Revolver, inclusive of a within line facility for standby letters of credit
of up to a maximum of $15,000,000, is available for two years, ending May 1,
1997, during which the Company can borrow, pay and reborrow principal amounts
without penalty. The Revolver bears interest at the option of the Company at
Bank of America's prime rate or the offshore rate plus 1.75%, and the Company
may further elect an agreed upon fixed rate.
As of March 31, 1996, Hollywood Park was in breach of the quick assets to
current liabilities bank covenant contained in the April 14, 1995, Business Loan
Agreement between Hollywood Park and Bank of America. The covenant was breached
due to, among other matters, the full funding of the capital improvements at
Crystal Park, by the Company, until the cost sharing agreement between Hollywood
Park, DeBartolo Entertainment and Leo Chu is finalized. On May 10, 1996, Bank
of America waived compliance with the breached covenant, through June 29, 1996.
On April 30, 1996, the Company and Bank of America executed Amendment One to the
Business Loan Agreement, which among other things, extended the date for drawing
down on the Line of Credit from May 1, 1996 to July 1, 1996, and adjusted the
tangible net worth covenant requirement for December 31, 1996.
On May 1, 1996, Hollywood Park issued a standby letter of credit (from within
the available Revolver facility) in the amount of $2,617,000 as security for the
self-insurance workers' compensation program with the state of California. On
May 7, 1996, the state of California informed Hollywood Park that the prior
self-insurance security (U.S. Treasury Security, par value $2,401,000) had been
released.
On February 15, 1996, the Company paid dividends of $481,000 on its convertible
preferred stock, representing $17.50 per share, or $0.175 per depositary share.
On April 1, 1996, Hollywood Park declared a quarterly dividend of $481,000, or
$17.50 per share of convertible preferred stock ($0.175 per depositary share),
payable May 15, 1996, to holders of record on April 15, 1996. Dividends of
$481,000 were paid during the three months ended March 31, 1995.
As of January 1, 1996, shares of the convertible preferred stock can be redeemed
at the option of the Company, though at no time will the convertible preferred
stock be redeemed for cash. The Company may exercise this option, only if,
among other requirements, for 20 trading days, within any period of 30
consecutive trading days, including the last trading day of such period, the
closing price of the Company's common stock exceeds $15.00, subject to
adjustments in certain circumstances. The conversion price is equal to 83.33
common shares for each convertible preferred share, or 0.8333 for each
depositary share.
12
<PAGE>
The Company anticipates converting the convertible preferred stock into common
stock at the earliest possible date.
In 1995, the Company began investing in corporate bonds, with approximately
$4,220,000 invested as of March 31, 1996, with Moody's ratings of Ba2 to B3 and
Standard and Poors ratings of BB+ to B-, though some of the bonds are not rated
by either agency. Investments in corporate bonds carry a greater amount of
principal risk than investments historically made by the Company and yield a
correspondingly higher return.
SUNFLOWER In 1991, Sunflower converted a $40,000,000 construction loan to a
term note payable to a group of five local and national banks (the "Banks"). On
March 24, 1994, an Amended and Restated Credit and Security Agreement (the
"Senior Credit") was executed in connection with the Company's acquisition of
Sunflower. The Senior Credit has been amended three times, most recently in
October 1995 by the Standstill Agreement (discussed below); on December 19,
1994, to allow for the Sunflower promissory note (discussed below), and for the
waiver of the default or event of default resulting from the failure to maintain
a fixed charge coverage ratio as of December 31, 1994; and on August 1, 1994, to
amend the definition of fixed charge coverage. The Senior Credit is non-
recourse to Hollywood Park, except with respect to the guarantee under the
Standstill Agreement.
On December 19, 1994, in anticipation of insufficient cash flow from daily
operations, due to intense competition from riverboat gaming in Missouri,
Sunflower executed a promissory note to Hollywood Park, allowing for the
advancement of up to $3,000,000, for the payment of its Senior Credit
obligations. In 1995, Hollywood Park advanced $2,500,000 to Sunflower.
Principal and accrued but interest are due by January 23, 1997.
