<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-60361
EMPRESS ENTERTAINMENT, INC. (the "COMPANY")
EMPRESS CASINO HAMMOND CORPORATION ("EMPRESS HAMMOND")
EMPRESS CASINO JOLIET CORPORATION ("EMPRESS JOLIET")
EMPRESS RIVER CASINO FINANCE CORPORATION ("EMPRESS FINANCE")
HAMMOND RESIDENTIAL, L.L.C. ("HAMMOND RESIDENTIAL")
-------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-3932031
Indiana 36-3865868
Illinois 36-3740765
Delaware 36-3929804
Indiana --
</TABLE>
-------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 Empress Drive, Joliet, Illinois 60436
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (815) 744-9400
<PAGE>
Indicate by checkmark 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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practical date.
Company: Voting Common Stock, $0.01 Par Value - 1,745.330 Shares as of
November 10, 1999; Non-Voting, Common Stock, $0.01 Par Value - 164.035 Shares as
of November 10, 1999
Empress Hammond: Common Stock, No Par Value - 1,000 Shares as of
November 10, 1999
Empress Joliet: Common Stock, No Par Value - 1,000 Shares as of
November 10, 1999
Empress Finance: Common Stock, $0.01 Par Value - 1,000 Shares as of
November 10, 1999
Hammond Residential: 100% Interest
<PAGE>
EMPRESS ENTERTAINMENT, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page
<S> <C> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk 14
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
</TABLE>
<PAGE>
EMPRESS ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 35,794 $ 33,555
Accounts receivable, less allowance for doubtful
accounts of $2,657 and $2,235, respectively 3,651 2,908
Other current assets 4,818 3,099
US Treasuries held for defeasance including accrued
interest and unamortized premium - 163,933
-------- --------
Total current assets 44,263 203,495
Property and equipment, net 189,859 193,809
Other assets, net 34,217 29,509
-------- --------
Total assets $268,339 $426,813
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,019 $ 4,289
Accrued payroll and related expenses 7,625 6,802
Interest payable 3,085 10,799
Other accrued liabilities 17,304 11,573
Current portion of long-term debt - 150,000
-------- --------
Total current liabilities 33,033 183,463
Long-term debt 165,000 176,000
Commitments and contingencies
Stockholders' equity:
Common stock; $.01 par value; 6,000 shares authorized;
1,909.364 shares issued and outstanding - -
Treasury stock; 17.381 shares, held at cost (4,667) (4,667)
Additional paid-in capital 16,548 16,548
Retained earnings 58,425 55,469
-------- --------
Total stockholders' equity 70,306 67,350
-------- --------
Total liabilities and stockholders' equity $268,339 $426,813
======== ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE>
EMPRESS ENTERTAINMENT, INC
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
---------- --------- -------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Casino $ 111,013 $ 94,959 $315,904 $276,550
Food and beverage 9,063 7,269 24,182 19,990
Hotel, parking, retail and other 3,044 1,817 6,809 5,182
---------- -------- -------- --------
Gross revenues 123,120 104,045 346,895 301,722
Less: promotional allowances (4,084) (2,944) (11,187) (7,896)
---------- -------- -------- --------
Net revenues 119,036 101,101 335,708 293,826
Operating Expenses:
Casino 58,787 49,218 164,335 142,874
Food and beverage 9,116 6,545 23,140 19,038
Hotel, parking and retail 1,321 1,207 3,886 3,448
Sales, general and administrative 10,361 11,453 31,088 33,417
Other operating 4,920 4,830 15,375 14,335
Corporate 2,709 1,586 5,876 4,153
Pre-opening costs - - 1,461 -
Depreciation and amortization 5,576 5,185 16,013 15,457
---------- -------- -------- --------
92,790 80,024 261,174 232,722
---------- -------- -------- --------
Income from operations 26,246 21,077 74,534 61,104
Other income (expense):
Interest income 181 2,375 2,676 4,363
Interest expense (3,403) (7,890) (14,358) (18,065)
---------- -------- -------- --------
Income before state income taxes 23,024 15,562 62,852 47,402
Provision for state income taxes 85 127 435 321
---------- -------- ------- --------
Net income before extraordinary loss 22,939 15,435 62,417 47,081
Extraordinary loss on early extinguishment
of debt - - 10,203 292
---------- -------- -------- --------
Net Income $ 22,939 $ 15,435 $ 52,214 $ 46,789
========== ======== ======== ========
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE>
EMPRESS ENTERTAINMENT, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------- -------------
1999 1998
----------------- -------------
<S> <C> <C>
(Unaudited)
Cash flows from operating activities:
Net income $ 52,214 $ 46,789
Adjustments to reconcile net income to cash
provided by operating activities
Depreciation and amortization 16,013 15,457
Extraordinary loss 10,203 292
Amortize premium on US Treasuries 296 310
Loss on sale of property and equipment 18 42
Change in operating assets and liabilities:
Accounts receivable (743) 1,664
Other current assets (1,719) 412
Accounts payable 730 3,359
Accrued payroll and related expenses 823 (737)
Interest payable (7,714) 7,770
Other accrued liabilities 5,731 2,881
--------- ---------
Net cash provided by operating activities 75,852 78,239
--------- ---------
Cash flows from investing activities:
Purchase of investments - (182,967)
Proceeds from sale of investments 161,099 30,970
Decrease in interest receivable on investments 2,538 -
Purchase of property and equipment (10,709) (22,184)
Increase in other assets (8,213) (10,278)
--------- ---------
Net cash provided by (used in) investing activities 144,715 (184,459)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings 21,500 182,000
Payments on borrowings (182,500) (58,524)
Payment of premium on early retirment of debt (8,070) -
Payment of financing costs - (6,412)
Purchase of treasury stock - (4,667)
Stockholder distributions (49,258) (38,665)
--------- ---------
Net cash provided by (used in) financing activities (218,328) 73,732
--------- ---------
Net increase (decrease) in cash and cash equivalents 2,239 (32,488)
Cash and cash equivalents, beginning of period 33,555 73,257
--------- ---------
