<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number: 1-13794
TRUMP HOTELS & CASINO RESORTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3818402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Boardwalk
Atlantic City, New Jersey 08401
Address of principal executive offices) (Zip Code)
(609) 441-6060
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Commission file number: 33-90786
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3818407
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 441-6060
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Commission file number: 33-90786
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3818405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 441-6060
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No ___
---
The number of outstanding shares of Common Stock, par value $.01 per share,
of Trump Hotels & Casino Resorts, Inc. as of August 13, 1999 was 22,195,256.
The number of outstanding shares of Class B Common Stock, par value $.01
per share, of Trump Hotels & Casino Resorts, Inc. as of August 13, 1999 was
1,000.
The number of outstanding shares of Common Stock, par value $.01 per share,
of Trump Hotels & Casino Resorts Funding, Inc. as of August 13, 1999 was 100.
================================================================================
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.,
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
AND
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I--FINANCIAL INFORMATION
ITEM 1--Financial Statements Page No.
--------
<S> <C>
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts, Inc
as of December 31, 1998 and June 30, 1999 (unaudited).................................................... 1
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts, Inc.
for the Three and Six Months Ended June 30, 1998 and 1999 (unaudited).................................... 2
Condensed Consolidated Statement of Stockholders' Equity of Trump Hotels & Casino Resorts, Inc.
for the Six Months Ended June 30, 1999 (unaudited)...................................................... 3
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts, Inc.
for the Six Months Ended June 30, 1998 and 1999 (unaudited).............................................. 4
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts Holdings, L.P.
as of December 31, 1998 and June 30, 1999 (unaudited).................................................... 5
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts Holdings, L.P.
for the Three and Six Months Ended June 30, 1998 and 1999 (unaudited).................................... 6
Condensed Consolidated Statement of Partners' Capital of Trump Hotels & Casino Resorts Holdings, L.P.
for the Six Months Ended June 30, 1999 (unaudited)....................................................... 7
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts Holdings, L.P.
for the Six Months Ended June 30, 1998 and 1999 (unaudited)............................................. 8
Notes to Condensed Consolidated Financial Statements of Trump Hotels & Casino Resorts,
Inc., Trump Hotels & Casino Resorts Holdings, L.P. and Trump Hotels & Casino Resorts Funding, Inc.
(unaudited).............................................................................................. 9
ITEM 2 -- Management's Discussion and Analysis of Financial Condition and Result of Operations.................. 11
ITEM 3 -- Quantitative and Qualitative Disclosures About Market Risk........................................... 14
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings...................................................................................... 14
ITEM 2 -- Changes in Securities and Use of Proceeds.............................................................. 15
ITEM 3 -- Defaults Upon Senior Securities........................................................................ 15
ITEM 4 -- Submission of Matters to a Vote of Security Holders.................................................... 15
ITEM 5 -- Other Information...................................................................................... 16
ITEM 6 -- Exhibits and Reports on Form 8-K....................................................................... 16
SIGNATURES
SIGNATURE -- Trump Hotels & Casino Resorts, Inc.................................................................. 17
SIGNATURE -- Trump Hotels & Casino Resorts Holdings, L.P......................................................... 18
SIGNATURE -- Trump Hotels & Casino Resorts Funding, Inc.......................................................... 19
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
December 31, June 30,
1998 1999
----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents................................. $ 114,757 $ 105,089
Receivables, net.......................................... 70,951 65,003
Inventories............................................... 12,804 13,047
Due from affiliates, net.................................. 12,774 25,648
Prepaid expenses and other current assets................. 18,679 16,355
---------- ----------
Total Current Assets......................................... 229,965 225,142
INVESTMENT IN BUFFINGTON HARBOR, L.L.C......................... 40,765 39,420
INVESTMENT IN TRUMP'S CASTLE PIK NOTES......................... 64,137 69,991
PROPERTY AND EQUIPMENT, NET.................................... 1,977,609 1,952,263
CASH RESTRICTED FOR FUTURE CONSTRUCTION........................ 2,523 -
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET..................... 37,978 34,333
DUE FROM AFFILIATES............................................ 15,766 3,916
OTHER ASSETS................................................... 59,721 65,625
---------- ----------
Total Assets................................................... $2,428,464 $2,390,690
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 10,504 $ 11,789
Accounts payable and accrued expenses..................... 118,597 123,809
Accrued interest payable.................................. 30,379 30,308
---------- ---------
Total Current Liabilities.................................. 159,480 165,906
LONG-TERM DEBT, net of current maturities...................... 1,838,492 1,842,615
OTHER LONG-TERM LIABILITIES.................................... 18,044 19,885
---------- ----------
Total Liabilities.............................................. 2,016,016 2,028,406
---------- ----------
MINORITY INTEREST.............................................. 125,540 107,195
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value, 75,000,000 shares authorized,
24,206,756 issued and outstanding........................... 242 242
Class B Common Stock, $.01 par value, 1,000 shares
authorized, issued and outstanding.......................... - -
Additional Paid in Capital................................... 455,645 455,645
Accumulated Deficit.......................................... (149,444) (181,263)
Less treasury stock, 2,011,500 shares of THCR Common Stock,
at cost..................................................... (19,535) (19,535)
---------- ----------
Total Stockholders' Equity..................................... 286,908 255,089
---------- ----------
Total Liabilities and Stockholders' Equity..................... $2,428,464 $2,390,690
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(unaudited)
(dollars in thousands, except share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Gaming........................................ $ 315,440 $ 330,438 $ 607,773 $ 622,221
Rooms......................................... 23,613 24,121 44,089 43,693
Food and Beverage............................. 35,845 36,858 69,516 69,094
Other......................................... 10,751 11,291 20,424 20,540
--------- --------- --------- ---------
Gross Revenues................................ 385,649 402,708 741,802 755,548
Less -- Promotional allowances................ 41,333 41,256 80,893 78,386
--------- --------- --------- ---------
Net Revenues.................................. 344,316 361,452 660,909 677,162
--------- --------- --------- ---------
COSTS AND EXPENSES:
Gaming........................................ 200,923 201,366 387,054 387,287
Rooms......................................... 8,161 9,444 15,269 17,247
Food and Beverage............................. 13,446 14,062 24,210 25,274
General and Administrative.................... 63,944 71,049 129,899 138,540
Depreciation and Amortization................. 20,793 21,209 41,715 42,790