As of October 27, 1995, Sunflower and the Banks executed a Standstill Agreement,
which among other things, provides for the extension of the Senior Credit
maturity. The Senior Credit maturity has been extended to the termination date
of the Standstill Agreement, which is the earlier of July 1, 1996; default of
the Standstill Agreement; or the close of the 1996 Kansas Legislative session
without the adoption, and full approval, of legislation permitting slot machines
or other casino gaming at Kansas race tracks, including Sunflower. The
Standstill Agreement also provides for the deferral of 100% of the principal
payments and 50% of the interest payments due under the Senior Credit from April
1995 through the termination date of the Standstill Agreement. Sunflower has
paid approximately $1,138,000 to cover the 50% interest obligations for the
period April 1, 1995, through March 31, 1996. Hollywood Park has executed a
guarantee of Sunflower's 50% interest obligations, effective only if Sunflower
does not pay the 50% interest obligations, and the Banks do not terminate the
Standstill Agreement prior to July 1, 1996. The Company has not guaranteed any
of Sunflower's principal payment obligations. As of March 31, 1996, the
outstanding balance of the Senior Credit was $28,667,000.
In December 1995, as required under the Standstill Agreement, Sunflower notified
the Banks that it had not made an approximately $400,000 property tax payment.
On May 2, 1996, the Kansas State Legislature concluded its 1996 legislative
session without adoption of legislation permitting slot machines or other casino
gaming at Kansas race tracks. This has resulted in the termination of the
Standstill Agreement as of May 2, 1996. As of the date of this filing, the
Banks have not taken action to enforce their remedies under the Senior Credit.
Hollywood Park is continually evaluating future growth opportunities in the
gaming, sports and entertainment industries. The Company expects that funding
for growth opportunities, dividend requirements on the convertible preferred
stock, payments on notes payable or capital expenditure needs will come from
existing cash balances, cash generated from operating activities and borrowings
from the credit facilities. In the opinion of management, these resources will
be sufficient to meet the Company's anticipated cash requirements for the
foreseeable future (and in any event for at least the next 12 months).
13
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
As previously reported by the Company, and described in the Company's Annual
Report on Form 10-K for 1994, six purported class actions (the "Class Actions")
were filed beginning in September 1994, against the Company and certain of its
directors and officers in the United States District Court, Central District of
California (the "District Court") and consolidated in a single action entitled
In re Hollywood Park Securities Litigation. The plaintiffs in the Class Actions
- ------------------------------------------
purported to assert violations of federal securities laws based upon, among
other things, allegations that the defendants made overly optimistic statements
about the Company. On September 15, 1995 a related stockholder derivative
action, entitled Barney v. Hubbard, et al. (the "Derivative Action"), was filed
-------------------------
in the California Superior Court for the County of San Diego (the "State
Court"). The plaintiff in the Derivative Action purported to assert claims
against certain officers and directors of the Company for alleged breach of
fiduciary duties.
The Company and other defendants each denied any liability or wrongdoing and
asserted various defenses. The District Court ordered the parties to engage in
non-binding mediation in an effort to settle all related claims. As previously
reported, as a result of the court ordered mediation, the parties reached an
agreement-in-principle to settle all claims raised in the Class and Derivative
Actions. The Company entered into the settlements in order to avoid the
expense, uncertainty and distraction of further litigation.
On November 6 and 13, 1995, respectively, the parties executed definitive
settlement agreements in the Derivative and Class Actions. Those agreements
provided for the release and dismissal of all claims raised or which might have
been raised in the Class and Derivative actions, subject to approval by each of
the respective courts. In settlement of the Class Actions, a settlement fund in
the principal amount of $5,800,000 has been created for the benefit of the
alleged class with contributions from the Company and the insurance carrier for
its directors and officers. After giving consideration to the amounts to be
received by the Company in settlement of the Derivative Action, the Company's
net settlement payment in the Class Actions was less than $2,500,000. Under
settlement of the Derivative Action, the Company will receive a $2,000,000
payment from the insurance carrier which the Company will use to pay plaintiff's
attorneys fees and expenses and partially to defray the Company's payment in the
settlement of the Class Actions. The Derivative Action settlement also includes
provisions enhancing the Company's financial controls and modifying certain
terms of its acquisition of Sunflower.
On February 26, 1996, the District Court approved the settlement of the Class
Actions and entered a judgment dismissing the Class Actions in their entirety.
On April 3, 1996, the State Court entered an order approving the settlement of
the Derivative Action.
