================================================================================
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: March 31, 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 08401
Atlantic City, New Jersey ---------
- ---------------------------------------- (Zip Code)
(Address of principal executive offices)
(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 08401
Atlantic City, New Jersey ----------
- ---------------------------------------- (Zip Code)
(Address of principal executive offices)
(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 08401
Atlantic City, New Jersey ----------
- ---------------------------------------- (Zip Code)
(Address of principal executive offices)
(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 May 14, 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 May 14, 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 May 14, 1999 was 100.
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.,
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
AND
TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
INDEX TO FORM 10-Q
<S> <C> <C>
PART I--FINANCIAL INFORMATION
ITEM 1--Financial Statements Page No.
--------
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts, Inc.
as of December 31, 1998 and March 31, 1999 (unaudited)............................................... 1
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts, Inc.
for the Three Months Ended March 31, 1998 and 1999 (unaudited)....................................... 2
Condensed Consolidated Statement of Stockholders' Equity of Trump Hotels & Casino Resorts, Inc.
for the Three Months Ended March 31, 1999 (unaudited)............................................... 3
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts, Inc.
for the Three Months Ended March 31, 1998 and 1999 (unaudited)....................................... 4
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts Holdings, L.P.
as of December 31, 1998 and March 31, 1999 (unaudited) .............................................. 5
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts Holdings, L.P.
for the Three Months Ended March 31, 1998 and 1999 (unaudited)....................................... 6
Condensed Consolidated Statement of Partners' Capital of Trump Hotels & Casino Resorts
Holdings, L.P. for the Three Months Ended March 31, 1999 (unaudited)................................ 7
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts Holdings, L.P.
for the Three Months Ended March 31, 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 Results
of Operations...................................................................................... 11
ITEM 3--Quantitative and Qualitative Disclosures About Market Risk........................................... 14
</TABLE>
<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 CONT'D
Page No.
--------
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings.......................................... 14
ITEM 2 -- Changes in Securities and Use of Proceeds.................. 16
ITEM 3 -- Defaults Upon Senior Securities............................ 16
ITEM 4 -- Submission of Matters to a Vote of Security Holders........ 16
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
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
December 31, March 31,
ASSETS 1998 1999
------ ------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ............................................. $ 114,757 $ 152,202
Receivables, net ...................................................... 70,951 62,735
Inventories ........................................................... 12,804 12,576
Due from affiliates, net .............................................. 12,774 13,126
Prepaid expenses and other current assets ............................. 18,679 10,850
---------- ----------
Total Current Assets ........................................... 229,965 251,489
INVESTMENT IN BUFFINGTON HARBOR, L.L.C .................................. 40,765 40,010
INVESTMENT IN TRUMP'S CASTLE PIK NOTES .................................. 64,137 67,014
PROPERTY AND EQUIPMENT, NET ............................................. 1,977,609 1,963,396
CASH RESTRICTED FOR FUTURE CONSTRUCTION ................................. 2,523 --
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET .............................. 37,978 36,128
DUE FROM AFFILIATES ..................................................... 15,766 16,066
OTHER ASSETS ............................................................ 59,721 63,246
---------- ----------
Total Assets ............................................................ $2,428,464 $2,437,349
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt .................................. $ 10,504 $ 8,388
Accounts payable and accrued expenses ................................. 118,597 113,681
Accrued interest payable .............................................. 30,379 81,326
---------- ----------
Total Current Liabilities ...................................... 159,480 203,395
LONG-TERM DEBT, net of current maturities ............................... 1,838,492 1,839,245
OTHER LONG-TERM LIABILITIES ............................................. 18,044 22,124
---------- ----------
Total Liabilities ....................................................... 2,016,016 2,064,764
---------- ----------
MINORITY INTEREST ....................................................... 125,540 110,962
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) (174,729)
Less treasury stock, 2,011,500 shares of THCR Common Stock, at cost ... (19,535) (19,535)
---------- ----------
Total Stockholders' Equity .............................................. 286,908 261,623
---------- ----------
Total Liabilities and Stockholders' Equity .............................. $2,428,464 $2,437,349
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(unaudited)
(dollars in thousands, except share data)
Three Months Ended
March 31,
--------------------------
1998 1999
--------- ---------
<S> <C> <C>
REVENUES:
Gaming..................................................... $ 292,333 $ 291,783
