================================================================================
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: September 30, 1998
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 November 13, 1998 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 November 13, 1998 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 November 13, 1998 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
PART I--FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1--FINANCIAL STATEMENTS PAGE NO.
--------
<S> <C>
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts, Inc.
as of September 30, 1998 (unaudited) and December 31, 1997........................................... 1
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts, Inc.
for the Three and Nine Months Ended September 30, 1998 and 1997 (unaudited).......................... 2
Condensed Consolidated Statement of Stockholders' Equity of Trump Hotels & Casino Resorts, Inc.
for the Nine Months Ended September 30, 1998 (unaudited)........................................... 3
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts, Inc.
for the Nine Months Ended September 30, 1998 and 1997 (unaudited)................................... 4
Condensed Consolidated Balance Sheets of Trump Hotels & Casino Resorts Holdings, L.P.
as of September 30, 1998 (unaudited) and December 31, 1997.......................................... 5
Condensed Consolidated Statements of Operations of Trump Hotels & Casino Resorts Holdings, L.P.
for the Three and Nine Months Ended September 30, 1998 and 1997 (unaudited).......................... 6
Condensed Consolidated Statement of Partners' Capital of Trump Hotels & Casino Resorts
Holdings, L.P. for the Nine Months Ended September 30, 1998 (unaudited)............................. 7
Condensed Consolidated Statements of Cash Flows of Trump Hotels & Casino Resorts Holdings, L.P.
for the Nine Months Ended September 30, 1998 and 1997 (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................................................................................... 12
ITEM 3 -- Quantitative and Qualitative Disclosures About Market Risk...................................... 18
</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............................................... 19
ITEM 2 -- Changes in Securities and Use of Proceeds....................... 20
ITEM 3 -- Defaults Upon Senior Securities................................. 20
ITEM 4 -- Submission of Matters to a Vote of Security Holders............. 20
ITEM 5 -- Other Information............................................... 20
ITEM 6 -- Exhibits and Reports on Form 8-K................................ 20
SIGNATURES
SIGNATURE -- Trump Hotels & Casino Resorts, Inc. ......................... 21
SIGNATURE -- Trump Hotels & Casino Resorts Holdings, L.P. ................ 22
SIGNATURE -- Trump Hotels & Casino Resorts Funding, Inc. ................. 23
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------------- ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.............................. $ 187,598 $ 140,328
Receivables, net....................................... 71,589 68,075
Inventories ........................................... 13,463 13,011
Due from affiliates, net............................... 12,307 13,173
Prepaid expenses and other current assets.............. 20,154 13,892
---------- ----------
Total Current Assets............................. 305,111 248,479
INVESTMENT IN BUFFINGTON HARBOR, L.L.C.................... 41,222 43,535
INVESTMENT IN TRUMP'S CASTLE PIK NOTES.................... 61,190 53,381
PROPERTY AND EQUIPMENT, NET............................... 1,973,095 2,004,751
CASH RESTRICTED FOR FUTURE CONSTRUCTION................... 6,987 13,000
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET................ 39,701 45,071
DUE FROM AFFILIATES....................................... 3,772 3,493
OTHER ASSETS.............................................. 73,397 60,659
---------- ----------
Total Assets.............................................. $2,504,475 $2,472,369
========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt..................... $ 13,088 $ 21,890
Accounts payable and accrued expenses.................... 119,801 109,489
Accrued interest payable................................. 81,661 29,038
---------- ----------
Total Current Liabilities.......................... 214,550 160,417
LONG-TERM DEBT, net of current maturities................... 1,831,543 1,817,569
OTHER LONG-TERM LIABILITIES................................. 20,110 17,080
---------- ----------
Total Liabilities........................................... 2,066,203 1,995,066
---------- ----------
MINORITY INTEREST........................................... 134,984 148,418
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...................................... (133,064) (109,726)
Less treasury stock, 2,011,500 and 1,706,500 shares
of THCR Common Stock, respectively, at cost............ (19,535) (17,276)
---------- ----------
Total Stockholders' Equity.................................. 303,288 328,885
---------- ----------
Total Liabilities and Stockholders' Equity.................. $2,504,475 $2,472,369
========== ==========
</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 AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- -----------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Gaming ....................................... $ 364,077 $ 341,080 $ 971,606 $ 994,655
Rooms ........................................ 26,841 29,346 70,930 77,149
Food and Beverage ............................ 40,925 41,997 110,441 115,836
Other ........................................ 13,121 14,190 33,545 36,132
------------ ------------ ------------ ------------
Gross Revenues ............................... 444,964 426,613 1,186,522 1,223,772
Less -- Promotional allowances ............... 47,685 51,017 128,578 137,910
------------ ------------ ------------ ------------
Net Revenues ................................. 397,279 375,596 1,057,944 1,085,862
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Gaming ....................................... 221,381 209,766 608,853 621,141
Rooms ........................................ 8,373 8,174 23,642 23,304
Food and Beverage ............................ 13,777 13,299 37,987 37,519
General and Administrative ................... 70,464 66,895 200,362 203,299
Depreciation and Amortization ................ 20,796 20,379 61,848 66,654
------------ ------------ ------------ ------------
334,791 318,513 932,692 951,917
------------ ------------ ---------- ------------
Income from operations ....................... 62,488 57,083 125,252 133,945
------------ ------------ ------------ ------------
NON-OPERATING INCOME AND (EXPENSES):
Interest income .............................. 2,019 1,290 7,166 4,492
Interest expense ............................. (55,390) (52,565) (166,679) (157,835)
Other non-operating expense .................. -- -- (286) --
------------ ------------ ------------ ----------
(53,371) (51,275) (159,799) (153,343)
------------ ------------ ------------ ----------
Income (Loss) before equity in loss of Buffington
Harbor, L.L.C. and Minority Interest ......... 9,117 5,808 (34,547) (19,398)
Equity in loss of Buffington Harbor, L.L.C ...... (742) (1,025) (2,225) (2,755)
------------ ------------ ------------ ----------
Loss before minority interest ................... 8,375 4,783 (36,772) (22,153)
Minority Interest ............................... (3,063) (1,749) 13,434 8,036
------------ ------------ ------------ ----------
NET INCOME (LOSS) ............................... $ 5,312 $ 3,034 $ (23,338) $ (14,117)
============ ============ ============ ============
Basic earnings (loss) per share ................. $ .24 $ .13 $ (1.05) $ (.62)
============ ============ ============ ============
Weighted average shares ......................... 22,195,256 22,500,256 22,206,428 22,894,222
========== ========== ========== ==========
Dilutive earnings (loss) per share .............. $ .24 $ .13 $ (1.05) $ (.62)
============ ============ ============ ============
Weighted average shares ......................... 22,195,256 22,500,256 22,206,428 23,894,222
========== ========== ========== ==========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS)
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, 1997...... 24,206,756 1,000 $242 $455,645 $(109,726) $(17,276) $328,885
Purchase of treasury
stock, 305,000 shares of
THCR Common Stock,
at cost........................ (2,259) (2,259)
Net Loss........................ (23,338) (23,338)
---------- ----- ---- -------- --------- -------- --------
