<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended March 31, 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 No.: 333-643
TRUMP ATLANTIC CITY ASSOCIATES
(Exact Name of Registrant as specified in its charter)
New Jersey 22-3213714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (609) 441-6060
Former name, former address and formal fiscal year, if changed
since last report: Not Applicable
TRUMP ATLANTIC CITY FUNDING, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 22-3418939
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (609) 441-6060
Former name, former address and formal fiscal year, if changed
since last report: Not Applicable
TRUMP ATLANTIC CITY FUNDING II, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 22-3550202
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (609) 441-6060
Former name, former address and formal fiscal year, if changed
since last report: Not Applicable
TRUMP ATLANTIC CITY FUNDING III, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 22-3550203
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (609) 441-6060
Former name, former address and formal fiscal year, if changed
since last report: Not Applicable
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
As of May 15, 2000, there were 100 shares of Trump Atlantic City Funding,
Inc.'s Common Stock outstanding.
As of May 15, 2000, there were 100 shares of Trump Atlantic City Funding II,
Inc.'s Common Stock outstanding.
As of May 15, 2000, there were 100 shares of Trump Atlantic City Funding III,
Inc.'s Common Stock outstanding.
Each of Trump Atlantic City Funding, Inc., Trump Atlantic City Funding II,
Inc. and Trump Atlantic City Funding III, Inc. meets the conditions set forth in
General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this
form with the reduced disclosure format.
================================================================================
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Condensed Consolidated Balance Sheets of Trump Atlantic City Associates and
Subsidiaries as of December 31, 1999 and March 31, 2000 (unaudited)............................ 1
Condensed Consolidated Statements of Operations of Trump Atlantic City Associates and
Subsidiaries for the Three Months Ended March 31, 1999 and 2000 (unaudited).................... 2
Condensed Consolidated Statement of Capital of Trump Atlantic City Associates and
Subsidiaries for the Three Months Ended March 31, 2000 (unaudited)............................. 3
Condensed Consolidated Statements of Cash Flows of Trump Atlantic City Associates and
Subsidiaries for the Three Months Ended March 31, 1999 and 2000 (unaudited).................... 4
Notes to Condensed Consolidated Financial Statements of Trump Atlantic City Associates and
Subsidiaries (unaudited)....................................................................... 5-6
ITEM 2 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................................. 7-10
ITEM 3 -- Quantitative and Qualitative Disclosures About Market Risk............................. 10
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings...................................................................... 11
ITEM 2 -- Changes in Securities and Use of Proceeds.............................................. 11
ITEM 3 -- Defaults Upon Senior Securities........................................................ 11
ITEM 4 -- Submission of Matters to a Vote of Security Holders.................................... 11
ITEM 5 -- Other Information...................................................................... 11
ITEM 6 -- Exhibits and Reports on Form 8-K....................................................... 11
SIGNATURES
Signature -- Trump Atlantic City Associates...................................................... 12
Signature -- Trump Atlantic City Funding, Inc.................................................... 13
Signature -- Trump Atlantic City Funding II, Inc................................................. 14
Signature -- Trump Atlantic City Funding III, Inc................................................ 15
</TABLE>
i
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS
December 31, March 31,
1999 2000
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents...................... $ 75,061 $ 112,643
Receivables, net............................... 33,881 31,150
Inventories.................................... 9,458 9,086
Due from affiliates, net....................... 62,948 63,765
Other current assets........................... 5,258 4,062
------------ -----------
Total Current Assets......................... 186,606 220,706
PROPERTY AND EQUIPMENT, NET...................... 1,322,599 1,313,897
DEFERRED LOAN COSTS, NET......................... 24,750 23,382
OTHER ASSETS (Note 2)............................ 36,911 38,342
------------ -----------
Total Assets................................. $ 1,570,866 $ 1,596,327
============ ===========
LIABILITIES AND CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt........... $ 4,438 $ 4,074
Accounts payable and accrued expenses.......... 110,256 111,623
Accrued interest payable....................... 24,375 60,937
------------ -----------
Total Current Liabilities.................... 139,069 176,634
LONG-TERM DEBT, net of current maturities........ 1,302,824 1,302,518
OTHER LONG-TERM LIABILITIES...................... 5,557 5,557
------------ -----------
Total Liabilities............................ 1,447,450 1,484,709
------------ -----------
CAPITAL:
Partners' Capital.............................. 329,691 329,691
Accumulated Deficit............................ (206,275) (218,073)
------------ -----------
Total Capital................................ 123,416 111,618
------------ -----------
Total Liabilities and Capital................ $ 1,570,866 $ 1,596,327
============ ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
1
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------------
1999 2000
---------- ----------
<S> <C> <C>
REVENUES:
Gaming............................................. $ 195,166 $ 202,668
Rooms.............................................. 15,716 13,439
