SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
AMENDMENT NUMBER TWO
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1995 Commission File
No. 0-8133.
UNION PLAZA HOTEL AND CASINO, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0110085
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number)
No. 1 Main Street, Las Vegas, Nevada 89125
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702)
386-2110
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
None N/A
Securities registered pursuant to Section 12(g) of the Act:
Capital stock par value $.50 per share
(Title or Class)
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,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated Document Location in Form 10-K
Annual Report to Stockholders For Year
Ended December 31, 1995 Exhibit Number 13
Financial Data Statement For Year
Ended December 31, 1995 Exhibit Number 5
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Union Plaza Hotel and Casino,
Inc. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
UNION PLAZA HOTEL AND CASINO, INC.
/SS/ JOHN D. GAUGHAN
JOHN D. GAUGHAN, Chairman of the Board
and Chief Executive Officer
EXHIBIT 13.01
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
1995
ANNUAL REPORT
PAGE
<PAGE>
TABLE OF CONTENTS
Page
Letter to Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . .1
Selected financial data. . . . . . . . . . . . . . . . . . . . . . . . . .2
Management's discussion and analysis of
financial condition and results of
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-5
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .6
Financial Statements:
Consolidated balance sheets. . . . . . . . . . . . . . . . . . . . . .7-8
Consolidated statements of income. . . . . . . . . . . . . . . . . . . .9
Consolidated statements of stockholders'
equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Consolidated statements of cash flows. . . . . . . . . . . . . . . .11-12
Notes to consolidated financial
statements. . . . . . . . . . . . . . . . . . . . . . . . . .13-23
Directors and executive officers . . . . . . . . . . . . . . . . . . . . 24
Special information. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
<PAGE>
Letter to Shareholders
Despite widespread construction in the downtown area of Las Vegas
throughout 1995, your company ended the year on a positive note. While
the first eleven months of 1995 was disappointing, the grand opening of
the "Fremont Street Experience" and the end of large scale construction
downtown helped produce the best December results in recent years.
Road closures and Fremont Street construction proved to be a difficult
obstacle to overcome in 1995. Gross revenues were down $2,467,000 from
1994 with decreases distributed over almost every department. Room
occupancy levels fell three percent along with declines in both food
and beverage revenues and more significantly, large scale declines in
gaming revenues. Overall, your Company saw net income decline to $104,000
from $1,107,000 a year ago. A $1,360,000 reduction in operating expenses
helped to keep the company's net earnings positive for the third
consecutive year.
While downtown as a whole was hampered significantly during the year due
to widespread construction and related factors, the outlook for 1996
and beyond is encouraging. During the month of December there was a
noticeable increase in foot traffic in the downtown area and a general
positive response by the general public. In addition to the downtown
improvements, your Company has taken various steps in the past few years
to take advantage of the market by improving the guest facilities at
the hotel and casino complex. Improvements have been made throughout
the property including remodeled rooms, elevators, new casino carpet and
the complete renovation of the kitchens and restaurants. With the
December reopening of the Center Stage Restaurant under the dome, most
of the remodeling efforts are now complete. I am happy to report that
all improvements have been funded by internally generated cash flow.
In closing, I would like to thank you for your continued support and look
forward to seeing each of you at our stockholder's meeting on May 17, 1996
at 10:00 a.m. in the Center Stage Restaurant.
/s/ John D. Gaughan
John D. Gaughan
Chairman and
Chief Executive Officer
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
Amounts in thousands, except per share data
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net revenues $ 51,999 $ 54,689 $ 57,238 $ 60,671 $ 60,870
Casino operating
revenue 36,558 38,864 40,039 43,588 43,836
Net income
(loss) 104 1,107 1,784 (479) (831)
Total assets 53,163 54,386 55,917 55,453 59,479
Long-term
obligations 29,845 31,498 30,888 32,548 32,962
Stockholders'
equity 17,794 17,740 17,198 15,420 16,295
Earnings (loss)
per common
share $ .14 $ 1.45 $ 2.25 $ (.60) $ (.86)
Cash dividends
declared
common share $ -0- $ -0- $ -0- $ -0- $ -0-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
This discussion and analysis should be reviewed with the financial
statements, notes and the special information.