Balance, September 30, 1998..... 24,206,756 1,000 $242 $455,645 $(133,064) $(19,535) $303,288
========== ===== ==== ======== ========= ======== ========
The accompanying notes are an integral part of this
condensed consolidated financial statement.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS)
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss......................................................................... $(23,338) $ (14,117)
Adjustments to reconcile net loss to net cash flows from operating activities:
Equity in loss of Buffington Harbor, L.L.C..................................... 2,225 2,755
Depreciation and amortization.................................................. 61,848 66,654
Payment-In-Kind interest in Castle PIK Notes................................... (7,809) (6,757)
Minority interest in net loss.................................................. (13,434) (8,036)
Accretion of discounts on mortgage notes....................................... 3,343 2,361
Amortization of deferred loan costs............................................ 5,997 5,861
Provision for losses on receivables............................................ 10,510 6,393
Valuation allowance of CRDA investments and amortization of Indiana
gaming costs................................................................. 7,456 7,587
Accretion of phantom stock units............................................... -- 194
Increase in receivables........................................................ (14,022) (19,369)
Increase in inventories........................................................ (453) (1,623)
Increase in other current assets............................................... (5,601) (15,799)
Decrease (increase) in due from affiliates..................................... 552 (1,437)
Increase in other assets....................................................... (10,181) (5,277)
Increase in accounts payable and accrued expenses.............................. 9,967 10,355
Increase in accrued interest payable .......................................... 52,622 47,255
Increase in other long-term liabilities........................................ 5,246 7,615
-------- --------
Net cash flows provided by operating activities ............................. 84,928 84,615
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net........................................ (25,772) (71,575)
Investment in Buffington Harbor, L.L.C. ....................................... 88 (1,867)
CRDA Investments............................................................... (10,272) (10,572)
Restricted cash ............................................................... 6,013 --
-------- ---------
Net cash flows used in investing activities.................................. (29,943) (84,014)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock..................................................... (2,259) (17,276)
Issuance of long-term debt..................................................... 68,164 2,177
Payment of long-term debt...................................................... (72,992) (14,947)
Cost of issuing debt........................................................... (628) --
-------- ---------
Net cash flows used in financing activities.................................. (7,715) (30,046)
-------- ---------
Net increase (decrease) in cash and cash equivalents........................ 47,270 (29,445)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.................................... 140,328 175,745
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.......................................... $187,598 $ 146,300
======== =========
CASH INTEREST PAID.................................................................. $104,710 $ 101,566
======== =========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations.................. $ 2,192 $ 4,095
======== =========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
</TABLE>
4
<PAGE>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
SEPTEMBER 30, DECEMBER 31,
1998 1997
----------- -----------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents ............... $ 187,594 $ 140,324
Receivables, net ........................ 71,589 68,075
Inventories ............................. 13,463 13,011
Due from affiliates, net ................ 12,307 13,173
Prepaid expenses and other current assets 20,154 13,892
----------- -----------
Total Current Assets .............. 305,107 248,475
INVESTMENT IN BUFFINGTON HARBOR, L.L.C. ... 41,222 43,535
INVESTMENT IN TRUMP'S CASTLE PIK NOTES .... 61,190 53,381
PROPERTY AND EQUIPMENT, NET ............... 1,973,095 2,004,751
CASH RESTRICTED FOR FUTURE CONSTRUCTION ... 6,987 13,000
DEFERRED BOND AND LOAN ISSUANCE COSTS, NET 39,701 45,071
DUE FROM AFFILIATES ....................... 3,772 3,493
OTHER ASSETS .............................. 73,397 60,659
----------- -----------
Total Assets .............................. $ 2,504,471 $ 2,472,365
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt .... $ 13,088 $ 21,890
Accounts payable and accrued expenses ... 119,801 109,489
Accrued interest payable ................ 81,661 29,038
----------- -----------
Total Current Liabilities ............. 214,550 160,417
LONG-TERM DEBT, net of current maturities . 1,831,543 1,817,569
OTHER LONG-TERM LIABILITIES ............... 20,110 17,080
----------- -----------
Total Liabilities ......................... 2,066,203 1,995,066
----------- -----------
PARTNERS' CAPITAL:
Partners' Capital ......................... 652,503 652,503
Accumulated Deficit ....................... (194,700) (157,928)
Less treasury stock ....................... (19,535) (17,276)
----------- -----------
Total Partners' Capital ................... 438,268 477,299
----------- -----------
Total Liabilities and Partners' Capital ... $ 2,504,471 $ 2,472,365
=========== ===========
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 AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- ---------------------
1998 1997 1998 1997
---- ---- ---- -----
<S> <C> <C> <C> <C>
REVENUES:
Gaming ....................................... $364,077 $341,080 $ 971,606 $ 994,655
Rooms ........................................ 26,841 29,346 70,930 77,149
Food and Beverage ............................ 40,925 41,997 110,441 115,836
Other ........................................ 13,121 14,190 33,545 36,132
-------- -------- ---------- ----------
Gross Revenues ............................... 444,964 426,613 1,186,522 1,223,772
Less -- Promotional allowances ............... 47,685 51,017 128,578 137,910
-------- -------- ---------- ----------
Net Revenues ................................. 397,279 375,596 1,057,944 1,085,862
-------- -------- ---------- ----------
COSTS AND EXPENSES:
Gaming ....................................... 221,381 209,766 608,853 621,141
Rooms ........................................ 8,373 8,174 23,642 23,304
Food and Beverage ............................ 13,777 13,299 37,987 37,519
General and Administrative ................... 70,464 66,895 200,362 203,105
Depreciation and Amortization ................ 20,796 20,379 61,848 66,654
-------- -------- ---------- ----------
334,791 318,513 932,692 951,723
-------- -------- ---------- ----------
Income from operations ....................... 62,488 57,083 125,252 134,139
-------- -------- ---------- ----------
NON-OPERATING INCOME AND (EXPENSES):
Interest income .............................. 2,019 1,290 7,166 4,492
Interest expense ............................. (55,390) (52,565) (166,679) (157,835)
Other non-operating expense .................. -- -- (286) --
-------- -------- ---------- ----------
(53,371) (51,275) (159,799) (153,343)
-------- -------- ---------- ----------
Income (Loss) before equity in loss of Buffington
Harbor, L.L.C. and Minority Interest ......... 9,117 5,808 (34,547) (19,204)
Equity in loss of Buffington Harbor, L.L.C. ..... (742) (1,025) (2,225) (2,755)
-------- -------- ---------- ----------
NET INCOME (LOSS) ............................... $ 8,375 $ 4,783 $ (36,772) $ (21,959)
======== ======== ========== ==========
</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 NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS)
Partners' Accumulated THCR
Capital Deficit Common Stock Total
-------- ----------- ------------ -----
<S> <C> <C> <C> <C>
Balance, December 31, 1997........................... $652,503 $(157,928) $(17,276) $477,299
Purchase of 305,000 shares of
THCR Common Stock................................. (2,259) (2,259)
Net Loss............................................. (36,772) (36,772)
--------- --------- --------- --------
Balance, September 30, 1998.......................... $652,503 $(194,700) $(19,535) $438,268
========= ========== ========= ========
