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, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _______________ to ______________.
Commission file number: 333-643
TRUMP ATLANTIC CITY ASSOCIATES
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-3213714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 441-6060
(Registrant's telephone number, including area code)
Commission file number: 333-643
TRUMP ATLANTIC CITY FUNDING, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 22-3418939
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 441-6060
(Registrant's telephone number, including area code)
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
Registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days. Yes ___ No _X_
The number of outstanding shares of Trump Atlantic City Funding, Inc. common
stock, par value $.01 per share, as of April 30, 1996, was 100.
Trump Atlantic City Associates and Trump Atlantic City Funding, Inc. meet the
conditions set forth in General Instruction (H) (1) (a) and (b) of Form 10-Q and
are therefore filing this Form with the reduced disclosure format.
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
INDEX TO FORM 10-Q
Page
Number
------
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Condensed Consolidated Balance Sheets of Trump Atlantic City
Associates and Subsidiaries as of March 31, 1996 (unaudited)
and December 31, 1995. 1
Condensed Consolidated Statements of Operations of Trump Atlantic
City Associates and Subsidiaries for the Three Months
Ended March 31, 1996 and 1995 (unaudited). 2
Condensed Consolidated Statement of Capital of Trump Atlantic
City Associates and Subsidiaries for the Three Months Ended
March 31, 1996 (unaudited). 3
Condensed Consolidated Statements of Cash Flows of Trump Atlantic
City Associates and Subsidiaries for the Three Months Ended
March 31, 1996 and 1995 (unaudited). 4
Notes to Condensed Consolidated Financial Statements of Trump
Atlantic City Associates and Subsidiaries. 5-8
ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 11
ITEM 2 -- Changes in Securities 11
ITEM 3 -- Defaults upon Senior Securities 11
ITEM 4 -- Submission of Matters to a Vote of Security Holders 11
ITEM 5 -- Other Information 11
ITEM 6 -- Exhibits and Reports on Form 8-K 12
Signature - Trump Atlantic City Associates 13
Signature - Trump Atlantic City Funding, Inc. 14
PART I - FINANCIAL INFORMATION
ITEM 1- Financial Statements
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
March 31, December 31,
1996 1995
-------- --------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 20,205 $ 15,937
Receivables, net 14,539 14,058
Inventories 2,640 2,609
Due from affiliates, net 2,068 1,298
Other current assets 4,475 5,045
-------- --------
Total current assets 43,927 38,947
PROPERTY AND EQUIPMENT, net 421,016 395,942
LAND RIGHTS 29,227 29,320
OTHER ASSETS 15,593 15,815
-------- --------
Total Assets $509,763 $480,024
======== ========
LIABILITIES AND CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,593 $ 2,901
Accounts payable and accrued expenses 32,099 27,912
Accrued interest payable 10,467 1,497
-------- --------
Total Current Liabilities 47,159 32,310
LONG-TERM DEBT, net of discount and current
maturities 332,879 332,721
DISTRIBUTION PAYABLE TO
TRUMP PLAZA FUNDING, INC 3,822 3,822
DEFERRED STATE INCOME TAXES 345 359
-------- --------
Total Liabilities 384,205 369,212
-------- --------
CAPITAL:
Partners' Equity 110,087 94,087
Retained Earnings 15,471 16,725
-------- --------
Total Capital 125,558 110,812
-------- --------
Total Liabilities and Capital $509,763 $480,024
======== ========
The accompanying notes are an integral part of
these condensed consolidated balance sheets.