1995 COMPARED TO 1994
Gross revenues of $59,741,000 were down 4% or $2,467,000 from 1994. The
decline in revenues was primarily due to fewer patrons in the casino as a
result of downtown construction relating to the "Fremont Street Experience"
project. Total Gaming revenues were down $2,306,000 (6%) as significantly
all major gaming departments showed a decline in revenue during 1995. Slot
revenue was down $1,670,000 (7%), Table Games revenue was down $164,000
(2%), Card Room revenue decreased by $203,000 (14%), and the Race and Sports
Book revenue also fell by $300,000 (15%). Keno was the only gaming
department to show an increase during the year with a gain of $31,000 (4%).
Food and Beverage revenues were down $373,000 (4%) which is also attributed
to less casino traffic. Occupancy rates in the Hotel averaged 89.9% in 1995
compared to 92.9% in 1994. Despite 11,000 fewer rooms rented in 1995, room
revenues actually rose $14,000 in 1995. Other revenues increased by
$198,000.
Total operating expenses were down $1,360,000. Food and Beverage expenses
were down $994,000 (7%) of which $540,000 is attributable to Cost of Food
Sales and $286,000 is attributable to other costs in the Food Department.
General and Administrative costs declined by $622,000, Advertising and
promotional expenses declined $109,000 and utility and maintenance expenses
were less by $168,000. While there was an overall decline in operating
expenses during the year, casino, entertainment and room expenses increased
in 1995. The $155,000 increase in casino costs were due to higher payroll
costs in the pit and the costs associated with leasing automatic shuffling
machines which amounted to $129,000. Room expenses increased by $56,000 and
entertainment expenses rose by $93,000.
For 1995 the Company recorded net income of $104,000 which was down
$1,003,000 from the net income of $1,107,000 reported in 1994.
During the summer of 1995, the Company negotiated and signed a new contract
with the Culinary and Bartenders Unions. Management believes that the
collective bargaining agreement which was signed in June will not have a
material impact on the profitability of the Company.
The completion of the "Fremont Street Experience" at the beginning of
December resulted in more visitors to the casino in a traditionally slow
month. The Fremont Street Experience is a steel structured canopy over five
blocks of Fremont Street in front of the North Hotel Tower of the Company.
This new structure and nightly show is a must see attraction for visitors in
Las Vegas. Upon reopening the street to foot traffic there was a visible
amount of increased activity in the area and a generally positive response
<PAGE>
generated from the public. While December was encouraging for downtown and
the Company, management remains cautiously optimistic about the future
impact of the FSE project.
1994 COMPARED TO 1993
Gross revenues of $62,208,000 were down $2,695,000 from 1993. Gaming
revenues were down $1,175,000, Slot revenue was down $1,247,000 (5%), Card
Room revenue was down $422,000 (23%) and Keno win was down $104,000 (12%).
Gaming revenues which partially offset these decreases were increases in
Table Games win of $541,000 (6%) and Race and Sports win of $66,000 (4%).
Food and Beverage sales were down $1,151,000 (11%). Room revenues increased
by $22,000 and Other revenues decreased by $391,000.
Total costs and expenses were down $1,872,000. Food and Beverage
expenses
were down $1,649,000 (11%) of which $762,000 is attributable to Cost of Food
Sales and $801,000 is attributable to other costs in the Food Department.
Expenses in all other departments did not change substantially over the
prior
year.
The Company recorded a net income of $1,107,000 for 1994 which was down
$677,000 from the net income of $1,784,000 reported in 1993.
1993 COMPARED TO 1992
Gross revenues of $69,833,000 were down $1,268,000 from 1992. Gaming
revenues were down $248,000 due primarily to a decrease in table games
revenue of $1,947,000 (17%) and a decrease in Keno, Card Room and Race and
Sports revenue of $336,000 (6%). These decreases in revenues were partially
offset by an increase in Slot revenue of $1,837,000 (7%). Food and Beverage
sales were down $838,000 (7%) from 1992. Food sales were down $734,000 due
primarily to decreased volume in the Center Stage Restaurant due to a
decrease in promotional complimentary meals. Hotel rents remained near 1992
levels. Other revenues decreased $204,000.