--------- --------- --------- ---------
307,267 317,130 598,147 611,138
--------- --------- --------- ---------
Income from operations........................ 37,049 44,322 62,762 66,024
--------- --------- --------- ---------
NON-OPERATING INCOME AND (EXPENSES):
Interest income............................... 2,038 1,669 5,147 3,311
Interest expense.............................. (55,667) (55,376) (111,287) (110,907)
Other non-operating expense................... 11 (170) (286) (1,460)
--------- --------- --------- ---------
(53,618) (53,877) (106,426) (109,056)
--------- --------- --------- ---------
Loss before equity in loss of Buffington
Harbor, L.L.C., minority interest, and
cumulative effect of change in accounting
principle..................................... (16,569) (9,555) (43,664) (43,032)
Equity in loss of Buffington Harbor, L.L.C..... (742) (746) (1,483) (1,512)
--------- --------- --------- ---------
Loss before minority interest and cumulative
effect of change in accounting principle..... (17,311) (10,301) (45,147) (44,544)
Minority Interest.............................. 6,331 3,767 16,497 16,290
--------- --------- --------- ---------
Loss before cumulative effect of change in
accounting principle.......................... (10,980) (6,534) (28,650) (28,254)
Cumulative effect of change in accounting
principle ($5,620), net of minority interest
($2,055)...................................... - - - (3,565)
--------- --------- --------- ----------
NET LOSS....................................... $ (10,980) $ (6,534) $ (28,650) $ (31,819)
========= ========= ========= ==========
Basic and diluted loss per share before
cumulative effect of change in accounting
principle..................................... $ (.49) $ (.29) $ (1.29) $ (1.27)
Cumulative effect of change in accounting
principle..................................... - - - (.16)
--------- --------- --------- ----------
Basic and diluted loss per share............... $ (.49) $ (.29) $ (1.29) $ (1.43)
========= ========= ========= ==========
Average number of shares outstanding........... 22,195,256 22,195,256 22,212,107 22,195,256
========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Number of Shares
----------------
Common Additional
Class B Stock Paid in Accumulated Treasury
Common Common Amount Capital Deficit Stock Total
------ ------- ------ --------- ----------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998.. 24,206,756 1,000 $242 $455,645 $(149,444) $(19,535) $286,908
Net Loss.................... ( 31,819) (31,819)
---------- ------- ------ --------- --------- -------- --------
Balance, June 30, 1999...... 24,206,756 1,000 $242 $455,645 $(181,263) $(19,535) $255,089
========== ======= ====== ========= ========= ======== ========
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
financial statement.
3
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss................................................................................. $(28,650) $(31,819)
Adjustments to reconcile net loss to net cash flows from operating activities:
Cumulative effect of change in accounting principle.................................... - 3,565
Issuance of debt in exchange for accrued interest...................................... 5,612 6,418
Interest income - Castle PIK Notes..................................................... (5,119) (5,853)
Equity in loss of Buffington Harbor, L.L.C............................................. 1,483 1,512
Depreciation and amortization.......................................................... 41,715 42,790
Minority interest in net loss.......................................................... (16,497) (16,290)
Accretion of discounts on mortgage notes............................................... 2,198 2,460
Amortization of deferred loan costs.................................................... 4,176 3,646
Provision for losses on receivables.................................................... 6,057 6,270
Valuation allowance of CRDA investments and amortization of Indiana gaming costs....... 4,142 4,515
Gain on disposition of property........................................................ - (335)
Increase in receivables................................................................ (9,892) (321)
Decrease (increase) in inventories..................................................... 806 (244)
Increase in other current assets....................................................... (5,047) (2,706)
Decrease (increase) in due from affiliates............................................. 11,610 (1,025)
Increase in other assets............................................................... (3,094) (2,751)
Increase in accounts payable and accrued expenses...................................... 7,072 4,434
Increase (decrease) in accrued interest payable........................................ 1,649 (71)
(Decrease) increase in other long-term liabilities..................................... (2,904) 3
-------- --------
Net cash flows provided by operating activities........................................ 15,317 14,198
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net.................................................. (13,709) (12,681)
Proceeds from disposition of property.................................................... - 1,087
Investment in Buffington Harbor, L.L.C................................................... 194 (167)
CRDA Investments......................................................................... (6,603) (6,737)
Restricted cash.......................................................................... 2,977 2,523
-------- --------
Net cash flows used in investing activities............................................ (17,141) (15,975)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock............................................................... (2,259) -
Issuance of long-term debt............................................................... 68,047 -
Payment of long-term debt................................................................ (68,799) (7,891)
Cost of issuing debt..................................................................... (1,589) -
-------- --------
Net cash flows used in financing activities............................................ (4,600) (7,891)
-------- --------
Net decrease in cash and cash equivalents.............................................. (6,424) (9,668)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.......................................... 140,328 114,757
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................................................ $133,904 $105,089
======== ========
CASH INTEREST PAID........................................................................ $103,437 $104,827
======== ========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations........................ $ 1,673 $ 4,421
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
------------ -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................ $ 114,753 $ 105,085
Receivables, net..................................... 70,951 65,003
Inventories.......................................... 12,804 13,047
Due from affiliates, net............................. 12,774 25,648
Prepaid expenses and other current assets............ 18,679 16,355
---------- ----------
Total Current Assets............................. 229,961 225,138
INVESTMENT IN BUFFINGTON HARBOR, L.L.C................. 40,765 39,420
INVESTMENT IN TRUMP'S CASTLE PIK NOTES................. 64,137 69,991
PROPERTY AND EQUIPMENT, NET............................ 1,977,609 1,952,263
CASH RESTRICTED FOR FUTURE CONSTRUCTION................ 2,523 -
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET............. 37,978 34,333
DUE FROM AFFILIATES.................................... 15,766 3,916
OTHER ASSETS........................................... 59,721 65,625
---------- ----------
Total Assets........................................... $2,428,460 $2,390,686
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt................. $ 10,504 $ 11,789
Accounts payable and accrued expenses................ 118,597 123,809
Accrued interest payable............................. 30,379 30,308
---------- ----------
Total Current Liabilities........................ 159,480 165,906
LONG-TERM DEBT, net of current maturities.............. 1,838,492 1,842,615
OTHER LONG-TERM LIABILITIES............................ 18,044 19,885
---------- ----------