Cash and cash equivalents, end of period $ 35,794 $ 40,769
========= =========
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 22,072 $ 10,144
Income taxes paid $ 400 $ 798
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE>
EMPRESS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands)
<TABLE><CAPTION>
Additional Total
Common Treasury Paid-in Retained Stockholders'
Stock Stock Capital Earnings Equity
------- -------- ------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1996 $ - $ - $16,548 $33,064 $49,612
Net income - - - 46,304 46,304
Cash distributions to stockholders - - - (40,057) (40,057)
-------- ------- ------- ------- -------
Balance December 31, 1997 - - 16,548 39,311 55,859
Net income - - - 61,326 61,326
Purchase of stock for treasury - (4,667) - - (4,667)
Cash distributions to stockholders - - - (45,168) (45,168)
-------- ------- ------- -------- -------
Balance December 31, 1998 - (4,667) 16,548 55,469 67,350
Net income - - - 52,214 52,214
Cash distributions to stockholders - - - (49,258) (49,258)
-------- ------- ------- ------- -------
Balance September 30, 1999 $ - $(4,667) $16,548 $58,425 $70,306
======== ======= ======= ======= =======
</TABLE>
The accompanying footnotes are an integral part of these financial statements
<PAGE>
EMPRESS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 (Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of Empress Entertainment, Inc. ("the
Company") include the accounts of its wholly owned subsidiaries, Empress
Casino Joliet Corporation ("Empress Joliet") incorporated on December 26,
1990, Empress Casino Hammond Corporation ("Empress Hammond") incorporated
on November 25, 1992, Empress River Casino Finance Corporation ("Empress
Finance") incorporated on January 7, 1994, and Empress Opportunities, Inc.
("Empress Opportunities") incorporated on July 14, 1998. Empress Finance
was formed to issue $150 million 10 3/4% Senior Notes (the "Senior Notes")
due 2002, all of which were redeemed on April 1, 1999. All significant
intercompany transactions have been eliminated.
The Company is engaged in the business of providing riverboat gaming and
related entertainment to the public. Empress Joliet was granted a three
year operating license from the Illinois Gaming Board on July 9, 1992,
which was renewed in June, 1999 for a one year period through June, 2000,
to operate the Empress I and Empress II riverboat casinos located on the
Des Plaines River in Joliet, Illinois. Empress Hammond was granted a five-
year operating license, with annual renewals thereafter, from the Indiana
Gaming Commission on June 21, 1996 to operate the Empress III riverboat
casino located on Lake Michigan in Hammond, Indiana. Empress Hammond
commenced operations on June 28, 1996. The majority of the Company's
customers reside in the Chicago metropolitan area.
Empress Opportunities was formed as an unrestricted subsidiary to serve as
a holding company, under which the Company is pursuing business
opportunities other than the Company's gaming operations in Joliet,
Illinois and Hammond, Indiana. Empress Racing, Inc. ("Empress Racing") was
formed as an unrestricted subsidiary of Empress Opportunities to indirectly
hold approximately 48% ownership interest in Kansas Racing, LLC, which
acquired the Woodlands Racetrack in Kansas City, Kansas on December 31,
1998 in an auction pursuant to a proceeding under Chapter 7 of the U.S.
Bankruptcy Code.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. Interim results may not necessarily be indicative of
results, which may be expected for any other interim period, or for the
year as a whole. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998. The accompanying unaudited consolidated financial
statements contain adjustments which are, in the opinion of management,
necessary to present fairly the financial position and results of
operations for the periods indicated. Such adjustments include only normal
recurring accruals.
Reclassifications
Certain amounts in prior years' financial statements have been reclassified
to conform to the current year presentation.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
2. Plan of Merger
On September 2, 1998, as amended on March 25, 1999 and July 23, 1999, the
Company entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Horseshoe Gaming (Midwest), Inc. and certain of its
affiliates ("Horseshoe Midwest"). The Merger Agreement if consummated,
would result in the acquisition by Horseshoe Midwest, of all of the
outstanding stock of Empress Hammond and Empress Joliet via two
simultaneous merger transactions (the "Proposed Mergers"). The Proposed
Mergers require regulatory approval from the Indiana Gaming Commission (the
"IGC") and the Illinois Gaming Board (the "IGB") and closing on or before
December 1, 1999. The Company has received approval for the Proposed
Mergers from the IGC and is awaiting final approval from the IGB.
Consummation of the Merger Agreement constitutes a "Change of Control"
under the Indenture, dated as of June 18, 1998, by and among the Company,
the Guarantors named therein and U.S. Bank Trust National Association, as
Trustee, (the "Indenture") and will trigger Horseshoe Midwest's obligation
to make an irrevocable offer to purchase an aggregate of up to $150 million
principal amount of the Company's 8 1/8% Senior Subordinated Notes due 2006
(the "Notes") (the "Change of Control Offer") at a cash price equal to 101%
of the principal amount plus accrued and unpaid interest. Holders of the
Notes will have the option of tendering all or any portion of their Notes
for redemption, or they may retain the Notes. The Company and/or Horseshoe
Midwest intend to comply with the provisions of the Indenture. The Change
of Control Offer must commence within 10 business days following the
consummation of the transactions contemplated by the Merger Agreement and
must remain open for at least 20 business days. Horseshoe Midwest must
complete the repurchase of any Notes tendered in response to the Change of
Control Offer no more than 30 business days after the consummation of the
transactions as contemplated in the Merger Agreement.
