SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2000
--------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- -----------
Commission file number 1-5440
----------------------------------------
AZTAR CORPORATION
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0636534
- ----------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016
- --------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 381-4100
----------------
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
----- -----
At April 27, 2000, the registrant had outstanding 41,618,335 shares of
its common stock, $.01 par value.
AZTAR CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Consolidated Balance Sheets at March 30, 2000 and
December 30, 1999 3
Consolidated Statements of Operations for the quarters
ended March 30, 2000 and April 1, 1999 5
Consolidated Statements of Cash Flows for the quarters
ended March 30, 2000 and April 1, 1999 6
Consolidated Statements of Shareholders' Equity for
the quarters ended March 30, 2000 and April 1, 1999 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
2
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
---------------------------------------
(in thousands, except share data)
<CAPTION>
March 30, December 30,
2000 1999
------------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 46,136 $ 54,180
Accounts receivable, net 24,886 26,104
Refundable income taxes -- 881
Inventories 6,999 7,836
Prepaid expenses 10,568 11,293
Deferred income taxes, net 17,340 17,333
---------- ----------
Total current assets 105,929 117,627
Investments in and advances to
unconsolidated partnership 7,479 7,659
Other investments 20,371 20,379
Property and equipment:
Buildings, riverboats and equipment, net 744,473 754,900
Land 102,445 102,428
Construction in progress 6,263 4,382
Leased under capital leases, net 3,701 4,447
---------- ----------
856,882 866,157
Deferred charges and other assets 36,476 37,185
---------- ----------
$1,027,137 $1,049,007
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
3
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (continued)
---------------------------------------
(in thousands, except share data)
<CAPTION>
March 30, December 30,
2000 1999
------------- ------------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 54,888 $ 51,197
Accrued payroll and employee benefits 26,263 26,399
Accrued interest payable 10,725 5,198
Income taxes payable 3,863 --
Current portion of long-term debt 3,354 3,334
Current portion of other long-term
liabilities 2,662 3,198
---------- ----------
Total current liabilities 101,755 89,326
Long-term debt 461,870 497,628
Other long-term liabilities 20,500 21,099
Deferred income taxes 8,687 6,041
Contingencies and commitments
Series B ESOP convertible preferred stock
(redemption value $10,054 and $9,734) 6,934 7,003
Shareholders' equity:
Common stock, $.01 par value (41,799,031
and 42,945,190 shares outstanding) 508 506
Paid-in capital 422,516 420,786
Retained earnings 74,826 63,963
Less: Treasury stock (70,459) (57,345)
---------- ----------
Total shareholders' equity 427,391 427,910
---------- ----------
$1,027,137 $1,049,007
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
4
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the periods ended March 30, 2000 and April 1, 1999
-------------------------------------------------------------
(in thousands, except per share data)
<CAPTION>
First Quarter
-------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues
Casino $170,729 $154,185
Rooms 16,878 15,565
Food and beverage 14,291 13,239
Other 9,626 7,555
-------- --------
211,524 190,544
Costs and expenses
Casino 74,805 70,038
Rooms 8,730 8,229
Food and beverage 13,695 13,607
Other 8,216 7,171
Marketing 23,059 19,616
General and administrative 19,424 17,959
Utilities 3,328 3,069
Repairs and maintenance 6,421 6,212
Provision for doubtful accounts 1,604 1,824
Property taxes and insurance 5,996 5,909
Rent 4,085 3,996
Depreciation and amortization 13,720 13,244
-------- --------
183,083 170,874
-------- --------
Operating income 28,441 19,670
Interest income 341 417
Interest expense (10,886) (14,285)
-------- --------
Income before other items and income taxes 17,896 5,802
Equity in unconsolidated partnership's loss (1,033) (1,008)
-------- --------
Income before income taxes 16,863 4,794
Income taxes (5,839) (1,942)
-------- --------
Net income $ 11,024 $ 2,852
======== ========
Net income per common share $ .26 $ .06
Net income per common share assuming dilution $ .25 $ .06
Weighted-average common shares applicable to:
Net income per common share 42,366 45,340
Net income per common share assuming dilution 43,753 46,467