Rooms...................................................... 20,476 19,572
Food and Beverage.......................................... 33,670 32,241
Other...................................................... 9,675 9,248
--------- ---------
Gross Revenues............................................. 356,154 352,844
Less -- Promotional allowances............................. 39,560 37,129
--------- ---------
Net Revenues............................................... 316,594 315,715
--------- ---------
COSTS AND EXPENSES:
Gaming..................................................... 186,131 185,925
Rooms...................................................... 7,108 7,803
Food and Beverage.......................................... 10,764 11,211
General and Administrative................................. 65,954 67,493
Depreciation and Amortization.............................. 20,922 21,581
--------- ---------
290,879 294,013
--------- ---------
Income from operations..................................... 25,715 21,702
--------- ---------
NON-OPERATING INCOME AND (EXPENSES):
Interest income............................................ 3,108 1,642
Interest expense........................................... (55,621) (55,531)
Other non-operating expense................................ (297) (1,290)
--------- ---------
(52,810) (55,179)
--------- ---------
Loss before equity in loss of Buffington
Harbor, L.L.C., minority interest, and cumulative
effect of change in accounting principle................... (27,095) (33,477)
Equity in loss of Buffington Harbor, L.L.C.................... (741) (766)
--------- ---------
Loss before minority interest and cumulative effect
of change in accounting principle.......................... (27,836) (34,243)
Minority Interest............................................. 10,166 12,523
--------- ---------
Loss before cumulative effect of change in accounting
principle.................................................. (17,670) (21,720)
Cumulative effect of change in accounting principle
($5,620), net of minority interest ($2,055)................ -- (3,565)
--------- ---------
NET LOSS...................................................... $ (17,670) $ (25,285)
========= =========
Basic and diluted loss per share:
before cumulative effect of change in accounting
principle.................................................. $ (.79) $ (.98)
Cumulative effect of change in accounting principle........... -- (.16)
--------- ---------
Basic and diluted loss per share.............................. $ (.79) $ (1.14)
========= =========
Average number of shares outstanding.......................... 22,229,145 22,195,256
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(unaudited)
(dollars in thousands)
Number of Shares Common Additional
-------------------- ------------------- Accumulated Treasury
Class B Stock Paid in ----------------------
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........................ (25,285) (25,285)
---------- ----- ---- -------- --------- -------- --------
Balance, March 31, 1999......... 24,206,756 1,000 $242 $455,645 $(174,729) $(19,535) $261,623
========== ===== ==== ======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
financial statement.
3
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(unaudited)
(dollars in thousands)
1998 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss......................................................................... $(17,670) $(25,285)
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.............................. 2,719 3,155
Equity in loss of Buffington Harbor, L.L.C..................................... 741 766
Depreciation and amortization.................................................. 20,922 21,581
Interest income - Castle PIK Notes............................................. (2,516) (2,877)
Minority interest in net loss.................................................. (10,166) (12,523)
Accretion of discounts on mortgage notes....................................... 1,085 1,211
Amortization of deferred loan costs............................................ 2,120 1,851
Provision for losses on receivables............................................ 2,568 2,569
Valuation allowance of CRDA investments and amortization of Indiana
gaming costs................................................................. 2,058 2,088
Gain on disposition of property................................................ -- (335)
(Increase) decrease in receivables............................................. (5,419) 5,648
Decrease in inventories........................................................ 810 228
Decrease in other current assets............................................... 378 2,218
Decrease (increase) in due from affiliates..................................... 12,886 (697)
Increase in other assets....................................................... (1,434) (1,906)
Increase (decrease) in accounts payable and accrued expenses................... 7,311 (4,620)
Increase in accrued interest payable .......................................... 49,513 50,946
Decrease in other long-term liabilities........................................ (708) --
-------- --------
Net cash flows provided by operating activities ............................. 65,198 47,583
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net........................................ (4,756) (6,915)
Proceeds from disposition of property.......................................... -- 1,045
Investment in Buffington Harbor, L.L.C......................................... (215) (11)
CRDA Investments............................................................... (3,378) (3,427)
Restricted cash ............................................................... 969 2,523
-------- --------
Net cash flows used in investing activities.................................. (7,380) (6,785)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock..................................................... (2,259) --
Issuance of long-term debt..................................................... 900 --
Payment of long-term debt...................................................... (4,268) (3,353)