3. Early Retirement of Debt
In June 1998, the Company irrevocably deposited $167.2 million (the
"Covenant Defeasance") for the purpose of effecting the redemption of all
of the Company's Senior Notes. On February 10, 1999, the Trustee sent out
a Notice of Redemption to the holders of the Senior Notes announcing the
redemption of such Senior Notes. On April 1, 1999, the Company redeemed
all its $150 million Senior Notes, thus fulfilling all of its obligations
related to the Senior Notes. The Company recognized an extraordinary loss
of $10.2 million in the second quarter of fiscal 1999 due to this early
retirement of debt, representing the premium paid on early retirement and
the write off of unamortized deferred financing costs.
4. Subsidiary Guarantors
In conjunction with the Covenant Defeasance, the Company issued the Notes.
The Notes are jointly, severally and unconditionally guaranteed on an
unsecured senior subordinated basis by all existing and future Restricted
Subsidiaries.
The following tables present summarized balance sheet information of the
Company as of September 30, 1999 and December 31, 1998 and summarized
statement of income information for the three and nine months ended
September 30, 1999 and 1998. The column labeled "Parent Company"
represents the holding company for each of the Company's direct
subsidiaries. The column labeled "Guarantors" represents each of the
Company's restricted subsidiaries, all of which are wholly owned by the
parent company. The column labeled "Non-Guarantors" represents the
unrestricted subsidiaries.
The Company believes that separate financial statements and other
disclosures regarding the Guarantors, except as otherwise required under
Regulation S-X, are not material to investors.
<PAGE>
Summarized balance sheet information as of September 30, 1999 and December 31,
1998 is as follows:
<TABLE>
<CAPTION>
September 30, 1999
-----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets $ 1,190 $ 43,073 $ - $ - $ 44,263
Non-current assets 170,245 216,663 11,047 (173,879) 224,076
------------ ------------ ------------ ------------ ------------
$ 171,435 $ 259,736 $ 11,047 $ (173,879) $ 268,339
============ ============ ============ ============ ============
Liabilities and Equity:
Current liabilities $ 5,279 $ 27,754 $ - $ - $ 33,033
Non-current liabilities 170,228 154,310 11,650 (171,188) 165,000
Stockholders' equity (4,072) 77,672 (603) (2,691) 70,306
------------ ------------ ------------ ------------ ------------
$ 171,435 $ 259,736 $ 11,047 $ (173,879) $ 268,339
============ ============ ============ ============ ============
December 31, 1998
-----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
------------ ------------ --------------- ------------ ------------
Assets:
Current assets $ 6,722 $ 196,773 $ - $ - $ 203,495
Non-current assets 163,881 216,521 9,334 (166,418) 223,318
------------ ------------ ------------ ------------ ------------
$ 170,603 $ 413,294 $ 9,334 $ (166,418) $ 426,813
============ ============ ============ ============ ============
Liabilities and Equity:
Current liabilities $ 7,132 $ 176,331 $ - $ - $ 183,463
Non-current liabilities 177,671 152,518 9,538 (163,727) 176,000
Stockholders' equity (14,200) 84,445 (204) (2,691) 67,350
------------ ------------ ------------ ------------ ------------
$ 170,603 $ 413,294 $ 9,334 $ (166,418) $ 426,813
============ ============ ============ ============ ============
</TABLE>
Summarized statement of income information for the three months ended September
30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended September 30, 1999
-----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
------------ ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,510 $ 119,026 $ - $ (1,500) $ 119,036
Cost and expenses 2,356 91,535 399 (1,500) 92,790
Net interest expense 362 2,860 - - 3,222
Net income (loss) (1,208) 24,546 (399) - 22,939
Three Months Ended September 30, 1998
-----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
------------ ------------ --------------- ------------ ------------
Net revenues $ 600 $ 101,101 $ - $ (600) $ 101,101
Cost and expenses 1,586 79,038 - (600) 80,024
Net interest expense 773 4,742 - - 5,515
Net income (loss) (1,759) 17,194 - - 15,435
</TABLE>
<PAGE>
Summarized statement of income information for the nine months ended September
30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1999
-----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
--------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $4,510 $335,698 $ - $(4,500) $335,708
Cost and expenses 5,615 259,660 399 (4,500) 261,174
Net interest expense 1,208 10,474 - - 11,682
Net income (loss) before extraordinary loss (2,313) 65,129 (399) - 62,417
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1998
----------------------------------------------------------------------------
Restricted Unrestricted
Parent Subsidiaries Subsidiaries
Company (Guarantors) (Non-Guarantors) Eliminations Consolidated
-------- ------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues $1,800 $293,826 $ - $(1,800) $293,826
Cost and expenses 4,153 230,369 - (1,800) 232,722
Net interest expense 2,191 11,511 - - 13,702
Net income (loss) before extraordinary loss (4,544) 51,625 - - 47,081
</TABLE>
5. Commitments and Contingencies
In August 1999, the Company executed two amendments to its Development
Agreement concerning its financial commitments with the City of Hammond,
Indiana.
The first amendment requires the Company to satisfy its $10 million
commercial commitment as follows:
. The payment of $0.5 million for the purchase of property in the City of
Hammond, which was consummated in June 1999;
. A cash grant of $3.0 million to the City of Hammond for the City's
unrestricted use in one or more public projects, which was paid
in August, 1999;
. The purchase of $3.0 million in revenue bond anticipation notes, which
must be repaid to the Company by December 31, 2000. $2.0 million of such
revenue bond anticipation notes were purchased in June, 1999 and $1.0
million were purchased in August, 1999;
. The expenditure of $2.5 million for the development of retail or
commercial facilities to be made by December 31, 2005; and
. The expenditure of $1.0 million for parking facilities and for the
acquisition of the hotel parcel.
