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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996 Commission File Number 0-20648
LOUISIANA - I GAMING, L.P.
(Exact Name of Registrant as Specified in its Charter)
Louisiana 72-1238179
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Boomtown, Inc.
P.O. Box 399, Verdi, Nevada 89439-0399
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 345-8643
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(A) AND
(B) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT.
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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes X No
--- ---
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference into the part
of this Form 10-K as indicated: None
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PART I
ITEM 1. BUSINESS
Louisiana - I Gaming, L.P., (the "Partnership" or "Boomtown New Orleans"
or "Boomtown Belle" or the "Company") a Louisiana limited partnership is
majority owned and controlled by Boomtown, Inc., ("Boomtown") and commenced
operations in August 1994 on a 50-acre site in Harvey, Louisiana,
approximately ten miles from downtown New Orleans. Gaming operations are
conducted from a 250-foot replica of a paddlewheel riverboat offering 912
slot machines and 56 table games (including blackjack ("21"), craps, poker,
roulette, pai gow poker, let it ride and Caribbean stud) in a 30,000 square
foot casino. The land-based facility adjacent to the riverboat dock is
composed of a western-themed, 88,000-square foot facility. The first floor
of the building opened December 1994, and offers the patrons of the Boomtown
Belle a deli-style restaurant, a 20,000-square foot family entertainment
center and a western saloon/dance hall. In addition, the land-based facility
provides for staging of the gaming vessel. This facility is the only one of
its type in the New Orleans area and it attracts both families and adults by
providing entertainment for non-gaming customers while also providing
incentive for gaming customers to increase the frequency and duration of
their visits. The Company believes it distinguishes itself from other
casinos in the New Orleans area by its location, emphasis on the Company's
old west theme and promoting its friendly, casual atmosphere. Boomtown New
Orleans currently employs approximately 900 employees.
BOOMTOWN'S PROPOSED MERGER WITH HOLLYWOOD PARK, INC. ("HOLLYWOOD PARK")
On April 23, 1996, Boomtown entered into an Agreement and Plan of Merger with
Hollywood Park relating to the strategic combination of Hollywood Park and
Boomtown. Pursuant to the Merger Agreement and subject to the terms and
conditions set forth therein, Boomtown would become a wholly-owned subsidiary
of Hollywood Park (the "Merger"). Pursuant to the Merger Agreement, at the
effective date of the Merger each issued and outstanding share of Boomtown
Common Stock will be converted into the right to receive 0.625 (the "Exchange
Ratio"), of a share of Hollywood Park Common Stock. The Merger is intended
to be structured as a tax-free reorganization. The shareholders of Boomtown
and Hollywood Park have approved the Merger. To date, the Merger has only
been approved by Mississippi gaming authorities. The Merger is subject to
the approval of other relevant gaming jurisdictions including Louisiana.
Certain additional matters relating to the signing of the Merger
Agreement and a complete description of the Merger Agreement are more fully
described in the Company's Form 8-K dated April 23, 1996, including the
Agreement and Plan of Merger file as exhibit 2.1 thereto, and filed with the
Securities and Exchange Commission on May 3, 1996.
On November 18, 1996, the Company entered into an agreement with its
partnership in the venture, Eric Skrmetta (Skrmetta"), in which the Company
agreed to pay $5,673,000 in return for Skrmetta's 7.5% interest in the
Partnership in addition to releasing the Company from any and all claims,
liabilities and causes of action of any kind arising from or related to the
Partnership agreement. The terms set forth thereto require Boomtown to pay a
down payment of $500,000 on or before December 5, 1996, (which amount was
paid) with the remaining $5,173,000 to be paid not later than August 10,
1997. Additionally, the $5,173,000 shall be reduced by a discount for the
time that the amount or any portion thereof is paid in full prior to August
10, 1997.
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NEW ORLEANS AND THE LOUISIANA GAMING MARKET Riverboat gaming was
legalized in Louisiana in July 1991, with the enactment of the Riverboat
Economic Development and Gaming Control Act. The law currently limits the
number of gaming licenses to 15 riverboat licenses of which 14 have already
been granted. One land based casino is also permitted in New Orleans.
Louisiana law requires that all riverboats be built after January 1,
1992 and be of "period" construction, at least 150 feet in length and have a
600-passenger minimum capacity. Twenty-four hour unlimited stakes gaming is
permitted on the riverboats, which are required to cruise for 90 minutes
every three hours. Fourteen riverboats operate in the state of Louisiana in
the areas of Shreveport, Lake Charles, New Orleans and Baton Rouge. Four
boats are currently operational in the New Orleans area (including the
Company's riverboat). However, one of the four which is located in downtown
New Orleans is scheduled to move to Shreveport in the fall of 1997.
The annual license fee to conduct gaming activities on a riverboat in
Louisiana is $50,000 for the first year of operations and $100,000 per year
thereafter. An additional fee of 18.5% of net gaming proceeds is charged by
the state, and local municipalities may charge a fee of up to $2.50 per
passenger boarding the riverboat. In the case of the Company's riverboat,
this fee was negotiated to 6% of net gaming proceeds.
In addition to riverboat casinos, a single, large-scale land-based
casino to be operated by Harrah's Jazz was approved for the City of New
Orleans. A temporary facility was constructed in New Orleans, and the casino
began operations in 1995. After almost seven months of operations, Harrah's
Jazz filed a Chapter 11 bankruptcy on November 22, 1995, due to numerous
occurrences including disappointing gaming revenues. Harrah's is currently
in negotiations with the State of Louisiana and attempting to reorganize and
commence operations. The land based casino may open as soon as mid-1997.
The New Orleans metropolitan area has a local resident population of
over 1.3 million people and attracts over 9 million tourists annually. The
"West Bank", which is located in Jefferson Parish, and is the site of
Boomtown New Orleans, has more than 250,000 local residents.
A large majority of the Boomtown Belle customers are local residents of
the West Bank. These customers are primarily blue-collar, working class and
suburban/rural. Boomtown believes that these customers are attracted by the
Company's value-oriented, middle market philosophy and the relaxed western
atmosphere. Studies have indicated that these customers are loyal to the
West Bank and do not like to travel into the downtown New Orleans urban area.
On November 5, 1996, referenda on the continuation of riverboat gaming
were held on a parish-by parish basis in each parish where riverboat gaming
operations were permitted. Voters in all parishes in which riverboat gaming
is currently conducted elected to continue to permit operations. In the
Boomtown Belle's parish the continuation of riverboats passed overwhelmingly
with a 68% approval rate.
