<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MAY 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 number 1-12802
HARVEYS CASINO RESORTS
----------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 88-0066882
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Highway 50 & Stateline Avenue
P.O. Box 128
Lake Tahoe, Nevada 89449
-------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (775) 588-2411
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
The number of shares outstanding of the registrant's Class A Common Stock, $0.01
par value was 40,091 and the number of shares outstanding of the registrant's
Class B Common Stock, $0.01 par value was 4,008,692, each as of July 10, 2000.
<PAGE>
HARVEYS CASINO RESORTS
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets,
May 31, 2000 and November 30, 1999 3
Condensed Consolidated Statements of Operations for the Three
Months Ended May 31, 2000 and 1999, the Six Months Ended May 31,
2000, the Period of December 1, 1998 through February 1, 1999
and the Period of February 2, 1999 (the date of acquisition)
through May 31, 1999 4
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended May 31 2000, the Period of December 1, 1998
through February 1, 1999 and the Period of February 2, 1999
(the date of acquisition) through May 31, 1999 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
May 31, November 30,
2000 1999
---------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 35,728 $ 32,496
Accounts and notes receivable, net 7,019 5,810
Prepaid expenses 4,232 2,228
Other current assets 6,468 6,846
----------- -----------
Total current assets 53,447 47,380
Property and equipment (net of accumulated depreciation of
$31,916 and $18,872) 436,930 440,759
Cost in excess of net assets acquired 152,103 155,904
Other assets 22,156 29,876
---------- ----------
Total assets $664,636 $673,919
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts and contracts payable $ 6,402 $ 9,752
Accrued expenses 34,065 34,468
---------- ----------
Total current liabilities 40,467 44,220
Long-term debt, net of current portion 389,162 400,577
Deferred income taxes 58,091 58,091
Other liabilities 28,199 28,234
---------- ----------
Total liabilities 515,919 531,122
--------- ---------
Preferred stock, $.01 par value, 1,000,000 shares authorized; 10 Series A and
99,990 Series B 13 1/2% senior redeemable convertible cumulative shares
outstanding (liquidation value $55,000) 65,660 61,442
---------- ----------
Stockholders' equity
Common stock, $.01 par value, 20,000,000 shares authorized; 4,085,450
shares issued at May 31, 2000, and 4,018,790 shares issued at
November 30, 1999 41 40
Additional paid-in capital 74,959 74,960
Retained earnings 8,057 6,355
----------- -----------
Total stockholders' equity 83,057 81,355
---------- ----------
Total liabilities, preferred stock and stockholders' equity $664,636 $673,919
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
Predecessor
Company
------------ February 2,
December 1, 1999
Three Months 1998 (date of
Ended May 31, Six Months to acquisition)
------------------------- Ended February 1, to May 31,
2000 1999 May 31, 2000 1999 1999
--------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
Revenues
Casino $ 96,468 $ 61,725 $ 186,627 $ 41,454 $ 80,405
Racing 1,796 -- 3,132 -- --
Lodging 8,920 8,611 17,616 5,958 11,467
Food and beverage 14,572 11,823 28,896 8,108 15,571
Other 2,353 2,010 4,719 1,271 2,765
Less: Casino promotional allowances (6,899) (6,453) (14,427) (5,003) (8,532)
--------- --------- --------- --------- ---------
Total net revenues 117,210 77,716 226,563 51,788 101,676
--------- --------- --------- --------- ---------
Costs and expenses
Casino 45,730 30,857 89,556 21,146 41,102
Racing 3,091 -- 5,847 -- --
Lodging 3,340 3,328 6,371 1,997 4,305
Food and beverage 10,485 7,629 20,413 4,727 9,867
Other operating 887 797 1,814 592 1,087
Selling, general and administrative 24,589 17,516 47,948 13,428 22,760
Depreciation and amortization 9,244 6,015 18,387 3,553 7,957
Development project write-downs 1,314 2,013 1,314 130 2,019
Consent fee and merger costs -- -- -- 19,879 --
--------- --------- --------- --------- ---------
Total costs and expenses 98,680 68,155 191,650 65,452 89,097
--------- --------- --------- --------- ---------
Operating income (loss) 18,530 9,561 34,913 (13,664) 12,579
--------- --------- --------- --------- ---------
Other income (expense)
Interest income 60 35 97 338 42
Interest expense (9,290) (6,940) (19,088) (3,016) (9,187)
Other, net (58) (265) (163) 77 (248)
--------- --------- --------- --------- ---------
Total other income (expense) (9,288) (7,170) (19,154) (2,601) (9,393)
--------- --------- --------- --------- ---------
Income (loss) before income taxes,
extraordinary item and the cumulative
effect of an accounting change 9,242 2,391 15,759 (16,265) 3,186
Income tax benefit (provision) (3,928) (936) (6,698) 3,904 (1,247)
--------- --------- --------- --------- ---------
Income (loss) before extraordinary item
and the cumulative effect of an
accounting change 5,314 1,455 9,061 (12,361) 1,939
Loss on early retirement of debt, net
of taxes -- -- -- (869) --
Cumulative effect of an accounting
change, net of taxes -- -- (3,142) -- --
--------- --------- --------- --------- ---------
Net income (loss) $ 5,314 $ 1,455 $ 5,919 $ (13,230) $ 1,939
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Predecessor Company February 2, 1999
Ended December 1,1998 to (date of acquisition)
May 31, 2000 February 1, 1999 to May 31, 1999
------------ ---------------- ---------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 5,919 $(13,230) $ 1,939
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation and amortization 18,387 3,553 7,957
Development project write-down 1,314 130 2,019
Amortization of deferred compensation 1,163 88 239
Write-off of debt issuance costs, net of tax -- 869 --
Change in income taxes payable 3,893 (3,904) 690
Accrual of consent fee and merger costs -- 19,823 --
Other, net (4,649) (2,478) (2,766)
-------- -------- --------
Net cash provided by operating activities 26,027 4,851 10,078
-------- -------- --------
Cash flows from investing activities
Capital expenditures (9,483) (3,830) (9,329)
Change in construction payables (2,201) -- --
Proceeds from sale of marketable securities -- 10,000 657
Proceeds from notes receivable -- -- 1,879
Other, net 60 (296) 422
-------- -------- --------
Net cash provided by (used in) investing
activities (11,624) 5,874 (6,371)
-------- -------- --------
Cash flows from financing activities
Net payments under revolving credit facility (10,903) -- (30,500)
Debt issuance and deferred financing costs (268) -- (2,934)
Payment of consent fee and merger costs -- (56) (19,823)
Other, net -- (251) 25
-------- -------- --------
Net cash used in financing activities (11,171) (307) (53,232)
-------- -------- --------
Increase (decrease) in cash and cash equivalents 3,232 10,418 (49,525)
Cash and cash equivalents at beginning of period 32,496 67,299 77,717
-------- -------- --------
Cash and cash equivalents at end of period $ 35,728 $ 77,717 $ 28,192
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the following footnotes, the words, "Company" and "Harveys" refer to Harveys
Casino Resorts, a Nevada corporation, and its wholly-owned subsidiaries unless
the context requires otherwise.
