<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
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 31, 1996
--------------------------------------------------
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 33-69716
---------------------------
GB PROPERTY FUNDING CORP.
GB HOLDINGS, INC.
GREATE BAY HOTEL AND CASINO, INC.
- - --------------------------------------------------------------------------------
(Exact name of each Registrant as specified in its charter)
DELAWARE 75-2502290
DELAWARE 75-2502293
NEW JERSEY 22-2242014
- - ---------------------------------------- ---------------------------------
(States or other jurisdictions of (I.R.S. Employer
incorporation or organization) Identification No.'s)
TWO GALLERIA TOWER, SUITE 2200
13455 NOEL ROAD, LB48
DALLAS, TEXAS 75240
- - ---------------------------------------------- ------------------------------
(Address of principal executive offices) (Zip Code)
(Registrants' telephone number, including area code): (214) 386-9777
---------------------------
(NOT APPLICABLE)
- - --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report.)
Indicate by check mark whether each of the Registrants (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
Registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
<TABLE>
<CAPTION>
REGISTRANT CLASS OUTSTANDING AT MAY 13, 1996
- - ------------------------------------ ----------------------------- ---------------------------
<S> <C> <C>
GB Property Funding Corp. Common stock, $1.00 par value 1,000 shares
GB Holdings, Inc. Common stock, $1.00 par value 1,000 shares
Greate Bay Hotel and Casino, Inc. Common stock, no par value 100 shares
</TABLE>
Each of the Registrants meet 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.
1
<PAGE>
PART I: FINANCIAL INFORMATION
- - ------------------------------
INTRODUCTORY NOTES TO FINANCIAL STATEMENTS
- - ------------------------------------------
The registered securities consist of 10 7/8% First Mortgage Notes (the
"10 7/8% First Mortgage Notes") in the principal amount of $185,000,000 due
January 15, 2004 issued by GB Property Funding Corp. ("GB Property Funding") and
listed on the American Stock Exchange. GB Property Funding's obligations are
unconditionally guaranteed by GB Holdings, Inc. ("Holdings"), a Delaware
corporation with principal executive offices at Two Galleria Tower, Suite 2200,
13455 Noel Road, LB48, Dallas, TX 75240 and by Greate Bay Hotel and Casino,
Inc. ("GBHC"), a New Jersey corporation and a wholly owned subsidiary of
Holdings with principal offices at 136 South Kentucky Avenue, Atlantic City, New
Jersey 08401.
GB Property Funding is wholly owned by Holdings. Holdings is a wholly
owned subsidiary of Pratt Casino Corporation ("PCC"), which is an indirect
wholly owned subsidiary of Pratt Hotel Corporation ("PHC"). PHC is an American
Stock Exchange listed company subject to the reporting requirements of the
Securities Act of 1934.
GB Property Funding was organized during September 1993 as a special
purpose subsidiary of Holdings for the purpose of borrowing funds through the
issuance of the 10 7/8% First Mortgage Notes for the benefit of GBHC.
GBHC owns the Sands Hotel and Casino located in Atlantic City, New
Jersey (the "Sands"). Substantially all of Holdings' assets and operations
relate to the Sands. Historically, the Sands' gaming operations have been
highly seasonal in nature, with the peak activity occurring from May to
September. Consequently, the results of operations for the three month period
ended March 31, 1996 are not necessarily indicative of the operating results to
be reported for the full year.
The financial statements of GB Property Funding and the consolidated
financial statements of Holdings as of March 31, 1996 and for the three month
periods ended March 31, 1996 and 1995 have been prepared without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, their respective financial statements contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly their respective financial positions as of March 31, 1996, and
their respective results of operations and their cash flows for the three month
periods ended March 31, 1996 and 1995.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
GB Property Funding, Holdings and GBHC's 1995 Annual Report on Form 10-K.
2
<PAGE>
GB PROPERTY FUNDING CORP.
(WHOLLY OWNED BY GB HOLDINGS, INC.)
BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Current assets:
Cash $ 1,000 $ 1,000
Interest receivable from affiliate 4,247,000 9,277,000
------------ ------------
Total current assets 4,248,000 9,278,000
------------ ------------
Note receivable from affiliate 185,000,000 185,000,000
------------ ------------
$189,248,000 $194,278,000
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accrued interest payable $ 4,247,000 $ 9,277,000
------------ ------------
Long-term debt 185,000,000 185,000,000
------------ ------------
Shareholder's equity (Note 1):
Common stock, $1.00 par value per share,
1,000 shares authorized and outstanding 1,000 1,000
------------ ------------
$189,248,000 $194,278,000
============ ============
</TABLE>
The accompanying introductory notes and notes to financial statements
are an integral part of these balance sheets.
3
<PAGE>
GB PROPERTY FUNDING CORP.
(WHOLLY OWNED BY GB HOLDINGS, INC.)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues:
Interest income $5,030,000 $5,030,000
Expenses:
Interest expense 5,030,000 5,030,000
---------- ----------
Net income $ - $ -
========== ==========
</TABLE>
The accompanying introductory notes and notes to financial statements
are an integral part of these financial statements.