The second amendment addresses the Company's commitment to construct a
$10.0 million hotel in the City of Hammond. The second amendment requires
the Company to commence construction of the hotel facilities on or before
August 1, 2000 and to diligently pursue its completion.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following discussion and analysis provides information which the Company's
management believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of the Company. The
discussion should be read in conjunction with the Consolidated Financial
Statements and notes thereto.
Three Months Ended September 30, 1999 Compared to Three Months Ended
September 30, 1998
Net revenues for the three months ended September 30, 1999 totaled $119.0
million compared to $101.1 million for the three months ended September 30,
1998, an increase of $17.9 million or 17.7%. The increase in net revenues was
primarily attributable to increased casino revenues. Empress Hammond's net
revenues increased $2.4 million or 4.1% to $61.0 million from $58.6 million.
Empress Joliet's net revenues increased $15.5 million or 36.5% to $58.0 million
from $42.5 million.
Casino revenues totaled $111.0 million and $95.0 million for the three months
ended September 30, 1999 and 1998, respectively, an increase of $16.0 million or
16.8%. Empress Hammond's casino revenues increased $2.2 million or 4.0% to $57.5
million from $55.3 million due to the addition of poker and an increase in the
number of passengers. Empress Joliet's casino revenues increased $13.8 million
or 34.8% to $53.5 million from $39.7 million primarily due to an increase the
number of guests as a result of dockside gaming which eliminated cruising
requirements effective June 26, 1999.
Casino expenses totaled $58.8 million and $49.2 million for the three months
ended September 30, 1999 and 1998, respectively, an increase of $9.6 million or
19.5%. Empress Hammond's casino expenses increased $2.4 million or 8.6% to $30.4
million from $28.0 million due to an increase in casino marketing to compete
with dockside gaming in Illinois and an increase in gaming and admission taxes
on the increased casino revenues. Empress Joliet's casino expenses increased
$7.2 million or 34.0% to $28.4 million from $21.2 million primarily due to
increased gaming taxes on the increase in casino revenue and increased casino
marketing and labor expenses.
Income from operations totaled $26.2 million and $21.1 million for the three
months ended September 30, 1999 and 1998, respectively, an increase of $5.1
million or 24.2%. Income from operations at Empress Hammond, before corporate
and intercompany transactions, decreased $0.5 million or 3.8% to $12.7 million
from $13.2 million. Income from operations at Empress Joliet, before corporate
and intercompany transactions, increased $6.7 million or 69.8% to $16.3 million
from $9.6 million. Corporate costs and expenses totaled $2.8 million and $1.7
million for the three months ended September 30, 1999 and 1998, respectively.
Net interest expense for the three months ended September 30, 1999 totaled $3.2
million compared to $5.5 million for the three months ended September 30, 1998,
a decrease of $2.3 million or 41.8%. This decrease was a result of reduced net
interest expense due to the early extinguishment of the 10 3/4% Senior Notes.
Net income amounted to $22.9 million and $15.4 million for the three months
ended September 30, 1999 and 1998, respectively. This increase in net income was
due to the factors discussed above.
<PAGE>
Nine Months Ended September 30, 1999 Compared to Nine Months Ended
September 30, 1998
Net revenues for the nine months ended September 30, 1999 totaled $335.7 million
compared to $293.8 million for the nine months ended September 30, 1998, an
increase of $41.9 million or 14.3%. The increase in net revenues was primarily
attributable to increased casino revenues. Empress Hammond's net revenues
increased $9.7 million or 5.6% to $184.5 million from $174.8 million and Empress
Joliet's net revenues increased $32.2 million or 27.1% to $151.2 million from
$119.0 million.
Casino revenues totaled $315.9 million and $276.6 million for the nine months
ended September 30, 1999 and 1998, respectively, an increase of $39.3 million or
14.2%. Empress Hammond's casino revenues increased $9.7 million or 5.9% to
$175.0 million from $165.3 million due to the addition of poker and an increase
in the number of passengers. Empress Joliet's casino revenues increased $29.6
million or 26.6% to $140.9 million from $111.3 million primarily due to an
increase in win per passenger during the first six months of the year and an
increase in the number of guests as a result of dockside gaming which eliminated
cruising requirements effective June 26, 1999.
Casino expenses totaled $164.3 million and $142.9 million for the nine months
ended September 30, 1999 and 1998, respectively, an increase of $21.4 million or
15.0%. Empress Hammond's casino expenses increased $6.7 million or 8.1% to $89.8
million from $83.1 million primarily due to an increase in casino marketing to
compete with the recent change to dockside gaming in Illinois and an increase in
gaming and admission taxes on the increased casino revenues. Empress Joliet's
casino expenses increased $14.7 million or 24.6% to $74.5 million from $59.8
million primarily due to increased gaming and admission taxes on the increase in
casino revenues and increased casino marketing and labor expenses.
Income from operations totaled $74.5 million and $61.1 million for the nine
months ended September 30, 1999 and 1998, respectively, an increase of $13.4
million or 21.9%. income from operations at Empress Hammond, before corporate
and intercompany transactions, increased $1.3 million or 3.1% to $43.9 million
from $42.6 million. Income from operations at Empress Joliet, before corporate
and intercompany transactions, increased $13.0 million or 54.6% to $36.8 million
from $23.8 million. Corporate costs and expenses totaled $6.2 million and $5.3
million for the nine months ended September 30, 1999 and 1998, respectively.
Net interest expense for the nine months ended September 30, 1999 totaled $11.7
million compared to $13.7 million for the nine months ended September 30, 1998,
a decrease of $2.0 million or 14.6%. This decrease was a result of reduced net
interest expense due to the early extinguishment of the 10 3/4% Senior Notes.
The Company recognized an extraordinary loss of $10.2 million on the early
extinguishment of debt during the nine months ended September 30, 1999. The loss
was comprised of the call premium on the extinguished debt of $8.1 million and
the write off of unamortized loan costs of $2.1 million.
