Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
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 No. 1-4748
Resorts International, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 59-0763055
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Boardwalk, Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 344-6000
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes X No
Number of shares outstanding of each class of registrant's common stock
as of September 30, 1994: Common Stock - 39,694,172 shares and Class B
Redeemable Common Stock - 35,000 shares.
Exhibit Index is presented on page 25
Total No. of Pages 26
1<PAGE>
RESORTS INTERNATIONAL, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of
Operations for the Quarters
and Three Quarters Ended
September 30, 1994 and 1993 3
Consolidated Balance Sheets
at September 30, 1994 and
December 31, 1993 4
Consolidated Statements of
Cash Flows for the Three
Quarters Ended September 30,
1994 and 1993 5
Notes to Consolidated
Financial Statements 6
Pro Forma Financial Data 13
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 17
Part II. Other Information
Item 1. Legal Proceedings 22
Item 5. Other Information 23
Item 6. Exhibits and Reports on
Form 8-K 23
2<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share data)
(Unaudited)
Quarter Ended Three Quarters Ended
September 30, September 30,
1994 1993 1994 1993
Revenues:
Casino $69,582 $ 85,063 $ 216,624 $236,488
Rooms 2,424 7,921 18,928 27,992
Food and beverage 4,267 11,403 24,970 35,933
Other casino/hotel revenues 1,406 5,485 11,138 17,713
Other operating revenues 5,105 4,577 13,704
Real estate related 2,081 2,030 6,211 6,028
79,760 117,007 282,448 337,858
Expenses:
Casino 37,700 49,725 123,359 141,600
Rooms 873 2,501 5,218 8,064
Food and beverage 4,412 10,442 21,584 31,332
Other casino/hotel
operating expenses 9,002 16,561 38,020 49,995
Other operating expenses 4,246 3,483 11,122
Selling, general and
administrative 10,952 17,654 43,607 56,119
Depreciation 3,303 6,996 14,093 20,942
Real estate related 165 324 954 1,114
Unallocated corporate expense (1,703) (1,225) (4,907) (3,110)
Write-down of non-operating
real estate 20,525
Loss on SIHL Sale 73,108
64,704 107,224 339,044 317,178
Earnings (loss) from operations 15,056 9,783 (56,596) 20,680
Other income (deductions):
Interest income 861 976 2,087 2,485
Interest expense (6,600) (13,364) (29,685) (38,336)
Amortization of debt discount (832) (13,369) (14,163) (37,320)
Recapitalization costs 1,300 (3,130) (8,488) (4,879)
Proceeds from Litigation
Trust 2,542
Earnings (loss) before income
taxes and extraordinary item 9,785 (19,104) (104,303) (57,370)
Income tax expense (1,000) (1,000)
Earnings (loss) before
extraordinary item 9,785 (20,104) (104,303) (58,370)
Extraordinary item - gain on
exchange of debt (1,300) 186,000
Net earnings (loss) $ 8,485 $(20,104) $ 81,697 $(58,370)
Per share data:
Earnings (loss) before
extraordinary item $ .25 $(1.00) $(3.44) $(2.90)
Extraordinary item (.03) 6.13
Net earnings (loss) $ .22 $(1.00) $ 2.69 $(2.90)
Weighted average number
of shares outstanding 39,040 20,157 30,326 20,157
3<PAGE>
RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, except par value)
September 30, December 31,
1994 1993
(Unaudited)
ASSETS
Current assets:
Cash (including cash equivalents
of $26,256 and $41,273) $ 38,798 $ 62,546
Restricted cash equivalents 5,966 14,248
Receivables, less allowance for
doubtful accounts of $4,029
and $7,874 6,272 19,297
Inventories 1,444 8,664
Prepaid expenses 9,919 10,664
Total current assets 62,399 115,419
Property and equipment, net of
accumulated depreciation of $45,957
and $82,099 247,916 447,840
Deferred charges and other assets 11,376 12,526
$ 321,691 $ 575,785
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term
debt, net of unamortized discount $ 5 $ 466,336
Accounts payable and accrued
liabilities 45,043 84,164
Total current liabilities 45,048 550,500
Long-term debt, net of unamortized
discount 222,332 85,029
Deferred income taxes 53,700 54,000
Shareholders' equity (deficit):
Common stock - $.01 par value 397 202
Class B Stock
Capital in excess of par 129,237 102,092
Accumulated deficit (129,023) (210,720)
611 (108,426)
Note receivable from related party (5,318)
Total shareholders' equity (deficit) 611 (113,744)
$ 321,691 $ 575,785
4<PAGE>
RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Three Quarters Ended
September 30,
1994 1993
Cash flows from operating activities:
Cash received from customers $ 278,046 $ 343,738
Cash paid to suppliers and employees (224,815) (297,057)
Cash flow from operations before
interest and income taxes 53,231 46,681
Interest received 2,203 3,149
Interest paid (13,423) (8,338)
Income taxes refunded (paid) (285) 317
Net cash provided by operating
activities 41,726 41,809
Cash flows from investing activities:
Cash proceeds from SIHL Sale, net of
cash balances transferred 39,747
Payments for property and equipment (6,057) (23,876)
Proceeds from sale of property 135
Casino Reinvestment Development
Authority deposits and bond purchases (2,175) (2,121)
Proceeds from sale of short-term money
market security with maturity greater
than three months 1,377
Purchase of short-term money market
security with maturity greater than
three months (492)
Net cash provided by (used in)
investing activities 31,650 (25,112)
Cash flows from financing activities:
Excess Cash and cash proceeds of SIHL
Sale distributed to noteholders (102,134)
Collection of note receivable from
related party 3,008 3,477
Payments of recapitalization costs (8,705) (5,748)
Proceeds from Litigation Trust 2,542
Repayments of non-public debt (117) (2,211)
Net cash used in financing
activities (105,406) (4,482)
Net increase (decrease) in cash and cash
equivalents (32,030) 12,215
Cash and cash equivalents at beginning
of period 76,794 66,887
Cash and cash equivalents at end of period $ 44,764 $ 79,102
5<PAGE>
RESORTS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. General:
The accompanying consolidated interim financial statements, which
are unaudited, include the operations of Resorts International, Inc.
