<PAGE>
- -------------------------------------------------------------------------------
UNITED STATES
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, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number: 1-9029
-------------------------------
TRUMP'S CASTLE HOTEL & CASINO, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 11-2735914
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Huron Avenue and Brigantine Boulevard
Atlantic City, New Jersey 08401
(609) 441-6060
(Address, including Zip Code and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
TRUMP'S CASTLE FUNDING, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 11-2739203
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Huron Avenue and Brigantine Boulevard
Atlantic City, New Jersey 08401
(609) 441-6060
(Address, including Zip Code and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
TRUMP'S CASTLE ASSOCIATES, L.P.
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2608426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Huron Avenue and Brigantine Boulevard
Atlantic City, New Jersey 08401
(609) 441-6060
(Address, including Zip Code and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
As of May 15, 2000, there were 100 shares of Trump's Castle Hotel &
Casino, Inc.'s Common Stock, no par value, outstanding. Trump's Castle Hotel &
Casino, Inc. meets the conditions set forth in General Instructions H(1)(a) and
(b) of Form 10-Q and is therefore filing this form with the reduced disclosure
format.
As of May 15, 2000, there were 200 shares of Trump's Castle Funding,
Inc.'s Common Stock, par value $.01 per share, outstanding. Trump's Castle
Funding, Inc. meets the conditions set forth in General Instructions H(1)(a) and
(b) of Form 10-Q and is therefore filing this form with the reduced disclosure
format.
- --------------------------------------------------------------------------------
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page No.
PART I - FINANCIAL INFORMATION
<S> <C>
ITEM 1 - Financial Statements
Condensed Consolidated Balance Sheets as of December 31, 1999 and March 31, 2000 (unaudited)........ 1
Condensed Consolidated Statements of Operations for the three months ended March 31, 1999 and
2000 (unaudited).............................................................................. 2
Condensed Consolidated Statement of Partners' Capital for the three months ended March 31,
2000 (unaudited).............................................................................. 3
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1999
and 2000 (unaudited).......................................................................... 4
Notes to Condensed Consolidated Financial Statements (unaudited) ................................... 5
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations........ 8
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk................................... 11
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings......................................................................... 12
ITEM 2 - Changes in Securities and Use of Proceeds................................................. 12
ITEM 3 - Defaults Upon Senior Securities........................................................... 12
ITEM 4 - Submission of Matters to a Vote of Security Holders....................................... 12
ITEM 5 - Other Information......................................................................... 12
ITEM 6 - Exhibits and Reports on Form 8-K.......................................................... 12
SIGNATURES
Trump's Castle Hotel & Casino, Inc............................................................... 13
Trump's Castle Funding, Inc...................................................................... 14
Trump's Castle Associates, L.P................................................................... 15
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------ -----------
(unaudited)
ASSETS
------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents................................................ $ 21,413 $ 29,239
Receivables, net......................................................... 10,627 8,298
Inventories.............................................................. 3,292 3,264
Prepaid expenses and other current assets................................ 1,825 1,544
----------- -----------
Total current assets............................................... 37,157 42,345
PROPERTY AND EQUIPMENT, NET................................................. 481,731 478,495
OTHER ASSETS................................................................ 14,480 14,472
----------- -----------
Total assets....................................................... $ 533,368 $ 535,312
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
CURRENT LIABILITIES
Current maturities-long term debt........................................ $ 1,296 $ 921
Accounts payable and accrued expenses.................................... 26,357 24,639
Due to affiliates........................................................ 20,116 19,879
Accrued interest payable................................................. 4,701 13,531
----------- -----------
Total current liabilities.......................................... 52,470 58,970
LONG TERM DEBT, LESS CURRENT MATURITIES..................................... 389,045 390,247
OTHER LONG TERM LIABILITIES................................................. 3,548 7,158
----------- -----------
Total liabilities.................................................. 445,063 456,375
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL........................................................... 88,305 78,937
----------- -----------
Total liabilities and partners' capital............................ $ 533,368 $ 535,312
=========== ===========
The accompanying notes are an integral part of these condensed consolidated statements.
