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 March 31, 1998
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
Sun International North America, 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.)
1415 E. Sunrise Blvd., Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip Code)
(954) 713-2500
(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
- continued -
Exhibit Index is presented on page 14
Total number of pages 23
Number of shares outstanding of registrant's common stock as of March
31, 1998: 100, all of which are owned by one shareholder. Accordingly
there is no current market for any of such shares.
The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with
the reduced disclosure format permitted by that General Instruction.
SUN INTERNATIONAL NORTH AMERICA, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
at March 31, 1998 and
December 31, 1997 4
Consolidated Statements of
Operations for the Quarters
Ended March 31, 1998 and 1997 5
Consolidated Statements of
Cash Flows for the Quarters
Ended March 31, 1998 and 1997 6
Notes to Consolidated
Financial Statements 7
Item 2. Management's Discussion and
Analysis of Financial
Condition and Results of
Operations 9
Part II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on
Form 8-K 12
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
SUN INTERNATIONAL NORTH AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, except par value)
March 31, December 31,
1998 1997
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 39,605 $ 46,912
Restricted cash equivalents 139 3,902
Receivables, less allowance for
doubtful accounts of $3,318
and $3,074 7,508 8,691
Inventories 1,566 1,730
Prepaid expenses 1,805 1,961
Total current assets 50,623 63,196
Land held for investment,
development or resale 47,750 155,368
Property and equipment, net of
accumulated depreciation of $14,413
and $11,630 253,275 249,166
Deferred charges and other assets, net 21,703 21,536
Due from affiliates 9,429 4,528
Goodwill, net of accumulated
amortization 100,747 101,410
$483,527 $595,204
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 2,104 $ 282
Accounts payable and accrued
liabilities 39,952 46,677
Total current liabilities 42,056 46,959
Long-term debt, net of unamortized
discounts 206,734 311,258
Deferred income taxes 46,000 46,000
Shareholder's equity:
Common stock - $.01 par value - -
Capital in excess of par 193,008 193,008
Accumulated deficit (4,271) (2,021)
188,737 190,987
$483,527 $595,204
See notes to consolidated financial statements.
SUN INTERNATIONAL NORTH AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1998 1997
Revenues:
Casino $ 59,741 $ 59,447
Rooms 2,942 2,964
Food and beverage 6,315 6,273
Other casino/hotel revenues 2,780 1,957
71,778 70,641
Less promotional allowances (6,494) (5,475)
Net casino and resort revenues 65,284 65,166
Tour operations 3,425 4,512
Management fees 935 -
Real estate related 754 2,201
70,398 71,879
Expenses:
Casino 37,815 37,423
Rooms 928 871
Food and beverage 3,770 3,633
Other casino/hotel operating
expense 7,727 9,037
Tour operations 3,144 4,182
Selling, general and
administrative 11,106 8,356
Depreciation and amortization 3,557 3,302
68,047 66,804
Operating income 2,351 5,075
Other income (expenses):
Interest income 2,096 630
Interest expense, net (6,403) (6,387)
Loss before income taxes and
extraordinary item (1,956) (682)
Income tax expense (294) -
Loss before extraordinary item (2,250) (682)
Extraordinary item-loss on
extinguishment of debt (net
of income tax benefit of $2,043) - (2,957)
Net loss $ (2,250) $ (3,639)
See notes to consolidated financial statements.
SUN INTERNATIONAL NORTH AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1998 1997
Cash flows from operating activities:
Reconciliation of net loss to net
cash used in operating activities:
Net loss $ (2,250) $ (3,639)
Extraordinary item - 2,957
Depreciation and amortization 3,878 3,152
Provision for doubtful receivables 230 178
Provision for discount on CRDA
obligations, net 144 342
Net change in working capital accounts:
Receivables 953 317
Inventories and prepaid expenses 320 274
Accounts payable and accrued liabilities (6,699) (5,455)
Net cash used in operating activities (3,424) (1,874)
Cash flows from investing activities:
Payments for construction capital expenditures (2,918) -
Payments for operating capital expenditures (138) (700)
Acquisition of other fixed assets (2,382) (7,633)
Proceeds received from the sale of land 110,000 -
Payments of merger costs (100) (2,378)
CRDA deposits and bond purchases (673) (730)
Repayments to affiliates (4,943) (32)
Net cash provided by (used in) investing
activities 98,846 (11,473)
Cash flows from financing activities:
Proceeds from issuance of debt - 199,084
Repayment of debt (106,492) (153,865)
Payments to secure borrowings - (4,479)
Cash and equivalents of contributed subsidiary - 1,159
Net cash provided by (used in) financing
activities (106,492) 41,899
Net increase (decrease) in cash and
cash equivalents (11,070) 28,552
Cash and cash equivalents at beginning
of period 50,814 33,805
Cash and cash equivalents at end of period $ 39,744 $ 62,357
See notes to consolidated financial statements.