Total Liabilities...................................... 2,016,016 2,028,406
---------- ----------
PARTNERS' CAPITAL:
Partners' capital...................................... 652,503 652,503
Accumulated deficit.................................... (220,524) (270,688)
Less cost of stock of THCR............................. (19,535) (19,535)
---------- ----------
Total Partners' Capital................................ 412,444 362,280
---------- ----------
Total Liabilities and Partners' Capital................ $2,428,460 $2,390,686
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
TRUMP HOTELS & CASINO HOLDINGS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
1998 1999 1998 1999
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Gaming..................................... $315,440 $330,438 $ 607,773 $ 622,221
Rooms...................................... 23,613 24,121 44,089 43,693
Food and Beverage.......................... 35,845 36,858 69,516 69,094
Other...................................... 10,751 11,291 20,424 20,540
-------- -------- --------- ---------
Gross Revenues............................. 385,649 402,708 741,802 755,548
Less -- Promotional allowances............. 41,333 41,256 80,893 78,386
-------- -------- --------- ---------
Net Revenues............................... 344,316 361,452 660,909 677,162
-------- -------- --------- ---------
COSTS AND EXPENSES:
Gaming..................................... 200,923 201,366 387,054 387,287
Rooms...................................... 8,161 9,444 15,269 17,247
Food and Beverage.......................... 13,446 14,062 24,210 25,274
General and Administrative................. 63,944 71,049 129,899 138,540
Depreciation and Amortization.............. 20,793 21,209 41,715 42,790
-------- -------- --------- ---------
307,267 317,130 598,147 611,138
-------- -------- --------- ---------
Income from operations..................... 37,049 44,322 62,762 66,024
-------- -------- --------- ---------
NON-OPERATING INCOME AND (EXPENSES):
Interest income............................ 2,038 1,669 5,147 3,311
Interest expense........................... (55,667) (55,376) (111,287) (110,907)
Other non-operating expense................ 11 (170) (286) (1,460)
-------- -------- --------- ---------
(53,618) (53,877) (106,426) (109,056)
-------- -------- --------- ---------
Loss before equity in loss of Buffington
Harbor, L.L.C., and cumulative effect of
change in accounting principle............. (16,569) (9,555) (43,664) (43,032)
Equity in loss of Buffington Harbor, L.L.C... (742) (746) (1,483) (1,512)
-------- -------- --------- ---------
Loss before cumulative effect of change in
accounting principle....................... (17,311) (10,301) (45,147) (44,544)
Cumulative effect of change in accounting
principle.................................. - - - (5,620)
-------- -------- --------- ---------
NET LOSS..................................... $(17,311) $(10,301) $ (45,147) $ (50,164)
======== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Partners' Accumulated THCR
Capital Deficit Common Stock Total
------- ------- ------------ -----
<S> <C> <C> <C> <C>
Balance, December 31, 1998 $652,503 $(220,524) $(19,535) $412,444
Net Loss (50,164) (50,164)
-------- --------- -------- --------
Balance, June 30, 1999 $652,503 $(270,688) $(19,535) $362,280
======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
financial statement.
7
<PAGE>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE SIX MONTHS ENDED JUNE 30, 1998 AND 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
1998 1999
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss........................................................................ $(45,147) $(50,164)
Adjustments to reconcile net loss to net cash flows from operating activities:
Cumulative effect of change in accounting principle........................... - 5,620
Issuance of debt in exchange for accrued interest............................. 5,612 6,418
Interest income - Castle PIK Notes............................................ (5,119) (5,853)
Equity in loss of Buffington Harbor, L.L.C.................................... 1,483 1,512
Depreciation and amortization................................................. 41,715 42,790
Accretion of discounts on mortgage notes...................................... 2,198 2,460
Amortization of deferred loan costs........................................... 4,176 3,646
Provision for losses on receivables........................................... 6,057 6,270
Valuation allowance of CRDA investments and amortization of Indiana
gaming costs............................................................... 4,142 4,515
Gain on disposition of property............................................... - (335)
Increase in receivables....................................................... (9,892) (321)
Decrease (increase) in inventories............................................ 806 (244)
Increase in other current assets.............................................. (5,047) (2,706)
Decrease (increase) in due from affiliates.................................... 11,610 (1,025)
Increase in other assets...................................................... (3,094) (2,751)
Increase in accounts payable and accrued expenses............................. 7,072 4,434
Increase (decrease) in accrued interest payable............................... 1,649 (71)
(Decrease) increase in other long-term liabilities............................ (2,904) 3
-------- --------
Net cash flows provided by operating activities.............................. 15,317 14,198
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net......................................... (13,709) (12,681)
Proceeds from disposition of property........................................... - 1,087
Investment in Buffington Harbor, L.L.C.......................................... 194 (167)
CRDA Investments................................................................ (6,603) (6,737)
Restricted cash................................................................. 2,977 2,523
-------- --------
Net cash flows used in investing activities................................... (17,141) (15,975)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock...................................................... (2,259) -
Issuance of long-term debt...................................................... 68,047 -
Payment of long-term debt....................................................... (68,799) (7,891)
Cost of issuing debt............................................................ (1,589) -
-------- --------
Net cash flows used in financing activities................................... (4,600) (7,891)
-------- --------
Net decrease in cash and cash equivalents..................................... (6,424) (9,668)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.................................. 140,324 114,753
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........................................ $133,900 $105,085
======== ========
CASH INTEREST PAID................................................................ $103,437 $104,827
======== ========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations................ $ 1,673 $ 4,421
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
8
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.,
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
AND
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) Organization And Operations
The accompanying condensed consolidated financial statements include those of
Trump Hotels & Casino Resorts, Inc. ("THCR"), a Delaware corporation, and Trump
Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings"), a Delaware limited
partnership, and its wholly owned subsidiaries. THCR Holdings is currently owned
approximately 63.4% by THCR, as both a general and limited partner, and
approximately 36.6% by Donald J. Trump ("Trump"), as a limited partner. Trump's
limited partnership interest in THCR Holdings represents his economic interests
in the assets and operations of THCR Holdings. Such limited partnership interest
is convertible at Trump's option into 13,918,723 shares of THCR's common stock
(the "THCR Common Stock") (subject to certain adjustments), representing
approximately 38.5% of the outstanding shares of THCR Common Stock. Accordingly,
the accompanying condensed consolidated financial statements include those of
(i) THCR and its 63.4% owned subsidiary, THCR Holdings, and (ii) THCR Holdings
and its wholly owned subsidiaries.