("RII") and its subsidiaries. The term "Company" as used herein
includes RII and/or one or more of its subsidiaries, as the context may
require.
While the accompanying interim financial information is unaudited,
management of the Company believes that all adjustments necessary for a
fair presentation of these interim results have been made and all such
adjustments are of a normal recurring nature.
The notes presented herein are intended to provide supplemental
disclosure of items of significance occurring subsequent to December 31,
1993 and should be read in conjunction with the Notes to Consolidated
Financial Statements contained in pages 50 through 68 of RII's Annual
Report on Form 10-K for the year ended December 31, 1993 ("RII's 1993
Form 10-K").
B. Restructuring of Senior Secured Redeemable Notes
due April 15, 1994 (the "Series Notes"):
As described in RII's 1993 Form 10-K, the Company proposed a
restructuring of the Series Notes (the "Restructuring") which RII and
GGRI, Inc. ("GGRI"), RII's subsidiary which guaranteed the Series Notes,
a c c o m p lished through a prepackaged bankruptcy joint plan of
reorganization (the "Plan"). On March 21, 1994, after receiving the
requisite acceptances for confirmation of the Plan from holders of
Series Notes and equity interests in RII, RII and GGRI filed their
prepackaged bankruptcy cases with the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court").
In accordance with Statement of Position 90-7, "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code," the Company
stopped accruing interest and amortizing discounts on the Series Notes
as of March 21, 1994.
The Plan was confirmed by the Bankruptcy Court on April 22, 1994
and on May 3, 1994 (the "Effective Date"), all conditions to the
effectiveness of the Plan were either met or waived and the Plan became
effective. Pursuant to the Plan, among other things, the Series Notes
were exchanged for: (i) $160,000,000 principal amount of New Debt
Securities (see below); (ii) 40% of RII's common stock on a fully
diluted basis (excluding certain stock options); (iii) the proceeds from
the sale (the "SIHL Sale," see below) of RII's properties and operations
on Paradise Island, The Bahamas; (iv) the Company's Excess Cash, as
defined in the Plan, which approximated $34,500,000; and (v) rights to
receive further cash distributions in certain circumstances.
Excess Cash was essentially all the Company's non-restricted cash
and equivalents on the Effective Date in excess of (i) $20,000,000, (ii)
cash balances to be transferred as part of the SIHL Sale, and (iii)
estimated cash balances required to pay certain recapitalization costs
and other expenses provided for in the Plan. Included in Excess Cash
was a $2,542,000 distribution that RII received in March 1994 from a
litigation
6<PAGE>
trust (the "Litigation Trust") established under a previous plan of
reorganization to pursue certain claims against a former affiliate.
Such distribution was described in the Plan as "Deferred Cash."
In July 1994, upon completion of the audit of certain settlement
adjustments regarding the SIHL Sale, approximately $1,000,000 of the
cash transferred in the SIHL Sale was returned to the Company. These
funds, described in the Plan as "Net Reserved Cash," will be distributed
to holders of the Series Notes.
I n O ctober 1994, after settlement of the majority of
recapitalization costs and updating estimates of unbilled costs and
costs still to be incurred, the Company determined that the cash balance
required to pay such costs was $1,300,000 less than originally
a n t i c i pated. This determination resulted in the $1,300,000
reclassification from recapitalization costs to extraordinary item
reported in the third quarter of 1994. These funds, described in the
Plan as "Net Plan Consummation Cash," will also be distributed to
holders of the Series Notes.
The difference between the carrying value of the Series Notes and
the sum of the fair values of the items exchanged therefor (including
the funds yet to be distributed) resulted in a gain of $186,000,000
which has been reported as an extraordinary item.
Pursuant to the Plan, the Company entered into the senior note
purchase agreement (the "Senior Facility") described below.
Also in connection with the Restructuring: (i) the Company prepaid
fees of $2,310,000 due The Griffin Group, Inc. (the "Griffin Group"), a
corporation controlled by Merv Griffin, Chairman of the Board of
Directors of RII, under a license and services agreement (the "Griffin
Services Agreement") by applying such amount as a reduction of the
balance of a note receivable from Griffin Group (the "Group Note"); (ii)
Griffin Group repaid the then remaining balance, $3,008,000, of the
Group Note (which was distributed to holders of the Series Notes as part
of Excess Cash); (iii) RII issued a warrant, which is exercisable
through May 3, 1998, to purchase 4,666,850 shares of RII's common stock
at $1.20 per share to an affiliate of Griffin Group (the "Griffin
Warrant"); (iv) the RII Senior Management Stock Option Plan was
terminated, although holders of options granted under that plan
established in 1990 retain their options; (v) the RII 1994 Stock Option
Plan, which allows for the granting of options to purchase up to 5% of
the outstanding common stock of RII, was adopted and (vi) RII increased
its authorized shares of common stock to 100,000,000 and authorized
120,000 shares of Class B redeemable common stock (the "Class B Stock").
For pro forma effects of the Restructuring on continuing operations
assuming the Restructuring occurred on January 1, 1993 see "Pro Forma
Financial Data" following Note J.
New Debt Securities
The "New Debt Securities" consist of $125,000,000 principal amount
of 11% Mortgage Notes (the "Mortgage Notes") due September 15, 2003 and
$35,000,000 principal amount of 11.375% Junior Mortgage Notes (the
"Junior Mortgage Notes") due December 15, 2004. The New Debt Securities
were issued by Resorts International Hotel Financing, Inc. ("RIHF"), a
subsidiary of RII, and are guaranteed by Resorts International Hotel,
Inc. ("RIH"), RII's subsidiary that owns and operates Merv Griffin's
Resorts
7<PAGE>
Casino Hotel (the "Resorts Casino Hotel") in Atlantic City, New Jersey.