</TABLE>
1
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
1999 2000
--------- ---------
REVENUES
<S> <C> <C>
Gaming......................................................... $ 60,890 $ 59,325
Rooms.......................................................... 3,286 3,547
Food and beverage.............................................. 7,269 7,193
Other.......................................................... 1,603 1,724
--------- --------
Gross revenues.............................................. 73,048 71,789
Less-promotional allowances.................................... 8,562 7,818
--------- --------
Net revenues................................................ 64,486 63,971
--------- --------
COSTS AND EXPENSES
Gaming......................................................... 38,782 35,700
Rooms.......................................................... 692 1,018
Food and beverage.............................................. 1,776 2,181
General and administrative..................................... 14,704 16,352
Depreciation and amortization.................................. 4,250 4,341
--------- --------
60,204 59,592
--------- --------
Income from operations...................................... 4,282 4,379
INTEREST INCOME................................................... 219 250
INTEREST EXPENSE.................................................. (13,438) (13,997)
--------- --------
Net loss.................................................... $ (8,937) $ (9,368)
========= ========
The accompanying notes are an integral part of these condensed consolidated statements.
</TABLE>
2
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Contributed Accumulated
Capital Deficit Total
----------- ----------- ---------
<S> <C> <C> <C>
Balance at December 31, 1999.................................. $ 175,395 $ (87,090) $ 88,305
Net loss...................................................... - (9,368) (9,368)
---------- ----------- --------
Balance at March 31, 2000..................................... $ 175,395 $ (96,458) $ 78,937
========== =========== ========
The accompanying notes are an integral part of this condensed consolidated statement.
</TABLE>
3
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
1999 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss.............................................................. $ (8,937) $ (9,368)
Adjustments to reconcile net loss to net cash flows provided
by operating activities-
Depreciation and amortization.................................. 4,250 4,341
Accretion of bond discount..................................... 1,033 1,207
(Credit) provision for losses on receivables................... (149) 262
Valuation allowance-CRDA investments........................... 349 281
Decrease in receivables........................................ 443 2,067
Decrease in inventories........................................ 22 28
Decrease in prepaid expenses and other current assets.......... 13 281
(Increase) decrease in other assets............................ (45) 388
Increase in current liabilities................................ 9,904 7,112
Decrease in amounts due to affiliates.......................... (1,238) (294)
Increase in other liabilities.................................. 3,155 3,610
--------- --------
Net cash flows provided by operating activities........... 8,800 9,915
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment............................ (1,312) (957)
Purchase of CRDA investments................................... (773) (752)
--------- --------
Net cash flows used in investing activities............... (2,085) (1,709)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of other borrowings.................................. (471) (380)
--------- ---------
Net cash flows used in financing activities............... (471) (380)
--------- ---------
Net increase in cash and cash equivalents................. 6,244 7,826
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD......................... 19,723 21,413
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................... $ 25,967 $ 29,239
========= =========
SUPPLEMENTAL INFORMATION
Cash paid for interest................................................ $ 292 $ 270
========= =========
The accompanying notes are an integral part of these condensed consolidated statements.
</TABLE>
4
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Organization and Operations
The accompanying condensed consolidated financial statements include
those of Trump's Castle Associates, L.P., a New Jersey limited partnership (the
"Partnership"), and its wholly owned subsidiary, Trump's Castle Funding, Inc., a
New Jersey corporation ("Funding"). The Partnership is 99% owned by Trump Hotels
& Casino Resorts Holdings, L.P., a Delaware limited partnership ("THCR
Holdings"), and 1% by Trump's Castle Hotel & Casino, Inc., a New Jersey
corporation ("TCHI"). TCHI is wholly owned by THCR Holdings, and THCR Holdings
is currently a 63.4% owned subsidiary of Trump Hotels & Casino Resorts, Inc., a
Delaware corporation ("THCR").
All significant intercompany balances and transactions have been
eliminated in these condensed consolidated financial statements.
The Partnership operates the Trump Marina Hotel Casino ("Trump Marina"),
a luxury casino hotel located in the Marina District of Atlantic City, New
Jersey. The majority of Trump Marina's revenues are derived from its gaming
operations.
Since Funding has no business operations, its ability to repay the
principal and interest on the $62,000,000 10 1/4% Senior Secured Notes due 2003
(the "Senior Notes"), the 11 3/4% Mortgage Notes due 2003 (the "Mortgage Notes")
and its Increasing Rate Subordinated Pay-in-Kind Notes due 2005 (the "PIK
Notes") is completely dependent upon the operations of the Partnership.
Since TCHI has no business operations, its ability to repay the principal
and interest on the $5,000,000 10 1/4% Senior Secured Notes due 2003 (the
"Working Capital Loan") is completely dependent upon the operations of the
Partnership.