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
5
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
For the periods ended March 30, 2000 and April 1, 1999
---------------------------------------------------------------
(in thousands)
<CAPTION>
First Quarter
---------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 11,024 $ 2,852
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 14,020 13,698
Provision for losses on accounts receivable 1,604 1,824
Loss on reinvestment obligation 431 19
Rent expense (243) (246)
Distribution in excess of equity in income
of partnership 180 215
Deferred income taxes 2,639 379
Change in assets and liabilities:
(Increase) decrease in accounts receivable (386) 1,940
(Increase) decrease in refundable income taxes 881 --
(Increase) decrease in inventories and
prepaid expenses 1,560 (1,613)
Increase (decrease) in accounts payable,
accrued expenses and income taxes payable 13,143 (19,333)
Other items, net 110 86
--------- ---------
Net cash provided by (used in) operating activities 44,963 (179)
--------- ---------
Cash Flows from Investing Activities
Payments received on notes receivable -- 823
Reduction in other investments 848 --
Purchases of property and equipment (3,578) (5,812)
Additions to other long-term assets (1,618) (3,191)
--------- ---------
Net cash provided by (used in) investing activities (4,348) (8,180)
--------- ---------
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt 67,900 58,700
Proceeds from issuance of common stock 491 --
Principal payments on long-term debt (103,665) (67,422)
Principal payments on other long-term liabilities (575) (325)
Debt issuance costs -- (125)
Repurchase of common stock (12,437) --
Preferred stock dividend (277) (312)
Redemption of preferred stock (96) (151)
--------- ---------
Net cash provided by (used in) financing activities (48,659) (9,635)
--------- ---------
Net increase (decrease) in cash and cash equivalents (8,044) (17,994)
Cash and cash equivalents at beginning of period 54,180 58,600
--------- ---------
Cash and cash equivalents at end of period $ 46,136 $ 40,606
========= =========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
6
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(continued)
For the periods ended March 30, 2000 and April 1, 1999
---------------------------------------------------------------
(in thousands)
<CAPTION>
First Quarter
-------------------
2000 1999
-------- --------
<S> <C> <C>
Supplemental Cash Flow Disclosures
Summary of non-cash investing and financing activities:
Capital lease obligations incurred for property
and equipment $ -- $ 16
Tax benefit from stock options and preferred stock
dividend 55 7
Exchange of common stock in lieu of cash payments
in connection with the exercise of stock options 677 --
Cash flow during the period for the following:
Interest paid, net of amount capitalized $ 5,059 $ 25,523
Income taxes paid (refunded) (1,599) 2,493
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
7
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
For the periods ended March 30, 2000 and April 1, 1999
-----------------------------------------------------------
(in thousands, except number of shares)
<CAPTION>
First Quarter
--------------------
2000 1999
-------- --------
<S> <C> <C>
Common stock:
Beginning balance $ 506 $ 492
Stock options exercised for 187,220 shares in 2000 2 --
-------- --------
Ending balance 508 492
-------- --------
Paid-in capital:
Beginning balance 420,786 412,528
Stock options exercised 1,675 --
Tax benefit from stock options exercised 55 --
-------- --------
Ending balance 422,516 412,528
-------- --------
Retained earnings:
Beginning balance 63,963 58,207
Preferred stock dividend and losses on redemption,
net of an income tax benefit of $7 in 1999 (161) (154)
Net income 11,024 2,852
-------- --------
Ending balance 74,826 60,905
-------- --------
Treasury stock:
Beginning balance (57,345) (17,126)
Repurchase of 1,242,500 shares of common stock,
at cost, in 2000 (12,228) --
Repurchase of 90,879 shares of common stock, at
cost, in connection with stock options exercised
in 2000 (886) --
-------- --------
Ending balance (70,459) (17,126)
-------- --------
$427,391 $456,799
======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
8
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1: General
- ----------------
The consolidated financial statements reflect all adjustments, such
adjustments being normal recurring accruals, which are necessary, in the
opinion of management, for the fair presentation of the results of the
interim periods; interim results, however, may not be indicative of the
results for the full year.