COMPETITION Boomtown New Orleans currently competes with other
riverboat casinos in Louisiana and dockside gaming casinos in Mississippi,
some of which have greater name recognition and greater financial and
marketing resources than Boomtown. The Company believes that Boomtown New
Orleans will face additional competition from a land-based casino in the City
of New Orleans if it again becomes operational. The Company believes that
its riverboat operation competes primarily on the basis of the riverboat's
location and overall atmosphere. Current Louisiana gaming legislation
authorizes a total of 15 riverboat casino licenses statewide, of which
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14 have been granted. The Company also believes the local residents of
Westbank who frequent the Boomtown Belle are loyal to the West Bank and do
not like to travel into the downtown New Orleans urban area. If new casinos
draw significant numbers of customers from the West Bank, however, or the
Boomtown Belle's customers do travel to other casinos, customer counts and
revenues of the Boomtown Belle would be adversely affected.
FUTURE EXPANSION The Boomtown Belle's current plan is to complete an
expansion of its land-based facility to include a 350 seat full service
buffet and a 150 seat specialty, fine dining restaurant to complement the
entertainment package offered. The Louisiana project is expected to commence
shortly following the Merger. In the event the Merger were not to be
completed, financing requested for the project would be severely jeopardized.
The Company has not obtained any financing for the project, and there is no
assurance that the Company will be able to obtain said financing, even if the
Merger is successfully completed, on acceptable terms.
REGULATION AND LICENSING
The ownership and operation of a riverboat gaming vessel is subject to
the Louisiana Riverboat Economic Development and Gaming Control Act (the
"Louisiana Act"). As of May 1, 1996, gaming activities are regulated by the
Louisiana Gaming Control Board (the "Board"). The Board is responsible for
issuing the gaming license and enforcing the laws, rules and regulations
relative to riverboat gaming activities. The Board is empowered to issue up
to 15 licenses to conduct gaming activities on a riverboat of new
construction in accordance with applicable law. However, no more than six
licenses may be granted to riverboats operating from any one parish.
The laws and regulations of Louisiana seek to (i) prevent unsavory or
unsuitable persons from having any direct or indirect involvement with gaming
any time or in any capacity; (ii) establish and maintain responsible
accounting practices and procedures; (iii) maintain effective control over
the financial practices of licensees, including establishing procedures for
reliable record keeping and making periodic reports to the Board; (iv)
prevent cheating and fraudulent practices; (v) provide a source of state and
local revenues through fees; and (vi) ensure that gaming licensees, to the
extent practicable, employ and contract with Louisiana residents, women and
minorities.
The Louisiana Act specifies certain restrictions and conditions relating
to the operation of riverboat gaming, including but not limited to the
following: (i) gaming is not permitted while a riverboat is docked, other
than for forty-five minutes between excursions, unless dangerous weather or
water conditions exist; (ii) each round trip riverboat cruise may not be less
than three nor more than eight hours in duration, subject to specified
exceptions; (iii) agents of the Board are permitted on board at any time
during gaming operations; (iv) gaming devices, equipment and supplies may be
purchased or leased from permitted suppliers; (v) gaming may only take place
in the designated river or waterway; (vi) gaming equipment may not be
possessed, maintained, or exhibited by any person on a riverboat except in
the specifically designated gaming area, or a secure area used for
inspection, repair, or storage of such equipment; (vii) wagers may be
received only from a person present on a licensed riverboat; (viii) persons
under 21 are not permitted in designated gaming areas; (ix) except for slot
machine play, wagers may be made only with tokens, chips, or electronic cards
purchased from the licensee aboard a riverboat, (x) licensees may only use
docking facilities and routes for which they are licensed and may only board
and discharge passengers at the riverboat's licensed berth; (xi) licensees
must have adequate protection and indemnity insurance; (xii) licensees must
have all necessary federal and state licenses, certificates and other
regulatory approvals prior to operating a riverboat and (xiii) gaming may
only be
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conducted in accordance with the terms of the license and the rules and
regulations adopted by the Board.
No person may receive any percentage of the profits from the Partnership
without first being found suitable. In March 1994, the Partnership, its
officers, key personnel, partners and persons holding a 5% or greater
interest in the partnership were found suitable by the predecessor to the
Board. A gaming license is deemed to be a privilege under Louisiana law and
as such may be denied, revoked, suspended, conditioned or limited at any time
by the Board. In issuing a license, the Board must find that the applicant is
a person of good character, honesty and integrity and the applicant is a
person whose prior activities, criminal record, if any, reputation, habits
and associations do not pose a threat to the public interest of the State of
Louisiana or to the effective regulation and control of gaming, or create or
enhance the dangers of unsuitable, unfair or illegal practices, methods, and
activities in the conduct of gaming or the carrying on of business and
financial arrangements in connection therewith. The Board will not grant any
licenses unless it finds that: (i) the applicant is capable of conducting
gaming operations, which means that the applicant can demonstrate the
capability, either through training, education, business experience, or a
combination of the above to operate a gaming casino; (ii) the proposed
financing of the riverboat and the gaming operations is adequate for the
nature of the proposed operation and from a source suitable and acceptable to
the Board; (iii) the applicant demonstrates a proven ability to operate a
vessel of comparable size, capacity and complexity to a riverboat so as to
ensure the safety of its passengers; (iv) the applicant submits a detailed
plan of design of the riverboat in its application for a license; (v) the
applicant designates the docking facilities to be used by the riverboat; (vi)
the applicant shows adequate financial ability to construct and maintain a
riverboat; (vii) the applicant has a good faith plan to recruit, train and
upgrade minorities in all employment classifications; and (viii) the
applicant is of good moral character.
The Board may not award a license to any applicant who fails to provide
information and documentation to reveal any fact material to qualifications
or who supplies information which is untrue or misleading as to a material
fact pertaining to the qualification criteria; who has been convicted of or
plead NOLO CONTENDERE to an offense punishable by imprisonment of more than
one year; who is currently being prosecuted for or regarding whom charges are
pending in any jurisdiction of an offense punishable by more than one year
imprisonment; if any holder of 5% or more in the profits and losses of the
applicant has been convicted of or plead guilty or NOLO CONTENDERE to an
offense, which at the time of conviction is punishable as a felony.
The transfer of a license is prohibited. The sale, assignment,
transfer, pledge, or disposition of securities which represent 5% or more of
the total outstanding shares issued by a holder of a license is subject to
Board approval. Accordingly, the Merger is subject to Board approval. A
security issued by a holder of a license must generally disclose these
restrictions.