Cost of issuing debt........................................................... (569) --
-------- --------
Net cash flows used in financing activities.................................. (6,196) (3,353)
-------- --------
Net increase in cash and cash equivalents.................................... 51,622 37,445
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................... 140,328 114,757
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......................................... $191,950 $152,202
======== ========
CASH INTEREST PAID................................................................. $ 1,975 $ 1,172
======== ========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations............... $ 881 $ 992
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
4
<PAGE>
<TABLE>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
December 31, March 31,
ASSETS 1998 1999
------ ------------ -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................................... $ 114,753 $ 152,198
Receivables, net........................................................ 70,951 62,735
Inventories ............................................................ 12,804 12,576
Due from affiliates, net................................................ 12,774 13,126
Prepaid expenses and other current assets............................... 18,679 10,850
---------- ----------
Total Current Assets.............................................. 229,961 251,485
INVESTMENT IN BUFFINGTON HARBOR, L.L.C..................................... 40,765 40,010
INVESTMENT IN TRUMP'S CASTLE PIK NOTES..................................... 64,137 67,014
PROPERTY AND EQUIPMENT, NET................................................ 1,977,609 1,963,396
CASH RESTRICTED FOR FUTURE CONSTRUCTION.................................... 2,523 --
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET................................. 37,978 36,128
DUE FROM AFFILIATES........................................................ 15,766 16,066
OTHER ASSETS............................................................... 59,721 63,246
---------- ----------
Total Assets............................................................... $2,428,460 $2,437,345
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt.................................... $ 10,504 $ 8,388
Accounts payable and accrued expenses................................... 118,597 113,681
Accrued interest payable................................................ 30,379 81,326
---------- ----------
Total Current Liabilities......................................... 159,480 203,395
LONG-TERM DEBT, net of current maturities.................................. 1,838,492 1,839,245
OTHER LONG-TERM LIABILITIES................................................ 18,044 22,124
---------- ----------
Total Liabilities.......................................................... 2,016,016 2,064,764
---------- ----------
PARTNERS' CAPITAL:
Partners' capital.......................................................... 652,503 652,503
Accumulated deficit........................................................ (220,524) (260,387)
Less cost of stock of THCR................................................. (19,535) (19,535)
---------- ----------
Total Partners' Capital ................................................... 412,444 372,581
---------- ----------
Total Liabilities and Partners' Capital.................................... $2,428,460 $2,437,345
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(unaudited)
(dollars in thousands)
Three Months Ended
March 31,
-----------------------
1998 1999
-------- --------
<S> <C> <C>
REVENUES:
Gaming..................................................... $292,333 $291,783
Rooms...................................................... 20,476 19,572
Food and Beverage.......................................... 33,670 32,241
Other...................................................... 9,675 9,248
-------- --------
Gross Revenues............................................. 356,154 352,844
Less -- Promotional allowances............................. 39,560 37,129
-------- --------
Net Revenues............................................... 316,594 315,715
-------- --------
COSTS AND EXPENSES:
Gaming..................................................... 186,131 185,925
Rooms...................................................... 7,108 7,803
Food and Beverage.......................................... 10,764 11,211
General and Administrative................................. 65,954 67,493
Depreciation and Amortization.............................. 20,922 21,581
-------- --------
290,879 294,013
-------- --------
Income from operations..................................... 25,715 21,702
-------- --------
NON-OPERATING INCOME AND (EXPENSES):
Interest income............................................ 3,108 1,642
Interest expense........................................... (55,621) (55,531)
Other non-operating expense................................ (297) (1,290)
-------- --------
(52,810) (55,179)
-------- --------
Loss before equity in loss of Buffington
Harbor, L.L.C., and cumulative effect of
change in accounting principle............................ (27,095) (33,477)
Equity in loss of Buffington Harbor, L.L.C.................... (741) (766)
-------- --------
Loss before cumulative effect of change in
accounting principle....................................... (27,836) (34,243)
Cumulative effect of change in accounting
principle.................................................. -- (5,620)
-------- --------
NET LOSS...................................................... $(27,836) $(39,863)
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(unaudited)
(dollars in thousands)
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.............................. (39,863) (39,863)
--------- --------- -------- --------
Balance, March 31, 1999............... $652,503 $(260,387) $(19,535) $372,581
========= ========= ======== ========
</TABLE>
The accompanying notes are an integral part of this condensed consolidated
financial statement.