All significant intercompany balances and transactions have been
eliminated in the accompanying condensed consolidated financial statements.
The accompanying condensed consolidated financial statements have been
prepared without audit. In the opinion of management, all adjustments,
consisting of only normal recurring adjustments necessary to present fairly the
financial position, the results of operations and cash flows for the periods
presented, have been made.
The accompanying condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Accordingly, certain information and note disclosures
normally included in financial statements prepared in conformity with generally
accepted accounting principles have been condensed or omitted.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the annual report on Form 10-K for the year ended December 31, 1998
filed with the SEC.
The casino industry in Atlantic City is seasonal in nature; accordingly,
results of operations for the three and six month periods ended June 30, 1999
are not necessarily indicative of the operating results for a full year.
THCR and THCR Holdings commenced operations on June 12, 1995. THCR, THCR
Holdings and Trump Hotels & Casino Resorts Funding, Inc. ("THCR Funding") have
no operations and their ability to service their debt is dependent on the
successful operations of its wholly owned subsidiaries: Trump Atlantic City
Associates ("Trump AC"), which owns Trump Taj Mahal Associates ("Taj
Associates") and Trump Plaza Associates ("Plaza Associates"); Trump Indiana,
Inc. ("Trump Indiana") and Trump's Castle Associates, L.P. ("Castle
Associates"), which operates the Trump Marina Hotel Casino ("Trump Marina").
THCR, through THCR Holdings and its subsidiaries, is the exclusive vehicle
through which Trump engages in new gaming activities in emerging or established
gaming jurisdictions.
Basic and Diluted Loss Per Share
Basic loss per share is based on the weighted average number of shares of
THCR Common Stock outstanding. Diluted earnings per share are the same as basic
earnings per share as common stock equivalents have not been included as they
would be anti-dilutive. The shares of THCR's Class B Common Stock owned by Trump
have no economic interest and therefore are not considered in the calculation of
weighted average shares outstanding.
Reclassifications
Certain reclassifications have been made to prior year financial statements
to conform to the current year presentation.
9
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.,
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
AND
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(2) Financial Information
Financial information relating to THCR Funding is as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Total Assets (including THCR Holdings' 15 1/2% Senior Secured
Notes due 2005 ("the Senior Notes") receivable of
$145,000,000 and accrued interest at December 31,
1998 and June 30, 1999)................................. $145,936,000 $145,936,000
============ ============
Total Liabilities and Capital (including $145,000,000 of
Senior Notes and accrued interest payable)............... $145,936,000 $146,936,000
============ ============
Six Months Ended June 30,
1998 1999
---- ----
Interest Income from THCR Holdings............................. $ 11,238,000 $ 11,238,000
Interest Expense............................................... $ 11,238,000 $ 11,238,000
------------ ------------
Net Income..................................................... $ - $ -
============ ============
</TABLE>
(3) Other Assets
Plaza Associates is appealing a real estate tax assessment by the City of
Atlantic City. Included in other assets is $7,264,000 which Plaza Associates
estimates will be recoverable on the settlement of the appeal.
(4) Change In Accounting Policy
On April 9, 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-5 "Reporting on the Costs of
Start-Up Activities". The new standard amends previous guidance from the AICPA
that permitted capitalization of start-up costs in certain industries and
requires that all nongovernmental entities expense the costs of start-up
activities as those costs are incurred. Under the SOP, the term "start-up" has
been broadly defined to include pre-operating, pre-opening and organization
activities. Companies must adopt the new standard in fiscal years beginning
after December 15, 1998. At adoption, a company must record a cumulative effect
of a change in accounting principle to write off any unamortized start-up costs
that existed as of the beginning of the fiscal year in which the SOP is adopted
and an operating expense for those costs which were incurred since the beginning
of the fiscal year and adoption of the SOP.
THCR adopted the new standard in the first quarter of 1999. Had THCR
adopted the new standard as of June 30, 1998, the net loss of $28,650,000 for
the six months ended June 30, 1998 would have increased by $663,000 for the
effect of the write-off of first and second quarter capitalized costs. The
corresponding earnings per share effect would increase the net loss per share as
reported of $1.29 by $.03 for the write-off of first and second quarter
capitalized costs to an adjusted loss per share of $1.32 for the six months
ended June 30, 1998.
(5) Subsequent Event
On July 8, 1999, THCR announced its intention to close Trump World's Fair
on or after October 1, 1999. Trump World's Fair currently operates under Plaza
Associates' gaming license. THCR has not yet determined the estimated cost of
closing Trump World's Fair.