4
<PAGE>
GB PROPERTY FUNDING CORP.
(WHOLLY OWNED BY GB HOLDINGS, INC.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ - $ -
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease in interest receivable from affiliate 5,030,000 5,030,000
Decrease in accrued interest payable (5,030,000) (5,030,000)
----------- -----------
Net cash provided by operating activities - -
----------- -----------
Net change in cash - -
Cash at beginning of period 1,000 1,000
----------- -----------
Cash at end of period $ 1,000 $ 1,000
=========== ===========
</TABLE>
The accompanying introductory notes and notes to financial statements
are an integral part of these financial statements.
5
<PAGE>
GB PROPERTY FUNDING CORP.
(WHOLLY OWNED BY GB HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) ORGANIZATION AND OPERATIONS
GB Property Funding Corp. ("GB Property Funding"), a Delaware corporation,
was incorporated on September 29, 1993. GB Property Funding is a wholly owned
subsidiary of GB Holdings, Inc. ("Holdings"), a Delaware corporation which is an
indirect, wholly owned subsidiary of Pratt Hotel Corporation ("PHC"). Holdings
was incorporated in September 1993 and, on February 17, 1994, acquired through
capital contributions by its parent, all of the outstanding capital stock of
Greate Bay Hotel and Casino, Inc. ("GBHC"), which owns the Sands Hotel and
Casino in Atlantic City, New Jersey (the "Sands"). GB Property Funding was
formed for the purpose of borrowing $185,000,000 for the benefit of GBHC; such
debt was issued during February 1994 at the rate of 10 7/8% per annum and the
proceeds were loaned to GBHC (see Note 2).
The operation of an Atlantic City casino/hotel is subject to significant
regulatory control. Under provisions of the New Jersey Casino Control Act, GBHC
is required to maintain a nontransferable license to operate a casino in
Atlantic City.
Administrative services for GB Property Funding are provided by other PHC
subsidiaries at no charge. The cost of such services is not significant.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The financial statements as of March 31, 1996 and for the three month
periods ended March 31, 1996 and 1995 have been prepared by GB Property Funding
without audit. In the opinion of management, these financial statements contain
all adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position of GB Property Funding as of March 31,
1996, and the results of its operations and cash flows for the three month
periods ended March 31, 1996 and 1995.
(2) LONG-TERM DEBT
On February 17, 1994, GB Property Funding issued $185,000,000 of non-
recourse first mortgage notes due January 15, 2004 (the "10 7/8% First Mortgage
Notes"). Interest on the notes accrues at the rate of 10 7/8% per annum, payable
semiannually commencing July 15, 1994. Interest only is payable during the first
three years. Commencing on July 15, 1997, semiannual principal payments of
$2,500,000 will become due on each interest payment date.
6
<PAGE>
GB PROPERTY FUNDING CORP.
(WHOLLY OWNED BY GB HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The indenture for the 10 7/8% First Mortgage Notes contains various
provisions which, among other things, restrict the ability of certain
subsidiaries of PHC to pay dividends to PHC, to merge, consolidate or sell
substantially all of their assets or to incur additional indebtedness beyond
certain limitations. In addition, the indenture requires the maintenance of
certain cash balances and, commencing in 1994, requires that a minimum of
$7,000,000 be expended for property and fixture renewals, replacements and
betterments at the Sands, subject to increases of five percent per annum
thereafter. The indenture also contains certain cross-default provisions with
other outstanding debt of affiliates. The proceeds of the 10 7/8% First
Mortgage Notes were loaned to GBHC on the same terms and conditions.
Interest paid and received with respect to the 10 7/8% First Mortgage Notes
and the loan to GBHC was $10,060,000 during each of the three month periods
ended March 31, 1996 and 1995.
(3) INCOME TAXES
GB Property Funding is included in the consolidated federal income tax
return of Hollywood Casino Corporation ("HCC"), PHC's parent. Pursuant to
agreements between Holdings, PHC and HCC, GB Property Funding's provision for
federal income taxes is calculated as if a separate federal return were filed.
For the three month periods ended March 31, 1996 and 1995, no provision or
payments were made under the agreements.
7
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
-------------- --------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 12,890,000 $ 21,769,000
Accounts receivable, net of allowances
of $16,946,000 and $16,494,000, respectively 11,203,000 11,350,000
Inventories 4,161,000 4,268,000
Due from affiliate 10,515,000 7,638,000
Refundable deposits and other current assets 5,051,000 4,736,000
------------- -------------
Total current assets 43,820,000 49,761,000
------------- -------------
Property and Equipment:
Land 37,807,000 37,807,000
Buildings and improvements 185,404,000 185,077,000
Operating equipment 88,343,000 87,489,000
Construction in progress 2,260,000 2,310,000
------------- -------------
313,814,000 312,683,000
Less - accumulated depreciation and
amortization (149,813,000) (145,243,000)
------------- -------------
Net property and equipment 164,001,000 167,440,000
------------- -------------
Other Assets:
Obligatory investments 5,122,000 5,521,000
Due from affiliate 13,960,000 13,681,000
Deferred financing costs and other assets 9,798,000 9,155,000
------------- -------------
Total other assets 28,880,000 28,357,000
------------- -------------
$ 236,701,000 $ 245,558,000
============= =============
</TABLE>
The accompanying introductory notes and notes to consolidated financial
statements are an integral part of these consolidated balance sheets.
