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, 1997
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. 33-50733-02
Resorts International Hotel, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 21-0423320
(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
- continued -
Exhibit Index is presented on page 16
Total number of pages 17
1<PAGE>
Number of shares outstanding of registrant's common stock as
of March 31, 1997: 1,000,000, 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.
2<PAGE>
RESORTS INTERNATIONAL HOTEL, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
at March 31, 1997 and
December 31, 1996 4
Consolidated Statements of
Operations for the Quarters
Ended March 31, 1997 and 1996 5
Consolidated Statements of
Cash Flows for the Quarters
Ended March 31, 1997 and 1996 6
Notes to Consolidated
Financial Statements 8
Item 2. Management's Discussion and
Analysis of Financial
Condition and Results of
Operations 11
Part II. Other Information
Item 6. Exhibits and Reports on
Form 8-K 14
3<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars, except par value)
March 31, December 31,
1997 1996
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 54,721 $ 20,892
Restricted cash equivalents 750 750
Receivables, less allowance for
doubtful accounts of $3,410
and $3,758 5,854 5,936
Inventories 1,097 1,194
Prepaid expenses 1,903 1,844
Total current assets 64,325 30,616
Property and equipment, net of
accumulated depreciation of
$2,369 and $-0- 206,730 209,226
Deferred charges and other assets 18,101 12,637
Goodwill, net of amortization 98,305 98,923
$387,461 $351,402
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 651 $ 636
Accounts payable and accrued
liabilities 31,500 32,307
Interest payable to affiliates 1,116 4,244
Due to SINA 305 2,422
Total current liabilities 33,572 39,609
Notes payable to affiliates, including
unamortized premiums (discounts) 205,920 155,927
Other long-term debt 115 283
Deferred income taxes 35,457 37,500
Shareholder's equity:
Common stock - $1 par value 1,000 1,000
Capital in excess of par 117,083 117,083
Accumulated deficit (5,686)
Total shareholder's equity 112,397 118,083
$387,461 $351,402
4<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1997 1996
Revenues:
Casino and resort revenues $70,641 $69,648
Less promotional allowances (6,454) (5,639)
64,187 64,009
Expenses:
Casino and resort expenses 50,104 50,636
Selling, general and administrative 7,873 8,746
SINA parent services fee 2,119 2,089
Depreciation and amortization 3,186 2,955
63,282 64,426
Operating income (loss) 905 (417)
Other income and expenses:
Interest income 543 584
Interest expense (4,327) (4,151)
Amortization of debt premiums,
discounts and issue costs 150 (364)
Loss before extraordinary item (2,729) (4,348)
Extraordinary item - loss on
extinguishment of debt (net of
income tax benefit of $2,043) (2,957)
Net loss $(5,686) $(4,348)
See Note A of Notes to Consolidated Financial Statements for a
discussion of the Merger in December 1996 and the related change in
basis of accounting.
5<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Quarter Ended
March 31,
1997 1996
Cash flows from operating activities:
Reconciliation of net loss to net
cash used in operating activities:
Net loss $ (5,686) $(4,348)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Extraordinary loss on
extinguishment of debt, net of
income tax benefit 2,957
Depreciation and amortization 3,186 2,955
Amortization of debt premiums,
discounts and issue costs (150) 364
Provision for doubtful
receivables 165 165
Provision for discount on CRDA
obligations, net of
amortization 342 348
Net (increase) decrease in
receivables (83) 945
Net decrease in inventories,
prepaid expenses and other
assets 40 1,143
Net decrease in accounts payable
and accrued liabilities (464) (1,066)
Net decrease in interest payable
to affiliates (3,128) (2,840)
Net cash used in operating
activities (2,821) (2,334)
- continued -
6<PAGE>
RESORTS INTERNATIONAL HOTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
- continued from preceding page -
Quarter Ended
March 31,
1997 1996
Cash flows from investing activities:
Payments for property and equipment (72) (892)
CRDA deposits and bond purchases (730) (768)
Net cash used in investing
activities (802) (1,660)
Cash flows from financing activities:
Proceeds of borrowings from
affiliates 199,084
Payments to secure borrowings (4,479)
Repayment of affiliated notes related
to Offer (153,712)
Advances from (repayments to) SINA (2,117) 1,716
Payments of Merger costs (1,171)
Other debt repayments (153) (142)
Net cash provided by financing
activities 37,452 1,574
Net increase (decrease) in cash and
cash equivalents 33,829 (2,420)
Cash and cash equivalents at beginning
of period 21,642 38,777
Cash and cash equivalents at end of
period $ 55,471 $36,357
7<PAGE>
RESORTS INTERNATIONAL HOTEL, 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 Hotel,
Inc. ("RIH") and its subsidiaries. RIH owns and operates the Resorts
Casino Hotel, a casino/hotel complex located in Atlantic City, New
Jersey. RIH is a wholly owned subsidiary of GGRI, Inc. ("GGRI"),
which is a wholly owned subsidiary of Sun International North America,
Inc. ("SINA"). SINA was known as Griffin Gaming & Entertainment, Inc.