10
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.,
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
AND
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Capital Resources And Liquidity
Cash flows from operating activities are THCR's principal source of
liquidity. THCR expects to have sufficient liquidity to meet its obligations
and intends to reduce debt by buying back bonds in the open market, when
permissible. Cash flow is managed based upon the seasonality of the operations.
Any excess cash flow achieved from operations during peak periods is utilized to
subsidize non-peak periods where necessary.
The indenture governing the Senior Notes (the "Senior Note Indenture") as
well as indentures of THCR Holdings' subsidiaries restrict the ability of THCR
Holdings and its subsidiaries to make distributions to partners or pay
dividends, as the case may be, unless certain financial ratios are achieved.
Further, THCR's future operating results are conditional and could fluctuate,
given the rapidly changing competitive environment.
In addition, the ability of Plaza Associates, Taj Associates and Castle
Associates to make payments of dividends or distributions to THCR Holdings may
be restricted by the New Jersey Casino Control Commission ("CCC"). Similarly,
the ability of Trump Indiana to make payments of dividends or distributions to
THCR Holdings may be restricted by the Indiana Gaming Commission.
Capital expenditures for THCR were $13,709,000 and $12,681,000 for the six
months ended June 30, 1998 and 1999, respectively.
Year 2000
THCR has assessed the Year 2000 issue and has begun implementing a plan to
ensure its systems are Year 2000 compliant. Analysis has been made of THCR's
various customer support and internal administration systems and appropriate
modifications have been made or are underway. Testing the modifications is
expected to be completed during 1999. THCR is approximately 95% complete in
its modifications.
THCR believes that the issues of concern are predominantly software related
as opposed to hardware related. Further, THCR relies upon third party suppliers
for support of property, plant and equipment, such as communications equipment,
elevators and fire safety systems. Contact has been made with all significant
system suppliers and THCR is at various stages of assessment, negotiation and
implementation. When necessary, contracts have been issued to update these
systems so as to ensure Year 2000 compliance. The cost of addressing the Year
2000 issue is not expected to be material as modifications are being made with
existing systems personnel and no significant expenditures for new hardware or
software are expected. Any additional costs will be funded out of operations.
If THCR did not assess the Year 2000 issue and provide for its compliance,
it would be forced to convert to manual systems to carry on its business. Since
THCR expects to be fully Year 2000 compliant, it does not feel that a
contingency plan is necessary at this time. However, THCR will continually
assess the situation and evaluate whether a contingency plan is necessary as the
millennium approaches.
This Year 2000 disclosure constitutes Year 2000 readiness disclosure within
the meaning of the Year 2000 Information and Readiness Disclosure Act.
11
<PAGE>
Results of Operations: Operating Revenues and Expenses
All business activities of THCR and THCR Holdings are conducted by Plaza
Associates, Taj Associates, Trump Marina and Trump Indiana.
Comparison of Three-Month Periods Ended June 30, 1998 and 1999. The
following tables include selected data of Plaza Associates, Taj Associates,
Trump Indiana and Trump Marina.
<TABLE>
<CAPTION>
Three Months Ended June 30, 1998
---------------------------------------------------------------------
Plaza Taj Trump Trump THCR
Associates Associates Indiana Marina Consolidated
----------- ----------- ---------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Table Game Revenues................ $ 23.5 $ 47.6 $ 8.8 $ 15.2 $ 95.1
Table Game Drop.................... $ 156.2 $ 299.9 $ 55.8 $ 100.8 $ 612.7
Table Win Percentage............... 15.0% 15.9% 15.7% 15.0% 15.5%
Number of Table Games.............. 111 153 59 91 414
Slot Revenues...................... $ 69.5 $ 73.7 $ 26.5 45.6 $ 215.2
Slot Handle........................ $ 856.7 $ 899.0 $ 424.0 $ 561.7 $ 2,741.4
Slot Win Percentage................ 8.1% 8.2% 6.3% 8.1% 7.9%
Number of Slot Machines............ 4,092 4,130 1,350 2,163 11,735
Other Gaming Revenues.............. - $ 4.6 - $ 0.5 $ 5.1
Total Gaming Revenues.............. $ 93.0 $ 125.9 $ 35.3 $ 61.3 $ 315.4
Three Months Ended June 30, 1999
---------------------------------------------------------------------
Plaza Taj Trump Trump THCR
Associates Associates Indiana Marina Consolidated
---------- ----------- ---------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Table Game Revenues................ $ 23.2 $ 44.8 $ 7.9 $ 19.6 $ 95.5
Incr (Decr) over prior period...... $ (0.3) $ (2.8) $ (0.9) $ 4.4 $ 0.4
Table Game Drop.................... $ 153.9 $ 269.7 $ 46.8 $ 126.0 $ 596.4
Incr (Decr) over prior period...... $ (2.3) $ (30.2) $ (9.0) $ 25.2 $ (16.3)
Table Win Percentage............... 15.1% 16.6% 17.0% 15.5% 16.0%
Increase over prior period......... 0.1pts. 0.7pts. 1.3pts. 0.5pts. 0.5pts.
Number of Table Games.............. 100 149 52 85 386
Decrease over prior period......... (11) (4) (7) (6) (28)
Slot Revenues...................... $ 70.7 $ 81.6 $ 27.6 $ 48.8 $ 228.6
Increase over prior period......... $ 1.2 $ 7.9 $ 1.1 $ 3.2 $ 13.4
Slot Handle........................ $ 884.8 $ 1,012.8 $ 418.1 $ 626.0 $ 2,941.7
Incr (Decr) over prior period...... $ 28.1 $ 113.8 $ (5.9) $ 64.3 $ 200.3
Slot Win Percentage................ 8.0% 8.1% 6.6% 7.8% 7.8%
Incr (Decr) over prior period...... (0.1)pts. (0.1)pts. 0.3pts. (0.3)pts. (0.1)pts.