7
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(unaudited)
(dollars in thousands)
1998 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss......................................................................... $(27,836) $(39,863)
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.............................. 2,719 3,155
Equity in loss of Buffington Harbor, L.L.C..................................... 741 766
Depreciation and amortization.................................................. 20,922 21,581
Interest income - Castle PIK Notes............................................. (2,516) (2,877)
Accretion of discounts on mortgage notes....................................... 1,085 1,211
Amortization of deferred loan costs............................................ 2,120 1,851
Provision for losses on receivables............................................ 2,568 2,569
Valuation allowance of CRDA investments and amortization of Indiana
gaming costs................................................................. 2,058 2,088
Gain on disposition of property................................................ -- (335)
(Increase) decrease in receivables............................................. (5,419) 5,648
Decrease in inventories........................................................ 810 228
Decrease in other current assets............................................... 378 2,218
Decrease (increase) in due from affiliates..................................... 12,886 (697)
Increase in other assets....................................................... (1,434) (1,906)
Increase (decrease) in accounts payable and accrued expenses................... 7,311 (4,620)
Increase in accrued interest payable .......................................... 49,513 50,946
Decrease in other long-term liabilities........................................ (708) --
-------- --------
Net cash flows provided by operating activities ............................. 65,198 47,583
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net........................................ (4,756) (6,915)
Proceeds from disposition of property.......................................... -- 1,045
Investment in Buffington Harbor, L.L.C......................................... (215) (11)
CRDA Investments............................................................... (3,378) (3,427)
Restricted cash ............................................................... 969 2,523
-------- --------
Net cash flows used in investing activities.................................. (7,380) (6,785)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock..................................................... (2,259) --
Issuance of long-term debt..................................................... 900 --
Payment of long-term debt...................................................... (4,268) (3,353)
Cost of issuing debt........................................................... (569) --
-------- --------
Net cash flows used in financing activities.................................. (6,196) (3,353)
-------- --------
Net increase in cash and cash equivalents.................................... 51,622 37,445
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................... 140,324 114,753
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......................................... $191,946 $152,198
======== ========
CASH INTEREST PAID................................................................. $ 1,975 $ 1,172
======== ========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations................. $ 881 $ 992
======== ========
</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., a Delaware corporation ("THCR"), Trump
Hotels & Casino Resorts Holdings, L.P., a Delaware limited partnership ("THCR
Holdings"), and Subsidiaries (as defined). 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 period ended March 31, 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 Trump Atlantic City Associates ("Trump AC"), which is
comprised of 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") d/b/a 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, March 31,
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 at December 31, 1998 and
March 31, 1999) ................................................ $145,936,000 $151,555,000
============ ============
Total Liabilities and Capital (including $145,000,000 of
Senior Notes) .................................................. $145,936,000 $151,555,000
============ ============
Three Months Ended March 31,
1998 1999
------------ ------------
Interest Income from THCR Holdings ............................... $ 5,619,000 $ 5,619,000
Interest Expense ................................................. $ 5,619.000 $ 5,619,000
------------ ------------
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 $6,514,000 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 and capitalized since the beginning of the fiscal year and adoption of
the SOP.