until February 6, 1997. "SINA" is used herein to refer to that
corporation both before and after its name change.
On December 16, 1996, SINA became a wholly owned subsidiary of
Sun International Hotels Limited ("SIHL"), a corporation organized
under the laws of the Commonwealth of The Bahamas, through a merger
transaction (the "Merger"). As a result of the Merger, RIH's
consolidated assets and liabilities were adjusted to their estimated
fair values as of December 31, 1996. The Merger and related basis
adjustments are discussed in detail in Note 1 of Notes to Consolidated
Financial Statements in RIH's Annual Report on Form 10-K for the year
ended December 31, 1996 (the "RIH 1996 Form 10-K").
While the accompanying interim financial information is
unaudited, management of RIH 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, 1996 and should be read in conjunction with the Notes to
Consolidated Financial Statements contained in pages 32 through 50 of
the RIH 1996 Form 10-K.
B. Reverse Repurchase Agreements:
Cash equivalents at March 31, 1997 included $35,930,000 of
reverse repurchase agreements (federal government securities purchased
under agreements to resell those securities) with Prudential
Securities, Inc. under which RIH had not taken delivery of the
underlying securities. These agreements matured during the first week
of April 1997.
C. Refinancing:
In February 1997 Resorts International Hotel Financing, Inc.
("RIHF"), a wholly owned subsidiary of SINA, mailed to each holder of
its $125,000,000 principal amount of 11% Mortgage Notes due 2003 (the
8<PAGE>
"Mortgage Notes") and $35,000,000 principal amount of 11.375% Junior
Mortgage Notes due 2004 (the "Junior Mortgage Notes") an Offer to
Purchase and Consent Solicitation Statement offering to purchase for
cash (the "Offer") the outstanding Mortgage Notes and Junior Mortgage
Notes and soliciting consents (the "Solicitation") for amending the
indentures pursuant to which those securities were issued (the
"Indentures") to, among other things, release the collateral for the
Mortgage Notes and the Junior Mortgage Notes. This collateral
consisted of liens on RIH's fee and leasehold interests in the Resorts
Casino Hotel, the contiguous parking garage and property and related
personal property. Holders who validly tendered their securities and
consents by February 26, 1997 (the "Consent Date") were entitled to
receive the purchase price of 106.733% for the Mortgage Notes and
107.447% for the Junior Mortgage Notes, accrued interest through March
12, 1997, and an additional 2.5% consent payment (the "Consent
Payment"). Holders who tendered their securities and consents
subsequent to the Consent Date but prior to the Offer's expiration on
March 10, 1997, were entitled to the purchase price and accrued
interest, but not the Consent Payment. $119,645,000 principal amount
of Mortgage Notes and $21,001,000 principal amount of Junior Mortgage
Notes were tendered. The purchase price and Consent Payments for
purchasing these tendered securities, excluding accrued interest,
totaled $153,712,000. $5,355,000 principal amount of Mortgage Notes
and $1,100,000 principal amount of Junior Mortgage Notes were not
validly tendered and, therefore, not purchased pursuant to the Offer.