8
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
Current Liabilities:
Current maturities of long-term debt $ 11,000 $ 11,000
Short-term credit facilities 2,000,000 -
Accounts payable 8,863,000 8,409,000
Accrued liabilities -
Salaries and wages 3,634,000 4,003,000
Interest 4,450,000 9,828,000
Insurance 2,604,000 2,330,000
Other 10,033,000 8,886,000
Due to affiliates 269,000 359,000
Other current liabilities 2,710,000 3,474,000
------------ ------------
Total current liabilities 34,574,000 37,300,000
------------ ------------
Long-Term Debt 195,439,000 195,442,000
------------ ------------
Other Noncurrent Liabilities 2,495,000 2,390,000
------------ ------------
Commitments and Contingencies
Shareholder's Equity:
Common stock, $1.00 par value per share;
1,000 shares authorized and
outstanding 1,000 1,000
Additional paid-in capital 18,438,000 18,438,000
Accumulated deficit (14,246,000) (8,013,000)
------------ ------------
Total shareholder's equity 4,193,000 10,426,000
------------ ------------
$236,701,000 $245,558,000
============ ============
</TABLE>
The accompanying introductory notes and notes to consolidated financial
statements are an integral part of these consolidated balance sheets.
9
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Casino $57,605,000 $63,876,000
Rooms 2,135,000 2,219,000
Food and beverage 8,524,000 7,247,000
Other 1,554,000 624,000
----------- -----------
69,818,000 73,966,000
Less - promotional allowances (7,119,000) (6,130,000)
----------- -----------
Net revenues 62,699,000 67,836,000
----------- -----------
Expenses:
Casino 53,113,000 49,738,000
Rooms 310,000 575,000
Food and beverage 2,394,000 2,012,000
Other 740,000 799,000
General and administrative 6,105,000 7,247,000
Depreciation and amortization 5,107,000 4,961,000
----------- -----------
Total expenses 67,769,000 65,332,000
----------- -----------
(Loss) income from operations (5,070,000) 2,504,000
----------- -----------
Non-operating income (expense):
Interest income 421,000 399,000
Interest expense (5,318,000) (5,263,000)
----------- -----------
Total non-operating expense, net (4,897,000) (4,864,000)
----------- -----------
Loss before income taxes (9,967,000) (2,360,000)
Income tax benefit 3,734,000 597,000
----------- -----------
Net loss $(6,233,000) $(1,763,000)
=========== ===========
</TABLE>
The accompanying introductory notes and notes to consolidated financial
statements are an integral part of these consolidated statements.
10
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(6,233,000) $(1,763,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 5,107,000 4,961,000
Provision for doubtful accounts 567,000 805,000
Deferred income tax benefit (329,000) (503,000)
(Increase) decrease in accounts receivable (420,000) 156,000
Decrease in accounts payable and accrued expenses (3,752,000) (5,152,000)
Net change in other current assets and liabilities (3,626,000) (862,000)
Net change in other noncurrent assets and liabilities (298,000) (178,000)
----------- -----------
Net cash used in operating activities (8,984,000) (2,536,000)
----------- -----------
INVESTING ACTIVITIES:
Net property and equipment additions (1,130,000) (3,330,000)
Obligatory investments (762,000) (652,000)
----------- -----------
Net cash used in investing activities (1,892,000) (3,982,000)
----------- -----------
FINANCING ACTIVITIES:
Net borrowings on credit facilities 2,000,000 -
Repayments of long-term debt (3,000) (3,000)
----------- -----------
Net cash provided by (used in) financing activities 1,997,000 (3,000)
----------- -----------
Net decrease in cash and cash equivalents (8,879,000) (6,521,000)
Cash and cash equivalents at beginning of period 21,769,000 23,137,000
----------- -----------
Cash and cash equivalents at end of period $12,890,000 $16,616,000
=========== ===========
</TABLE>
The accompanying introductory notes and notes to consolidated financial
statements are an integral part of these consolidated statements.
11
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION
GB Holdings, Inc. ("Holdings") is a Delaware corporation and a wholly owned
subsidiary of Pratt Casino Corporation ("PCC"), also a Delaware corporation.