Net income amounted to $52.2 million and $46.8 million for the nine months ended
September 30, 1999 and 1998, respectively. This increase in net income was due
to the factors discussed above.
Earnings Before Interest, Taxes, Depreciation and Amortization
Earnings before interest, taxes, depreciation and amortization and pre-opening
expenses ("EBITDA") for the three months ended September 30, 1999 totaled $31.8
million compared to $26.2 million for the three months ended September 30, 1998
an increase of $5.6 million or 21.4%. EBITDA from Empress Hammond, before
corporate and intercompany transactions, increased by $0.1 million or 0.6% to
$16.4 million from $16.3 million and Empress Joliet's EBITDA, before pre-opening
expenses and corporate and intercompany transactions, increased $6.6 million or
57.4% to $18.1 million from $11.5 million. Corporate expenses amounted to $2.7
million and $1.6 million for the three months ended September 30, 1999 and 1998,
respectively.
<PAGE>
Earnings before interest, taxes, depreciation and amortization and pre-opening
expenses ("EBITDA") for the nine months ended September 30, 1999 totaled $92.0
million compared to $76.5 million for the nine months ended September 30, 1998
an increase of $15.5 million or 20.3%. EBITDA from Empress Hammond, before
corporate and intercompany transactions, increased by $3.9 million or 7.8% to
$54.2 million from $50.3 million and Empress Joliet's EBITDA, before pre-opening
expenses and corporate and intercompany transactions, increased $13.3 million or
43.8% to $43.7 million from $30.4 million. Corporate expenses amounted to $5.9
million and $4.2 million for the nine months ended September 30, 1999 and 1998,
respectively.
EBITDA is calculated by adding depreciation and amortization and pre-opening
expenses to income from operations.
The Company considers EBITDA to be a widely accepted financial indicator of a
Company's ability to service debt, fund capital expenditures and expand its
business: however, EBITDA is not calculated the same way by all companies and
does not represent cash flows from operations as defined by generally accepted
accounting principles. EBITDA should not be considered by an investor as an
alternative to net income, as an indicator of operating performance or as an
alternative to cash flow as a measure of liquidity. The calculation of EBITDA
presented herein is calculated differently than for the purpose of the covenants
under the Company's Indenture governing its Notes.
Liquidity and Capital Resources
For the nine months ended September 30, 1999, the Company generated cash flow
from operations of $75.9 million compared to $78.2 million for the nine months
ended September 30, 1998. This decrease of $2.3 million was primarily
attributable to changes in operating assets and liabilities and partially offset
by an increase in net income before the extraordinary loss.
During the nine months ended September 30, 1999, the Company contributed $1.2
million to Empress Racing, Inc., which indirectly holds an approximate 48%
ownership interest in Kansas Racing, L.L.C. Kansas Racing, L.L.C. used the funds
to acquire the remaining 15% of outstanding secured indebtedness of Sunflower
Racing, Inc., the owner of the Woodlands Racetrack in Kansas City, Kansas.
Kansas Racing, L.L.C. previously acquired 85% of the outstanding secured
indebtedness of Sunflower Racing, Inc. in December 1998 using in part funds
contributed by the Company of $9.2 million to acquire the Woodlands Racetrack
pursuant to a proceeding under Chapter 7 of the U.S. Bankruptcy Code.
During the nine months ended September 30, 1999, the Company received cash of
$144.7 million from investing activities. Proceeds from the sale of U.S.
Treasuries amounted to $161.1 million. The sale proceeds and interest received
on the U.S. Treasuries of $5.0 million were transferred to the restricted cash
account on March 31, 1999. The restricted cash was used on April 1, 1999 to
retire all of the Senior Notes. See also Note 3 to the interim consolidated
financial statements.
During the nine months ended September 30, 1999, principal payments of
borrowings were $182.5 million, including the $150 million payment to retire the
Senior notes compared to $58.5 million for the nine months ended September 30,
1998.
During the nine months ended September 30, 1999 and 1998, stockholder
distributions totaled $49.3 million and $38.7 million, respectively. Of these
distributions, $28.3 million and $28.4 million, respectively, were distributed
to shareholders for payment of federal and state income taxes.
As of September 30, 1999, the Company had $15.0 million outstanding under its
$100 million revolving Credit Facility.
The Company's 1999 operating plan includes capital expenditures totaling $12.4
million. Capital improvements include the recently completed renovation of the
interior of the Empress Hammond pavilion and the addition of the Club Chameleon
nightclub to the Empress Joliet pavilion. The nightclub was opened on June 23,
1999 and the pre-opening expenses totaling $1.5 million were expensed in the
second quarter.
<PAGE>
On June 25, 1999, Illinois Governor George Ryan signed into law Senate Bill 1017
permitting Illinois casino riverboats to discontinue cruising and allowing
gaming while the boats remain dockside. On June 26, 1999, Empress Joliet
received approval from the IGB to operate the Empress I and Empress II dockside.
Empress Joliet subsequently began and continues to explore alternate facilities
related to dockside gaming. The scope and cost of any project has not been
determined. Any project will require the appropriate regulatory approvals
including the IGB.
On October 8, 1999 Lake County Riverboat L.P. ("Plaintiff") filed suit against
the IGB alleging, among other things, that the Illinois General Assembly's
enactment of 230 ILCS 10/11.2 (the "Amendment") constitutes special legislation
under Article IV, Section 13, of the Illinois Constitution and is therefore
prohibited. The Amendment contains a nonseverability provision, which makes the
entire Amendment inoperable if any portion of the Amendment is struck down by
the courts. If the court rules in Plaintiff's favor, the entire Amendment would
be struck down, including dockside gaming which could result in a material
adverse effect on the business, finances and results of operations of Empress
Joliet.