1
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(unaudited)
(in thousands)
1996 1995
-------- --------
Revenues:
Gaming $ 74,270 $ 65,722
Rooms 5,798 3,898
Food and Beverage 11,383 10,259
Other 2,100 1,781
-------- --------
Gross Revenues 93,551 81,660
Less - Promotional allowances 10,683 7,557
-------- --------
Net Revenues 82,868 74,103
-------- --------
COSTS AND EXPENSES:
Gaming 44,126 36,785
Rooms 777 680
Food and Beverage 4,094 4,449
Pre-Opening 479 --
General and Administrative 18,392 16,750
Depreciation and Amortization 4,523 4,092
Other 800 833
-------- --------
73,191 63,589
-------- --------
Income from operations 9,677 10,514
-------- --------
NON-OPERATING INCOME AND
(EXPENSES):
Interest income 195 173
Interest expense (9,751) (12,527)
Other non-operating expense (1,375) (909)
-------- --------
(10,931) (13,263)
Loss before benefit
for state income taxes (1,254) (2,749)
BENEFIT FOR STATE
INCOME TAXES -- (206)
-------- --------
Net Loss $ (1,254) $ (2,543)
======== ========
The accompanying notes are an integral part of
these condensed consolidated financial statements.
2
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(unaudited)
(in thousands)
Partners' Retained
Capital Earnings Total
-------- -------- ---------
Balance,
December 31, 1995 $ 94,087 $ 16,725 $ 110,812
Net Income -- (1,254) (1,254)
Contributed Capital - Trump
Hotels & Casino Resorts
Holdings, L.P. 16,000 -- 16,000
-------- -------- ---------
Balance,
March 31, 1996 $110,087 $ 15,471 $ 125,558
======== ======== =========
The accompanying notes are an integral part of
these condensed consolidated financial statements.
3
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(unaudited)
(in thousands)
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,254) $ (2,543)
Adjustments to reconcile net loss to
net cash flows from operating activities-
Noncash charges-
Depreciation and amortization 4,523 4,092
Accretion of discounts on indebtedness 112 522
Amortization of deferred loan offering costs 448 448
Provisions for losses on receivables 317 330
Deferred state income taxes -- (206)
Utilization of CRDA credits and donations -- 125
Valuation allowance of CRDA investments 86 98
-------- --------
4,232 2,866
Increase in receivables (798) (453)
(Increase) decrease in inventories (31) 145
Increase in amounts due from affiliates (770) (171)
Decrease in other current assets 570 696
Decrease (increase) in other assets 512 (473)
Increase (decrease) in accounts payable and
accrued expenses 4,187 11,215
Increase (decrease)in accrued interest payable 8,970 (971)
-------- --------
Net cash provided by operating
activities 16,872 12,854
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (28,053) (7,354)
Purchase of CRDA Investments (926) (742)
-------- --------
Net cash used in Investing Activities (28,979) (8,096)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional borrowings 1,152 3,918
Payments and current maturities of long-term debt (777) (695)
Capital contributed from Trump Hotel and Casino
Resorts Holdings, L.P. 16,000 --
-------- --------
Net cash provided by financing activities 16,375 3,223
-------- --------
Net increase in cash and cash equivalents 4,268 7,981
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 15,937 11,144
-------- --------
CASH AND CASH EQUIVALENTS AT MARCH 31, $ 20,205 $ 19,125
======== ========
CASH INTEREST PAID $ 205 $ 54
======== ========
The accompanying notes are an integral part of
these condensed consolidated financial statements.
4
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONDENSED FINANCIAL STATEMENTS:
The accompanying condensed consolidated financial statements include those of
Trump Atlantic City Associates, a New Jersey general partnership, formerly known
as Trump Plaza Holding Associates ("Trump AC"), its 99% owned subsidiary, Trump
Plaza Associates, a New Jersey general partnership ("Plaza Associates") that
owns and operates Trump Plaza Hotel and Casino located in Atlantic City, New
Jersey ("Trump Plaza"), and its 100% owned subsidiary, Trump Atlantic City
Funding, Inc., a Delaware corporation ("Trump AC Funding"). Trump AC Funding had
no operations prior to the issuance of the First Mortgage Notes on April 17,
1996 (see Note 6). Prior to April 17, 1996, Trump Plaza Funding, Inc., a New
Jersey corporation ("Plaza Funding"), owned the remaining 1% interest in Plaza
Associates which, as of such date, has been held by Trump Atlantic City
Corporation, a Delaware corporation formerly known as The Trump Taj Mahal
Corporation ("TACC") (see Note 6). Trump AC's sole sources of liquidity are
distributions in respect of its interest in Plaza Associates. Trump AC and Plaza
Funding are owned by Trump Hotels & Casino Resorts Holdings, L.P., a Delaware
limited partnership ("Trump Holdings").