Food and Beverage.................................. 24,230 22,797
Other.............................................. 7,295 6,051
--------- ---------
Gross Revenues................................... 242,407 244,955
Less--Promotional allowances....................... 28,110 26,737
--------- ---------
Net Revenues..................................... 214,297 218,218
--------- ---------
COSTS AND EXPENSES:
Gaming............................................. 122,398 126,690
Rooms.............................................. 6,718 5,865
Food and Beverage.................................. 8,208 6,819
General and Administrative......................... 41,479 39,024
Depreciation and Amortization...................... 15,325 13,485
Trump World's Fair Closing (Note 3)................ -- 482
--------- ---------
194,128 192,365
--------- ---------
Income from operations........................... 20,169 25,853
--------- ---------
NON-OPERATING INCOME AND (EXPENSES):
Interest income.................................... 707 822
Interest expense................................... (38,397) (38,500)
Non-Operating income............................... 335 27
--------- ---------
Non-Operating expense, net....................... (37,355) (37,651)
--------- ---------
NET LOSS............................................. $ (17,186) $ (11,798)
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Retained
Earnings
Partners' (Accumulated
Capital Deficit) Total
---------- ------------- -----------
<S> <C> <C> <C>
Balance, December 31, 1999............. $ 329,691 $ (206,275) $ 123,416
Net Loss............................... -- (11,798) (11,798)
--------- ---------- ---------
Balance, March 31, 2000................ $ 329,691 $ (218,073) $ 111,618
========= ========== =========
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
financial statement.
3
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1999 2000
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................. $ (17,186) $ (11,798)
Adjustments to reconcile net loss to net cash flows
from operating activities --
Noncash charges --
Depreciation and amortization .................................... 15,325 13,485
Accretion of discounts on indebtedness ........................... 178 158
Provisions for losses on receivables ............................. 2,635 1,130
Amortization of deferred loan offering costs ..................... 1,546 1,368
Valuation allowance of CRDA investments .......................... 814 862
Gain on disposition of property .................................. (335) (27)
Decrease in receivables............................................. 5,185 1,601
Decrease in inventories............................................. 230 372
Decrease/(increase) in advances to affiliates........................ 740 (815)
Decrease in other current assets..................................... 1,588 1,339
(Increase)/decrease in other assets.................................. (1,045) 488
(Decrease)/increase in accounts payable and accrued expenses......... (6,432) 1,215
Increase in accrued interest payable................................. 36,562 36,562
--------- ---------
Net cash provided by operating activities ........................ 39,805 45,940
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net............................. (2,614) (4,295)
Purchase of CRDA investments........................................ (2,654) (2,470)
Proceeds from disposition of property............................... 1,045 27
--------- ---------
Net cash used in investing activities ........................... (4,223) (6,738)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments and current maturities of long-term debt................... (1,516) (1,620)
--------- ---------
Net cash used in financing activities.............................. (1,516) (1,620)
--------- ---------
NET INCREASE IN CASH & CASH EQUIVALENTS ............................ 34,066 37,582
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................... 80,954 75,061
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ......................... $ 115,020 $ 112,643
========= =========
CASH INTEREST PAID ................................................. $ 97 $ 441
========= =========
Supplemental Disclosure of noncash activities:
Purchase of property and equipment under capitalized lease obligations $ 779 $ 800
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Organization and Operations
The accompanying consolidated financial statements include those of Trump
Atlantic City Associates, a New Jersey general partnership ("Trump AC") and its
subsidiaries, Trump Plaza Associates, a New Jersey general partnership ("Plaza
Associates"), which owns and operates the Trump Plaza Hotel and Casino located
in Atlantic City, New Jersey ("Trump Plaza"), Trump Taj Mahal Associates, a New
Jersey general partnership ("Taj Associates"), which owns and operates the Trump
Taj Mahal Casino Resort located in Atlantic City, New Jersey (the "Taj Mahal"),
Trump Atlantic City Funding, Inc., a Delaware corporation ("Trump AC Funding"),
Trump Atlantic City Funding II, Inc., a Delaware corporation ("Trump AC Funding
II"), Trump Atlantic City Funding III, Inc., a Delaware corporation ("Trump AC
Funding III"), Trump Atlantic City Corporation, a Delaware Corporation ("TACC"),
and Trump Casino Services, L.L.C., a New Jersey limited liability company
("Trump Services"). Trump AC's sole sources of liquidity are distributions in
respect of its interests in Plaza Associates and Taj Associates. Trump AC is
100% beneficially owned by Trump Hotels & Casino Resorts Holdings, L.P., a
Delaware limited partnership ("THCR Holdings"). Trump AC, Trump AC Funding,
Trump AC Funding II and Trump AC Funding III have no independent operations and,
therefore, their ability to service debt is dependent upon the successful
operations of Plaza Associates and Taj Associates. There are no restrictions on
the ability of the guarantors (the "Subsidiary Guarantors") of the 11 1/4% First
Mortgage Notes due 2006 of Trump AC and Trump AC Funding, of Trump AC and Trump
AC Funding II and of Trump AC and Trump AC Funding III (the "Trump AC Mortgage
Notes") to distribute funds to Trump AC.