PCC was incorporated during September 1993 and is wholly owned by PPI
Corporation, a New Jersey corporation and a wholly owned subsidiary of Pratt
Hotel Corporation ("PHC"). On February 17, 1994, Holdings acquired Greate Bay
Hotel and Casino, Inc. ("GBHC"), a New Jersey corporation, through a capital
contribution by its parent. GBHC's principal business activity is its ownership
of the Sands Hotel and Casino in Atlantic City, New Jersey (the "Sands"). The
Sands is managed by New Jersey Management, Inc. ("NJMI"), also a wholly owned
subsidiary of PCC. GB Property Funding Corp. ("GB Property Funding"), a
Delaware corporation and a wholly owned subsidiary of Holdings, was incorporated
in September 1993 for the purpose of borrowing funds through the issuance of
$185,000,000 of ten-year, nonrecourse first mortgage notes for the benefit of
GBHC; such debt was issued in February 1994 at the rate of 10 7/8% per annum and
the proceeds were loaned to GBHC (see Note 3). Holdings has no operating
activities and its only significant asset is its investment in GBHC. The
accompanying consolidated financial statements include the accounts and
operations of Holdings, GBHC and GB Property Funding; all significant
intercompany balances and transactions have been eliminated.
GBHC estimates that a significant amount of the Sands' revenues are derived
from patrons living in southeastern Pennsylvania, northern New Jersey and
metropolitan New York City. Competition in the Atlantic City gaming market is
intense and management believes that this competition will continue in the
future.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
GBHC is self insured for a portion of its general liability, certain health
care and other liability exposures. Accrued insurance includes estimates of
such accrued liabilities based on an evaluation of the merits of individual
claims and historical claims experience; accordingly, GBHC's ultimate liability
may differ from the amounts accrued.
During the fourth quarter of 1995, GBHC adopted the provisions of Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets" ("SFAS 121"). SFAS 121 requires, among other things, that an
entity review its long-lived assets and certain related intangibles for
impairment whenever changes in circumstances indicate that the carrying amount
of an asset may not be fully recoverable. As a result of its review, GBHC does
not believe that any material impairment currently exists related to its long-
lived assets.
The consolidated financial statements as of March 31, 1996 and for the
three month periods ended March 31, 1996 and 1995 have been prepared by Holdings
without audit. In the opinion of management, these
12
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
consolidated financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the consolidated
financial position of Holdings as of March 31, 1996, and the results of its
operations and cash flows for the three month periods ended March 31, 1996 and
1995.
(2) SHORT-TERM CREDIT FACILITIES
GBHC is presently renegotiating a bank line of credit in the amount of
$5,000,000 which expired on April 30, 1996. As of March 31, 1996, $2,000,000
was outstanding under the line of credit; no such borrowings were outstanding
under the line of credit at December 31, 1995. Borrowings under the line of
credit are guaranteed to the extent of $2,000,000 by PCC.
(3) LONG-TERM DEBT AND PLEDGE OF ASSETS
Substantially all of Holdings' and GBHC's assets are pledged in connection
with their long-term indebtedness.
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
10 7/8% first mortgage notes, due 2004 (a) $185,000,000 $185,000,000
14 5/8% affiliate loan, due 2005 (b) 10,000,000 10,000,000
Other 450,000 453,000
------------ ------------
Total indebtedness 195,450,000 195,453,000
Less - current maturities (11,000) (11,000)
------------ ------------
Total long-term debt $195,439,000 $195,442,000
============ ------------
</TABLE>
- - --------------------------
(a) On February 17, 1994, the Sands obtained $185,000,000 from GB Property
Funding, which issued $185,000,000 of non-recourse first mortgage notes due
January 15, 2004 (the "10 7/8% First Mortgage Notes"). Interest on the
notes accrues at the rate of 10 7/8% per annum, payable semiannually
commencing July 15, 1994. Interest only is payable during the first three
years. Commencing on July 15, 1997, semiannual principal payments of
$2,500,000 will become due on each interest payment date. The 10 7/8%
First Mortgage Notes are redeemable at the option of the issuer, in whole
or in part, on or after January 15, 1999 at stated redemption prices
ranging up to 104.08% of par plus accrued interest.
The indenture for the 10 7/8% First Mortgage Notes contains various
provisions which, among other things, restrict the ability of certain
subsidiaries of PHC to pay dividends to PHC, to merge, consolidate or sell
substantially all of their assets or to incur additional indebtedness
beyond certain limitations. In
13
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
addition, the indenture requires the maintenance of certain cash balances
and, commencing in 1994, requires that a minimum of $7,000,000 be expended
for property and fixture renewals, replacements and betterments at the
Sands, subject to increases of five percent per annum thereafter. The
indenture also contains certain cross-default provisions with other
outstanding debt of affiliates.
(b) On February 17, 1994, GBHC issued a $10,000,000 subordinated promissory
note to an affiliate. The note bears interest at the rate of 14 5/8% per
annum, payable semiannually commencing August 17, 1994, subject to
maintaining average daily cash balances required by the indenture for the
10 7/8% First Mortgage Notes, with the principal due in February 2005.