The accrual of interest and amortization of discount on the New Debt
Securities commenced on May 3, 1994.
The Mortgage Notes are secured by a $125,000,000 promissory note
made by RIH (the "RIH Promissory Note"), the terms of which mirror the
terms of the Mortgage Notes. The RIH Promissory Note and RIH's guaranty
of the Mortgage Notes are secured by liens on the Resorts Casino Hotel,
consisting of RIH's fee and leasehold interests comprising the Resorts
Casino Hotel, the contiguous parking garage and property, all additions
and improvements thereto, and related personal property. The liens
securing the Mortgage Notes will be subordinated to the lien securing
the Senior Facility Notes (described below), if the Senior Facility
Notes are issued.
The Junior Mortgage Notes were issued as part of Units with Class B
Stock (see below). In certain circumstances, interest payable on the
Junior Mortgage Notes may be satisfied by the issuance of additional
Units. The Junior Mortgage Notes are secured by a $35,000,000
promissory note made by RIH (the "RIH Junior Promissory Note"), the
terms of which mirror the terms of the Junior Mortgage Notes. The RIH
Junior Promissory Note and RIH's guaranty of the Junior Mortgage Notes
are also secured by liens on the Resorts Casino Hotel property as
described above. The liens securing the Junior Mortgage Notes will be
subordinated to the lien securing the Senior Facility Notes, if the
Senior Facility Notes are issued, and are subordinated to the liens
securing the Mortgage Notes.
The indentures pursuant to which the Mortgage Notes and the Junior
Mortgage Notes were issued (collectively, the "Indentures") prohibit RIH
a n d its subsidiaries from paying dividends, from making other
distributions in respect of their capital stock, and from purchasing or
redeeming their capital stock, with certain exceptions, unless certain
interest coverage ratios are attained. Also, the Indentures restrict
RIH and its subsidiaries from incurring additional indebtedness, with
certain exceptions, and limit intercompany loans by RIH to RII to loans
from the proceeds of the Senior Facility (or similar working capital
facility) and other advances not in excess of $1,000,000 in the
aggregate at any time outstanding. Similar restrictions curtail the
activities of RIHF. The shareholder's equity of RIH amounted to
$30,432,000 at September 30, 1994, all of which is restricted under
these Indenture provisions.
Senior Facility
The Senior Facility among RIHF, RII and RIH and certain funds and
accounts advised or managed by Fidelity Management & Research Company
("Fidelity") is available for a single borrowing of up to $20,000,000
during the one-year period ending May 2, 1995, through the issuance of
notes (the "Senior Facility Notes"). If issued, the Senior Facility
Notes will bear interest at 11% and will be due in 2002. The Senior
Facility Notes will be senior obligations of RIHF secured by a
promissory note from RIH in an aggregate principal amount of up to
$20,000,000 payable in amounts and at times necessary to pay the
principal of and interest on the Senior Facility Notes. The Senior
Facility Notes will be guaranteed by RIH and secured by a lien on the
Resorts Casino Hotel property as described above. The Senior Facility
Notes will also be secured by a pledge by GGRI, RII's subsidiary which
became the parent of RIH as a result of the Restructuring, of all issued
and outstanding shares of RIH common stock.
8<PAGE>
In addition, the Senior Facility Notes will be guaranteed by RII, which
guaranty will be secured by a pledge of all the issued and outstanding
stock of GGRI and RIHF. Market interest rates and other economic
conditions, among other factors, will determine if it is appropriate for
the Company to draw on the Senior Facility.
Units
Each Unit comprises $1,000 principal amount of Junior Mortgage
Notes and one share of Class B Stock. Shares of Class B Stock may not
be transferred separately from the related Junior Mortgage Note.
Holders of Class B Stock are entitled to elect one-third of the Board of
Directors of RII and under certain circumstances they would be entitled
to elect a majority of the Board of Directors. Holders of Class B Stock
do not participate in any dividends which may be declared by RII's Board
of Directors. Approximately 35,000 Units were issued pursuant to the
Plan.
SIHL Sale
The Plan contemplated two alternatives for the disposition of the
Company's Paradise Island operations and properties. The disposition
that was effected was the SIHL Sale, which was negotiated among RII, two
representatives of major holders of Series Notes (Fidelity and TCW
Special Credits) and an unrelated party, Sun International Investments
Limited ("SIIL"). In essence, SIIL acquired a 60% interest in the
Company's Paradise Island assets through a subsidiary of SIIL, Sun
International Hotels Limited ("SIHL"), formed for that purpose.
SIIL purchased 60% of the capital stock of SIHL for $90,000,000
plus interest at 7.5% from January 1, 1994 through the Effective Date
(the "SIHL Proceeds"). Pursuant to the purchase agreement, SIHL then
purchased 100% of the equity of Resorts International (Bahamas) 1984
Limited, RII's former Bahamian subsidiary which, along with its
s u b sidiaries, owned and operated the Company's Paradise Island
properties. Also, certain subsidiaries of SIHL acquired certain assets
of RII and its U.S. subsidiaries which supported the Paradise Island
operations and assumed certain related liabilities. The purchase price
received from SIHL was $65,000,000 in cash, plus interest at 7.5% from
January 1, 1994 through the Effective Date, and 2,000,000 Series A
Ordinary Shares of SIHL (the "SIHL Shares"), which amounts to the
remaining 40% of the capital stock of SIHL. These cash proceeds as well
as the SIHL Shares were distributed to holders of Series Notes pursuant
to the Plan. SIHL used a portion of the SIHL Proceeds to fund its
$65,000,000 (plus interest) purchase price of the Company's Paradise
Island assets. RII understands that the other $25,000,000 of SIHL
Proceeds remaining in SIHL as of the Effective Date ($90,000,000 SIHL
Proceeds less the $65,000,000 used to purchase the Paradise Island
assets) will increase the equity value of SIHL and, in effect,
represents additional consideration in the amount of $10,000,000 (40% of
$25,000,000) for the sale of the Company's Paradise Island assets. Such
consideration was realized by the holders of Series Notes through the
increased value of their 40% equity interest in SIHL.