The Company also executed a separate settlement as to all purported claims
against the Company and its officers and directors by the former controlling
stockholder of Turf Paradise (the "Walkers") in connection with the Company's
acquisition of Turf Paradise. Under the terms of the consummation of the
settlement of the Class and Derivative Actions, the Walkers were excluded from
participating in the Class Actions settlement fund, agreed to release all of
their potential threatened claims, and are to receive a payment in the principal
amount of $2,750,000.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
- ------- ------------------------------
As of March 31, 1996, the outstanding balance of Sunflower's Senior Credit was
$28,667,000. The Senior Credit is non-recourse to the parent company, Hollywood
Park, Inc., except with respect to the guarantee under the Standstill Agreement
(described below). On March 31, 1995, though current on principal and interest
due on the Senior Credit, Sunflower was in technical default of the fixed charge
coverage ratio covenant; however, Sunflower was unable to pay the July 3, 1995,
Senior Credit principal and interest payment of approximately $1,200,000. On
May 2, 1996, the Kansas Legislature concluded its 1996 legislative
14
<PAGE>
session without adoption of legislation permitting slot machines or other casino
gaming at Kansas race tracks. This has resulted in the termination of the
Standstill Agreement as of May 2, 1996. As of the date of this filing, the Banks
have not taken action to enforce their remedies under the Senior Credit. The
Standstill Agreement, among other things, provides for the deferral of 100% of
the principal payments and 50% of the interest payments under the Senior Credit,
from April 1995 through the termination date of the Standstill Agreement.
Sunflower has paid approximately $1,138,000 to cover the 50% interest
obligations for the period April 1, 1995, through March 31, 1996. Hollywood Park
has executed a guarantee of Sunflower's 50% interest obligations, effective only
if Sunflower does not pay the 50% interest obligations, but has not guaranteed
any of Sunflower's principal payment obligations.
ITEM 6.a EXHIBITS
- -----------------
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<C> <S>
2.1 Agreement and Plan of Reorganization, by and among Hollywood Park,
Inc., and Pacific Casino Management, Inc., dated November 17, 1995, is
hereby incorporated by reference to the Company's Current Report on
Form 8-K, filed November 30, 1995, and to the Company's Current Report
on Form 8-K/A, filed January 25, 1996.
2.2 Agreement and Plan of Merger, by and among Hollywood Park, Inc., HP
Acquisition, Inc. and Boomtown, Inc., dated April 23, 1996, is hereby
incorporated by reference to the Company's Current Report of Form 8-K,
filed May 3, 1996.
3.1 Certificate of Incorporation of Hollywood Park, Inc., is hereby
incorporated by reference to the Company's Registration Statement on
Form S-1 dated January 29, 1993.
3.2 Amended By-laws of Hollywood Park, Inc., are hereby incorporated by
reference to the Company's Registration Statement on Form S-1 dated
January 29, 1993.
4.5 Convertible Preferred Stock Depository Stock Agreement between
Hollywood Park, Inc. and Chemical Trust Company of California, dated
February 9, 1993, is hereby incorporated by reference to the Company's
Registration Statement on Form S-1 dated January 29, 1993.
4.6 Hollywood Park Stock Option Plan is hereby incorporated by reference
to Exhibit A to the Notice of Annual Meeting of Stockholders and Proxy
Statement relating to the Annual Meeting of Stockholders of Hollywood
Park, Inc., held on May 17, 1993.
10.1 Directors Deferred Compensation Plan for Hollywood Park, Inc., is
hereby incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1991.
10.2 Lease Agreement dated January 1, 1989, by and between Hollywood Park
Realty Enterprises, Inc. and Hollywood Park Operating Company, as
amended, is hereby incorporated by reference to the Joint Annual
Report on Form 10-K for the fiscal year ended December 31, 1989, of
Hollywood Park Operating Company and Hollywood Park Realty
Enterprises, Inc.
10.3 Aircraft rental agreement dated November 1, 1993, by and between
Hollywood Park, Inc., and R.D. Hubbard Enterprises, Inc., is hereby
incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993.
10.4 Amended and Restated Credit Agreement dated March 23, 1994, by and
between Sunflower Racing, Inc. and First Union National Bank of North
Carolina, Bank One Lexington, Texas Commerce Bank, Home State Bank of
Kansas City and Intrust Bank, N.A., is hereby incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994.
10.5 Pledge Agreement dated March 23, 1994, by and between Hollywood Park,
Inc., First Union National Bank of North Carolina, (as agent for the
ratable benefit of itself and the Banks named in the Amended and
Restated Credit Agreement included as Exhibit 10.4) is hereby
incorporated by reference to the Company's Quarterly Report on Form
10-Q for quarter ended June 30, 1994.
10.6 Subordination and Amendment Agreement dated March 23, 1994, by and
between R.D. Hubbard and Sunflower Racing, Inc., is hereby
incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994.