A licensee (the Partnership) must periodically report the following
information to the Board, which is not confidential and is to be available
for public inspection; the licensee's net gaming proceeds from all authorized
games; the amount of net gaming proceeds tax paid; and all quarterly and
annual financial statements presenting historical data that are submitted to
the Board, including annual financial statements that have been audited by an
independent certified public accountant.
The Board has adopted rules governing the method for approval of the
area of operations, the rules and odds of authorized games and devices
permitted, and prescribe grounds and procedures for the revocation,
limitation or suspension of licenses and permits.
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On April 19, 1996, the Louisiana legislature adopted legislation requiring
statewide local elections on a parish-by-parish basis to determine whether to
prohibit or continue to permit licensed riverboat gaming, licensed video poker
gaming, and licenses land-based gaming in Orleans Parish. The applicable local
election took place on November 5, 1996, and the voters in the parish of the
Partnership voted to continue licenses for riverboat and video poker gaming.
However, it is noteworthy that the current legislation does not provide for any
moratorium on future local elections on gaming.
ITEM 2. PROPERTIES
In November 1993, the Partnership completed the purchase of approximately
50 acres located in Jefferson Parish, 10 miles from downtown New Orleans,
Louisiana, for approximately $3 million. This property is used for land-based
amenities related to its riverboat casino at Boomtown New Orleans. At this
property, Boomtown New Orleans owns all facilities, including the riverboat
restaurants, bars, fun center and entertainment facility. See "ITEM 1.
Business" for further discussion of the Company's properties.
ITEM 3. LEGAL PROCEEDINGS
A demand for arbitration had been filed by Eric Skrmetta, a limited
partner, with the American Arbitration Association, alleging that Boomtown
breached the Louisiana Partnership Agreement and its fiduciary duty to limited
partners resulting in less than anticipated distributions to Mr. Skrmetta. On
November 18, 1996, the Company entered into an agreement with Eric Skrmetta in
which the Company agreed to pay $5,673,000 in return for Skrmetta's 7.5%
interest in the Partnership in addition to releasing the Company from any and
all claims, liabilities and causes of action of any kind arising from or related
to the Partnership agreement. The terms set forth thereto require Boomtown to
pay a down payment of $500,000 on or before December 5, 1996 with the remaining
$5,173,000 to be paid not later than August 10, 1997. Additionally, the
$5,173,000 shall be reduced by a discount for the time that the amount or any
portion thereof is paid in full prior to August 10, 1997.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Partnership's equity securities are not publicly traded.
Boomtown owns an 87.5% limited partnership interest in the Partnership.
Through its wholly-owned subsidiary, Louisiana Gaming Enterprises, Inc., a
Louisiana corporation, Boomtown owns an additional 5% general partnership
interest in the Partnership. Eric Skrmetta owns the remaining 7.5% limited
partnership interest in the Partnership.
Quarterly distributions were made by the Partnership as follows prior to
the "Minority Purchase" as described below:
(1) For each of the first three quarters of each year, to the
extent permitted under applicable law, 75% of Partnership
Distributable Income (as defined below) shall be distributed on a
pro rata basis to all equity holders within forty-five (45) days
after the quarter end.
(2) Within sixty (60) days after the end of the fourth
quarter of each fiscal year, to the extent permitted under
applicable law, a pro rata distribution shall be made which results
in 100% of the Partnership Distributable Income for the fiscal year
having been distributed on a cumulative basis. "Partnership
Distributable Income" is defined as (a) the sum of (i) the net
income for the Partnership for the fiscal quarter or year, plus
(ii) depreciation and amortization charges for such period, plus
(iii) the provision for any income taxes (or similar governmental
fees) for accounting purposes for such period, less (b) the sum of
(i) all capital expenditures incurred during such period in the
normal course of operation, (ii) all scheduled principal repayments
on all indebtedness which are required to be made during such
period and (iii) any actual income taxes (or similar governmental
fees) actually paid in such period, all as determined with regard
to amounts accrued or incurred in accordance with generally
accepted accounting principles consistently applied, and less (c)
50% of any aggregate deficit in Partnership Distributable Income
for all prior periods.
On November 18, 1996, the Company entered into an agreement (the
"Minority Purchase") with Eric Skrmetta in which the Company agreed to pay
$5,673,000 in return for Skrmetta's 7 1/2% interest in the Partnership in
addition to releasing the Company from any and all claims, liabilities and
causes of action of any kind arising from or related to the Partnership
agreement. The terms set forth thereto require Boomtown to pay a down
payment of $500,000 on or before December 5, 1996 and the remaining
$5,173,000 to be paid not later than August 10, 1997. Additionally, the
$5,173,000 shall be reduced by a discount for the time that the amount or any
portion thereof is paid in full prior to August 10, 1997.
ITEM 7. NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
Years Ended September 30,
1995 1996
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Revenues:
Gaming $ 72,157 97.1% $ 69,674 96.1%
Non-gaming 2,146 2.9 2,857 3.9
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74,303 100.0 72,531 100.0
Operating expenses:
Gaming 25,625 34.5 28,822 39.7
Non-gaming 1,274 1.7 2,044 2.8
Marketing, general and
administrative 24,649 33.2 21,587 29.8
Management fee-
Boomtown, Inc. 1,068 1.4 960 1.3
Depreciation and
amortization 2,415 3.3 2,741 3.8
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55,031 74.1 56,154 77.4
Income from operations 19,272 25.9 16,377 22.6
Interest and other
expense, net (4,879) (6.5) (4,305) (5.9)
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Net income $ 14,393 19.4% $ 12,072 16.7%
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FISCAL 1996 COMPARED TO FISCAL 1995
Total revenues for the year ended September 30, 1996 were $72.5 million,
2.3% lower than the $74.3 million generated during the prior fiscal year.
Gaming revenues, representing 96.1% of total revenues for the year declined
3.4% from $72.2 million. Gaming revenues are derived from the Company's 912
slot machines and 56 table games. Slot machines contributed approximately
75% of total gaming revenues during both fiscal 1996 and 1995. The reduction
in gaming revenues resulted from fewer passengers on the Company's gaming
riverboat. During fiscal 1996 the Partnership had 1,524,000 in admissions,
down 9.9% from fiscal 1995 due primarily to additional cruising of the
riverboat. The additional cruising was due to Louisiana's stricter
enforcement of cruising regulations which are in effect for all gaming
riverboats operating in the state. Riverboats are required to cruise for 90
minutes every 3 hours, and beginning in the late summer 1995 Louisiana State
Police began strict enforcement of this regulation. Although the number of
admissions and gaming passengers has declined in fiscal 1996 the Partnership
experienced an increase in the average win per passenger from approximately
$42.00 in fiscal 1995 to $46.00 in fiscal 1996. This is attributable to
having a higher level of gaming clientele as compared to a higher level of
"sightseers" during the prior year.