Although the SIHL Sale was effective May 3, 1994, the consolidated
statements of operations reflect the Paradise Island operations through
April 30, 1994. The loss on SIHL Sale represents the difference between
the carrying values and the fair values of the assets and equity
interests sold.
9<PAGE>
For information as to the revenues and contribution to consolidated
earnings from operations of the operations disposed of in the SIHL Sale,
see the Paradise Island portion of the casino/hotel segment, the
Paradise Island portion of the real estate related segment and the
airline segment included in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" herein and in RII's 1993
Form 10-K.
C. Reverse Repurchase Agreements:
Cash equivalents at September 30, 1994 included reverse repurchase
agreements (federal government securities purchased under agreements to
resell those securities) with the institutions listed in the following
table under which the Company had not taken delivery of the underlying
securities. These agreements matured on October 3, 1994.
(In Thousands of Dollars)
National Westminster Bank NJ $21,346
City National Bank of Florida $ 5,397
Prudential Securities, Inc. $ 2,108
Summit Trust Company $ 1,998
First Fidelity Bank N.A., South Jersey $ 735
D. Stock Option Plan:
As noted above, the RII 1994 Stock Option Plan (the "Option Plan")
was adopted as part of the Plan. The Option Plan is to be administered
by an Option Committee of RII's Board of Directors. In accordance with
the Option Plan, on June 7, 1994 the four members serving on that
committee were each granted options to purchase 10,000 shares of RII
common stock. One half of these options are exercisable immediately and
the remainder become exercisable on June 7, 1995. On August 1, 1994 RII
granted options to purchase approximately 1,000,000 shares of RII common
stock to certain officers and other employees of RII and RIH. These
options are to vest 25% per year on the first four anniversaries of the
date granted. The exercise price of all of the options discussed herein
is $1.03125 per share.
E. Complimentary Services:
The Consolidated Statements of Operations reflect each category of
operating revenues excluding the retail value of complimentary services
provided to casino patrons without charge. The rooms, food and
beverage, and other casino/hotel operations departments allocate a
percentage of their total operating expenses to the casino department
f o r complimentary services provided to casino patrons. These
allocations do not necessarily
10<PAGE>
represent the incremental cost of providing such complimentary services
to casino patrons. Amounts allocated to the casino department from the
other operating departments were as follows:
Quarter Ended Three Quarters Ended
September 30, September 30,
(In Thousands of Dollars) 1994 1993 1994 1993
Rooms $1,071 $1,179 $ 3,243 $ 3,376
Food and beverage 3,688 5,014 11,854 15,346
Other casino/hotel operations 1,974 2,031 5,377 5,231
Total allocated to casino $6,733 $8,224 $20,474 $23,953
F. Write-down of Non-operating Real Estate:
The Company owns various non-operating sites in Atlantic City, New
Jersey, which are available for sale. Certain of these properties could
be developed while others are designated as wetlands. Based on a study
of these properties directed by the initial post-Restructuring Board of
Directors of RII, which Board was named as part of the Plan, the Company
determined that write-downs totalling $20,525,000 were appropriate in
order to properly reflect the net realizable value of these properties.
These charges were recorded in the second quarter of 1994.
G. Related Party Transaction:
The Company was required to pay Griffin Group $2,425,000 in cash on
September 17, 1995, which was to be the final payment under the Griffin
Services Agreement. On August 1, 1994, following review and approval by
the independent members of RII's Board of Directors, RII agreed to issue
1,940,000 shares of common stock of RII to an affiliate of Griffin Group
in satisfaction of this final payment obligation. The closing price of
RII's common stock on the date of the agreement was $1.0625 per share.
RII will issue the shares as of August 1, 1994 and the financial
i n formation presented herein considers the shares to have been
outstanding since that date. The shares will not be registered under
the Securities Act of 1933 and will be restricted securities.
H. Income Taxes:
Because the exchange of the Series Notes occurred pursuant to a
plan confirmed by the Bankruptcy Court, any cancellation of debt income
realized by reason of the consummation of the Plan is excludable from
the Company's federal taxable income.
11<PAGE>
I. Statements of Cash Flows:
S u pplemental disclosures required by Statement of Financial
Accounting Standards No. 95 "Statement of Cash Flows" are presented
below.
Three Quarters Ended
September 30,
(In Thousands of Dollars) 1994 1993
Reconciliation of net earnings (loss) to net
cash provided by operating activities:
Net earnings (loss) $ 81,697 $(58,370)
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Extraordinary item - gain on exchange of debt (186,000)
Loss on SIHL Sale 73,108
Write-down of non-operating real estate 20,525
Depreciation 14,093 20,942
Amortization (principally debt discount) 14,163 37,349
Provision for doubtful receivables 1,097 2,284
Interest expense for which obligation
was satisfied by issuance of debt 16,787
Provision for discount on Casino
Reinvestment Development Authority
obligations, net of amortization 1,098 1,196
Deferred tax provision (benefit) (300) 1,000
Recapitalization costs 8,488 4,879
Proceeds from Litigation Trust (2,542)
Net loss on sale of property 138
Net (increase) decrease in receivables (246) 8,177
Net (increase) decrease in inventories and
prepaid expenses 4,036 (3,297)
Net (increase) decrease in deferred charges
and other assets 1,048 (439)
Net increase in accounts payable and
accrued liabilities 11,323 11,301
Net cash provided by operating activities $ 41,726 $ 41,809
12<PAGE>
Three Quarters Ended
September 30,
(In Thousands of Dollars) 1994 1993
Non-cash investing and financing transactions:
Exchange of Series Notes for:
New Debt Securities (at estimated market
value) $135,300
SIHL Shares (at estimated market value) 60,000
Common stock of RII (at estimated market
value) 24,415
Other liabilities 1,425
Reduction in Group Note applied to
prepaid services 2,310 $2,205
Issuance of common stock of RII for prepaid
services 2,060
Exchange of note receivable from shareholder
for Group Note 7,523
Issuance of common stock of RII in settlement
of certain recapitalization costs 865
Reclassification to other assets from
receivables and property and equipment 450
Increase in liabilities for additions to
property and equipment and other assets 176 843
J. Commitments and Contingencies:
Litigation
RII and certain of its subsidiaries are defendants in certain
litigation. In the opinion of management, based upon advice of counsel,
the aggregate liability, if any, arising from such litigation will not
have a material adverse effect on the accompanying consolidated
financial statements.