SUN INTERNATIONAL NORTH AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. General:
The accompanying consolidated interim financial statements, which are
unaudited, include the operations of Sun International North America, Inc.
("SINA") and its subsidiaries. SINA was known as Griffin Gaming &
Entertainment, Inc. until February 6, 1997. "SINA" is used herein to refer
to the corporation both before and after its name change. The term "Company"
as used herein includes SINA and its subsidiaries.
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 seasonality of the business is
described in Management's Discussion and Analysis of Financial Condition and
Results of Operations in the SINA 1997 Form 10-K. The results of operations
for the three month periods presented are not necessarily indicative of the
results to be expected for the entire fiscal year ending December 31, 1998.
The notes presented herein are intended to provide supplemental
disclosure of items of significance occurring subsequent to December 31, 1997
and should be read in conjunction with the Notes to Consolidated Financial
Statements contained in pages 40 through 54 of the SINA 1997 Form 10-K.
B. Reverse Repurchase Agreements:
Cash equivalents at March 31, 1998 included $21.8 million of reverse
repurchase agreements (federal government securities purchased under
agreements to resell those securities) with Prudential Securities, Inc. under
which the Company had not taken delivery of the underlying securities. These
agreements matured during the first week of April 1998.
C. Management Fees:
Effective January 1, 1998, the Company entered into an agreement to
provide management services to certain affiliated companies.
D. Sale of Showboat Land and Redemption of Showboat Notes:
Prior to January 1998, the Company leased (the "Showboat Lease") 10
acres of land (the "Showboat Land") to a subsidiary of Showboat, Inc., a
resort and casino operator. Lease payments received pursuant to the Showboat
Lease were passed through to the holders of the Company's $105.3 million
First Mortgage Non-Recourse Pass-Through Notes due June 30, 2000 (the
"Showboat Notes"). On January 29, 1998, the Company sold the Showboat Land
for proceeds of $110.0 million. The majority of the proceeds were used to
redeem the Showboat Notes effective February 28, 1998.
E. Statements of Cash Flows:
Supplemental disclosures required by Statement of Financial Accounting
Standards No. 95 "Statement of Cash Flows" are presented below.
Quarter Ended
March 31,
(In Thousands of Dollars) 1998 1997
Interest paid, net of amounts capitalized $14,720 $11,888
Income taxes paid (refunded), net 213 (142)
Noncash investing and financing
activities:
Increase due to contributed subsidiary:
Assets - 6,097
Liabilities - 5,729
Shareholder's equity - 368
Increase in liabilities
for additions to other assets 74 17
F. Reclassifications
Certain reclassifications have been made to the 1997 balances to conform
with the current year presentation.
G. Commitments and Contingencies:
Casino Reinvestment Development Authority ("CRDA")
The New Jersey Casino Control Act, as amended, requires SINA to purchase
bonds issued by the CRDA, or to make other investments authorized by the
CRDA, in an amount equal to 1.25% of its gross gaming revenues, as defined.
The CRDA bonds have interest rates ranging from 3.9% to 7.0% and have
repayment terms of between 20 and 50 years.
At March 31, 1998, SINA had $10.5 million face value of bonds issued by
the CRDA and had $14.3 million on deposit with the CRDA.
These bonds and deposits, net of an estimated discount to reflect the
below-market interest rates payable on the bonds, are included in deferred
charges and other assets in the accompanying Consolidated Balance Sheets.