The notes to the interim consolidated financial statements are presented to
enhance the understanding of the financial statements and do not necessarily
represent complete disclosures required by generally accepted accounting
principles. There was no interest capitalized during the quarters ended 2000
or 1999. Capitalized costs related to various development projects, included
in deferred charges and other assets, were $4,890,000 and $4,778,000 at March
30, 2000 and December 30, 1999, respectively. For additional information
regarding significant accounting policies, Las Vegas Tropicana redevelopment,
long-term debt, lease obligations, and other matters applicable to the
Company, reference should be made to the Company's Annual Report to
Shareholders for the year ended December 30, 1999.
Note 2: Investments in and Advances to Unconsolidated Partnership
- -----------------------------------------------------------------
<TABLE>
Following are summarized operating results for the Company's unconsolidated
partnership, accounted for using the equity method for the periods ended
March 30, 2000 and April 1, 1999 (in thousands):
<CAPTION>
First Quarter
-------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues $ 4,376 $ 4,257
Operating expenses (684) (684)
-------- --------
Operating income 3,692 3,573
Interest expense (1,098) (1,037)
-------- --------
Net income $ 2,594 $ 2,536
======== ========
</TABLE>
<TABLE>
The Company's share of the above operating results, after intercompany
eliminations, is as follows (in thousands):
<CAPTION>
First Quarter
-------------------
2000 1999
-------- --------
<S> <C> <C>
Equity in unconsolidated
partnership's loss $ (1,033) $ (1,008)
</TABLE>
9
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 3: Long-term Debt
- -----------------------
<TABLE>
Long-term debt consists of the following (in thousands):
<CAPTION>
March 30, December 30,
2000 1999
-------- ------------
<S> <C> <C>
8 7/8% Senior Subordinated Notes Due 2007 $235,000 $235,000
Revolving credit facility ("Revolver");
floating rate, 7.68% at March 30, 2000;
matures June 30, 2003 175,000 210,100
Term loan ("Term Loan"); floating rate, 8.61%
at March 30, 2000; matures June 30, 2005 49,750 49,875
Other notes payable; 14.6%; maturities
to 2002 621 594
Obligations under capital leases 4,853 5,393
-------- --------
465,224 500,962
Less current portion (3,354) (3,334)
-------- --------
$461,870 $497,628
======== ========
</TABLE>
Note 4: Other Long-term Liabilities
- -------------------------------------
<TABLE>
Other long-term liabilities consist of the following (in thousands):
<CAPTION>
March 30, December 30,
2000 1999
--------- ------------
<S> <C> <C>
Deferred compensation and retirement plans $ 12,213 $ 12,530
Accrued rent expense 9,296 9,539
Obligation to City of Evansville and
other civic and community organizations 1,238 1,800
Las Vegas Boulevard beautification assessment 415 428
-------- --------
23,162 24,297
Less current portion (2,662) (3,198)
-------- --------
$ 20,500 $ 21,099
======== ========
</TABLE>
Note 5: Income Taxes
- ----------------------
The Company is responsible, with certain exceptions, for the taxes of Ramada
Inc. ("Ramada") through December 20, 1989. The Internal Revenue Service
("IRS") has completed its examinations of the income tax returns for the
years 1989 through 1991 and has settled for all but one issue. The IRS is
examining the income tax returns for the years 1992 through 1996. The
Indiana Department of Revenue is examining the Indiana income tax returns for
the years 1995 through 1997. Management believes that adequate provision for
income taxes and interest has been made in the financial statements. In
connection with the IRS examinations of the years 1989 through 1996,
10
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
management has estimated and provided a reserve for amounts that could be due
upon settlement. It is reasonably possible that an issue in these
examinations could be favorably settled in the near term.
Note 6: Earnings Per Share
- ---------------------------
Net income per common share excludes dilution and is computed by dividing
income applicable to common shareholders by the weighted-average number of
common shares outstanding. Net income per common share, assuming dilution,
is computed based on the weighted-average number of common shares outstanding
after consideration of the dilutive effect of stock options and the assumed
conversion of the preferred stock at the stated rate.