PRO FORMA FINANCIAL DATA
S e t forth below is certain unaudited pro forma financial
information. The pro forma statements of operations information for the
year ended December 31, 1993 and the three quarters ended September 30,
1994 gives effect to the Restructuring as if it occurred on January 1,
1993. However, the pro forma statements of operations information
excludes the gains (losses) resulting from the Restructuring and the
costs associated therewith. The unaudited pro forma information is not
necessarily indicative of future results or what the Company's results
of operations would actually have been had the transactions occurred on
January 1, 1993. Such information should not be used as a basis to
project results for any future period.
13<PAGE>
RESORTS INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
Three Quarters Ended September 30, 1994
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Casino $ 216,624 $ (28,115) (a) $188,509
Rooms 18,928 (13,419) (a) 5,509
Food and beverage 24,970 (13,646) (a) 11,324
Other casino/hotel revenues 11,138 (7,708) (a) 3,430
Other operating revenues 4,577 (4,577) (a) -0-
Real estate related 6,211 6,211
282,448 (67,465) 214,983
Expenses:
Casino 123,359 (16,623) (a) 106,736
Rooms 5,218 (2,787) (a) 2,431
Food and beverage 21,584 (9,308) (a) 12,276
Other casino/hotel operating
expenses 38,020 (11,687) (a) 26,333
Other operating expenses 3,483 (3,483) (a) -0-
Selling, general and
administrative 43,607 (9,390) (a) 34,217
Depreciation 14,093 (4,013) (a) 10,080
Real estate related 954 954
Unallocated corporate expense (4,907) (4) (a) (3,840)
1,971 (b)
(900) (c)
Write-down of non-operating
real estate 20,525 20,525
Loss on SIHL Sale 73,108 (73,108) (d) -0-
339,044 (129,332) 209,712
Earnings (loss) from operations (56,596) 61,867 5,271
Other income (deductions):
Interest income 2,087 1,967 (a) 1,804
(2,250) (e)
Interest expense (29,685) 10 (a) (19,543)
16,064 (f)
(5,932) (g)
Amortization of debt discount (14,163) 12,021 (f) (2,809)
(667) (g)
Recapitalization costs (8,488) 1,326 (a) -0-
7,162 (h)
Proceeds from Litigation
Trust 2,542 2,542
Loss before extraordinary item $(104,303) $ 91,568 $(12,735)
Loss before extraordinary item
per share $ (3.44) $ (.33)
Weighted average number of
shares outstanding 30,326 38,188 (i)
See Notes to Pro Forma Consolidated Statements of Operations
14<PAGE>
RESORTS INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
Year Ended December 31, 1993
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Casino $ 307,059 $ (62,943) (a) $244,116
Rooms 35,708 (28,734) (a) 6,974
Food and beverage 46,843 (30,917) (a) 15,926
Other casino/hotel revenues 23,330 (18,867) (a) 4,463
Other operating revenues 18,122 (18,121) (a) 1
Real estate related 8,502 (445) (a) 8,057
439,564 (160,027) 279,537
Expenses:
Casino 189,304 (47,696) (a) 141,608
Rooms 10,906 (7,504) (a) 3,402
Food and beverage 41,859 (24,149) (a) 17,710
Other casino/hotel operating
expenses 69,918 (35,154) (a) 34,764
Other operating expenses 14,697 (14,697) (a) -0-
Selling, general and
administrative 74,589 (26,328) (a) 48,261
Depreciation 27,924 (14,169) (a) 13,755
Real estate related 1,605 (221) (a) 1,384
Unallocated corporate expense (4,136) (8) (a) (2,584)
4,635 (b)
(3,075) (c)
426,666 (168,366) 258,300
Earnings from operations 12,898 8,339 21,237
Other income (deductions):
Interest income 3,174 6,350 (a) 2,774
(6,750) (e)
Interest expense (57,244) 50 (a) (26,034)
48,891 (f)
(17,731) (g)
Amortization of debt discount (51,203) 49,170 (f) (3,362)
(1,329) (g)
Recapitalization costs (8,789) 3,335 (a) -0-
5,454 (h)
Loss before income taxes (101,164) 95,779 (5,385)
Income tax expense (1,000) (1,000)
Net loss $(102,164) $ 95,779 $ (6,385)
Net loss per share $ (5.07) $ (.17)
Weighted average number of
shares outstanding 20,157 37,754(i)
See Notes to Pro Forma Consolidated Statements of Operations
15<PAGE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(a) Reflects the elimination of operating results of operations
disposed of in the SIHL Sale (the "PIRL Group").
(b) Reflects the elimination of the management fee charged to PIRL
Group by RII. Such fee was based on 3% of certain PIRL Group gross
revenues.
(c) Reflects the elimination of costs incurred by RII for services
provided to the PIRL Group including accounting, data processing and
other support services.