All significant intercompany balances and transactions have been eliminated in
the accompanying condensed consolidated financial statements. The minority
interest in Plaza Associates has not been separately reflected in the condensed
consolidated financial statements of Trump AC because it is not deemed material.
The accompanying condensed consolidated financial statements have been prepared
by Trump AC without audit. In the opinion of Trump AC, all adjustments,
consisting of only normal recurring adjustments, necessary to present fairly the
financial position, results of operations and cash flows for the periods
presented, have been made. Certain prior year amounts have been reclassified to
conform with the current period presentation.
The accompanying condensed consolidated financial statements have been prepared
by Trump AC pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission"). 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 financial statements should be read in conjunction with the
financial statements and notes thereto included in Plaza Funding's and Plaza
Associates' Annual Report on Form 10-K for the year ended December 31, 1995
filed with the Commission.
The separate financial statements of the Subsidiary Guarantors (as defined in
Note 6) have not been included because (i) the Subsidiary Guarantors constitute
all of Trump AC's direct and indirect subsidiaries; (ii) the Subsidiary
Guarantors have fully and unconditionally guaranteed the Mortgage Notes (on a
joint and several basis); (iii) the aggregate assets, liabilities, earnings and
equity of the Subsidiary Guarantors are substantially equivalent to the assets,
liabilities, earnings and equity of Trump AC on a consolidated basis; and (iv)
the separate financial and other disclosure concerning the Subsidiary Guarantors
are not deemed material to investors.
5
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONDENSED FINANCIAL STATEMENTS CONT'D:
The casino industry in Atlantic City is seasonal in nature; therefore, results
of operations for the three months ended March 31, 1996 are not necessarily
indicative of the operating results for a full year.
2. PUBLIC OFFERINGS:
On June 12, 1995, Trump Hotels & Casino Resorts, Inc. ("THCR") completed a
public offering of 10,000,000 shares of its common stock, par value $.01 per
share (the "THCR Common Stock") at $14.00 per share (the "June 1995 Stock
Offering") for gross proceeds of $140,000,000. Concurrently with the June 1995
Stock Offering, Trump Holdings, together with its subsidiary, Trump Hotels &
Casino Resorts Funding, Inc., a Delaware corporation, ("Trump Funding") issued
its 15 1/2% Senior Secured Notes (the "Senior Notes") for gross proceeds of
$155,000,000 (the "June 1995 Note Offering" and, together with the June 1995
Stock Offering, the "June 1995 Offerings"). THCR contributed approximately
$126,848,000 of the proceeds of the June 1995 Stock Offering to Trump Holdings.
Trump Holdings subsequently contributed $146,859,000 of the proceeds of the June
1995 Offerings to Trump AC.
Prior to the June 1995 Offerings, Donald J. Trump ("Trump") was the owner of
Trump Holdings. Concurrent with the June 1995 Offerings, Trump contributed to
Trump Holdings all of his beneficial interest in Plaza Associates, consisting of
all of the outstanding capital stock of Plaza Funding, a 99% equity interest in
Trump AC and all of the outstanding capital stock of Trump Atlantic City
Holding, Inc., a Delaware corporation formerly known as Trump Plaza Holding,
Inc. ("AC Holding Inc."), which owns the remaining 1% equity interest in Trump
AC (see Note 6). Trump also contributed to Trump Holdings all of his existing
interest and rights to new gaming activities in both emerging and established
gaming jurisdictions, including Trump Indiana, Inc., a Delaware corporation
("Trump Indiana"), which is developing a riverboat gaming project in Buffington
Harbor, Indiana, scheduled to commence operations in the second quarter of 1996
(the "Indiana Riverboat"), but excluding his interests in the Trump Taj Mahal
Casino Resort and Trump's Castle Casino Resort (together, the "Other Trump
Casinos").