</TABLE>
15
<PAGE>
<TABLE>
<C> <S>
10.7 Agreement Respecting Pyramid Casino dated December 3, 1994, by and
between Hollywood Park, Inc. and Compton Entertainment, Inc., is
hereby incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
10.8 Amendment of Oil and Gas Lease dated January 10, 1995, by and among
Hollywood Park, Inc., Casex Co., Nunn Ltd., and Votex Energy & Mineral
is hereby incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
10.9 Agreement to sell contingent rights to additional consideration
payable by Hollywood Park, Inc. related to the Agreement of Merger, by
and among Hollywood Park, Inc., HP Acquisition, Inc., Sunflower
Racing, Inc., R.D. Hubbard and Richard J. Boushka, dated February 24,
1994, executed on March 23 1994, by and among Hollywood Park, Inc.,
R.D. Hubbard and Richard J. Boushka, dated March 23, 1995, is hereby
incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994.
10.10 Business Loan Agreement dated April 14, 1995, by and between
Hollywood Park, Inc., and Bank of America National Trust and Savings
Association, is hereby incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
10.11 Amendment No. One dated April 30, 1996, by and between Hollywood
Park, Inc. and Bank of America National Trust and Savings Association,
to the Business Loan Agreement dated April 14, 1995.
10.12 Amendment to Agreement Respecting Pyramid Casino dated April 14,
1995, by and between Hollywood Park, Inc. and Compton Entertainment,
Inc., is hereby incorporated by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1995.
10.13 Amended and Restated Agreement Respecting Pyramid Casino dated July
14, 1995, by and between Hollywood Park, Inc. and Compton
Entertainment, Inc., is hereby incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
10.14 Amended and Restated Disposition and Development Agreement of
Purchase and Sale, and Lease with Option to Purchase, dated August 2,
1995, by and between The Community Redevelopment Agency of the City of
Compton and Compton Entertainment, Inc., is hereby incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarter ended Septembr 30, 1995.
10.15 Guaranty, dated July 31, 1995, by Hollywood Park, Inc. in favor of the
Community Redevelopment Agency of the City of Compton, is hereby
incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995.
10.16 Lease, by and between HP Compton, Inc. and Compton Entertainment,
Inc., dated August 3, 1995, is hereby incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
10.17 Standstill Agreement, dated October 27, 1995, by and between
Sunflower Racing, Inc., and First Union National Bank of Florida, Bank
One Lexington, N.A., Bank Midwest, N.A., Intrust Bank, N.A., and FCLT
Loans, L.P., is hereby incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1995.
22.1 Subsidiaries of Hollywood Park, Inc.: HP Compton, Inc., a California
corporation, HP Casino, Inc., a California corporation, Hollywood Park
Operating Company, a Delaware corporation (and its subsidiaries:
Hollywood Park Fall Operating Company, a Delaware corporation and
Hollywood Park Food Services, Inc., a California corporation):
Sunflower Racing, Inc., a Kansas corporation (and its subsidiary SR
Food and Beverage, Inc., a Kansas corporation): and Turf Paradise,
Inc., an Arizona corporation.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
A current report on Form 8-K was filed on March 22, 1996, to report
the March 19, 1996, signing of the letter of intent relating to the
strategic combination of Hollywood Park, Inc. and Boomtown, Inc., and
the filing of the press release announcing the signing of the letter
of intent.
A current report on Form 8-K was filed on May 3, 1996, to report the
April 23, 1996, execution of the Agreement and Plan of Merger relating
to the strategic combination of Hollywood Park, Inc. and Boomtown,
Inc.
</TABLE>
16
<PAGE>
Hollywood Park, Inc.