The accompanying notes are an integral part of this
condensed consolidated financial statement.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS)
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss ..................................................................... $ (36,772) $ (21,959)
Adjustments to reconcile net loss to net cash flows from operating activities:
Equity in loss of Buffington Harbor, L.L.C. ................................ 2,225 2,755
Depreciation and amortization .............................................. 61,848 66,654
Payment-In-Kind interest in Castle PIK Notes ............................... (7,809) (6,757)
Accretion of discounts on mortgage notes ................................... 3,343 2,361
Amortization of deferred loan costs ........................................ 5,997 5,861
Provision for losses on receivables ........................................ 10,510 6,393
Valuation allowance of CRDA investments and amortization of Indiana
gaming costs ............................................................ 7,456 7,587
Increase in receivables .................................................... (14,022) (19,369)
Increase in inventories .................................................... (453) (1,623)
Increase in other current assets ........................................... (5,601) (15,799)
Decrease (increase) in due from affiliates ................................. 552 (1,437)
Increase in other assets ................................................... (10,181) (5,277)
Increase in accounts payable and accrued expenses .......................... 9,967 10,355
Increase in accrued interest payable ....................................... 52,622 47,255
Increase in other long-term liabilities .................................... 5,246 7,615
--------- ---------
Net cash flows provided by operating activities ........................... 84,928 84,615
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net ...................................... (25,772) (71,575)
Investment in Buffington Harbor, L.L.C. ...................................... 88 (1,867)
CRDA Investments ............................................................. (10,272) (10,572)
Restricted cash .............................................................. 6,013 --
--------- ---------
Net cash flows used in investing activities ................................ (29,943) (84,014)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock ................................................... (2,259) (17,276)
Issuance of long-term debt ................................................... 68,164 2,177
Payment of long-term debt .................................................... (72,992) (14,947)
Cost of issuing debt ......................................................... (628) --
--------- ---------
Net cash flows used in financing activities ................................ (7,715) (30,046)
--------- ---------
Net increase (decrease) in cash and cash equivalents ..................... 47,270 (29,445)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............................... 140,324 175,745
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................................... $187,594 $146,300
======== ========
CASH INTEREST PAID ............................................................. $104,710 $101,566
======== ========
Supplemental Disclosure of Non-Cash Activities:
Purchase of property and equipment under capital lease obligations ............. $2,192 $4,095
====== ======
</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, including Trump Hotels & Casino Resorts Funding,
Inc. ("THCR Funding"). 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. Accordingly, such limited partnership interest is convertible
at Trump's option into 13,918,723 shares of THCR's common stock, par value $.01
per share (the "THCR Common Stock"). Trump's voting interest in THCR is
represented by the Class B Common Stock of THCR. The Class B Common Stock votes
together with the THCR Common Stock as a single class. The number of votes
represented by the THCR Class B Common Stock is equal to the number of shares of
THCR Common Stock issuable upon conversion of Trump's partnership interest in
THCR Holdings into THCR Common Stock. Upon conversion, the corresponding voting
power of shares of THCR Common Stock provides Trump with a voting interest in
THCR equal to his equity interest in THCR Holdings' assets represented by his
limited partnership interest. The accompanying 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:
Trump Atlantic City Associates ("Trump AC") and its subsidiaries, Trump
Plaza Associates ("Plaza Associates") and Trump Taj Mahal Associates ("Taj
Associates"). Plaza Associates owns and operates the Trump Plaza Hotel and
Casino ("Trump Plaza") located in Atlantic City, New Jersey. Taj Associates
owns and operates the Trump Taj Mahal Casino Resort (the "Taj Mahal")
located in Atlantic City, New Jersey. Taj Associates was acquired on April
17, 1996.
Trump Indiana, Inc. ("Trump Indiana"), which commenced operations on June
8, 1996, owns and operates a riverboat gaming facility at Buffington
Harbor, on Lake Michigan, Indiana (the "Indiana Riverboat").
Trump's Castle Associates, L.P. ("Castle Associates"), which was acquired
on October 7, 1996. Castle Associates owns and operates Trump Marina Hotel
Casino ("Trump Marina") located in Atlantic City, New Jersey.
THCR Funding, the co-issuer of $145,000,000 15 1/2% Senior Secured Notes,
due 2005 (the "Senior Notes").
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, 1997
filed with the SEC.
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)
The casino industry in Atlantic City is seasonal in nature; accordingly,
results of operations for the period ended September 30, 1998 are not
necessarily indicative of the operating results for a full year.
THCR, THCR Holdings and THCR Funding have no operations and their ability
to service their debt is dependent on the successful operations of Trump AC,
Trump Indiana and Castle Associates. 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 Loss Per Share
In the fourth quarter of 1997, THCR adopted Statement of Financial
Accounting Standards Board, Statement No. 128 "Earnings per Share" ("SFAS No.
128"). SFAS No. 128 requires the presentation in the consolidated statement of
operations for all years presented of both basic and dilutive earnings per
share. Basic and dilutive loss per share calculated under this Statement does
not differ from earnings per share reported in prior periods.
Basic loss per share is based on the weighted average number of shares of
THCR Common Stock outstanding. Dilutive 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, par value
$.01 per share ("the THCR 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.
(2) PROPERTY AND EQUIPMENT
During the second quarter of 1997, Plaza Associates, Taj Associates and
Castle Associates revised their estimates of the useful lives of buildings,
building improvements, furniture and fixtures which were acquired in 1996.
Building and building improvements were reevaluated to have a forty year life
and furniture and fixtures were determined to have a seven year life. During the
third quarter of 1997, Trump Indiana revised its estimates of the useful life of
the riverboat and its improvements from fifteen to thirty years. THCR believes
these changes more appropriately reflect the timing of the economic benefits to
be received from these assets during their estimated useful lives. For the nine
months ended September 30, 1998, the net effect of applying these new lives was
to decrease net loss by $2,300,000 and decrease loss per share by $.07.
(3) LONG-TERM DEBT
On April 17, 1998, Trump's Castle Funding, Inc. ("Castle Funding")
refinanced its 11 1/2% Senior Secured Notes due 2000 (the "Old Castle Senior
Notes") and its term loan with a bank (the "Term Loan") by issuing 10 1/4%
Senior Secured Notes due 2003 (the "New Castle Senior Notes"). The proceeds from
the issuance of the New Castle Senior Notes were used to redeem all of the
issued and outstanding Old Castle Senior Notes at 100% of their principal amount
and to repay the Term Loan in full. In conjunction with this refinancing,
Trump's Castle Hotel & Casino, Inc. ("TCHI"), a New Jersey corporation and the
general partner of Castle Associates, obtained a working capital credit facility
(the "Working Capital Loan"). Both the New Castle Senior Notes and the Working
Capital Loan are guaranteed by Castle Associates.
The New Castle Senior Notes have an outstanding principal amount of
$62,000,000 and bear interest at the rate of 10 1/4% per annum, payable
semi-annually each April and October. The New Castle Senior Notes mature on
April 17, 2003.