Non-gaming revenues are generated from the Partnership's family
entertainment center ("Fun Center"), food and beverage sales, a cabaret show
and other promotional revenues. During fiscal 1996 the Partnership recorded
$2.9 million in non-gaming revenues as compared to $2.1 million recorded
during the prior year period. This was due to the expansion of the cabaret
showroom to include food and beverage sales as well as additional revenues
generated from the fun
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center. The Partnership has undergone additional efforts to improve the
availability and quality of its food products in an effort to attract more
gaming and non-gaming patrons to the property.
The property's gaming margin decreased $5.6 million during fiscal 1996
to $40.9 million as compared to $46.5 million recorded during fiscal 1995.
The gaming margin percentage fell from 64.5% to 58.6% primarily as a result
of a change in the calculation of gaming taxes, resulting in a financial
statement reclassification. During fiscal 1996, the gaming taxes were
calculated as a percentage of revenue and charged to gaming operating costs.
In the prior year, the taxes were calculated based on a flat charge per
admission and recorded as general and administrative expenses. Additionally,
during fiscal 1996 the gaming margin was negatively affected by gaming leases
entered into in April 1995 resulting in additional charges of $466,000 during
fiscal 1996. The overall decline in the gaming margin was offset by a
reduction of $752,000 in payroll costs due to more efficient management of
the games departments.
The Company's non-gaming margin fell from $872,000 during fiscal 1995 to
$813,000 during fiscal 1996 primarily resulting from an increase in food and
beverage costs in an effort to attract more gaming and non-gaming patrons.
Additionally, the reduction was caused by a slight reduction in the fun
center revenue from more sharing agreements entered into with fun center
games vendors.
Marketing expenses were $4.3 million during fiscal 1996 as compared to
$3.8 million during the prior year. The increase is due to the additional
advertisement of live entertainment bands at the Company's cabaret, the
promotion of outdoor events and special functions held during fiscal 1996.
Additionally, the higher marketing expenses were due to additional bus tour
expenses in efforts to bring new gaming patrons and higher players club
redemption fees as the Company's players club program expands and becomes
more mature.
General and administrative ("G & A"), expenses were $17.3 million during
fiscal 1996, as compared to $20.9 million during the prior year, resulting in
a $3.6 million or 17.2% decline from the prior year. The decline in G &A
expenses resulted from the reclassification of gaming taxes to gaming
expenses and lower payroll costs offset by higher insurance premiums and
medical related expenses as well as additional surveillance costs due to
State police staffing requirements. Also, during fiscal 1996 the Partnership
was charged management fees of $960,000 as compared to $1.1 million during
fiscal 1995 by Boomtown, Inc. Boomtown, Inc. is responsible for managing the
operations of the Partnership and charges its subsidiaries a pro-rata share
of the costs incurred relative to this management function. Depreciation and
amortization expenses were $2.7 million and $2.4 million during the fiscal
years ended September 30, 1996 and 1995, respectively. The Company incurred
depreciation primarily on the riverboat, the land-based facility and all
equipment, furniture and fixtures. During fiscal 1996 the property increased
its depreciable asset base by approximately $2.8 million.
The Partnership incurred interest and other expenses of $4.3 million
during fiscal 1996, 11.7% lower than the $4.9 million recorded in the prior
year period. This decline is a result of less interest charged on the note
payable to Boomtown, due to lower outstanding balances.
LIQUIDITY AND CAPITAL RESOURCES
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The Partnership believes that its current available cash and cash
equivalents and anticipated cash flow from operations, will be sufficient to
fund the Partnership's ongoing working capital and normal recurring capital
expenditures through the end of fiscal 1997. The Partnership does not
believe such sources of liquidity will be sufficient to fund its proposed
expansion projects as described above. The Partnership believes that
expansion of its existing facilities is important for continued growth. If
the project, as described above was to proceed, the Partnership anticipates
that such financing, subject to certain restrictions set forth in the First
Mortgage Notes, would come from one or more of a number of sources, including
cash flow from operations, bank financing, vendor financing or debt, joint
ventures, equity financing, other long-term debt or additional advances from
Boomtown. However, there can be no assurance that such financing will be
available on terms acceptable to the Partnership or that any proposed
expansion projects by the Partnership will ever be completed. Further, given
the rapidly changing national competitive and legal environments related to
gaming, the Partnership's future operating results are highly conditional and
could fluctuate significantly. Should cash flow from the Partnership's
operations be below expectations, the Partnership may have difficulty in
satisfying capital requirements.
The statements set forth above regarding the Partnership's estimates of
its liquidity and capital expenditure requirements and the sufficiency of its
resources are "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbors created
thereby. Future operating results of the Partnership and its liquidity may
be adversely affected or otherwise fluctuate significantly as a result of a
number of factors, including without limitation, seasonality, weather
conditions, the general level of demand for casino gaming and entertainment
facilities, competition in the gaming industry, and uncertainties in general
economic, regulatory and political conditions affecting the gaming industry,
difficulties in integrating the businesses of Boomtown and Hollywood Park
following the proposed Merger and lack of financing following the proposed
Merger with Hollywood Park. For example, revenues and operating income were
adversely affected by Louisiana's recently enacted strict cruising
regulations which are in effect for riverboat casinos in the New Orleans
area. Any of the above factors, among others, could cause the Partnership's
operating results and liquidity to be weaker than expected, and could cause
the Partnership's cash requirements to differ materially from the
Partnership's current estimates.