The Company anticipates that cash on hand and cash flows from operations and the
revolving Credit Facility will be sufficient to satisfy the Company's cash
requirements as currently contemplated.
On September 2, 1998, as amended on March 25, 1999 and July 23, 1999, the
Company entered into an Agreement and Plan of Merger (the "Merger Agreement")
with Horseshoe Gaming (Midwest), Inc. and certain of its affiliates ("Horseshoe
Midwest"). The Merger Agreement if consummated, would result in the acquisition
by Horseshoe Midwest of all of the outstanding stock of Empress Hammond and
Empress Joliet via two simultaneous merger transactions (the "Proposed Mergers")
for $609.0 million, subject to adjustment, including assumption the Notes. The
Company anticipates distributing the net proceeds to the shareholders. The
Proposed Mergers require regulatory approval from the IGC and IGB and closing
on or before December 1, 1999. The Company has received approval for the
Proposed Mergers from the IGC and is awaiting approval from the IGB. There can
be no assurance that the Company will be successful in obtaining the approval of
the IGB.
On July 23, 1999, the Company entered into a consulting agreement with Horseshoe
Midwest to provide consulting and advisory services in connection with operating
casinos in the greater Chicago market and in particular the opportunities
presented to Empress Joliet as a result of the legislation permitting dockside
gaming. In consideration for the consulting and advisory services. Horseshoe
Midwest will pay the Company a monthly fee of $333,333 for a period of five
years. The total of all such payments is not to exceed $20.0 million. The
consulting payments will not commence until the closing of the Proposed Mergers
and will be suspended during any period during which Empress Joliet is
prohibited from conducting dockside gaming activities.
Year 2000
The Year 2000 or "Y2K" problem is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's programs that have time sensitive software may recognize a date using
"00" as the year 1900, rather than the year 2000. This could result in a major
system failure or miscalculations.
As part of the first phase of the Company's Year 2000 compliance program, the
Company conducted an internal review of its computer systems to identify the
systems that could be affected by the Year 2000 problem, including both
"information technology" systems (such as software that processes financial and
other information) and non-information technology. The Company is in the process
of completing the second phase of its Year 2000 compliance program, which
involves (1) the implementation of its existing remediation plan to resolve the
Company's internal Year 2000 issues, (2) the identification of any potential
Year 2000 issues with the Company's significant vendors and suppliers and (3)
the evaluation of a contingency plan in the event that the Company or its
significant vendors and suppliers are unable to adequately address Year 2000
issues in time. The Company has an early December 1999 target date to complete
its implementation efforts.
The Company presently believes that, with modifications to existing software and
conversions to new software, the Year 2000 issue will not pose significant
operational problems for the Company's internal computer systems as so modified
and converted. However, if such modifications and conversions are not completed
on a timely basis, the Year 2000 problem may have a material adverse impact on
the operations of the Company. In addition, in the event that any of the
Company's significant vendors and suppliers do not successfully and timely
achieve Year 2000 compliance, the Company's business or operations could be
adversely affected. The Company estimates it will incur less than $300,000 in
expenses to ensure all systems will function properly with respect to dates in
the year 2000. These expenses are not expected to have a material impact on the
financial position, results of operations or liquidity of the Company.
This is a Year 2000 readiness disclosure entitled to protection as provided in
the Year 2000 Information and Readiness Disclosure Act.
This quarterly report on Form 10-Q contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
which generally can be identified by the use of such terms as "may," "expect,"
"anticipate," "believe," "continue," or similar variations or the negative
thereof. These forward-looking statements involve risks and uncertainties, many
of which are outside the Company's control and, accordingly, actual results may
differ materially. Factors that might cause a difference include, but are not
limited to, the competitive nature of the casino gaming industry, risk of
increases in the number of competitors in the market in which the Company
operates, risk of dockside gaming being repealed, risk of changes in gaming laws
and regulations, risk of failure by the Company or third parties to adequately
address issues relating to the Year 2000, and other factors discussed in the
Company's Annual report on Form 10-K for the year ended December 3, 1998.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The market risk inherent in the Company's financial instruments is the
potential loss in fair value arising from adverse changes in interest
rates. Currently, the Company does not use interest rate derivative
instruments to manage exposure to interest rate changes as the vast
majority of the Company's indebtedness is financed at fixed rates. At
September 30, 1999, the carrying amount of the Company's long-term
debt instruments approximated their value.
<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Unless otherwise noted, the following exhibits are
incorporated by reference into this Report:
Exhibit No. Exhibit
- ----------- -------
2.1 Agreement and Plan of Merger, dated June 1, 1998, of New Empress
Joliet, Inc. into Empress Joliet, incorporated by reference to Exhibit
2.1 of the Company's Registration Statement on Form S-4, filed July 31,
1998.
2.2 Articles of Merger, filed June 5, 1998, between New Empress Joliet,
Inc. into Empress Joliet (included in Exhibit 3.5), incorporated by
reference to Exhibit 2.2 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
2.3 Stock Purchase Agreement, dated June 12, 1998, between the Company and
Empress Joliet, incorporated by reference to Exhibit 2.3 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
2.4 Termination of Lease, dated June 17, 1998, between the Company and
Empress Hammond, incorporated by reference to Exhibit 2.4 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
2.5 Bill of Sale for the Empress III, dated June 17, 1998 executed by the
Company incorporated by reference to Exhibit 2.5 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
2.6 Agreement and Plan of Merger, dated as of September 2, 1998, by and
among the Company, Empress Hammond, Empress Joliet and Horseshoe
Gaming, L.L.C., a Delaware limited liability company ("Horseshoe"),
Horseshoe Gaming (Midwest), Inc., a Delaware corporation ("Horseshoe
Midwest"), Empress Acquisition Illinois, Inc., a Delaware corporation
("Empress Illinois"), Empress Acquisition Indiana, Inc., a Delaware
corporation ("Empress Indiana"), incorporated by reference to Exhibit
2.6 of the Company's Pre-Effective Amendment No. 1 to Registration
Statement on Form S-4, filed September 11, 1998.