These securities remain outstanding as unsecured obligations of RIHF
and operate under the Indentures, as amended. Under the amended
Indentures, the repayment terms, interest payment terms and redemption
provisions for the remaining Mortgage Notes and Junior Mortgage Notes
are unchanged; however, many of the restrictive covenants as to
payment of dividends and incurring additional indebtedness (as
disclosed in Note 8 of Notes to Consolidated Financial Statements in
the RIH 1996 Form 10-K) have been deleted. See discussion below for
certain restrictions related to the senior notes issued by SIHL and
SINA. The remaining Junior Mortgage Notes continue to trade as part
of units consisting of $1,000 principal amount of Junior Mortgage
Notes and .1928 of an ordinary share of SIHL.
In connection with the Offer and Solicitation, SIHL and SINA (the
"Issuers") issued $200,000,000 principal amount of 9% Senior
Subordinated Notes due 2007 (the "Senior Notes") in a private
placement which, after costs, will result in net proceeds of
approximately $194,000,000. These proceeds were loaned to RIH in
exchange for a $200,000,000 promissory note (the "New RIH Note") with
terms that mirror the terms of the Senior Notes, and RIH's guarantee
of the Senior Notes. RIH transferred to RIHF (i) $153,712,000 in cash
which RIHF needed to pay the purchase price and Consent Payments,
excluding accrued interest, for the Mortgage Notes and Junior Mortgage
Notes tendered to RIHF pursuant to the Offer and (ii) $12,899,000
Junior Mortgage Notes owned by RIH. In exchange for this, the
$125,000,000 and $35,000,000 promissory notes from RIH to RIHF (the
"RIH Notes"), the terms of which
9<PAGE>
mirror the terms of the Mortgage Notes and Junior Mortgage Notes,
respectively, will be canceled and RIH will issue new promissory notes
to RIHF in the amounts of, and with terms that mirror, the remaining
Mortgage Notes and Junior Mortgage Notes. The excess of the cash and
carrying value of the Junior Mortgage Notes tendered by RIH to RIHF
over the net decrease in carrying value, excluding accrued interest,
of the affiliated notes from RIH to RIHF, plus estimated costs of the
Offer and Solicitation, which were borne by RIH, resulted in an
extraordinary loss of $5,000,000. RIH also recorded a deferred tax
benefit of $2,043,000 related to this extraordinary item. The
remainder of the proceeds will be used for general corporate purposes.
The Senior Notes, which are unsecured obligations, are unconditionally
guaranteed by RIH, GGRI and certain of SIHL's subsidiaries (the
"Guarantors"). RIH's guarantee of the Senior Notes is senior to its
guarantee of the Mortgage Notes and Junior Mortgage Notes. Interest
on the Senior Notes and the New RIH Note is payable on March 15 and
September 15 in each year, commencing September 15, 1997. The
indenture for the Senior Notes (the "Senior Indenture") contains
certain covenants, including limitations on the ability of the Issuers
and the Guarantors to, among other things: (i) incur additional
indebtedness, (ii) incur certain liens, (iii) engage in certain
transactions with affiliates and (iv) pay dividends and make certain
other restricted payments. Because the Senior Notes were issued in a
private placement, they were restricted as to transfer.
The Issuers filed a Form F-4 Registration Statement with the
Securities and Exchange Commission in order to register $200,000,000
of 9% Exchange Senior Subordinated Notes due 2007 (the "Exchange
Notes"), and on April 11, 1997, the effective date of that
registration statement, commenced an exchange offer (the "Exchange
Offer") in order to exchange the Senior Notes for the Exchange Notes.
The Exchange Notes have terms identical in all material respects to
the Senior Notes, evidence the same debt as the Senior Notes and are
issued under and are entitled to the same benefits under the Senior
Indenture as the Senior Notes. In addition, the Exchange Notes and
the Senior Notes are treated as one series of securities under the
Senior Indenture which, hereinafter, will be referred to as the
"Exchange Notes." The Exchange Offer expired on May 13, 1997.
D. Statements of Cash Flows:
Supplemental disclosures required by Statement of Financial
Accounting Standards No. 95 "Statement of Cash Flows" are presented
below.