THCR has adopted the new standard in the first quarter of 1999. Had
THCR adopted the new standard as of March 31, 1998, the net loss of $17,670,000
for the three months ended March 31, 1998 would have increased by $355,000 for
the effect of the write-off of first quarter capitalized costs. The
corresponding earnings per share effect would increase the net loss per share as
reported of $.79 by $.02 for the write-off of first quarter capitalized costs to
an adjusted loss per share of $.81 for the three months ended March 31, 1998.
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 and were $65,198,000 for the three months ended March 31, 1998
compared to $47,583,000 for the three months ended March 31, 1999.
Capital expenditures for THCR were $4,756,000 and $6,915,000 for the three
months ended March 31, 1998 and 1999, respectively.
The indenture governing the Senior Notes (the "Senior Note Indenture") as
well as indentures of the 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.
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 with appropriate
modifications having been made or underway. Testing the modifications is
expected to be completed during 1999. THCR is approximately 85% complete in its
modifications.
THCR believes that the issues of concern are predominantly software related
versus 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 expectations 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 be
assessing the situation and considering 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, Castle Associates and Trump Indiana.
Comparison of Three-Month Periods Ended March 31, 1998 and 1999. The
following tables include selected data of Plaza Associates, Taj Associates,
Trump Indiana and Castle Associates.
<TABLE>
<CAPTION>
Three Months Ended March 31, 1998
--------------------------------------------------------------------
Plaza Taj Trump Castle THCR
Associates Associates Indiana Associates Consolidated*
---------- ---------- ------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming ........................ $ 87.3 $114.5 27.8 62.7 292.3
Other .......................... 23.0 27.2 0.7 12.9 63.8
------ ------ ---- ---- -----
GROSS REVENUES ................. 110.3 141.7 28.5 75.6 356.1
Less: Promotional Allowances ..... 14.3 16.1 0.2 8.9 39.5
------ ------ ---- ---- -----
NET REVENUES ................... 96.0 125.6 28.3 66.7 316.6
------ ------ ---- ---- -----
COSTS AND EXPENSES:
Gaming ......................... 54.0 72.6 19.5 40.0 186.1
General & Administrative ....... 20.0 21.3 6.9 15.0 66.0
Depreciation & Amortization .... 6.0 9.3 1.4 4.0 20.9
Other .......................... 6.6 8.0 0.8 2.5 17.9
------ ------ ---- ---- -----
TOTAL COSTS AND EXPENSES ..... 86.6 111.2 28.6 61.5 290.9
------ ------ ---- ---- -----
INCOME (LOSS) FROM OPERATIONS .... 9.4 14.4 (0.3) 5.2 25.7
------ ------ ---- ---- -----
Non-operating Income (Expense) ... 0.4 0.2 0.0 0.2 2.8
Interest Expense ................. (12.0) (23.6) (2.5) (12.6) (55.6)
------ ------ ---- ---- -----
TOTAL NON-OPERATING EXPENSE, NET (11.6) (23.4) (2.5) (12.4) (52.8)
------ ------ ---- ---- -----
Loss in Joint Venture ............ -- -- (0.7) -- (0.7)
------ ------ ---- ---- -----
Net Loss
Before Minority Interest ....... $ (2.2) $( 9.0) $(3.5) $ (7.2) (27.8)
====== ====== ===== ======
Minority Interest................. 10.1
-----
NET LOSS ......................... $(17.7)
======
</TABLE>
- ----------
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
<TABLE>
<CAPTION>
Three Months Ended March 31, 1999
--------------------------------------------------------------------
Plaza Taj Trump Castle THCR
Associates Associates Indiana Associates Consolidated*
---------- ---------- ------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming........................... $82.3 $112.8 $35.7 $60.9 $291.8