2.7 First Amendment to Agreement and Plan of Merger, dated as of March 25,
1999, by and among the Company, Empress Hammond, Empress Joliet and
Horseshoe Gaming, L.L.C., a Delaware limited liability company
("Horseshoe"), Horseshoe Gaming (Midwest), Inc., a Delaware corporation
("Horseshoe Midwest"), Empress Acquisition Illinois, Inc., a Delaware
corporation ("Empress Illinois"), Empress Acquisition Indiana, Inc., a
Delaware corporation ("Empress Indiana"), incorporated by reference to
Exhibit 2.7 of the Company's Annual Report on Form 10-K, filed March
31, 1999.
2.8 Second Amendment to Agreement and Plan of Merger, dated as of July 23,
1999, by and among the Company, Empress Hammond, Empress Joliet and
Horseshoe Gaming, L.L.C., a Delaware limited liability company
("Horseshoe"), Horseshoe Gaming (Midwest), Inc., a Delaware corporation
("Horseshoe Midwest"), Empress Acquisition Illinois, Inc., a Delaware
corporation ("Empress Illinois"), Empress Acquisition Indiana, Inc., a
Delaware corporation ("Empress Indiana").
<PAGE>
3.1 Amended Certificate of Incorporation of the Company, as amended as of
May 28, 1998, incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
3.2 By-Laws of the Company incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
3.3 Restated Articles of Incorporation of Empress Hammond as amended as of
March 11, 1996 incorporated by reference to Exhibit 3. of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
3.4 By-Laws of Empress Hammond incorporated by reference to Exhibit 3.4 of
the Company's Registration Statement on Form S-4, filed July 31, 1998.
3.5 Articles of Incorporation of Empress Joliet incorporated by reference
to Exhibit of the Company's Registration Statement on Form S-4, filed
July 31, 1998.
3.6 By-Laws of Empress Joliet incorporated by reference to Exhibit 3.6 of
the Company's Registration Statement on Form S-4, filed July 31, 1998.
3.7 Certificate of Incorporation of Empress Finance incorporated by
reference to Exhibit 3.7 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
3.8 By-Laws of Empress Finance incorporated by reference to Exhibit 3.8 of
the Company's Registration Statement on Form S-4, filed July 31, 1998.
3.9 Certificate of Organization of Hammond Residential as of February 23,
1998 incorporated by reference to Exhibit 3.9 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
3.10 Operating Agreement of Hammond Residential incorporated by reference to
Exhibit 3.10 of the Company's Registration Statement on Form S-4, filed
July 31, 1998.
4.1 Indenture, dated June 18, 1998, among the Company, the Guarantors and
U.S. Bank Trust National Association, as Trustee, including forms of
the Old Notes and the New Notes issued pursuant to such Indenture,
incorporated by reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-4, filed July 31, 1998.
4.2 Registration Rights Agreement, dated June 18, 1998, by and among the
Company, the Guarantors, and the Initial Purchasers, incorporated by
reference to Exhibit 4.2 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
4.3 Indenture, dated April 1, 1994, among Empress Finance, the Company
(f/k/a LMC Leasing, Ltd.), Empress Hammond (f/k/a Lake Michigan
Charters, Ltd.), Empress Joliet (f/k/a Empress River Casino
Corporation) and U.S. Bank Trust National Association (f/k/a First
Trust National Association), as Trustee, including a form the Notes,
incorporated by reference to Exhibit 4.3 of the Company's Registration
Statement on Form S-4, filed July 31, 1998.
4.4 Supplemental Indenture to the 1994 Indenture dated November 6, 1997
among Empress Finance, the Company, Empress Hammond, Empress Joliet,
New Empress Hammond, Inc. and First Trust National Association, as
Trustee, incorporated by reference to Exhibit 4.4 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
4.5 Supplemental Indenture No. 2 to the 1994 Indenture dated February 23,
1998 among Empress Finance, the Company, Empress Hammond, Empress
Joliet, Hammond Residential and U.S. Bank
<PAGE>
Trust National Association, as Trustee, incorporated by reference to
Exhibit 4.5 of the Company's Registration Statement on Form S-4, filed
July 31, 1998.
4.6 Supplemental Indenture No. 3 to the 1994 Indenture dated April 29, 1998
among Empress Finance, the Company, Empress Hammond, Empress Joliet,
New Empress Joliet, Inc., Hammond Residential and U.S. Bank Trust
National Association, as Trustee, incorporated by reference to Exhibit
4.6 of the Company's Registration Statement on Form S-4, filed July 31,
1998.
4.7 Supplemental Indenture No. 4 to the 1994 Indenture dated June 10, 1998
among Empress Finance, the Company, Empress Hammond, Empress Joliet,
New Empress Joliet, Inc., Hammond Residential and U.S. Bank Trust
National Association, as Trustee, incorporated by reference to Exhibit
4.7 of the Company's Registration Statement on Form S-4, filed July 31,
1998.
4.8 Credit Agreement, dated as of June 17, 1998 by and among the Company,
Empress Hammond, Empress Joliet and Wells Fargo Bank, National
Association ("Wells Fargo"), incorporated by reference to Exhibit 4.8
of the Company's Registration Statement on Form S-4, filed July 31,
1998.