<TABLE>
The computations of net income per common share and net income per common
share, assuming dilution, for the periods ended March 30, 2000 and April 1,
1999, are as follows:
<CAPTION>
First Quarter
------------------
2000 1999
-------- --------
<S> <C> <C>
Net income $ 11,024 $ 2,852
Less: preferred stock dividends
and losses on redemption (net of an
income tax benefit of $7 in 1999,
credited to retained earnings) (161) (154)
-------- --------
Net income applicable to computations $ 10,863 $ 2,698
======== ========
Weighted-average common shares
applicable to net income per
common share 42,366 45,340
Effect of dilutive securities:
Stock option incremental shares 650 299
Assumed conversion of preferred stock 737 828
-------- --------
1,387 1,127
-------- --------
Weighted-average common shares
applicable to net income per
common share assuming dilution 43,753 46,467
======== ========
Net income per common share $ .26 $ .06
======== ========
Net income per common share
assuming dilution $ .25 $ .06
======== ========
</TABLE>
11
Note 7: Contingencies and Commitments
- --------------------------------------
The Company agreed to indemnify Ramada against all monetary judgments in
lawsuits pending against Ramada and its subsidiaries as of the conclusion of
the restructuring of Ramada (the "Restructuring") on December 20, 1989, as
well as all related attorneys' fees and expenses not paid at that time,
except for any judgments, fees or expenses accrued on the hotel business
balance sheet and except for any unaccrued and unreserved aggregate amount up
to $5,000,000 of judgments, fees or expenses related exclusively to the hotel
business. Aztar is entitled to the benefit of any crossclaims or
counterclaims related to such lawsuits and of any insurance proceeds
received. In addition, the Company agreed to indemnify Ramada for various
lease guarantees made by Ramada relating to the restaurant business. In
connection with these matters, the Company has an accrued liability of
$3,832,000 at March 30, 2000 and December 30, 1999.
The Company is a party to various other claims, legal actions and complaints
arising in the ordinary course of business or asserted by way of defense or
counterclaim in actions filed by the Company. Management believes that its
defenses are substantial in each of these matters and that the Company's
legal posture can be successfully defended without material adverse effect on
its consolidated financial statements.
The Tropicana Las Vegas lease agreement contains a provision that requires
the Company to maintain an additional security deposit with the lessor of
$21,000,000 in cash or a letter of credit if the Tropicana Las Vegas
operation fails to meet certain financial tests. The Company has a 50%
partnership interest in the lessor.
The Company has severance agreements with certain of its senior executives.
Severance benefits range from a lump-sum cash payment equal to three times
the sum of the executive's annual base salary and the average of the
executive's annual bonuses awarded in the preceding three years plus payment
of the value in the executive's outstanding stock options and vesting and
distribution of any restricted stock to a lump-sum cash payment equal to the
executive's annual base salary. In certain agreements, the termination must
be as a result of a change in control of the Company. Based upon current
salary levels and stock options, the aggregate commitment under the severance
agreements should all these executives be terminated was approximately
$17,000,000 at March 30, 2000.
Item 2. Management's Discussion and Analysis
Financial Condition
During the first quarter of 2000, we repurchased 1,242,500 shares of common
stock at prices ranging from $8.81 per share to $10.88 per share and at an
average price of $9.80 per share, under a program authorized by our Board of
Directors in 1999.
12
AZTAR CORPORATION AND SUBSIDIARIES
Results of Operations
Quarter Ended March 30, 2000 Compared to Quarter Ended April 1, 1999
Our consolidated revenues in the first quarter of 2000 were $211.5 million,
an increase of 11% over $190.5 million in the first quarter of 1999,
reflecting higher total revenues at all properties. Consolidated casino
revenue was $16.5 million or 11% higher in the 2000 versus 1999 first
quarter, with a substantial portion of the increase coming from Tropicana
Atlantic City. Consolidated operating income was $28.4 million in the 2000
first quarter, a 45% improvement over $19.7 million in the 1999 first
quarter, reflecting improved operating results at all properties. Consistent
with the increase in consolidated casino revenue, consolidated casino costs
were up $4.8 million in the 2000 versus 1999 first quarter, largely
attributable to an increase in casino costs at Tropicana Atlantic City.
Consolidated marketing costs were $3.4 million higher in the 2000 versus 1999
first quarter primarily due to an increased number of marketing promotions
and special events at Tropicana Atlantic City.
Consolidated interest expense was 24% or $3.4 million lower in the 2000
versus 1999 first quarter. The decrease in interest expense was primarily a
result of lower interest rates achieved through a refinancing of debt we
completed in 1999.