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)
The Working Capital Loan has an outstanding principal amount of $5,000,000
and bears interest at the rate of 10 1/4% per annum, payable semi-annually each
April and October. The entire principal balance of the Working Capital Loan
matures on April 17, 2003.
A tender offer was made to existing holders of Castle Associates' 11 3/4%
Mortgage Notes due 2003 (the "Mortgage Notes") on July 9, 1998, offering $940
per $1,000 of principal amount, plus accrued interest. On August 19, 1998, the
tender offer was amended to increase the consideration to be paid to tendering
Mortgage Note holders to $975 per $1,000 of principal amount, plus accrued
interest. Consummation of the tender offer was conditioned upon, among other
things a minimum tender of 98% of the principal amount of the Mortgage Notes.
Since the minimum tender requirement of 98% was not satisfied, the tender offer
expired at 5:00 p.m. on September 17, 1998, in accordance with its terms.
(4) FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Financial information relating to THCR Funding is as follows:
SEPTEMBER 30, DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
Total Assets (including Notes receivable of
$145,000,000 at September 30, 1998 and
December 31, 1997)................................... $151,555,000 $145,936,000
============ ============
Total Liabilities and Capital (including $145,000,000 of Senior
Notes ............................................... $151,555,000 $145,936,000
============ ============
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1997
---- ----
<S> <C> <C>
Interest Income from THCR Holdings............................ $16,856,000 $16,856,000
Interest Expense.............................................. $16,856,000 $16,856,000
----------- -----------
Net Income ................................................. $ -- $ --
=========== ===========
</TABLE>
(5) ACCOUNTS RECEIVABLE
Plaza Associates is appealing a real estate tax assessment by the City of
Atlantic City. Included in accounts receivable is $5,191,000 which Plaza
Associates estimates will be recoverable on the settlement of the appeal.
(6) 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.
11
<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)
THCR has decided to adopt the new standard in the first quarter of 1999.
Had THCR adopted the new standard as of September 30, 1998, the net loss of
$23,338,000 for the nine months ended September 30, 1998 would have increased by
$1,091,000 for the effect of the write-off of capitalized costs incurred through
the third quarter of 1998 and $1,872,000 for costs incurred through December 31,
1997, to an adjusted net loss of $26,301,000. The corresponding earnings per
share effect would increase the net loss per share as reported of $1.05 for the
nine months ended September 30, 1998 by $.05 for the write-off of capitalized
costs through the third quarter of 1998 and $.08 for costs incurred through
December 31, 1997, to an adjusted loss per share of $1.18.
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 $84,928,000 for the nine months ended September 30, 1998
compared to $84,615,000 for the comparable period in 1997.
Capital expenditures for Trump AC were $14,708,000 and $63,449,000 for the
nine months ended September 30, 1998 and 1997, respectively. Capital
expenditures for improvements to Trump Plaza's existing facilities were
$8,338,000 and $24,798,000 for the nine months ended September 30, 1998 and
1997, respectively. In addition, in 1997, Plaza Associates exercised its option
to purchase from Seashore Four Associates, an entity beneficially owned by
Trump, one of the parcels of land underlying Trump Plaza's main tower, pursuant
to the terms of a lease, the payments under which were terminated upon the
exercise of such option. The purchase price and associated closing costs were
$10,144,000.
Capital expenditures attributable to the Taj Mahal were $5,849,000 and
$37,948,000 for the nine months ended September 30, 1998 and 1997, respectively.
Capital expenditures for improvements to existing facilities were approximately
$5,849,000 and $7,596,000 for the nine months ended September 30, 1998 and 1997,
respectively. Capital expenditures attributable to the expansion of the facility
were approximately $30,352,000 for the nine months ended September 30, 1997.
The expansion at the Taj Mahal (the "Taj Mahal Expansion") consisted of the
construction of a new 14-bay bus terminal which was completed in December 1996,
a 2,400 space expansion of the existing self parking facilities, which was
completed in May 1997, and an approximate 7,000 square-foot casino expansion
with 260 slot machines, which was completed in July 1997. The total costs of the
Taj Mahal Expansion including amounts expended in 1996 and 1997 were
approximately $43,500,000 and have been funded principally out of cash from
operations.
Capital expenditures attributable to Castle Associates were $1,950,000 and
$5,453,000 for the nine months ended September 30, 1998 and 1997, respectively.
Capital expenditures attributable to Trump Indiana were $8,994,000 and
$2,616,000 for the nine months ended September 30, 1998 and 1997, respectively.
Approximately $15,000,000 costs of hotel construction and other infrastructure
improvements will be applied towards satisfying the economic development
commitment required in connection with the Indiana licensing process. THCR is
currently negotiating with the Majestic Star Casino, L.L.C. ("Barden"), the
other riverboat licensee and joint owner with Trump Indiana of Buffington Harbor
Riverboats, L.L. C. ("BHR") for the development of a 1,500 space parking garage
by BHR which would cost approximately $15,000,000.
12
<PAGE>
On April 17, 1998 Castle Funding refinanced its Old Castle Senior Notes and
its Term Loan by issuing the New Castle Senior Notes. The proceeds from the
issuance of the New Castle Senior Notes were used to redeem all of the issued
and outstanding Old Castle Senior Notes and 100% of their principal amount and
to repay the Term Loan in full. In conjunction with this refinancing, TCHI, a
New Jersey corporation and the general partner of Castle Associates, obtained a
Working Capital Loan. Both the New Castle Senior Notes and the Working Capital
Loan are guaranteed by Castle Associates.
The New Castle Senior Notes have an outstanding principal amount of
$62,000,000 and bear interest at the rate of 10 1/4% per annum, payable
semi-annually each April and October. The New Castle Senior Notes mature on
April 17, 2003.
The Working Capital Loan has an outstanding principal amount of $5,000,000
and bears interest at the rate of 10 1/4% per annum, payable semi-annually each
April and October. The entire principal balance of the Working Capital Capital
Loan matures on April 17, 2003.
A tender offer was made to existing Castle Associates' Mortgage Note
holders on July 9, 1998, offering $940 per $1,000 of principal amount, plus
accrued interest. On August 19, 1998, the tender offer was amended to increase
the consideration to be paid to tendering Mortgage Note holders to $975 per
$1,000 of principal amount, plus accrued interest. Consummation of the tender
offer was conditioned upon, among other things a minimum tender of 98% of the
principal amount of the Mortgage Notes. Since the minimum tender requirement of
98% was not satisfied, the tender offer expired at 5:00 p.m. on September 17,
1998, in accordance with its terms.
Castle Associates has the authority to obtain a working capital facility of
up to $10,000,000 (of which approximately $5,440,000 is outstanding) although
there can be no assurance that such financing will be available or on terms
acceptable to Castle Associates.