The accompanying condensed consolidated financial statements have been
prepared by the Partnership without audit. In the opinion of the Partnership,
all adjustments, consisting of only normal recurring adjustments necessary to
present fairly the financial position, results of operations and cash flows for
the periods presented have been made.
The accompanying condensed consolidated financial statements have been
prepared by the Partnership pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Accordingly, certain information
and note disclosures normally included in the financial statements prepared in
conformity with generally accepted accounting principles have been omitted.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the annual report on Form 10-K for the year ended December 31, 1999
filed with the SEC by the Partnership, Funding and TCHI.
The casino industry in Atlantic City is seasonal in nature; accordingly,
the results of operations for the three month period ending March 31, 2000 are
not necessarily indicative of the operating results for a full year.
5
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
<TABLE>
<CAPTION>
(2) Financial Information of Funding
Financial information relating to Funding is as follows:
December 31, March 31,
1999 2000
------------- ------------
<S> <C> <C>
Total Assets (including Mortgage Notes Receivable of
$242,141,000, net of unamortized discount of
$22,906,000 at December 31, 1999 and $21,837,000 at
March 31, 2000, PIK Notes Receivable of $105,791,000,
net of unamortized discount of $6,325,000 at December
31, 1999 and $6,187,000 at March 31, 2000, Senior
Notes Receivable of $62,000,000 at December 31, 1999
and March 31, 2000).............................................. $ 380,701,000 $ 381,908,000
============= =============
Total Liabilities and Capital (including Mortgage Notes
Payable of $242,141,000, net of unamortized discount of
$22,906,000 at December 31, 1999 and $21,837,000 at March
31, 2000, PIK Notes Payable of $105,791,000, net of
unamortized discount of $6,325,000 at December 31, 1999 and
$6,187,000 at March 31, 2000, Senior Notes Payable of
$62,000,000 at December 31, 1999 and March 31, 2000)............. $ 380,701,000 $ 381,908,000
============= =============
Three Months Ended March 31,
1999 2000
--------- ---------
Interest Income................................................... $ 12,976,000 $ 13,531,000
Interest Expense.................................................. 12,976,000 13,531,000
------------ -------------
Net Income........................................................ $ - $ -
============ =============
</TABLE>
6
<PAGE>
TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
<TABLE>
<CAPTION>
(3) Financial Information of TCHI
Financial information relating to TCHI is as follows:
December 31, March 31,
1999 2000
------------- -------------
<S> <C> <C>
Total Assets (including Working Capital Loan Receivable of
$5,000,000 at December 31, 1999 and March 31, 2000).................. $ 5,000,000 $ 5,000,000
============ =============
Total Liabilities and Capital (including Working Capital Loan
Payable of $5,000,000 at December 31, 1999 and March 31, 2000)........ $ 5,000,000 $ 5,000,000
============ =============
Three Months Ended March 31,
1999 2000
------- -------
Interest Income....................................................... $ 128,000 $ 128,000
Interest Expense...................................................... 128,000 128,000
------- -------
Net Income............................................................ $ - $ -
======= =======
</TABLE>
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Capital Resources and Liquidity
Cash flow from operating activities is the Partnership's principal source
of liquidity. For the three months ended March 31, 2000, the Partnership's net
cash flow provided by operating activities was $9,915,000.
In addition to funding operations, the Partnership's principal uses of
cash are capital expenditures and debt service.
Capital expenditures for 2000 are anticipated to be approximately
$10,600,000 and principally consist of a slot room expansion project, hotel room
renovations, as well as ongoing property enhancements. The slot room expansion
project, scheduled to be completed during the second quarter of 2000, will
increase Trump Marina's gaming space by approximately 5,600 square feet (7.4%)
and will add approximately 250 slot machines.
The Partnership's debt consists primarily of (i) the Mortgage Notes, (ii)
the PIK Notes, (iii) the Senior Notes and (iv) the Working Capital Loan.
The Mortgage Notes have an outstanding principal amount of approximately
$242,141,000, bear interest at the rate of 11 3/4% per annum and mature on
November 15, 2003.
The PIK Notes have an outstanding principal amount of approximately
$105,791,000 and mature on November 15, 2005. Interest is currently payable
semi-annually at the rate of 13 7/8%. On or prior to November 15, 2003, interest
on the PIK Notes may be paid in cash or through the issuance of additional PIK
Notes. The Partnership anticipates that interest due in 2000 of approximately
$15,188,000 will be paid through the issuance of additional PIK Notes. Also,
approximately 90% of the PIK Notes are currently owned by THCR Holdings.