(d) Reflects elimination of loss on SIHL Sale.
(e) Reflects the elimination of interest income on RIH's $50,000,000
note receivable from a former Bahamian affiliate which was cancelled
pursuant to the terms of the Restructuring.
(f) Reflects the elimination of interest expense and amortization of
debt discount on the Series Notes.
(g) Reflects interest expense and amortization of debt discount on the
Mortgage Notes and the Junior Mortgage Notes.
(h) Reflects the elimination of recapitalization costs incurred in
connection with the Restructuring.
(i) Reflects the issuance, as of January 1, 1993, of (x) 612,500 shares
of common stock to financial advisers in settlement of certain
recapitalization costs and (y) 40% of RII's outstanding common stock
(after giving effect to the Restructuring, assuming the Griffin Warrant
is exercised) to holders of the Series Notes.
16<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
FINANCIAL CONDITION
Liquidity
As described in Note B of Notes to Consolidated Financial
Statements, the Company recently restructured its Series Notes pursuant
to a prepackaged bankruptcy plan. The Plan was confirmed by the
Bankruptcy Court on April 22, 1994 and became effective on May 3, 1994.
Pursuant to the terms of the Plan, the Company exchanged the Series
Notes for, among other things: (i) Excess Cash; (ii) Mortgage Notes and
Junior Mortgage Notes; and (iii) 40% of the common stock of RII on a
f u l l y diluted basis (excluding certain stock options). The
Restructuring resulted in a significant reduction in the Company's
unrestricted cash and equivalents due to the distribution of Excess Cash
to holders of the Series Notes. However, the Restructuring also
resulted in a significant decrease in the Company's long-term debt
outstanding. The Company believes that the Restructuring will improve
its long term liquidity and enhance its ability to meet its financial
obligations as they become due.
At September 30, 1994 the Company's working capital amounted to
$17,351,000, including unrestricted cash and equivalents of $38,798,000.
A substantial amount of the unrestricted cash and equivalents is
required for day-to-day operations, including approximately $10,000,000
of currency and coin on hand which amount varies by days of the week,
holidays and seasons, as well as additional cash balances necessary to
meet current working capital needs.
In addition, the Company has the $20,000,000 Senior Facility
available for the one-year period ending May 2, 1995 should the Company
have unforeseen cash needs. The Company believes that the Senior
Facility will serve as a safeguard if an emergency arises from current
operations, or serve as a source of funds for a profitable investment
opportunity. However, market interest rates and other economic
conditions, among other factors, will determine if it is appropriate for
the Company to draw on the Senior Facility.
The Company will satisfy the $2,499,000 of interest due December
15, 1994 on the Junior Mortgage Notes by cash payment.
Capital Expenditures
During the first three quarters of 1994 the Company expended
$3,885,000 for capital improvements in Atlantic City including the
purchase of 115 slot machines, most of which were replacements for older
models, and capital maintenance projects. Prior to the disposition of
i t s Paradise Island assets, the Company expended approximately
$2,000,000 on its Paradise Island facilities; a significant portion of
these expenditures were required by the purchase agreement.
17<PAGE>
RESULTS OF OPERATIONS
General
The following discussion addresses the Company's Atlantic City
operations as well as certain operations which were disposed of through
the
SIHL Sale. Operations disposed of include the Paradise Island portion
of the casino/hotel segment and the airline segment.
Revenues
Revenues by geographic and business segment were as follows (in
thousands of dollars):
Quarter Ended Three Quarters Ended
September 30, September 30,
1994 1993 1994 1993
Casino/hotel:
Atlantic City, New Jersey:
Casino $69,582 $ 72,396 $188,509 $187,803
Rooms 2,424 2,216 5,509 5,370
Food and beverage 4,267 4,873 11,324 12,340
Other casino/hotel 1,406 1,315 3,430 3,301
77,679 80,800 208,772 208,814
Paradise Island, The Bahamas:
Casino 12,667 28,115 48,685
Rooms 5,705 13,419 22,622
Food and beverage 6,530 13,646 23,593
Other casino/hotel 4,170 7,708 14,412
-0- 29,072 62,888 109,312
Total casino/hotel 77,679 109,872 271,660 318,126
Real estate related -
Atlantic City, New Jersey 2,081 2,030 6,211 6,028
Airline 6,017 5,674 16,618
Other segments 12 7 109
Intersegment eliminations (924) (1,104) (3,023)
Revenues from operations $79,760 $117,007 $282,448 $337,858
Third Quarter and First Three Quarters 1994 Compared to 1993
Casino/hotel - Atlantic City, New Jersey
Casino revenues were down by $2,814,000 for the third quarter and
increased by $706,000 for the first three quarters of 1994. The modest
growth in the Atlantic City casino industry continues with the increase
in slot win more than offsetting the decline in table game win. The
addition of poker and simulcast betting in June 1993 and keno in June
1994 has added to the industry's revenues, though not significantly.
The Company believes that increased competition from other newly opened
or expanded jurisdictions which permit gaming has slowed the growth of
gaming revenue in Atlantic City. Expansion of existing Atlantic City
casinos has also
18<PAGE>
adversely affected the Company's operations. These factors have
significantly increased the Company's cost of obtaining additional
revenue.
The Company's revenue from poker, simulcasting and keno combined
decreased by $905,000 for the third quarter and increased by $3,475,000
for the first three quarters. The Company's win from slot and table
games decreased by $1,909,000 for the third quarter and by $2,769,000
for the first three quarters of 1994. The Company's growth in slot win
has more than kept pace with the industry's, as slot players have been
the prime focus of the Company's marketing efforts. However, the
Company's decline in table game win has been much greater than that
experienced by the industry as a whole because the Company's marketing
programs have not targeted table players and the Company's hold
percentage (ratio of casino win to total amount of chips purchased) has
been below the industry's average. The Company recently increased its
program of charter flights and is reevaluating its marketing efforts
with a view to recapturing some of its lost market share of table win.