GUARANTEE OF BOOMTOWN NOTES BY THE PARTNERSHIP
In November 1993, Boomtown closed the issuance and sale of an aggregate
of $103.5 million principal amount of 11-1/2% First Mortgage Notes due
November 1, 2003 (the "Notes") and warrants to purchase 472,000 shares of
Boomtown's Common Stock. Payment of the principal, interest and any other
amounts owing under the Notes has been unconditionally guaranteed by certain
subsidiaries of Boomtown, including the Partnership. See the Indenture,
which is hereby incorporated by reference, attached as Exhibit 12.36 to
Boomtown, Inc.'s Annual Report on Form 10-K for the year ended September 30,
1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information is incorporated by reference to the financial statements
data listed in Item 14 of Part IV of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
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Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
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(a) The following items are filed as part of this report:
Item 1. FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors . . . . . 13
Balance Sheets, September 30, 1995 and 1996 . . . . . . . . 14
Statements of Operations for the years
ended September 30, 1994, 1995 and 1996 . . . . . . . . . . 15
Statements of Partners' Capital for the years
ended September 30, 1994, 1995 and 1996 . . . . . . . . . . 16
Statements of Cash Flows for the years
ended September 30, 1994, 1995 and 1996 . . . . . . . . . . 17
Notes to Financial Statements . . . . . . . . . . . . . . . 18
Item 2. FINANCIAL STATEMENT SCHEDULES
Valuation and Qualifying Accounts . . . . . . . . . . . . . 24
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
Item 3. EXHIBITS
The Exhibits listed on the accompanying index immediately following
the signature page are filed as part of this Report.
(b) Reports on Form 8-K. Not applicable.
(c) Exhibits
See Item 14(a)(3) above.
(d) Financial Statement Schedules
See Item 14(a)(2) above.
12
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Executive Committee
Louisiana-I Gaming, L.P.,
a Louisiana Limited Partnership
We have audited the accompanying balance sheets of Louisiana-I Gaming, L.P.
(the Partnership), a Louisiana limited partnership, as of September 30, 1995
and 1996, and the related statements of operations, and statements of
partners' capital and cash flows for each of the three years in the period
ended September 30, 1996. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership at September
30, 1995 and 1996, and the results of its operations and its cash flows for
each of the three years in the period ended September 30, 1996, in conformity
with generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
New Orleans, Louisiana
November 6, 1996,
except for Note 9, as to which
the date is November 18, 1996
13
<PAGE>
LOUISIANA - I GAMING, L.P.
BALANCE SHEETS
(in thousands)
September 30,
1995 1996
-------- ---------
ASSETS:
Current assets:
Cash and cash equivalents $ 3,072 $ 3,512
Accounts receivable, net 147 94
Inventories 567 205
Prepaid expenses 1,369 1,357
-------- ---------
Total current assets 5,155 5,168
Property and equipment, at cost, net (Note 2) 55,716 55,776
Other assets 302 161
-------- ---------
Total assets $ 61,173 $ 61,105
-------- ---------
-------- ---------
LIABILITIES AND PARTNERS' CAPITAL:
Current liabilities:
Accounts payable $732 $704
Accrued compensation 609 843
Other accrued liabilities 2,787 2,907
Note payable - Boomtown, Inc. 36,290 25,695
Accrued interest payable - Boomtown, Inc. (Note 3) 322 242
Long-term debt due within one year (Note 4) 1,604 2,097
-------- ---------
Total current liabilities 42,344 32,488
Commitment and contingencies (Note 5)
Long-term debt due after one year (Note 4) 3,750 2,288
Deferred gain 213 112
Partners' capital:
General partner 743 1,301
Limited partners 14,123 24,916
-------- ---------
Total partners' capital 14,866 26,217
-------- ---------
Total liabilities and partners' capital $ 61,173 $ 61,105
-------- ---------
-------- ---------
See accompanying notes.
14
<PAGE>
LOUISIANA - I GAMING, L.P.
STATEMENTS OF OPERATIONS
(in thousands)
Years ended September 30,
---------------------------------
1994 1995 1996
--------- -------- --------
Revenues:
Gaming $12,100 $72,157 $69,674
Family entertainment center -- 789 884
Food and beverage 41 589 583
Cabaret -- 333 823
Other income 61 435 567
--------- -------- --------
12,202 74,303 72,531
Costs and expenses:
Gaming 4,122 24,759 27,127
Gaming equipment leases -- 866 1,695
Family entertainment center -- 459 562
Food and beverage 62 607 719
Cabaret -- 208 683
Other operating expenses -- -- 80
Marketing 574 3,762 4,295
Management fee-Boomtown, Inc. -- 1,068 960
General and administrative 3,355 20,887 17,292
Pre-opening expenses 5,272 -- --
Depreciation and amortization 249 2,415 2,741
--------- -------- --------
13,634 55,031 56,154
--------- -------- --------
Income (loss) from operations (1,432) 19,272 16,377
Interest and other income (expense), net (521) (4,879) (4,305)
--------- -------- --------
Net income (loss) ($1,953) $14,393 $12,072
--------- -------- --------
Net income (loss) allocated to partners:
General partner ($98) $720 $604
Limited partners (1,855) 13,673 11,468
--------- -------- --------
($1,953) $14,393 $12,072
--------- -------- --------
--------- -------- --------
See accompanying notes.
LOUISIANA - I GAMING, L.P.
15
<PAGE>
STATEMENTS OF PARTNERS' CAPITAL
Years ended September 30, 1994, 1995 and 1996
(in thousands)
Limited Partners
-------------------------
Total
General Boomtown Partners'
Partner Inc. Other Capital
------- --------- -------- ---------
Balances, September 30, 1993 $ -- $ -- $ -- $ --
Capital contributions 250 4,750 1 5,001
Net loss ($ 98) (1,855) -- (1,953)
------- --------- -------- ---------
Balances, September 30, 1994 152 2,895 1 3,048
Net income 720 12,740 933 14,393
Distributions (129) (2,252) (193) (2,574)
------- --------- -------- ---------
Balances, September 30, 1995 743 13,383 741 14,867
Net income 604 10,563 905 12,072
Distributions (46) (572) (104) (722)
------- --------- -------- ---------
Balances, September 30, 1996 $1,301 $ 23,374 $ 1,542 $ 26,217
------- --------- -------- ---------
------- --------- -------- ---------
See accompanying notes.
LOUISIANA - I GAMING, L.P.