TROPICANA ATLANTIC CITY Total revenues at Tropicana Atlantic City were
$111.0 million in the first quarter of 2000, up 14% from $97.3 million in the
1999 first quarter. Casino revenue was 13% higher in the 2000 versus 1999
first quarter, reflecting a 16% increase in slot revenue and an 8% increase
in games revenue. Rooms revenue was $0.6 million or 20% higher in the first
quarter of 2000, primarily as a result of an increase in occupied rooms on a
non-complimentary basis. The increase in occupied rooms led to a 24%
increase in food and beverage revenue in the first quarter of 2000.
Tropicana Atlantic City had operating income of $17.5 million in the 2000
first quarter, a 19% improvement over $14.7 million in the 1999 first
quarter. Consistent with the increases in casino revenue, rooms revenue and
food and beverage revenue, casino costs and rooms costs were each 13% higher
and food and beverage costs were 14% higher in the 2000 versus 1999 first
quarter. Marketing costs were $3.6 million higher in the 2000 versus 1999
first quarter primarily due to an increased number of marketing promotions
and special events. Operating income is after rent and depreciation and
amortization expenses. Rent expense was $0.5 million in both periods.
Depreciation and amortization was $6.6 million in the first quarter of 2000
compared to $6.3 million in the first quarter of last year.
TROPICANA LAS VEGAS At Tropicana Las Vegas, total revenues were $38.1
million in the first quarter of 2000, a 6% increase over $35.8 million in the
first quarter of 1999. Casino revenue was slightly lower in the 2000 versus
13
AZTAR CORPORATION AND SUBSIDIARIES
1999 first quarter, primarily due to an 11% decrease in games revenue
partially offset by a 3% increase in slot revenue. Contributing to the
increase in total revenue was an increase in revenue from retail shops and
entertainment. Tropicana Las Vegas had operating income of $1.1 million in
the 2000 first quarter compared to an operating loss of $1.9 million in the
1999 first quarter. Operating income or loss is after rent and depreciation
and amortization expenses. Rent expense was $2.5 million in the first
quarter of 2000 compared to $2.4 million in the first quarter of 1999.
Depreciation and amortization was $2.4 million in the 2000 first quarter
compared to $2.5 million in the 1999 first quarter.
RAMADA EXPRESS At Ramada Express, total revenues were $27.7 million in the
first quarter of 2000, up 10% from $25.2 million in the first quarter of
1999. Operating income was $6.7 million in the 2000 first quarter, a 27%
improvement over $5.3 million in the 1999 first quarter. Operating income is
after rent and depreciation and amortization expenses. Rent expense was $0.2
million in both periods. Depreciation and amortization was $1.3 million in
the 2000 first quarter compared to $1.1 million in the 1999 first quarter.
CASINO AZTAR EVANSVILLE Total revenues at Casino Aztar Evansville were $28.1
million in the first quarter of 2000, up 7% from $26.4 million in the first
quarter of last year. Operating income was $6.0 million in the 2000 first
quarter, a 20% improvement over $5.0 million in the 1999 first quarter.
Operating income is after rent and depreciation and amortization expenses.
Rent expense was $0.8 million in both periods. Depreciation and amortization
was $2.5 million in the 2000 first quarter compared to $2.4 million in the
1999 first quarter.
CASINO AZTAR CARUTHERSVILLE Total revenues at Casino Aztar Caruthersville
were $6.6 million in the first quarter of 2000, a 14% increase over $5.8
million in the first quarter of 1999. Casino Aztar Caruthersville had
operating income of $0.2 million in the 2000 first quarter compared to an
operating loss of $41,000 in the 1999 first quarter. Operating income or
loss is after depreciation and amortization of $0.9 million in the 2000 first
quarter compared to $0.8 million in the 1999 first quarter.
Other Matters
In June 1998, the Financial Accounting Standards Board adopted Statement of
Financial Accounting Standards No. 133 entitled "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. If specific conditions are met, a derivative may
be specifically designated as a hedge of specific financial exposures. The
accounting for changes in the fair value of a derivative depends on the
intended use of the derivative and, if it is used in hedging activities, it
depends on its effectiveness as a hedge. SFAS 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. SFAS 133
should not be applied retroactively to financial statements of prior periods.