Scheduled payments of long-term debt as of March 31, 1996 are set forth
below:
<TABLE>
<CAPTION>
<S> <C>
1996 (nine months) $ 8,000
1997 2,512,000
1998 5,013,000
1999 5,014,000
2000 5,015,000
Thereafter 177,888,000
------------
Total $195,450,000
============
</TABLE>
Interest paid amounted to $10,849,000 and $10,082,000, respectively, during
the three month periods ended March 31, 1996 and 1995.
(4) INCOME TAXES
Components of the benefit for income taxes consisted of the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
---------- ---------
<S> <C> <C>
Benefit in lieu of federal income taxes:
Current $2,643,000 $ 73,000
Deferred 254,000 382,000
State income tax benefit:
Current 762,000 21,000
Deferred 75,000 121,000
---------- --------
$3,734,000 $597,000
========== ========
</TABLE>
14
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Holdings is included in the consolidated federal income tax return of
Hollywood Casino Corporation ("HCC"), PHC's parent. Pursuant to agreements
between Holdings, PCC, PHC and HCC, Holdings' provision for federal income taxes
is based on the amount of tax which would be provided if a separate federal
income tax return were filed. The payment of taxes in accordance with the tax
allocation agreements is subject to the approval of the New Jersey Casino
Control Commission. Holdings made no federal or state income tax payments
during the three month periods ended March 31, 1996 and 1995.
Federal and state income tax provisions or benefits are based upon
estimates of the results of operations for the current annual period and reflect
the nondeductibility for income tax purposes of certain items, including certain
amortization, meals and entertainment and other expenses.
Deferred income taxes result primarily from the use of the allowance
method rather than the direct write-off method for doubtful accounts, the use of
accelerated methods of depreciation for federal and state income tax purposes
and differences in the timing of deductions taken between tax and financial
reporting purposes for contributions of and adjustments to the carrying value of
certain investment obligations and for vacation and other accruals.
The components of the deferred tax asset as of March 31, 1996 and
December 31, 1995 were as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 6,883,000 $ 6,829,000
Other liabilities and accruals 2,344,000 2,089,000
Other 1,227,000 1,377,000
----------- -----------
Total deferred tax assets 10,454,000 10,295,000
----------- -----------
Deferred tax liabilities:
Depreciation and amortization (8,509,000) (8,679,000)
Other (597,000) (597,000)
----------- -----------
Total deferred tax liabilities (9,106,000) (9,276,000)
----------- -----------
Net deferred tax asset $ 1,348,000 $ 1,019,000
=========== ===========
</TABLE>
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109") requires that the tax benefit of deferred tax assets
resulting from temporary differences be recorded as an asset and, to the extent
that management can not assess that the utilization of all or a portion of such
deferred tax
15
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
asset is more likely than not, a valuation allowance should be recorded. The
net deferred tax asset has been reflected in the accompanying consolidated
balance sheets at March 31, 1996 and December 31, 1995 with no reduction for
valuation allowances as management believes that it is more likely than not that
future taxable earnings will be sufficient to utilize such tax benefits.
Receivables from and payables to affiliates in connection with the
aforementioned tax allocation agreements were as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------ -------------
<S> <C> <C>
Due from affiliate - current $10,216,000 $7,365,000
Due from affiliate - non-current 5,948,000 5,903,000
Due to affiliate - current (129,000) (129,000)
</TABLE>
Included in current due from affiliate at March 31, 1996 and
December 31, 1995 are current federal taxes receivable of $3,981,000 and
$1,339,000, respectively, with the balance representing net current deferred
federal taxes receivable.
(5) TRANSACTIONS WITH RELATED PARTIES
NJMI, under a management agreement with the Sands, is responsible for
the supervision, direction and control of the day-to-day operations of the
Sands. NJMI is entitled to receive annually (i) a basic consulting fee of 1.5%
of "adjusted gross revenues," as defined, and (ii) incentive compensation of
between 5% and 7.5% of gross operating profits in excess of certain stated
amounts should annual "gross operating profits," as defined, exceed $5,000,000.
Such fees amounted to $984,000 and $1,286,000 during the three month periods
ended March 31, 1996 and 1995, respectively, and are included in general and
administrative expenses in the accompanying consolidated financial statements.
Management fees payable to NJMI at March 31, 1996 and December 31, 1995 amounted
to $40,000 and $28,000, respectively.
GBHC licenses the trade name "Sands" from PHC, which licenses the name
from an unaffiliated third party. Amounts payable by the Sands under this
agreement are equal to the amounts paid to the unaffiliated third party. Such
charges amounted to $61,000 and $66,000 for the three month periods ended March
31, 1996 and 1995, respectively.