10<PAGE>
Quarter Ended
March 31,
(In Thousands of Dollars) 1997 1996
Interest paid $7,455 $6,991
Non-cash investing and financing
activities - increase in liabilities
for additions to other assets $ 17
E. Commitments and Contingencies:
Casino Reinvestment Development Authority ("CRDA")
As previously reported, certain issues have been raised by the
CRDA and the State of New Jersey Department of the Treasury (the
"Treasury") concerning the satisfaction of investment obligations for
the years 1979 through 1983 by RIH. These matters were dormant for an
extensive period of time until late 1995 when RIH was contacted by the
CRDA. CRDA legal representatives have recently indicated that
Treasury may take a position that RIH owes additional investment
alternative taxes including interest and possibly penalties. If
these issues are determined adversely, RIH could be required to pay
the relevant amount in cash. Management of RIH intends to contest
these issues and believes a negotiated settlement that would not
involve a material monetary cost to RIH is possible.
Litigation
RIH is a defendant in certain litigation. In the opinion of
management, based upon the 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, 1997 RIH had working capital of $30,753,000
including $54,721,000 of unrestricted cash and equivalents. The day-
to-day operations of RIH require approximately $10,000,000 of currency
and coin on hand which amount varies by days of the week, holidays and
seasons. Additional cash balances are necessary to meet current
working capital needs.
11<PAGE>
RIH, through notes payable to affiliates, is the principal source
of funds for servicing the $200,000,000 principal amount of Exchange
Notes, the remaining $5,355,000 principal amount of Mortgage Notes and
the remaining $1,100,000 principal amount of Junior Mortgage Notes.
Annual interest expense on these notes totals approximately
$18,700,000.
Capital Expenditures and Resources
In March 1997 SIHL and SINA loaned the net proceeds of the
Exchange Notes which, after costs, will approximate $194,000,000, to
RIH in exchange for the $200,000,000 New RIH Note and RIH's guarantee
of the Exchange Notes. RIH then transferred to RIHF (i) the portion
of the proceeds ($153,712,000) needed to purchase the Mortgage Notes
and the Junior Mortgage Notes tendered to RIHF pursuant to the Offer
and (ii) $12,899,000 Junior Mortgage Notes owned by RIH. In exchange
for this, the RIH Notes will be canceled and RIH will issue new
promissory notes to RIHF in the amounts of $5,355,000 and $1,100,000
and with terms that mirror the terms of the remaining Mortgage Notes
and Junior Mortgage Notes, respectively. The remaining proceeds will
be used for general corporate purposes. See Note C of Notes to
Consolidated Financial Statements for further discussion of these
transactions.
As previously disclosed, officials of SIHL announced plans to
transform Resorts Casino Hotel into a highly themed resort. At
present, the project is in the conceptual design stage and detailed
planning is expected to begin in 1998. The expansion is expected to
include additional hotel rooms and a highly themed casino and
entertainment complex. The size and scope of the expansion depend, in
part, upon the amount of additional land RIH and SINA are able to
acquire. In this regard, SINA spent in excess of $7,500,000 during
the first quarter of 1997 on land intended to be used in this
expansion. In addition, RIH's ability to carry out the expansion
depends on a number of other factors, including receipt of adequate
financing and certain state and local approvals.
During 1997 RIH expects to begin enhancing the Resorts Casino
Hotel through the construction of additional parking, the renovation
of approximately 500 of the hotel rooms and various improvements to
public areas. The planning for such renovation has just recently
begun, and the costs and schedule therefor have not yet been
determined.
RESULTS OF OPERATIONS - First Quarter 1997 Compared to 1996
Revenues
Net casino revenues increased from $58,687,000 in the first
quarter of 1996 to $59,104,000 in the first quarter of 1997 as table
win increased by $1,045,000, slot win decreased by $416,000 and poker,
simulcast and keno revenues decreased by $212,000. Table game win was
up due to both an increase in amounts wagered by patrons and the
effects
12<PAGE>
of an increased hold percentage (ratio of casino win to total amount
of chips purchased for table games or total amount wagered for slots).
The decrease in slot win was due to a decrease in amounts wagered.