Racing Data
<TABLE>
<CAPTION>
HOLLYWOOD PARK RACE TRACK
1996 1995
------------------------ ------------------------
<S> <C> <C>
LIVE RACING DATES:
Spring/Summer meeting ("S/S") April 26 through July 22 April 28 through July 24
Autumn meeting ("A") Nov. 11 through Dec. 22 Nov. 15 through Dec. 24
LIVE RACE DAYS INCLUDING CHARITY DAYS (a):
Spring/Summer meeting 67 67
Autumn meeting 35 30
--- ---
102 97
=== ===
LIVE RACE DAYS BY QUARTER:
First quarter 0 0
Second quarter (S/S) 51 48
Third quarter (S/S) 16 19
Fourth quarter (A) 35 30
--- ---
102 97
=== ===
SIMULCAST RACE DAYS BY QUARTER 1996:
<CAPTION>
1Q 2Q 3Q 4Q TOTAL
--- --- --- --- -----
<S> <C> <C> <C> <C> <C>
Santa Anita thoroughbred 66 16 0 4 86
Del Mar thoroughbred 0 0 43 0 43
Fairplex Pomona thoroughbred 0 0 18 0 18
Oak Tree from Santa Anita
thoroughbred 0 0 0 27 27
Los Alamitos Harness - night
races 51 4 0 0 55
Los Alamitos Quarter Horse -
night races 0 43 52 48 143
Cal Expo Harness - night races 0 36 9 0 45
Bay Meadows - northern
California (b) 40 0 23 26 89
Golden Gate Fields - northern
California (b) 5 55 0 35 95
Fairs - northern California (b) 0 16 53 10
--- --- --- --- -----
TOTAL 162 170 198 150 680
=== === === === =====
SIMULCAST RACE DAYS BY QUARTER 1995:
<CAPTION>
1Q 2Q 3Q 4Q TOTAL
--- --- --- --- -----
<S> <C> <C> <C> <C> <C>
Santa Anita thoroughbred 65 19 0 5 89
Del Mar thoroughbred 0 0 43 0 43
Fairplex Pomona thoroughbred 0 0 17 2 19
Oak Tree from Santa Anita
thoroughbred 0 0 0 32 32
Los Alamitos Harness - night
races 36 0 0 5 41
Los Alamitos Quarter Horse -
night races 0 45 54 53 152
Cal Expo Harness - night races 1 36 11 16 64
Bay Meadows - northern
California (b) 19 11 28 45 103
Golden Gate Fields - northern
California (b) 44 55 0 15 114
Fairs - northern California (b) 0 16 60 12 88
--- --- --- --- -----
TOTAL 165 182 213 185 745
=== === === === =====
</TABLE>
- ---------
(a) There are three charity days in both the Spring/Summer and Autumn meetings,
for a total of six charity days per year.
(b) Simulcasting from northern California runs year round and is simulcast
concurrently with either live on-track racing or with southern California
simulcasting.
17
<PAGE>
SUNFLOWER -- OPERATING AS THE WOODLANDS
Sunflower, operating as the Woodlands race track, under Kansas racing law is not
granted any race days and does not generate any pari-mutuel commissions. The
Kansas Racing Commission granted Sunflower the facility ownership and manager
licenses, with all race days until 2014 granted to TRAK East, a Kansas not-for-
profit corporation. Sunflower has an agreement with TRAK East to provide the
physical race tracks along with management and consulting services for twenty-
five years with options to renew for one or more successive five year terms.
The Agreement and Restatement of Lease and Management Agreement was entered into
as of September 14, 1989. Sunflower had guaranteed that the minimum net
revenues to be retained by TRAK East, which are for distribution to charities,
would not be less than $500,000. During 1995 through the May 2, 1996, the
charity payments were suspended, pending the outcome of the 1996 Kansas State
Legislative session. The Kansas Legislature adjourned on May 2,1996, without
passing legislation which would have allowed additional forms of gaming at
Sunflower, thereby allowing Sunflower to compete with Missouri riverboat gaming.
Sunflower's charity agreement with TRAK East will be reviewed after management
has determined Sunflower's future operating arrangement, given the lack of
additional forms of gaming.
1996 RACE DAYS AND PERFORMANCES BY QUARTER:
<TABLE>
<CAPTION>
Live On-track Simulcast
------------------------ ---------
Race Days Performances Race Days
--------- ------------ ---------
<S> <C> <C> <C>
GREYHOUNDS
First quarter 62 79 61
Second quarter 66 93 65
Third quarter 66 93 65
Fourth quarter 65 92 65
--- --- ---
259 357 256
=== === ===
THOROUGHBREDS
First quarter 0 -- 62
Second quarter 0 -- 66
Third quarter 34 -- 66
Fourth quarter 26 -- 65
--- --- ---
60 -- 259
=== === ===
</TABLE>
1995 RACE DAYS AND PERFORMANCES BY QUARTER:
<TABLE>
<CAPTION>
Live On-track Simulcast
------------------------ ---------
Race Days Performances Race Days
--------- ------------ ---------
<S> <C> <C> <C>
GREYHOUNDS
First quarter 73 103 44
Second quarter 78 104 77
Third quarter 76 101 76
Fourth quarter 65 78 65
--- --- ---
292 386 262
=== === ===
THOROUGHBREDS
First quarter 0 -- 66
Second quarter 0 -- 66
Third quarter 32 -- 64
Fourth quarter 13 -- 66
--- --- ---
45 -- 262
=== === ===
</TABLE>
The following pari-mutuel wagering data is related to TRAK East at Sunflower.