Total costs and expenses were down $1,656,000. The major item
contributing to the reduction in expenses was payroll and benefits costs
which were down $1,376,000 due primarily to the 1993 figures reflecting the
additional cost for the settlement of the case with the Culinary and
Bartenders Unions. Other decreases in expenses included a $542,000 decrease
in interest expense due to lower interest rates, a $402,000 decrease in
costs associated with the lease with Exber, Inc., and a $160,000 decrease in
Legal Fees.
Promotional allowances decreased $1,069,000 (10%) over 1992 which
consisted primarily of a decrease in complimentary food. The Company
discontinued some promotions in which complimentary meals were given away.
These measures were instituted in order to decrease costs in the Food
Department.
<PAGE>
The Company recorded a net loss $479,000 for 1993, down $352,000 from the
net loss of $831,000 reported in 1992.
LIQUIDITY AND CAPITAL RESOURCES
The Company had total cash assets amounting to $2,959,000 (6% of total
assets) at December 31, 1995 and $2,744,000 (5% of total assets) at December
31, 1994. Current assets exceeded current liabilities by a small margin at
December 31, 1995 while current liabilities exceeded current assets at
December 31, 1994.
Due to the liquidity provided by the gaming activities in the Company's
casino, management believes that its working capital ratio is sufficient to
meet normal operating requirements.
In February 1994, the Company increased it's loan from Exber, Inc. from
$3,000,000 to $18,000,000. The additional proceeds were used to reduce the
outstanding loan from Bank of America. The loan from Exber, Inc. bears
interest at 1% less than the Bank of America loan, resulting in an average
annual saving of approximately $150,000.
The Company's long-term debt, including current maturities, was $21,280,000
and $22,750,000 at December 31, 1995 and 1994, respectively. The ratio of
long-term debt to equity was 1.2 to 1 at December 31, 1995 compared to 1.3
to 1 at December 31, 1994.
The Company disbursed $50,000 to purchase 2,500 treasury shares during 1995,
$565,000 to purchase 28,262 treasury shares during 1994 and $6,000 to
purchase 565 treasury shares during 1993. The acquisitions were funded from
internally generated cash flow. The net effect of these transactions on
book value per share as of December 31, 1995 was negligible. There are no
material acquisitions of Treasury shares anticipated during 1996 and
subsequent periods.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Stockholders and
Board of Directors
Union Plaza Hotel and Casino, Inc.
We have audited the accompanying consolidated balance sheets of Union Plaza
Hotel and Casino, Inc. and subsidiaries as of December 31, 1995 and 1994,
and the related consolidated statements of incomes, stockholders' equity
and cash flows for the years ended December 31, 1995, 1994 and 1993. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Union Plaza Hotel and
Casino, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the years ended December
31, 1995, 1994 and 1993 in conformity with generally accepted accounting
principles.
Gary V. Campbell, CPA, Ltd.
Las Vegas, Nevada
February 10, 1996
PAGE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
Amounts in thousands, except per share data
</TABLE>
<TABLE>
<CAPTION>
ASSETS
1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,959 $ 2,744
Accounts receivable (Note 2) 966 597
Inventories of food, beverage
and supplies 470 463
Prepaid expenses 1,306 1,292
TOTAL CURRENT ASSETS 5,701 5,096
PROPERTY AND EQUIPMENT (Notes 6 & 7):
Land 6,912 6,912
Buildings 56,709 56,330
Construction in progress - 1
Leasehold improvements 3,456 3,453
Furniture and equipment 33,986 34,048
101,063 100,744
Less accumulated depreciation
and amortization 55,928 53,856
NET PROPERTY AND EQUIPMENT 45,135 46,888
OTHER ASSETS (Note 3) 2,327 2,402
$ 53,163 $ 54,386
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
Amounts in thousands, except per share data
<CAPTION>
1995 1994
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 2,736 $ 2,141
Accrued liabilities (Note 4) 2,126 2,227
Current portion of long-term debt (Note 6) 39 236
Current portion of obligations under
capital leases (Note 7) 623 544
TOTAL CURRENT LIABILITIES 5,524 5,148