The separate financial statements of the Subsidiary Guarantors have not
been included because (i) the Subsidiary Guarantors constitute all of Trump AC's
direct and indirect subsidiaries; (ii) the Subsidiary Guarantors have fully and
unconditionally guaranteed the Trump AC Mortgage Notes on a joint and several
basis; (iii) the aggregate assets, liabilities, earnings and equity of the
Subsidiary Guarantors are substantially equivalent to the assets, liabilities,
earnings and equity of Trump AC on a consolidated basis; and (iv) the separate
financial and other disclosures concerning the Subsidiary Guarantors are not
deemed material to investors. The assets and operations of the nonguarantor
subsidiaries are not significant.
All significant intercompany balances and transactions have been eliminated
in the accompanying condensed consolidated financial statements.
The accompanying condensed consolidated financial statements have been
prepared without audit. In the opinion of management, all adjustments,
consisting of only normal recurring adjustments necessary to present fairly the
financial position, the results of operations and cash flows for the periods
presented, have been made.
The accompanying condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Accordingly, certain information and note disclosures
normally included in financial statements prepared in conformity with generally
accepted accounting principles have been condensed or omitted.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the annual report on Form 10-K for the year ended December 31, 1999
filed with the SEC.
The casino industry in Atlantic City is seasonal in nature; therefore,
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the operating results for a full year.
Reclassifications
Certain reclassifications have been made to prior year financial statements
to conform to the current year presentation.
(2) Other Assets
Plaza Associates is appealing a real estate tax assessment by the City of
Atlantic City. Included in other assets at March 31, 2000 is $8,014,000 which
Plaza Associates believes will be recoverable on settlement of the appeal.
5
<PAGE>
(3) Trump World's Fair Closing
On October 4, 1999, Trump AC closed Trump World's Fair. In addition to
closing costs recorded at December 31, 1999, costs of $482,000 were recorded
during the three months ended March 31, 2000.
(4) Combined Financial Information--Trump AC Funding, Trump AC Funding II, and
Trump AC Funding III.
Combined financial information relating to Trump AC Funding, Trump AC
Funding II and Trump AC Funding III is as follows:
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
--------------- ---------------
(unaudited)
<S> <C> <C>
Total Assets (including notes receivable of $1,297,119,000 at
December 31, 1999 and $1,297,278,000 at March 31, 2000
and related interest receivable).............................. $ 1,321,494,000 $ 1,358,216,000
=============== ===============
Total Liabilities and Capital (including notes payable of
$1,297,119,000 at December 31, 1999 and $1,297,278,000 at
March 31, 2000 and related interest payable).................. $ 1,321,494,000 $ 1,358,216,000
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
--------------- ---------------
<S> <C> <C>
Interest Income $ 36,562,000 $ 36,562,000
================ ================
Interest Expense $ 36,562,000 $ 36,562,000
================ ================
Net Income $ -- $ --
================ ================
</TABLE>
6
<PAGE>
Item 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Capital Resources and Liquidity
Cash flows from operating activities are Trump AC's principal source of
liquidity. Trump AC expects to have sufficient liquidity to meet its
obligations during 2000. Cash flow is managed based upon the seasonality of the
operations. Any excess cash flow achieved from operations during peak periods
is utilized to subsidize non-peak periods when necessary.