Sunflower does not generate any pari-mutuel wagering related revenue, but
instead receives a lease and management fee from TRAK East.
18
<PAGE>
TRAK EAST - AT SUNFLOWER
<TABLE>
<CAPTION>
For the three months ended March 31,
----------------------------------------------------
1996 1995 1996 1995
----------- ----------- ---------- ----------
GREYHOUNDS HORSES
------------------------- ------------------------
<S> <C> <C> <C> <C>
Pari-mutuel handle:
On-track $ 7,502,000 $14,107,000 $ 0 $ 0
Simulcast 3,467,000 1,563,000 6,997,000 7,536,000
----------- ----------- ---------- ----------
$10,969,000 $15,670,000 $6,997,000 $7,536,000
=========== =========== ========== ==========
Pari-mutuel commissions:
On-track $ 972,000 $ 1,804,000 $ 0 $ 0
Simulcast 303,000 161,000 424,000 786,000
----------- ----------- ---------- ----------
$ 1,275,000 $ 1,965,000 $ 424,000 $ 786,000
=========== =========== ========== ==========
</TABLE>
TURF PARADISE
Turf Paradise has one continuous live thoroughbred race meet that starts in
September and runs through May. During 1996 Turf Paradise raced live for the
period January 1 through May 7 and resumes live racing on September 28 and will
run through December 31. Turf Paradise operates as a simulcast facility for
Arizona's Prescott Downs during the period May 24 through September 2. In 1995,
Turf Paradise raced live from January 1 through May 22, operated as a simulcast
facility for the period May 26 through September 4, and resumed live racing on
September 30 running through December 31. Along with running live thoroughbred
races, Turf Paradise offers two quarter horse races a day during the first three
months of the live meet (September through November) and a limited number of
Arabian races each spring. Turf Paradise also typically accepts simulcast
signals during live racing on Fridays, Saturdays and Sundays, and operates as a
simulcast facility during the two dark days (days without live racing during the
live race meet) of each week during the live on-track racing season.
<TABLE>
<CAPTION>
LIVE ON-TRACK DARK DAY SIMULCASTING -
RACE DAYS SIMULCASTING PRESCOTT
------------- --------------- ---------------
1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
First quarter 71 67 20 23 0 0
Second quarter 27 37 23 14 30 30
Third quarter 3 1 18 18 56 56
Fourth quarter 66 66 24 25 0 0
--- --- -- -- -- --
167 171 85 80 86 86
=== === == == == ==
</TABLE>
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
HOLLYWOOD PARK, INC.
(Registrant)
By: /s/ R.D. Hubbard
--------------------------------------- Dated: May 13, 1996
R.D. Hubbard
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
By: /s/ G. Michael Finnigan
--------------------------------------- Dated: May 13, 1996
G. Michael Finnigan
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
20
<PAGE>
Hollywood Park, Inc.
Calculation of Earnings Per Share
<TABLE>
<CAPTION>
For the three months ended March 31,
------------------------------------------------------------
Primary Assuming full dilution (b)
---------------------------- --------------------------
1996 1995 1996 1995
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Average number of common shares outstanding 18,610,114 18,369,634 18,610,114 18,369,634
Average common shares due to assumed conversion
of convertible preferred shares 0 0 2,291,492 2,291,492
------------ ----------- ----------- ----------
Total shares 18,610,114 18,369,634 20,901,606 20,661,126
============ =========== =========== ==========
Net loss ($13,378,000) ($594,000) ($2,032,000) ($594,000)
Less dividend requirements on convertible preferred shares 481,000 481,000 0 0
------------ ----------- ----------- ----------
Net loss allocated to common shareholders ($13,859,000) ($1,075,000) ($2,032,000) ($594,000)
============ =========== =========== ==========
Net loss per share ($0.74) ($0.06)(a) ($0.10) ($0.03)
============ =========== =========== ==========
</TABLE>
- ---------
(a) Also see Pro Forma Results of Operations.
(b) The computed values assuming full dilution are anti-dilutive; therefore, the
primary share values are presented on the face of the consolidated statements of
operations.
21
<PAGE>
Hollywood Park, Inc.