LONG-TERM DEBT, less current portion (Note 6) 21,241 22,514
OBLIGATIONS UNDER CAPITAL LEASES,
less current portion (Note 7) 4,239 4,861
DEFERRED INCOME TAXES (Note 5) 4,365 4,123
35,369 36,646
COMMITMENTS AND CONTINGENCIES (Notes 7 and 11)
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value; authorized
20,000,000 shares; issued 1,500,000 shares;
outstanding 761,719 shares and 764,219
shares at December 31, 1995 and 1994,
respectively 750 750
Additional paid-in capital 5,462 5,462
Retained earnings 25,371 25,267
31,583 31,479
Less treasury stock, at cost, 738,281 shares
and 735,781 shares at December 31, 1995
and 1994, respectively 13,789 13,739
TOTAL STOCKHOLDERS' EQUITY 17,794 17,740
$ 53,163 $ 54,386
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Amounts in thousands, except per share data
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
REVENUES:
Casino $ 36,558 $ 38,864 $ 40,039
Food and beverage 8,953 9,326 10,477
Rooms 11,971 11,957 11,935
Other 2,259 2,061 2,452
GROSS REVENUES 59,741 62,208 64,903
Less promotional allowances 7,742 7,519 7,665
NET REVENUES 51,999 54,689 57,238
OPERATING EXPENSES:
Casino 14,843 14,688 15,054
Food and beverage 12,499 13,493 15,056
Rooms 5,143 5,087 4,911
General and administrative 4,245 4,867 4,962
Entertainment 595 502 306
Advertising and promotion 344 453 356
Utilities and maintenance 5,637 5,805 5,619
Depreciation & amortization 4,422 4,218 4,296
Provision for doubtful accounts 6 19 57
Other costs and expenses 1,289 1,251 1,428
TOTAL OPERATING EXPENSES 49,023 50,383 52,045
OPERATING INCOME 2,976 4,306 5,193
OTHER INCOME (EXPENSE):
Interest income 65 61 85
Interest expense ( 2,645) ( 2,474) ( 2,421)
Investment in Fremont
Street Experience (Note 12) ( 46) - -
TOTAL OTHER INCOME (EXPENSE) ( 2,626) ( 2,413) ( 2,336)
INCOME BEFORE
INCOME TAX EXPENSE 350 1,893 2,857
INCOME TAX EXPENSE (Note 5):
Current 4 214 367
Deferred 242 572 706
TOTAL INCOME TAX EXPENSE 246 786 1,073
NET INCOME $ 104 $ 1,107 $ 1,784
EARNINGS PER COMMON SHARE
(Note 9) $0.14 $1.45 $2.25
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Amounts in thousands, except per share data
<CAPTION>
Additional
Common paid-in Retained Treasury
stock capital earnings stock Total
<S> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1992 $750 $ 5,462 $ 22,376 $(13,168) $ 15,420
Purchase of 1,463
shares of
treasury stock - - - ( 24) ( 24)
Sale of 900 shares
of treasury stock - - - 18 18
Net income for 1993 - - 1,784 - 1,784
BALANCE
December 31, 1993 $750 $ 5,462 $ 24,160 $(13,174) $ 17,198
Purchase of 28,262
shares of
treasury stock - - - ( 565) ( 565)
Net income for 1994 - - 1,107 - 1,107
BALANCE,
December 31, 1994 $750 $ 5,462 $ 25,267 $(13,739) $ 17,740
Purchase of 2,500
shares of
treasury stock - - - ( 50) ( 50)
Net income for 1995 - - 104 - 104
BALANCE
December 31, 1995 $750 $5,462 $25,371 $(13,789) $ 17,794
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Amounts in thousands, except per share data
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 51,577 $ 54,886 $ 57,244
Cash paid to suppliers and
employees (44,249) (47,329) (47,509)
Interest received 75 77 93
Interest paid ( 2,645) ( 2,474) ( 2,421)
Income taxes paid - ( 172) ( 539)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 4,758 4,988 6,868
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property
and equipment 70 4 127
Proceeds from sale of bonds 25 - 15
Purchase of property and equipment ( 2,575) ( 3,202) ( 4,797)
NET CASH USED IN
INVESTING ACTIVITIES ( 2,480) ( 3,198) ( 4,655)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of treasury stock - - 18
Proceeds from long-term debt - 4,574 15,000
Principal payments on capital leases ( 543) ( 475) ( 414)
Principal payments on long-term debt ( 1,470) ( 5,750) (17,374)
Purchase of treasury stock ( 50) ( 565) ( 24)
NET CASH USED IN
FINANCING ACTIVITIES ( 2,063) ( 2,216) ( 2,794)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 215 ( 426) ( 581)
CASH AND CASH EQUIVALENTS, at
beginning of the year 2,744 3,170 3,751
CASH AND CASH EQUIVALENTS, at
end of the year $ 2,959 $ 2,744 $ 3,170
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Amounts in thousands, except per share data
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 104 $ 1,107 $ 1,784
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 4,422 4,218 4,296
(Gain) loss on sale and abandonment of