STATEMENTS OF CASH FLOWS
16
<PAGE>
Increase (decrease) in cash and cash equivalents
(in thousands)
Years ended September 30,
-------------------------------
1994 1995 1996
--------- --------- ---------
Cash flows from operating activities:
Net income (loss) ($1,953) $14,393 $ 12,072
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 249 2,415 2,741
Loss (gain) on the sale of property
and equipment -- 144 (93)
Changes in operating assets and liabilities:
Accounts receivable, net (78) (69) 19
Inventories (467) (100) 310
Prepaid expenses (1,225) (144) 11
Other assets (85) 109 112
Accounts payable 299 433 (28)
Accrued compensation 348 261 234
Other accrued liabilities 1,251 1,422 119
Accrued interest payable-Boomtown, Inc. 132 190 (79)
--------- --------- ---------
Net cash provided by
(used in) operating activities (1,529) 19,054 15,418
--------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of property
and equipment -- 6,653 2
Increase in construction related payables 1,128 (1,128) --
Reductions of other assets 151 -- --
Payments for purchases of property
and equipment (52,641) (10,943) (1,718)
--------- --------- ---------
Net cash used in investing activities (51,362) (5,418) (1,716)
--------- --------- ---------
Cash flows from financing activities:
Advances from Boomtown, Inc. (1,400) -- --
Note payable-Boomtown, Inc. 51,917 (18,008) (11,537)
Loan costs -- (101) --
Proceeds from long-term debt -- 6,206 --
Principal payments on long-term debt -- (1,095) (1,725)
Equity investment by general partner 250 -- --
Equity investment by Boomtown, Inc. 4,750 -- --
Equity investment by limited partner 1 -- --
Partnership distributions -- (193) --
--------- --------- ---------
Net cash provided by (used in)
financing activities 55,518 (13,191) (13,262)
--------- --------- ---------
Net increase in cash and cash equivalents 2,627 445 440
Cash and cash equivalents:
Beginning of year -- 2,627 3,072
--------- --------- ---------
End of year $ 2,627 $ 3,072 $ 3,512
--------- --------- ---------
--------- --------- ---------
See accompanying notes
17
<PAGE>
LOUISIANA - I GAMING, L.P.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
BASIS OF PRESENTATION AND NATURE OF BUSINESS - Louisiana-I Gaming, L.P.
(the "Partnership" or the "Company"), a Louisiana limited partnership is a
majority owned and controlled partnership of Boomtown, Inc. ("Boomtown").
Boomtown owns an 87.5% limited partnership interest and through its
wholly-owned subsidiary, Louisiana Gaming Enterprises, Inc. (a Louisiana
corporation and the general partner of the Partnership), Boomtown owns an
additional 5% interest in the Partnership. The remaining 7.5% limited
partnership is owned by an individual (see Note 9). The Partnership was
formed on April 20, 1993 and was in the construction and development phase
and had no operating revenues or expenses until commencing gaming operations
on August 6, 1994. Under the terms of the partnership agreement, after three
years of operation, either Boomtown or the individual may exercise an option
to convert the individual's ownership interest in the Partnership into
Boomtown common stock or cash, at an amount calculated per the partnership
agreement. The partnership agreement also provides for quarterly
distributions to be made to the partners.
USE OF ESTIMATES - The accompanying financial statements have been
prepared in conformity with generally accepted accounting principles which
require the Company's management to make estimates and assumptions that
affect the amounts reported therein. Actual results could vary from such
estimates.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents consist of cash on
hand and in banks. The Partnership considers highly liquid investments with
original maturities of three months or less as cash equivalents. The
Partnership paid interest of approximately $387,000, $4,629,000 and
$3,672,000 on a note payable to Boomtown in 1994, 1995 and 1996,
respectively. Loan fees of $242,000 were excluded from proceeds of long-term
debt acquired during the year ended September 30, 1995.
FAIR VALUES OF FINANCIAL INSTRUMENTS - The carrying amounts reported in
the accompanying balance sheets for cash and cash equivalents approximate
their respective fair values. The carrying amounts of the Company's
borrowings under its debt agreements approximate their fair value. The fair
value was based on the Company's current incremental borrowing rates for
similar types of borrowing arrangements.
CONCENTRATION OF CREDIT RISK - The Partnership places its temporary cash
in an interest-bearing account with a financial institution. The account is
collateralized by securities issued by the United States Government and other
high quality credit instruments.
INVENTORIES - Inventories consist primarily of food and beverage stock
and uniforms and are stated at the lower cost (determined using the first-in,
first-out method) or market.
ADVERTISING COSTS - Advertising costs are expensed as incurred and
totaled $306,000, $1.4 million and $1.4 million in fiscal 1994, 1995 and
1996, respectively.
DEPRECIATION AND AMORTIZATION - Depreciation of property and equipment
is provided on the straight-line method over the useful lives of the
respective assets which range from three to thirty-five years.
LOUISIANA - I GAMING, L.P.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
PRE-OPENING EXPENSES - Pre-opening expenses were associated with the
acquisition, development and opening of the riverboat casino. These amounts
include items that were capitalized as incurred prior to opening and items
that are directly related to the opening of the dockside casino. Such
amounts were expensed when the Partnership commenced gaming operations on
August 6, 1994.
INCOME TAXES - No provision for income taxes has been made in the
accompanying financial statements since any liability is that of the partners
and not of the Partnership. The book basis exceeded the tax basis of the
Partnerships' assets and liabilities by approximately $220,000 and
$3,300,000, respectively at September 30, 1995 and 1996.
GAMING REVENUES AND PROMOTIONAL ALLOWANCES - In accordance with industry
practice, the Partnership recognizes as gaming revenues the net win from
gaming activities, which is the difference between gaming wins and losses.
Revenues in the accompanying statements of operations exclude the retail
value of food, beverage and other promotional allowances provided to
customers without charge. The estimated costs of providing such promotional
allowances have been classified as gaming operating expenses through
interdepartmental allocations as follows:
Years ended September 30,
---------------------------------------
1994 1995 1996
--------- ---------- ----------
Food and beverage $612,000 $2,092,000 $2,509,000
Other 7,000 1,000 1,000
--------- ---------- ----------
Total costs allocated to gaming
operating expenses $619,000 $2,093,000 $2,510,000
--------- ---------- ----------
--------- ---------- ----------
RECLASSIFICATIONS - Certain reclassification have been made to the 1994 and
1995 financial statements to conform to the 1996 presentation.
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
September 30,
--------------------------
1995 1996
--------------------------
Boat $18,925,000 $18,925,000
Buildings and improvements 28,201,000 28,299,000
Land 4,943,000 4,943,000
Equipment 3,009,000 5,390,000
Furniture and fixtures 2,388,000 2,678,000
Construction-in-progress 505,000 506,000
----------- -----------
57,971,000 60,741,000
Less accumulated depreciation 2,255,000 4,965,000
----------- -----------
$55,716,000 $55,776,000
----------- -----------
----------- -----------
The construction-in-progress at September 30, 1995 and 1996, relates
primarily to costs associated with the construction of level two of the land-
based facility.