3. LONG-TERM DEBT :
Long-term debt consists of the following:
March 31, December 31,
1996 1995
------------ ------------
Plaza Notes (10 7/8% Mortgage
Notes, due 2001 net of unamortized
discount of $3,236,000 and $3,348,000
respectively (A) $326,764,000 $326,652,000
Mortgage notes payable 2,738,000 2,953,000
Other notes payable 7,970,000 6,017,000
------------ ------------
337,472,000 335,622,000
Less - Current maturities 4,593,000 2,901,000
------------ ------------
$332,879,000 $332,721,000
============ ============
6
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. LONG-TERM DEBT CONT.:
(A) On June 25, 1993, Plaza Funding issued $330,000,000 principal amount of 10
7/8% Mortgage Notes, due 2001 (the "Plaza Notes"), net of discount of
$4,313,000, and loaned the proceeds to Plaza Associates. (See Note 6).
On June 25, 1993 Trump AC (then known as Trump Plaza Holding Associates) issued
$60,000,000 principal amount of 12 1/2% Pay-In-Kind Notes, due 2003 (the "PIK
Notes"), together with warrants to acquire an additional $12,000,000 of PIK
Notes at no additional cost (the "Warrants"). The Warrants were exercised prior
to June 12, 1995, and, with proceeds from the June 1995 Offerings contributed by
Trump Holdings to Trump AC, the PIK Notes were repurchased and redeemed on June
12, 1995. Such repurchase and redemption resulted in the recognition of an
extraordinary loss of $9,250,000 relating to the redemption and the write-off of
unamortized deferred financing costs.
4. CASINO LICENSE RENEWAL:
The operation of an Atlantic City casino hotel is subject to significant
regulatory controls which affect virtually all of its operations. Under the New
Jersey Casino Control Act (the "Act") Plaza Associates is required to maintain
certain licenses.
In June 1995, the New Jersey Casino Control Commission ("CCC") renewed Plaza
Associates' license to operate Trump Plaza. This license must be renewed in June
1999, is not transferable, and such renewal of the license will include a review
of the financial stability of Plaza Associates. Upon revocation, suspension for
more than 120 days or if the CCC fails or refuses to renew such casino license,
the Act provides for the appointment of a conservator to take possession of the
hotel and casino's business and property, subject to all valid liens, claims and
encumbrances.
5. TRUMP WORLD'S FAIR:
In December 1993, Trump entered into an option agreement, as amended (the "Trump
World's Fair Purchase Option"), with Chemical Bank ("Chemical") and ACFH Inc.
("ACFH"). The Trump World's Fair Purchase Option granted to Trump an option to
purchase (i) the former Trump Regency Hotel, located on The Boardwalk on the
opposite side of the Atlantic City Convention Center from Trump Plaza's main
tower ("Trump World's Fair") (including the land, improvements and personal
property used in the operation of the hotel) and (ii) certain secured promissory
notes (including a personal promissory note of Trump payable to Chemical for
$35.9 million (the "Trump Note")) made by Trump and/or certain of his affiliates
and payable to Chemical, which are secured by certain real estate assets located
in New York and are unrelated to Plaza Associates (the "Chemical Notes"). On
June 12, 1995, using proceeds from the June 1995 Offerings contributed by Trump
Holdings, the Trump World's Fair Purchase Option was exercised for $58,150,000
($60 million less $1,850,000 in option payments which were available as of that
date to offset the original exercise price), and title to Trump World's Fair was
transferred via directed deed from ACFH to Plaza Associates. In connection with
the exercise of the Trump World's Fair Purchase Option, the Trump Note was
cancelled. THCR is currently in the process of renovating and integrating Trump
World's Fair into Trump Plaza.