property, equipment and improvements ( 35) 167 ( 88)
Provision for doubtful accounts 6 19 57
(Increase) decrease in assets:
Accounts receivable ( 375) ( 3) ( 3)
Inventories ( 7) 48 23
Prepaid expenses ( 14) 132 62
Other assets ( 79) ( 278) 80
Increase (decrease) in liabilities:
Accounts payable 602 ( 952) 850
Accrued salaries ( 208) 26 ( 564)
Accrued liabilities 100 ( 68) ( 389)
Deferred income tax 242 572 760
TOTAL ADJUSTMENTS 4,654 3,881 5,084
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 4,758 $ 4,988 $ 6,868
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF THE OPERATIONS AND BASIS OF ACCOUNTING
The Company's wholly-owned subsidiary, Union Plaza Operating Company,
operates hotel and gaming operations in downtown Las Vegas, Nevada. A
substantial portion of the operating revenues of the Company's subsidiary is
derived from gaming operations which are subject to extensive regulations in
the State of Nevada by the Gaming Commission, the Gaming Control Board and
local regulatory agencies.
Management believes that the Company's procedures for supervising
casino operations, recording casino and other revenues and for granting
credit comply in all material respects with applicable regulations.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements for 1994, 1993 and
1992 include the accounts of Union Plaza Hotel and Casino, Inc. (the
Company) and its wholly-owned subsidiaries. All material intercompany
balances and transactions have been eliminated in consolidation.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
CASINO REVENUE AND RECEIVABLES
In accordance with common industry practice, the Company recognizes as
casino revenue the net win (which is the difference between amounts wagered
and amounts paid to winning patrons) from gaming activities. Credit is
extended to certain casino customers and the Company records all unpaid
advances as casino receivables on the date credit was granted. Allowances
for estimated uncollectible casino receivables are provided to reduce these
receivables to amounts anticipated to be collected.
PROMOTIONAL ALLOWANCES
Gross revenues include the retail value of complimentary food,
beverage and hotel services furnished to customers. The retail value of
these promotional allowances is deducted to arrive at net revenues.
PAGE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Expenditures for
additions, renewals and betterments are capitalized; expenditures for
maintenance and repairs are charged to expenses as incurred. Upon
retirement or disposal of assets, the cost and accumulated depreciation are
eliminated from the accounts and the resulting gain or loss is included in
income. Depreciation, including amortization of capitalized leases, is
computed using the straight-line method. Leasehold improvements
(distinguished from unamortized leasehold costs) are amortized over the
lives of the leases.
Property and equipment, including capitalized leases, are depreciated
over their estimated useful lives of 3 to 20 years for land improvements, 20
to 40 years for buildings, 5 to 30 years for leasehold improvements and 3 to
10 years for furniture and equipment.
OTHER ASSETS
Leasehold costs are being amortized on a straight-line basis over the
initial 30-year term of the lease. Expansion of gaming rights is being
amortized on a straight-line basis over 20 years. Subordination of security
interest in lease is being amortized on a straight-line basis over 15 years.
PROGRESSIVE SLOT LIABILITY
The Company has installed a number of progressive slot machines. As
coins are played the amount available to win increases and will be paid out
when the appropriate jackpot is hit. In accordance with common industry
practice, the Company has recorded the liability and has charged this amount
against casino revenue.
INVENTORIES
Inventories are valued at the lower cost (first-in, first-out) or
market. Maintenance and other operating supplies are stated at estimated
amounts considered by management to be necessary to conduct full operations.
Subsequent replacements are charged to expense.
STATEMENTS OF CASH FLOWS
The Statements of Cash flows classify changes in cash and cash
equivalents according to operating, investing or financing activities. For
purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to be
cash equivalents.