Other............................ 22.5 24.8 1.7 12.2 61.0
----- ------ ----- ------ -----
GROSS REVENUES.................. 104.8 137.6 37.4 73.1 352.8
Less: Promotional Allowances...... 14.0 14.1 0.5 8.6 37.1
----- ------ ----- ----- -----
NET REVENUES.................... 90.8 123.5 36.9 64.5 315.7
----- ------ ----- ----- -----
COSTS AND EXPENSES:
Gaming........................... 50.2 72.2 24.7 38.8 185.9
General & Administrative......... 19.6 21.8 7.7 14.7 67.5
Depreciation & Amortization...... 6.0 9.4 1.7 4.3 21.6
Other............................ 7.2 7.7 1.6 2.4 19.0
----- ------ ----- ----- -----
TOTAL COSTS AND EXPENSES........ 83.0 111.1 35.7 60.2 294.0
----- ------ ----- ----- -----
INCOME FROM OPERATIONS............ 7.8 12.4 1.2 4.3 21.7
----- ----- ----- ----- -----
Non-operating Income ............. 0.1 0.5 (1.5) 0.2 .3
Interest Expense.................. (11.8) (23.4) (1.8) (13.4) (55.5)
----- ------ ----- ----- -----
TOTAL NON-OPERATING EXPENSE, NET (11.7) (22.9) (3.3) (13.2) (55.2)
----- ------ ----- ----- -----
Loss in Joint Venture............. -- -- (0.8) -- (0.7)
----- ------ ------ ----- -----
NET LOSS BEFORE MINORITY INTEREST &
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE............ $(3.9) $(10.5) $(2.9) $(8.9) $(34.2)
===== ====== ===== =====
Minority Interest................. 12.5
Cumulative Effect of Change in
Accounting Principle............ (3.6)
-----
NET LOSS.......................... $(25.3)
======
</TABLE>
- ----------
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
12
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1998
--------------------------------------------------------------------
Plaza Taj Trump Castle THCR
Associates Associates Indiana Associates Consolidated
---------- ---------- ------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Table Game Revenues .................... $ 24.9 $ 41.6 $ 8.4 $ 17.7 $ 92.6
Table Game Drop......................... $151.6 $274.7 $51.1 $111.8 $ 589.2
Table Win Percentage.................... 16.4% 15.1% 16.5% 15.8% 15.7%
Number of Table Games................... 117 156 59 94 426
Slot Revenues........................... $ 62.4 $ 68.4 $19.4 $ 44.7 $ 194.9
Slot Handle............................. $776.3 $832.0 $304.8 $551.8 $2,464.9
Slot Win Percentage..................... 8.0% 8.2% 6.4% 8.1% 7.9%
Number of Slot Machines................. 4,076 4,145 1,367 2,155 11,743
Other Gaming Revenues................... N/A $ 4.5 N/A $ 0.3 $ 4.8
Total Gaming Revenues................... $ 87.3 $114.5 $27.8 $62.7 $ 292.3
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1999
--------------------------------------------------------------------
Plaza Taj Trump Castle THCR
Associates Associates Indiana Associates Consolidated
---------- ---------- ------- ---------- -------------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
TABLE GAME REVENUES..................... $ 21.7 $ 38.7 $ 8.5 $ 15.4 $ 84.3
Incr (Decr) over prior period........ $ (3.2) $ (2.9) $ 0.1 $ (2.3) $ (8.3)
Table Game Drop......................... $ 140.1 $ 234.5 $ 51.4 $ 101.3 $ 527.3
Incr (Decr) over prior period........ $ (11.5) $ (40.2) $ 0.3 $ (10.5) $ (61.9)
Table Win Percentage.................... 15.5% 16.5% 16.5% 15.2% 16.0%
Incr (Decr) over prior period........ (0.9)pts. 1.4 pts. 0.0 pts. (0.6)pts. 0.3pts.
Number of Table Games................... 103 147 52 91 393
Incr (Decr) over prior period........ (14) (9) (7) (3) (33)
Slot Revenues........................... $ 60.6 $ 69.1 $ 27.2 $ 45.3 $ 202.3
Incr (Decr) over prior period........ $ (1.8) $ 0.7 $ 7.8 $ 0.6 $ 7.4
Slot Handle............................. $ 770.6 $ 885.1 $ 441.5 $ 552.6 $ 2,649.8
Incr (Decr) over prior period........ $ (5.7) $ 53.1 $ 136.7 $ .8 $ 184.9
Slot Win Percentage..................... 7.9% 7.8% 6.2% 8.2% 7.6%
Incr (Decr) over prior period........ (0.1)pts. (0.4)pts. (0.2)pts. 0.1pts. (0.3)pts.