1. BASIS OF PRESENTATION AND CONSOLIDATION
Founded in 1944, Harveys has been engaged in the casino entertainment
industry for over 55 years. On February 2, 1999, Harveys Acquisition
Corporation merged with and into Harveys. Harveys was the surviving
corporation in the merger and is continuing business operations as
conducted prior to the merger. Harveys Tahoe Management Company, Inc., a
wholly-owned subsidiary, owns and operates Harveys Resort & Casino on the
south shore of Lake Tahoe, Nevada. Harveys Iowa Management Company, Inc., a
wholly-owned subsidiary, is the owner and operator of Harveys Casino Hotel,
a riverboat casino, hotel and convention center complex in Council Bluffs,
Iowa. Harveys C. C. Management Company, Inc., a wholly-owned subsidiary,
owns and operates Harveys Wagon Wheel Hotel/Casino in Central City,
Colorado.
On October 6, 1999, HBR Realty Company, Inc., a wholly-owned subsidiary,
purchased the net assets (excluding the gaming equipment) of Bluffs Run
Casino, the greyhound racetrack and casino in Council Bluffs, Iowa. The
facilities were purchased pursuant to a Purchase and Sale Agreement and
Joint Escrow Instructions dated as of August 31, 1999 by and between HBR
Realty Company and Iowa West Racing Association. Immediately after closing
of the transaction, the Bluffs Run Casino facilities were leased back to
Iowa West Racing Association for an initial term of 25 years. At the same
time, Iowa West Racing Association retained Harveys BR Management Company,
Inc., a wholly-owned subsidiary, to manage the operations of Bluffs Run
Casino for a minimum of 25 years. Iowa West Racing Association continues to
hold the pari-mutuel and gaming licenses under Iowa law. Harveys, through
its wholly-owned subsidiaries, receives management fees and lease income
generally equal to the ongoing cash flow from the operations of Bluffs Run
Casino.
The February 2, 1999 merger was accounted for as a purchase. This required
an allocation of the purchase price to the individual assets acquired and
liabilities assumed based on their fair value at the time of the merger. As
a result, the consolidated financial statements for the periods after the
merger are presented on a different basis of accounting from those for the
periods before the merger and, therefore, are not directly comparable. The
accompanying condensed consolidated statements of operations and condensed
consolidated statements of cash flows for periods prior to the merger are
captioned as the predecessor company and are shown for informational
purposes.
6
<PAGE>
The October 6, 1999 acquisition of the net assets of Bluffs Run Casino was
accounted for as a purchase. Consequently, the net assets acquired are
included in the condensed consolidated balance sheet based on their fair
value as of the date of acquisition. The condensed consolidated statements
of operations include the revenues and expenses of Bluffs Run Casino for
the periods ended May 31, 2000.
The condensed consolidated financial statements include the accounts of
Harveys and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The condensed consolidated balance sheet as of November 30, 1999 has been
prepared from the audited financial statements at that date. The
accompanying condensed consolidated financial statements at May 31, 2000
and 1999, have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.
Certain reclassifications have been made to prior periods to conform to the
current quarter presentation. These reclassifications had no effect on net
income (loss).
All adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of financial condition, results of operations and
cash flows have been included. Results of operations for interim periods
should not be considered to be indicative of results for the full fiscal
year. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended November 30, 1999.
2. PROPOSED MERGER
On April 17, 2000, PH Casino Resorts, a newly formed subsidiary of Harveys
Casino Resorts, entered into a definitive agreement with Pinnacle
Entertainment, Inc. (formerly Hollywood Park, Inc.) pursuant to which PH
Casino Resorts would acquire by merger all of the outstanding capital stock
of Pinnacle Entertainment, Inc.
Pinnacle Entertainment, Inc. is a gaming company that owns and operates
eight casinos in Nevada, Mississippi, Louisiana and Argentina, two of which
are the subject of a pending third-party sales transaction. Pinnacle
Entertainment, Inc. also receives lease income from two card club casinos
in the Los Angeles area. Pinnacle Entertainment, Inc. is in the process of
constructing a casino resort in southern Indiana.
7
<PAGE>
Upon closing of the merger, PH Casino Resorts will acquire all of the then
outstanding stock of Pinnacle Entertainment, Inc. for $24 in cash per fully
diluted share (or aggregate cash consideration of approximately $661.2
million). Additional consideration of up to $1 in cash per fully diluted
share may be payable contingent upon the timing and net after tax proceeds
of Pinnacle Entertainment, Inc.'s sale of 97 acres of surplus land in
Inglewood, California. As a condition to the proposed transaction, senior
management of Pinnacle Entertainment, Inc. will contribute $50 million of
Pinnacle Entertainment, Inc. shares and share equivalents to PH Casino
Resorts and will assume an ongoing role with PH Casino Resorts.
Consummation of the merger is subject to, among other things, regulatory
approvals in the various jurisdictions in which Pinnacle Entertainment,
Inc. and Harveys Casino Resorts conduct gaming operations, approval by a
majority of Pinnacle Entertainment, Inc.'s stockholders, completion of PH
Casino Resorts' financing for the transaction and satisfaction of other
conditions precedent, including certain dispositions by Pinnacle
Entertainment, Inc. and the opening of their Indiana casino resort
(currently under construction), substantially in accordance with its
current budget, not later than September 15, 2000. The Company expects the
transaction to close in the fourth quarter of 2000.