PAGE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company and its subsidiaries file a consolidated federal
income tax return. Deferred income taxes are provided to reflect the tax
effect of timing differences between financial and tax reporting, principally
related to depreciation, slot machine revenue, interest costs, accrued
expenses, capitalization of leases, capitalization of property costs and
write-down of facilities and other investments to estimated recoverable
value. The Company accounts for the investment tax credit as a reduction of
income tax expense in the year in which such credits are utilized.
Carryforwards of this credit, as well as the tax effect of net operating loss
carryforwards, are shown as a reduction to deferred income taxes.
<TABLE>
NOTE 2 - ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Casino $ 408 $ 353
Hotel 336 186
Other 236 75
980 614
Less allowance for
doubtful accounts 14 17
$ 966 $ 597
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - OTHER ASSETS
Other assets consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Expansion of gaming rights, less
accumulated amortization of
$587,000 and $547,000 $ 223 $ 263
Subordination of security interest
in lease, less accumulated
amortization of $783,000 and
$729,000 27 81
Net investment in direct financing
lease, net of current portion
(Note 7) 224 257
Leasehold costs, less accumulated
amortization of $354,000 and
$344,000 80 95
Investment in Fremont Street Experience
(Note 12) 1,135 1,000
Deposits and other 638 706
$ 2,327 $ 2,402
</TABLE>
<TABLE>
NOTE 4 - ACCRUED LIABILITIES
Accrued liabilities consist of the following:
Amounts in thousands
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Salaries and wages $ 848 $ 967
Union back wages 148 238
Taxes, other than taxes on income 425 352
Other 705 670
$ 2,126 $ 2,227
</TABLE>
<PAGE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 - INCOME TAXES
Deferred income tax expense (benefit) results from timing differences in
the recognition of revenue and expense for tax and financial statement
purposes.
Statements of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," (SFAS 109) requires deferred tax liabilities or assets at
the end of each period be determined using the tax rate expected to be in
effect when taxes are actually paid or recovered. Previous rules required
providing deferred taxes using rates in effect when the tax liability or
asset was first recorded, without subsequent adjustment for tax-rate
changes. Deferred income taxes have been calculated based on this new
standard, no material adjustment for prior years was necessary.
The sources of those timing differences and the current tax effect of
each were as follows:
<TABLE>
Amounts in thousands
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Depreciation and respective
gains $ 250 $ 304 $ 112
Capitalized leases 115 93 73
Net operating losses ( 90) - 192
Vacation and backpay 31 65 83
Tax credits 1 118 176
Other ( 65) ( 8) 70
$ 242 $ 572 $ 706
The components of the net deferred tax liability at December 31, 1995
and 1994 under SFAS 109 are as follows:
<CAPTION>
1995 1994
<S> <C> <C>
Depreciation and
amortization $ 5,656 $ 5,290
Net operating loss ( 90) -
Tax credits ( 868) ( 868)
Other ( 333) ( 299)
$ 4,365 $ 4,123
</TABLE>
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 - INCOME TAXES (CONTINUED)
The Company has net operating loss and tax credit carryforwards at
December 31, 1995 of approximately $265,000 and $900,000, respectively, with
expiration dates through December 31, 2002.
Reconciliations between the actual tax expense and the amount computed
by applying the U.S. Federal Income Tax rate to income before taxes are as
follows:
<TABLE>
Amounts in thousands
<CAPTION>
1995 1994 1993
Percent Percent Percent
of of of
pretax pretax pretax
Amount income Amount income Amount income
<S> <C> <C> <C> <C> <C> <C>
Computed "expected"
tax expense (benefit) $ 119 34.0% $ 644 34.0% $ 971 34.0%
Increase (reduction)
in tax resulting from:
Other 4 1.1 - - 29 1.0
Nondeductible
expenses 123 35.1 142 7.5 73 2.6
ACTUAL TAX
EXPENSE $ 246 70.3% $ 786 41.5% $1,073 37.6%
</TABLE>
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 - LONG-TERM DEBT
Amounts in Thousands
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Bank of America prime rate, payable in
monthly installments of $158,265,
including principal and interest, until
July 6, 2004 at which time the entire
balance plus accrued interest is due.