Litigation
SINA and certain of its subsidiaries are defendants in certain
litigation. Except for items disclosed in the 1997 SINA 10-K, 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.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
FINANCIAL CONDITION
Liquidity
At March 31, 1998 the Company's working capital amounted to $8.6 million
including unrestricted cash and equivalents of $39.6 million. A portion of
the unrestricted cash and equivalents is required for day-to-day operations
of the Resorts Casino Hotel, including approximately $15.0 million 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 January 1998, the Company sold the land under the Showboat Casino
Hotel in Atlantic City for proceeds of $110.0 million. The majority of the
proceeds were used to redeem the $105.3 million Showboat Notes, effective
February 28, 1998.
Capital Expenditures and Resources
Previously announced plans to redevelop the Resorts Casino Hotel have
been revised and will be limited to the renovation of the existing 500-room
hotel tower as well as completing modest enhancements to the public areas.
It is anticipated that the cost of this renovation will be approximately
$15.0 million and that the work will be completed by the summer of 1999.
Although the Company is evaluating the possibility of developing a larger
project on its undeveloped real estate in Atlantic City, the planning of any
future expansion is still in the preliminary stages and the scope and timing
of such development is uncertain.
Management believes that existing cash balances, available borrowing
facilities and operating cash flows will provide the Company with sufficient
resources to meet its existing debt obligations and foreseeable capital
expenditure requirements with respect to current operations for at least the
next twelve months.
RESULTS OF OPERATIONS - First Quarter 1998 Compared to 1997
Revenues
Casino and Resort Revenues
Competition for Atlantic City casino patrons remains intense. Adding to
the competition for patrons, expansions at two competing Atlantic City
properties opened in mid-1996 which, combined, added approximately 1,100
hotel rooms and approximately 85,000 square feet of gaming space. In July
1997 a competitor added approximately 75,000 square feet of casino space
which includes approximately 1,766 slot machines and 58 table games. Also,
a competitor added a new hotel tower with 620 rooms and plans to open more
casino space in 1998. Several other companies have announced plans to expand
existing or construct new casino/hotels in Atlantic City.
Gaming revenues were $59.7 million for the three months ended March 31,
1998, an increase of $300,000 or 0.5% from gaming revenues of $59.4 million
for the comparable period in 1997. This increase in gaming revenues consisted
of an increase in slot revenues with a reduction in table game revenues.
Slot revenues were $42.7 million for the three months ended March 31,
1998, an increase of 6.8% from $40.0 million for the comparable period in
1997. This increase was due to an increase in slot handle (dollar amounts
wagered) by 3.1% to $470.8 million for the three months ended March 31, 1998
from $456.6 million for the comparable period in 1997. Management is
continuing the process of upgrading its slot product. In 1997, Resorts
completed an upgrade of 35% of its $0.25 denomination slot product to include
more popular machines. During the first quarter of 1998, Resorts added 66 new
machines, replacing older, less popular ones. The new machines include 40
highly themed slots, which can be replaced at no cost with new product if
customer demand should change.
Table games revenues were $16.4 million for the three months ended March
31, 1998, a decrease of $1.6 million or 8.9% from $18.0 million for the
comparable period in 1997. This decrease was due to a combination of a
reduction in table games drop (the dollar amount of chips purchased) by 3.7%
to $106.0 million for the three months ended March 31, 1998 from $110.1
million for the comparable period in 1997, and a reduction in hold percentage
(ratio of casino win to total amount of chips purchased) of 0.8 percentage
points to 15.5% for the three months ended March 31, 1998 from 16.3% for the
comparable period in 1997.
Poker, Simulcast and Keno revenues were $628,000 for the three months
ended March 31, 1998, a decrease of $772,000 or 55.1% from $1.4 million for
the comparable period in 1997. Management significantly reduced the hours of
operations for these gaming activities because of unfavorable returns, and by
March 1998 eliminated both poker and keno.
Other revenues were $12.1 million for the three months ended March 31,
1998, an increase of $900,000 or 8.0% from other revenues of $11.2 million
for the comparable period of 1997. Other revenues include revenues from
rooms, food and beverage, and miscellaneous items. The increase is primarily
attributable to a $800,000 or 72.7% increase in entertainment revenues to
$1.9 million for the three months ended March 31, 1998 from $1.1 million for
the comparable period in 1997.
Tour Operations
Through a wholly owned subsidiary, the Company operates as a tour
operator and wholesaler of tour packages and provides reservations services,
which includes services to affiliated properties in The Bahamas. Mild
weather in the US northeast during the quarter resulted in lower customer
volumes and reduced revenues.