Casino/hotel - Paradise Island, The Bahamas
The Company's Paradise Island casino/hotel facilities were disposed
of in the SIHL Sale effective May 3, 1994. The Company's Paradise
Island revenues for 1994 reflect the Company's operation of the Paradise
Island properties through April 30, 1994.
Airline
The Company's airline operation was effectively disposed of in the
SIHL Sale. The only aircraft owned by the Company was transferred to a
subsidiary of SIHL as part of the SIHL Sale. Pursuant to an agreement,
the Company is to operate the airline on behalf of SIHL for a nominal
management fee for a period not to exceed 14 months. All profits earned
or losses incurred in such operation are to accrue to or be borne by
SIHL. Airline revenues reflect airline operations through April 30,
1994.
19<PAGE>
Contribution to Consolidated Earnings (Loss)
Before Income Taxes and Extraordinary Item
Results by geographic and business segment were as follows (in
thousands of dollars):
Quarter Ended Three Quarters Ended
September 30, September 30,
1994 1993 1994 1993
Casino/hotel:
Atlantic City, New Jersey $11,445 $ 10,795 $ 16,742 $ 15,804
Paradise Island,
The Bahamas* (3,844) 10,206 (2,974)
11,445 6,951 26,948 12,830
Real estate related -
Atlantic City, New Jersey 1,911 1,702 (15,283) 4,900
Airline* (14) (7) (14)
Other segments (63) (24) (94)
Unallocated general
corporate expense 1,700 1,207 4,878 3,058
Loss on SIHL Sale (73,108)
Earnings (loss) from
operations 15,056 9,783 (56,596) 20,680
Other income (deductions):
Interest income 861 976 2,087 2,485
Interest expense (6,600) (13,364) (29,685) (38,336)
Amortization of debt
discount (832) (13,369) (14,163) (37,320)
Recapitalization costs 1,300 (3,130) (8,488) (4,879)
Proceeds from Litigation
Trust 2,542
Earnings (loss) before income
taxes and extraordinary item $ 9,785 $(19,104) $(104,303) $(57,370)
* The Paradise Island casino/hotel segment subsidized the operations of
Paradise Island Airlines, Inc., a subsidiary of RII whose operations
were effectively disposed of in the SIHL Sale, in the third quarter of
1993 and in the first three quarters of 1994 and 1993 in the amounts of
$145,000, $993,000 and $813,000, respectively.
Third Quarter and First Three Quarters of 1994 Compared to 1993
Casino/hotel - Atlantic City, New Jersey
For the third quarter of 1994 casino, hotel and related operating
results increased by $650,000 as the decreased revenues described above
were more than offset by a net decrease in operating costs. The most
significant variances in operating expenses were decreases in payroll
and related costs ($1,400,000), casino promotional costs ($800,000),
other casino operating costs ($500,000) and food and beverage costs
($400,000). Payroll and related costs were down primarily due to
decreased staffing levels. Other casino operating costs were higher in
the third quarter of 1993 due to certain start up costs associated with
the opening of the simulcast and poker room in late June 1993 and the
larger volume of activity during its first full quarter of operation.
The decrease in food
20<PAGE>
and beverage costs resulted primarily from reduced patronage at the
Company's "all-you-can-eat" Beverly Hills Buffet due to price increases,
although there has been a general decline in the number of patrons
served at all of the Company's food and beverage outlets. Prices at the
Beverly Hills Buffet were increased as management determined that this
promotion was no longer cost effective at the prior price levels.
Casino, hotel and related operating results for the first three
quarters of 1994 increased by $938,000 due to a net decrease in
operating expenses. The most significant decreases in operating
expenses in 1994 were in food and beverage costs ($1,300,000) and
payroll and related costs ($1,000,000) due to the reasons described
above. Advertising costs were also down ($600,000) as the second
q u arter of 1993 included advertising costs associated with the
introduction of the "cash-back" program (a promotion which rewards slot
players by giving cash back to patrons based on their level of play) and
the 15th anniversary celebration for Resorts Casino Hotel. Favorable
variances in these and other costs were partially offset by increases in
other expenses. The most significant increase was in casino promotional
costs ($1,500,000) due primarily to the "cash-back" program noted above,
which commenced in late April 1993. Since the introduction of the
" c ash-back" program the Company has reduced certain other cash
giveaways. Other significant cost increases were in entertainment
($600,000) and the accrual for management incentive bonuses ($700,000).
Entertainment costs were up as more revue and headliner shows were
presented in 1994 and the revue shows included more featured performers.
Casino/hotel - Paradise Island, The Bahamas
The Company's Paradise Island casino/hotel facilities were disposed
of in the SIHL Sale effective May 3, 1994. The Paradise Island
operating results for 1994 reflect the Company's operation of the
Paradise Island properties through April 30, 1994.
Real Estate Related - Atlantic City, New Jersey
Atlantic City real estate related results for the first three
quarters of 1994 includes a charge of $20,525,000 for the write-down of
certain non-operating properties to net realizable value. See Note F of
Notes to Consolidated Financial Statements.
Airline
The Company's airline operation was effectively disposed of in the
SIHL Sale. Pursuant to an agreement, the Company is to operate the
airline on behalf of SIHL for a nominal management fee for a period not
to exceed 14 months. All profits earned or losses incurred in such
operation are to accrue to or be borne by SIHL. Operating results of
the airline segment presented herein include airline operations through
April 30, 1994.
Unallocated Corporate Expense
For both the third quarter and the first three quarters of 1994 the
decrease in corporate expenses resulted primarily from decreases in
payroll and related costs associated with certain executives whose
service to the Company terminated in 1993.