The note is secured by a First Deed of
Trust on land and building. (See Note 10) $ 21,280 $ 22,750
Less current portion 39 236
$ 21,241 $ 22,514
</TABLE>
Principal payments on long-term debt during the succeeding five years are
as follows:
1996 $ 39
1997 42
1998 46
1999 50
2000 55
Thereafter 21,048
$ 21,280
Interest on long-term debt was $1,938,000 in 1995, $1,699,000 in 1994 and
$1,574,000 in 1993.
PAGE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 - LEASES
The Company leases buildings and equipment under long-term agreements
which are classified as capital leases. The lease with Exber Inc. (Note 10)
covering the hotel and bus depot property expires in 2001. The hotel and
bus depot property lease contains one renewal option of twenty-five years
and four renewal options of ten years. The bus depot property is sublet to
Greyhound Lines, Inc. under a lease expiring in 2001, with two ten-year
renewal options available.
<TABLE>
Property and equipment includes the following property under capital
leases by major classes:
Amounts in thousands
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Building $ 9,242 $ 9,242
Less accumulated amortization 8,265 8,089
$ 977 $ 1,153
</TABLE>
Depreciation and amortization expense includes amortization of property
under capital leases of $176,000, per year for 1995, 1994, and 1993.
Interest paid on property under capital leases was $706,000 for 1995,
$775,000 for 1994 and $836,000 for 1993.
Future minimum payments, by year and in the aggregate, under capital
leases and non-cancelable operating leases with initial or remaining terms
of one year or more consist of the following at December 31, 1995:
CAPITAL
LEASES
(In thousands)
1996 $ 1,250
1997 1,250
1998 1,250
1999 1,250
2000 1,250
Thereafter 729
TOTAL MINIMUM LEASE PAYMENTS 6,979
Less amount representing interest 2,117
Present value of net minimum lease
payments under capital leases 4,862
Less current portion 623
OBLIGATIONS UNDER CAPITAL LEASES $ 4,239
<PAGE>
TABLE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 - LEASES (CONTINUED)
Rental expense for all operating leases are as follows:
(In thousands)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Parking lot leases $ 72 $ 68 $ 65
</TABLE>
<TABLE>
SUBLEASES
The bus depot property under a capital lease is sublet as follows:
(In thousands)
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Minimum future rents receivable $369 $363
Less amount representing interest 112 78
Minimum lease payments receivable 257 285
Less current portion (included in
accounts receivable) 33 28
Net investment in direct financing
lease (See Note 3) $224 $257
</TABLE>
Other sublet rental property:
ther sublet rental property:
The Company rents building space to several retail stores under
various short-term leases.
Income from these subleases, included in other income, for 1995,
1994, and 1993 was $188,000, $166,000 and $186,000, respectively.
ND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 -EMPLOYEE BENEFIT PLANS
The Company contributes to a discretionary executive bonus plan.
Contributions for 1995, 1994, and 1993 were $247,000, $414,000 and $577,000,
respectively.
The Company also has a qualified profit sharing plan for eligible
non-union employees. Contributions to this plan are made at the discretion
of the Board of Directors and benefits are limited to the allocated
interests in fund assets. Contributions for 1995, 1994, and 1993 were
$300,000, $300,000 and $413,000, respectively.
The Company provides no postretirement benefits to employees subject to
the requirements of Statement of Financial Accounting Standards No. 106
(SFAS 106) which requires accrual of expected cost of providing those
benefits to an employee during the years that the employee renders service.
NOTE 9 - EARNINGS (LOSS) PER COMMON SHARE
Earnings (loss) per common share is based on the weighted average number
of shares of common stock outstanding during the years. Shares used for the
computation on earning per common share are 762,448 in 1995, 770,464 in 1994
and 792,645 in 1993.
NOTE 10 - RELATED PARTIES
As of December 31, 1995, the Company holds a note payable to Exber, Inc.,
a 45.02% stockholder, in the amount of $21,241,000, payable in monthly
installments of $158,264 including principal and interest until July 2004
when entire principal and accrued interest is due in full. Interest expense
on loans from Exber, Inc. was $1,938,177, $1,568,240 and $994,521 for 1995,
1994, and 1993, respectively.
Exber, Inc. also leased to the Company land and buildings in Las Vegas,
Nevada. Annual payments by the Company and its subsidiaries are
approximately $1,250,000. The leases extend through 2001 with renewal
options.