The indentures under which the notes of Trump AC were issued restrict the
ability of Trump AC and its subsidiaries to make distributions or pay dividends,
as the case may be, unless certain financial ratios are achieved. In addition,
the ability of Plaza Associates and Taj Associates to make payments of dividends
or distributions (except for payment of interest) through Trump AC to THCR
Holdings may be restricted by the Casino Control Commission.
Capital expenditures for Trump AC were $2,614,000 and $4,295,000 for the
three months ended March 31, 1999 and 2000, respectively.
Capital expenditures for Trump Plaza were $681,000 and $1,199,000 and for
the Taj Mahal were $1,878,000 and $2,662,000 for the three months ended March
31, 1999 and 2000, respectively.
7
<PAGE>
Results of Operations: Operating Revenues and Expenses
The financial information presented below reflects the results of
operations of Plaza Associates and Taj Associates. Because Trump AC has no
business operations other than its interests in Plaza Associates and Taj
Associates its results of operations are not discussed below.
Comparison of Three-Month Periods Ended March 31, 1999 and 2000. The
following table includes selected data of Plaza Associates and Taj Associates
for the three months ended March 31, 1999 and 2000 (Trump AC also includes TCS;
which were not separately disclosed).
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------------------------------
1999 2000 1999 2000 1999 2000
Plaza Plaza Taj Taj Total Total
Associates Associates Associates Associates Trump AC Trump AC
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(in thousands)
Revenues:
Gaming.......................... $ 82,322 $ 77,603 $ 112,844 $ 125,065 $ 195,166 $ 202,668
Other........................... 22,463 17,754 24,778 24,533 47,241 42,287
--------- --------- --------- --------- --------- ---------
Gross Revenues.................. 104,785 95,357 137,622 149,598 242,407 244,955
Less: Promotional Allowances.... 13,989 11,846 14,121 14,891 28,110 26,737
--------- --------- --------- --------- --------- ---------
Net Revenues.................... 90,796 83,511 123,501 134,707 214,297 218,218
--------- --------- --------- --------- --------- ---------
Costs & Expenses:
Gaming.......................... 50,233 51,108 72,165 75,582 122,398 126,690
General & Administrative........ 19,628 16,034 21,834 22,965 41,479 39,024
Depreciation & Amortization..... 5,949 4,449 9,376 9,036 15,325 13,485
Trump World's Fair closing...... -- 482 -- -- -- 482
Other........................... 7,194 4,687 7,732 7,997 14,926 12,684
--------- --------- --------- --------- --------- ---------
Total Costs and Expenses........ 83,004 76,760 111,107 115,580 194,128 192,365
--------- --------- --------- --------- --------- ---------
Income from Operations.............. 7,792 6,751 12,394 19,127 20,169 25,853
--------- --------- --------- --------- --------- ---------
Non-Operating Income.............. 58 115 552 224 1,042 849
Interest Expense.................. (11,761) (11,904) (23,445) (23,457) (38,397) (38,500)
--------- --------- --------- --------- --------- ---------
Total Non-Operating Expense....... (11,703) (11,789) (22,893) (23,233) (37,355) (37,651)
--------- --------- --------- --------- --------- ---------
Net Loss............................ $ (3,911) $ (5,038) $ (10,499) $ (4,106) $ (17,186) $ (11,798)
========= ========= ========= ========= ========= =========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------------------------------------------
1999 2000 1999 2000 1999 2000
Plaza Plaza Taj Taj Total Total
Associates Associates Associates Associates Trump AC Trump AC
------------------------------------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Table Game Revenues.................. $ 21,668 $ 23,321 $ 38,715 $ 42,087 $ 60,383 $ 65,408
Incr (Decr) over Prior Period........ $ 1,653 $ 3,372 $ 5,025
Table Game Drop...................... $ 140,082 $ 152,246 $ 234,539 $ 252,161 $ 374,621 $ 404,407
Incr (Decr) over Prior Period........ $ 12,164 $ 17,622 $ 29,786
Table Win Percentage................. 15.5% 15.3% 16.5% 16.7% 16.1% 16.2%
Incr (Decr) over Prior Period........ (0.2) pts 0.2 pts. 0.1 pts
Number of Table Games................ 103 95 147 143 250 238
Incr (Decr) over Prior Period........ (8) (4) (12)
Slot Revenues........................ $ 60,654 $ 54,282 $ 69,071 $ 77,762 $ 129,725 $ 132,044
Incr (Decr) over Prior Period........ $ (6,372) $ 8,691 $ 2,319
Slot Handle.......................... $ 770,592 $ 695,282 $ 885,143 $ 1,009,122 $ 1,655,735 $ 1,704,404
Incr (Decr) over Prior Period........ $ (75,310) $ 123,979 $ 48,669
Slot Win Percentage.................. 7.9% 7.8% 7.8% 7.7% 7.8% 7.7%