GBHC has, from time to time, advanced monies to PCC or certain of its
subsidiaries and PHC or certain of its subsidiaries have advanced monies to GBHC
primarily for working capital purposes. GBHC has also periodically entered into
short-term borrowing arrangements with affiliated companies in connection with
16
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
various construction projects. An advance to a PHC subsidiary in the amount of
$5,672,000 was outstanding as of March 31, 1996 and December 31, 1995 and
accrues interest at the rate of 16.5% per annum. Interest income (expense)
incurred with respect to affiliate advances and borrowings is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
Net advances $ 234,000 $ 234,000
Affiliate loan (Note 3) (365,000) (365,000)
</TABLE>
Interest receivable on affiliate advances, included in non-current due
from affiliates in the accompanying consolidated balance sheets at March 31,
1996 and December 31, 1995 was $2,340,000 and $2,106,000, respectively.
Interest accrued on the affiliate loan in the amount of $179,000 and $544,000 is
included in interest payable in the accompanying consolidated balance sheets at
March 31, 1996 and December 31, 1995, respectively.
From time to time, GBHC performs certain services for HCC and its
subsidiaries and invoices those companies for the Sands' cost of providing those
services. Similarly, GBHC is charged for certain legal, accounting and other
expenses incurred by HCC and its subsidiaries that relate to the Sands'
business. Such affiliate transactions are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
--------- ---------
<S> <C> <C>
Billings to affiliates $ 426,000 $ 200,000
Charges from affiliates (296,000) (164,000)
</TABLE>
(6) LITIGATION
GBHC is a party in various legal proceedings with respect to the
conduct of casino and hotel operations. Although a possible range of loss can
not be estimated, in the opinion of management, based upon the advice of
counsel, settlement or resolution of these proceedings should not have a
material adverse impact upon the consolidated financial position or results of
operations of Holdings and GBHC. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of
the uncertainties described above.
17
<PAGE>
GB HOLDINGS, INC. AND SUBSIDIARIES
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(7) RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 consolidated
financial statements to conform to the 1996 consolidated financial statement
presentation.
18
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
The Sands sustained a loss from operations of $5.1 million for the three
month period ended March 31, 1996 compared to income from operations of $2.5
million for the same period of 1995. Operating results were adversely affected
by record winter snowstorms in January, two additional weekend snowstorms in
February and the advent of both unprecedented and highly aggressive marketing
programs instituted by certain other Atlantic City casinos seeking to increase
their market share. These factors, together with declines in both the table
games and slot hold percentages, combined to produce a 7.6% decline in net
revenues (from $67.8 million in 1995 to $62.7 million in 1996). In addition,
marketing and advertising costs increased by $2.7 million (16.8%) during the
first quarter of 1996 compared to the same period of 1995 in response to
competitive pressures.
GAMING OPERATIONS
The following table sets forth certain unaudited financial and operating
data relating to the Sands' operations:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
-------- --------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C>
REVENUES:
Table games $ 20,175 $ 22,961
Slot machines 36,441 39,737
Other (1) 989 1,178
-------- --------
Total $ 57,605 $ 63,876
======== ========
TABLE GAMES:
Gross Wagering
(Drop) (2) $134,388 $142,588
======== ========
Hold Percentages: (3)
Sands 15.0% 16.1%
Atlantic City Casino
Gaming Industry 16.5% 15.9%
SLOT MACHINES:
Gross Wagering
(Handle) (2) $439,380 $469,817
======== ========
Hold Percentage:(3)
Sands (4) 8.3% 8.5%
</TABLE>
19
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
____________________________
(1) Consists of revenues from poker ($651,000 and $841,000, respectively, for
the three month periods ended March 31, 1996 and 1995) and simulcast horse
racing wagering ($338,000 and $337,000, respectively, for the three month
periods ended March 31, 1996 and 1995).
(2) Gross wagering consists of the total value of chips purchased for table
games (excluding poker) and keno wagering (collectively, the "drop") and
coins wagered in slot machines ("handle").
(3) Casino revenues consist of the portion of gross wagering that a casino
retains and, as a percentage of gross wagering, is referred to as the "hold
percentage".
(4) The Sands' hold percentage with respect to slot machines is reflected on an
accrual basis. Comparable data for the Atlantic City gaming industry is
not available.
Table games drop at the Sands declined $8.2 million (5.8%) during the three
month period ended March 31, 1996 compared with the same period of 1995. The
Sands' decrease compares with an increase of 3.6% in table drop for all other
Atlantic City casinos during the same period. As a result, the Sands' table
game market share (expressed as a percentage of the Atlantic City industry
aggregate table game drop) decreased to 8.2% during the three month period ended
March 31, 1996 from 9% during the same period of 1995. The Sands' table game
drop decrease is largely attributable to an increase in competitive pressures in
the rated table market segment, of which a significant portion is in the "high
end" and mid-market segments.