Amortization of leased assets is included in depreciation and amortization
expense.
LOUISIANA - I GAMING, L.P.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. NOTE PAYABLE - BOOMTOWN, INC.
Note Payable - Boomtown, Inc., consists of advances to the Partnership
from Boomtown used to fund the pre-opening expenses, construction of the
land-based facility and gaming boat and to acquire furniture, fixtures and
equipment. The principal of the note is variable and is due on demand along
with the interest. However, management of Boomtown will not require payments
except to the extent of the Partnership's available cash flows. Interest is
calculated on the note at 11.5% and is based on the average monthly
outstanding balance. Payments are applied first to accrued interest and then
to principal.
Certain cash payments were made by Boomtown on behalf of the
Partnership, primarily while in the Partnership's development stage, and are
included in the accompanying statements of cash flows for the year ended
September 30, 1994.
The Partnership incurred interest costs of $2,844,000, $4,797,000 and
$3,592,000 in 1994, 1995 and 1996 on advances and notes from Boomtown, of
which $2,323,000 and $533,000 was capitalized in fiscal 1994 and 1995,
respectively.
The advances, note payable, accrued interest payable and interest
expenses to Boomtown are eliminated in the consolidated financial statements
of Boomtown.
4. LONG-TERM DEBT
Long-term debt consists of the following:
September 30,
----------------------------
1995 1996
----------------------------
13% note payable $4,336,000 $3,227,000
11.5% note payable 1,018,000 538,000
10.5% capital lease obligation -- 620,000
---------- ----------
5,354,000 4,385,000
Less amounts due in one year 1,604,000 2,097,000
---------- ----------
$3,750,000 $2,288,000
---------- ----------
---------- ----------
Principal maturities of long-term debt by fiscal year as of September
30, 1996 are $2,097,000 in 1997, $1,765,000 in 1998, and $523,000 in 1999.
The 13% note is secured by a first preferred mortgage on the boat with a
net book value of $17,296,000 as of September 30, 1996. This note is payable
in 48 monthly installments of approximately $134,000 and matures in January
1999.
LOUISIANA - I GAMING, L.P.
NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
The 11.5% note payable is secured by various furniture, fixtures and
equipment with a net book value of approximately $873,000 as of September 30,
1996. This note payable is payable in 36 monthly installments of
approximately $48,000 and matures in September 1997.
The 10.5% capital lease obligation is secured by various furniture,
fixtures and equipment with a net book value of $1,046,000 as of September
30, 1996. This note payable is payable in 30 monthly installments of
approximately $26,000 and matures in September 1998.
5. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES - The Partnership leases various billboards and operating
equipment under noncancelable operating lease arrangements with terms in excess
of one year.
SLOT MACHINE LEASE UNDER AGREEMENT - On March 29, 1995, the Partnership
sold 789 slot machines to Marquis Leasing Company, a subsidiary of First
National Bank of Commerce ("Marquis") for $5.1 million. Simultaneously with
the sale, the Partnership leased the slot machines for three years and was
granted the option to purchase the leased assets for the greater of the fair
market value at the end of the lease or the residual value as stated in the
lease agreement. This transaction resulted in a deferred gain of $327,072,
which is being amortized over the term of the lease.
FURNITURE, FIXTURES AND EQUIPMENT LEASE UNDER AGREEMENT - On November
14, 1994, the Partnership sold furniture, fixtures and equipment to PDS
Financial Corporation for $1.5 million. Simultaneously with the sale, the
Partnership leased the furniture, fixtures and equipment for three years and
was granted the option to purchase the furniture, fixtures and equipment at
the fair market value of the equipment at the end of the lease term. During
March 1996, the Company converted this lease to a capital lease obligation
whereby the residual balance on the operating lease was funded and the
remaining outstanding balance was converted into a capital lease (Note 4).
The aggregate future minimum annual rental commitments as of September
30, 1996, under operating leases having noncancelable lease terms in excess
of one year are as follows:
1997 $ 1,901,000
1998 933,000
1999 16,000
------------
$ 2,850,000
------------
------------
Rental expense during the year ended September 30, 1994, 1995 and 1996
amounted to approximately $324,000, $2,206,000 and $2,270,000, respectively.
SELF-INSURANCE - The Partnership maintains a plan of partial
self-insurance for medical and dental coverage for substantially all
full-time employees and their dependents. Claims in excess of $75,000 per
individual beginning March 1, 1995 are fully covered by insurance.
Management has established reserves considered adequate to cover estimated
future payments on claims.
LOUISIANA - I GAMING, L.P.
NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
DEBT GUARANTEES - On November 24, 1993, Boomtown completed the private
placement of $103.5 million of 11.5% First Mortgage Notes due November 2003
(the "Notes"). The Notes are secured by, among other things, a full and
unconditional guarantee by the Partnership, as defined in the indenture
relating to the Notes. The Indenture governing the Notes places certain
business, financial and operating restrictions on Boomtown and its
subsidiaries including, among other things, the incurrence of additional
indebtedness, issuance of preferred equity interests and entering into
operating leases; limitations on dividends, repurchases of capital stock of
Boomtown and redemption of subordinated debt; limitations on transactions
with affiliates; limitations on mergers, consolidations and sales of assets;
limitations on amending existing partnership and facility construction
agreements; and limitations on the use of proceeds from the issuance of the
Notes.
In addition, the Partnership is a guarantor for a promissory note, with
an outstanding principal balance of $442,000 at September 30, 1996 of Blue
Diamond Hotel & Casino, Inc., a majority owned and controlled partnership of
Boomtown.
6. 401(k) PLAN
The Company's employees are covered under the Boomtown, Inc., 401(k)
Plan (the "Plan"). Under the Plan, the Company will match 50% of employees'
contributions up to a maximum of 5% of the employees' wages. The Company
recorded approximately $4,000, $23,000 and $114,000 in expense during the
years ended September 30, 1994, 1995 and 1996, respectively, related to their
matching contributions.
7. MANAGEMENT FEE
Boomtown is responsible for managing the operations of the Company and
other of its subsidiaries (collectively the "Subsidiaries"). During 1996,
the Company charged the Subsidiaries for their pro-rata share of the costs it
incurred relative to this management function (the "Management Fee"). During
the years ended September 30, 1995 and 1996, the Company recorded Management
Fees of $1,068,000 and $960,000, respectively (none for 1994).