Number of Slot Machines............ 4,223 4,240 1,310 2,133 11,906
Incr (Decr) over prior period...... 131 110 (40) (30) 171
Other Gaming Revenues.............. - $ 5.5 - $ 0.8 $ 6.3
Increase over prior period......... - $ 0.9 - $ 0.3 $ 1.2
Total Gaming Revenues.............. $ 93.9 $ 131.9 $ 35.5 $ 69.2 $ 330.4
Increase Over Prior Period......... $ 0.9 $ 6.0 $ 0.2 $ 7.9 $ 15.0
</TABLE>
Gaming revenues are the primary source of THCR's revenues. The year over year
increase in gaming revenues was due primarily to an increase in slot revenues,
partially offset by a decrease in table game revenues due to a decline in high-
end international table game players due to Asian economic conditions. Table
games revenues represent the amount retained by THCR from amounts wagered at
table games. The table win percentage tends to be fairly constant over the long
term, but may vary significantly in the short term, due to large wagers by "high
rollers". The Atlantic City industry table win percentages were 14.9% and 15.4%
for the quarters ended June 30, 1998 and 1999, respectively.
General and administrative expenses were $71,049,000 for the three months
ended June 30, 1999, an increase of $7,105,000 or 11.1% from $63,944,000 for the
comparable period in 1998. This increase is primarily the result of higher
entertainment and insurance costs.
12
<PAGE>
Comparison of Six-Month Periods Ended June 30, 1998 and 1999. The following
tables include selected data of Plaza Associates, Taj Associates, Trump Indiana
and Trump Marina.
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998
--------------------------------
Plaza Taj Trump Trump THCR
Associates Associates Indiana Marina Consolidated
---------- ----------- --------- --------- ------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Table Game Revenues............. $ 48.4 $ 89.2 $ 17.2 $ 32.8 $ 187.6
Table Game Drop................. $ 307.8 $ 574.6 $ 107.0 $ 212.6 $ 1,202.0
Table Win Percentage............ 15.7% 15.5% 16.1% 15.4% 15.6%
Number of Table Games........... 114 154 59 93 420
Slot Revenues................... $ 131.9 $ 142.0 $ 45.9 $ 90.4 $ 410.2
Slot Handle..................... $1,633.0 $1,731.0 $ 728.8 $1,113.6 $ 5,206.4
Slot Win Percentage............. 8.1% 8.2% 6.3% 8.1% 7.9%
Number of Slot Machines......... 4,084 4,137 1,356 2,159 11,736
Other Gaming Revenues........... - $ 9.2 - $ 0.8 $ 10.0
Total Gaming Revenues........... $ 180.3 $ 240.4 $ 63.1 $ 124.0 $ 607.8
Six Months Ended June 30, 1999
--------------------------------
Plaza Taj Trump Trump THCR
Associates Associates Indiana Marina Consolidated
---------- ---------- --------- --------- ------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Table Game Revenues............. $ 44.8 $ 83.6 $ 16.4 $ 35.0 $ 179.8
Incr (Decr) over prior period... $ (3.6) $ (5.6) $ (0.8) $ 2.2 $ (7.8)
Table Game Drop................. $ 293.9 $ 504.2 $ 98.2 $ 227.3 $ 1,123.6
Incr (Decr) over prior period... $ (13.9) $ (70.4) $ (8.8) $ 14.7 $ (78.4)
Table Win Percentage............ 15.3% 16.6% 16.8% 15.4% 16.0%
Incr (Decr) over prior period... (0.4)pts. 1.1pts. 0.7pts. 0.0pts. 0.4pts.
Number of Table Games........... 102 148 52 88 390
Decrease over prior period...... (12) (6) (7) (5) (30)
Slot Revenues................... $ 131.4 $ 150.6 $ 54.8 $ 94.1 $ 430.9
Incr (Decr) over prior period... $ (0.5) $ 8.6 $ 8.9 $ 3.7 $ 20.7
Slot Handle..................... $1,655.4 $1,898.0 $ 859.6 $1,178.6 $ 5,591.6
Increase over prior period...... $ 22.4 $ 167.0 $ 130.8 $ 65.0 $ 385.2
Slot Win Percentage............. 7.9% 7.9% 6.4% 8.0% 7.7%
Incr (Decr) over prior period... (0.2)pts. (0.3)pts. 0.1pts. (0.1)pts. (0.2)pts.
Number of Slot Machines......... 4,213 4,207 1,310 2,155 11,885
Incr (Decr) over prior period... 129 70 (46) (4) 149
Other Gaming Revenues........... - 10.5 - 1.0 11.5
Increase over prior period...... - 1.3 - .2 1.5
Total Gaming Revenues........... $ 176.2 $ 244.7 $ 71.2 $ 130.1 $ 622.2
Incr (Decr) Over Prior Period... $ (4.1) $ 4.3 $ 8.1 $ 6.1 $ 14.4
</TABLE>
Gaming revenues are the primary source of THCR's revenues. The year over year
increase in gaming revenues was due primarily to an increase in slot revenues,
offset by a decline in high-end international table game players due to Asian
economic conditions and Taj Associates' last year results which included an
unusual $8 million dollar table game win from one premium player. Table games
revenues represent the amount retained by THCR from amounts wagered at table
games. The table win percentage tends to be fairly constant over the long term,
but may vary significantly in the short term, due to large wagers by "high
rollers". The Atlantic City industry table win percentages were 15.2% and 15.7%
for the six months ended June 30, 1998 and 1999, respectively.
General and administrative expenses were $138,540,000 for the six months ended
June 30, 1999, an increase of $8,641,000 or 6.7% from $129,899,000 for the
comparable period in 1998. This increase is primarily the result of higher
entertainment and insurance costs.
Non-operating expense includes the $1,334,000 jury settlement awarded on
March 3, 1999 to residents of Indiana who had asserted claims to ownership of
7.5% of the value of Trump Indiana.