21<PAGE>
The Environmental Protection Agency ("EPA") has named a predecessor
to RII as a potentially responsible party in the Bay Drum hazardous
waste site (the "Site") in Tampa, Florida which the EPA has listed on
the National Priorities List. No formal action has commenced against
RII and RII intends to dispute any claims of this nature, if asserted.
Although it may ultimately be determined that RII is one of several
hundred parties that are jointly and severally liable for the costs of
Site remediation and for damages to natural resources at the Site caused
by hazardous wastes, the extent of any such liability, if any, cannot be
determined at this time.
Loss on SIHL Sale
See Note B of Notes to Consolidated Financial Statements for a
description of the SIHL Sale.
Other Income (Deductions)
The decreases in interest expense and amortization of debt discount
for the third quarter and the first three quarters of 1994 are
attributable to the Restructuring, which resulted in a significant
decrease in the principal amount of debt outstanding as well as a
reduction in interest rates.
Also affecting the comparison of these expenses is the fact that
the Company stopped accruing interest and amortizing debt discounts on
the Series Notes as of March 21, 1994, the date the Company entered
bankruptcy proceedings, while the accrual of interest and amortization
of discount on the New Debt Securities did not start until May 3, 1994.
See Note B of Notes to Consolidated Financial Statements for a
description of the Company's New Debt Securities.
Recapitalization costs include legal and other advisory fees
incurred in connection with the Restructuring. See Note B of Notes to
Consolidated Financial Statements for discussion of third quarter 1994
adjustment.
Proceeds from Litigation Trust represent the distribution that the
Company received as a holder of units of beneficial interest in the
Litigation Trust established under a previous plan of reorganization.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
United States District Court, Southern District
of New York - Friedman Derivative Action
RII has been named as the nominal defendant in an action (Arthur M.
Friedman suing derivatively on behalf of RII v. Merv Griffin et al. and
RII, Nominal Defendant) brought derivatively on its behalf by a
shareholder, Arthur Friedman. The complaint was filed in the Supreme
Court of the State of New York, New York County on January 27, 1994 and
was amended in February 1994. The defendants in the action, as amended,
are Merv Griffin, Griffin Group, Thomas E. Gallagher, David P. Hanlon,
who was President, Chief Executive Officer and a director of RII through
October 31, 1993, and four former directors of RII who served in that
capacity until the Effective Date. The complaint seeks to recover for
the Company
22<PAGE>
an unspecified sum of money as compensatory damages for allegedly
wrongful acts by the defendants. The allegations include that the
defendants improperly (i) permitted defendant Griffin not to repay money
he allegedly owed to the Company and (ii) paid defendant Hanlon
excessive compensation.
On April 26, 1994, RII removed this action to the United States
District Court for the Southern District of New York (the "District
Court"). On May 26, 1994, RII filed a motion to transfer the action to
the Bankruptcy Court. A response to the motion to transfer has not been
filed and no deadline has been set. Plaintiff's counsel has withdrawn.
On October 31, 1994, the District Court gave the plaintiff an extension
to November 14, 1994 to retain new counsel.
Item 5. Other Information
The Company has determined the issue price of the Mortgage Notes
and the Junior Mortgage Notes to be used in calculating the related
original issue discount for Federal income tax purposes to be 85% and
83%, respectively.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Part I exhibit is filed herewith:
Exhibit
Number Exhibit
(27) Financial data schedule
b. Reports on Form 8-K
No Current Report on Form 8-K was filed by RII covering an event
during the third quarter of 1994. No amendments to previously filed
Forms 8-K were filed during the third quarter of 1994.
23<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.
RESORTS INTERNATIONAL, INC.
(Registrant)
/s/ Matthew B. Kearney
Matthew B. Kearney
Executive Vice President -
Finance
(Authorized Officer of
Registrant and Chief
Financial Officer)
Date: November 9, 1994
24<PAGE>
RESORTS INTERNATIONAL, INC.
Form 10-Q for the quarterly period
ended September 30, 1994
EXHIBIT INDEX
Exhibit Page
Number Exhibit Number
(27) Financial data schedule 26
25<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RESORTS
INTERNATIONAL, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO
INCLUDED IN THE FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1994, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> $44,764<F1>
<SECURITIES> 0
<RECEIVABLES> $8,534
<ALLOWANCES> $4,029
<INVENTORY> $1,444
<CURRENT-ASSETS> $62,399
<PP&E> $293,873
<DEPRECIATION> $45,957
<TOTAL-ASSETS> $321,691
<CURRENT-LIABILITIES> $45,048
<BONDS> $222,332<F2>
<COMMON> $397
0
0
<OTHER-SE> $214
<TOTAL-LIABILITY-AND-EQUITY> $321,691
<SALES> 0
<TOTAL-REVENUES> $282,448
<CGS> 0
<TOTAL-COSTS> $192,618<F3>
<OTHER-EXPENSES> $107,726<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $43,848
<INCOME-PRETAX> $(104,303)
<INCOME-TAX> 0
<INCOME-CONTINUING> $(104,303)
<DISCONTINUED> 0
<EXTRAORDINARY> $186,000<F5>
<CHANGES> 0
<NET-INCOME> $81,697
<EPS-PRIMARY> $2.69<F6>
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $26,256
AND RESTRICTED CASH EQUIVALENTS OF $5,966.
<F2>NET OF UNAMORTIZED DISCOUNT.
<F3>EXCLUDES DEPRECIATION.
<F4>INCLUDES DEPRECIATION OF $14,093, WRITE-DOWN OF NON-OPERATING REAL
ESTATE OF $20,525 AND LOSS ON SIHL SALE OF $73,108 (SEE NOTE B OF
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS).
<F5>GAIN ON EXCHANGE OF DEBT (SEE NOTE B OF NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.)
<F6>INCLUDES LOSS BEFORE EXTRAORDINARY ITEM - $(3.44) PER SHARE AND
EXTRAORDINARY ITEM - $6.13 PER SHARE.
</FN>
</TABLE>