8. SUBSEQUENT EVENTS
MINORITY PURCHASE AGREEMENT - On November 18, 1996 the Company entered
into an agreement with Eric Skrmetta in which the Company agreed to pay
$5,673,000 in return for Skrmetta's 7 1/2% interest in the Partnership in
addition to releasing the Company from any and all claims, liabilities and
causes of action of any kind arising from or related to the Partnership
agreement. The terms set forth thereto require Boomtown to pay a down
payment of $500,000 on or before December 5, 1996 and the remaining
$5,173,000 to be paid not later than August 10, 1997. Additionally, the
$5,173,000 shall be reduced by a discount for the time that the amount or any
portion thereof is paid in full prior to August 10, 1997.
For a full discussion of the terms of the minority purchase agreement as
described above see exhibit number 10.3(4) attached in the schedule of
exhibits of this filing.
LOUISIANA - I GAMING, L.P.
NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
8. SUBSEQUENT EVENTS (CONTINUED)
BOOMTOWN'S PROPOSED MERGER WITH HOLLYWOOD PARK, INC. ("HOLLYWOOD PARK")
- - On April 23, 1996, Boomtown entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Hollywood Park relating to the strategic
combination of Hollywood Park and Boomtown. Pursuant to the Merger Agreement
and subject to the terms and conditions set forth therein, Boomtown would
become a wholly-owned subsidiary of Hollywood Park (the "Merger"). Pursuant
to the Merger Agreement, at the effective date of the Merger (the "Effective
Date"), each issued and outstanding share of Boomtown Common Stock will be
converted into the right to receive 0.625 (the "Exchange Ratio"), of a share
of Hollywood Park Common Stock. The Merger is intended to be structured as a
tax-free reorganization. The shareholders of Boomtown and Hollywood Park
have approved the Merger. To date, the Merger has only been approved by
Mississippi gaming authorities. The Merger is subject to the approval of
other relevant gaming jurisdictions including Louisiana.
Certain additional matters relating to the signing of the Merger
Agreement and a complete description of the Merger Agreement are more fully
described in the Company's Form 8-K dated April 23, 1996, including the
Agreement and Plan of Merger filed as exhibit 2.1 thereto, and filed with the
Securities and Exchange Commission on May 3, 1996.
On November 5, 1996, referenda on the continuation of riverboat
gaming were held on a parish-by parish basis in each parish where riverboat
gaming operations were permitted. Voters in all parishes in which riverboat
gaming is currently conducted elected to continue to permit operations. In
the Boomtown Belle's parish the continuation of riverboats passed
overwhelmingly with a 68% approval rate.
23
<PAGE>
LOUISIANA - I GAMING, L.P.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
Additions Deductions
Balance at Charged to Write-offs,
beginning of Costs and net of Balance at
Description Period Expenses Collections End of Period
- ---------------------------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C>
Year ended September 30, 1996:
Deducted from asset accounts:
Allowance for doubtful accounts: $ 6 $ 32 $ 33 $ 5
Year ended September 30, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts: $ 4 $ 42 $ 40 $ 6
Year ended September 30, 1994:
Deducted from asset accounts:
Allowance from doubtful accounts $ -- $ 4 $ -- $ 4
</TABLE>
24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized on this 23rd day
of December, 1996.
Louisiana-I Gaming, L.P.
By: Louisiana Gaming Enterprises, Inc.
its General Partner
/s/ Timothy J. Parrott
-----------------------------------------------
Timothy J. Parrott, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Timothy J. Parrott and Phil Bryan and
each of them acting individually, as such person's true and lawful attorneys-in-
fact and agents, each with power of substitution, for such person, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Report on Form 10-K, and to file with same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on Form 10-K has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
- --------------------------------------------------------------------------------
/s/ Timothy J. Parrott Chairman of the Board and Chief December 27, 1996
- ---------------------- Officer (Principal Executive Officer)
Timothy J. Parrott
/s/ Phil E. Bryan President and Director December 27, 1996
- ----------------------
Phil E. Bryan
/s/ Jon L. Whipple Vice President of Finance (Principal December 27, 1996
- ---------------------- Financial and Accounting Officer)
Jon L. Whipple
/s/ Robert F. List Director December 27, 1996
- ----------------------
Robert F. List
25
<PAGE>
SCHEDULE OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
10.1(1) Letter of Intent dated as of March 26, 1993 among Boomtown, Inc., The
Skrmetta Group, Inc. and Skrmetta Machinery Corporation, relating
to the property in Harvey, Louisiana.
10.2(2) Letter Agreement dated April 16, 1993 among Boomtown, Inc.,
Raphael Skrmetta, The Skrmetta Group and Skrmetta Machinery
Corporation.
10.3(3) Purchase Agreement dated as of November 3, 1993 among Boomtown, Inc.,
Boomtown Hotel & Casino, Inc., Blue Diamond Hotel & Casino, Inc.,
Louisiana-I Gaming, L.P., Louisiana Gaming Enterprises, Inc.,
Mississippi-I Gaming, L.P., Bayview Yacht Club, Inc., Oppenheimer
& Co., Inc. and Sutro & Co. Incorporated.
10.3(4) Minority Purchase Agreement dated November 18, 1996 among Louisiana-I
Gaming, Inc., Boomtown, Inc. and Eric Skrmetta.
_______________________
(1) Incorporated by reference to the exhibit filed with Boomtown's Current
Report on Form 8-K filed with the SEC on April 1, 1993.
(2) Incorporated by reference to the exhibit filed with Boomtown's Registration
Statement on Form S-1 (File No. 33-61198), effective May 24, 1993.
(3) Incorporated by reference to the exhibit filed with Boomtown's Form 10-K
for the fiscal year ended September 30, 1993.
26
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 3,512,000
<SECURITIES> 0
<RECEIVABLES> 94,000
<ALLOWANCES> 5,000
<INVENTORY> 205,000
<CURRENT-ASSETS> 5,168,000
<PP&E> 55,776,000
<DEPRECIATION> 4,965,000
<TOTAL-ASSETS> 61,105,000
<CURRENT-LIABILITIES> 32,488,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 26,217,000
<TOTAL-LIABILITY-AND-EQUITY> 61,105,000
<SALES> 583,000
<TOTAL-REVENUES> 72,531,000
<CGS> 719,000
<TOTAL-COSTS> 30,866,000
<OTHER-EXPENSES> 25,288,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,305,000
<INCOME-PRETAX> 12,072,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,072,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,072,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