3. LONG-TERM DEBT
Long-term debt consisted of the following (in thousands) as of:
<TABLE>
<CAPTION>
May 31 2000 November 30, 1999
----------- -----------------
<S> <C> <C>
10 5/8% Senior Subordinated Notes, due 2006 $150,000 $150,000
Unamortized premium on Senior Subordinated Notes 6,141 6,654
------------ ------------
156,141 156,654
Note payable to banks 233,021 243,923
------------ ------------
$389,162 $400,577
============ ============
</TABLE>
Senior Subordinated Notes - The indenture governing the senior subordinated
notes contains certain covenants that impose limitations on, among other
things: (i) the incurrence of additional indebtedness by the Company, (ii)
the payment of dividends, (iii) the repurchase of capital stock and the
making of certain other restricted payments and restricted investments
(each defined in the indenture), (iv) mergers, consolidations and sales of
assets, (v) the creation or incurrence of liens on the assets of the
Company, and (vi) transactions by the Company or any of its subsidiaries
with affiliates (as defined in the indenture). These limitations are
subject to a number of qualifications and exceptions as described in the
indenture. The Company was in compliance with these covenants at May 31,
2000.
The premium on the senior subordinated notes is being amortized as a
reduction of interest expense over the remaining term of the notes.
8
<PAGE>
Note Payable to Banks - A second amended and restated credit facility,
dated as of October 5, 1999, provides a revolving loan facility, a
swingline facility that allows borrowing on same- day notice and a letter
of credit facility. The Company can borrow up to $10 million under the
swingline facility. The maximum available under the credit facility,
including amounts outstanding under the swingline facility and letters of
credit exposure, is $335 million. The maximum permitted principal balance
is reduced quarterly, beginning August 31, 2000.
At May 31, 2000, the Company had approximately $233.0 million in
outstanding borrowings and approximately $48.5 million in letters of credit
exposure.
Interest on outstanding borrowings accrues at a base rate plus an
applicable margin. The base rate is equal to the higher of the prime rate
or the federal funds rate plus one-half of one percent. The Company may, at
its option and under certain circumstances, elect to pay interest based on
the London Interbank Offered Rate ("LIBOR") plus an applicable margin. The
applicable margins are based on the ratio of total funded debt to earnings
before deductions for interest, taxes, depreciation and amortization
("EBITDA"). The applicable margins are determined quarterly and are subject
to change. At May 31, 2000 the applicable margin relative to the base rate
was 1.00% and the applicable margin relative to the LIBOR was 2.00%.
The Company entered into an interest rate cap agreement, effective March 1,
2000, to reduce the potential impact of increases in interest rates on
variable-rate debt. The notional amount of the interest rate cap agreement
was $48 million on March 1, 2000 and reduces quarterly over the 35 month
term of the agreement. The notional amount on May 31, 2000 was $43.5
million. The agreement entitles the Company to receive from counterparties,
on a monthly basis, the amount, if any, by which the Company's interest
payments on its floating LIBOR-based debt exceeds the amount that would
have been paid if the one-month LIBO rate was capped at 7.5%. The
combination of the interest rate cap agreement and the terms of the credit
facility result in the Company paying interest, on an amount of
variable-rate debt equal to the notional amount of the interest rate cap
agreement, at a variable rate (LIBOR plus 2.00%), not to exceed 9.5%.
The cost (approximately $0.3 million) of acquiring the interest rate cap
agreement is being amortized to interest expense over the term of the
agreement. The unamortized cost is included in other assets in the
condensed consolidated balance sheet. Amounts receivable under the interest
rate cap agreement are recorded as a reduction of interest expense.
The amounts the banks lend under the credit facility are secured by
substantially all of the Company's assets including a pledge of the capital
stock of its subsidiaries.
9
<PAGE>
The credit facility contains a number of covenants that restrict the
Company's ability to: (i) dispose of assets, (ii) incur additional
indebtedness, (iii) prepay any of the 10 5/8% senior subordinated notes,
(iv) pay dividends, (v) create liens on assets, (vi) make investments,
loans or advances, (vii) engage in mergers or consolidations, change the
Company's business, engage in certain transactions with affiliates, and
(viii) engage in certain corporate activities. The Company is required to
maintain specified financial ratios and net worth requirements, satisfy
specified financial tests, including interest coverage tests, and maintain
certain levels of annual capital expenditures. At May 31, 2000, the Company
was in compliance with these covenants.
4. REDEEMABLE PREFERRED STOCK
At May 31, 2000, the Company had outstanding 10 shares of 13 1/2% Series A
Senior Redeemable Convertible Cumulative Preferred Stock and 99,990 shares
of 13 1/2% Series B Senior Redeemable Convertible Cumulative Preferred
Stock. The Series A Preferred Stock and Series B Preferred Stock each have
a liquidation value of $550 per share. Both series of preferred stock are
entitled to quarterly dividends at an annual rate of 13 1/2% of the
liquidation value. If dividends are not paid in cash when due, they
cumulate and compound at an annual rate of 13 1/2%. The Company must redeem
all the outstanding preferred stock on February 1, 2011, for cash, at the
liquidation value plus any accrued and unpaid dividends, and has the right
to redeem the preferred stock, at any time, at the liquidation value plus
any accrued and unpaid dividends. The Series A and Series B Preferred Stock
are convertible, at any time on or prior to February 1, 2002, into
corresponding shares of Class A and Class B Common Stock. The right of
conversion, as it relates to the Series A and Series B Preferred Stock,
only vests in, and is only exercisable by, the current holders of preferred
stock and their affiliates (as that term is defined in the certificate of
designation that governs the preferred stock). The conversion rate is
28.7309164 shares of common stock per share of preferred stock and is
subject to customary antidilution adjustments. The conversion of the
preferred stock to common stock would require the approval of all
applicable gaming authorities. At the time of conversion, the Company would
have the option of satisfying any accrued and unpaid dividends due on the
preferred stock being converted by paying cash or issuing additional shares
of the corresponding Class A Common Stock or Class B Common Stock having a
market value equal to the amount of accrued dividends.
The certificate of designation contains covenants which: (i) limit the
Company's ability to make restricted payments or investments, (ii) limit
consolidation, merger and the sale of assets, (iii) require the Company to
provide certain financial reports, and (iv) limit business activities. At
May 31, 2000, the Company was in compliance with these covenants.
The combined liquidation value of the Series A Preferred Stock and Series B
Preferred Stock at May 31, 2000 was $55 million. Additionally, on that
date, there were approximately $10.7 million of accrued and unpaid
dividends on the preferred stock.