The Senior Notes have an outstanding principal amount of $62,000,000 and
bear interest at the rate of 10 1/4% per annum, payable semi-annually each April
and October. The entire principal balance of the Senior Notes matures on April
30, 2003.
The Working Capital Loan has an outstanding principal amount of
$5,000,000 and bears interest at the rate of 10 1/4% per annum, payable
semi-annually each April and October. The entire principal balance of the
Working Capital Loan matures on April 30, 2003. The Partnership has the
authority to obtain a working capital facility of up to $10,000,000 (of which
approximately $5,000,000 is outstanding), although there can be no assurance
that such financing will be available, or on terms acceptable to the
Partnership.
The ability of Funding, TCHI and the Partnership to pay their
indebtedness when due will depend on the Partnership either generating cash from
operations sufficient for such purposes or refinancing such indebtedness on or
before the date on which it becomes due. Cash flow from operations may not be
sufficient to repay a substantial portion of the principal amount of the debt at
maturity. The future operating performance of the Partnership and the ability to
refinance this debt will be subject to the then prevailing economic conditions,
industry conditions and numerous other financial, business and other factors,
many of which are beyond the control of Funding, TCHI or the Partnership. There
can be no assurance that the future operating performance of the Partnership
will be sufficient to meet these repayment obligations or that the general state
of the economy, the status of the capital markets or the receptiveness of the
capital markets to the gaming industry will be conducive to refinancing this
debt or other attempts to raise capital.
8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (Continued)
Results of Operations: Operating Revenues and Expenses
The financial information presented below reflects the financial
condition and results of operations of the Partnership. Funding is a wholly
owned subsidiary of the Partnership and conducts no business other than
collecting amounts due under certain intercompany notes from the Partnership for
the purpose of paying principal of, premium, if any, and interest on its
indebtedness, which Funding issued as a nominee for the Partnership.
Comparison of Results of Operations for the Three Month Periods Ended March 31,
1999 and 2000.
Gaming revenues are the primary source of the Partnership's revenues and
primarily consist of table game and slot machine win. The following chart
details activity for the major components of gaming revenue:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
---- ----
(dollars in thousands)
<S> <C> <C>
Table Game Revenue...................................................... $15,447 $13,562
Decrease from Prior Period.............................................. ($1,885)
Table Game Drop......................................................... $101,296 $88,395
Decrease from Prior Period.............................................. ($12,901)
Table Game Win Percentage............................................... 15.2% 15.3%
Increase from Prior Period.............................................. 0.1 pts.
Number of Table Games................................................... 91 76
Decrease from Prior Period.............................................. (15)
Slot Revenue............................................................ $45,270 $45,633
Increase from Prior Period.............................................. $363
Slot Handle............................................................. $552,582 $582,532
Increase from Prior Period.............................................. $29,950
Slot Win Percentage..................................................... 8.2% 7.8%
Decrease from Prior Period.............................................. (0.4) pts.
Number of Slot Machines................................................. 2,178 2,265
Increase from Prior Period.............................................. 87
Other Gaming Revenue.................................................... $173 $130
Decrease from Prior Period.............................................. ($43)
Total Gaming Revenues................................................... $60,890 $59,325
Decrease from Prior Period.............................................. ($1,565)
</TABLE>
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (Continued)
Table game revenues decreased by approximately $1,885,000 or 12.2% to
$13,562,000 for the three months ended March 31, 2000 from $15,447,000 for the
three months ended March 31, 1999. This decrease is the result of lower table
game drop than the previous year, offset slightly by an increased table game win
percentage. The Partnership has continued its strategic marketing focus of
de-emphasizing the more volatile high-end table patron as it continues to
concentrate on the more profitable slot patron. Table game revenues represent
the amount retained by the Partnership from amounts wagered at table games. The
table game win percentage tends to be fairly constant over the long term, but
may vary significantly in the short term, due to large wagers by "high rollers."
The Atlantic City industry table game win percentages were 15.4% and 15.9% for
the three months ended March 31, 2000 and 1999, respectively. Competition in the
Atlantic City gaming market is intense and while no significant expansion is
expected in 2000, the Partnership believes that competition will continue to
intensify due to planned future expansion by existing operators and as new
entrants to the gaming industry become operational.
Slot revenues increased by approximately $363,000 or 0.8% to $45,633,000
for the three months ended March 31, 2000 from $45,270,000 for the three months
ended March 31, 1999. This increase is due to a higher slot handle as compared
to the previous year, offset by a lower slot win percentage. The increased slot
handle is due primarily to sustained marketing programs and events designed
specifically for the slot customer. The Partnership's slot revenues, and to a
lesser extent table game revenues, were adversely impacted for the first quarter
of 2000 by the severe January weather, which affected approximately ten days.