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 another competitor's expansion is
expected to open adding approximately 75,000 square feet of casino
space and two other competitors are scheduled to open hotel room
additions of 300 and 400 rooms this summer. Several other companies
have announced plans to expand existing or construct new casino/hotels
in Atlantic City.
Expenses
Casino and Resort Expenses
For the first quarter of 1997 the largest decreases in casino and
resort expenses were in fees charged RIH by the New Jersey Casino
Control Commission ("CCC") and Division of Gaming Enforcement ("DGE")
($600,000) and cash giveaways at RIH ($600,000). The CCC and DGE fees
were higher in 1996 because RIH's gaming license renewal investigation
and hearing took place in early 1996. The cash giveaways were down as
the cash giveaway per bus patron decreased, though RIH's number of bus
passengers increased.
Selling, General and Administrative
T h ese costs decreased, primarily due to the decrease in
amortization of prepaid fees ($600,000) under an agreement whereby RIH
and SINA have a non-exclusive license to use the name and likeness of
Merv Griffin to advertise the Resorts Casino Hotel. The balance of
such prepaid fees were written off in December 1996.
Depreciation and Amortization
These expenses were up slightly as the decrease in depreciation
expense ($400,000) resulting primarily from the changes in remaining
depreciable lives assigned in conjunction with the Merger was more
than offset by the amortization of goodwill ($600,000).
13<PAGE>
PART II. OTHER INFORMATION
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 RIH covering an event
during the first quarter of 1997. No amendments to previously filed
Forms 8-K were filed during the first quarter of 1997.
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.
RESORTS INTERNATIONAL HOTEL, INC.
(Registrant)
/s/ George Papanier
George Papanier
Executive Vice President
(Authorized Officer of
Registrant, Chief Operating
Officer and Chief Financial
Officer)
Date: May 14, 1997
15<PAGE>
RESORTS INTERNATIONAL HOTEL, INC.
Form 10-Q for the quarterly period
ended March 31, 1997
EXHIBIT INDEX
Exhibit
Number Exhibit Page Number in Form 10-Q
(27) Financial data schedule Page 17.
16<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RESORTS
INTERNATIONAL HOTEL, 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.
PLEASE SEE FOOTNOTE 5 RELATING TO INFORMATION IN THIS FDS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> $55,471<F1>
<SECURITIES> 0
<RECEIVABLES> $8,327
<ALLOWANCES> $3,587
<INVENTORY> $1,097
<CURRENT-ASSETS> $64,325
<PP&E> $209,099
<DEPRECIATION> 0
<TOTAL-ASSETS> $387,461
<CURRENT-LIABILITIES> $33,572
<BONDS> $206,035<F2>
<COMMON> $1,000
0
0
<OTHER-SE> $111,397
<TOTAL-LIABILITY-AND-EQUITY> $387,461
<SALES> 0
<TOTAL-REVENUES> $64,187
<CGS> 0
<TOTAL-COSTS> $50,104<F3>
<OTHER-EXPENSES> $3,186<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $4,177
<INCOME-PRETAX> $(2,729)
<INCOME-TAX> 0
<INCOME-CONTINUING> $(2,729)
<DISCONTINUED> 0
<EXTRAORDINARY> $(2,957)
<CHANGES> 0
<NET-INCOME> $(5,686)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>INCLUDES NON-RESTRICTED CASH EQUIVALENTS OF $43,377 AND
RESTRICTED CASH EQUIVALENTS OF $750.
<F2>INCLUDING UNAMORTIZED PREMIUMS.
<F3>EXCLUDES DEPRECIATION EXPENSE.
<F4>DEPRECIATION EXPENSE OF $2,568 AND AMORTIZATION OF GOODWILL OF $618.
<F5>SEE NOTE 1 OF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS IN RESORTS
INTERNATIONAL HOTEL, INC.'S ("RIH") FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1996 FOR DISCUSSION OF A MERGER IN DECEMBER 1996 OF SUN
INTERNATIONAL NORTH AMERICA, INC., RIH'S FORMER ULTIMATE PARENT, AND
THE RELATED CHANGE IN RIH'S BASIS OF ACCOUNTING.
</FN>
</TABLE>