Selected Financial Data by Operational Location
<TABLE>
<CAPTION>
For the three months ended
March 31,
----------------------------
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
REVENUES:
Hollywood Park, Inc. and Race Track $5,701,000 $5,786,000
Sunflower Racing, Inc. 1,782,000 2,638,000
Turf Paradise, Inc. 6,597,000 6,443,000
Hollywood Park, Inc.-Casino Division 13,773,000 9,589,000
---------- ----------
27,853,000 24,456,000
---------- ----------
EXPENSES:
Hollywood Park, Inc. and Race Track 9,335,000 8,517,000
Sunflower Racing, Inc. 1,703,000 2,265,000
Turf Paradise, Inc. 4,122,000 4,530,000
Hollywood Park, Inc.-Casino Division 12,297,000 6,312,000
---------- ----------
27,457,000 21,624,000
---------- ----------
INCOME (LOSS) BEFORE INTEREST, INCOME TAXES,
DEPRECIATION, AMORTIZATION AND WRITE OFF OF
INVESTMENT IN SUBSIDIARY:
Hollywood Park, Inc. and Race Track (3,634,000) (2,731,000)
Sunflower Racing, Inc. 79,000 373,000
Turf Paradise, Inc. 2,475,000 1,913,000
Hollywood Park, Inc.-Casino Division 1,476,000 3,277,000
---------- ----------
396,000 2,832,000
---------- ----------
WRITE OFF OF INVESTMENT IN SUBSIDIARY:
Write off of investment in Sunflower Racing, Inc. 11,346,000 0
DEPRECIATION AND AMORTIZATION:
Hollywood Park, Inc. and Race Track 1,393,000 1,351,000
Sunflower Racing, Inc. 536,000 621,000
Turf Paradise, Inc. 309,000 329,000
Hollywood Park, Inc.-Casino Division 675,000 491,000
---------- ----------
2,913,000 2,792,000
---------- ----------
INTEREST EXPENSE:
Hollywood Park, Inc. and Race Track 63,000 49,000
Sunflower Racing, Inc. 781,000 888,000
Turf Paradise, Inc. 0 17,000
---------- ----------
844,000 954,000
---------- ----------
INCOME (LOSS) BEFORE INCOME TAX BENEFIT:
Hollywood Park, Inc. and Race Track (5,090,000) (4,131,000)
Write off of Investment in Sunflower Racing, Inc. (11,346,000) 0
Sunflower Racing, Inc. (1,238,000) (1,136,000)
Turf Paradise, Inc. 2,166,000 1,567,000
Hollywood Park, Inc.-Casino Division 801,000 2,786,000
---------- ----------
(14,707,000) (914,000)
Income tax benefit 1,329,000 320,000
Net loss ---------- ----------
($13,378,000) ($594,000)
========== ==========
Dividend requirements on convertible
preferred stock $481,000 $481,000
---------- ----------
Net loss allocated to common shareholders ($13,859,000) ($1,075,000)
========== ==========
Per common share:
Net loss-primary ($0.74) ($0.06)
Net loss-fully diluted ($0.74) ($0.06)
Number of shares-primary 18,610,114 18,369,634
Number of shares-fully diluted 20,901,606 20,661,126
</TABLE>
<PAGE>
Hollywood Park, Inc.
Pari-mutuel Wagering Data
<TABLE>
<CAPTION>
For the three months ended
March 31,
--------------------------
1996 1995
------------ -----------
(unaudited)
<S> <C> <C>
HOLLYWOOD PARK
- ------------------------------
Pari-mutuel handle:
On-track $0 $0
Off-track-shared handle wagering 0 0
Simulcast 86,158,000 82,406,000
------------ ------------
Total $86,158,000 $82,406,000
============ ============
Pari-mutuel commissions:
On-track $0 $0
Off-track-shared handle wagering 0 0
Off-track-independent handle 0 0
Simulcast 1,669,000 1,602,000
------------ -----------
Total $1,669,000 $1,602,000
============ ============
TURF PARADISE
- ------------------------------
Pari-mutuel handle:
On-track $11,772,000 $11,977,000
Off-track-shared handle wagering 48,965,000 30,513,000
Simulcast 17,931,000 16,840,000
------------ ------------
Total $78,668,000 $59,330,000
============ ============
Pari-mutuel commissions:
On-track $1,387,000 $1,352,000
Off-track-shared handle wagering 2,101,000 1,653,000
Off-track-independent handle 54,000 368,000
Simulcast 1,507,000 1,333,000
------------ ------------
Total $5,049,000 $4,706,000
============ ============
COMBINED
- ------------------------------
Pari-mutuel handle:
On-track $11,772,000 $11,977,000
Off-track-shared handle wagering 48,965,000 30,513,000
Simulcast 104,089,000 99,246,000
------------ ------------
Total $164,826,000 $141,736,000
============ ============
Pari-mutuel commissions:
On-track $1,387,000 $1,352,000
Off-track-shared handle wagering 2,101,000 1,653,000
Off-track-independent handle 54,000 368,000
Simulcast 3,176,000 2,935,000
------------ ------------
Total $6,718,000 $6,308,000
============ ============
</TABLE>
<PAGE>
Hollywood Park, Inc.