Real Estate Related
Real estate related revenues consisted of lease receipts related to the
land under the Showboat Casino Hotel. As the Company sold this land
effective January 28, 1998, only one month's rent was included in the first
quarter of 1998.
Expenses
Casino and Resort Expenses
Gaming costs and expenses were $37.8 million for the three months ended
March 31, 1998, a decrease of $400,000 or 1.0% from expenses of $37.4 million
for the comparable period in 1997. This represents costs and expenses
associated with table games, slot operations, win tax, and promotional items
and services provided to patrons. The decrease is primarily due to
management's continuing cost reductions associated with discontinuing
marketing to segments that did not provide incremental profit.
Tour Operations
The reduced tour operation expenses reflect the reduced volume of
business during the quarter.
Selling General and Administrative
Selling, general and administrative costs were $11.1 million for the
three months ended March 31, 1998, an increase of $2.7 million from expenses
of $8.4 million for the comparable period in 1997. The increase was due
primarily to the inclusion of the costs of certain management personnel which
were included in an affiliated but unconsolidated company during the first
quarter of 1997, as well as the opening in January 1998 of a marketing and
public relations office in New York.
Interest Income
Interest income increased $1.5 million for the first quarter of 1998
compared to the first quarter of 1997. Average invested balances were higher
partially due to $110.0 million proceeds from the sale of the land under the
Showboat Casino which were received at the end of January 1998. These funds
were not used to repay the Showboat Notes until the end of February.
Forward Looking Statements
The statements contained herein include forward looking statements based
on management's current expectations of SINA's future performance.
Predictions relating to future performance are inherently uncertain and
subject to a number of risks. Consequently, SINA's actual results could
differ materially from the expectations expressed in the preceding
paragraphs. Factors that could cause SINA's actual results to differ
materially from the expected results include, among other things: the
intensely competitive nature of the casino gaming industry; increases in the
number of competitors in the market in which SINA operates; the seasonality
of the industry in the market in which SINA operates; the susceptibility of
SINA's operating results to adverse weather conditions and natural disasters;
changes in governmental regulations governing SINA's activities and other
risks detailed in SINA's filings with the Securities and Exchange Commission.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
The following is an update of the status of certain litigation which was
previously described in "Item 3. Legal Proceedings" of the SINA 1997 Form 10-
K.
US District Court Action - SINA v. Lowenschuss
On March 26, 1998, the US District Court for the District of New Jersey
reversed the US Bankruptcy Court's decision and $3.8 million judgment in
favor of the Company and remanded the case to the US Bankruptcy Court for
disposition consistent with the US District Court's opinion. The Company has
filed an appeal with the US Court of Appeals. No amounts have been reflected
in the financial statements pending resolution of this matter.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Part I exhibits are filed herewith:
Exhibit
Number Exhibit
(10)(j) Services Agreement between Sun International North America,
Inc. and Sun International Hotels Limited dated as of January
1, 1998.
(27)(a) Financial data schedule as of March 31, 1998.
(27)(b) Restated financial data schedule as of March 31, 1997.
b. Reports on Form 8-K
No Current Report on Form 8-K was filed by SINA covering an event during
the first quarter of 1998. No amendments to previously filed Forms 8-K were
filed during the first quarter of 1998.
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.
SUN INTERNATIONAL NORTH AMERICA, INC.
(Registrant)
s/s John Allison
John Allison
Executive Vice President - Finance
(Authorized Officer of Registrant
and Chief Financial Officer)
Date: May 14, 1998
SUN INTERNATIONAL NORTH AMERICA, INC.
Form 10-Q for the quarterly period
ended March 31, 1998
EXHIBIT INDEX
Exhibit
Number Exhibit Page Number in Form 10-Q
(10)(j) Services Agreement Between
Sun International North
America, Inc. and Sun
International Hotels Limited
dated as of January 1, 1998. Page 15
(27)(a) Financial data schedule
as of March 31, 1998. Page 22
(27)(b) Restated financial data
schedule as of March 31,
1997 Page 23
SERVICES AGREEMENT
BETWEEN
SUN INTERNATIONAL NORTH AMERICA, INC.