7
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
6. SUBSEQUENT EVENTS:
On April 17, 1996, in connection with the acquisition by Trump Holdings of Trump
Taj Mahal Associates, a New Jersey general partnership ("Taj Associates"), that
owns and operates the Trump Taj Mahal Casino Resort (the "Taj Mahal"), Trump AC
and its wholly owned subsidiary, Trump AC Funding issued $1,200,000,000
aggregate principal amount of 11 1/4% First Mortgage Notes due 2006 (the "1996
Note Offering") (the Mortgage Notes"). The Mortgage Notes are guaranteed by
Plaza Associates, Taj Associates and Trump (TACC and, together with Plaza
Associates and Taj Associates, the "Subsidiary Guarantors"). Trump AC and TACC
currently own 99% and 1% general partnership interests, respectively, in each of
Plaza Associates and Taj Associates. The proceeds of the 1996 Note Offering,
together with proceeds from the offering of 12.5 million shares of THCR Common
Stock by THCR (plus an additional .75 million shares of THCR Common Stock issued
in connection with the partial exercise of the underwriters' over-allotment
option) (the "1996 Stock Offering" and, together with the 1996 Note Offering,
the "1996 Offerings"), were used to, among other things,
(a) redeem the outstanding 11.35% Mortgage Bonds, Series A, due 1999 of
Trump Taj Mahal Funding, Inc.;
(b) retire the outstanding Plaza Notes;
(c) satisfy the indebtedness of Taj Associates under its loan agreement
with National Westminster Bank USA;
(d) purchase certain real property used in the operation of the Taj Mahal
that was leased from a corporation wholly owned by Trump;
(e) purchase certain real property used in the operation of Trump Plaza
that was leased from an unaffiliated third party;
(f) make a payment to Bankers Trust Company ("Bankers Trust") to obtain
releases of liens and guarantees that Bankers Trust had in connection with
indebtedness owed by Trump to Bankers Trust; and
(g) issue warrants to Trump to purchase an aggregate of 1.8 million shares
of THCR Common Stock, (i) 600,000 shares of which may be purchased on or prior
to April 17, 1999, at $30.00 per share, (ii) 600,000 shares of which may be
purchased on or prior to April 17, 2000, at $35.00 per share, and (iii) 600,000
shares of which may be purchased on or prior to April 17, 2001, at $40.00 per
share.
Trump AC and Trump AC Funding have no independent operations, therefore, their
ability to service debt is dependent upon the successful operations of Plaza
Associates and Taj Associates. There are no restrictions on the ability of the
Subsidiary Guarantors to distribute funds to Trump AC.
8
Item 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
Cash flows from operating activities is Plaza Associates' principal source of
liquidity. With proceeds from the June 1995 Offerings, Trump Holdings made a
capital contribution of $146,859,000 in Trump AC and Plaza Associates. This
contribution was used to repurchase and redeem the PIK Notes (together with
related accrued interest), exercise the Trump World's Fair Purchase Option and
purchase Trump World's Fair and to fund construction costs incurred in the
renovation and integration of a hotel located adjacent to Trump Plaza's main
tower ("Trump Plaza East Tower"). Funds have been restricted by Trump Holdings
for the renovation of Trump World's Fair and further renovation of Trump Plaza
East Tower. With these restricted funds and cash flows from operating
activities, management believes that sufficient funds are available to complete
the renovations. During the three months ended March 31, 1996, Trump Holdings
made additional capital contributions of $16,000,000 to Plaza Associates to fund
such construction costs. When the renovations are completed, Plaza Associates
will have 139,553 square feet of gaming space, 1,404 hotel rooms and additional
restaurant and meeting space.
Capital expenditures were $29,417,000 for the three months ended March 31, 1996,
an increase of approximately $22,063,000 or 300%, from the comparable period in
1995. Capital expenditures attributable to Trump Plaza East Tower were
approximately $4,611,000 and $1,597,000 for the months ended March 31, 1996 and
1995. Capital expenditures attributable to Trump World's Fair were approximately
$22,428,000 for the three months ended March 31, 1996. Capital expenditures for
improvements to existing facilities were $2,378,000 and $5,757,000 for the three
months ended March 31, 1996 and 1995.