Aztar will adopt SFAS 133 when required. Because of our minimal use of
derivatives, we do not anticipate that the adoption of SFAS 133 will have a
significant effect on Aztar's earnings or financial position.
14
AZTAR CORPORATION AND SUBSIDIARIES
Private Securities Litigation Reform Act
Certain information included in Aztar's 1999 Form 10-K, this Form 10-Q and
other materials filed or to be filed by us with the Securities and Exchange
Commission (as well as information included in oral statements or other
written statements made or to be made by us including those made in Aztar's
1999 annual report) contains statements that are forward-looking. These
include forward-looking statements relating to the following activities,
among others: operation and expansion of existing properties, including
future performance; redevelopment of the Las Vegas Tropicana and financing
and/or concluding an arrangement with a partner for such redevelopment; other
business development activities; uses of free cash flow; stock repurchases;
debt repayments; and use of derivatives. Such forward-looking information
involves important risks and uncertainties that could significantly affect
results in the future and, accordingly, such results may differ materially
from those expressed in any forward-looking statements made by us or on our
behalf. These risks and uncertainties include, but are not limited to, the
following factors as well as other factors described from time to time in
Aztar's reports filed with the SEC: construction and development factors,
including zoning issues, environmental restrictions, soil conditions, weather
and other hazards, site access matters and building permit issues; factors
affecting leverage and debt service, including sensitivity to fluctuation in
interest rates; access to available and feasible financing; regulatory and
licensing approvals; third-party consents, approvals and representations, and
relations with partners, owners, suppliers and other third parties; reliance
on key personnel; business and economic conditions; market prices of our
common stock; litigation, judicial actions and political uncertainties,
including gaming legislation and taxation; and the effects of competition,
including locations of competitors and operating and marketing competition.
Any forward-looking statements are made pursuant to the Private Securities
Litigation Reform Act of 1995 and, as such, speak only as of the date made.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of March 30, 2000, there were no material changes to the information
incorporated by reference in Item 7A of the Company's Annual Report on Form
10-K for the fiscal year ended December 30, 1999.
15
AZTAR CORPORATION AND SUBSIDIARIES
PART - II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Page No.
----------
10.1 Amendment No. 4, dated March 17, 2000, to Amended
and Restated Reducing Revolving Loan Agreement,
dated as of May 28, 1998, among Aztar Corporation
and the lenders therein named; Bankers Trust
Company and Societe Generale, as documentation
agents; Bank of Scotland, Credit Lyonnais Los
Angeles Branch and PNC Bank, National
Association, as co-agents; and Bank of America
National Trust and Savings Association,
as administrative agent. *
27. Financial Data Schedule. *
* See exhibit index at page E-1 of this report for a
listing of exhibits filed with this report.
All other exhibits have been omitted because the
information is either not required or not applicable.
(b) Reports on Form 8-K
The Company did not file any report on Form 8-K during the quarter
ended March 30, 2000.
16
AZTAR CORPORATION AND SUBSIDIARIES
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.
AZTAR CORPORATION
------------------------------
(Registrant)
Date May 3, 2000 By ROBERT M. HADDOCK
-------------------------- ---------------------------
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
17
AZTAR CORPORATION AND SUBSIDIARIES
Exhibit Index
- -------------
10.1 Amendment No. 4, dated March 17, 2000, to Amended and
Restated Reducing Revolving Loan Agreement, dated as of
May 28, 1998, among Aztar Corporation and the lenders
therein named; Bankers Trust Company and Societe
Generale, as documentation agents; Bank of Scotland,
Credit Lyonnais Los Angeles Branch and PNC Bank, National
Association, as co-agents; and Bank of America National
Trust and Savings Association, as administrative agent.
27. Financial Data Schedule.
E-1
AMENDMENT NO. 4 TO AMENDED AND RESTATED
REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 4 to Amended and Restated Reducing
Revolving Loan Agreement (this "Amendment") dated as of
March 17, 2000 is entered into with reference to the Amended
and Restated Reducing Revolving Loan Agreement dated as of
May 28, 1998 among Aztar Corporation ("Borrower"), the Banks
party thereto, Bankers Trust Company and Societe Generale,
as Documentation Agents, Bank of Scotland, Credit Lyonnais
Los Angeles Branch and PNC Bank, National Association, as
Co-Agents, and Bank of America National Trust and Savings
Association, as Administrative Agent (the "Loan Agreement").