AND
SUN INTERNATIONAL HOTELS LIMITED
AND ITS NON-UNITED STATES SUBSIDIARIES
SERVICES AGREEMENT
AGREEMENT (the "Agreement"), dated as of the 1st day of
January, 1998, by and between Sun International North America,
Inc. a Delaware Corporation, ("Provider") and Sun
International Hotels Limited, a Bahamian Corporation,
("Purchaser" which expression shall include Sun International
Hotels Limited's non-United States subsidiaries).
WHEREAS, Provider is a direct wholly-owned subsidiary of
Purchaser;
WHEREAS, Purchaser has determined it to be in its best
interests, and those of its stockholders, employees,
customers, suppliers, creditors, and other persons and
entities having an interest in Purchaser to operate
efficiently, successfully, and profitably, and, in accordance
with the terms and conditions set forth herein in furtherance
thereof, to avail itself through Provider of the entire range
of expertise and capabilities of Provider;
WHEREAS, Purchaser further recognizes that, as a result,
Provider will be diverting a portion of its valuable expertise
and capabilities away from other enterprises in which it is,
or could, become engaged and that, accordingly, Provider is
entitled to be reasonably compensated for the value of such
services;
WHEREAS, the parties hereto, by entering into this Agreement,
do not intend to abrogate, negate, or withdraw any of the
authority, duties, or responsibilities of the officers and
directors of Purchasers at any time and from time to time in
office;
WHEREAS, the parties have agreed, based upon the foregoing
considerations, that Purchaser requires, and that Provider has
agreed to provide the services described in Schedule 1 hereto
(the "Services") on the terms and conditions herein contained;
and
WHEREAS, the Board of Directors of Purchaser has reviewed this
Agreement carefully, has availed itself, to the extent it
deemed necessary and appropriate, of the advice and services
of financial and legal advisers, and has, in consultation with
such advisers, personally discussed with senior management of
Purchaser its need for the Services, Provider's ability to
provide such Services, and the fairness, and the
reasonableness of the fees to be paid for such Services, and
has satisfied itself, by its own independent examination of
this Agreement and of all facts and opinions deemed relevant
to it in its exercise of its prudent and independent business
judgment, as to the fairness and reasonableness of the terms
and conditions of this Agreement, and has determined this
Agreement to be fair and reasonable and in the best interests
of Purchaser and its stockholders, employees, customers,
suppliers, creditors, and all other persons having an interest
in Purchaser's being operated efficiently, successfully, and
profitably.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the
parties, and intending to be legally bound, the parties hereto
hereby agree as follows:
ARTICLE 1
SERVICES
During the Term (as defined in Article 3), Provider will make
available to Purchaser, the Services.
ARTICLES 2
ANNUAL SERVICES FEE
In consideration of the Services rendered hereunder Provider
shall receive an annual services fee described in Schedule 2
hereto, for each fiscal year or part thereof included within
the Term ("the Annual Services Fee").
ARTICLE 3
TERM
The initial term of this Agreement shall be for a period of
One (1) year commencing on the 1st day of January, 1997, (the
"Initial Term"). Thereafter this Agreement shall be
automatically renewed for subsequent renewal terms of one (1)
year each, (a "Renewal Term"), unless either party shall serve
on the other a written notice of its desire to terminate this
Agreement prior to the expiration of the then current term.
As appropriate, "Term" shall mean the Initial Term and all
Renewal Terms.
ARTICLE 4
MISCELLANEOUS
4.1 ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective successors and assigns. Neither party shall
assign any or all of its rights, obligations or interests
in the Agreement without the prior written consent of the
other party.
4.2 WAIVER. No exercise or waiver, in whole or in part, of
any right or remedy provided for in this Agreement shall
operate as a waiver of any other right or remedy, except
as otherwise herein provided. No delay on the part of
any party in the exercise of any right or remedy
hereunder shall operate as a waiver thereof.
4.3 SEVERABILITY. If any of the provisions of the Agreement
shall be held invalid by a court of competent
jurisdiction or by any governmental agency having the
power to approve or disapprove this Agreement, such
adjudication shall not affect the validity or
enforceability of the remaining portions of this
Agreement.
4.4 GOVERNING LAW. This Agreement shall be governed by, and
construed and interpreted in accordance with the laws of
the State of Delaware, including such laws with respect
to conflicts of laws.