Slot machine handle decreased $30.4 million (6.5%) during the three month
period ended March 31, 1996 compared with the same period of 1995. The Sands'
decrease in slot machine handle compares with a 7.5% increase in handle for all
other Atlantic City casinos. The decrease experienced by the Sands is a result
of the same competitive pressures resulting from casino expansions and
aggressive marketing campaigns at other properties as discussed above with
respect to table games, particularly in the "high-end" slot segment. The Sands'
average number of slot machines increased 1.2% during the first quarter of 1996
compared to an increase of 7.4% for all other Atlantic City casinos. The
greater percentage increase in the number of slot machines for other Atlantic
City casinos reflects, in part, expansions of certain facilities during the
first quarter of 1996, which resulted in an overall increase of approximately
33,000 square feet of casino space in Atlantic City compared to the 1995 first
quarter.
The Sands' decrease in table games drop and slot machine handle also
reflects, in part, a return to pre-expansion market shares. The Sands increased
the size of its casino in 1994 and posted higher than industry increases in
casino wagering during the last half of 1994 and early 1995. During the first
quarter of 1995, for example, the Sands' increases in table games drop and slot
machine handle over the same period of 1994 were 16.8% and 33.5%, respectively,
compared with increases of 5.1% and 25%, respectively, for all other Atlantic
City casinos. The Sands' table game market share increased to 9% in the first
quarter of 1995 from
20
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
8.1% in the first quarter of 1994. As other casinos complete new expansions,
the Sands' previous market share gains are being offset.
REVENUES
Casino revenues at the Sands, including poker and simulcast horse racing
wagering revenues, decreased by $6.3 million (9.8%) for the three month period
ended March 31, 1996 compared with the same period of 1995. Casino revenues
were negatively impacted by the loss of market share as discussed previously and
by decreases in both the table games and slot machine hold percentages at the
Sands during the 1996 period compared to the 1995 period.
Rooms revenue did not change significantly during the three month period
ended March 31, 1996 compared with 1995. Food and beverage revenues increased
$1.3 million (17.6%) for the three month period ended March 31, 1996 compared
with the prior year period primarily as a result of the opening of the Epic
Buffet during the third quarter of 1995. Other revenues increased $930,000
(149%) during the three month period ended March 31, 1996 compared to the 1995
period as a result of an increase in theater entertainment revenue.
Promotional allowances represent the estimated value of goods and services
provided free of charge to casino customers under various marketing programs.
As a percentage of rooms, food and beverage and other revenues at the Sands,
these allowances decreased to 58.3% during the three month period ended March
31, 1996 from 60.8% during the first quarter of 1995. Such decrease is
primarily attributable to an increase in other types of marketing programs not
associated with promotional allowances being used in lieu of complimentaries.
DEPARTMENTAL EXPENSES
Casino expenses at the Sands increased $3.4 million (6.8%) during the three
month period ended March 31, 1996 compared with 1995. This increase is
primarily due to increased costs with respect to marketing activities, which
resulted in higher allocations of rooms, food and beverage and other expenses to
casino expense.
Rooms expense decreased $265,000 (46.1%) during the first quarter of 1996
as compared to the first quarter of 1995 primarily due to increased allocation
of rooms expense to casino expense as a result of an increase in casino
marketing activities relating to rooms. Decreased payroll expenses resulting
from an overall decline in occupancy during the first quarter of 1996 as
compared to 1995 also contributed to the reduction in rooms expense. Food and
beverage expense increased by $382,000 (19%) during the three month period ended
March 31, 1996 compared to the same period in 1995. Increased costs associated
with the Epic Buffet were partially offset by increases in food and beverage
marketing programs, the costs of which are allocated to the casino department.
Other expenses decreased $59,000 (7.4%) during the three month period ended
21
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
March 31, 1996 compared with 1995 as increases in costs related to theater
entertainment were offset by increased allocations to the casino department.
GENERAL AND ADMINISTRATIVE
General and administrative expenses decreased $1.1 million (15.8%) during
the three month period ended March 31, 1996 as compared to 1995. This decrease
was primarily due to decreases in management fees and legal expenses.
INCOME TAX PROVISION
Holdings is included in HCC's consolidated federal income tax return.
Pursuant to agreements between Holdings, PHC and HCC, Holdings' provision for
federal income taxes is based on the amount of tax which would have been
provided if a separate return were filed.
INFLATION
Management believes that in the near term, modest inflation, together with
increasing competition within the gaming industry for qualified and experienced
personnel, will continue to cause increases in operating expenses, particularly
labor and employee benefits costs.
SEASONALITY
Historically, the Sands' operations have been highly seasonal in nature,
with the peak activity occurring from May to September. Consequently, the
results of Holdings' operations for the first and fourth quarters are
traditionally less profitable than the other quarters of the fiscal year. In
addition, the Sands' operations may fluctuate significantly due to a number of
factors, including chance. Such seasonality and fluctuations may materially
affect Holdings' casino revenues and profitability.
LIQUIDITY AND CAPITAL RESOURCES
Holdings' only operations and resulting sources of liquidity and capital
resources are those of its wholly owned subsidiary, GBHC, whose only operations
are those of the Sands. The Sands' earnings before depreciation, interest,
amortization, taxes and intercompany management fees have been sufficient to
meet its debt service obligations (other than certain maturities of principal
that have been refinanced) and to fund a substantial portion of its capital
expenditures. The Sands has also used short-term borrowings to fund seasonal
cash needs and has used long-term borrowings for certain capital projects.