10
<PAGE>
5. DEVELOPMENT PROJECT WRITE-DOWNS
In the second quarter of fiscal 2000, Harveys reviewed its business
development plans as they related to a proposed resort in Salisbury Beach,
Massachusetts. As a result of that review, the Company abandoned the
project and wrote off approximately $1.3 million of real estate options and
architectural designs. In the second quarter of fiscal 1999, the Company
wrote off approximately $2.0 million related to a proposed casino project
in Las Vegas which the Company chose not to pursue.
6. CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE
Effective December 1, 1999, the Company adopted Statement of Position
("SOP") 98-5, Reporting on the Costs of Start-Up Activities. SOP 98-5 was
issued by the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants and its provisions are effective
for fiscal years beginning after December 15, 1998. SOP 98-5 requires costs
of start-up activities (commonly referred to as preopening costs in the
gaming industry) to be expensed as incurred. The initial effect of adopting
SOP 98-5 is reported as the cumulative effect of a change in accounting
principle. As required, all capitalized preopening costs as of December 1,
1999 were written off. These costs included previously deferred
organization and licensing costs. The write-offs resulted in a charge of
approximately $3.1 million, net of an income tax benefit of approximately
$1.4 million.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In the following discussion, the words "Harveys," "Company," "we," "our," and
"us" refer to Harveys Casino Resorts, a Nevada corporation, and its wholly-owned
subsidiaries, unless the context requires otherwise.
On February 2, 1999, we were acquired by Harveys Acquisition Corporation, which
merged with and into Harveys. The Company was the surviving corporation in the
merger and we are continuing our business operations as conducted prior to the
merger. We currently own and operate Harveys Resort & Casino at Lake Tahoe,
Nevada, Harveys Casino Hotel in Council Bluffs, Iowa and Harveys Wagon Wheel in
Central City, Colorado. We also own the assets of, and manage, Bluffs Run Casino
in Council Bluffs, Iowa, a facility under license from Iowa West Racing
Association.
The following table presents certain operating results for the Company's
properties. For comparative purposes, results for the first six months of fiscal
1999 have been presented on a combined six-month basis by aggregating the
results for the period December 1, 1998 through February 1, 1999 with the
results for the period February 2, 1999 (the date of acquisition) through May
31, 1999.
Results of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
------------ ------------ ------------ ------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net Revenues
Harveys Resort & Casino $ 36,473 $ 32,374 $ 69,126 $ 63,523
Harveys Casino Hotel 32,959 31,554 65,792 61,855
Bluffs Run Casino 34,219 - 64,507 -
Harveys Wagon Wheel 13,559 13,788 27,138 28,086
----------- ----------- ----------- ----------
$117,210 $ 77,716 $226,563 $153,464
========= ========= ========= ========
Operating Income (Loss)
Harveys Resort & Casino $ 7,544 $ 5,108 $ 12,230 $ 8,521
Harveys Casino Hotel 7,224 7,010 14,321 13,486
Bluffs Run Casino 7,562 - 13,229 -
Harveys Wagon Wheel 1,439 2,520 3,225 4,894
Corporate and Development (5,239) (5,077) (8,092) (8,107)
Consent fee and merger costs - - - (19,879)
--------------- --------------- --------------- ----------
$ 18,530 $ 9,561 $ 34,913 ($1,085)
========= ======= ======== ========
EBITDA (1)
Harveys Resort & Casino $ 10,363 $ 7,510 $ 17,763 $ 13,213
Harveys Casino Hotel 9,398 8,991 18,647 17,409
Bluffs Run Casino 10,210 - 18,528 -
Harveys Wagon Wheel 2,463 3,506 5,286 6,829
Corporate and Development (2,353) (2,210) (4,448) (4,672)
---------- ---------- ---------- ----------
$ 30,081 $ 17,797 $ 55,776 $ 32,779
======== ======== ======== ========
</TABLE>
12
<PAGE>
Note to the operating results
(1) EBITDA (operating income plus depreciation and amortization and excluding
non-recurring items) should not be construed as an indicator of the
Company's operating performance, or as an alternative to cash flows from
operating activities as a measure of liquidity. We have presented EBITDA
solely as supplemental disclosure because we believe that it allows for a
more complete analysis of results of operations. Because companies do not
calculate EBITDA identically, the presentation of EBITDA herein is not
necessarily comparable to similarly entitled measures of other companies.
EBITDA is not intended to represent and should not be considered more
meaningful than, or an alternative to, measures of operating performance as
determined in accordance with generally accepted accounting principles.
SUMMARY - Our fiscal year 2000 results are significantly affected by our October
6, 1999 acquisition of the net assets of Bluffs Run Casino and our management of
that facility.
Our consolidated net revenues for the second quarter of fiscal 2000 amounted to
$117.2 million, an increase of $39.5 million, or 50.8%, over our net revenues
for the second quarter of fiscal 1999. Bluffs Run Casino provided $34.2 million
of the net revenue growth. Excluding the net revenue contribution from Bluffs
Run Casino, our same-store net revenues improved by $5.3 million, or 6.8%.
Improvements in net revenues from Harveys Casino Hotel at Council Bluffs and
Harveys Resort & Casino at Lake Tahoe mitigated our declining net revenues from
Harveys Wagon Wheel in the increasingly competitive Central City/Black Hawk,
Colorado market.
Operating income amounted to $18.5 million for the second quarter of fiscal
2000. This was a $9.0 million, or 93.8%, improvement from the prior year period.
Bluffs Run Casino provided $7.6 million of the increased operating income. On a
same-store basis, our operating income improved $1.4 million, or 14.7%.
For the first six months of fiscal 2000, net revenues amounted to $226.6
million, an increase of $73.1 million, or 47.6%, over net revenues for the first
half of fiscal 1999. Bluffs Run Casino provided $64.5 million of the net revenue
growth. Excluding the contribution from Bluffs Run Casino, our same-store net
revenues improved by $8.6 million, or 5.6%. The growth in same-store net
revenue was driven by improvements at our Lake Tahoe property and at Harveys
Casino Hotel in Council Bluffs. Harveys Wagon Wheel experienced a decline in net
revenues for the comparable six month periods due to increased competition.