Gross revenues include the retail value of the complimentary food,
beverage and hotel services provided to patrons. The retail value of these
promotional allowances is deducted from gross revenues to arrive at net
revenues. The costs of providing such complimentaries have been classified as
gaming costs and expenses through interdepartmental allocations in the
accompanying consolidated statements of operations. The costs associated with
providing cash nongaming services are classified in food, beverage and rooms
costs and expenses in the accompanying consolidated statements of operations.
Nongaming revenues, in the aggregate, increased by approximately $306,000
or 2.5% to $12,464,000 for the three months ended March 31, 2000 from
$12,158,000 for the three months ended March 31, 1999. This result reflects the
continued strategy designed to control marketing costs and to increase cash
sales from nongaming operations. Accordingly, promotional allowances decreased
by approximately $744,000 or 8.7% to $7,818,000 for the three months ended March
31, 2000 from $8,562,000 for the three months ended March 31, 1999. In addition,
cash sales from nongaming operations increased by approximately $1,050,000 or
29.2% to $4,646,000 for the three months ended March 31, 2000 from $3,596,000
for the three months ended March 31, 1999.
Gaming costs and expenses decreased approximately $3,082,000 or 7.9% to
$35,700,000 for the three months ended March 31, 2000 from $38,782,000 for the
three months ended March 31, 1999, resulting from the strategic reduction or
elimination of less profitable promotional and complimentary expenses and
programs.
Room costs increased by approximately $326,000 or 47.1% to $1,018,000 for
the three months ended March 31, 2000 from $692,000 for the three months ended
March 31, 1999. This increase is due primarily to associated costs incurred
related to a 58.0% increase in cash rooms revenues generated in 2000.
Food and beverage costs increased by approximately $405,000 or 22.8% to
$2,181,000 for the three months ended March 31, 2000 from $1,776,000 for the
three months ended March 31, 1999. This increase is due primarily to associated
costs incurred related to a 21.4% increase in food and beverage cash revenues
generated in 2000.
10
<PAGE>
General and administrative costs and expenses increased by approximately
$1,648,000 or 11.2% to $16,352,000 for the three months ended March 31, 2000
from $14,704,000 for the three months ended March 31, 1999. This increase is
primarily the result of incremental costs incurred related to a Services
Agreement the Partnership has with Trump Casinos II, Inc. and employee benefit
accruals.
Interest expense increased approximately $559,000 or 4.2% to $13,997,000
for the three months ended March 31, 2000 from $13,438,000 for the three months
ended March 31, 1999, primarily due to an increase in the outstanding principal
of the PIK Notes.
Seasonality
The casino industry in Atlantic City is seasonal in nature; accordingly,
the results of operations for the three month period ending March 31, 2000 are
not necessarily indicative of the operating results for a full year.
Important Factors Relating to Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. All statements, trend
analysis and other information contained in this Quarterly Report on Form 10-Q
relative to the Partnership's performance, trends in the Partnership's
operations or financial results, plans, expectations, estimates and beliefs, as
well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend" and other similar expressions, constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. In connection with certain forward-looking statements contained in this
Quarterly Report on Form 10-Q and those that may be made in the future by or on
behalf of the Registrants, the Registrants note that there are various factors
that could cause actual results to differ materially from those set forth in any
such forward-looking statements. The forward-looking statements contained in the
Quarterly Report were prepared by management and are qualified by, and subject
to, significant business, economic, competitive, regulatory and other
uncertainties and contingencies, all of which are difficult or impossible to
predict and many of which are beyond the control of the Registrants.