22
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
OPERATING ACTIVITIES
At March 31, 1996, GBHC had cash and cash equivalents of $12.9 million.
During the three month period ended March 31, 1996, net cash used in operating
activities was $9 million compared with $2.5 million during the 1995 period.
GBHC utilized its existing cash and short-term borrowings during the first
quarter of 1996 to meet its operating needs, to fund capital additions totaling
$1.1 million and to make obligatory investments of $762,000.
FINANCING ACTIVITIES
During February 1994, GBHC refinanced virtually all of its outstanding debt
as part of an overall restructuring by PHC (the "PHC Recapitalization"). The
refinancing was completed through a public offering of $270 million of debt
securities consisting of $185 million of 10 7/8% First Mortgage Notes due
January 15, 2004 and $85 million of 11 5/8% Senior Notes due April 15, 2004.
Proceeds from the debt offerings were used, in part, to refinance the Sands'
first mortgage and other indebtedness scheduled to mature in 1994 and to provide
partial funding for an expansion of gaming space at the Sands. As part of the
PHC Recapitalization, a subsidiary of PHC also issued $15 million of 14 5/8%
junior subordinated notes due in 2005 to HCC, the parent of PHC; the subsidiary
loaned $10 million of such proceeds to GBHC on the same terms. Interest on this
subordinated affiliate debt is payable semiannually commencing August 17, 1994,
with payment subject to meeting certain tests required by the indenture for the
10 7/8% First Mortgage Notes.
GBHC is presently renegotiating a $5 million bank line of credit which
expired on April 30, 1996. As of March 31, 1996, $2 million was outstanding
under the line of credit.
Scheduled maturities of long-term debt during the remainder of 1996 are
$8,000.
CAPITAL EXPENDITURES AND OBLIGATORY INVESTMENTS
Capital expenditures at the Sands during the three month period ended March
31, 1996 amounted to approximately $1.1 million and management anticipates
capital expenditures during the remainder of 1996 will be approximately $5
million. Projects currently planned during 1996 include substantial upgrades
and improvements to all rooms at the Sands, including its higher-end suite
product, and the purchase of additional gaming equipment.
The Sands is required by the New Jersey Casino Control Act to make certain
investments with the Casino Reinvestment Development Authority, a governmental
agency which administers the statutorily mandated investments made by casino
licensees. Deposit requirements for the first quarter of 1996 totaled $762,000
and are anticipated to be approximately $2.6 million during the remainder of
1996.
23
<PAGE>
GB HOLDINGS, INC.
(WHOLLY OWNED BY PRATT CASINO CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
SUMMARY
Management anticipates that Holdings' funding requirements for the next 12
months will be satisfied by existing cash, cash generated by the Sands'
operations and borrowings from a bank line of credit or from affiliates.
24
<PAGE>
PART II: OTHER INFORMATION
- - ---------------------------
The Registrants did not file any reports on Form 8-K during the quarter
ended March 31, 1996. The Registrants filed their Annual Report on Form 10-K for
the year ended December 31, 1995 with the Securities and Exchange Commission on
March 29, 1996.
SIGNATURES
- - ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, each
of the Registrants has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GB HOLDINGS, INC.
GB PROPERTY FUNDING CORP.
-------------------------------------
Registrants
Date: May 13, 1996 By:/s/ John C. Hull
----------------------- ---------------------------------
John C. Hull
Principal Accounting Officer
25
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GB PROPERTY FUNDING CORP. AND IS QUALIFIED IN ITS
ENTIRETY BY RFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000912906
<NAME> GB PROPERTY FUNDING CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 4,247
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,248
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 189,248
<CURRENT-LIABILITIES> 4,247
<BONDS> 185,000
0
0
<COMMON> 1
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 189,248
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GB HOLDINGS, INC. AND SUBSIDIARIES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000912926
<NAME> GB HOLDINGS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 12,890
<SECURITIES> 0
<RECEIVABLES> 28,149
<ALLOWANCES> 16,946
<INVENTORY> 4,161
<CURRENT-ASSETS> 43,820
<PP&E> 313,814
<DEPRECIATION> 149,813
<TOTAL-ASSETS> 236,701
<CURRENT-LIABILITIES> 34,574
<BONDS> 195,439
0
0
<COMMON> 1
<OTHER-SE> 4,192
<TOTAL-LIABILITY-AND-EQUITY> 236,701
<SALES> 0
<TOTAL-REVENUES> 62,699
<CGS> 0
<TOTAL-COSTS> 55,990
<OTHER-EXPENSES> 11,212
<LOSS-PROVISION> 567
<INTEREST-EXPENSE> 4,897
<INCOME-PRETAX> (9,967)
<INCOME-TAX> (3,734)
<INCOME-CONTINUING> (6,233)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,233)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