During the quarter ended September 30, 1998, THCR Holdings advanced a loan
to Trump in the amount of $11,000,000 and prepaid 1999 fees and expenses in the
amount of $1,500,000 to Trump in accordance with the Executive Agreement. Such
loan is secured by a pledge of certain receivables due to Trump. On October 19,
1998, THCR Holdings loaned Trump $13,500,000. Such loan was offset in its
entirety when Trump advanced $13,500,000 to THCR Enterprises, L.L.C. ("THCR
Enterprises"), which then purchased Trump's indebtedness to Donaldson Lufkin &
Jenrette Securities Corporation. In connection with such purchase, THCR
Enterprises was assigned a pledge of Trump's and Trump Casinos, Inc.'s ("TCI")
equity interests in THCR and THCR Holdings.
THCR has assessed the year 2000 issue and has begun implementing a plan to
insure 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 will be
ongoing during 1998 and is expected to be completed during early 1999. THCR is
approximately 50% 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 their individual systems provided to THCR. These are primarily
support of property, plant and equipment, such as telephones, 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 insure
year 2000 compliance. The cost of addressing the year 2000 issue is not expected
to be material, and 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.
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.
13
<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 September 30, 1998 and 1997. The
following tables include selected data of Plaza Associates, Taj Associates,
Trump Indiana and Trump Marina.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED*
---------- ---------- ------- ------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming ............................................... $ 103.7 $ 148.0 $ 38.2 $ 74.2 $ 364.1
Other ................................................ 28.8 32.1 0.8 19.2 80.9
-------- -------- ------- ------- --------
GROSS REVENUES ...................................... 132.5 180.1 39.0 93.4 445.0
Less: Promotional Allowances .......................... 17.8 18.0 0.2 11.7 47.7
-------- -------- ------- ------- --------
NET REVENUES ........................................ 114.7 162.1 38.8 81.7 397.3
-------- -------- ------- ------- --------
COSTS AND EXPENSES:
Gaming ............................................... 62.0 84.6 27.8 47.0 221.4
General & Administrative ............................. 19.9 23.3 8.4 16.2 70.5
Depreciation & Amortization .......................... 6.5 8.9 1.1 4.2 20.8
Other ................................................ 8.9 8.8 0.9 3.5 22.1
-------- -------- ------- ------- --------
TOTAL COSTS AND EXPENSES ............................ 97.3 125.6 38.2 70.9 334.8
-------- -------- ------- ------- --------
INCOME FROM OPERATIONS ................................ 17.4 36.5 0.6 10.8 62.5
-------- -------- ------- ------- --------
Non-operating Income (Expense) ........................ 0.1 0.2 0.3 0.2 2.0
Interest Expense ...................................... (11.8) (23.5) (2.2) (12.9) (55.4)
-------- -------- ------- ------- --------
TOTAL NON-OPERATING EXPENSE, NET .................... (11.7) (23.3) (1.9) (12.7) (53.4)
-------- -------- ------- ------- --------
Loss in Joint Venture ................................. -- -- (0.7) -- (0.7)
-------- -------- ------- ------- --------
INCOME (LOSS) BEFORE MINORITY
INTEREST ........................................... $ 5.7 $ 13.2 $(2.0) $ (1.9) 8.4
======== ======== ======= =======
Minority Interest ..................................... (3.1)
--------
NET INCOME ............................................ $ 5.3
========
</TABLE>
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1997
----------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED*
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming ............................................. $ 100.8 $ 137.8 $ 29.9 $ 72.6 $ 341.1
Other .............................................. 30.8 35.3 0.7 18.7 85.5
-------- -------- ------- ------- --------
GROSS REVENUES .................................... 131.6 173.1 30.6 91.3 426.6
Less: Promotional Allowances ........................ 18.4 20.8 0.2 11.6 51.0
-------- -------- ------- ------- --------
NET REVENUES ...................................... 113.2 152.3 30.4 79.7 375.6
-------- -------- ------- ------- --------
COSTS AND EXPENSES:
Gaming ............................................. 62.3 82.5 20.4 44.6 209.8
General & Administrative ........................... 17.5 21.6 7.3 16.6 66.9
Depreciation & Amortization ........................ 6.1 9.0 1.1 4.2 20.4
Other .............................................. 8.8 8.7 0.2 3.7 21.4
-------- -------- ------- ------- --------
TOTAL COSTS AND EXPENSES .......................... 94.7 121.8 29.0 69.1 318.5
-------- -------- ------- ------- --------
INCOME FROM OPERATIONS .............................. 18.5 30.5 1.4 10.6 57.1
-------- -------- ------- ------- --------
Non-operating Income ................................ 0.1 0.3 0.0 0.1 1.3
Interest Expense .................................... (12.2) (23.7) (2.3) (12.8) (52.6)
-------- -------- ------- ------- --------
TOTAL NON-OPERATING EXPENSE, NET .................. (12.1) (23.4) (2.3) (12.7) (51.3)
-------- -------- ------- ------- --------
Loss in Joint Venture ............................... -- -- (1.0) -- (1.0)
-------- -------- ------- ------- --------
INCOME (LOSS) BEFORE
MINORITY INTEREST ................................ $ 6.4 $ 7.1 $ (1.9) $ (2.1) 4.8
======== ======== ======= =======
Minority Interest ................................... (1.8)
--------
NET INCOME .......................................... $ 3.0
========
</TABLE>
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
14
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1998
---------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED
----------- ---------- ------- ------ -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
TABLE GAME REVENUES..................... $ 27.9 $ 60.1 $ 8.5 $ 20.8 $ 117.3
Incr (Decr) over prior period........ $ 2.3 $ 11.3 $ 0.1 $ (2.3) $ 11.4
Table Game Drop......................... $ 177.9 $ 328.5 $ 54.9 $ 132.7 $ 694.0
Incr (Decr) over prior period........ $ 5.2 $ (18.0) $ 7.5 $ (3.2) $ (8.5)
Table Win Percentage.................... 15.7% 18.2% 15.4% 15.7% 16.9%
Incr (Decr) over prior period........ 0.9pts. 4.1pts. (2.3)pts. (1.3)pts. 1.8pts.
Number of Table Games................... 101 156 60 91 408
Incr (Decr) over prior period........ (9) 1 (7) (3) (18)
Slot Revenues........................... $ 75.8 $ 82.5 $ 29.7 $ 52.4 $ 240.4
Incr (Decr) over prior period........ $ 0.6 $ (1.6) $ 8.2 $ 3.8 $ 11.0
Slot Handle............................. $ 929.4 $ 1,011.6 $ 457.3 $ 650.0 $ 3,048.3
Incr (Decr) over prior period........ $ (3.1) $ 15.1 $ 136.1 $ 43.1 $ 191.2
Slot Win Percentage..................... 8.2% 8.2% 6.5% 8.1% 7.9%
Incr (Decr) over prior period........ 0.1 pts. (0.2)pts. (0.2)pts. 0.1pts. (0.1)pts.