10.1 Tax Reimbursement Agreement, dated June 18, 1998, by and between the
Company and each of the Stockholders of the Company, incorporated by
reference to Exhibit 10.1 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
10.2 Guaranty executed by Empress Hammond in favor of the holders of the
Notes, incorporated by reference to Exhibit 10.2 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.3 Guaranty executed by Empress Joliet in favor of the holders of the
Notes, incorporated by reference to Exhibit 10.3 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.4 Guaranty executed by Empress Finance in favor of the holders of the
Notes, incorporated by reference to Exhibit 10.4 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.5 Guaranty executed by Hammond Residential in favor of the holders of the
Notes, incorporated by reference to Exhibit 10.5 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.6 Contract dated November 20, 1997 between Empress Joliet and Gas City,
Ltd., incorporated by reference to Exhibit 10.6 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.7 Trademark License Agreement dated June 30, 1997 between Empress Joliet
and Empress Hammond, incorporated by reference to Exhibit 10.7 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.8 Consulting Agreement dated January 1, 1998 between Empress Hammond and
William J. Sabo, incorporated by reference to Exhibit 10.8 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.9 Consulting Agreement dated January 1, 1998 between Empress Joliet and
William J. Sabo, incorporated by reference to Exhibit 10.9 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.10 Hammond Riverboat Gaming Project Development Agreement by and among the
City of Hammond, Indiana, City of Hammond, Department of Redevelopment
and Empress Casino
<PAGE>
Hammond Corporation, dated as of June 21, 1996, incorporated by
reference to Exhibit 10.10 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
10.11 Lease by and between the City of Hammond, Department of Redevelopment
and Empress Hammond, dated as of June 19, 1996, incorporated by
reference to Exhibit 10.11 of the Company's Registration Statement on
Form S-4, filed July 31, 1998.
10.12 License Agreement by and between Hammond Port Authority and Empress
Hammond, dated as of June 21, 1996, incorporated by reference to
Exhibit 10.12 of the Company's Registration Statement on Form S-4,
filed July 31, 1998.
10.13 License Agreement by and between Department of Waterworks of the City
of Hammond and the City of Hammond, Indiana and Empress Hammond,
incorporated by reference to Exhibit 10.13 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.14 Employment Agreement dated March 7, 1997 between Empress Hammond and
Peter A. Ferro, Jr., incorporated by reference to Exhibit 10.14 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.15 Employment Agreement dated March 7, 1997 between Empress Joliet and
Peter A. Ferro, Jr., incorporated by reference to Exhibit 10.15 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.16 Allocation Agreement dated March 7, 1997 between Empress Hammond and
Empress Joliet, incorporated by reference to Exhibit 10.16 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.17 Employment Agreement dated June 12, 1997 between Empress Hammond and
Joseph J. Canfora, incorporated by reference to Exhibit 10.17 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.18 Employment Agreement dated June 12, 1997 between Empress Joliet and
Joseph J. Canfora, incorporated by reference to Exhibit 10.18 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.19 Long Term Incentive Bonus Agreement dated June 12, 1997 between Empress
Hammond and Joseph J. Canfora, incorporated by reference to Exhibit
10.19 of the Company's Registration Statement on Form S-4, filed
July 31, 1998.
10.20 Long Term Incentive Bonus Agreement dated June 12, 1997 between Empress
Joliet and Joseph J. Canfora, incorporated by reference to Exhibit
10.20 of the Company's Registration Statement on Form S-4, filed
July 31, 1998.
10.21 Allocation Agreement dated June 12, 1997 between Empress Hammond and
Empress Joliet, incorporated by reference to Exhibit 10.21 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.22 Employment Agreement dated March 12, 1998 between Empress Joliet and
John G. Costello, incorporated by reference to Exhibit 10.22 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.23 Employment Agreement dated March 12, 1998 between Empress Joliet and
Michael W. Hansen, incorporated by reference to Exhibit 10.23 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
<PAGE>
10.24 Employment Agreement dated March 12, 1998 between Empress Joliet and
David F. Fendrick, incorporated by reference to Exhibit 10.24 of the
Company's Registration Statement on Form S-4, filed July 31, 1998.
10.25 Employment Agreement dated March 12, 1998 between Empress Hammond and
Rick. Mazer, incorporated by reference to Exhibit 10.25 of the Company's
Registration Statement on Form S-4, filed July 31, 1998.
10.26 Employment Agreement dated as of January, 1999, between Peter A. Ferro,
Jr. and Horseshoe Gaming, Inc., incorporated by reference to Exhibit
10.24 of the Company's Annual Report on Form 10-K, filed March 31, 1999.
10.27 Employment Agreement dated as of January, 1999, between Joseph J. Canfora
and Horseshoe Gaming, Inc., incorporated by reference to Exhibit 10.25 of
the Company's Annual Report on Form 10-K, filed March 31, 1999.
10.28 Consulting Agreement, dated as of July 23, 1999, by and between the
Company and Horseshoe Gaming, L.L.C.
27.1 Financial Data Schedule. *
(b) Reports on Form 8-K
No reports of Form 8-K were filed during the period covered by
this report.
* Copy of exhibit filed with this report of Form 10-Q.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the issuer
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Empress Entertainment, Inc.
(Issuer)
Dated: November 15, 1999
s/s John G. Costello
--------------------
By: John G. Costello, Vice President,
Chief Financial Officer & Treasurer
(Principal Financial Officer)
Empress Casino Hammond Corporation
(Issuer)
- --------
s/s John G. Costello
- --------------------
By: John G. Costello
Vice President, Chief Financial Officer & Treasurer
(Principal Financial Officer)
Empress Casino Joliet Corporation
(Issuer)
s/s John G. Costello
- --------------------
By: John G. Costello
Vice President, Chief Financial Officer & Treasurer
(Principal Financial Officer)
Empress River Casino Finance Corporation
(Issuer)
s/s John G. Costello
- --------------------
By: John G. Costello
Vice President, Chief Financial Officer & Treasurer
(Principal Financial Officer)
Hammond Residential, L.L.C.
(Issuer)
s/s John G. Costello
- --------------------
By: John G. Costello
Vice President Chief Financial Officer & Treasurer
(Principal Financial Officer)
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