Operating income of $34.9 million for the six-months ended May 31, 2000 exceeded
operating income for the same period of the prior year by $16.1 million, or
85.8%, (excluding $19.9 million of consent fee and merger related expenses from
the 1999 period). The addition of Bluffs Run Casino was responsible for $13.2
million of that growth. On a same-store basis, our operating income improved by
$2.9 million, with growth recognized at Harveys Resort & Casino and Harveys
Casino Hotel while Harveys Wagon Wheel recorded a decline in operating income.
HARVEYS RESORT & CASINO - Our Lake Tahoe property produced net revenues for the
quarter of $36.5 million, an increase of $4.1 million, or 12.7%, over our net
revenues for the second quarter of fiscal 1999. Revenues improved primarily as a
result of increased wagering volume and an increase in the number of meals
served. Our operating profit of $7.5 million increased by $2.4 million, or
47.7%, primarily as a result of improvements in casino profit margins.
13
<PAGE>
Our net revenues from Lake Tahoe for the six months ended May 31, 2000 amounted
to $69.1 million, an increase of $5.6 million, or 8.8%, over our net revenues
recorded for the same period of fiscal 1999. All operating areas experienced
revenue improvements as a result of overall growth in the South Lake Tahoe
market and a combination of our marketing efforts and some business disruption
at one of our competitors due to its remodeling construction which was just
recently completed. Our Lake Tahoe operating profit of $12.2 million for the
first half of fiscal 2000 improved by $3.7 million, or 43.5 %, driven by
improvements in casino profit margins.
We have not yet experienced any impact from additional competition that could
result from an increase in the number of casinos on Native American lands in
California as a consequence of the approval of the California Indian
Self-reliance Initiative in November 1998. While we do not anticipate any such
additional competition to affect us in fiscal 2000, any future Native American
casinos on lands between Harveys Resort & Casino and major population centers,
such as the San Francisco Bay area, could have an adverse impact on our Lake
Tahoe operations.
HARVEYS CASINO HOTEL - This Council Bluffs property provided net revenues for
the quarter of $33.0 million, an increase of $1.4 million, or 4.5% over our net
revenues recorded in the second quarter of fiscal 1999. Revenues improved as a
result of increases in wagering volume and the number of meals served. Operating
profit of $7.2 million increased by $0.2 million, or 3.1%, as a result of the
improvements.
Our net revenues from Harveys Casino Hotel for the six months ended May 31, 2000
amounted to $65.8 million, an increase of $3.9 million, or 6.4%, over our net
revenues recorded in the same period of fiscal 1999. All operating areas
experienced revenue improvements as a result of increases in wagering volume,
hotel occupancy and the number of meals served. Operating profits of $14.3
million improved by $0.8 million, or 6.2 %, driven primarily by casino revenues
and profits.
BLUFFS RUN CASINO - The second quarter of fiscal 2000 was the second full
quarter of our management of Bluffs Run Casino. This Council Bluffs property
provided net revenues for the quarter of $34.2 million and operating profit of
$7.6 million.
Our net revenues from this property for the six months ended May 31, 2000
amounted to $64.5 million and operating profit amounted to $13.2 million.
Casinos at pari-mutuel tracks in Iowa, including Bluffs Run Casino, are subject
to an escalating wagering tax which is currently 28%. The tax, which applies to
gross receipts from slot machines, increases two percent per year until it
reaches a maximum of 36% on January 1, 2004. We were subject to our first
increase in the tax (since our October 6, 1999 acquisition) on January 1, 2000
and will be subject to the next increase on January 1, 2001.
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<PAGE>
HARVEYS WAGON WHEEL - Net revenues from our Central City property amounted to
$13.6 million for the quarter, a decrease of $0.2 million, or 1.7%, from our net
revenues recorded in the second quarter of fiscal 1999. The decrease was
primarily in casino revenues, resulting from additional competition in nearby
Black Hawk, Colorado. Our operating profit of $1.4 million declined by $1.1
million, or 42.9%, primarily as a result of the decline in our casino revenues
and profits and an increase in our marketing and advertising expenditures in
response to the new competition.
Our net revenues from Central City for the six months ended May 31, 2000
amounted to $27.1 million, a decrease of $0.9 million, or 3.4%, from our net
revenues recorded in the same period of fiscal 1999. The revenue decline was in
our casino revenues and is principally the result of the opening of new
competition in Black Hawk, Colorado. Our Central City operating profit of $3.2
million declined $1.7 million, or 34.1%, as a result of the decline in our
casino revenues and profits and marketing and advertising expenditures in
response to the new competition.
During the second quarter of our current fiscal year, another competitor opened
a new casino facility in Black Hawk, bringing to four the number of new gaming
facilities opened there in the past two years.
OTHER FACTORS AFFECTING RESULTS OF OPERATIONS - Our results for the quarter and
six months ended May 31, 2000 were affected by several other factors, including:
increases in depreciation and amortization, increases in selling, general and
administrative expenses, a development project write-off, increases in interest
expense and the cumulative effect of a change in accounting principle.
Depreciation and amortization expense amounted to approximately $9.2 million in
the second quarter of fiscal 2000 compared to approximately $6.0 million of
depreciation and amortization in the second quarter of the prior year. This
increase included approximately $2.1 million of amortization of the costs in
excess of net assets acquired in the merger with Harveys Acquisition Corporation
and in the acquisition of the net assets of Bluffs Run Casino. The balance of
the increase for the second quarter of fiscal 2000 was primarily the result of
the change in the accounting basis for property and equipment brought on by the
merger and additional depreciation from Bluffs Run Casino. The increase in
depreciation and amortization for the comparable six-month periods amounted to
approximately $6.9 million and was attributable to the same factors.
Our selling, general and administrative expenses increased by $7.1 million over
the selling, general and administrative expenses of the prior year second
quarter. Assuming management of the Bluffs Run Casino accounted for
approximately $4.9 million of the increase. Other increases included higher
marketing costs for Harveys Wagon Wheel and recognition of increased deferred
compensation expenses related to executive stock-based compensation plans. The
increase in selling, general and administrative expenses for the six months
ended May 31, 2000, compared to the prior year period, was approximately $11.8
million. The management of Bluffs Run Casino accounted for approximately $9.5
million of the increase.