Number of Slot Machines................. 4,204 4,175 1,310 2,178 11,867
Incr (Decr) over prior period........ 128 30 (57) 23 124
Other Gaming Revenues................... N/A $ 5.0 N/A $ 0.2 $ 5.2
Incr (Decr) over prior period........ N/A $ 0.5 N/A $ (0.1) $ 0.4
Total Gaming Revenues................... $ 82.3 $ 112.8 $ 35.7 $ 60.9 $ 291.8
Incr (Decr) over prior period........ $ (5.0) $ (1.7) $ 7.9 $ (1.8) $ (0.5)
</TABLE>
Gaming revenues are the primary source of THCR's revenues. 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 15.4% and 15.9%
for the quarters ended March 31, 1998 and March 31, 1999, respectively. The
increase in slot revenues is primarily attributed to higher slot handles at
Trump Indiana in 1999.
Gaming costs and expenses were $185.9 million for the three months ended
March 31, 1999, a decrease of $.2 million or .1% from $186.1 million for the
comparable period in 1998. Trump Indiana incurred an increase of $5.3 million or
28.4% to $24.7 million for the three months ended March 31, 1999 as a result of
increases in wagering fees proportionate to the increase in slot revenue as well
as costs related to player promotions and special events caused by the expansion
of gaming in Indiana. The increase at Trump Indiana was offset by decreases in
marketing and promotion costs at the three Atlantic City properties due to the
elimination of less profitable programs. Trump Plaza Hotel and Casino's ("Trump
Plaza") gaming costs for the three months ended March 31, 1999, decreased $3.8
million from the comparable period in 1998, while Trump Marina's and the Trump
Taj Mahal Casino Resort's (the "Taj Mahal") gaming costs decreased $1.2 million
and $.5 million, respectively.
General and administrative expenses were $67.5 million for the three months
ended March 31, 1999, an increase of $1.5 million or 2.3% from general and
administrative expenses of $66.0 million for the comparable period in 1998.
Non-operating expense includes the $1.3 million 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>
During the first quarter of 1999, THCR wrote off $5.6 million of new
development costs which had been classified as prepaid expense at December 31,
1998. The cumulative effect (after minority interest) of this accounting change
is $3.6. Additionally, all development costs incurred during the first quarter
of 1999 were expensed. Therefore, general and administrative expense during the
quarter ending March 31, 1999, included an additional $498,000 of costs
associated with new development.
SEASONALITY
The casino industry in Atlantic City and Indiana is seasonal in nature;
accordingly, the results of operations for the period ending March 31, 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.
Trump Indiana. Commencing in early 1994 Trump Indiana, through its Indiana
legal counsel, had discussions with eight Indiana residents regarding (1) the
potential purchase by such residents of nonvoting stock of Trump Indiana,
representing a total of 7.5% of the value of Trump Indiana, and (2) the creation
and funding of a charitable foundation for the benefit of residents of the Gary,
Indiana area. Subsequent to those discussions, it was determined to include
Trump Indiana as a wholly owned subsidiary of THCR Holdings in connection with
the June, 1995 offerings. The residents then asserted a right to purchase stock
in Trump Indiana equal to 7.5% of the value of Trump Indiana, and also asserted
that Trump Indiana was required to contribute an additional 7.5% of its value,
represented by shares of its stock, into the charitable foundation. Trump
Indiana and THCR did not agree with the residents' assertions and so advised
them. Such residents then caused a complaint to be filed in the United States
District Court, Southern District of Indiana, against Trump Indiana, THCR, THCR
Holdings, and Donald J. Trump ("the Litigation"). Later, The Trump Organization,
Inc. was added as a defendant. The claims sought (1) compensatory damages to the
eight plaintiffs equal
14
<PAGE>
to 7.5% of the value of Trump Indiana, (2) funding of the charitable foundation
in an amount equal to an additional 7.5% of the value of Trump Indiana, (3)
transfer of Trump Indiana stock to the plaintiffs and to the charitable
foundation, and (4) punitive damages in an unspecified amount. Monetary
settlements later were reached between all defendants and six of the plaintiffs.