Incr (Decr) over Prior Period........ (0.1) pts (0.1) pts. (0.1) pts
Number of Slot Machines.............. 4,204 2,774 4,175 4,521 8,379 7,295
Incr (Decr) over Prior Period........ (1,430) 346 (1,084)
Poker Revenues....................... -- -- $ 4,432 $ 4,645 $ 4,432 $ 4,645
Incr (Decr) over Prior Period........ -- $ 213 $ 213
Number of Poker Tables............... -- -- 61 65 61 65
Incr (Decr) over Prior Period........ -- 4 4
Other Gaming Revenues................ -- -- $ 626 $ 571 $ 626 $ 571
Incr (Decr) over Prior Period........ -- $ (55) $ (55)
Total Gaming Revenues................ $ 82,322 $ 77,603 $ 112,844 $ 125,065 $ 195,166 $ 202,668
Incr (Decr) over Prior Period........ $ (4,719) $ 12,221 $ 7,502
Number of Guest Rooms................ 1,404 904 1,250 1,250 2,654 2,154
Occupancy Rate....................... 81.6% 86.6% 93.6% 90.0% 87.2% 88.6%
Average Daily Rate (Room Revenue).... $ 75.29 $ 77.19 $ 75.67 $ 77.55 $ 75.49 $ 77.40
</TABLE>
Gaming revenues are the primary source of Trump AC's revenues. The year
over year increase in gaming revenues was due to increases in both table games
and slot revenues. Table game revenues increased approximately $5,025,000 or
8.3% from the comparable period in 1999 due to increased volumes at both the Taj
Mahal and Trump Plaza. Over all Trump AC's table win percentage increased to
16.2% from 16.1% in the comparable period in 1999. Table game revenues
represent the amount retained by Trump AC from amounts wagered at table games.
The table win percentage tends to be fairly constant over the long term, but may
vary significantly in the short term, due to large wagers by "high rollers".
The Atlantic City industry table win percentages were 15.9% and 15.4% for the
quarters ended March 31, 1999 and 2000, respectively.
Slot revenues increased approximately $2,319,000 or 1.8% from the
comparable period in 1999. Slot revenues at the Taj Mahal increased
approximately $8,691,000 or 12.6% from the comparable period in 1999 but were
offset by a decline at the Trump Plaza due to the closing of Trump World's Fair.
Other revenues, General & Administrative, Depreciation & Amortization and
Other Expenses were reduced from the comparable period in 1999 due to the
closing of Trump World's Fair.
Gaming Expenses increased over the comparable period in 1999 due to
increased marketing and promotional expenses associated with increased Gaming
revenues.
Seasonality
The casino industry in Atlantic City is seasonal in nature; accordingly,
the results of operations for the period ending March 31, 2000 are not
necessarily indicative of the operating results for a full year.
9
<PAGE>
Important Factors Relating to Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. All statements, trend
analysis and other information contained in this Quarterly Report on Form 10-Q
relative to Trump AC performance, trends in Trump AC operations or financial
results, plans, expectations, estimates and beliefs, as well as other
statements including words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend" and other similar expressions, constitute forward-looking
statements under the Private Securities Litigation Reform Act of 1995. In
connection with certain forward-looking statements contained in this Quarterly
Report on Form 10-Q and those that may be made in the future by or on behalf of
the Registrants, the Registrants note that there are various factors that could
cause actual results to differ materially from those set forth in any such
forward-looking statements. The forward-looking statements contained in this
Quarterly Report were prepared by management and are qualified by, and subject
to, significant business, economic, competitive, regulatory and other
uncertainties and contingencies, all of which are difficult or impossible to
predict and many of which are beyond the control of the Registrants.
Accordingly, there can be no assurance that the forward-looking statements
contained in this Quarterly Report will be realized or that actual results will
not be significantly higher or lower. Readers of this Quarterly Report should
consider these facts in evaluating the information contained herein. In
addition, the business and operations of the Registrants are subject to
substantial risks which increase the uncertainty inherent in the forward-looking
statements contained in this Quarterly Report. The inclusion of the forward-
looking statements contained in this Quarterly Report should not be regarded as
a representation by the Registrants or any other person that the forward-looking
statements contained in this Quarterly Report will be achieved. In light of the
foregoing, readers of this Quarterly Report are cautioned not to place undue
reliance on the forward-looking statements contained herein.