15
<PAGE>
In the second quarter of fiscal 2000, we reviewed our business development plans
as they related to a proposed resort in Salisbury Beach, Massachusetts. As a
result of that review, we abandoned the project and wrote off approximately $1.3
million of real estate options and architectural designs. In the second quarter
of fiscal 1999, we wrote off approximately $2.0 million related to a proposed
casino project in Las Vegas which we chose not to pursue.
As a result of the merger financing and the 100% financing of the acquisition of
the net assets of Bluffs Run Casino, our average long-term debt during the
second quarter and first half of fiscal 2000 was substantially higher than
during the comparable periods of fiscal 1999. Consequently, our interest
expense, net of interest income, increased by $2.3 million to $9.2 million for
the most recent quarter, and increased by $7.2 million to $19.0 million for the
first six months of fiscal 2000.
Effective December 1, 1999, we adopted Statement of Position 98-5, Reporting on
the Costs of Start-Up Activities. The provisions of this accounting
pronouncement require costs of start-up activities (commonly referred to as
preopening costs in the gaming industry) to be expensed as incurred. The initial
effect upon adoption is reported as the cumulative effect of a change in
accounting principle. As required, we wrote off all capitalized preopening costs
as of December 1, 1999. These costs included previously deferred organization
and licensing costs. The write-off resulted in a charge of approximately $3.1
million, net of an income tax benefit of approximately $1.4 million.
Liquidity and Capital Resources
Our primary source of cash during the first half of fiscal 2000 was
approximately $26.0 million of cash flow from operations, compared to
approximately $14.9 million of aggregate cash flow from operations in the first
six months of the prior year. We expended approximately $9.5 million on capital
improvements and replacements and paid approximately $2.2 million of
construction payables on our parking structure at Harveys Casino Hotel in
Council Bluffs. We were also able to reduce our outstanding indebtedness under
our credit facility by approximately $10.9 million.
Primarily as a result of the above, our cash and cash equivalents increased by
$3.2 million, from $32.5 million at November 30, 1999 to $35.7 million at May
31, 2000. Additionally, our outstanding debt decreased from $393.9 million at
the end of fiscal 1999 to approximately $383.0 million at May 31, 2000,
excluding the unamortized premium on our senior subordinated notes. Our debt at
May 31, 2000 consisted of $150 million of senior subordinated notes and $233.0
million outstanding under our credit facility.
In addition to our debt, we were obligated at May 31, 2000 for an aggregate of
approximately $65.7 million on our outstanding Series A Preferred Stock and
Series B Preferred Stock and the unpaid dividends accrued thereon.
16
<PAGE>
At May 31, 2000, we also had approximately $48.5 million of standby letters of
credit outstanding, including a $45.0 million irrevocable letter of credit to
support contingent consideration of up to $50.0 million which may be due as part
of the consideration paid for the assets of Bluffs Run Casino. The contingent
payment depends on the results of a referendum to be decided by the voters of
Pottawattamie County, Iowa in November of 2002.
Our credit facility matures and is fully due and payable on September 30, 2004.
The permitted principal balance of the credit facility reduces on a quarterly
basis, beginning August 31, 2000. Given our outstanding balance at May 31, 2000
and our anticipated sources and uses of cash, we do not expect to be subject to
any mandatory principal payment requirements during the next twelve months.
Interest on borrowings outstanding under the credit facility are payable, at our
option, at either LIBOR or an alternative base rate, in each case plus an
applicable margin. In the future, the applicable margins may be changed, based
on the ratio of our total funded debt to EBITDA. The credit facility contains a
number of covenants that, among other things, subject to applicable gaming
approvals, restrict our ability to dispose of assets, incur additional
indebtedness, prepay any principal amount of our $150 million senior
subordinated notes, pay dividends, create liens on assets, make investments,
loans or advances, engage in mergers or consolidations, change the nature of our
business or engage in certain transactions with affiliates and otherwise
restrict certain corporate activities. In addition, under the credit facility,
we are required to maintain specified financial ratios and net worth
requirements, satisfy specified financial tests, including interest coverage
tests, and maintain certain levels of annual capital expenditures. The credit
facility contains events of default customary for facilities of this nature.
Our senior subordinated notes are governed by an indenture and are general
unsecured obligations of the Company, subordinated in right of payment to all
existing and future senior debt of the Company. Interest on the senior
subordinated notes is payable semi-annually on June 1 and December 1 of each
year. The senior subordinated notes mature on June 1, 2006. The senior
subordinated notes are redeemable at our option, in whole or in part, at any
time on or after June 1, 2001 at prices ranging from 105.313% of the principal
amount plus accrued and unpaid interest, to 100% of the principal amount plus
accrued and unpaid interest beginning June 1, 2004 and thereafter. The indenture
contains certain covenants that impose limitations on, among other things, the
incurrence of additional indebtedness, the payment of dividends, the repurchase
of capital stock and the making of certain other restricted payments and
restricted investments (as defined in the indenture), mergers, consolidations
and sales of assets by the Company, the creation or incurrence of liens on the
assets of the Company, and transactions by the Company or any of its
subsidiaries with affiliates (as defined in the indenture). These limitations
are subject to a number of qualifications and exceptions as described in the
indenture.
Our Series A Preferred Stock and Series B Preferred Stock are entitled to
quarterly dividends at an annual rate of 13 1/2% of the $550 per share
liquidation value. To the extent we do not pay the dividends in cash, dividends
will cumulate and compound quarterly at an annual rate of 13 1/2%. The Series A
Preferred Stock and Series B Preferred Stock are subject to mandatory redemption
on February 1, 2011 for cash at the liquidation value plus any accrued and
unpaid dividends. We have the right to redeem the Series A Preferred Stock and
the Series B Preferred Stock at any
17
<PAGE>
time for cash at the liquidation value plus any accrued and unpaid dividends.
The certificate of designation for the preferred stock contains covenants which
limit restricted payments or investments; limit consolidation, merger and the
sale of assets; mandate the provision of financial reports; and limit business
activities. Upon the receipt of all applicable gaming approvals the Series A
Preferred Stock and Series B Preferred Stock are convertible at any time on or
before February 1, 2002, at the per share rate of 28.7309164 shares of the Class
A Common and Class B Common, respectively, subject to customary anti-dilution
adjustments. The right of conversion, as it relates to our Series A and Series B
Preferred Stock, only vests in, and is only exercisable by, the current holders
of our preferred stock and their affiliates (as that term is defined in the
certificate of designation). Any accrued and unpaid dividends at the time of a
conversion will be required to be paid in cash or, at our election, may be
satisfied with additional shares of the corresponding common stock having a fair
market value equal to the amount of accrued dividends.