Capitalized terms used but not defined herein are used with
the meanings set forth for those terms in the Loan
Agreement.
Borrower and the Administrative Agent, acting with
the consent of the Requisite Banks pursuant to Section 11.2
of the Loan Agreement, agree as follows:
1. Section 1.1. Section 1.1 of the Loan
Agreement is amended by revising the definitions of
"Aggregate Basket" and "Sub Debt Basket" to read as follows:
"Aggregate Basket" means, as of any date of
determination, (a) $430,000,000 plus (b) the
principal amount of any New Subordinated Debt
issued subsequent to the Closing Date.
"Sub Debt Basket" means, as of any date of
determination, (a) $205,000,000 plus (b) the
principal amount of any New Subordinated Debt
issued subsequent to the Closing Date.
2. Effective Date. The revisions to the
definitions of "Aggregate Basket" and "Sub Debt Basket" set
forth in Paragraph 1 shall be effective as of the effective
date of Amendment No. 2 dated as of March 5, 1999 to the
Loan Agreement.
3. Compliance Certificate. Exhibit B to the Loan
Agreement is amended to reflect the revisions in the
definitions of "Aggregate Basket" and "Sub Debt Basket" set
forth in Paragraph 1.
4. Conditions Precedent. The effectiveness of this
Amendment shall be conditioned upon the receipt by the
Administrative Agent of all of the following, each properly
executed by a Responsible Official of each party thereto and
dated as of the date hereof:
(a) Counterparts of this Amendment
executed by all parties hereto;
(b) Written consent of each of the
Significant Subsidiaries to the execution, delivery
and performance hereof, substantially in the form of
Exhibit A to this Amendment; and
(c) Written consent of the Requisite Banks
as required under Section 11.2 of the Loan Agreement
in the form of Exhibit B to this Amendment.
5. Representation and Warranty. Borrower
represents and warrants to the Administrative Agent and the
Banks that no Default or Event of Default has occurred and
remains continuing.
6. Confirmation. In all other respects, the terms
of the Loan Agreement and the other Loan Documents are
hereby confirmed.
IN WITNESS WHEREOF, Borrower and the Administrative
Agent have executed this Amendment as of the date first
written above by their duly authorized representatives.
AZTAR CORPORATION
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Treasurer
[Printed Name and Title]
BANK OF AMERICA, N.A. (formerly
known as "Bank of America National
Trust and Savings Association") as
Administrative Agent
By: JANICE HAMMOND
Janice Hammond
Vice President
Exhibit A to Amendment
CONSENT OF SUBSIDIARY GUARANTORS
Reference is hereby made to that certain Amended
and Restated Reducing Revolving Loan Agreement dated as of
May 28, 1998 among Aztar Corporation ("Borrower"), the Banks
party thereto, Bankers Trust Company and Societe Generale,
as Documentation Agents, Bank of Scotland, Credit Lyonnais
Los Angeles Branch and PNC Bank, National Association, as
Co-Agents, and Bank of America National Trust and Savings
Association, as Administrative Agent (as amended, the "Loan
Agreement").
Each of the undersigned hereby consents to the
execution, delivery and performance by Borrower and the
Administrative Agent of Amendment No. 4 to the Loan
Agreement.
Each of the undersigned represents and warrants to
the Administrative Agent and the Banks that there is no
defense, counterclaim or offset of any type or nature to the
Subsidiary Guaranty, and that the same remains in full force
and effect.
Dated: March 17, 2000
HOTEL RAMADA OF NEVADA
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
AZTAR DEVELOPMENT CORPORATION
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Secretary
AZTAR INDIANA GAMING CORPORATION
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
AZTAR MISSOURI GAMING CORPORATION
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
RAMADA NEW JERSEY, INC.
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
ATLANTIC-DEAUVILLE INC.