ITEM 3--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management has reviewed the disclosure requirements for Item 3 and, based upon
Trump AC, Trump AC Funding, Trump AC Funding II and Trump AC Funding III's
current capital structure, scope of operations and financial statement
structure, management believes that such disclosure is not warranted at this
time. Since conditions may change, each of Trump AC, Trump AC Funding, Trump AC
Funding II and Trump AC Funding III will periodically review their compliance
with this disclosure requirement to the extent applicable.
10
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
General. Trump AC, its partners, certain members of its former executive
committee, and certain of its employees, have been involved in various legal
proceedings. Such persons and entities are vigorously defending the allegations
against them and intend to contest vigorously any future proceedings. In
general, Trump AC has agreed to indemnify such persons against any and all
losses, claims, damages, expenses (including reasonable costs, disbursements and
counsel fees) and liabilities (including amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties) incurred by them in
said legal proceedings.
Other Litigation. On or about March 20, 2000, Mark Metelman, a stockholder of
Trump Hotels & Casino Resorts, Inc. ("THCR"), filed a proposed class action on
behalf of all THCR stockholders in the Superior Court of New Jersey, Chancery
Division, Atlantic County (Civil Action No. Atl-C-43-00) against THCR and each
member of the Board of Directors of THCR. The plaintiff claims that a third
party made an offer to purchase THCR and that one or more members of the Board
of Directors wrongly failed to consider the supposed offer. The plaintiff seeks,
among other things, an order requiring the defendants "to fully and fairly
consider offers to purchase [THCR]," as well as money damages. The defendants
believe the complaint is based on erroneous factual allegations and is legally
without merit, and intend to seek its dismissal.
Various legal proceedings are now pending against Trump AC. Trump AC
considers all such proceedings to be ordinary litigation incident to the
character of its business. Trump AC believes that the resolution of these
claims, to the extent not covered by insurance, will not, individually or in the
aggregate, have a material adverse effect on the financial condition or results
of operations of Trump AC.
From time to time, Plaza Associates and Taj Associates may be involved in
routine administrative proceedings involving alleged violations of certain
provisions of the Casino Control Act. However, management believes that the
final outcome of these proceedings will not, either individually or in the
aggregate, have a material adverse effect on Plaza Associates or Taj Associates
or on the ability of Plaza Associates or Taj Associates to otherwise retain or
renew any casino or other licenses required under the Casino Control Act for the
operation of Trump Plaza and the Taj Mahal.
ITEM 2 -- CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None.
ITEM 6 --EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
Exhibit No. Description of Exhibit
----------- ----------------------
27.1 Financial Data Schedule of Trump Atlantic City Associates.
27.2 Financial Data Schedule of Trump Atlantic City Funding, Inc.
27.3 Financial Data Schedule of Trump Atlantic City Funding II, Inc.
27.4 Financial Data Schedule of Trump Atlantic City Funding III, Inc.
b. Current Reports on Form 8-K:
The Registrants did not file any Current Reports on Form 8-K during the
period beginning January 1, 2000 and ending March 31, 2000.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRUMP ATLANTIC CITY ASSOCIATES
(Registrant)
By: Trump Atlantic City Holding, Inc.,
its general partner
Date: May 15, 2000
By: /s/ Francis X. McCarthy, Jr.
--------------------------------------------
Francis X. McCarthy, Jr.
Chief Financial Officer
(Principal Financial and Accounting Officer)
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRUMP ATLANTIC CITY FUNDING, INC.
(Registrant)
Date: May 15, 2000
By: /s/ Francis X. McCarthy, Jr.
--------------------------------------------
Francis X. McCarthy, Jr.
Chief Financial Officer
(Principal Financial and Accounting Officer)
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRUMP ATLANTIC CITY FUNDING II, INC.
(Registrant)
Date: May 15, 2000
By: /s/ Francis X. McCarthy, Jr.
--------------------------------------------
Francis X. McCarthy, Jr.
Chief Financial Officer
(Principal Financial and Accounting Officer)
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRUMP ATLANTIC CITY FUNDING III, INC.
(Registrant)
Date: May 15, 2000
By: /s/ Francis X. McCarthy, Jr.
--------------------------------------------
Francis X. McCarthy, Jr.
Chief Financial Officer
(Principal Financial and Accounting Officer)
15
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