Thereafter, the remaining two plaintiffs voluntarily dismissed their claims for
the transfer of ownership of stock in Trump Indiana, and proceeded in the
Litigation only with their claims for consequential and punitive monetary
damages against the defendants. In February, 1999, these two remaining
plaintiffs voluntarily dismissed all claims against The Trump Organization,
Inc., and the court entered summary judgment against the plaintiffs and in favor
of THCR and THCR Holdings on all claims in the Litigation. The case was then
tried in United States District Court, Indianapolis. On March 3, 1999, the jury
assessed consequential damages against Trump Indiana for breach of contract in
the total amount of One Million Three Hundred Thirty-Four Thousand One Hundred
Twenty-Four Dollars ($1,334,124.00) and further determined that Trump Indiana
had breached a contract to create and fund a charitable foundation. The jury
assessed no consequential damages against Donald J. Trump personally. Punitive
damages were not awarded against either Trump Indiana or Donald J. Trump. The
United States District Court, sitting in equity, will determine whether, and to
what extent, Trump Indiana will be required to provide additional funding to the
charitable foundation. The court is aware, from evidence presented during trial,
that Trump Indiana has already established and funded, prior to trial, a
charitable foundation for the benefit of residents of the Gary, Indiana, area in
accord with Trump Indiana's commitments to the Indiana Gaming Commission and
pursuant to the Development Agreement between Trump Indiana and the City of
Gary, Indiana. The court is also aware, from evidence presented during trial,
that the foundation has fulfilled, and continues to fulfill, its charitable
purposes in Gary, Indiana. The court heard argument concerning this matter on
March 23, 1999. Trump Indiana intends to vigorously contest the claim by the
plaintiffs that additional funding of the charitable foundation is required.
Management believes that further resolution of this issue will not have a
material adverse affect on THCR.
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 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
CRDA. On March 20, 1998, the Appellate Division affirmed. THCR has appealed in
the State Supreme Court, which heard argument on January 21, 1999.
On June 26, 1997, THCR filed an action against NJDOT, SJTA, Mirage and
others, in the Superior Court of 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. This decision
has been appealed and is pending in the Appellate Division.
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 Taj Mahal, Trump Marina and the Trump
Indiana Riverboat, respectively.
15
<PAGE>
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
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 Funding, Inc.
(1) Filed only with the Quarterly Report on Form 10-Q of THCR for the
quarter ended March 31, 1999.
(2) Filed only with the Quarterly Report on Form 10-Q of THCR Holdings
and THCR Funding for the quarter ended March 31, 1999.
b. Current Reports on Form 8-K:
The Registrants did not file any Current Reports on Form 8-K during the
period beginning January 1, 1999 ending March 31, 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: May 14, 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: May 14, 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: May 14, 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>
<ARTICLE> 5
<CIK> 0000943320
<NAME> TRUMP HOTELS & CASINO RESORTS INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 152,202
<SECURITIES> 0
<RECEIVABLES> 88,607
<ALLOWANCES> 25,872
<INVENTORY> 12,576
<CURRENT-ASSETS> 251,489
<PP&E> 2,362,835
<DEPRECIATION> 399,439
<TOTAL-ASSETS> 2,437,349
<CURRENT-LIABILITIES> 203,395
<BONDS> 1,743,686
<COMMON> 242
0
0
<OTHER-SE> 261,381
<TOTAL-LIABILITY-AND-EQUITY> 2,437,349
<SALES> 315,715
<TOTAL-REVENUES> 352,844
<CGS> 0
<TOTAL-COSTS> 204,939<F1>
<OTHER-EXPENSES> 89,074<F2>
<LOSS-PROVISION> 2,569
<INTEREST-EXPENSE> 55,531
<INCOME-PRETAX> (21,720)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,720)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (3,565)
<NET-INCOME> (25,285)
<EPS-PRIMARY> (1.14)
<EPS-DILUTED> (1.14)
<FN>
<F1> Includes gaming, lodging, food & beverage and other.
<F2> Includes general & administration and depreciation & amortization.
</FN>
</TABLE>