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
ADAMAR GARAGE CORPORATION
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
AZTAR INDIANA GAMING CORPORATION, LLC
By: Aztar Indiana
Gaming Corporation,
its Managing Member
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
RAMADA NEW JERSEY HOLDINGS CORPORATION
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
MANCHESTER MALL, INC.
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
RAMADA EXPRESS, INC.
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
ADAMAR OF NEW JERSEY, INC.
By: NEIL A. CIARFALIA
Neil A. Ciarfalia
Title: Treasurer
AZTAR RIVERBOAT HOLDING COMPANY, LLC
By: NED ARMSTRONG
its Managing Member
By: Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
AZTAR MISSOURI RIVERBOAT GAMING COMPANY, LLC
By: Aztar Missouri
Gaming Corporation,
its Managing Member
By: NED ARMSTRONG
Nelson W. Armstrong, Jr.
Title: Vice President & Secretary
Exhibit B to Amendment
CONSENT OF BANK
Reference is hereby made to that certain Amended
and Restated Reducing Revolving Loan Agreement dated as of
May 28, 1998 among Aztar Corporation ("Borrower"), the Banks
party thereto, Bankers Trust Company and Societe Generale,
as Documentation Agents, Bank of Scotland, Credit Lyonnais
Los Angeles Branch and PNC Bank, National Association, as
Co-Agents, and Bank of America National Trust and Savings
Association, as Administrative Agent (as amended, the "Loan
Agreement").
The undersigned Bank hereby consents to the
execution and delivery of Amendment No. 4 to the Loan
Agreement by the Administrative Agent on its behalf,
substantially in the form of the most recent draft thereof
presented to the undersigned Bank.
Date: March 16, 2000
Bank of America
--------------------------------------
[Name of Institution]
By R.L. WENNEKAMP
R.L. Wennekamp, MD
---------------------------------------
[Printed Name and Title]
Date: March 9, 2000
Bank of Scotland
--------------------------------------
[Name of Institution]
By ANNIE GLYNN
Annie Glynn
Senior Vice President
---------------------------------------
[Printed Name and Title]
Date: March 14, 2000
Fleet Bank, NA
--------------------------------------
[Name of Institution]
By JOHN T. HARRISON
John T. Harrison
Senior Vice President
---------------------------------------
[Printed Name and Title]
Date: March 14, 2000
Imperial Bank
--------------------------------------
[Name of Institution]
By R. VADALMA
Ray Vadalma
Senior Managing Director
---------------------------------------
[Printed Name and Title]
Date: March 9, 2000
KeyBank National Association
--------------------------------------
[Name of Institution]
By MARY K. YOUNG
Mary K. Young
Assistant Vice President
---------------------------------------
[Printed Name and Title]
Date: March 14, 2000
PNC Bank National Association
--------------------------------------
[Name of Institution]
By GARY W. WESSELS
Gary W. Wessels
Vice President
---------------------------------------
[Printed Name and Title]
Date: March 16, 2000
Societe Generale
--------------------------------------
[Name of Institution]
By DONALD L. SCHUBERT
Donald L. Schubert
Managing Director
---------------------------------------
[Printed Name and Title]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at March 30, 2000 and the Consolidated Statement
of Operations for the year-to-date period ended March 30, 2000 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-2000
<PERIOD-END> MAR-30-2000
<CASH> 46,136
<SECURITIES> 0
<RECEIVABLES> 49,845
<ALLOWANCES> 24,959
<INVENTORY> 6,999
<CURRENT-ASSETS> 105,929
<PP&E> 1,236,225
<DEPRECIATION> 379,343
<TOTAL-ASSETS> 1,027,137
<CURRENT-LIABILITIES> 101,755
<BONDS> 461,870
6,934
0
<COMMON> 508
<OTHER-SE> 426,883
<TOTAL-LIABILITY-AND-EQUITY> 1,027,137
<SALES> 14,291
<TOTAL-REVENUES> 211,524
<CGS> 13,695
<TOTAL-COSTS> 105,446
<OTHER-EXPENSES> 9,749
<LOSS-PROVISION> 1,604
<INTEREST-EXPENSE> 10,886
<INCOME-PRETAX> 17,896
<INCOME-TAX> 5,839
<INCOME-CONTINUING> 11,024
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,024
<EPS-BASIC> .26
<EPS-DILUTED> .25
</TABLE>