Number of Slot Machines................. 4,204 4,136 1,375 2,170 11,885
Incr (Decr) over prior period........ 114 0 (41) 28 101
Other Gaming Revenues................... N/A $ 5.4 N/A $ 1.0 $ 6.4
Incr (Decr) over prior period........ N/A $ 0.5 N/A $ 0.1 $ 0.6
TOTAL GAMING REVENUES................... $ 103.7 $ 148.0 $ 38.2 $ 74.2 $ 364.1
INCR (DECR) OVER PRIOR PERIOD........ $ 2.9 $ 10.2 $ 8.3 $ 1.6 $ 23.0
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1997
-----------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED
------------- ---------- ------- -------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Table Game Revenues .................... $ 25.6 $ 48.8 $ 8.4 $ 23.1 $ 105.9
Table Game Drop......................... $ 172.7 $ 346.5 $ 47.4 $ 135.9 $ 702.5
Table Win Percentage.................... 14.8% 14.1% 17.7% 17.0% 15.1%
Number of Table Games................... 110 155 67 94 426
Slot Revenues........................... $ 75.2 $ 84.1 $ 21.5 $ 48.6 $ 229.4
Slot Handle............................. $ 932.5 $ 996.5 $ 321.2 $ 606.9 $ 2,857.1
Slot Win Percentage..................... 8.1% 8.4% 6.7% 8.0% 8.0%
Number of Slot Machines................. 4,090 4,136 1,416 2,142 11,784
Other Gaming Revenues................... N/A $ 4.9 N/A $ 0.9 $ 5.8
TOTAL GAMING REVENUES................... $ 100.8 137.8 $ 29.9 $ 72.6 $ 341.1
</TABLE>
Gaming revenues are the primary source of THCR's revenues. The year over
year increase in table game revenues was due primarily to the increased table
win percentages at Trump Plaza and the Taj Mahal. 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 15.5% and 14.6% for the
quarters ended September 30, 1998 and 1997, respectively. The increase in slot
revenues is primarily attributed to higher slot handles at Trump Indiana and
Trump Marina in 1998.
Gaming costs and expenses were $221,381,000 for the three months ended
September 30, 1998, an increase of $11,615,000 or 5.5% from $209,766,000 for the
comparable period in 1997. Trump Indiana incurred an increase of $7,364,000 or
36.1% to $27,786,000 for the three months ended September 30, 1998 as a result
of increases in costs related to player promotions and special events caused by
the expansion of gaming in Indiana. Gaming costs and expenses for Trump Marina
were $46,941,000 for the three months ended September 30, 1998, an increase of
$2,336,000 or 5.2% from $44,605,000 for the comparable period in 1997. This
increase is primarily the result of an increase in promotional and complimentary
expenses as well as increased entertainment expenses.
General and administrative expenses were $70,464,000 for the three months
ended September 30, 1998, an increase of $3,569,000 or 5.3% from general and
administrative expenses of $66,895,000 for the comparable period in 1997.
15
<PAGE>
Comparison of Nine-Month Periods Ended September 30, 1998 and 1997. The
following tables include selected data of Plaza Associates, Taj Associates,
Trump Indiana and Trump Marina.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED*
---------- ---------- ------- ------ -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming............................... $283.9 $388.4 $101.3 $198.0 $ 971.6
Other................................ 77.1 88.9 2.1 46.8 214.9
------ ------ ------ ------ --------
GROSS REVENUES...................... 361.0 477.3 103.4 244.8 1,186.5
Less: Promotional Allowances.......... 47.8 50.6 0.5 29.7 128.6
------ ------ ------ ------ --------
NET REVENUES........................ 313.2 426.7 102.9 215.1 1,057.9
------ ------ ------ ------ --------
COSTS AND EXPENSES:
Gaming............................... 172.5 237.0 73.9 125.5 608.9
General & Administrative............. 58.7 65.8 22.0 44.8 200.4
Depreciation & Amortization.......... 18.7 27.2 3.2 12.4 61.8
Other................................ 24.2 25.4 2.4 9.5 61.5
------ ------ ------ ------ --------
TOTAL COSTS AND EXPENSES............ 274.1 355.4 101.5 192.2 932.6
------ ------ ------ ------ --------
INCOME FROM OPERATIONS................ 39.1 71.3 1.4 22.9 125.3
------ ------ ------ ------ --------
Non-operating Income ................ 0.9 1.6 0.6 0.5 6.9
Interest Expense...................... (35.8) (70.6) (7.0) (38.3) (166.7)
------ ------ ------ ------ --------
TOTAL NON-OPERATING EXPENSE, NET.... (34.9) (69.0) (6.4) (37.8) (159.8)
------ ------ ------ ------ --------
Loss in Joint Venture................. -- -- (2.2) - (2.2)
------ ------ ------ ------ --------
INCOME (LOSS) BEFORE
MINORITY INTEREST................... $ 4.2 $ 2.3 $ (7.2) $(14.9) (36.7)
====== ====== ====== ======
Minority Interest..................... 13.4
-------
NET LOSS.............................. $ (23.3)
=======
</TABLE>
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
----------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED*
---------- ---------- ------- ------ --------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Gaming.................................. $285.5 $400.7 $103.3 $205.1 $ 994.6
Other................................... 83.7 93.3 2.7 49.4 229.2
------ ------ ------ ------ --------
GROSS REVENUES......................... 369.2 494.0 106.0 254.5 1,223.8
Less: Promotional Allowances............. 49.7 56.3 0.5 31.3 137.9
------ ------ ------ ------ --------
NET REVENUES........................... 319.5 437.7 105.5 223.2 1,085.9
------ ------ ------ ------ --------
COSTS AND EXPENSES:
Gaming.................................. 178.7 245.7 66.6 130.1 621.1
General & Administrative................ 59.4 64.6 21.8 48.9 203.3
Depreciation & Amortization............. 18.1 31.9 3.6 12.9 66.7
Other................................... 24.6 24.9 1.7 9.6 60.8
------ ------ ------ ------ --------
TOTAL COSTS AND EXPENSES............... 280.8 367.1 93.7 201.5 951.9
------ ------ ------ ------ --------
INCOME FROM OPERATIONS................... 38.7 70.6 11.8 21.7 134.0
------ ------ ------ ------ --------
Non-operating Income .................... 0.4 0.9 0.5 0.3 4.5
Interest Expense......................... (36.6) (71.1) (7.8) (37.3) (157.8)
------ ------ ------ ------ --------
TOTAL NON-OPERATING EXPENSE, NET....... (36.2) (70.2) (7.3) (37.0) (153.3)
------ ------ ------ ------ --------
Loss in Joint Venture.................... -- -- (2.8) -- (2.8)
------ ------ ------ ------ --------
INCOME (LOSS) BEFORE
MINORITY INTEREST..................... $ 2.5 $ 0.4 $ 1.7 $(15.3) (22.1)
====== ====== ====== ======
Minority Interest........................ 8.0
--------
NET LOSS ................................ $ (14.1)
========
</TABLE>
* Intercompany eliminations and expenses of THCR and THCR Holdings are not
separately shown.