13
<PAGE>
Seasonality
The casino industry in Atlantic City and Indiana is seasonal in nature;
accordingly, the results of operations for the three and six month periods
ending June 30, 1999 are not necessarily indicative of the operating results for
a full year.
Important Factors Relating to Forward-looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements so long as those statements are identified as
forward-looking and are accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those projected in such statements. In connection with certain
forward-looking statements contained in this Quarterly Report on Form 10-Q and
those that may be made in the future by or on behalf of the Registrants, the
Registrants note that there are various factors that could cause actual results
to differ materially from those set forth in any such forward-looking
statements. The forward-looking statements contained in this Quarterly Report
were prepared by management and are qualified by, and subject to, significant
business, economic, competitive, regulatory and other uncertainties and
contingencies, all of which are difficult or impossible to predict and many of
which are beyond the control of the Registrants. Accordingly, there can be no
assurance that the forward-looking statements contained in this Quarterly Report
will be realized or that actual results will not be significantly higher or
lower. The statements have not been audited by, examined by, compiled by or
subjected to agreed-upon procedures by independent accountants, and no third-
party has independently verified or reviewed such statements. Readers of this
Quarterly Report should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Registrants
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Quarterly Report. The inclusion of
the forward-looking statements contained in this Quarterly Report should not be
regarded as a representation by the Registrant or any other person that the
forward-looking statements contained in the Quarterly Report will be achieved.
In light of the foregoing, readers of this Quarterly Report are cautioned not to
place undue reliance on the forward-looking statements contained herein.
ITEM 3-- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management has reviewed the disclosure requirements for Item 3 and, based upon
THCR, THCR Funding and THCR Holdings' current capital structure, scope of
operations and financial statement structure, management believes that such
disclosure is not warranted at this time. Since conditions may change, THCR,
THCR Funding and THCR Holdings will periodically review their compliance with
this disclosure requirement to the extent applicable.
PART II -- OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
General. THCR and certain of its employees have been involved in various
legal proceedings. Such persons are vigorously defending the allegations against
them and intend to contest vigorously any future proceedings. In general, THCR
has agreed to indemnify such persons against any and all losses, claims,
damages, expenses (including reasonable costs, disbursements and counsel fees)
and liabilities (including amounts paid or incurred in satisfaction of
settlements, judgments, fines and penalties) incurred by them in said legal
proceedings.
Other Litigation. On March 13, 1997, THCR filed a lawsuit in the United
States District Court, District of New Jersey, against Mirage, the State of New
Jersey ("State"), the New Jersey Department of Transportation ("NJDOT"), the
South Jersey Transportation Authority ("SJTA"), the Casino Reinvestment
Development Authority (the "CRDA"), the New Jersey Transportation Trust Fund
Authority and others. THCR was seeking declaratory and injunctive relief to
recognize and prevent violations by the defendants of the casino clause of the
New Jersey State Constitution and various federal securities and environmental
laws relating to proposed infrastructure improvements in the Atlantic City
marina area. While this action was pending, defendants State and the CRDA then
filed an action in the New Jersey State Court seeking a declaratory judgment as
to the claim relating to the casino clause of the New Jersey State Constitution.
On May 1, 1997, the United States District Court dismissed the federal claims
and ruled that the State constitutional claims should be pursued in State Court.
On April 2, 1998, the United States Court of Appeals for the Third Circuit
affirmed the dismissal and THCR's petition to the Third Circuit for a rehearing
was denied. On May 14, 1997, the State Court granted judgment in favor of the
State and the CRDA. On March 20, 1998, the Appellate Division affirmed. THCR has
appealed in the State Supreme Court, which heard argument on January 21, 1999.
The State Supreme Court affirmed on August 2, 1999, with two justices
dissenting.
On June 26, 1997, THCR filed an action against NJDOT, SJTA, Mirage and
others, in the Superior Court of
14
<PAGE>
New Jersey, Chancery Division, Atlantic County (the "Chancery Division Action").
THCR is seeking to declare unlawful and enjoin certain actions and omissions of
the defendants arising out of and relating to a certain Road Development
Agreement dated as of January 10, 1997, by and among NJDOT, SJTA and Mirage (the
"Road Development Agreement") and the public funding of a certain road and a
tunnel project to be constructed in Atlantic City, as further described in the
Road Development Agreement. THCR moved to consolidate this action with other
previously filed related actions. Defendants opposed THCR's motion to
consolidate the Chancery Division Action, initially moved to dismiss this action
on procedural grounds and subsequently moved to dismiss this action on
substantive ground. On October 20, 1997, the Chancery Court denied the
defendants' motion to dismiss this action on procedural grounds, but entered
summary judgment dismissing this action on substantive grounds. On June 9, 1999,
the Appellate Division affirmed. On July 14, 1999, THCR filed a petition for
Certification seeking review of the Appellate Division's decision in the State
Supreme Court, where it is currently pending.
On June 26, 1997, THCR also filed an action, in lieu of prerogative writs,
against the CRDA, in the Superior Court of New Jersey, Law Division, Atlantic
County, seeking review of the CRDA's April 15, 1997 approval of funding ($120
million principal amount plus interest) for the road and tunnel project
discussed above, a declaratory judgement that the said project is not eligible
for such CRDA funding, and an injunction prohibiting the CRDA from contributing
such funding to that said project. Defendants moved to dismiss this action on
procedural grounds and also sought to transfer this action to New Jersey's
Appellate Division. On October 3, 1997, this action was so transferred. On June
9, 1999, the Appellate Division issued an opinion affirming the trial court's
ruling in the Chancery Division Action and ruling in favor of CRDA in the Law
Division Action. On July 14, 1999, THCR filed a Petition for Certification in
the New Jersey Supreme Court seeking review of the Appellate Division's decision
as to both actions.