At March 31, 1996, Plaza Associates had a combined working capital deficit of
$3,232,000 which included a receivable from the CRDA for approximately
$6,700,000 for reimbursable improvements made to the Trump Plaza East Tower,
which receivable is currently the subject of litigation.
As of March 31, 1996 the indenture pursuant to which the Plaza Notes were issued
(the Plaza Note Indenture) restricted the ability of Plaza Associates to make
distributions to its partners, and required compliance with certain financial
ratios. On April 17, 1996, the Plaza Notes were defeased pursuant to a covenant
defeasance (the "Defeasance"). As a result of the Defeasance the restrictions
limiting distributions by Plaza Associates have been eliminated. As of April 17,
1996, there are no restrictions on the ability of the Subsidiary Guarantors to
distribute funds to Trump AC.
The financial information presented below reflects the results of operations of
Plaza Associates. Because Trump AC has no business operations other than its
interest in Plaza Associates at March 31, 1996, its results of operations are
not discussed below.
9
COMPARISON OF THREE-MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
OPERATING REVENUES AND EXPENSES
Gaming revenues were $74,270,000 for the three months ended March 31, 1996, an
increase of $8,548,000 or 13.0% from gaming revenues of $65,722,000 for the
comparable period in 1995. This increase in gaming revenues consisted of an
increase in both table games and slot revenues. Management believes this
increase in gaming revenue is due primarily to an increased level of demand
evident in the Atlantic City market, management's marketing initiatives, and the
availability of additional hotel rooms at Trump Plaza East Tower as well as the
February 1996 opening of the casino at Trump Plaza East Tower.
Slot revenues were $49,832,000 for the three months ended March 31, 1996, an
increase of $6,528,000 or 15.1% from $43,304,000 in 1995. This increase is
directly attributable to the addition of 405 slot machines in Trump Plaza East
Tower, as well as management's marketing programs.
Table games revenues were $24,438,000 for the three months ended March 31, 1996,
an increase of $2,020,000 or 9.0% from $22,418,000 for the comparable period in
1995. This increase is due primarily to an increase in table game drop (i.e.,
the dollar value of chips purchased) by 8.0% for the three months ended March
31, 1996 from 1995, as well as the addition of 12 table games in Trump Plaza
East Tower.
Other revenues were $19,281,000 for the three months ended March 31, 1996, an
increase of $3,343,000 or 21.0% from other revenues of $15,938,000 for the
comparable period in 1995. Other revenues include revenues from rooms, food and
beverage and miscellaneous items. The increase primarily reflects the additional
rooms at Trump Plaza East Tower as well as increases in rooms, and food and
beverage revenues attendant to increased levels of gaming activity due in part
to increased promotional activities.
Promotional allowances were $10,683,000 for the three months ended March 31,
1996, an increase of $3,126,000 or 41.4% from promotional allowances of
$7,557,000 in 1995. This increase is attributable primarily to the additional
rooms at Trump Plaza East Tower as well as increases in marketing initiatives
during the three months ended March 31, 1996.
Gaming costs and expenses were $44,126,000 for the three months ended March 31,
1996, an increase of $7,341,000 or 20.0% from $36,785,000 for the comparable
period in 1995. This increase was primarily due to increased promotional and
operating expenses and taxes associated with increased levels of gaming revenues
from the comparable period in 1995.
General and administrative expenses were $18,392,000 for the three months ended
March 31, 1996, an increase of $1,642,000 or 9.8% from general and
administrative expenses of $16,750,000 for the comparable period in 1995. This
increase is primarily the result of increased expense associated with the Trump
Plaza East Tower.
Income from operations was $9,677,000 for the three months ended March 31, 1996,
a decrease of $837,000 or 8.0% from income from operations of $10,514,000 for
the comparable period in 1995.