16
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1998
------------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED
----------- ---------- -------- ------- -------------
(DOLLARS IN MILLIONS, EXCEPT STATISTICAL DATA)
<S> <C> <C> <C> <C> <C>
TABLE GAME REVENUES................... $ 76.3 $ 149.3 $ 25.7 $ 53.6 $ 304.9
Incr (Decr) over prior period........... $ 5.2 $ (7.3) $ (5.2) $ (6.8) $ (14.1)
Table Game Drop......................... $ 485.6 $ 903.0 $ 161.9 $ 345.3 $ 1,895.8
Incr (Decr) over prior period........... $ (10.9) $ (88.2) $ (3.2) $ (35.6) $ (137.9)
Table Win Percentage.................... 15.7% 16.5% 15.9% 15.5% 16.1%
Incr (Decr) over prior period........... 1.4pts. 0.7pts. (2.8) pts. (0.4) pts. 0.4 pts.
Number of Table Games................... 110 155 60 92 417
Incr (Decr) over prior period........... (8) (5) (9) 2 (20)
SLOT REVENUES........................... $ 207.6 $ 224.5 $ 75.6 $ 142.6 $ 650.3
Incr (Decr) over prior period........... $ (6.8) $ (5.5) $ 3.2 $ (0.4) $ (9.5)
Slot Handle............................. $ 2,562.3 $ 2,742.6 $ 1,186.1 $ 1,763.5 $ 8,254.5
Incr (Decr) over prior period........... $ (60.4) $ (8.8) $ 109.1 $ 18.8 $ 58.7
Slot Win Percentage..................... 8.1% 8.2% 6.4% 8.1% 7.9%
Incr (Decr) over prior period........... (0.1)pts. (0.2)pts. (0.3)pts. (0.1)pts. (0.1)pts.
Number of Slot Machines................. 4,124 4,137 1,375 2,163 11,799
Incr (Decr) over prior period........... 44 213 (53) (51) 153
Other Gaming Revenues .................. N/A $ 14.6 N/A $ 1.8 $ 16.4
Incr (Decr) over prior period........... N/A $ 0.5 N/A $ 0.1 $ 0.6
TOTAL GAMING REVENUES................... $ 283.9 $ 388.4 $ 101.3 $ 198.0 $ 971.6
INCR (DECR) OVER PRIOR PERIOD........... $ (1.6) $ (12.3) $ (2.0) $ (7.1) $ (23.0)
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 31, 1997
-------------------------------------------------------------------------
PLAZA TAJ TRUMP TRUMP THCR
ASSOCIATES ASSOCIATES INDIANA MARINA CONSOLIDATED
-------------- ------------ ----------- --------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
TABLE GAME REVENUES................... $ 71.1 $ 156.6 $ 30.9 $ 60.4 $ 319.0
Table Game Drop....................... $ 496.5 $ 991.2 $ 165.1 $ 380.9 $2,033.7
Table Win Percentage.................. 14.3% 15.8% 18.7% 15.9% 15.7%
Number of Table Games................... 118 160 69 90 437
SLOT REVENUES........................... $ 214.4 $ 230.0 $ 72.4 $ 143.0 $ 659.8
Slot Handle............................. $ 2,622.7 $ 2,751.4 $ 1,077.0 $ 1,744.7 $8,195.8
Slot Win Percentage..................... 8.2% 8.4% 6.7% 8.2% 8.0%
Number of Slot Machines................. 4,080 3,924 1,428 2,214 11,646
Other Gaming Revenues................... N/A $ 14.1 N/A $ 1.7 $ 15.8
TOTAL GAMING REVENUES................... $ 285.5 $ 400.7 $ 103.3 $ 205.1 $ 994.6
</TABLE>
Gaming revenues are the primary source of THCR's revenues. The year over
year decrease in gaming revenues was primarily due to Taj Associates' first
quarter results for last year which included an unusual, approximately $8
million dollar, table game win from one premium player, a decline in high-end
international table game players due to Asian economic conditions and the
decline in slot revenues at both the Taj Mahal and Trump Plaza. Trump Marina's
decrease in table game revenue is due to increased capacity in the Atlantic City
Market as well as management's decision to reduce promotional gaming costs in an
effort to eliminate less profitable programs. 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 15.3% and 14.9% for the nine
months ended September 30, 1998 and 1997, respectively. Decreases in revenue at
Trump Indiana are attributed to the new facilities and capacity added over the
past year.
Substantially proportionate to the decrease in gaming revenues, gaming
costs and expenses decreased $12,288,000 or 2.0% from the comparable period in
1997. This decrease primarily represents marketing and promotional costs.
17
<PAGE>
During the second quarter of 1997, Plaza Associates, Taj Associates and
Castle Associates revised their estimates of the useful lives of buildings,
building improvements, furniture and fixtures which were acquired in 1996.
Building and building improvements were reevaluated to have a forty year life
and furniture and fixtures were determined to have a seven year life. During the
third quarter of 1997, Trump Indiana revised its estimates of the useful life of
the riverboat and its improvements from fifteen to thirty years. THCR believes
these changes more appropriately reflect the timing of the economic benefits to
be received from these assets during their estimated useful lives. For the nine
months ended September 30, 1998, the net effect of applying these new lives was
to decrease net loss by $2,300,000 and decrease loss per share by $.07.
Additionally, Taj Associates' depreciation decreased due to furniture and
equipment classifications becoming fully depreciated.
Insurance reserves were reduced by $2,820,000 as the result of an internal
risk management review at Plaza Associates, Taj Associates and Castle
Associates.
Interest expense increased due to the additional $100,000,000 of TAC II
Notes and TAC III Notes issued on December 10, 1997 of which $75,000,000 are TAC
II Notes issued by Trump AC together with Trump AC Funding II and of which
$25,000,000 are TAC III Notes issued by Trump AC together with Trump AC Funding
III.
SEASONALITY
The casino industry in Atlantic City and Indiana is seasonal in nature;
accordingly, the results of operations for the period ending September 30, 1998
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
Pursuant to the General Instructions to Rule 305 of Regulation S-K, the
quantitative and qualitative disclosures called for by this Item 3 and by Rule
305 of Regulation S-K are inapplicable to the Registrants at this time.
PART II--OTHER INFORMATION
ITEM 1--LEGAL PROCEEDINGS
THCR and certain of its subsidiaries, affiliates and employees have been
involved in various legal 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. Such persons and entities
are vigorously defending the allegations against them and intend to vigorously
contest any future proceedings.
18
<PAGE>
Plaza Associates. The Casino Reinvestment Development Authority ("CRDA"),
as required, set aside funds for investment in hotel development projects in
Atlantic City undertaken by casino licensees which result in the construction or
rehabilitation of at least 200 hotel rooms. These investments are to fund up to
27% of the cost to casino licensees of such projects. In June 1993, Plaza
Associates made application for such funding to the CRDA with respect to its
proposed construction of the Trump Plaza East facilities, demolition of a
certain structure adjacent thereto, development of an appurtenant public park,
roadway and parking area and acquisition of the entire project site. The CRDA,
in rulings through January 10, 1995, approved the hotel development project and,
with respect to same and pursuant to a credit agreement between them, reserved
to Plaza Associates the right to take investment tax credits up to approximately
$14.2 million. Plaza Associates has, except for three small parcels discussed
below, acquired the site and constructed and presently operates and maintains
the proposed hotel tower, public park, roadway and parking area.