NOTE 11 - CONTINGENCIES
The Company has contingent liabilities with respect to lawsuits and other
matters arising in the ordinary course of business. In the opinion of
management, no material liability exists with respect to these
contingencies.
PAGE
<PAGE>
UNION PLAZA HOTEL AND CASINO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 - INVESTMENT IN FREMONT STREET EXPERIENCE
In 1994, the Company's wholly-owned subsidiary, Union Plaza Experience,
Inc., was organized to participate with other downtown Las Vegas casino
enterprises and the City of Las Vegas Redevelopment Agency, in a
redevelopment project known as the Fremont Street Experience. The Union
Plaza Experience, Inc. is entitled to one seat on the board of directors of
the Fremont Street Experience Limited Liability Company at all times. The
Company's 5.6% investment had been accounted for by the equity method.
Investment at December 31, 1995 and 1994 was $1,135,000 and $1,000,000
respectively.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Directors
John D. Gaughan Chairman of the Board
J.K. Houssels Vice Chairman of the Board
Roberta M. Gaughan Director
John F. Gaughan Director
Donald L. Dobson Director
Larry Dolesh Director
John P. Jones Director
Michael Nolan Director
R.G. Taylor Director
Executive Officers
John D. Gaughan Chief Executive Officer
John F. Gaughan President and Chief
Operating Officer
Donald L. Dobson Vice President/Corporate
Secretary
John P. Jones Vice President/Treasurer
Larry Dolesh Vice President
Michael Nolan Vice President
Alan J. Woody Controller<PAGE>
SCOPE OF OPERATIONS
The Company operates the Union Plaza Hotel and Casino (Union Plaza)
resort complex in downtown Las Vegas, Nevada.
The casino facilities offer a variety of games which generate
approximately 62% of the gross revenue of the Company. The major games of
chance featured by the Company's casino include craps, card room, blackjack
("21"), keno, slot machines, race and sports book, big six wheels, roulette,
mini-baccarat and pai gow poker.
The food and beverage facilities account for approximately 15% of the
Company's gross revenues. The room operation provides approximately 19% of
gross revenue with retail shops, subleases, vending, interest on
investments, and miscellaneous gains on the sale of assets accounting for
the remaining 4%.
FORM 10-K
A copy of the Company's Annual Report of Form 10-K, as filed with the
Securities and Exchange Commission, will be furnished without charge to any
stockholder upon written request to Mr. John F. Gaughan, President, Union
Plaza Hotel and Casino, Number One Main Street, P.O. Box 760, Las Vegas,
Nevada 89125.
ANNUAL STOCKHOLDERS' MEETING
The annual meeting of Union Plaza Hotel and Casino, Inc. will be held on
May 17, 1996, at the Center Stage Restaurant, Number One Main Street, Las
Vegas, Nevada.
DIVIDENDS AND MARKET PRICE STATISTICS OF COMMON STOCK
The Company's stock is not traded on any securities exchange. A dividend
of $.10 per share was paid to the stockholders of record on the shares of
common stock outstanding on the last day of each quarter during 1981 and
1980. No dividends have been declared or paid since 1981.
AUDITORS
The Company's auditors are Gary V. Campbell, CPA, Ltd., 6600 West
Charleston Boulevard, Suite 102, Las Vegas, Nevada 89102.
This report is prepared for the information of stockholders,
employees, and other interested persons. It is not
transmitted in connection with the sale of any security or
offer to sell or offer to buy any security.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 2959000
<SECURITIES> 0
<RECEIVABLES> 966000
<ALLOWANCES> 0
<INVENTORY> 470000
<CURRENT-ASSETS> 5701000
<PP&E> 101063000
<DEPRECIATION> 55928000
<TOTAL-ASSETS> 53163000
<CURRENT-LIABILITIES> 5524000
<BONDS> 21241000
<COMMON> 750000
0
0
<OTHER-SE> 17044000
<TOTAL-LIABILITY-AND-EQUITY> 53163000
<SALES> 6659000
<TOTAL-REVENUES> 59741000
<CGS> 12499000
<TOTAL-COSTS> 28667000
<OTHER-EXPENSES> 11348000
<LOSS-PROVISION> 6000
<INTEREST-EXPENSE> 2645000
<INCOME-PRETAX> 350000
<INCOME-TAX> 246000
<INCOME-CONTINUING> 104000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104000
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