As of May 31, 2000, we were in compliance with the covenants under the credit
facility, the indenture and the certificate of designation.
At the end of the first half of fiscal 2000, we had approximately $53.5 million
available to us under the bank credit facility, net of outstanding letters of
credit and subject to compliance with certain financial covenants. We also had
cash and cash equivalents of approximately $35.7 million.
We anticipate expending an additional $11.4 million for maintenance capital
expenditures and property improvements in fiscal 2000. We believe that our
existing cash and cash equivalents, cash flows from operations and our borrowing
capacity under the credit facility will be sufficient to meet the cash
requirements of our existing operations for at least the next twelve months,
including capital improvements and replacements at the operating properties and
debt service requirements. We currently believe that cash requirements of our
existing operations beyond the next twelve months will consist of debt service
requirements and capital improvements and replacements in the ordinary course,
which we expect to be met by then-existing cash, cash flows from operations and
borrowing capacity under the credit facility. Other than the proposed merger
discussed below, we do not currently anticipate incurring material capital
expenditures, balloon or other extraordinary payments on long-term obligations
or any other extraordinary demands or commitments beyond the next twelve months.
We do not expect to pay cash dividends on the preferred stock prior to 2004
because of, among other reasons, restrictions in the credit facility and the
indenture on the payment of cash dividends.
On April 17, 2000, our newly formed subsidiary, PH Casino Resorts, entered into
a definitive agreement with Pinnacle Entertainment, Inc. (formerly Hollywood
Park, Inc.) pursuant to which PH Casino Resorts would acquire by merger all of
the outstanding capital stock of Pinnacle Entertainment, Inc. for $24 in cash
per fully diluted share (or aggregate cash consideration of approximately $661.2
million). Additional consideration of up to $1 in cash per fully diluted
18
<PAGE>
share may be payable depending upon the timing and net after tax proceeds of
Pinnacle Entertainment, Inc.'s sale of 97 acres of surplus land in Inglewood,
California.
Consummation of the merger is subject to, among other things, completion of PH
Casino Resorts' financing for the transaction. We believe that the financing
will be provided by some combination of: (i) assumption of existing debt of
Pinnacle Entertainment, Inc., (ii) issuance of unsecured subordinated debt,
(iii) incurrence of secured bank financing, (iv) conversion of Harveys'
preferred stock into common equity, and (v) equity contributions by key
shareholders of Pinnacle Entertainment, Inc. However, we cannot make any
assurances that financing will be available at terms acceptable to us, if at
all.
19
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates. Borrowings
outstanding under our credit facility are subject to variable interest rates.
The amount outstanding under our credit facility at May 31, 2000 was
approximately $233 million, subject to a weighted-average interest rate of
8.48%. Assuming an identical outstanding balance, a hypothetical immediate 100
basis point increase in interest rates would increase interest expense for the
next twelve months by approximately $2.3 million.
We entered into an interest rate cap agreement, effective March 1, 2000, to
reduce the potential impact of increases in interest rates on variable-rate
debt. The notional amount of the interest rate cap agreement was $48 million on
March 1, 2000 and reduces quarterly over the 35 month term of the agreement. The
notional amount on May 31, 2000 was $43.5 million. The agreement entitles us to
receive from counterparties, on a monthly basis, the amount, if any, by which
our interest payments on our floating LIBOR-based debt exceeds the amount that
we would have paid if the one-month LIBO rate was capped at 7.5%. The
combination of the interest rate cap agreement and the terms of the credit
facility result in the Company paying interest, on an amount of variable-rate
debt equal to the notional amount of the interest rate cap agreement, at a
variable rate (LIBOR plus 2.00%), not to exceed 9.50%. We may use additional
derivative financial instruments in the future as a risk management tool. We do
not use derivative financial instruments for speculative or trading purposes.
Additionally, the fair value of our fixed rate long-term debt, consisting of our
$150 million of senior subordinated notes and approximately $6.1 million of
unamortized premium on our senior subordinated notes at May 31, 2000, and the
fair value of our fixed rate preferred stock, are sensitive to differences
between market interest rates and rates at the time of issuance. A hypothetical
immediate 100 basis point increase in interest rates at May 31, 2000 would have
decreased the fair value of our fixed rate long-term debt by approximately $13.9
million. Conversely, a 100 basis point decrease in interest rates would have
increased the fair value of our outstanding long-term debt at May 31, 2000 by
approximately $17.0 million. A hypothetical immediate 100 basis point increase
in interest rates would have decreased the fair value of our fixed rate
preferred stock by approximately $4.3 million at May 31, 2000. Conversely, a 100
basis point decrease in interest rates would have increased the fair value of
our preferred stock by approximately $5.0 million.
20
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CAUTIONARY STATEMENT FOR PURPOSES OF THE 'SAFE HARBOR' PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
This document includes various "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Sections 21E of
the Securities Exchange Act of 1934, as amended, which represent the Company's
expectations or beliefs concerning future events. Statements containing
expressions such as "believes", "anticipates", or "expects" used in the
Company's press releases and periodic reports on Forms 10-K and 10-Q filed with
the Securities and Exchange Commission are intended to identify forward-looking
statements. All forward-looking statements involve risks and uncertainties.