4.5 CORPORATE AUTHORITY. Each party hereto represents and
warrants that it has all requisite corporate authority
and power to enter into this Agreement and to fulfill its
respect obligations hereunder.
4.6 ENTIRE AGREEMENT; MODIFICATION. This Agreement, together
with the Schedules attached hereto constitutes the entire
understanding between the parties with respect to the
subject matter hereof and supersedes all other agreements
and undertakings, whether oral or written, between the
parties hereto with respect to the subject matter hereof.
This Agreement may not be amended, modified, altered, or
waived, in whole or in part except by a subsequent
writing signed by both parties hereto.
SCHEDULE 1
THE SERVICES
Provider, whether directly or through its subisidiaries, shall
provide to Purchaser accounting services, including by way of
example, but not limitation, the services described below:
Maintenance of books and records for Purchaser and certain
subsidiaries of Purchaser.
Production of reports as required for internal management.
Production of reports as required to meet all external
reporting requirements.
SCHEDULE 2
ANNUAL SERVICES FEE
Cost plus a mark up percentage determined annually excluding
interest and taxes.
It is the intent of the parties that the foregoing fee
reflects current market rates for the Services, and such rates
may be reviewed and adjusted accordingly by mutual agreement
of the parties from time to time during the Term and as
required by section 482 of the Internal Revenue Code.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above
written.
SUN INTERNATIONAL NORTH AMERICA,
INC.
By:
Name:
Title:
SUN INTERNATIONAL HOTELS LIMITED
By:
Name:
Title:
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SUN
INTERNATIONAL NORTH AMERICA, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED IN THE FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> $39,744<F1>
<SECURITIES> 0
<RECEIVABLES> $7,090
<ALLOWANCES> $3,318
<INVENTORY> $1,566
<CURRENT-ASSETS> $50,623
<PP&E> $267,688
<DEPRECIATION> $14,413
<TOTAL-ASSETS> $483,527
<CURRENT-LIABILITIES> $42,056
<BONDS> $206,734<F2>
<COMMON> 0
0
0
<OTHER-SE> $188,737
<TOTAL-LIABILITY-AND-EQUITY> $483,527
<SALES> 0
<TOTAL-REVENUES> $70,398
<CGS> 0
<TOTAL-COSTS> $53,384
<OTHER-EXPENSES> $3,557<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $6,403
<INCOME-PRETAX> $(1,956)
<INCOME-TAX> (294)
<INCOME-CONTINUING> $(2,250)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $(2,250)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $29,787 AND RESTRICTED CASH
EQUIVALENTS OF $139.
<F2>NET OF UNAMORTIZED DISCOUNTS.
<F3>DEPRECIATION AND AMORTIZATION EXPENSE.
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SUN
INTERNATIONAL NORTH AMERICA, INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED IN THE FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> $62,357<F1>
<SECURITIES> 0
<RECEIVABLES> $8,327
<ALLOWANCES> $3,587
<INVENTORY> $1,097
<CURRENT-ASSETS> $73,598
<PP&E> $157,749
<DEPRECIATION> $2,656
<TOTAL-ASSETS> $596,098
<CURRENT-LIABILITIES> $51,044
<BONDS> $311,368<F2>
<COMMON> 0
0
0
<OTHER-SE> $189,729
<TOTAL-LIABILITY-AND-EQUITY> $596,098
<SALES> 0
<TOTAL-REVENUES> $71,879<F3>
<CGS> 0
<TOTAL-COSTS> $55,146<F3>
<OTHER-EXPENSES> $3,302<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $6,387
<INCOME-PRETAX> $(682)
<INCOME-TAX> 0
<INCOME-CONTINUING> $(682)
<DISCONTINUED> 0
<EXTRAORDINARY> $(2,957)
<CHANGES> 0
<NET-INCOME> $(3,639)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $49,052 AND RESTRICTED CASH
EQUIVALENTS OF $2,419.
<F2>INCLUDING UNAMORTIZED PREMIUMS.
<F3>RECLASSES HAVE BEEN MADE TO CONFORM WITH CURRENT YEAR PRESENTATION.
<F4>DEPRECIATION EXPENSE OF $2,684 AND AMORTIZATION OF GOODWILL OF $618.
</FN>
</TABLE>