As part of its approval and on the basis of its powers of eminent domain,
the CRDA, during 1994, initiated certain condemnation proceedings in the
Superior Court of New Jersey, Atlantic County, to acquire five small parcels of
land within the project site. Plaza Associates has since acquired two of the
parcels and proceedings with respect to those parcels have been concluded. The
court, in a July 20, 1998 opinion, directed entry of judgments dismissing the
CRDA actions with respect to the remaining three parcels, which if acquired,
would be included in the public park and parking area of the project, on the
basis of its determination that the CRDA had failed to establish that a valid
primarily public purpose justified acquisition of the parcels. Written orders of
dismissal were entered by the court on July 28. The right of the CRDA to appeal
these judgments expired on September 11, 1998. The judgements were not appealed.
Additionally, with respect to the two parcels to be included in the public
park portion of the project, the CRDA, by a separate motion, sought an order
that Plaza Associates' application and credit agreement be deemed amended to
terminate the CRDA's obligation to acquire the two parcels and to enable the
CRDA to abandon the condemnation proceedings with respect to these two parcels.
This motion was opposed by Plaza Associates. By order dated April 1, 1998, the
Court denied the motion but granted the CRDA leave to amend its pleadings by a
filing within 14 days from the date thereof formally asserting a claim for
specific performance of the alleged agreement. The CRDA did not file any such
amended pleading within this permitted time period.
Also, the defendants in two of the condemnation proceedings filed a
separate joint complaint in the New Jersey Superior Court alleging, among other
claims, that the CRDA and Plaza Associates were wrongfully attempting to deprive
them of property rights in violation of their constitutional and civil rights.
Coking, et al. v. Casino Reinvestment Development Authority, et al., Docket No.
ATL-L-2555-97. The CRDA's motion for summary judgment on the complaint and Plaza
Associates' motion to dismiss it for failure to state a claim were granted by
the New Jersey Superior Court on October 24, 1997 and November 11, 1997.
Trump Indiana. Commencing in early 1994, Trump Indiana (which was then
wholly owned by Trump), through its Indiana counsel, had discussions with eight
Indiana residents regarding the potential purchase by such residents of
non-voting stock of Trump Indiana, representing a total of 7.5% of the equity in
Trump Indiana. The purchase price of the stock was to have been paid with a
promissory note secured by the stock purchased, although the purchase price and
other material terms of the proposed purchase were never agreed upon. Such
discussions did not result in an agreement for, or the purchase of, any stock by
the residents. It was subsequently 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. Trump Indiana and THCR did not agree with the residents' assertions of
any such rights with respect to the stock of Trump Indiana or otherwise, and so
advised the residents. Although discussions had been ongoing with respect to the
resolution of this matter, on March 29, 1996, in the matter entitled Keshav D.
Aggarwal, et. al. v. Donald J. Trump, Trump Hotels & Casino Resorts, Inc., Trump
Hotels & Casino Resorts Holdings, L.P. and Trump Indiana, Inc., such residents
filed a complaint with respect to this matter in the United States District
Court, Southern District of Indiana, seeking, among other things, compensatory
and punitive damages in an unspecified amount and that the court order the
defendants to transfer ownership of 7.5% of Trump Indiana to the plaintiffs.
Trump, THCR, THCR Holdings and Trump Indiana filed an answer to the complaint on
May 31, 1996. Cross-motions for summary judgment have been filed by all parties
and a decision regarding each motion is expected in the near future. Monetary
settlements have been reached between all defendants and six of the plaintiffs.
The remaining plaintiffs voluntarily dismissed their demands for the transfer of
ownership in Trump Indiana. A trial date has been set for February 1999. THCR
and the other defendants intend to vigorously contest the allegations against
them. Further, management believes that the further resolution of these claims
will not have a material adverse effect on THCR.
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, 1997, 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,
19
<PAGE>
have a material adverse effect on its financial condition or results of
operations of THCR.
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
At the 1998 Annual Meeting of shareholders on August 6, 1998, the
stockholders of THCR voted on the following two proposals:
Proposal 1. The stockholders of THCR re-elected each of the Directors of
THCR. The number of votes cast for each of the nominees were as follows:
Common Stock
---------------------------
For Withheld
---------- ----------
Donald J. Trump........................ 32,556,131 1,334,579
Nicholas L. Ribis...................... 32,619,595 1,271,115
Wallace B. Askins...................... 32,618,032 1,272,678
Don M. Thomas.......................... 32,618,723 1,271,987
Peter M. Ryan.......................... 32,629,523 1,261,187
All 1,000 shares of Class B Common Stock were voted in favor of Proposal 1.
Proposal 2. The appointment of Arthur Andersen LLP as the independent
public accountants of THCR for the fiscal year ending December 31, 1998 was
ratified by a vote of 33,724,460 shares of Common Stock for, and 104,959 shares
against, with 61,291 shares abstaining. All 1,000 shares of Class B Common Stock
were voted in favor of Proposal 2.
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 September 30, 1998.
(2) Filed only with the Quarterly Report on Form 10-Q of THCR Holdings and THCR
Funding for the quarter ended September 30, 1998.
B. CURRENT REPORTS ON FORM 8-K:
The Registrants did not file any Current Reports on Form 8-K during the
period beginning July 1, 1998 and ending September 30, 1998.
20
<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: November 13, 1998
By: FRANCIS X. MCCARTHY, JR.
-----------------------------------------
FRANCIS X. MCCARTHY, JR.
Executive Vice President of Finance and
Chief Financial Officer
(DULY AUTHORIZED OFFICER AND PRINCIPAL
FINANCIAL OFFICER)
21
<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: November 13, 1998 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)
22
<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: November 13, 1998
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)
23
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943322
<NAME> TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 187,594
<SECURITIES> 0
<RECEIVABLES> 95,137
<ALLOWANCES> 23,548
<INVENTORY> 13,463
<CURRENT-ASSETS> 305,107
<PP&E> 2,329,921
<DEPRECIATION> 356,826
<TOTAL-ASSETS> 2,504,471
<CURRENT-LIABILITIES> 214,550
<BONDS> 1,735,298
0
0
<COMMON> 0
<OTHER-SE> 438,268
<TOTAL-LIABILITY-AND-EQUITY> 2,504,471
<SALES> 1,057,944
<TOTAL-REVENUES> 1,186,522
<CGS> 0
<TOTAL-COSTS> 670,482<F1>
<OTHER-EXPENSES> 262,210<F2>
<LOSS-PROVISION> 10,510
<INTEREST-EXPENSE> 166,679
<INCOME-PRETAX> (36,772)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,772)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,772)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Includes gaming, lodging, food & beverage and other.
<F2> Includes general & administration, depreciation & amortization and
development costs.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943323
<NAME> TRUMP HOTELS & CASINO RESORTS FUNDING, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 6,555
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,555
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 151,555
<CURRENT-LIABILITIES> 6,555
<BONDS> 145,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 151,555
<SALES> 0
<TOTAL-REVENUES> 16,856
<CGS> 0
<TOTAL-COSTS> 0<F1>
<OTHER-EXPENSES> 0<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,856
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Includes gaming, lodging, food & beverage and other.
<F2> Includes general & administration, depreciation & amortization
</FN>
</TABLE>