Although the Company believes its expectations are based upon reasonable
assumptions within the bounds of its knowledge of its business and operations,
there can be no assurances that actual results will not materially differ from
expected results. The Company cautions that these and similar statements
included in this report and in previously filed periodic reports, including
reports filed on Forms 10-K and 10-Q, are further qualified by important factors
that could cause actual results to differ materially from those in the
forward-looking statements. Such factors include, without limitation, the
following: ability to complete the proposed merger with Pinnacle Entertainment,
Inc.; increased competition in existing markets or the opening of new gaming
jurisdictions; a decline in the public acceptance of gaming; the limitation,
conditioning or suspension of any of the Company's gaming licenses; increases in
or new taxes imposed on gaming revenues or gaming devices; a finding of
unsuitability by regulatory authorities with respect to the Company's officers,
directors or key employees; loss or retirement of key executives; significant
increases in fuel or transportation prices; adverse economic conditions in the
company's key markets; severe and unusual weather in the Company's key markets;
adverse results of significant litigation matters. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as of the
date thereof. The Company undertakes no obligation to publicly release any
revision to such forward-looking statements to reflect events or circumstances
after the date thereof.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
See attached Exhibit Index
(b) Reports on Form 8-K
On April 27, 2000, the Company filed a Current Report on Form
8-K to report, that PH Casino Resorts, a newly formed subsidiary
of Harveys Casino Resorts had entered into a definitive
agreement with Pinnacle Entertainment, Inc. (formerly Hollywood
Park, Inc.) pursuant to which PH Casino Resorts would acquire by
merger all of the outstanding capital stock of Pinnacle
Entertainment, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HARVEYS CASINO RESORTS
-----------------------------------------
Registrant
Date: July 13, 2000 /S/ John McLaughlin
-----------------------------------------
John McLaughlin
Senior Vice President, Treasurer and Chief
Financial Officer
23
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- ---------------------------------------------------------------------
<S> <C>
3.1 Amendments to Articles of Incorporation of Harveys Casino Resorts as
Surviving Constituent Entity (filed as Exhibit A to Articles of Merger of
Harveys Acquisition Corporation into Harveys Casino Resorts). (4) (Articles
of Incorporation are incorporated herein by reference to Harveys
Acquisition Corporations's Registration Statement on Form 10 (File No.
0-25093), filed November 20,1998).
3.2 Eighth Amended and Restated Bylaws of the Registrant (5)
4.1 Form of Stock Certificate of the Registrant (5)
4.2 Indenture, dated as of May 15, 1996 ( the "Original Indenture"), by and
among the Registrant, Harveys Wagon Wheel Casino Limited Liability Company,
Harveys C. C. Management Company, Inc., Harveys Iowa Management Company,
Inc. and Harveys L. V. Management Company, Inc. ( the 'Guarantors') and IBJ
Schroder Bank & Trust Company as Trustee ( including form of Note) (1)
4.3 First Supplemental Indenture, dated as of June 5, 1996, supplementing the
Original Indenture (2)
4.4 Second Supplemental Indenture, dated as of May 22, 1997, supplementing the
Original Indenture (3)
4.5 Third Supplemental Indenture, dated as of December 24, 1998, among the
Registrant, Harveys Tahoe Management Company, Inc., Harveys C. C.
Management Company, Inc., Harveys Iowa Management Company, Inc., Harveys L.
V. Management Company, Inc. and IBJ Schroder Bank and Trust Company,
supplementing the Original Indenture (5)
4.6 Fourth Supplemental Indenture, dated as of December 24, 1998, among the
Registrant, Harveys Tahoe Management Company, Inc., Harveys C. C.
Management Company, Inc., Harveys Iowa Management Company, Inc., Harveys L.
V. Management Company, Inc. and IBJ Schroder Bank and Trust Company,
supplementing the Original Indenture (5)
4.7 Certificate of Designation of the 13 1/2% Series A Senior Redeemable
Convertible Cumulative Preferred Stock ($0.01 par value per share) and the
13 1/2% Series B Redeemable Convertible Cumulative Preferred Stock ($0.01
par value per share) of Harveys Casino Resorts (4)
4.8 Certificate of Amendment, dated as of February 7, 2000, to the Certificate
of Designation of the 13 1/2% Series A Senior Redeemable Convertible
Cumulative Preferred Stock ($0.01 par value per share) and the 13 1/2%
Series B Senior Redeemable Convertible Cumulative Preferred Stock ($0.01
par value per share) of Harveys Casino Resorts (6)
10.1 Second Amended and Restated Credit Agreement, dated as of October 5, 1999,
among Harveys Casino Resorts, a Nevada corporation, Harveys C. C.
Management Company, Inc., a Nevada corporation, Harveys Iowa Management
Company, Inc., a Nevada corporation, Harveys Tahoe Management Company,
Inc., a Nevada corporation, HBR Realty Company,
</TABLE>
24
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<TABLE>
<S> <C>
Inc., a Nevada corporation, Harveys BR Management Company, Inc., a Nevada
corporation, HCR Services Company, Inc., a Nevada corporation, as
Borrowers, the Lenders herein named, Wells Fargo Bank, National
Association, as Swingline Lender, L/C Issuer and Agent Bank, Credit
Lyonnais Los Angeles Branch, as Syndication Co-Agent, Deutsche Banc
Securities, as Documentation Agent, Societe Generale and Bank One, N. A. as
Co-Managing Agents. (6)
10.2 First Amendment to Second Amended and Restated Credit Agreement, dated as
of April 14, 2000 by and among Harveys Casino Resorts, a Nevada
corporation, Harveys C. C. Management Company, Inc., a Nevada corporation,
Harveys Tahoe Management Company, Inc., a Nevada corporation, HBR Realty
Company, Inc., a Nevada corporation, Harveys BR Management Company, Inc., a
Nevada corporation and HCR Services Company, Inc., a Nevada corporation, as
Borrowers, the Lenders herein named, Wells Fargo Bank, National Association
as Swingline Lender, L/C Issuer and Agent Bank. (7)
10.3 Employment Agreement and Agreement and Covenant Not to Compete or Use or
Disclose Trade Secrets, each dated as of December 6, 1999, by and between
John R. Bellotti and Harveys Casino Resorts. (7)
10.4 Amended and Restated Employment Agreement dated as of April 28, 2000, by
and between Harveys Casino Resorts and Charles W. Scharer. (7)
10.5 Amended and Restated Employment Agreement dated as of April 28, 2000, by
and between Harveys Casino Resorts and John J. McLaughlin. (7)
10.6 2000 Deferred Compensation Plan Participants. (7)
27 Financial Data Schedule (7)
</TABLE>
------------------------
(1) Incorporated herein by reference to Registration Statement No.
333-3576
(2) Incorporated herein by reference to Registrant's Current Report on
Form 8-K filed June 14, 1996
(3) Incorporated herein by reference to Registrant's Quarterly Report on
Form 10-Q for the period ended August 31, 1997
(4) Incorporated herein by reference to Registrant's Current Report on
Form 8-K filed February 16, 1999
(5) Incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended November 30, 1998
(6) Incorporated herein by reference to Registrant's Quarterly Report on
Form 10-Q for the period ended February 29, 2000.
(7) Filed herewith
25