Accordingly, there can be no assurance that the forward-looking statements
contained in this Quarterly Report will be realized or that actual results will
not be significantly higher or lower. Readers of this Quarterly Report should
consider these facts in evaluating the information contained herein. In
addition, the business and operations of the Registrants are subject to
substantial risks which increase the uncertainty inherent in the forward-looking
statements contained in this Quarterly Report. The inclusion of the forward-
looking statements contained in this Quarterly Report should not be regarded as
a representation by the Registrants or any other person that the forward-looking
statements contained in this Quarterly Report will be achieved. In light of the
foregoing, readers of this Quarterly Report are cautioned not to place undue
reliance on the forward-looking statements contained herein.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management has reviewed the disclosure requirements for Item 3 and, based
upon the Partnership, Funding and TCHI's current capital structure, scope of
operations and financial statement structure, management believes that such
disclosure is not warranted at this time. Since conditions may change, the
Partnership, Funding and TCHI will periodically review its compliance with this
disclosure requirement to the extent applicable.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
General. The Partnership, its partners, certain members of the former
Executive Committee of the Partnership, Funding, TCHI and certain of their
employees are involved in various legal proceedings. Such persons and entities
are vigorously defending the allegations against them and intend to contest
vigorously any future proceedings. The Partnership, Funding and TCHI have agreed
to indemnify such persons against any and all losses, claims, damages, expenses
(including reasonable costs, disbursements and counsel fees) and liabilities
(including amounts paid or incurred in satisfaction of settlements, judgments,
fines and penalties) incurred by them in said legal proceedings.
Various other legal proceedings are now pending against the Partnership.
The Partnership considers all such proceedings to be ordinary litigation
incident to the character of its business. Management believes that the
resolution of these claims will not, individually or in the aggregate, have a
material adverse effect on the financial condition or results of operations of
the Partnership.
From time to time, the Partnership may be involved in routine
administrative proceedings involving alleged violations of certain provisions of
the Casino Control Act. However, the Partnership believes that the final outcome
of these proceedings will not, either individually or in the aggregate, have a
material adverse effect on the Partnership or on its ability to otherwise retain
or renew any casino or other licenses required under the Casino Control Act for
the operation of Trump Marina.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
Exhibit No. Description of Exhibit
----------- ----------------------
27.1 Financial Data Schedule of Trump's Castle Hotel & Casino, Inc.
27.2 Financial Data Schedule of Trump's Castle Funding, Inc.
27.3 Financial Data Schedule of Trump's Castle Associates, L.P.
b. Current Reports on Form 8-K:
None.
12
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRUMP'S CASTLE HOTEL & CASINO, INC.
(Registrant)
Date: May 15, 2000
By: /s/ Nicholas L. Ribis
------------------------------------
Nicholas L. Ribis
President and Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
13
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRUMP'S CASTLE FUNDING, INC.
(Registrant)
Date: May 15, 2000
By: /s/ Nicholas L. Ribis
------------------------------------
Nicholas L. Ribis
President and Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
14
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRUMP'S CASTLE ASSOCIATES, L.P.
(Registrant)
By: Trump's Castle Hotel & Casino, Inc.
its general partner
Date: May 15, 2000
By: /s/ Nicholas L. Ribis
--------------------------------------
Nicholas L. Ribis
President and Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information from Trump's Castle Hotel &
Casino, Inc. This data has been extracted from the Consolidated Balance Sheets
and Consolidated Statements of Operations for the three month period ended March
31, 2000 and is qualified in its entirety by reference to such Financial
Statements.
</LEGEND>
<CIK> 0001063882
<NAME> TRUMP'S CASTLE HOTEL & CASINO, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,000
<SALES> 0
<TOTAL-REVENUES> 128
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 128
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information from Trump's Castle Funding,
Inc. This data has been extracted from the Consolidated Balance Sheets and
Consolidated Statements of Operations for the three month period ended March 31,
2000 and is qualified in its entirety by reference to such Financial Statements.
</LEGEND>
<CIK> 0000770618
<NAME> TRUMP'S CASTLE FUNDING, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 381,908
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 381,908
<SALES> 0
<TOTAL-REVENUES> 13,531
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,531
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information from Trump's Castle
Associates, L.P. This data has been extracted from the Consolidated Balance
Sheets and Consolidated Statements of Operations for the three month period
ended March 31, 2000 and is qualified in its entirety by reference to such
Financial Statements.
</LEGEND>
<CIK> 0000911534
<NAME> TRUMP'S CASTLE ASSOCIATES, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 29,239
<SECURITIES> 0
<RECEIVABLES> 8,298 <F1>
<ALLOWANCES> 0
<INVENTORY> 3,264
<CURRENT-ASSETS> 42,345
<PP&E> 537,349
<DEPRECIATION> 58,854
<TOTAL-ASSETS> 535,312
<CURRENT-LIABILITIES> 58,970
<BONDS> 390,247
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 535,312
<SALES> 0
<TOTAL-REVENUES> 63,971
<CGS> 0
<TOTAL-COSTS> 55,251
<OTHER-EXPENSES> 4,341 <F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,997
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,368)
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>Asset values represent net amounts.
<F2>Represents depreciation and amortization expenses.
</FN>
</TABLE>