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Description Page
- ------- ----------- ----
<C> <S> <C>
10.11 Amendment No. One dated April 30, 1996, 1
by and between Hollywood Park, Inc. and
Bank of America National Trust and
Savings Association, to the Business Loan
Agreement dated April 14, 1995.
27.1 Financial Data Schedule 3
</TABLE>
<PAGE>
AMENDMENT NO. ONE TO BUSINESS LOAN AGREEMENT
This Amendment No. One (the "Amendment") dated as of April 30, 1996,
is between Bank of America National Trust and Savings Association (the "Bank")
and Hollywood Park, Inc. (the "Borrower").
RECITALS
--------
A. The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of April 14, 1995 (the "Agreement").
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
---------
1. Definitions. Capitalized terms used but not defined in this
-----------
Amendment shall have the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
----------
2.1 In Subparagraph 1.8(i), the number "365" is substituted for
the number "395".
2.2 In Paragraph 2.2, the date "July 1, 1996" is substituted for the
date "May 1, 1996".
2.3 In Subparagraph 2.4(b), the date "August 1, 1996" is substituted
for the date "June 1, 1996" and the date "July 1, 2003" is substituted for the
date "May 1, 2003".
2.4 In the column entitled "Amount" in Paragraph 7.3 A, the amount
------
"$144,500,000" is amended to read "$137,500,000" in both places it appears.
2.5 In the column entitled "Amount" in Paragraph 7.3 B, the amount
------
"$165,000,000" is amended to read "$152,500,000" in both places it appears.
3. Representations and Warranties. When the Borrower signs this
------------------------------
Amendment, the Borrower represents and warrants to the
-1-
<PAGE>
Bank that: (a) there is no event which is, or with notice or lapse of time or
both would be, a default under the Agreement, except that the Borrower has
notified the Bank that it will not be in compliance with the provisions of
Paragraph 7.6 A. of the Agreement, as of March 31, 1996, (b) the representations
and warranties in the Agreement are true as of the date of this Amendment as if
made on the date of this Amendment, (c) this Amendment is within the Borrower's
powers, has been duly authorized, and does not conflict with any of the
Borrower's organizational papers, and (d) this Amendment does not conflict with
any law, agreement, or obligation by which the Borrower is bound.
4. Effect of Amendment. Except as provided in this Amendment, all of
-------------------
the terms and conditions of the Agreement shall remain in full force and effect.
This Amendment is executed as of the date stated at the beginning of
this Amendment.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: /s/ Sheryl Bond
--------------------------------------
Title: Vice President
HOLLYWOOD PARK, INC.
By: /s/ R.D. Hubbard
--------------------------------------
R.D. Hubbard
Title: Chairman of the Board and
Chief Executive Officer
By: /s/ G.Michael Finnigan
--------------------------------------
G. Michael Finnigan
Title: Executive Vice President and
Chief Financial Officer
-2-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 15,367,000
<SECURITIES> 5,679,000
<RECEIVABLES> 5,945,000
<ALLOWANCES> 1,502,000
<INVENTORY> 0
<CURRENT-ASSETS> 35,151,000
<PP&E> 263,996,000
<DEPRECIATION> 90,692,000
<TOTAL-ASSETS> 265,911,000
<CURRENT-LIABILITIES> 70,699,000
<BONDS> 47,946,000
0
28,000
<COMMON> 1,850,000
<OTHER-SE> 149,994,000
<TOTAL-LIABILITY-AND-EQUITY> 265,911,000
<SALES> 3,174,000
<TOTAL-REVENUES> 27,853,000
<CGS> 4,868,000
<TOTAL-COSTS> 27,457,000
<OTHER-EXPENSES> 14,259,000
<LOSS-PROVISION> 126,000
<INTEREST-EXPENSE> 844,000
<INCOME-PRETAX> (14,707,000)
<INCOME-TAX> (1,329,000)
<INCOME-CONTINUING> (13,378,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,378,000)
<EPS-PRIMARY> (0.74)
<EPS-DILUTED> (0.74)
</TABLE>