10
OPERATING REVENUES AND EXPENSES CONT'D
Interest expense was $9,751,000 for the three months ended March 31, 1996, a
decrease of $2,776,000 or 22.2% from interest expense of $12,527,000 for the
comparable period in 1995. This decrease is the result of the redemption of the
PIK notes in June 1995.
Other non-operating expense was $1,375,000 for the three months ended March 31,
1996, an increase of $466,000 or 51.3% from non-operating expense of $909,000
for the comparable period in 1995. This increase is directly attributable to
costs associated with Trump World's Fair.
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
Plaza Associates, its partners, certain members of its former Executive
Committee, and certain of its employees, have been involved in various legal
proceedings. In general, Plaza Associates has agreed to indemnify such persons
and entities, 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.
Various legal proceedings are now pending against Plaza Associates. Trump AC
considers all such proceedings to be ordinary litigation incident to the
character of its business and not material to its business or financial
condition. The majority of such claims are covered by liability insurance
(subject to applicable deductibles), and Trump AC 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 the financial condition
or results of operations of Plaza Associates.
ITEM 2 -- CHANGES IN SECURITIES
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
11
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits:
Exhibit No. Description of Exhibit
3.8.4 Amended and Restated Partnership Agreement of Trump
Atlantic City Associates.
4.19.6 Pledge Agreement, dated April 17, 1996, from Trump
Atlantic City Associates, as pledgor, to First Bank
National Association, as Senior Note Trustee.
4.26.1 Indenture, among Trump Atlantic City Associates and
Trump Atlantic City Funding, Inc., as issuers, Trump
Plaza Associates, Trump Taj Mahal Associates and The
Trump Taj Mahal Corporation, as guarantors, Trump Taj
Mahal Funding, Inc., and First Bank National
Association, as trustee.
4.27.1 First Mortgage Note Certificate (included in Exhibit
4.26.1).
4.28.1 Indenture of Mortgage and Security Agreement, among
Trump Taj Mal Associates, as mortgagor, and First Bank
National Association, as collateral agent, as
mortgagee.
4.28.2 Indenture of Mortgage and Security Agreement, among
Trump Plaza Associates, as mortgagor, and First Bank
National Association, as collateral agent, as
mortgagee.
4.29.1 Assignment of Leases and Rents, among Trump Taj Mahal
Associates, as assignor, and First Bank National
Association, as collateral agent, as mortgagee.
4.29.2 Assignment of Leases and Rents, among Trump Plaza
Associates, as assignor, and First Bank National
Association, as collateral agency, as mortgagee.
4.30.1 Collateral Agency Agreement, among and First Bank
National Association, as collateral agent, and First
Bank National Association, as trustee, Trump Atlantic
City Associates, Trump Atlantic City Funding, Inc.,
the other secured parties signatory thereto; and the
guarantors under the First Mortgage Note Indenture.
10.63 Third Amended and Restated Partnership Agreement of
Trump Plaza Associates.
27 Financial Data Schedule of Trump Atlantic City
Associates.
b. Current Reports on Form 8-K:
The Registrants did not file any reports on Form 8-K during the
period beginning January 1, 1996 and ending March 31, 1996.
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SIGNATURE
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 ATLANTIC CITY ASSOCIATES
(Registrant)
By: Trump Hotels & Casino Resorts Holdings, L.P.
its general partner
By: Trump Hotels & Casino Resorts, Inc.
its general partner
Dated: May 23, 1996 /s/ Nicholas L. Ribis
-----------------------------------
Name: Nicholas L. Ribis
Title: President, Chief Executive
Officer, Chief Financial Officer
and Director
(Duly Authorized Officer and
Principal Financial Officer)
13
SIGNATURE
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 ATLANTIC CITY FUNDING, INC.
(Registrant)
Dated: May 23, 1996 /s/ Nicholas L. Ribis
-----------------------------------
Name: Nicholas L. Ribis
Title: President, Chief Executive
Officer, Chief Financial Officer
and Director
(Duly Authorized Officer and
Principal Financial Officer)
14