On September 9, 1997, Mirage filed a complaint against Trump, THCR and
Hilton Hotels Corporation in the United States District Court for the Southern
District of New York. The complaint seeks damages for alleged violations of
antitrust laws, tortious interference with prospective economic advantage and
tortious inducement of a break of fiduciary duties arising out of activities
purportedly engaged in by defendants in furtherance of an alleged conspiracy to
impede Mirage's efforts to build a casino resort in the Marina district of
Atlantic City, New Jersey. Among other things, Mirage contends that the
defendants filed several frivolous lawsuits and funded others that challenge the
proposed state funding mechanisms for the construction of a proposed roadway and
tunnel that would be paid for chiefly through government funds and which would
link the Atlantic City Expressway with the site of Mirage's proposed new casino
resort. On November 10, 1997, THCR and Trump moved to dismiss the complaint. On
December 18, 1998, the Court denied the motion to dismiss brought by Trump and
THCR. On July 2, 1999, Trump, THCR, and Hilton filed a joint motion to transfer
the case to federal court in New Jersey. The transfer motion is pending.
Steiner Action. On or about July 30, 1999, William K. Steiner, a
stockholder of THCR, filed a derivative action in the Court of Chancery in
Delaware (Civil Action No. 17336NC) against each member of the Board of
Directors of THCR. The plaintiff claims that the directors breached their
fiduciary duties by approving certain loans from THCR to Trump. The complaint
seeks to rescind the loans, and also seeks an order requiring the defendants to
account to THCR for losses and damages allegedly resulting from the loans. The
defendants have not yet responded to the complaint, but intend to defend
vigorously the allegations against them.
Various other legal proceedings are now pending against THCR. Except as set
forth herein and in THCR's Annual Report on Form 10-K for the year ended
December 31, 1998, THCR considers all such proceedings to be ordinary litigation
incident to the character of its business and not material to its business or
financial condition. THCR believes that the resolution of these claims, to the
extent not covered by insurance, will not, individually or in the aggregate,
have a material adverse effect on its financial condition or results of
operations of THCR.
From time to time, Plaza Associates, Taj Associates, Castle Associates and
Trump Indiana may be involved in routine administrative proceedings involving
alleged violations of certain provisions of the New Jersey Casino Control Act
(the"Casino Control Act") and the Riverboat Gambling Act, as the case may be.
However, management believes that the final outcome of these proceedings will
not, either individually or in the aggregate, have a material adverse effect on
THCR or on the ability of Plaza Associates, Taj Associates, Castle Associates or
Trump Indiana to otherwise retain or renew any casino or other licenses required
under the Casino Control Act or the Indiana Riverboat Act, as the case may be,
for the operation of Trump Plaza, the Trump Taj Mahal, Trump Marina and the
Trump Indiana Riverboat, respectively.
ITEM 2 -- CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
15
<PAGE>
ITEM 5 -- OTHER INFORMATION
None.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
Exhibit No. Description of Exhibit
----------- ----------------------
27.1(1) Financial Data Schedule of Trump Hotels & Casino Resorts, Inc.
27.2(2) Financial Data Schedule of Trump Hotels & Casino Resorts
Holdings, L.P.
27.3(2) Financial Data Schedule of Trump Hotels & Casino Resorts
Funding, Inc.
(1) Filed only with the Quarterly Report on Form 10-Q of THCR for the
quarter ended June 30, 1999.
(2) Filed only with the Quarterly Report on Form 10-Q of THCR Holdings
and THCR Funding for the quarter ended June 30, 1999.
b. Current Reports on Form 8-K:
The Registrants did not file any Current Reports on Form 8-K during the
period beginning April 1, 1999 ending June 30, 1999.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRUMP HOTELS & CASINO RESORTS, INC.
(Registrant)
Date: August 13, 1999
By:/s/ FRANCIS X. MCCARTHY, JR.
--------------------------------------------
Francis X. McCarthy, Jr.
Executive Vice President of Finance and
Chief Financial Officer
(Duly Authorized Officer And Principal
Financial Officer)
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
(Registrant)
Date: August 13, 1999
By: TRUMP HOTELS & CASINO RESORTS, INC.,
its general partner
By: /s/ FRANCIS X. MCCARTHY, JR.
---------------------------------------------
Francis X. McCarthy, Jr.
Executive Vice President of Finance and
Chief Financial Officer
(Duly Authorized Officer And
Principal Financial Officer)
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
(Registrant)
Date: August 13, 1999
By:/s/ FRANCIS X. MCCARTHY, JR.
-------------------------------------
Francis X. McCarthy, Jr.
Executive Vice President of Finance and
Chief Financial Officer
(Duly Authorized Officer And Principal
Financial Officer)
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information from Trump Hotels & Casino
Resorts Inc. and Consolidated Statement of Operations for the six month period
ended June 30, 1999 and is qualified in its entirety by reference to such
Financial Statements.
</LEGEND>
<CIK> 0000943320
<NAME> TRUMP HOTELS & CASINO RESORTS INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 105,089
<SECURITIES> 0
<RECEIVABLES> 92,905
<ALLOWANCES> 27,902
<INVENTORY> 13,047
<CURRENT-ASSETS> 225,142
<PP&E> 2,366,777
<DEPRECIATION> 414,514
<TOTAL-ASSETS> 2,390,690
<CURRENT-LIABILITIES> 165,906
<BONDS> 1,751,354
0
0
<COMMON> 242
<OTHER-SE> 254,847
<TOTAL-LIABILITY-AND-EQUITY> 2,390,690
<SALES> 677,162
<TOTAL-REVENUES> 755,548
<CGS> 0
<TOTAL-COSTS> 429,808<F1>
<OTHER-EXPENSES> 181,330<F2>
<LOSS-PROVISION> 6,270
<INTEREST-EXPENSE> 110,907
<INCOME-PRETAX> (28,254)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28,254)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (3,565)
<NET-INCOME> (31,819)
<EPS-BASIC> (1.43)
<EPS-DILUTED> (1.43)
<FN>
<F1>Includes gaming, lodging, food & beverage and other
<F2>Includes general & administration and depreciation & amortization
</FN>
</TABLE>
